<PAGE>

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                          ---------------------------

                                   FORM 10-Q

<Table>
<S>     <C>
[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934
        FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
        SECURITIES EXCHANGE ACT OF 1934
        FOR THE TRANSITION PERIOD FROM ________ TO________
</Table>

                         COMMISSION FILE NUMBER 0-14836

                          ---------------------------

                             METAL MANAGEMENT, INC.
             (Exact name of registrant as specified in its charter)

                          ---------------------------

<Table>
<S>                                            <C>
                   DELAWARE                                      94-2835068
         (State or other jurisdiction                         (I.R.S. Employer
      of incorporation or organization)                     Identification No.)

500 N. DEARBORN STREET, SUITE 405, CHICAGO, IL                     60610
   (Address of principal executive offices)                      (Zip Code)
</Table>

       Registrant's telephone number, Including Area Code (312) 645-0700

                          ---------------------------

     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 ___

     Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).  Yes ___     No  X

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

     As of October 21, 2005, the registrant had 25,180,404 shares of common
stock outstanding.
<PAGE>

                                     INDEX

<Table>
<Caption>
                                                                              PAGE
                                                                              ----
<S>         <C>                                                               <C>
PART I:     FINANCIAL INFORMATION

Item 1.     Financial Statements

            Consolidated Statements of Operations -- three and six
               months
               ended September 30, 2005 and 2004 (unaudited)                    1

            Consolidated Balance Sheets -- September 30, 2005 and
               March 31, 2005 (unaudited)                                       2

            Consolidated Statements of Cash Flows -- six months ended
               September 30, 2005 and 2004 (unaudited)                          3

            Consolidated Statement of Stockholders' Equity --
               six months ended September 30, 2005 (unaudited)                  4

            Notes to Consolidated Financial Statements (unaudited)              5

Item 2.     Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                       16

Item 3.     Quantitative and Qualitative Disclosures about Market Risk         26

Item 4.     Controls and Procedures                                            26

PART II:    OTHER INFORMATION

Item 1.     Legal Proceedings                                                  28

Item 4.     Submission of Matters to a Vote of Security Holders                30

Item 6.     Exhibits                                                           30

            Signatures                                                         31

            Exhibit Index                                                      32
</Table>
<PAGE>

                         PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                             METAL MANAGEMENT, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
              (unaudited, in thousands, except per share amounts)

<Table>
<Caption>
                                           THREE MONTHS ENDED               SIX MONTHS ENDED
                                      -----------------------------   -----------------------------
                                      SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,
                                          2005            2004            2005            2004
                                      -------------   -------------   -------------   -------------
<S>                                   <C>             <C>             <C>             <C>
NET SALES                              $  378,301      $  425,007      $  759,935      $  792,183

OPERATING EXPENSES:
  Cost of sales (excluding
     depreciation)                        329,048         350,066         679,427         673,845
  General and administrative               18,496          18,314          38,242          36,996
  Depreciation and amortization             4,363           4,680           8,977           9,209
                                       ----------      ----------      ----------      ----------
OPERATING INCOME                           26,394          51,947          33,289          72,133

Income from joint ventures                  1,451           4,707           3,502           7,937
Interest expense                             (382)           (921)           (758)         (2,234)
Interest and other income, net                585              35           1,057              74
Loss on debt extinguishment                     0               0               0          (1,653)
                                       ----------      ----------      ----------      ----------

Income before income taxes                 28,048          55,768          37,090          76,257
Provision for income taxes                 11,127          21,715          14,723          29,679
                                       ----------      ----------      ----------      ----------
NET INCOME                             $   16,921      $   34,053      $   22,367      $   46,578
                                       ==========      ==========      ==========      ==========

EARNINGS PER SHARE:
  Basic                                $     0.69      $     1.48      $     0.92      $     2.03
                                       ==========      ==========      ==========      ==========
  Diluted                              $     0.66      $     1.40      $     0.88      $     1.92
                                       ==========      ==========      ==========      ==========

CASH DIVIDENDS DECLARED PER SHARE      $    0.075      $    0.000      $     0.15      $     0.00
                                       ==========      ==========      ==========      ==========

WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING:
  Basic                                    24,376          22,986          24,365          22,967
                                       ==========      ==========      ==========      ==========
  Diluted                                  25,566          24,357          25,433          24,259
                                       ==========      ==========      ==========      ==========
</Table>

          See accompanying notes to consolidated financial statements

                                        1
<PAGE>

                             METAL MANAGEMENT, INC.
                          CONSOLIDATED BALANCE SHEETS
                           (unaudited, in thousands)

<Table>
<Caption>
                                                              SEPTEMBER 30,   MARCH 31,
                                                                  2005           2005
                                                              -------------   ----------
<S>                                                           <C>             <C>
                           ASSETS
Current assets:
  Cash and cash equivalents                                    $   38,583     $   52,821
  Short-term investments                                            5,035              0
  Accounts receivable, net                                        142,196        153,056
  Inventories                                                     120,013         96,345
  Deferred income taxes                                             5,103          5,103
  Prepaid expenses and other assets                                 6,968          4,193
                                                               ----------     ----------
     TOTAL CURRENT ASSETS                                         317,898        311,518

Property and equipment, net                                       120,114        111,253
Goodwill and other intangibles, net                                 2,613          2,591
Deferred income taxes, net                                          9,626         10,996
Investments in joint ventures                                      39,447         39,782
Other assets                                                        2,354          2,642
                                                               ----------     ----------
                                TOTAL ASSETS                   $  492,052     $  478,782
                                                               ==========     ==========


            LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt                            $      381     $      367
  Accounts payable                                                121,428        122,666
  Income taxes payable                                              1,563          3,601
  Other accrued liabilities                                        26,098         31,686
                                                               ----------     ----------
     TOTAL CURRENT LIABILITIES                                    149,470        158,320
Long-term debt, less current portion                                2,070          2,164
Other liabilities                                                   4,779          5,682
                                                               ----------     ----------
     TOTAL LONG-TERM LIABILITIES                                    6,849          7,846

Stockholders' equity:
  Preferred stock                                                       0              0
  Common stock                                                        252            249
  Warrants                                                            371            395
  Additional paid-in capital                                      172,479        167,649
  Deferred compensation                                            (8,442)        (8,154)
  Accumulated other comprehensive loss                             (1,913)        (1,913)
  Retained earnings                                               172,986        154,390
                                                               ----------     ----------
     TOTAL STOCKHOLDERS' EQUITY                                   335,733        312,616
                                                               ----------     ----------
            TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $  492,052     $  478,782
                                                               ==========     ==========
</Table>

          See accompanying notes to consolidated financial statements

                                        2
<PAGE>

                             METAL MANAGEMENT, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (unaudited, in thousands)

<Table>
<Caption>
                                                                    SIX MONTHS ENDED
                                                              -----------------------------
                                                              SEPTEMBER 30,   SEPTEMBER 30,
                                                                  2005            2004
                                                              -------------   -------------
<S>                                                           <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                     $   22,367      $   46,578
Adjustments to reconcile net income to cash flows from
  operating activities:
     Depreciation and amortization                                  8,977           9,209
     Deferred income taxes                                          1,456          24,015
     Income from joint ventures                                    (3,365)         (7,937)
     Distribution of earnings from joint ventures                   2,650               0
     Stock-based compensation expense                               3,362           2,171
     Amortization of debt issuance costs                              318             411
     Loss on debt extinguishment                                        0           1,653
     Tax benefit on exercise of stock options and warrants            170           1,366
     Other                                                            810             569
Changes in assets and liabilities:
     Accounts and other receivables                                10,322          (9,475)
     Inventories                                                  (23,668)        (23,396)
     Accounts payable                                              (5,231)         (3,887)
     Income taxes                                                  (3,803)          2,493
     Other accrued liabilities                                     (9,704)         (1,612)
     Other                                                         (2,205)         (5,758)
                                                               ----------      ----------
Net cash provided by operating activities                           2,456          36,400

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                             (14,299)         (5,055)
  Proceeds from sale of property and equipment                        478             987
  Purchases of short-term investments                             (76,635)              0
  Sales of short-term investments                                  71,600               0
  Distributions of capital from joint ventures                      1,050               0
  Other                                                                 0             302
                                                               ----------      ----------
Net cash used in investing activities                             (17,806)         (3,766)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuances of long-term debt                                     427,815         812,260
  Repayments of long-term debt                                   (427,895)       (843,886)
  Proceeds from exercise of stock options and warrants                905           1,047
  Cash dividends paid to stockholders                              (3,771)              0
  Other                                                             4,058          (1,419)
                                                               ----------      ----------
Net cash provided by (used in) financing activities                 1,112         (31,998)
                                                               ----------      ----------

Net increase (decrease) in cash and cash equivalents              (14,238)            636
Cash and cash equivalents at beginning of period                   52,821           1,155
                                                               ----------      ----------

Cash and cash equivalents at end of period                     $   38,583      $    1,791
                                                               ==========      ==========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash interest paid                                             $      426      $    1,819
                                                               ==========      ==========
Cash income taxes paid                                         $   16,901      $    1,805
                                                               ==========      ==========
</Table>

          See accompanying notes to consolidated financial statements

                                        3
<PAGE>

                             METAL MANAGEMENT, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                           (unaudited, in thousands)

<Table>
<Caption>
                                                                                          ACCUMULATED
                                 COMMON STOCK                ADDITIONAL     DEFERRED         OTHER
                                 ------------                 PAID-IN     STOCK-BASED    COMPREHENSIVE    RETAINED
                               SHARES   AMOUNT    WARRANTS    CAPITAL     COMPENSATION       LOSS         EARNINGS       TOTAL
                               ------   ------    --------    -------     ------------       ----         --------       -----
<S>                            <C>      <C>       <C>        <C>          <C>            <C>             <C>          <C>
BALANCE AT MARCH 31, 2005      24,878   $  249    $   395    $ 167,649    $    (8,154)   $     (1,913)   $  154,390   $   312,616

Net income                         0         0          0            0              0               0        22,367        22,367
                                                                                                                      -----------
Total comprehensive income                                                                                                334,983

Issuance of restricted stock
  (net of cancellations)         180         2          0        3,648         (3,650)              0             0             0

Exercise of stock options and
  warrants and related tax
  benefits                       122         1        (24)       1,097              0               0             0         1,074

Cash dividends paid to
  stockholders                     0         0          0            0              0               0        (3,771)       (3,771)

Other                              0         0          0           85              0               0             0            85

Stock-based compensation
  expense                          0         0          0            0          3,362               0             0         3,362
                               ------   -------   --------   ----------   ------------   -------------   ----------   -----------
BALANCE AT SEPTEMBER 30, 2005  25,180   $  252    $   371    $ 172,479    $    (8,442)   $     (1,913)   $  172,986   $   335,733
                               ======   =======   ========   ==========   ============   =============   ==========   ===========
</Table>

          See accompanying notes to consolidated financial statements

                                        4
<PAGE>

                             METAL MANAGEMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

NOTE 1 -- BASIS OF PRESENTATION

Organization and Business
     Metal Management, Inc., a Delaware corporation, and its wholly owned
subsidiaries (the "Company") are principally engaged in the business of
collecting and processing ferrous and non-ferrous metals. The Company collects
industrial scrap metal and obsolete scrap metal, processes it into reusable
forms, and supplies the recycled metals to its customers, including electric-arc
furnace mills, integrated steel mills, foundries, secondary smelters and metals
brokers. These services are provided through the Company's recycling facilities
located in 15 states. The Company's ferrous products primarily include shredded,
sheared, cold briquetted and bundled scrap metal, and other purchased scrap
metal, such as turnings, cast and broken furnace iron. The Company also
processes non-ferrous metals, including aluminum, stainless steel and other
nickel-bearing metals, copper, brass, titanium and high-temperature alloys,
using similar techniques and through application of certain of the Company's
proprietary technologies.

     The Company has one reportable segment operating in the scrap metal
recycling industry, as determined in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 131, "Disclosure about Segments of an
Enterprise and Related Information."

Basis of Presentation
     The accompanying unaudited consolidated financial statements of the Company
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission (the "SEC"). All significant intercompany accounts,
transactions and profits have been eliminated. Certain information related to
the Company's organization, significant accounting policies and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
These unaudited consolidated financial statements reflect, in the opinion of
management, all material adjustments (which include normal recurring
adjustments) necessary to fairly state the financial position and the results of
operations for the periods presented.

