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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-Q



| |  |  | (Mark One)                                                                               
| |  |  | -----------------------------------------------------------------------------------------
|
| |  |  | x   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OFTHE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2003

OR



| |  |  | o   TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934
| |  |  | -------------------------------------------------------------------------------------------

For the transition period from      to      .

Commission file number 333-49957-01

EaglePicher Holdings, Inc.

A Delaware Corporation
I.R.S. Employer IdentificationNo. 13-3989553


11201 North Tatum Blvd. Suite 110, Phoenix, Arizona 85028

Registrants telephone number, including area code:602-923-7200

Former Name

Eagle-Picher Holdings, Inc.


EAGLEPICHER HOLDINGS, INC. IS FILING THIS REPORT VOLUNTARILY IN ORDER TO COMPLY
WITH THE REQUIREMENTS OF THE TERMS OF ITS 9 3/8% SENIOR SUBORDINATED NOTES AND
11 3/4% SERIES B CUMULATIVE EXCHANGEABLE PREFERRED STOCK AND IS NOT REQUIRED TO
FILE THIS REPORT PURSUANT TO EITHER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

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



| |  |  | Yes   o   No   x  (See explanatory note immediately above.)
| |  |  | -----------------------------------------------------------

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



| |  |  | Yes   o   No   x
| |  |  | ----------------

930,500 shares of common capital stock, $.01 par value each, were outstanding
at April 14, 2003

1



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TABLE OF CONTENTS



|                              |                                                                                                |                                                      |  |  |  |  |  | 
|----------------------------- | ---------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | Item 1. Financial Statements.                                                                 
|                              |                                                                                                | CONDENSED CONSOLIDATED BALANCE SHEETS               
|                              |                                                                                                | CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)  
|                              |                                                                                                | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                              |                                                                                                | NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                              | Item 3. Quantitative and Qualitative Disclosures About Market Risk                            
|                              | Item 4. Controls and Procedures                                                               
|PART II. OTHER INFORMATION   
|                              | Item 1. Legal Proceedings                                                                     
|                              | Item 6. Exhibits and Reports on Form 8-K                                                      
|SIGNATURES                   
|CERTIFICATIONS               
|EXHIBIT INDEX                
|EX-10.66                     
|EX-10.67                     
|EX-12.1                      



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TABLE OF ADDITIONAL REGISTRANTS

|                                                            |  |                                  |     |              |  |                  |              |            |              |                |            |              |            |  |  | 
|----------------------------------------------------------- |  | -------------------------------- | --- | ------------ |  | ---------------- | ------------ | ---------- | ------------ | -------------- | ---------- | ------------ | ---------- |  |  | 
|                                                            |  |                                  |     |              |  | Jurisdiction     |              |            |              |                |            | IRS Employer
|                                                            |  |                                  |     |              |  | Incorporation or |              | Commission |              | Identification
|Names                                                       |  | Former Names                     |     | Organization |  | File Number      |              | Number    
|                                                            |  |                                  |     |              |  |                  |              |           
|EaglePicher Incorporated                                    |  | Eagle-Picher Industries, Inc     |     | Ohio         |  |                  | 333-49957    |            |              |                | 31-0268670 |             
|Daisy Parts, Inc.                                           |  |                                  | N/A |              |  | Michigan         |              |            | 333-49957-02 |                |            |              | 38-1406772 | 
|EaglePicher Development Co., Inc.                           |  | Eagle-Picher Development Co.,Inc |     | Delaware     |  |                  | 333-49957-03 |            |              |                | 31-1215706 |             
|EaglePicher Far East, Inc.                                  |  | Eagle-Picher Far East, Inc       |     | Delaware     |  |                  | 333-49957-04 |            |              |                | 31-1235685 |             
|EaglePicher Filtration and
Minerals, Inc.                   |  | Eagle-Picher Minerals, Inc       |     | Nevada       |  |                  | 333-49957-06 |            |              |                | 31-1188662 |             
|EaglePicher Technologies, LLC                               |  | Eagle-Picher Technologies, LLC   |     | Delaware     |  |                  | 333-49957-09 |            |              |                | 31-1587660 |             
|Hillsdale Tool & Manufacturing Co.                          |  |                                  | N/A |              |  | Michigan         |              |            | 333-49957-07 |                |            |              | 38-0946293 | 
|EPMR Corporation (f/k/a Michigan
Automotive Research Corp.) |  |                                  | N/A |              |  | Michigan         |              |            | 333-49957-08 |                |            |              | 38-2185909 | 

TABLE OF CONTENTS

|                                                                                              |                                                      |                               |                            |   |        |  | 
|--------------------------------------------------------------------------------------------- | ---------------------------------------------------- | ----------------------------- | -------------------------- | - | ------ |  | 
|                                                                                              |                                                      |                               |                            |   | Page  
|                                                                                              |                                                      |                               |                            |   | Number
|                                                                                              |                                                      |                               |                            |   |       
|                                                                                              |                                                      | PART I. FINANCIAL INFORMATION |                            |   |        | 
|Item 1. Financial Statements (unaudited)                                                      |                                                      |                               |                            |  
|                                                                                              | Condensed Consolidated Balance
Sheets                |                               |                            | 3 |       
|                                                                                              | Condensed Consolidated Statements of Income (Loss)   |                               |                            | 4 |       
|                                                                                              | Condensed Consolidated Statements of Cash Flows      |                               |                            | 5 |       
|                                                                                              | Notes to Condensed Consolidated Financial Statements |                               |                            | 6 |       
|Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations |                                                      |                               | 19                         |  
|Item 3. Quantitative and Qualitative Disclosures About Market
Risk                            |                                                      |                               | 30                         |  
|Item 4. Controls and
Procedures                                                               |                                                      |                               | 31                         |  
|                                                                                              |                                                      |                               | PART II. OTHER INFORMATION |   |        |  | 
|Item 1. Legal Proceedings                                                                     |                                                      |                               | 31                         |  
|Item 6. Exhibits and Reports on Form
8-K                                                      |                                                      |                               | 31                         |  
|Signatures                                                                                    |                                                      |                               | 32                         |  
|Certifications                                                                                |                                                      |                               | 41                         |  
|Exhibit
Index                                                                                 |                                                      |                               | 43                         |  

2



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##### Table of Contents






PART I.  FINANCIAL INFORMATION




Item 1.  Financial Statements.

EaglePicher Holdings, Inc.




CONDENSED CONSOLIDATED BALANCE SHEETS
November 30, 2002 and February 28, 2003
(unaudited) (in thousands of dollars)

|                                                              |  |                                                           |         |   |              |   |              |   |          |   | 
|------------------------------------------------------------- |  | --------------------------------------------------------- | ------- | - | ------------ | - | ------------ | - | -------- | - | 
|                                                              |  |                                                           |         |   | November 30, |   | February 28,
|                                                              |  |                                                           |         |   | 2002         |   | 2003        
|                                                              |  |                                                           |         |   |              |   |             
|ASSETS                                                        |  |                                                           |         |   |              |   |              |  
|Current Assets:                                               |  |                                                           |         |   |              |   |              |  
|                                                              |  | Cash and cash
equivalents                                 |         | $ | 31,522       |   |              | $ | 32,290   |  
|                                                              |  | Receivables, net                                          |         |   | 23,704       |   |              |   | 24,373   |  
|                                                              |  | Retained interest in
EaglePicher Funding
Corporation,
net |         |   | 29,400       |   |              |   | 29,409   |  
|                                                              |  | Costs and estimated
earnings in excess of
billings        |         |   | 16,942       |   |              |   | 20,142   |  
|                                                              |  | Inventories                                               |         |   | 54,718       |   |              |   | 54,447   |  
|                                                              |  | Net assets of
operations to be
sold                       |         |   | 643          |   |              |   | 494      |  
|                                                              |  | Prepaid expenses and
other
assets                         |         |   | 15,667       |   |              |   | 18,861   |  
|                                                              |  | Deferred income
taxes                                     |         |   | 10,798       |   |              |   | 10,798   |  
|                                                              |  |                                                           |         |   |              |   |              |   |          |  
|                                                              |  |                                                           | 183,394 |   |              |   | 190,814      |  
|Property, Plant and Equipment,
net                            |  |                                                           | 183,405 |   |              |   | 176,524      |  
|Goodwill,
net                                                 |  |                                                           | 163,940 |   |              |   | 163,940      |  
|Prepaid
Pension                                               |  |                                                           | 54,796  |   |              |   | 54,613       |  
|Other Assets,
net                                             |  |                                                           | 27,506  |   |              |   | 25,777       |  
|                                                              |  |                                                           |         |   |              |   |              |   |          |  
|                                                              |  | $                                                         | 613,041 |   |              | $ | 611,668      |  
|                                                              |  |                                                           |         |   |              |   |              |   |          |  
|LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)                |  |                                                           |         |   |              |   |              |  
|Current Liabilities:                                          |  |                                                           |         |   |              |   |              |  
|                                                              |  | Accounts
payable                                          |         | $ | 85,055       |   |              | $ | 74,987   |  
|                                                              |  | Current portion of
long-term
debt                         |         |   | 18,625       |   |              |   | 150,393  |  
|                                                              |  | Compensation and
employee
benefits                        |         |   | 21,044       |   |              |   | 18,385   |  
|                                                              |  | Billings in excess of
costs and estimated
earnings        |         |   | 944          |   |              |   | 1,048    |  
|                                                              |  | Accrued divestiture
reserve                               |         |   | 17,662       |   |              |   | 15,198   |  
|                                                              |  | Other accrued
liabilities                                 |         |   | 37,653       |   |              |   | 37,955   |  
|                                                              |  |                                                           |         |   |              |   |              |   |          |  
|                                                              |  |                                                           | 180,983 |   |              |   | 297,966      |  
|Long-Term Debt, net of current
portion                        |  |                                                           | 355,100 |   |              |   | 233,600      |  
|Postretirement Benefits Other Than
Pensions                   |  |                                                           | 17,635  |   |              |   | 17,476       |  
|Other Long-Term
Liabilities                                   |  |                                                           | 8,928   |   |              |   | 9,506        |  
|                                                              |  |                                                           |         |   |              |   |              |   |          |  
|                                                              |  |                                                           | 562,646 |   |              |   | 558,548      |  
|                                                              |  |                                                           |         |   |              |   |              |   |          |  
|11.75% Cumulative Redeemable
Exchangeable Preferred
Stock     |  |                                                           | 137,973 |   |              |   | 141,910      |  
|                                                              |  |                                                           |         |   |              |   |              |   |          |  
|Commitments and Contingencies
Shareholders Equity (Deficit): |  |                                                           |         |   |              |   |              |  
|                                                              |  | Common stock                                              |         |   | 10           |   |              |   | 10       |  
|                                                              |  | Additional paid-in capital                                |         |   | 99,991       |   |              |   | 99,991   |  
|                                                              |  | Accumulated deficit                                       |         |   | (175,112     | ) |              |   | (177,881 | )
|                                                              |  | Accumulated other
comprehensive loss                      |         |   | (4,376       | ) |              |   | (2,819   | )
|                                                              |  | Treasury stock                                            |         |   | (8,091       | ) |              |   | (8,091   | )
|                                                              |  |                                                           |         |   |              |   |              |   |          |  
|                                                              |  |                                                           | (87,578 | ) |              |   | (88,790      | )
|                                                              |  |                                                           |         |   |              |   |              |   |          |  
|                                                              |  | $                                                         | 613,041 |   |              | $ | 611,668      |  
|                                                              |  |                                                           |         |   |              |   |              |   |          |  

The accompanying notes are an integral part of these consolidated balance sheets.

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EaglePicher Holdings, Inc.




CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
Three Months Ended February 28, 2002 and 2003
(unaudited) (in thousands of dollars, except share and per share amounts)

|                                                                       |                                                   |   |         |         |      |   |         |         |  
|---------------------------------------------------------------------- | ------------------------------------------------- | - | ------- | ------- | ---- | - | ------- | ------- | -
|                                                                       |                                                   |   | 2002    |         | 2003
|                                                                       |                                                   |   |         |         |     
|Net
Sales                                                              |                                                   | $ | 163,229 |         |      | $ | 170,310 |        
|                                                                       |                                                   |   |         |         |      |   |         |        
|Operating Costs and Expenses:                                          |                                                   |   |         |         |      |   |         |        
|                                                                       | Cost of products sold
(exclusive of
depreciation) |   |         | 129,772 |      |   |         | 133,112 |  
|                                                                       | Selling and
administrative                        |   |         | 13,482  |      |   |         | 14,551  |  
|                                                                       | Depreciation and
amortization of
intangibles      |   |         | 11,038  |      |   |         | 11,607  |  
|                                                                       | Goodwill amortization                             |   |         | 3,956   |      |   |         |        |  
|                                                                       | Loss from
divestitures                            |   |         | 125     |      |   |         |        |  
|                                                                       |                                                   |   |         |         |      |   |         |        
|                                                                       |                                                   |   | 158,373 |         |      |   | 159,270 |        
|                                                                       |                                                   |   |         |         |      |   |         |        
|Operating Income                                                       |                                                   |   | 4,856   |         |      |   | 11,040  |        
|                                                                       | Interest
expense                                  |   |         | (11,081 | )    |   |         | (9,409  | )
|                                                                       | Other income,
net                                 |   |         | 403     |      |   |         | 433     |  
|                                                                       |                                                   |   |         |         |      |   |         |        
|Income (Loss) Before
Taxes                                             |                                                   |   | (5,822  | )       |      |   | 2,064   |        
|                                                                       | Income
Taxes                                      |   |         | 385     |      |   |         | 896     |  
|                                                                       |                                                   |   |         |         |      |   |         |        
|Net Income
(Loss)                                                      |                                                   |   | (6,207  | )       |      |   | 1,168   |        
|Preferred Stock Dividends
Accreted                                     |                                                   |   | 3,512   |         |      |   | 3,937   |        
|                                                                       |                                                   |   |         |         |      |   |         |        
|Loss Applicable to Common
Shareholders                                 |                                                   | $ | (9,719  | )       |      | $ | (2,769  | )      
|                                                                       |                                                   |   |         |         |      |   |         |        
|Basic and Diluted Net Loss per Share Applicable
to Common
Shareholders |                                                   | $ | (10.04  | )       |      | $ | (2.98   | )      
|                                                                       |                                                   |   |         |         |      |   |         |        
|Weighted Average Number of Common
Shares                               |                                                   |   | 968,417 |         |      |   | 930,500 |        
|                                                                       |                                                   |   |         |         |      |   |         |        

The accompanying notes are an integral part of these consolidated financial statements.

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EaglePicher Holdings, Inc.




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three-Months Ended February 28, 2002 and 2003
(unaudited) (in thousands of dollars)

|                                               |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |        |        |        |         |  
|---------------------------------------------- | -------------------------------------------------------------------------------------------------- | ---------------------------------- | --------------------------------------------------- | ------------------------------------------------------------------------- | ------ | ------- | ------ | ------ | ------ | ------ | ------- | -
|                                               |                                                                                                    |                                    |                                                     |                                                                           |        | 2002    |        | 2003  
|                                               |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |       
|Cash Flows From Operating Activities:          |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |       
|                                               | Net income (loss)                                                                                  |                                    | $                                                   | (6,207                                                                    | )      |         | $      | 1,168  |       
|                                               | Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities: |                                    |                                                     |                                                                           |        |         |        |        |       
|                                               |                                                                                                    | Depreciation and
amortization      |                                                     |                                                                           | 15,649 |         |        |        | 12,390 |       
|                                               |                                                                                                    | Loss from
divestitures             |                                                     |                                                                           | 125    |         |        |        |       |       
|                                               |                                                                                                    | Changes in assets and liabilities: |                                                     |                                                                           |        |         |        |        |        |       
|                                               |                                                                                                    |                                    |                                                     | Sale of
receivables, net
(See Note F)                                     |        |         | 43,775 |        |        |        |        |  
|                                               |                                                                                                    |                                    |                                                     | Receivables and
retained interest
in EaglePicher
Funding
Corporation,
net |        |         | 2,897  |        |        |        | (678    | )
|                                               |                                                                                                    |                                    |                                                     | Inventories                                                               |        |         | 5,507  |        |        |        | 271     |  
|                                               |                                                                                                    |                                    |                                                     | Prepaid
expenses                                                          |        |         | 171    |        |        |        | (3,194  | )
|                                               |                                                                                                    |                                    |                                                     | Other
assets                                                              |        |         | (1,323 | )      |        |        | 126     |  
|                                               |                                                                                                    |                                    |                                                     | Accounts
payable                                                          |        |         | (9,527 | )      |        |        | (10,068 | )
|                                               |                                                                                                    |                                    |                                                     | Accrued
liabilities                                                       |        |         | 6,332  |        |        |        | (4,717  | )
|                                               |                                                                                                    |                                    |                                                     | Other,
net                                                                |        |         | (7,118 | )      |        |        | (2,883  | )
|                                               |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |        |       
|                                               |                                                                                                    |                                    | Net cash provided by (used in)
operating
activities |                                                                           |        | 50,281  |        |        |        | (7,585 | )      
|                                               |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |        |       
|Cash Flows From Investing Activities:          |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |       
|                                               | Proceeds from sales of divisions                                                                   |                                    |                                                     | 6,300                                                                     |        |         |        |       |       
|                                               | Proceeds from the sale of property and equipment, and other, net                                   |                                    |                                                     |                                                                          |        |         |        | 329    |       
|                                               | Capital expenditures                                                                               |                                    |                                                     | (5,106                                                                    | )      |         |        | (3,903 | )     
|                                               | Other, net                                                                                         |                                    |                                                     | 122                                                                       |        |         |        |       |       
|                                               |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |        |       
|                                               |                                                                                                    |                                    | Net cash provided by (used in)
investing
activities |                                                                           |        | 1,316   |        |        |        | (3,574 | )      
|                                               |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |        |       
|Cash Flows From Financing Activities:          |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |       
|                                               | Reduction of long-term debt                                                                        |                                    |                                                     | (12,800                                                                   | )      |         |        | (4,232 | )     
|                                               | Net borrowings (repayments) under revolving credit agreements                                      |                                    |                                                     | (36,088                                                                   | )      |         |        | 14,500 |       
|                                               | Acquisition of treasury stock                                                                      |                                    |                                                     | 156                                                                       |        |         |        |       |       
|                                               |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |        |       
|                                               |                                                                                                    |                                    | Net cash (used in) provided by
financing
activities |                                                                           |        | (48,732 | )      |        |        | 10,268 |        
|                                               |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |        |       
|Effect of Exchange Rates on Cash               |                                                                                                    |                                    | 151                                                 |                                                                           |        |         | 1,659  |       
|                                               |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |        |       
|Net Increase in Cash and Cash Equivalents      |                                                                                                    |                                    | 3,016                                               |                                                                           |        |         | 768    |       
|Cash and Cash Equivalents, beginning of period |                                                                                                    |                                    | 24,620                                              |                                                                           |        |         | 31,522 |       
|                                               |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |        |       
|Cash and Cash Equivalents, end of period       |                                                                                                    | $                                  | 27,636                                              |                                                                           |        | $       | 32,290 |       
|                                               |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |        |       
|Supplemental Cash Flow Information:            |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |       
|                                               | Interest
paid                                                                                      |                                    | $                                                   | 5,003                                                                     |        |         | $      | 3,068  |       
|                                               |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |        |       
|                                               | Income taxes paid (refunded), net                                                                  |                                    | $                                                   | 267                                                                       |        |         | $      |       |       
|                                               |                                                                                                    |                                    |                                                     |                                                                           |        |         |        |        |       

The accompanying notes are an integral part of these consolidated financial statements.

