<PAGE>   1

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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q

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

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1999

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

                          COMMISSION FILE NO. 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 Number)
</TABLE>

                        500 N. DEARBORN ST., SUITE 405,
                               CHICAGO, IL 60610
          (Address of principal executive offices including zip code)

       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 [ ]

     As of February 1, 2000, the Registrant had 57,204,142 shares of Common
Stock outstanding.

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<PAGE>   2

                                     INDEX

<TABLE>
<CAPTION>
                                                                         PAGE
                                                                         ----
  <S>      <C>                                                           <C>
                      PART I: FINANCIAL INFORMATION

  ITEM     Financial Statements
    1:
           Condensed Consolidated Balance Sheets -- December 31, 1999
           (unaudited) and March 31, 1999..............................    1
           Condensed Consolidated Statements of Operations -- three and
           nine months ended December 31, 1999 and 1998 (unaudited)....    2
           Condensed Consolidated Statements of Cash Flows -- nine
           months ended December 31, 1999 and 1998 (unaudited).........    3
           Condensed Consolidated Statements of Stockholders'
           Equity -- nine months ended December 31, 1999 (unaudited)...    4
           Notes to Condensed Consolidated Financial Statements
           (unaudited).................................................    5
  ITEM     Management's Discussion and Analysis of Financial Condition
    2:     and Results of Operations...................................   14
  ITEM     Quantitative and Qualitative Disclosures about Market
    3:     Risk........................................................   21

                       PART II: OTHER INFORMATION

  ITEM     Legal Proceedings...........................................   22
    1:
  ITEM     Changes in Securities.......................................   22
    2:
  ITEM     Submission of Matters to a Vote of Security Holders.........   22
    4:
  ITEM     Other Information...........................................   23
    5:
  ITEM     Exhibits and Reports on Form 8-K............................   23
    6:
           Signatures..................................................   24
           Exhibit Index...............................................   25
</TABLE>
<PAGE>   3

PART I: FINANCIAL INFORMATION

ITEM 1 -- FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>
                                                               (UNAUDITED)
                                                            DECEMBER 31, 1999    MARCH 31, 1999
                                                            -----------------    --------------
<S>                                                         <C>                  <C>
                      ASSETS
Current assets:
  Cash and cash equivalents                                   $        840        $      2,482
  Accounts receivable, net                                         142,035             103,760
  Inventories                                                       65,056              60,443
  Prepaid expenses and other assets                                  7,760              11,405
  Deferred taxes                                                     3,235               3,303
                                                              ------------        ------------
       Total current assets                                        218,926             181,393

Property and equipment, net                                        168,091             171,240
Goodwill, net                                                      284,233             290,362
Deferred financing costs and other intangibles, net                 13,035              13,228
Deferred taxes                                                       5,982               3,261
Investments in joint ventures                                        3,279               4,525
Other assets                                                         3,048               3,727
                                                              ------------        ------------
                              TOTAL ASSETS                    $    696,594        $    667,736
                                                              ============        ============

        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt                           $      4,065        $      5,308
  Accounts payable                                                  69,576              62,230
  Accrued interest                                                   3,223               8,638
  Other accrued liabilities                                         15,474              19,323
                                                              ------------        ------------
       Total current liabilities                                    92,338              95,499

Long-term debt, less current portion                               373,528             330,154
Other liabilities                                                    4,115               2,879
                                                              ------------        ------------
                              TOTAL LIABILITIES                    469,981             428,532

Stockholders' equity:
  Convertible preferred stock:
          Series A                                                       0               4,020
          Series B                                                   4,893              10,877
          Series C                                                   5,100               5,100
  Common Stock                                                         565                 489
  Warrants                                                          40,745              40,745
  Additional paid-in-capital                                       269,024             259,878
  Accumulated deficit                                              (93,714)            (81,905)
                                                              ------------        ------------
                      TOTAL STOCKHOLDERS' EQUITY                   226,613             239,204
                                                              ------------        ------------
               TOTAL LIABILITIES AND STOCKHOLDERS'
                 EQUITY                                       $    696,594        $    667,736
                                                              ============        ============
</TABLE>

   The accompanying notes are an integral part of these financial statements

                                        1
<PAGE>   4

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

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                          ----------------------------       ----------------------------
                                                          DECEMBER 31,    DECEMBER 31,       DECEMBER 31,    DECEMBER 31,
                                                              1999            1998               1999            1998
                                                              ----            ----               ----            ----
<S>                                                       <C>             <C>                <C>             <C>
NET SALES                                                 $    233,734    $    178,752       $    643,882    $    610,959
Cost of sales                                                  205,245         167,607            565,004         570,178
                                                          ------------    ------------       ------------    ------------
Gross profit                                                    28,489          11,145             78,878          40,781

OPERATING EXPENSES:
  General and administrative                                    13,535          14,670             41,144          42,307
  Depreciation and amortization                                  6,896           7,512             20,197          18,162
  Non-cash and non-recurring (Note 3)                                0           6,452              5,014           3,091
                                                          ------------    ------------       ------------    ------------
Total operating expenses                                        20,431          28,634             66,355          63,560
                                                          ------------    ------------       ------------    ------------

Operating income (loss) from continuing operations               8,058         (17,489)            12,523         (22,779)

Income (loss) from joint ventures                                  100            (695)                69          (1,626)
Interest expense                                                 9,834           9,043             27,828          22,634
Interest and other income (expense), net                            (3)            568                359           1,884
                                                          ------------    ------------       ------------    ------------

Loss from continuing operations before income taxes
  and extraordinary charge                                      (1,679)        (26,659)           (14,877)        (45,155)
Benefit for income taxes                                           (91)         (8,269)            (4,285)        (12,052)
                                                          ------------    ------------       ------------    ------------

Loss from continuing operations before extraordinary
  charge                                                        (1,588)        (18,390)           (10,592)        (33,103)

DISCONTINUED OPERATIONS:
  Gain on sale of discontinued operations, net of
    taxes                                                           14              21                 41              95
                                                          ------------    ------------       ------------    ------------
Loss before extraordinary charge                                (1,574)        (18,369)           (10,551)        (33,008)

Extraordinary charge for early retirement of debt, net
  of taxes                                                           0              76                  0             938
                                                          ------------    ------------       ------------    ------------
NET LOSS                                                        (1,574)        (18,445)           (10,551)        (33,946)

Premium paid on redemption of preferred stock                        0               0                616               0
Preferred stock dividends                                          183             619                642           1,475
                                                          ------------    ------------       ------------    ------------
NET LOSS APPLICABLE TO COMMON STOCK                       $     (1,757)   $    (19,064)      $    (11,809)   $    (35,421)
                                                          ============    ============       ============    ============

BASIC LOSS PER SHARE:
  Loss from continuing operations                         $      (0.03)   $      (0.46)      $      (0.22)   $      (0.92)
  Gain on sale of discontinued operations                         0.00            0.00               0.00            0.00
  Extraordinary charge                                            0.00            0.00               0.00           (0.02)
                                                          ------------    ------------       ------------    ------------
  Net loss applicable to Common Stock                     $      (0.03)   $      (0.46)      $      (0.22)   $      (0.94)
                                                          ============    ============       ============    ============

Weighted average shares outstanding                             54,215          41,381             53,350          37,506

DILUTED LOSS PER SHARE:
  Loss from continuing operations                         $      (0.03)   $      (0.46)      $      (0.22)   $      (0.92)
  Gain on sale of discontinued operations                         0.00            0.00               0.00            0.00
  Extraordinary charge                                            0.00            0.00               0.00           (0.02)
                                                          ------------    ------------       ------------    ------------
  Net loss applicable to Common Stock                     $      (0.03)   $      (0.46)      $      (0.22)   $      (0.94)
                                                          ============    ============       ============    ============

Weighted average diluted shares outstanding                     54,215          41,381             53,350          37,506
</TABLE>

   The accompanying notes are an integral part of these financial statements

                                        2
<PAGE>   5

                             METAL MANAGEMENT, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (unaudited, in thousands)

<TABLE>
<CAPTION>
                                                             NINE MONTHS ENDED DECEMBER 31,
                                                            --------------------------------
                                                                  1999              1998
                                                                  ----              ----
<S>                                                         <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from continuing operations                             $ (10,592)      $   (33,103)
Adjustments to reconcile net loss from continuing
  operations to cash flows from operating activities:
    Depreciation and amortization                                  20,197            18,162
    Deferred income taxes                                          (4,257)          (10,856)
    Amortization of debt issuance costs and bond discount           2,543             1,538
    Non-cash and non-recurring expense (income)                       211              (523)
    Discontinued operations                                            41               182
    Penalties paid on early retirement of debt                          0              (973)
    Other                                                           1,940             1,653
Changes in assets and liabilities, net of acquisitions:
    Accounts and notes receivable                                 (37,878)           62,030
    Inventories                                                    (4,241)           15,791
    Accounts payable                                                7,347           (14,890)
    Other                                                          (5,398)           (1,367)
                                                                ---------       -----------
Cash flows provided by (used in) operating activities             (30,087)           37,644

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                              (7,042)          (15,451)
  Proceeds from sale of property and equipment                      2,008               697
  Acquisitions, net of cash acquired                               (4,542)         (184,542)
  Costs of operating lease buyouts                                      0           (10,623)
  Other                                                             1,316               689
                                                                ---------       -----------
Net cash used in investing activities                              (8,260)         (209,230)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuances of long-term debt                                     772,312         1,227,357
  Repayments of long-term debt                                   (730,173)       (1,047,473)
  Fees paid to issue long-term debt                                (2,356)          (11,056)
  Redemption of convertible preferred stock                        (3,078)                0
  Issuances of Common Stock, net                                        0               724
                                                                ---------       -----------
Net cash provided by financing activities                          36,705           169,552
                                                                ---------       -----------

Net decrease in cash and cash equivalents                          (1,642)           (2,034)
Cash and cash equivalents at beginning of period                    2,482             4,464
                                                                ---------       -----------

Cash and cash equivalents at end of period                      $     840       $     2,430
                                                                =========       ===========

SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid                                                   $  30,771       $    18,792
Income taxes refunded, net                                      $   1,873       $       125
</TABLE>

   The accompanying notes are an integral part of these financial statements

                                        3
<PAGE>   6

                             METAL MANAGEMENT, INC.

           CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                    (unaudited, in thousands, except shares)
<TABLE>
<CAPTION>
                                           PREFERRED STOCK              COMMON STOCK
                                    ------------------------------   -------------------
                                                                       NUMBER                         ADDITIONAL
                                                                         OF                            PAID-IN-    ACCUMULATED
                                    SERIES A   SERIES B   SERIES C     SHARES     AMOUNT   WARRANTS    CAPITAL       DEFICIT
                                    --------   --------   --------     ------     ------   --------   ----------   -----------
<S>                                 <C>        <C>        <C>        <C>          <C>      <C>        <C>          <C>
BALANCE AT MARCH 31, 1999           $ 4,020    $10,877    $ 5,100    48,890,898   $ 489    $ 40,745   $  259,878   $   (81,905)

Conversion of preferred stock        (1,558)    (5,984)         0     6,934,675      69           0        7,854             0

Cash redemption of preferred stock   (2,462)         0          0             0       0           0            0          (616)

Preferred stock dividends                 0          0          0       256,163       3           0          410          (642)

Acquisitions                              0          0          0       322,467       3           0          275             0

Other                                     0          0          0        84,209       1           0          607             0

Net loss                                  0          0          0             0       0           0            0       (10,551)
                                    -------    -------    -------    ----------   ------   --------   ----------   -----------

BALANCE AT DECEMBER 31, 1999        $     0    $ 4,893    $ 5,100    56,488,412   $ 565    $ 40,745   $  269,024   $   (93,714)
                                    =======    =======    =======    ==========   ======   ========   ==========   ===========

<CAPTION>

                                       TOTAL
                                       -----
<S>                                 <C>
BALANCE AT MARCH 31, 1999           $   239,204
Conversion of preferred stock               381
Cash redemption of preferred stock       (3,078)
Preferred stock dividends                  (229)
Acquisitions                                278
Other                                       608
Net loss                                (10,551)
                                    -----------
BALANCE AT DECEMBER 31, 1999        $   226,613
                                    ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements

                                        4
<PAGE>   7

                             METAL MANAGEMENT, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE 1 -- INTERIM FINANCIAL STATEMENTS

     The accompanying unaudited condensed consolidated financial statements
include the accounts of Metal Management, Inc. and its subsidiaries (herein
referred to as "MTLM" or the "Company") and have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange Commission
("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 condensed
consolidated financial statements reflect, in the opinion of management, all
material adjustments (which include only 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, 1999.

     In order to maintain consistency and comparability between periods
presented, certain amounts have been reclassified from the previously reported
financial statements in order to conform to the financial statement presentation
of the current period.

NOTE 2 -- ACQUISITIONS

  Fiscal 2000

     In November 1999, the Company acquired the assets of National Metals
Company of Phoenix and Tucson, Arizona. The purchase consideration was not
material to the Company's consolidated financial position or results of
operations.

  Fiscal 1999

     In July 1998, the Company acquired the common stock of Naporano Iron &
Metal Co. and Nimco Shredding Co. (collectively "Naporano"). The purchase
consideration for Naporano consisted of approximately 1.9 million shares of
common stock, par value $.01 per share ("Common Stock") and $86.6 million of
cash (including transaction costs). The Common Stock issued to Naporano was
valued at $18.5 million for financial reporting purposes. The following
unaudited pro forma statement of operations information presents a summary of
the consolidated results of operations of the Company and Naporano as if the
acquisition of Naporano had occurred on April 1, 1998. The unaudited pro forma
statement of operations information includes certain adjustments, such as
additional depreciation expense as a result of a step-up in basis of the fixed
assets acquired, additional amortization expense as a result of goodwill and
interest expense related to cash portions of purchase consideration and assumed
debt. The unaudited pro forma statement of operations information also includes
non-cash and non-recurring expenses of $6.1 million. The unaudited pro forma

                                        5
<PAGE>   8
                             METAL MANAGEMENT, INC.

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

results do not purport to be indicative of the financial results which actually
would have resulted had the Naporano acquisition been in effect on April 1, 1998
(in thousands, except per share data):

<TABLE>
<CAPTION>
                                                      NINE MONTHS ENDED
                                                        DECEMBER 31,
                                                            1998
                                                      -----------------
                                                         (UNAUDITED)
<S>                                                   <C>
PRO FORMA STATEMENT OF OPERATIONS
Net sales                                                 $651,115
Net loss from continuing operations applicable to
  Common Stock                                            $(37,407)
Basic and diluted net loss from continuing
  operations applicable to Common Stock                   $  (0.87)
</TABLE>

     During this nine months ended December 31, 1998, the Company also acquired
various other businesses in the scrap metals industry. The total purchase
consideration for these acquisitions consisted of approximately $101.7 million
of cash (including transaction costs), 2.6 million shares of Common Stock,
warrants to purchase 150,000 shares of Common Stock, 6,000 shares of Series C
convertible preferred stock and promissory notes aggregating $1.3 million. The
Common Stock, Series C convertible preferred stock and warrants to purchase
Common Stock were valued at $23.3 million, $5.1 million and $0.7 million,
respectively, for financial reporting purposes.

     The allocation of the purchase consideration for all these acquisitions was
as follows (in thousands):

<TABLE>
<S>                                                         <C>
Fair value of tangible assets acquired                      $132,999
Goodwill                                                     133,014
Liabilities assumed                                          (29,419)
Common Stock and warrants issued                             (42,462)
Convertible preferred stock issued                            (5,100)
Promissory notes issued                                       (1,250)
                                                            --------
Cash paid                                                    187,782
Less: cash acquired                                           (3,240)
                                                            --------
Net cash paid for acquisitions                              $184,542
                                                            ========
</TABLE>

     These acquisitions have been accounted for by the purchase method of
accounting and are included in the Company's results of operations from the
effective date of each acquisition. The purchase price was allocated based on
estimates of the fair value of assets acquired and liabilities assumed. These
estimates were revised during the allocation period when information regarding
contingencies became available to define and quantify the assets acquired and
liabilities assumed.

                                        6
<PAGE>   9
                             METAL MANAGEMENT, INC.

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 3 -- NON-CASH AND NON-RECURRING EXPENSES (INCOME)

  Fiscal 2000

     During the nine months ended December 31, 1999, the Company recorded
non-cash and non-recurring expenses of $5.0 million consisting of the following
(in thousands):

<TABLE>
<CAPTION>
                                                      NINE MONTHS ENDED
                                                        DECEMBER 31,
                                                            1999
                                                      -----------------
<S>                                                   <C>
Severance and other benefits                               $4,701
Other                                                         313
                                                           ------
                                                           $5,014
                                                           ======
</TABLE>

  Severance and other benefits

     Effective July 15, 1999, T. Benjamin Jennings resigned as the Company's
Chairman of the Board and Chief Executive Officer, as a director of the Company
and as an officer and director of all of the Company's subsidiaries for which he
served in such capacities. In connection with his resignation, the Company
entered into a settlement agreement and general release with Mr. Jennings (the
"Jennings Settlement Agreement"). Mr. Jennings' employment agreement was
terminated and superseded by the terms of the Jennings Settlement Agreement.
Pursuant to the terms of the Jennings Settlement Agreement, Mr. Jennings
received approximately $2.1 million in a lump-sum cash payment from the Company,
and continues to receive health, dental and life insurance and certain other
benefits as set forth in the Jennings Settlement Agreement. In accordance with
the Jennings Settlement Agreement, on January 2, 2000, the Company also forgave
an outstanding $500,000 loan to Mr. Jennings, plus accrued interest thereon. In
addition, Mr. Jennings agreed to release, waive and renounce his interest under
and pursuant to the amended and restated stockholders' agreement, dated February
12, 1999. The Company and Mr. Jennings agreed to mutual general releases from
any and all liabilities arising out of any matter or event occurring on or prior
to the date of the Jennings Settlement Agreement. During the three months ended
September 30, 1999, the Company recorded a $2.8 million non-recurring expense
related to the Jennings Settlement Agreement.

