<PAGE>


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

                                    FORM 10-Q

(MARK ONE)

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

                For the quarterly period ended September 30, 2002

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

              For the transition period from            to

                            METALLURG HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)
<TABLE>
<S>                                            <C>
                Delaware                                    23-2967577
         (State of organization)               (I.R.S. Employer Identification No.)

              Building 400                                (610) 293-0838
          435 Devon Park Drive                   (Registrant's telephone number,
        Wayne, Pennsylvania 19087                      including area code)
(Address of principal executive offices)
</TABLE>

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

      There are no common equity securities of the registrant outstanding. At
November 13, 2002, the outstanding capital of Metallurg Holdings, Inc. was
comprised of 5,202.335 shares of Series A Voting Convertible Preferred Stock and
4,524 shares of Series B Non-Voting Convertible Preferred Stock, $.01 par value.







<PAGE>


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                                      INDEX
<TABLE>
<CAPTION>
                                                                                                                Page No.
                                                                                                                --------
<S>            <C>                                                                                              <C>
Part I.        FINANCIAL INFORMATION:

               Item 1 - Financial Statements (Unaudited)

                        Condensed Statements of Consolidated Operations for the Quarters and the Three
                        Quarters Ended September 30, 2002 and 2001 ...................................             2

                        Condensed Consolidated Balance Sheets at September 30, 2002 and
                        December 31, 2001 ............................................................             3

                        Condensed Statements of Consolidated Cash Flows for the Three Quarters Ended
                        September 30, 2002 and 2001 ..................................................             4

                        Notes to Condensed Unaudited Consolidated Financial Statements ...............          5-15

               Item 2 - Management's Discussion and Analysis of Financial Condition and Results
                        of Operations ................................................................         16-24

               Item 3 - Quantitative and Qualitative Disclosure of Market Risk .......................            25

               Item 4 - Controls and Procedures ......................................................            26


Part II.       OTHER INFORMATION:

               Item 6. (a) EXHIBITS ..................................................................            27

               Item 6. (b) REPORTS ON FORM 8-K .......................................................            27

               Signature Page ........................................................................            28

               Officers' Certifications ..............................................................         29-30
</TABLE>

                                       1








<PAGE>


                         PART I - FINANCIAL INFORMATION

                          ITEM 1 - FINANCIAL STATEMENTS

             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

           CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
                                 (In thousands)

<TABLE>
<CAPTION>
                                                             Quarters Ended              Three Quarters Ended
                                                              September 30,                   September 30,
                                                        ------------------------        -------------------------
                                                          2002            2001            2002             2001
                                                        --------        --------        --------         --------
<S>                                                     <C>             <C>             <C>              <C>
Sales ...............................................   $108,254        $112,032        $314,969         $374,239
Commission income ...................................        325             203             970              868
                                                        --------        --------        --------         --------
   Total revenue ....................................    108,579         112,235         315,939          375,107
                                                        --------        --------        --------         --------
Operating costs and expenses:
   Cost of sales ....................................     96,082          96,913         281,905          318,489
   Selling, general and administrative expenses .....     12,559          13,579          39,829           42,162
   Environmental expense recoveries .................          -               -          (3,000)            (600)
   Restructuring charges, net .......................        990               -           2,351                -
                                                        --------        --------        --------         --------
   Total operating costs and expenses ...............    109,631         110,492         321,085          360,051
                                                        --------        --------        --------         --------
   Operating (loss) income ..........................     (1,052)          1,743          (5,146)          15,056

Other income (expense):
   Other income, net ................................         63              42             181              174
   Interest expense, net ............................     (4,843)         (4,413)        (13,980)         (12,843)
                                                        --------        --------        --------         --------
   (Loss) income before income tax provision
     (benefit), minority interest and discontinued
     operation ......................................     (5,832)         (2,628)        (18,945)           2,387
Income tax provision (benefit) ......................        612             (80)            610            4,889
                                                        --------        --------        --------         --------
   Loss before minority interest and discontinued ...
     operation ......................................     (6,444)         (2,548)        (19,555)          (2,502)
Minority interest ...................................        (48)            (15)            (46)              37
                                                        --------        --------        --------         --------
   Loss from continuing operations ..................     (6,492)         (2,563)        (19,601)          (2,465)
Discontinued operation (Note 6):
   Income from discontinued operation (net of tax of
     $32 and $118 in the quarter and the three
     quarters ended September 30, 2001, respectively)          -             115               -              373
   Loss on disposition of discontinued operation
     (net of tax of nil) ............................          -               -          (4,713)               -
                                                        --------        --------        --------         --------
   Income (loss) from discontinued operation ........          -             115          (4,713)             373
                                                        --------        --------        --------         --------
   Net loss .........................................     (6,492)         (2,448)        (24,314)          (2,092)

Other comprehensive income (loss):
   Foreign currency translation adjustment ..........        710           1,319           3,648           (1,495)
   Deferred (loss) gain on derivatives, net .........       (214)            116            (288)             (76)
                                                        --------        --------        --------         --------
   Comprehensive loss ...............................   $ (5,996)       $ (1,013)       $(20,954)        $ (3,663)
                                                        ========        ========        ========         ========
</TABLE>

      See notes to condensed unaudited consolidated financial statements.

                                       2







<PAGE>


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                         September 30,     December 31,
                                                                                              2002             2001
                                                                                         -------------     ------------
                                                                                          (Unaudited)
<S>                                                                                          <C>              <C>
ASSETS
Current Assets:
   Cash and cash equivalents............................................................    $ 28,309         $ 25,904
   Accounts receivable, net.............................................................      60,703           62,687
   Inventories..........................................................................      83,658           87,469
   Prepaid expenses and other current assets............................................      13,830           13,749
                                                                                            --------         --------
     Total current assets...............................................................     186,500          189,809
Goodwill................................................................................      71,701           86,293
Property, plant and equipment, net......................................................      77,943           67,321
Other assets (including restricted cash of $1,929 in 2002 - Note 6).....................      14,468           11,453
                                                                                            --------         --------
     Total..............................................................................    $350,612         $354,876
                                                                                            ========         ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
   Short-term debt and current portion of long-term debt................................    $  5,102         $  5,714
   Accounts payable.....................................................................      47,660           39,530
   Accrued expenses.....................................................................      23,748           22,232
   Other current liabilities............................................................       2,432            3,092
                                                                                            --------         --------
     Total current liabilities........................................................        78,942           70,568
                                                                                            --------         --------
Long-term Liabilities:
   Long-term debt.....................................................................       164,530          159,623
   Accrued pension liabilities........................................................        48,013           42,581
   Environmental liabilities, net.....................................................        26,846           29,049
   Other liabilities..................................................................         1,379            1,297
                                                                                            --------         --------
     Total long-term liabilities......................................................       240,768          232,550
                                                                                            --------         --------
     Total liabilities................................................................       319,710          303,118
                                                                                            --------         --------

Minority Interest.......................................................................         568              521
                                                                                            --------         --------
Shareholders' Equity:
   Additional paid-in capital.........................................................       101,756          101,705
   Accumulated other comprehensive loss...............................................       (21,607)         (24,967)
   Retained deficit...................................................................       (49,815)         (25,501)
                                                                                            --------         --------
     Total shareholders' equity.......................................................        30,334           51,237
                                                                                            --------         --------
     Total............................................................................      $350,612         $354,876
                                                                                            ========         ========

</TABLE>

      See notes to condensed unaudited consolidated financial statements.

                                       3







<PAGE>

             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

           CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                              Three Quarters Ended
                                                                                                  September 30,
                                                                                          -------------------------------
                                                                                             2002                  2001
                                                                                          ---------             ---------
<S>                                                                                        <C>                  <C>
Cash Flows from Operating Activities:
Net loss ......................................................................            $(24,314)            $ (2,092)
Adjustments to reconcile net loss to net cash provided by operating activities:
   Depreciation and amortization ..............................................               7,332               11,804
   Loss on sale of discontinued operation .....................................               4,713                    -
   Interest accretion on the Senior Discount Notes ............................               3,638                3,198
   Deferred income taxes ......................................................                (384)               2,351
   Restructuring charges ......................................................               2,351                    -
   Change in operating assets and liabilities:
    Decrease in trade receivables .............................................               7,096                1,900
    Decrease (increase) in inventories ........................................               5,834              (13,824)
    (Increase) decrease in other current assets ...............................                (374)                 367
    Increase in accounts payable and accrued expenses .........................               3,547                4,962
    Environmental payments ....................................................              (2,277)              (1,376)
    Restructuring payments ....................................................              (1,522)                 (48)
    Other assets and liabilities, net .........................................              (1,005)              (2,676)
                                                                                           --------             --------
     Net cash provided by operating activities ................................               4,635                4,566
                                                                                           --------             --------
Cash Flows from Investing Activities:
Additions to property, plant and equipment ....................................             (15,302)             (11,872)
Net proceeds from sale of discontinued operation ..............................              13,643                    -
Other, net ....................................................................                (222)                (995)
                                                                                           --------             --------
     Net cash used in investing activities ....................................              (1,881)             (12,867)
                                                                                           --------             --------
Cash Flows from Financing Activities:
(Repayment of) proceeds from long-term debt, net ..............................                (609)               7,549
Net repayment of short-term debt ..............................................              (1,656)              (4,057)
                                                                                           --------             --------
     Net cash (used in) provided by financing activities ......................              (2,265)               3,492
                                                                                           --------             --------

Effects of exchange rate changes on cash and cash equivalents .................               1,916                 (514)
                                                                                           --------             --------

Net increase (decrease) in cash and cash equivalents ..........................               2,405               (5,323)
Cash and cash equivalents - beginning of period ...............................              25,904               34,008
                                                                                           --------             --------
Cash and cash equivalents - end of period .....................................            $ 28,309             $ 28,685
                                                                                           ========             ========

</TABLE>

      See notes to condensed unaudited consolidated financial statements.