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EaglePicher Holdings, Inc.




NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

A.    BASIS OF REPORTING FOR INTERIM FINANCIAL STATEMENTS

Our accompanying unaudited condensed consolidated financial statements
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission (SEC). Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
accounting principles generally accepted in the United States of America have
been omitted pursuant to such rules and regulations, although we believe that
the disclosures are adequate to make the information presented not misleading.
These financial statements should be read in conjunction with our financial
statements and notes thereto for the fiscal year ended November 30, 2002
presented in our Form 10-K, filed with the SEC on March 3, 2003.

The financial statements presented herein reflect all adjustments
(consisting of normal and recurring adjustments), which, in our opinion are
necessary to fairly state the results of operations for the three month periods
ended February 28, 2002 and 2003. Results of operations for interim periods are
not necessarily indicative of results to be expected for an entire year.

In the fourth quarter of fiscal 2002, we restated our financial statements
to reflect the appropriate adoption of EITF 00-10, Accounting for Shipping and
Handling Fees and Costs, which we should have adopted in 2001. EITF 00-10
states that all amounts billed to a customer in a sale transaction related to
shipping and handling represent revenues earned for the goods provided and
should be classified as revenue. Prior to the adoption of EITF 00-10, some of
the costs billed to customers for shipping and handling costs (our
transportation expenses) were included as an offset to our costs. This
restatement had no impact on operating income, net income, or cash flows. The
impacts to the financial statements for the three months ended February 28,
2002 was an increase in Net Sales and Cost of Products Sold by $3.9 million.
In addition, certain amounts in 2002 have been reclassified to conform to the
2003 financial statement presentation.

Inventories

Inventories consisted of the following at November 30, 2002 and February
28, 2003 (in thousands of dollars):

|                           |  |      |        |      |  |   |        | 
|-------------------------- |  | ---- | ------ | ---- |  | - | ------ | 
|                           |  | 2002 |        | 2003
|                           |  |      |        |     
|Raw materials and
supplies |  | $    | 25,365 |      |  | $ | 28,124 | 
|Work-in-process            |  |      | 14,058 |      |  |   | 13,331 | 
|Finished
goods             |  |      | 15,295 |      |  |   | 12,992 | 
|                           |  |      |        |      |  |   |        | 
|                           |  | $    | 54,718 |      |  | $ | 54,447 | 
|                           |  |      |        |      |  |   |        | 

Comprehensive Income (Loss)

During the three months ended February 28, 2002 and 2003 our comprehensive
loss was as follows (in thousands of dollars):

|                                                  |  |      |        |      |  |   |       |  
|------------------------------------------------- |  | ---- | ------ | ---- |  | - | ----- | -
|                                                  |  | 2002 |        | 2003
|                                                  |  |      |        |     
|Net income
(loss)                                 |  | $    | (6,207 | )    |  | $ | 1,168 |  
|Gain (loss) on interest rate swap
agreements      |  |      | 45     |      |  |   | 545   |  
|Gain (loss) on forward foreign currency
contracts |  |      | 323    |      |  |   | (647  | )
|Change in currency translation
adjustment         |  |      | (217   | )    |  |   | 1,659 |  
|                                                  |  |      |        |      |  |   |       |  
|                                                  |  | $    | (6,056 | )    |  | $ | 2,725 |  
|                                                  |  |      |        |      |  |   |       |  

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B.    GOODWILL

On December 1, 2002, we adopted SFAS No. 142, Goodwill and Other
Intangible Assets. The ratable amortization of goodwill and other intangible
assets with indefinite lives was replaced with an annual test for impairment.
Accordingly, we ceased amortization of goodwill on December 1, 2002. We have
determined that we have six reporting units, as defined in SFAS No. 142, within
our three reportable business segments. The following goodwill amounts by
reporting unit were recorded as of November 30, 2002 and February 28, 2003 (in
thousands of dollars):

|                                           |  |                         |  |        |        |   |         | 
|------------------------------------------ |  | ----------------------- |  | ------ | ------ | - | ------- | 
|Reporting Unit                             |  | Segment                 |  | Amount
|                                           |  |                         |  |       
|Hillsdale
Division                         |  | Automotive              |  | $      | 34,816 |  
|Wolverine
Division                         |  | Automotive              |  |        | 47,268 |  
|Power Group                                |  | Technologies            |  |        | 44,486 |  
|Specialty Materials
Group                  |  | Technologies            |  |        | 31,398 |  
|Pharmaceutical Services (formerly
ChemSyn) |  | Technologies            |  |        | 2,929  |  
|Filtration and
Minerals                    |  | Filtration and Minerals |  |        | 3,043  |  
|                                           |  |                         |  |        |        |   |         | 
|                                           |  |                         |  |        |        | $ | 163,940 | 
|                                           |  |                         |  |        |        |   |         | 

We have completed our initial impairment test as of December 1, 2002, and
determined that no impairment charge exists. Our fair values for each
reporting unit were determined based on our estimate of future cash flows by
reporting unit, which were derived from our annual forecasting process.

The following pro forma disclosure presents our net income (loss) and
basic and diluted net income (loss) per share applicable to common shareholders
for the three-months ended February 28, 2002 and 2003 as if SFAS No. 142 had
been adopted on December 1, 2001 (in thousands of dollars, except per share
amounts):

|                                                                                            |                       |   |        |       |      |   |       |   | 
|------------------------------------------------------------------------------------------- | --------------------- | - | ------ | ----- | ---- | - | ----- | - | 
|                                                                                            |                       |   | 2002   |       | 2003
|                                                                                            |                       |   |        |       |     
|Reported Net Income
(Loss)                                                                  |                       | $ | (6,207 | )     |      | $ | 1,168 |  
|                                                                                            | Goodwill
amortization |   |        | 3,956 |      |   |       |  | 
|                                                                                            |                       |   |        |       |      |   |       |  
|As Adjusted Net Income
(Loss)                                                               |                       | $ | (2,251 | )     |      | $ | 1,168 |  
|                                                                                            |                       |   |        |       |      |   |       |  
|Reported Basic and Diluted Net Income
(Loss) per Share Applicable to Common
Shareholders    |                       | $ | (10.04 | )     |      | $ | 2.98  |  
|                                                                                            | Goodwill
amortization |   |        | 4.09  |      |   |       |  | 
|                                                                                            |                       |   |        |       |      |   |       |  
|As Adjusted Basic and Diluted Net Income
(Loss) per Share Applicable to Common
Shareholders |                       | $ | (5.95  | )     |      | $ | 2.98  |  
|                                                                                            |                       |   |        |       |      |   |       |  

C.    RECENTLY RELEASED OR ADOPTED ACCOUNTING STANDARDS

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations, which requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized as part of the carrying amount of the
long-lived assets and depreciated over their estimated useful life while the
liability is accreted to its expected obligation amount upon retirement. We
adopted SFAS No. 143 on December 1, 2002. The adoption did not have a material
impact on our financial condition or results of operations.

In September 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which superceded SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed of. The primary difference is that goodwill and certain
intangibles with indefinite lives have been removed from the scope of SFAS No.
144, as they are covered by SFAS No. 142, as described above. It also broadens
the presentation of discontinued operations to include a component of an entity
rather than a segment of a business. A component of an entity comprises
operations and cash flows that can clearly be distinguished operationally and
for financial accounting purposes from the rest of the entity. We adopted SFAS
No. 144 on December 1, 2002. The adoption did not have a material impact on
our financial condition or results of operations.

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In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or disposal Activities, which is effective for exit or
disposal activities initiated after December 31, 2002. SFAS No. 146 addresses
financial accounting and reporting for costs associated with exit or disposal
activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3,
Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring). The adoption of this statement did not have a material impact
on our financial condition or results of operations.

In November 2002, the FASB issued Interpretation No. 45 (FIN 45)
Guarantors Accounting and Disclosure requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. FIN 45 elaborates on the
existing disclosure requirements for most guarantees, including loan
guarantees. It also clarifies that at the time a company issues a guarantee,
the company must recognize an initial liability for the fair value, or market
value, of the obligations it assumes under that guarantee. However, the
provisions related to recognizing a liability at inception of the guarantee for
the fair value of the guarantors obligations does not apply to product
warranties or to guarantees accounted for as derivatives. The initial
recognition and initial measurement provisions apply on a prospective basis to
guarantees issued or modified after December 31, 2002. The disclosure
requirements of FIN 45 are effective for financial statements of interim or
annual periods ending after December 15, 2002. FIN 45 does not affect the
accounting for guarantees issued prior to the effective date, unless the
guarantee is modified subsequent to December 31, 2002. We adopted the
disclosure requirements on December 1, 2002, and the initial recognition and
measurement provisions in our February 28, 2003 financial statements. The
adoption of FIN 45 did not have a material impact on our financial condition or
results of operations.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46)
Consolidation of Variable Interest Entities. Until this interpretation, a
company generally included another entity in its consolidated financial
statements only if it controlled the entity through voting interests. FIN 46
requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entitys activities or entitled to receive a majority of the entitys residual
returns. FIN 46 applies to variable interest entities created after January 31,
2003, and to variable interest entities in which an enterprise obtains an
interest in after that date. A public entity with a variable interest in a
variable interest entity created before February 1, 2003, shall apply the
provisions of this interpretation (other than the transition disclosure
provisions in paragraph 26) to that entity no later than the beginning of the
first interim or annual reporting period beginning after June 15, 2003. The
related disclosure requirements are effective immediately. The impact of this
interpretation is not expected to have a material impact on our financial
condition or results of operations.

In November 2002, the EITF issued EITF 00-21, Revenue Arrangements with
Multiple Deliverables. EITF 00-21 prescribes a method to account for
contracts that have multiple elements or deliverables. It provides guidance on
how to allocate the value of a contract to its different deliverables, as well
as guidance on when to recognize revenue allocated to each deliverable over its
performance period. We are required to adopt EITF 00-21 on December 1, 2003.
We are evaluating the impact EITF 00-21 will have on us, but do not expect it
to have a material impact on our financial condition or results of operations.

D.    RESTRUCTURING

During 2001, we recorded asset write-downs and other charges totaling
$14.1 million in connection with a restructuring plan (the Plan) announced in
November 2001. The Plan primarily relocated our corporate headquarters from
Cincinnati, Ohio to Phoenix, Arizona and closed three plants in the
Technologies Segment as a result of the elimination of certain product lines in
the Power Group business.

In May 2002, we announced we would exit the Gallium business in our
Technologies Segment due to the downturn in the fiber-optic, telecommunication
and semiconductor markets, the primary markets for our Gallium products. This
action resulted in a $5.5 million charge to restructuring expense.

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The remaining balance of $2.2 million as of February 28, 2003, is included
in Other Accrued Liabilities in our balance sheets. An analysis of the
facilities, severance and other costs incurred related to restructuring
reserves since November 30, 2002 is as follows (in thousands of dollars):

|                             |               |   |            |      |           |   |       |     |       |   |       |      |   |   |       |        |  
|---------------------------- | ------------- | - | ---------- | ---- | --------- | - | ----- | --- | ----- | - | ----- | ---- | - | - | ----- | ------ | -
|                             |               |   |            |      |           |   | Other |     |      
|                             |               |   | Facilities |      | Severance |   | Costs |     | Total
|                             |               |   |            |      |           |   |       |     |      
|Balance at November 30,
2002 |               | $ | 1,629      |      |           | $ | 314   |     |       | $ | 1,340 |      |   | $ | 3,283 |       
|                             | Amounts
spent |   |            | (271 | )         |   |       | (55 | )     |   |       | (745 | ) |   |       | (1,071 | )
|                             |               |   |            |      |           |   |       |     |       |   |       |      |   |   |       |       
|Balance at February 28,
2003 |               | $ | 1,358      |      |           | $ | 259   |     |       | $ | 595   |      |   | $ | 2,212 |       
|                             |               |   |            |      |           |   |       |     |       |   |       |      |   |   |       |       

E.    DIVESTITURES AND DISCONTINUED OPERATIONS

Divestitures

We have indemnified buyers of our former divisions and subsidiaries for
certain liabilities related to items such as environmental remediation and
warranty issues on divisions sold in previous years. We had previously
recorded liabilities for these exposures; however, from time to time, as
additional information becomes available, additional amounts need to be
recorded.

An analysis of the liabilities related to divestitures is as follows (in
thousands of dollars):

|                             |               |   |        |        |  
|---------------------------- | ------------- | - | ------ | ------ | -
|Balance at November 30,
2002 |               | $ | 17,662 |       
|                             | Amounts
spent |   |        | (2,464 | )
|                             |               |   |        |       
|Balance at February 28,
2003 |               | $ | 15,198 |       
|                             |               |   |        |       

Discontinued Operations

Effective December 14, 2001, we sold certain of the assets of our former
Construction Equipment Division. This division represented our entire former
Machinery Segment. The sale price was $6.1 million in cash, plus an estimated
working capital adjustment of $1.0 million, and the assumption of approximately
$6.7 million of current liabilities. We retained the land and buildings of the
Construction Equipment Divisions main facility in Lubbock, Texas and leased
the facility to the buyer for a five-year term. The buyer has an option to buy
the facility for $2.5 million, increasing $100,000 per year over the term of
the lease. We also retained $900,000 of accounts receivable, and approximately
$2.3 million of raw materials inventory, which the buyer was required to
purchase within one year. The buyer failed to purchase approximately $400,000
of the inventory. We are pursuing collection actions. The Net Assets of
Operations to be Sold at November 30, 2002 and February 28, 2003 are primarily
the remaining balance of the inventory, as the liabilities associated with this
transaction, totaling $2.9 million and representing primarily environmental
liabilities, had been transferred to the Accrued Divestitures reserve at
November 30, 2002.

|   |  |                                                                                    
|-- |  | -----------------------------------------------------------------------------------
|F. |  | ACCOUNTS RECEIVABLE ASSET-BACKED SECURITIZATION (QUALIFYING SPECIAL PURPOSE ENTITY)

During the first quarter of 2002, we entered into an agreement with a
major U.S. financial institution to sell an interest in certain receivables
through an unconsolidated qualifying special purpose entity, EaglePicher
Funding Corporation (EPFC). Initially $47.0 million of proceeds from this
new facility were used primarily to payoff amounts outstanding under our
existing Receivables Loan Agreement with our wholly owned subsidiary,
EaglePicher Acceptance Corporation. This agreement provides for the sale of
certain receivables to EPFC, which in turn sells an interest in a revolving
pool of receivables to the
financial institution. EPFC has no recourse against us for failure of the
debtors to pay when due. The agreement provides for the continuation of the
program on a revolving basis until the earlier of a) the maturity of our senior
credit facility, or b) assuming we are able to refinance our senior credit
facility, the fourth quarter of 2004.

We account for the securitization of these sold receivables in accordance
with SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets
and Extinguishment of Liabilitiesa Replacement of FASB Statement No. 125.
Under this

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guidance, at the time the receivables are sold, the balances are
removed from our financial statements. For purposes of calculating our debt
covenant compliance under our Credit Agreement, we include the debt outstanding
on EPFC.