     Effective August 1, 1999, George A. Isaac, III resigned as the Company's
Executive Vice President and as an officer and director of all of the Company's
subsidiaries for which he served in such capacities. In connection with his
resignation, Mr. Isaac invoked what he believed to be a contractual entitlement
to certain "change of control" payments and other benefits included in his
employment agreement with the Company which were triggered by the resignation of
Gerard M. Jacobs as the Company's Chief Executive Officer. In connection with
his resignation and the invocation of the "change of control" provisions of his
employment agreement, the Company entered into a settlement agreement and
general release with Mr. Isaac (the "Isaac Settlement Agreement"). Mr. Isaac's
employment agreement was terminated and superseded by the terms of the Isaac
Settlement Agreement. Pursuant to the terms of the Isaac Settlement Agreement,
Mr. Isaac received a lump-sum cash payment of approximately $768,000 from the
Company. In addition, Mr. Isaac received $415,000 to be paid in six equal
monthly payments beginning on September 1, 1999. The Company also agreed to
continue to employ Mr. Isaac as a non-officer, part-time employee without an
employment agreement through January 31, 2000 at a salary of $120,000 per year
($60,000 aggregate compensation for the six-month employment period). Mr. Isaac
will continue to be covered by the Company's medical, dental and life insurance
plans through June 23, 2002. The Company agreed to provide Mr. Isaac, at the
Company's expense, use of his current office space and the services of an
administrative assistant through June 23, 2002. The Company and Mr. Isaac agreed
to mutual general releases from any and all liabilities arising out of any
matter or event occurring on or prior to the date of the Isaac Settlement
Agreement. During the three months ended September 30, 1999, the Company
recorded a $1.4 million non-recurring expense related to the Isaac

                                        7
<PAGE>   10
                             METAL MANAGEMENT, INC.

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Settlement Agreement. Mr. Isaac remained a director of the Company until his
resignation on January 3, 2000.

     During the three months ended September 30, 1999, the Company also incurred
severance and other termination benefits relating to twelve employees totaling
$0.5 million as a result of consolidation and integration of its various
businesses.

  Facility abandonment, shutdown and integration

     In connection with facility abandonments and other termination
arrangements, during the year ended March 31, 1999, the Company recorded
severance, facility closure and other charges totaling approximately $1.8
million, of which $1.5 million remained unpaid at March 31, 1999. The primary
components of this charge were $0.6 million of severance and $1.2 million for
lease cancellation, facility clean-up and other exit costs. During the nine
months ended December 31, 1999, the Company paid approximately $0.8 million
related to severance, facility closure and other charges. At December 31, 1999,
approximately $0.2 million of unpaid severance and $0.5 million of unpaid lease
cancellation, facility clean-up and other exit costs remain in accrued
liabilities. Certain terminated employees are being paid in installments and
these payments will be made by the end of the fiscal year. The final clean-up
and shutdown of all abandoned facilities is expected to be completed by March
31, 2000.

  Fiscal 1999

     During the three and nine months ended December 31, 1998, the Company
recorded non-cash and non-recurring expense of $6.4 million and $3.1 million,
respectively, consisting of the following (in thousands):

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED   NINE MONTHS ENDED
                                                        DECEMBER 31,        DECEMBER 31,
                                                            1998                1998
                                                     ------------------   -----------------
<S>                                                  <C>                  <C>
Impairment of goodwill                                     $6,000              $ 6,000
Pooling related merger expense                                 37                1,721
Non-cash warrant compensation income                            0               (6,775)
Terminated merger expenses                                    371                1,453
Other                                                          44                  692
                                                           ------              -------
                                                           $6,452              $ 3,091
                                                           ======              =======
</TABLE>

  Impairment of goodwill

     On February 12, 1999, the Company signed a definitive purchase agreement to
sell Superior Forge Inc. ("SFI"). In accordance with Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-lived Assets and for Long-lived Assets to be Disposed of", the Company
determined that a portion of the goodwill associated with the Company's original
acquisition of SFI was impaired. The Company recorded a $6.0 million non-cash
and non-recurring charge to reflect the impairment of its goodwill related to
SFI at December 31, 1998. The sale was completed in March 1999. As partial
consideration in the sale of SFI, the Company received a $2.5 million note which
bears interest at 10% per annum. Due to recent weakness in business activity
between SFI and a significant customer, there have been losses incurred by SFI.
There is a reasonable possibility that if the business conditions for SFI do not
recover that the Company may not realize payments of principal and interest on
the note received in the sale of SFI.

  Pooling merger expenses

     In connection with a merger which was a pooling of interests, the Company
recognized merger expenses consisting primarily of fees and expenses for
accountants, attorneys, and investment bankers. The merger

                                        8
<PAGE>   11
                             METAL MANAGEMENT, INC.

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

expenses also included a charge of $750,000 related to the buy-out of existing
contracts which was recorded during the three months ended September 30, 1998.

  Non-cash warrant compensation income

     On May 1, 1997, the Company issued warrants to purchase 1,400,000 shares of
Common Stock to the former general partners of Reserve Iron & Metal Limited
Partnership (the "Reserve Warrants"). The Reserve Warrants have initial exercise
prices of $3.50 or $4.00 per share, subject to a $0.50 per share increase in the
event that the Company's stock price exceeds $10.00 per share on the date of
exercise. The Reserve Warrants have terms that range from 30 to 60 months and
vest over 6 month, 12 month, 18 month and 24 month intervals for each group of
350,000 warrants, respectively, beginning on May 1, 1997. The decrease in the
Company's stock price during the nine months ended December 31, 1998 resulted in
the reversal of $6.8 million of previously recognized non-cash warrant
compensation expense. Since the Reserve Warrants are considered variable
instruments under APB No. 25, the Company will record non-cash warrant
compensation expense or income throughout the term of the warrants depending on
the fair market value of its Common Stock. At December 31, 1999, warrants to
purchase 455,000 shares of Common Stock remained outstanding under the Reserve
Warrants.

  Terminated merger expenses

     In September 1998, the Company elected, due to adverse scrap metals market
conditions, to terminate all negotiations and related due diligence processes
with potential acquisition candidates. The terminated merger expenses recognized
represented all incurred transaction costs associated with acquisitions that the
Company was pursuing.

NOTE 4 -- INVENTORIES

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

<TABLE>
<CAPTION>
                                                              DECEMBER 31,   MARCH 31,
                                                                  1999         1999
                                                              ------------   ---------
<S>                                                           <C>            <C>
Ferrous metals                                                  $31,483       $37,679
Non-ferrous metals                                               30,169        19,791
Other                                                             3,404         2,973
                                                                -------       -------
                                                                $65,056       $60,443
                                                                =======       =======
</TABLE>

NOTE 5 -- DEBT

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

<TABLE>
<CAPTION>
                                                              DECEMBER 31,   MARCH 31,
                                                                  1999         1999
                                                              ------------   ---------
<S>                                                           <C>            <C>
Senior Credit Facility                                          $161,450     $144,410
Notes payable to related parties                                   1,723        3,688
12 3/4% Senior Secured Notes                                      27,263            0
10% Senior Subordinated Notes                                    180,000      180,000
Other debt                                                         7,157        7,364
                                                                --------     --------
                                                                 377,593      335,462
Less: current portion                                             (4,065)      (5,308)
                                                                --------     --------
                                                                $373,528     $330,154
                                                                ========     ========
</TABLE>

                                        9
<PAGE>   12
                             METAL MANAGEMENT, INC.

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Senior Credit Facility

     On March 31, 1998, the Company and its subsidiaries entered into a three
year credit facility (the "Senior Credit Facility"), as amended, which provides
for a revolving credit and letter of credit facility of $250.0 million, subject
to borrowing base limitations. A security interest on substantially all of the
assets and properties of the Company and its subsidiaries, including pledges of
the capital stock of the Company's subsidiaries, are pledged as collateral
against the obligations of the Company and its subsidiaries under the Senior
Credit Facility.

     Pursuant to the Senior Credit Facility, the Company is required to satisfy
a minimum EBITDA (as defined in the Senior Credit Facility) to interest coverage
ratio test. The minimum interest coverage tests (i) for the twelve month period
ending March 31, 2000 and (ii) for the end of each subsequent fiscal quarter
thereafter for the twelve month period then ending require that the Company
satisfy an interest coverage ratio of not less than 1.0 to 1.0. In addition, the
Senior Credit Facility places contractual restrictions on the Company's ability
to make interest payments on its Senior Subordinated Notes (defined below)
unless during the thirty day period ending on the date on which the interest
payment is to be made, there exists average undrawn availability under the
Senior Credit Facility of not less than $12.0 million plus the amount of
interest ($9.0 million) which is then due and payable on the Senior Subordinated
Notes.

  Senior Secured Notes

     On May 7, 1999, the Company issued $30.0 million principal amount of
12 3/4% Senior Secured Notes due on June 15, 2004 (the "Senior Secured Notes").
Interest on the Senior Secured Notes is payable semi-annually. The Senior
Secured Notes were issued at 90% of their principal amount and are redeemable by
the Company, in whole or in part, at 100% of their principal amount at any time
after June 15, 2000. The Senior Secured Notes are secured by a second priority
lien on substantially all of the Company's personal property, plant (to the
extent it constitutes fixtures) and equipment that secures the Senior Credit
Facility. The Senior Secured Notes are senior obligations of the Company,
ranking equally with all of its existing and future unsubordinated debt,
including indebtedness under the Senior Credit Facility, and senior to all of
its existing and future subordinated debt, including the Senior Subordinated
Notes. The Company's payment obligation is jointly and severally guaranteed by
the Company's current and future subsidiaries. The Company received net proceeds
of approximately $25.5 million, after the 10% original issue discount and
transaction fees and expenses. Net proceeds were used to reduce amounts
outstanding under the Senior Credit Facility. The Senior Secured Notes are
traded on the PORTAL system.

