<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549


                                    FORM 10-Q


                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarter ended August 31, 1999        Commission file number 333-49957-01
                                                                   -------------



                         EAGLE-PICHER HOLDINGS, INC.
--------------------------------------------------------------------------------
            (Exact name of registrant as specified in its charter)



           DELAWARE                                    13-3989553
---------------------------------      -----------------------------------------
  (State or other jurisdiction of         (I.R.S. Employer Identification No.)
   incorporation or organization)


         250 East Fifth Street, Suite 500, Cincinnati, Ohio    45202
--------------------------------------------------------------------------------
         (Address of principal executive offices)             Zip Code


Registrant's telephone number, including area code       513-721-7010
                                                  ---------------------------


                               (Not Applicable)
--------------------------------------------------------------------------------
              Former name, former address and former fiscal year,
                         if changed since last report


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X  No
                                      ---   ---

Indicate by check mark whether the additional registrant, Eagle-Picher
Industries, Inc., has filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. Yes X  No
                                                                 ---   ---

625,001 shares of Class A common capital stock, $.01 par value each, were
outstanding at September 24, 1999.

374,999 shares of Class B common capital stock, $.01 par value each, were
outstanding at September 24, 1999.









                                       1
<PAGE>   2


                         TABLE OF ADDITIONAL REGISTRANTS



<TABLE>
<CAPTION>
                                        Jurisdiction of                                  IRS Employer
                                       Incorporation or        Commission File          Identification
         Name                            Organization              Number                   Number
         ----                            ------------              ------                   ------
<S>                                    <C>                     <C>                      <C>

Eagle-Picher Industries, Inc.               Ohio                333-49957                 31-0268670
Daisy Parts, Inc.                           Michigan            333-49957-02              38-1406772
Eagle-Picher Development Co., Inc.          Delaware            333-49957-03              31-1215706
Eagle-Picher Far East, Inc.                 Delaware            333-49957-04              31-1235685
Eagle-Picher Fluid Systems, Inc.            Michigan            333-49957-05              31-1452637
Eagle-Picher Minerals, Inc.                 Nevada              333-49957-06              31-1188662
Eagle-Picher Technologies, LLC              Delaware            333-49957-09              31-1587660
Hillsdale Tool & Manufacturing Co.          Michigan            333-49957-07              38-0946293
Michigan Automotive Research Corp.          Michigan            333-49957-08              38-2185909
</TABLE>



                                       2
<PAGE>   3


                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                                      Page
                                                                     Number
                                                                     ------
<S>  <C>                                                             <C>
                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements............................................ 4

     Condensed Consolidated Statements of Income (Loss)(Unaudited)....... 4
     Condensed Consolidated Balance Sheets (Unaudited)................... 5
     Condensed Consolidated Statements of Cash Flows (Unaudited)......... 7
     Notes to Condensed Consolidated Financial Statements (Unaudited).... 9

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations.......................................23

Item 3.  Quantitative and Qualitative Disclosures About Market Risk......31


                           PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K................................32

Signatures...............................................................33

Exhibit Index............................................................43
</TABLE>





                                       3
<PAGE>   4


                          PART I. FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS.


                           EAGLE-PICHER HOLDINGS, INC.
          CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)(UNAUDITED)
                (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                         Three Months Ended        Nine Months     Six Months    Three Months
                                              August 31               Ended          Ended          Ended
                                      ------------------------      August 31      August 31     February 28
                                         1999          1998           1999           1998           1998
                                      ---------      ---------      ---------      ---------      ---------

                                                                                                 Predecessor

<S>                                   <C>            <C>            <C>            <C>            <C>
Net Sales                             $ 231,308      $ 206,356      $ 675,569      $ 426,277      $ 205,842
                                      ---------      ---------      ---------      ---------      ---------

Operating Costs and Expenses:
Cost of Products sold (exclusive
  of depreciation)                      185,283        163,518        534,786        333,093        162,796
Selling and administrative               17,874         18,042         55,859         38,329         17,141
Management compensation - special            --          4,395             --         21,716          2,056
Depreciation                             11,836          9,644         33,901         19,417          8,983
Amortization of intangibles               4,413          4,244         12,828          8,741          3,839
Loss (gain) on sales of assets              148             --            137             --             --
                                      ---------      ---------      ---------      ---------      ---------
                                        219,554        199,843        637,511        421,296        194,815
                                      ---------      ---------      ---------      ---------      ---------

Operating Income                         11,754          6,513         38,058          4,981         11,027

Interest expense                        (14,137)       (12,132)       (37,586)       (24,686)        (6,940)
Other income                                659            681            985          1,007            820
                                      ---------      ---------      ---------      ---------      ---------

Income (Loss) Before Taxes               (1,724)        (4,938)         1,457        (18,698)         4,907

Income Taxes (Benefit)                      350         (1,135)         2,300         (5,596)         4,100
                                      ---------      ---------      ---------      ---------      ---------

Net Income (Loss)                     $  (2,074)     $  (3,803)     $    (843)     $ (13,102)     $     807
                                      =========      =========      =========      =========      =========

Income (Loss) Applicable to
  Common Shareholders                 $  (4,714)     $  (6,338)     $  (8,617)     $ (17,990)     $     807
                                      =========      =========      =========      =========      =========

Income (Loss) per Common Share        $   (4.71)     $   (6.34)     $   (8.62)     $  (17.99)     $     .08
                                      =========      =========      =========      =========      =========

Comprehensive Loss                    $  (1,561)     $  (4,329)     $  (3,035)     $ (12,975)     $  (1,002)
                                      =========      =========      =========      =========      =========
</TABLE>

See accompanying notes to the condensed consolidated financial statements.




                                       4
<PAGE>   5


                          EAGLE-PICHER HOLDINGS, INC.
                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                   August 31    November 30
ASSETS                                                1999         1998
                                                    --------     --------
<S>                                                <C>          <C>
CURRENT ASSETS
  Cash and cash equivalents                         $  4,957     $ 13,681
  Receivables, less allowances                       142,061      144,844
  Inventories:
    Raw materials and supplies                        60,520       52,384
    Work in process                                   29,018       20,641
    Finished goods                                    16,943       15,848
                                                    --------     --------
                                                     106,481       88,873
  Prepaid expenses                                     9,649        8,338
  Deferred income taxes                               12,129       10,851
                                                    --------     --------

        Total current assets                         275,277      266,587
                                                    --------     --------

PROPERTY, PLANT AND EQUIPMENT                        351,775      279,061
  Less accumulated depreciation                       62,301       30,524
                                                    --------     --------
        Net property, plant and equipment            289,474      248,537
                                                    --------     --------


EXCESS OF ACQUIRED NET ASSETS OVER COST, net of
 accumulated amortization of $25,128 and
 $12,300, respectively                               239,230      228,910
                                                    --------     --------


OTHER ASSETS                                          76,855       72,293
                                                    --------     --------

        Total Assets                                $880,836     $816,327
                                                    ========     ========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                  $ 59,328     $ 50,307
  Long-term debt - current portion                    22,125       25,173
  Income taxes                                         2,919        6,282
  Other current liabilities                           77,673       74,260
                                                    --------     --------
        Total current liabilities                    162,045      156,022

LONG-TERM DEBT - less current portion                518,197      459,183

DEFERRED INCOME TAXES                                 10,404        8,304

OTHER LONG-TERM LIABILITIES                           25,244       24,819
                                                    --------     --------

        Total Liabilities                            715,890      648,328
                                                    --------     --------

11-3/4% CUMULATIVE REDEEMABLE EXCHANGEABLE
 PREFERRED STOCK; authorized 50,000 shares;
 issued and outstanding 14,191 shares                 95,161       87,387
                                                    --------     --------
</TABLE>




                                       5
<PAGE>   6


                          EAGLE-PICHER HOLDINGS, INC.
                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                             (Dollars in thousands)


<TABLE>
<CAPTION>
                                                       August 31     November 30
                                                         1999            1998
                                                       ---------      ---------
<S>                                                    <C>           <C>
SHAREHOLDERS' EQUITY
  Class A Common stock, authorized 625,001 shares,
    $.01 par value each; issued and outstanding
    625,001 shares                                             6              6

  Class B Common stock, authorized 374,999 shares,
    $.01 par value each; issued and outstanding
    374,999 shares                                             4              4

  Additional paid-in capital                              99,991         99,991
  Deficit                                                (30,363)       (21,746)
  Other comprehensive income                                 147          2,357
                                                       ---------      ---------


        Total Shareholders' Equity                        69,785         80,612
                                                       ---------      ---------


        Total Liabilities and Shareholders' Equity     $ 880,836      $ 816,327
                                                       =========      =========
</TABLE>


See accompanying notes to the condensed consolidated financial statements.








                                       6
<PAGE>   7


                           EAGLE-PICHER HOLDINGS, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                       Nine Months        Six Months         Three Months
                                                         Ended               Ended              Ended
                                                        August 31          August 31          February 28
                                                          1999                1998               1998
                                                        ---------           --------           ---------

                                                                                              Predecessor

<S>                                                    <C>                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                    $    (843)          $(13,102)          $     807
   Adjustments to reconcile net income (loss)
      to net cash provided by (used in)
      operating activities:
         Depreciation and amortization                     48,851             29,522              12,822
         Proceeds from insurance settlement                    --             13,659                  --
         Changes in assets and liabilities,
          net of effect of acquisitions and
          divestitures:
            Receivables                                     7,701             15,848              (3,681)
            Inventories                                   (12,587)             4,435              (2,235)
            Accounts payable                               (5,677)            (6,837)             (2,787)
            Accrued liabilities                             1,516             25,205              (5,488)
            Other                                          (4,026)            (4,784)             (8,521)
                                                        ---------           --------           ---------


              Net cash provided by (used in)
              operating activities                         34,935             63,946              (9,083)
                                                        ---------           --------           ---------


CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from sale of division                          12,400                 --                  --
   Acquisition                                            (60,209)                --                  --
   Capital expenditures                                   (39,860)           (16,053)             (5,692)
   Other                                                      517                 94              (1,042)
                                                        ---------           --------           ---------
               Net cash used in
               investing activities                       (87,152)           (15,959)             (6,734)
                                                        ---------           --------           ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Issuance of long-term debt                                  --                 --             445,000
   Reduction of long-term debt                           (136,522)            (2,580)           (250,000)
   Net borrowings (repayments) under revolving
     credit agreements                                    180,285            (43,253)             78,740
   Redemption of common stock                                  --                 --            (446,638)
   Issuance of common stock                                    --                 --             100,001
   Issuance of preferred stock                                 --                 --              80,005
   Debt issuance cost                                         (54)                --             (26,062)
   Other                                                     (216)               (23)                 --
                                                        ---------           --------           ---------
              Net cash provided by (used in)
              financing activities                         43,493            (45,856)            (18,954)
                                                        ---------           --------           ---------
</TABLE>





                                       7
<PAGE>   8


                          EAGLE-PICHER HOLDINGS, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (Dollars in thousands)


<TABLE>
<CAPTION>
                                                       Nine Months       Six Months       Three Months
                                                         Ended              Ended            Ended
                                                        August 31         August 31        February 28
                                                          1999               1998             1998
                                                        --------           -------          --------

                                                                                           Predecessor

<S>                                                     <C>               <C>             <C>
Net increase (decrease) in cash and
 cash equivalents                                         (8,724)            2,131           (34,771)

Cash and cash equivalents, beginning of period            13,681            18,968            53,739
                                                        --------           -------          --------
Cash and cash equivalents, end of period                $  4,957           $21,099          $ 18,968
                                                        ========           =======          ========
</TABLE>




<TABLE>
<CAPTION>
Supplemental cash flow information:                      1999                1998
                                                         ----                ----
<S>                                                    <C>                 <C>
  Cash paid during the nine months ended August 31:
     Interest paid                                     $29,527             $19,060
     Income taxes paid, net                            $10,122             $ 4,446

  Cash paid during the three months ended August 31:
     Interest paid                                     $ 7,968             $ 6,250
     Income taxes paid, net                            $ 2,124             $ 4,141
</TABLE>


See accompanying notes to the condensed consolidated financial statements.




