<PAGE>   1

                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 OCTOBER 31, 2000

                                       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 INCLUDING AREA CODE)
       WAYNE, PENNSYLVANIA 19087
(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 December
11, 2000, 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 Preferred Stock, $.01 par value.


<PAGE>   2



             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES


                                      INDEX


<TABLE>
<CAPTION>
                                                                                                       PAGE NO.
                                                                                                       --------
<S>                                                                                                    <C>
Part I.    FINANCIAL INFORMATION:

           Item 1 - Financial Statements (Unaudited)

                Condensed Statements of Consolidated Operations
                   for the Quarters and the Three Quarters Ended October 31, 2000 and 1999 ..........      3

                Condensed Consolidated Balance Sheets
                   at October 31, 2000 and January 31, 2000 .........................................      4

                Condensed Statements of Consolidated Cash Flows
                   for the Three Quarters Ended October 31, 2000 and 1999 ...........................      5

                Notes to Condensed Unaudited Consolidated Financial Statements ......................   6-14

           Item 2 - Management's Discussion and Analysis of Financial Condition
                    and Results of Operations .......................................................  15-22

           Item 3 - Quantitative and Qualitative Disclosure of Market Risk ..........................     23

Part II.   OTHER INFORMATION:

           Item 6. (a)    EXHIBITS ..................................................................     24

           Item 6. (b)    REPORTS ON FORM 8-K .......................................................     24

           Signature Page ...........................................................................     25

</TABLE>



                                       2
<PAGE>   3


                         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
                                                                       OCTOBER 31,                     OCTOBER 31,
                                                                -------------------------       -------------------------
                                                                   2000           1999            2000            1999
                                                                ---------       ---------       ---------       ---------
<S>                                                             <C>             <C>             <C>             <C>
Sales ....................................................      $ 116,983       $ 113,103       $ 372,940       $ 346,679
Commission income ........................................            183             155             486             444
                                                                ---------       ---------       ---------       ---------
        Total revenues ...................................        117,166         113,258         373,426         347,123
                                                                ---------       ---------       ---------       ---------

Operating costs and expenses:
        Cost of sales ....................................        101,697          99,570         322,228         308,374
        Selling, general and administrative expenses .....         14,712          14,994          45,409          46,134
        Environmental expense recovery ...................              -               -            (750)         (5,501)
        Restructuring charges ............................              -               -               -           4,386
                                                                ---------       ---------       ---------       ---------
        Total operating costs and expenses ...............        116,409         114,564         366,887         353,393
                                                                ---------       ---------       ---------       ---------

Operating income (loss) ..................................            757          (1,306)          6,539          (6,270)

Other income (expense):
        Other income (expense), net ......................            135             (16)          5,485             (11)
        Interest expense, net ............................         (4,927)         (4,721)        (15,444)        (15,041)
                                                                ---------       ---------       ---------       ---------

Loss before income tax provision,
   minority interest and extraordinary item ..............         (4,035)         (6,043)         (3,420)        (21,322)
Income tax provision .....................................          1,205             746           4,706           3,496
                                                                ---------       ---------       ---------       ---------

Loss before minority interest and
   extraordinary item ....................................         (5,240)         (6,789)         (8,126)        (24,818)
Minority interest ........................................            104               -             161               -
                                                                ---------       ---------       ---------       ---------
Loss before extraordinary item ...........................         (5,136)         (6,789)         (7,965)        (24,818)
Extraordinary item, net ..................................         32,649               -          32,649               -
                                                                ---------       ---------       ---------       ---------
Net income (loss) ........................................         27,513          (6,789)         24,684         (24,818)

Other comprehensive (loss) income:
        Foreign currency translation adjustment ..........         (1,472)          2,048          (4,598)           (373)
                                                                ---------       ---------       ---------       ---------
        Comprehensive income (loss) ......................      $  26,041       $  (4,741)      $  20,086       $ (25,191)
                                                                =========       =========       =========       =========
</TABLE>

       See notes to condensed unaudited consolidated financial statements.


                                       3
<PAGE>   4


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                        OCTOBER 31,        JANUARY 31,
                                                                           2000               2000
                                                                        -----------        ----------
                                                                        (Unaudited)
<S>                                                                      <C>               <C>
ASSETS
Current Assets:
        Cash and cash equivalents ...............................        $  30,664         $  59,780
        Accounts and notes receivable, net ......................           69,575            68,386
        Inventories .............................................           91,167            80,653
        Other current assets ....................................           13,366            10,728
                                                                         ---------         ---------
               Total current assets .............................          204,772           219,547
Goodwill ........................................................           89,909            93,717
Property, plant and equipment, net ..............................           59,086            52,545
Other assets ....................................................           21,330            25,577
                                                                         ---------         ---------
               Total ............................................        $ 375,097         $ 391,386
                                                                         =========         =========


LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
        Short-term debt and current portion of long-term debt ...        $   6,369         $   1,932
        Trade payables ..........................................           49,041            48,792
        Accrued expenses ........................................           33,886            30,357
        Other current liabilities ...............................            2,805             1,311
                                                                         ---------         ---------
               Total current liabilities ........................           92,101            82,392
                                                                         ---------         ---------

Long-term Liabilities:
        Long-term debt ..........................................          146,484           187,932
        Accrued pension liabilities .............................           31,757            35,890
        Environmental liabilities, net ..........................           29,844            31,819
        Other liabilities .......................................            6,518             6,220
                                                                         ---------         ---------
               Total long-term liabilities ......................          214,603           261,861
                                                                         ---------         ---------
               Total liabilities ................................          306,704           344,253
                                                                         ---------         ---------

Minority Interest ...............................................              670               (24)
                                                                         ---------         ---------

Shareholders' Equity:
        Additional paid-in capital ..............................           97,837            97,357
        Accumulated other comprehensive loss ....................           (6,098)           (1,500)
        Retained deficit ........................................          (24,016)          (48,700)
                                                                         ---------         ---------
               Total shareholders' equity .......................           67,723            47,157
                                                                         ---------         ---------
               Total ............................................        $ 375,097         $ 391,386
                                                                         =========         =========
</TABLE>


       See notes to condensed unaudited consolidated financial statements.



