<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

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

                For the quarterly period ended November 30, 2002
                          Commission File Number 1-8803

                          MATERIAL SCIENCES CORPORATION
             (Exact name of Registrant as specified in its charter)


Delaware                                95-2673173
(State or other jurisdiction            (IRS employer identification number)
of incorporation or organization)

2200 East Pratt Boulevard
Elk Grove Village, Illinois             60007
(Address of principal                   (Zip code)
executive offices)

     Registrant's telephone number, including area code: (847) 439-8270


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

Yes   X     No______
   -------

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

Yes   X     No______
   -------

As of January 2, 2003, there were 14,032,268 outstanding shares of common stock,
$.02 par value.

<PAGE>

                          MATERIAL SCIENCES CORPORATION

                                    FORM 10-Q

                     For The Quarter Ended November 30, 2002
                      (In thousands, except per share data)

                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

    (a)  Financial statements of Material Sciences Corporation and Subsidiaries

                                       2

<PAGE>

              Consolidated Statements of Income (Loss) (Unaudited)
                 Material Sciences Corporation and Subsidiaries

<TABLE>
<CAPTION>
                                                                                        Three Months Ended      Nine Months Ended
                                                                                           November 30,            November 30,
(In thousands, except per share data)                                                    2002        2001        2002       2001
------------------------------------------------------------------------------------  ----------  ----------  ----------  ---------
<S>                                                                                   <C>         <C>             <C>     <C>
Net Sales (1)                                                                         $   67,401   $  63,249  $  207,212  $ 196,610
Cost of Sales                                                                             55,593      51,495     168,207    159,971
                                                                                      ----------   ---------  ----------  ---------
Gross Profit                                                                          $   11,808   $  11,754  $   39,005  $  36,639
Selling, General and Administrative Expenses                                              10,390      11,131      30,074     32,059
Restructuring Expenses (10)                                                                  855       1,385         855      1,385
                                                                                      ----------   ---------  ----------  ---------
Income (Loss) from Operations                                                         $      563   $    (762) $    8,076  $   3,195
                                                                                      ----------   ---------  ----------  ---------
Other (Income) and Expense:
   Interest (Income) Expense, Net (14)                                                $      747   $    (496) $    1,605  $    (854)
   Equity in Results of Joint Ventures                                                       363         369       1,120      1,014
   Other, Net                                                                                 32         193          76        309
                                                                                      ----------   ---------  ----------  ---------
     Total Other Expense, Net                                                         $    1,142   $      66  $    2,801  $     469
                                                                                      ----------   ---------  ----------  ---------
Income (Loss) from Continuing Operations Before Provision
   (Benefit) for Income Taxes                                                         $     (579)  $    (828) $    5,275  $   2,726
Provision (Benefit) for Income Taxes                                                        (281)       (509)      1,944        759
                                                                                      ----------   ---------  ----------  ---------
Income (Loss) from Continuing Operations                                              $     (298)  $    (319) $    3,331  $   1,967
Discontinued Operations: (7)(13)
   Income from Discontinued Operation - Specialty Films (Net of Provision
     for Income Taxes of $0, $0, $0 and $1,009, Respectively)                                  -           -           -      1,469
   Loss from Discontinued Operation - Pinole Point Steel (Net of Benefit
     for Income Taxes of $0, $0, $0 and $5,261, Respectively)                                  -           -           -     (7,561)
   Gain (Loss) on Sale of Discontinued Operation - Specialty Films (Net of Benefit
     for Income Taxes of $0, $0, $70 and Provision for Income Taxes
     of $31,445, Respectively)                                                                 -           -        (101)    38,787
   Gain (Loss) on Discontinued Operation - Pinole Point Steel (Net of Benefit
     for Income Taxes of $102, Provision for Income Taxes of $0 and $2,032 and
     Benefit for Income Taxes of $7,588, Respectively)                                      (145)          -       2,928    (42,248)
Extraordinary Loss on Early Retirement of Debt (Net of Benefit
     for Income Taxes of $1,546) (15)                                                          -           -      (2,388)         -
                                                                                      ----------   ---------  ----------  ---------
Net Income (Loss)                                                                     $     (443)  $    (319) $    3,770  $  (7,586)
                                                                                      ==========   =========  ==========  =========

Basic Net Income (Loss) Per Share:
Income (Loss) from Continuing Operations                                              $    (0.02)  $   (0.02) $     0.24  $    0.14
Income from Discontinued Operation - Specialty Films                                           -           -           -       0.11
Loss from Discontinued Operation - Pinole Point Steel                                          -           -           -      (0.54)
Gain (Loss) on Sale of Discontinued Operation - Specialty Films                                -           -       (0.01)      2.78
Gain (Loss) on Discontinued Operation - Pinole Point Steel                                 (0.01)          -        0.21      (3.03)
Extraordinary Loss on Early Retirement of Debt                                                 -           -       (0.17)         -
                                                                                      ----------   ---------  ----------  ---------
Basic Net Income (Loss) Per Share                                                     $    (0.03)  $   (0.02) $     0.27  $   (0.54)
                                                                                      ==========   =========  ==========  =========

Diluted Net Income (Loss) Per Share:
Income (Loss) from Continuing Operations                                              $    (0.02)  $   (0.02) $     0.23  $    0.14
Income from Discontinued Operation - Specialty Films                                           -           -           -       0.11
Loss from Discontinued Operation - Pinole Point Steel                                          -           -           -      (0.54)
Gain (Loss) on Sale of Discontinued Operation - Specialty Films                                -           -       (0.01)      2.75
Gain (Loss) on Discontinued Operation - Pinole Point Steel                                 (0.01)          -        0.21      (3.00)
Extraordinary Loss on Early Retirement of Debt                                                 -           -       (0.17)         -
                                                                                      ----------   ---------- ----------  ---------
Diluted Net Income (Loss) Per Share                                                   $    (0.03)  $   (0.02) $     0.26  $   (0.54)
                                                                                      ==========   =========  ==========  =========

Weighted Average Number of Common Shares Outstanding
   Used for Basic Net Income (Loss) Per Share                                             13,656      14,036      14,004     13,954
Dilutive Shares                                                                                -           -         258        137
                                                                                      ----------   ---------  ----------  ---------
Weighted Average Number of Common Shares Outstanding
   Plus Dilutive Shares                                                                   13,656      14,036      14,262     14,091
                                                                                      ==========   =========  ==========  =========

Outstanding Common Stock Options Having No Dilutive Effect                                   747       1,261         726      1,179
                                                                                      ===========  =========  ==========  =========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        3

<PAGE>

                    Consolidated Balance Sheets (Unaudited)
                 Material Sciences Corporation and Subsidiaries

<TABLE>
<CAPTION>
                                                                                   November 30,          February 28,
(In thousands)                                                                        2002                   2002
------------------------------------------------------------------------------    ------------           ------------
<S>                                                                                 <C>                    <C>
Assets:
  Current Assets:
    Cash and Cash Equivalents                                                       $  44,505              $  33,806
    Restricted Cash (8)                                                                 2,630                  5,315
                                                                                    ---------              ---------
      Total Cash and Cash Equivalents                                               $  47,135              $  39,121
    Marketable Securities (11)                                                          3,030                 13,121
    Receivables, Less Reserves of $4,581 and $4,754, Respectively (2)                  27,583                 27,249
    Income Taxes Receivable                                                             3,526                  4,325
    Prepaid Expenses                                                                    2,458                  1,431
    Inventories:
      Raw Materials                                                                    10,755                 10,211
      Finished Goods                                                                   14,402                 14,645
    Prepaid Taxes                                                                       2,451                  2,451
    Current Assets of Discontinued Operation, Net - Pinole Point Steel (7)             13,597                 65,104
                                                                                    ---------              ---------
      Total Current Assets                                                          $ 124,937              $ 177,658
                                                                                    ---------              ---------

  Property, Plant and Equipment                                                     $ 248,915              $ 244,709
  Accumulated Depreciation and Amortization                                          (153,990)              (141,794)
                                                                                    ---------              ---------
      Net Property, Plant and Equipment                                             $  94,925              $ 102,915
                                                                                    ---------              ---------

