<PAGE>   1

                                    FORM 10-Q
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                Quarterly Report Pursuant to Section 13 or 15 (d)
                     of the Securities Exchange Act of 1934


For the three month period ended June 30, 1999 Commission File Number: 333-04254
                                                                       ---------



                              BAR TECHNOLOGIES INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)




            DELAWARE                                        13-3753384
-------------------------------------------      -------------------------------
 (State or other jurisdiction                              (IRS Employer
of incorporation or organization)                        Identification No.)



            3770 EMBASSY PARKWAY
             AKRON, OHIO  44333                          (330) 670-3000
-------------------------------------------      -------------------------------
   (Address of principal executive offices)      (Registrant's telephone number)




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.
                                        X   Yes       No
                                      -----      -----




Number of shares outstanding of common stock as of June 30, 1999:



         CLASS A COMMON STOCK, $0.001 PAR VALUE        204,458 SHARES

         CLASS B COMMON STOCK, $0.001 PAR VALUE        536,829 SHARES

         CLASS C COMMON STOCK, $0.001 PAR VALUE        536,865 SHARES



                                       1
<PAGE>   2


                              BAR TECHNOLOGIES INC.

                                TABLE OF CONTENTS



                         PART I - FINANCIAL INFORMATION
                         ------------------------------

<TABLE>
<CAPTION>
Item 1.       Financial Statements

<S>                                                                                               <C>
              Consolidated Statements of Operations (Unaudited) for the three and six month
              periods ended June 30, 1999 and July 4, 1998.............................................3

              Consolidated Balance Sheets as of June 30, 1999 (Unaudited) and
              January 2, 1999........................................................................4-5

              Consolidated Statements of Stockholders' Equity (Deficit) for the year ended January 2,
              1999 and the six month period ended June 30, 1999 (Unaudited)............................6

              Consolidated Statements of Cash Flows (Unaudited) for the six month
              periods ended June 30, 1999 and July 4, 1998.............................................7

              Notes to Consolidated Financial Statements............................................8-14

Item 2.       Management's Discussion and Analysis of
              Financial Condition and Results of Operations........................................14-19



                           PART II - OTHER INFORMATION
                           ---------------------------

Item 1.       Legal Proceedings.......................................................................20

Item 2.       Changes in Securities...................................................................20

Item 3.       Defaults Upon Senior Securities.........................................................20

Item 4.       Submission of Matters to a Vote of Security Holders.....................................20

Item 5.       Other Information.......................................................................20

Item 6.       Exhibits and Reports on Form 8-K........................................................20

              Signatures..............................................................................21
</TABLE>






                                       2
<PAGE>   3




                     Bar Technologies Inc. and Subsidiaries
                      Consolidated Statements of Operations
                    For the Three and Six Month Periods Ended
                         June 30, 1999 and July 4, 1998
                (In thousands of dollars, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                     Three Months Ended                  Six Months Ended
                                                 ---------------------------         ---------------------------
                                                 June 30,           July 4,          June 30,           July 4,
                                                   1999              1998              1999               1998
                                                 ---------         ---------         ---------         ---------
<S>                                              <C>               <C>               <C>               <C>
Net sales                                        $  76,592         $  79,946         $ 136,369         $ 161,589

Cost of sales                                       75,009            72,000           131,778           150,986

Depreciation and amortization                        1,683             1,491             2,930             2,918

Selling, general and administrative
  expenses                                           3,484             5,020             6,407             9,920
                                                 ---------         ---------         ---------         ---------

   Income (loss) from operations                    (3,584)            1,435            (4,746)           (2,235)

Interest expense, net                                6,590             7,013            12,635            13,187

Other expense (income)                                 492              (191)              454              (268)
                                                 ---------         ---------         ---------         ---------

   Loss before provision for income taxes          (10,666)           (5,387)          (17,835)          (15,154)

Provision (benefit) for income taxes                   283              (104)              376                59
                                                 ---------         ---------         ---------         ---------

   Net loss                                        (10,949)           (5,283)          (18,211)          (15,213)

Preferred  stock dividends                              96                96               192               192
                                                 ---------         ---------         ---------         ---------

Net loss applicable to common shares             $ (11,045)        $  (5,379)        $ (18,403)        $ (15,405)
                                                 =========         =========         =========         =========

Net loss per share - basic and diluted           $   (8.64)        $   (4.21)        $  (14.40)        $  (12.05)
                                                 =========         =========         =========         =========
</TABLE>




The accompanying notes are an integral part of these statements.


                                       3
<PAGE>   4

                     Bar Technologies Inc. and Subsidiaries
                           Consolidated Balance Sheets
                     As of June 30, 1999 and January 2, 1999
                            (In thousands of dollars)


<TABLE>
<CAPTION>
                                                                  June 30, 1999    January 2, 1999
                                                                  -------------    ---------------
ASSETS                                                             (Unaudited)

<S>                                                                 <C>               <C>
Current assets:
    Cash and cash equivalents                                       $   2,883         $   2,188
    Accounts receivable, less allowances of $1,111 and
          $1,104, respectively                                         29,163            26,152
    Amounts due from affiliates                                        12,863             1,935
    Inventories                                                        73,048            74,168
    Other current assets                                                3,024             2,676
                                                                    ---------         ---------

       Total current assets                                           120,981           107,119

Property, plant and equipment:
    Land and improvements                                               2,629             2,580
    Buildings and improvements                                         20,042            19,944
    Machinery and equipment                                            78,702            72,162
    Construction in-progress                                            6,659             8,396
                                                                    ---------         ---------

       Total property, plant and equipment                            108,032           103,082

    Accumulated depreciation                                          (15,812)          (12,983)
                                                                    ---------         ---------

       Net property, plant and equipment                               92,220            90,099

    Goodwill, net of accumulated amortization of $1,053 and
         $891, respectively                                            11,807            11,969

    Restricted debt service fund                                        1,551             1,551

    Other assets                                                       10,834            11,763
                                                                    ---------         ---------


       Total assets                                                 $ 237,393         $ 222,501
                                                                    =========         =========
</TABLE>




The accompanying notes are an integral part of these statements.


                                       4
<PAGE>   5

                     Bar Technologies Inc. and Subsidiaries
                           Consolidated Balance Sheets
                     As of June 30, 1999 and January 2, 1999
                (In thousands of dollars, except per share data)

<TABLE>
<CAPTION>
                                                              June 30, 1999    January 2, 1999
                                                              -------------    ---------------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                 (Unaudited)
<S>                                                             <C>               <C>
  Current liabilities:
     Accounts payable                                           $  42,818         $  44,791
     Amounts due to affiliates                                     63,121            16,401
     Accrued interest                                               4,474             4,885
     Other accrued liabilities                                     16,008            19,687
     Current maturities of long-term debt                           3,614             3,805
     Revolving credit facility                                     69,372            79,000
                                                                ---------         ---------
       Total current liabilities                                  199,407           168,569

  Long-term debt                                                  128,229           128,962
  Deferred income taxes                                             5,031             5,001
  Amounts due to affiliates, long-term                                221               531
  Other long-term liabilities                                       8,392             5,377
                                                                ---------         ---------
       Total liabilities                                          341,280           308,440

  Redeemable stock:
     Series A preferred stock $0.001 par value
          Authorized 1,100 shares
          Issued and outstanding, 1,100 shares                      5,500             5,500

Commitments and contingencies

  Stockholders' equity (deficit):
     Series B preferred stock $0.001 par value
          Authorized, issued and outstanding, 1 share                  --                --
     Class A common stock, $0.001 par value
          Authorized, 1,000,000 shares
          Issued and outstanding, 204,458 shares                       --                --
     Class B common stock, $0.001 par value
          Authorized, 600,000 shares
          Issued and outstanding, 536,829 shares                        1                 1
     Class C common stock, non-voting, $0.001 par value,
          Authorized, 600,000 shares
          Issued and outstanding, 536,865 shares                        1                 1
     Additional paid-in capital                                    63,055            63,055
     Warrants outstanding                                           5,119             5,119
     Accumulated deficit                                         (176,827)         (158,424)
     Accumulated other comprehensive loss                            (736)           (1,191)
                                                                ---------         ---------
  Total stockholders' equity (deficit)                           (109,387)          (91,439)
                                                                ---------         ---------

Total liabilities and stockholders' equity (deficit)            $ 237,393         $ 222,501
                                                                =========         =========
</TABLE>




The accompanying notes are an integral part of these statements.


