<PAGE>   1
 
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                             ---------------------
 
                                   FORM 10-Q
 
              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
 
               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998
 
                         COMMISSION FILE NUMBER 0-29204
 
                                 SIMCALA, INC.
             (Exact name of Registrant as specified in its charter)
 
<TABLE>
<S>                                                         <C>
       (State or Other Jurisdiction of                        (I.R.S. Employer
        Incorporation or Organization)                      Identification No.)
</TABLE>
 
             (Address of principal executive offices and zip code)
 
              (Registrant's telephone number, including area code)
 
     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) and has been subject to
such filing requirements for the past 90 days.
 
                       Yes  [X]                    No [ ]
 
     As of November 5, 1998, there were 4,980,703 outstanding shares of the
             Registrant's Common Stock, par value $.0001 per share.
 
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--------------------------------------------------------------------------------
<PAGE>   2



                         PART I. FINANCIAL INFORMATION*
























      * As used in this Form 10-Q, unless the context otherwise requires,
"SAC" refers to SAC Acquisition Corp. "Predecessor" refers to SIMCALA, Inc. in
respect of periods prior to the Acquisition (as defined herein), the "Company"
                    refers to the registrant, SIMCALA, Inc.



<PAGE>   3



                                 SIMCALA, INC.
                            CONDENSED BALANCE SHEETS
                  (IN THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)
On March 31, 1998, SAC acquired all of the outstanding capital stock of the
Company. The purchase method of accounting was used to record assets acquired
and liabilities assumed. The allocation of the purchase price and acquisition
costs to the assets acquired and liabilities assumed is preliminary and is
subject to change pending finalization of expenses associated with the
transaction. As a result of purchase accounting, the accompanying financial
statements of the Predecessor and the Company are not comparable in all
material respects since the financial statements report financial position,
results of operations, and cash flows of these two separate entities. The
Condensed Balance Sheet as of December 31, 1997 was derived from audited
financial statements as of such date.

<TABLE>
<CAPTION>
                                                                                 COMPANY             PREDECESSOR
                                                                               SEPTEMBER 30,         DECEMBER 31,
                                                                                   1998                  1997
                                                                               (UNAUDITED)
<S>                                                                            <C>                   <C>
ASSETS
Current Assets
       Cash and cash equivalents                                                $  18,967              $   635
       Accounts receivable, net of allowance for doubtful
         accounts of $0 at September 30, 1998 and $77 at                            6,167                5,830
          December 31, 1997
       Inventories                                                                  2,769                2,664
       Deferred income taxes                                                        2,876                1,288
       Other current assets                                                           259                  128
                                                                                ---------              -------
Total Current Assets                                                               31,038               10,545

Property, Plant and Equipment, net of accumulated
       depreciation of $1,945 and $4,045, at September 30, 1998
       and December 31, 1997, respectively                                         53,445               22,448
Intangible Assets, net of accumulated amortization of $1,080
       and $540, at September 30, 1998 and December 31, 1997,
       respectively                                                                37,466                  670
                                                                                ---------              -------
Total Assets                                                                    $ 121,949              $33,663
                                                                                =========              =======

LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
    Accounts payable and accrued expenses                                       $  10,413              $ 6,125
    Current maturities of long-term debt                                               79                2,341
    Income taxes payable                                                                                 1,194
                                                                                ---------              -------
Total Current Liabilities                                                          10,492                9,660
Long Term Debt - Net of Current Portion                                            81,051               12,763
Deferred Income Taxes                                                              13,339                2,964
                                                                                ---------              -------
Total Liabilities                                                                 104,882               25,387

Commitments and Contingencies

Stockholder's Equity
Common Stock, 20,000 shares authorized - 22,000 and 10,000 shares issued
           and outstanding, at September 30, 1998 and
           December 31, 1997, respectively,
           par value $.01 per share in 1997 and no par in 1998                         --                   --
Additional Paid-in Capital                                                         18,807                2,250
Retained Earnings                                                                  (1,740)               6,026
                                                                                ---------              -------
      Total Stockholder's Equity                                                   17,067                8,276
                                                                                ---------              -------

Total Liabilities and Stockholder's Equity                                      $ 121,949              $33,663
                                                                                =========              =======
</TABLE>


See Notes to Condensed Financial Statements.



                                      -1-
<PAGE>   4



                                 SIMCALA, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                           (IN THOUSANDS OF DOLLARS)
                                  (UNAUDITED)
On March 31, 1998, SAC acquired all of the outstanding capital stock of the
Company. The purchase method of accounting was used to record assets acquired
and liabilities assumed. The allocation of the purchase price and acquisition
costs to the assets acquired and liabilities assumed is preliminary and is
subject to change pending finalization of expenses associated with the
transaction. As a result of purchase accounting, the accompanying financial
statements of the Predecessor and the Company are not comparable in all
material respects since the financial statements report financial position,
results of operations, and cash flows of these two separate entities.


