<PAGE>   1

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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------

                                   FORM 10-Q

(MARK ONE)

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

                FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 2000

                                       OR

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

                  FOR THE TRANSITION PERIOD FROM           TO

                            ------------------------

                                METALLURG, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
        <S>                                        <C>
                         DELAWARE                                  13-1661467
                 (State of organization)              (I.R.S. Employer Identification No.)

                    6 EAST 43RD STREET                           (212) 835-0200
                 NEW YORK, NEW YORK 10017               (Registrant's telephone number,
         (Address of principal executive offices)             including area code)
</TABLE>

                            ------------------------

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

     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 [ ]

     The number of shares of common stock, $0.01 par value, issued and
outstanding as of December 11, 2000 was 5,000,000.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>   2

                 METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES

                                     INDEX

<TABLE>
<CAPTION>
                                                              PAGE NO.
                                                              --------
<S>                                                           <C>
Part I. FINANCIAL INFORMATION:
  Item 1 -- Financial Statements (Unaudited)
     Condensed Statements of Consolidated Operations for the
      Quarter and the Three Quarters Ended October 31, 2000
      and 1999..............................................       3
     Condensed Consolidated Balance Sheets at October 31,
      2000 and January 31, 2000.............................       4
     Condensed Statements of Consolidated Cash Flows for the
      Three Quarters Ended October 31, 2000 and 1999........       5
     Notes to Condensed Unaudited Consolidated Financial
      Statements............................................    6-13
  Item 2 -- Management's Discussion and Analysis of
     Financial Condition and Results of Operations..........   14-19
  Item 3 -- Quantitative and Qualitative Disclosure of
     Market Risk............................................      20

Part II. OTHER INFORMATION:
  Item 6. (a) EXHIBITS......................................      21
  Item 6. (b) REPORTS ON FORM 8-K...........................      21
  Signature Page............................................      22
</TABLE>

                                        2
<PAGE>   3

                        PART I -- FINANCIAL INFORMATION
                         ITEM 1 -- FINANCIAL STATEMENTS

                 METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES
          CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                      QUARTERS ENDED           THREE QUARTERS ENDED
                                                       OCTOBER 31,                 OCTOBER 31,
                                                  ----------------------      ----------------------
                                                    2000          1999          2000          1999
                                                  --------      --------      --------      --------
<S>                                               <C>           <C>           <C>           <C>
Sales...........................................  $116,983      $113,103      $372,940      $346,679
Commission income...............................       183           155           486           444
                                                  --------      --------      --------      --------
  Total revenues................................   117,166       113,258       373,426       347,123
                                                  --------      --------      --------      --------
Operating costs and expenses:
  Cost of sales.................................   101,697        99,570       322,228       308,374
  Selling, general and administrative
     expenses...................................    13,412        13,656        41,528        42,130
  Environmental expense recovery................        --            --          (750)       (5,501)
  Restructuring charges.........................        --            --            --         4,386
                                                  --------      --------      --------      --------
  Total operating costs and expenses............   115,109       113,226       363,006       349,389
                                                  --------      --------      --------      --------
Operating income (loss).........................     2,057            32        10,420        (2,266)
Other income (expense):
  Other income (expense), net...................       135           (16)        5,485           (11)
  Interest expense, net.........................    (2,499)       (2,298)       (7,848)       (8,158)
                                                  --------      --------      --------      --------
(Loss) income before income tax provision and
  minority interest.............................      (307)       (2,282)        8,057       (10,435)
Income tax provision............................     1,200           743         4,691         3,488
                                                  --------      --------      --------      --------
(Loss) income before minority interest..........    (1,507)       (3,025)        3,366       (13,923)
Minority interest...............................       104            --           161            --
                                                  --------      --------      --------      --------
Net (loss) income...............................    (1,403)       (3,025)        3,527       (13,923)
Other comprehensive (loss) income:
  Foreign currency translation adjustment.......    (1,472)        2,048        (4,598)         (373)
                                                  --------      --------      --------      --------
  Comprehensive loss............................  $ (2,875)     $   (977)     $ (1,071)     $(14,296)
                                                  ========      ========      ========      ========
</TABLE>

      See notes to condensed unaudited consolidated financial statements.
                                        3
<PAGE>   4