                                       5
<PAGE>   6
<TABLE>
<CAPTION>


                                                  Bar Technologies Inc. and Subsidiaries
                                         Consolidated Statements of Stockholders' Equity (Deficit)
                          For the Year Ended January 2, 1999 and Six Month Period Ended June 30, 1999 (Unaudited)
                                                         (In thousands of dollars)




                                                                                                     Additional
                                               Class A             Class B          Class C           Paid-in         Warrants
                                            Common Stock         Common Stock     Common Stock        Capital        Outstanding
                                          ---------------       --------------  ---------------    --------------   ------------
<S>                                       <C>                    <C>            <C>                    <C>             <C>
Balance, January 3, 1998                  $           -          $          1   $           1          $ 63,055        $ 5,119
  Net loss
  Preferred stock dividend
  Other comprehensive
    income - foreign currency
     translation adjustments
                                          ---------------       --------------  ---------------    --------------   ------------
Balance, January 2, 1999                              -                     1               1            63,055          5,119

  Net loss
  Preferred stock dividend
  Other comprehensive
    income - foreign currency
     translation adjustments
                                          ---------------       --------------  ---------------    --------------   ------------
Balance, June 30, 1999                    $           -          $          1   $           1          $ 63,055        $ 5,119
                                          ===============       ==============  ===============    ==============   ============

<CAPTION>

                                                              Accumulated
                                                                Other                                     Total
                                              Accumulated     Comprehensive       Comprehensive       Stockholders'
                                                Deficit       Income (Loss)       Income (Loss)      Equity (Deficit)
                                            -------------   -----------------   -----------------   ----------------
<S>                                         <C>                <C>                 <C>                 <C>
Balance, January 3, 1998                    $    (116,061)     $      (494)                            $   (48,379)
  Net loss                                        (41,978)                         $   (41,978)            (41,978)
  Preferred stock dividend                           (385)                                                    (385)
  Other comprehensive
    income - foreign currency
     translation adjustments                                          (697)               (697)               (697)
                                            --------------  -----------------   -----------------   ----------------
Balance, January 2, 1999                         (158,424)          (1,191)        $   (42,675)            (91,439)
                                                                                =================
  Net loss                                        (18,211)                         $   (18,211)            (18,211)
  Preferred stock dividend                           (192)                                                    (192)
  Other comprehensive
    income - foreign currency
     translation adjustments                                           455                 455                 455
                                            --------------  -----------------   -----------------   ----------------
Balance, June 30, 1999                       $   (176,827)     $      (736)        $   (17,756)        $  (109,387)
                                            ==============  =================   =================   ================

</TABLE>



The accompanying notes are an integral part of these statements.





                                        6





<PAGE>   7



                     Bar Technologies Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows
         For the Six Month Periods Ended June 30, 1999 and July 4, 1998
                            (In thousands of dollars)

<TABLE>
<CAPTION>
                                                                         Six Months        Six Months
                                                                           Ended              Ended
                                                                          June 30,           July 4,
                                                                           1999               1998
                                                                       ---------------   -------------
                                                                         (Unaudited)      (Unaudited)
<S>                                                                       <C>              <C>
Cash flows from operating activities
     Net loss                                                             $(18,211)        $(15,213)
     Adjustments to reconcile net cash provided by
        (used in) operating activities:
        Depreciation and amortization                                        2,930            2,918
        Amortization of original issue discount                                772              673
        Amortization of deferred financing cost                              1,343            1,224
        Increase in accounts receivable                                     (4,590)          (8,066)
        (Increase) decrease in inventory                                     1,442           (2,617)
        Increase in other current assets                                      (375)            (471)
        Increase (decrease) in accounts payable                             (1,037)           1,908
        Increase in due to affiliates, net                                  35,482              ---
        Increase (decrease) in other current liabilities                    (3,856)           5,916
        Other                                                                3,112             (220)
                                                                          --------         --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                         17,012          (13,948)
                                                                          --------         --------

Cash flows from investing activities
         Capital expenditures                                               (4,689)          (8,585)
                                                                          --------         --------
NET CASH USED BY INVESTING ACTIVITIES                                       (4,689)          (8,585)
                                                                          --------         --------

Cash flows from financing activities
          Net receipts (payments) under revolving credit agreement          (9,628)          25,350
          Repayments of debt                                                (1,696)          (1,022)
          Preferred stock dividends                                           (192)            (192)
                                                                          --------         --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                        (11,516)          24,136
                                                                          --------         --------

Effect of exchange rate changes on cash                                       (112)            (276)

NET INCREASE IN CASH AND CASH EQUIVALENTS                                      695            1,327

Cash and cash equivalents-beginning of  period                               2,188            3,391
                                                                          --------         --------

Cash and cash equivalents-end of period                                   $  2,883         $  4,718
                                                                          ========         ========

SUPPLEMENTAL CASH FLOW INFORMATION:

  Cash paid for interest                                                  $ 11,140         $  9,086
                                                                          ========         ========

  Cash paid for income taxes, net                                         $    156         $    165
                                                                          ========         ========
</TABLE>


The accompanying notes are an integral part of these statements.


                                       7
<PAGE>   8

                     BAR TECHNOLOGIES INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
               (In thousands of dollars, except share information)


1.    NATURE OF OPERATIONS AND CONCENTRATION OF RISK

Bar Technologies Inc. a Delaware corporation ("Bar Tech" or, the "Company"),
manufactures and markets special bar quality ("SBQ") steel bar products. SBQ
steel bar products are high quality hot rolled and cold finished carbon and
alloy steel bars used primarily in critical applications in the automotive and
industrial equipment industries.

The Company's principal owners, Blackstone Capital Partners II Merchant Banking
Fund L. P. and its affiliates (together, "Blackstone") and Veritas Capital
Management, L.L.C. ("Veritas"), serving as general partners for limited
partnerships, acquired Republic Engineered Steels, Inc. ("Republic") in
September 1998 with the intent to combine the Company and Republic. In March
1999, Blackstone and Veritas announced their intention to combine the
steelmaking and bar producing assets of the USS/Kobe Steel Company ("USS/Kobe")
with those of Bar Tech and Republic (the "Combination"). The Combination was
completed August 13, 1999.