                                       8
<PAGE>   9


                          EAGLE-PICHER HOLDINGS, INC.
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

A. BASIS OF REPORTING FOR INTERIM FINANCIAL STATEMENTS

      The unaudited financial statements included herein 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 generally accepted accounting
principles have been omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
presented not misleading. These financial statements should be read in
conjunction with the financial statements and notes thereto included for the
fiscal year ended November 30, 1998 presented in the Company's Form 10-K/A filed
with the SEC on June 28, 1999.

      The financial statements presented herein reflect all adjustments
(consisting of normal and recurring accruals) which, in the opinion of
management, are necessary to fairly state the results of operations for the nine
months ended August 31, 1999, the six months ended August 31, 1998 and the three
months ended August 31, 1999 and 1998, and February 28, 1998. (See Note B.)
Results of operations for interim periods are not necessarily indicative of
results to be expected for an entire year. Certain prior year amounts have been
reclassified to conform with current year financial statement presentation.

      Effective December 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income," which
establishes standards for reporting comprehensive income and its components.


B. ACQUISITION OF THE COMPANY

      On February 24, 1998 ("Closing Date"), Eagle-Picher Industries, Inc.
("Subsidiary") was acquired by a subsidiary of Granaria Industries BV,
Eagle-Picher Holdings, Inc. ("Company"), from the Eagle-Picher Industries, Inc.
Personal Injury Settlement Trust ("Trust") (the "Acquisition"). The Trust was
established pursuant to the Subsidiary's Plan of Reorganization upon its
emergence from bankruptcy in November 1996. The Company's results of operations
and cash flows approximate those of the Subsidiary, the operating entity.
References will be to the Company except where it is more appropriate to
specifically refer to the Subsidiary.

      The unaudited condensed consolidated financial statements as of and for
the three months ended February 28, 1998 include the effects of the Acquisition
as of February 24, 1998. Accordingly, the condensed consolidated statement of
income (loss) for the three months ended February 28, 1998 includes results of
operations from (1) December 1, 1997 through February 24, 1998 of the Company
prior to the consummation of the Acquisition (for clarity, sometimes referred to
herein as the "Predecessor Company") and (2) February 25 through February 28,
1998 of the Company.

      The Acquisition was accounted for using the purchase method of accounting.
The purchase price has been allocated to the assets and liabilities of the
Company based on their respective fair values as determined primarily by
independent appraisals. The excess of the purchase price over the assessed
values of the net assets was allocated to excess of acquired net assets over
cost. As a result, the consolidated financial statements relating to operations
after the Acquisition are not comparable to those prior to the Acquisition.
Accordingly, the period prior to the Acquisition has been labeled "Predecessor."




                                       9
<PAGE>   10


C. ACQUISITION

          On April 14, 1999, the Company acquired all of the outstanding capital
stock of Charterhouse Automotive Group, Inc. ("Charterhouse"), a holding company
whose only operating subsidiary was Carpenter Enterprises, Ltd. ("Carpenter"), a
manufacturer of precision-machined automotive parts. Immediately following the
acquisition, Charterhouse was merged into Carpenter.

          The total consideration paid for Charterhouse was approximately $72.0
million consisting of $37.9 million for the stock of Charterhouse, a $3.1
million payment to the former president of Carpenter under a phantom stock plan
and $31.0 million of existing indebtedness of Carpenter, of which approximately
$18.6 million was refinanced from the Company's Revolving Credit Facility.

          The acquisition of Charterhouse was effective as of March 1, 1999 for
accounting purposes and was accounted for as a purchase. The preliminary
allocation of the purchase price has been determined based on estimates of fair
value and is subject to change. Appraisals are currently being completed to
value property, plant and equipment. The excess of the purchase price over the
assessed values of those assets has been allocated to goodwill. The Company
expects to finalize the purchase price allocation by November 30, 1999. Other
than adjustments to record property, plant and equipment at fair value,
adjustments are not expected to be material.

          The following pro forma information for the nine months ended August
31, 1999 and 1998 gives effect to the acquisition of Carpenter as if it had been
consummated on December 1, 1998 and 1997, respectively. This information is not
necessarily indicative of either the future results of operations or the results
of operations that would have occurred if those events had been consummated on
the indicated dates.

<TABLE>
<CAPTION>
                                                           Nine Months Ended
                                                               August 31
                                                      ---------------------------
                                                      1999                   1998
                                                      ----                   ----
                                           (Dollars in thousands, except per share amounts)
                                                            (unaudited)

         <S>                                      <C>                   <C>
         Net sales                                $   707,100           $   698,200

         Net income (loss)                        $    (1,100)          $   (12,100)

         Net income (loss) applicable
           to common shareholders                 $    (8,928)          $   (16,988)

         Net loss per common share                $     (8.93)          $    (16.99)

         Average number of common shares            1,000,000             1,000,000
</TABLE>



D. BASIC EARNINGS PER SHARE

          The calculation of net income (loss) per share is based upon the
average number of common shares outstanding, which was 1,000,000 in the three
months and nine months ended August 31, 1999 and in the three months and six
months ended August 31, 1998 and 9,600,071 in the three months ended February
28, 1998. Prior to the Acquisition, 10,000,000 shares were



                                       10
<PAGE>   11


outstanding. The net loss applicable to common shareholders represents the net
income reduced by, or the net loss increased by, accreted dividends on preferred
stock of $2.6 million and $7.8 million for the three and nine months ended
August 31, 1999, respectively, and $2.5 million and $4.9 million for the three
months and six months ended August 31, 1998, respectively. No potential common
stock was outstanding during the nine months ended August 31, 1999 or 1998.


E. LONG-TERM DEBT

          On May 18, 1999, the Company amended its syndicated secured loan
facility ("Credit Agreement") to provide for a) a securitization transaction
("Securitization"); b) an increase in the revolving credit facility ("Revolving
Credit Facility") provided under the Credit Agreement; and c) the repayment and
cancellation of a portion of the term loan facility ("Term Loan Facility")
provided under the Credit Agreement. The transaction was funded on June 4, 1999.

          In connection with the Securitization, the Company will sell its
domestic trade receivables on an ongoing basis to a wholly-owned, consolidated
subsidiary, Eagle-Picher Acceptance Corporation. The receivables are then used
as security for loans made under a separate revolving credit facility providing
up to $75.0 million. In addition, the Credit Agreement was amended to increase
the amount available for borrowings under the Revolving Credit Facility from
$160.0 million to $220.0 million and allow the Company to repay two of the term
loans under the Term Loan Facility without requiring that the third term loan be
ratably reduced.

          Interest rate spreads under the Credit Agreement increased by .25% and
loans outstanding under the Securitization are at variable rates equal to market
rates on commercial paper with fees of .75% on 102% of the maximum amount
available. Approximately $120.5 million in term loans were repaid upon closing
of this transaction with the proceeds from the Securitization of $65.0 million
and additional borrowings under the revolving Credit Facility.


F. SUPPLEMENTAL GUARANTOR INFORMATION

     Upon closing of the Acquisition, the Subsidiary issued $220.0 million in
senior subordinated notes ("Subordinated Notes") in addition to its borrowings
under the Credit Agreement. Both the Credit Agreement and the Subordinated Notes
are guaranteed on a full, unconditional and joint and several basis by the
Company and certain of the Subsidiary's wholly-owned domestic subsidiaries
("Subsidiary Guarantors") including Carpenter and Eagle-Picher Acceptance
Corporation. Management has determined that full financial statements and other
disclosures concerning the Subsidiary or the Subsidiary Guarantors would not be
material to investors and such financial statements are not presented. The
following supplemental condensed combining financial statements present
information regarding the Subsidiary, the Subsidiary Guarantors and the
subsidiaries that did not guarantee the debt.

          The Subsidiary and the Subsidiary Guarantors are subject to
restrictions on the payment of dividends under the terms of both the Credit
Agreement and the Indenture supporting the Subordinated Notes, both of which
were filed with the Company's Form S-4 Registration Statement No. 333-49957-01
filed on April 11, 1998 and both of which were incorporated by reference to the
Company's Form 10-K/A filed on June 28, 1999.