<TABLE>
<CAPTION>
                                                                COMPANY                             PREDECESSOR
                                                     -----------------------------   --------------------------------------------
                                                     Three Months     Six Months     Three Months   Three Months    Nine Months
                                                        Ended            Ended          Ended           Ended          Ended
                                                     September 30,   September 30,     March 31,     September 30,  September 30,
                                                         1998            1998            1998            1997           1997
<S>                                                  <C>             <C>              <C>             <C>            <C>
Net Sales                                             $ 12,618        $ 27,536        $ 14,854        $ 15,920       $ 46,718
Cost of Goods Sold                                      12,211          25,233          11,679          12,270         36,897
                                                      --------        --------        --------        --------       --------
   Gross Profit                                            407           2,303           3,175           3,650          9,821
Selling, General and Administrative Expenses               613           1,439           3,824             746          2,112
                                                      --------        --------        --------        --------       --------
   Operating (Loss) Income                                (206)            864            (649)          2,904          7,709
Interest Expense                                         1,941           3,840             314             473          1,335
Other Income, Net                                          271             615             282              76            139
                                                      --------        --------        --------        --------       --------
   Earnings (Loss) before Income Taxes                  (1,876)         (2,361)           (681)          2,507          6,513
Income Tax (Benefit) Provision                            (575)           (621)           (100)          1,031          2,393
                                                      --------        --------        --------        --------       --------

   Net Income (Loss)                                  $ (1,301)       $ (1,740)       $   (581)       $  1,476       $  4,120
                                                      ========        ========        ========        ========       ========
</TABLE>


See Notes to Condensed Financial Statements.



                                      -2-
<PAGE>   5



                                 SIMCALA, INC.
                       CONDENSED STATEMENTS OF CASH FLOW
                           (IN THOUSANDS OF DOLLARS)
                                  (UNAUDITED)
On March 31, 1998, SAC acquired all of the outstanding capital stock of the
Company. The purchase method of accounting was used to record assets acquired
and liabilities assumed. The allocation of the purchase price and acquisition
costs to the assets acquired and liabilities assumed is preliminary and is
subject to change pending finalization of expenses associated with the
transaction. As a result of purchase accounting, the accompanying financial
statements of the Predecessor and the Company are not comparable in all
material respects since the financial statements report financial position,
results of operations, and cash flows of these two separate entities.


<TABLE>
<CAPTION>
                                                                COMPANY                             PREDECESSOR
                                                     -----------------------------   --------------------------------------------
                                                     Three Months     Six Months     Three Months   Three Months     Nine Months
                                                        Ended            Ended          Ended           Ended           Ended
                                                     September 30,   September 30,     March 31,     September 30,   September 30,
                                                         1998            1998            1998            1997            1997
----------------------------------------------------------------------------------   ------------   --------------   ------------
<S>                                                  <C>             <C>              <C>            <C>             <C>
Cash Flows from Operating Activities:
Net income (loss)                                    $ (1,301)        $ (1,740)        $  (581)        $ 1,476         $ 4,120 
Adjustments to reconcile net income (loss)                                                                                     
 to net cash used in operating activities:                                                                                     
   Depreciation and amortization                        1,528            2,962             533             454           1,311 
   (Increase) decrease in deferred income taxes                           (630)            800                              71 
   Noncash stock option compensation                                                       904              87              87 
Change in assets and liabilities:                                                                                              
   (Increase) decrease in accounts receivable             631              656              21            (224)         (1,090)
   (Increase) decrease in other receivables                              1,800          (2,807)                                
   (Increase) decrease in inventories                    (369)             102            (207)           (190)           (285)
   Decrease (increase) in other assets                   (184)            (435)            140            (380)         (2,327)
   Decrease (increase) in accounts payable                                                                                     
       and other accrued expenses                        (273)             541           2,365             (95)          1,647 
                                                     --------         --------         -------         -------         ------- 
Net cash provided by operating activities                  32            3,256           1,168           1,128           3,534 
                                                     --------         --------         -------         -------         ------- 
                                                                                                                               
Cash Flows used in Investing Activities:                                                                                       
  Purchase of property, plant and equipment            (1,079)          (2,314)         (1,184)           (311)         (1,504)
                                                     --------         --------         -------         -------         ------- 
Cash Flows from Financing Activities:                                                                                          
Redemption of preferred stock                                                                                           (1,770)
Repayment under line of credit, net                                                                       (500)         (3,244)
Net borrowings (repayment) of long-term debt              (16)             (32)             39            (607)          2,976 
                                                     --------         --------         -------         -------         ------- 
Net cash provided by (used in)
  financing activities                                    (16)             (32)             39          (1,107)         (2,038)
                                                     --------         --------         -------         -------         ------- 
                                                                                                                               
Increase (Decrease) in Cash and Equivalents            (1,063)             910              23            (290)             (8)
                                                                                                                               
Cash and Equivalents:                                                                                                          
  Beginning of Period                                  20,030           18,057             635             468             186 
                                                     --------         --------         -------         -------         ------- 
                                                                                                                               
  End of Period                                      $ 18,967         $ 18,967         $   658         $   178         $   178 
                                                     ========         ========         =======         =======         ======= 
                                                                                                                               
SUPPLEMENTAL DISCLOSURES                                                                                                       
  OF CASH FLOW INFORMATION:                                                                                                    
  Cash paid for:                                                                                                               
     Interest                                        $     86         $    225         $   161         $   497         $ 1,073 
                                                     ========         ========         =======         =======         ======= 
                                                                                                                               
     Income taxes                                    $     75         $     75         $   112         $    --         $   184 
                                                     ========         ========         =======         =======         ======= 
</TABLE>


See Notes to Condensed Financial Statements.