     Operating results for interim periods are not necessarily indicative of the
results that can be expected for a full year. These interim financial statements
should be read in conjunction with the Company's audited consolidated financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the year ended March 31, 2005.

Reclassifications
     Certain reclassifications have been made to prior year's financial
information to conform to the current year presentation. On the statements of
operations, stock-based compensation expense has been reclassified to general
and administrative expenses. Such reclassifications had no material effect on
the previously reported consolidated balance sheet, results of operations or
cash flows of the Company.

Revenue Recognition
     The Company's primary source of revenue is from the sale of processed
ferrous and non-ferrous scrap metals. The Company also generates revenues from
the brokering of scrap metals or from services performed, including but not
limited to tolling, stevedoring and dismantling. Revenues from processed ferrous
and non-ferrous scrap metal sales are recognized when title passes to the
customer. Revenues relating to brokered sales are recognized upon receipt of the
materials by the customer. Revenues from services are recognized as the service
is performed. Sales adjustments related to price and weight differences and
allowances for uncollectible receivables are accrued against revenues as
incurred.

                                        5
<PAGE>

     Revenues by product category were as follows (in thousands):

<Table>
<Caption>
                                   THREE MONTHS ENDED               SIX MONTHS ENDED
                              -----------------------------   -----------------------------
                              SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,
                                  2005            2004            2005            2004
                              -------------   -------------   -------------   -------------
<S>                           <C>             <C>             <C>             <C>
Ferrous metals                 $  243,169      $  302,873      $  491,751      $  565,449
Non-ferrous metals                112,359         103,850         228,473         192,028
Brokerage -- ferrous               16,478          12,364          27,488          23,921
Brokerage -- non-ferrous            1,278             357           3,527           1,352
Other                               5,017           5,563           8,696           9,433
                               ----------      ----------      ----------      ----------
               Net sales       $  378,301      $  425,007      $  759,935      $  792,183
                               ==========      ==========      ==========      ==========
</Table>

Recently Issued Accounting Pronouncements
     In November 2004, the Financial Accounting Standards Board (the "FASB")
issued SFAS No. 151, "Inventory Costs -- an amendment of ARB No. 43, Chapter 4."
SFAS No. 151 clarifies the accounting for abnormal amounts of idle facility
expense, freight, handling costs and wasted material (spoilage), requiring that
these items be recognized as current-period charges and not capitalized in
inventory overhead. In addition, this statement requires that allocation of
fixed production overhead to the costs of conversion be based on the normal
capacity of the production facilities. The provisions of this statement are
effective for inventory costs incurred during fiscal years beginning after June
15, 2005. The adoption of this statement is not expected to materially impact
the Company's consolidated financial statements.

     In December 2004, the FASB issued SFAS No. 123(R), "Share-Based Payment."
The revised statement eliminates the ability to account for share-based
compensation transactions using Accounting Principles Board ("APB") Opinion No.
25, "Accounting for Stock Issued to Employees." This statement instead requires
that all share-based payments to employees be recognized as compensation expense
in the statement of operations based on their fair value over the applicable
vesting period. The provisions of this statement are effective for fiscal years
beginning after June 15, 2005. The Company will transition to SFAS No. 123(R)
using the "modified prospective application" effective April 1, 2006. Under the
"modified prospective application," compensation costs will be recognized in the
financial statements for all new share-based payments granted after April 1,
2006. Additionally, the Company will recognize compensation costs for the
portion of previously granted awards for which the requisite service has not
been rendered ("nonvested awards") that are outstanding as of the effective date
over the remaining requisite service period of the awards.

     In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections -- a replacement of APB Opinion No. 20 and SFAS No. 3." This
statement provides guidance on the accounting for and reporting of accounting
changes and error corrections. It requires, unless impracticable, retrospective
application for reporting a change in accounting principle, unless the newly
adopted accounting principle specifies otherwise, and reporting of a correction
of an error. The provisions of this statement are effective for accounting
changes and corrections of errors made in fiscal years beginning after December
15, 2005. The adoption of this statement is not expected to materially impact
the Company's consolidated financial statements.

     In October 2004, the American Jobs Creation Act of 2004 ("AJCA") was signed
by the President. The AJCA provides a deduction for income from qualified
domestic production activities, which will be phased in from fiscal years
beginning after December 31, 2004 through 2010. In return, the AJCA also
provides for a two-year phase-out of the existing extraterritorial income
exclusion ("ETI") for foreign sales that was viewed to be inconsistent with
international trade protocols by the European Union. In December 2004, the FASB
issued Staff Position ("FSP") No. 109-1, "Application of FASB Statement No. 109,
Accounting for Income Taxes, to the Tax Deduction on Qualified Production
Activities Provided by the American Jobs Creation Act of 2004." FSP No. 109-1
treats a deduction for income from qualified production activities as a "special
deduction" as described in SFAS No. 109. As such, a special deduction has no
effect on deferred tax assets and liabilities existing at the enactment date.
Rather, the impact of such a deduction will be reported in the

                                        6
<PAGE>

period in which the deduction is claimed on the Company's tax return. The
Company is currently evaluating the impact the AJCA will have on its results of
operations, financial condition and effective tax rate.

NOTE 2 -- EARNINGS PER SHARE

     Basic earnings per share ("EPS") is computed by dividing net income by the
weighted average common shares outstanding. Diluted EPS reflects the potential
dilution that could occur from the exercise of stock options and warrants and
from unvested restricted stock. The following is a reconciliation of the
numerators and denominators used in computing EPS (in thousands, except for per
share amounts):

<Table>
<Caption>
                                            THREE MONTHS ENDED               SIX MONTHS ENDED
                                       -----------------------------   -----------------------------
                                       SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,
                                           2005            2004            2005            2004
                                       -------------   -------------   -------------   -------------
<S>                                    <C>             <C>             <C>             <C>
NUMERATOR:
Net income                              $   16,921      $   34,053      $   22,367      $   46,578
                                        ==========      ==========      ==========      ==========
DENOMINATOR:
Weighted average common shares
  outstanding, basic                        24,376          22,986          24,365          22,967
Incremental common shares
  attributable to
  dilutive stock options and warrants          880           1,229             816           1,195
Incremental common shares
  attributable to
  unvested restricted stock                    310             142             252              97
                                        ----------      ----------      ----------      ----------
Weighted average common shares
  outstanding, diluted                      25,566          24,357          25,433          24,259
                                        ==========      ==========      ==========      ==========
Basic income per share                  $     0.69      $     1.48      $     0.92      $     2.03
                                        ==========      ==========      ==========      ==========
Diluted income per share                $     0.66      $     1.40      $     0.88      $     1.92
                                        ==========      ==========      ==========      ==========
</Table>

     For the three and six months ended September 30, 2005, options and warrants
to purchase 305,000 and 365,000 weighted average shares of common stock,
respectively, were excluded from the diluted EPS calculation. For the three and
six months ended September 30, 2004, options and warrants to purchase 360,000
and 453,105 weighted average shares of common stock, respectively, were excluded
from the diluted EPS calculation. These shares were excluded from the diluted
EPS calculation as the option and warrant exercise prices were greater than the
average market price of the Company's common stock for the respective periods
referenced above, and therefore their inclusion would have been anti-dilutive.

NOTE 3 -- STOCK-BASED COMPENSATION

     The Company accounts for stock-based compensation in accordance with APB
No. 25 and related interpretations. Compensation expense for stock options and
warrants is measured as the excess, if any, of the quoted market price of the
Company's common stock at the date of grant over the exercise price of the stock
option or warrant. Compensation expense for restricted stock awards is measured
at fair value on the date of grant based on the number of shares granted and the
quoted market price of the Company's common stock. Such value is recognized as
expense over the vesting period of the award. To the extent restricted stock
awards are forfeited prior to vesting, the previously recognized expense is
reversed.

                                        7
<PAGE>

     The following table illustrates the pro forma effects on net income and
earnings per common share if the Company had applied the fair value recognition
provisions of SFAS No. 123, "Accounting for Stock-Based Compensation" to
stock-based compensation (in thousands, except for earnings per share):

<Table>
<Caption>
                                            THREE MONTHS ENDED               SIX MONTHS ENDED
                                       -----------------------------   -----------------------------
                                       SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,
                                           2005            2004            2005            2004
                                       -------------   -------------   -------------   -------------
<S>                                    <C>             <C>             <C>             <C>
Net income, as reported                $     16,921    $     34,053    $     22,367     $    46,578
 Add: Stock-based employee
   compensation expense included
   in reported net income, net of
   related tax effects                        1,124             674           2,027           1,326
 Deduct: Total stock-based
   compensation
   expense determined under the fair
   value method for all awards, net
   of
   related tax effects                       (1,354)         (1,094)         (2,455)         (2,116)
                                       ------------    ------------    ------------     -----------
PRO FORMA NET INCOME                   $     16,691    $     33,633    $     21,939     $    45,788
                                       ============    ============    ============     ===========
Earnings per share:
  Basic -- as reported                 $       0.69    $       1.48    $       0.92     $      2.03
                                       ============    ============    ============     ===========
  Basic -- pro forma                   $       0.68    $       1.46    $       0.90     $      1.99
                                       ============    ============    ============     ===========
  Diluted -- as reported               $       0.66    $       1.40    $       0.88     $      1.92
                                       ============    ============    ============     ===========
  Diluted -- pro forma                 $       0.65    $       1.38    $       0.86     $      1.89
                                       ============    ============    ============     ===========
</Table>

Restricted Stock
     Restricted stock grants consist of shares of the Company's common stock
which are awarded to employees. The grants are restricted such that they are
subject to substantial risk of forfeiture and to restrictions on their sale or
other transfer by the employee. During the three months ended September 30, 2005
and 2004, the Company granted 10,000 shares and 7,500 shares of restricted
stock, with a per share weighted average fair value of $26.55 and $16.81,
respectively. During the six months ended September 30, 2005 and 2004, the
Company granted 195,081 shares and 19,500 shares of restricted stock, with a per
share weighted average fair value of $19.49 and $17.69, respectively. The
Company recorded stock-based compensation expense related to restricted stock of
approximately $1.9 million and $1.1 million in the three months ended September
30, 2005 and 2004, respectively, and $3.4 million and $2.2 million in the six
months ended September 30, 2005 and 2004, respectively.

     Summarized information for restricted stock issued by the Company is as
follows:

<Table>
<Caption>
                                                                 SHARES
                                                               ----------
<S>                                                            <C>
Restricted stock outstanding at March 31, 2005                    569,258
Granted                                                           195,081
Vested                                                             (4,500)
Cancelled                                                         (14,302)
                                                               ----------
Restricted stock outstanding at September 30, 2005                745,537
                                                               ==========
</Table>

Employee Stock Purchase Plan
     On September 13, 2005, the Company's stockholders approved the Metal
Management, Inc. Employee Stock Purchase Plan (the "ESPP") under which 1 million
shares of the Company's common stock have been reserved for issuance. Eligible
employees may purchase a limited number of shares of the Company's common stock
at a discount of 15% of the lesser of the fair market value of the Company's
common stock at the beginning of an offering period or the end of an offering
period. The ESPP provides for four quarterly offering periods, the first of
which commenced on October 1, 2005.

                                        8
<PAGE>

NOTE 4 -- OTHER BALANCE SHEET INFORMATION

Short-term investments
     All investments with original maturities of greater than 90 days are
accounted for in accordance with SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." The Company determines the
appropriate classification at the time of purchase. At September 30, 2005, the
Company had short-term investments of approximately $5.0 million, which mainly
consisted of investments in auction rate securities which are classified as
available-for-sale. Auction rate securities consist of tax-free bonds issued by
municipalities which mainly carry AAA ratings. Investments in auction rate
securities are recorded at cost, which approximates fair value due to their
variable interest rates which reset every 7 to 30 days. As a result, these
securities are classified as current assets. Despite the long-term nature of
their stated contractual maturities, there is a readily liquid market for these
securities. As a result, the Company had no cumulative gross unrealized holding
gains (losses) or gross realized gains (losses) from its short-term investments.
All income generated from these investments was recorded as interest income.