  Other Assets:
    Investment in Joint Ventures (12)                                               $  13,475              $  11,033
    Intangible Assets, Net (9)                                                          6,557                  6,594
    Other                                                                               1,138                  1,274
                                                                                    ---------              ---------
      Total Other Assets                                                            $  21,170              $  18,901
                                                                                    ---------              ---------
      Total Assets                                                                  $ 241,032              $ 299,474
                                                                                    =========              =========

Liabilities:
  Current Liabilities:
    Current Portion of Long-Term Debt (15)                                          $  11,721              $  14,045
    Accounts Payable                                                                   23,646                 23,518
    Accrued Payroll Related Expenses                                                   12,006                 10,338
    Accrued Expenses                                                                    8,177                 10,911
    Accrued Future Operating Losses - Pinole Point Steel (7)                                -                  3,383
                                                                                    ---------              ---------
      Total Current Liabilities                                                     $  55,550              $  62,195
                                                                                    ---------              ---------

  Long-Term Liabilities:
    Deferred Income Taxes                                                           $   6,802              $   7,053
    Long-Term Debt, Less Current Portion (15)                                          43,944                 91,217
    Other                                                                              10,949                 10,385
                                                                                    ---------              ---------
      Total Long-Term Liabilities                                                   $  61,695              $ 108,655
                                                                                    ---------              ---------

Shareowners' Equity:
  Preferred Stock (3)                                                               $       -              $       -
  Common Stock (4)                                                                        365                    363
  Additional Paid-In Capital                                                           69,607                 67,441
  Treasury Stock at Cost (5)                                                          (46,528)               (34,813)
  Retained Earnings                                                                    99,572                 95,802
  Accumulated Other Comprehensive Income (Loss) (6)(11)                                   771                   (169)
                                                                                    ---------              ---------
      Total Shareowners' Equity                                                     $ 123,787              $ 128,624
                                                                                    ---------              ---------
      Total Liabilities and Shareowners' Equity                                     $ 241,032              $ 299,474
                                                                                    =========              =========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       4

<PAGE>

               Consolidated Statements of Cash Flows (Unaudited)
                 Material Sciences Corporation and Subsidiaries

<TABLE>
<CAPTION>
                                                                                    Three Months Ended          Nine Months Ended
                                                                                      November 30,                 November 30,
(In thousands)                                                                      2002         2001            2002       2001
---------------------------------------------------------------------------       ---------   ----------      ---------  ---------
<S>                                                                                <C>        <C>             <C>        <C>
Cash Flows From:
Operating Activities:
Net Income (Loss)                                                                  $  (443)   $    (319)      $  3,770   $  (7,586)
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by
    (Used in) Operating Activities:
    Discontinued Operation, Net - Specialty Films (13)                                   -            -              -      (2,597)
    Discontinued Operation, Net - Pinole Point Steel (7)                               725       (4,090)        20,022      (2,784)
    Gain on Sale of Discontinued Operation - Specialty Films (13)                        -            -            101     (38,787)
    Loss on Discontinued Operation - Pinole Point Steel (7)                            145            -         (2,928)     42,248
    Depreciation and Amortization                                                    4,052        4,340         12,328      12,855
    Benefit for Deferred Income Taxes                                                 (164)        (133)          (251)     (1,565)
    Compensatory Effect of Stock Plans                                                 342          660          1,081       2,196
    Other, Net                                                                         355          370          1,323       1,029
Changes in Assets and Liabilities:
    Receivables                                                                        841        2,829           (334)        989
    Income Taxes Receivable                                                           (279)           -            799       1,637
    Prepaid Expenses                                                                   491          (23)        (1,128)       (168)
    Inventories                                                                        (73)      (2,048)          (301)      2,020
    Accounts Payable                                                                   631       (4,428)           128      (5,521)
    Accrued Expenses                                                                 2,231       (3,645)        (1,081)     (5,085)
    Income Taxes Payable                                                                 -      (20,028)             -     (23,012)
    Other, Net                                                                         155         (337)           415        (104)
                                                                                   -------    ---------       --------   ---------
            Net Cash Provided by (Used in) Operating Activities                    $ 9,009    $ (26,852)      $ 33,944   $ (24,235)
                                                                                   -------    ---------       --------   ---------

Investing Activities:
Discontinued Operation, Net - Specialty Films (13)                                 $     -    $       -       $      -   $  (6,508)
Discontinued Operation, Net - Pinole Point Steel (7)                                     -         (179)          (176)     (1,482)
Cash Received from Sale of Specialty Films, Net (13)                                     -        1,494              -     121,982
Cash Received from Sale of Pinole Point Steel, Net (7)                                   -            -         31,221           -
Capital Expenditures                                                                (1,131)      (1,135)        (3,679)     (3,355)
Acquisition, Net of Cash Acquired                                                        -          (47)             -        (397)
Investment in Joint Ventures (12)                                                     (108)         (28)        (3,562)         (9)
Purchases of Marketable Securities (11)                                                  -      (20,512)        (8,003)    (20,512)
Proceeds from Sale of Marketable Securities (11)                                     1,037        2,056         18,196       2,056
Other                                                                                   43         (274)           298        (881)
                                                                                   -------    ---------       --------   ---------
            Net Cash Provided by (Used in) Investing Activities                    $  (159)   $ (18,625)      $ 34,295   $  90,894
                                                                                   -------    ---------       --------   ---------

Financing Activities:
Discontinued Operation, Net - Specialty Films (13)                                 $     -    $       -       $      -   $    (294)
Proceeds Under Line of Credit                                                            -            -              -      65,800
Payments Under Line of Credit                                                            -            -              -     (90,300)
Payments of Debt                                                                      (158)        (142)       (49,597)     (7,557)
Cash from Cancellation of Letter of Credit (8)                                          28            -          2,685           -
Purchase of Treasury Stock (5)                                                           -            -        (11,715)          -
Issuance of Common Stock                                                               267          339          1,087       1,231
                                                                                   -------    ---------       --------   ---------
            Net Cash Provided by (Used in) Financing Activities                    $   137    $     197       $(57,540)  $ (31,120)
                                                                                   -------    ---------       --------   ---------

Net Increase (Decrease) in Cash                                                    $ 8,987    $ (45,280)      $ 10,699   $  35,539
Cash and Cash Equivalents at Beginning of Period                                    35,518       83,238         33,806       2,419
                                                                                   -------    ---------       --------   ---------
Cash and Cash Equivalents at End of Period                                         $44,505    $  37,958       $ 44,505   $  37,958
                                                                                   =======    =========       ========   =========

Supplemental Cash Flow Disclosures:
    Interest Paid                                                                  $   203    $   3,666       $  4,316   $   8,564
    Income Taxes Paid                                                                  182       16,999          1,707      17,207
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        5

<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
                          MATERIAL SCIENCES CORPORATION
                                 (In thousands)

The data for the three and nine months ended November 30, 2002 and 2001 have not
been audited by our independent public accountants but, in the opinion of
Material Sciences Corporation (the "Company" or "MSC"), reflect all adjustments
(consisting of only normal, recurring adjustments) necessary for a fair
presentation of the information at those dates and for those periods. The
financial information contained in this report should be read in conjunction
with the Company's Annual Report on Form 10-K for the year ended February 28,
2002. Certain prior year amounts have been reclassified to conform with the
fiscal 2003 presentation.

(1) During the nine months ended November 30, 2002 and 2001, the Company
    derived approximately 22% and 21%, respectively, of its sales from fees
    billed by a subsidiary of the Company to Walbridge Coatings (the
    "Partnership") for operating the Walbridge, Ohio facility. Summarized
    financial information for the Partnership is presented below:

<TABLE>
<CAPTION>
                                       Three Months Ended      Nine Months Ended
                                       ------------------      -----------------
                                           November 30,            November 30,
                                           -----------             -----------
         Income Statement Information     2002         2001       2002        2001
                                          ----         ----       ----        ----
         <S>                            <C>         <C>         <C>         <C>
         Net Sales                      $ 11,577    $  4,153    $ 42,182    $ 32,663
         Loss from Operations               (624)       (207)     (1,847)     (1,453)
         Net Loss                           (568)       (207)     (1,774)     (1,439)

<CAPTION>
                                       November 30, February 28,
         Balance Sheet Information        2002         2002
                                          ----         ----
         <S>                            <C>         <C>
         Current Assets                 $  6,324    $  7,949
         Total Assets                     17,575      20,632
         Total Liabilities                   122       1,627
         Partners' Capital                17,453      19,005
</TABLE>

(2) Includes trade receivables due from the Partnership of $2,399 as of November
    30, 2002 and $1,621 as of February 28, 2002.