                                       4
<PAGE>   5


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES
           CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                 THREE QUARTERS ENDED
                                                                                      OCTOBER 31,
                                                                              ---------------------------
                                                                                 2000             1999
                                                                              ---------         ---------
<S>                                                                           <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ....................................................        $  24,684         $ (24,818)
Adjustments to reconcile net income (loss) to net cash (used in)
provided by operating activities:
  Depreciation and amortization ......................................           10,529            10,266
  (Gain) loss on sale of assets ......................................           (5,161)               16
  Interest accretion on Senior Discount Notes ........................            7,409             6,794
  Deferred income taxes ..............................................            1,825             1,311
  Provision for restructuring costs ..................................                -             4,386
  Extraordinary item .................................................          (32,724)                -
                                                                              ---------         ---------
    Total ............................................................            6,562            (2,045)

Change in operating assets and liabilities:
  Increase in trade receivables ......................................             (893)           (6,022)
  (Increase) decrease in inventories .................................          (12,371)           21,112
  (Increase) decrease in other current assets ........................           (3,561)            2,392
  Increase in trade payables and accrued expenses ....................            4,447            13,457
  Restructuring payments .............................................           (1,510)                -
  Environmental payments .............................................           (1,889)           (2,132)
  Other assets and liabilities, net ..................................            2,338            (3,295)
                                                                              ---------         ---------
    Net cash (used in) provided by operating activities ..............           (6,877)           23,467
                                                                              ---------         ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property, plant and equipment .........................          (12,356)           (9,373)
  Proceeds from asset sales ..........................................            8,417                42
  Acquisitions, net of cash ..........................................          (11,196)                -
  Other, net .........................................................               62               (61)
                                                                              ---------         ---------
    Net cash used in investing activities ............................          (15,073)           (9,392)
                                                                              ---------         ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net short-term borrowings (repayments) .............................            5,877            (1,680)
  Proceeds (repayment) of long-term debt, net ........................            6,915              (874)
  Metallurg, Inc. purchase of Senior Discount Notes ..................          (19,714)                -
  Minority interest contribution .....................................              676                 -
                                                                              ---------         ---------
    Net cash used in financing activities ............................           (6,246)           (2,554)
                                                                              ---------         ---------

Effects of exchange rate changes on cash and cash equivalents ........             (920)             (333)
                                                                              ---------         ---------
Net (decrease) increase in cash and cash equivalents .................          (29,116)           11,188
Cash and cash equivalents - beginning of period ......................           59,780            38,395
                                                                              ---------         ---------
Cash and cash equivalents - end of period ............................        $  30,664         $  49,583
                                                                              =========         =========
</TABLE>


       See notes to condensed unaudited consolidated financial statements.



                                       5
<PAGE>   6


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

         NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1. BASIS OF PRESENTATION

    Metallurg Holdings, Inc. ("Metallurg Holdings"), a Delaware corporation, was
formed on June 10, 1998 and is 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. On July 13, 1998, Metallurg Holdings acquired
Metallurg, Inc. Metallurg, Inc. and its majority-owned subsidiaries
(collectively, "Metallurg") manufacture and sell high quality metal alloys and
specialty metals used by manufacturers of aluminum, superalloys, titanium
alloys, steel and chemicals and other metal consuming industries.

    The accompanying condensed unaudited consolidated financial statements
include the accounts of Metallurg Holdings and Metallurg, (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, they 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 January 31, 2000 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.

    For further information, see the financial statements and footnotes thereto
included in the Company's audited consolidated financial statements for the year
ended January 31, 2000.

    Metallurg Holdings and Metallurg, Inc. both report on a fiscal year ending
January 31. The operating subsidiaries of Metallurg, Inc. report on a calendar
year ending December 31. Accordingly, the three quarters ended October 31, 2000
and 1999 include operating results of Metallurg Holdings and Metallurg, Inc. for
the nine months ended October 31, 2000 and 1999 and worldwide operating results
for the nine months ended September 30, 2000 and 1999. Balance sheet data at
October 31, 2000 reflect the financial position of Metallurg Holdings and
Metallurg, Inc. at October 31, 2000 and of Metallurg, Inc.'s subsidiaries at
September 30, 2000. Balance sheet data at January 31, 2000 reflect the financial
position of Metallurg Holdings and Metallurg, Inc. at January 31, 2000 and of
Metallurg, Inc.'s subsidiaries at December 31, 1999. See "Note 10. Subsequent
Event - Change in Fiscal Year".

    Amounts reflected in the 1999 condensed statement of consolidated cash flows
have been reclassed to conform to the current period's disclosure.



                                       6
<PAGE>   7


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (CONTINUED)


2.  SEGMENTS AND RELATED INFORMATION

    Metallurg operates in one significant industry segment, the manufacture and
sale of ferrous and non-ferrous metals and alloys. Metallurg is organized
geographically, having established a worldwide sales network built around
Metallurg's core production facilities in the U.S., the U.K. and Germany. In
addition to selling products manufactured by Metallurg, Metallurg distributes
complementary products manufactured by third parties. The results of Metallurg
Holdings consist primarily of interest expense on the 12 3/4% Senior Discount
Notes due 2008 (the "Senior Discount Notes"), amortization of goodwill and
deferred costs and general overhead expenses. Such costs are reported in the
segment "Other" below.

Reportable Segments

    Shieldalloy Metallurgical Corporation ("Shieldalloy") - This unit is
comprised of two production facilities in the U.S. The New Jersey plant
manufactures and sells aluminum alloy grain refiners and alloying tablets for
the aluminum industry, metal powders for the welding industry 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. 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. On March 31, 2000, LSM acquired the
business of Hydelko KS ("Hydelko"), a Norwegian producer of master alloys for
the aluminum industry.

    Gesellschaft fur Elektrometallurgie mbH and its subsidiaries (collectively
"GfE") - This unit is comprised of two production facilities 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, steel,
biomedical and optics industries. The Morsdorf plant produces medical
prostheses, implants and surgical instruments for orthopedic applications.

    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.

    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. Metallurg
does not allocate general corporate overhead expenses to operating segments.
There have been no material changes in segment assets from the amounts disclosed
in the last annual report.