                                      -3-
<PAGE>   6



                                 SIMCALA, INC.
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (UNAUDITED)

1.       ORGANIZATION AND OPERATIONS

         On March 31, 1998, SAC Acquisition Corp. ("SAC"), a subsidiary of
         SIMCALA Holdings, Inc. ("Holdings") purchased all of the outstanding
         common stock of SIMCALA, Inc. ("SIMCALA" or the "Company") (the
         "Acquisition"). On such date, SAC was merged into SIMCALA. Holdings
         and SAC conducted no significant business other than in connection
         with the Acquisition.

         The Company is a producer of silicon metal for sale to the aluminum
         and silicone industries. The Company sells to customers in the metal
         industry who are located primarily throughout the United States.
         Credit is extended based on an evaluation of the customer's financial
         condition. During 1997, three customers accounted for 29%, 24%, and
         16% of net sales. During the three months ended September 30, 1998,
         three customers accounted for 46.3%, 22.5%, and 8.8% of net sales. At
         September 30, 1998 and December 31, 1997, three customers accounted
         for 58.8%, 10.5%, and 7.5% and 31%, 26% and 12%, respectively, of
         outstanding receivables. The Company maintains credit insurance for
         all customer accounts receivable.

         The Acquisition of the Predecessor for approximately $65.5 million in
         cash, including approximately $5 million for fees and other costs
         directly associated with the Acquisition, has been accounted for as a
         purchase. The Acquisition was financed through the issuance of senior
         notes in the amount of $75,000,000 (see Note 4 to the Condensed
         Financial Statements) and equity contributed of $22,000,000.
         Accordingly, purchase price has been allocated to the identifiable
         assets and liabilities based on fair values at the acquisition date.
         The allocation of the purchase price and acquisition costs to the
         assets acquired and liabilities assumed is preliminary at September
         30, 1998, and is subject to change pending the finalization of
         expenses related to the Acquisition. Management does not expect such
         adjustments to be material. The excess of the purchase price over the
         fair value of the identifiable net assets in the amount of $35.0
         million has been classified as goodwill. Additionally, the effect of
         the carryover basis of senior management of $3.2 million has been
         considered in the allocation of the purchase price. The carryover
         basis adjustment results from the application of Emerging Issues Task
         Force ("EITF") Consensus No. 88-16, "Basis in Leveraged Buyout
         Transactions," and is allocated to property, plant and equipment and
         goodwill based upon the March 31, 1998 balances.

         The condensed financial statements included herein have been prepared
         by the Company without audit, pursuant to the rules and regulations of
         the Securities and Exchange Commission. Certain information and
         footnote disclosures normally included in the financial statements
         prepared in accordance with generally accepted accounting principles
         have been condensed or omitted pursuant to such rules and regulations.
         Although management believes that the disclosures are adequate to make
         the information presented not misleading, it is suggested that the
         Predecessor interim condensed financial statements be read in
         conjunction with the Predecessor's most recent audited financial
         statements and notes thereto. In the opinion of management, all
         adjustments necessary for a fair presentation of the financial
         position, results of operations and cash flows for the interim periods
         presented have been made. Operating results for the interim periods
         are not necessarily indicative of the results that may be expected for
         the year ending December 31, 1998.

         The condensed financial statements included herein for the periods
         prior to March 31, 1998, represent the Predecessor's results of
         operations and cash flows prior to the Acquisition and consequently,
         are stated on the Predecessor's historical cost basis. 



                                      -4-
<PAGE>   7

         The condensed financial statements as of September 30, 1998, and for
         the six months then ended, reflect the adjustments which were made to
         record the Acquisition. Accordingly, the financial statements of the
         Predecessor for the periods prior to March 31, 1998 are not comparable
         in all material respects with the financial statements subsequent to
         the Acquisition date. The most significant differences relate to
         amounts recorded for property, plant and equipment, goodwill, and debt
         which resulted in increased cost of sales, amortization, depreciation
         and interest expense in the six months ended September 30, 1998 and in
         future periods.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         For a summary of the Company's and the Predecessor's accounting
         policies, please refer to the Company's Registration Statement No.
         333-53791 filed on July 27, 1998 with the Securities and Exchange
         Commission on Form S-1.

         New Accounting Pronouncements - In June 1997, the Financial Accounting
         Standards Board issued Statements of Financial Accounting Standards
         No. 130, "Reporting Comprehensive Income" ("SFAS 130"), and Statement
         of Financial Accounting Standards No. 131, "Disclosures about Segments
         of an Enterprise and Related Information" ("SFAS 131"). SFAS 130
         establishes standards for the reporting and displaying of
         comprehensive income and its components (revenues, expenses, gains,
         and losses) in a full set of general-purpose financial statements.
         SFAS 131 establishes standards for the way the public business
         enterprises report information about operating segments in interim
         financial reports issued to shareholders. The Company adopted SFAS 130
         and SFAS 131 effective January 1, 1998. The adoption of these
         standards did not have an effect on its financial statements.
         Comprehensive income equals net income for the three months ended
         September 30, 1998, the six months ended September 30,1998, the three
         months ended March 31, 1998 and the six and nine months ended
         September 30, 1997. The Company did not have accumulated other
         comprehensive income as of September 30, 1998 or December 31, 1997.