                                       4







<PAGE>

             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

         NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.  Basis of Presentation

      The accompanying condensed unaudited consolidated financial statements
include the accounts of Metallurg Holdings, Inc. ("Metallurg Holdings") and its
majority-owned subsidiaries (collectively, the "Company"). These financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information pursuant to Accounting Principles
Board Opinion No. 28. Accordingly, these financial statements do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. The condensed consolidated balance
sheet as of December 31, 2001 was derived from audited financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the interim periods presented are not necessarily
indicative of the results to be expected for a full year.

      The Company is wholly owned by a group of investors led by and including
Safeguard International Fund, L.P. ("Safeguard International"), an international
private equity fund that invests primarily in equity securities of companies in
process industries.

      Metallurg Holdings' balance sheet is comprised primarily of its investment
in Metallurg, Inc. and its 12 3/4% Senior Discount Notes due 2008 (the "Senior
Discount Notes")

      For further information, see the financial statements and footnotes
thereto included in the Company's audited consolidated financial statements for
the year ended December 31, 2001.

      Certain prior year amounts were reclassified to conform to current year
presentations. See "Note 6. Discontinued Operation".

2.  Segments and Related Information

      The Company operates in one significant industry segment, the manufacture
and sale of performance-enhancing additives mainly for the metallurgical
industry. The Company is organized around its major production facilities in the
U.S., the U.K., Germany and Brazil, which are supported by an established
worldwide sales network. In addition to its own products, the Company
distributes complementary products manufactured by third parties.

      Reportable Segments

      Shieldalloy Metallurgical Corporation ("Shieldalloy") - This unit is
comprised of two production facilities in the U.S. The New Jersey plant
currently manufactures and sells alloying tablets for the aluminum industry and
metal powders for the welding industry. In prior periods it also manufactured
aluminum alloy grain refiners and specialty ferroalloys for the superalloy and
steel industries. The Ohio plant manufactures and sells ferrovanadium and
vanadium-based chemicals used mostly in the steel and petrochemical industries.

      London & Scandinavian Metallurgical Co Limited and its subsidiaries
(collectively, "LSM") - This unit is comprised mainly of three production
facilities in the U.K. and another in Norway which manufacture and sell aluminum
alloy grain refiners and alloying tablets for the aluminum industry, chromium
metal and specialty ferroalloys for the steel and superalloy industries and
aluminum powder for various metal powder-consuming industries.

      GfE Gesellschaft fur Elektrometallurgie mbH and its subsidiaries
(collectively, "GfE") - This unit is comprised of a production facility and a
sales office in Germany. The Nuremberg plant manufactures and sells a wide
variety of specialty products, including vanadium-based chemicals and
sophisticated metals, alloys and powders used in the titanium, superalloy,
electronics, telecommunications, biomedical and optics industries. The
prosthetics company, which was sold in January 2002, produced medical
prostheses, implants and surgical instruments for orthopedic applications. See
"Note 6. Discontinued Operation".

      Elektrowerk Weisweiler GmbH ("EWW") - This production unit, also located
in Germany, produces various grades of low carbon ferrochrome used in the
superalloy, welding and steel industries.




                                       5








<PAGE>

             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (Continued)

2. Segments and Related Information - (Continued)

      Companhia Industrial Fluminense ("CIF") - This unit is comprised mainly of
two production facilities in Brazil. The Sao Joao del Rei plant manufactures and
sells aluminum alloy grain refiners and alloying tablets for the aluminum
industry and metal oxides used in the telecommunications, superalloy and
specialty metal industries. The Nazareno mine extracts and concentrates ores
containing tantalum and niobium that are processed, along with other raw
materials, into metal oxides at the Sao Joao del Rei plant.

      In addition to their manufacturing operations, Shieldalloy, LSM and GfE
import and distribute complementary products manufactured by affiliates and
third parties.

      Summarized financial information concerning the Company's reportable
segments is shown in the following table (in thousands). Each segment records
direct expenses related to its employees and operations. The "Other" column
includes corporate-related items and results of subsidiaries not meeting the
quantitative thresholds as prescribed by applicable accounting rules for
determining reportable segments. The Company does not allocate general corporate
overhead expenses to operating segments. The accounting policies of the segments
are the same as those of the consolidated group. Transactions among segments are
established based on negotiation among the parties. There have been no material
changes in segment assets from the amounts disclosed in the last annual report,
except as noted in "Note 6. Discontinued Operation".

<TABLE>
<CAPTION>

                                                                                               Intersegment   Consolidated
                           Shieldalloy     LSM       GfE        EWW        CIF       Other     Eliminations      Totals
                           -----------     ---       ---        ---        ---       -----     ------------      ------

<S>                        <C>            <C>        <C>        <C>         <C>     <C>            <C>             <C>
Quarter Ended
     September 30, 2002
Revenue from external
  customers ...............     $20,799   $33,948    $14,370     $3,987     $4,000    $31,475                       $108,579
Intergroup revenue ........       1,524    10,735      2,938      3,486      4,416      2,220      $(25,319)               -
Income tax (benefit)
  provision ...............      (1,369)      110         35       (195)         -      2,031             -              612
Net (loss) income .........        (369)      175       (940)      (399)       497     (3,733)       (1,723)          (6,492)

Quarter Ended
     September 30, 2001
Revenue from external
  customers ...............     $24,815   $32,500    $14,203     $3,559     $3,806    $33,352                       $112,235
Intergroup revenue ........         995    12,515      2,131      4,796      6,826      4,404      $(31,667)              -
Income tax (benefit)
  provision ...............        (323)     (157)       185        (34)       734       (485)            -              (80)
Income from discontinued
  operation ...............           -         -        115          -          -          -             -              115
Net (loss) income .........        (581)     (557)      (524)        17        937        883        (2,623)          (2,448)

</TABLE>




                                       6









<PAGE>

             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (Continued)



2. Segments and Related Information - (Continued)

<TABLE>
<CAPTION>

                                                                                              Intersegment   Consolidated
                          Shieldalloy     LSM        GfE        EWW       CIF       Other     Eliminations      Totals
                          -----------     ---        ---        ---       ---       -----     ------------      ------

<S>                       <C>             <C>       <C>        <C>        <C>       <C>       <C>             <C>
Three Quarters Ended
     September 30, 2002
Revenue from external
  customers .................  $65,396    $88,394   $45,770    $12,470    $12,461    $91,448                      $315,939
Intergroup revenue ..........    4,222     30,189     9,207      9,133     12,645      9,451       $(74,847)             -
Environmental expense
  recoveries ................   (3,000)         -         -          -          -          -              -         (3,000)
Income tax (benefit)
  provision .................   (3,066)      (481)       95       (312)        47      4,327              -            610
Gain (loss) on
  disposition of
  discontinued operation ....        -          -    10,076          -          -    (14,789)             -         (4,713)
Net (loss) income ...........   (2,104)    (1,427)    8,107       (494)     1,046     (9,744)       (19,698)       (24,314)

Three Quarters Ended
     September 30, 2001
Revenue from external
  customers .................  $75,920   $103,307   $56,046    $10,406    $11,667   $117,761                      $375,107
Intergroup revenue ..........    3,507     31,840     8,637     18,681     18,703     15,806       $(97,174)             -
Environmental expense
  recoveries ................     (600)         -         -          -          -          -              -           (600)
Income tax (benefit)
  provision .................     (637)       549       970      1,305      1,235      1,467              -          4,889
Income from discontinued
  operation .................        -          -       373          -          -          -              -            373
Net (loss) income ...........   (1,696)       759     1,022      2,195      3,366     11,937        (19,675)        (2,092)

</TABLE>

3.  Inventories

      Inventories consist of the following (in thousands):

<TABLE>
<CAPTION>

                                                             September 30,         December 31,
                                                                  2002                 2001
                                                             -------------         ------------

<S>                                                          <C>                  <C>
Raw materials.............................................       $16,443              $19,783
Work in process...........................................         4,177                4,018
Finished goods............................................        59,993               60,635
Other.....................................................         3,045                3,033
                                                                 -------              -------
     Total................................................       $83,658              $87,469
                                                                 =======              =======

</TABLE>

4. Contingent Liabilities

      The Company defends, from time to time, various claims and legal actions
arising in the normal course of business, including those relating to
environmental matters. Management believes, based on the advice of counsel, that
the outcome of such matters will not have a material adverse effect on the
Company's consolidated financial position, results of operations or liquidity.
There can be no assurance, however, that future litigation or proceedings will
not result in an adverse judgment against the Company that could have a material
adverse effect on the Company's future results of operations or cash flows.



                                       7








<PAGE>

             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (Continued)



5. Environmental Expense Recoveries

      Shieldalloy realized environmental expense recoveries of $3,000,000 and
$600,000 in 2002 and 2001, respectively, upon receipt of settlements with
insurance companies relating to coverage for certain environmental claims.