                                       7
<PAGE>   8


             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         OTHER    ELIMINATIONS         TOTALS
                                        -----------   --------     -------     -------      --------  ------------   ------------
<S>                                     <C>           <C>         <C>         <C>          <C>        <C>            <C>
QUARTER ENDED OCTOBER 31, 2000
Revenues from external
   customers ........................      $ 28,608   $ 30,647    $ 19,191    $  3,023     $ 35,697                      $117,166
Intergroup revenues .................           951      8,649       3,059       4,556        8,467      $(25,682)              -
Income tax (benefit) provision ......          (224)       327          22         146          934             -           1,205
Extraordinary item, net .............             -          -           -           -       32,649             -          32,649
Net (loss) income ...................          (314)       391          96         276       28,128        (1,064)         27,513

QUARTER ENDED OCTOBER 31, 1999
Revenues from external
   customers ........................      $ 29,978   $ 25,685    $ 16,959    $  2,779     $ 37,857                      $113,258
Intergroup revenues .................         1,387      7,135       2,252       3,862        6,010      $(20,646)              -
Income tax provision (benefit) ......           403       (145)         11        (115)         592             -             746
Net income (loss) ...................           598       (340)        290        (116)      (7,080)         (141)         (6,789)
</TABLE>



<TABLE>
<CAPTION>
                                                                                                      INTERSEGMENT   CONSOLIDATED
                                        SHIELDALLOY     LSM          GfE         EWW        OTHER     ELIMINATIONS         TOTALS
                                        -----------   --------    --------     -------     --------   ------------   ------------
<S>                                     <C>           <C>         <C>         <C>          <C>        <C>            <C>
THREE QUARTERS ENDED OCTOBER 31, 2000
Revenues from external
   customers ........................      $ 87,694   $ 97,675    $ 62,716    $ 10,000     $115,341                      $373,426
Intergroup revenues .................         2,975     31,149       9,722      16,364       23,865      $(84,075)              -
Environmental expense recovery ......          (750)         -           -           -            -             -            (750)
Income tax provision ................           658      1,337         395         847        1,469             -           4,706
Extraordinary item, net .............             -          -           -           -       32,649             -          32,649
Net income (loss) ...................           970      2,822        (497)        838       33,122       (12,571)         24,684

THREE QUARTERS ENDED OCTOBER 31, 1999
Revenues from external
   customers ........................      $ 89,396   $ 79,140    $ 53,502    $  9,027     $116,058                      $347,123
Intergroup revenues .................         3,455     25,416      10,274      14,413       27,247      $(80,805)              -
Environmental expense recovery ......        (5,501)         -           -           -            -             -          (5,501)
Restructuring charge ................             -          -       3,385       1,001            -             -           4,386
Income tax provision ................           969        362         283         334        1,548             -           3,496
Net income (loss) ...................         2,230        904      (5,627)       (893)     (24,636)        3,204         (24,818)
</TABLE>



                                       8
<PAGE>   9


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (CONTINUED)

3. INVENTORIES

    Inventories, net of reserves, consist of the following (in thousands):

<TABLE>
<CAPTION>
                               OCTOBER 31,    JANUARY 31,
                                  2000           2000
                               -----------    -----------
<S>                              <C>            <C>
Raw materials ...........        $18,498        $16,222
Work in process .........          3,036          3,212
Finished goods ..........         66,383         57,607
Other ...................          3,250          3,612
                                 -------        -------
   Total ................        $91,167        $80,653
                                 =======        =======
</TABLE>


4. COMMITMENTS AND CONTINGENCIES

   The Company continues defending 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 litigation 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 existing or future litigation will not result in
an adverse judgment against the Company which could have a material adverse
effect on the Company's future results of operations or cash flows.


5. EARNINGS PER COMMON SHARE

   Earnings per share is not presented since 100% of the capital stock of the
Company is owned by a group of private investors led by and including Safeguard
International.


6. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

   In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
SFAS No. 133, as amended, is effective for all fiscal quarters of fiscal years
beginning after June 15, 2000. The Company is currently evaluating the impact
SFAS No. 133 will have on its financial statements.

   The Securities and Exchange Commission (the "SEC") has issued Staff
Accounting Bulletin ("SAB") No. 101 which addresses principles of revenue
recognition. The Company is currently evaluating the impact, if any, SAB No. 101
will have on its financial statements for the year ending December 31, 2000.



                                       9
<PAGE>   10


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (CONTINUED)


7. SUPPLEMENTAL GUARANTOR INFORMATION

   In November 1997, Metallurg, Inc. sold $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, Inc. 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.

           CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)
                     FOR THE QUARTER ENDED OCTOBER 31, 2000
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                         METALLURG, INC.    COMBINED         COMBINED
                                           ("PARENT        GUARANTOR       NON-GUARANTOR
                                           COMPANY")      SUBSIDIARIES     SUBSIDIARIES     ELIMINATIONS     CONSOLIDATED
                                        ----------------  ------------     -------------    ------------     ------------
<S>                                     <C>               <C>              <C>              <C>              <C>
Total revenues ......................                       $  36,890        $  96,233        $ (15,957)       $ 117,166
                                                            ---------        ---------        ---------        ---------
Operating costs and expenses:
   Cost of sales ....................                          33,746           83,688          (15,737)         101,697
   Selling, general and
      administrative expenses .......      $   1,599            2,837            8,976                -           13,412
                                           ---------        ---------        ---------        ---------        ---------
   Total operating costs and
      expenses ......................          1,599           36,583           92,664          (15,737)         115,109
                                           ---------        ---------        ---------        ---------        ---------
Operating (loss) income .............         (1,599)             307            3,569             (220)           2,057

Other income (expense):
   Other income, net ................              5                -              130                -              135
   Interest (expense) income, net ...         (1,926)             205             (778)               -           (2,499)
   Equity in earnings of
      subsidiaries ..................            844            1,266                -           (2,110)               -
                                           ---------        ---------        ---------        ---------        ---------
(Loss) income before income tax
   provision and minority interest ..         (2,676)           1,778            2,921           (2,330)            (307)
Income tax (benefit) provision ......         (1,273)           1,270            1,203                -            1,200
                                           ---------        ---------        ---------        ---------        ---------
(Loss) income before minority
   interest .........................         (1,403)             508            1,718           (2,330)          (1,507)
Minority interest ...................              -                -              104                -              104
                                           ---------        ---------        ---------        ---------        ---------
Net (loss) income ...................         (1,403)             508            1,822           (2,330)          (1,403)

Other comprehensive loss:
   Foreign currency translation
     adjustment .....................         (1,472)            (683)          (1,472)           2,155           (1,472)
                                           ---------        ---------        ---------        ---------        ---------
    Comprehensive (loss) income .....      $  (2,875)       $    (175)       $     350        $    (175)       $  (2,875)
                                           =========        =========        =========        =========        =========
</TABLE>



                                       10
<PAGE>   11


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (CONTINUED)

7. SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED)

           CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)
                  FOR THE THREE QUARTERS ENDED OCTOBER 31, 2000
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                          METALLURG, INC.    COMBINED          COMBINED
                                            ("PARENT         GUARANTOR       NON-GUARANTOR
                                            COMPANY")       SUBSIDIARIES      SUBSIDIARIES    ELIMINATIONS     CONSOLIDATED
                                          ---------------   ------------     -------------    ------------     ------------
<S>                                       <C>               <C>              <C>              <C>              <C>
Total revenues .......................                        $ 113,768        $ 312,916        $ (53,258)       $ 373,426
                                                              ---------        ---------        ---------        ---------
Operating costs and expenses:
   Cost of sales .....................                          102,777          272,653          (53,202)         322,228
   Selling, general and
      administrative expenses ........       $   4,665            8,493           28,370                -           41,528
   Environmental expense recovery ....               -             (750)               -                -             (750)
                                             ---------        ---------        ---------        ---------        ---------
   Total operating costs and
      expenses .......................           4,665          110,520          301,023          (53,202)         363,006
                                             ---------        ---------        ---------        ---------        ---------
Operating (loss) income ..............          (4,665)           3,248           11,893              (56)          10,420
Other income (expense):
   Other income, net .................               1            5,128              356                -            5,485
   Interest (expense) income, net ....          (6,590)             658           (1,916)               -           (7,848)
   Equity in earnings of
      subsidiaries ...................          12,515            5,100                -          (17,615)               -
                                             ---------        ---------        ---------        ---------        ---------
Income before income tax
   provision and minority interest ...           1,261           14,134           10,333          (17,671)           8,057
Income tax (benefit) provision .......          (2,266)           2,638            4,319                -            4,691
                                             ---------        ---------        ---------        ---------        ---------
Income before minority
   interest ..........................           3,527           11,496            6,014          (17,671)           3,366
Minority interest ....................               -                -              161                -              161
                                             ---------        ---------        ---------        ---------        ---------
Net income ...........................           3,527           11,496            6,175          (17,671)           3,527

Other comprehensive loss:
   Foreign currency translation
     adjustment ......................          (4,598)          (3,278)          (4,598)           7,876           (4,598)
                                             ---------        ---------        ---------        ---------        ---------
    Comprehensive (loss) income ......       $  (1,071)       $   8,218        $   1,577        $  (9,795)       $  (1,071)
                                             =========        =========        =========        =========        =========
</TABLE>



                                       11
<PAGE>   12


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (CONTINUED)


7.  SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED)

      CONDENSED CONSOLIDATING BALANCE SHEET AT OCTOBER 31, 2000 (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                          METALLURG, INC.    COMBINED         COMBINED
                                            ("PARENT        GUARANTOR      NON-GUARANTOR
                                            COMPANY")      SUBSIDIARIES     SUBSIDIARIES     ELIMINATIONS     CONSOLIDATED
                                          --------------   ------------    -------------     ------------     ------------
<S>                                       <C>              <C>             <C>               <C>              <C>
ASSETS
Current Assets:
   Cash and cash equivalents ........       $  24,985        $     853        $  14,949        $ (11,056)       $  29,731
   Accounts, notes and loans
      receivable, net ...............          16,912           23,668           60,829          (31,814)          69,595
   Inventories ......................               -           37,086           55,932           (1,851)          91,167
   Other current assets .............           3,761            1,457            9,997           (1,999)          13,216
                                            ---------        ---------        ---------        ---------        ---------
       Total current assets .........          45,658           63,064          141,707          (46,720)         203,709
Investments - intergroup ............          87,109           50,855                -         (137,964)               -
Property, plant and
   equipment, net ...................             829           13,000           45,257                -           59,086
Other assets ........................           7,109           17,451           16,652          (20,751)          20,461
                                            ---------        ---------        ---------        ---------        ---------
      Total .........................       $ 140,705        $ 144,370        $ 203,616        $(205,435)       $ 283,256
                                            =========        =========        =========        =========        =========


Current Liabilities:
   Short-term debt and current
     portion of long-term debt ......                                         $  17,425        $ (11,056)       $   6,369
   Trade payables ...................       $   7,401        $  27,291           46,163          (31,814)          49,041
   Accrued expenses .................           6,770           10,129           16,880                -           33,779
   Other current liabilities ........               -            1,999            2,802           (1,999)           2,802
                                            ---------        ---------        ---------        ---------        ---------
      Total current liabilities .....          14,171           39,419           83,270          (44,869)          91,991
                                            ---------        ---------        ---------        ---------        ---------
Long-term Liabilities:
   Long-term debt ...................         100,000                -           14,340                -          114,340
   Accrued pension liabilities ......              35            1,663           30,059                -           31,757
   Environmental liabilities, net ...               -           28,173            1,671                -           29,844
   Other liabilities ................          18,363                -            8,907          (20,752)           6,518
                                            ---------        ---------        ---------        ---------        ---------
      Total long-term liabilities ...         118,398           29,836           54,977          (20,752)         182,459
                                            ---------        ---------        ---------        ---------        ---------
      Total liabilities .............         132,569           69,255          138,247          (65,621)         274,450
                                            ---------        ---------        ---------        ---------        ---------
Minority Interest ...................               -                -              670                -              670
                                            ---------        ---------        ---------        ---------        ---------

Shareholder's Equity:
   Common stock .....................              50            1,227           52,191          (53,418)              50
   Due from parent company ..........         (19,714)               -                -                -          (19,714)
   Additional paid-in capital .......          46,661           94,460           11,927         (106,387)          46,661
   Accumulated other compre-
      hensive (loss) income .........          (6,501)          (3,955)          15,234          (11,279)          (6,501)
   Retained deficit .................         (12,360)         (16,617)         (14,653)          31,270          (12,360)
                                            ---------        ---------        ---------        ---------        ---------
      Total shareholder's equity ....           8,136           75,115           64,699         (139,814)           8,136
                                            ---------        ---------        ---------        ---------        ---------
      Total .........................       $ 140,705        $ 144,370        $ 203,616        $(205,435)       $ 283,256
                                            =========        =========        =========        =========        =========
</TABLE>



                                       12
<PAGE>   13


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (CONTINUED)