In conjunction with the initial transaction during 2002, we sold $82.5
million of receivables to EPFC, and we incurred charges of $1.5 million, which
are included in Interest Expense in the accompanying condensed consolidated
statements of income (loss) for the three-months ended February 28, 2002. We
continue to service sold receivables and receive a monthly servicing fee from
EPFC of approximately 1% per annum of the receivable pools average balance.
As this servicing fee approximates our cost to service, no servicing asset or
liability has been recorded at November 30, 2002 or February 28, 2003. We
retain an interest in a portion of the receivables transferred, representing an
over collateralization on the securitization. Our involvement with both this
over collateralization interest and the transferred receivables is generally
limited to the servicing performed. The carrying value of our interest in the
receivables is carried at fair value, which is estimated as its net realizable
value due to the short duration of the receivables transferred. The net
realizable value considers the collection period and includes an estimated
provision for credit losses and returns and allowances, which is based on our
historical results and probable future losses.

At November 30, 2002, our interest in EPFC, including a service fee
receivable, was $29.4 million and the revolving pool of receivables that we
serviced totaled $77.5 million. At November 30, 2002, the outstanding balance
of the interest sold to the financial institution recorded on EPFCs financial
statements was $46.5 million. During the three months ended February 28,
2002, we sold, outside of the initial sale, $109.0 million of accounts
receivable to EPFC. During the same period, EPFC collected $104.5 million of
cash that was reinvested in new securitizations. At February 28, 2003, our
interest in EPFC, including a service fee receivable, was $29.4 million and the
revolving pool of receivables that we serviced totaled $75.0 million. At
February 28, 2003, the outstanding balance of the interest sold to the
financial institution recorded on EPFCs financial statements was $43.8
million. During the three months ended February 28, 2003, we sold $138.6
million of accounts receivable to EPFC. During the same period, EPFC collected
$130.9 million of cash that was reinvested in new securitizations. The
effective interest rate as of February 28, 2003 in the securitization was
approximately 2.5%.

G.    LEGAL MATTERS

On January 25, 1996, Richard Darrell Peoples, a former employee, filed a
lawsuit in the United States District Court for the Western District of
Missouri claiming that we violated the federal False Claims Act based on
alleged irregularities in testing procedures in connection with certain U.S.
Government contracts. Mr. Peoples filed this lawsuit under a procedure which
gives a private individual the right to file a lawsuit for a violation of a
Federal statute and be awarded up to 30% of any recovery. The government has
the right to intervene and take control of such a lawsuit. Following an
extensive investigation, the U.S. Government declined the opportunity to
intervene or take control of this suit. The allegations in the lawsuit are
similar to allegations made by Mr. Peoples, and investigated by our outside
counsel, prior to the filing of the lawsuit. Our outside counsels
investigation found no evidence to support any of Mr. Peoples allegations,
except for some inconsequential expense account matters. The case is in a
discovery phase. Recently the court disqualified Mr. Peoples lawyer from the
case after he read some of our attorney-client privileged documents that Mr.
Peoples took from our lawyers offices without authorization. We intend to
contest this suit vigorously and do not believe that the resolution of this
lawsuit will have a material adverse effect on our financial condition, results
of operations or cash flows.

On May 8, 1997, Caradon Doors and Windows, Inc. (Caradon), filed a suit
against us in the United States District Court for the Northern District of
Georgia alleging breach of contract, negligent misrepresentation, and
contributory infringement and seeking contribution and indemnification in the
amount of approximately $20.0 million. This suit arose out of patent
infringement litigation between Caradon and Therma-Tru Corporation extending
over the 1989-1996 time period, the result of which was for Caradon to be held
liable for patent infringement. In June 1997, we filed a motion with the
United States Bankruptcy Court for the Southern District of Ohio, Western
Division, seeking an order that Caradons claims had been discharged by our
bankruptcy and enjoining Caradon from pursuing its lawsuit. On December 24,
1997, the Bankruptcy Court held that Caradons claims had been discharged and
enjoined Caradon from pursuing its lawsuit. Caradon appealed the Bankruptcy
Courts decision to the United States District Court for the Southern District
of Ohio, and on February 3, 1999, the District Court reversed on the grounds
that the Bankruptcy Court had not done the proper factual analysis and remanded
the matter back to the Bankruptcy Court. The Bankruptcy Court held a hearing on
this matter on September 24 and 25, 2001, and on May 9, 2002 again held that
Caradons claims had been discharged and enjoined Caradon from pursuing the
Caradon Suit. Caradon has again appealed this decision to the District Court.
We intend to contest this suit vigorously and do not believe that the
resolution of this suit will have a material adverse effect on our financial
condition, results of operations or cash flows.

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In addition, we are involved in routine litigation, environmental
proceedings and claims pending with respect to matters arising out of the
normal course of our business. In our opinion, the ultimate liability
resulting from all claims, individually or in the aggregate, will not
materially affect our financial position, results of operations or cash flows.

H.    BUSINESS SEGMENT INFORMATION

Our Automotive Segment provides mechanical and structural parts and raw
materials for passenger cars, trucks, vans and sport utility vehicles for
original equipment manufacturers and replacement markets. Resources are
concentrated in serving the North American, European and Pacific Rim markets.
Our Hillsdale operation is a precision-machined components business, and our
Wolverine operation is a rubber coated metal products business.

Our Technologies Segment is a diverse group of businesses with a broad
spectrum of technologies and capabilities. It is a major supplier of batteries
and power systems components for aerospace, defense and telecommunications
applications. In addition, it produces high-purity specialty material compounds
and rare metals, industrial chemicals, bulk pharmaceuticals and super-clean
containers, which meet strict EPA protocols, for environmental sampling. This
segment serves the commercial aerospace, nuclear, telecommunication electronics
and other industrial markets globally. Some of these products are also used in
defense applications.

Our Filtration and Minerals Segment mines and refines diatomaceous earth
products, which are used globally in high purity filtration applications,
primarily by the food and beverage industry. These products are also used as
industrial absorbents.

Sales between segments were not material.

The following data represents financial information about our reportable
business segments for the three-months ended February 28, 2002 and 2003.
During 2002, we elected to modify our internal methodology of allocating
certain expenses from the corporate segment to the operating segments. In the
following tables, the financial information for the three-months ended February
28, 2002 has been restated to conform to the new presentation (in thousands of
dollars).

|                                           |              |   |         |         |      |   |         |         | 
|------------------------------------------ | ------------ | - | ------- | ------- | ---- | - | ------- | ------- | 
|                                           |              |   | 2002    |         | 2003
|                                           |              |   |         |         |     
|Net Sales                                  |              |   |         |         |      |   |         |        
|Hillsdale
Division                         |              | $ | 85,834  |         |      | $ | 83,282  |        
|Wolverine
Division                         |              |   | 17,648  |         |      |   | 20,718  |        
|                                           |              |   |         |         |      |   |         |        
|                                           | Automotive   |   |         | 103,482 |      |   |         | 104,000 | 
|                                           |              |   |         |         |      |   |         |        
|Power
Group                                |              |   | 22,870  |         |      |   | 32,283  |        
|Precision Products- divested
July 17, 2002 |              |   | 1,215   |         |      |   |        |        
|Specialty Materials
Group                  |              |   | 13,031  |         |      |   | 13,219  |        
|Pharmaceutical Services
(formerly ChemSyn) |              |   | 3,405   |         |      |   | 1,902   |        
|                                           |              |   |         |         |      |   |         |        
|                                           | Technologies |   |         | 40,521  |      |   |         | 47,404  | 
|                                           |              |   |         |         |      |   |         |        
|Filtration and
Minerals                    |              |   | 19,226  |         |      |   | 18,906  |        
|                                           |              |   |         |         |      |   |         |        
|                                           |              | $ | 163,229 |         |      | $ | 170,310 |        
|                                           |              |   |         |         |      |   |         |        
|Operating Income (Loss)                    |              |   |         |         |      |   |         |        
|Automotive                                 |              | $ | 3,516   |         |      | $ | 5,141   |        
|Technologies                               |              |   | 668     |         |      |   | 8,046   |        
|Filtration and
Minerals                    |              |   | 1,306   |         |      |   | (111    | )      
|Divested
Divisions                         |              |   | (125    | )       |      |   |        |        
|Corporate/
Intersegment                    |              |   | (509    | )       |      |   | (2,036  | )      
|                                           |              |   |         |         |      |   |         |        
|                                           |              | $ | 4,856   |         |      | $ | 11,040  |        
|                                           |              |   |         |         |      |   |         |        

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|                                             |  |   |        |  |  |   |        |  
|-------------------------------------------- |  | - | ------ |  |  | - | ------ | -
|                                             |  |   | 2002   |  |  |   | 2003   |  
|                                             |  |   |        |  |  |   |        |  
|Depreciation and Amortization of Intangibles |  |   |        |  |  |   |        |  
|Automotive                                   |  | $ | 9,801  |  |  | $ | 8,946  |  
|Technologies                                 |  |   | 3,659  |  |  |   | 1,616  |  
|Filtration and
Minerals                      |  |   | 1,420  |  |  |   | 1,258  |  
|Corporate/
Intersegment                      |  |   | 114    |  |  |   | (213   | )
|                                             |  |   |        |  |  |   |        |  
|                                             |  | $ | 14,994 |  |  | $ | 11,607 |  
|                                             |  |   |        |  |  |   |        |  

I.    SUBSEQUENT EVENT

In April 2003, we reached an agreement in principle for the sale of
certain assets at our Hillsdale U.K. Automotive operation for cash of $1.1
million. In addition, we will be winding down the remaining operations of our
Hillsdale U.K. Automotive operation and expect to incur $1.5 million to $2.0
million of shutdown costs during 2003. In addition to the shutdown costs, we
believe we will realize a loss of approximately $2.0 million to $3.0 million
during the second quarter of 2003 related to this sale. We also believe we
will realize net cash proceeds from the sale of this operation of $1.5 million
to $2.0 million (including the $1.1 million above related to the sale of the
operation) during 2003. We will account for this sale as a Discontinued
Operation when we file our second quarter of 2003 Form 10-Q. During the year
ended November 30, 2002, our Hillsdale U.K. Automotive operation had $13.9
million in revenues, and as of November 30, 2002, had $11.5 million in total
assets, which were comprised of primarily inventory, accounts receivable, and
property, plant and equipment. During the three months ended February 28,
2003, the Hillsdale U.K. Automotive operation had $3.4 million in revenues.

J.    SUBSIDIARY GUARANTORS AND NON-GUARANTORS

Our Credit Agreement and the Senior Subordinated Notes were issued by our
wholly owned subsidiary, EaglePicher Incorporated (EPI), and are guaranteed
on a full, unconditional, and joint and several basis by us and certain of our
wholly-owned domestic subsidiaries (Subsidiary Guarantors). We have
determined that full financial statements and other disclosures concerning EPI
or the Subsidiary Guarantors would not be material to investors, and such
financial statements are not presented. EPI and the Subsidiary Guarantors are
subject to restrictions on the payment of dividends under the terms of both the
Credit Agreement and the Senior Subordinated Notes. The following supplemental
condensed combining financial statements present information regarding EPI, as
the Issuer, the Subsidiary Guarantors and Non-Guarantor Subsidiaries.

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EAGLEPICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINING BALANCE SHEETS
AS OF NOVEMBER 30, 2002
(in thousands of dollars)

|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|-------------------------------------------------- |  | ------ | -------- | -------------- |  | ----------- | ------- | -------------- |  | ------------ | ------- | ----- |  | - | ------- |  |  | - | -------- | - |  | - | ------- | -
|                                                   |  |        |          |                |  | Guarantors  |         |                |  |              |         |       |  |   |         |  |  |  
|                                                   |  |        |          |                |  |             |         | Non-Guarantors |  |              |         |       |  |   |         | 
|                                                   |  |        |          |                |  | EaglePicher |         | Subsidiary     |  | Foreign      |         |       |  |   |         |  |  |  
|                                                   |  | Issuer |          | Holdings,
Inc. |  | Guarantors  |         | Subsidiaries   |  | Eliminations |         | Total
|                                                   |  |        |          |                |  |             |         |                |  |              |         |      
|ASSETS                                             |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|Current Assets:                                    |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|Cash
and cash equivalents                          |  | $      | 27,694   |                |  | $           | 1       |                |  | $            | (4,895  | )     |  | $ | 7,902   |  |  | $ | 820      |   |  | $ | 31,522  |  
|Receivables
and retained interest, net             |  |        | 2,535    |                |  |             |        |                |  |              | 31,472  |       |  |   | 19,097  |  |  |   |         |   |  |   | 53,104  |  
|Costs
and estimated earnings in excess of billings |  |        |         |                |  |             |        |                |  |              | 16,942  |       |  |   |        |  |  |   |         |   |  |   | 16,942  |  
|Intercompany
accounts receivable                   |  |        | 1,997    |                |  |             |        |                |  |              | 6,228   |       |  |   | 2,037   |  |  |   | (10,262  | ) |  |   |        |  
|Inventories                                        |  |        | 3,957    |                |  |             |        |                |  |              | 39,394  |       |  |   | 13,283  |  |  |   | (1,916   | ) |  |   | 54,718  |  
|Net
assets of operations to be sold                |  |        | 643      |                |  |             |        |                |  |              |        |       |  |   |        |  |  |   |         |   |  |   | 643     |  
|Prepaid expenses                                   |  |        | 7,840    |                |  |             |        |                |  |              | 4,755   |       |  |   | 4,686   |  |  |   | (1,614   | ) |  |   | 15,667  |  
|Deferred
income taxes                              |  |        | 10,798   |                |  |             |        |                |  |              |        |       |  |   |        |  |  |   |         |   |  |   | 10,798  |  
|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|                                                   |  |        | 55,464   |                |  |             | 1       |                |  |              | 93,896  |       |  |   | 47,005  |  |  |   | (12,972  | ) |  |   | 183,394 |  
|Property,
Plant and Equipment, net                 |  |        | 24,016   |                |  |             |        |                |  |              | 129,052 |       |  |   | 30,337  |  |  |   |         |   |  |   | 183,405 |  
|Investment
in Subsidiaries                         |  |        | 239,864  |                |  |             | 58,509  |                |  |              | 18,286  |       |  |   |        |  |  |   | (316,659 | ) |  |   |        |  
|Goodwill, net                                      |  |        | 37,339   |                |  |             |        |                |  |              | 116,586 |       |  |   | 13,154  |  |  |   | (3,139   | ) |  |   | 163,940 |  
|Prepaid Pension                                    |  |        | 54,796   |                |  |             |        |                |  |              |        |       |  |   |        |  |  |   |         |   |  |   | 54,796  |  
|Other Assets                                       |  |        | 14,296   |                |  |             | (8,091  | )              |  |              | 21,744  |       |  |   | 11,070  |  |  |   | (11,513  | ) |  |   | 27,506  |  
|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|                                                   |  | $      | 425,775  |                |  | $           | 50,419  |                |  | $            | 379,564 |       |  | $ | 101,566 |  |  | $ | (344,283 | ) |  | $ | 613,041 |  
|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|LIABILITIES
AND SHAREHOLDERS EQUITY(DEFICIT)      |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|Current Liabilities:                               |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|Accounts payable                                   |  | $      | 15,398   |                |  | $           |        |                |  | $            | 53,151  |       |  | $ | 15,686  |  |  | $ | 820      |   |  | $ | 85,055  |  
|Intercompany
accounts payable                      |  |        | 3,171    |                |  |             |        |                |  |              | 5,887   |       |  |   | 1,184   |  |  |   | (10,242  | ) |  |   |        |  
|Long-term
debt-current portion                     |  |        | 18,625   |                |  |             |        |                |  |              |        |       |  |   |        |  |  |   |         |   |  |   | 18,625  |  
|Other
accrued liabilities                          |  |        | 46,313   |                |  |             |        |                |  |              | 25,128  |       |  |   | 5,862   |  |  |   |         |   |  |   | 77,303  |  
|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|                                                   |  |        | 83,507   |                |  |             |        |                |  |              | 84,166  |       |  |   | 22,732  |  |  |   | (9,422   | ) |  |   | 180,983 |  
|Long-term
Debt, less current portion               |  |        | 355,100  |                |  |             |        |                |  |              |        |       |  |   | 11,491  |  |  |   | (11,491  | ) |  |   | 355,100 |  
|Postretirement Benefits Other Than Pensions        |  |        | 17,635   |                |  |             |        |                |  |              |        |       |  |   |        |  |  |   |         |   |  |   | 17,635  |  
|Deferred
Income Taxes                              |  |        |         |                |  |             |        |                |  |              |        |       |  |   |        |  |  |   |         |   |  |   |        |  
|Other
Long-term Liabilities                        |  |        | 8,687    |                |  |             |        |                |  |              |        |       |  |   | 216     |  |  |   | 25       |   |  |   | 8,928   |  
|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|                                                   |  |        | 464,929  |                |  |             |        |                |  |              | 84,166  |       |  |   | 34,439  |  |  |   | (20,888  | ) |  |   | 562,646 |  
|Intercompany Accounts                              |  |        | (282,707 | )              |  |             | 24      |                |  |              | 269,573 |       |  |   | 23,930  |  |  |   | (10,820  | ) |  |   |        |  
|Preferred Stock                                    |  |        |         |                |  |             | 137,973 |                |  |              |        |       |  |   |        |  |  |   |         |   |  |   | 137,973 |  
|Shareholders Equity(Deficit)                      |  |        | 243,553  |                |  |             | (87,578 | )              |  |              | 25,825  |       |  |   | 43,197  |  |  |   | (312,575 | ) |  |   | (87,578 | )
|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|                                                   |  | $      | 425,775  |                |  | $           | 50,419  |                |  | $            | 379,564 |       |  | $ | 101,566 |  |  | $ | (344,283 | ) |  | $ | 613,041 |  
|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  