3.       INVENTORIES

         Inventories consist of the following (in thousands of dollars):


<TABLE>
<CAPTION>
                                                 COMPANY           PREDECESSOR
                                              -------------       -------------
                                              September 30,       December 31,
                                                  1998                1997
                                              -------------       ------------
<S>                                           <C>                 <C>
Raw Materials                                     $     959            $   948
Finished Goods                                        1,514              1,420
Supplies                                                296                296
                                                  ---------            -------

                                                  $   2,769            $ 2,664
                                                  =========            =======
</TABLE>



                                      -5-
<PAGE>   8



4.       LONG-TERM DEBT

         As of September 30, 1998, long-term debt consists of the following (in
         thousands of dollars):

<TABLE>
<S>                                                                                 <C>
 Senior Notes which bear interest at 9 5/8% and are due April 2006                  $75,000
 Industrial development bonds which bear interest at a variable rate.
   At September 30, 1998, the interest rate was 5.45%.  The bonds mature on
   December 1, 2019.  Bonds and applicable interest are secured by a letter
   of credit                                                                          6,000
 Various capital leases payable at interest rates of 9.91% to 10.0%
   expiring at various dates through 1999.  Aggregate monthly payments
   approximate $6,000                                                                   130
                                                                                    -------
                                                                                     81,130
 Less current portion                                                                    79
                                                                                    -------

 Long-term debt                                                                     $81,051
                                                                                    =======
</TABLE>

         The Senior Notes (the "Notes") mature on April 15, 2006, unless
         previously redeemed. Interest on the Notes is payable semiannually on
         April 15 and October 15, commencing October 15, 1998. The Notes are
         redeemable at the option of the Company, in whole or in part, on or
         after April 15, 2002, at the redemption price, plus accrued interest
         and liquidated damages, as defined, if any. The Notes are generally
         unsecured obligations of the Company and rank senior to all existing
         and future subordinated indebtedness of the Company.

         In connection with the Acquisition, the Company entered into a credit
         facility which provides availability for revolving borrowings and
         letters of credit in an aggregate amount of up to $15,000,000 (the
         "Revolving Credit Facility"). The Revolving Credit Facility expires in
         March 2003. At September 30, 1998, $6.1 million was outstanding under
         the Revolving Credit Facility.

         The Notes and the Revolving Credit Facility contain a number of
         covenants, including, among others, covenants restricting the Company
         and its subsidiaries with respect to the incurrence of indebtedness
         (including contingent obligations); the creation of liens;
         substantially changing the nature of its business; the consummation of
         certain transactions such as dispositions of substantial assets,
         mergers or consolidations; the making of certain investments and
         loans; the making of dividends and other distributions; the prepayment
         of indebtedness; transactions with affiliates; agreeing to certain
         restrictions on its actions (including agreeing not to grant liens);
         and limitations on sale leaseback transactions. In addition, the
         Revolving Credit Facility contains affirmative covenants including,
         among others, requirements regarding compliance with laws;
         preservation of corporate existence; maintenance of insurance; payment
         of taxes and other obligations; maintenance of properties;
         environmental compliance; the keeping of the books and records; the
         maintenance of intellectual property; and the delivery of financial
         and other information to the agent and the lenders under the Revolving
         Credit Facility.

         The Company is required to comply with certain financial tests and
         maintain certain financial ratios. Certain of these test and ratios
         include: (i) maintaining a minimum net worth; (ii) maintaining a
         maximum ratio of indebtedness to EBITDA; and (iii) maintaining a
         minimum ratio of EBITDA to interest expense.



                                      -6-
<PAGE>   9



         During the quarter ended September 30, 1998, the Company reached
         agreement with BankAmerica to amend its Minimum Net Worth covenant. As
         a result of the amendment, the Company is in compliance with all loan
         covenants as of November 9, 1998.

         Credit extended under the Revolving Credit Facility is secured by
         substantially all of the Company's assets and the real and personal
         property used in the Company's operations.

         The Company is a party to a capital lease for land and buildings at
         its manufacturing facility in Mt. Meigs, Alabama (the "Lease"). The
         Lease is with the Industrial Development Board ("IDB") for the city of
         Montgomery. Rental payments of $2,000 a year are required and the term
         of the Lease expires June 1, 2010. The Lease contains a bargain
         purchase option whereby the property can be purchased from the IDB for
         $1.

5.       PRO FORMA DATA

         The following unaudited pro forma financial data has been prepared
         assuming that the Acquisition was consummated on January 1, 1997. This
         pro forma financial data is presented for informational purposes and
         is not necessarily indicative of the operating results that would have
         occurred had the Acquisition been consummated on January 1, 1997, nor
         is it necessarily indicative of future operations (in thousands of
         dollars).

<TABLE>
<CAPTION>
                               THREE MONTHS           NINE MONTHS           THREE MONTHS          NINE MONTHS
                                   Ended                 Ended                  Ended                Ended
                               March 31, 1998      September 30, 1998     September 30, 1997    September 30, 1997
          <S>                  <C>                 <C>                    <C>                   <C>
          Net Sales              $ 14,854              $ 42,390               $15,920              $  46,718
          
          Net Income (Loss)      $ (2,378)             $ (7,988)              $    72              $  (1,248)
          </TABLE>

6.       RELATED PARTY TRANSACTIONS

         In connection with the Acquisition, the Company entered into a
         consulting agreement with CGW Southeast Management III, L.L.C. ("CGW
         Management") whereby the Company pays a monthly retainer fee of
         $15,000 for financial and management consulting services. In addition,
         the Company pays a fee to CGW Management at the end of each year which
         is based on the profits generated by the Company during the year. The
         consulting agreement expires in 2003.