7.  SUPPLEMENTAL GUARANTOR INFORMATION - (CONTINUED)

           CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)
                  FOR THE THREE QUARTERS ENDED OCTOBER 31, 2000
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                 METALLURG, INC.   COMBINED        COMBINED
                                                    ("PARENT       GUARANTOR     NON-GUARANTOR
                                                    COMPANY")     SUBSIDIARIES    SUBSIDIARIES    ELIMINATIONS    CONSOLIDATED
                                                 ---------------  ------------   -------------    ------------    ------------
<S>                                              <C>              <C>            <C>              <C>             <C>
NET CASH FLOWS FROM
   OPERATING ACTIVITIES .....................       $ (4,888)       $ (7,925)       $    169        $  6,003        $ (6,641)
                                                    --------        --------        --------        --------        --------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property, plant and
     equipment ..............................            (59)         (3,306)         (8,991)              -         (12,356)
   Proceeds from asset sales ................             48           8,277              92               -           8,417
   Acquisitions, net of cash ................              -               -         (11,196)              -         (11,196)
   Other, net ...............................             62               -               -               -              62
                                                    --------        --------        --------        --------        --------
Net cash provided by (used in) investing
   activities ...............................             51           4,971         (20,095)              -         (15,073)
                                                    --------        --------        --------        --------        --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Intergroup borrowings (repayments)........          3,519           3,243            (759)         (6,003)              -
   Net short-term borrowings ................              -               -           7,784          (1,907)          5,877
   Proceeds from long-term debt .............              -               -           6,915               -           6,915
   Purchase of parent company debt ..........        (19,714)              -               -               -         (19,714)
   Minority interest contribution ...........              -               -             676               -             676
   Dividends received (paid) ................            590               -            (590)              -               -
                                                    --------        --------        --------        --------        --------
Net cash (used in) provided by financing
   activities ...............................        (15,605)          3,243          14,026          (7,910)         (6,246)
                                                    --------        --------        --------        --------        --------

Effects of exchange rate changes on cash
   and cash equivalents .....................              -               -            (920)              -            (920)
                                                    --------        --------        --------        --------        --------

Net (decrease) increase in cash and cash
   equivalents ..............................        (20,442)            289          (6,820)         (1,907)        (28,880)
Cash and cash equivalents -
   beginning of period ......................         45,427             564          21,769          (9,149)         58,611
                                                    --------        --------        --------        --------        --------
Cash and cash equivalents -
   end of period ............................       $ 24,985        $    853        $ 14,949        $(11,056)       $ 29,731
                                                    ========        ========        ========        ========        ========
</TABLE>



                                       13
<PAGE>   14


             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                    NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                       FINANCIAL STATEMENTS - (CONTINUED)


        8.  INVESTMENTS

            On March 31, 2000, LSM acquired the business of Hydelko, a
        Norwegian producer of master alloys for the aluminum industry, for
        approximately $9.0 million.

            During April, 2000, a subsidiary of Metallurg, Inc. completed
        the sale of its minority interest in Solikamsk Magnesium Works ("SMW"),
        a Russian magnesium metal producer, for proceeds of approximately $8.3
        million resulting in a gain on sale of approximately $5.1 million.

            On September 29, 2000, LSM acquired the ferrotitanium business
        of Willan-Wogen Alloys Limited ("Willan-Wogen"), for approximately $1.7
        million.


        9.  PURCHASE OF SENIOR DISCOUNT NOTES

            On October 17, 2000, Metallurg, Inc. completed the purchase of
        approximately $76.1 million in face amount of the Senior Discount Notes
        of Metallurg Holdings, its parent company, for approximately $19.7
        million in cash. The Senior Discount Notes were purchased on the open
        market in several separately negotiated transactions. Consent to the
        transaction from Metallurg, Inc.'s bank group under its Amended and
        Restated Loan Agreement, dated October 29, 1999, had been previously
        obtained. The purchased Senior Discount Notes had a book value on that
        date of approximately $54.0 million. On a consolidated basis, the
        Company wrote off approximately $1.7 million of related deferred
        issuance costs and recognized an extraordinary gain on the
        extinguishment of debt of $32.6 million, net of nil tax due to statutory
        exemption.

        10. SUBSEQUENT EVENT - CHANGE IN FISCAL YEAR

            On November 13, 2000, Metallurg Holdings' Board of Directors
        approved a change in the company's fiscal year-end, from January 31 to
        December 31, to be effective beginning December 31, 2000. The report on
        Form 10-K covering the fiscal year ended December 31, 2000 (the
        transition period) will include the results of Metallurg Holdings and
        Metallurg, Inc., both parent holding companies, for the eleven months
        ended December 31, 2000 and, consistent with current reporting practice,
        the results of Metallurg Inc.'s operating subsidiaries for the twelve
        month period ended December 31, 2000, and will be filed in accordance
        with the SEC filing requirements.



                                       14
<PAGE>   15


    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, but are not limited to, the cyclical nature of
Metallurg's business, Metallurg's dependence on foreign customers (particularly
customers in Europe), the economic strength of Metallurg's markets generally and
particularly the strength of the demand of the aluminum, superalloy, titanium
alloy, iron and steel industries in those markets, the accuracy of Metallurg'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 owned by Safeguard
International (an international private equity fund that invests primarily in
equity securities of companies in process industries), certain limited partners
of Safeguard International, certain individuals and a private equity fund which
is associated with Safeguard International. As Metallurg Holdings is a holding
company and does not have any material operations or assets other than the
ownership of Metallurg, Inc., the following discussions of the Company's results
of operations relate to Metallurg, unless otherwise indicated.

     Metallurg is a leading international producer and seller of high quality
metal alloys and specialty metals used by manufacturers of aluminum,
superalloys, titanium alloys, steel and chemicals and in other metal consuming
industries. The industries that Metallurg supplies are cyclical.

     Steady growth in the aluminum industry continued throughout much of the
world and Metallurg's sales of products continued to increase in Europe, Asia
and South America. In recent months, however, U.S. consumption of aluminum has
tended to decline such as in the construction and transport sectors, and at the
same time, U.S. primary aluminum production has declined in response to higher
cost and lower availability of power. As a result, demand for Metallurg's
products has weakened in the U.S. The acquisition of Hydelko, a Norwegian
producer of master alloys for the aluminum industry has increased Metallurg's
worldwide market share and production capability.

     The superalloy industry remained strong as its customers continued to meet
heavy U.S. demand for power generation equipment. In addition, the demand for
aerospace materials began to gather pace as the excess inventories built up in
the late 1990's finally appear to have been substantially consumed. Metallurg
has thus seen strong demand for its chromium and related products, and a notable
rise in sales of master alloys to the titanium industry, particularly in Europe.

     Worldwide steel production increased steadily over the past 12-18 months,
but a slowdown that began in the U.S. in the second quarter of 2000 has gathered
pace and spread to many other parts of the world. Sales volume of ferrovanadium
in the U.S. remained steady but prices declined due to falling customer demand
and stronger pressure from imports.


