<PAGE>

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

                                   Form 10-Q/A
                                (Amendment No. 1)
(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, 1998

                                    OR

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

          For the transition period from _____________ to ______________

                            METALLURG HOLDINGS, INC.
             (Exact Name of Registrant as Specified in Its Charter)

           DELAWARE                                        23-2967577
-------------------------------                        -------------------
(State or Other Jurisdiction of                        (I.R.S. Employer
Incorporation or Organization)                         Identification No.)

                           800 The Safeguard Building
                              435 Devon Park Drive
                            Wayne, Pennsylvania 19087
                    ----------------------------------------
                    (Address of Principal Executive Offices)
                                   (Zip Code)

                                 (610) 293-0838
                                 --------------
              (Registrant's Telephone Number, Including Area Code)

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

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
                                 Yes X       No
                                    ---        ---

At December 15, 1998, the outstanding capital of Metallurg Holdings, Inc. was
comprised of 5,202.335 shares of Series A Voting Convertible Preferred Stock and
4,500 shares of Series B Non-Voting Preferred Stock, $.01 par value.


<PAGE>


                             EXPLANATORY INFORMATION

This Quarterly Report on Form 10-Q/A (Amendment No. 1) for the period ended 
October 31, 1998 is being filed to reflect a change in the accounting by 
Metallurg Holdings, Inc. for its purchase of Metallurg, Inc. on July 13, 1998 
and its calculation of goodwill in accordance with APB No. 16, "Business 
Combinations". Previously, a $3.5 million payment to cancel compensatory 
options of Metallurg, Inc. was recorded as merger-related costs in the period 
June 10, 1998 (inception) to October 31, 1998 and Metallurg Holdings, Inc. 
reported a net loss of approximately $8.4 million. The condensed consolidated 
financial statements of Metallurg Holdings, Inc. and related notes thereto 
are amended and restated in their entirety to reflect the $3.5 million 
payment, net of taxes of $0.8 million, as a component of the purchase price. 
Upon revision, (i) the excess of the purchase price over the fair value of 
the net assets acquired was approximately $102 million, versus $99.2 million 
previously reported, (ii) goodwill amortization, net of tax, has been 
adjusted in the periods ended October 31, 1998 and (iii) the net loss for the 
period is reduced to approximately $5.6 million.


                                       2
<PAGE>

METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

                                      INDEX
<TABLE>
<CAPTION>

                                                                                                 PAGE NO.
Part I.  FINANCIAL INFORMATION:

         <S>                                                                                     <C>
         Item 1 -  Financial Statements (Unaudited)

              Condensed Statements of Consolidated Operations of Metallurg Holdings,
              Inc. for the Quarter Ended October 31, 1998 and for
              the Period June 10, 1998 (inception) to October 31, 1998                              4

              Condensed Statements of Consolidated Operations of Metallurg, Inc.
              for the Quarter and the Three Quarters Ended October 31, 1998,
              the Quarter and the Two Quarters ended October 1997 and
              the Quarter Ended March 31, 1997                                                      5

              Condensed Statements of Consolidated Comprehensive Income of
              Metallurg Holdings, Inc. for the Quarter Ended October 31, 1998 and
              for the Period June 10, 1998 (inception) to October 31, 1998                          6

              Condensed Statements of Consolidated Comprehensive Income of
              Metallurg, Inc. for the Quarter and the Three Quarters Ended
              October 31, 1998, the Quarter and the Two Quarters Ended October
              31, 1997 and the Quarter Ended March 31, 1997                                         7

              Condensed Consolidated Balance Sheet of Metallurg Holdings, Inc. at
              October 31, 1998                                                                      8

              Condensed Consolidated Balance Sheets of Metallurg, Inc. at
              October 31, 1998 and January 31, 1998                                                 9

              Condensed Consolidated Balance Sheet of Metallurg, Inc. at
              March 31, 1997                                                                       10

              Condensed Statement of Consolidated Cash Flows of Metallurg Holdings,
              Inc. for the Period June 10, 1998 (inception) to October 31, 1998                    11

              Condensed Statements of Consolidated Cash Flows of Metallurg, Inc.
              for the Three Quarters Ended October 31, 1998, the Two Quarters
              Ended October 31, 1997 and the Quarter Ended March 31, 1997                          12

              Notes to Condensed Unaudited Consolidated Financial Statements                     13-17

         Item 2 - Management's Discussion and Analysis of
              Financial Condition and Results of Operations                                      18-24


Part II.   OTHER INFORMATION

           Item 6. (a)  EXHIBITS                                                                   25

                6. (b)  REPORT ON FORM 8-K                                                         25


           Signature Page                                                                          26
</TABLE>


                                       3
<PAGE>

METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
(IN THOUSANDS)
-------------------------------------------------------------------------------


<TABLE>
<CAPTION>


                                                                                                           For the Period
                                                                                        Quarter            June 10, 1998
                                                                                         Ended             (inception) to
                                                                                       October 31,          October 31, 
                                                                                          1998                 1998
                                                                                -------------------- --------------------
<S>                                                                                        <C>                  <C>     
Total revenue ................................................................             $125,666             $127,940
                                                                                -------------------- --------------------
Operating costs and expenses:
    Cost of sales ............................................................              109,720              111,894
    Selling, general and administrative expenses .............................               15,080               15,866
    Merger-related costs .....................................................                2,607                3,482
                                                                                -------------------- --------------------
    Total operating costs and expenses .......................................              127,407              131,242
                                                                                -------------------- --------------------

      Operating loss .........................................................               (1,741)              (3,302)

Other income, net ............................................................                1,306                1,306
Interest expense, net ........................................................               (4,443)              (5,276)
                                                                                -------------------- ---------------------

Loss before income tax provision .............................................               (4,878)              (7,272)

Income tax benefit ...........................................................                1,104                1,678
                                                                                -------------------- ---------------------
Net loss .....................................................................              $(3,774)             $(5,594)
                                                                                -------------------- ---------------------
                                                                                -------------------- ---------------------
</TABLE>















       See notes to condensed unaudited consolidated financial statements



                                       4
<PAGE>


METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
(IN THOUSANDS)

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                                                     Predecessor
                                                                    Reorganized Company                                Company
                                            ---------------------------------------------------------------------  ----------------
                                               Quarter       Three Quarters        Quarter        Two Quarters         Quarter
                                                Ended             Ended             Ended            Ended              Ended
                                             October 31,       October 31,       October 31,      October 31,         March 31,
                                                 1998              1998              1997             1997              1997
                                             (Unaudited)       (Unaudited)       (Unaudited)      (Unaudited)         (Audited)
                                            --------------- ------------------ ----------------------------------  ----------------


<S>                                               <C>                <C>               <C>              <C>               <C>     
Total revenue .............................       $142,708           $480,551          $148,325         $315,204          $155,587
                                            --------------- ------------------ -----------------  ---------------  ----------------
Operating costs and expenses:
   Cost of sales ..........................        124,401            406,080           127,276          269,411           134,060
   Selling, general and administrative
      expenses ............................         15,587             45,495            13,560           27,987            15,046
   Merger-related costs ...................          2,607              7,023              --               --                --
                                            --------------- ------------------ -----------------  ---------------  ----------------
   Total operating costs and expenses .....        142,595            458,598           140,836          297,398           149,106
                                            --------------- ------------------ -----------------  ---------------  ----------------
      Operating income ....................            113             21,953             7,489           17,806             6,481
Other income (expense):
   Other income, net ......................          1,487              2,032             1,074              998             3,179
   Interest expense, net ..................         (2,303)            (6,919)           (1,332)          (2,811)             (245)
   Reorganization expense .................           --                 --                --               --              (2,663)
   Fresh-start revaluation ................           --                 --                --               --               5,107
                                            --------------- ------------------ -----------------  ---------------  ----------------
Income (loss) before income tax
   provision and extraordinary item .......           (703)            17,066             7,231           15,993            11,859
Income tax provision (benefit) ............           (741)             8,740             5,517           10,628            (3,063)
                                            --------------- ------------------ -----------------  ---------------  ----------------
Income before extra-
   ordinary item ..........................             38              8,326             1,714            5,365            14,922
Extraordinary item ........................           --                 --                --               --              43,032
                                            --------------- ------------------ -----------------  ---------------  ----------------
Net income ................................           $ 38             $8,326            $1,714           $5,365          $ 57,954
                                            --------------- ------------------ -----------------  ---------------  ----------------
                                            --------------- ------------------ -----------------  ---------------  ----------------
</TABLE>



       See notes to condensed unaudited consolidated financial statements.