                                      -7-
<PAGE>   10



7.       SUPPLEMENTAL CASH FLOW INFORMATION

         Following are the sources and uses of cash associated with the
         Acquisition (in thousands of dollars):

<TABLE>
           <S>                                                                  <C>
           Sources of Funds Received for the Acquisition:
            Notes sold in the offering                                          $ 75,000
            Equity contribution                                                   22,000
                                                                                --------
                                                                                $ 97,000
                                                                                ========
           Uses of Funds for the Acquisition:
            The Acquisition                                                     $ 65,533
            Repayment of indebtedness                                              9,159
            Transaction fees and expenses                                          4,886
            General corporate purposes                                            17,422
                                                                                --------

                                                                                $ 97,000
                                                                                ========
</TABLE>



                                      -8-
<PAGE>   11


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS



GENERAL

         On March 31, 1998, SIMCALA Holdings, Inc. ("Holdings"), through its
         wholly-owned subsidiary, SAC Acquisition Corp. ("SAC"), acquired all
         of the outstanding shares of common stock of SIMCALA, Inc. ("SIMCALA"
         or the "Company"). On such date, SAC was merged into SIMCALA (the
         "Acquisition"). SIMCALA, as the surviving corporation in the
         Acquisition, became a wholly-owned subsidiary of Holdings.

         The following is a discussion of the Company's results of operations.
         The discussion is based upon (a) the three month period ended
         September 30, 1998 in comparison to the three month period ended
         September 30, 1997 and (b) the six month period ended September 30,
         1998 plus the three month period ended March 31, 1998, in comparison
         to the nine month period ended September 30, 1997.

RESULTS OF OPERATIONS

         The table below sets forth certain income and expense items and the
         percentage that such items increased or decreased in 1998 when
         compared to the corresponding period in 1997.

                 (IN THOUSANDS OF DOLLARS, EXCEPT PERCENTAGES)

<TABLE>
<CAPTION>


                                                                                                     %INCREASE
                                                                         QUARTER ENDED               (DECREASE)
                                                                         SEPTEMBER 30,                 FROM
                                                              ------------------------------           PRIOR
                                                                 1998                  1997            PERIOD
<S>                                                           <C>                   <C>              <C>
Net sales                                                     $ 12,618              $ 15,920           (20.7)%
Cost of goods sold                                              12,211                12,270            (0.6)%
                                                              --------              --------
Gross profit                                                       407                 3,650           (88.8)%
Selling, general and administrative expenses                       613                   746           (17.8)%
                                                              --------              --------
Operating income (loss)                                           (206)                2,904          (107.1)%
Interest expense                                                 1,941                   473           310.4 %
Other income, net                                                  271                    76           256.6 %
                                                              --------              --------
Earnings (loss) before income taxes                             (1,876)                2,507          (174.8)%
Income tax (benefit) provision                                    (575)                1,031          (155.8)%
                                                              --------              --------

Net income (loss)                                             $ (1,301)             $  1,476          (188.1)%
                                                              ========              ========
</TABLE>



                                      -9-
<PAGE>   12



         The table below sets forth certain of the Company's statement of
         operations information as a percentage of net sales during the three
         months ended September 30, 1998 and 1997:


<TABLE>
<CAPTION>
                                                                             QUARTER ENDED
                                                                             SEPTEMBER 30,
                                                                   ------------------------------
                                                                      1998                 1997
          <S>                                                      <C>                    <C>
          Net sales                                                    100.0%               100.0%
          Cost of goods sold                                            96.8%                77.1%
                                                                   ---------              -------
          
          Gross profit margin                                            3.2%                22.9% 
          Selling, general and administrative expenses                   4.9%                 4.7%
                                                                   ---------              -------
          
          Operating income (loss)                                       (1.7)%               18.2%
          Interest expense                                              15.4%                 3.0%
          Other income, net                                              2.1%                 0.5%
                                                                   ---------              -------
          
          Earnings (loss) before income taxes                          (15.0)%               15.7%
          Income tax (benefit) provision                                (4.6)%                6.5%
                                                                   ---------              -------
          
          Net income (loss)                                            (10.4)%                9.2%
                                                                   =========              =======
          </TABLE>

THREE MONTHS ENDED SEPTEMBER 30, 1998
COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 1997

NET SALES

         Net sales decreased by $3.3 million in the third quarter of 1998, or
         20.7 percent, to $12.6 million from $15.9 million in the third quarter
         of 1997. This decline was due principally to decreased selling prices
         in the secondary aluminum silicon metal markets coupled with a
         decrease in tons sold in the quarter. Production of silicon metal in
         the third quarter of 1998 was 8,554 metric tons, compared with 9,866
         metric tons produced in the same period in 1997. Production was lower
         due to a shutdown for planned furnace maintenance coupled with
         smelting inefficiencies in one of the Company's furnaces.