  Senior Subordinated Notes

     On May 13, 1998, the Company issued $180.0 million principal amount of 10%
Senior Subordinated Notes due on May 15, 2008 (the "Senior Subordinated Notes")
and received net proceeds of $174.6 million. Interest on the Senior Subordinated
Notes is payable semi-annually. The Senior Subordinated Notes are general
unsecured obligations of the Company and are subordinated in right of payment to
all senior debt of the Company, including the indebtedness of the Company under
the Senior Credit Facility and the Senior Secured Notes. The Company's payment
obligation is jointly and severally guaranteed by the Company's current and
certain future subsidiaries. The Senior Subordinated Notes are redeemable at the
Company's option at specified redemption prices and redemption events. The
Senior Subordinated Notes are traded on the PORTAL system.

                                       10
<PAGE>   13
                             METAL MANAGEMENT, INC.

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The Senior Credit Facility, the Indenture governing the Senior Secured
Notes and the Indenture governing the Senior Subordinated Notes contain
covenants that, among other things, restrict the Company and most of its
subsidiaries' ability to:

     - incur additional indebtedness;

     - pay dividends;

     - prepay subordinated indebtedness;

     - dispose of some types of assets;

     - make capital expenditures;

     - create liens and make some types of investments or acquisitions; and

     - engage in some fundamental corporate transactions.

     In addition, under the Senior Credit Facility, the Company is required to
satisfy specified financial covenants, including an interest coverage ratio and
ratio of capital expenditures to consolidated revenues. The Company's ability to
comply with these provisions may be affected by general economic conditions,
industry conditions, and other events or circumstances beyond its control. A
breach of any of these covenants could result in a default under the Senior
Credit Facility. In the event of a default, depending on the actions taken by
the lenders under the Senior Credit Facility, the lenders could elect to declare
all amounts borrowed under the Senior Credit Facility, together with accrued
interest, to be due and payable. In addition, a default under the Indenture
governing the Senior Secured Notes or the Indenture governing the Senior
Subordinated Notes would constitute a default under the Senior Credit Facility
and any instruments governing our other indebtedness.

     Both the Indenture governing the Senior Secured Notes and the Indenture
governing the Senior Subordinated Notes contain restrictions on the Company's
ability to incur, subject to certain exceptions, additional indebtedness, unless
the Company meets an EBITDA (as defined in the Indenture) to fixed charge
coverage ratio of 2.0 to 1.0 for the immediately preceding four calendar
quarters. Because of recent financial performance, the Company currently would
not satisfy the fixed charge coverage ratio test, and, accordingly, is unable
and will remain unable in the foreseeable future to incur significant amounts of
additional indebtedness. As a result, if the Company experiences a liquidity
shortfall, the ability to incur additional indebtedness to cover the shortfall
will be severely limited.

  Extraordinary charge on early retirement of debt

     The Company borrowed under the Senior Credit Facility to refinance existing
secured debt (including notes payable to related parties), buyout certain
operating leases and pay prepayment penalties associated with the early
retirement of debt. In connection with the refinancing of debt, the Company
recognized extraordinary charges consisting of the following (in thousands):

                                       11
<PAGE>   14
                             METAL MANAGEMENT, INC.

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                                                                 NINE MONTHS
                                                               THREE MONTHS         ENDED
                                                              ENDED 12/31/98-   12/31/98------
<S>                                                           <C>               <C>
Cash prepayment penalties...................................       $  0             $  973
Value of warrants to purchase 106,797 shares of Common Stock
  issued as a prepayment penalty............................        128                128
Write-off of related unamortized financing costs............          0                487
                                                                   ----             ------
Extraordinary charge before income tax benefit..............        128              1,588
Income tax benefit..........................................         52                650
                                                                   ----             ------
Net extraordinary charge....................................       $ 76             $  938
                                                                   ====             ======
</TABLE>

     The warrants are exercisable at $6.50 per share over a 3 year period and
were issued as a prepayment penalty in connection with the repayment of certain
notes issued in an acquisition. The value of the warrants was determined using
the Black-Scholes model.

NOTE 6 -- STOCKHOLDERS' EQUITY

  Convertible preferred stock

     The Company's Amended and Restated Certificate of Incorporation allows for
the issuance of up to 4,000,000 shares of preferred stock. During the year ended
March 31, 1998, the Company issued 25,000 shares of convertible preferred stock
(designated as Series A) and 20,000 shares of convertible preferred stock
(designated as Series B). In November 1998, the Company issued 6,000 shares of
convertible preferred stock (designated as Series C) in connection with an
acquisition. The Series A, Series B and Series C convertible preferred stock
each have a par value of $.01 per share and a stated value of $1,000 per share.

     Dividends on the Series A, Series B and Series C convertible preferred
stock accrue, whether or not declared by the Board of Directors, at an annual
rate of 6.0%, 4.5% and 6.9%, respectively, of the stated value of each
outstanding share of Series A, Series B and Series C convertible preferred
stock. Dividends are payable in cash, or at the Company's option, in additional
shares of preferred stock, or Common Stock in the case of the Series C
convertible preferred stock.

     On September 29, 1999, the Company redeemed all of the outstanding shares
of its Series A convertible preferred stock at a price equal to 125% of the
aggregate stated value plus all accrued and unpaid dividends thereon. As a
result, the Company recognized a special dividend of $0.6 million representing
the premium paid on the redemption. The aggregate price paid by the Company for
the redemption of all remaining shares of Series A convertible preferred stock
was approximately $3.1 million. Upon redemption, the shares of Series A
convertible preferred stock were cancelled by the Company. These shares are not
subject to reissuance by the Company.

     The Company has the right to redeem up to 2,500 shares or $2.5 million
stated value of Series B convertible preferred stock in exchange for a cash
payment of $3.1 million plus accrued dividends. The right to redeem Series B
convertible preferred stock expires on or about March 24, 2000.

     The holders of Series B convertible preferred stock are able to convert
their shares into Common Stock at a price equal to the lower of: (i) $24.60;
(ii) 92.5% of the average closing bid price for the Common Stock for the five
trading days prior to the conversion date; or (iii) the lowest traded price of
the Common Stock during the time when the Common Stock is not listed on a
national securities exchange. The holders of the Series C convertible preferred
stock are able to convert their shares into Common Stock at a price equal to
$9.00 per share of Common Stock until November 2003, and thereafter, at a price
equal to the average closing bid price for the Common Stock for the five trading
days prior to the conversion date.

                                       12
<PAGE>   15
                             METAL MANAGEMENT, INC.

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following presents a summary of the Series A, Series B and Series C
convertible preferred stock activity during the nine months ended December 31,
1999:

<TABLE>
<CAPTION>
                                                            SERIES A   SERIES B   SERIES C
                                                            --------   --------   --------
<S>                                                         <C>        <C>        <C>
Shares outstanding at March 31, 1999                          4,020     10,877     6,000
Shares converted into Common Stock                           (1,560)    (6,163)        0
Shares redeemed for Cash                                     (2,462)         0         0
Shares issued for dividends                                       2        179         0
                                                             ------     ------     -----
Shares outstanding at December 31, 1999                           0      4,893     6,000
                                                             ======     ======     =====
</TABLE>

NOTE 7 -- RECENTLY ISSUED ACCOUNTING STANDARDS

     SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," was issued by the FASB in June 1998 and is effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000. SFAS No. 133
establishes accounting and reporting standards for derivative instruments and
for hedging activities. SFAS No. 133 requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. The Company is evaluating
SFAS No. 133 to determine its impact on the consolidated financial statements.

NOTE 8 -- LOSS PER COMMON SHARE

     Basic and diluted earnings per share (EPS) are calculated in accordance
with SFAS No. 128, "Earnings Per Share." Basic EPS is computed by dividing
reported net income (loss) applicable to Common Stock by the weighted average
shares outstanding. Diluted EPS includes the incremental shares issuable upon
the assumed exercise of stock options and warrants, using the treasury stock
method and the assumed conversion of preferred stock. The following is a
reconciliation of the numerators and denominators of the basic and diluted EPS
from continuing operations per share computations (in thousands, except per
share amounts):

<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED    NINE MONTHS ENDED
                                                 DECEMBER 31,         DECEMBER 31,
                                              ------------------   -------------------
                                               1999       1998       1999       1998
                                              -------   --------   --------   --------
<S>                                           <C>       <C>        <C>        <C>
LOSS (NUMERATOR):
Loss from continuing operations               $(1,588)  $(18,390)  $(10,592)  $(33,103)
Premium paid on redemption of preferred
  stock                                             0          0       (616)         0
Dividends on convertible preferred stock         (183)      (619)      (642)    (1,475)
                                              -------   --------   --------   --------
Net loss applicable to Common Stock           $(1,771)  $(19,009)  $(11,850)  $(34,578)
                                              =======   ========   ========   ========
SHARES (DENOMINATOR):
Weighted average number of shares
  outstanding during the period                54,215     41,381     53,350     37,506
Incremental common shares attributable to
  dilutive stock options and warrants               0          0          0          0
                                              -------   --------   --------   --------
Diluted number of shares outstanding during
  the period                                   54,215     41,381     53,350     37,506
                                              =======   ========   ========   ========
Basic loss per common share                   $ (0.03)  $  (0.46)  $  (0.22)  $  (0.92)
                                              =======   ========   ========   ========
Diluted loss per common share                 $ (0.03)  $  (0.46)  $  (0.22)  $  (0.92)
                                              =======   ========   ========   ========
</TABLE>

     The effect of dilutive stock options and warrants were not included as
their effect would have been anti-dilutive for all periods presented. Also, the
potentially dilutive effect of the Company's convertible preferred stock was not
used in the diluted earnings per share calculation as its effect was also
anti-dilutive.