                                       5
<PAGE>


METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (UNAUDITED)
(IN THOUSANDS)
--------------------------------------------------------------------------------



<TABLE>
<CAPTION>

                                                                                                         For the Period
                                                                                         Quarter         June 10, 1998
                                                                                          Ended          (inception) to
                                                                                        October 31,       October 31, 
                                                                                           1998              1998
                                                                                -------------------- ---------------------
<S>                                                                                         <C>                 <C>      
Net loss......................................................................              $(3,774)            $ (5,594)
Other comprehensive income ...................................................                1,356                1,356
                                                                                -------------------- ---------------------
Comprehensive loss ...........................................................              $(2,418)             $(4,238)
                                                                                -------------------- --------------------
                                                                                -------------------- --------------------
</TABLE>

























       See notes to condensed unaudited consolidated financial statements



                                       6
<PAGE>

METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME
(IN THOUSANDS)

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                                                    Predecessor
                                                                    Reorganized Company                               Company
                                            ---------------    ---------------- ---------------  ---------------   --------------
                                                Quarter        Three Quarters       Quarter       Two Quarters        Quarter
                                                 Ended              Ended            Ended           Ended              Ended
                                              October 31,        October 31,      October 31,     October 31,        March 31,
                                                  1998               1998             1997            1997              1997
                                              (Unaudited)        (Unaudited)      (Unaudited)     (Unaudited)        (Audited)
                                            ---------------    ---------------- ---------------  ---------------   --------------


<S>                                                     <C>              <C>             <C>              <C>             <C>    
Net income ................................             $ 38             $8,326          $1,714           $5,365          $57,954

Other comprehensive income (loss):
   Foreign currency translation
      adjustments (a) .....................            1,356                280            (557)             688           (1,224)
                                            ---------------    ---------------- ---------------  ---------------   --------------

Comprehensive income ......................           $1,394             $8,606          $1,157           $6,053          $56,730
                                            ---------------    ---------------- ---------------  ---------------   --------------
                                            ---------------    ---------------- ---------------  ---------------   --------------
</TABLE>









(a)   The Company does not provide for U.S. income taxes on foreign currency
      translation adjustments because it does not provide for such taxes on
      undistributed earnings of foreign subsidiaries.















       See notes to condensed unaudited consolidated financial statements.


                                       7
<PAGE>

METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(IN THOUSANDS)
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>


                                                                                   October 31,
                                                                                      1998

                                                                              ----------------------
<S>                                                                                         <C>    
ASSETS
Current assets:
   Cash and cash equivalents ...............................................                $42,009
   Accounts and notes receivable, net ......................................                 78,489
   Inventories .............................................................                139,932
   Other assets ............................................................                 17,360
                                                                              ----------------------
      Total current assets .................................................                277,790
Property, plant and equipment, net .........................................                 48,047
Goodwill ...................................................................                100,179
Other assets ...............................................................                 25,461
                                                                              ----------------------
      TOTAL ................................................................               $451,477
                                                                              ----------------------
                                                                              ----------------------

LIABILITIES
Current liabilities:
   Short-term debt and current portion of long-term debt ...................                $ 1,969
   Trade payables ..........................................................                 48,329
   Accrued expenses ........................................................                 38,330
   Other current liabilities ...............................................                  8,420
                                                                              ----------------------
      Total current liabilities ............................................                 97,048
                                                                              ----------------------

Long-term debt .............................................................                176,086
Accrued pension liabilities ................................................                 41,566
Environmental liabilities, net .............................................                 36,618
Other liabilities ..........................................................                  6,020
                                                                              ----------------------
      Total long-term liabilities ..........................................                260,290
                                                                              ----------------------

      Total liabilities ....................................................                357,338
                                                                              ----------------------

SHAREHOLDERS' EQUITY
Common and preferred stock .................................................                   --
Additional paid-in capital..................................................                 98,377
Accumulated other comprehensive income......................................                  1,356
Retained earnings (deficit) ................................................                 (5,594)
                                                                              ----------------------
   Total shareholders' equity ..............................................                 94,139
                                                                              ----------------------
      TOTAL ................................................................               $451,477
                                                                              ----------------------
                                                                              ----------------------



       See notes to condensed unaudited consolidated financial statements.


                                       8
<PAGE>

METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)


                                                                             Reorganized Company
                                                                 --------------------------------------------
                                                                          October 31,            January 31,
                                                                             1998                  1998
                                                                 --------------------------------------------
ASSETS
Current assets:
   Cash and cash equivalents ..................................               $ 40,515              $ 43,003
   Accounts and notes receivable, net .........................                 78,489                83,931
   Inventories ................................................                139,932               117,589
   Other assets ...............................................                 17,013                14,239
                                                                ---------------------- ----------------------
      Total current assets ....................................                275,949               258,762
Property, plant and equipment, net ............................                 48,047                41,502
Other assets ..................................................                 22,444                19,522
                                                                ---------------------- ----------------------
      TOTAL ...................................................              $ 346,440             $ 319,786
                                                                ---------------------- ----------------------
                                                                ---------------------- ----------------------

LIABILITIES
Current liabilities:
   Short-term debt and current portion
      of long-term debt .......................................              $   1,969             $   4,016
   Trade payables .............................................                 48,329                51,308
   Accrued expenses ...........................................                 37,494                30,575
   Other current liabilities ..................................                  8,420                 5,106
                                                                ---------------------- ----------------------
      Total current liabilities ...............................                 96,212                91,005
                                                                ---------------------- ----------------------

Long-term debt ................................................                108,415               103,133
Accrued pension liabilities ...................................                 41,566                38,351
Environmental liabilities, net ................................                 36,618                38,527
Other liabilities .............................................                  6,020                 6,999
                                                                ---------------------- ----------------------
      Total long-term liabilities .............................                192,619               187,010
                                                                ---------------------- ----------------------

      Total liabilities .......................................                288,831               278,015
                                                                ---------------------- ----------------------

SHAREHOLDERS' EQUITY
Common stock ..................................................                   --                      50
Additional paid-in capital ....................................                 47,491                40,209
Accumulated other comprehensive income.........................                    953                   673
Retained earnings .............................................                  9,165                   839
                                                                ---------------------- ----------------------
   Total shareholders' equity .................................                 57,609                41,771
                                                                ---------------------- ----------------------
      TOTAL ...................................................              $ 346,440             $ 319,786
                                                                ---------------------- ----------------------
                                                                ---------------------- ----------------------
</TABLE>



       See notes to condensed unaudited consolidated financial statements.