(3) Preferred Stock, $1.00 Par Value; 10,000,000 Shares Authorized; 1,000,000
    Designated Series B Junior Participating Preferred; None Issued.

(4) Common Stock, $.02 Par Value; 40,000,000 Shares Authorized; 18,225,175
    Shares Issued and 14,036,527 Shares Outstanding as of November 30, 2002
    and 18,115,624 Shares Issued and 14,731,188 Shares Outstanding as of
    February 28, 2002.

(5) Treasury Stock at Cost: 4,188,648 Shares as of November 30, 2002 and
    3,384,436 Shares as of February 28, 2002. On June 22, 2000, MSC's Board
    of Directors authorized the repurchase of up to one million shares of
    the Company's common stock. In the third quarter of fiscal 2001, the
    Company suspended the program after having purchased 709,381 shares.

                                       6

<PAGE>

     On March 1, 2002, the Company purchased 13,593 of its shares from certain
     employees based on the closing price on February 28, 2002 in connection
     with the vesting of shares granted under the Company's 1999 Long-Term
     Incentive/Leverage Stock Awards Program ("1999 Program"). The Compensation
     Committee of the Board of Directors approved the share repurchase under the
     provisions of the Material Sciences Corporation 1992 Omnibus Awards Plan
     for Key Employees to cover a portion of the participants' tax withholding
     liability for the vesting of these shares under the 1999 Program.

     On June 20, 2002, the Company resumed the previously approved repurchase
     program and by August 31, 2002, the Company had completed this share
     repurchase program by purchasing the remaining 290,619 shares with an
     average purchase price of $14.89 per share. On June 20, 2002, MSC's Board
     of Directors also authorized a new program to repurchase up to an
     additional 500,000 shares of the Company's common stock. The repurchase of
     500,000 shares was complete at August 31, 2002 with an average purchase
     price of $14.50 per share. No further share repurchases have been approved
     by the Company's Board of Directors.

(6)  Comprehensive Income (Loss):

<TABLE>
<CAPTION>
                                          Three Months Ended      Nine Months Ended
                                          ------------------      -----------------
                                             November 30,            November 30,
                                             ------------            ------------
                                           2002        2001         2002       2001
                                          ------      ------      -------    -------
     <S>                                  <C>         <C>         <C>        <C>
     Net Income (Loss)                    $ (443)     $ (319)     $ 3,770    $(7,586)
     Other Comprehensive Income:
        Foreign Currency Translation
        Adjustments                           12         181          850        181
        Unrealized Gain on Marketable
        Securities                             1          62           90         62
                                          ------      ------      -------    -------
     Comprehensive Income (Loss)          $ (430)     $  (76)     $ 4,710    $(7,343)
                                          ======      ======      =======    =======
</TABLE>

     The decrease in foreign currency translation adjustments was due to higher
     exchange rates used to translate the Company's international operations to
     U.S. dollars in the third quarter of fiscal 2003. The Accumulated Other
     Comprehensive Income (Loss) included in Shareowners' Equity as of November
     30, 2002 of $771 included foreign currency translation adjustments of $765
     and unrealized gains on marketable securities of $6.

(7)  On May 31, 2002, the Company completed the sale of substantially all of the
     assets of its Pinole Point Steel business. The Company is in the process of
     liquidating the remaining assets and liabilities of the business. As of
     November 30, 2002, the Company has received $51,243 related to the
     disposition and liquidation of the business, consisting of $31,221 of sale
     proceeds from Grupo IMSA S.A. de C.V. and $20,022 from liquidating the
     Pinole Point Steel operations. In addition, as of November 30, 2002, there
     is $13,597 in net assets remaining to be liquidated. The net assets consist
     primarily of the expected tax refund due to a loss carryback offsetting a
     portion of the gain on sale of its Specialty Films business in the prior
     year. The remaining net assets include accounts receivable, offset, in
     part, by severance expenses and other liabilities not assumed by Grupo IMSA
     S.A. de C.V. Pinole Point Steel has been reported as a discontinued
     operation, and the consolidated financial

                                        7

<PAGE>

     statements have been reclassified to segregate the net assets and operating
     results of the business.

     As of February 28, 2002, the Company recorded a provision for loss on
     discontinued operation, net of income taxes, of $53,287. The loss on
     discontinued operation, net of income taxes, included the allocation of
     consolidated interest expense of $5,391 incurred from September 1, 2001
     through May 31, 2002. The allocations were based on the debt associated
     with the original purchase of Pinole Point Steel in December 1997 and
     Pinole Point Steel's subsequent cash flow. During the first quarter of
     fiscal 2003, the Company recorded an adjustment on sale of discontinued
     operation, net of income taxes, of $3,683 to reduce the previously provided
     loss on discontinued operation. The adjustment consisted of a reduction for
     estimated operating losses of $1,247 due to higher plant utilization and
     customers' willingness to accelerate product deliveries prior to the
     closing of the transaction. In addition, MSC recorded a favorable change in
     the estimated proceeds of the sale of $2,436. During the second quarter of
     fiscal 2003, the Company recorded an additional loss on sale of
     discontinued operation, net of income taxes, of $610 related to increases
     in previously estimated bad debt expense and product claims expense, and
     employee expenses related to the collection of accounts receivable and
     settlement of certain retained liabilities. During the third quarter of
     fiscal 2003, the Company recorded an additional loss on sale of
     discontinued operation, net of income taxes, of $145 related to increases
     in previously estimated workers compensation expense, product claims
     expense and bad debt expense.

     Net sales and loss from discontinued operation of Pinole Point Steel were
     as follows:

<TABLE>
<CAPTION>
                                                Three Months Ended           Nine Months Ended
                                                ------------------           -----------------
                                                   November 30,                 November 30,
                                                   ------------                 ------------
                                                2002          2001           2002         2001
                                                ----          ----           ----         ----
     <S>                                       <C>          <C>            <C>          <C>
     Net Sales                                 $    _       $34,267        $48,050      $102,191
     Loss from Discontinued Operation,
       Net of Income Taxes                          _        (3,591)        (2,136)      (11,152)
</TABLE>

     No consolidated interest expense was allocated to Pinole Point Steel in the
     three months ended November 30, 2002. The loss from discontinued operation,
     net of income taxes, for the three months ended November 30, 2001 includes
     the allocation of consolidated interest expense of $1,797. For the
     nine-months ended November 30, 2002 and 2001, the loss from discontinued
     operation, net of income taxes, includes the allocation of interest expense
     of $1,797 and $6,303, respectively.

(8)  In April 2002, one of the Company's letters of credit for $3,235 was
     canceled and the related cash collateral was released to the Company.
     During the third quarter of fiscal 2003, a $28 commercial letter of credit
     expired. As of November 30, 2002, the Company's outstanding letters of
     credit continue to be cash collateralized. Other than $2,630 and $5,315
     that were classified as restricted cash in the consolidated balance sheets
     as of November 30, 2002 and February 28, 2002, respectively, there are no
     other restrictions on the use of the Company's cash and cash equivalents
     under the Company's line of credit facility at times when no borrowings are
     outstanding. The line of credit is secured by accounts receivable of the
     Company.

                                        8

<PAGE>

(9)  In June 2001, the Financial Accounting Standards Board ("FASB") issued
     Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
     Combinations" and SFAS No. 142, "Goodwill and Other Intangible Assets."
     SFAS No. 141 requires that all business combinations initiated after June
     30, 2001, be accounted for using the purchase method of accounting. With
     the adoption of SFAS No. 142 on March 1, 2002, goodwill is no longer
     subject to amortization over its estimated useful life. Goodwill will be
     subject to at least an annual assessment of impairment by applying a
     fair-value based test, beginning on the date of adoption of the new
     accounting standard. The Company completed its initial impairment
     assessment as of August 31, 2002 as required under the impairment
     requirements of SFAS No. 142 and no impairment was deemed necessary. MSC
     will complete the required annual impairment assessment in the fourth
     quarter of fiscal 2003.