                 METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                              OCTOBER 31,   JANUARY 31,
                                                                 2000          2000
                                                              -----------   -----------
                                                              (UNAUDITED)
<S>                                                           <C>           <C>
ASSETS
Current Assets:
  Cash and cash equivalents.................................   $ 29,731      $ 58,611
  Accounts and notes receivable, net........................     69,595        68,480
  Inventories...............................................     91,167        80,653
  Other current assets......................................     13,216        10,369
                                                               --------      --------
     Total current assets...................................    203,709       218,113
Property, plant and equipment, net..........................     59,086        52,545
Other assets................................................     20,461        22,993
                                                               --------      --------
     Total..................................................   $283,256      $293,651
                                                               ========      ========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
  Short-term debt and current portion of long-term debt.....   $  6,369      $  1,932
  Trade payables............................................     49,041        48,792
  Accrued expenses..........................................     33,779        30,213
  Other current liabilities.................................      2,802         1,306
                                                               --------      --------
     Total current liabilities..............................     91,991        82,243
                                                               --------      --------
Long-term Liabilities:
  Long-term debt............................................    114,340       109,062
  Accrued pension liabilities...............................     31,757        35,890
  Environmental liabilities, net............................     29,844        31,819
  Other liabilities.........................................      6,518         6,220
                                                               --------      --------
     Total long-term liabilities............................    182,459       182,991
                                                               --------      --------
     Total liabilities......................................    274,450       265,234
                                                               --------      --------
Minority Interest...........................................        670           (24)
Shareholder's Equity:
  Common stock..............................................         50            50
  Due from parent company...................................    (19,714)           --
  Additional paid-in capital................................     46,661        46,181
  Accumulated other comprehensive loss......................     (6,501)       (1,903)
  Retained deficit..........................................    (12,360)      (15,887)
                                                               --------      --------
     Total shareholder's equity.............................      8,136        28,441
                                                               --------      --------
     Total..................................................   $283,256      $293,651
                                                               ========      ========
</TABLE>

      See notes to condensed unaudited consolidated financial statements.
                                        4
<PAGE>   5

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

<TABLE>
<CAPTION>
                                                              THREE QUARTERS ENDED
                                                                  OCTOBER 31,
                                                              --------------------
                                                                2000        1999
                                                              --------    --------
<S>                                                           <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)...........................................  $  3,527    $(13,923)
Adjustments to reconcile net income (loss) to net cash (used
  in) provided by operating activities:
  Depreciation and amortization.............................     6,485       6,190
  (Gain) loss on sale of assets.............................    (5,161)         16
  Deferred income taxes.....................................     1,825       1,306
  Provision for restructuring costs.........................        --       4,386
                                                              --------    --------
          Total.............................................     6,676      (2,025)
Change in operating assets and liabilities:
  Increase in trade receivables.............................      (819)     (6,087)
  (Increase) decrease in inventories........................   (12,371)     21,112
  (Increase) decrease in other current assets...............    (3,552)      2,419
  Increase in trade payables and accrued expenses...........     4,486      13,414
  Restructuring payments....................................    (1,510)         --
  Environmental payments....................................    (1,889)     (2,132)
  Other assets and liabilities, net.........................     2,338      (3,290)
                                                              --------    --------
     Net cash (used in) provided by operating activities....    (6,641)     23,411
                                                              --------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property, plant and equipment................   (12,356)     (9,373)
  Proceeds from asset sales.................................     8,417          42
  Acquisitions, net of cash.................................   (11,196)         --
  Other, net................................................        62         (61)
                                                              --------    --------
     Net cash used in investing activities..................   (15,073)     (9,392)
                                                              --------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net short-term borrowings (repayments)....................     5,877      (1,680)
  Proceeds (repayment) of long-term debt....................     6,915        (874)
  Purchase of parent company debt...........................   (19,714)         --
  Minority interest contribution............................       676          --
                                                              --------    --------
     Net cash used in financing activities..................    (6,246)     (2,554)
                                                              --------    --------
Effects of exchange rate changes on cash and cash
  equivalents...............................................      (920)       (333)
                                                              --------    --------
Net (decrease) increase in cash and cash equivalents........   (28,880)     11,132
Cash and cash equivalents -- beginning of period............    58,611      37,293
                                                              --------    --------
Cash and cash equivalents -- end of period..................  $ 29,731    $ 48,425
                                                              ========    ========
</TABLE>

      See notes to condensed unaudited consolidated financial statements.
                                        5
<PAGE>   6

                 METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES

                   NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                              FINANCIAL STATEMENTS
1.  BASIS OF PRESENTATION

     The accompanying condensed unaudited consolidated financial statements
include the accounts of Metallurg, Inc. and its majority-owned subsidiaries
(collectively, "Metallurg"). These financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information pursuant to Accounting Principles Board Opinion No. 28. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. The condensed
consolidated balance sheet as of January 31, 2000 was derived from audited
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the interim periods presented are not
necessarily indicative of the results to be expected for a full year.