6. Discontinued Operation

      On January 1, 2002, GfE completed the sale of its prosthetics company in
Morsdorf, Germany and the Company recorded a loss of $4,713,000, after the
allocation of $14,789,000 of goodwill. In connection with the sale, GfE was
required to deposit cash to collateralize certain bank guarantees. Deposits of
DM 3,750,000 ($1,929,000), relating to guarantees which expire in September
2003, are held in investments that mature in November 2003 and are recorded as
restricted cash in the balance sheet at September 30, 2002. These deposits are
excluded from cash and cash equivalents in the Company's consolidated balance
sheet.

      Summary financial information for the prosthetics company is presented
below (in thousands):

<TABLE>
<CAPTION>

                                                                     December 31,
                                                                         2001
                                                                    ----------------
<S>                                                                 <C>
Accounts receivable, net ..............................................      $  669
Inventories ...........................................................       2,406
Prepaid expenses and other current assets .............................         196
Property, plant and equipment, net ....................................       1,496
Accounts and loans payable ............................................       2,855
Other liabilities .....................................................         810
Shareholder's equity ..................................................       1,102


<CAPTION>

                                                                      Year Ended
                                                                     December 31,
                                                                         2001
                                                                    ----------------
<S>                                                                 <C>
Total revenue .........................................................      $7,812
Net income ............................................................         624

</TABLE>

      The consolidated statement of operations and the related notes for the
quarter and the three quarters ended September 30, 2001 have been restated,
where applicable, to reflect the discontinued operation. Cash provided by
operating activities for the prosthetics company was $191,000 in the three
quarters ended September 30, 2001.

7. Restructuring

      During the second and third quarters of 2002, the Company carried out a
restructuring program intended to reduce the cost structure at Metallurg, Inc.,
Shieldalloy and LSM. The restructuring plan includes the discontinuation of
certain production activities, the termination of employees and the write-down
of redundant plant and equipment. As a result of the restructuring and other
cost reduction activities, the Company currently expects to generate cost
savings of approximately $8 million annually in future periods. Details of the
restructuring charge are as follows (in thousands):

<TABLE>
<CAPTION>

                                                                                   Utilized                 Balance at
                                                          Original        ----------------------------    September 30,
                                                           Charge            Cash          Non-cash            2002
                                                           ------            ----          --------            ----

<S>                                                      <C>              <C>             <C>                  <C>
Severance and other employee costs.......................     $2,385           $1,406                               $979
Write-down of plant and equipment........................        103                -            $103                  -
                                                              ------           ------            ----               ----
      Total..............................................     $2,488           $1,406            $103               $979
                                                              ======           ======            ====               ====
</TABLE>




                                       8








<PAGE>


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (Continued)



7. Restructuring - (Continued)

      Metallurg, Inc.'s restructuring charge of $875,000 in the second quarter
was for severance costs of three corporate executives who were terminated at the
end of the second quarter of 2002. Under the terms of their employment and
severance agreements, the severance will be paid over a period of up to 18
months. Of this amount, $224,000 was paid as of September 30, 2002. In the third
quarter, a further charge of $214,000 was incurred for severance costs of five
administrative employees. None of this amount had been paid as of September 30,
2002.

      In the second quarter, SMC's restructuring charge of $273,000 included
$170,000 for severance costs of 16 production employees and six administrative
employees, of which $154,000 had been paid by September 30, 2002. Twenty-one
employees were terminated in the second quarter and one in the third quarter.
The remaining $103,000 was for the write-down of property and equipment no
longer used in operations. During the third quarter, an additional charge of
$98,000 was incurred for the termination of one executive. None of this amount
had been paid as of September 30, 2002.

      In the second quarter, LSM expensed, and paid in full, a restructuring
charge of 'L'242,000 ($350,000) for severance costs of 11 production
employees who were terminated during the second quarter. In the third quarter,
LSM expensed, and paid in full, a restructuring charge of 'L'452,000
($678,000) for severance costs of seven production employees and 11
administrative employees who were terminated during the third quarter.

      The restructuring charge of $2,351,000 in the three quarters ended
September 30, 2002 is net of the reversal of a prior year accrual balance of
$137,000 following the completion of a restructuring program at EWW in 2002.

8. Earnings Per Share

      Earnings per share is not presented since Metallurg Holdings is wholly
owned by a group of private investors led by and including Safeguard
International.

9. Goodwill and Other Intangible Assets

      Effective January 1, 2002, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets",
which addresses the accounting and reporting of acquired goodwill and other
intangible assets. SFAS No. 142 eliminates the amortization of goodwill and
requires an evaluation of potential goodwill impairment on adoption and annually
thereafter, as well as on occasions when circumstances indicate a possible
impairment. The Company has completed its assessment of the impact of adopting
the impairment provision of the standard and has concluded there is currently no
impairment of goodwill.

      Goodwill amortization was $5,302,000 in the year ended December 31, 2001.
The effect of goodwill amortization on net income was as follows (in thousands):

<TABLE>
<CAPTION>

                                               Quarters Ended                Three Quarters Ended
                                                September 30,                    September 30,
                                        ------------------------------- ---------------------------------
                                             2002            2001            2002              2001
                                             ----            ----            ----              ----

<S>                                            <C>             <C>             <C>               <C>
Net loss, as reported ..................       $(6,492)        $(2,448)        $(24,314)         $(2,092)
Goodwill amortization ..................             -           1,325                -            3,977
                                               -------         -------         --------          -------
   Adjusted net (loss) income ..........       $(6,492)        $(1,123)        $(24,314)         $ 1,885
                                               =======         =======         ========          =======

</TABLE>

      The annual amortization of intangible assets subject to amortization for
the next five years is estimated to be approximately $139,000, $9,000, $9,000,
$9,000 and $9,000.




                                       9







<PAGE>

             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (Continued)




9. Goodwill and Other Intangible Assets - (Continued)

      The gross carrying values and the accumulated amortization of goodwill and
other amortizable intangible assets are as follows (in thousands):

<TABLE>
<CAPTION>

                                                 September 30, 2002               December 31, 2001
                                           ------------------------------- ---------------------------------
                                               Gross                           Gross
                                             Carrying      Accumulated        Carrying       Accumulated
                                               Value       Amortization         Value       Amortization
                                               -----       ------------         -----       ------------

<S>                                              <C>              <C>            <C>                <C>
     Goodwill .............................      $86,469          $14,768        $104,130           $17,837
     Other amortizable intangible assets ..          487              267             364               151
                                                 -------          -------        --------           -------
          Total ...........................      $86,956          $15,035        $104,494           $17,988
                                                 =======          =======        ========           =======

</TABLE>


      The decrease in goodwill from December 31, 2001 to September 30, 2002 is
due primarily to the sale of GfE's prosthetics company. See "Note 6.
Discontinued Operation".

10. Borrowings

      LSM has four revolving term loan facilities with Barclays Bank plc
("Barclays") and HSBC Bank plc ("HSBC") that provide for borrowings up to
'L'12,000,000 ($18,823,000), all of which were outstanding at September 30,
2002. Interest is currently charged at a rate per annum of LIBOR plus 0.8% -
1.75%. Two of the facilities expire during the second quarter of 2004 while the
other two expire during the second quarter of 2006. These term loan facilities
are unsecured and require LSM to comply with various covenants, including the
maintenance of minimum net worth and interest coverage.

      Following a decline in operating results, LSM obtained a waiver from
Barclays regarding the required minimum interest coverage ratio covenant for the
period ended December 31, 2001. In August 2002, the agreement was amended to
modify this covenant and other terms. Compliance with the amended interest
coverage ratio covenant will next be measured at December 31, 2002 and will be
based on the results for the six months ended December 31, 2002. As a result of
the amendment, the annual interest rate on the two revolving term loan
facilities was increased to LIBOR plus 1.75%. Also as a result of the amendment,
LSM's overdraft facility with Barclays was reduced by 'L'1,000,000
($1,569,000).

      LSM obtained a similar waiver from HSBC for the period ended December 31,
2001. The next measurement date on these facilities is December 31, 2002. LSM
does not anticipate the need for a waiver at this date but believes that it
would, if required, be able to obtain a similar waiver, though no assurance of
obtaining such a waiver can be given. The terms of the overdraft and term loan
facilities with HSBC remain unchanged.

11. Recent Accounting Pronouncements

      In June 2001, SFAS No. 143, "Accounting for Asset Retirement Obligations"
was issued. This statement covers all legally enforceable obligations associated
with the retirement of tangible long-lived assets and provides the accounting
and reporting requirements for such obligations. SFAS No. 143 is effective on
January 1, 2003. The Company does not believe the adoption of SFAS No. 143 will
have a material impact on its consolidated financial statements.

      In August 2001, SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets" was issued. This statement supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of" and related literature and establishes a single accounting
model, based on the framework established in SFAS No. 121, for long-lived assets
to be disposed of by sale, but it retains the fundamental provisions of SFAS No.
121 for the recognition of the impairment of long-lived assets to be held and
used. SFAS No. 144 was effective for the Company on January 1, 2002. While the
adoption of SFAS No. 144 did not have a material impact on the Company's
consolidated financial statements, it requires that GfE's prosthetics company be
reflected as a discontinued operation upon its disposal. See "Note 6.
Discontinued Operation".



                                       10








<PAGE>

             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (Continued)



11. Recent Accounting Pronouncements - (Continued)

      In light of recent operating results, the Company will be completing an
assessment of the recoverability of long-lived assets as required under SFAS No.
144 during the fourth quarter of 2002. This assessment could result in the
recognition of long-lived asset impairments.