     As of November 30, 2002, the Company's net intangibles consisted of $6,516
     for goodwill and $41 for a non-compete agreement.

     The Company adopted SFAS No. 144, "Impairment or Disposal of Long-Lived
     Assets" on March 1, 2002. This statement further refines the rules for
     accounting for long-lived assets and long-lived assets to be disposed of.
     MSC has assessed the impairment requirements of SFAS No. 144 and believes
     that no adjustment is deemed necessary.

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
     No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical
     Corrections." SFAS No. 145 makes changes to several areas, including the
     classification of gains and losses from extinguishment of debt and
     accounting for certain lease modifications. The statement is effective for
     fiscal years beginning after May 15, 2002. With the adoption of SFAS No.
     145 on March 1, 2003, the extraordinary loss on early retirement of debt
     will no longer be classified as an extraordinary item and will be reflected
     as a component of income from continuing operations in the consolidated
     statements of income (loss).

     In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
     Associated with Exit or Disposal Activities" which addresses financial
     accounting and reporting for costs associated with exit or disposal
     activities. This statement requires that a liability be recognized at fair
     value for costs associated with exit or disposal activities only when the
     liability is incurred as opposed to at the time the Company commits to an
     exit plan as permitted under EITF Issue No. 94-3, "Liability Recognition
     for Certain Employee Termination Benefits and Other Costs to Exit an
     Activity (including Certain Costs Incurred in a Restructuring)." SFAS No.
     146 is effective for exit or disposal activities that are initiated after
     December 31, 2002. The Company does not expect that the adoption of this
     statement will have a material impact on the Company's financial position,
     results of operations or cash flows.

                                        9

<PAGE>

(10) During the nine months of fiscal 2003, cash of $459 was paid in conjunction
     with the restructuring program announced on November 15, 2001.

     On November 20, 2002, the Company announced it implemented a program to
     reduce overhead and improve efficiencies. The program involves
     restructuring MSC's manufacturing organization, including terminations of
     14 salaried personnel. The Company recorded a restructuring charge of $855
     for severance and other related costs in the third quarter of fiscal 2003.
     As of November 30, 2002, cash of $16 was paid in conjunction with the
     restructuring program. As presented in the chart below, the restructuring
     reserve was $918 at November 30, 2002.

                                             Severance       Other       Total
                                             ---------       -----       -----

     Restructuring Reserve as of
     February 28, 2002                         $   434      $   104     $   538
     Restructuring Reserve as of                   677          178         855
     November 20, 2002
     Total Cash Payments                          (389)         (86)       (475)
                                               -------      -------     -------
     Total Restructuring Reserve as
     of November 30, 2002                      $   722      $   196     $   918
                                               =======      =======     =======

(11) During fiscal 2003, the Company made investments in marketable securities.
     These marketable securities are available for sale and consist primarily of
     investments in U.S. agency and corporate notes. These investments are
     expected to be held less than twelve months and are classified as
     marketable securities in the consolidated balance sheets. The Company
     recorded unrealized gains and losses on its investments in marketable
     securities to adjust the carrying value of these investments to fair value.
     Unrealized gains were $6 as of November 30, 2002. The unrealized gains were
     classified as a component of Accumulated Other Comprehensive Income (Loss).

(12) On May 13, 2002, MSC completed the purchase of LTV Corporation's ownership
     interests in the Partnership for $3,137. As a result, MSC's ownership
     interest in the Partnership increased to 66.5% and it gained access to an
     additional 33% of the facility's available line time. Under the terms of
     the Partnership agreements, all significant operating actions require the
     consent of the management committee. MSC and Bethlehem Steel Company are
     each represented by two members on the four-member management committee. As
     a result, the Company does not have a controlling voting interest in the
     Partnership and, accordingly, continues to account for the Partnership
     under the equity method.

                                       10

<PAGE>

(13)    On June 29, 2001, the Company completed the sale of substantially all
        of the assets of its Specialty Films segment, including its interest in
        Innovative Specialty Films, LLC, to Bekaert pursuant to the terms of
        the Purchase Agreement by and among MSC, MSC Specialty Films, Inc.
        ("MSC/SFI"), Bekaert and N.V. Bekaert S.A., dated June 10, 2001. As a
        result of the sale, Specialty Films is being reported as a discontinued
        operation in the prior year.

        During the second quarter of fiscal 2003, the Company recorded an
        after-tax charge of $101 related to a decrease in the previously
        estimated insurance premium refund for the Specialty Films business.

(14)    The table presented below analyzes the components of interest (income)
        expense, net.

<TABLE>
<CAPTION>
                                                      Three Months Ended         Nine Months Ended
                                                      ------------------         -----------------
                                                         November 30,               November 30,
                                                         ------------               ------------
        Interest (Income) Expense, Net:                2002       2001           2002        2001
                                                       ----       ----           ----        ----
<S>                                                   <C>       <C>             <C>        <C>
        Interest Expense                              $  966    $ 1,829         $ 4,179    $ 6,498
        Interest Income                                 (219)      (528)           (777)    (1,049)
        Interest Expense Allocated to
           Pinole Point Steel                              -     (1,797)         (1,797)    (6,303)
                                                      ------    -------         -------    -------
        Interest (Income) Expense, Net                $  747    $  (496)        $ 1,605    $  (854)
                                                      ======    =======         =======    =======
</TABLE>

        As a result of the sale of Pinole Point Steel, the Company no longer
        allocates interest expense to Pinole Point Steel.

(15)    On July 31, 2002, the Company made a debt payment of $39,852 to the
        holders of the 1997 Senior Notes. The debt payment consisted of
        principal of $35,714, interest of $420 and a contractual prepayment
        penalty of $3,718 (pretax basis). The extraordinary loss on early
        retirement of debt, net of income taxes, includes the prepayment
        penalty of $2,257 and a $131 write-off of debt issuance costs.

        The estimated fair value of the Company's remaining debt, based on
        discounted cash flows, was less than the carrying value by $6,387 as of
        November 30, 2002.

        The 1998 Senior Note agreements require the Company to adhere to certain
        covenants. The most significant of these covenants include maintenance
        of consolidated cumulative adjusted net worth of $118,341. This covenant
        may limit the Company's ability to repurchase its common stock from time
        to time. Other covenants include a consolidated senior debt ratio
        (maximum of 55.0% until agreement expiration) and a total indebtedness
        ratio (maximum of 60.0% until agreement expiration). MSC was in
        compliance with the financial covenants related to the 1998 Senior Notes
        for the period ended November 30, 2002.

                                       11

<PAGE>

(16)    MSC is a party to various legal proceedings in connection with the
        remediation of certain environmental matters. The most significant
        proceedings relate to the Company's involvement in Superfund sites in
        Kingsbury and Gary, Indiana. MSC has been named as a potentially
        responsible party ("PRP") for the surface, soil and ground water
        contamination at these sites.

        The United States District Court for the Northern District of Indiana
        has entered a Consent Decree between the government and certain PRPs on
        the scope of its remediation work at the Kingsbury site. The
        participating PRPs account for approximately 75% of the waste volume
        sent to this site. In December 2001, the PRPs established and funded a
        trust that has contracted with a remediation contractor to undertake all
        foreseeable activities necessary to achieve cleanup of the site pursuant
        to the decree. The trust has purchased an annuity that will pay the
        remediation contractor the anticipated expenses and oversight costs,
        including the purchase of stop-loss insurance coverage to reimburse the
        trust in the event of unforeseen cleanup expenses. The Company
        contributed $2,047 to the trust in December 2001, with no impact to
        income (loss) before income taxes, and expects that this payment will
        conclude its financial obligations with respect to the Kingsbury site.
        Upon the conclusion of litigation against a PRP that elected not to
        participate in the trust, the Company will be entitled to receive its
        pro rata share of any funds remaining in the site group litigation
        account and any periodic payments by the non-participating PRP equal to
        its share of the trust's ongoing remediation expenses. Moreover, should
        site closure be achieved ahead of schedule, the Company will be entitled
        to receive its pro rata share of the commuted value of the annuity less
        a 25% early closure incentive bonus payable to the remediation
        contractor.