Inventories
     Inventories for all periods presented are stated at the lower of cost or
market. Cost is determined principally on the average cost method. Inventories
consist of the following at (in thousands):

<Table>
<Caption>
                                       SEPTEMBER 30,      MARCH 31,
                                            2005             2005
                                      ----------------   ------------
<S>                                   <C>                <C>
Ferrous metals                          $    62,037      $    58,215
Non-ferrous metals                           57,775           37,888
Other                                           201              242
                                        -----------      -----------
                                        $   120,013      $    96,345
                                        ===========      ===========
</Table>

Property and Equipment
     Property and equipment consists of the following at (in thousands):

<Table>
<Caption>
                                      SEPTEMBER 30,      MARCH 31,
                                           2005             2005
                                     ----------------   ------------
<S>                                  <C>                <C>
Land and improvements                  $    32,093      $    30,704
Buildings and improvements                  22,608           22,069
Operating machinery and equipment          107,899           98,978
Automobiles and trucks                      10,918           10,687
Computer equipment and software              2,102            1,995
Furniture, fixture and office
  equipment                                    796              790
Construction in progress                    11,979            6,709
                                       -----------      -----------
                                           188,395          171,932
Less -- accumulated depreciation           (68,281)         (60,679)
                                       -----------      -----------
                                       $   120,114      $   111,253
                                       ===========      ===========
</Table>

     In August 2005, the Company exercised a purchase option on land which it
leased in Phoenix, Arizona. The purchase price of the land was $1.4 million and
is recorded in land and improvements. The Company closed on the land purchase on
October 21, 2005.

     At September 30, 2005, the Company recorded $4 million of construction in
progress and an offsetting liability in other accrued liabilities relating to
the construction of a crane to be leased by the Company upon completion. The
Company expects the crane to be delivered in January 2006. The Company is
considered the owner of the crane during its construction and must record the
amount paid to-date by the lessor for the construction as an asset and
liability.

                                        9
<PAGE>

Other Accrued Liabilities
     Other accrued liabilities consist of the following at (in thousands):

<Table>
<Caption>
                                          SEPTEMBER 30,    MARCH 31,
                                              2005            2005
                                          -------------   ------------
<S>                                       <C>             <C>
Accrued employee compensation and
  benefits                                 $   12,009      $   21,731
Accrued insurance                               4,926           4,324
Accrued real and personal property taxes        2,135           2,237
Accrued equipment purchase commitment           4,000               0
Other                                           3,028           3,394
                                           ----------      ----------
                                           $   26,098      $   31,686
                                           ==========      ==========
</Table>

Accrued Severance and Other Charges
     During the year ended March 31, 2004, the Company implemented a management
realignment that resulted in the recognition of $6.2 million of charges
consisting mainly of employee severance payments. As of September 30, 2005,
approximately $1.2 million is remaining to be paid, which is reflected in other
accrued liabilities. These payments were to be made in July 2005, however, the
Company is contesting these payments (see Note 8 -- Commitments and
Contingencies).

NOTE 5 -- GOODWILL AND OTHER INTANGIBLE ASSETS

     Goodwill and other intangible assets consist of the following at (in
thousands):

<Table>
<Caption>
                                                   SEPTEMBER 30, 2005            MARCH 31, 2005
                                                -------------------------   -------------------------
                                                  GROSS                       GROSS
                                                 CARRYING    ACCUMULATED     CARRYING    ACCUMULATED
                                                  AMOUNT     AMORTIZATION     AMOUNT     AMORTIZATION
                                                 --------    ------------    --------    ------------
         <S>                                    <C>          <C>            <C>          <C>
         Other intangibles:
             Customer lists                     $    1,280    $    (256)    $    1,280    $    (213)
             Non-compete agreement                     290         (179)           290         (144)
             Pension intangible                         98            0             98            0
         Goodwill                                    1,380            0          1,280            0
                                                ----------    ---------     ----------    ---------
           Goodwill and other intangibles, net  $    3,048    $    (435)    $    2,948    $    (357)
                                                ==========    =========     ==========    =========
</Table>

     The increase in goodwill in the six months ended September 30, 2005 was due
to contingent consideration payable in connection with an acquisition.

     Total amortization expense for other intangibles in the three and six
months ended September 30, 2005 was $39,000 and $78,000, respectively. Based on
the other intangible assets recorded as of September 30, 2005, annual
amortization expense for other intangible assets will be approximately $0.1
million for each of the fiscal years 2007 through 2011.

NOTE 6 -- LONG-TERM DEBT

     Long-term debt consists of the following at (in thousands):

<Table>
<Caption>
                                                     SEPTEMBER 30,    MARCH 31,
                                                         2005            2005
                                                     -------------   ------------
<S>                                                  <C>             <C>
Mortgage loan (interest rate of 5.50%) due January
  2009                                                $    2,059      $    2,193
Other debt (including capital leases)                        392             338
                                                      ----------      ----------
                                                           2,451           2,531
Less -- current portion of long-term debt                   (381)           (367)
                                                      ----------      ----------
                                                      $    2,070      $    2,164
                                                      ==========      ==========
</Table>

                                        10
<PAGE>

Credit Agreement
     In June 2004, the Company entered into a $200 million secured four-year
revolving credit and letter of credit facility, as amended, with a maturity date
of June 28, 2008 (the "Credit Agreement"). As of September 30, 2005, the Company
had no outstanding borrowings under its Credit Agreement. Interest rates under
the Credit Agreement are based on variable rates tied to the prime rate plus a
margin or the London Interbank Offered Rate ("LIBOR") plus a margin. The margin
is based on the Company's leverage ratio (as defined in the Credit Agreement) as
determined for the trailing four fiscal quarters. Based on the Company's current
leverage ratio, LIBOR and prime rate margins are 125 basis points and 0 basis
points, respectively.

     Borrowings under the Credit Agreement are generally subject to borrowing
base limitations based upon a formula equal to 85% of eligible accounts
receivable plus the lesser of $65 million or 70% of eligible inventory.
Inventories cannot represent more than 40% of the total borrowing base. A
security interest in substantially all of the Company's assets and properties,
other than equipment, fixtures and real property, unless and until the average
excess availability for any two consecutive months is less than $10 million, has
been granted to the agent for the lenders as collateral against the Company's
obligations under the Credit Agreement. Pursuant to the Credit Agreement, the
Company pays a fee on the undrawn portion of the facility that is determined by
the leverage ratio. As of September 30, 2005, that fee was .25% per annum.

     Under the Credit Agreement, the Company is required to satisfy specified
financial covenants, including a maximum leverage ratio of 2.50 to 1.00, a
minimum consolidated fixed charge coverage ratio of 1.50 to 1.00 and a minimum
tangible net worth of not less than the sum of $110 million plus 25% of
consolidated net income earned in each fiscal quarter. The leverage ratio and
consolidated fixed charge coverage ratio are tested for the twelve-month period
ending each fiscal quarter. The Credit Agreement also limits capital
expenditures to $20 million for the twelve-month period ending each fiscal
quarter. As a result of an amendment to the Credit Agreement, the Company's
limit on capital expenditures was increased to $40 million for the current
fiscal year.

     The Credit Agreement contains restrictions which, among other things,
limits the Company's ability to (i) incur additional indebtedness; (ii) pay
dividends under certain conditions; (iii) enter into transactions with
affiliates; (iv) enter into certain asset sales; (v) engage in certain
acquisitions, investments, mergers and consolidations; (vi) prepay certain other
indebtedness; (vii) create liens and encumbrances on Company assets; and (viii)
engage in other matters customarily restricted in such agreements.

     The Company's ability to meet financial ratios and tests in the future may
be affected by events beyond its control, including fluctuations in operating
cash flows and working capital. While the Company currently expects to be in
compliance with the covenants and satisfy the financial ratios and tests in the
future, there can be no assurance that the Company will meet such financial
ratios and tests or that it will be able to obtain future amendments or waivers
to the Credit Agreement, if so needed, to avoid a default. In the event of a
default, the lenders could elect to not make loans available to the Company and
declare all amounts borrowed under the Credit Agreement to be due and payable.

     On June 28, 2004, the Company paid off all balances under its previous
credit agreement with proceeds from its Credit Agreement. The Company recognized
a loss on debt extinguishment of $1.7 million associated with the repayment of
its previous credit agreement. This amount represented a write-off of a portion
of the unamortized deferred financing costs associated with the previous credit
agreement.

NOTE 7 -- EMPLOYEE BENEFIT PLANS

     The Company sponsors three defined benefit pension plans for employees at
certain of its subsidiaries. Only employees covered under collective bargaining
agreements accrue future benefits under these defined benefit pension plans.
These benefits are based either on years of service and compensation or on years
of service at fixed benefit rates. The Company's funding policy for the pension
plans is to contribute amounts

                                        11
<PAGE>

required to meet regulatory requirements. The components of net pension costs
were as follows (in thousands):

<Table>
<Caption>
                              THREE MONTHS ENDED               SIX MONTHS ENDED
                         -----------------------------   -----------------------------
                         SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,   SEPTEMBER 30,
                             2005            2004            2005            2004
                         -------------   -------------   -------------   -------------
<S>                      <C>             <C>             <C>             <C>
Service cost               $     50        $     31        $     83        $     65
Interest cost                   176             180             350             348
Expected return on plan
  assets                       (191)           (157)           (349)           (315)
Amortization of prior
  service cost                   23              23              47              47
Recognized net
  actuarial loss                 65              33              98              66
                           --------        --------        --------        --------
Net periodic benefit
  cost                     $    123        $    110        $    229        $    211
                           ========        ========        ========        ========
</Table>

     In the six months ended September 30, 2005, the Company made cash
contributions of $0.5 million to its pension plans. Based on estimates provided
by its actuaries, the Company expects to make cash funding contributions to its
pension plans of approximately $0.4 million by March 31, 2006.

NOTE 8 -- COMMITMENTS AND CONTINGENCIES

Environmental Matters
     The Company is subject to comprehensive local, state, federal and
international regulatory and statutory environmental requirements relating to,
among others, the acceptance, storage, treatment, handling and disposal of solid
waste and hazardous waste, the discharge of materials into air, the management
and treatment of wastewater and storm water, the remediation of soil and
groundwater contamination, the restoration of natural resource damages and the
protection of employees' health and safety. The Company believes that it and its
subsidiaries are in material compliance with currently applicable statutes and
regulations governing the protection of human health and the environment,
including employee health and safety. However, environmental legislation may in
the future be enacted and create liability for past actions and the Company or
its subsidiaries may be fined or held liable for damages.

     Certain of the Company's subsidiaries have received notices from the United
States Environmental Protection Agency ("EPA"), state agencies or third parties
that the subsidiary has been identified as potentially responsible for the cost
of investigation and cleanup of landfills or other sites where the subsidiary's
material was shipped. In most cases, many other parties are also named as
potentially responsible parties. The Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA" or "Superfund") enables EPA and state
agencies to recover from owners, operators, generators and transporters the cost
of investigation and cleanup of sites which pose serious threats to the
environment or public health. In certain circumstances, a potentially
responsible party can be held jointly and severally liable for the cost of
cleanup. In other cases, a party who is liable may only be liable for a
divisible share. Liability can be imposed even if the party shipped materials in
a lawful manner at the time of shipment and the liability for investigation and
cleanup costs can be significant, particularly in cases where joint and several
liability may be imposed.

     Recent amendments to CERCLA, including the Superfund Recycling Equity Act
of 1999, have limited the exposure of scrap metal recyclers for sales of certain
recyclable material under certain circumstances. However, the recycling defense
is subject to conducting of reasonable care evaluations of current and potential
consumers.

     Because CERCLA can be imposed retroactively on shipments that occurred many
years ago, and because EPA and state agencies are still discovering sites that
present problems to public heath or the environment, the Company can provide no
assurance that it will not become liable in the future for significant costs
associated with investigation and remediation of CERCLA waste sites.