                                       9
<PAGE>

METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
METALLURG, INC. CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)

The effect of the consummation of the Plan (as defined herein) and the
implementation of fresh-start reporting on Metallurg's consolidated balance
sheet as of March 31, 1997 was as follows:

<TABLE>
<CAPTION>

                                                                                              Adoption of     Opening
                                                   Prior to Joint Plan    Effects of Joint    Fresh-Start     Balance
                                                     Effectiveness          Plan (a)           Reporting        Sheet
                                                   -------------------    ----------------    -------------  ---------
  <S>                                                       <C>               <C>                             <C>     
  ASSETS
  Current Assets:
     Cash and cash equivalents ..................           $ 66,670          $(36,330)                       $ 30,340
     Trade receivable, less allowance for
       doubtful accounts ........................             94,255              (105)                         94,150
     Inventories ................................            109,258            --                             109,258
     Prepaid expenses and other current assets ..             16,382               180          $(250)(b)       16,312
     Assets held for sale .......................                341            --                839 (b)        1,180
                                                   -------------------    ----------------    -------------  ---------
        Total current assets ....................            286,906           (36,255)           589          251,240

  Investments in affiliates......................              2,779            --             (1,318)(c)        1,461

  Property, plant and equipment, net ............             42,348            --             (3,441)(c)       38,907
  Other assets ..................................             14,243               614           (761)(c)       14,096
                                                   -------------------    ----------------    -------------  ---------

        Total ...................................           $346,276          $(35,641)       $(4,931)        $305,704
                                                   -------------------    ----------------    -------------  ---------
                                                   -------------------    ----------------    -------------  ---------

  LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
  Current Liabilities:
     Short-term debt ............................           $ 13,500                                          $ 13,500
     Current portion of long-term debt ..........              1,277                                             1,277
     Trade payables .............................             55,947                                            55,947
     Accrued expenses ...........................             22,736            $2,338          $ 277 (b)       25,351
     Current portion of environmental
        liabilities ...............................            5,270             --                --            5,270
     Taxes payable ..............................              7,136              (557)            --            6,579
                                                   -------------------    ----------------    -------------  ---------
        Total current liabilities ...............            105,866             1,781            277          107,924
                                                   ------------------ --------------------    -------------  ---------

  Long-term Liabilities:
     Long-term debt .............................              4,248            47,463             --           51,711
     Accrued pension liabilities ................             39,610            (1,345)         2,825 (b)       41,090
     Environmental liabilities, net .............             37,495             5,370             --           42,865
     Other liabilities ..........................             10,293             --             1,821 (b)       12,114
                                                   -------------------    ----------------    -------------  ---------
        Total long-term liabilities .............             91,646            51,488          4,646          147,780
                                                   -------------------    ----------------    -------------  ---------

  Liabilities Subject to Compromise .............            180,247          (180,247)            --           --
                                                   -------------------    ----------------    -------------  ---------

        Total liabilities .......................            377,759          (126,978)         4,923          255,704
                                                   -------------------    ----------------    -------------  ---------
  Commitments and Contingencies .................

  Shareholders' Equity (Deficit): 
     Common stock ...............................                 20                30           --                 50
     Additional paid in capital .................              --               49,950           --             49,950
     Cumulative foreign currency
         translation adjustment .................             14,531                56        (14,587)(d)         --
     Retained (deficit) earnings ................            (46,034)           41,301          4,733 (d)         --
                                                   -------------------    ----------------    -------------  ---------
        Total shareholders' equity (deficit) ....            (31,483)           91,337         (9,854)          50,000
                                                   -------------------    ----------------    -------------  ---------

        Total ...................................           $346,276          $(35,641)       $(4,931)        $305,704
                                                   -------------------    ----------------    -------------  ---------
                                                   -------------------    ----------------    -------------  ---------
</TABLE>

      NOTES:
      ------
(a)   To record the distribution of cash and securities, the settlement of
      liabilities subject to compromise and other transactions in accordance
      with the Plan.
(b)   To adjust assets and liabilities to their estimated fair value.
(c)   To reduce long-term assets for the excess of the fair value of
      identifiable net assets over the total reorganization value as of the
      Effective Date.
(d)   To eliminate the accumulated deficit and cumulative foreign currency
      translation adjustment in accordance with fresh-start reporting.


                                       10
<PAGE>

METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                     For the Period
                                                                                      June 10, 1998
                                                                                     (inception) to
                                                                                    October 31, 1998
                                                                                   -------------------
<S>                                                                                           <C>     
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss .......................................................................              $(5,594)
Adjustments to reconcile net loss to net cash
 provided by operating activities:
  Amortization of executive stock awards ........................................                 354
  Depreciation and amortization .................................................               3,338
  Interest accretion on Discount Notes ..........................................               2,494
  Other .........................................................................               3,553
                                                                                   -------------------
    Total .......................................................................               4,145

Change in operating assets and liabilities:
  Decrease in trade receivables .................................................              21,294
  Increase in inventories .......................................................             (14,209)
  Increase in other current assets ..............................................              (6,571)
  Decrease in trade payables and accrued expenses ...............................              (8,732)
  Other assets and liabilities, net .............................................                (444)
                                                                                   -------------------
    Net cash used in operating activities .......................................              (4,517)
                                                                                   -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property, plant and equipment ....................................              (4,581)
  Cash paid for acquisition of Metallurg, Inc., net of cash acquired ............            (112,345)
  Other, net ....................................................................                (101)
                                                                                   -------------------
    Net cash used in investing activities .......................................            (117,027)
                                                                                   -------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Capital contribution ..........................................................              97,023
  Proceeds from long-term debt, net .............................................              68,037
  Net short-term borrowings .....................................................                (117)
  Other .........................................................................              (1,835)
                                                                                   -------------------
     Net cash provided by financing activities ..................................             163,108
                                                                                   -------------------

Effects of exchange rate changes on cash and cash equivalents ...................                 445
Net increase in cash and cash equivalents .......................................              42,009
Cash and cash equivalents - beginning of period .................................                --
                                                                                   -------------------
Cash and cash equivalents - end of period .......................................             $42,009
                                                                                   -------------------
                                                                                   -------------------
</TABLE>


       See notes to condensed unaudited consolidated financial statements


                                       11
<PAGE>

METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                                      Predecessor
                                                                       Reorganized Company              Company
                                                                ----------------  ---------------   -----------------
                                                                 Three Quarters    Two Quarters         Quarter
                                                                     Ended            Ended              Ended
                                                                  October 31,      October 31,         March 31,
                                                                      1998             1997               1997
                                                                ----------------  ---------------   ----------------
<S>                                                                      <C>              <C>               <C>    
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ...................................................           $ 8,326          $ 5,365           $57,954
Adjustments to reconcile net income to net cash provided by
operating activities:
  Executive stock awards .....................................               750              875               500
  Extraordinary item .........................................              --               --             (43,032)
  Fresh-start revaluation ....................................              --               --              (5,107)
  Depreciation and amortization ..............................             6,234            3,494             2,143
  Gain on sale of assets .....................................              (622)          (2,183)           (3,266)
  Reorganization expense, net of payments ....................              (144)          (4,051)            1,538
  Deferred income taxes ......................................             2,515            4,798            (3,767)
  Provision for doubtful accounts ............................               550            1,242               162
  Provision for environmental costs, net of payments .........            (1,718)            (927)             (256)
  Other, net .................................................             6,656            3,419             3,057
                                                                ----------------  ---------------   ----------------
    Total ....................................................            22,547           12,032             9,926

Change in operating assets and liabilities:
  Decrease (increase) in trade receivables ...................             7,954            8,363           (20,272)
  Increase in inventories ....................................           (19,983)         (20,081)           (6,120)
  (Increase) decrease in other current assets ................            (4,985)           1,931              (355)
  Increase (decrease) in trade payables and accrued expenses .             6,974           (1,482)           18,895
  Decrease in prepetition liabilities ........................              --               --                 (39)
  Receipt from environmental trust, net ......................              --               --               5,928
  Other assets and liabilities, net ..........................            (8,714)          (2,993)           (1,547)
                                                                ----------------  ---------------   ----------------
    Net cash provided by (used in) operating activities ......             3,793           (2,230)            6,416
                                                                ----------------  ---------------   ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property, plant and equipment .................           (11,576)          (5,493)           (2,774)
  Proceeds from asset sales ..................................             1,337            3,812             4,966
  Other, net .................................................            (2,406)              39               (25)
                                                                ----------------  ---------------   ----------------
    Net cash (used in) provided by investing activities ......           (12,645)          (1,642)            2,167
                                                                ----------------  ---------------   ----------------