        The United States District Court for the Northern District of Indiana
        also has entered a Consent Decree between the government and certain
        PRPs on the scope of the remediation work at the Gary site. The estimate
        of the Company's liability for this site is $1,100. This work has begun,
        and MSC has maintained a letter of credit for approximately $1,200 to
        secure its obligation to pay its currently estimated share of the
        remediation expenses at this site.

        On February 27, 2002, the Company received a notice of alleged
        violations of environmental laws, regulations or permits from the
        Illinois EPA related to volatile organic matter ("VOM") air emissions
        and other permitting issues at its Elk Grove Village facility. The
        Company has filed a response and performed stack testing for one of its
        production lines under the supervision of the Illinois EPA. Those recent
        stack test results, when considered with stack test results from the
        facility's other production lines taken in the past, indicate the
        Company's Elk Grove Village facility is in compliance with the overall
        VOM emission limitations in its Clean Air Act permit. However, the
        Company's VOM coating application volume on one of its production lines
        is in excess of the permit limit. To address that issue, the Company has
        filed a permit modification request to reflect the current VOM
        application rates on the facility's production lines, which the Illinois
        EPA recently granted. The Illinois EPA has indicated that resolution of
        the matters alleged in the February 27, 2002 Notice of Violation may
        require referral to the office of the Illinois Attorney General for
        potential enforcement action, which could lead to the imposition of
        penalties on the Company.

                                       12

<PAGE>

        MSC believes its range of exposure for all known environmental matters,
        based on allocations of liability among PRPs, the most recent estimate
        of remedial work and other factors is $1,100 to $1,700. The Company's
        environmental reserves were approximately $1,400 as of November 30,
        2002.

        The Company believes that the ultimate outcome of its environmental
        legal proceedings will not have a material adverse effect on the
        Company's financial condition or results of operations, given the
        reserves recorded as of November 30, 2002 and, where applicable,
        taking into account contributions from other PRPs. However, there can
        be no assurance that the Company's environmental legal proceedings,
        individually or in the aggregate, will not have a material adverse
        effect on the Company's financial condition or results of operations
        due to a number of uncertainties, including without limitation, the
        costs of site cleanup, the discretionary authority of the Illinois
        Attorney General in bringing enforcement actions and other factors.

        The Company is also party to various legal actions arising in the
        ordinary course of its business. These legal actions cover a broad
        variety of claims spanning the Company's entire business. The Company
        believes that the resolution of these legal actions will not,
        individually or in the aggregate, have a material adverse effect on the
        Company's financial condition or results of operations.

                                       13

<PAGE>

                          MATERIAL SCIENCES CORPORATION

                                    FORM 10-Q

                     For The Quarter Ended November 30, 2002

                          PART I. FINANCIAL INFORMATION

                                 (In thousands)

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

The following management's discussion and analysis of financial condition and
results of operations ("MD&A") should be read in conjunction with the February
28, 2002 Financial Statements and notes thereto, the MD&A included in the
Company's Annual Report on Form 10-K and the Company's other filings with the
Securities and Exchange Commission. Certain prior year amounts have been
reclassified to conform with the fiscal 2003 presentation.

As a result of the sale of substantially all of the assets of the Company's
Specialty Films segment, including MSC Specialty Films, Inc. ("MSC/SFI"), to
Bekaert Corporation and its affiliates ("Bekaert") in the second quarter of
fiscal 2002, and the sale of substantially all of the assets of the Company's
Pinole Point Steel business, including MSC Pinole Point Steel Inc. and MSC Pre
Finish Metals (PP) Inc., to Grupo IMSA S.A. de C.V. ("IMSA") and other third
parties in the first quarter of fiscal 2003, both Specialty Films and Pinole
Point Steel are reported as discontinued operations for all periods presented.

RESULTS OF OPERATIONS

Net Sales

Net sales from continuing operations in the third quarter of fiscal 2003 were
$67,401, 6.6% higher than $63,249 in the third quarter of fiscal 2002. For the
nine months ended November 30, 2002, net sales from continuing operations
increased 5.4% to $207,212 from $196,610 in the same period last year.

Sales of electronic-based materials decreased 7.6% to $6,176 in the third
quarter of fiscal 2003 from $6,686 in the prior year period. For the nine months
ended November 30, 2002, electronic-based materials sales increased 1.7% to
$16,729 compared with $16,452 for the same period last year. For both periods,
an unfavorable change in mix from stainless steel to aluminum disk drive sales
and lower electronic cabinetry material sales were offset, in part, by higher
set-top box and printer cartridge material shipments. For the third quarter and
nine months of fiscal 2003, the Company has reported sales of $102 and $122
related to the switch and sensor business, respectively.

                                       14

<PAGE>

Acoustical/thermal materials sales declined 6.3% in the third quarter of fiscal
2003 to $14,916 as compared with $15,921 in the third quarter of fiscal 2002,
due mainly to decreased sales of disc brake noise damping materials as well as
lower shipments of Specular+(R) to the lighting market offset, in part, by
higher engine and body panel material shipments. For the nine months ended
November 30, 2002 and 2001, acoustical/thermal materials sales decreased 7.1% to
$46,091 compared with $49,633 for the same period last year. The change was due
mainly to decreased sales to the automotive market and Specular+(R), somewhat
offset by higher shipments to the appliance market.

Sales of coated metal materials increased 13.9% to $46,309 during the third
quarter of fiscal 2003, from $40,642 in the third quarter of fiscal 2002. Coated
metal materials sales increased to $144,392 for the nine-month period ended
November 30, 2002 as compared to $130,525 for the same period last year, a 10.6%
increase. The main contributors to the increase, for both periods, were higher
electrogalvanizing sales as well as higher shipments of coated metal to the
transportation and appliance markets, offset slightly by a decline in shipments
to the building and construction and lighting markets. For the nine-month period
ended November 30, 2002, the Company's electrogalvanizing sales primarily
benefited from supplying a portion of Double Eagle Steel Coating Company's
("DESCO") requirements, whose coating line capabilities were interrupted by a
major fire at the DESCO facility in December 2001.

Gross Profit

The Company's gross profit margin for the third quarter of fiscal 2003 was
17.5%, or $11,808, as compared with 18.6%, or $11,754, in the third quarter of
fiscal 2002. The decrease in gross profit margin for the third quarter was due
mainly to an unfavorable product mix partially offset by higher capacity
utilization. For the nine months of fiscal 2003, gross profit margin was 18.8%,
or $39,005, as compared with 18.6%, or $36,639, in the nine months of fiscal
2002. Higher capacity utilization was offset by a less favorable product mix and
additional resources being focused at the manufacturing facilities as a result
of the Company's November 15, 2001 restructuring program.

Selling, General and Administrative Expenses

Selling, general and administrative ("SG&A") expenses of $10,390 were 15.4% of
net sales in the third quarter of fiscal 2003 as compared with $11,131, or
17.6%, of net sales in the same period last year. The decrease in SG&A
percentage was due to the increase in net sales somewhat offset by investments
in marketing and research and development in the switch and sensor products
business and professional services. For the nine-months ended November 30, 2002,
SG&A expenses of $30,074 were 14.5% of net sales as compared with $32,059, or
16.3%, of net sales in fiscal 2002. The decrease in SG&A percentage was due to
the increase in net sales offset by increased spending in marketing and research
and development, higher variable compensation expense and professional services.
The Company's year-to-date spending on its marketing and research and
development spending related to the switch and sensor business in fiscal 2003
was approximately $2,500. The Company anticipates marketing and research and
development spending related to the switch and sensor business to be
approximately $3,700 for fiscal 2003.