                                       13
<PAGE>   16

     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 the Company 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 the Company's business and operations and other such matters are
forward-looking statements. Although the Company believes the expectations
expressed in such forward-looking statements are based on reasonable assumptions
within the bounds of its knowledge of its 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 "Investment Considerations" appearing in the
Company's Annual Report on Form 10-K for the year ended March 31, 1999, as
amended, and elsewhere in the Company's quarterly and periodic filings with the
Securities Exchange Commission filed subsequent to the date of the Annual
Report.

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
condensed consolidated financial statements and notes thereto included under
Item 1. 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 the
Company's Annual Report on Form 10-K for the year ended March 31, 1999.

GENERAL OVERVIEW

     Metal Management is one of the largest and fastest-growing full-service
metals recyclers in the United States, with approximately 50 recycling
facilities in 14 states. In addition, Metal Management holds a 28.5% member
interest in Southern Recycling, L.L.C., the largest scrap metal recycler in the
Gulf Coast region. The Company is a leading consolidator in the metals recycling
industry. The Company has achieved its leading position in the metals recycling
industry primarily by implementing a national strategy of completing and
integrating regional acquisitions. The Company believes that its consolidation
strategy will enhance the competitive position and profitability of the
operations it acquires because of improved managerial and financial resources
and increased economies of scale.

     The Company is primarily engaged in the collection and processing of
ferrous and non-ferrous metals for resale to metals brokers, steel producers,
and producers and processors of other metals. The Company collects industrial
scrap and obsolete scrap, processes it into reusable forms and supplies the
recycled metals to its customers, including mini-mills, integrated steel mills,
foundries and metals brokers. The Company believes that it provides one of the
most comprehensive offerings of both ferrous and non-ferrous scrap metals in the
industry. The Company's ferrous products primarily include shredded, sheared,
hot briquetted, cold briquetted and bundled scrap and other processed scrap,
such as turnings, cast and broken furnace iron. The Company also processes
non-ferrous metals, including aluminum, copper, stainless steel, brass, titanium
and high temperature alloys, using similar techniques and through application of
the Company's proprietary technologies.

     The Company's predecessor was incorporated on September 24, 1981 as a
California corporation under the name General Parametrics Corporation, and was
reincorporated as a Delaware corporation in September 1986 under the same name.
Prior to April 1996, the Company manufactured and marketed color thermal and dye
sublimation printers and related consumables, including ribbons, transparencies
and paper. On April 12, 1996, the Company changed its name to "Metal Management,
Inc."

     The Company's Common Stock is traded on the NASDAQ SmallCap Market under
the symbol "MTLM." The Company's principal executive offices are located at 500
North Dearborn Street, Suite 405, Chicago, Illinois 60610, and its telephone
number is (312) 645-0700.

                                       14
<PAGE>   17

RESULTS OF OPERATIONS

     The Company's consolidated net sales consist primarily of revenues derived
from the sale of processed and brokered scrap metals. The Company recognizes
revenues from processed product sales at the time of shipment. Revenues related
to brokerage sales are recognized upon receipt of the material by the customer.

     Cost of sales consists primarily of the cost of processed and brokered
metals sold, direct and indirect labor and related taxes and benefits, repairs
and maintenance, utilities and freight.

     General and administrative expenses include management salaries, clerical
and administrative costs, professional services, facility rentals and related
insurance and utility costs, as well as costs related to the Company's marketing
and business development activities.

     Non-cash and non-recurring expenses include costs recognized relating to
severance, stock based compensation, facility abandonment, goodwill impairment,
and merger related expenses.

     The Company's results of operations for the three and nine months ended
December 31, 1998 include the operations of Superior Forge, Inc. ("Superior
Forge"), which was sold in March 1999. Superior Forge derived substantially all
of its revenues from non-ferrous metals. The Company's results of operations for
the nine months ended December 31, 1999 include the results of operations of
businesses acquired by the Company subsequent to June 30, 1998. These
acquisitions include Naporano Iron & Metal Co. and Nimco Shredding Co.
(collectively, "Naporano") and Michael Schiavone & Sons, Inc. ("Schiavone")
which are primarily ferrous processors, and M. Kimerling & Sons, Inc.
("Kimerling") which is primarily a non-ferrous processor (collectively, the
"July 1998 Acquisitions"). The nine month period ended December 31, 1998
reflects only a portion of activity relating to the July 1998 Acquisitions.

     During the fiscal year ended March 31, 1999 ("Fiscal 1999"), the Company's
results of operations were negatively impacted by the adverse market conditions
prevalent in the steel and scrap metals sectors. These market conditions were
characterized by a significant decline in the price and demand for scrap metals.
This decline resulted in large part from the increase in steel imports flowing
into the United States, principally from Japanese, Brazilian, Russian and
Southeast Asian steel producers during the last nine months of calendar 1998.

     Consolidated net sales for the three months ended December 31, 1999 and
1998 in broad product categories were as follows (in thousands):

<TABLE>
<CAPTION>
                                              DECEMBER 31, 1999            DECEMBER 31, 1998
                                          --------------------------   --------------------------
COMMODITY                                 WEIGHT    NET SALES    %     WEIGHT    NET SALES    %
---------                                 ------    ---------    -     ------    ---------    -
<S>                                       <C>       <C>         <C>    <C>       <C>         <C>
Ferrous metals (tons)                       1,143   $130,717    55.9       859   $ 81,456    45.6
Non-ferrous metals (lbs)                  133,175     70,538    30.2   147,301     60,526    33.9
Brokerage -- ferrous (tons)                   199     21,147     9.0       337     26,040    14.6
Brokerage -- non ferrous (lbs)             15,503      6,036     2.6    22,625      5,110     2.8
Other                                                  5,296     2.3                5,620     3.1
                                                    --------    ----             --------    ----
                                                    $233,734     100%            $178,752     100%
                                                    ========    ====             ========    ====
</TABLE>

     Consolidated net sales for the nine months ended December 31, 1999 and 1998
in broad product categories were as follows (in thousands):

<TABLE>
<CAPTION>
                                              DECEMBER 31, 1999            DECEMBER 31, 1998
                                          --------------------------   --------------------------
                                          WEIGHT    NET SALES    %     WEIGHT    NET SALES    %
                                          ------    ---------    -     ------    ---------    -
<S>                                       <C>       <C>         <C>    <C>       <C>         <C>
COMMODITY
Ferrous metals (tons)                       3,194   $343,802    53.4     2,775   $305,928    50.1
Non-ferrous metals (lbs)                  405,535    196,106    30.5   402,878    190,708    31.2
Brokerage -- ferrous (tons)                   767     74,461    11.6       881     87,487    14.3
Brokerage -- non ferrous (lbs)             48,580     14,381     2.2    61,978     18,161     3.0
Other                                                 15,132     2.3                8,675     1.4
                                                    --------    ----             --------    ----
                                                    $643,882     100%            $610,959     100%
                                                    ========    ====             ========    ====
</TABLE>

                                       15
<PAGE>   18

     Consolidated net sales for the three and nine months ended December 31,
1999 increased by $55.0 million (30.8%) and $32.9 million (5.4%), respectively,
compared with consolidated net sales for the three and nine months ended
December 31, 1998. The increase in consolidated net sales from the prior periods
is principally due to higher units sold in the ferrous product category and
higher average realized sales prices in both the ferrous and non-ferrous product
categories.

     Ferrous sales for the three and nine months ended December 31, 1999
increased by $49.3 million (60.5%) and $37.9 million (12.4%), respectively,
compared with ferrous sales for the three and nine months ended December 31,
1998. Ferrous sales during the three months ended December 31, 1999 reflect
significant increases in units sold and average realized sales prices resulting
from improving market conditions. The Company's average sales price for ferrous
metals sold increased by 20.6% to $114.36 in the three months ended December 31,
1999 compared with the three months ended December 31, 1998. Ferrous sales
during the nine months ended December 31, 1999 increased primarily due to higher
units sold, mainly as a result of the inclusion of the sales of Naporano and
Schiavone for the entire period ending December 31, 1999 and for only six months
of the nine month period ended December 31, 1998.