      In April 2002, SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and
64, Amendment of FASB Statement No. 13, and Technical Corrections" was issued.
SFAS No. 145, in rescinding SFAS No. 4, requires that only unusual or infrequent
gains and losses from extinguishment of debt be classified as extraordinary
items, consistent with Accounting Principles Board Opinion No. 30. The Company
will adopt SFAS No. 145 on January 1, 2003. The adoption is not expected to have
a material effect on the Company's financial statements.

      In June 2002, SFAS No. 146, "Accounting for Costs Associated with Exit or
Disposal Activities" was issued. This statement requires the recording of costs
associated with exit or disposal activities at their fair values only once a
liability exists. Under previous guidance, certain exit costs were accrued when
management committed to an exit plan, which may have been before an actual
liability arose. SFAS No. 146 is effective for exit or disposal activities
initiated after December 31, 2002. The Company does not believe the adoption of
SFAS No. 146 will have a material impact on its consolidated financial
statements.

12. Related Party Transactions

      During the quarter ended September 30, 2002, companies under the control
of Safeguard International purchased $21,500,000 face amount of the Senior
Discount Notes on the open market.





                                       11








<PAGE>

             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (Continued)




13. Supplemental Guarantor Information

      In November 1997, Metallurg, Inc. issued $100 million principal amount of
its 11% Senior Notes due 2007 (the "Senior Notes"). Under the terms of the
Senior Notes, Shieldalloy, Metallurg Holdings Corporation, Metallurg Services,
Inc., Metallurg International Resources, LLC and MIR (China), Inc.
(collectively, the "Guarantors"), wholly owned subsidiaries of Metallurg, Inc.,
have fully and unconditionally guaranteed on a joint and several basis
Metallurg, Inc.'s obligations to pay principal, premium and interest relative to
the Senior Notes. Management has determined that separate, full financial
statements of the Guarantors would not be material to potential investors and,
accordingly, such financial statements are not provided. Supplemental financial
information of the Guarantors is presented below.

                Metallurg, Inc. and its Consolidated Subsidiaries
           Condensed Consolidating Statement of Operations (Unaudited)
                        Quarter Ended September 30, 2002
                                 (In thousands)

<TABLE>
<CAPTION>

                                                              Combined        Combined
                                              Metallurg,      Guarantor     Non-Guarantor
                                                 Inc.       Subsidiaries    Subsidiaries    Eliminations    Consolidated
                                                 ----       ------------    ------------    ------------    ------------

<S>                                            <C>          <C>              <C>            <C>             <C>
Total revenue ...............................                     $25,366         $95,221        $(12,008)       $108,579
                                                                  -------         -------        --------        --------
Operating costs and expenses:
   Cost of sales ............................                      24,607          84,098         (12,623)         96,082
   Selling, general and administrative
     expenses ...............................      $ 1,228          2,368           8,955               -          12,551
   Restructuring charges, net ...............          214             98             678               -             990
                                                   -------        -------         -------        --------        --------
   Total operating costs and expenses .......        1,442         27,073          93,731         (12,623)        109,623
                                                   -------        -------         -------        --------        --------
   Operating (loss) income ..................       (1,442)        (1,707)          1,490             615          (1,044)
Other income (expense):
   Other income, net ........................            -              -              63               -              63
   Interest (expense) income, net ...........       (2,697)           409          (1,250)              -          (3,538)
   Equity in earnings of subsidiaries .......          482            498           1,358          (2,338)              -
                                                   -------        -------         -------        --------        --------
   (Loss) income before income tax
     provision (benefit) and minority
     interest ...............................       (3,657)          (800)          1,661          (1,723)         (4,519)
Income tax provision (benefit) ..............        1,521         (1,208)            298               -             611
                                                   -------        -------         -------        --------        --------
   (Loss) income before minority interest ...       (5,178)           408           1,363          (1,723)         (5,130)
Minority interest                                        -              -             (48)              -             (48)
                                                   -------        -------         -------        --------        --------
   Net (loss) income ........................       (5,178)           408           1,315          (1,723)         (5,178)

Other comprehensive income (loss):
   Foreign currency translation adjustment ..          710            713           1,489          (2,202)            710
   Deferred loss on derivatives, net ........         (214)          (214)           (429)            643            (214)
                                                   -------        -------         -------        --------        --------
   Comprehensive (loss) income ..............      $(4,682)       $   907         $ 2,375        $ (3,282)       $ (4,682)
                                                   =======        =======         =======        ========        ========

</TABLE>




                                       12






<PAGE>


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (Continued)

13. Supplemental Guarantor Information - (Continued)

                Metallurg, Inc. and its Consolidated Subsidiaries
           Condensed Consolidating Statement of Operations (Unaudited)
                     Three Quarters Ended September 30, 2002
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                  Combined       Combined
                                                  Metallurg,      Guarantor    Non-Guarantor
                                                     Inc.       Subsidiaries   Subsidiaries   Eliminations    Consolidated
                                                  ----------    ------------   -------------  ------------    ------------
<S>                                                <C>              <C>            <C>           <C>                  <C>
Total revenue ..............................                      $83,384        $270,928        $(38,373)       $315,939
                                                                  -------        --------        --------        --------
Operating costs and expenses:

   Cost of sales                                                   81,679         240,599         (40,373)        281,905
   Selling, general and administrative .....
     expenses ..............................       $ 3,966          8,266          27,536               -          39,768
   Environmental expense recoveries ........             -         (3,000)              -               -          (3,000)
   Restructuring charges, net...............         1,089            371             891               -           2,351
                                                   -------        -------        --------        --------        --------
   Total operating costs and expenses ......         5,055         87,316         269,026         (40,373)        321,024
                                                   -------        -------        --------        --------        --------

   Operating (loss) income .................        (5,055)        (3,932)          1,902           2,000          (5,085)

Other income (expense):
   Other income, net .......................             -              -             181               -             181
   Interest (expense) income, net ..........        (8,116)         1,252          (3,384)              -         (10,248)
   Equity in earnings of subsidiaries ......        10,037         10,303           1,358         (21,698)              -
                                                   -------        -------        --------        --------        --------
   (Loss) income before income tax
     provision (benefit) and minority
     interest ..............................        (3,134)         7,623              57         (19,698)        (15,152)
Income tax provision (benefit) .............         2,594         (2,199)            211               -             606
                                                   -------        -------        --------        --------        --------
   (Loss) income before minority interest
     and discontinued operation ............        (5,728)         9,822            (154)        (19,698)        (15,758)
Minority interest ..........................             -              -             (46)              -             (46)
                                                   -------        -------        --------        --------        --------
   (Loss) income from continuing operations         (5,728)         9,822            (200)        (19,698)        (15,804)
Discontinued operation .....................             -              -          10,076               -          10,076
                                                   -------        -------        --------        --------        --------
   Net (loss) income .......................        (5,728)         9,822           9,876         (19,698)         (5,728)

Other comprehensive income (loss):
   Foreign currency translation adjustment..         3,648          3,594           6,870         (10,464)          3,648
   Deferred loss on derivatives, net .......          (288)          (288)           (579)            867            (288)
                                                   -------        -------        --------        --------        --------
   Comprehensive (loss) income .............       $(2,368)       $13,128        $ 16,167        $(29,295)       $ (2,368)
                                                   =======        =======        ========        ========        ========
</TABLE>

                                       13








<PAGE>


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (Continued)

13. Supplemental Guarantor Information - (Continued)

                Metallurg, Inc. and its Consolidated Subsidiaries
                Condensed Consolidating Balance Sheet (Unaudited)
                               September 30, 2002
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                  Combined       Combined
                                                  Metallurg,      Guarantor    Non-Guarantor
                                                     Inc.       Subsidiaries   Subsidiaries   Eliminations    Consolidated
                                                  ----------    ------------   -------------  ------------    ------------
<S>                                                <C>              <C>            <C>           <C>                  <C>
ASSETS
Current Assets:
   Cash and cash equivalents...............       $ 15,789       $    114        $ 20,671       $  (8,270)       $ 28,304
   Accounts and loans receivable, net......         28,835         19,647          60,888         (48,667)         60,703
   Inventories.............................              -         24,928          59,944          (1,214)         83,658
   Prepaid expenses and other current
     assets................................            865          7,212          11,627          (6,010)         13,694
                                                  --------       --------        --------       ---------        --------
       Total current assets................         45,489         51,901         153,130         (64,161)        186,359
Investments - intergroup...................         83,074         18,331          53,424        (154,829)              -
Property, plant and equipment, net.........            616         22,600          54,727               -          77,943
Other assets...............................          5,988         59,240          58,320        (107,197)         16,351
                                                  --------       --------        --------       ---------        --------
       Total...............................       $135,167       $152,072        $319,601       $(326,187)       $280,653
                                                  ========       ========        ========       =========        =========

LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
   Short-term debt and current portion of
     long-term debt........................                                      $ 13,372       $  (8,270)       $  5,102
   Accounts and loans payable..............       $  3,928       $ 38,225          54,180         (48,667)         47,666
   Accrued expenses........................          5,009          8,045          10,648               -          23,702
   Other current liabilities...............          5,028            982           2,423          (6,010)          2,423
                                                  --------       --------        --------       ---------        --------
       Total current liabilities...........         13,965         47,252          80,623         (62,947)         78,893
                                                  --------       --------        --------       ---------        --------
Long-term Liabilities:
   Long-term debt..........................        100,000              -          23,773               -         123,773
   Accrued pension liabilities.............          2,145            289          45,579               -          48,013
   Environmental liabilities, net.........               -         24,510           2,336               -          26,846
   Other liabilities.......................         17,876              -          43,867         (60,364)          1,379
                                                  --------       --------        --------       ---------        --------
       Total long-term liabilities........         120,021         24,799         115,555         (60,364)        200,011
                                                  --------       --------        --------       ---------        --------
       Total liabilities...................        133,986         72,051         196,178        (123,311)        278,904
                                                  --------       --------        --------       ---------        --------