                                       15

<PAGE>

Restructuring Expenses

On November 20, 2002, the Company announced it implemented a program to reduce
overhead and improve efficiencies. The program involves restructuring MSC's
manufacturing organization, including terminations of 14 salaried personnel. The
Company recorded a restructuring charge of $855 for severance and other related
costs in the third quarter of fiscal 2003. During the third quarter of fiscal
2002, the Company recorded a $1,385 restructuring charge related to a
reorganization and cost reduction program that combined the Company's previous
three continuing operations into a single business unit. Total cash paid related
to the restructuring programs in the third quarter and nine months of fiscal
2003 was $102 and $475, respectively. The remaining restructuring reserve for
this program and the program initiated in 2001 was $918 as of November 30, 2002.

Total Other (Income) and Expense, Net and Income Taxes

Total other expense, net was $1,142 in the third quarter of fiscal 2003 as
compared with $66 in the third quarter of fiscal 2002. For the nine months ended
November 30, 2002, total other expense, net was $2,801 compared to $469 in the
prior year period. The variance was primarily due to interest expense not
allocated to the Pinole Point Steel business in the third quarter. Equity in
Results of Joint Ventures was flat with the prior year third quarter. For the
nine months of fiscal 2003 and 2002, Equity in Results of Joint Ventures was a
net loss of $1,120 and $1,014, respectively. The change in net loss was due to
the increased ownership in Walbridge Coatings (the "Partnership") as a result of
the Company purchasing LTV Corporation's ("LTV") interest in the first quarter.
MSC's effective tax rate for continuing operations was 48.5% (benefit) for the
third quarter of fiscal 2003 versus 61.5% (benefit) for the same period last
year. For the nine months of fiscal 2003, the Company's effective income tax
rate was 36.9% as compared with 27.8% in the nine months of fiscal 2002. The
variance in the effective tax rate for both periods was due to tax credits and
other permanent items relative to income before income taxes.

General

MSC serves the electrogalvanizing market through its 66.5% ownership interest in
the Partnership. Under the terms of the Partnership agreements, all significant
operating actions require the consent of the management committee. Bethlehem
Steel Corporation ("BSC") continues to maintain a 33.5% ownership interest and
has access to 63% of the available line time. MSC has the right to utilize
available line time to the extent BSC does not order Partnership services. In
the third quarter of fiscal 2003, MSC utilized 31% of the available line time.
MSC and BSC are each represented by two members on the four-member management
committee. The Company does not have a controlling voting interest in the
Partnership and, accordingly, continues to account for the Partnership under the
equity method. The Partnership term expires on December 31, 2004.

As previously reported, BSC filed for protection under Chapter 11 of the U.S.
Bankruptcy Code on October 15, 2001. The Partnership is being treated as a
critical vendor under BSC's proceedings. As of November 30, 2002, the
Partnership had no BSC pre-petition receivables outstanding and $2,940 of BSC
post-petition receivables outstanding. The BSC post-petition receivables are
judged to be collectible in full and, therefore, no reserve was recorded as of
November 30, 2002. Sales to BSC through the Partnership were $9,149 in the third
quarter of fiscal 2003. BSC continues to participate in the Partnership and to
furnish electrogalvanized coatings to the automotive industry. The Company
believes that the Partnership's processing services are valuable to the BSC
estate, however, there can be no assurance that the BSC bankruptcy will not
result in further disruption of the business.

                                       16

<PAGE>

On December 15, 2001, a major fire destroyed an electrogalvanizing facility
owned by DESCO, a joint venture between U.S. Steel Corporation and Rouge Steel
Company. The DESCO facility resumed production in September 2002 and MSC
anticipates that sales to U.S. Steel Corporation and Rouge Steel Company will be
significantly less than in the first two quarters of fiscal 2003. For the third
quarter of fiscal 2003, U.S. Steel Corporation and Rouge Steel Company utilized
3% of the Partnership's available line time compared with 31% in the first two
fiscal quarters. Due to uncertainty in the economy and bankruptcies in the steel
industry, no assurance can be made as to the Partnership's future production
levels.

On February 27, 2002, the Company received a notice of alleged violations of
environmental laws, regulations or permits from the Illinois EPA related to
volatile organic matter ("VOM") air emissions and other permitting issues at its
Elk Grove Village facility. The Company has filed a response and performed stack
testing for one of its production lines under the supervision of the Illinois
EPA. Those recent stack test results, when considered with stack test results
from the facility's other production lines taken in the past, indicate the
Company's Elk Grove Village facility is in compliance with the overall VOM
emission limitations in its Clean Air Act permit. However, the Company's VOM
coating application volume on one of its production lines is in excess of the
permit limit. To address that issue, the Company has filed a permit modification
request to reflect the current VOM application rates on the facility's
production lines, which the Illinois EPA recently granted. The Illinois EPA has
indicated that resolution of the matters alleged in the February 27, 2002 Notice
of Violation may require referral to the office of the Illinois Attorney General
for potential enforcement action, which could lead to the imposition of
penalties on the Company.

The Company believes that the ultimate outcome of its environmental legal
proceedings will not have a material adverse effect on the Company's financial
condition or results of operations, given the reserves recorded as of November
30, 2002 and, where applicable, taking into account contributions from other
PRPs. However, there can be no assurance that the Company's environmental legal
proceedings, individually or in the aggregate, will not have a material adverse
effect on the Company's financial condition or results of operations due to a
number of uncertainties, including without limitation, the costs of site
cleanup, the discretionary authority of the Illinois Attorney General in
bringing enforcement actions and other factors.

The Company is also party to various legal actions arising in the ordinary
course of its business. These legal actions cover a broad variety of claims
spanning the Company's entire business. The Company believes that the resolution
of these legal actions will not, individually or in the aggregate, have a
material adverse effect on the Company's financial condition or results of
operations.

RESULTS OF DISCONTINUED OPERATIONS

Pinole Point Steel

On May 31, 2002, the Company completed the sale of substantially all of the
assets of its Pinole Point Steel business. The Company is in the process of
liquidating the remaining assets and liabilities of the business. As of November
30, 2002, the Company has received $51,243 related to the disposition and
liquidation of the business, consisting of $31,221 of sale proceeds from Grupo
IMSA S.A. de C.V. and $20,022 from liquidating the Pinole Point Steel
operations. In addition, as of November 30, 2002, there is $13,597 in net assets
remaining to

                                       17

<PAGE>

be liquidated. The net assets consist primarily of the expected tax refund due
to a loss carryback offsetting a portion of the gain on sale of its Specialty
Films business in the prior year. The remaining net assets include accounts
receivable, offset, in part, by severance expenses and other liabilities not
assumed by Grupo IMSA S.A. de C.V. Pinole Point Steel has been reported as a
discontinued operation, and the consolidated financial statements have been
reclassified to segregate the net assets and operating results of the business.

As of February 28, 2002, the Company recorded a provision for loss on
discontinued operation, net of income taxes, of $53,287. The loss on
discontinued operation, net of income taxes, included the allocation of
consolidated interest expense of $5,391 incurred from September 1, 2001 through
May 31, 2002. The allocations were based on the debt associated with the
original purchase of Pinole Point Steel in December 1997 and Pinole Point
Steel's subsequent cash flow. During the first quarter of fiscal 2003, the
Company recorded an adjustment on sale of discontinued operation, net of income
taxes, of $3,683 to reduce the previously provided loss on discontinued
operation. The adjustment consisted of a reduction for estimated operating
losses of $1,247 due to higher plant utilization and customers' willingness to
accelerate product deliveries prior to the closing of the transaction. In
addition, MSC recorded a favorable change in the estimated proceeds of the sale
of $2,436. During the second quarter of fiscal 2003, the Company recorded an
additional loss on sale of discontinued operation, net of income taxes, of $610
related to increases in previously estimated bad debt expense and product claims
expense, and employee expenses related to the collection of accounts receivable
and settlement of certain retained liabilities. During the third quarter of
fiscal 2003, the Company recorded an additional loss on sale of discontinued
operation, net of income taxes, of $145 related to increases in previously
estimated workers compensation expense, product claims expense and bad debt
expense.

Specialty Films

On June 29, 2001, the Company completed the sale of substantially all of the
assets of its Specialty Films segment, including its interest in Innovative
Specialty Films, LLC, to Bekaert pursuant to the terms of the Purchase Agreement
by and among MSC, MSC/SFI, Bekaert and N.V. Bekaert S.A., dated June 10, 2001.
As a result of the sale, Specialty Films has been reported as a discontinued
operation for the prior fiscal year.