     Non-ferrous sales for the three and nine months ended December 31, 1999
increased by $10.0 million (16.5%) and $5.4 million (2.8%), respectively,
compared with non-ferrous sales for the three and nine months ended December 31,
1998. Non-ferrous sales increased in dollar terms during the three months ended
December 31, 1999 over the prior year period notwithstanding a decrease in units
of non-ferrous metals sold of 14.1 million pounds (9.6%). The increase in sales
for this period was due to higher realized sales prices and a change in product
mix. The increase in non-ferrous sales for the nine months ended December 31,
1999 was due to an increase in units sold, mainly as a result of the inclusion
of sales of Kimerling for the entire period ending December 31, 1999 and for
only six months of the nine month period ended December 31, 1998. The Company's
average selling price for the non-ferrous product category is impacted by market
conditions and the product mix of non-ferrous metals sold. The majority of the
Company's non-ferrous sales are derived from copper, aluminum and stainless
steel.

     Brokerage ferrous sales decreased by $4.9 million (18.8%) during the three
months ended December 31, 1999 compared with brokerage ferrous sales for the
three months ended December 31, 1998. For the nine month period ended December
31, 1999, brokerage ferrous sales decreased by $13.0 million (14.9%) compared
with brokerage ferrous sales during the nine months ended December 31, 1998. The
decrease from the prior year periods was principally the result of lower units
sold.

     Brokerage non-ferrous sales increased by $0.9 million (18.1%) during the
three months ended December 31, 1999 compared with brokerage non-ferrous sales
for the three months ended December 31, 1998. Although units of non-ferrous
metals brokered decreased by 7.1 million pounds (31.5%), average realized sales
prices for non-ferrous brokered metals increased to $0.39 per pound during the
three months ended December 31, 1999, compared with $0.23 per pound for the
three months ended December 31, 1998. For the nine month period ended December
31, 1999, brokerage non-ferrous sales decreased by $3.8 million (20.8%) compared
with brokerage non-ferrous sales during the nine months ended December 31, 1998.
The decrease was a result of lower units sold.

     Gross profit was $28.5 million (12.2% of consolidated net sales) and $78.9
million (12.3% of consolidated net sales) for the three and nine months ended
December 31, 1999, respectively, compared with gross profit of $11.1 million
(6.2% of consolidated net sales) and $40.8 million (6.7% of consolidated net
sales) for the three and nine months ended December 31, 1998, respectively. The
improvement in the gross profit margin reflects higher material margins realized
by the Company from improved market conditions, better purchasing practices and
the benefits from consolidation and integration initiatives undertaken during
Fiscal 1999. Gross profit for the three and nine months ended December 31, 1998
was adversely impacted by inventory write-downs recorded principally to reflect
lower of cost or market adjustments arising from adverse market conditions.

     General and administrative expenses were $13.5 million (5.8% of
consolidated net sales) and $41.1 million (6.4% of consolidated net sales) for
the three and nine months ended December 31, 1999, respectively, compared with
$14.7 million (8.2% of consolidated net sales) and $42.3 million (6.9% of
                                       16
<PAGE>   19

consolidated net sales) for the three and nine months ended December 31, 1998,
respectively. The decrease in general and administrative expenses reflect
reductions in executive and administrative personnel and other cost containment
initiatives undertaken by the Company.

     Depreciation and amortization expense was $6.9 million (3.0% of
consolidated net sales) and $20.2 million (3.1% of consolidated net sales) for
the three and nine months ended December 31, 1999, respectively, compared with
$7.5 million (4.2% of consolidated net sales) and $18.2 million (3.0%
consolidated net sales) for the three and nine months ended December 31, 1998,
respectively. The increase for the nine months ended December 31, 1999, both in
dollars and as a percentage of consolidated net sales, is attributed to the
inclusion of goodwill amortization and depreciation of fixed assets of the
businesses comprising the July 1998 Acquisitions for the entire period.

     During the nine months ended December 31, 1999, the Company recorded
non-cash and non-recurring expenses of $5.0 million. During the three and nine
months ended December 31, 1998, the Company recorded non-cash and non-recurring
expense of $6.4 million and $3.1 million, respectively (see Note 3 to the
condensed consolidated financial statements included in Item 1 of this Report).

     Interest expense was $9.8 million (4.2% of consolidated net sales) and
$27.8 million (4.3% of consolidated net sales) for the three and nine months
ended December 31, 1999, respectively, compared with $9.0 million (5.1% of
consolidated net sales) and $22.6 million (3.7% of consolidated net sales) for
the three and nine months ended December 31, 1998, respectively. The increase is
primarily attributable to an increase in the Company's borrowings under the
Senior Credit Facility, to fund the Company's operating and investing
activities, and an increase in the applicable base interest rates payable under
the Senior Credit Facility, and the issuance of the Senior Secured Notes.

     Net loss from continuing operations, after preferred stock dividends, was
$1.8 million ($0.03 per share) and $11.8 million ($0.22 per share) for the three
and nine months ended December 31, 1999, respectively, compared with a net loss
from continuing operations, after preferred stock dividends, of $19.0 million
($0.46 per share) and $34.6 million ($0.92 per share) for the three and nine
months ended December 31, 1998, respectively. The decrease in the net loss is
due to the improvements the Company has been able to achieve in its gross margin
resulting from improved scrap metals market conditions and the realization of
consolidation and integration benefits. These benefits from the Company's
consolidation and integration efforts are evidenced by the reduced general and
administrative expenses and increased gross profits of the Company as compared
with the prior year periods.

     The Company's effective tax rate differs from the statutory rate primarily
due to permanent differences represented by non-deductible goodwill amortization
and certain non-deductible, non-cash and non-recurring expenses.

     During the nine months ended December 31, 1998, the Company recognized an
extraordinary charge of $0.9 million, net of taxes, related to the early
retirement of debt and other costs principally incurred in connection with the
closing of the Senior Credit Facility (see Note 5 to the condensed consolidated
financial statements included in Item 1 of this Report).

LIQUIDITY AND CAPITAL RESOURCES

     The Company has required significant amounts of capital to fund its
operations, capital expenditures and acquisition program. The Company has funded
these cash needs principally through cash generated from operating activities,
borrowings under the Senior Credit Facility, and the issuance of equity
securities, the Senior Subordinated Notes and the Senior Secured Notes.

     The Company anticipates that it will continue to have significant capital
requirements to fund its operations, capital expenditures and consolidation
strategy. The Company believes that cash generated from operations and undrawn
borrowing availability under the Senior Credit Facility provide it with
sufficient liquidity to fund its operations, capital expenditure and debt
service requirements. However, limiting conditions provided for in the
documentation governing the Senior Credit Facility, the Senior Subordinated
Notes and the Senior Secured Notes will limit the Company's ability to incur
significant additional debt to
                                       17
<PAGE>   20

fund significant acquisition or expansion opportunities unless and until the
Company achieves an EBITDA to interest coverage ratio of greater than 2 to 1 for
four consecutive quarters.

  Cash Flows from Operating Activities

     During the nine months ended December 31, 1999, the Company used $30.1
million of cash for operating activities. During this period, working capital
increased by $40.7 million principally due to higher accounts receivable and
inventory balances, which were generated as a result of business expansion
during the current fiscal year. Pursuant to separation agreements with two
former officers, the Company also made cash payments totaling $4.0 million (see
Note 3 to the condensed consolidated financial statements included in Item 1 of
this Report).

  Cash Flows from Investing Activities

     During the nine months ended December 31, 1999, the Company used $8.3
million of cash for investing activities. Purchases of property and equipment
were $7.0 million, while the Company generated $2.0 million of cash from the
sale of redundant fixed assets. Proceeds from the sale of property and equipment
include assets sold as part of the Company's plan to abandon and consolidate
certain facilities. The Company also used $4.5 million of cash for the
acquisition of certain assets of National Metals Company.

  Cash Flows from Financing Activities

     During the nine months ended December 31, 1999, the Company's financing
activities provided $36.7 million of cash, principally from increased borrowings
under the Senior Credit Facility. On May 7, 1999, the Company issued $30.0
million aggregate principal amount of Senior Secured Notes, and received net
proceeds of $25.5 million after the 10% discount, transaction fees and expenses.
Proceeds from the Senior Secured Notes were used to repay amounts then
outstanding under the Senior Credit Facility. The Company also used $3.1 million
of cash to redeem 2,462 shares of Series A convertible preferred stock at 125%
of par value.

FINANCIAL CONDITION

  Cash Requirements for Maturing Debt Obligations and Interest Payments

     On May 15, 2000, the Company is required to make a semi-annual interest
payment of $9.0 million on the Senior Subordinated Notes. The Company's amended
Senior Credit Facility allows the Company to make interest payments on the
Senior Subordinated Notes, but requires the Company to maintain average unused
availability equal to the sum of (x) the interest payment and (y) $12.0 million
for a period of thirty days prior to the payment date. On June 15, 2000, the
Company is required to make a semi-annual interest payment of approximately $2.0
million on the Senior Secured Notes. The Company is also required to pay
currently maturing obligations under other long-term borrowings totaling $4.1
million.

     The Company believes, based on its current financial condition and
liquidity and its current projections of cash flows, that it will be able to
meet all interest payment and maturing debt obligations coming due in the
current fiscal year.

  Working Capital Availability and Requirements

     Accounts receivable balances of the Company increased from $103.8 million
at March 31, 1999 to $142.0 million at December 31, 1999. The increase is
primarily due to increases in sales realized by the Company during the three
months ended December 31, 1999 compared with the three months ended March 31,
1999, and an increase in average days sales outstanding principally as a result
of increased sales of stainless steel metals to customers which generally
benefit from longer payment terms.