Minority Interest..........................              -              -             568               -             568
                                                  --------       --------        --------       ---------        --------

Shareholder's Equity:
   Common stock............................             50          1,227         120,935        (122,162)             50
   Due from parent company.................        (19,714)             -               -               -         (19,714)
   Additional paid-in capital..............         50,580        104,945           8,090        (113,035)         50,580
   Accumulated other comprehensive loss....        (22,010)       (18,283)         (9,880)         28,163         (22,010)
   Retained (deficit) earnings.............         (7,725)        (7,868)          3,710           4,158          (7,725)
                                                  --------       --------        --------       ---------        --------
       Total shareholder's equity..........          1,181         80,021         122,855        (202,876)          1,181
                                                  --------       --------        --------       ---------        --------
       Total...............................       $135,167       $152,072        $319,601       $(326,187)       $280,653
                                                  ========       ========        ========       =========        ========
</TABLE>

                                       14







<PAGE>


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (Continued)

13. Supplemental Guarantor Information - (Continued)

                Metallurg, Inc. and its Consolidated Subsidiaries
           Condensed Consolidating Statement of Cash Flows (Unaudited)
                     Three Quarters Ended September 30, 2002
                                 (In thousands)


<TABLE>
<CAPTION>
                                                                  Combined       Combined
                                                  Metallurg,      Guarantor    Non-Guarantor
                                                     Inc.       Subsidiaries   Subsidiaries   Eliminations    Consolidated
                                                  ----------    ------------   -------------  ------------    ------------
<S>                                                <C>              <C>            <C>           <C>                  <C>

Cash Flows from Operating Activities.......       $(10,906)       $ 5,120        $ 10,501                        $  4,715
                                                  --------        -------        --------                        --------
Cash Flows from Investing Activities:
   Additions to property, plant and
     equipment.............................            (13)        (5,070)        (10,219)                        (15,302)
   Net proceeds from sale of discontinued
     operation.............................              -              -          13,643                          13,643
   Other, net..............................             62              -            (284)                           (222)
                                                  --------        -------        --------                        --------
        Net cash provided by (used in)
          investing activities.............             49         (5,070)          3,140                          (1,881)
                                                  --------        -------        --------                        --------
Cash Flows from Financing Activities:
   Intergroup borrowings (repayments)......          4,921         (1,209)         (3,712)                              -
   Net repayment of long-term debt.........              -              -            (609)                           (609)
   Net repayment of short-term debt .......              -              -          (5,012)       $  3,356          (1,656)
   Dividends received (paid)...............          3,204              -          (3,204)              -               -
                                                  --------        -------        --------        --------        --------
        Net cash provided by (used
          in) financing activities.........          8,125         (1,209)        (12,537)          3,356          (2,265)
                                                  --------        -------        --------        --------        --------
Effects of exchange rate changes on cash
   and cash equivalents....................              -              -           1,916               -           1,916
                                                  --------        -------        --------        --------        --------
Net decrease (increase) in cash and cash
   equivalents.............................         (2,732)        (1,159)          3,020           3,356           2,485

Cash and cash equivalents -
   beginning of period.....................         18,521          1,273          17,651         (11,626)         25,819
                                                  --------        -------        --------        --------        --------
Cash and cash equivalents -
   end of period...........................       $ 15,789        $   114        $ 20,671        $ (8,270)       $ 28,304
                                                  ========        =======        ========        ========        ========

</TABLE>

                                       15






<PAGE>

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

Forward-Looking Statements

      Certain matters discussed under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in this Form 10-Q may
constitute forward-looking statements for purposes of Section 21E of the
Securities Exchange Act of 1934, as amended, and as such may involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance and achievements of the Company to be materially different
from future results, performance or achievements expressed or implied by such
forward-looking statements. Factors which may cause the Company's results to be
materially different include the cyclical nature of the Company's customers, its
dependence on foreign customers, the impact of changes in foreign exchange rates
and foreign trade regulations on the Company's competitive standing, the
economic strength of the Company's markets generally and particularly the
strength of the demand for aluminum, superalloys, titanium alloys, iron and
steel in those markets, the accuracy of the Company's estimates of the costs of
environmental remediation and the extension or expiration of existing
anti-dumping duties.

Overview

      Metallurg Holdings was formed on June 10, 1998 and is wholly owned by a
group of investors led by and including Safeguard International, an
international private equity fund that invests primarily in equity securities of
companies in process industries.

      The Company is a leading international producer and seller of high-quality
specialty metals, alloys and metallic chemicals, which are essential to the
production of high-performance aluminum and titanium alloys, superalloys, steel
and certain non-metallic materials for various applications in the aerospace,
power supply, automotive, petrochemical processing and telecommunications
industries. The industries that the Company supplies are cyclical.

      Western world* primary aluminum consumption fell by over 6% in 2001 and
the downward trend continued in the first quarter of 2002. The demand for the
Company's products for the aluminum industry fell commensurately. In the second
and third quarters of 2002, the trend reversed and the stronger demand for the
Company's products seen in the second quarter continued into the third quarter.
However, further improvement in aluminum industry product volumes is not
expected until 2003. Over the past year, the Company has rationalized its
aluminum master alloy and grain refiner production to concentrate on its lowest
cost melting, casting and finishing facilities in the U.K., Norway and Brazil.

      The aerospace sector saw its fortunes drop sharply after September 11th
last year, and since then it has been affected by the difficult financial
situation of much of the airline industry. This year has also seen the
cancellation of many land-based turbine power generation projects in the U.S.
These market developments led the producers of superalloys and titanium alloys
to cut their production rates very sharply, particularly in the U.S., and thus
reduce similarly their demand for the Company's chromium and niobium products
and alloys for the titanium industry. We have sustained sales volumes of our
chromium products by increasing sales of lower margin grades to non-superalloy
users, but at the expense of reduced prices and margins.

      The U.S. steel industry operated at low production levels throughout most
of 2001 and into 2002 but, with the imposition of protective duties in March
2002, production rates increased significantly. In the second quarter, we thus
saw demand and pricing for our U.S. ferrovanadium production improve somewhat.
In the third quarter, prices continued to strengthen but volumes fell slightly
due to summer shutdowns; SMC's ferrovanadium plant operated for only two months
during the third quarter. Steel production in the rest of the world was
reasonably steady allowing further improvement in sales of ferrotitanium and
normal grade low carbon ferrochrome. There are, however, signs of activity
levels dropping somewhat, especially in Europe.

      Although market price and demand for tantalum declined in 2001, the
Company had continued to benefit in the first quarter of 2002 from fixed price
sales contracts that had been negotiated in late 2000 when prices were at their
peak. Demand and consumption of tantalum has been extremely weak in 2002, and
this has resulted in much lower volumes and prices for the Company's tantalum
products as the year has progressed.

* Defined as the world, excluding the Commonwealth of Independent States (CIS),
Eastern Europe and China.




                                       16








<PAGE>

      The Company has completed capital investments in the U.K. and is
completing investments in the U.S. and Brazil aimed at reducing the cost of raw
materials and expanding capacity for the production of certain specialty grade
products. In Germany there is on-going investment to raise capacity, output and
sales of various coatings and other specialty materials. Significant cost
reduction programs were initiated in the second quarter. These programs
progressed during the third quarter and will continue. The investments and cost
saving measures have already begun to improve operating results though the full
benefits will come in 2003.

Results of Operations - The Quarter Ended September 30, 2002 Compared to the
Quarter Ended September 30, 2001

      The Company operates in one significant industry segment, the manufacture
and sale of performance-enhancing additives mainly for the metallurgical
industry. The Company is organized around its major production facilities in the
U.S., the U.K., Germany and Brazil, which are supported by an established
worldwide sales network. In addition to its own products, the Company
distributes products manufactured by third parties. This is a natural complement
to the Company's manufacturing operations and leverages its global sales staff
by providing a broader product offering to existing customers without incurring
significant additional overhead.

      Summarized financial information concerning the Company's reportable
segments is shown in the following table (in thousands). Each segment records
direct expenses related to its employees and operations. The "Other" column
includes corporate-related items and results of subsidiaries not meeting the
quantitative thresholds as prescribed by applicable accounting rules for
determining reportable segments. The Company does not allocate general corporate
overhead expenses to operating segments. The accounting policies of the segments
are the same as those of the consolidated group. Transactions among segments are
established based on negotiation among the parties. There have been no material
changes in segment assets from the amounts disclosed in the last annual report,
except as disclosed in "Note 6. Discontinued Operation" to the Company's
consolidated financial statements.