GROSS PROFIT

         Gross profit decreased by $3.2 million, or 88.8 percent, to $.4 million
         in the third quarter of 1998 as compared to $3.6 million in the third
         quarter of 1997. The gross profit margin, defined as gross profit as a
         percentage of net sales, decreased to 3.2 percent in the third quarter
         of 1998 from 22.9 percent in the third quarter of 1997. These decreases
         were principally due to decreased selling prices in secondary aluminum
         silicon metal markets coupled with higher depreciation and amortization
         expenses resulting from the Acquisition.

SELLING, GENERAL AND ADMINISTRATIVE

         Selling, general and administrative expenses decreased $.1 million, to
         $.6 million in the third quarter of 1998 as compared to $.7 million in
         the third quarter of 1997. The decrease is primarily due to
         recognition of stock option compensation expense in 1997 which was not
         recognized in 1998.



                                     -10-
<PAGE>   13



OPERATING INCOME

         As a result of the decrease in net sales as discussed above, income
         from operations decreased $3.1 million to $(.2) million in the third
         quarter of 1998 from $2.9 million in the third quarter of 1997, while
         the operating margin, defined as operating income (loss) as a
         percentage of net sales, decreased to (1.7) percent from 18.2 percent
         for the same periods.

INTEREST EXPENSE

         Interest expense increased $1.4 million to $1.9 million in the third
         quarter of 1998 from $.5 million in the third quarter of 1997. The
         significant change in interest expense resulted from the increased
         debt associated with the Acquisition.

OTHER INCOME - NET

         Other income - net increased $.2 million to $.3 million in the third
         quarter of 1998 from $76,000 in the third quarter of 1997. The
         increase in income is primarily due to increased interest income as
         the result of excess cash received from the Acquisition.

INCOME TAX (BENEFIT) PROVISION

         The provision for income taxes decreased to a benefit of $.6 million
         in the third quarter of 1998 from a provision of $1.0 million in the
         second quarter of 1996. This decrease is primarily due to the decrease
         in taxable income from $2.5 million in 1997 to a loss of $1.9 million
         in the third quarter of 1998.

NET INCOME (LOSS)

         Net loss for the third quarter of 1998 was $1.3 million compared to
         net income of $1.5 million for the third quarter of 1997. This
         decrease was primarily due to the decrease in net sales as discussed
         above as well as increased depreciation and amortization expenses
         resulting from the Acquisition.

NINE MONTHS ENDED SEPTEMBER 30, 1998
COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 1997

GENERAL

         The condensed financial statements included herein for the periods
         prior to March 31, 1998, represent the Predecessor's results of
         operations and cash flows prior to the Acquisition and consequently,
         are stated on the Predecessor's historical cost basis. The condensed
         financial statements as of September 30, 1998, and for the nine months
         then ended, reflect the adjustments which were made to record the
         Acquisition. Accordingly, the financial statements of the Predecessor
         for the periods prior to March 31, 1998 are not comparable in all
         material respects with the financial statements subsequent to the
         Acquisition date. The most significant differences relate to amounts
         recorded for property, plant and equipment, goodwill, and debt which
         resulted in increased cost of sales, amortization, depreciation and
         interest expense in the nine months ended September 30, 1998 and will
         result in such increases in future periods.

NET SALES

         Net sales decreased by approximately $4.3 million in the first nine
         months of 1998, or 9.3 percent, to $42.4 million from $46.7 million in
         the first nine months of 1997. This decrease is due principally to a
         decrease in selling prices in aluminum silicon metal markets coupled
         with lower sales volume. The



                                     -11-
<PAGE>   14



         lower sales volume resulted from lower production volume. Production
         in the first nine months of 1998 was 27.134 metric tons, compared with
         28.238 metric tons produced in the same period in 1997.

GROSS PROFIT

         Gross profit decreased by $4.3 million, or 44.2 percent, to $5.5
         million in the first nine months of 1998 as compared to $9.8 million
         in the first nine months of 1997. At the same time, the gross profit
         margin decreased to 12.9 percent from 21.0 percent. These decreases
         were principally due to decreased selling prices in secondary aluminum
         silicon metal markets coupled with higher depreciation and
         amortization expenses resulting from the Acquisition.

SELLING, GENERAL AND ADMINISTRATIVE

         Selling, general and administrative expenses increased $3.2 million to
         $5.3 million in the first nine months of 1998 as compared to $2.1
         million in the first nine months of 1997. The increase is due to a
         bonus paid to management related to the exercise of options of $1.5
         million during the quarter ended March 31, 1998. In addition, the
         Company recognized compensation expense of $.9 million related to the
         exercise of stock options in the first quarter of 1998. The difference
         was further impacted by increases in management fees and compensation
         expense related to the Acquisition.

OPERATING INCOME

         As a result of the above comments, income from operations decreased
         $7.5 million to $.2 million in the first nine months of 1998 from $7.7
         million in the first nine months of 1997. At the same time, the
         operating margin decreased to .5 percent from 16.5 percent for the
         same period last year. Excluding the bonus costs discussed above
         recorded in the first quarter of 1998, income from operations
         decreased $6.0 million, or 77.9 percent, to $1.7 million in the first
         nine months of 1998 from $7.7 million in the first nine months of
         1997, while the operating margin decreased to 4 percent from 16.5
         percent for the same period last year.

INTEREST EXPENSE

         Interest expense increased $2.9 million to $4.2 million for the first
         nine months of 1998 from $1.3 in the first nine months of 1997. The
         increase resulted form substantially higher debt levels beginning in
         the second quarter of 1998 associated with the Acquisition.