During fiscal 1999, the Company and Republic have shared common management and
continue to perform certain sales, marketing and administrative functions on a
combined basis. These functions include marketing both companies' steel products
jointly under the combined brand name "Republic Technologies International"
using a single sales force. The costs of joint functions have been borne ratably
by the Company and Republic based upon relative sales volumes achieved. The
Company also participates in an inventory purchasing arrangement with Republic.
Under the terms of this arrangement, Republic purchases materials on behalf of
both companies and bills the Company for its respective purchases, plus an
administrative fee.

As of January 4, 1999, Republic Technologies International Marketing, LLC
("Marketing JV") was formed to formalize the relationship between the Company
and Republic to jointly market, advertise, promote and sell both companies'
steel products to each company's existing and potential customers. The Marketing
JV is owned by the Company and Republic in equal proportions and will fill
purchase orders for steel products by purchasing such steel products from the
Company and/or Republic, as appropriate for a particular order, and allocating
such purchase orders to the Company or Republic and receiving a sales commission
designed to cover the Marketing JV's operating expenses. The Company and
Republic are reimbursed for expenses they incur on behalf of the Marketing JV,
including compensation costs of employees of the Company and Republic who
perform sales and marketing functions for the Marketing JV.

On August 13, 1999, management completed the Combination by combining USS/Kobe's
steelmaking and bar producing assets with those of the Company and Republic. The
combined company was named Republic Technologies International, LLC ("RTI").
Effective with the Combination, the Company and Republic terminated the limited
liability company agreement of the Marketing JV. (See Note 10.)

Since its formation, the Company has incurred substantial losses as a result of
the ongoing start-up activities of its facilities and its general and
administrative expenses. Any substantial delay in achieving or a failure to
bring the facilities up to commercial volumes and productivity levels, or to
sell its products in its target markets could have a material adverse effect on
the Company's financial condition and results of operations. A substantial delay
in integrating the operations of the Company, Republic and USS/Kobe could have a
material adverse effect on the Company's financial condition and results of
operations. In the event of the above, the Company may need to borrow additional
funds under its revolving credit agreement or, to the extent that the funds are
not available thereunder, to obtain additional financing to meet its cash flow
requirements. The Company is highly leveraged. Restrictive covenants included in
the indenture and other debt obligations may have the effect of limiting the
Company's ability to incur additional indebtedness, sell assets, or acquire
other entities and may otherwise limit the operational and financial flexibility
of the Company.


                                       8
<PAGE>   9
 The Company and Republic presently perform certain functions on a combined
basis and intend to further integrate operations with USS/Kobe in 1999
subsequent to the Combination. Following the Combination, the capital resources
and liquidity of the Company, Republic and USS/Kobe will be managed on a
combined basis. Management has prepared fiscal 1999 financial and operational
plans on a combined basis for the companies. Based on these plans, management
believes that the aggregate of cash flows from combined operations and available
funds under its new and existing credit agreements will be sufficient in 1999 to
enable the companies to meet their debt service requirements when due and to
fund their capital expenditures, working capital and general corporate
requirements, although there can be no assurances with respect thereto.

The Company operates in two reportable segments: hot-rolled and cold-finished.
The Company manages the reportable segments as separate strategic business
units. Differences between the segments include manufacturing techniques and
equipment, competition, and end-users.

2.    BASIS OF PRESENTATION

The consolidated financial statements and other financial information included
herein have been prepared by Bar Technologies Inc. ("Bar Tech") and are
unaudited. Certain information and footnote disclosures normally prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to the rules and regulations of the Securities and Exchange
Commission ("SEC"). Although management believes that all adjustments, including
normal recurring adjustments, necessary for a fair presentation have been made,
interim periods are not necessarily indicative of the results of operations for
a full year. As such, these financial statements should be read in conjunction
with the audited financial statements and notes thereto for the fiscal year
ended January 2, 1999, included in the Company's Form 10-K, filed with the SEC.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

The consolidated financial statements include the accounts of Bar Tech and its
wholly owned subsidiary, Bliss & Laughlin Industries Inc. ("BLI"). All
significant intercompany accounts and transactions have been eliminated.

Certain previously reported amounts have been reclassified to conform to the
current presentation.

3.    FISCAL YEAR CHANGE

Effective with its reporting for fiscal 1999, the Company changed its fiscal
year from a 4/4/5 week fiscal quarter basis ending the Saturday closest to
December 31 to a calendar quarter basis with the fiscal year ending on December
31. Accordingly, under the new fiscal year calendar, the Company's quarters will
each be comprised of three calendar months ending March 31, June 30, September
30 and December 31. Previously, each of the Company's quarters were comprised of
thirteen weeks.

4.     NET LOSS PER SHARE

Basic earnings per share are computed by dividing income available to common
shareholders by the weighted-average number of common shares outstanding for the
period. Diluted earnings per share reflect the potential dilution that could
occur if common stock equivalents (i.e., warrants and stock options) were
exercised and then shared in the earnings of the Company. For the three and six
month periods ended June 30, 1999 and July 4, 1998, the reported basic and
diluted earnings per share were the same; however, securities totaling 91,609
and 137,416, respectively, were excluded from the diluted earnings per share
calculations due to their antidilutive effect. The weighted average number of
common shares used in the calculation of net loss per common share was 1,278,152
for both the three and six month periods ended June 30, 1999 and July 4, 1998.


                                       9
<PAGE>   10


5.    INVENTORIES

The components of inventory were as follows:

<TABLE>
<CAPTION>
                                                                               (in thousands)
                                                              June 30, 1999                     January 2, 1999
                                                         -------------------------          -------------------------
<S>                                                      <C>                                <C>
Raw materials                                            $                9,808             $            13,965
Work-in-process                                                          21,796                          21,812
Finished goods                                                           41,444                          38,391
                                                         -------------------------          -------------------------
Total                                                    $               73,048             $            74,168
                                                         =========================          =========================
</TABLE>

6.    OTHER ASSETS

Other assets consisted of the following:

<TABLE>
<CAPTION>
                                                                               (in thousands)
                                                              June 30, 1999                     January 2, 1999
                                                         -------------------------          -------------------------
<S>                                                      <C>                                 <C>
Deferred financing costs, net of accumulated
  amortization of $8,513 and $7,170                      $                 5,214             $            6,557
Deferred income taxes                                                      1,214                          1,214
Other                                                                      4,406                          3,992
                                                         -------------------------          -------------------------
Total                                                    $                10,834             $           11,763
                                                         =========================          =========================
</TABLE>


7.    DEBT

The Company's 13 1/2% Senior Notes due April 1, 2001,consisting of $91.6 million
in aggregate principal amount at June 30, 1999, (the "Existing Senior Notes")
are fully and unconditionally guaranteed on a senior basis, jointly and
severally, by the Company's wholly-owned subsidiary, BLI and its wholly-owned
subsidiary, CDSC. The subsidiary guarantors comprise all of the direct and
indirect subsidiaries of the Company.