     Accounts payable balances of the Company increased from $62.2 million at
March 31, 1999 to $69.6 million at December 31, 1999 due to improved support
from and relations with suppliers engaged in trade markets which provide
materials to the Company and due to increases in inventories.

                                       18
<PAGE>   21

     Inventory levels can vary significantly among the Company's operations and
with changes in market conditions. Inventories consisted of the following
categories at (in thousands):

<TABLE>
<CAPTION>
                                                              DECEMBER 31,   MARCH 31,
                                                                  1999         1999
                                                              ------------   ---------
<S>                                                           <C>            <C>
Ferrous metals                                                  $31,483       $37,679
Non-ferrous metals                                               30,169        19,791
Other                                                             3,404         2,973
                                                                -------       -------
                                                                $65,056       $60,443
                                                                =======       =======
</TABLE>

     The Company's ferrous inventory levels have decreased during the current
fiscal year as the Company continues to implement its strategy of reducing
inventory levels to reduce interest costs and to reduce the Company's exposure
to changing market prices for scrap metals. Non-ferrous inventory, however, has
increased due to an increase of inventory units and an increase in purchase
prices for non-ferrous scrap metals, due to changes in non-ferrous metals
markets during the current fiscal year.

COMPANY INDEBTEDNESS

     The Company's principal indebtedness is represented by borrowings under the
Senior Credit Facility, the Senior Subordinated Notes and the Senior Secured
Notes.

  Senior Credit Facility

     The Credit Agreement, dated March 31, 1998, among the Company, BT
Commercial Corporation, as agent and the lenders thereunder (as amended, the
"Senior Credit Facility") provides for a revolving credit and letter of credit
facility of $250.0 million, subject to borrowing base limitations. The Company's
obligations under the Senior Credit Facility are secured by substantially all of
the Company's assets and properties, including pledges of the capital stock of
the Company's subsidiaries. Availability of loans and letters of credit under
the Senior Credit Facility is generally limited to a borrowing base of 85% of
eligible accounts receivable, 70% of eligible inventory (subject to a cap of
$100.0 million) and a fixed asset sublimit ($50.1 million as of December 31,
1999) that amortizes on a quarterly basis.

     The Senior Credit Facility provides the Company with the option of
borrowing at an interest rate equal to either the Bankers Trust Company's prime
rate plus a margin or the London Interbank Offered Rate ("LIBOR") plus a margin.
As of February 1, 2000, the interest rate margins are 1.25% for prime rate
borrowings and 2.00% for LIBOR borrowings. The margins applicable to both prime
and LIBOR rate loans, however, decrease to the extent that the Company is able
to satisfy interest coverage tests in subsequent fiscal periods or has excess
availability of at least $40.0 million for a period of 30 consecutive days.

     The Senior Credit Facility also contains certain financial covenants,
including a minimum interest coverage ratio, imposes certain limitation on the
Company's ability to make capital expenditures and incur additional
indebtedness, and restricts payments of dividends and equity redemptions. The
Senior Credit Facility limits capital expenditures to 2% of consolidated net
sales for the fiscal year ending March 31, 2000.

     The interest coverage test of the Senior Credit Facility requires the
Company to maintain an interest coverage ratio of not less than 1.0 to 1.0
(EBITDA (as defined in the Senior Credit Facility) to interest expense) (i) for
the twelve months ending March 31, 2000 and (ii) for the end of each fiscal
quarter thereafter, for the twelve-month period then ending. The Company is in
compliance as of December 31, 1999 with this and other financial covenants set
forth in the Senior Credit Facility.

     At December 31, 1999, the Company had outstanding borrowings under its
Senior Credit Facility of approximately $161.5 million. As of January 31, 2000,
the Company had undrawn availability of approximately $29 million under the
Senior Credit Facility.

     The Senior Credit Facility also restricts the Company's ability to make
interest payments on the Senior Subordinated Notes with respect to the interest
payment due on May 15, 2000 and on each subsequent

                                       19
<PAGE>   22

interest payment date thereafter unless the Company maintains average undrawn
availability of $12.0 million plus the amount of the interest payment for the
30-day period ending on the interest payment date.

  10% Senior Subordinated Notes due 2008

     On May 13, 1998, the Company issued $180.0 million of 10% Senior
Subordinated Notes due on May 15, 2008 (the "Senior Subordinated Notes") in a
private placement pursuant to exemptions under the Securities Act of 1933.
Interest on the Senior Subordinated Notes is payable semi-annually during May
and November of each year. The Company received net proceeds of $174.6 million
in the offering of the Senior Subordinated Notes. The Senior Subordinated Notes
are the Company's general unsecured obligations and are subordinated in right of
payment to all of the Company's senior debt, including the Company's
indebtedness under the Senior Credit Facility and the Senior Secured Notes. The
Company's payment obligations are jointly and severally guaranteed by all of the
Company's current and certain future subsidiaries.

     Except as described below, the Senior Subordinated Notes are not redeemable
at the Company's option prior to May 15, 2003. After May 15, 2003, the Senior
Subordinated Notes are redeemable by the Company at the redemption prices
(expressed as a percentage of the principal amount and rounded to the nearest
whole percentage) plus accrued and unpaid interest, if redeemed during the
twelve month period beginning on May 15 of each of the years indicated below:

<TABLE>
<CAPTION>
YEAR                                                        PERCENTAGE
----                                                        ----------
<S>                                                         <C>
2003                                                           105%
2004                                                           103%
2005                                                           102%
2006 and thereafter                                            100%
</TABLE>

     Also, prior to May 15, 2001, the Company may redeem up to 35% of the
aggregate principal amount of the Senior Subordinated Notes at a redemption
price of 110% of the principal amount of the Senior Subordinated Notes, plus
accrued and unpaid interest, from the proceeds of one or more sales of Common
Stock. The Senior Subordinated Notes are also redeemable at the option of the
holders of such notes at a repurchase price of 101% of the principal amount
thereof, plus accrued and unpaid interest, in the event of certain change of
control events with respect to the Company. Subject to certain exceptions, the
Senior Subordinated Notes are redeemable at the option of the holders of such
notes at a repurchase price of 100% of the principal amount thereof, plus
accrued and unpaid interest, in the event of certain asset sales made by the
Company.

     The Indenture governing the Senior Subordinated Notes contains certain
covenants that limit, among other things, the Company's ability to: (i) incur
additional indebtedness (including by way of guarantee), subject to certain
exceptions, unless the Company meets a fixed charge coverage ratio of 2.0 to 1.0
or certain other conditions apply; (ii) issue certain types of securities
containing mandatory redemption rights or which otherwise are redeemable at the
option of the holder prior to the maturity of the Senior Subordinated Notes;
(iii) pay dividends or distributions, or make certain types of investments or
other restricted payments, unless the Company meets certain specified
conditions; (iv) enter into certain transactions with affiliates; (v) dispose of
certain assets; (vi) incur liens securing indebtedness that is pari passu or
subordinated to the Senior Subordinated Notes; or (viii) engage in certain
mergers and consolidations.

  12 3/4% Senior Secured Notes due 2004

     On May 7, 1999, the Company issued $30.0 million aggregate principal amount
of its Senior Secured Notes (the "Senior Secured Notes") in a private placement
pursuant to Rule 144A under the Securities Act of 1933. The Senior Secured Notes
were issued at 90% of their stated principal amount at maturity. The Senior
Secured Notes mature on September 15, 2004 and bear interest at the rate of
12 3/4% per annum. Interest on the Senior Secured Notes is payable semi-annually
during September and December of each year. The Company received net proceeds of
$25.5 million in the offering of the Senior Secured Notes. The Senior Secured
Notes are senior obligations of the Company and will rank equally in right of
payment with all of the

                                       20
<PAGE>   23

Company's unsubordinated debt, including the Company's indebtedness under the
Senior Credit Facility, and senior in right of payment to all of the Company's
subordinated debt, including the Senior Subordinated Notes.

     The Company's payment obligations are jointly and severally guaranteed by
all of the Company's current and future subsidiaries. The Senior Secured Notes
are also secured by a second priority lien on substantially all of the Company's
personal property, plant (to the extent it constitutes fixtures) and equipment
that secure the Senior Credit Facility. The liens that secure the Senior Secured
Notes are subordinated to the liens that secure the indebtedness under the
Senior Credit Facility.

     The Senior Secured Notes are not redeemable at the Company's option prior
to June 15, 2000. Thereafter, the Company may redeem some or all of the Senior
Secured Notes (in multiples of $10.0 million) at a redemption price of 100% of
the principal amount thereof, plus accrued and unpaid interest. The Senior
Secured Notes are redeemable at the option of the holders of such notes at a
repurchase price of 101% of the principal amount thereof, plus accrued and
unpaid interest, in the event of a change of control with respect to the
Company. Subject to certain exceptions, the Senior Secured Notes are redeemable
at the option of the holders of such notes at a repurchase price of 100% of the
principal amount thereof, plus accrued and unpaid interest, in the event of
certain asset sales made by the Company.