     Metallurg is a wholly owned subsidiary of Metallurg Holdings, Inc.
("Metallurg Holdings") since the acquisition date of July 13, 1998. The
financial statements do not reflect the pushdown of purchase accounting
adjustments recorded by Metallurg Holdings.

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

     Metallurg, Inc. reports the results of its operating subsidiaries on a
one-month lag. Accordingly, the three quarters ended October 31, 2000 and 1999
include operating results of Metallurg, Inc., the parent holding company, for
the nine months ended October 31, 2000 and 1999 and worldwide operating results
for the nine months ended September 30, 2000 and 1999. Balance sheet data at
October 31, 2000 reflect the financial position of Metallurg, Inc. at October
31, 2000 and of its subsidiaries at September 30, 2000. Balance sheet data at
January 31, 2000 reflect the financial position of Metallurg, Inc. at January
31, 2000 and of its subsidiaries at December 31, 1999. See "Note 10. Subsequent
Event -- Change in Fiscal Year".

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

2.  SEGMENTS AND RELATED INFORMATION

     Metallurg operates in one significant industry segment, the manufacture and
sale of ferrous and non-ferrous metals and alloys. Metallurg is organized
geographically, having established a worldwide sales network built around
Metallurg's core production facilities in the U.S., the U.K. and Germany. In
addition to selling products manufactured by Metallurg, Metallurg distributes
complementary products manufactured by third parties.

  Reportable Segments

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

     London & Scandinavian Metallurgical Co Limited and its subsidiaries
(collectively, "LSM") -- This unit is comprised mainly of three production
facilities in the U.K. which manufacture and sell aluminum alloy grain refiners
and alloying tablets for the aluminum industry, chromium metal and specialty
ferroalloys for the steel and superalloy industries and aluminum powder for
various metal powder consuming industries. On March 31, 2000, LSM acquired the
business of Hydelko KS ("Hydelko"), a Norwegian producer of master alloys for
the aluminum industry.
                                        6
<PAGE>   7
                 METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES

                   NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                      FINANCIAL STATEMENTS -- (CONTINUED)

2.  SEGMENTS AND RELATED INFORMATION -- (CONTINUED)
     Gesellschaft fur Elektrometallurgie mbH and its subsidiaries (collectively,
"GfE") -- This unit is comprised of two production facilities and a sales office
in Germany. The Nuremberg plant manufactures and sells a wide variety of
specialty products, including vanadium based chemicals and sophisticated metals,
alloys and powders used in the titanium, superalloy, electronics, steel,
biomedical and optics industries. The Morsdorf plant produces medical
prostheses, implants and surgical instruments for orthopedic applications.

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

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

     Summarized financial information concerning Metallurg's reportable segments
is shown in the following table (in thousands). Each segment records direct
expenses related to its employees and operations. The "Other" column includes
corporate related items and results of subsidiaries not meeting the quantitative
thresholds as prescribed by applicable accounting rules. Metallurg does not
allocate general corporate overhead expenses to operating segments. There have
been no material changes in segment assets from the amounts disclosed in the
last annual report.

<TABLE>
<CAPTION>
                                                                                                INTERSEGMENT   CONSOLIDATED
                                         SHIELDALLOY     LSM       GFE       EWW      OTHER     ELIMINATIONS      TOTALS
                                         -----------   -------   -------   -------   --------   ------------   ------------
<S>                                      <C>           <C>       <C>       <C>       <C>        <C>            <C>
QUARTER ENDED OCTOBER 31, 2000
Revenues from external customers.......    $28,608     $30,647   $19,191   $ 3,023   $ 35,697                    $117,166
Intergroup revenues....................        951       8,649     3,059     4,556      8,467     $(25,682)            --
Income tax (benefit) provision.........       (224)        327        22       146        929           --          1,200
Net (loss) income......................       (314)        391        96       276       (788)      (1,064)        (1,403)
QUARTER ENDED OCTOBER 31, 1999
Revenues from external customers.......    $29,978     $25,685   $16,959   $ 2,779   $ 37,857                    $113,258
Intergroup revenues....................      1,387       7,135     2,252     3,862      6,010     $(20,646)            --
Income tax provision (benefit).........        403        (145)       11      (115)       589           --            743
Net income (loss)......................        598        (340)      290      (116)    (3,316)        (141)        (3,025)
</TABLE>