                                       11
<PAGE>   12




                          EAGLE-PICHER HOLDINGS, INC.
    SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) (UNAUDITED)
                       THREE MONTHS ENDED AUGUST 31, 1999

<TABLE>
<CAPTION>
                                                            GUARANTORS
                                                    --------------------------   NON-GUARANTORS
                                                     EAGLE-PICHER   SUBSIDIARY      FOREIGN
                                          ISSUER    HOLDINGS, INC.  GUARANTORS    SUBSIDIARIES   ELIMINATIONS     TOTAL
                                          ------    --------------  ----------    ------------   ------------     -----
                                                                    (IN THOUSANDS OF DOLLARS)
<S>                                      <C>        <C>             <C>            <C>           <C>          <C>
Net Sales
    Customers                            $ 53,009      $    --      $ 150,027      $ 28,272      $    --      $ 231,308
    Intercompany                            2,817           --          3,101         2,099       (8,017)            --

Operating Costs and Expenses:
    Cost of products sold (exclusive
     of depreciation)                      41,039           --        125,464        26,823       (8,043)       185,283
    Selling and administrative              9,933           --          5,164         2,828          (51)        17,874
    Intercompany charges                   (2,883)          --          2,883           (50)          50             --
    Depreciation                            2,863           --          7,717         1,256           --         11,836
    Amortization of intangibles             1,778           --          2,393           242           --          4,413
    (Gain) loss on sale of assets              (4)          --            152            --           --            148
                                         --------      -------      ---------      --------      -------      ---------
                    Total                  52,726           --        143,773        31,099       (8,044)       219,554
                                         --------      -------      ---------      --------      -------      ---------

Operating Income (Loss)                     3,100           --          9,355          (728)          27         11,754

Other Income (Expense)
    Interest expense                      (11,903)          --         (2,664)         (231)         661        (14,137)
    Other income (expense)                    213           --            958           149         (661)           659
    Equity in earnings of
     consolidated subsidiaries              3,969       (2,074)           301            --       (2,196)            --
                                         --------      -------      ---------      --------      -------      ---------

Income (Loss) Before Taxes                 (4,621)      (2,074)         7,950          (810)      (2,169)        (1,724)

Income taxes (benefit)                     (2,821)          --          2,654           517           --            350
                                         --------      -------      ---------      --------      -------      ---------

Net Income (Loss)                        $ (1,800)     $(2,074)     $   5,296      $ (1,327)     $(2,169)     $  (2,074)
                                         ========      =======      =========      ========      =======      =========
</TABLE>




                                       12
<PAGE>   13


                           EAGLE-PICHER HOLDINGS, INC.
    SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) (UNAUDITED)
                        NINE MONTHS ENDED AUGUST 31, 1999

<TABLE>
<CAPTION>
                                                            GUARANTORS
                                                    -----------------------------  NON-GUARANTORS
                                                     EAGLE-PICHER      SUBSIDIARY     FOREIGN
                                          ISSUER    HOLDINGS, INC.     GUARANTORS   SUBSIDIARIES  ELIMINATIONS     TOTAL
                                          ------    --------------     ----------   ------------  ------------     -----
                                                                       (IN THOUSANDS OF DOLLARS)
<S>                                      <C>            <C>           <C>            <C>           <C>           <C>
Net Sales
    Customers                            $ 162,812      $  --         $ 430,948      $ 81,809      $     --      $ 675,569
    Intercompany                             9,962         --             7,680         6,070       (23,712)            --

Operating Costs and Expenses:
    Cost of products sold (exclusive
     of depreciation)                      127,865         --           354,464        76,273       (23,816)       534,786
    Selling and administrative              31,402         --            16,650         7,962          (155)        55,859
    Intercompany charges                    (8,079)        --             8,078          (161)          162             --
    Depreciation                             8,700         --            21,552         3,649            --         33,901
    Amortization of intangibles              4,922         --             7,179           727            --         12,828
    (Gain) loss on sale of assets              (20)        --               152             5            --            137
                                         ---------      -----         ---------      --------      --------      ---------
         Total                             164,790         --           408,075        88,455       (23,809)       637,511
                                         ---------      -----         ---------      --------      --------      ---------

Operating Income (Loss)                      7,984         --            30,553          (576)           97         38,058

Other Income (Expense)
    Interest expense                       (34,885)        --            (2,737)         (625)          661        (37,586)
    Other income (expense)                     758         --               994          (106)         (661)           985
    Equity in earnings of
     consolidated subsidiaries              17,795       (843)              561            --       (17,513)            --
                                         ---------      -----         ---------      --------      --------      ---------

Income (Loss) Before Taxes                  (8,348)      (843)           29,371        (1,307)      (17,416)         1,457

Income taxes (benefit)                      (7,969)        --             8,983         1,286            --          2,300
                                         ---------      -----         ---------      --------      --------      ---------

Net Income (Loss)                        $    (379)     $(843)        $  20,388      $ (2,593)     $(17,416)     $    (843)
                                         =========      =====         =========      ========      ========      =========
</TABLE>



                                       13
<PAGE>   14


                           EAGLE-PICHER HOLDINGS, INC.
           SUPPLEMENTAL CONDENSED COMBINED BALANCE SHEETS (UNAUDITED)
                              AS OF AUGUST 31, 1999

<TABLE>
<CAPTION>
                                                                    GUARANTORS
                                                            --------------------------   NON-GUARANTORS
                                                             EAGLE-PICHER   SUBSIDIARY      FOREIGN
                                                  ISSUER    HOLDINGS, INC.  GUARANTORS    SUBSIDIARIES   ELIMINATIONS     TOTAL
                                                  ------    --------------  ----------    ------------   ------------     -----
                                                                           (IN THOUSANDS OF DOLLARS)
<S>                                              <C>            <C>          <C>          <C>            <C>            <C>
ASSETS
Cash and cash equivalents                        $     383      $      1     $  1,125     $   3,247      $     201      $  4,957
Receivables, net                                    14,209            --      104,271        23,581             --       142,061
Intercompany accounts receivable                     4,037            --        3,818           448         (8,303)           --
Inventories                                         30,702            --       57,962        19,192         (1,375)      106,481
Prepaid expenses                                     3,671            --        4,803         1,219            (44)        9,649
Deferred income taxes                               12,129            --           --            --             --        12,129
                                                 ---------      --------     --------     ---------      ---------      --------
     Total current assets                           65,131             1      171,979        47,687         (9,521)      275,277

Property, Plant & Equipment, net                    61,903            --      185,682        41,889             --       289,474

Investment in Subsidiaries                         140,523       164,798        6,978            --       (312,299)           --

Excess of Acquired Net Assets Over Cost, net        97,064            --      129,074        13,092             --       239,230

Other Assets                                        63,478            --       21,368           614         (8,605)       76,855
                                                 ---------      --------     --------     ---------      ---------      --------

     Total Assets                                $ 428,099      $164,799     $515,081     $ 103,282      $(330,425)     $880,836
                                                 =========      ========     ========     =========      =========      ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable                                 $  12,003      $     --     $ 36,259     $  11,066      $      --      $ 59,328
Intercompany accounts payable                          140            --          442         7,673         (8,255)           --
Long-term debt - current portion                    14,882            --           --         7,243             --        22,125
Income taxes                                         2,524            --           --           395             --         2,919
Other current liabilities                           48,653            --       23,794         5,296            (70)       77,673
                                                 ---------      --------     --------     ---------      ---------      --------
     Total current liabilities                      78,202            --       60,495        31,673         (8,325)      162,045

Long-term Debt - less current portion              445,814            --       71,855         9,133         (8,605)      518,197

Deferred Income Taxes                               10,934            --           --          (530)            --        10,404

Other Long-Term Liabilities                         25,244            --           --            --             --        25,244
                                                 ---------      --------     --------     ---------      ---------      --------

     Total liabilities                             560,194            --      132,350        40,276        (16,930)      715,890

Intercompany Accounts                             (311,674)           --      294,528        31,004        (13,858)           --

11-3/4% Cumulative Redeemable
     Exchangeable Preferred Stock                       --        95,161           --            --             --        95,161

Shareholders' Equity                               179,579        69,638       88,203        32,002       (299,637)       69,785
                                                 ---------      --------     --------     ---------      ---------      --------

    Total Liabilities and Shareholders'
      Equity                                     $ 428,099      $164,799     $515,081     $ 103,282      $(330,425)     $880,836
                                                 =========      ========     ========     =========      =========      ========
</TABLE>



                                       14
<PAGE>   15


                           EAGLE-PICHER HOLDINGS, INC.
      SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF CASH FLOWS (UNAUDITED)
                        NINE MONTHS ENDED AUGUST 31, 1999

<TABLE>
<CAPTION>
                                                                GUARANTORS
                                                         --------------------------   NON-GUARANTORS
                                                          EAGLE-PICHER   SUBSIDIARY      FOREIGN
                                               ISSUER    HOLDINGS, INC.  GUARANTORS    SUBSIDIARIES   ELIMINATIONS      TOTAL
                                               ------    --------------  ----------    ------------   ------------      -----
                                                                     (IN THOUSANDS OF DOLLARS)
<S>                                          <C>            <C>           <C>             <C>          <C>           <C>
Cash Flows From Operating Activities:
Net Income (Loss)                            $    (379)     $(843)        $ 20,388        $(2,593)     $(17,416)     $    (843)
Adjustments to reconcile net income
    (loss) to cash provided by (used in)
    operating activities:
    Equity in earnings of consolidated
       subsidiaries                            (17,795)       843             (561)            --        17,513             --
    Depreciation and amortization               15,744         --           28,731          4,376            --         48,851
    Changes in assets and liabilities,
       net of effect of acquisitions
       and divestitures                         16,264         --          (24,254)        (5,325)          242        (13,073)
                                             ---------      -----         --------        -------      --------      ---------

    Net cash provided by (used in)
      operating activities                      13,834         --           24,304         (3,542)          339         34,935
                                             ---------      -----         --------        -------      --------      ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of division                  12,400         --               --             --            --         12,400
Acquisition of division                             --         --          (60,209)            --            --        (60,209)
Capital expenditures                            (4,055)        --          (26,772)        (9,033)           --        (39,860)
Other                                             (757)        --              749           (183)          708            517
                                             ---------      -----         --------        -------      --------      ---------

    Net cash provided by (used in)
      investing activities                       7,588         --          (86,232)        (9,216)          708        (87,152)
                                             ---------      -----         --------        -------      --------      ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction of long-term debt                   (136,522)        --               --             --            --       (136,522)
Borrowings (repayments) on revolving
    credit agreement                           107,175         --           63,250          9,860            --        180,285
Other                                              (54)        --               --           (216)           --           (270)
                                             ---------      -----         --------        -------      --------      ---------

    Net cash provided by (used in)
      financing activities                     (29,401)        --           63,250          9,644            --         43,493
                                             ---------      -----         --------        -------      --------      ---------

Increase (decrease) in cash and
    cash equivalents                            (7,979)        --            1,322         (3,114)        1,047         (8,724)

Intercompany accounts                              898         --             (909)         1,236        (1,225)            --

CASH AND CASH EQUIVALENTS,
    BEGINNING OF PERIOD                          7,464          1              712          5,125           379         13,681
                                             ---------      -----         --------        -------      --------      ---------

CASH AND CASH EQUIVALENTS,
    END OF PERIOD                            $     383      $   1         $  1,125        $ 3,247      $    201      $   4,957
                                             =========      =====         ========        =======      ========      =========
</TABLE>



                                       15
<PAGE>   16


                           EAGLE-PICHER HOLDINGS, INC.
    SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) (UNAUDITED)
                       THREE MONTHS ENDED AUGUST 31, 1998