13



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##### Table of Contents



EAGLEPICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINING BALANCE SHEETS
AS OF FEBRUARY 28, 2003
(in thousands of dollars)

|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|-------------------------------------------------- |  | ------ | -------- | -------------- |  | ----------- | ------- | -------------- |  | ------------ | ------- | ----- |  | - | ------- |  |  | - | -------- | - |  | - | ------- | -
|                                                   |  |        |          |                |  | Guarantors  |         |                |  |              |         |       |  |   |         |  |  |  
|                                                   |  |        |          |                |  |             |         | Non-Guarantors |  |              |         |       |  |   |         | 
|                                                   |  |        |          |                |  | EaglePicher |         | Subsidiary     |  | Foreign      |         |       |  |   |         |  |  |  
|                                                   |  | Issuer |          | Holdings,
Inc. |  | Guarantors  |         | Subsidiaries   |  | Eliminations |         | Total
|                                                   |  |        |          |                |  |             |         |                |  |              |         |      
|ASSETS                                             |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|Current Assets:                                    |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|Cash and cash equivalents                          |  | $      | 19,714   |                |  | $           | 1       |                |  | $            | 2,178   |       |  | $ | 10,397  |  |  | $ |         |   |  | $ | 32,290  |  
|Receivables and retained interest, net             |  |        | 2,427    |                |  |             |        |                |  |              | 30,187  |       |  |   | 21,168  |  |  |   |         |   |  |   | 53,782  |  
|Costs and estimated earnings in excess of billings |  |        |         |                |  |             |        |                |  |              | 17,485  |       |  |   | 2,657   |  |  |   |         |   |  |   | 20,142  |  
|Intercompany accounts receivable                   |  |        | 2,783    |                |  |             |        |                |  |              | 5,863   |       |  |   | 132     |  |  |   | (8,778   | ) |  |   |        |  
|Inventories                                        |  |        | 4,353    |                |  |             |        |                |  |              | 39,219  |       |  |   | 12,917  |  |  |   | (2,042   | ) |  |   | 54,447  |  
|Net assets of operations to be sold                |  |        | 494      |                |  |             |        |                |  |              |        |       |  |   |        |  |  |   |         |   |  |   | 494     |  
|Prepaid expenses                                   |  |        | 9,163    |                |  |             |        |                |  |              | 5,813   |       |  |   | 3,885   |  |  |   |         |   |  |   | 18,861  |  
|Deferred income taxes                              |  |        | 10,798   |                |  |             |        |                |  |              |        |       |  |   |        |  |  |   |         |   |  |   | 10,798  |  
|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|                                                   |  |        | 49,732   |                |  |             | 1       |                |  |              | 100,745 |       |  |   | 51,156  |  |  |   | (10,820  | ) |  |   | 190,814 |  
|Property, Plant and Equipment, net                 |  |        | 23,761   |                |  |             |        |                |  |              | 121,671 |       |  |   | 31,092  |  |  |   |         |   |  |   | 176,524 |  
|Investment in Subsidiaries                         |  |        | 237,685  |                |  |             | 61,229  |                |  |              | 17,467  |       |  |   | 1       |  |  |   | (316,382 | ) |  |   |        |  
|Goodwill, net                                      |  |        | 37,339   |                |  |             |        |                |  |              | 116,586 |       |  |   | 13,154  |  |  |   | (3,139   | ) |  |   | 163,940 |  
|Prepaid Pension                                    |  |        | 54,613   |                |  |             |        |                |  |              |        |       |  |   |        |  |  |   |         |   |  |   | 54,613  |  
|Other Assets                                       |  |        | 22,517   |                |  |             | (8,091  | )              |  |              | 22,868  |       |  |   | 13,082  |  |  |   | (24,599  | ) |  |   | 25,777  |  
|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|                                                   |  | $      | 425,647  |                |  | $           | 53,139  |                |  | $            | 379,337 |       |  | $ | 108,485 |  |  | $ | (354,940 | ) |  | $ | 611,668 |  
|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)     |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|Current Liabilities:                               |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|Accounts payable                                   |  | $      | 13,310   |                |  | $           |        |                |  | $            | 52,473  |       |  | $ | 9,204   |  |  | $ |         |   |  | $ | 74,987  |  
|Intercompany accounts payable                      |  |        |         |                |  |             |        |                |  |              | 124     |       |  |   | 8,453   |  |  |   | (8,577   | ) |  |   |        |  
|Long-term debt - current portion                   |  |        | 150,393  |                |  |             |        |                |  |              |        |       |  |   |        |  |  |   |         |   |  |   | 150,393 |  
|Other accrued liabilities                          |  |        | 44,136   |                |  |             |        |                |  |              | 21,920  |       |  |   | 6,530   |  |  |   |         |   |  |   | 72,586  |  
|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|                                                   |  |        | 207,839  |                |  |             |        |                |  |              | 74,517  |       |  |   | 24,187  |  |  |   | (8,577   | ) |  |   | 297,966 |  
|Long-term Debt, less current portion               |  |        | 233,600  |                |  |             |        |                |  |              |        |       |  |   | 12,941  |  |  |   | (12,941  | ) |  |   | 233,600 |  
|Postretirement Benefits Other Than Pensions        |  |        | 17,476   |                |  |             |        |                |  |              |        |       |  |   |        |  |  |   |         |   |  |   | 17,476  |  
|Other Long-term Liabilities                        |  |        | 7,861    |                |  |             |        |                |  |              | 131     |       |  |   | 1,514   |  |  |   |         |   |  |   | 9,506   |  
|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|                                                   |  |        | 466,776  |                |  |             |        |                |  |              | 74,648  |       |  |   | 38,642  |  |  |   | (21,518  | ) |  |   | 558,548 |  
|Intercompany Accounts                              |  |        | (286,286 | )              |  |             | 19      |                |  |              | 281,711 |       |  |   | 25,902  |  |  |   | (21,346  | ) |  |   |        |  
|Preferred Stock                                    |  |        |         |                |  |             | 141,910 |                |  |              |        |       |  |   |        |  |  |   |         |   |  |   | 141,910 |  
|Shareholders Equity (Deficit)                     |  |        | 245,157  |                |  |             | (88,790 | )              |  |              | 22,978  |       |  |   | 43,941  |  |  |   | (312,076 | ) |  |   | (88,790 | )
|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  
|                                                   |  | $      | 425,647  |                |  | $           | 53,139  |                |  | $            | 379,337 |       |  | $ | 108,485 |  |  | $ | (354,940 | ) |  | $ | 611,668 |  
|                                                   |  |        |          |                |  |             |         |                |  |              |         |       |  |   |         |  |  |   |          |   |  |   |         |  

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##### Table of Contents



EAGLEPICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS)
THREE MONTHS ENDED FEBRUARY 28, 2002
(in thousands of dollars)

|                              |                                                          |   |        |        |                |   |             |        |                |   |              |         |       |   |        |        |   |   |        |        |   |   |         |         |  
|----------------------------- | -------------------------------------------------------- | - | ------ | ------ | -------------- | - | ----------- | ------ | -------------- | - | ------------ | ------- | ----- | - | ------ | ------ | - | - | ------ | ------ | - | - | ------- | ------- | -
|                              |                                                          |   |        |        |                |   | Guarantors  |        |                |   |              |         |       |   |        |        |   |   |       
|                              |                                                          |   |        |        |                |   |             |        | Non-Guarantors |   |              |         |       |   |        |        |  
|                              |                                                          |   |        |        |                |   | EaglePicher |        | Subsidiary     |   | Foreign      |         |       |   |        |        |   |   |       
|                              |                                                          |   | Issuer |        | Holdings, Inc. |   | Guarantors  |        | Subsidiaries   |   | Eliminations |         | Total
|                              |                                                          |   |        |        |                |   |             |        |                |   |              |         |      
|Net Sales:                    |                                                          |   |        |        |                |   |             |        |                |   |              |         |       |   |        |        |   |   |        |        |   |   |         |        
|                              | Customers                                                |   | $      | 11,635 |                |   | $           |       |                |   | $            | 130,645 |       |   | $      | 20,949 |   |   | $      |       |   |   | $       | 163,229 |  
|                              | Intercompany                                             |   |        | 3,623  |                |   |             |       |                |   |              | 2,826   |       |   |        | 2      |   |   |        | (6,451 | ) |   |         |        |  
|                              |                                                          |   |        |        |                |   |             |        |                |   |              |         |       |   |        |        |   |   |        |        |   |   |         |         |  
|                              |                                                          |   | 15,258 |        |                |   |            |        |                |   | 133,471      |         |       |   | 20,951 |        |   |   | (6,451 | )      |   |   | 163,229 |        
|                              |                                                          |   |        |        |                |   |             |        |                |   |              |         |       |   |        |        |   |   |        |        |   |   |         |         |  
|Operating Costs and Expenses: |                                                          |   |        |        |                |   |             |        |                |   |              |         |       |   |        |        |   |   |        |        |   |   |         |        
|                              | Cost of products sold (exclusive of depreciation)        |   |        | 8,512  |                |   |             |       |                |   |              | 110,775 |       |   |        | 16,936 |   |   |        | (6,451 | ) |   |         | 129,772 |  
|                              | Selling and administrative                               |   |        | 6,295  |                |   |             |       |                |   |              | 5,317   |       |   |        | 1,917  |   |   |        | (47    | ) |   |         | 13,482  |  
|                              | Intercompany charges                                     |   |        | (2,650 | )              |   |             |       |                |   |              | 2,466   |       |   |        | 137    |   |   |        | 47     |   |   |         |        |  
|                              | Depreciation and amortization                            |   |        | 1,147  |                |   |             |       |                |   |              | 9,125   |       |   |        | 766    |   |   |        |       |   |   |         | 11,038  |  
|                              | Goodwill amortization                                    |   |        | 934    |                |   |             |       |                |   |              | 2,775   |       |   |        | 247    |   |   |        |       |   |   |         | 3,956   |  
|                              | Divestitures                                             |   |        | 125    |                |   |             |       |                |   |              |        |       |   |        |       |   |   |        |       |   |   |         | 125     |  
|                              |                                                          |   |        |        |                |   |             |        |                |   |              |         |       |   |        |        |   |   |        |        |   |   |         |         |  
|                              |                                                          |   | 14,363 |        |                |   |            |        |                |   | 130,458      |         |       |   | 20,003 |        |   |   | (6,451 | )      |   |   | 158,373 |        
|                              |                                                          |   |        |        |                |   |             |        |                |   |              |         |       |   |        |        |   |   |        |        |   |   |         |         |  
|Operating Income (Loss)       |                                                          |   | 895    |        |                |   |            |        |                |   | 3,013        |         |       |   | 948    |        |   |   |       |        |   |   | 4,856   |        
|Other Income (Expense):       |                                                          |   |        |        |                |   |             |        |                |   |              |         |       |   |        |        |   |   |        |        |   |   |         |        
|                              | Interest (expense) income                                |   |        | (2,931 | )              |   |             |       |                |   |              | (7,522  | )     |   |        | (1,273 | ) |   |        | 645    |   |   |         | (11,081 | )
|                              | Other income (expense), net                              |   |        | 478    |                |   |             |       |                |   |              | 404     |       |   |        | 166    |   |   |        | (645   | ) |   |         | 403     |  
|                              | Equity in earnings (losses) of
consolidated subsidiaries |   |        | (4,070 | )              |   |             | (6,207 | )              |   |              | 579     |       |   |        |       |   |   |        | 9,698  |   |   |         |        |  
|                              |                                                          |   |        |        |                |   |             |        |                |   |              |         |       |   |        |        |   |   |        |        |   |   |         |         |  
|Income (Loss) Before Taxes    |                                                          |   | (5,628 | )      |                |   | (6,207      | )      |                |   | (3,526       | )       |       |   | (159   | )      |   |   | 9,698  |        |   |   | (5,822  | )      
|Income Taxes                  |                                                          |   |       |        |                |   |            |        |                |   | 12           |         |       |   | 373    |        |   |   |       |        |   |   | 385     |        
|                              |                                                          |   |        |        |                |   |             |        |                |   |              |         |       |   |        |        |   |   |        |        |   |   |         |         |  
|Net Income (Loss)             |                                                          | $ | (5,628 | )      |                | $ | (6,207      | )      |                | $ | (3,538       | )       |       | $ | (532   | )      |   | $ | 9,698  |        |   | $ | (6,207  | )      
|                              |                                                          |   |        |        |                |   |             |        |                |   |              |         |       |   |        |        |   |   |        |        |   |   |         |         |  

15



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##### Table of Contents



EAGLEPICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS)
THREE MONTHS ENDED FEBRUARY 28, 2003
(in thousands of dollars)

|                              |  |                                                          |        |        |        |                |       |             |       |                |         |              |         |       |        |   |        |   |        |   |        |   |         |   |         |  
|----------------------------- |  | -------------------------------------------------------- | ------ | ------ | ------ | -------------- | ----- | ----------- | ----- | -------------- | ------- | ------------ | ------- | ----- | ------ | - | ------ | - | ------ | - | ------ | - | ------- | - | ------- | -
|                              |  |                                                          |        |        |        |                |       | Guarantors  |       |                |         |              |         |       |        |   |        |   |        |  
|                              |  |                                                          |        |        |        |                |       |             |       | Non-Guarantors |         |              |         |       |        |   |        |  
|                              |  |                                                          |        |        |        |                |       | EaglePicher |       | Subsidiary     |         | Foreign      |         |       |        |   |        |   |        |  
|                              |  |                                                          |        | Issuer |        | Holdings, Inc. |       | Guarantors  |       | Subsidiaries   |         | Eliminations |         | Total
|                              |  |                                                          |        |        |        |                |       |             |       |                |         |              |         |      
|Net Sales:                    |  |                                                          |        |        |        |                |       |             |       |                |         |              |         |       |        |   |        |   |        |   |        |   |         |  
|                              |  | Customers                                                |        | $      | 12,714 |                |       | $           |      |                |         | $            | 128,647 |       |        | $ | 28,949 |   |        | $ |       |   |         | $ | 170,310 |  
|                              |  | Intercompany                                             |        |        | 4,516  |                |       |             |      |                |         |              | 4,450   |       |        |   | 314    |   |        |   | (9,280 | ) |         |   |        |  
|                              |  |                                                          |        |        |        |                |       |             |       |                |         |              |         |       |        |   |        |   |        |   |        |   |         |   |         |  
|                              |  |                                                          | 17,230 |        |        |                |      |             |       |                | 133,097 |              |         |       | 29,263 |   |        |   | (9,280 | ) |        |   | 170,310 |  
|                              |  |                                                          |        |        |        |                |       |             |       |                |         |              |         |       |        |   |        |   |        |   |        |   |         |   |         |  
|Operating Costs and Expenses: |  |                                                          |        |        |        |                |       |             |       |                |         |              |         |       |        |   |        |   |        |   |        |   |         |  
|                              |  | Cost of products sold (exclusive of depreciation)        |        |        | 11,085 |                |       |             |      |                |         |              | 107,192 |       |        |   | 24,114 |   |        |   | (9,279 | ) |         |   | 133,112 |  
|                              |  | Selling and administrative                               |        |        | 6,399  |                |       |             | 1     |                |         |              | 6,144   |       |        |   | 2,007  |   |        |   |       |   |         |   | 14,551  |  
|                              |  | Intercompany charges                                     |        |        | (1,656 | )              |       |             |      |                |         |              | 1,615   |       |        |   | 41     |   |        |   |       |   |         |   |        |  
|                              |  | Depreciation and
amortization                            |        |        | 947    |                |       |             |      |                |         |              | 9,260   |       |        |   | 1,400  |   |        |   |       |   |         |   | 11,607  |  
|                              |  |                                                          |        |        |        |                |       |             |       |                |         |              |         |       |        |   |        |   |        |   |        |   |         |   |         |  
|                              |  |                                                          | 16,775 |        |        |                | 1     |             |       |                | 124,211 |              |         |       | 27,562 |   |        |   | (9,279 | ) |        |   | 159,270 |  
|                              |  |                                                          |        |        |        |                |       |             |       |                |         |              |         |       |        |   |        |   |        |   |        |   |         |   |         |  
|Operating Income (Loss)       |  |                                                          | 455    |        |        |                | (1    | )           |       |                | 8,886   |              |         |       | 1,701  |   |        |   | (1     | ) |        |   | 11,040  |  
|Other Income (Expense):       |  |                                                          |        |        |        |                |       |             |       |                |         |              |         |       |        |   |        |   |        |   |        |   |         |  
|                              |  | Interest (expense) income                                |        |        | 3,273  |                |       |             |      |                |         |              | (12,653 | )     |        |   | (29    | ) |        |   |       |   |         |   | (9,409  | )
|                              |  | Other income (expense), net                              |        |        | 55     |                |       |             |      |                |         |              | 420     |       |        |   | (42    | ) |        |   |       |   |         |   | 433     |  
|                              |  | Equity in earnings (losses) of
consolidated subsidiaries |        |        | (2,179 | )              |       |             | 1,169 |                |         |              | 510     |       |        |   |       |   |        |   | 500    |   |         |   |        |  
|                              |  |                                                          |        |        |        |                |       |             |       |                |         |              |         |       |        |   |        |   |        |   |        |   |         |   |         |  
|Income (Loss) Before Taxes    |  |                                                          | 1,604  |        |        |                | 1,168 |             |       |                | (2,837  | )            |         |       | 1,630  |   |        |   | 499    |   |        |   | 2,064   |  
|Income Taxes                  |  |                                                          |       |        |        |                |      |             |       |                | 10      |              |         |       | 886    |   |        |   |       |   |        |   | 896     |  
|                              |  |                                                          |        |        |        |                |       |             |       |                |         |              |         |       |        |   |        |   |        |   |        |   |         |   |         |  
|Net Income (Loss)             |  | $                                                        | 1,604  |        |        | $              | 1,168 |             |       | $              | (2,847  | )            |         | $     | 744    |   |        | $ | 499    |   |        | $ | 1,168   |  
|                              |  |                                                          |        |        |        |                |       |             |       |                |         |              |         |       |        |   |        |   |        |   |        |   |         |   |         |  