<TABLE>
<CAPTION>
                                                                                                INTERSEGMENT   CONSOLIDATED
                                         SHIELDALLOY     LSM       GFE       EWW      OTHER     ELIMINATIONS      TOTALS
                                         -----------   -------   -------   -------   --------   ------------   ------------
<S>                                      <C>           <C>       <C>       <C>       <C>        <C>            <C>
THREE QUARTERS ENDED OCTOBER 31, 2000
Revenues from external customers.......    $87,694     $97,675   $62,716   $10,000   $115,341                    $373,426
Intergroup revenues....................      2,975      31,149     9,722    16,364     23,865     $(84,075)            --
Environmental expense recovery.........       (750)         --        --        --         --           --           (750)
Income tax provision...................        658       1,337       395       847      1,454           --          4,691
Net income (loss)......................        970       2,822      (497)      838     11,965      (12,571)         3,527
THREE QUARTERS ENDED OCTOBER 31, 1999
Revenues from external customers.......    $89,396     $79,140   $53,502   $ 9,027   $116,058                    $347,123
Intergroup revenues....................      3,455      25,416    10,274    14,413     27,247     $(80,805)            --
Environmental expense recovery.........     (5,501)         --        --        --         --           --         (5,501)
Restructuring charges..................         --          --     3,385     1,001         --           --          4,386
Income tax provision...................        969         362       283       334      1,540           --          3,488
Net income (loss)......................      2,230         904    (5,627)     (893)   (13,741)       3,204        (13,923)
</TABLE>

                                        7
<PAGE>   8
                 METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES

                   NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                      FINANCIAL STATEMENTS -- (CONTINUED)

3.  INVENTORIES

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

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

4.  COMMITMENTS AND CONTINGENCIES

     Metallurg 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 Metallurg's
consolidated financial position, results of operations or liquidity. There can
be no assurance, however, that existing or future litigation will not result in
an adverse judgment against Metallurg which could have a material adverse effect
on Metallurg's future results of operations or cash flows.

5.  EARNINGS PER COMMON SHARE

     Earnings per share is not presented since Metallurg, Inc. is a wholly owned
subsidiary of Metallurg Holdings, Inc.

6.  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

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

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

7.  SUPPLEMENTAL GUARANTOR INFORMATION

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

                                        8
<PAGE>   9
                 METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES

                   NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                      FINANCIAL STATEMENTS -- (CONTINUED)

7.  SUPPLEMENTAL GUARANTOR INFORMATION -- (CONTINUED)
          CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)
                     FOR THE QUARTER ENDED OCTOBER 31, 2000
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                   METALLURG, INC.     COMBINED       COMBINED
                                      ("PARENT        GUARANTOR     NON-GUARANTOR
                                      COMPANY")      SUBSIDIARIES   SUBSIDIARIES    ELIMINATIONS   CONSOLIDATED
                                   ---------------   ------------   -------------   ------------   ------------
<S>                                <C>               <C>            <C>             <C>            <C>
Total revenues...................                      $36,890         $96,233        $(15,957)      $117,166
                                                       -------         -------        --------       --------
Operating costs and expenses:
  Cost of sales..................                       33,746          83,688         (15,737)       101,697
  Selling, general and
     administrative expenses.....      $ 1,599           2,837           8,976              --         13,412
                                       -------         -------         -------        --------       --------
  Total operating costs and
     expenses....................        1,599          36,583          92,664         (15,737)       115,109
                                       -------         -------         -------        --------       --------
Operating (loss) income..........       (1,599)            307           3,569            (220)         2,057
Other income (expense):
  Other income, net..............            5              --             130              --            135
  Interest (expense) income,
     net.........................       (1,926)            205            (778)             --         (2,499)
  Equity in earnings of
     subsidiaries................          844           1,266              --          (2,110)            --
                                       -------         -------         -------        --------       --------
(Loss) income before income tax
  provision and minority
  interest.......................       (2,676)          1,778           2,921          (2,330)          (307)
Income tax (benefit) provision...       (1,273)          1,270           1,203              --          1,200
                                       -------         -------         -------        --------       --------
(Loss) income before minority
  interest.......................       (1,403)            508           1,718          (2,330)        (1,507)
Minority interest................           --              --             104              --            104
                                       -------         -------         -------        --------       --------
Net (loss) income................       (1,403)            508           1,822          (2,330)        (1,403)
Other comprehensive loss:
  Foreign currency translation
     adjustment..................       (1,472)           (683)         (1,472)          2,155         (1,472)
                                       -------         -------         -------        --------       --------
  Comprehensive (loss) income....      $(2,875)        $  (175)        $   350        $   (175)      $ (2,875)
                                       =======         =======         =======        ========       ========
</TABLE>

                                        9
<PAGE>   10
                 METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES

                   NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                      FINANCIAL STATEMENTS -- (CONTINUED)