<TABLE>
<CAPTION>
                                                                GUARANTORS
                                                        ---------------------------   NON-GUARANTORS
                                                         EAGLE-PICHER    SUBSIDIARY      FOREIGN
                                            ISSUER      HOLDINGS, INC.   GUARANTORS    SUBSIDIARIES    ELIMINATIONS       TOTAL
                                            ------      --------------   ----------    ------------    ------------       -----
                                                                         (IN THOUSANDS OF DOLLARS)
<S>                                        <C>             <C>            <C>            <C>             <C>            <C>
Net Sales
    Customers                              $ 63,628        $    --        $117,887       $ 24,841        $    --        $ 206,356
    Intercompany                              3,793             --           2,193          1,012         (6,998)              --

Operating Costs and Expenses:
    Cost of products sold (exclusive
      of depreciation)                       51,580             --          97,338         21,581         (6,981)         163,518
    Selling and administrative               11,160             --           4,487          2,395             --           18,042
    Intercompany charges                     (2,241)            --           2,241             --             --               --
    Depreciation                              2,990             --           5,683          1,046            (75)           9,644
    Amortization of intangibles                 610             --           3,634             --             --            4,244
    Management compensation-special           4,395             --              --             --             --            4,395
                                           --------        -------        --------       --------        -------        ---------
         Total                               68,494             --         113,383         25,022         (7,056)         199,843
                                           --------        -------        --------       --------        -------        ---------

Operating Income (Loss)                      (1,073)            --           6,697            831             58            6,513

Other Income (Expense)
    Interest expense                        (12,005)            --              --           (127)            --          (12,132)
    Other income                                434             --             178             72             (3)             681
    Equity in earnings of
     consolidated subsidiaries                5,000         (3,803)             80             --         (1,277)              --
                                           --------        -------        --------       --------        -------        ---------

Income (Loss) Before Taxes                   (7,644)        (3,803)          6,955            776         (1,222)          (4,938)

Income taxes (benefit)                       (3,866)            --           2,081            650             --           (1,135)
                                           --------        -------        --------       --------        -------        ---------

Net Income (Loss)                          $ (3,778)       $(3,803)       $  4,874       $    126        $(1,222)       $  (3,803)
                                           ========        =======        ========       ========        =======        =========
</TABLE>



                                       16
<PAGE>   17


                           EAGLE-PICHER HOLDINGS, INC.
    SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) (UNAUDITED)
                        SIX MONTHS ENDED AUGUST 31, 1998


<TABLE>
<CAPTION>
                                                                 GUARANTORS
                                                         ---------------------------    NON-GUARANTORS
                                                          EAGLE-PICHER    SUBSIDIARY       FOREIGN
                                            ISSUER       HOLDINGS, INC.   GUARANTORS     SUBSIDIARIES    ELIMINATIONS       TOTAL
                                            ------       --------------   ----------     ------------    ------------       -----
                                                                         (IN THOUSANDS OF DOLLARS)
<S>                                       <C>              <C>             <C>            <C>             <C>             <C>
Net Sales
    Customers                             $ 132,861        $     --        $243,412       $ 50,004        $     --        $ 426,277
    Intercompany                              7,944              --           4,824          3,341         (16,109)              --

Operating Costs and Expenses:
    Cost of products sold (exclusive
      of depreciation)                      105,862              --         199,185         44,080         (16,034)         333,093
    Selling and administrative               23,254              --          10,283          4,792              --           38,329
    Intercompany charges                     (4,538)             --           4,538             --              --               --
    Depreciation                              6,040              --          11,468          2,045            (136)          19,417
    Amortization of intangibles               1,473              --           7,268             --              --            8,741
    Management compensation-special          21,716              --              --             --              --           21,716
                                          ---------        --------        --------       --------        --------        ---------
         Total                              153,807              --         232,742         50,917         (16,170)         421,296
                                          ---------        --------        --------       --------        --------        ---------

Operating Income (Loss)                     (13,002)             --          15,494          2,428              61            4,981

Other Income (Expense)
    Interest expense                        (24,422)             --              --           (264)             --          (24,686)
    Other income                                625              --             264            121              (3)           1,007
    Equity in earnings of
     consolidated subsidiaries               11,729         (13,102)            123             --           1,250               --
                                          ---------        --------        --------       --------        --------        ---------

Income (Loss) Before Taxes                  (25,070)        (13,102)         15,881          2,285           1,308          (18,698)

Income taxes (benefit)                      (12,033)             --           4,906          1,531              --           (5,596)
                                          ---------        --------        --------       --------        --------        ---------

Net Income (Loss)                         $ (13,037)       $(13,102)       $ 10,975       $    754        $  1,308        $ (13,102)
                                          =========        ========        ========       ========        ========        =========
</TABLE>



                                       17
<PAGE>   18


                           EAGLE-PICHER HOLDINGS, INC.
    SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF INCOME (LOSS) (UNAUDITED)
                      THREE MONTHS ENDED FEBRUARY 28, 1998
                                   PREDECESSOR

<TABLE>
<CAPTION>
                                                                        NON-GUARANTORS
                                                         SUBSIDIARY        FOREIGN
                                            ISSUER       GUARANTORS      SUBSIDIARIES      ELIMINATIONS       TOTAL
                                            ------       ----------      ------------      ------------       -----
                                                                       (IN THOUSANDS OF DOLLARS)
<S>                                        <C>             <C>              <C>             <C>            <C>
Net Sales
    Customers                              $ 61,071        $ 123,181        $ 21,590        $    --        $ 205,842
    Intercompany                              3,381            2,421           1,451         (7,253)              --

Operating Costs and Expenses:
    Cost of products sold (exclusive
      of depreciation                        48,329          102,771          18,772         (7,076)         162,796
    Selling and administrative                9,673            5,167           2,301             --           17,141
    Intercompany charges                     (2,172)           2,172              --             --               --
    Depreciation                              2,823            5,220             940             --            8,983
    Amortization of intangibles                 765            3,064              10             --            3,839
    Management compensation-special           2,056               --              --             --            2,056
                                           --------        ---------        --------        -------        ---------
          Total                              61,474          118,394          22,023         (7,076)         194,815
                                           --------        ---------        --------        -------        ---------

Operating Income (Loss)                       2,978            7,208           1,018           (177)          11,027

Other Income (Expense)
    Interest expense                         (6,844)              --             (96)            --           (6,940)
    Other income (expense)                      812              333            (325)            --              820
    Equity in earnings of
      consolidated subsidiaries               4,785             (270)             --         (4,515)              --
                                           --------        ---------        --------        -------        ---------

Income (Loss) Before Taxes                    1,731            7,271             597         (4,692)           4,907

Income taxes                                  1,083            2,486             531             --            4,100
                                           --------        ---------        --------        -------        ---------

Net Income (Loss)                          $    648        $   4,785        $     66        $(4,692)       $     807
                                           ========        =========        ========        =======        =========
</TABLE>



                                       18
<PAGE>   19


                           EAGLE-PICHER HOLDINGS, INC.
           SUPPLEMENTAL CONDENSED COMBINED BALANCE SHEETS (UNAUDITED)
                             AS OF NOVEMBER 30, 1998

<TABLE>
<CAPTION>
                                                                   GUARANTORS
                                                           ---------------------------  NON-GUARANTORS
                                                            EAGLE-PICHER   SUBSIDIARY      FOREIGN
                                                ISSUER     HOLDINGS, INC.  GUARANTORS    SUBSIDIARIES   ELIMINATIONS     TOTAL
                                                ------     --------------  ----------    ------------   ------------     -----
                                                                          (IN THOUSANDS OF DOLLARS)
<S>                                            <C>             <C>           <C>           <C>           <C>            <C>
Cash and cash equivalents                     $   7,464       $      1      $    712       $ 5,125       $     379      $ 13,681
Receivables, net                                 52,197             --        70,418        22,229              --       144,844
Intercompany accounts receivable                  3,414             --         3,874           154          (7,442)           --
Inventories                                      30,755             --        43,708        15,785          (1,375)       88,873
Prepaid expenses                                  4,073             --         3,614           651              --         8,338
Deferred income taxes                            10,851             --            --            --              --        10,851
                                              ---------       --------      --------       -------       ---------      --------
      Total current assets                      108,754              1       122,326        43,944          (8,438)      266,587

Property, Plant & Equipment, net                 66,500             --       143,872        38,165              --       248,537

Investment in Subsidiaries                      113,265        165,641         6,416            --        (285,322)           --

Excess of Assets Acquired Over Cost, net         78,838             --       136,253        13,819              --       228,910

Other Assets                                     54,187             --        17,675           431              --        72,293
                                              ---------       --------      --------       -------       ---------      --------

      Total Assets                            $ 421,544       $165,642      $426,542       $96,359       $(293,760)     $816,327
                                              =========       ========      ========       =======       =========      ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable                              $  15,064       $     --      $ 24,648       $10,595       $      --      $ 50,307
Intercompany accounts payable                        85             --            16         7,561          (7,662)           --
Long-term debt - current portion                 18,777             --            --         6,396              --        25,173
Income taxes                                      5,296             --            --           986              --         6,282
Other current liabilities                        45,744             --        24,464         4,052              --        74,260
                                              ---------       --------      --------       -------       ---------      --------
     Current liabilities                         84,966             --        49,128        29,590          (7,662)      156,022

Long-term Debt - less current portion           458,848             --            --           335              --       459,183

Deferred income taxes                             8,304             --            --            --              --         8,304

Other Long-term Liabilities                      24,819             --            --            --              --        24,819
                                              ---------       --------      --------       -------       ---------      --------

      Total Liabilities                         576,937             --        49,128        29,925          (7,662)      648,328

Intercompany Accounts                          (326,706)            --       309,571        29,768         (12,633)           --

11-3/4% Cumulative Exchangeable
   Preferred Stock                                   --         87,387            --            --              --        87,387

Shareholders' Equity                            171,313         78,255        67,843        36,666        (273,465)       80,612
                                              ---------       --------      --------       -------       ---------      --------

     Total Liabilities and
       Shareholders' Equity                   $ 421,544       $165,642      $426,542       $96,359       $(293,760)     $816,327
                                              =========       ========      ========       =======       =========      ========
</TABLE>


                                       19
<PAGE>   20


                           EAGLE-PICHER HOLDINGS, INC.
      SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF CASH FLOWS (UNAUDITED)
                      FOR SIX MONTHS ENDED AUGUST 31, 1998