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EAGLEPICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED FEBRUARY 28, 2002
(in thousands of dollars)

|                                                                                               |                                                                    |   |         |        |                |   |             |       |                |   |              |        |       |   |        |        |   |   |         |         |   |   |         |        | 
|---------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | - | ------- | ------ | -------------- | - | ----------- | ----- | -------------- | - | ------------ | ------ | ----- | - | ------ | ------ | - | - | ------- | ------- | - | - | ------- | ------ | 
|                                                                                               |                                                                    |   |         |        |                |   | Guarantors  |       |                |   |              |        |       |   |        |        |   |   |        
|                                                                                               |                                                                    |   |         |        |                |   |             |       | Non-Guarantors |   |              |        |       |   |        |        |  
|                                                                                               |                                                                    |   |         |        |                |   | EaglePicher |       | Subsidiary     |   | Foreign      |        |       |   |        |        |   |   |        
|                                                                                               |                                                                    |   | Issuer  |        | Holdings,
Inc. |   | Guarantors  |       | Subsidiaries   |   | Eliminations |        | Total
|                                                                                               |                                                                    |   |         |        |                |   |             |       |                |   |              |        |      
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                          |                                                                    |   |         |        |                |   |             |       |                |   |              |        |       |   |        |        |   |   |         |         |   |   |         |       
|Net income (loss)                                                                              |                                                                    | $ | (5,628  | )      |                | $ | (6,207      | )     |                | $ | (3,538       | )      |       | $ | (532   | )      |   | $ | 9,698   |         |   | $ | (6,207  | )     
|Adjustments to reconcile net income
(loss) to cash provided by (used in)
operating activities: |                                                                    |   |         |        |                |   |             |       |                |   |              |        |       |   |        |        |   |   |         |         |   |   |         |       
|                                                                                               | Equity in (earnings) loss of consolidated
subsidiaries             |   |         | 4,070  |                |   |             | 6,207 |                |   |              | (579   | )     |   |        |       |   |   |         | (9,698  | ) |   |         |       | 
|                                                                                               | Depreciation and amortization                                      |   |         | 2,891  |                |   |             |      |                |   |              | 11,745 |       |   |        | 1,013  |   |   |         |        |   |   |         | 15,649 | 
|                                                                                               | Loss from Divestitures                                             |   |         | 125    |                |   |             |      |                |   |              |       |       |   |        |       |   |   |         |        |   |   |         | 125    | 
|                                                                                               | Changes in assets and liabilities, net of effect
of non-cash items |   |         | 36,959 |                |   |             | 312   |                |   |              | 59,229 |       |   |        | (2,990 | ) |   |         | (52,796 | ) |   |         | 40,714 | 
|                                                                                               |                                                                    |   |         |        |                |   |             |       |                |   |              |        |       |   |        |        |   |   |         |         |   |   |         |       
|                                                                                               |                                                                    |   | 38,417  |        |                |   | 312         |       |                |   | 66,857       |        |       |   | (2,509 | )      |   |   | (52,796 | )       |   |   | 50,281  |       
|                                                                                               |                                                                    |   |         |        |                |   |             |       |                |   |              |        |       |   |        |        |   |   |         |         |   |   |         |       
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                          |                                                                    |   |         |        |                |   |             |       |                |   |              |        |       |   |        |        |   |   |         |         |   |   |         |       
|Proceeds from sales of divisions                                                               |                                                                    |   | 6,300   |        |                |   |            |       |                |   |             |        |       |   |       |        |   |   |        |         |   |   | 6,300   |       
|Capital expenditures                                                                           |                                                                    |   | (232    | )      |                |   |            |       |                |   | (4,608       | )      |       |   | (266   | )      |   |   |        |         |   |   | (5,106  | )     
|Other                                                                                          |                                                                    |   | 5       |        |                |   |            |       |                |   | 1,401        |        |       |   | (1,284 | )      |   |   |        |         |   |   | 122     |       
|                                                                                               |                                                                    |   |         |        |                |   |             |       |                |   |              |        |       |   |        |        |   |   |         |         |   |   |         |       
|                                                                                               |                                                                    |   | 6,073   |        |                |   |            |       |                |   | (3,207       | )      |       |   | (1,550 | )      |   |   |        |         |   |   | 1,316   |       
|                                                                                               |                                                                    |   |         |        |                |   |             |       |                |   |              |        |       |   |        |        |   |   |         |         |   |   |         |       
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                          |                                                                    |   |         |        |                |   |             |       |                |   |              |        |       |   |        |        |   |   |         |         |   |   |         |       
|Reduction of long-term debt                                                                    |                                                                    |   | (12,800 | )      |                |   |            |       |                |   | (42,452      | )      |       |   |       |        |   |   | 42,452  |         |   |   | (12,800 | )     
|Net borrowings (repayments) under revolving
credit agreements                                  |                                                                    |   | (22,000 | )      |                |   |            |       |                |   | (14,246      | )      |       |   | 158    |        |   |   |        |         |   |   | (36,088 | )     
|Other                                                                                          |                                                                    |   |        |        |                |   | (312        | )     |                |   | 483          |        |       |   | (15    | )      |   |   |        |         |   |   | 156     |       
|                                                                                               |                                                                    |   |         |        |                |   |             |       |                |   |              |        |       |   |        |        |   |   |         |         |   |   |         |       
|                                                                                               |                                                                    |   | (34,800 | )      |                |   | (312        | )     |                |   | (56,215      | )      |       |   | 143    |        |   |   | 42,452  |         |   |   | (48,732 | )     
|                                                                                               |                                                                    |   |         |        |                |   |             |       |                |   |              |        |       |   |        |        |   |   |         |         |   |   |         |       
|Effect of exchange rates on cash                                                               |                                                                    |   |        |        |                |   |            |       |                |   |             |        |       |   | 151    |        |   |   |        |         |   |   | 151     |       
|                                                                                               |                                                                    |   |         |        |                |   |             |       |                |   |              |        |       |   |        |        |   |   |         |         |   |   |         |       
|Net increase (decrease) in cash and
cash equivalents                                           |                                                                    |   | 9,690   |        |                |   |            |       |                |   | 7,435        |        |       |   | (3,765 | )      |   |   | (10,344 | )       |   |   | 3,016   |       
|Intercompany accounts                                                                          |                                                                    |   | (6,113  | )      |                |   |            |       |                |   | (6,452       | )      |       |   | 2,288  |        |   |   | 10,277  |         |   |   |        |       
|Cash and cash equivalents,
beginning of period                                                 |                                                                    |   | 17,145  |        |                |   | 1           |       |                |   | 471          |        |       |   | 6,936  |        |   |   | 67      |         |   |   | 24,620  |       
|                                                                                               |                                                                    |   |         |        |                |   |             |       |                |   |              |        |       |   |        |        |   |   |         |         |   |   |         |       
|Cash and cash equivalents,
end of period                                                       |                                                                    | $ | 20,722  |        |                | $ | 1           |       |                | $ | 1,454        |        |       | $ | 5,459  |        |   | $ |        |         |   | $ | 27,636  |       
|                                                                                               |                                                                    |   |         |        |                |   |             |       |                |   |              |        |       |   |        |        |   |   |         |         |   |   |         |       

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EAGLEPICHER HOLDINGS, INC.
SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED FEBRUARY 28, 2003
(in thousands of dollars)

|                                                                                               |                                                                    |   |         |         |                |   |             |        |                |   |              |       |       |   |        |        |   |   |         |        |   |   |        |         |  
|---------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | - | ------- | ------- | -------------- | - | ----------- | ------ | -------------- | - | ------------ | ----- | ----- | - | ------ | ------ | - | - | ------- | ------ | - | - | ------ | ------- | -
|                                                                                               |                                                                    |   |         |         |                |   | Guarantors  |        |                |   |              |       |       |   |        |        |   |   |        
|                                                                                               |                                                                    |   |         |         |                |   |             |        | Non-Guarantors |   |              |       |       |   |        |        |  
|                                                                                               |                                                                    |   |         |         |                |   | EaglePicher |        | Subsidiary     |   | Foreign      |       |       |   |        |        |   |   |        
|                                                                                               |                                                                    |   | Issuer  |         | Holdings,
Inc. |   | Guarantors  |        | Subsidiaries   |   | Eliminations |       | Total
|                                                                                               |                                                                    |   |         |         |                |   |             |        |                |   |              |       |      
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                          |                                                                    |   |         |         |                |   |             |        |                |   |              |       |       |   |        |        |   |   |         |        |   |   |        |        
|Net income (loss)                                                                              |                                                                    | $ | 1,604   |         |                | $ | 1,168       |        |                | $ | (2,847       | )     |       | $ | 744    |        |   | $ | 499     |        |   | $ | 1,168  |        
|Adjustments to reconcile net income (loss) to cash provided
by (used in) operating activities: |                                                                    |   |         |         |                |   |             |        |                |   |              |       |       |   |        |        |   |   |         |        |   |   |        |        
|                                                                                               | Equity in (earnings) loss of consolidated
subsidiaries             |   |         | 2,179   |                |   |             | (1,169 | )              |   |              | (510  | )     |   |        |       |   |   |         | (500   | ) |   |        |        |  
|                                                                                               | Depreciation and amortization                                      |   |         | 1,730   |                |   |             |       |                |   |              | 9,260 |       |   |        | 1,400  |   |   |         |        |   |   |        | 12,390  |  
|                                                                                               | Changes in assets and liabilities, net of effect
of non-cash items |   |         | (30,577 | )              |   |             | 24     |                |   |              | (393  | )     |   |        | (1,133 | ) |   |         | 10,936 |   |   |        | (21,143 | )
|                                                                                               |                                                                    |   |         |         |                |   |             |        |                |   |              |       |       |   |        |        |   |   |         |        |   |   |        |        
|                                                                                               |                                                                    |   | (25,064 | )       |                |   | 23          |        |                |   | 5,510        |       |       |   | 1,011  |        |   |   | 10,935  |        |   |   | (7,585 | )      
|                                                                                               |                                                                    |   |         |         |                |   |             |        |                |   |              |       |       |   |        |        |   |   |         |        |   |   |        |        
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                          |                                                                    |   |         |         |                |   |             |        |                |   |              |       |       |   |        |        |   |   |         |        |   |   |        |        
|Capital expenditures                                                                           |                                                                    |   | (422    | )       |                |   |            |        |                |   | (2,437       | )     |       |   | (1,044 | )      |   |   |        |        |   |   | (3,903 | )      
|Proceeds from sale of property and equipment, and other, net                                   |                                                                    |   |        |         |                |   |            |        |                |   | 329          |       |       |   |       |        |   |   |        |        |   |   | 329    |        
|                                                                                               |                                                                    |   |         |         |                |   |             |        |                |   |              |       |       |   |        |        |   |   |         |        |   |   |        |        
|                                                                                               |                                                                    |   | (422    | )       |                |   |            |        |                |   | (2,108       | )     |       |   | (1,044 | )      |   |   |        |        |   |   | (3,574 | )      
|                                                                                               |                                                                    |   |         |         |                |   |             |        |                |   |              |       |       |   |        |        |   |   |         |        |   |   |        |        
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                          |                                                                    |   |         |         |                |   |             |        |                |   |              |       |       |   |        |        |   |   |         |        |   |   |        |        
|Reduction of long-term debt                                                                    |                                                                    |   | (4,232  | )       |                |   |            |        |                |   |             |       |       |   |       |        |   |   |        |        |   |   | (4,232 | )      
|Net borrowings (repayments) under revolving
credit agreements                                  |                                                                    |   | 14,500  |         |                |   |            |        |                |   |             |       |       |   |       |        |   |   |        |        |   |   | 14,500 |        
|                                                                                               |                                                                    |   |         |         |                |   |             |        |                |   |              |       |       |   |        |        |   |   |         |        |   |   |        |        
|                                                                                               |                                                                    |   | 10,268  |         |                |   |            |        |                |   |             |       |       |   |       |        |   |   |        |        |   |   | 10,268 |        
|                                                                                               |                                                                    |   |         |         |                |   |             |        |                |   |              |       |       |   |        |        |   |   |         |        |   |   |        |        
|Effect of exchange rates on cash                                                               |                                                                    |   |        |         |                |   |            |        |                |   |             |       |       |   | 1,659  |        |   |   |        |        |   |   | 1,659  |        
|                                                                                               |                                                                    |   |         |         |                |   |             |        |                |   |              |       |       |   |        |        |   |   |         |        |   |   |        |        
|Net increase (decrease) in cash and
cash equivalents                                           |                                                                    |   | (15,218 | )       |                |   | 23          |        |                |   | 3,402        |       |       |   | 1,626  |        |   |   | 10,935  |        |   |   | 768    |        
|Intercompany accounts                                                                          |                                                                    |   | 7,238   |         |                |   | (23         | )      |                |   | 3,671        |       |       |   | 869    |        |   |   | (11,755 | )      |   |   |       |        
|Cash and cash equivalents,
beginning of period                                                 |                                                                    |   | 27,694  |         |                |   | 1           |        |                |   | (4,895       | )     |       |   | 7,902  |        |   |   | 820     |        |   |   | 31,522 |        
|                                                                                               |                                                                    |   |         |         |                |   |             |        |                |   |              |       |       |   |        |        |   |   |         |        |   |   |        |        
|Cash and cash equivalents,
end of period                                                       |                                                                    | $ | 19,714  |         |                | $ | 1           |        |                | $ | 2,178        |       |       | $ | 10,397 |        |   | $ |        |        |   | $ | 32,290 |        
|                                                                                               |                                                                    |   |         |         |                |   |             |        |                |   |              |       |       |   |        |        |   |   |         |        |   |   |        |        

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

Critical Accounting Policies

Our financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America. The preparation
of these financial statements requires the use of estimates, judgments, 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 periods presented. We believe that our critical accounting
policies, which involve a higher degree of judgments, estimates and complexity,
are as follows:

Environmental Reserves

We are subject to extensive and evolving Federal, state and local
environmental laws and regulations. Compliance with such laws and regulations
can be costly. Governmental authorities may enforce these laws and regulations
with a variety of enforcement measures, including monetary penalties and
remediation requirements. We have policies and procedures in place to ensure
that our operations are conducted in compliance with such laws and regulations
and with a commitment to the protection of the environment.

We are involved in various stages of investigation and remediation related
to environmental remediation projects at a number of sites as a result of past
and present operations, including currently-owned and formerly-owned plants.
Also, we have received notice that we may have liability under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 as
a potentially responsible party at a number of sites (Superfund Sites).

The ultimate cost of site remediation is difficult to predict given the
uncertainties regarding the extent of the required remediation, the
interpretation of applicable laws and regulations and alternative remediation
methods. Based on our experience with environmental remediation matters, we
have accrued reserves for our best estimate of remediation costs, and we do not
believe that remediation activities will have a material adverse impact on our
financial condition, results of operations or cash flows. In addition, in the
course of our bankruptcy described in Item 3 of our Form 10-K for the year
ended November 30, 2002, filed on March 3, 2003, we obtained an agreement with
the U.S. Environmental Protection Agency and the states of Arizona, Michigan
and Oklahoma whereby we are limited in our responsibility for environmental
sites not owned by us that allegedly arise from pre-bankruptcy activities. We
retain all of our defenses, legal or factual, at such sites. However, if we are
found liable at any of these sites, we would only be required to pay as if such
claims had been resolved in our bankruptcy and therefore our liability is paid
at approximately 37%.

As of November 30, 2002, we had $17.7 million accrued for sold divisions
or businesses related to legal and environmental matters, and $2.4 million
recorded in other accrued liabilities related to environmental liabilities for
our on-going businesses. As of February 28, 2003, we had $15.2 million accrued
for sold divisions or businesses related to legal and environmental matters,
and $2.2 million recorded in other accrued liabilities related to environmental
liabilities for our on-going businesses. We believe such reserves to be
adequate under the current circumstances.

Impairment of Long-Lived Assets, including Goodwill

We review for impairment the carrying value of our long-lived assets held
for use and assets to be disposed of. For all assets excluding goodwill, the
carrying value of a long-lived asset is considered impaired if the sum of the
undiscounted cash flows is greater than the carrying value of the asset. If
this occurs, an impairment charge is recorded for the amount by which the
carrying value of the long-lived assets exceeds its fair value. Effective
December 1, 2002, we adopted SFAS No. 142, Goodwill and Other Intangible
Assets. Under this new accounting standard, we no longer amortize our
goodwill and will be required to complete an annual impairment test. We have
determined that we have six reporting units, as defined in SFAS No. 142, within
our three reportable business segments. We have completed our initial
impairment test required by this accounting standard and have determined there
was no impairment charge related to the adoption of this accounting standard on
December 1, 2002. These impairment tests require us to forecast our future cash
flows, which requires significant judgment. As of November 30, 2002 and
February 28, 2003, we had recorded $163.9 million of goodwill. In addition as
of November 30, 2002, we had recorded $183.4 million of property, plant, and
equipment, net (our primary long-lived asset), and as of February 28, 2003 we
had recorded $176.5 million of property, plant, and equipment, net.