     On July 1, 1998, Metal Management Connecticut, Inc. ("MTLM-Connecticut"), a
subsidiary of the Company, acquired the scrap metal recycling assets of Joseph
A. Schiavone Corp. (formerly known as

                                        12
<PAGE>

Michael Schiavone & Sons, Inc.). The acquired assets include real property in
North Haven, Connecticut upon which MTLM-Connecticut's scrap metal recycling
operations are currently performed (the "North Haven Facility"). The owner of
Joseph A. Schiavone Corp. was Michael Schiavone ("Schiavone"). On March 31,
2003, the Connecticut Department of Environmental Protection ("CTDEP") filed
suit against Joseph A. Schiavone Corp., Schiavone, and MTLM-Connecticut in the
Superior Court of the State of Connecticut -- Judicial District of Hartford. The
suit alleges, among other things, that the North Haven Facility discharged and
continues to discharge contaminants, including oily material, into the
environment and has failed to comply with the terms of certain permits and other
filing requirements. The suit seeks injunctions to restrict MTLM-Connecticut
from maintaining discharges and to require MTLM-Connecticut to remediate the
facility. The suit also seeks civil penalties from all of the defendants in
accordance with Connecticut environmental statutes. At this stage, the Company
is not able to predict MTLM-Connecticut's potential liability in connection with
this action or any required investigation and/or remediation. The Company
believes that MTLM-Connecticut has meritorious defenses to certain of the claims
asserted in the suit and MTLM-Connecticut intends to vigorously defend itself
against the claims. In addition, the Company believes it is entitled to
indemnification from Joseph A. Schiavone Corp. and Schiavone for some or all of
the obligations and liabilities that may be imposed on MTLM-Connecticut in
connection with this matter under the various agreements governing its purchase
of the North Haven Facility from Joseph A. Schiavone Corp. The Company cannot
provide assurances that Joseph A. Schiavone Corp. or Schiavone will have
sufficient resources to fund any or all indemnifiable claims that the Company
may assert.

     In a letter dated July 13, 2005, MTLM-Connecticut and the Company received
notification from Schiavone of his demand seeking indemnification (including the
advance of all costs, charges and expenses incurred by Schiavone in connection
with his defense) from MTLM-Connecticut and the Company to those claims made
against Schiavone in the action brought by CTDEP. Schiavone's demand refers to
his employment agreement and to the certificate of incorporation of
MTLM-Connecticut, which provide for indemnification against claims by reason of
his being or having been a director, officer, employee, or agent of
MTLM-Connecticut, or serving or having served at the request of MTLM-Connecticut
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, or other enterprise to the fullest extent permitted by
applicable law.

     The Company has engaged in settlement discussions with Joseph A. Schiavone
Corp., Schiavone and CTDEP regarding the possible characterization of the North
Haven Facility, and the subsequent remediation thereof should contamination be
present at concentrations that require remedial action. The Company is currently
working with an independent environmental consultant to develop an acceptable
characterization plan. The Company cannot provide assurances that it will be
able to reach an acceptable settlement of this matter with the other parties.

     On April 29, 1998, Metal Management Midwest, Inc. ("MTLM-Midwest"), a
subsidiary of the Company, acquired substantially all of the operating assets of
138 Scrap, Inc. ("138 Scrap") that were used in its scrap metal recycling
business. Most of these assets were located at a recycling facility in
Riverdale, Illinois (the "Facility"). In early November 2003, MTLM-Midwest was
served with a Notice of Intent to Sue (the "Notice") by The Jeff Diver Group,
L.L.C., on behalf of the Village of Riverdale, alleging, among other things,
that the release or disposal of hazardous substances within the meaning of
CERCLA has occurred at an approximately 57 acre property in the Village of
Riverdale (which includes the 8.8 acre Facility that was leased by MTLM-Midwest
until December 31, 2003). The Notice indicates that the Village of Riverdale
intends to file suit against MTLM-Midwest (directly and as a successor to 138
Scrap) and numerous other third parties under one or both of CERCLA and the
Resource Conservation and Recovery Act. At this preliminary stage, the Company
cannot predict MTLM-Midwest's potential liability, if any, in connection with
such lawsuit or any required remediation. The Company believes that it has
meritorious defenses to certain of the claims outlined in the Notice and
MTLM-Midwest intends to vigorously defend itself against any claims ultimately
asserted by the Village of Riverdale. In addition, although the Company believes
that it would be entitled to indemnification from the sellers of 138 Scrap for
some or all of the obligations that may be imposed on MTLM-Midwest in connection
with this matter under the agreement governing its purchase of

                                        13
<PAGE>

the operating assets of 138 Scrap, the Company cannot provide assurances that
any of the sellers will have sufficient resources to fund any indemnifiable
claims to which the Company may be entitled.

     On September 22, 2005 and September 23, 2005, CTDEP's Bureau of Water
Management and Bureau of Waste Management each issued a Notice of Violation
("NOV") to Metal Management Aerospace, Inc. ("MTLM-Aerospace"), a subsidiary of
the Company, for alleged violations at MTLM-Aerospace's facility, including,
among other things (1) operation of a solid waste facility without the approval
of CTDEP; (2) failure to comply with certain environmental regulations regarding
the handling of used oil, the performance of certain hazardous waste
determinations, the disposal of PCBs and the discharge of oils and coolants; (3)
failure to comply with certain discharge reporting obligations; (4) creation of
certain potential environmental hazards; (5) inadequacy or improper maintenance
of certain pollution management devices, including erosion and sediment controls
and release detection for an underground diesel storage tank; and (6) failure to
comply with a pollution prevention plan.

     On October 21, 2005, MTLM-Aerospace submitted substantive responses to
CTDEP regarding the NOVs. At this time, the Company is unable to determine
MTLM-Aerospace's potential liability in connection with these NOVs. The Company
believes that MTLM-Aerospace has meritorious defenses to certain of the
allegations outlined in the NOVs. In addition, although the Company believes
that by virtue of certain consent orders, Connecticut Transfer Act obligations,
and lease/transactional documents executed by the lessor and former owner,
certain environmental liabilities noted in the NOVs will be the responsibility
of the lessor and former owner, there can be no assurance that the lessor and
former owner will have sufficient resources to fund any or all of such
liabilities.

     On August 22, 2005, the Occupational Safety and Health Administration
("OSHA") requested that MTLM-Aerospace conduct an internal investigation of a
recent accident. MTLM-Aerospace responded to this request in a timely manner. At
this time, OSHA has not taken any action with respect to this accident. Further
investigations of MTLM-Aerospace by OSHA of a more comprehensive nature have
been undertaken and are ongoing. At this preliminary stage, the Company cannot
predict the likelihood of any citations or the extent of any penalties.

Legal Proceedings
     In January 2003, the Company received a subpoena requesting that it provide
documents to a grand jury that is investigating scrap metal purchasing practices
in the four state region of Ohio, Illinois, Indiana and Michigan. The Company is
fully cooperating with the subpoena and the grand jury's investigation. The
Company is unable at this preliminary stage to determine future legal costs or
other costs to be incurred in responding to such subpoena or other impact to the
Company of such investigation.

     As a result of internal audits conducted by the Company, the Company
determined that current and former employees of certain business units engaged
in activities relating to cash payments to individual industrial account
suppliers of scrap metal that may have involved violations of federal and state
law. In May 2004, the Company voluntarily disclosed its concerns regarding such
cash payments to the U.S. Department of Justice. The Board of Directors
appointed a special committee, consisting of all of its independent directors,
to conduct an investigation of these activities. The Company is cooperating with
the U.S. Department of Justice. The Company implemented policies to eliminate
cash payments to industrial customers. During the year ended March 31, 2004,
such cash payments to industrial customers represented approximately 0.7% of the
Company's consolidated ferrous and non-ferrous yard shipments. The fines and
penalties under applicable statutes contemplate qualitative as well as
quantitative factors that are not readily assessable at this stage of the
investigation, but could be material. The Company is not able to predict at this
time the outcome of any actions by the U.S. Department of Justice or other
governmental authorities or their effect on the Company, if any, and
accordingly, the Company has not recorded any amounts in the financial
statements. The Company has incurred legal and other costs related to this
matter of approximately $2.3 million to date.

     On July 15, 2005, the Company and MTLM-Midwest filed a complaint (the
"Complaint") against former officers and directors Albert A. Cozzi, Frank J.
Cozzi, and Gregory P. Cozzi (collectively, the "Defendants") in the Circuit
Court of Cook County Illinois, County Department, Chancery Division. The

                                        14
<PAGE>

Complaint seeks damages from Frank J. Cozzi and Gregory P. Cozzi for their
actions in designing, implementing, and maintaining cash payment practices in
MTLM-Midwest's accounts payable that violated Company policy and, potentially,
federal law. The Complaint also alleges that the Defendants breached the
non-competition and non-solicitation provisions of their respective separation
and release agreements by seeking to engage in business activities and seeking
to solicit suppliers, customers and service providers in competition with the
Company's business. The Complaint seeks, among other things, monetary
compensation for the Company's actual losses and damages, and an injunction
restraining and enjoining the Defendants from breaching their respective
separation and release agreements. On October 21, 2005, Defendants moved to
dismiss the Complaint or in the alternative to compel arbitration and stay the
judicial proceedings. Defendants also filed a counterclaim seeking recovery of
unpaid employee severance payments of approximately $1.2 million.

     For other commitment and contingencies, please see Note 11 to the Company's
consolidated financial statements included in our Annual Report on Form 10-K for
the year ended March 31, 2005. From time to time, the Company is involved in
various litigation matters involving ordinary and routine claims incidental to
its business. A significant portion of these matters result from environmental
compliance issues and workers compensation related claims arising from the
Company's operations. There are presently no legal proceedings pending against
the Company, which, in the opinion of the Company's management, is likely to
have a material adverse effect on its business, financial condition or results
of operations.

                                        15
<PAGE>

     This Form 10-Q includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Statements in this Form 10-Q which address
activities, events or developments that Metal Management, Inc. (herein, "Metal
Management," the "Company," "we," "us," "our" or other similar terms) expects or
anticipates will or may occur in the future, including such things as future
acquisitions (including the amount and nature thereof), business strategy,
expansion and growth of our business and operations, general economic and market
conditions and other such matters are forward-looking statements. Although we
believe the expectations expressed in such forward-looking statements are based
on reasonable assumptions within the bounds of our knowledge of our business, a
number of factors could cause actual results to differ materially from those
expressed in any forward-looking statements. These and other risks,
uncertainties and other factors are discussed under "Risk Factors" appearing in
our Annual Report on Form 10-K for the year ended March 31, 2005, as the same
may be amended from time to time.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The following discussion should be read in conjunction with the unaudited
consolidated financial statements and notes thereto included under Item 1 of
this Report. In addition, reference should be made to the audited consolidated
financial statements and notes thereto and related Management's Discussion and
Analysis of Financial Condition and Results of Operations included in our Annual
Report on Form 10-K for the year ended March 31, 2005 ("Annual Report").

OVERVIEW
     We are one of the largest domestic scrap metal recycling companies with
approximately 40 facilities in 15 states. We enjoy leadership positions in many
major metropolitan markets, such as Birmingham, Chicago, Cleveland, Denver,
Hartford, Houston, Memphis, Newark, New Haven, Phoenix, Pittsburgh, Salt Lake
City, Toledo and Tucson. We have a 28.5% equity ownership position in Southern
Recycling, L.L.C. ("Southern"), one of the largest scrap metals recyclers in the
Gulf Coast region. We operate in one reportable segment, the scrap metal
recycling industry.

     Our operations primarily involve the collection and processing of ferrous
and non-ferrous scrap metals. We collect industrial scrap metal and obsolete
scrap metal, process it into reusable forms and supply the recycled metals to
our customers, including electric-arc furnace mills, integrated steel mills,
foundries, secondary smelters and metal brokers. In addition to buying,
processing and selling ferrous and non-ferrous scrap metals, we are periodically
retained as demolition contractors in certain of our large metropolitan markets
in which we dismantle obsolete machinery, buildings and other structures
containing metal and, in the process, collect both the ferrous and non-ferrous
metals from these sources. At certain of our locations adjacent to commercial
waterways, we provide stevedoring services. We also operate a bus dismantling
business combined with a bus replacement parts business in Newark, New Jersey.

     We believe that we provide one of the most comprehensive product offerings
of both ferrous and non-ferrous scrap metals. Our ferrous products primarily
include shredded, sheared, cold briquetted and bundled scrap metal, and other
purchased scrap metal, such as turnings, cast and broken furnace iron. We also
process non-ferrous scrap metals, including aluminum, copper, stainless steel
and other nickel-bearing metals, brass, titanium and high-temperature alloys,
using similar techniques and through application of our proprietary
technologies.