7.  SUPPLEMENTAL GUARANTOR INFORMATION -- (CONTINUED)
          CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS (UNAUDITED)
                 FOR THE THREE QUARTERS ENDED OCTOBER 31, 2000
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                    METALLURG, INC.                          COMBINED
                                       ("PARENT       COMBINED GUARANTOR   NON-GUARANTOR
                                       COMPANY")         SUBSIDIARIES      SUBSIDIARIES    ELIMINATIONS   CONSOLIDATED
                                    ---------------   ------------------   -------------   ------------   ------------
<S>                                 <C>               <C>                  <C>             <C>            <C>
Total revenues....................                         $113,768          $312,916        $(53,258)      $373,426
                                                           --------          --------        --------       --------
Operating costs and expenses:
  Cost of sales...................                          102,777           272,653         (53,202)       322,228
  Selling, general and
     administrative expenses......     $  4,665               8,493            28,370              --         41,528
  Environmental expense
     recovery.....................           --                (750)               --              --           (750)
                                       --------            --------          --------        --------       --------
  Total operating costs and
     expenses.....................        4,665             110,520           301,023         (53,202)       363,006
                                       --------            --------          --------        --------       --------
Operating (loss) income...........       (4,665)              3,248            11,893             (56)        10,420
Other income (expense):
  Other income, net...............            1               5,128               356              --          5,485
  Interest (expense) income,
     net..........................       (6,590)                658            (1,916)             --         (7,848)
  Equity in earnings of
     subsidiaries.................       12,515               5,100                --         (17,615)            --
                                       --------            --------          --------        --------       --------
Income before income tax provision
  and minority interest...........        1,261              14,134            10,333         (17,671)         8,057
Income tax (benefit)
  provision.......................       (2,266)              2,638             4,319              --          4,691
                                       --------            --------          --------        --------       --------
Income before minority interest...        3,527              11,496             6,014         (17,671)         3,366
Minority interest.................           --                  --               161              --            161
                                       --------            --------          --------        --------       --------
Net income........................        3,527              11,496             6,175         (17,671)         3,527
Other comprehensive loss:
  Foreign currency translation
     adjustment...................       (4,598)             (3,278)           (4,598)          7,876         (4,598)
                                       --------            --------          --------        --------       --------
  Comprehensive (loss) income.....     $ (1,071)           $  8,218          $  1,577        $ (9,795)      $ (1,071)
                                       ========            ========          ========        ========       ========
</TABLE>

                                       10
<PAGE>   11
                 METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES

                   NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                      FINANCIAL STATEMENTS -- (CONTINUED)

7.  SUPPLEMENTAL GUARANTOR INFORMATION -- (CONTINUED)
     CONDENSED CONSOLIDATING BALANCE SHEET AT OCTOBER 31, 2000 (UNAUDITED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                   METALLURG, INC.     COMBINED       COMBINED
                                      ("PARENT        GUARANTOR     NON-GUARANTOR
                                      COMPANY")      SUBSIDIARIES   SUBSIDIARIES    ELIMINATIONS   CONSOLIDATED
                                   ---------------   ------------   -------------   ------------   ------------
<S>                                <C>               <C>            <C>             <C>            <C>
ASSETS
Current Assets:
  Cash and cash equivalents......     $ 24,985         $    853       $ 14,949       $ (11,056)      $ 29,731
  Accounts, notes and loans
     receivable, net.............       16,912           23,668         60,829         (31,814)        69,595
  Inventories....................           --           37,086         55,932          (1,851)        91,167
  Other current assets...........        3,761            1,457          9,997          (1,999)        13,216
                                      --------         --------       --------       ---------       --------
     Total current assets........       45,658           63,064        141,707         (46,720)       203,709
Investments -- intergroup........       87,109           50,855             --        (137,964)            --
Property, plant and equipment,
  net............................          829           13,000         45,257              --         59,086
Other assets.....................        7,109           17,451         16,652         (20,751)        20,461
                                      --------         --------       --------       ---------       --------
     Total.......................     $140,705         $144,370       $203,616       $(205,435)      $283,256
                                      ========         ========       ========       =========       ========
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
  Short-term debt and current
     portion of long-term debt...                                     $ 17,425       $ (11,056)      $  6,369
  Trade payables.................     $  7,401         $ 27,291         46,163         (31,814)        49,041
  Accrued expenses...............        6,770           10,129         16,880              --         33,779
  Other current liabilities......           --            1,999          2,802          (1,999)         2,802
                                      --------         --------       --------       ---------       --------
     Total current liabilities...       14,171           39,419         83,270         (44,869)        91,991
                                      --------         --------       --------       ---------       --------
Long-term Liabilities:
  Long-term debt.................      100,000               --         14,340              --        114,340
  Accrued pension liabilities....           35            1,663         30,059              --         31,757
  Environmental liabilities,
     net.........................           --           28,173          1,671              --         29,844
  Other liabilities..............       18,363               --          8,907         (20,752)         6,518
                                      --------         --------       --------       ---------       --------
     Total long-term
       liabilities...............      118,398           29,836         54,977         (20,752)       182,459
                                      --------         --------       --------       ---------       --------
     Total liabilities...........      132,569           69,255        138,247         (65,621)       274,450
                                      --------         --------       --------       ---------       --------
Minority Interest................           --               --            670              --            670
                                      --------         --------       --------       ---------       --------
Shareholder's Equity:
  Common stock...................           50            1,227         52,191         (53,418)            50
  Due from parent company........      (19,714)              --             --              --        (19,714)
  Additional paid-in capital.....       46,661           94,460         11,927        (106,387)        46,661
  Accumulated other comprehensive
     (loss) income...............       (6,501)          (3,955)        15,234         (11,279)        (6,501)
  Retained deficit...............      (12,360)         (16,617)       (14,653)         31,270        (12,360)
                                      --------         --------       --------       ---------       --------
     Total shareholder's
       equity....................        8,136           75,115         64,699        (139,814)         8,136
                                      --------         --------       --------       ---------       --------
     Total.......................     $140,705         $144,370       $203,616       $(205,435)      $283,256
                                      ========         ========       ========       =========       ========
</TABLE>