During the second quarter of fiscal 2003, the Company recorded an after-tax
charge of $101 related to a decrease in the previously estimated insurance
premium refund for the Specialty Films business.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically financed its operations with funds generated from
operating activities, sales of various businesses and borrowings under its
credit facilities or long-term debt instruments.

During the third quarter of fiscal 2003, MSC generated $9,009 of cash from
operating activities as compared with utilizing $26,852 in the third quarter
last year. The change in cash generation for the third quarter was primarily due
to higher accounts payable and accrued expenses as well as the payment of income
taxes related to the gain on the sale of Specialty Films in the third quarter of
fiscal 2002. For the nine months ended November 30, 2002, the Company generated
$33,944 of cash as compared with utilizing $24,235 in the same period

                                       18

<PAGE>

last year. The change in cash generation was due to higher net income and cash
generated from liquidating the Pinole Point Steel business, offset in part by
the previously mentioned tax payment.

In the third quarter and nine months of fiscal 2003, MSC invested $1,131 and
$3,679 in capital improvement projects, respectively, compared to $1,135 and
$3,355 in the same periods last year, respectively. There was no capital
spending related to discontinued operations for the third quarter of fiscal 2003
and $179 of capital spending for discontinued operations for the third quarter
of fiscal 2002. Capital spending related to discontinued operations for the nine
months of fiscal 2003 and 2002 was $176 and $2,840, respectively. Investments in
joint ventures were $108 in the third quarter of fiscal 2003, compared with $28
during the same period last fiscal year. For the year-to-date period,
investments in joint ventures were $3,562, which relates to the Company's
purchase of LTV's ownership interest in the Partnership in the first quarter of
fiscal 2003 compared to investments of $9 during the same period last fiscal
year. There were no investments in joint ventures related to discontinued
operations in the third quarter of fiscal 2003 and 2002. There were no
investments in joint ventures related to discontinued operations for the nine
months of fiscal 2003 compared with $5,114 in the nine months of fiscal 2002 due
to the investment in the joint venture with Bekaert Corporation prior to the
disposition of the Company's Specialty Films segment.

MSC's total debt decreased to $55,665 as of November 30, 2002 from $105,262 as
of February 28, 2002. The Company made principal debt payments of $13,421 and
interest payments of $3,594 on May 31, 2002 related to the 1998 Senior Notes and
the 1997 Senior Notes. In addition, on July 31, 2002, the Company made a debt
payment of $39,852 to the holders of the 1997 Senior Notes. The debt payment
consisted of principal of $35,714, interest of $420 and a contractual prepayment
penalty of $3,718 (pretax basis). The extraordinary loss on early retirement of
debt, net of income taxes, includes the prepayment penalty of $2,257 and a $131
write-off of debt issuance costs. On December 2, 2002, the Company made interest
payments of $1,870 for interest accrued from June 1, 2002 to November 30, 2002
related to the 1998 Senior Notes.

During the third quarter of fiscal 2003, a $28 commercial letter of credit
expired. The Company's outstanding letters of credit continue to be cash
collateralized as of November 30, 2002. Other than $2,630 that was classified as
restricted cash in the consolidated balance sheets, there are no other
restrictions on the Company's use of its cash and cash equivalents under the
Company's line of credit facility at times when no borrowings are outstanding.
The line of credit is secured by accounts receivable of the Company.

On June 3, 2002, the Company made a minimum annual royalty payment of $417 for
amounts accrued from January 31, 2002 through May 31, 2002 related to the
license agreement with TouchSensor Technologies, LLC ("TST"). On September 3,
2002, the Company paid a second minimum annual royalty payment of $250 for
amounts accrued from June 1, 2002 through August 31, 2002. On December 2, 2002,
the Company paid a third minimum annual royalty payment of $250 for amounts
accrued from September 1, 2002 through November 30, 2002.

On June 22, 2000, MSC's Board of Directors authorized the repurchase of up to
one million shares of the Company's common stock. In the third quarter of fiscal
2001, the Company suspended the program after having purchased 709,381 shares.

                                       19

<PAGE>

On March 1, 2002, the Company purchased 13,593 of its shares from certain
employees based on the closing price on February 28, 2002 in connection with the
vesting of shares granted under the Company's 1999 Long-Term Incentive/Leverage
Stock Awards Program ("1999 Program"). The Compensation Committee of the Board
of Directors approved the share repurchase under the provisions of the Material
Sciences Corporation 1992 Omnibus Awards Plan for Key Employees to cover a
portion of the participants' tax withholding liability for the vesting of these
shares under the 1999 Program.

On June 20, 2002, the Company resumed the previously approved repurchase program
and by August 31, 2002, the Company had completed this share repurchase program
by purchasing the remaining 290,619 shares with an average purchase price of
$14.89 per share. On June 20, 2002, MSC's Board of Directors also authorized a
new program to repurchase up to an additional 500,000 shares of the Company's
common stock. The repurchase of 500,000 shares was complete at August 31, 2002
with an average purchase price of $14.50 per share. No further share repurchases
have been approved by the Company's Board of Directors.

Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that
all business combinations initiated after June 30, 2001, be accounted for using
the purchase method of accounting. With the adoption of SFAS No. 142 on March 1,
2002, goodwill is no longer subject to amortization over its estimated useful
life. Goodwill will be subject to at least an annual assessment of impairment by
applying a fair-value based test, beginning on the date of adoption of the new
accounting standard. The Company completed its initial impairment assessment as
of August 31, 2002 as required under the impairment requirements of SFAS No. 142
and no impairment was deemed necessary. MSC will complete the required annual
impairment assessment in the fourth quarter of fiscal 2003.

The Company adopted SFAS No. 144, "Impairment or Disposal of Long-Lived Assets"
on March 1, 2002. This statement further refines the rules for accounting for
long-lived assets and long-lived assets to be disposed of. MSC has assessed the
impairment requirements of SFAS No. 144 and believes that no adjustment is
deemed necessary.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections."
SFAS No. 145 makes changes to several areas, including the classification of
gains and losses from extinguishment of debt and accounting for certain lease
modifications. The statement is effective for fiscal years beginning after May
15, 2002. With the adoption of SFAS No. 145 on March 1, 2003, the extraordinary
loss on early retirement of debt will no longer be classified as an
extraordinary item and will be reflected as a component of income from
continuing operations in the consolidated statements of income (loss).

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities" which addresses financial accounting and
reporting for costs associated with exit or disposal activities. This statement
requires that a liability be recognized at fair value for costs associated with
exit or disposal activities only when the liability is incurred as opposed to at
the time the Company commits to an exit plan as permitted under EITF Issue No.
94-3, "Liability Recognition for Certain Employee Termination Benefits and Other
Costs to

                                       20

<PAGE>

Exit an Activity (including Certain Costs Incurred in a Restructuring)." SFAS
No. 146 is effective for exit or disposal activities that are initiated after
December 31, 2002. The Company does not expect that the adoption of this
statement will have a material impact on the Company's financial position,
results of operations or cash flows.