RECENT EVENTS
     Southern operates approximately 15 scrap metals facilities in the Gulf
Coast region across the states of Louisiana, Mississippi, Alabama and Florida,
with its headquarters and largest single processing facility in New Orleans. Due
to Hurricane Katrina in August 2005, Southern incurred damage at its facilities
and suffered disruptions to its operations in New Orleans and Gulfport,
Mississippi. Southern has temporarily relocated its headquarters from New
Orleans to Baton Rouge, Louisiana. Southern has not yet been able to restart its
New Orleans processing facility due to inadequate power although all of its
other facilities are operational. Southern has advised us that it is currently
operating at approximately 70% to 80% of capacity.

                                        16
<PAGE>

RESULTS OF OPERATIONS
     After achieving record results in fiscal 2005, our results for the three
and six months ended September 30, 2005 were impacted by extreme price
volatility in ferrous scrap metals. In the three months ended June 30, 2005, we
experienced lower domestic demand for ferrous scrap metals as a result of a
buildup in steel mill raw material inventories exacerbated by slower demand for
finished steel. In the months of May and June 2005, prices for certain grades of
ferrous scrap declined by more than $100 per ton. As a result, ferrous scrap
metal prices declined and we experienced lower ferrous scrap metal margins in
the three months ended June 30, 2005. Ferrous scrap metal prices rebounded in
August and September 2005 and our metal margins improved accordingly. Extreme
volatility in ferrous scrap metal prices in calendar 2005 has caused significant
fluctuations in our profitability.

     The volatility in ferrous scrap metal prices is evident in data published
by the American Metal Market ("AMM"). According to AMM, the average price for #1
Heavy Melting Steel Scrap -- Chicago (which is a common indicator for ferrous
scrap) declined from $217 per ton in April 2005 to approximately $125 per ton in
June 2005 and then recovered to $241 per ton in September 2005. Ferrous scrap
metal prices declined again in October 2005, continuing the extreme volatility
experienced throughout calendar 2005.

     Our non-ferrous businesses continued to perform well in the three and six
months ended September 30, 2005, primarily due to strong demand from our
consumers in the aerospace industry. This also resulted in higher pricing for
high-temperature alloys and nickel-based metals and alloys, which resulted in
higher sales and material margins.

     Although our results of operations during the three and six months ended
September 30, 2005 demonstrated lower profitability from the three and six
months ended September 30, 2004, respectively, our objective of turning our
inventories rather than speculating on commodity prices allowed us to remain
profitable, despite lower ferrous metal prices in fiscal 2006 when compared to
fiscal 2005.

     The following table sets forth selected statement of operations and sales
volume data for the three and six months ended September 30, 2005 and 2004.

STATEMENT OF OPERATIONS SELECTED ITEMS ($ IN THOUSANDS)

<Table>
<Caption>
                                      THREE MONTHS ENDED SEPTEMBER 30,       SIX MONTHS ENDED SEPTEMBER 30,
                                     -----------------------------------   -----------------------------------
                                       2005       %       2004       %       2005       %       2004       %
                                       ----       -       ----       -       ----       -       ----       -
<S>                                  <C>        <C>     <C>        <C>     <C>        <C>     <C>        <C>
SALES BY COMMODITY:
  Ferrous metals                     $243,169    64.3%  $302,873    71.3%  $491,751    64.7%  $565,449    71.4%
  Non-ferrous metals                  112,359    29.7    103,850    24.4    228,473    30.1    192,028    24.2
  Brokerage - ferrous                  16,478     4.4     12,364     2.9     27,488     3.6     23,921     3.0
  Brokerage - non-ferrous               1,278     0.3        357     0.1      3,527     0.5      1,352     0.2
  Other                                 5,017     1.3      5,563     1.3      8,696     1.1      9,433     1.2
                                     --------   -----   --------   -----   --------   -----   --------   -----
Net sales                             378,301   100.0%   425,007   100.0%   759,935   100.0%   792,183   100.0%
Cost of sales (excluding
  depreciation)                       329,048    87.0    350,066    82.4    679,427    89.4    673,845    85.1
General and administrative
  expense                              18,496     4.9     18,314     4.3     38,242     5.0     36,996     4.7
Depreciation and amortization
  expense                               4,363     1.2      4,680     1.1      8,977     1.2      9,209     1.2
Income from joint ventures              1,451     0.4      4,707     1.1      3,502     0.5      7,937     1.0
Interest expense                         (382)    0.1       (921)    0.2       (758)    0.1     (2,234)    0.3
Interest and other income, net            585     0.2         35     0.0      1,057     0.1         74     0.0
Loss on debt extinguishment                 0     0.0          0     0.0          0     0.0     (1,653)    0.2
Provision for income taxes             11,127     2.9     21,715     5.1     14,723     2.0     29,679     3.7
                                     --------   -----   --------   -----   --------   -----   --------   -----
Net income                           $ 16,921     4.5%  $ 34,053     8.0%  $ 22,367     2.9%  $ 46,578     5.8%
                                     ========   =====   ========   =====   ========   =====   ========   =====
</Table>

                                        17
<PAGE>

<Table>
<Caption>
     SALES VOLUME BY COMMODITY         2005               2004               2005               2004
          (IN THOUSANDS):              ----               ----               ----               ----
<S>                                  <C>        <C>     <C>        <C>     <C>        <C>     <C>        <C>
  Ferrous metals (tons)                 1,049              1,106              2,150              2,304
  Non-ferrous metals (lbs.)           111,275            134,471            231,450            252,439
  Brokerage - ferrous (tons)               79                 51                138                 99
  Brokerage - non-ferrous (lbs.)        1,299                408              3,242              1,443
</Table>

NET SALES
     Consolidated net sales decreased by $46.7 million (11.0%) and $32.2 million
(4.1%) to $378.3 million and $760.0 million in the three and six months ended
September 30, 2005, respectively, compared to consolidated net sales of $425.0
million and $792.2 million in the three and six months ended September 30, 2004,
respectively. The decrease in consolidated net sales was primarily due to lower
average ferrous selling prices and lower unit shipments of ferrous and
non-ferrous products. During the three months ended September 30, 2005, we
shipped two cargos that aggregated to $11 million of sales that will not be
recognized until our third quarter.

Ferrous Sales
     Ferrous sales decreased by $59.7 million (19.7%) and $73.6 million (13.0%)
to $243.2 million and $491.8 million in the three and six months ended September
30, 2005, respectively, compared to ferrous sales of $302.9 million and $565.4
million in the three and six months ended September 30, 2004, respectively. The
decrease in the three months ended September 30, 2005 was due to lower average
selling prices which decreased by $42 per ton (15.4%) to $232 per ton, and sales
volumes which declined by 57,000 tons (5.2%). The decrease in the six months
ended September 30, 2005 was due to lower average selling prices, which
decreased by $17 per ton (6.8%) to $229 per ton, and sales volumes which
declined by 154,000 tons (6.7%). Lower unit shipments of ferrous products
reflected slower inbound activity from suppliers.

     The decrease in selling prices for ferrous scrap is evident in data
published by AMM. According to AMM data, the average price for #1 Heavy Melting
Steel Scrap -- Chicago was approximately $189 per ton and $182 per ton for the
three and six months ended September 30, 2005, respectively, compared to $230
per ton and $213 per ton for the three and six months ended September 30, 2004,
respectively.

Non-ferrous Sales
     Non-ferrous sales increased by $8.5 million (8.2%) and $36.5 million
(19.0%) to $112.4 million and $228.5 million in the three and six months ended
September 30, 2005, respectively, compared to non-ferrous sales of $103.9
million and $192.0 million in the three and six months ended September 30, 2004,
respectively. The increase was due to higher average selling prices which were
offset in part by a decrease in sales volumes. In the three and six months ended
September 30, 2005, the average selling price for non-ferrous products increased
by approximately $.24 per pound (31.2%) to $1.01 per pound and $.23 per pound
(30.3%) to $0.99 per pound, respectively, while non-ferrous sales volumes
decreased by 23 million pounds (17.2%) and 21 million pounds (8.3%),
respectively, compared to the three and six months ended September 30, 2004.

     The decrease in non-ferrous sales volumes was primarily due to stainless
steel shipments which were shipped, but not delivered to customers by September
30, 2005, resulting in deferral of recognition of these sales to October 2005.
Our non-ferrous operations have benefited from rising prices for aluminum,
copper and stainless steel (nickel base metal). The increase in non-ferrous
prices is evident in data published by the London Metals Exchange ("LME") and
COMEX. According to LME data, average prices for nickel were 4.0% and 16.9%
higher and average prices for aluminum were 7.0% and 6.8% higher in the three
and six months ended September 30, 2005, respectively, compared to the three and
six months ended September 30, 2004. According to COMEX data, average prices for
copper were 31.8% and 28.6% higher in the three and six months ended September
30, 2005, respectively, compared to the three and six months ended September 30,
2004. We believe non-ferrous prices are strong, in part, due to increases in
industrial production and demand from industrializing China.

                                        18
<PAGE>

     Our non-ferrous sales are also impacted by the mix of non-ferrous metals
sold. Generally, prices for copper are higher than prices for aluminum and
stainless steel. In addition, the amount of high-temperature alloys that we sell
and the selling prices for these metals will impact our non-ferrous sales as
prices for these metals are generally higher than other non-ferrous metals.

Brokerage Sales
     Brokerage ferrous sales increased by $4.1 million (33.3%) and $3.6 million
(15.0%) to $16.5 million and $27.5 million in the three and six months ended
September 30, 2005, respectively, compared to brokerage ferrous sales of $12.4
million and $23.9 million in the three and six months ended September 30, 2004,
respectively. The increase in brokerage ferrous sales was the result of an
increase in brokered ferrous sales volumes. Brokered ferrous sales volume
increased by 28,000 tons (54.9%) and 39,000 tons (39.4%) in the three and six
months ended September 30, 2005, respectively, compared to the three and six
months ended September 30, 2004.

     Brokerage ferrous sales increased despite a $34 per ton (14.0%) and $42 per
ton (17.6%) decline in average selling prices for brokered ferrous metals during
the three and six months ended September 30, 2005, respectively, compared to the
three and six months ended September 30, 2004. The average selling price for
brokered metals is significantly affected by the product mix, such as prompt
industrial grades versus obsolete grades, which can vary significantly between
periods. Prompt industrial grades of scrap metal are generally associated with
higher unit prices.

COST OF SALES (EXCLUDING DEPRECIATION)
     Cost of sales was $329.0 million and $679.4 million in the three and six
months ended September 30, 2005, respectively, compared to cost of sales of
$350.1 million and $673.8 million in the three and six months ended September
30, 2004, respectively. The decrease in the three months ended September 30,
2005 of $21.1 million (6.0%) is primarily due to lower material costs related to
ferrous metals, partially offset by higher freight costs. Freight costs were
higher in the three months ended September 30, 2005 due to an increase in export
activity sold on delivered terms. The increase in cost of sales in the six
months ended September 30, 2005 of $5.6 million (0.8%) is primarily due to
increased freight and processing costs, partially offset by lower material costs
related to ferrous metals. Freight costs were higher due to increases in freight
rates resulting from higher fuel costs and increased export activity.

     Cost of sales represented approximately 87% and 89% of sales in the three
and six months ended September 30, 2005, respectively, compared to 82% and 85%
of sales in the three and six months ended September 30, 2004, respectively. In
the three months ended September 30, 2005, the increase was due to ferrous
material costs representing a higher percentage of ferrous sales compared to the
three months ended September 30, 2004. During the six months ended September 30,
2005, the increase was due to freight costs and processing expenses representing
a higher percentage of net sales compared to the six months ended September 30,
2004 and due to our inability to reduce purchase prices for industrial grades of
scrap (in May and June 2005) in certain markets that tend to support integrated
steel mills.

GENERAL AND ADMINISTRATIVE EXPENSE
     General and administrative expense was $18.5 million and $38.2 million in
the three and six months ended September 30, 2005, respectively, compared to
general and administrative expense of $18.3 million and $37.0 million in the
three and six months ended September 30, 2004, respectively. The increase is
mainly due to higher compensation expense partially offset by lower professional
fees. The increase in compensation expense was primarily due to higher salaries
as a result of an increase in headcount and increased stock-based compensation
expense.