CASH FLOWS FROM FINANCING, MERGER AND REORGANIZATION
  ACTIVITIES:
  Capital contribution from Safeguard International...........             3,541             --                --
  Cash distribution pursuant to plan of reorganization .......              --               --             (59,366)
  Drawdown of prepetition letters of credit ..................              --               --               9,700
  Proceeds from long-term debt, net ..........................             5,569             --               8,100
  Net short-term borrowings...................................            (1,968)             (57)            1,062
  Repayment of long-term debt ................................              (975)            (576)             (487)
                                                                ----------------  ---------------   ----------------
    Net cash provided by (used in) financing, merger and
       reorganization activities .............................             6,167             (633)          (40,991)
                                                                ----------------  ---------------   ----------------

Effects of exchange rate changes on cash and cash
  equivalents ................................................               197             (217)             (526)
                                                                ----------------  ---------------   ----------------
Net decrease in cash and cash equivalents ....................            (2,488)          (4,722)          (32,934)
Cash and cash equivalents - beginning of period ..............            43,003           30,340            63,274
                                                                ----------------------------------  ----------------
Cash and cash equivalents - end of period ....................           $40,515          $25,618           $30,340
                                                                ----------------  ---------------   ----------------
                                                                ----------------  ---------------   ----------------
</TABLE>


       See notes to condensed unaudited consolidated financial statements.


                                       12
<PAGE>

METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.    BASIS OF PRESENTATION

      This Quarterly Report on Form 10-Q/A (Amendment No. 1) for the period 
      ended October 31, 1998 is being filed to reflect a change in the 
      accounting by Metallurg Holdings, Inc. ("Metallurg Holdings") for its 
      purchase of Metallurg, Inc. on July 13, 1998 and its calculation of 
      goodwill in accordance with APB No. 16, "Business Combinations". 
      Previously, a $3.5 million payment to cancel compensatory options of 
      Metallurg, Inc. was recorded as merger-related costs in the period June 
      10, 1998 (inception) to October 31, 1998 and Metallurg Holdings, Inc. 
      reported a net loss of approximately $8.4 million. The condensed 
      consolidated financial statements of Metallurg Holdings, Inc. and 
      related notes thereto are amended and restated in their entirety to 
      reflect the $3.5 million payment, net of taxes of $0.8 million, as a 
      component of the purchase price. Upon revision, (i) the excess of the 
      purchase price over the fair value of the net assets acquired was 
      approximately $102 million, versus $99.2 million previously reported, 
      (ii) goodwill amortization, net of tax, has been adjusted in the 
      periods ended October 31, 1998 and (iii) the net loss for the period is 
      reduced to approximately $5.6 million.

      Metallurg Holdings' accompanying condensed unaudited consolidated
      financial statements as of October 31, 1998 and for the periods ended
      October 31, 1998 include the accounts of Metallurg Holdings and its
      majority-owned subsidiaries (collectively, the "Company"). Metallurg,
      Inc.'s condensed consolidated financial statements for the quarter and the
      three quarters ended October 31, 1998 (unaudited), the quarter and the two
      quarters ended October 31, 1997 (unaudited), and March 31, 1997 (audited)
      and as of October 31, 1998 (unaudited), January 31, 1998 (audited) and
      March 31, 1997 (audited), include the accounts of Metallurg, Inc. and its
      majority-owned subsidiaries ("Metallurg"). These financial statements 
      have been prepared in accordance with generally accepted accounting 
      principles for interim financial information pursuant to Accounting 
      Principles Board ("APB") Opinion No. 28. Accordingly, they do not 
      include all of the information and footnotes required by generally 
      accepted accounting principles for complete 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.

      On February 26, 1997, the Fourth Amended and Restated Joint Plan of
      Reorganization (the "Plan") of Metallurg, Inc. and one of its
      subsidiaries, Shieldalloy Metallurgical Corporation ("Shieldalloy"), was
      confirmed by the U.S. Bankruptcy Court for the Southern District of New
      York. Transactions contemplated by the Plan were consummated on April 14,
      1997 (the "Effective Date"). For financial reporting purposes, Metallurg
      has reflected the effects of the Plan consummation as of March 31, 1997.
      As a result of the consummation of the Plan and the adoption of
      fresh-start reporting under the American Institute of Certified Public
      Accountants' ("AICPA") Statement of Position 90-7, "Financial Reporting
      by Entities in Reorganization Under the Bankruptcy Code", financial
      statements for the quarter ended March 31, 1997, which includes the
      effects of the adoption of fresh-start reporting and consummation of the
      Plan, are referred to as the "Predecessor Company". Financial statements
      for periods subsequent to March 31, 1997 are referred to as the
      "Reorganized Company". The financial statements of Metallurg after
      consummation of the Plan are not directly comparable to Metallurg's
      financial statements of prior periods.

      Metallurg Holdings and Metallurg, the two holding companies, report on a
      fiscal year ending January 31. The operating subsidiaries report on a
      one-month lag. Accordingly, the period ended October 31, 1998 includes (i)
      the results of Metallurg Holdings from its inception (June 10, 1998) to
      October 31, 1998 (a loss of $4,112,000) and (ii) the results of Metallurg
      for the period subsequent to the Merger date of July 13, 1998, as defined
      below (a loss of $1,482,000). The results of operations of Metallurg for
      the quarter ended October 31, 1998 includes operating subsidiaries'
      results for the period July 1, 1998 to September 30, 1998 and Metallurg,
      Inc.'s, the holding company's, results for the period August 1, 1998 to
      October 31, 1998. 


                                       13
<PAGE>

      The results of operations of Metallurg for the three quarters ended
      October 31, 1998 include the operating subsidiaries' results from January
      1, 1998 to September 30, 1998 and Metallurg, Inc.'s, the holding company's
      results from February 1, 1998 to October 31, 1998. The consolidated
      balance sheet at October 31, 1998 reflects the positions of Metallurg
      Holdings and Metallurg, Inc. at October 31, 1998 and of Metallurg's
      operating subsidiaries at September 30, 1998.

2.    THE ACQUISITION TRANSACTIONS

      Metallurg Holdings, a Delaware corporation formed on June 10, 1998, is a
      wholly owned subsidiary of 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, certain limited partners of
      Safeguard International and a private equity fund. On July 13, 1998,
      Metallurg Acquisition Corp., a wholly owned subsidiary of Metallurg
      Holdings, merged with and into Metallurg, Inc., with Metallurg, Inc. being
      the surviving company and Metallurg Holdings becoming the sole parent of
      Metallurg, Inc. (the "Merger"). Metallurg, founded in 1911, is a leading
      international producer and seller of high-quality metal alloys and
      specialty metals used by manufacturers of steel, aluminum, superalloys and
      chemicals and other metal consuming industries.

      At the time of the Merger, each outstanding share of Metallurg common
      stock, par value $0.01 per share, was converted into the right to receive
      $30 in cash, representing an aggregate cash price of approximately $152.2
      million (including payments for cancellation of compensatory options).
      Metallurg Holding's purchase of Metallurg was recorded under the purchase
      method of accounting in accordance with APB Opinion No. 16, "Business
      Combinations". The total value of the transaction, including existing
      indebtedness and environmental, pension and other assumed liabilities, net
      of cash, was approximately $300 million. The excess of the purchase price
      over the fair value of the net assets acquired was approximately $102
      million and is being amortized over a period of 20 years.

      In order to finance the Merger, (i) Safeguard International and certain of
      its limited partners contributed approximately $97.0 million of capital to
      Metallurg Holdings (the "Equity Contribution"); and (ii) Metallurg
      Holdings received approximately $62.9 million net proceeds upon
      consummation of the offering of $121.0 million aggregate principal amount
      at maturity of 12 3/4% Senior Discount Notes due 2008 (the "Discount
      Notes") in a Rule 144A private placement to qualified institutional
      investors (the "Offering"). As used herein, the term "Acquisition
      Transactions" means the Equity Contribution, the Offering, the Merger, 
      the Consent Solicitation (as defined herein) and the execution of a
      supplemental indenture to the indenture governing Metallurg, Inc.'s 11%
      Senior Notes due 2007 (the "Senior Notes").