<TABLE>
<CAPTION>

                                                                                                Intersegment   Consolidated
                             Shieldalloy    LSM        GfE        EWW        CIF       Other    Eliminations      Totals
                             ------------ --------- ---------- ---------- ---------- ---------- -------------- ---------------

<S>                          <C>           <C>      <C>         <C>       <C>         <C>       <C>             <C>
 Quarter Ended
     September 30, 2002
Total revenue.............       $22,323   $44,683    $17,308     $7,473     $8,416    $33,695       $(25,319)      $108,579
Gross profit..............           616     4,014      2,645       (182)     1,102      3,687            615         12,497
SG&A......................         2,141     2,605      3,504        437        368      3,504              -         12,559
Restructuring charges.....            98       678          -          -          -        214              -            990
Operating (loss) income..         (1,623)      731       (859)      (619)       734        (31)           615         (1,052)
Interest (expense)
   income, net............          (115)     (425)       (58)        25       (237)    (4,033)             -         (4,843)
Income tax (benefit)
   provision..........            (1,369)      110         35       (195          -      2,031              -            612
Net (loss) income.........          (369)      175       (940)      (399)       497     (3,733)        (1,723)        (6,492)

 Quarter Ended
     September 30, 2001
Total revenue.............       $25,810   $45,015    $16,334     $8,355    $10,632    $37,756      $(31,667)       $112,235
Gross profit..............         1,527     2,405      2,297        345      2,282      7,042          (576)         15,322
SG&A......................         2,362     2,664      2,599        416        429      5,472          (363)         13,579
Operating (loss) income..           (835)     (259)      (302)       (71)     1,853      1,570          (213)          1,743
Interest (expense)
   income, net............           (69)     (479)      (163)        54       (182)    (3,574)            -          (4,413)
Income tax (benefit)
   provision..........              (323)     (157)       185        (34)       734       (485)            -             (80)
Income from discontinued
   operation.............              -         -        115          -          -          -             -             115
Net (loss) income.........          (581)     (557)      (524)        17        937        883        (2,623)         (2,448)
</TABLE>


Total Revenue

      Consolidated total revenue decreased by $3.7 million (3%) in the third
quarter of 2002 as compared to the third quarter of 2001. Shieldalloy revenue
was $3.5 million (14%) below the third quarter of 2001, due primarily to
decreased sales




                                       17







<PAGE>

volume of chrome products. LSM revenue was $0.3 million (1%) below the third
quarter of 2001, due primarily to decreased sales volume and selling prices of
chromium metal offset by improved sales volume of aluminum products and
ferrotitanium. GfE revenue was $1.0 million (6%) above the third quarter of
2001, due primarily to increased sales volume and selling prices of specialty
coating materials and increased sales volume of nickel and ferro alloys sourced
from third parties. EWW revenue was $0.9 million (11%) below the third quarter
of 2001, due to decreased sales volume of ferrochrome. CIF revenue was $2.2
million (21%) below the third quarter of 2001, due primarily to decreased
selling prices of tantalum products partly offset by increased sales volume of
aluminum products. Decreased revenue from distribution activities included in
"Other" above was primarily the result of decreased volume and selling prices of
tantalum-containing products.

Gross Profit

      Gross profit decreased to $12.5 million (11.5% of total revenue) in the
quarter ended September 30, 2002 from $15.3 million (13.7% of total revenue) in
the quarter ended September 30, 2001, a decrease of $2.8 million (18%).
Shieldalloy gross profit was $0.9 million (60%) below the third quarter of 2001,
due primarily to decreased sales volume of ferrochrome and ferrovanadium. LSM
gross profit was $1.6 million (67%) above the third quarter of 2001, due
primarily to increased sales volume of aluminum products and ferrotitanium. GfE
gross profit was $0.3 million (15%) above the third quarter of 2001, due
primarily to increased sales volume of nickel and ferro alloys sourced from
third parties. EWW gross profit was $0.5 million (153%) below the third quarter
of 2001, due primarily to decreased sales volume of ferrochrome. CIF gross
profit was $1.2 million (52%) below the third quarter of 2001, due primarily to
decreased selling prices of tantalum products. Decreased gross profit from
distribution activities included in "Other" above was primarily the result of
decreased volume and selling prices of tantalum-containing products.

Selling, General and Administrative Expenses ("SG&A")

      SG&A decreased to $12.6 million in the quarter ended September 30, 2002
from $13.6 million in the quarter ended September 30, 2001, a decrease of $1.0
million (8%). For the quarter ended September 30, 2002, SG&A represented 11.6%
of total revenue compared to 12.1% for the quarter ended September 30, 2001. In
the quarter ended September 30, 2002, start-up and other costs at a new GfE
subsidiary that manufactures and sells titanium coated medical products were
partially offset by cost savings beginning to come through as a result of the
Company's recent restructuring program. The quarter ended September 30, 2001
included $1.3 million of goodwill amortization. Goodwill amortization ceased in
2002 following the adoption of SFAS No. 142 on January 1, 2002.

Restructuring Charges

      During the third quarter of 2002, the Company continued a restructuring
program, initiated in the second quarter, intended to reduce the cost structure
at Metallurg, Inc., Shieldalloy and LSM. The restructuring plan includes the
discontinuation of certain production activities, the termination of employees
and the write-down of redundant plant and equipment. As a result of the
restructuring and other cost reduction activities, the Company currently expects
to generate cost savings of approximately $8 million annually in future periods.
A charge of $990,000 was incurred in the third quarter, all of which was for
severance costs of terminated employees.

      Metallurg, Inc.'s restructuring charge of $214,000 in the third quarter of
2002 was for severance costs of five administrative employees. None of this
amount had been paid as of September 30, 2002. During the third quarter, SMC's
restructuring charge of $98,000 was for the termination of one executive. None
of this amount had been paid as of September 30, 2002. In the third quarter, LSM
incurred a restructuring charge of 'L'452,000 ($678,000) for severance costs
of seven production employees and 11 administrative employees who were
terminated during the third quarter. The entire amount had been paid as of
September 30, 2002.

      See "Note 7. Restructuring" to the Company's Consolidated Financial
Statements.

Operating Income

      There was an operating loss of $1.1 million in the quarter ended September
30, 2002 compared to operating income of $1.7 million in the quarter ended
September 30, 2001, due primarily to the decrease in gross profit and the
restructuring, discussed above.




                                       18








<PAGE>

Interest Expense, Net

      Interest expense, net, is as follows (in thousands):

<TABLE>
<CAPTION>
                                                              Quarters Ended
                                                               September 30,
                                                      --------------------------------
                                                          2002             2001
                                                         -------          -------
<S>                                                      <C>              <C>
  Interest income .............................          $   262          $   457
  Interest expense .............................          (5,105)          (4,870)
                                                         -------          -------
     Interest expense, net.....................          $(4,843)         $(4,413)
                                                         =======          =======
</TABLE>

      Interest expense includes interest on Metallurg Holdings' Senior Discount
Notes of $1.3 million and $1.1 million in 2002 and 2001, respectively, and on
Metallurg, Inc.'s Senior Notes of $2.8 million in both 2002 and 2001.

Income Tax Provision (Benefit), Net

      Income tax provision (benefit), net, is as follows (in thousands):

<TABLE>
<CAPTION>

                                                               Quarters Ended
                                                                September 30,
                                                      --------------------------------
                                                            2002             2001
                                                            ----             ----
<S>                                                         <C>             <C>
  Total current ...............................             $540            $(334)
  Total deferred ...............................              72              254
                                                            ----             ----
     Income tax provision (benefit), net......              $612             $(80)
                                                            ====             ====
</TABLE>

      The difference between the statutory federal income tax rate and the
Company's effective rate for the quarter ended September 30, 2002 is principally
due to losses in certain jurisdictions for which the related deferred tax assets
were offset by valuation allowances.

Net Loss

      Net loss was $6.5 million in the quarter ended September 30, 2002 compared
to $2.4 million for the quarter ended September 30, 2001. The loss is due
primarily to the decrease in operating income discussed above.

Results of Operations - The Three Quarters Ended September 30, 2002 Compared to
the Three Quarters Ended September 30, 2001

<TABLE>
<CAPTION>

                                                                                                Intersegment   Consolidated
                            Shieldalloy     LSM        GfE        EWW        CIF       Other    Eliminations      Totals
                            ------------ ---------- ---------- ---------- ---------- ---------- -------------- --------------
<S>                         <C>          <C>         <C>        <C>        <C>       <C>        <C>            <C>
 Three Quarters Ended
     September 30, 2002
Total revenue..............     $69,618   $118,583    $54,977    $21,603    $25,106   $100,899       $(74,847)      $315,939
Gross profit...............         (18)     9,335      8,178        247      2,875     11,417          2,000         34,034
SG&A.......................       7,503      9,102      9,895      1,293      1,257     10,779              -         39,829
Environmental expense
   recoveries..............      (3,000)         -          -          -          -          -              -         (3,000)
Restructuring charges, net.         371      1,028          -       (137)         -      1,089              -          2,351
Operating (loss) income...       (4,892)      (795)    (1,717)      (909)     1,618       (451)         2,000         (5,146)
Interest (expense)
   income, net.............        (278)    (1,132)      (192)       103       (525)   (11,956)             -        (13,980)
Income tax (benefit)
   provision...........          (3,066)      (481)        95       (312)        47      4,327              -            610
Gain (loss) on disposition
   of discontinued
   operation...............           -          -     10,076          -          -    (14,789)             -         (4,713)
Net (loss) income..........      (2,104)    (1,427)     8,107       (494)     1,046     (9,744)       (19,698)       (24,314)