                                       15
<PAGE>   16


RESULTS OF OPERATIONS - THE QUARTER ENDED OCTOBER 31, 2000 COMPARED TO THE
QUARTER ENDED OCTOBER 31, 1999

Metallurg Holdings

     In the quarter ended October 31, 2000, the Company recognized net income of
$27.5 million, which includes an extraordinary net gain of $32.6 million on the
extinguishment of certain Senior Discount Notes and the writteoff of related
deferred issuance costs, the consolidation of Metallurg (loss of $1.4 million),
$2.4 million of interest expense on its Senior Discount Notes and $1.3 million
of amortization of acquisition, goodwill and deferred debt issuance costs.

     In the quarter ended October 31, 1999, Metallurg Holdings recognized a net
loss of $6.8 million, which includes the consolidation of Metallurg (a loss of
$3.0 million), $2.4 million of net interest expense on its Senior Discount Notes
and $1.4 million of amortization of acquisition, goodwill and deferred debt
issuance costs.

     As Metallurg Holdings is a holding company and does not have any material
operations or assets other than the ownership of Metallurg, the following
discussion of the Company's results of operations for the quarter ended October
31, 2000 compared to the quarter ended October 31, 1999 relates to Metallurg,
unless otherwise indicated.

Metallurg

     Metallurg operates in one significant industry segment, the manufacture and
sale of ferrous and non-ferrous metals and alloys. It is organized
geographically, having established a worldwide sales network built around the
core production facilities in the U.S., the U.K. and Germany.

     Summarized financial information concerning Metallurg'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. Metallurg does not
allocate general corporate overhead expenses to operating segments. There have
been no material changes in segment assets from the amounts disclosed in the
last annual report.



                                       16
<PAGE>   17


<TABLE>
<CAPTION>
                                                                                                         INTERSEGMENT  CONSOLIDATED
                                      SHIELDALLOY       LSM           GfE          EWW         OTHER     ELIMINATIONS     TOTALS
                                      -----------    ---------     ---------     ---------   ---------   ------------  ------------
<S>                                   <C>            <C>           <C>           <C>         <C>         <C>           <C>
QUARTER ENDED OCTOBER 31, 2000
Total revenues ...................     $ 29,559      $ 39,296      $ 22,250      $  7,579    $ 44,164      $(25,682)     $117,166
Gross margins ....................        1,890         3,862         3,650           844       5,443          (220)       15,469
Operating (loss) income ..........         (687)        1,048           341           403       1,172          (220)        2,057
Interest income  (expense), net ..          149          (354)         (351)           19      (1,962)            -        (2,499)
Income tax (benefit) provision ...         (224)          327            22           146         929             -         1,200
Net (loss) income ................         (314)          391            96           276        (788)       (1,064)       (1,403)

QUARTER ENDED OCTOBER 31, 1999
Total revenues ...................     $ 31,365      $ 32,820      $ 19,211      $  6,641    $ 43,867      $(20,646)     $113,258
Gross margins ....................        2,311         2,889         3,477           314       3,894           803        13,688
Operating income (loss) ..........          298          (491)          149          (233)       (494)          803            32
Interest income  (expense), net ..          704             6          (177)          (10)     (2,821)            -        (2,298)
Income tax provision (benefit) ...          403          (145)           11          (115)        589             -           743
Net income (loss) ................          598          (340)          290          (116)     (3,316)         (141)       (3,025)
</TABLE>


Total Revenues

     Shieldalloy revenues were $1.8 million (6%) below the third quarter of 1999
due primarily to lower sales volumes of products to the aluminum industry in the
quarter ended October 31, 2000. LSM revenues were $6.5 million (20%) above the
third quarter of 1999. Approximately one-half of this increase was due to the
Hydelko acquisition in March 2000. In addition, nickel boron and aluminum powder
sales volumes increased in the third quarter of 2000. GfE revenues were $3.0
million (16%) above 1999 due primarily to higher selling prices of nickel-based
and columbium-based products. EWW revenues were $0.9 million (14%) above the
third quarter of 1999 due to increased sales volumes of low carbon ferrochrome.

Gross Margins

     Gross margins increased from $13.7 million (12.1% of total revenues) in the
quarter ended October 31, 1999 to $15.5 million (13.2% of total revenues) in the
quarter ended October 31, 2000, an increase of 13%, due principally to improved
profitability in vanadium products, aluminum powder and tantalum products.
Increased production volumes and lower production costs resulting from
restructuring activities implemented in the second half of 1999 also contributed
to the improved gross margins.

Selling, General and Administrative Expenses

     Selling, general and administrative expenses ("SG&A") decreased from $13.7
million in the quarter ended October 31, 1999 to $13.4 million in the quarter
ended October 31, 2000. Reduced compensation costs following reductions in
staffing were partially offset by increased outside professional fee expenses.
For the quarter ended October 31, 2000, SG&A represented 11.4% of total revenues
compared to 12.1% for the quarter ended October 31, 1999.

Operating Income

     Operating income of $2.1 million in the quarter ended October 31, 2000
reflects a significant improvement as compared to breakeven results for the
quarter ended October 31, 1999, due primarily to the increase in gross margins,
discussed above.


                                       17
<PAGE>   18


Interest Expense, Net

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

<TABLE>
<CAPTION>
                                                Quarter Ended
                                                  October 31,
                                           ------------------------
                                             2000            1999
                                           -------         -------
<S>                                        <C>             <C>
Interest income ...................        $ 1,124         $   788
Interest expense ..................         (3,623)         (3,086)
                                           -------         -------
   Interest expense, net ..........        $(2,499)        $(2,298)
                                           =======         =======
</TABLE>

Income Tax Provision

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

<TABLE>
<CAPTION>
                                                Quarter Ended
                                                  October 31,
                                           ------------------------
                                             2000            1999
                                           -------         -------
<S>                                        <C>             <C>
Total current ..........................   $   729         $   537
Total deferred .........................       471             206
                                           -------         -------
   Income tax provision, net ...........   $ 1,200         $   743
                                           =======         =======
</TABLE>

     The differences between the statutory Federal income tax rate and
Metallurg's effective rate result primarily because of: (i) the excess of
foreign tax rates over the statutory Federal income tax rate; (ii) certain
deductible temporary differences which, in other circumstances would have
generated a deferred tax benefit, have been fully provided for in a valuation
allowance; (iii) the deferred tax effects of certain tax assets, primarily
foreign net operating losses, for which the benefit had been previously
recognized approximating $0.2 million in the quarter ended October 31, 2000; and
(iv) the deferred tax effects of certain deferred tax assets for which a
corresponding credit has been recorded to "Additional paid-in capital"
approximating $0.1 million in the quarter ended October 31, 2000. The deferred
tax expenses referred to in items (iii) and (iv) above will not result in cash
payments in future periods.