      In connection with the Merger, Metallurg received the consents (the
      "Consent Solicitation") of 100% of the registered holders of its Senior
      Notes to a one-time waiver of the change of control provisions of the
      Senior Note Indenture to make such provisions inapplicable to the Merger
      and to amend the definition of "Permitted Holders" under the Senior Note
      Indenture to reflect the post-Merger ownership of Metallurg. No other
      modifications to terms of then outstanding debt were affected in this
      regard.

      For further information, see the financial statements and footnotes
      thereto included in Metallurg, Inc.'s Form 10-Q for the quarter ended
      October 31, 1998 and report on Form 10-K for the period ended January 31,
      1998.


3.    CHANGE OF CONTROL

      Following the acquisition transactions discussed above, Metallurg made a
      number of management changes. As of August 10, 1998, Michael A. Standen
      resigned as President and Chief Executive Officer and was elected Vice
      Chairman of the board of directors. Alan D. Ewart was appointed President
      and Chief 


                                       14
<PAGE>

      Executive Officer, Eric E. Jackson was appointed Senior Vice President and
      Chief Operating Officer and Robin A. Brumwell was appointed Senior Vice
      President. Barry C. Nuss and Mr. Brumwell signed new employment agreements
      with Metallurg, pursuant to which each received a one-time payment of
      $150,000 in consideration of waiving their right to receive payments under
      their former employment agreements. As of October 31, 1998, J. Richard
      Budd and Eric L. Schondorf elected to terminate their employment
      agreements. Mr. Budd resigned as Senior Vice President as of October 31,
      1998. Michael A. Banks has notified Metallurg that he intends to terminate
      his employment as of January 1999. Pursuant to employment agreements
      between Metallurg and Mr. Standen, Mr. Budd, Mr. Banks and Mr. Schondorf,
      each of these individuals became entitled to payments of $1.2 million,
      $474,300, $321,300 and $313,650, respectively, as a result of their
      termination, in accordance with the terms of their respective employment
      agreements following the Merger. See Metallurg's Annual Report on Form
      10-K for the year ended January 31, 1998 which has been filed with the
      Securities and Exchange Commission for a discussion of these employment
      agreements and of certain other benefits to which these employees become
      entitled in the event of their termination.

4.    CAPITALIZATION

     The total number of shares of all classes of stock which Metallurg Holdings
     is authorized to issue is 50,000 shares, of which 30,000 shares shall be
     Common Stock, $.01 par value ("Common Stock"), 10,000 shares shall be
     Series A Voting Convertible Preferred Stock, $.01 par value ("Series A
     Preferred Stock") and 10,000 shares shall be Series B Non-Voting Preferred
     Stock, $.01 par value ("Series B Preferred Stock"). At October 31, 1998, 
     no Common Stock was issued and outstanding; however, 5,202.335 shares of
     Series A Preferred Stock and 4,500 shares of Series B Preferred Stock were
     issued and outstanding.

5.    EARNINGS PER SHARE

     The presentation of 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.    INVENTORIES

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


<TABLE>
<CAPTION>


                                                                    Metallurg
                                                                     Holdings                 Metallurg
                                                                 ----------------- ---------------- ---------------
                                                                   October 31,      January 31,       March 31,
                                                                       1998             1998             1997
                                                                 ----------------- ---------------- ---------------
           <S>                                                           <C>              <C>              <C>     
           Raw materials ......................................          $ 41,017         $ 32,938         $ 21,769
           Work in process ....................................             2,761            1,981            2,330
           Finished goods .....................................            91,046           77,473           80,500
           Other ..............................................             5,108            5,197            4,659
                                                                 ----------------- ---------------- ---------------
              Total ...........................................          $139,932         $117,589         $109,258
                                                                 ----------------- ---------------- ---------------
                                                                 ----------------- ---------------- ---------------
</TABLE>



7.   PRO FORMA RESULTS (UNAUDITED)

     The pro forma information presented here is based upon the historical
     financial statements of Metallurg included elsewhere herein. The pro forma
     information illustrate the estimated effects of (i) the adoption of
     fresh-start reporting following the consummation of the Plan, (ii) the
     issuance of the Senior Notes of Metallurg due 2007 and the application of
     the proceeds related thereto, (iii) the issuance of the 12 3/4% Senior


                                       15
<PAGE>

     Discount Notes of Metallurg Holdings due 2008 and (iv) the Merger and the
     transactions related thereto (collectively, the "Pro Forma 
     Transactions"), as if each of the listed transactions had occurred as of 
     January 1, 1997.
<TABLE>
<CAPTION>

                                                                  Three Quarters     Two Quarters        Quarter
                                                                      Ended             Ended             Ended
                                                                   October 31,       October 31,        March 31,
                                                                       1998              1997              1997
                                                                 -----------------  ---------------    ---------------
      <S>                                                                 <C>              <C>                <C>     
      Revenues ...............................................            $480,551         $315,204           $155,587
      Operating income .......................................             $25,346          $14,695            $ 6,014
      Net income (loss) ......................................             $ 4,225         $ (4,972)           $ 2,671
</TABLE>

      The pro forma financial information presented is not necessarily
      indicative of either the results of operations that would have occurred
      had the Pro Forma Transactions taken place at the beginning of the
      respective periods or the future operating results of the Company.

      This Merger has been accounted for under the purchase method of accounting
      and accordingly, the results of operations of Metallurg have been included
      in the accompanying consolidated financial statements since the date of
      the Merger, July 13, 1998. The cost of the Merger was allocated on the
      basis of the preliminary estimated fair market value of the assets
      acquired and liabilities assumed.

      The pro forma adjustments include the amortization of goodwill over 20
      years, interest expense due to the issuance of the Discount Notes and the
      retirement of certain debt, certain overhead expenses and the tax effect
      of the pro forma adjustments.


8.    RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      The Company adopted Statement of Financial Accounting Standards ("SFAS")
      No. 130, "Reporting Comprehensive Income", as of February 1, 1998. This
      standard requires the display of comprehensive income and its components
      in the financial statements.

      In June 1997, the Financial Accounting Standards Board ("FASB") issued
      SFAS No. 131, "Disclosure about Segments of an Enterprise and Related
      Information". SFAS No. 131 requires the reporting of profit and loss,
      specific revenue and expense items and assets for reportable segments. It
      also requires the reconciliation of total segment revenues, total segment
      profit or loss, total segment assets and other amounts disclosed for
      segments to the corresponding amounts in the general purpose financial
      statements. The Company will adopt this standard in the fourth quarter of
      1998.

      In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosure
      About Pensions and Other Postretirement Benefits". SFAS No. 132 changes
      current financial disclosure requirements from those that were required
      under SFAS No. 87, "Employers' Accounting for Pensions", SFAS No. 88,
      "Employers' Accounting for Settlement and Curtailments of Defined Benefit
      Pension Plans and for Termination Benefits" and SFAS No. 106, 
      "Employers' Accounting for Postretirement Benefits Other Than Pensions".
      The Company will adopt this standard in the fourth quarter of 1998.

      In June 1998, the FASB issued 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 is effective for all fiscal
      quarters of fiscal years 


                                       16
<PAGE>

      beginning after June 15, 1999. The Company is currently evaluating the
      impact SFAS No. 133 will have on its financial statements.

9.    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 statements.


                                       17
<PAGE>

             METALLURG HOLDINGS, INC. AND CONSOLIDATED SUBSIDIARIES
    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/A
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 Metallurg Holdings, Inc. 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 business, the Company's dependence on foreign customers (particularly
customers in Europe), the economic strength of the Company's markets generally
and particularly the strength of the demand for iron, steel, aluminum and
superalloys and titanium alloy industries in those markets, pricing of the
Company's products, the accuracy of the Company's estimates of the costs of
environmental remediation and the extension or expiration of existing
anti-dumping duties.