</TABLE>




                                       19








<PAGE>


<TABLE>
<CAPTION>

                                                                                                Intersegment  Consolidated
                            Shieldalloy    LSM        GfE        EWW         CIF       Other    Eliminations     Totals
                            -----------  ---------  ---------  ---------  ---------- ---------- ------------- --------------
<S>                          <C>         <C>         <C>        <C>         <C>       <C>       <C>            <C>
 Three Quarters Ended
     September 30, 2001
Total revenue.............     $79,427   $135,147    $64,683    $29,087     $30,370   $133,567      $(97,174)      $375,107
Gross profit..............       4,299     10,803     10,883      4,771       6,479     21,301        (1,918)        56,618
SG&A......................       7,139      8,367      8,683      1,423       1,359     15,911          (720)        42,162
Environmental expense
   recoveries.............        (600)         -          -          -           -          -             -           (600)
Operating (loss) income..       (2,240)     2,436      2,200      3,348       5,120      5,390        (1,198)        15,056
Interest (expense)
   income, net............         (93)    (1,230)      (642)       152        (519)   (10,511)            -        (12,843)
Income tax (benefit)
   provision..........            (637)       549        970      1,305       1,235      1,467             -          4,889
Income from  discontinued
   operation.............            -          -        373          -           -          -             -            373
Net (loss) income.........      (1,696)       759      1,022      2,195       3,366     11,937       (19,675)        (2,092)
</TABLE>

Total Revenue

      Consolidated total revenue decreased by $59.2 million (16%) in the first
three quarters of 2002 as compared to the first three quarters of 2001.
Shieldalloy revenue was $9.8 million (12%) below the first three quarters of
2001, due primarily to decreased sales volume and selling prices of vanadium and
chrome products. LSM revenue was $16.6 million (12%) below the first three
quarters of 2001, due primarily to decreased selling prices of aluminum products
and decreased sales volume and selling prices of chromium metal. GfE revenue was
$9.7 million (15%) below the first three quarters of 2001, due primarily to
decreased sales volume and selling prices of specialty coating materials and
alloys for the titanium industry. EWW revenue was $7.5 million (26%) below the
first three quarters of 2001, due to decreased sales volume and prices of
ferrochrome. EWW's 2001 sales also included one-time sales of
tantalum-containing products. CIF revenue was $5.3 million (17%) below the first
three quarters of 2001, due primarily to decreased selling prices of tantalum
products partly offset by increased sales volumes of aluminum products.
Decreased revenue from distribution activities included in "Other" above was
primarily the result of decreased volume and selling prices of tantalum-
containing products.

Gross Profit

      Gross profit decreased to $34.0 million (10.8% of total revenue) in the
three quarters ended September 30, 2002 from $56.6 million (15.1% of total
revenue) in the three quarters ended September 30, 2001, a decrease of $22.6
million (40%). Shieldalloy gross profit was $4.3 million (100%) below the first
three quarters of 2001, due primarily to decreased sales volume and selling
prices of vanadium and chrome products. LSM gross profit was $1.5 million (14%)
below the first three quarters of 2001, due primarily to decreased sales volume
and selling prices of chromium metal. GfE gross profit was $2.7 million (25%)
below the first three quarters of 2001, due primarily to decreased sales volume
and selling prices of specialty coating materials and alloys for the titanium
industry. EWW gross profit was $4.5 million (95%) below the first three quarters
of 2001, due primarily to decreased sales volume of ferrochrome, but the 2001
gross profit also included one-time sales of tantalum-containing products. CIF
gross profit was $3.6 million (56%) below the first three quarters of 2001, due
primarily to decreased selling prices of tantalum products. Decreased gross
profit from distribution activities included in "Other" above was primarily the
result of decreased volume and selling prices of tantalum-containing products.

Selling, General and Administrative Expenses

      SG&A decreased to $39.8 million in the three quarters ended September 30,
2002 from $42.2 million in the three quarters ended September 30, 2001, a
decrease of $2.4 million (6%). For the three quarters ended September 30, 2002,
SG&A represented 12.6% of total revenue compared to 11.2% for the three quarters
ended September 30, 2001. The three quarters ended September 30, 2002 included
an increase in pension expense at LSM, bad debt expense resulting from
bankruptcy filings by three customers and start-up and other costs at GfE's new
medical products subsidiary, offset by cost savings beginning to come through as
a result of the Company's recent restructuring program. The three quarters ended
September 30, 2001 included $4.0 million of goodwill amortization. Goodwill
amortization ceased in 2002 following the adoption of SFAS No. 142 on January 1,
2002.


                                       20








<PAGE>

Restructuring Charges, Net

      During the second and third quarters of 2002, the Company carried out a
restructuring program intended to reduce the cost structure at Metallurg, Inc.,
Shieldalloy and LSM. The restructuring plan includes the discontinuation of
certain production activities, the termination of employees and the write-down
of redundant plant and equipment. As a result of the restructuring and other
cost reduction activities, the Company currently expects to generate cost
savings of approximately $8 million annually in future periods. Details of the
restructuring charge are as follows (in thousands):

<TABLE>
<CAPTION>

                                                                                   Utilized                 Balance at
                                                          Original        ----------------------------    September 30,
                                                           Charge            Cash          Non-cash            2002
                                                         ------------     ------------    ------------    ---------------
<S>                                                      <C>              <C>             <C>             <C>
Severance and other employee costs....................        $2,385           $1,406                               $979
Write-down of plant and equipment.....................           103                -            $103                  -
                                                              ------           ------            ----               ----
      Total...........................................        $2,488           $1,406            $103               $979
                                                              ======           ======            ====               ====
</TABLE>


      Metallurg, Inc.'s restructuring charge of $875,000 in the second quarter
was for severance costs of three corporate executives who were terminated at the
end of the second quarter of 2002. Under the terms of their employment and
severance agreements, the severance will be paid over a period of up to 18
months. Of this amount, $224,000 was paid as of September 30, 2002. In the third
quarter, a further charge of $214,000 was incurred for severance costs of five
administrative employees. None of this amount had been paid as of September 30,
2002.

      In the second quarter, SMC's restructuring charge of $273,000 included
$170,000 for severance costs of 16 production employees and six administrative
employees, of which $154,000 had been paid by September 30, 2002. Twenty-one
employees were terminated in the second quarter and one in the third quarter.
The remaining $103,000 was for the write-down of property and equipment no
longer used in operations. During the third quarter, an additional charge of
$98,000 was incurred for the termination of one executive. None of this amount
had been paid as of September 30, 2002.

      In the second quarter, LSM expensed, and paid in full, a restructuring
charge of 'L'242,000 ($350,000) for severance costs of 11 production
employees who were terminated during the second quarter. In the third quarter,
LSM expensed, and paid in full, a restructuring charge of 'L'452,000
($678,000) for severance costs of seven production employees and 11
administrative employees who were terminated during the third quarter.

      The restructuring charge of $2,351,000 in the three quarters ended
September 30, 2002 is net of the reversal of a prior year accrual balance of
$137,000 following the completion of a restructuring program at EWW in 2002.

      See "Note 7. Restructuring" to the Company's Consolidated Financial
Statements.

Operating (Loss) Income

      There was an operating loss of $5.1 million in the three quarters ended
September 30, 2002 compared to an operating income of $15.1 million in the three
quarters ended September 30, 2001, due primarily to the decrease in gross profit
and the restructuring, discussed above. In addition, Shieldalloy recognized an
environmental expense recovery of $3.0 million and $0.6 million in the three
quarters ended September 30, 2002 and 2001, respectively, upon settlements with
insurance companies relating to coverage for certain environmental claims.

Interest Expense, Net

      Interest expense, net, is as follows (in thousands):

<TABLE>
<CAPTION>

                                                          Three Quarters Ended
                                                               September 30,
                                                        ----------------------------
                                                           2002             2001
                                                         --------         --------
<S>                                               <C>               <C>
  Interest income .............................          $    856         $  1,496
  Interest expense .............................          (14,836)         (14,339)
                                                         --------         --------
     Interest expense, net.....................          $(13,980)        $(12,843)
                                                         ========         ========
</TABLE>

      Interest expense includes interest on Metallurg Holdings' Senior Discount
Notes of $3.6 million and $3.2 million in 2002 and 2001, respectively, and on
Metallurg, Inc.'s Senior Notes of $8.3 million in both 2002 and 2001.



                                       21







<PAGE>


Income Tax Provision, Net

      Income tax provision, net, is as follows (in thousands):

<TABLE>
<CAPTION>

                                                             Three Quarters Ended
                                                                 September 30,
                                                      ---------------------------------
                                                            2002             2001
                                                            -----           ------
<S>                                                         <C>             <C>
  Total current ...............................             $ 994           $2,538
  Total deferred ...............................             (384)           2,351
                                                            -----           ------
     Income tax provision, net................              $ 610           $4,889
                                                            =====           ======

</TABLE>


      The difference between the statutory federal income tax rate and the
Company's effective rate for the three quarters ended September 30, 2002 is
principally due to: (i) the absence of a tax benefit on the loss on the sale of
GfE's prosthetics company in January 2002; and (ii) losses in certain
jurisdictions which the related deferred tax assets were offset by valuation
allowances.

Net Loss

      Net loss was $24.3 million in the three quarters ended September 30, 2002
compared to $2.1 million for the three quarters ended September 30, 2001. In
addition to the decrease in 2002 operating income, discussed above, the Company
recorded a net loss of $4.7 million, after the allocation of $14.8 million of
goodwill, on the sale of GfE's prosthetics company in January 2002.

Liquidity and Financial Resources

General

      The Company's sources of liquidity include cash and cash equivalents, cash
from operations and amounts available under credit facilities. At September 30,
2002, the Company had $28.3 million in cash and cash equivalents and working
capital of $107.6 million as compared to $25.9 million and $119.2 million,
respectively, at December 31, 2001.