Net Income

     Metallurg recognized a net loss of $1.4 million for the quarter ended
October 31, 2000 compared to a net loss of $3.0 million for the quarter ended
October 31, 1999. The improvement in 2000 resulted primarily from increased
gross margins, discussed above.


RESULTS OF OPERATIONS - THE THREE QUARTERS ENDED OCTOBER 31, 2000 COMPARED TO
THE THREE QUARTERS ENDED OCTOBER 31, 1999

Metallurg Holdings

     In the three quarters ended October 31, 2000, the Company recognized net
income of $24.7 million, which includes an extraordinary net gain of $32.6
million on the extinguishment of certain Senior Discount Notes and the write off
of related deferred issuance costs, the consolidation of Metallurg (income of
$3.5 million), $7.4 million of interest expense on its Senior Discount Notes and
$4.0 million of amortization of acquisition, goodwill and deferred debt issuance
costs.

     In the three quarters ended October 31, 1999, Metallurg Holdings recognized
a net loss of $24.8 million, which includes the consolidation of Metallurg (a
loss of $13.9 million), $6.8 million of net interest expense on its Senior
Discount Notes and $4.1 million of amortization of acquisition, goodwill and
deferred debt issuance costs.


                                       18
<PAGE>   19


     As Metallurg Holdings is a holding company and does not have any material
operations or assets other than the ownership of Metallurg, the following
discussion of the Company's results of operations for the three quarters ended
October 31, 2000 compared to the three quarters ended October 31, 1999 relates
to Metallurg, unless otherwise indicated.


Metallurg

<TABLE>
<CAPTION>
                                                                                                          INTERSEGMENT  CONSOLIDATED
                                           SHIELDALLOY      LSM          GfE          EWW        OTHER    ELIMINATIONS    TOTALS
                                           -----------   ---------    ---------    ---------   ---------  ------------  -----------
<S>                                        <C>           <C>          <C>          <C>         <C>        <C>           <C>
THREE QUARTERS ENDED OCTOBER 31, 2000
Total revenues .........................    $ 90,669     $128,824     $ 72,438     $ 26,364     $139,206     $(84,075)    $373,426
Gross margins ..........................       7,823       13,353       11,325        3,213       15,540          (56)      51,198
Environmental expense recovery .........        (750)           -            -            -            -            -         (750)
Operating income .......................         912        4,773          708        1,653        2,430          (56)      10,420
Interest income (expense), net .........         716         (808)      (1,014)          32       (6,774)           -       (7,848)
Income tax provision ...................         658        1,337          395          847        1,454            -        4,691
Net income (loss) ......................         970        2,822         (497)         838       11,965      (12,571)       3,527

THREE QUARTERS ENDED OCTOBER 31, 1999
Total revenues .........................    $ 92,851     $104,556     $ 63,776     $ 23,440     $143,305     $(80,805)    $347,123
Gross margins ..........................       2,106       11,184        8,156        2,439       13,561        1,303       38,749
Environmental expense recovery .........      (5,501)           -            -            -            -            -       (5,501)
Restructuring charges ..................           -            -        3,385        1,001            -            -        4,386
Operating income (loss) ................       1,513        1,244       (5,455)        (477)        (394)       1,303       (2,266)
Interest income (expense), net .........       1,696           22         (732)         (94)      (9,050)           -       (8,158)
Income tax provision ...................         969          362          283          334        1,540            -        3,488
Net income (loss) ......................       2,230          904       (5,627)        (893)     (13,741)       3,204      (13,923)
</TABLE>

Total Revenues

     Shieldalloy revenues were $2.2 million (2%) lower than the first three
quarters of 1999. Increased sales volumes of columbium alloys were more than
offset by lower sales volumes and selling prices of aluminum, silicon and chrome
products. LSM revenues were $24.3 million (23%) above the first three quarters
of 1999. Approximately $8.8 million of the increase resulted from the
acquisition of Hydelko on March 31, 2000. In addition, aluminum powder sales
volumes and ferrotitanium selling prices increased in 2000. GfE revenues were
$8.7 million (14%) above 1999 due primarily to increased selling prices of
nickel-based products and increased sales volumes of columbium-based products.
EWW revenues were $2.9 million (12%) higher in the current year than in the
first three quarters of 1999 due primarily to increased sales volumes of low
carbon ferrochrome.

Gross Margins

     Gross margins increased from $38.7 million (11.2% of total revenues) in the
three quarters ended October 31, 1999 to $51.2 million (13.7% of total revenues)
in the three quarters ended October 31, 2000, an increase of 32%, due
principally to improved profitability in ferrovanadium, low carbon ferrochrome
and tantalum products. In the first quarter of 1999, Shieldalloy recognized a
lower of cost or market adjustment of $3.6 million related to ferrovanadium.
Increased production volumes and lower production costs resulting from
restructuring activities implemented in the second half of 1999 also contributed
to the increased gross margins in the current year.

Selling, General and Administrative Expenses

     SG&A decreased from $42.1 million in the three quarters ended October 31,
1999 to $41.5 million in the three quarters ended October 31, 2000. Reduced
compensation costs of over $2 million following reductions in



                                       19
<PAGE>   20


staffing were partially offset by increased outside professional fee expenses.
For the three quarters ended October 31, 2000, SG&A represented 11.1% of
total revenues compared to 12.1% for the three quarters ended October 31,
1999.

Operating Income

     Operating income of $10.4 million in the three quarters ended October 31,
2000 reflects a significant improvement as compared to a loss of $2.3 million in
the three quarters ended October 31, 1999, due primarily to the increase in
gross margins, discussed above. The 2000 results also included an environmental
expense recovery of $0.8 million. The 1999 results included a restructuring
provision of $4.4 million and an environmental expense recovery of $5.5 million.