OVERVIEW - On July 13, 1998, Metallurg Holdings, a Delaware corporation formed
on June 10, 1998 by Safeguard International and institutional co-investors,
acquired Metallurg. Effective March 31, 1997, Metallurg implemented fresh-start
reporting relating to its emergence from bankruptcy. Accordingly, all assets and
liabilities were restated to reflect their respective fair values and the
consolidated financial statements subsequent to that date include the related
amortization of credits associated with the fair value adjustments. The
consolidated financial statements after that date are those of a new reporting
entity and are not directly comparable to the pre-confirmation periods.

Metallurg Holdings' quarter ended October 31, 1998 includes the holding
company's results for the period August 1, 1998 to October 31, 1998 and the
consolidated results of Metallurg, as described below. Metallurg Holdings'
year-to-date financial statements ended October 31, 1998 include the results of
the holding company from its inception (June 10, 1998) to October 31, 1998 and
the consolidated results of Metallurg for the period subsequent to the Merger
date of July 13, 1998 to October 31, 1998, as described below. Metallurg's
quarter ended October 31, 1998 includes operating subsidiaries' results for the
period July 1, 1998 to September 30, 1998 and the holding company's results for
the period August 1, 1998 to October 31, 1998. Metallurg's year-to-date
financial statements ended October 31, 1998 include the operating subsidiaries'
results from January 1, 1998 to September 30, 1998 and the holding company's
results from February 1, 1998 to October 31, 1998. The consolidated balance
sheet data of the Company at October 31, 1998 reflect the financial position of
Metallurg, Inc. and Metallurg Holdings, Inc. at October 31, 1998 and the
operating subsidiaries at September 30, 1998.

In addition, as a result of Metallurg's change in its fiscal year from a
calendar year to January 31, effective as of April 1, 1997, the consolidated
operating results of Metallurg for the three quarters ending October 31, 1997
include the results of Metallurg, Inc., the parent holding company, for the ten
month period ended October 31, 1997 and the results of its operating
subsidiaries (whose fiscal years remain the calendar year) for the nine month
period ended September 30, 1997. The consolidated balance sheet data of
Metallurg at October 31, 1997 reflect the financial position of Metallurg, Inc.
at October 31, 1997 and the operating subsidiaries at September 30, 1997.


                                       18
<PAGE>

METALLURG HOLDINGS' RESULTS OF OPERATIONS - QUARTER AND THE PERIOD ENDED OCTOBER
31, 1998

The net loss of $5.6 million includes the consolidation of Metallurg, Inc. for
the period subsequent to the acquisition (a loss of $1.5 million), $2.5 million
of interest expense on its Senior Secured Discount Notes and amortized goodwill
and deferred issuance costs, in the amount of approximately $1.6 million.

The net loss of $3.8 million in the quarter ended October 31, 1998 was 
primarily attributable to $2.1 million of interest expense on the Company's 
Senior Secured Discount Notes, $1.3 million of goodwill amortization and the 
loss of Metallurg, Inc. during the period of $0.3 million, which included 
$2.6 million of merger-related costs, primarily payments made pursuant to 
existing employment agreements with Metallurg management.

METALLURG INC.'S RESULTS OF OPERATIONS -

The following presentation of the Management, Discussion and Analysis for
results of operations are for Metallurg, Inc. and its consolidated subsidiaries
and do not include the results of operations for Metallurg Holdings, which are
discussed in the preceding paragraph. As stated previously, Metallurg Holdings
was formed on June 10, 1998 for the purpose of consummating the acquisition of
Metallurg, Inc., which was completed on July 13, 1998.

The amounts presented below for the Company for the three quarters ended October
31, 1997 represent the mathematical addition of the historical amounts for the
Predecessor Company and the Reorganized Company only for purposes of the
discussion below. Significant differences between periods due to fresh-start
reporting adjustments are explained below, when necessary.
<TABLE>
<CAPTION>

                                                   Quarter          Quarter             Three Quarters     Three Quarters
                                                    Ended            Ended                  Ended              Ended
                                                 October 31,      October 31,            October 31,        October 31,
                                                     1998             1997                   1998               1997
                                                --------------   -----------------     -----------------  ------------------

<S>                                                   <C>                <C>                    <C>                <C>     
Total revenue ................................        $142,708           $148,325               $480,551           $470,791
                                                --------------   -----------------     -----------------  ------------------
Operating costs and expenses:
   Cost of sales .............................         124,401            127,276                406,080            403,471
   Selling, general and administrative
      expenses ...............................          15,587             13,560                 45,495             43,033
   Merger-related costs ......................           2,607               --                    7,023               --
                                                --------------   -----------------     -----------------  ------------------
   Total operating costs and expenses ........         142,595            140,836                458,598            446,504
                                                --------------   -----------------     -----------------  ------------------
      Operating income .......................             113              7,489                 21,953             24,287
Other income (expense):
   Other income, net .........................           1,487              1,074                  2,032              4,177
   Interest expense, net .....................          (2,303)            (1,332)                (6,919)            (3,056)
   Reorganization expense ....................            --                 --                     --               (2,663)
   Fresh-start revaluation ...................            --                 --                     --                5,107
                                                --------------   -----------------     -----------------  ------------------
Income (loss) before income tax
   provision and extraordinary item ..........            (703)             7,231                 17,066             27,852
Income tax provision (benefit) ...............            (741)             5,517                  8,740              7,565
                                                ----------------------------------    --------------------------------------
Income before extraordinary item .............              38              1,714                  8,326             20,287
Extraordinary item ...........................            --                 --                     --               43,032
                                                --------------   -----------------     -----------------  ------------------
Net income ...................................           $  38             $1,714                 $8,326            $63,319
                                                --------------   -----------------     -----------------  ------------------
                                                --------------   -----------------     -----------------  ------------------
</TABLE>


TOTAL REVENUES
Total revenues increased by 2.1%, from $470.8 million in the three quarters
ended October 31, 1997 to $480.6 million in the three quarters ended October 31,
1998. Increased volume and selling prices during the first half of 1998 of
ferrovanadium accounted for most of the increase. In addition, revenues from
increased sales of 


                                       19
<PAGE>

ferrotitanium and chromium metal, due primarily to increased volume, more than
offset a reduction in sales of low carbon ferrochrome, ferroboron and polishing
powders due primarily to increased price competition. Revenues from sales of
products not produced by the Company, primarily cobalt, silicon and manganese
products, also declined during this period, due primarily to lower volumes.

Total revenues decreased by 3.8%, from $148.3 million in the third quarter of
1997 to $142.7 million in the third quarter of 1998. Decreased revenues from
sales of aluminum master alloys and compacted products, cobalt, silicon and
manganese products, due primarily to declines in volume, more than offset the
increase in volume and selling prices of ferrovanadium.

GROSS MARGINS
Gross margins increased from $67.3 million in the three quarters ended October
31, 1997 to $74.5 million in the three quarters ended October 31, 1998, an
increase of 10.6%, due principally to the price and volume increases in
ferrovanadium. In aluminum master alloys and compacted products, a decrease in
volume was more than offset by improvements in product mix and cost reductions.
Improvement in gross margins was partially offset by decreases in low carbon
ferrochrome margins resulting from lower selling prices and less favorable
product mix. The values of the Company's assets were reduced pursuant to
fresh-start reporting, reducing depreciation expense by $1.0 million and $0.7
million in the three quarters ended October 31, 1998 and 1997, respectively, and
increasing gross margins by equal amounts.