The following is the condensed information of the subsidiary guarantors on a
combined basis. The separate financial statements and other disclosures
concerning the subsidiary guarantors are not presented because management does
not believe they would be material to investors. The following information is as
of and for the periods described below:

<TABLE>
<CAPTION>
                                                                               (in thousands)
                                                                 June 30,                          January 2,
AT THE PERIOD ENDED:                                               1999                               1999
                                                         -------------------------          -------------------------
<S>                                                      <C>                                <C>
Current assets                                           $           54,980                 $           48,465
Noncurrent assets                                                    37,531                             37,745
Current liabilities                                                  39,911                             33,152
Noncurrent liabilities                                               14,261                             13,979
</TABLE>


<TABLE>
<CAPTION>
                                                                         (in thousands)
                                     Three Months              Three Months           Six Months           Six Months
                                     Ended June 30,            Ended July 4,         Ended June 30,        Ended July 4,
                                         1999                     1998                   1999                 1998
                                  ---------------------     -----------------     -----------------    -------------------
<S>                               <C>                       <C>                    <C>                  <C>
Net sales                         $          34,224         $       41,072         $         67,205     $       88,796
Gross profit                                  2,137                  5,276                    4,328             10,721
Operating income (loss)                        (782)                 2,181                     (820)             4,401
Net income (loss)                              (649)                 1,619                   (1,196)             3,225
</TABLE>



                                       10
<PAGE>   11

As a result of the Combination, the Company initiated a call to purchase any
and all of the Existing Senior Notes at a purchase price of 106.75% of their
principal amount, plus accrued and unpaid interest (the "Call"). The Call will
expire on September 13, 1999.

In connection with the Existing Senior Notes, warrants were issued which
entitled the holders thereof to acquire an aggregate of 91,609 shares of Class A
Common Stock. The warrants can be exercised at a price of $0.01 per share of
common stock on or after July 1, 1996 and after the occurrence of certain other
events. The warrants will become exercisable and are expected to remain
outstanding subsequent to the Combination and the warrants will expire on
April 1, 2001.

Concurrent with the Combination, RTI issued $425.0 million in aggregate
principal amount 13 3/4 % Senior Notes due 2009 (the "New Senior Notes") and
entered into a new revolving credit agreement that permits borrowings up to
$425.0 million which are secured by certain assets of RTI. The Call will be
funded by proceeds from the issuance of the New Senior Notes and a combined
equity investment in RTI of $155.0 million by Blackstone, Veritas, FirstEnergy
Corp., USX Corporation, Kobe Steel, Ltd. and certain other investors. (See Note
10 for further discussion of the Combination.)

The Company has a revolving credit agreement with a group of banks with The
Chase Manhattan Bank as agent which originally provided the Company with
borrowings in an aggregate principal amount of up to $90.0 million, of which
$5.4 million was in the form of letters of credit. This revolving credit
agreement was subsequently amended in September 1997 to provide for the addition
of a new revolving sub-facility ("Sub-Facility") and amended certain portions of
the original revolving credit agreement. The Sub-Facility component of the
amended agreement provided the Company with up to $15.0 million of additional
borrowing capacity based on a higher receivable and inventory advance rate than
in the revolving credit agreement.

On May 5, 1999, the Company further amended its revolving credit agreement
("Amended Agreement") in conjunction with the formation of Marketing JV (See
Note 9). The Amended Agreement provides for a reduction in the Company's
borrowing capacity at June 30, 1999 to $77.0 million, of which $5.3 million is
in the form of letters of credit. In addition, amounts available under the
Company's Sub-Facility were reduced to $2.0 million with this Amended Agreement.
By July 31, 1999, amounts available under the Amended Agreement were further
reduced to $71.5 million and amounts were no longer available under the
Company's Sub-Facility. The maturity date of the Amended Agreement remains April
2, 2000 and is secured by certain assets and stock of the Company.

Borrowings under the Amended Agreement bear interest at a rate per annum equal
to, at the Company's option, either a prime rate plus 2.0% or adjusted LIBOR
plus 3.0%, subject to upward adjustment in certain circumstances. Sub-Facility
borrowings bear interest at a rate per annum equal to, at the Company's option,
either a prime rate plus 3.5% or LIBOR plus 4.5%. Borrowings outstanding under
the Amended Agreement including the Sub-Facility were $69.4 million at June 30,
1999 and $79.0 million at January 2, 1999, respectively. Based on the applicable
borrowing base, the Company's borrowings under its Amended Agreement were $4.9
million in excess of its availability at June 30, 1999. The Company has
subsequently repaid their excess borrowings. Weighted-average interest rates on
borrowings under the Amended Agreement and the Sub-Facility were 8.56% and
11.25%, respectively at June 30, 1999 and 8.79% and 11.50%, respectively, at
January 2, 1999.

The Amended Agreement contains a number of covenants that, among other things,
require the Company to maintain a minimum consolidated interest coverage ratio.
As of June 30, 1999, the Company did not comply with the consolidated interest
coverage ratio covenant. The Company has received a waiver for this
noncompliance. Furthermore, total amounts outstanding under the Company's
Amended Agreement were repaid from proceeds obtained in the Combination on
August 13, 1999.


8.   SEGMENT INFORMATION

The Company operates in two reportable segments: hot-rolled and cold-finished.
The Company manages the reportable segments as separate strategic business
units. Differences between the segments include manufacturing techniques and
equipment, competition, and end-users. The Company measures segment performance
based on earnings before interest, taxes, depreciation and amortization
("EBITDA").


                                       11
<PAGE>   12


Hot-rolled accounts for intersegment sales at current market prices as if the
transaction had taken place with a third party.

<TABLE>
<CAPTION>
                                                          For the Three Months Ended June 30, 1999
                                                                       (in thousands)
                                      --------------------------------------------------------------------------------------
                                                                                             Inter
                                                         Cold-             Total            Segment
                                       Hot-Rolled       Finished          Segments        Eliminations      Consolidated
                                      -------------   -------------   -------------    ----------------    --------------
<S>                                   <C>               <C>             <C>              <C>                 <C>
Net sales                             $    47,631       $   34,224      $   81,855       $    (5,263)        $   76,592
Depreciation and amortization               1,143              540           1,683               ---              1,683
Segment profit (EBITDA)                    (2,905)             512          (2,393)              ---             (2,393)
Capital expenditures                        2,219              216           2,435               ---              2,435
</TABLE>

<TABLE>
<CAPTION>
                                                          For the Three Months Ended July 4, 1998
                                                                       (in thousands)
                                      --------------------------------------------------------------------------------------
                                                                                             Inter
                                                         Cold-             Total            Segment
                                       Hot-Rolled       Finished          Segments        Eliminations      Consolidated
                                      -------------   -------------   -------------    ----------------    --------------
<S>                                   <C>               <C>             <C>              <C>                 <C>
Net sales                             $    53,202       $   41,072      $   94,274       $   (14,328)        $   79,946
Depreciation and amortization                 850              641           1,491               ---              1,491
Segment profit (EBITDA)                       295            2,821           3,116               ---              3,116
Capital expenditures                        4,621              669           5,290               ---              5,290
</TABLE>

<TABLE>
<CAPTION>
                                                           For the Six Months Ended June 30, 1999
                                                                       (in thousands)
                                      --------------------------------------------------------------------------------------
                                                                                             Inter
                                                         Cold-             Total            Segment
                                       Hot-Rolled       Finished          Segments        Eliminations      Consolidated
                                      -------------   -------------   -------------    ----------------    --------------
<S>                                   <C>               <C>             <C>              <C>                 <C>
Net sales                             $    83,459       $   67,205      $  150,664       $   (14,295)        $  136,369
Depreciation and amortization               1,832            1,098           2,930               ---              2,930
Segment profit (EBITDA)                    (3,221)             951          (2,270)              ---             (2,270)
Segment assets                            163,802           88,344         252,146           (14,753)           237,393
Capital expenditures                        4,294              395           4,689               ---              4,689
</TABLE>