     Professional fees were $1.5 million lower in the six months ended September
30, 2005 compared to the six months ended September 30, 2004. In the six months
ended September 30, 2004, we incurred legal fees and related costs of $2.1
million as a result of the investigations performed in connection with our
voluntary disclosure to the U.S. Department of Justice regarding cash payments
made to certain industrial account suppliers (see the section entitled "Legal
Proceedings" in Part II of this report).

                                        19
<PAGE>

DEPRECIATION AND AMORTIZATION
     Depreciation and amortization expense was $4.4 million and $9.0 million in
the three and six months ended September 30, 2005, respectively, compared to
depreciation and amortization expense of $4.7 million and $9.2 million in the
three and six months ended September 30, 2004, respectively. Our depreciation
expense has decreased as a result of assets that became fully depreciated and
our decision to replace older material handling equipment with new equipment
financed through operating leases which contain attractive terms when compared
to purchasing the equipment.

INCOME FROM JOINT VENTURES
     Income from joint ventures was $1.5 million and $3.5 million in the three
and six months ended September 30, 2005, respectively, compared to income from
joint ventures of $4.7 million and $7.9 million in the three and six months
ended September 30, 2004, respectively. The income from joint ventures primarily
represents our 28.5% share of income from Southern and our 50% share of earnings
from three other joint ventures.

     The decline in income from joint ventures is primarily attributable to
business interruptions at Southern as a result of Hurricane Katrina in August
2005 and relatively weaker demand and prices for ferrous scrap metals in the six
months ended September 30, 2005. In the three months ended September 30, 2005,
Southern recorded estimates for asset impairments and lease termination costs of
approximately $2.8 million in the aggregate (of which 28.5% or $0.8 million is
recorded as our share) due to losses arising from Hurricane Katrina. Southern
will attempt to recover some or all of these losses from its commercial
insurance policies but such collection is not considered probable as of this
date. Any such insurance proceeds Southern receives will be reported in income
at the time that collection is deemed probable. The decline in income from
Southern was mitigated, to some degree, by income from our joint venture in
Albany, NY which commenced operations in February 2005 and is performing well.

INTEREST EXPENSE
     Interest expense was $0.4 million and $0.8 million in the three and six
months ended September 30, 2005, respectively, compared to interest expense of
$0.9 million and $2.2 million in the three and six months ended September 30,
2004, respectively. The decrease in interest expense was a result of lower
borrowings. Average debt was approximately $2.4 million in the three and six
months ended September 30, 2005 compared to average debt of approximately $47.8
million and $55.3 million in the three and six months ended September 30, 2004,
respectively. Our interest expense primarily consists of amortization of
deferred financing costs, unused line fees under our Credit Agreement and
interest on mortgage loans.

INTEREST AND OTHER INCOME, NET
     Interest income recognized in the three and six months ended September 30,
2005 was $0.2 million and $0.3 million, respectively. As a result of our cash
balances and short-term investments, our interest income recognized has
increased. In the three and six months ended September 30, 2004, we did not have
any cash balances earning interest nor did we have any short-term investments.
Other income during the three and six months ended September 30, 2005 consists
mainly of insurance reimbursements of $0.3 million and $0.7 million,
respectively.

LOSS ON DEBT EXTINGUISHMENT
     During the six months ended September 30, 2004, we recognized a loss on
debt extinguishment of $1.7 million associated with the repayment of our
previous credit agreement with proceeds from the Credit Agreement. This amount
represented a write-off of unamortized deferred financing costs associated with
the previous credit agreement.

INCOME TAXES
     In the three and six months ended September 30, 2005, we recognized income
tax expense of $11.1 million and $14.7 million, respectively, resulting in an
effective tax rate of 39.7%. In the three and six months ended September 30,
2004, our income tax expense was $21.7 million and $29.7 million, respectively,

                                        20
<PAGE>

resulting in an effective tax rate of 38.9%. The effective tax rate differs from
the federal statutory rate mainly due to state taxes and permanent tax items.

     As of March 31, 2005, we have fully consumed our federal net operating loss
("NOL") carryforwards and most of our state NOL carryforwards. As a result, our
cash tax payment obligations are higher in fiscal 2006.

NET INCOME
     Net income was $16.9 million and $22.4 million in the three and six months
ended September 30, 2005, respectively, compared to net income of $34.1 million
and $46.6 million in the three and six months ended September 30, 2004,
respectively. Net income in the three and six months ended September 30, 2005
decreased due to lower ferrous material margins attributable to weaker ferrous
metal market conditions, lower unit shipments, and lower income from joint
ventures, partially offset by lower interest expense.

LIQUIDITY AND CAPITAL RESOURCES
     Our financial condition remained strong during the six months ended
September 30, 2005. At September 30, 2005, our total indebtedness was $2.5
million (primarily a single property real estate mortgage). We had no borrowings
outstanding on our Credit Agreement and had cash, cash equivalents and
short-term investments of $43.6 million at September 30, 2005. Our primary
source of working capital is collections from customers supplemented by
financing under our Credit Agreement.

Cash Flows
     Net cash provided by operating activities was $2.5 million in the six
months ended September 30, 2005 compared to $36.4 million in the six months
ended September 30, 2004. The decrease was primarily due to lower net income and
increased working capital. In the six months ended September 30, 2005, $34.3
million of cash was used for working capital. The working capital increase was
mainly due to higher inventories ($23.7 million) and lower accrued expenses
($9.7 million), offset, in part, by lower accounts receivable ($10.3 million).
Inventories increased due to higher levels of both ferrous and non-ferrous
inventory on hand at September 30, 2005 as compared to March 31, 2005. Other
accrued expenses decreased as a result of the payment of $16.6 million of
incentive compensation for employees that was accrued for at March 31, 2005.
Accounts receivable decreased due to lower sales in September 2005 as compared
to March 2005.

     Net cash used in investing activities was $17.8 million in the six months
ended September 30, 2005 compared to $3.8 million in the six months ended
September 30, 2004. The increase was due to higher capital expenditures and the
net purchase of $5.0 million of short-term investments. Our capital expenditures
in the current fiscal year are higher due to investments we are making in our
operations to either upgrade or purchase scrap metal processing equipment.

     Net cash provided by financing activities was $1.1 million in the six
months ended September 30, 2005 compared to net cash used in financing
activities of $32.0 million in the six months ended September 30, 2004. We paid
cash dividends of $3.8 million during the period.

Indebtedness
     The Credit Agreement is a revolving credit and letter of credit facility
that is available to support our working capital requirements and for general
corporate purposes. Borrowing costs are based on variable rates tied to the
prime rate plus a margin or the London Interbank Offered Rate ("LIBOR") plus a
margin. The margin is based on our leverage ratio (as defined in the Credit
Agreement) as determined for the trailing four fiscal quarters. Based on our
current leverage ratio, our LIBOR and prime rate margins are 125 basis points
and 0 basis points, respectively.

     Borrowings under the Credit Agreement are generally subject to borrowing
base limitations based upon a formula equal to 85% of eligible accounts
receivable plus the lesser of $65 million or 70% of eligible inventory.
Inventories cannot represent more than 40% of the total borrowing base. A
security interest in substantially all of our assets and properties, other than
equipment, fixtures and real property, unless and until the average excess
availability for any two consecutive months is less than $10 million, has been
granted to the agent for
                                        21
<PAGE>

the lenders as collateral against our obligations under the Credit Agreement.
Pursuant to the Credit Agreement, we pay a fee on the undrawn portion of the
facility that is determined by the leverage ratio. As of September 30, 2005,
that fee was .25% per annum.

     Under the Credit Agreement, we are required to satisfy specified financial
covenants, including a maximum leverage ratio of 2.50 to 1.00, a minimum
consolidated fixed charge coverage ratio of 1.50 to 1.00 and a minimum tangible
net worth of not less than the sum of $110 million plus 25% of consolidated net
income earned in each fiscal quarter. The leverage ratio and consolidated fixed
charge coverage ratio are tested for the twelve-month period ending each fiscal
quarter. The Credit Agreement also limits capital expenditures to $20 million
for the twelve-month period ending each fiscal quarter. An amendment to our
Credit Agreement permits capital expenditures of up to $40 million in fiscal
2006. The Credit Agreement contains restrictions which, among other things,
limit our ability to (i) incur additional indebtedness; (ii) pay dividends under
certain conditions; (iii) enter into transactions with affiliates; (iv) enter
into certain asset sales; (v) engage in certain acquisitions, investments,
mergers and consolidations; (vi) prepay certain other indebtedness; (vii) create
liens and encumbrances on our assets; and (viii) engage in other matters
customarily restricted in such agreements. As of September 30, 2005, we were in
compliance with all financial covenants contained in the Credit Agreement. As of
October 19, 2005, we had no outstanding borrowings under the Credit Agreement,
and had undrawn availability of approximately $180.7 million.

Future Capital Requirements
     We expect to fund our working capital needs, dividend payments and capital
expenditures over the next twelve months with cash generated from operations,
supplemented by undrawn borrowing availability under the Credit Agreement. Our
future cash needs will be driven by working capital requirements, planned
capital expenditures and acquisition objectives, should attractive acquisition
opportunities present themselves.

     Capital expenditures were $14.3 million in the six months ended September
30, 2005. Capital expenditures are expected to be approximately $17 million to
$25 million for the remainder of fiscal 2006. On October 21, 2005, we purchased
the land which we leased in Phoenix, Arizona for $1.4 million. Our remaining
major capital expenditures in fiscal 2006 will include, among other projects,
the rebuild of our shredder in Newark, upgrades to equipment and technology
deployed in our Aerospace operations and installations of induction separation
systems at five shredding facilities.

     In addition, due to favorable financing terms made available by equipment
manufacturing vendors, we have entered into operating leases for new equipment.
Since April 2002, we have entered into 79 operating leases for equipment which
would have cost approximately $23.3 million to purchase. These operating leases
are attractive to us since the implied interest rates are lower than interest
rates under our Credit Agreement. We expect to selectively use operating leases
for new material handling equipment or trucks required by our operations.

     We anticipate that our Board of Directors will continue to declare cash
dividends; however, the continuance of cash dividends is not guaranteed and
dependent on many factors, some of which are beyond our control.

     We believe these sources of capital will be sufficient to fund planned
capital expenditures, dividend payments and working capital requirements for the
next twelve months, although there can be no assurance that this will be the
case.

OFF-BALANCE SHEET ARRANGEMENTS, CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS
Off-Balance Sheet Arrangements
     Other than operating leases, we do not have any off-balance sheet
arrangements that are likely to have a current or future effect on our financial
condition, results of operations or cash flows.

                                        22
<PAGE>

Contractual Obligations
     We have various financial obligations and commitments assumed in the normal
course of our operations and financing activities. Financial obligations are
considered to represent known future cash payments that we are required to make
under existing contractual arrangements, such as debt and lease agreements.

     The following table sets forth our known contractual obligations as of
September 30, 2005, and the effect such obligations are expected to have on our
liquidity and cash flow in future periods (in thousands):

<Table>
<Caption>
                                                LESS THAN      ONE TO       THREE TO
                                     TOTAL       ONE YEAR    THREE YEARS   FIVE YEARS   THEREAFTER
<S>                                <C>          <C>          <C>           <C>          <C>
Long-term debt and capital leases  $    2,789   $      504   $      953    $    1,332   $        0
Operating leases                       62,653       11,808       19,683        12,702       18,460
Other contractual obligations*          4,111        3,711            0           400            0
                                   ----------   ----------   ----------    ----------   ----------
Total contractual cash
  obligations                      $   69,553   $   16,023   $   20,636    $   14,434   $   18,460
                                   ==========   ==========   ==========    ==========   ==========
</Table>

    * Includes $1.2 million of employee termination benefits scheduled for
      payment in July 2005 for which we are contesting the payments (see "Legal
      Proceedings" under Part II, Item 1 of this report).

Other Commitments
     We are required to make contributions to our defined benefit pension plans.
These contributions are required under the minimum funding requirements of the
Employee Retirement Income Security Act (ERISA). However, due to uncertainties
regarding significant assumptions involved in estimating future required
contributions, such as pension plan benefit levels, interest rate levels and the
amount of pension plan asset returns, we are not able to reasonably estimate the
amount of future required contributions beyond fiscal 2006. Our minimum required
pension contributions for fiscal 2006 are approximately $0.9 million, of which
we paid $0.5 million in the six months ended September 30, 2005.