Gross margins decreased from $21.0 million in the third quarter of 1997 to $18.3
million in the third quarter of 1998, a decrease of 13.0%. Decreases in low
carbon ferrochrome margins, due to lower volume and selling prices, and
decreases in gross margins from sales of products not produced by the Company,
more than offset the increase in ferrovanadium margins resulting from higher
selling prices during the period. The values of the Company's assets were
reduced pursuant to fresh-start reporting, reducing depreciation expense in each
of the quarters ended October 31, 1998 and 1997 by $0.3 million and increasing
gross margins by an equal amount.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 
Selling, general and administrative expenses ("SG&A") increased from $43.0
million in the three quarters ended October 31, 1997 to $45.5 million in the
three quarters ended October 31, 1998, an increase of 5.7%. For the three
quarters ended October 31, 1997, SG&A represented 9.1% of the Company's sales
compared to 9.5% for the three quarters ended October 31, 1998. SG&A were higher
in 1998 due primarily to increased compensation expense and increased spending
on research and development projects.

SG&A increased from $13.6 million in the third quarter of 1997 to $15.6 million
in the third quarter of 1998, an increase of 14.9%. For the third quarter of
1997, SG&A represented 9.2% of the Company's sales compared to 10.9% for the
third quarter of 1998. SG&A were higher in 1998 due to increased compensation
expense and increased research and development spending. During 1997, the
Company recognized a recovery of bad debt expense which reduced SG&A by
approximately $0.5 million.

OPERATING INCOME
Operating income decreased from $24.3 million in the three quarters ended
October 31, 1997 to $22.0 million in the three quarters ended October 31, 1998,
a decrease of 9.6%. The increase in gross margin, discussed above, was more than
offset by merger-related costs of $7.0 million incurred in 1998. These costs
included (a) $3.5 million for payments to cancel compensatory options; (b) $0.6
million in consent fees incurred in order to obtain a one-time waiver of the
change of control provisions of the Indenture with regard to the Company's
senior notes and to amend the Indenture to reflect the post-Merger ownership of
Metallurg, Inc.; (c) $2.1 million for payments made pursuant to existing
employment agreements with Metallurg management; and (d) $0.8 million of other
merger-related costs.

Operating income decreased substantially, from $7.5 million for the third
quarter of 1997 to $0.1 million for the third quarter of 1998. The decrease
resulted from reduced gross margins and increased SG&A, as noted above. 


                                       20
<PAGE>

In addition, $2.6 million of merger-related costs, primarily payments made
pursuant to existing employment agreements with Metallurg management, were
recorded during the period.

INTEREST INCOME (EXPENSE), NET  
Interest income (expense), net is as follows (in thousands):
<TABLE>
<CAPTION>

                                                    Quarter          Quarter            Three Quarters     Three Quarters
                                                     Ended            Ended                 Ended              Ended
                                                  October 31,      October 31,           October 31,        October 31,
                                                      1998             1997                  1998               1997
                                                ----------------  ---------------     ------------------  ------------------



      <S>                                                <C>              <C>                    <C>                <C>    
      Interest income .......................              $ 995            $ 610                $ 2,643            $ 3,018
      Interest expense .......................            (3,298)          (1,942)                (9,562)            (6,074)
                                                ----------------  ---------------     ------------------  ------------------
         Interest income (expense), net .....            $(2,303)         $(1,332)               $(6,919)           $(3,056)
                                                ----------------  ---------------     ------------------  ------------------
                                                ----------------  ---------------     ------------------  ------------------
</TABLE>


Interest expense increased significantly in 1998. In each of the first three
quarters of 1998, the Company accrued approximately $2.8 million of interest
expense on $100 million aggregate principal amount of its 11% senior notes due
2007 (the "11% Senior Notes"), which were issued in November 1997. The Company
used a portion of the proceeds from the 11% Senior Notes to retire $39.5 million
of the then outstanding 12% Senior-Secured Notes of Metallurg, Inc. due 2007
(the "12% Senior-Secured Notes"). In each of the first three quarters of 1997,
the Company accrued approximately $1.2 million of interest expense on these 12%
Senior-Secured Notes. The Company did not accrue interest on debt incurred prior
to entering Chapter 11 proceedings. As a result, approximately $2.1 million of
contractual interest on these unsecured obligations, which were reported as part
of liabilities subject to compromise, was not reflected in the quarter ended
March 31, 1997.

INCOME TAX PROVISION (BENEFIT):
Income tax provision, net of tax benefits, is as follows (in thousands):
<TABLE>
<CAPTION>

                                                    Quarter          Quarter            Three Quarters     Three Quarters
                                                     Ended            Ended                 Ended              Ended
                                                  October 31,      October 31,           October 31,        October 31,
                                                      1998             1997                  1998               1997
                                                ----------------  ---------------     ------------------  ------------------

      <S>                                                  <C>             <C>                    <C>                <C>   
      Total current .........................              $(943)          $3,420                 $6,259             $6,534
      Total deferred .........................               202            2,097                  2,481              1,031
                                                ----------------  ---------------     ------------------  ------------------
         Income tax provision (benefit), net               $(741)          $5,517                 $8,740             $7,565
                                                ----------------  ---------------     ------------------  ------------------
                                                ----------------  ---------------     ------------------  ------------------
</TABLE>



The differences between the statutory Federal income tax rate and the Company'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
$(0.8) million and $(0.4) million in the quarter and the three quarters ended
October 31, 1998, respectively; 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 $1.0 million and $2.9 million in 
the quarter and the three quarters ended October 31, 1998, respectively. The
deferred tax expenses referred to in items (iii) and (iv) above will not result
in cash payments in future periods.

NET INCOME
Net income decreased from $63.3 million for the three quarters ended October 31,
1997 to $8.3 million for the three quarters ended October 31, 1998. Included in
the 1997 net income is an extraordinary item of $43.0 million 


                                       21
<PAGE>

representing the cancellation of debt resulting from the consummation of the
Company's Reorganization Plan and a $5.1 million credit representing the effects
of revaluing the Company's assets and liabilities under fresh-start reporting.
In addition, other income included gains on the sales of the Company's New York
office building and of certain plant assets of one of the Company's German
subsidiaries totaling $4.7 million. The decrease in 1998 results from the
merger-related costs and increased interest and SG&A expenses, noted above.
These decreases more than offset gains from increased gross margins, as noted
above, as well as a $0.9 million gain realized on the sale of the Company's
Luxembourg affiliate.

Net income was $1.7 million for the third quarter of 1997 compared to breakeven
for the third quarter of 1998, due primarily to reduced gross margins and the
merger-related costs, as described above.

RECENT MARKET DEVELOPMENTS
Market prices for several of the Company's products have been declining during
the second half of 1998. The Company believes that the price declines are a
result of lower worldwide and significantly lower U.S. steel production and
adjustments of production plans for the titanium and superalloy industries,
among other generally weaker metal market conditions. During the quarter ended
October 31, 1998, the Company recognized lower of cost or market inventory
provisions of approximately $1.4 million relating to several chrome products.
Management anticipates additional inventory write-downs during the fourth
quarter, the amount of which is indeterminable at this time, because it is
dependent on future market conditions. The market price of ferrovanadium, a
significant product produced by the Company, declined from over $9 per pound
vanadium at the end of October to under $6 per pound vanadium at the end of
November.

LIQUIDITY AND FINANCIAL RESOURCES

GENERAL
The Company's sources of liquidity include cash from operations and amounts
available under credit facilities. Metallurg believes that these sources are
sufficient to fund the current and anticipated future requirements of working
capital, capital expenditures, pension benefits, potential acquisitions and
environmental expenditures through at least 1999.

In November 1997, Metallurg sold $100 million principal amount of 11% Senior
Notes due 2007, the proceeds of which were used to retire Metallurg's then
existing 12% Senior-Secured Notes (approximately $39.5 million), repay certain
debt of the UK and German subsidiaries (approximately $19.8 million) and to pay
a cash dividend (approximately $20.0 million). The balance of the net proceeds
will be used for general corporate purposes.

In July 1998, Metallurg Holdings issued Senior Secured Discount Notes due 2008
which yielded gross proceeds of $65.2 million, which proceeds were used, in
part, to consummate the acquisition of Metallurg, Inc.