                                       11
<PAGE>   12
                 METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES

                   NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                      FINANCIAL STATEMENTS -- (CONTINUED)

7.  SUPPLEMENTAL GUARANTOR INFORMATION -- (CONTINUED)
          CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)
                 FOR THE THREE QUARTERS ENDED OCTOBER 31, 2000
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                   METALLURG, INC.     COMBINED       COMBINED
                                      ("PARENT        GUARANTOR     NON-GUARANTOR
                                      COMPANY")      SUBSIDIARIES   SUBSIDIARIES    ELIMINATIONS   CONSOLIDATED
                                   ---------------   ------------   -------------   ------------   ------------
<S>                                <C>               <C>            <C>             <C>            <C>
NET CASH FLOWS FROM OPERATING
  ACTIVITIES.....................      $(4,888)        $(7,925)       $    169        $  6,003       $(6,641)
                                       -------         -------        --------        --------       -------
CASH FLOWS FROM INVESTING
  ACTIVITIES:
  Additions to property, plant
     and equipment...............          (59)         (3,306)         (8,991)             --       (12,356)
  Proceeds from asset sales......           48           8,277              92              --         8,417
  Acquisitions, net of cash......           --              --         (11,196)             --       (11,196)
  Other, net.....................           62              --              --              --            62
                                       -------         -------        --------        --------       -------
Net cash provided by (used in)
  investing activities...........           51           4,971         (20,095)             --       (15,073)
                                       -------         -------        --------        --------       -------
CASH FLOWS FROM FINANCING
  ACTIVITIES:
  Intergroup borrowings
     (repayments)................        3,519           3,243            (759)         (6,003)           --
  Net short-term borrowings......           --              --           7,784          (1,907)        5,877
  Proceeds from long-term debt...           --              --           6,915              --         6,915
  Purchase of parent company
     debt........................      (19,714)             --              --              --       (19,714)
  Minority interest
     contribution................           --              --             676              --           676
  Dividends received (paid)......          590              --            (590)             --            --
                                       -------         -------        --------        --------       -------
Net cash (used in) provided by
  financing activities...........      (15,605)          3,243          14,026          (7,910)       (6,246)
                                       -------         -------        --------        --------       -------
Effects of exchange rate changes
  on cash and cash equivalents...           --              --            (920)             --          (920)
                                       -------         -------        --------        --------       -------
Net (decrease) increase in cash
  and cash equivalents...........      (20,442)            289          (6,820)         (1,907)      (28,880)
Cash and cash equivalents --
  beginning of period............       45,427             564          21,769          (9,149)       58,611
                                       -------         -------        --------        --------       -------
Cash and cash equivalents -- end
  of period......................      $24,985         $   853        $ 14,949        $(11,056)      $29,731
                                       =======         =======        ========        ========       =======
</TABLE>

8.  INVESTMENTS

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

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

                                       12
<PAGE>   13
                 METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES

                   NOTES TO CONDENSED UNAUDITED CONSOLIDATED
                      FINANCIAL STATEMENTS -- (CONTINUED)