     At September 30, 2005, we recorded $4.0 million of construction in progress
and an offsetting liability relating to the construction of a crane which we
committed to lease upon completion. We expect the crane to be delivered in
January 2006. We are considered the owner of the crane during its construction.

     We exercised a purchase option for land which we leased in Phoenix,
Arizona. The purchase price of the land is $1.4 million and was recorded as a
purchase commitment as of September 30, 2005. We closed on the land purchase on
October 21, 2005.

     We also enter into letters of credit in the ordinary course of operating
and financing activities. As of October 19, 2005, we had outstanding letters of
credit of $7.0 million, much of which is securing insurance policies.

CRITICAL ACCOUNTING POLICIES
     Our discussion and analysis of our financial condition and results of
operations are based upon our consolidated financial statements which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of our financial statements requires the use of
estimates and judgments that affect the reported amounts and related disclosures
of commitments and contingencies. We rely on historical experience and on
various other assumptions that we believe to be reasonable under the
circumstances to make judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ materially from these estimates.

     We believe the following critical accounting policies, among others, affect
the more significant judgments and estimates used in the preparation of our
consolidated financial statements.

Revenue Recognition
     Our primary source of revenue is from the sale of processed ferrous and
non-ferrous scrap metals. We also generate revenue from the brokering of scrap
metals or from services performed, including, but not limited to, tolling,
stevedoring and dismantling. Revenues from processed ferrous and non-ferrous
scrap metal sales are recognized when title passes to the customer. Revenues
relating to brokered sales are recognized upon receipt of the materials by the
customer. Revenues from services are recognized as the service is performed.
Sales adjustments related to price and weight differences and allowances for
uncollectible receivables are accrued against revenues as incurred.

                                        23
<PAGE>

Short-term Investments
     All investments with original maturities of greater than 90 days are
accounted for in accordance with Statement of Financial Accounting Standards
("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." We determine the appropriate classification at the time of
purchase. At September 30, 2005, we had short-term investments of approximately
$5.0 million, which mainly consisted of investments in auction rate securities
which are classified as available-for-sale. Auction rate securities consist of
tax-free bonds issued by municipalities which mainly carry AAA ratings.
Investments in auction rate securities are recorded at cost, which approximates
fair value due to their variable interest rates which reset every 7 to 30 days.
As a result, these securities are classified as current assets. Despite the
long-term nature of their stated contractual maturities, there is a readily
liquid market for these securities. As a result, we had no cumulative gross
unrealized holding gains (losses) or gross realized gains (losses) from our
short-term investments. All income generated from these investments was recorded
as interest income.

Accounts Receivable and Allowance for Uncollectible Accounts Receivable
     Accounts receivable consist primarily of amounts due from customers from
product and brokered sales. The allowance for uncollectible accounts receivable
totaled $2.0 million and $2.7 million at September 30, 2005 and March 31, 2005,
respectively. Our determination of the allowance for uncollectible accounts
receivable includes a number of factors, including the age of the balance, past
experience with the customer account, changes in collection patterns and general
industry conditions.

Inventory
     Our inventories primarily consist of ferrous and non-ferrous scrap metals
and are valued at the lower of average purchased cost or market. Quantities of
inventories are determined based on our inventory systems and are subject to
periodic physical verification using estimation techniques including
observation, weighing and other industry methods. As indicated in our Annual
Report under the section entitled "Risk Factors -- Prices of commodities we own
may be volatile and markets are competitive," we are exposed to risks associated
with fluctuations in the market price for both ferrous and non-ferrous metals,
which are at times volatile. We attempt to mitigate this risk by seeking to
rapidly turn our inventories.

Goodwill
     We account for goodwill and other intangible assets under SFAS No. 142,
"Goodwill and Other Intangible Assets." Under SFAS No. 142, goodwill is not
amortized, but it is tested for impairment at least annually, or earlier if
certain events occur indicating that the carrying value of goodwill may be
impaired. Other intangible assets are also tested for impairment at least
annually. If an impairment exists, a loss is recognized in an amount equal to
the excess of the carrying value over the fair value.

Long-lived Assets
     We assess the impairment of long-lived assets whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. If an
evaluation is required, the estimated future undiscounted cash flows associated
with the asset are compared to the asset's carrying amount to determine if an
impairment of such asset is necessary. The effect of any impairment would be the
recognition of a loss representing the difference between the fair value of such
asset and its carrying value.

Self-insured Accruals
     We are self-insured for medical claims for most of our employees. We are
self-insured for workers' compensation claims that involve a loss of not greater
than $350,000 per claim. Our exposure to claims is protected by stop-loss
insurance policies. We record an accrual for reported but unpaid claims and the
estimated cost of incurred but not reported ("IBNR") claims. IBNR accruals are
based on either a lag estimate (for medical claims) or on actuarial assumptions
(for workers' compensation claims).

Income Taxes
     Income taxes are accounted for under the asset and liability method
prescribed by SFAS No. 109, "Accounting for Income Taxes." Deferred tax assets
and liabilities are recognized for the future tax
                                        24
<PAGE>

consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

Contingencies
     We record accruals for estimated liabilities, which include environmental
remediation, potential legal claims and IBNR claims. A loss contingency is
accrued when our assessment indicates that it is probable that a liability has
been incurred and the amount of the liability can be reasonably estimated. Our
estimates are based upon currently available facts and presently enacted laws
and regulations. These estimated liabilities are subject to revision in future
periods based on actual costs or new information.

     The above listing is not intended to be a comprehensive list of all of our
accounting policies. Please refer to our Annual Report, which contains
accounting policies and other disclosures required by generally accepted
accounting principles.

RECENT ACCOUNTING PRONOUNCEMENTS
     In November 2004, the Financial Accounting Standards Board (the "FASB")
issued SFAS No. 151, "Inventory Costs -- an amendment of ARB No. 43, Chapter 4."
SFAS No. 151 clarifies the accounting for abnormal amounts of idle facility
expense, freight, handling costs and wasted material (spoilage), requiring that
these items be recognized as current-period charges and not capitalized in
inventory overhead. In addition, this statement requires that allocation of
fixed production overhead to the costs of conversion be based on the normal
capacity of the production facilities. The provisions of this statement are
effective for inventory costs incurred during fiscal years beginning after June
15, 2005. The adoption of this statement is not expected to materially impact
our consolidated financial statements.

     In December 2004, the FASB issued SFAS No. 123(R), "Share-Based Payment."
The revised statement eliminates the ability to account for share-based
compensation transactions using Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees." This statement instead requires that
all share-based payments to employees be recognized as compensation expense in
the statement of operations based on their fair value over the applicable
vesting period. The provisions of this statement are effective for fiscal years
beginning after June 15, 2005. We will transition to SFAS No. 123(R) using the
"modified prospective application" effective April 1, 2006. Under the "modified
prospective application," compensation costs will be recognized in the financial
statements for all new share-based payments granted after April 1, 2006.
Additionally, we will recognize compensation costs for the portion of previously
granted awards for which the requisite service has not been rendered ("nonvested
awards") that are outstanding as of the effective date over the remaining
requisite service period of the awards.

     In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections -- a replacement of APB Opinion No. 20 and SFAS No. 3." This
statement provides guidance on the accounting for and reporting of accounting
changes and error corrections. It requires, unless impracticable, retrospective
application for reporting a change in accounting principle, unless the newly
adopted accounting principle specifies otherwise, and reporting of a correction
of an error. The provisions of this statement are effective for accounting
changes and corrections of errors made in fiscal years beginning after December
15, 2005. The adoption of this statement is not expected to materially impact
our consolidated financial statements.

     In October 2004, the American Jobs Creation Act of 2004 ("AJCA") was signed
by the President. The AJCA provides a deduction for income from qualified
domestic production activities, which will be phased in from fiscal years
beginning after December 31, 2004 through 2010. In return, the AJCA also
provides for a two-year phase-out of the existing extraterritorial income
exclusion ("ETI") for foreign sales that was viewed to be inconsistent with
international trade protocols by the European Union. In December 2004, the FASB
issued Staff Position ("FSP") No. 109-1, "Application of FASB Statement No. 109,
Accounting for Income Taxes, to the Tax Deduction on Qualified Production
Activities Provided by the American Jobs Creation Act of 2004." FSP No. 109-1
treats a deduction for income from qualified production activities as a "special
                                        25
<PAGE>

deduction" as described in SFAS No. 109. As such, a special deduction has no
effect on deferred tax assets and liabilities existing at the enactment date.
Rather, the impact of such a deduction will be reported in the period in which
the deduction is claimed on our tax return. We are currently evaluating the
impact the AJCA will have on our results of operations, financial condition and
effective tax rate.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are exposed to financial risk resulting from fluctuations in interest
rates and commodity prices. We seek to minimize these risks through regular
operating and financing activities. We do not use derivative financial
instruments. Refer to Item 7A of the Annual Report.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of our Disclosure Controls and Procedures.
     As of the end of the period covered by this report, we evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")). This evaluation was done
under the supervision and with the participation of management, including Daniel
W. Dienst, our Chairman of the Board, Chief Executive Officer and President
("CEO"), and Robert C. Larry, our Executive Vice President, Finance and Chief
Financial Officer ("CFO").

     As described in Item 1, Note 1 on page 5 of our Form 10-Q/A for the three
months ended June 30, 2005, the Company restated its previously issued statement
of cash flows for the three months ended June 30, 2005 to correct the
classification of a single tax distribution received from a joint venture. The
restatement did not affect the net change in cash for the three months ended
June 30, 2005 and had no impact on the Company's consolidated balance sheet at
June 30, 2005, the consolidated statement of operations for the three months
ended June 30, 2005, or the consolidated statement of stockholders' equity for
the three months ended June 30, 2005. Moreover, the correction only impacted the
statement of cash flows for the three months ended June 30, 2005 and did not
impact any period prior to June 30, 2005. The evaluation of our disclosure
controls and procedures by our CEO and CFO included consideration of the
restatement.

     Based on this evaluation and because of the material weakness described
below, our CEO and CFO have concluded that our disclosure controls and
procedures were not effective, at the reasonable assurance level, to enable us
to record, process, summarize, and report information required to be included in
our periodic SEC filings within the required time period. Notwithstanding this
material weakness, our management has concluded that the financial statements
included in this Form 10-Q fairly present in all material respects the Company's
financial position, results of operations and cash flows for the periods
presented in conformity with generally accepted accounting principles.

Changes in Internal Control over Financial Reporting.
     There have been no changes in our internal control over financial reporting
during the three months ended September 30, 2005 that have materially affected,
or are reasonably likely to materially affect, our internal control over
financial reporting other than as described below.

     A material weakness is a control deficiency or a combination of control
deficiencies that result in a more than remote likelihood that a material
misstatement of the annual or interim consolidated financial statements will not
be prevented or detected. As of September 30, 2005, the Company did not maintain
effective controls over the preparation and review of its consolidated statement
of cash flows. Specifically, the Company failed to report a cash distribution of
earnings from a joint venture in the cash flow category required by generally
accepted accounting principles in its consolidated statement of cash flows for
the three months ended June 30, 2005. This control deficiency resulted in the
restatement of our interim consolidated financial statements for the three
months ended June 30, 2005. Additionally, this control deficiency could result
in a misstatement to investing and operating cash flows in the financial
statements that would result in a material misstatement in the annual or interim
financial statements that would not be prevented or detected. Accordingly,
management

                                        26
<PAGE>

determined that this control deficiency represents a material weakness in
internal control over financial reporting as of September 30, 2005.

     Subsequent to June 30, 2005, management has taken steps to remediate the
material weakness described above. These steps include a thorough review, on a
quarterly basis, of all joint venture activities including the Company's
allocated share of income, cash advances and cash distributions and an
additional review, on a quarterly basis, of the classification requirements of
each component line item and the individual elements that comprise each line
item of the statement of cash flows, in accordance with Statement of Financial
Accounting Standards, No. 95, "Statement of Cash Flows." Management believes the
additional control procedures designed, when implemented, will fully remediate
this material weakness.