OTHER INCOME - NET

         Other income - net increased $.8 million to $.9 million in the first
         nine months of 1998 from $.1 million in the first nine months of 1997
         due to increased benefits associated with the state of Alabama's
         Mercedes Act which allows the Company to recognize the state taxes
         withheld from employees as income coupled with higher interest income.
         The interest was earned on excess cash balances resulting from the
         Acquisition. This increased benefit resulted from state tax
         withholdings recognized in the period for compensation related to
         stock options exercised by certain managers in connection with the
         Acquisition.



                                     -12-
<PAGE>   15



INCOME TAX (BENEFIT) PROVISION

         The provision for income taxes decreased to a benefit of $.7 million
         in the first nine months of 1998 from a provision of $2.4 million in
         the first nine months of 1997. This decrease was primarily due to the
         decrease in taxable income from $6.5 million in 1997 to a loss of $3.0
         million in 1998.

NET INCOME (LOSS)

         Net loss for the first nine months of 1998 was $3.1 million compared
         to net income of $4.1 million for the first nine months of 1997. This
         decrease was primarily due to the decrease in net sales as discussed
         above as well as increased depreciation and amortization expenses
         resulting from the Acquisition.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's primary sources of liquidity are cash flow from
         operations, borrowings under its secured credit facility and a portion
         of the net proceeds from the offering of its 9 5/8% Senior Notes due
         2006 (the "Notes"). The Company's principal uses of liquidity are to
         fund operations, meet debt service retirements and finance the
         Company's planned capital expenditures, including the construction of
         a fourth smelting furnace.

         The Company's cash flows from its operations are influenced by selling
         prices of its products and raw materials costs, and are subject to
         moderate fluctuation due to market supply factors driven by imports.
         The Company's silicon metal business experiences price fluctuations
         principally due to the competitive nature of one of its markets, the
         secondary aluminum market. Historically, the Company's microsilica
         business has been affected the developing nature of the markets for
         this product. Average transaction selling prices for the Company's
         microsilica in the third quarter of 1998 were slightly below the
         average transaction selling princes at the end of the third quarter of
         1997.

         Cash and cash equivalents at September 30, 1998 increased
         significantly from December 31, 1997, to $19.0 million from $0.6
         million. Approximately $17.0 million of this increase is related to
         excess borrowings as of the Acquisition date. These funds will be used
         by the Company to fund part of the construction cost of a fourth
         smelting furnace. The remaining increase in cash results from normal
         operations of the Company coupled with the timing of payment of a
         recurring liability of the Company.

         Depreciation and amortization for the third quarter of 1998 totaled
         $1.5 million compared to $.5 million in the same quarter last year.
         The increase primarily results from a significant increase in
         depreciation which relates to the step-up of assets associated with
         the Acquisition. In addition, amortization expense increased
         significantly due to the amortization of the goodwill recorded as a
         result of the Acquisition as well as debt issuance costs also related
         to the Acquisition.

         For the nine months ended September 30, 1998 and September 30, 1997,
         net cash provided by operating activities was $4.4 million and $3.5
         million, respectively. This increase resulted primarily from an
         increase in noncash expenses and collection of a large receivable
         offset by reduced net income. Net cash used in investing activities
         increased to $3.5 million for the nine months ended September 30, 1998
         from $1.5 million for the nine months ended September 30, 1997. This
         increase was the result of higher capital spending. Net cash provided
         by financing activities was $7,000 for the nine months ended September
         30, 1998 as compared to net cash used in financing activities of $2.0
         million for the nine months ended September 30, 1997. This change was
         principally a result of no significant financing activity in 1998.




                                      -13-
<PAGE>   16
         For the three months ended September 30, 1998 and September 30, 1997,
         net cash provided by operating activities was $32,000 and $1.2
         million, respectively. This decrease resulted primarily from a
         significant decrease in net income. Net cash used in investing
         activities increased to $1.1 million for the three months ended
         September 30, 1998 from $.3 million for the three months ended
         September 30, 1997. This increase was the result of higher capital
         spending. Net cash used in financing activities was $16,000 for the
         three months ended September 30, 1998 as compared to $1.1 million for
         the three months ended September 30, 1997. This change was principally
         a result of no required principal payments during the quarter ended
         September 30, 1998.

         In connection with the Acquisition, the Company replaced its existing
         credit facility with a new credit facility (the "Credit Facility")
         providing availability for revolving borrowings and letters of credit
         in an aggregate principal amount of up to $15.0 million (of which $6.1
         million is reserved for support of a letter of credit issued in
         connection with the industrial revenue bond financing of the Company).
         As of September 30, 1998, the Company had $15.0 million of
         availability under the Credit Facility (as such availability is
         reduced by the $6.1 million letter of credit thereunder).

         Ongoing interest payments on the 9 5/8% Senior Notes due 2006 (the
         "Notes") represent significant liquidity requirements for the Company.
         With respect to the $75.0 million borrowed under the Notes, the
         Company will be required to make semi-annual interest payments of
         approximately $3.6 million over the life of the Notes.

         With respect to ongoing capital spending, the Company expects to spend
         approximately $3.0 million to $4.0 million annually to properly
         maintain its furnaces and other production facilities. In addition,
         the Company intends to add a fourth smelting furnace over the next two
         years from proceeds of the Notes together with internally generated
         cash flow. The Company estimates that construction of the furnace will
         cost a total of approximately $25.0 million.