<TABLE>
<CAPTION>
                                                             For the Six Months Ended July 4, 1998
                                                                       (in thousands)
                                      --------------------------------------------------------------------------------------
                                                                                             Inter
                                                         Cold-             Total            Segment
                                       Hot-Rolled       Finished          Segments        Eliminations      Consolidated
                                      -------------   -------------   -------------    ----------------    --------------
<S>                                   <C>               <C>             <C>              <C>                 <C>
Net sales                             $   101,520       $   88,796      $  190,316       $   (28,727)        $  161,589
Depreciation and amortization               1,636            1,282           2,918               ---              2,918
Segment profit (EBITDA)                    (4,731)           5,682             951               ---                951
Segment assets                            151,799           95,572         247,371           (24,472)           222,899
Capital expenditures                        7,452            1,133           8,585               ---              8,585
</TABLE>

9.    RELATED PARTY TRANSACTIONS

Affiliates of Blackstone and Veritas provide certain management and financial
monitoring services to the Company pursuant to an agreement between the
respective parties for which the Company pays an annual advisory fee of $0.9
million plus reimbursement of certain out-of-pocket expenses.

At January 1, 1999, certain salaried employees of the Company became employees
of Republic. Under the terms of an employee leasing and overhead allocation
agreement, the Company and Republic share the costs of common expenses
including, but not limited to sales and marketing services, administrative
services, plant overhead and costs for certain common facilities. The Company's
allocation of these net costs, which was based on approximate



                                       12
<PAGE>   13

share of combined trade volumes, was $2.0 and $3.7 million for the three and
six month periods ended June 30, 1999, respectively, and is included in selling,
general and administrative expense.

The Company participates in an inventory purchasing arrangement with Republic.
Under the terms of this arrangement, Republic purchases materials on behalf of
both companies and bills the Company for its respective purchases plus an
administrative fee. During the three and six month periods ended June 30, 1999,
the Company purchased approximately $18.9 and $43.3 million, respectively, of
materials from Republic. A similar arrangement is in place with regard to
insurance. Republic purchased insurance coverage for the combined company for
which the costs are borne ratably by the Company and Republic based on their
respective share of coverage. The Company purchased $8.0 and $9.8 million of
billet and bar products, at market prices, from Republic during the three and
six month periods ended June 30, 1999, respectively.

As of January 4, 1999, Marketing JV was formed to formalize prior efforts of the
Company and Republic to jointly market, advertise, promote and sell both
companies' steel products to each company's existing and potential customers.
The Marketing JV is owned by the Company and Republic in equal proportions and
fills purchase orders for steel products by purchasing such steel products from
the Company and/or Republic, as appropriate for a particular order. The
Marketing JV allocates such purchase orders to the Company or Republic and
receives sales commission designed to cover the Marketing JV's operating
expenses. The Company and Republic are reimbursed for expenses they incur on
behalf of the Marketing JV, including compensation costs of employees of the
Company and Republic who perform sales and marketing functions for the Marketing
JV. Effective with the Combination, the Company and Republic terminated the
Marketing JV (see Note 10).

The following information is the result of the Company's transactions with its
affiliates as described above. The following information is as of and for the
periods described below:

<TABLE>
<CAPTION>
                                                                                       (in thousands)
AS OF:                                                                    June 30, 1999            January 2, 1999
                                                                        -------------------      --------------------
<S>                                                                     <C>                      <C>
Amounts due from affiliates:
  Republic Engineered Steels, Inc.                                      $            3,107       $           1,935
  Republic Technologies International Marketing, LLC                                 9,756                      --
                                                                        -------------------      --------------------
                                                                        $           12,863       $           1,935
                                                                        ===================      ====================
Amounts due to affiliates:
  Republic Engineered Steels, Inc.                                      $           57,906       $          15,526
  Blackstone Capital Partners II Merchant Banking Fund L.P.
    and its affiliates                                                               1,313                     875
  Republic Technologies International Marketing, LLC                                 3,902                      --
                                                                        -------------------      --------------------
                                                                        $           63,121       $          16,401
                                                                        ===================      ====================
Amounts due to affiliates, long-term:
  Republic Engineered Steels, Inc.                                      $              221       $             531
                                                                        -------------------      --------------------
                                                                        $              221       $             531
                                                                        ===================      ====================

FOR THE THREE MONTH PERIOD ENDED:                                          June 30, 1999             July 4, 1998
                                                                        -------------------      --------------------
Net sales to affiliates:
  Republic Engineered Steels, Inc.                                      $           13,463       $              --
  Republic Technologies International Marketing, LLC                                43,338                      --
                                                                        -------------------      --------------------
                                                                        $           56,801       $              --
                                                                        ===================      ====================

FOR THE SIX MONTH PERIOD ENDED:                                            June 30, 1999             July 4, 1998
                                                                        -------------------      --------------------
Net sales to affiliates:
  Republic Engineered Steels, Inc.                                      $           22,176       $              --
  Republic Technologies International Marketing, LLC                                47,485                      --
                                                                        -------------------      --------------------
                                                                        $           69,661       $              --
                                                                        ===================      ====================
</TABLE>


                                       13
<PAGE>   14

10.   SUBSEQUENT EVENT

On August 13, 1999, management of the Company completed the Combination of Bar
Tech, Republic and the steelmaking and bar producing assets of USS/Kobe. The
Combination was completed through a series of mergers, asset transfers, and
related steps as set forth in the Master Restructuring Agreement among the
Company, Republic and USS/Kobe and various of their affiliates. The newly formed
operating company was named Republic Technologies International, L.L.C.

As a result of the Combination, the Company initiated a call to purchase any and
all of the $91.6 million of Existing Senior Notes at a purchase price of 106.75%
of their principal amount, plus accrued and unpaid interest (the "Call"). The
Call will expire on September 13, 1999. Concurrent with the Combination, RTI
issued $425.0 million in aggregate principal amount New Senior Notes due 2009
and entered into a new revolving credit agreement that permits borrowings up to
$425.0 million and is secured by certain assets of RTI. The Call will be funded
by proceeds from the issuance of the New Senior Notes and a combined equity
investment of $155.0 million by Blackstone, Veritas, FirstEnergy Corp., USX
Corporation, Kobe Steel, Ltd. and certain other investors.

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

OVERVIEW
See Note 1 to the Consolidated Financial Statements for a description of the
Company's operations and a discussion of its relationship with Republic, the
Marketing JV and the Combination.

During fiscal 1999, the Company and Republic have shared common management and
continue to perform certain sales, marketing and administrative functions on a
combined basis. These functions include marketing both companies' steel products
jointly under the combined brand name "Republic Technologies International"
using a single sales force. The costs of joint functions have been borne ratably
by the Company and Republic based upon relative sales volumes achieved. The
Company also participates in an inventory purchasing arrangement with Republic.
Under the terms of this arrangement, Republic purchases materials on behalf of
both companies and bills the Company for its respective purchases, plus an
administrative fee.