<TABLE>
<CAPTION>
                                                                  GUARANTORS
                                                          ---------------------------   NON-GUARANTORS
                                                           EAGLE-PICHER    SUBSIDIARY      FOREIGN
                                               ISSUER     HOLDINGS, INC.   GUARANTORS    SUBSIDIARIES   ELIMINATIONS     TOTAL
                                               ------     --------------   ----------    ------------   ------------     -----
                                                                           (IN THOUSANDS OF DOLLARS)
<S>                                           <C>            <C>            <C>            <C>           <C>           <C>
Cash Flows From Operating Activities:
Net Income (Loss)                             $(13,037)      $(13,102)      $ 10,975       $   754       $ 1,308       $(13,102)
Adjustments to reconcile net income
    (loss) to cash provided by (used in)
    operating activities:
    Equity in earnings of consolidated
      subsidiaries                             (11,729)        13,102           (123)           --        (1,250)            --
    Depreciation and amortization                8,877             --         18,736         2,045          (136)        29,522
    Proceeds from insurance settlement          13,659             --             --            --            --         13,659
    Changes in assets and liabilities           22,315             --         11,724           (43)         (129)        33,867
                                              --------       --------       --------       -------       -------       --------


    Net cash provided by (used in)
      operating activities                      20,085             --         41,312         2,756          (207)        63,946
                                              --------       --------       --------       -------       -------       --------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                            (5,985)            --         (5,321)       (4,747)           --        (16,053)
Other                                           (2,276)            --           (275)         (878)        3,523             94
                                              --------       --------       --------       -------       -------       --------

    Net cash provided by (used in)
      investing activities                      (8,261)            --         (5,596)       (5,625)        3,523        (15,959)
                                              --------       --------       --------       -------       -------       --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction of long-term debt                     (2,580)            --             --            --            --         (2,580)
Borrowings (repayments) on revolving
    credit agreement                           (44,100)            --             --           847            --        (43,253)
Other                                               --             --             --           (23)           --            (23)
                                              --------       --------       --------       -------       -------       --------

    Net cash provided by (used in)
      financing activities                     (46,680)            --             --           824            --        (45,856)
                                              --------       --------       --------       -------       -------       --------

Increase (decrease) in cash and
    cash equivalents                           (34,856)            --         35,716        (2,045)        3,316          2,131

Intercompany accounts                           36,124             --        (36,151)        3,440        (3,413)            --

CASH AND CASH EQUIVALENTS,
    BEGINNING OF PERIOD                         12,115              1          1,145         5,513           194         18,968
                                              --------       --------       --------       -------       -------       --------

CASH AND CASH EQUIVALENTS,
    END OF PERIOD                             $ 13,383       $      1       $    710       $ 6,908       $    97       $ 21,099
                                              ========       ========       ========       =======       =======       ========
</TABLE>



                                       20
<PAGE>   21


                           EAGLE-PICHER HOLDINGS, INC.
      SUPPLEMENTAL CONDENSED COMBINING STATEMENTS OF CASH FLOWS (UNAUDITED)
                    FOR THREE MONTHS ENDED FEBRUARY 28, 1998
                                   PREDECESSOR

<TABLE>
<CAPTION>
                                                                   GUARANTORS
                                                           ----------------------------   NON-GUARANTORS
                                                            EAGLE-PICHER     SUBSIDIARY      FOREIGN
                                               ISSUER      HOLDINGS, INC.    GUARANTORS    SUBSIDIARIES   ELIMINATIONS     TOTAL
                                               ------      --------------    ----------    ------------   ------------     -----
                                                                           (IN THOUSANDS OF DOLLARS)
<S>                                           <C>             <C>             <C>           <C>           <C>             <C>
Cash Flows From Operating Activities:
Net Income (Loss)                             $     648       $      --       $ 4,785       $    66       $  (4,692)      $     807
Adjustments to reconcile net income
    (loss) to cash provided by (used in)
    operating activities:
    Equity in earnings of consolidated
      subsidiaries                               (4,785)             --           270            --           4,515              --
    Depreciation and amortization                 3,588              --         8,284           950              --          12,822
    Changes in assets and liabilities,
    net of effect of divestitures               (16,059)             --        (9,247)        2,019             575         (22,712)
                                              ---------       ---------       -------       -------       ---------       ---------

    Net cash provided by (used in)
      operating activities                      (16,608)             --         4,092         3,035             398          (9,083)
                                              ---------       ---------       -------       -------       ---------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in Subsidiary                             --        (180,005)           --            --         180,005              --
Capital expenditures                             (2,300)             --        (1,833)       (1,559)             --          (5,692)
Other                                              (956)             --            65          (846)            695          (1,042)
                                              ---------       ---------       -------       -------       ---------       ---------

    Net cash provided by (used in)
      investing activities                       (3,256)       (180,005)       (1,768)       (2,405)        180,700          (6,734)
                                              ---------       ---------       -------       -------       ---------       ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt                      445,000              --            --            --              --         445,000
Reduction of long-term debt                    (250,000)             --            --            --              --        (250,000)
Borrowings (repayments) on revolving
    credit agreement                             79,100              --            --          (360)             --          78,740
Redemption of common stock                     (446,638)             --            --            --              --        (446,638)
Issuance of common stock                        180,005         100,001            --            --        (180,005)        100,001
Issuance of preferred stock                          --          80,005            --            --              --          80,005
Debt issue cost                                 (26,062)             --            --            --              --         (26,062)
                                              ---------       ---------       -------       -------       ---------       ---------

    Net cash provided by (used in)
      financing activities                      (18,595)        180,006            --          (360)       (180,005)        (18,954)
                                              ---------       ---------       -------       -------       ---------       ---------

Increase (decrease) in cash and
    cash equivalents                            (38,459)              1         2,324           270           1,093         (34,771)

Intercompany accounts                             1,740              --        (1,740)          899            (899)             --

CASH AND CASH EQUIVALENTS,
    BEGINNING OF PERIOD                          48,834              --           561         4,344              --          53,739
                                              ---------       ---------       -------       -------       ---------       ---------

CASH AND CASH EQUIVALENTS,
    END OF PERIOD                             $  12,115       $       1       $ 1,145       $ 5,513       $     194       $  18,968
                                              =========       =========       =======       =======       =========       =========
</TABLE>



                                       21
<PAGE>   22


G. LEGAL MATTERS

          For other information on legal proceedings, see Item 3 of the
Company's Annual Report on Form 10-K/A for the fiscal year ended November 30,
1998.

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


H. SUBSEQUENT EVENT

          On September 1, 1999, the Board of Directors approved a plan to
explore the sale of several smaller divisions in addition to the Ross Aluminum
Division (which, as previously announced, the Company is in the process of
selling) in order to focus on core businesses. None of the divisions under
consideration had sales in excess of approximately $35.0 million in the nine
months ended August 31, 1999 or $40.0 million in the twelve months ended
November 30, 1998. In the aggregate, the divisions under consideration for sale
(including the Ross Aluminum Division) had sales of approximately $95.0 million
in the nine months ended August 31, 1999 and $125 million in the twelve months
ended November 30, 1998. The Company had previously entered in a letter of
intent for the sale of the Ross Aluminum Division, however, the potential buyer
terminated the letter of intent due to a lack of financing. The Company intends
to continues to pursue the sale of the Ross Aluminum Division. These
divestitures are at an early stage and are subject to acceptable prices being
achieved and there can be no assurances that they will be completed. The
proceeds of such sales will be used to repay debt and finance future growth.


                                       22
<PAGE>   23


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


RESULTS OF OPERATIONS

         As a result of the Acquisition as of February 24, 1998, which was
accounted for as a purchase, the Company's results of operations and financial
position for periods after February 24, 1998 are not comparable to those of
prior periods. The unaudited condensed consolidated statement of income (loss)
as of February 28, 1998 includes results of operations from (1) December 1, 1997
through February 24, 1998 of the Predecessor Company and (2) February 25 through
February 28, 1998 of the Company. In addition to the effects of the Acquisition,
other factors affecting the comparability of operations are the sale of the Trim
Division in the fourth quarter in 1998 and the acquisition of Carpenter in the
second quarter of 1999.

The following table sets forth certain sales and operating data, net of all
inter-segment transactions, for the Company's businesses for the periods
indicated:

<TABLE>
<CAPTION>

                                      Three Months        Nine Months   Six Months  Three Months
                                     Ended August 31         Ended        Ended        Ended
                                  ---------------------    August 31    August 31   February 28
                                    1999         1998         1999         1998         1998
                                  --------     --------     --------     --------     --------

                                                      (In millions of dollars)

                                                                                    Predecessor

<S>                               <C>          <C>          <C>          <C>          <C>
Net sales by segment:
  Automotive                      $  135.8     $  103.3     $  390.1     $  218.0     $  103.8
  Machinery                           58.2         68.0        174.9        136.8         64.4
  Industrial                          37.3         35.1        110.6         71.5         37.6
                                  --------     --------     --------     --------     --------
    Total                         $  231.3     $  206.4     $  675.6     $  426.3     $  205.8
                                  ========     ========     ========     ========     ========

Operating income by segment:
  Automotive                      $    8.3     $    6.0     $   29.8     $   16.1     $    8.2
  Machinery                            3.7          6.9         11.6         15.1          5.4
Industrial                             4.2          3.4         11.7          6.7          3.2
Corporate overhead                    (4.4)        (9.8)       (15.0)       (32.9)        (5.8)
                                  --------     --------     --------     --------     --------
    Total                         $   11.8     $    6.5     $   38.1     $    5.0     $   11.0
                                  ========     ========     ========     ========     ========
</TABLE>


         Net Sales. The Company's net sales were $231.3 million for the third
quarter ended August 31, 1999, an increase of $24.9 million or 12.1% from the
comparable period of 1998. Included in the results of the third quarter of 1999
are net sales of Carpenter, which was acquired in the second quarter of 1999,
and included in the second quarter of 1998 are net sales of the Trim Division,
which was sold in the fourth quarter of 1998. If the net sales of the Trim
Division and Carpenter are excluded, the Company's quarterly net sales decreased
1.1%. On a year-to-date basis, net sales increased 6.9% in 1999 from the
comparable period in 1998. However if the net sales of the Trim Division and
Carpenter are excluded, net sales decreased 1.0%.





                                       23
<PAGE>   24


         The Automotive Group's net sales in the third quarter of 1999,
excluding Carpenter and the Trim Division, increased 5.5% over the same period
in 1998. A substantial part of the increase is due to broader market penetration
of precision-machined components in Europe. Sales of precision-machined
components in the United States were relatively flat as the Company added new
business with different customers to replace programs with Ford which were
discontinued throughout 1999. The acquisition of Carpenter is expected to
further expand the Company's product lines and its customer base for
precision-machined components. Demand for rubber-coated metal products has been
stronger throughout 1999 than 1998, but particularly in the third quarter, due
to improvements in certain Asian markets. Since the 1980's, original equipment
manufacturers ("OEM's"), such as Ford and General Motors, have been outsourcing
an increasing percentage of their production requirements. OEM's benefit from
outsourcing because outside suppliers generally have significantly lower cost
structures and can assist in shortening development periods for new products.
The benefits of this trend have been somewhat offset by the effects of intense
pricing pressures by the OEM's on their supplier base. Net sales for the
Machinery Group in the third quarter of 1999 decreased 14.3% from the comparable
period in 1998 due primarily to the declines in sales of heavy-duty forklift
trucks resulting from a decline in demand coupled with increased competition.
Net sales for the Industrial Group increased 6.3% in the third quarter of 1999.
The increase can be attributed in part to an increase in shipments of boron
products.