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Revenue Recognition

We recognize revenue when persuasive evidence of an arrangement exists,
delivery has occurred, the fee is fixed and determinable, and collectibility is
reasonably assured. Generally, all of these conditions are met at the time we
ship our products to our customers. Net Sales and Cost of Products Sold
include transportation costs. For certain products sold under fixed-price
contracts and subcontracts with various United States Government agencies and
aerospace and defense contractors, we utilize the percentage-of-completion
method of accounting. When we use the percentage-of-completion method, we
measure our percent complete based on total costs incurred to date as compared
to our best estimate of total costs to be incurred.

Under the percentage-of-completion method, contract costs include direct
material, labor costs, and those indirect costs related to contract
performance, such as indirect labor, supplies, tools and repairs. Selling and
administrative expenses are charged to expense as incurred. Provisions for
estimated losses on uncompleted contracts are made in the period in which such
losses are determined. Changes to job performance, job conditions, and
estimated profitability may result in revisions to contract revenue and costs
and are recognized in the period in which the revisions are made. We provided
for estimated losses on uncompleted contracts of $0.5 million at November 30,
2002 and February 28, 2003. The percentage of completion method requires a
higher degree of judgment and use of estimates than other revenue recognition
methods. The primary judgments and estimates involved include our ability to
accurately estimate the contracts percent complete and the reasonableness of
the estimated costs to complete as of each financial reporting period.

Pension and Postretirement Benefit Plan Assumptions

We sponsor pension plans covering substantially all employees who meet
certain eligibility requirements. We also sponsor postretirement benefit plans
that make health care and life insurance benefits available for certain
employees. Several statistical and other factors that attempt to anticipate
future events are used in calculating the expense and liability related to
these plans. These factors include key assumptions, such as discount rate,
expected return on plan assets, rate of increase of health care costs and rate
of future compensation increases. In addition, our actuarial consultants also
use subjective factors such as withdrawal and mortality rates to estimate these
factors. The actuarial assumptions we use may differ materially from actual
results due to changing market and economic conditions, higher or lower
withdrawal rates or longer or shorter life spans of participants. These
differences may result in a significant impact to the amount of pension or
postretirement benefits expenses we have recorded or may record in the future.
Assuming a constant employee base, the most important estimate associated with
our post retirement plan is the assumed health care cost trend rate. As of
November 30, 2002, a 100 basis point increase in this estimate would increase
the expense by approximately $0.2 million. A similar analysis for the expense
associated with our pension plans is more difficult due to the variety of
assumptions; plan types and regulatory requirements for these plans around the
world. However, for example, our U.S. plans, which represent approximately 90%
of the consolidated projected benefit obligation at November 30, 2002, a 25
basis point change in the discount rate, would change the annual pension
expense by approximately $0.8 million, and the annual post-retirement expense
by approximately $0.1 million. Additionally, a 25 basis point change in the
expected return on plan assets would change the pension expense by
approximately $0.6 million.

Legal Contingencies

We are a defendant in numerous litigation and regulatory matters including
those involving environmental law, employment law and patent law, as discussed
in Note G to the condensed consolidated financial statements. As required by
SFAS No. 5, we determine whether an estimated loss from a loss contingency
should be accrued by assessing whether a loss is deemed probable and can be
reasonably estimated. We analyze our litigation and regulatory matters based on
available information to assess potential liability. We develop our views on
estimated losses in consultation with outside counsel and environmental experts
handling our defense in these matters, which involves an analysis of potential
results, assuming a combination of litigation and settlement strategies. Should
these matters result in an adverse judgment or be settled for significant
amounts, they could have a material adverse effect on our results of
operations, cash flows and financial position in the period or periods in which
such judgment or settlement occurs.

Estimates Used Relating to Restructuring, Divestitures and Asset
Impairments

Over the last several years we have engaged in significant restructuring
actions and divestitures, which have required us to develop formalized plans as
they relate to exit activities. These plans have required us to utilize
significant estimates related to

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salvage values of assets that were made redundant or obsolete. In addition, we have had to record estimated expenses
for severance and other employee separation costs, lease cancellation and
other exit costs. Given the significance of, and the timing of the execution
of such actions, this process is complex and involves periodic reassessments of
estimates made at the time the original decisions were made. Our policies, as
supported by current authoritative guidance, require us to continually evaluate
the adequacy of the remaining liabilities under our restructuring initiatives.
As we continue to evaluate the business, there may be supplemental charges for
new plan initiatives as well as changes in estimates to amounts previously
recorded as payments are made or actions are completed.

Income Taxes and Tax Valuation Allowances

We record the estimated future tax effects of temporary differences
between the tax bases of assets and liabilities and amounts reported in our
balance sheets, as well as operating loss and tax credit carryforwards. We
follow very specific and detailed guidelines in each tax jurisdiction regarding
the recoverability of any tax assets recorded on the balance sheet and provide
necessary valuation allowances as required. We regularly review our deferred
tax assets for recoverability based on historical taxable income, projected
future taxable income, the expected timing of the reversals of existing
temporary differences and tax planning strategies. If we continue to operate
at a loss in certain jurisdictions, as we have in the United States, or are
unable to generate sufficient future taxable income, or if there is a material
change in the actual effective tax rates or time period within which the
underlying temporary differences become taxable or deductible, we could be
required to increase the valuation allowance against all or a significant
portion of our deferred tax assets resulting in a substantial increase in our
effective tax rate and a material adverse impact on our operating results.

Risk Management Activities

We are exposed to market risk including changes in interest rates,
currency exchange rates and commodity prices. We use derivative instruments to
manage our interest rate and foreign currency exposures. We do not use
derivative instruments for speculative or trading purposes. Generally, we
enter into hedging relationships such that changes in the fair values or cash
flows of items and transactions being hedged are expected to be offset by
corresponding changes in the values of the derivatives. Accounting for
derivative instruments is complex, as evidenced by the significant
interpretations of the primary accounting standard, and continues to evolve.
As of November 30, 2002 we had $13.5 million and at February 28, 2003 we had
$12.9 million of foreign forward exchange contracts. In addition, at November
30, 2002 and February 28, 2003, we had $90.0 million of interest rate swap
contracts to hedge our interest rate risks.

Other Significant Accounting Policies

Other significant accounting policies, not involving the same level of
uncertainties as those discussed above, are nevertheless important to an
understanding of our financial statements. See Note B to the consolidated
financial statements, Summary of Significant Accounting Policies, included in
our Form 10-K for the year ended November 30, 2002, filed on March 3, 2003,
which discusses accounting policies that must be selected by us when there are
acceptable alternatives.

Results of Operations

The following summary financial information about our industry segment
data is presented to gain a better understanding of the narrative discussion
below about our business segments. See Note O in our Form 10-K for the year
ended November 30, 2002, filed on March 3, 2003, for additional financial
information by segment. All references herein to years are to the three-months
ended February 28 unless otherwise indicated (in thousands of dollars).

As discussed in Note Q to our financial statements for the year ended
November 30, 2002, the accompanying 2002 financial statements have been
restated to reflect the appropriate adoption of EITF 00-10 which resulted in an
increase to Net Sales and Cost of Products Sold for transportation costs billed
to our customers. This restatement had no impact on operating income, net
income or cash flows. The following discussion and analysis gives effect to
the restatement.

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|                                           |              |   |         |         |      |   |          |         |   |   |        |       |  |  |         |      | 
|------------------------------------------ | ------------ | - | ------- | ------- | ---- | - | -------- | ------- | - | - | ------ | ----- |  |  | ------- | ---- | 
|                                           |              |   | 2002    |         | 2003 |   | Variance |         | %
|                                           |              |   |         |         |      |   |          |         |  
|Net Sales                                  |              |   |         |         |      |   |          |         |   |   |        |       |  |  |         |     
|Hillsdale Division                         |              | $ | 85,834  |         |      | $ | 83,282   |         |   | $ | (2,552 | )     |  |  | (3.0    | )   
|Wolverine Division                         |              |   | 17,648  |         |      |   | 20,718   |         |   |   | 3,070  |       |  |  | 17.4    |     
|                                           |              |   |         |         |      |   |          |         |   |   |        |       |  |  |         |     
|                                           | Automotive   |   |         | 103,482 |      |   |          | 104,000 |   |   |        | 518   |  |  |         | 0.5  | 
|                                           |              |   |         |         |      |   |          |         |   |   |        |       |  |  |         |     
|Power Group                                |              |   | 22,870  |         |      |   | 32,283   |         |   |   | 9,413  |       |  |  | 41.2    |     
|Precision Products-
divested July 17, 2002 |              |   | 1,215   |         |      |   |         |         |   |   | (1,215 | )     |  |  | (100.0  | )   
|Specialty Materials Group                  |              |   | 13,031  |         |      |   | 13,219   |         |   |   | 188    |       |  |  | 1.4     |     
|Pharmaceutical
Services (formerly
ChemSyn) |              |   | 3,405   |         |      |   | 1,902    |         |   |   | (1,503 | )     |  |  | (44.1   | )   
|                                           |              |   |         |         |      |   |          |         |   |   |        |       |  |  |         |     
|                                           | Technologies |   |         | 40,521  |      |   |          | 47,404  |   |   |        | 6,883 |  |  |         | 17.0 | 
|                                           |              |   |         |         |      |   |          |         |   |   |        |       |  |  |         |     
|Filtration and Minerals                    |              |   | 19,226  |         |      |   | 18,906   |         |   |   | (320   | )     |  |  | (1.7    | )   
|                                           |              |   |         |         |      |   |          |         |   |   |        |       |  |  |         |     
|                                           |              | $ | 163,229 |         |      | $ | 170,310  |         |   | $ | 7,081  |       |  |  | 4.3     |     
|                                           |              |   |         |         |      |   |          |         |   |   |        |       |  |  |         |     
|Operating Income (Loss)                    |              |   |         |         |      |   |          |         |   |   |        |       |  |  |         |     
|Automotive                                 |              | $ | 3,516   |         |      | $ | 5,141    |         |   | $ | 1,625  |       |  |  | 46.2    |     
|Technologies                               |              |   | 668     |         |      |   | 8,046    |         |   |   | 7,378  |       |  |  | 1,104.5 |     
|Filtration and Minerals                    |              |   | 1,306   |         |      |   | (111     | )       |   |   | (1,417 | )     |  |  | (108.5  | )   
|Divested
Divisions                         |              |   | (125    | )       |      |   |         |         |   |   | 125    |       |  |  | 100.0   |     
|Corporate/
Intersegment                    |              |   | (509    | )       |      |   | (2,036   | )       |   |   | (1,527 | )     |  |  | (300.0  | )   
|                                           |              |   |         |         |      |   |          |         |   |   |        |       |  |  |         |     
|                                           |              | $ | 4,856   |         |      | $ | 11,040   |         |   | $ | 6,184  |       |  |  | 127.3   |     
|                                           |              |   |         |         |      |   |          |         |   |   |        |       |  |  |         |     

Automotive Segment

Sales in our Automotive Segment increased $0.5 million, or 0.5%, to $104.0
million in 2003 from $103.5 million in 2002. The Wolverine division sales
increased $3.1 million, or 17.4%, due primarily to an 11% volume increase as a
result of increased penetration of the aftermarket and small engine markets,
and favorable foreign currency as a result of the strengthening of the Euro.
Approximately 38.8% of the Wolverine divisions sales are from Europe.
Partially offsetting the Wolverine divisions sales increase was a $2.6
million, or 3.0%, decline in our Hillsdale divisions sales due to (a) a $2.8
million decline in transmission pump sales related to a program phase-out, and
(b) a $1.3 million decline in sales of our Hillsdale U.K. Automotive operation,
which is in the process of being sold. These decreases are partially offset by
a modest increase in North American sales due to the increase in automotive
builds in 2003 compared to 2002. The pending sale of the Hillsdale U.K.
Automotive operation is discussed in Note I of Item 1 of this report. We
anticipate that the net charge to our earnings related to this divestiture will
be approximately $3.5 million to $5.0 million in 2003, with net cash proceeds
of approximately $1.5 million to $2.0 million.

Operating income increased $1.6 million, or 46.2%, to $5.1 million in 2003
from $3.5 million in 2002. This improved performance was primarily due to a
$0.9 million reduction in depreciation and amortization expense due to the
elimination of $2.0 million of goodwill amortization expense in 2003 compared
to 2002 (due to the adoption of SFAS No. 142, Goodwill and Other Intangible
Assets, which no longer requires the amortization of goodwill), which was
partially offset by a $1.1 million increase in tooling amortization expenses.
The remaining $0.7 million of operating income improvement was primarily due to
favorable foreign currency exchange rates. Productivity improvements and
improved sales mix were largely offset by price decreases ($0.9 million) and
higher wage and benefit costs in unionized facilities ($0.8 million).

Technologies Segment

Sales in our Technologies Segment increased $6.9 million, or 17.0%, to
$47.4 million in 2003 from $40.5 million in 2002. Excluding sales from our
Precision Products business, which we divested in July 2002, this segments
sales increased $8.1 million, or 20.6%. Sales in the Power Group increased
$9.4 million, or 41.2%, during 2003 compared to 2002, which was partially
offset by a decrease of $1.5 million in our Pharmaceutical Services businesses.
The increase in our Power Group sales is primarily related to new programs,
improved pricing, and increased spending in our defense power business, as well
as a $1.0 million, or 43%, increase in our commercial power sales, as a result
of new initiatives in the commercial market. Decreased sales in our
Pharmaceutical Services business is the result of lower sales to our larger
customers and short-term operational issues. Sales increased $0.2 million in
our Specialty Materials Group due primarily to continued strong demand for
enriched Boron related

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products which increased $2.2 million, or 50.7%, partially offset by the
continued decline of Germanium and the exiting of our Gallium-based products
sold to the telecommunications, fiber optics, and semiconductor markets.

Operating income increased $7.4 million to $8.0 million in 2003 from $0.6
million in 2002. This improved performance resulted primarily from operational
improvements of $5.5 million related to higher sales volumes, productivity
initiatives, improved sales mix and pricing, as well as $1.2 million of lower
legal expenses and settlement charges in 2003 compared to 2002. In addition,
the elimination of $1.9 million of goodwill amortization expense during 2003
compared to 2002 due to our adoption of SFAS No. 142, Goodwill and Other
Intangible Assets, contributed to the improved performance.

Filtration and Minerals Segment

Sales in our Filtration and Minerals Segment decreased $0.3 million, or
1.7%, to $18.9 million in 2003 from $19.2 million in 2002.

Operating results decreased $1.4 million to a loss of $0.1 million in 2003
from income of $1.3 million in 2002. The decreased earnings were due to
severance and recruiting costs of $0.5 million related to restructuring the
segments management team and additional freight costs of $0.8 million largely
related to the resolution of disputed freight claims with a former carrier.

Company Discussion

Net Sales.Net sales increased $7.1 million, or 4.3%, to $170.3 million
in 2003 from $163.2 million in 2002. Excluding the sale in July 2002 of our
Precision Products business included in our Technologies Segment, our net sales
increased $8.3 million, or 5.1%, in 2003 compared to 2002. This increase was
primarily driven by a $9.4 million increase in our Technologies Segments Power
Group due primarily to new programs, improved pricing, and increased spending
in our defense power business, as well as a $1.0 million, or 43%, increase in
our commercial power sales, as a result of new initiatives in the commercial
market, and a $3.1 million increase in our Automotive Segments Wolverine
division due primarily to the penetration of the aftermarket and small engine
markets. These increases were partially offset by reduced sales of $2.6
million in our Automotive Segments Hillsdale division due to the continued
phase out of an automotive transmission pump program and lower sales at our
Hillsdale U.K. Automotive operation, which is in the process of being sold.

Cost of Products Sold (exclusive of depreciation). Our gross margins
increased by $3.7 million from $33.5 million in 2002 to $37.2 million in 2003
as a result of higher volumes, improved sales mix, and productivity
improvements. Our gross margin increased 1.3 points to 21.8% in 2003 from
20.5% in 2002, despite a negative impact of $0.5 million (0.3 points) in
pension costs. The margin rate improvement was primarily a result of
productivity improvements in our Automotive and Technologies Segments.

Selling and Administrative.Selling and administrative expenses increased
$1.1 million, or 7.9%, to $14.6 million in 2003 from $13.5 million in 2002.
The increase is primarily attributable to $0.7 million for increased
compensation costs related to our long-term and annual management bonus plans,
higher insurance costs, wage increases, and increased selling costs due to
higher sales volumes.

Goodwill Amortization.Due to the adoption of SFAS No. 142, Goodwill and
Other Intangible Assets, no goodwill amortization expense was recorded 2003
while 2002 included $3.9 million of goodwill amortization expense. This new
accounting standard required that we cease the amortization of goodwill,
effective December 1, 2002, and complete an annual impairment test to determine
if an impairment charge has occurred. We have completed our initial impairment
test as required by this accounting standard and have determined that our
goodwill was not impaired at the time of we adopted this accounting standard.

Interest Expense.Interest expense was $11.1 million in 2002 and $9.4
million in 2003. Included in interest expense in 2002 are $1.5 million in fees
and other costs, primarily related to our accounts receivable asset-backed
securitization (see Accounts Receivable Asset-Backed Securitization under
Liquidity and Capital Resources). Excluding these $1.5 million in fees and
other costs in 2002, our 2002 interest expense was $9.6 million. This
represents a decrease of 2.1%, or $0.2 million, in 2003 compared to 2002. The
decrease in interest expense is due to lower interest rates and lower debt
levels.