At October 31, 1998, the Company had $42.0 million of cash and cash equivalents
and working capital of $180.7 million. Metallurg had $40.5 million in cash and
cash equivalents and working capital of $179.7 million at October 31, 1998, as
compared to $43.0 million and $167.8 million, respectively, at January 31, 1998.
For the first three quarters of 1998, Metallurg generated $3.8 million in cash
from operations and received proceeds of approximately $1.1 million on the sale
of its Luxembourg affiliate. Capital expenditures approximated $11.6 million in
the first three quarters and in February 1998, Metallurg purchased an additional
5% interest in a Russian magnesium metal producer for approximately $2.0
million.


                                       22
<PAGE>

CREDIT FACILITIES AND OTHER FINANCING ARRANGEMENTS

METALLURG, INC.

Metallurg has a credit facility with certain financial institutions led by
BankBoston, N.A. as agent (the "Revolving Credit Facility") which provides
Metallurg, Shieldalloy and certain of their subsidiaries with up to $50.0
million of financing resources at a rate per annum equal to (i) the Alternate
Base Rate plus 1.0% per annum (the Alternate Base Rate is the greater of the
Base Rate or the Federal Funds Effective Rate plus 0.5%) or (ii) the reserve
adjusted Eurodollar rate plus 2.5% for interest periods of one, two or three
months. The Revolving Credit Facility permits borrowings of up to $50.0 million
for working capital requirements and general corporate purposes, up to $30.0
million of which may be used for letters of credit in the U.S. At October 31,
1998, there were no outstanding loans and $25.3 million of letters of credit
outstanding in the U.S. under the Revolving Credit Facility. On October 20,
1997, BankBoston, N.A., through its Frankfurt office, made available up to DM
20.5 million (approximately $11.3 million) of financing to certain of its German
subsidiaries (the "German Subfacility"), which is guaranteed by Metallurg and
the other U.S. borrowers under the Revolving Credit Facility. At October 31,
1998, loans of $0.4 million were outstanding in Germany under this facility.

In August 1998, one of the Company's German subsidiaries entered into a term
loan with IKB Deutsche Industriebank in the amount of DM 10.0 million
(approximately $6.0 million). The loan, which matures in 2008, bears interest at
rates ranging from 3.75% - 4.75% and is secured by certain property of the
German subsidiary.

In addition, several of the other 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, 1998,
there were $0.4 million of outstanding loans under these local credit
facilities.

METALLURG HOLDINGS

Metallurg Holdings is a holding company, and its ability to meet its payment
obligations on the Discount Notes is dependent upon the receipt of dividends and
other distributions from its direct and indirect subsidiaries. Metallurg
Holdings does not have, and may not in the future have, any material assets
other than the common stock of Metallurg. Metallurg, Inc. and its subsidiaries
are parties to various credit agreements, including the Senior Note Indenture
and the Revolving Credit Facility, which impose substantial restrictions on
Metallurg, Inc.'s ability to pay dividends to Metallurg Holdings.

CAPITAL EXPENDITURES

Metallurg invested $11.6 million in capital expenditures during the first three
quarters of 1998. Capital expenditures are expected to total approximately $20.0
million in 1998. Although the Company has budgeted these items in 1998, the
Company has not committed to complete these projects which are contingent on
senior management approval and other conditions. The Company believes that these
projects will be funded through internally generated cash, borrowings under the
Revolving Credit Facility and local credit lines.

ENVIRONMENTAL REMEDIATION COSTS

In 1996, the Company elected early adoption of the AICPA Statement of Position
96-1, "Environmental Remediation Liabilities", which among other requirements,
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 1998, the Company expended $1.7 million for
environmental remediation.


                                       23
<PAGE>

As part of the Plan, 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, 1998, had an estimated cost of completion of $38.2 million. Of
this amount, approximately $1.9 million is expected to be expended in the last
quarter of 1998, $3.3 million in 1999 and $6.6 million in 2000. In addition, the
Company estimates it will make expenditures of $5.4 million with respect to
environmental remediation at its foreign facilities. Of this amount,
approximately $0.1 million is expected to be expended in the last quarter of
1998, $0.2 million in 1999 and $0.8 million in 2000.


YEAR 2000 COMPLIANCE

The Year 2000 statement set forth below is a Year 2000 Readiness Disclosure
pursuant to the Year 2000 Information and Readiness Disclosure Act, Public Law
105-271. Please note that, for purposes of any action brought under the
securities laws, as that term is defined in section 3(a)(47) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)(47)), the Year 2000 Information and
Readiness Disclosure Act does not apply to any statements contained in any
documents or materials filed with the Securities and Exchange Commission, or
with Federal banking regulators, pursuant to section 12(i) of the Securities
Exchange Act of 1934 (15 U.S.C. 781(i)), or disclosures or writing that, when
made, accompanied the solicitation of an offer or sale of securities.

Metallurg has completed an internal review of its and its subsidiaries'
information technology systems in connection with its assessment of Year 2000
compliance. Metallurg is in the process of replacing or modifying some of the
management and accounting systems at its subsidiaries to upgrade them generally
and to make them Year 2000 compliant. Metallurg expects to spend between $1.0
million and $2.0 million on these systems changes. Metallurg expects that the
information technology systems for all of its subsidiaries will be Year 2000
compliant by March 31, 1999. Metallurg is currently assessing whether any of its
non-information technology will need to be modified to become Year 2000
compliant.

Metallurg has not received written assurances from its significant suppliers and
customers to determine the state of their readiness with regard to Year 2000
compliance. Metallurg believes that they will be prepared for Year 2000 based on
Metallurg's normal interactions with its customers and suppliers and because of
the wide attention which the issue has received. Metallurg has not yet seen the
need for contingency plans for the Year 2000 issue, but this need will continue
to be monitored as Metallurg obtains more information about the state of
readiness of its suppliers and customers.

Metallurg presently believes that the Year 2000 issue will not pose significant
operational problems for its business systems. However, if any needed
modifications and conversions were not made, or were not completed timely, the
Year 2000 issue could have an adverse impact on Metallurg's operations and
liquidity. If any of Metallurg's suppliers or customers do not, or if Metallurg
itself does not, successfully deal with the Year 2000 issue, Metallurg could
experience delays in receiving or shipping products and in receiving payments.
The severity of these possible problems would depend on the nature of the
problem and how quickly it could be corrected or an alternative implemented,
which is unknown at this time.

The anticipated costs for Metallurg to become Year 2000 compliant and the
anticipated timing for Metallurg to complete the Year 2000 modifications are
based on management's best estimates, which were derived utilizing numerous
assumptions of future events, including timely performance by third parties who
will provide Metallurg with the software for its new systems. However, there can
be no guarantee that these estimates will be achieved and actual results could
differ materially from those anticipated. Specific factors that might cause such
material differences include, but are not limited to, the ability to locate and
correct all relevant computer codes, the ability to successfully integrate new
business systems with existing operations and similar uncertainties. Some risks
of the Year 2000 issue are beyond the control of Metallurg and its suppliers and
customers. In particular, Metallurg cannot predict the effect that the Year 2000
issue will have on the general economy.


                                       24
<PAGE>

PART II               OTHER  INFORMATION




ITEM 6. (A)           EXHIBITS

                      27 Financial Data Schedule


       6. (b)         REPORT ON FORM 8-K

                      1.   Form 8-K dated November 25, 1998 (filed on November
                           25, 1998) announcing that Metallurg Holdings had
                           changed its certified public accountants to
                           PricewaterhouseCoopers LLP.


                                       25
<PAGE>


                                   SIGNATURES



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

                                       METALLURG HOLDINGS, INC.




January 28, 1999                         /s/  ARTHUR R. SPECTOR
                                       -----------------------------------------
                                             Arthur R. Spector
                                             Vice President
                                             (Principal Financial Officer and
                                             Principal Accounting Officer)


                                       26