The Company's strategy is to expand its role as a critical supplier to
automotive and original equipment manufacturers and their first tier suppliers.
To successfully penetrate these markets, producers must meet pre-qualification
requirements for certain potential customers. Certain customers in the higher
quality bar segments require their suppliers to be certified to third party
quality systems such as QS-9000 and ISO 9000 before commencing new supplier
trials. The Company obtained QS-9000 certification for its Lackawanna hot rolled
steelmaking operations in August 1998 and is in the process of obtaining such
certification for its Johnstown hot rolled facility with completion scheduled
for third quarter 1999. The Company's Hamilton, Ontario and Harvey, Illinois
cold finishing plants also received QS-9000 certification in 1998. Certification
of the Company's facility in Cartersville, Georgia has begun with expected
completion in the first quarter 2000. As a result of these qualifications, the
Company has accelerated the shift of its product mix from lower to higher
margins and product grades.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 1999 COMPARED WITH THREE MONTHS ENDED JULY 4, 1998
Net sales for the three months ended June 30, 1999 totaled $76.6 million on
shipments of approximately 159,200 net tons compared with net sales of $79.9
million for the three months ended July 4, 1998 on shipments of approximately
158,400 tons. Net sales for the three months ended June 30, 1999 were comprised
of $42.4 million for hot-rolled and $34.2 million for cold-finished, compared
with hot-rolled net sales of $38.9 million and cold-finished net sales of $41.0
million for the three months ended July 4, 1998. The $3.3 million decrease in
net sales is primarily the result of a 12.5% decrease in cold-finished shipping
volumes reflecting the general weakening in demand within the domestic steel. In
addition, there was a 4.9% decrease in average selling prices per ton on
cold-finished products as a reaction to competition and as a result of product
mix. Partially offsetting the decline in the cold-finished net sales results was
an increase in hot-rolled shipping volumes to Republic's cold-finished
operations as management further integrates the operations of the two companies
in anticipation of their combination.


                                       14
<PAGE>   15


Cost of sales totaled $75.0 million, or 97.9% of net sales, for the three months
ended June 30, 1999 compared with cost of sales of $72.0 million, or 90.1% of
net sales, for the similar period ended July 4, 1998. Cost of sales for the
three months ended June 30, 1999 consisted of $42.9 million on hot-rolled
products and $32.1 million on cold-finished products compared with $36.2 million
on hot-rolled products and $35.8 million on cold-finished products for the three
months ended July 4, 1998. The increase in cost of sales as a percentage of
sales was primarily generated by a increase in material and manufacturing costs
on a cost per ton basis for both the Company's hot-rolled and cold-finished
operations.

Selling, general and administrative expenses were $3.5 million, or 4.5% of net
sales, for the three months ended June 30, 1999 compared with $5.0 million, or
6.3% of net sales, for the three months ended July 4, 1998. The decrease in
selling, general and administrative expenses is attributable to certain on-going
cost sharing arrangements begun in the fourth quarter of fiscal 1998 between the
Company and Republic. Under the terms of an employee leasing and overhead
allocation agreement, the Company and Republic share the costs of common
expenses of the combined company including, but not limited to sales and
marketing services, administrative services, plant overhead and costs for
certain common facilities. These costs are allocated according to each company's
approximate share of combined trade volumes. Also a contributing factor to the
decrease in selling, general and administrative expense as a percentage of net
sales are the results of the consolidation plan between the Company and Republic
initiating certain cost reductions in anticipation of the combination.

Net interest expense was $6.6 million for the three months ended June 30, 1999
compared with $7.0 million for the similar period ended July 4, 1998. The $0.4
million decrease in net interest expense was attributable to a decrease in the
average amount outstanding under the revolving credit agreement while average
debt levels on amounts borrowed under long-term arrangements remained relatively
constant during the comparable periods.

The provision for income taxes for the three month period ended June 30, 1999
consisted of currently payable income taxes, primarily foreign income taxes owed
by CDSC. The benefit for income taxes in the similar period of the prior year
was the result of the Company's net operating losses generating a refund of
taxes previously paid by the Company's wholly owned subsidiary, Bliss & Laughlin
Industries, Inc. As a result, the Company reported a net loss of $10.9 million
for the three months ended June 30, 1999 compared with a net loss of $5.3
million for the three months ended July 4, 1998.

SIX MONTHS ENDED JUNE 30, 1999 COMPARED WITH SIX MONTHS ENDED JULY 4, 1998
Net sales for the six months ended June 30, 1999 totaled $136.4 million on
shipments of approximately 279,300 net tons compared with net sales of $161.6
million for the six months ended July 4, 1998 on shipments of approximately
319,000 tons. Net sales for the six months ended June 30, 1999 were comprised of
$69.2 million for hot-rolled and $67.2 million for cold-finished, compared with
hot-rolled net sales of $72.8 million and cold-finished net sales of $88.8
million for the six months ended July 4, 1998. The $25.2 million, or 15.6%,
decrease in net sales is primarily the result of a 12.5% decrease in shipping
volumes reflecting the general weakening in demand within the domestic steel
industry. In addition, there was a 3.7% decrease in average selling prices per
ton on cold-finished products as a reaction to competition and as a result of
product mix. Partially offsetting the decrease in shipping volumes was an
increase in hot-rolled shipping volumes to Republic's cold-finished operations
as management further integrates the operations of the two companies in
anticipation of their combination.

Cost of sales totaled $131.8 million, or 96.6% of net sales, for the six months
ended June 30, 1999 compared with cost of sales of $151.0 million, or 93.4% of
net sales, for the similar period ended July 4, 1998. Cost of sales for the six
months ended June 30, 1999 consisted of $68.9 million on hot-rolled products and
$62.9 million on cold-finished products compared with $72.9 million on
hot-rolled products and $78.1 million on cold-finished products for the six
months ended July 4, 1998. The increase in cost of sales as a percentage of
sales was primarily generated by a increase in material and manufacturing costs
on a cost per ton basis for both the Company's hot-rolled and cold-finished
operations.

Selling, general and administrative expenses were $6.4 million, or 4.7% of net
sales, for the six months ended June 30, 1999 compared with $9.9 million, or
6.1% of net sales, for the six months ended July 4, 1998. The decrease in
selling, general and administrative expenses is attributable to certain on-going
cost sharing arrangements begun in the fourth quarter of fiscal 1998 between the
Company and Republic. Under the terms of an employee leasing and overhead
allocation agreement, the Company and Republic share the costs of common
expenses of the combined


                                       15
<PAGE>   16


company including, but not limited to sales and marketing services,
administrative services, plant overhead and costs for certain common facilities.
These costs are allocated according to each company's approximate share of
combined trade volumes. Also a contributing factor to the decrease in selling,
general and administrative expense as a percentage of net sales are the results
of the consolidation plan between the Company and Republic initiating certain
cost reductions in anticipation of the combination.

Net interest expense was $12.6 million for the six months ended June 30, 1999
compared with $13.2 million for the similar period ended July 4, 1998. The $0.6
million decrease in net interest expense was attributable to a decrease in the
average amount outstanding under the revolving credit agreement while average
debt levels on amounts borrowed under long-term arrangements remained primarily
fixed during the comparable periods.

The provision for income taxes for the six month period ended June 30, 1999
consisted of currently payable income taxes, primarily foreign income taxes owed
by CDSC. The provision for income taxes in the similar period of the prior year
included a benefit for income taxes as the Company's net operating losses
generating a refund of taxes previously paid by the Company's wholly owned
subsidiary, Bliss & Laughlin Industries, Inc. As a result, the Company reported
a net loss of $18.2 million for the six months ended June 30, 1999 compared with
a net loss of $15.2 million for the six months ended July 4, 1998.