Interest Expense, Net

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

<TABLE>
<CAPTION>
                                              Three Quarters Ended
                                                  October 31,
                                           -------------------------
                                             2000             1999
                                           --------         --------
<S>                                        <C>              <C>
Interest income ...................        $  2,787         $  1,999
Interest expense ..................         (10,635)         (10,157)
                                           --------         --------
   Interest expense, net ..........        $ (7,848)        $ (8,158)
                                           ========         ========
</TABLE>

Income Tax Provision

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

<TABLE>
<CAPTION>
                                                Three Quarters Ended
                                                     October 31,
                                           -------------------------
                                             2000             1999
                                           --------         --------
<S>                                        <C>           <C>
Total current ..........................   $  2,866         $  2,182
Total deferred .........................      1,825            1,306
                                           --------         --------
   Income tax provision, net ...........   $  4,691         $  3,488
                                           ========         ========
</TABLE>

     The differences between the statutory Federal income tax rate and
Metallurg's effective rate result primarily because of: (i) the excess of
foreign tax rates over the statutory Federal income tax rate; (ii) certain
deductible temporary differences which, in other circumstances would have
generated a deferred tax benefit, have been fully provided for in a valuation
allowance; (iii) the deferred tax effects of certain tax assets, primarily
foreign net operating losses, for which the benefit had been previously
recognized approximating $0.9 million in the three quarters ended October 31,
2000; and (iv) the deferred tax effects of certain deferred tax assets for which
a corresponding credit has been recorded to "Additional paid-in capital"
approximating $0.5 million in the three quarters ended October 31, 2000. The
deferred tax expenses referred to in items (iii) and (iv) above will not result
in cash payments in future periods.



                                       20
<PAGE>   21


Net Income

     Metallurg recognized net income of $3.5 million for the three quarters
ended October 31, 2000 compared to a net loss of $13.9 million for the three
quarters ended October 31, 1999. The improvement in 2000 resulted primarily from
increased gross margins, discussed above. In addition, the 2000 results included
a pre-tax gain of approximately $5.1 million relating to the sale of SMW.

LIQUIDITY AND FINANCIAL RESOURCES

General

     The Company's sources of liquidity include cash from operations and amounts
available under credit facilities. In addition, the Company had $30.7 million of
cash and cash equivalents at October 31, 2000. The Company believes that these
sources, together with cash and cash equivalents at October 31, 2000, are
sufficient to fund the current and anticipated future requirements through at
least December 31, 2001.

     At October 31, 2000, the Company had working capital of $112.7 million, as
compared to $137.2 million at January 31, 2000. For the first three quarters of
2000, the Company's use of $6.9 million in cash for operations resulted
primarily from the increase in inventory and payment of interest on Metallurg,
Inc.'s Senior Notes. In April 2000, Metallurg, Inc. received cash proceeds of
$8.3 million upon the sale of a minority interest in SMW owned by one of
Metallurg, Inc.'s operating subsidiaries. On March 31, 2000, LSM acquired the
business of Hydelko for approximately $9.0 million. On September 29, 2000, LSM
acquired the ferrotitanium business of Willan-Wogen for $1.7 million. LSM
utilized existing cash balances and loan facilities to effect these purchases.

     On October 17, 2000, Metallurg, Inc. completed the purchase of
approximately $76.1 million in face amount of the Senior Discount Notes of
Metallurg Holdings, its parent company, for approximately $19.7 million in cash.
The Senior Discount Notes were purchased on the open market in several
separately negotiated transactions. Consent to the transaction from Metallurg,
Inc.'s bank group under its Amended and Restated Loan Agreement, dated October
29, 1999, had been previously obtained. The purchased Senior Discount Notes had
a book value on that date of approximately $54.0 million. On a consolidated
basis, the Company wrote off approximately $1.7 million of related deferred
issuance costs and recognized an extraordinary gain on the extinguishment of
debt of $32.6 million, net of nil tax due to statutory exemption.

Credit Facilities and Other Financing Arrangements

     Metallurg 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 with up to $50.0
million of financing resources including a German subfacility (as discussed
below). 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 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 in the U.S. As part of the Revolving Credit Facility, Fleet National
Bank, through its London office, makes available up to DM 20.5 million
(approximately $9.2 million) of financing to certain of Metallurg's German
subsidiaries, which is guaranteed by Metallurg, Inc. and the other U.S.
borrowers under the Revolving Credit Facility. At October 31, 2000, $1.5 million
of loans were outstanding in Germany and $24.8 million of letters of credit were
outstanding in the U.S.

     In addition, certain foreign subsidiaries of Metallurg have credit facility
arrangements with local banking institutions to provide funds for working
capital and general corporate purposes. These local credit facilities contain
restrictions that vary from company to company. At October 31, 2000, there were
$3.8 million of outstanding loans under these local credit facilities.

CAPITAL EXPENDITURES

     Metallurg invested $12.4 million in capital expenditures during the first
three quarters of 2000. Capital expenditures are expected to total approximately
$25 million over the next five quarters. Although Metallurg has projected these
items in 2000 and 2001, some projects remain contingent on appropriate senior
management or board of directors approval and the



                                       21
<PAGE>   22


actual timing of expenditures may extend into 2002. Metallurg believes that
these projects will be funded through internally generated cash, borrowings
under the Revolving Credit Facility and local credit lines.

ENVIRONMENTAL REMEDIATION COSTS

     American Institute of Certified Public Accountants' Statement of Position
96-1, "Environmental Remediation Liabilities", states that 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 generally not
discounted to their present value. During the first three quarters of 2000,
Metallurg expended $1.9 million for environmental remediation.

     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 which,
as of October 31, 2000, had a remaining estimated cost of completion of $33.2
million. Of this amount, approximately $0.5 million is expected to be expended
in the fourth quarter of 2000, $5.6 million in 2001 and $5.8 million in 2002. In
addition, Metallurg estimates it will make expenditures of $3.0 million with
respect to environmental remediation at its foreign facilities. Of this amount,
no material expenditures are anticipated through 2002.



                                       22
<PAGE>   23


         ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK


     Refer to the Market Risk and Risk Management Policies 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 January 31, 2000, which is incorporated by reference herein.




                                       23
<PAGE>   24


                           PART II - OTHER INFORMATION
                    ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K



        (a)     EXHIBITS

                27. Financial Data Schedule


        (b)     REPORTS ON FORM 8-K

                Metallurg Holdings, Inc. filed Reports on Form 8-K with the SEC
                on October 26, 2000, reporting the purchase of certain Senior
                Discount Notes by Metallurg, Inc. and on November 21, 2000
                announcing the change in its fiscal year.



                                       24
<PAGE>   25


                                   SIGNATURES



     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on December 11, 2000 on its
behalf by the undersigned thereunto duly authorized.


                                      METALLURG HOLDINGS, INC.




                                      /s/ ARTHUR R. SPECTOR
                                      ----------------------------------
                                          Arthur R. Spector
                                          Executive Vice President
                                          (Principal Financial Officer and
                                          Principal Accounting Officer)







                                       25