     Cost of Products Sold. Cost of products sold, which excludes depreciation
expense, increased $21.8 million or 13.3% in the third quarter of 1999 from the
comparable period in 1998. As a percentage of sales, cost of products sold was
80.1% for the three months ended August 31, 1999 compared to 79.2% for the same
period in the prior year. Excluding the results of Carpenter and the Trim
Division, cost of sales as a percentage of sales was 78.9% and 78.8% in the
three month periods ended August 31, 1999 and 1998, respectively, and 78.3% and
78.1% for the nine month periods ended August 31, 1999 and 1998, respectively.
Positive trends in the first quarter, such as changes in product mix in certain
operations in the Machinery Group and productivity improvements, continued into
the second and third quarters, but were offset by the effects of the decline in
shipments of heavy-duty forklift trucks, which resulted in higher fixed costs on
a per unit basis, and costs related to inefficiencies in manufacturing new
multi-layer fuel transfer systems programs in Europe.

         Since the Company expects strong price pressure to continue across all
product lines, particularly in the Automotive Group, the Company will continue
to pursue productivity improvements and material cost reductions to mitigate
such price pressures.

         Selling and Administrative. Selling and administrative expenses
decreased $0.2 million or 1.0% in the third quarter of 1999 from the same period
in 1998. Excluding those of Carpenter and the Trim Division, selling and
administrative expenses increased $0.4 million or 2.6% from the third quarter of
1998 to the third quarter of 1999. On a year to date basis, selling and
administrative expenses, excluding those of Carpenter and the Trim Division,
have increased 3.7%. This increase is due to expenses incurred by the Company as
a result of the Acquisition in February 1998 which were not incurred in the
first quarter of 1998, including management fees to Granaria Holdings B.V. and a
long-term incentive program for managers.

         Management Compensation-Special. The management compensation-special of
$21.7 million in the six months ended August 31, 1998 and $2.1 million in the
first quarter of 1998 is a one-time item related to the Acquisition.

         Depreciation. Depreciation expense was $11.8 million and $9.6 million
in the third quarters of 1999 and 1998, respectively, and $33.9 million and
$28.4 million in the nine months ended August 31, 1999 and 1998, respectively.
Depreciation is not comparable due to the differences in asset bases as a result
of the Acquisition in February 1998. Purchase accounting allows a company to
take up to a year to allocate the purchase price to its assets and liabilities
based on their fair values. Although the Acquisition took place in February,
final adjustments to the fair values of plant, property and equipment and
depreciation expense in 1998 were not made until November 1998, after appraisals
had been obtained and analyzed. Other factors affecting the comparability of
depreciation expense include the depreciation attributable to Carpenter in 1999
and the Trim Division in 1998.

         Amortization. Amortization of intangibles was $4.4 million and $4.2
million in the third quarters of 1999 and 1998, respectively, and $12.8 million
and $12.6 million in the nine months ended August 31, 1999 and 1998,
respectively. Amortization is not comparable



                                       24
<PAGE>   25


due to the differences in the asset bases as a result of the Acquisition in 1998
and the acquisition of Carpenter in 1999. In the first quarter of 1998, the
reorganization value in excess of amounts allocable to identifiable assets of
$65.1 million was being amortized over four years. In accordance with purchase
accounting, this asset was not allocated a fair value in the Acquisition. The
excess of acquired net assets over cost of $241.1 million, which resulted from
the Acquisition, is being amortized over 15 years. However, the final adjustment
of the amount of the excess of acquired net assets over cost and amortization
thereof was not made until November 1998.

         Operating Income. Operating income was $11.8 million and $6.5 million
for the three months ended August 31, 1999 and 1998, respectively. Many factors
affect the comparability of operating income in 1999 and 1998. Depreciation and
amortization have been computed using different asset bases in 1999 than in
1998. Purchase accounting allows up to one year to allocate the purchase price
to assets and liabilities based on fair value of those assets. The final
adjustments to the fair values of property, plant and equipment were made in the
fourth quarter of 1998. Therefore, depreciation expense in the second and third
quarters of 1998 was computed based on an estimate of those values while 1999
depreciation was computed on fair values based on appraisals. These adjustments
also affected amortization of intangible assets. In addition, there were
management compensation - special expenses of $21.7 million in the six months
ended August 31, 1998 for which there were no comparable expenses in 1999.
Finally, Carpenter was acquired in the second quarter of 1999 and the Trim
Division was sold in the fourth quarter of 1998. After excluding all of these
items, operating income decreased 13.7% in the third quarter of 1999 compared to
the third quarter of 1998.

         Operating income of the Automotive Group increased $2.3 million or 39%
in the third quarter of 1999 compared to the same period of the prior year.
Excluding the results of Carpenter and the Trim Division and the effects of the
changes in depreciation and amortization from 1998 to 1999, operating income
decreased 6.4% in the third quarter. Increases in operating income due to
increased volumes of rubber-coated metal products and improved efficiencies at
certain facilities that produce precision machined components have been offset
by operating losses caused by manufacturing inefficiencies related to new
multi-layer fuel transfer systems programs in Europe.

         In the Machinery Group, operating income declined $3.2 million or 46.4%
in the third quarter of 1999 from the same quarter in 1998. This decline was
partially the result of a greater portion of the intangible asset associated
with the Acquisition being allocated to the Machinery Group in the final
adjustment of the purchase price allocation with occurred in the fourth quarter
of 1998. Additionally, the majority of the increased depreciation resulting from
the adjustment to asset bases affected the Machinery Group. After considering
these items, the decline in operating income in the Machinery Group was
approximately 35.5% in the third quarter. The majority of this decline is due to
reduced volumes of fork-lift trucks and start-up costs resulting from moving
production of fork-lift trucks to another facility. In addition, on a
year-to-date basis, increases in operating income in 1999 resulting from a more
favorable mix of special-purpose batteries sold was offset by losses resulting
from low volumes of industrial cleaning and finishing machinery.

         Operating income of the Industrial Group increased $.8 million or 23.5%
in the third quarter of 1999 from the comparable period in 1998. However, the
majority of this increase is due to the reallocation of the intangible asset
which also impacted the Machinery Group. Operating income increased 9.0% in the
third quarter if the effect of the reallocation of the intangible asset is
excluded. This increase is due to modest operating gains in diatomaceous earth
and specialty materials operations.

         For the nine months ended August 31, 1999, operating income was $38.1
million. After excluding the effects of the difference in depreciation and
amortization, the acquisition of Carpenter, the divestiture of Trim Division and
the management compensation - special, operating income decreased 12.7% from the
comparable period in 1998 for the same reasons discussed above.

         Interest Expense. Interest expense for the three months ended August
31, 1999 and 1998 was $14.1 million and $12.1 million, respectively. This
increase is due to the acquisition of Carpenter. Interest expense was $37.6
million and $31.6 million for the nine months ended August 31, 1999 and 1998,
respectively. Upon the Acquisition in February of 1998, the Company repaid
$250.0 million of subordinated debentures, and borrowed $524.1 million in new
debt, which, together with the additional debt resulting from the acquisition
of Carpenter, accounts for most of the increase in year-to-date interest expense
in 1999.

         Income Taxes. Income taxes were $0.4 million and $(1.1) million in the
three months ended August 31, 1999 and 1998, respectively, and $2.3 million and
$(1.5) million in the nine months ended August 31, 1999 and 1998, respectively.
Effective tax rates vary for a number of reasons including: 1) the amortization
of the reorganization value in excess



                                       25
<PAGE>   26


of amounts allocable to identifiable assets in the first quarter of 1998 was not
deductible for tax purposes while a substantial portion of the amortization of
the excess of acquired net assets over costs created during the Acquisition is
deductible; 2) the amortization of the excess of acquired net assets over costs
created upon the acquisition of Carpenter is not deductible for tax purposes;
and 3) the effect of income taxes in countries with higher tax rates, such as
Germany, varies as income in those countries varies in proportion to the
Company's total income.

         Net Income. The income (loss) for the three months ended August 31,
1999 and 1998 was $(2.1) million and $(3.8) million, respectively, $(0.8)
million for the nine months ended August 31, 1999, $(13.1) million for the six
months ended August 31, 1998 and $0.8 million for the three months ended
February 28, 1998. However, as discussed above, the comparability of net income
has been significantly affected by the Acquisition and the application of
purchase accounting, the effects of the Trim Division divestiture, which was
sold in the fourth quarter of 1998, and the impact of the Carpenter acquisition
in the second quarter of 1999.

         The loss applicable to common shareholders was increased by dividends
accreted on the 11 3/4% Cumulative Redeemable Exchangeable Preferred Stock
("Preferred Stock") of $2.6 million and $7.8 million for the three months and
nine months ended August 31, 1999, respectively, to $4.7 million and $8.6
million, respectively. The net loss applicable to common shareholders was
increased by preferred stock dividends of $2.5 million and $4.9 million in the
three months and six months ended August 31, 1998, respectively, to $6.3 million
and $18.0 million, respectively. Since the Preferred Stock was issued upon the
Acquisition, net income applicable to common shareholders of $0.8 million for
the three months ended February 28, 1998 was not reduced.


LIQUIDITY AND CAPITAL RESOURCES

The following are certain financial data regarding earnings before interest,
taxes, depreciation and amortization ("EBITDA"), cash flows and earnings to
fixed charges and preferred stock dividends:

<TABLE>
<CAPTION>
                                                             Nine Months         Six Months         Three Months
                                                           Ended August 31     Ended August 31    Ended February 28
                                                                1999                1998                1998
                                                                ----                ----                ----

                                                                        (in million of dollars)

                                                                                                    Predecessor

<S>                                                           <C>                <C>                 <C>
EBITDA                                                        $  87.1            $  56.7             $  27.0
Cash provided by (used in) operating activities                  34.9               63.9                (9.1)
Cash used in investing activities                               (87.2)             (16.0)               (6.7)
Cash provided by (used in) financing activities                  43.5              (45.9)              (19.0)
Preferred stock dividends accreted                                7.8                4.9                  --
Earnings/fixed charges and preferred stock dividends              .86X               .22X               1.69x
</TABLE>


EBITDA

         The Company's EBITDA is defined by the terms of the Preferred Stock and
the Indenture for the 9 3/8% Senior Subordinated Notes as earnings before
interest expense, income taxes, depreciation and amortization, certain one-time
management compensation expenses and other non-cash charges. EBITDA, as defined
herein, may not be comparable to similarly titled measures reported by other
companies and should not be construed as an alternative to operating income or
to cash flows from operating activities, as determined by generally accepted
accounting principles, as a measure of the Company's operating performance or
liquidity, respectively. Funds depicted by EBITDA are not available for
management's discretionary use to the extent they are required for debt service
and other commitments.