LIQUIDITY AND CAPITAL RESOURCES
Prior to the acquisition of Republic by Blackstone and Veritas, the Company's
liquidity and capital resources were managed on a stand-alone basis. The
resources available to the Company on a stand-alone basis are described below.
Subsequently, the Company's relationship with Republic has provided additional
capital resources and sources of liquidity through the combined management of
the two companies, as more fully described below.

The Company's primary capital resources have consisted of long-term debt and
borrowings under its revolving credit agreement. The long-term debt financing
arrangements consist principally of existing Senior Notes and economic
development financing. The Company has obtained deferrals of principal and
interest payments on certain economic development financing through fiscal 1999.

On May 5, 1999, the Company further amended its revolving credit agreement
("Amended Agreement") in conjunction with the formation of the Marketing JV. The
Amended Agreement required a reduction in borrowing capacity at June 30, 1999 to
$77.0 million, of which $5.3 million was in the form of letters of credit. In
addition at June 30, 1999, amounts available under the Company's Sub-Facility
were reduced to $2.0 million with this Amended Agreement. By July 31, 1999,
amounts available under the Amended Agreement were further reduced to $71.5
million and amounts were no longer available under the Company's Sub-Facility.
The maturity date of the Amended Agreement remains April 2, 2000 and is secured
by certain assets and stock of the Company.

Amounts available under the Amended Agreement and Sub-Facility vary based upon
the Company's borrowing base, as defined under the agreements. As of June 30,
1999, there were no amounts available for additional borrowings under the
Amended Agreement as the Company borrowed in excess of its availability by $4.9
million. The Company subsequently repaid these excess borrowings. Amounts
outstanding under the Company's Amended Agreement, including amounts outstanding
under its Sub-Facility, were $69.4 million and $79.0 million at June 30, 1999
and January 2, 1999, respectively. As of June 30, 1999, the Company did not
comply with the consolidated interest ratio coverage covenant for its Amended
Agreement. The Company has received a waiver for this noncompliance.
Furthermore, total amounts outstanding under the Company's Amended Agreement
were repaid from proceeds obtained in the Combination on August 13, 1999.


Weighted average interest rates on borrowings under the Amended Agreement were
8.56% and 8.79% at June 30, 1999 and January 2, 1999, respectively. Weighted
average interest rates on amounts outstanding under the Company's sub-facility
were 11.25% and 11.50% at June 30, 1999 and January 2, 1999, respectively.
Capital expenditures were $4.7 million for the six months ended June 30, 1999
compared with $8.6 million in the similar period of the prior year. Capital
expenditures are funded by cash provided by operations and borrowings under the
Company's revolving credit agreement. Expenditures for the six months ended June
30, 1999 were for capital improvement projects directed at expanding the
Company's product offering.

Cash provided by operating activities was $17.0 million for the six months ended
June 30, 1999 compared with net cash used by operations of $13.9 million for the
similar period ended July 4, 1998. The increase in net cash



                                       16
<PAGE>   17

provided by operations was primarily attributable to the growth in net amounts
due to/from affiliates in the second quarter of 1999 compared to the similar
period in 1998.

There are no restrictions on the ability of BLI to transfer funds to the
Company.

During fiscal 1999, the Company and Republic have combined their sales efforts
and commenced marketing their respective steel products jointly under the
combined brand name "Republic Technologies International". As of January 4,
1999, Marketing JV was formed to formalize prior efforts of the Company and
Republic to jointly market, advertise, promote and sell both companies' steel
products to each company's existing and potential customers. The Marketing JV is
owned by the Company and Republic in equal proportions and fills purchase orders
for steel products by purchasing such steel products from the Company and/or
Republic, as appropriate for a particular order. The Marketing JV allocates such
purchase orders to the Company or Republic and receives a sales commission
designed to cover the Marketing JV's operating expenses. The Company and
Republic are reimbursed for expenses they incur on behalf of the Marketing JV,
including compensation costs of employees of the Company and Republic who
perform sales and marketing functions for the Marketing JV.

The Company participates in an inventory purchasing arrangement with Republic.
Under the terms of this arrangement, Republic purchases materials on behalf of
the combined companies and bills the Company for their respective share plus an
administrative fee. A similar arrangement is in place with regards to insurance.
Republic purchases insurance coverage for the combined companies for which the
costs are borne ratably by the Company and Republic based on their respective
share.

At January 1, 1999, certain salaried employees of the Company became employees
of Republic. Under the terms of an employee leasing and overhead allocation
agreement, the Company and Republic share the costs of common expenses
including, but not limited to sales and marketing services, administrative
services, plant overhead and costs for certain common facilities. The Company's
allocation of these net costs are based on approximate share of combined trade
volumes.

Since its formation, the Company has incurred substantial losses as a result of
the ongoing start-up activities of its facilities and its general and
administrative expenses. Any substantial delay in achieving or a failure to
bring the facilities up to commercial volumes and productivity levels, or to
sell its products in its target markets could have a material adverse effect on
the Company's financial condition and results of operations. A substantial delay
in integrating the operations of the Company, Republic and USS/Kobe, could have
a material adverse effect on the Company's financial condition and results of
operations. In the event of the above, the Company may need to borrow additional
funds under its Revolving Credit Agreement or, to the extent that the funds are
not available thereunder, to obtain additional financing to meet its cash flow
requirements. The Company is highly leveraged. Restrictive covenants included in
the indenture and other debt obligations may have the effect of limiting the
Company's ability to incur additional indebtedness, sell assets, or acquire
other entities and may otherwise limit the operational and financial flexibility
of the Company.

The Company and Republic presently perform the above mentioned functions on a
combined basis and intend to further integrate operations in 1999 along with
USS/Kobe subsequent to the Combination. Following the Combination, the capital
resources and liquidity of the Company, Republic and USS/Kobe will be managed on
a combined basis. Management has prepared fiscal 1999 financial and operational
plans on a combined basis for the companies. Based on these plans, management
believes that the aggregate of cash flows from combined operations and available
funds under its new and existing credit agreements will be sufficient in 1999 to
enable the companies to meet their debt service requirements when due and to
fund their capital expenditures, working capital and general corporate
requirements, although there can be no assurances with respect thereto.

Dividends declared to holders of the Company's preferred stock were
approximately $96 thousand and $192 thousand for both the three and six month
periods ended June 30, 1999 and July 4, 1998.

On August 13, 1999, management of the Company completed the Combination and RTI
concurrently issued $425.0 million in aggregate principal amount New Senior
Notes and entered into a new revolving credit agreement


                                       17
<PAGE>   18


that permits borrowings up to $425.0 million and is secured by certain assets of
RTI. The Call will be funded by proceeds from the issuance of the New Senior
Notes and a combined equity investment of $155.0 million by Blackstone, Veritas,
FirstEnergy Corp., USX Corporation, Kobe Steel, Ltd. and certain other
investors.

Utilizing proceeds from the equity contribution and its new revolving credit
agreement, RTI repaid in full amounts outstanding under the Bar Tech revolving
credit agreement, $5.5 million for its subordinated loan agreement with
Bethlehem Steel Corporation, and $15.9 million for certain of its economic
development loans. Effective with the Combination, the Company and Republic
terminated the limited liability company agreement of the Marketing JV. (See
Note 10.)