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Income (Loss) Before Taxes. Income (Loss) Before Taxes improved $7.9
million in 2003 to income of $2.1 million in 2003 compared to a loss of $5.8
million in 2002. This improvement is primarily related to:



| | a. |  | $3.7 million of higher gross margin due to increased sales volume and
a 1.3 point gross margin rate improvement for the reasons discussed
above,                                                                   
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | $3.9 million of goodwill amortization expense in 2002 which we are no
longer required to expense with the adoption of SFAS No. 142, Goodwill
and Other Intangible Assets, on December 1, 2002,                     
|
| | c. |  | $1.5 million of additional interest expense in 2002 related to our
accounts receivable asset-backed securitization (see Accounts Receivable
Asset-Backed Securitization under Liquidity and Capital Resources), and
|
| | d. |  | $1.1 million increase in Selling and Administrative expense, as
discussed above.                                                                                                                                   

Income Taxes.Income tax provision was $0.9 million in 2003 compared to
$0.4 million in 2002. The provision in 2003 and 2002 relates to the allocation
of income and loss between the United States and foreign jurisdictions and
represents the estimated tax that will be due in certain jurisdictions where no
tax benefit can be assured from utilizing previous losses. There is no U.S.
Federal or state net tax benefit or provision recorded during 2002 and 2003.

Net Income (Loss).The net income (loss) improved $7.4 million to net
income of $1.2 million in 2003 from a net loss of $6.2 million in 2002. The
improved net income (loss) is the result of the items discussed above.

Preferred stock dividend accretion of $3.9 million in 2003 decreased our
net income of $1.2 million to a net loss applicable to common shareholders of
$2.8 million. In 2002, preferred stock dividend accretion of $3.5 million
increased the net loss of $6.2 million to a net loss applicable to common
shareholders of $9.7 million.

Company Outlook.Projected sales for 2003 are estimated to be in the range
of $670.0 million to $700.0 million compared to $696.8 million in 2002. The
2003 sales range is primarily attributed to the current uncertainty regarding
industry forecasted automotive builds for 2003. Also, the sales estimate for
2003 reflects the anticipated decrease in sales of approximately $15.0 million
related to the phase-out of an automotive transmission pump program in our
Hillsdale Division, as well as our decision to sell our Hillsdale U.K.
Automotive operation, which will have approximately $10.0 million less sales in
2003 compared to 2002.

We are projecting 2003 Operating Income to be in the range of $53.5
million to $57.5 million. This amount includes $45.0 million of depreciation
and amortization of intangibles, and excludes $0.5 million of non-operating
income. These Operating Income estimates also include $3.0 million of expense
related to non-cash provisions for our long-term bonus program, which are added
back to Operating Income for purposes of determining our debt covenant
calculations. In 2002, our Operating Income was $5.3 million, which included
$64.0 million in depreciation and amortization of intangibles expense, and
excluded $1.6 million of non-operating income. This projected improved
Operating Income, despite lower sales, primarily reflects:



| | a. |  | the adoption of SFAS No. 142, Goodwill and Other Intangible
Assets, which eliminated the amortization of goodwill, effective
December 1, 2002 (approximately $16.0 million)                                    
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | a reduction of special charges of approximately $26.0 million
in 2002 related to legal expenses and legal settlements,
divestitures, restructuring expenses and other unusual charges,                         
|
| | c. |  | improved sales mix in our Technologies and Automotive Segments,
and improved pricing in our Technologies Segment,                                                                                              
|
| | d. |  | cost reductions and productivity initiatives across all
businesses,                                                                                                                                            
|
| | e. |  | an approximate $4.8 million increase in our pension expense,
from $3.8 million of income in 2002 (excluding special termination
benefits incurred in 2002) to an estimated $1.0 million of expense in
2003, and
|
| | f. |  | approximately $2.0 million in increased compensation costs
related to our long-term and annual management bonus plans.                                                                                         

On the basis of these projections, we believe we will be in compliance
with all covenants under our various credit facilities during 2003.

Liquidity and Capital Resources

Our cash flows from operations and availability under our credit
facilities are considered adequate to fund our short-term

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capital needs. As of February 28, 2003, we had $43.8 million unused under our
senior credit agreement. However, due to various financial covenant
limitations under our senior credit agreement measured at the end of each
quarter, on February 28, 2003, we could only incur an additional $39.9 million
of indebtedness.

At February 28, 2003, we were in compliance with all our debt covenants.
Also, based on our projections for 2003, we expect to remain in compliance with
all covenants. Our senior secured credit agreement expires in February 2004.
We will need to replace or extend this facility before that date. Although
there are no guarantees this can be accomplished, based on the projections
described in the Company Outlook section under the Results of Operations above
and discussion with potential lenders, we believe we can obtain a new credit
facility sufficient to meet our long-term capital requirements. As described
below under Accounts Receivable Asset-Backed Securitization, our qualifying
special purpose entity, which is an important element of our liquidity and
capital resources will terminate upon the expiration of our senior credit
agreement unless the senior credit agreement is refinanced.

All references herein to years are to the three-months ended February 28
unless otherwise indicated.

Cash Flows

Operating Activities.Net cash used in operating activities during 2003
was $7.6 million compared to net cash provided by operating activities of $50.3
million in 2002, which includes $43.8 million as a result of selling certain of
our receivables to an unconsolidated qualifying special purpose entity, as
discussed below in Accounts Receivable Asset-Backed Securitization. The
remaining difference between 2003 and 2002 operating activities is primarily
the use of cash for our accrued liabilities of $4.7 million in 2003, compared
to a source of cash of $6.3 million in accrued liabilities in 2002. This
change is primarily related to 2003 spending on restructuring and legal
settlement matters which were expensed during 2002. Approximately $8.0 million
of 2002 litigation settlements were paid in the first quarter of 2003.

Investing Activities.Investing activities used $3.6 million in cash
during 2003 compared to providing $1.3 million in 2002. During 2002, $6.3
million was provided by proceeds from the sale of our Construction Equipment
Division, which represented our former Machinery Segment, which was offset by
capital expenditures of $5.1 million in 2002. During 2003, our net cash used
in investing activities was primarily for capital expenditures. We expect our
capital expenditures during 2003 will be approximately $22.0 million to $25.0
million, with the largest increase in our Technologies Segment.

Financing Activities.Financing activities provided $10.3 million during
2003 compared to using $48.7 million during 2002. During 2002, we used $36.1
million to reduce our revolving credit facility, primarily from proceeds
associated with the sale of our receivables to an unconsolidated qualifying
special purpose entity, as discussed below under Accounts Receivable
Asset-Backed Securitization. Both regularly scheduled debt payments and the
proceeds from the sale of CED resulted in a $12.8 million decline in our
long-term debt during 2002. During 2003, we used $14.5 million under our
revolving credit facility to pay off $4.2 million of long-term debt, and to
fund our capital expenditures and reductions in accounts payable and accrued
liabilities.

Accounts Receivable Asset-Backed Securitization (Qualifying Special
Purpose Entity)

During the first quarter of 2002, we entered into an agreement with a
major U.S. financial institution to sell an interest in certain receivables
through an unconsolidated qualifying special purpose entity, EaglePicher
Funding Corporation (EPFC). Initially $47.0 million of proceeds from this
new facility were used primarily to payoff amounts outstanding under our
existing Receivables Loan Agreement with our wholly owned subsidiary,
EaglePicher Acceptance Corporation. This agreement provides for the sale of
certain receivables to EPFC, which in turn sells an interest in a revolving
pool of receivables to the financial institution. EPFC has no recourse against
us for failure of the debtors to pay when due. The agreement provides for the
continuation of the program on a revolving basis until the earlier of a) the
maturity of our senior credit facility, or b) assuming we are able to refinance
our senior credit facility, the fourth quarter of 2004.

We account for the securitization of these sold receivables in accordance
with SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets
and Extinguishment of Liabilitiesa Replacement of FASB Statement No. 125.
Under this guidance, at the time the receivables are sold, the balances are
removed from our financial statements. For purposes of calculating our debt
covenant compliance under our Credit Agreement, we include the debt outstanding
on EPFC.

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In conjunction with the initial transaction during 2002, we sold $82.5
million of receivables to EPFC, and we incurred charges of $1.5 million, which
are included in Interest Expense in the accompanying condensed consolidated
statements of income (loss) for the three-months ended February 28, 2002. We
continue to service sold receivables and receive a monthly servicing fee from
EPFC of approximately 1% per annum of the receivable pools average balance.
As this servicing fee approximates our cost to service, no servicing asset or
liability has been recorded at November 30, 2002 or February 28, 2003. We
retain an interest in a portion of the receivables transferred, representing an
over collateralization on the securitization. Our involvement with both this
over collateralization interest and the transferred receivables is generally
limited to the servicing performed. The carrying value of our interest in the
receivables is carried at fair value, which is estimated as its net realizable
value due to the short duration of the receivables transferred. The net
realizable value considers the collection period and includes an estimated
provision for credit losses and returns and allowances, which is based on our
historical results and probable future losses.

At November 30, 2002, our interest in EPFC, including a service fee
receivable, was $29.4 million and the revolving pool of receivables that we
serviced totaled $77.5 million. At November 30, 2002, the outstanding balance
of the interest sold to the financial institution recorded on EPFCs financial
statements was $46.5 million. At February 28, 2003, our interest in EPFC,
including a service fee receivable, was $29.4 million and the revolving pool of
receivables that we serviced totaled $75.0 million. At February 28, 2003, the
outstanding balance of the interest sold to the financial institution recorded
on EPFCs financial statements was $43.8 million. The effective interest rate
as of February 28, 203 in the securitization was approximately 2.5%.

We believe that EPFC is an important element of our ability to manage our
liquidity, capital resources and credit risk with certain major customers.

Accounts Receivable Asset-Backed Securitization (Qualifying Special
Purpose Entity) Financial Covenants

EPFC has two financial covenants contained in its asset-backed
securitization agreement. They are a minimum fixed charge coverage ratio (the
ratio of total EBITDA (earnings before interest, taxes, depreciation and
amortization) minus capital expenditures to the sum of interest expense,
scheduled payments of principal on debt, cash income taxes, and cash dividends,
all as defined in the agreement), and a minimum EBITDA (as defined in the
agreement) amount. These ratios and amounts are calculated based on the
financial statement amounts of EaglePicher Holdings, Inc. and EPFC, which is
not consolidated in our financial statements as EPFC is an off balance sheet
qualifying special purpose entity.

As of February 28, 2003, we were in compliance with the covenant
calculations described above. Additionally, based on the required
calculations, we could have had $30.6 million less in EBITDA (as calculated
above) minus actual capital expenditures, or $22.5 million more of interest
expense, scheduled payments of principal on debt, cash income taxes, and cash
dividends, and continued to remain in compliance with EPFCs financial
covenants.

In the event that EPFC failed to meet one of the financial covenants
listed above, we would not be required to buy back any receivables from EPFC
that had not been collected; however, we would no longer be able to sell any
future receivables to EPFC. In addition, if EPFC fails to meet one of these
financial covenants, we would be in default under our senior credit facility.
This could have a significant impact on our liquidity and capital resources.
We believe that based on our projected 2003 results, EPFC will remain in
compliance with its financial debt covenants; however, there is no assurance
this will occur.

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Capitalization

Our capitalization, which excludes the debt of our off-balance sheet
qualifying special purpose entity, consisted of the following at (in thousands
of dollars):

|                                                          |                                                  |   |              |         |              |   |         |         | 
|--------------------------------------------------------- | ------------------------------------------------ | - | ------------ | ------- | ------------ | - | ------- | ------- | 
|                                                          |                                                  |   | November 30, |         | February 28,
|                                                          |                                                  |   | 2002         |         | 2003        
|                                                          |                                                  |   |              |         |             
|Credit Agreement:                                         |                                                  |   |              |         |              |   |         |        
|                                                          | Revolving credit
facility, due February 27,
2004 |   | $            | 121,500 |              |   | $       | 136,000 | 
|                                                          | Term loan, due
2003                              |   |              | 16,925  |              |   |         | 12,693  | 
|Senior Subordinated Notes, 9.375%
interest, due 2008      |                                                  |   | 220,000      |         |              |   | 220,000 |        
|Industrial Revenue Bonds, 1.8% to
2.2% interest, due 2005 |                                                  |   | 15,300       |         |              |   | 15,300  |        
|                                                          |                                                  |   |              |         |              |   |         |        
|                                                          |                                                  |   | 373,725      |         |              |   | 383,993 |        
|Preferred Stock                                           |                                                  |   | 137,973      |         |              |   | 141,910 |        
|Shareholders Deficit                                     |                                                  |   | (87,578      | )       |              |   | (88,790 | )      
|                                                          |                                                  |   |              |         |              |   |         |        
|                                                          |                                                  | $ | 424,120      |         |              | $ | 437,113 |        
|                                                          |                                                  |   |              |         |              |   |         |        

Credit Agreement.We have a syndicated senior secured loan facility
(Credit Agreement) providing an original term loan (Term Loan) of $75.0
million, as amended, and a $220.0 million revolving credit facility
(Facility). The Facility and the Term Loan bear interest, at our option, at
LIBOR rate plus 2.75%, or the banks prime rate plus 1.5%. Interest is
generally payable quarterly on the Facility and Term Loan. We have entered
into interest rate swap agreements to manage our variable interest rate
exposure.

At February 28, 2003, we had $40.2 million in outstanding letters of
credit under the Facility, which together with borrowings of $136.0 million,
made our available borrowing capacity $43.8 million. However, due to various
financial covenant limitations under the Credit Agreement, we could only incur
an additional $39.9 million of indebtedness at February 28, 2003. The Credit
Agreement also contains certain fees. There are fees for letters of credit
equal to 2.75% per annum for all issued letters of credit, and there is a
commitment fee on the Facility equal to 0.5% per annum of the unused portion of
the Facility. If we meet or fail to meet certain financial benchmarks, the
interest rate spreads on the borrowing, the commitment fees and the fees for
letters of credit may be reduced or increased.

The Credit Agreement is secured by our capital stock, the capital stock of
our domestic United States subsidiaries, a certain portion of the capital stock
of our foreign subsidiaries, and substantially all other property of our United
States subsidiaries. Additionally, the Credit Agreement is guaranteed by us
and certain of our subsidiaries.

The Credit Agreement contains covenants that restrict our ability to
declare dividends or redeem capital stock, incur additional debt or liens,
alter existing debt agreements, make loans or investments, form joint ventures,
undergo a change in control or engage in mergers, acquisitions or asset sales.
These covenants also limit the annual amount of capital expenditures and
require us to meet certain minimum financial ratios. For purposes of
calculating our debt compliance under our Credit Agreement, we include the debt
outstanding on EPFC, our off-balance sheet qualifying special purpose entity.
See Accounts Receivable Asset-Backed Securitization above for a detailed
discussion of EPFC. Also, see Credit Agreement Financial Covenants below for a
summary of the debt covenant requirements. We were in compliance with all
covenants at February 28, 2003.

Senior Subordinated Notes.Our Senior Subordinated Notes, due in 2008,
require semi-annual interest payments on September 1 and March 1. The Senior
Subordinated Notes, which are unsecured, are redeemable at our option, in whole
or in part, any time after February 28, 2003 at set redemption prices. We are
required to offer to purchase the Senior Subordinated Notes at a set redemption
price should there be a change in control. The Senior Subordinated Notes
contain covenants which restrict or limit our ability to declare or pay
dividends, incur additional debt or liens, issue stock, engage in affiliate
transactions, undergo a change in control or sell assets. We are in compliance
with these covenants at February 28, 2003. The Senior Subordinated Notes are
guaranteed by us and certain of our subsidiaries.

Industrial Revenue Bonds.Our industrial revenue bonds require monthly
interest payments at variable interest rates based on the market for similar
issues and are secured by letters of credit issued under the Facility described
above.

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Preferred Stock.Our preferred stock increased $3.9 million during 2003
as a result of mandatory dividend accretion. Commencing March 1, 2003,
dividends on our Cumulative Redeemable Exchangeable Preferred Stock became cash
payable at 11.75% per annum; the first semiannual dividend payment of $8.3
million is due September 1, 2003. If we do not pay cash dividends on the
preferred stock, then holders of the preferred stock become entitled to elect a
majority of our Board of Directors. Dakruiter S.A., a company controlled by
Granaria Holdings B.V., our controlling common shareholder, holds a majority of
our preferred stock, and therefore Granaria Holdings B.V. would continue to be
able to elect our entire Board of Directors.

Granaria Holdings B.V. and certain executive officers have agreed to buy
the 69,500 shares of our Common Stock held in our Treasury for $13.00 per
share, or a total price of $0.9 million. This transaction is expected to be
completed in the second quarter of 2003. In addition, Granaria Holdings B.V.
and certain executive officers have agreed to purchase for $13.00 per share any
future common stock re-purchases by us.

Shareholders Deficit.Our shareholders deficit increased in 2003
primarily due to the required accretion of our preferred stock discussed above,
which was partially offset by our comprehensive income of $2.7 million.

Credit Agreement Financial Covenants

There are three financial covenants contained in our senior secured credit
agreement. They are a leverage ratio (the ratio of total debt less cash on the
balance sheet to EBITDA, as defined in the agreement), an interest coverage
ratio (the ratio of EBITDA, as defined in the agreement, to interest expense)
and a fixed charge coverage ratio (the ratio of EBITDA, as defined in the
agreement, to the sum of interest expense plus required principal payments plus
cash dividends paid plus income taxes paid). For purposes of determining
outstanding debt under our Credit Agreement, we include the debt outstanding on
EPFC, our off-balance sheet qualifying special purpose entity. See Accounts
Receivable Asset-Backed Securitization above for a detailed discussion of EPFC.