CEO and CFO Certifications.
     As an exhibit to this report, there are "Certifications" of the CEO and
CFO. The first form of Certification is required in accordance with Section 302
of the Sarbanes-Oxley Act of 2002. This section of the quarterly report is the
information concerning the controls evaluation referred to in the Section 302
Certifications and this information should be read in conjunction with the
Section 302 Certifications for a more complete understanding of the topics
presented.

Limitations on the Effectiveness of Controls.
     Our management, including our CEO and the CFO, does not expect that our
disclosure controls and procedures or our internal control over financial
reporting will prevent all error and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs. Because
of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that all control issues and instances of fraud,
if any, within the Company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by management override of the control. The design of any
system of controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions;
over time, controls may become inadequate because of changes in conditions, or
the degree of compliance with the policies or procedures may deteriorate.
Because of the inherent limitations in a cost effective control system,
misstatements due to error or fraud may occur and not be detected.

                                        27
<PAGE>

                           PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     On July 1, 1998, Metal Management Connecticut, Inc. ("MTLM-Connecticut"), a
subsidiary of the Company, acquired the scrap metal recycling assets of Joseph
A. Schiavone Corp. (formerly known as Michael Schiavone & Sons, Inc.). The
acquired assets include real property in North Haven, Connecticut upon which
MTLM-Connecticut's scrap metal recycling operations are currently performed (the
"North Haven Facility"). The owner of Joseph A. Schiavone Corp. was Michael
Schiavone ("Schiavone"). On March 31, 2003, the Connecticut Department of
Environmental Protection ("CTDEP") filed suit against Joseph A. Schiavone Corp.,
Schiavone, and MTLM-Connecticut in the Superior Court of the State of
Connecticut -- Judicial District of Hartford. The suit alleges, among other
things, that the North Haven Facility discharged and continues to discharge
contaminants, including oily material, into the environment and has failed to
comply with the terms of certain permits and other filing requirements. The suit
seeks injunctions to restrict MTLM-Connecticut from maintaining discharges and
to require MTLM-Connecticut to remediate the facility. The suit also seeks civil
penalties from all of the defendants in accordance with Connecticut
environmental statutes. At this stage, the Company is not able to predict
MTLM-Connecticut's potential liability in connection with this action or any
required investigation and/or remediation. The Company believes that
MTLM-Connecticut has meritorious defenses to certain of the claims asserted in
the suit and MTLM-Connecticut intends to vigorously defend itself against the
claims. In addition, the Company believes it is entitled to indemnification from
Joseph A. Schiavone Corp. and Schiavone for some or all of the obligations and
liabilities that may be imposed on MTLM-Connecticut in connection with this
matter under the various agreements governing its purchase of the North Haven
Facility from Joseph A. Schiavone Corp. The Company cannot provide assurances
that Joseph A. Schiavone Corp. or Schiavone will have sufficient resources to
fund any or all indemnifiable claims that the Company may assert.

     In a letter dated July 13, 2005, MTLM-Connecticut and the Company received
notification from Schiavone of his demand seeking indemnification (including the
advance of all costs, charges and expenses incurred by Schiavone in connection
with his defense) from MTLM-Connecticut and the Company to those claims made
against Schiavone in the action brought by CTDEP. Schiavone's demand refers to
his employment agreement and to the certificate of incorporation of
MTLM-Connecticut, which provide for indemnification against claims by reason of
his being or having been a director, officer, employee, or agent of
MTLM-Connecticut, or serving or having served at the request of MTLM-Connecticut
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, or other enterprise to the fullest extent permitted by
applicable law.

     The Company has engaged in settlement discussions with Joseph A. Schiavone
Corp., Schiavone and CTDEP regarding the possible characterization of the North
Haven Facility, and the subsequent remediation thereof should contamination be
present at concentrations that require remedial action. The Company is currently
working with an independent environmental consultant to develop an acceptable
characterization plan. The Company cannot provide assurances that it will be
able to reach an acceptable settlement of this matter with the other parties.

     On September 22, 2005 and September 23, 2005, CTDEP's Bureau of Water
Management and Bureau of Waste Management each issued a Notice of Violation
("NOV") to Metal Management Aerospace, Inc. ("MTLM-Aerospace"), a subsidiary of
the Company, for alleged violations at MTLM-Aerospace's facility, including,
among other things (1) operation of a solid waste facility without the approval
of CTDEP; (2) failure to comply with certain environmental regulations regarding
the handling of used oil, the performance of certain hazardous waste
determinations, the disposal of PCBs and the discharge of oils and coolants; (3)
failure to comply with certain discharge reporting obligations; (4) creation of
certain potential environmental hazards; (5) inadequacy or improper maintenance
of certain pollution management devices, including erosion and sediment controls
and release detection for an underground diesel storage tank; and (6) failure to
comply with a pollution prevention plan.

                                        28
<PAGE>

     On October 21, 2005, MTLM-Aerospace submitted substantive responses to
CTDEP regarding the NOVs. At this time, the Company is unable to determine
MTLM-Aerospace's potential liability in connection with these NOVs. The Company
believes that MTLM-Aerospace has meritorious defenses to certain of the
allegations outlined in the NOVs. In addition, although the Company believes
that by virtue of certain consent orders, Connecticut Transfer Act obligations,
and lease/transactional documents executed by the lessor and former owner,
certain environmental liabilities noted in the NOVs will be the responsibility
of the lessor and former owner, there can be no assurance that the lessor and
former owner will have sufficient resources to fund any or all of such
liabilities.

     On August 22, 2005, the Occupational Safety and Health Administration
("OSHA") requested that MTLM-Aerospace conduct an internal investigation of a
recent accident. MTLM-Aerospace responded to this request in a timely manner. At
this time, OSHA has not taken any action with respect to this accident. Further
investigations of MTLM-Aerospace by OSHA of a more comprehensive nature have
been undertaken and are ongoing. At this preliminary stage, the Company cannot
predict the likelihood of any citations or the extent of any penalties.

     As a result of internal audits conducted by the Company, the Company
determined that current and former employees of certain business units engaged
in activities relating to cash payments to individual industrial account
suppliers of scrap metal that may have involved violations of federal and state
law. In May 2004, the Company voluntarily disclosed its concerns regarding such
cash payments to the U.S. Department of Justice. The Board of Directors
appointed a special committee, consisting of all of its independent directors,
to conduct an investigation of these activities. The Company is cooperating with
the U.S. Department of Justice. The Company implemented policies to eliminate
cash payments to industrial customers. During the year ended March 31, 2004,
such cash payments to industrial customers represented approximately 0.7% of the
Company's consolidated ferrous and non-ferrous yard shipments. The fines and
penalties under applicable statutes contemplate qualitative as well as
quantitative factors that are not readily assessable at this stage of the
investigation, but could be material. The Company is not able to predict at this
time the outcome of any actions by the U.S. Department of Justice or other
governmental authorities or their effect on the Company, if any, and
accordingly, the Company has not recorded any amounts in the financial
statements. The Company has incurred legal and other costs related to this
matter of approximately $2.3 million to date.

     On July 15, 2005, the Company and its subsidiary Metal Management Midwest,
Inc. ("MTLM-Midwest") filed a complaint (the "Complaint") against former
officers and directors, Albert A. Cozzi, Frank J. Cozzi, and Gregory P. Cozzi
(collectively, the "Defendants") in the Circuit Court of Cook County Illinois,
County Department, Chancery Division. The Complaint seeks damages from Frank J.
Cozzi and Gregory P. Cozzi for their actions in designing, implementing, and
maintaining cash payment practices in MTLM-Midwest's accounts payable that
violated Company policy and potentially federal law. The Complaint also alleges
that the Defendants breached the non-competition and non-solicitation provisions
of their respective separation and release agreements by seeking to engage in
business activities and seeking to solicit suppliers, customers and service
providers in competition with the Company's business. The Complaint seeks, among
other things, monetary compensation for the Company's actual losses and damages,
and an injunction restraining and enjoining the Defendants from breaching their
respective separation and release agreements. On October 21, 2005, Defendants
moved to dismiss the Complaint or in the alternative to compel arbitration and
stay the judicial proceedings. Defendants also filed a counterclaim seeking
recovery of unpaid employee severance payments of approximately $1.2 million.

     From time to time, we are involved in various litigation matters involving
ordinary and routine claims incidental to our business. A significant portion of
these matters result from environmental compliance issues and workers
compensation related claims applicable to our operations. Management currently
believes that the ultimate outcome of these proceedings, individually and in the
aggregate, will not have a material adverse effect on our results of operations
or financial condition. Please refer to Part I, Item 3 of the Annual Report for
a description of other litigation in which we are currently involved.

                                        29
<PAGE>

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Our Annual Meeting of Stockholders was held on September 13, 2005 in New
York, New York. At the meeting, our stockholders elected five members to our
board of directors pursuant to the following votes:

<Table>
<Caption>
                                                VOTES IN       VOTES
NAME                                             FAVOR        WITHHELD
<S>                                            <C>            <C>
Daniel W. Dienst                               22,149,693     650,978
John T. DiLacqua                               22,487,695     312,976
Robert Lewon                                   22,580,018     220,653
Kevin P. McGuinness                            22,578,721     221,950
Gerald E. Morris                               22,485,446     315,225
</Table>

     In addition to electing directors, our stockholders approved the proposal
for the adoption of the Metal Management, Inc. Employee Stock Purchase Plan by
the vote of 17,160,439 in favor, 248,323 against, 34,497 abstentions and
5,357,412 broker non-votes. Stockholders also approved the proposal to ratify
the appointment of PricewaterhouseCoopers LLP as our independent registered
public accounting firm for the fiscal year ending March 31, 2006 by the vote of
22,662,758 in favor, 123,668 against and 14,245 abstentions.

ITEM 6. EXHIBITS

     See Exhibit Index

                                        30
<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.

                                               METAL MANAGEMENT, INC.

                                               By:   /s/ Daniel W. Dienst
                                               ---------------------------------
                                                      Daniel W. Dienst
                                                  Chairman of the Board,
                                                  Chief Executive Officer
                                                  and President
                                                  (Principal Executive Officer)

                                               By:   /s/ Robert C. Larry
                                               ---------------------------------
                                                      Robert C. Larry
                                                  Executive Vice President,
                                                  Finance, Chief Financial
                                                  Officer, Treasurer and
                                                      Secretary
                                                  (Principal Financial Officer)

                                               By:   /s/ Amit N. Patel
                                               ---------------------------------
                                                      Amit N. Patel
                                                  Vice President, Finance
                                                  and Controller
                                                  (Principal Accounting Officer)

                                               Date: November 2, 2005

                                        31
<PAGE>

                             METAL MANAGEMENT, INC.
                                 EXHIBIT INDEX

<Table>
<Caption>
      NUMBER AND DESCRIPTION OF EXHIBIT
      ---------------------------------
<S>   <C>
2.1   Disclosure Statement with respect to First Amended Joint
      Plan of Reorganization of Metal Management, Inc. and its
      Subsidiary Debtors, dated May 4, 2001 (incorporated by
      reference to Exhibit 2.1 of the Company's Annual Report on
      Form 10-K for the year ended March 31, 2001).

3.1   Second Amended and Restated Certificate of Incorporation of
      the Company, as filed with the Secretary of State of the
      State of Delaware on June 29, 2001 (incorporated by
      reference to Exhibit 3.1 of the Company's Annual Report on
      Form 10-K for the year ended March 31, 2001).

3.2   Amended and Restated By-Laws of the Company adopted as of
      April 29, 2003 (incorporated by reference to Exhibit 3.2 of
      the Company's Annual Report on Form 10-K for the year ended
      March 31, 2003).

10.1  Amendment to Employment Agreement, dated August 10, 2005,
      between Robert C. Larry and the Company.

31.1  Certification of Daniel W. Dienst pursuant to Section
      240.13a-14(a) and Section 240.15d-14(a) of the Securities
      Exchange Act of 1934, as amended, as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002.

31.2  Certification of Robert C. Larry pursuant to Section
      240.13a-14(a) and Section 240.15d-14(a) of the Securities
      Exchange Act of 1934, as amended, as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002.

32.1  Certification of Daniel W. Dienst and Robert C. Larry
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002.
</Table>

                                        32