The Company's EBITDA for the nine months ended August 31, 1999 was $87.1
million, an increase of 4.1% over the EBITDA of the same period of the
comparable year of $83.7 million. Increases in EBITDA resulting from the
Carpenter Acquisition, improvements in operating efficiencies in certain
facilities manufacturing precision-machined automotive components and better
volumes of rubber-coated metal products in Automotive Group were partially
offset by decreases resulting from low volumes of fork-lift trucks and costs



                                       26
<PAGE>   27


incurred as a result of moving production of such trucks to another facility and
inefficiencies related to the production of new multi-layer fuel transfer
systems in Europe.


Operating Activities

         Cash provided by operating activities was $34.9 million, and $54.8
million for the nine months ended August 31, 1999, and 1998 and consisted of the
following:

<TABLE>
<CAPTION>
                                                                    Nine Months Ended August 31,
                                                                    ----------------------------
                                                                       1999             1998
                                                                       ----             ----

                                                                     (in millions of dollars)

               <S>                                                   <C>              <C>
               Operating income                                      $ 38.1           $ 16.0
               Depreciation and amortization,
                 excluding amortization of
                 deferred financing costs                              46.7             41.0
               Interest paid                                          (29.5)           (19.1)

               Income taxes paid, net                                 (10.1)            (4.4)
               Insurance settlement                                      --             13.7
               Funding of management trust upon acquisition              --            (10.0)
               Working capital and other                              (10.3)            17.6
                                                                     ------           ------
                                                                     $ 34.9           $ 54.8
                                                                     ======           ======
</TABLE>

     See "Results of Operations" for discussions concerning operating income and
depreciation and amortization. Interest paid has increased in conjunction with
the increase in interest expense described in "Results of Operations." Net
income taxes paid in 1999 have increased in part because: 1) there was a refund
of foreign taxes received early in 1998; 2) the Predecessor Company had net
operating loss carryforwards and as a result, there were no Federal income taxes
payable for income earned prior to the Acquisition (approximately the first
three months of 1998); and 3) a portion of the tax liability associated with the
tax period ended November 30, 1998 was paid in fiscal year 1999. The proceeds
from the insurance settlement in 1998 related to contingent assets at the time
of the Acquisition which were recognized as adjustments to excess of acquired
net assets over cost when realized. In 1998, the Eagle-Picher Management Trust
was funded upon the Acquisition for the benefit of certain senior management of
the Company. See discussion of this item in "Management Compensation" in the
Company's 10-K/A filed with the SEC on June 28, 1999. The decrease in cash in
1999, due to increases in working capital, versus decreases in working capital
in 1998, can be attributed to several items: 1)in 1998, much of the increase was
because the Company elected to use cash in an employee benefits trust to pay for
such benefits rather than the Company's cash; 2) a major customer changed its
payment schedule from the end of the month in 1998 to the beginning of the next
month in 1999; 3) the timing of the Thanksgiving holiday at the end of fiscal
year 1997 resulted in delayed payments from customers which were received in
early 1998; and 4) inventories have increased at various divisions in 1999 due
to preparation for fourth quarter shipments of boron products and other items,
increased mining activities due to favorable weather conditions, rebuilding of
inventory after a fire at one location, changes in certain shipping schedules
and Year 2000 preparedness.


Investing Activities

         Cash used in investing activities was $87.2 million and $22.7 million
in the nine months ended August 31, 1999 and 1998, respectively. Early in the
first quarter of 1999, the Company received $12.4 million in cash relating to
the sale of the Trim Division, which was effective as of October 31, 1998.
Capital expenditures for the nine months ended August 31, 1999 were $40.0
million compared to $21.7 million for the same period in 1998. Besides
expenditures to complete a new plant in Mt. Pleasant, Michigan for Carpenter and
a small expansion to a plant manufacturing bulk pharmaceuticals in 1999, these
expenditures generally related to capital needed for new programs and
maintenance. The Company anticipates capital expenditures will not exceed $10.0
million for the remainder of 1999.

         On April 14, 1999, the Company completed the acquisition of Carpenter,
a manufacturer of precision-machined automotive parts. This acquisition is
expected to expand both the Company's product lines and its customer base for
precision-machined automotive



                                       27
<PAGE>   28
products. The total consideration included approximately $41.0 million in cash,
which was financed from the Revolving Credit Facility, and approximately $31.0
million of existing indebtedness of Carpenter, of which approximately $18.6
million was refinanced from the Company's Revolving Credit Facility. The
remainder of Carpenter's debt was assumed. The acquisition was accounted for as
a purchase and was effective March 1, 1999 for accounting purposes.

         On September 1, 1999 the Board of Directors approved a plan to explore
the sale of several smaller divisions in addition to the Ross Aluminum Division
(which, as previously announced, the Company is in the process of selling) in
order to focus on core businesses. None of the divisions under consideration had
sales in excess of approximately $35.0 million in the nine months ended August
31, 1999 or $40.0 million in the twelve months ended November 30, 1998. In the
aggregate, the divisions under consideration for sale (including the Ross
Aluminum Divisions) had sales of approximately $95.0 million in the nine months
ended August 31, 1999 and $125.0 million in the twelve months ended November 30,
1998. The Company had previously entered into a letter of intent for the sale of
the Ross Aluminum Division, however, the potential buyer terminated the letter
of intent due to a lack of financing. The Company intends to continue to pursue
the sale of the Ross Aluminum Division. These divestitures are at an early stage
and are subject to acceptable prices being achieved. There can be no assurances
that they will be completed. The proceeds of such sales will be used to repay
debt and finance future growth.



Financing Activities

         Cash provided from financing activities was $43.5 million in the first
nine months of 1999, due primarily to borrowings under the Credit Agreement to
finance the acquisition of Carpenter. Cash used in financing activities was
$64.8 million for the comparable period in 1998 as the Company repaid borrowings
incurred as a result of the Acquisition during the second and third quarters of
1998 and used cash in connection with the Acquisition transaction itself during
the first quarter of 1998.


         As of August 31, 1999, letters of credit outstanding against the
Revolving Credit Facility were $53.0 million, which, coupled with the $127.0
million in outstanding borrowings at August 31, 1999, left the Company with
available borrowing capacity of approximately $40.0 million at that date. The
European operations had $10.7 million of borrowing capacity at August 31, 1999;
however, the Company is in the process of renegotiating certain of its credit
agreements in Europe.


Earnings to Fixed Charges and Preferred Stock Dividends

         The earnings to fixed charges and preferred stock dividends for the
nine months ended August 31, 1999 were .86X and earnings were insufficient to
cover fixed charges and preferred stock dividends by $6.3 million in that
period.

         The earnings to fixed charges and preferred stock dividends for the six
months ended August 31, 1998 is not meaningful. Earnings were insufficient to
cover fixed charges and preferred stock dividends by $23.6 million in this
period. However, one time management compensation expenses of $21.7 million are
included in this period. Excluding this item, earnings to fixed charges and
preferred stock dividends would have been .94X and earnings would have been
insufficient to cover fixed charges and preferred stock dividends by $1.9
million.


YEAR 2000 READINESS DISCLOSURE

         The Year 2000 problem arose because many existing computer programs use
only the last two digits to refer to a year. Therefore, these computer programs
do not properly recognize a year that begins with "20." If not corrected, many
computer programs could fail or cause erroneous results. Failures of this nature
could cause interruptions to manufacturing processes, business and financial
functions and communications with customers and suppliers.

         Due to the diverse nature of the Company's operations, each operating
division has its own discrete computer systems. The Company currently has a Year
2000 program in place, which included a comprehensive review to identify the
areas of concern in each of the systems affected by the Year 2000 issue and
followed up with design and implementation of measures to address those issues.
The Company has assessed its information technology systems such as business
computing systems, end user computer systems and technical infrastructure, as
well as embedded systems commonly found in manufacturing and service equipment,
testing equipment and environmental operations. The assessments also included



                                       28
<PAGE>   29


the Company's products and evaluation of the readiness of its suppliers and
service providers.

         The Company's Year 2000 program involves a five step process applied to
each of eight different application areas within each operation and at the
Corporate level. The Company first inventoried areas of potential risk based on
comparison to guidelines published by the Automotive Industry Action Group. Each
component identified in the inventory was then evaluated for its risk of failure
and the impact of potential failure to the Company's operations and its
customers. Once the risks were assessed, remediation was commenced. Options for
remediation included replacement, modification or continued use depending on
information gathered during the inventory and assessment stages. The remediated
system is then tested and reviewed before the determination is made as to the
readiness of the system. A project committee meets regularly to review the
status of the investigation into and resolution of Year 2000 issues.

         The Company's divisions have completed the inventory and assessment
phases and are in the final phases of remediation and testing. The final step of
the program is review by the Company's outside consultant for Year 2000
readiness, a review that is ongoing, to ensure that procedures are properly
documented and that modifications or upgrades will not interfere with the
Company's preparedness. The Company maintains a record of its progress to date,
and publishes reports for each of its divisions on its web site at
www.epcorp.com.

         The Company's remaining costs to remediate the Year 2000 problem are
not expected to exceed $1.0 million. Of this amount, approximately $0.3 million
will be spent in the form of capital for systems replacement and approximately
$0.4 million will be incremental costs. The remaining costs relate to the
redeployment of the Company's existing resources to assess and remediate the
Year 2000 problem. Projects being deferred by this issue include items such as
system enhancements that would improve performance or functionality. Through
August 31, 1999, the Company estimates it has spent approximately $4.6 million
in assessing and remediating the Year 2000 problem, of which $1.3 million was
for capital equipment and $2.1 million related to incremental costs.

         The Company suspects its greatest risk lies within its financial
computer systems and Electronic Data Interchange ("EDI") capabilities with its
customers and suppliers. The Company relies on customer requirements and outside
services for most of its EDI capabilities and therefore is dependent on such
parties addressing Year 2000 issues. If these systems were to fail, the Company
would encounter difficulty performing functions such as compiling financial
data, invoicing customers, accepting electronic customer orders or informing
customers electronically of shipments. While some of these functions could be
performed manually, the Company presently is not certain what the extent of the
impact on operations would be. Failures in the Company's supply chain,
particularly in locations where the Company operates in a "just-in-time"
environment, pose another risk. The Company's year 2000 program involves a
cooperative effort with its suppliers to exchange information regarding year
2000 preparedness. Additionally, there are special risks associated with certain
suppliers, including utility companies, due to the Company's limited control
over those critical suppliers.