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

9.  DUE FROM PARENT COMPANY

     On October 17, 2000, Metallurg, Inc. completed the purchase of
approximately $76.1 million in face amount of 12 3/4% Senior Discount Notes due
2008 (the "Senior Discount Notes) of Metallurg Holdings, Inc., its parent
company, for approximately $20 million in cash. The Senior Discount Notes were
purchased on the open market in several separately negotiated transactions.
Consent to the transaction from Metallurg, Inc.'s bank group under its Amended
and Restated Loan Agreement, dated October 29, 1999, had been previously
obtained. Metallurg, Inc.'s investment in these Senior Discount Notes is
recorded as a reduction in equity, as the only significant asset of Metallurg
Holdings, Inc. is its investment in Metallurg, Inc.

10.  SUBSEQUENT EVENT -- CHANGE IN FISCAL YEAR

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

                                       13
<PAGE>   14

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

FORWARD-LOOKING STATEMENTS

     Certain matters discussed under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in this Form 10-Q may
constitute forward-looking statements for purposes of Section 21E of the
Securities Exchange Act of 1934, as amended, and as such may involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance and achievements of Metallurg to be materially different
from future results, performance or achievements expressed or implied by such
forward-looking statements. Factors which may cause Metallurg's results to be
materially different include, but are not limited to, the cyclical nature of
Metallurg's business, Metallurg's dependence on foreign customers (particularly
customers in Europe), the economic strength of Metallurg's markets generally and
particularly the strength of the demand of the aluminum, superalloy, titanium
alloy, iron and steel industries in those markets, the accuracy of Metallurg's
estimates of the costs of environmental remediation and the extension or
expiration of existing anti-dumping duties.

OVERVIEW

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

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

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

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

RESULTS OF OPERATIONS

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

     Summarized financial information concerning Metallurg's reportable segments
is shown in the following table (in thousands). Each segment records direct
expenses related to its employees and operations. The "Other" column includes
corporate related items and results of subsidiaries not meeting the quantitative
thresholds as prescribed by applicable accounting rules. Metallurg does not
allocate general corporate overhead expenses to operating segments. There have
been no material changes in segment assets from the amounts disclosed in the
last annual report.

                                       14
<PAGE>   15

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

<TABLE>
<CAPTION>
                                                                                                INTERSEGMENT   CONSOLIDATED
                                           SHIELDALLOY     LSM       GFE      EWW      OTHER    ELIMINATIONS      TOTALS
                                           -----------   -------   -------   ------   -------   ------------   ------------
<S>                                        <C>           <C>       <C>       <C>      <C>       <C>            <C>
QUARTER ENDED OCTOBER 31, 2000
Total revenues...........................    $29,559     $39,296   $22,250   $7,579   $44,164     $(25,682)      $117,166
Gross margins............................      1,890       3,862     3,650      844     5,443         (220)        15,469
Operating (loss) income..................       (687)      1,048       341      403     1,172         (220)         2,057
Interest income (expense), net...........        149        (354)     (351)      19    (1,962)          --         (2,499)
Income tax (benefit) provision...........       (224)        327        22      146       929           --          1,200
Net (loss) income........................       (314)        391        96      276      (788)      (1,064)        (1,403)
QUARTER ENDED OCTOBER 31, 1999
Total revenues...........................    $31,365     $32,820   $19,211   $6,641   $43,867     $(20,646)      $113,258
Gross margins............................      2,311       2,889     3,477      314     3,894          803         13,688
Operating income (loss)..................        298        (491)      149     (233)     (494)         803             32
Interest income (expense), net...........        704           6      (177)     (10)   (2,821)          --         (2,298)
Income tax provision (benefit)...........        403        (145)       11     (115)      589           --            743
Net income (loss)........................        598        (340)      290     (116)   (3,316)        (141)        (3,025)
</TABLE>

  Total Revenues

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

  Gross Margins

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

  Selling, General and Administrative Expenses

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

  Operating Income

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

                                       15
<PAGE>   16

  Interest Expense, Net

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

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

  Income Tax Provision

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

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

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

  Net Income

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

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

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

                                       16
<PAGE>   17

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

  Total Revenues

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

  Gross Margins

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

  Selling, General and Administrative Expenses

     SG&A decreased from $42.1 million in the three quarters ended October 31,
1999 to $41.5 million in the three quarters ended October 31, 2000. Reduced
compensation costs of over $2 million following reductions in staffing were
partially offset by increased outside professional fee expenses. For the three
quarters ended October 31, 2000, SG&A represented 11.1% of total revenues
compared to 12.1% for the three quarters ended October 31, 1999.