     The Indenture governing the Senior Secured Notes contains substantially the
same operating restrictions as those contained in the Indenture governing the
Senior Subordinated Notes. These include limits on, among other things, the
Company's ability to: (i) incur additional indebtedness; (ii) pay dividends or
distributions on the Company's capital stock or repurchase its capital stock;
(iii) issue stock of subsidiaries; (iv) make certain investments; (v) create
liens on the Company's assets; (vi) enter into transactions with affiliates;
(vii) merge or consolidate with another company; and (viii) transfer and sell
assets or enter into sale and leaseback transactions.

YEAR 2000

     As described in the Company's previous filings, the Company had developed
plans to address the possible exposures related to the impact of the Year 2000
on its computer systems and on its non-information technology systems. Since
entering the year 2000, the Company has not experienced any major disruptions to
its business nor is it aware of any significant Year 2000 related disruptions
impacting its customers and suppliers.

     However, there is no guarantee that the Company has discovered all possible
failure points. Specific factors contributing to this uncertainty include
failure to identify all systems, non-ready third parties whose systems and
operations impact the Company, and other similar uncertainties. The Company will
continue to monitor its critical systems over the next several months, but does
not anticipate any significant impacts due to Year 2000 exposures from its
computer systems, non-information technology systems as well as from the
activities of its suppliers and customers. Costs incurred to date associated
with Year 2000 readiness have not been material to the Company's financial
position or results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     The Company is exposed to financial risk resulting from fluctuations in
interest rates and commodity prices. The Company seeks to minimize these risks
through regular operating and financing activities and, where appropriate,
through use of derivative financial instruments. The Company's use of derivative
financial instruments is limited and related solely to hedges of certain
non-ferrous inventory positions. Reference is made to the Company's quantitative
disclosures about market risk as of March 31, 1999 included under Item 7A of the
Company's most recent Annual Report on Form 10-K.

                                       21
<PAGE>   24

                          PART II -- OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

     The Company's subsidiary, Metal Management Midwest, Inc., formerly known as
Cozzi Iron & Metal, Inc. ("MMMI"), operates seven facilities in the Chicago area
(the "MMMI Facilities") which have been the subject to a series of inspections
dating back to the mid-1990s by, among other agencies, the United States
Environmental Protection Agency ("USEPA") pursuant to the so-called Greater
Chicagoland Initiative to perform multimedia and multi-agency inspections of
scrap yards in the Chicago Area (the "USEPA Initiative"). The USEPA Initiative
included the MMMI Facilities and inspections have occurred since 1997. In
addition, the MMMI Facilities have responded to multiple document requests.

     In a letter dated January 10, 2000, USEPA alleged that certain of the MMMI
Facilities had violated certain provisions of the Resource Conservation and
Recovery Act, the Clean Air Act, the Clean Water Act, the Oil Pollution
Standards and the Toxic Substances Control Act. MMMI has initiated a dialogue
with the USEPA to respond to USEPA's allegations and expects to resolve any
compliance issues in 2000 and is currently negotiating an informal resolution of
the enforcement matter. As with any litigation matter, outcomes are uncertain
until definitive settlement terms are reached or the case is litigated.

ITEM 2: CHANGES IN SECURITIES

     In November 1999, the Company issued 347,706 shares of Common Stock to
National Metals Company in exchange for certain assets of National Metals
Company. The Common Stock was valued at approximately $0.5 million for financial
reporting purposes.

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

     (a) The Annual Meeting of the Stockholders of the Company was held on
November 22, 1999.

     (b) The following directors were elected at the Annual Meeting of
Stockholders: Albert A. Cozzi, Frank J. Cozzi, Gregory P. Cozzi, George A. Isaac
III, Gerard M. Jacobs, Kenneth A. Merlau, Joseph F. Naporano, Timothy T.
Orlowski and William T. Proler.

     (c) Of the 53,353,582 shares entitled to vote, 43,516,736 shares were
represented at the meeting by proxy or present in person. The stockholders
considered the following matters:

<TABLE>
<CAPTION>
PROPOSAL                                                                  FOR       WITHHELD    NON-VOTE
--------                                                                  ---       --------    --------
<S>       <C>  <C>                                                     <C>          <C>         <C>
1.        Election of Directors:
          a.   Albert A. Cozzi                                         42,864,381     652,355      0
          b.   Frank J. Cozzi                                          43,175,370     341,366      0
          c.   Gregory P. Cozzi                                        43,167,270     349,466      0
          d.   George A. Isaac III                                     42,571,573     945,163      0
          e.   Gerard M. Jacobs                                        42,360,823   1,155,913      0
          f.   Kenneth A. Merlau                                       43,166,840     349,896      0
          g.   Joseph F. Naporano                                      43,175,640     341,096      0
          h.   Timothy T. Orlowski                                     43,188,640     328,096      0
          i.   William T. Proler                                       43,185,140     331,596      0
</TABLE>

                                       22
<PAGE>   25

<TABLE>
<CAPTION>
PROPOSAL                                                    FOR        AGAINST    WITHHELD    NON-VOTE
--------                                                    ---        -------    --------    --------
<S>       <C>                                            <C>          <C>         <C>        <C>
2.        Approval of the Company's Restricted Stock
          Plan                                           24,688,447   1,803,736   249,301    16,775,252
3.        Approval and Ratification of the Issuance of
          Common Stock previously issued in a Private
          Placement to certain Officers and Directors
          of the Company                                 25,463,345   1,808,473   250,291    15,994,627
4.        Approval of PricewaterhouseCoopers LLP as
          the Company's independent accountants          43,010,270     377,075   129,391             0
</TABLE>

ITEM 5: OTHER INFORMATION

  Directorships:

     In December 1999, Governor James R. Thompson, Richard L. Measelle and
Patrick J. Ottensmeyer were appointed to serve on the Company's Board of
Directors. The appointments became effective in February 2000. In addition,
effective January 2000, Gerard M. Jacobs and George A. Isaac III resigned as
directors of the Company. As a result, the Board of Directors is currently
comprised of ten directors, with two vacancies.

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

  (a)  Exhibits

     See Exhibit Index

  (b)  Reports on Form 8-K

     The following reports on Form 8-K were filed during the quarter ended
December 31, 1999:

          (1) Form 8-K dated September 24, 1999, filed October 8, 1999,
     disclosing the redemption of 2,500 shares of Series A Convertible Preferred
     Stock.

                                       23
<PAGE>   26

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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/ ALBERT A. COZZI
                                              ----------------------------------
                                                       Albert A. Cozzi
                                               Director, Chairman of the Board,
                                                  and Chief Executive Officer
                                                 (Principal Executive Officer)

                                            By:    /s/ MICHAEL W. TRYON
                                              ----------------------------------
                                                       Michael W. Tryon
                                                President and Chief Operating
                                                            Officer

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

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

Date: February 11, 2000

                                       24
<PAGE>   27

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
     EXHIBIT NUMBER                         DESCRIPTION OF EXHIBIT
     --------------                         ----------------------
<C>                      <S>
          3.1            -- Amended and Restated Certificate of Incorporation of the
                            Company, as filed with the Secretary of State of the
                            State of Delaware on November 2, 1998 (incorporated by
                            reference to Exhibit 3.1 of the Company's Quarterly
                            Report on Form 10-Q for the quarter ended September 30,
                            1998).
          3.2            -- Certificate of Designations, Preferences and Rights of
                            Series C Convertible Preferred Stock of the Company, as
                            filed with the Secretary of State of the State of
                            Delaware on November 2, 1998 (incorporated by reference
                            to Exhibit 3.2 of the Company's Quarterly Report on Form
                            10-Q for the quarter ended September 30, 1998).
          3.3            -- Restated By-Laws of the Company, as amended through March
                            31, 1999.
         10.1            -- Warrant to purchase 50,000 shares of Common Stock at an
                            exercise price of $2.50 per share, dated December 3,
                            1999, issued by the Company to Richard L. Measelle.
         10.2            -- Warrant to purchase 50,000 shares of Common Stock at an
                            exercise price of $2.00 per share, dated December 3,
                            1999, issued by the Company to Richard L. Measelle.
         10.3            -- Warrant to purchase 50,000 shares of Common Stock at an
                            exercise price of $3.50 per share, dated December 3,
                            1999, issued by the Company to Richard L. Measelle.
         10.4            -- Warrant to purchase 33,333 shares of Common Stock at an
                            exercise price of $2.50 per share, dated December 3,
                            1999, issued by the Company to Patrick J. Ottensmeyer.
         10.5            -- Warrant to purchase 33,334 shares of Common Stock at an
                            exercise price of $2.00 per share, dated December 3,
                            1999, issued by the Company to Patrick J. Ottensmeyer.
         10.6            -- Warrant to purchase 33,333 shares of Common Stock at an
                            exercise price of $3.50 per share, dated December 3,
                            1999, issued by the Company to Patrick J. Ottensmeyer.
         10.7            -- Warrant to purchase 50,000 shares of Common Stock at an
                            exercise price of $2.50 per share, dated December 3,
                            1999, issued by the Company to James R. Thompson.
         10.8            -- Warrant to purchase 50,000 shares of Common Stock at an
                            exercise price of $2.00 per share, dated December 3,
                            1999, issued by the Company to James R. Thompson.
         10.9            -- Warrant to purchase 50,000 shares of Common Stock at an
                            exercise price of $3.50 per share, dated December 3,
                            1999, issued by the Company to James R. Thompson.
         27.1            -- Financial Data Schedule.
</TABLE>

                                       25