As of February 28, 2003, we were in compliance with the covenant
calculations described above. Additionally, for purposes of the leverage ratio
defined above, we could have had $15.2 million less in EBITDA, or $72.2 million
more in total debt less cash on the balance sheet and continued to remain in
compliance with the Credit Agreements financial covenants.

As discussed above under Accounts Receivable Asset-Backed Securitization
(Qualifying Special Purpose Entity) Financial Covenants, as of February 28,
2003, we were in compliance with the covenants in our securitization
Additionally, based on the required calculations of the securitization, we
could have had $30.6 million less in EBITDA (as calculated above in accordance
with the securitization) minus actual capital expenditures, or $22.5 million
more of interest expense, scheduled payments of principal on debt, cash income
taxes, and cash dividends, and continued to remain in compliance with the
securitizations financial covenants.

The following table presents the required ratios and the actual ratios.

|                  |          |  |                 |      |                 |  |                 |      |              |  |         |      | 
|----------------- | -------- |  | --------------- | ---- | --------------- |  | --------------- | ---- | ------------ |  | ------- | ---- | 
|                  |          |  |                 |      |                 |  |                 |      |              |  | Minimum
|                  |          |  |                 |      |                 |  | Minimum         |      | Fixed Charge
|                  |          |  | Maximum         |      | Interest        |  | Coverage       
|                  |          |  | Leverage Ratio  |      | Coverage Ratio  |  | Ratio          
|                  |          |  | (not more than) |      | (not less than) |  | (not less than)
|                  |          |  |                 |      |                 |  |                
|November 30, 2002 |          |  |                 |      |                 |  |                 |      |              |  |         |     
|                  | Required |  |                 | 4.75 |                 |  |                 | 2.00 |              |  |         | 1.25 | 
|                  | Actual   |  |                 | 4.02 |                 |  |                 | 2.63 |              |  |         | 1.65 | 
|February 28, 2003 |          |  |                 |      |                 |  |                 |      |              |  |         |     
|                  | Required |  |                 | 4.75 |                 |  |                 | 2.25 |              |  |         | 1.35 | 
|                  | Actual   |  |                 | 4.02 |                 |  |                 | 2.75 |              |  |         | 1.74 | 
|May 31, 2003      |          |  |                 |      |                 |  |                 |      |              |  |         |     
|                  | Required |  |                 | 4.50 |                 |  |                 | 2.25 |              |  |         | 1.35 | 
|August 31, 2003   |          |  |                 |      |                 |  |                 |      |              |  |         |     
|                  | Required |  |                 | 4.25 |                 |  |                 | 2.25 |              |  |         | 1.40 | 
|November 30, 2003 |          |  |                 |      |                 |  |                 |      |              |  |         |     
|                  | Required |  |                 | 4.25 |                 |  |                 | 2.50 |              |  |         | 1.40 | 

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Based on our projections for 2003, which are described under the Company
Outlook section under the Results of Operations above, we expect to remain in
compliance with all covenants. However, any adverse changes in actual results
from projections, along with the contractual tightening of the covenants under
the Credit Agreement, would place us at risk of not being able to comply with
all of the covenants of the Credit Agreement. In the event we cannot comply
with the terms of the Credit Agreement as currently written, it would be
necessary for us to obtain a waiver or renegotiate our loan covenants, and
there can be no assurance that such negotiations will be successful. In
addition, EPFC would be in default under our accounts receivable asset-backed
securitization, described above, and we would need to obtain a waiver. Any
agreements to amend the covenants and/or obtain waivers would likely require us
to pay a fee and increase the interest rate payable under the Credit Agreement.
The amount of such fee and increase in interest rate would be determined in
the negotiations of the amendment.

Contractual Obligations and Other Commercial Commitments

We have included a summary of our Contractual Obligations and Other
Commercial Commitments in our annual report on Form 10-K for the year ended
November 30, 2002, filed on March 3, 2003. There have been no material changes
to the summary provided in that report.

Earnings to Fixed Charges and Preferred Stock Dividends

During 2003, our earnings were insufficient to cover fixed charges and
preferred stock dividends by $1.9 million, and in 2002, our earnings were
insufficient to cover fixed charges and preferred stock dividends by $9.3
million. This improvement is primarily related to our improved operating
performance, and our adoption of SFAS No. 142 on December 1, 2002, which no
longer requires us to recognize goodwill amortization expense.

Recently Released or Adopted Accounting Standards

In June 2001, the FASB issued SFAS No. 142, Goodwill and Intangible
Assets and effective December 1, 2002, we adopted this standard. This
standard addresses goodwill and other intangible assets that have indefinite
useful lives and, as such, prescribes that these assets will not be amortized,
but rather tested, at least annually, for impairment. This standard also
provides specific guidance on performing the annual impairment test for
goodwill and intangibles with indefinite lives. Under this new accounting
standard, we no longer amortize our goodwill and are required to complete an
annual impairment test. We have had approximately $16.0 million of goodwill
amortization per year that is no longer recognized as expense. We have
determined that we have six reporting units, as defined in SFAS No. 142, within
our three reportable business segments. We have completed our initial
impairment test as of December 1, 2002 and determined that no impairment charge
exists.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations, which requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized as part of the carrying amount of the
long-lived assets and depreciated over their estimated useful life while the
liability is accreted to its expected obligation amount upon retirement. We
adopted SFAS No. 143 on December 1, 2002. The adoption did not have a material
impact on our financial condition or results of operations.

In September 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which superceded SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed of. The primary difference is that goodwill and certain
intangibles with indefinite lives have been removed from the scope of SFAS No.
144, as they are covered by SFAS No. 142, as described above. It also broadens
the presentation of discontinued operations to include a component of an entity
rather than a segment of a business. A component of an entity comprises
operations and cash flows that can clearly be distinguished operationally and
for financial accounting purposes from the rest of the entity. We adopted SFAS
No. 144 on December 1, 2002. The adoption did not have a material impact on
our financial condition or results of operations.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or disposal Activities, which is effective for exit or
disposal activities initiated after December 31, 2002. SFAS No. 146 addresses
financial accounting and reporting for costs associated with exit or disposal
activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3,
Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring). The adoption of this statement did not have a material impact
on our financial condition or results of

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operations.

In November 2002, the FASB issued Interpretation No. 45 (FIN 45)
Guarantors Accounting and Disclosure requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. FIN 45 elaborates on the
existing disclosure requirements for most guarantees, including loan
guarantees. It also clarifies that at the time a company issues a guarantee,
the company must recognize an initial liability for the fair value, or market
value, of the obligations it assumes under that guarantee. However, the
provisions related to recognizing a liability at inception of the guarantee for
the fair value of the guarantors obligations does not apply to product
warranties or to guarantees accounted for as derivatives. The initial
recognition and initial measurement provisions apply on a prospective basis to
guarantees issued or modified after December 31, 2002. The disclosure
requirements of FIN 45 are effective for financial statements of interim or
annual periods ending after December 15, 2002. FIN 45 does not affect the
accounting for guarantees issued prior to the effective date, unless the
guarantee is modified subsequent to December 31, 2002. We adopted the
disclosure requirements on December 1, 2002, and the initial recognition and
measurement provisions in our February 28, 2003 financial statements. The
adoption of FIN 45 did not have a material impact on our financial condition or
results of operations.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46)
Consolidation of Variable Interest Entities. Until this interpretation, a
company generally included another entity in its consolidated financial
statements only if it controlled the entity through voting interests. FIN 46
requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entitys activities or entitled to receive a majority of the entitys residual
returns. FIN 46 applies to variable interest entities created after January 31,
2003, and to variable interest entities in which an enterprise obtains an
interest in after that date. A public entity with a variable interest in a
variable interest entity created before February 1, 2003, shall apply the
provisions of this interpretation (other than the transition disclosure
provisions in paragraph 26) to that entity no later than the beginning of the
first interim or annual reporting period beginning after June 15, 2003. The
related disclosure requirements are effective immediately. The impact of this
interpretation is not expected to have a material impact on our financial
condition or results of operations.

In November 2002, the EITF issued EITF 00-21, Revenue Arrangements with
Multiple Deliverables. EITF 00-21 prescribes a method to account for
contracts that have multiple elements or deliverables. It provides guidance on
how to allocate the value of a contract to its different deliverables, as well
as guidance on when to recognize revenue allocated to each deliverable over its
performance period. We are required to adopt EITF 00-21 on December 1, 2003.
We are evaluating the impact EITF 00-21 will have on us, but do not expect it
to have a material impact on our financial condition or results of operations.

Forward Looking Statements

This report contains statements which, to the extent that they are not
statements of historical fact, constitute forward looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, Section
21E of the Securities Exchange Act of 1934. The words estimate,
anticipate, project, intend, believe, expect, and similar expressions
are intended to identify forward-looking statements. Forward looking
statements in this report include, but are not limited to, any statements under
the Company Outlook heading. Such forward-looking information involves risks
and uncertainties that could cause actual results to differ materially from
those expressed in any such forward-looking statements. These risks and
uncertainties include, but are not limited to, our ability to maintain existing
relationships with customers, demand for our products, our ability to
successfully implement productivity improvements and/or cost reduction
initiatives, our ability to develop, market and sell new products, our ability
to obtain raw materials, increased government regulation or changing regulatory
policies resulting in conditions, acquisitions and divestitures, technological
developments and changes in the competitive environment in which we operate.
Persons reading this report are cautioned that such forward-looking statements
are only predictions and that actual events or results may differ materially.




Item 3.  Quantitative and Qualitative Disclosures About Market Risk

We have included a summary of our Quantitative and Qualitative Disclosure
About Market Risk in our annual report on Form 10-K for the year ended November
30, 2002, filed on March 3, 2003. There have been no material changes to the
summary provided in that report.

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Item 4.  Controls and Procedures

Our management, including our Chief Executive Officer and our Chief
Financial Officer, conducted an evaluation of our disclosure controls and
procedures within 90 days of the filing of this report as required by the rules
of the Securities and Exchange Commission. Based on that evaluation, our Chief
Executive Officer and our Chief Financial Officer have concluded that our
disclosure controls and procedures are effective in ensuring that all material
information required to be filed in this report has been made known to them in
a timely manner. There have been no significant changes in our internal
controls or in other factors that could significantly affect these controls
subsequent to the date our Chief Executive Officer and our Chief Financial
Officer completed their evaluation.




PART II. OTHER INFORMATION




Item 1.  Legal Proceedings

Please refer to Note G regarding Legal Matters contained in Part I, Item 1
of this report, which is incorporated by reference in this Part II, as its Item
1.




Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits:

| |       |   |  |                                                                                                                              
| | ----- | - |  | -----------------------------------------------------------------------------------------------------------------------------
| | 10.66 |  |  | EaglePicher Incorporated (formerly Eagle-Picher Industries, Inc.)2002 Long-term Bonus Program                                
| |       |   |  |                                                                                                                              
| | 10.67 |  |  | Amended and Restated Executive Employment Agreement dated December 1, 2002 between EaglePicher Incorporated and John W. Weber
| |       |   |  |                                                                                                                              
| | 12.1  |  |  | Ratios of Earnings to Fixed Charges and Preferred Stock Dividends                                                            

(b)  Reports on Form 8-K



| |  |  | Form 8-K, filed January 16, 2003, concerning our press release dated January 16, 2003
| | - |  | -------------------------------------------------------------------------------------
|
| |  |  | Form 8-K, filed January 31, 2003, concerning our press release dated January 31, 2003
|
| |  |  | Form 8-K, filed March 4, 2003, concerning our press release dated March 3, 2003      

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SIGNATURES

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

| |  |                                                                                                    
| |  | ---------------------------------------------------------------------------------------------------
| |  | EAGLEPICHER HOLDINGS, INC.                                                                         
| |  |                                                                                                    
| |  | /s/ Thomas R. Pilholski                                                                            
| |  |                                                                                                    
| |  | Thomas R. Pilholski
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

DATE:  April 14, 2003

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SIGNATURES

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

| |  |                                                                                                    
| |  | ---------------------------------------------------------------------------------------------------
| |  | EAGLEPICHER INCORPORATED                                                                           
| |  |                                                                                                    
| |  | /s/ Thomas R. Pilholski                                                                            
| |  |                                                                                                    
| |  | Thomas R. Pilholski
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

DATE:   April 14, 2003

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SIGNATURES

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

| |  |                                                                 
| |  | ----------------------------------------------------------------
| |  | DAISY PARTS, INC.                                               
| |  |                                                                 
| |  | /s/ Thomas R. Pilholski                                         
| |  |                                                                 
| |  | Thomas R. Pilholski
Vice President
(Principal Financial Officer)

DATE:   April 14, 2003

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SIGNATURES

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

| |  |                                                                 
| |  | ----------------------------------------------------------------
| |  | EAGLEPICHER DEVELOPMENT CO., INC.                               
| |  |                                                                 
| |  | /s/ Thomas R. Pilholski                                         
| |  |                                                                 
| |  | Thomas R. Pilholski
Vice President
(Principal Financial Officer)

DATE: April 14, 2003

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SIGNATURES

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

| |  |                                                                 
| |  | ----------------------------------------------------------------
| |  | EAGLEPICHER FAR EAST, INC.                                      
| |  |                                                                 
| |  | /s/ Thomas R. Pilholski                                         
| |  |                                                                 
| |  | Thomas R. Pilholski
Vice President
(Principal Financial Officer)

DATE: April 14, 2003

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SIGNATURES

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

| |  |                                                                 
| |  | ----------------------------------------------------------------
| |  | EAGLEPICHER FILTRATION AND MINERALS, INC.                       
| |  |                                                                 
| |  | /s/ Thomas R. Pilholski                                         
| |  |                                                                 
| |  | Thomas R. Pilholski
Vice President
(Principal Financial Officer)

DATE: April 14, 2003

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SIGNATURES

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

| |  |                                                                                           
| |  | ------------------------------------------------------------------------------------------
| |  | EAGLEPICHER TECHNOLOGIES, LLC                                                             
| |  |                                                                                           
| |  | /s/ Bradley J. Waters                                                                     
| |  |                                                                                           
| |  | Bradley J. Waters
Vice President and Chief Financial Officer
(Principal Financial Officer)

DATE April 14, 2003

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SIGNATURES

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

| |  |                                                                 
| |  | ----------------------------------------------------------------
| |  | HILLSDALE TOOL & MANUFACTURING CO.                              
| |  |                                                                 
| |  | /s/ Thomas R. Pilholski                                         
| |  |                                                                 
| |  | Thomas R. Pilholski
Vice President
(Principal Financial Officer)

DATE: April 14, 2003

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SIGNATURES

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

| |  |                                                                 
| |  | ----------------------------------------------------------------
| |  | EPMR CORPORATION                                                
| |  |                                                                 
| |  | /s/ Thomas R. Pilholski                                         
| |  |                                                                 
| |  | Thomas R. Pilholski
Vice President
(Principal Financial Officer)

DATE: April 14, 2003

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CERTIFICATIONS

I, John H. Weber, President and Chief Executive Officer, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of EaglePicher Holdings,
Inc. , EaglePicher Incorporated, Daisy Parts, Inc., EaglePicher Development
Co., Inc., EaglePicher Far East, Inc., EaglePicher Filtration and Minerals,
Inc., EaglePicher Technologies, LLC, Hillsdale Tool & Manufacturing Co. and
EPMR Corporation;

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
|
| | b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):



| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
|
| | b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                                                     |  |                     
|---------------------------------------------------- |  | --------------------
|/s/ JOHN H. WEBER                                    |  | Date: April 14, 2003
|                                                     |  |                     
|John H. Weber, President and Chief Executive Officer |  |                     





---



##### Table of Contents



I, Thomas R. Pilholski, Senior Vice President and Chief Financial Officer,
certify that:

1.     I have reviewed this quarterly report on Form 10-Q of EaglePicher Holdings,
Inc. , EaglePicher Incorporated, Daisy Parts, Inc., EaglePicher Development
Co., Inc., EaglePicher Far East, Inc., EaglePicher Filtration and Minerals,
Inc., EaglePicher Technologies, LLC, Hillsdale Tool & Manufacturing Co. and
EPMR Corporation;

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report is
being prepared;
|
| | b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):



| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
|
| | b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                                                                                  |  |                     
|--------------------------------------------------------------------------------- |  | --------------------
|/s/ THOMAS R. PILHOLSKI                                                           |  | Date: April 14, 2003
|                                                                                  |  |                     
|Thomas R. Pilholski, Senior Vice President
           and Chief Financial Officer |  |                     





---



##### Table of Contents






EXHIBIT INDEX

|        |  |   |  |                                                                                                                              
|------- |  | - |  | -----------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |   |  |                                                                                                                              
|Number  |  |   |  |                                                                                                                              
|        |  |   |  |                                                                                                                              
|10.66   |  |  |  | EaglePicher Incorporated (formerly Eagle-Picher Industries, Inc.)
2002 Long-term Bonus Program                               
|        |  |   |  |                                                                                                                              
|10.67   |  |  |  | Amended and Restated Executive Employment Agreement dated
December 1, 2002 between EaglePicher Incorporated and John W. Weber
|        |  |   |  |                                                                                                                              
|12.1    |  |  |  | Ratios of Earnings to Fixed Charges and Preferred Stock Dividends