         Each Division has completed and is strengthening its contingency plans
which address issues related to potential failures of critical systems due to
Year 2000 problems. The Company will continue to review and strengthen those
plans throughout the balance of this year. The Company believes that the most
likely worst case scenario will be limited to isolated disruptions that will
affect individual business processes, facilities, suppliers or customers for a
relatively short time.

         The Company presently believes that through the planned modification to
existing systems and conversion to new systems, as well as ongoing
correspondence with suppliers and customers, the Year 2000 issue will not
materially impair the Company's ability to conduct business.


EURO CONVERSION

         On January 1, 1999, eleven members of the European Union adopted the
euro as their common legal currency and established fixed conversion rates
between their existing local currencies and the euro. During the transition
period, which runs from January 1, 1999 through December 31, 2002, transactions
may take place using either the euro or a local currency. However, conversion
rates will no longer be computed directly from one local



                                       29
<PAGE>   30


currency to another, but be converted from one local currency into an amount
denominated in euro, then be converted from the euro denominated amount into the
second local currency. On July 1, 2002, the local currencies will no longer be
legal tender for any transactions.

         The Company has both operating divisions and domestic export customers
located in Europe. In 1998, combined revenues from these sources were
approximately 15% of total revenues. The Company has operations in Germany, the
Netherlands, France and Spain, which are participating in the euro conversion,
and the United Kingdom, which has elected not to participate at this time. Most
of the affected operations plan to make the euro the functional currency in
fiscal year 2000, although certain of the Company's European operations have
already entered into euro-based transactions.

         It is difficult to assess the competitive impact of the euro conversion
on the Company's operations, both in Europe and in the United States. In markets
where sales are made in U.S. dollars or British pounds, there may be pressures
to denominate sales in the euro, however, exchange risks resulting from these
transactions could be mitigated through hedging. Pressures to price products in
euros may be more urgent for operations located in the United Kingdom,
particularly in the automotive industry, as the European automotive industry is
somewhat dominated by German companies. The currency risk to the operations
located in the United Kingdom could also be hedged, however the risk is greater
on a regional level that the hedging could result in additional costs that could
harm the cost competitiveness of those operations. Some customers have initiated
the process to price products in euros, but the process has not been progressing
quickly. It is not anticipated that costs incurred for changes to information
technology and other systems which are necessary for the euro conversion will be
material. The Company is currently assessing the impact the euro conversion may
have on items such as taxation and other issues.


RESTRICTIONS ON PAYMENT OF DIVIDENDS

         The Subsidiary and the Subsidiary Guarantors are subject to
restrictions on the payment of dividends and other forms of payment in both the
Credit Agreement and the Indenture for the Subordinated Notes. Those
restrictions generally prohibit the payment of dividends to the Company either
directly by the Subsidiary or indirectly through any Subsidiary Guarantor.
Certain limited exceptions are provided allowing for payments to the Company.
Specifically, the Subsidiary is authorized to make payments to the Company in
amounts not in excess of any amounts the Company is required to pay to meet its
consolidated income tax obligations. Additional payments from the Subsidiary to
the Company are permitted commencing September 1, 2003 in amounts not in excess
of the Company's obligations to make any cash dividend payments required to be
paid under the Company's Preferred Stock and to make any cash interest payments
required to be paid under any debentures issued by the Company in exchange for
the Company's Preferred Stock ("Exchange Debentures").


ACCOUNTING STANDARDS NOT YET ADOPTED

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which addresses the accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities in the balance sheet
and measure those instruments at fair value. The accounting for gains and losses
resulting from changes in fair value of a derivative depends on its intended use
and the resulting designation. The provisions of this statement become effective
for the Company beginning December 1, 2000. The Company has not yet determined
the impact this statement will have on its financial position or the results of
its operations. Other pronouncements issued by the FASB since June 1998 are not
applicable to the Company.


FORWARD-LOOKING STATEMENTS

         This Form 10-Q contains statements which, to the extent that they are
not recitations of historical fact, constitute "forward looking statements"
within the meaning of Section 21E of the Securities Exchange Act of 1934. Such
forward-looking information involves important risks and uncertainties that
could materially alter results in the future from those expressed in any
forward-looking statements made by, or on behalf of, the Company. These risks
and



                                       30
<PAGE>   31


uncertainties include, but are not limited to, the ability of the Company to
maintain existing relationships with customers, the ability of the Company to
successfully implement productivity improvements, cost reduction initiatives,
facilities expansion and the ability of the Company to develop, market and sell
new products and to continue to comply with environmental laws, rules and
regulations. Other risks and uncertainties include uncertainties relating to
economic conditions, acquisitions and divestitures, government and regulatory
policies, technological developments and changes in the competitive environment
in which the Company operates. Persons reading this Form 10-Q are cautioned that
such forward-looking statements are only predictions and that actual events or
results may differ materially. In evaluating such statements, readers should
specifically consider the various factors which could cause actual events or
results to differ materially from those indicated by such forward-looking
statements.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Both the Company's Term Loan Facility and Revolving Credit Facility
under the Credit Agreement bear interest at a variable rate equal to either (a)
the average daily rate on overnight U.S. federal funds transactions ("Federal
Funds Rate"), or (b) the London Interbank Offered Rate shown on Telerate Page
3750 for the applicable interest period ("LIBOR"), plus, in either case, an
applicable spread.

         On February 26, 1998, the Company entered into a three year interest
rate swap agreement with its lead bank to partially hedge its interest rate risk
on loans under the Credit Agreement. Under this agreement, the Company pays a
fixed rate of 5.805% on a notional amount of $150.0 million and receives LIBOR
on that amount. This swap transaction effectively fixes the interest rate on
$150.0 million of debt outstanding under the Credit Agreement at 5.805% plus the
applicable spread for the duration of the interest rate swap.

         The Credit Agreement was amended in May 1999 to increase the Revolving
Credit Facility, reduce the Term Loan Facility and provide for the
Securitization. In June 1999, approximately $120.5 million in term loans were
repaid with the proceeds from the Securitization of $65.0 million and
additional borrowings under the Revolving Credit Facility. The interest rate
swap agreement was not impacted by this transaction; however, it does not cover
debt outstanding under the Securitization.

         Loans under the Securitization bear interest at a variable rate equal
to market rates on commercial paper having a term similar to the applicable
interest period. As of August 31, 1999, $210.5 million in debt was outstanding
under the Credit Agreement, of which interest on $150.0 million is essentially
fixed by the interest rate swap agreement. The remaining $123.8 million of debt
outstanding bears interest at the variable rates under either the Revolving
Credit Agreement or Securitization as described above. Accordingly, a 1%
increase in both the applicable index rates would result in additional interest
expense of $1.2 million per year assuming no change in the level of borrowing.






                                       31
<PAGE>   32


     PART II. OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:


27.1 Financial Data Schedule



(b) Reports on Form 8-K

    None.






                                       32
<PAGE>   33


                                   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.








                                                EAGLE-PICHER HOLDINGS, INC.





                                                /s/ Carroll D. Curless
                                                --------------------------------
                                                Carroll D. Curless
                                                Vice President and Controller

                                                (Principal Financial Officer and
                                                Principal Accounting Officer)




DATE   September 24, 1999
    --------------------------------







                                       33
<PAGE>   34


                                   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.











                                                EAGLE-PICHER INDUSTRIES, INC.





                                                /s/ Carroll D. Curless
                                                --------------------------------
                                                Carroll D. Curless
                                                Vice President and Controller

                                                (Principal Financial Officer and
                                                Principal Accounting Officer)




DATE   September 24, 1999
    --------------------------------







                                       34
<PAGE>   35


                                   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/ Gary M. Freytag
                                                --------------------------------
                                                Gary M. Freytag
                                                Vice President and Treasurer
                                                (Principal Financial Officer)





DATE   September 24, 1999
    --------------------------------








                                       35
<PAGE>   36


                                   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.











                                          EAGLE-PICHER DEVELOPMENT COMPANY, INC.





                                          /s/ Gary M. Freytag
                                          -------------------------------------
                                          Gary M. Freytag
                                          Vice President and Treasurer
                                          (Principal Financial Officer)





DATE   September 24, 1999
    --------------------------------









                                       36
<PAGE>   37


                                   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.











                                          EAGLE-PICHER FAR EAST, INC.








                                          /s/ Gary M. Freytag
                                          -------------------------------------
                                          Gary M. Freytag
                                          Vice President and Treasurer
                                          (Principal Financial Officer)





DATE   September 24, 1999
    --------------------------------









                                       37
<PAGE>   38


                                   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.











                                          EAGLE-PICHER FLUID SYSTEMS, INC.





                                          /s/ Gary M. Freytag
                                          -------------------------------------
                                          Gary M. Freytag
                                          Treasurer
                                          (Principal Financial Officer)





DATE   September 24, 1999
    --------------------------------








                                       38
<PAGE>   39


                                   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.











                                          EAGLE-PICHER MINERALS, INC.





                                          /s/ Gary M. Freytag
                                          -------------------------------------
                                          Gary M. Freytag
                                          Vice President and Treasurer
                                          (Principal Financial Officer)





DATE   September 24, 1999
    --------------------------------









                                       39
<PAGE>   40


                                   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.











                                                EAGLE-PICHER TECHNOLOGIES, LLC





                                                /s/ R. Doug Wright
                                                --------------------------------
                                                R. Doug Wright
                                                Vice President, Controller
                                                and Chief Financial Officer




DATE   September 24, 1999
    --------------------------------










                                       40
<PAGE>   41


                                   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/ Gary M. Freytag
                                          -------------------------------------
                                          Gary M. Freytag
                                          Vice President and Treasurer
                                          (Principal Financial Officer)





DATE   September 24, 1999
    --------------------------------











                                       41
<PAGE>   42


                                   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.











                                        MICHIGAN AUTOMOTIVE RESEARCH CORPORATION





                                        /s/ Terence J. Rhoades
                                        ----------------------------------------
                                        Terence J. Rhoades
                                        Secretary and Treasurer
                                        (Principal Financial Officer)



DATE    September 24, 1999
    -----------------------------------








                                       42
<PAGE>   43


                                 EXHIBIT INDEX





Exhibit No.                    Description
-----------                    -----------


27.1                       Financial Data Schedule (submitted electronically to
                           the Securities and Exchange Commission for its
                           information.)












                                       43