         Moreover, the agreement governing the Credit Facility (the " Credit
         Agreement") imposes restrictions on the Company's ability to make
         capital expenditures and both the Credit Agreement and the indenture
         governing the Notes ("the Indenture") limit the Company's ability to
         incur additional indebtedness. Such restrictions, together with the
         highly leveraged nature of the Company, could limit the Company's
         ability to respond to market conditions, to meet its capital spending
         program, to provide for unanticipated capital investments or to take
         advantage of business opportunities. The covenants contained in the
         Credit Agreements also, among other things, restrict the ability of
         the Company and its subsidiaries to dispose of assets, incur guarantee
         obligations, repay the Notes, pay dividends, create liens on assets,
         enter into sale and leaseback transactions, make investments, loans or
         advances, make acquisitions, engage in acquisitions or consolidations,
         make capital expenditures or engage in certain transactions with
         affiliates, and otherwise restrict corporate activities. The covenants
         contained in the Indentures governing the Notes also impose
         restrictions on the operation of the Company's business. During the
         quarter ended September 30, 1998, the Company reached agreement with
         BankAmerica to amend its' Minimum Net Worth covenant. As a result of
         the amendment, the Company is in compliance with all loan covenants as
         of November 9, 1998.

YEAR 2000

         The Company uses several application programs written over many years
         using two-digit year fields to define the applicable year, rather than
         four-digit year fields. Such programs may recognize a date using "00"
         as the year 1900 rather than the Year 2000. This misinterpretation of
         the year could result in an incorrect computation, a computer
         malfunction, or a computer shutdown.



                                     -14-
<PAGE>   17



         The Company has identified the systems that could be affected by the
         Year-2000 issue and has developed a plan to resolve the issue. The
         plan contemplates, among other things, the replacement or modification
         of certain data processing systems. Management has estimated that the
         costs associated with the implementation of the plan to be
         approximately $50,000 although no assurances can be given in this
         regard.

         The Company has also begun to review its top suppliers and customers
         to determine whether they have similar Year-2000 issues and, if so,
         when they will become Year-2000 compliant. This will allow the Company
         to determine whether the suppliers' and customers' Year-2000 problems
         will impede their ability to provide goods and services to the
         Company. An initial review has indicated that all of the Company's
         major suppliers and customers appear to be in the progress of
         resolving their Year-2000 issues and that they do not foresee any
         material problems.

         If the Company cannot successfully and timely resolve its Year-2000
         issues, its business, results of operations and financial condition
         could be materially adversely effected. The Company has not developed
         a contingency plan in the event of a Year-2000 problem. However, based
         upon the results of the Company's internal review, it does not believe
         a contingency plan is necessary. The Company will, however, continue
         to evaluate the need for a contingency plan is necessary. The Company
         will, however, continue to evaluate the need for a contingency plan.

FORWARD LOOKING STATEMENTS

         Certain of the matters discussed in the preceding pages, particularly
         regarding anticipating future financial performance, business
         prospects, growth and operating strategies, the effects of the
         Acquisition on the Company and similar matters, and those preceded by,
         followed by or that otherwise include the words "may," "would,"
         "could," "will," "believes," "expects," "anticipates, plans, intends,
         estimates, or similar expressions or variation thereof constitute
         "forward-looking statements" within the meaning of Section 27A of the
         Securities Act of 1933, as amended. For those statements, the Company
         claims the protection of the safe harbor for forward-looking
         statements contained in the Private Securities Litigation Reform Act
         of 1995. Forward-looking statements involve a number of risks and
         uncertainties. The following important facts, in addition to those
         discussed elsewhere in this document, may affect the future results of
         the Company and could cause those results to differ materially from
         those expressed in the forward-looking statements: the Company's
         significant leverage and debt service requirements; restrictive
         covenants in the Company's debt agreements; the loss of business from
         a key customer; the Company's dependence on its supply of electrical
         power; increasing levels of competition in the Company's industry; the
         maintenance of effective silicon metal anti-dumping legislation;
         changes in the demand for, and the pricing of, silicon metal; the
         Company's retention of key personnel; changes in the price of silicon
         metal; the inability of the Company, or its major customer or
         suppliers, to resolve the Year-2000 issue in a manner that does not
         have a material adverse effect on the business, operations or revenues
         of the Company; changes in accounting policies and practices; and
         other risks identified from time to time in the Company's SEC reports.



                                     -15-
<PAGE>   18


                          PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

Not applicable

ITEM 2.  CHANGES IN SECURITIES.

Not applicable

ITEM 3.  DEFAULTS UPON SENIOR NOTES.

Not applicable

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

Not applicable

ITEM 5.  OTHER INFORMATION.

Not applicable

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)      Exhibits

         27 Financial Data Schedule (for SEC use only)

(b)      Reports on Form 8-K

         Not applicable

                                   SIGNATURE

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


                                 SIMCALA, Inc.
----------------------------------------------------------

                                       (Registrant)

<TABLE>
<S>                                       <C>
Date   November 13, 1998                     /s/ R. Myles Cowan
     ---------------------------           -------------------------------------------
                                                                        R. Myles Cowan
                                            Vice President and Chief Financial Officer
                                          (Principal Accounting and Financial Officer)
</TABLE>



                                     -16-