Critical Accounting Policies

The Company has identified significant accounting policies that, as a result of
the judgments, uncertainties, uniqueness and complexities of the underlying
accounting standards and operations involved, could result in material changes
to its financial condition or results of operations under different conditions
or using different assumptions. The Company's most critical accounting policies
are related to the following areas: revenue recognition, long-lived assets and
concentrations of credit risks. Details regarding the Company's use of these
policies and the related estimates are described in MSC's Annual Report on Form
10-K for the fiscal year ended February 28, 2002 filed with the Securities and
Exchange Commission. There have been no material changes to the Company's
critical accounting policies that impacted MSC's financial condition or results
of operations in the third quarter of fiscal 2003 or the nine months of fiscal
2003.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements contained in this report, including, without limitation, the
estimated loss and estimated proceeds from the disposition of discontinued
operation set forth in the financial statements, are forward-looking, based on
current expectations, forecasts and assumptions. MSC cautions the reader that
the following factors could cause MSC's actual outcomes and results to differ
materially from those stated or implied in the forward-looking statements: the
risk of the successful development, introduction and marketing of new products
and technologies, including products based on the touch-sensory technology we
have licensed from TouchSensor Technologies, LLC; competitive factors; changes
in the business environment, including the transportation, building and
construction, electronics and durable goods industries; the ability of the
Company to successfully implement its reorganization plans and to achieve the
benefits the Company expects from such plans; final realization of proceeds on
the sale of Pinole Point Steel; changes in laws, regulations, policies or other
activities of governments, agencies and similar organizations (including the
ruling under Section 201 of the Trade Act of 1974); continuation of the
favorable environment to make acquisitions, including regulatory requirements
and market values of candidates; the stability of governments and business
conditions inside and outside the U.S., which may affect a successful
penetration of the Company's products; impact of changes in the overall economy;
increases in the prices of raw and other material inputs used by the Company;
the loss, or changes in the operations, financial condition or results of
operation of one or more significant customers of the Company; environmental
risks, costs and penalties associated with the Company's past and present
manufacturing operations, including any risks, costs and penalties arising out
of an enforcement action by the Illinois EPA and Attorney General related to the
Company's Elk Grove Village facility; risks associated with the termination of
the Partnership in December 2004 or the termination of the joint venture
partnership with Tekno in December 2003; facility utilization and product mix at
Walbridge Coatings; acts of war or terrorism; and the other factors identified
in Part II, Item 7 of the Company's 2002 Annual Report on Form 10-K filed with
the Securities and Exchange Commission. We undertake no obligation to publicly
update forward-looking statements, whether as a result of new information,
future events or otherwise.

                                       21

<PAGE>

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

There has been a material change in the Company's assessment of its sensitivity
to market risk since its presentation set forth in Item 7A, "Quantitative and
Qualitative Disclosures About Market Risk," in its Annual Report on Form 10-K
for the year ended February 28, 2002.

On July 31, 2002, the Company made a debt payment of $39,852 to the holders of
the 1997 Senior Notes. The debt payment consisted of principal of $35,714,
interest of $420 and a contractual prepayment penalty of $3,718 (pretax basis).
The table below provides information about the Company's remaining outstanding
debt that is sensitive to changes in interest rates.

As of November 30, 2002, the fair value of the Company's debt was $49,278.

<TABLE>
<CAPTION>
(Dollars in Thousands)
                                             Expected Maturity Date (Fiscal Year)
                     -------------------------------------------------------------------------------------
                                                                                                  Fair
                      2003*        2004     2005      2006      2007     Thereafter    Total      Value
                      -----        ----     ----      ----      ----     ----------    -----      ------
<S>                   <C>       <C>       <C>        <C>        <C>         <C>         <C>       <C>
    Total Debt:
    -----------
Fixed Rate:
  Principal Amount    $ 6,902   $11,559   $ 6,278    $ 6,278    $ 6,278     $25,110     $62,405   $49,278
  Average Interest
  Rate                    7.2%      6.8%      6.8%       6.8%       6.8%        6.8%        6.8%
Variable Rate:
  Principal Amount    $     -   $     -   $     -    $     -    $     -     $     -     $     -   $     -
  Average Interest
  Rate                    N/A       N/A       N/A        N/A        N/A         N/A         N/A
</TABLE>

* During the nine months ended November 30, 2002, the Company paid $6,740 of the
2003 principal amount.

Item 4.  Controls and Procedures

Evaluation of disclosure controls and procedures. Our chief executive officer
and our chief financial officer, after evaluating the effectiveness of the
Company's "disclosure controls and procedures" (as defined in the Rules
13a-14(c) and 15d-14(c) of the Securities Exchange Act of 1934) as of a date
(the "Evaluation Date") within 90 days before the filing date of this quarterly
report, have concluded that as of the Evaluation Date, the Company's disclosure
controls and procedures were adequate and designed to ensure that material
information relating to the Company and its consolidated subsidiaries would be
made known to them by others within those entities.

Changes in internal controls. There were no significant changes in the Company's
internal controls or in other factors that could significantly affect the
Company's disclosure controls and procedures subsequent to the Evaluation Date.

                                       22

<PAGE>

                          MATERIAL SCIENCES CORPORATION

                                    FORM 10-Q

                     For the Quarter Ended November 30, 2002

                           PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

               (a) Exhibits. Reference is made to the attached Index to
                   Exhibits.

               (b) Reports on Form 8-K. On October 3, 2002, the Company filed a
                   Current Report on Form 8-K, pursuant to Items 7 and 9, to
                   file a copy of a presentation to investors.

                                       23

<PAGE>

                                   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, in Elk Grove Village, State of Illinois,
on the 8th day of January 2003.

                                      MATERIAL SCIENCES CORPORATION


                                         By:   /s/ Gerald G. Nadig
                                               ---------------------------------
                                                  Gerald G. Nadig
                                                  Chairman, President
                                                  and Chief Executive Officer


                                         By:    /s/ James J. Waclawik, Sr.
                                               ---------------------------------
                                                  James J. Waclawik, Sr.
                                                  Vice President,
                                                  Chief Financial Officer
                                                  and Secretary

                                       24

<PAGE>

                                 CERTIFICATIONS

I, Gerald G. Nadig, certify that:

           1.  I have reviewed this quarterly report on Form 10-Q of Material
               Sciences Corporation;

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

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

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

                   a.) designed such disclosure controls and procedures to
                       ensure that material information relating to the
                       registrant, including its consolidated subsidiaries, is
                       made known to us by others within those entities,
                       particularly during the period in which this quarterly
                       report is being prepared;

                   b.) evaluated the effectiveness of the registrant's
                       disclosure controls and procedures as of a date within
                       90 days prior to the filing date of this quarterly
                       report (the "Evaluation Date"); and

                   c.) presented in this quarterly report our conclusions
                       about the effectiveness of the disclosure controls and
                       procedures based on our evaluation as of the Evaluation
                       Date;

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

                   a.) all significant deficiencies in the design or operation
                       of internal controls which could adversely affect the
                       registrant's ability to record, process, summarize and
                       report financial data and have identified for the
                       registrant's auditors any material weaknesses in
                       internal controls; and

                   b.) any fraud, whether or not material, that involves
                       management or other employees who have a significant
                       role in the registrant's internal controls; and

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

Dated:  January 8, 2003               By:  /s/ Gerald G. Nadig
                                           -------------------------------------
                                                 Gerald G. Nadig
                                                 Chairman, President
                                                 and Chief Executive Officer

                                       25

<PAGE>

I, James J. Waclawik, Sr., certify that:

          1.   I have reviewed this quarterly report on Form 10-Q of Material
               Sciences Corporation;

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

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

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

                    a.)  designed such disclosure controls and procedures to
                         ensure that material information relating to the
                         registrant, including its consolidated subsidiaries, is
                         made known to us by others within those entities,
                         particularly during the period in which this quarterly
                         report is being prepared;

                    b.)  evaluated the effectiveness of the registrant's
                         disclosure controls and procedures as of a date within
                         90 days prior to the filing date of this quarterly
                         report (the "Evaluation Date"); and

                    c.)  presented in this quarterly report our conclusions
                         about the effectiveness of the disclosure controls and
                         procedures based on our evaluation as of the Evaluation
                         Date;

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

                    a.)  all significant deficiencies in the design or operation
                         of internal controls which could adversely affect the
                         registrant's ability to record, process, summarize and
                         report financial data and have identified for the
                         registrant's auditors any material weaknesses in
                         internal controls; and

                    b.)  any fraud, whether or not material, that involves
                         management or other employees who have a significant
                         role in the registrant's internal controls; and

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

Dated:  January 8, 2003                  By:  /s/ James J. Waclawik, Sr.
                                             --------------------------------
                                                James J. Waclawik, Sr.
                                                Vice President,
                                                Chief Financial Officer
                                                and Secretary

                                       26

<PAGE>

                          MATERIAL SCIENCES CORPORATION

                          Quarterly Report on Form 10-Q

                                Index to Exhibits

Exhibit Number   Description of Exhibit

     99.1        Certifications of the registrant's Chief Executive Officer
                 and Chief Financial Officer pursuant to 18 U.S.C. Section
                 1350, as adopted pursuant to Section 906 of the
                 Sarbanes-Oxley Act of 2002.

                                       27