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
Year 2000
The Year 2000 issue ("Year 2000") is the result of computer programs being
written using two digits rather than four digits to define the applicable year.
Computer equipment, software and other devices with embedded technology that are
time-sensitive may recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in system failures or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to receive orders or manufacture product, ship inventory, process transactions,
send invoices, deposit cash, or engage in other normal business activities. The
inability of business processes to function properly in year 2000 could have
adverse effects on companies and entities throughout the world.

The Company and Republic have developed integrated plans to address issues
related to the impact of Year 2000 in both companies in four major areas:
infrastructure, business applications, plant applications and suppliers.

The infrastructure portion of the program addresses wide and local area
networks, servers, personal computing, telecommunications systems and software,
fax and facility security systems. Each location's equipment has been
inventoried and assessed for Year 2000 problems. Some facilities have completed
the remediation process through replacement or upgrade, and have been tested. As
of June 30, 1999, this portion of the program is approximately 85% complete. The
remaining facilities are scheduled to be completed by September 1999.

The business application portion of the program addresses applications and
system software that run on the larger mainframe and mid-range computers. These
systems are being upgraded and/or replaced with new applications to provide Year
2000 readiness. As of June 30, 1999, approximately 90% of this program area has
been completed, with six facilities converted or upgraded. The remaining work is
scheduled for completion by September 1999.

The Company's plant systems include hardware, software and associated embedded
computer technologies that are used to operate the Company's manufacturing
facilities. These systems have been inventoried and assessed. Six of the seven
plant sites have completed remediation and testing. The final plant site is
scheduled for testing in August 1999.

The Company is currently assessing the impact of the Year 2000 issue as it
relates to its suppliers and customers to identify the extent to which the
Company may be vulnerable in the event those parties fail to properly resolve
their own Year 2000 issues. Readiness questionnaires were sent to the Company's
supplier base. Less than 25% of the suppliers surveyed responded.

As part of the Year 2000 readiness plan, the Company is continuing to assess the
risks associated with the potential system failures of its suppliers, banks,
utilities and internal systems. The Company is developing contingency plans for
these failures, which may include, but are not limited to the use of alternative
suppliers and developing alternative manual systems.

The cost of the Year 2000 project is estimated at $1.6 to $2.0 million and is
being funded through operating cash flows. The Company has to date incurred
approximately $1.5 million of costs and expects to incur the remaining amounts
through year 2000. The cost of replacement hardware and software will be
capitalized as appropriate according to the Company's capital policies and
amortized over the applicable useful lives.

The Company presently believes that it has effective plans in place to
anticipate and resolve the potential Year 2000 issues. In the event, however,
that the Company does not properly and fully anticipate and resolve all Year
2000




                                       18
<PAGE>   19


issues, there can be no assurance that Year 2000 issues will not materially
impact and adversely effect the Company's results of operations or its
relationships with third parties.

The estimated costs and dates by which the Company believes it will have
completed its objectives are based on management's best estimates, which rely on
numerous assumptions regarding future events, including the availability of
certain key resources, third-party remediation plans, and other factors. These
estimates, however, may prove to be inaccurate, and actual results could differ
materially from those anticipated. Factors that could result in material
differences include, without limitation, the availability and cost of personnel
with the appropriate training and experience, the ability to accurately
identify, assess, remediate and test all relevant computer codes and embedded
technology, and similar uncertainties. In addition, Year 2000 issues may lead to
possible third-party claims, the impact of which cannot be estimated at this
time. No assurances can be given that the aggregate cost of defending and
resolving such claims, if any, would not have a material adverse effect on the
Company.

The Company currently believes that the most reasonably likely worst case
scenario for its operations with respect to the Year 2000 issue would be the
inability to sustain its current level of shipments, inability to bill or
invoice and a decrease in operational efficiency as a result of the increase in
manual processing efforts. This could result in potential lost sales and
profits. The Company is continuing to develop its contingency plans to address
these potential disruptions to its business.

FORWARD LOOKING STATEMENTS
Statements included in this filing with the Securities and Exchange Commission
(including those portions of Management's Discussion and Analysis that refer to
the future) may contain forward-looking statements that are not historical facts
but refer to management's intentions, beliefs, or expectations for the future.
It is important to note that the Company's actual results could differ
materially from those projected in such forward-looking statements. Certain
factors that could cause actual results to differ from those in such
forward-looking statements include, but are not limited to, the following:

     That the combined company is unable to achieve the objectives of
     rationalizing and modernizing production facilities;

     Any substantial unanticipated delays or difficulties in integrating the
     operations of or managing the capital resources and liquidity of the
     Company, Republic and USS/Kobe on a combined basis;

     Any substantial delay in the implementation of the Company's plans or
     substantial unanticipated costs associated with its plans for a successful
     transition into an integrated steelmaking and bar rolling operation;

     The ability of the Company to sell its products in its targeted markets at
     gross margins necessary to produce and maintain positive operating income.
     The Company's success is dependent on its ability to increase sales. The
     Company is in the process of enhancing its sales and customer service
     programs;

     The Company is subject to a variety of competitive factors such as pricing,
     the financial strength of its competitors and the Company's ability to
     establish a favorable position in the steelmaking and bar rolling industry.
     The Company's competitive position could also be adversely affected by any
     consolidation of its competition in the steelmaking industry; and

     The ability of the Company and its major suppliers to remedy its Year 2000
     issues timely and in a cost-effective manner.



                                       19
<PAGE>   20



                           PART II - OTHER INFORMATION
                           ---------------------------

ITEM 1.  LEGAL PROCEEDINGS
--------------------------

The Company and its subsidiaries are involved in various legal proceedings
occurring in the ordinary course of business. It is the opinion of management,
after consultation with legal counsel, that these matters will not materially
affect the Company's consolidated financial position, results of operations or
cash flows.


ITEM 2.  CHANGES IN SECURITIES
------------------------------

None.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
----------------------------------------

None.


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

None.


ITEM 5.  OTHER INFORMATION
--------------------------

None.

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

         (10.54)  1999 Settlement Agreement between United Steelworkers of
                  America, AFL-CIO on behalf of its Local 1104 and the Company,
                  Republic Engineered Steels. Inc. and Republic Technologies
                  International, LLC. dated July 7, 1999, filed herewith.

         (10.55)  1999 Settlement Agreement between United Steelworkers of
                  America, AFL-CIO on behalf of its Local 2354 and the Company,
                  Republic Engineered Steels. Inc. and Republic Technologies
                  International, LLC. dated July 7, 1999, and filed herewith.

         (10.56)  First amendment, dated as of May 5, 1999 to the Facility
                  Pledge Agreement dated as of April 2, 1996, and amended and
                  restated as of September 5, 1997, filed herewith.



         (27)     Financial Data Schedule


         a.)   Reports on Form 8-K

               The Company filed a Form 8-K with the Securities and Exchange
               Commission on May 18, 1999 for the Amendment of its Credit
               Agreement dated April 2, 1996, as amended and restated April 26,
               1996, as further amended and restated September 5, 1997.



                                       20
<PAGE>   21


                                   SIGNATURES



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




BAR TECHNOLOGIES INC.





Date:  August 16, 1999                  By: /s/ Thomas N. Tyrrell
                                            ---------------------
                                        Thomas N. Tyrrell
                                        Chief Executive Officer



Date:  August 16, 1999                  By: /s/ Brenda K. Brown
                                            -------------------
                                        Brenda K. Brown
                                        Vice President of Finance and Controller



                                       21