      Cash Flows from Operating Activities - Net cash provided by operating
activities was $4.6 million for both the three quarters ended September 30, 2002
and the three quarters ended September 30, 2001. In 2002, a net loss, adjusted
for the loss on the sale of GfE's prosthetics company and depreciation and other
non-cash items, was more than offset by a decrease in working capital. In 2001,
net loss, adjusted for depreciation, amortization and other non-cash items, was
partially offset by cash used to fund increases in working capital items.

      Cash Flows from Investing Activities - Net cash used in investing
activities was $1.9 million for the three quarters ended September 30, 2002,
compared to $12.9 million for the three quarters ended September 30, 2001. The
2002 cash flows included the receipt of $13.6 million in net proceeds upon the
sale of GfE's prosthetics company in January 2002. In addition, cash flows for
capital expenditures totaled $15.3 million in 2002 compared to $11.9 million in
2001.

      Cash Flows from Financing Activities - Net cash used in financing
activities was $2.3 million for the three quarters ended September 30, 2002,
compared to cash provided by financing activities of $3.5 million in the three
quarters ended September 30, 2001. Cash flows in 2001 reflect primarily
long-term borrowings by LSM for financing of its working capital.

Credit Facilities and Other Financing Arrangements

      The Company has a credit facility with certain financial institutions led
by Fleet National Bank as agent (the "Revolving Credit Facility") which provides
Metallurg, Inc., Shieldalloy and certain of their subsidiaries (the "Borrowers")
with up to $50.0 million of financing resources. Interest is charged at a rate
per annum equal to (i) LIBOR plus 2.0% - 2.5% or (ii) Prime, plus up to 1%,
based on the performance of Metallurg, Inc. and certain of its subsidiaries (the
"North American Group" as defined in the Revolving Credit Facility). The
Revolving Credit Facility permits borrowings of up to $50.0 million for working
capital requirements and general corporate purposes, up to $35.0 million of
which may be used for letters of credit. The Revolving Credit Facility prohibits
Metallurg, Inc. from making dividends prior to 2004 and requires the Borrowers
and certain subsidiaries to comply with various covenants, including the
maintenance of minimum liquidity, as defined in the agreement, at a $10.0
million level. Liquidity, as defined, was $14.3 million at September 30, 2002.
The total amount the Borrowers may borrow at any time is limited to a borrowing
base calculation that is based on eligible accounts






                                       22








<PAGE>

receivable, inventory and certain fixed assets. At September 30, 2002, there
were no borrowings under this facility; however, outstanding letters of credit
totaled $21.5 million. The Borrowers had unused borrowing capacity of $4.7
million under this facility.

      LSM has overdraft facilities with Barclays and HSBC that currently provide
LSM with up to 'L'7.5 million ($11.8 million) of borrowings, up to
'L'43.3 million ($67.9 million) notional amount of foreign exchange
contracts and options and 'L'4.0 million ($6.2 million) for other ancillary
banking arrangements, including bank guarantees. Borrowings under these
facilities are unsecured and payable on demand. Outstanding loans under these
facilities currently bear interest at a rate of 1.0% over the lender's base
rate. At September 30, 2002, there were no amounts outstanding under these
overdraft facilities.

      LSM also has four revolving term loan facilities with Barclays and HSBC
that provide for borrowings up to 'L'12.0 million ($18.8 million), all of
which were outstanding at September 30, 2002. Interest is currently charged at a
rate per annum of LIBOR plus 0.8% - 1.75%. Two of the facilities expire during
the second quarter of 2004 while the other two expire during the second quarter
of 2006. These term loan facilities are unsecured and require LSM to comply with
various covenants, including the maintenance of minimum net worth and interest
coverage.

      Following a decline in operating results, LSM obtained a waiver from
Barclays regarding the required minimum interest coverage ratio covenant for the
period ended December 31, 2001. In August 2002, the agreement was amended to
modify this covenant and other terms. Compliance with the amended interest
coverage ratio covenant will next be measured at December 31, 2002 and will be
based on the results for the six months ended December 31, 2002. As a result of
the amendment, the annual interest rate on the two revolving term loan
facilities was increased to LIBOR plus 1.75%. Also as a result of the amendment,
LSM's overdraft facility with Barclays was reduced by 'L'1.0 million ($1.6
million).

      LSM obtained a similar waiver from HSBC for the period ended December 31,
2001. The next measurement date on these facilities is December 31, 2002. LSM
does not anticipate the need for a waiver at this date but believes that it
would, if required, be able to obtain a similar waiver, though no assurance of
obtaining such a waiver can be given. The terms of the overdraft and term loan
facilities with HSBC remain unchanged.

      Several of the Company's other foreign subsidiaries have term loans and
credit facility arrangements with local banking institutions to provide funds
for working capital, capital expenditures and general corporate purposes. These
local credit facilities contain restrictions that vary from company to company.
At September 30, 2002, these facilities totaled $14.1 million, of which $4.1
million of loans were outstanding.

      The Company believes that existing cash balances and these sources are
sufficient to fund the current and anticipated future requirements of working
capital, capital expenditures, pension benefits, potential acquisitions and
environmental expenditures for the next twelve months.

Other

      The funded status of the Company's pension plans continues to be impacted
by decreases in the plans' asset values due to continuing declines in equity
markets in 2002. Management continues to monitor these developments as further
declines in the funded status of these plans may impact future pension expense
and funding requirements.

Capital Expenditures

      The Company invested $15.3 million in capital expenditures during the
first three quarters of 2002. Capital expenditures are expected to total about
$10 million over the next five quarters. Although the Company has projected
these items in 2002 and 2003, the Company has not committed purchases to vendors
for all of these projects, as some projects remain contingent on final approvals
and other conditions and the actual timing of expenditures may extend into 2004.
The Company believes that these projects will be funded through existing and
future internally generated cash and credit lines.

Environmental Remediation Costs

      Losses associated with environmental remediation obligations are accrued
when such losses are deemed probable and reasonably estimable. Such accruals
generally are recognized no later than the completion of the remedial
feasibility study and are adjusted as further information develops or
circumstances change. Costs of future expenditures for environmental remediation
obligations are not discounted to their present value. During the first three
quarters of 2002, the Company expended $2.3 million for environmental
remediation.



                                       23








<PAGE>

      In 1997, Shieldalloy entered into settlement agreements with various
environmental regulatory authorities with regard to all of the significant
environmental remediation liabilities of which it is aware. Pursuant to these
agreements, Shieldalloy has agreed to perform environmental remediation that, as
of September 30, 2002, had an accrual of $28.9 million for the remaining
estimated cost of completion. Of this amount, $1.0 million is expected to be
expended in the last quarter of 2002, $3.0 million in 2003 and $4.0 million in
2004. In addition, the Company estimates it will make expenditures of $1.5
million with respect to environmental remediation at its foreign facilities
through 2004. These amounts have been accrued for in prior years and are
reflected in the Company's balance sheet.

      While its remediation obligations and other environmental costs, in the
aggregate, will reduce its liquidity, the Company believes its cash balances,
cash from operations and cash available under its credit facilities are
sufficient to fund its current and anticipated future requirements for
environmental expenditures.






                                       24








<PAGE>

         ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK

      Refer to the Market Risk section of Management's Discussion and Analysis
of Financial Condition and Results of Operations included in the Company's
annual report on Form 10-K for the year ended December 31, 2001, which is
incorporated by reference herein.





                                       25









<PAGE>

                        ITEM 4 - CONTROLS AND PROCEDURES

      Within the 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision of its Chief Executive Officer and
Principal Financial Officer, of the effectiveness of the design and operation of
its disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.
Based upon that evaluation, the Chief Executive Officer and Principal Financial
Officer concluded that the Company's disclosure controls and procedures are
effective in timely alerting them to material information relating to the
Company (including its consolidated subsidiaries) required to be included in its
Exchange Act filings.

      There have been no significant changes in the Company's internal controls
or in other factors that could significantly affect internal controls subsequent
to the date that the Company carried out its evaluation.





                                       26








<PAGE>

                           PART II - OTHER INFORMATION

                    ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     (a) EXHIBITS

         None

     (b) REPORTS ON FORM 8-K

         None





                                       27








<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on November 13, 2002 on its
behalf by the undersigned thereunto duly authorized.



                                       METALLURG HOLDINGS, INC.
                                       By:   /s/ Arthur R. Spector
                                          ----------------------------
                                       Arthur R. Spector
                                       Executive Vice President
                                       (Principal Financial Officer and
                                        Principal Accounting Officer)















                                       28








<PAGE>

                            OFFICERS' CERTIFICATIONS

I, Heinz C. Schimmelbusch, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Metallurg Holdings,
     Inc.;

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

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

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

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

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

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

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

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

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

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

Date: November 13, 2002

                                         /s/ Heinz C. Schimmelbusch
                                        -----------------------------------
                                        Heinz C. Schimmelbusch
                                        Chief Executive Officer




                                       29








<PAGE>

                      OFFICERS' CERTIFICATIONS (CONTINUED)

I, Arthur R. Spector, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Metallurg Holdings,
     Inc.;

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

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

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

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

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

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

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

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

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

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

Date: November 13, 2002

                                        /s/ Arthur R. Spector
                                        -----------------------------------
                                        Arthur R. Spector
                                        Principal Financial Officer



                                       30


                          STATEMENT OF DIFFERENCES
                          ------------------------

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