  Operating Income

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

                                       17
<PAGE>   18

  Interest Expense, Net

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

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

  Income Tax Provision

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

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

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

  Net Income

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

LIQUIDITY AND FINANCIAL RESOURCES

  General

     Metallurg's sources of liquidity include cash from operations and amounts
available under credit facilities. In addition, Metallurg had $29.7 million of
cash and cash equivalents at October 31, 2000. Metallurg believes that these
sources are sufficient to fund current and anticipated future requirements
through at least December 31, 2001.

     At October 31, 2000, Metallurg had working capital of $111.7 million, as
compared to $135.9 million at January 31, 2000. For the first three quarters of
2000, Metallurg's use of $6.6 million in cash for operations resulted primarily
from the increase in inventory and payment of interest on its Senior Notes. In
April 2000, Metallurg, Inc. received cash proceeds of $8.3 million upon the sale
of a minority interest in SMW owned by one of Metallurg, Inc.'s operating
subsidiaries. On March 31, 2000 LSM acquired the business of Hydelko for
approximately $9.0 million. On September 29, 2000 LSM acquired the ferrotitanium
business of Willan-Wogen for $1.7 million. LSM utilized existing cash balances
and loan facilities to effect these purchases.

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     On October 17, 2000, Metallurg, Inc. purchased approximately $76.1 million
in face amount of Senior Discount Notes of Metallurg Holdings, Inc., its parent
company, for approximately $20 million in cash. The Senior Discount Notes were
purchased on the open market in several separately negotiated transactions.
Consent to the transaction from Metallurg, Inc.'s bank group under its Amended
and Restated Loan Agreement, dated October 29, 1999, had been previously
obtained. Metallurg, Inc.'s investment in these Senior Discount Notes is
recorded as a reduction in equity, as the only significant asset of Metallurg
Holdings, Inc. is its investment in Metallurg, Inc.

  Credit Facilities and Other Financing Arrangements

     Metallurg has a credit facility with certain institutions led by Fleet
National Bank as agent (the "Revolving Credit Facility") which provides
Metallurg, Inc., Shieldalloy and certain of their subsidiaries with up to $50.0
million of financing resources, including a German subfacility (as discussed
below). Interest is charged at a rate per annum equal to (i) LIBOR plus
2.0% - 2.5% or (ii) Prime plus up to 1%, based on the performance of Metallurg,
Inc. and certain of its subsidiaries. The Revolving Credit Facility permits
borrowings of up to $50.0 million for working capital requirements and general
corporate purposes, up to $35.0 million of which may be used for letters of
credit in the U.S. As part of the Revolving Credit Facility, Fleet National
Bank, through its London office, makes available up to DM 20.5 million
(approximately $9.2 million) of financing to certain of Metallurg's German
subsidiaries, which is guaranteed by Metallurg, Inc. and the other U.S.
borrowers under the Revolving Credit Facility. At October 31, 2000, $1.5 million
of loans were outstanding in Germany and $24.8 million of letters of credit were
outstanding in the U.S.

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

CAPITAL EXPENDITURES

     Metallurg invested $12.4 million in capital expenditures during the first
three quarters of 2000. Capital expenditures are expected to total approximately
$25 million over the next five quarters. Although Metallurg has projected these
items in 2000 and 2001, some projects remain contingent on appropriate senior
management or board of directors approval and the actual timing of expenditures
may extend into 2002. Metallurg believes that these projects will be funded
through internally generated cash, borrowings under the Revolving Credit
Facility and local credit lines.

ENVIRONMENTAL REMEDIATION COSTS

     American Institute of Certified Public Accountants' Statement of Position
96-1, "Environmental Remediation Liabilities", states that losses associated
with environmental remediation obligations are accrued when such losses are
deemed probable and reasonably estimable. Such accruals generally are recognized
no later than the completion of the remedial feasibility study and are adjusted
as further information develops or circumstances change. Costs of future
expenditures for environmental remediation obligations are generally not
discounted to their present value. During the first three quarters of 2000,
Metallurg expended $1.9 million for environmental remediation.

     In 1997, Shieldalloy entered into settlement agreements with various
environmental regulatory authorities with regard to all of the significant
environmental remediation liabilities of which it is aware. Pursuant to these
agreements, Shieldalloy has agreed to perform environmental remediation that, as
of October 31, 2000, had a remaining estimated cost of completion of $33.2
million. Of this amount, approximately $0.5 million is expected to be expended
in the fourth quarter of 2000, $5.6 million in 2001 and $5.8 million in 2002. In
addition, Metallurg estimates it will make expenditures of $3.0 million with
respect to environmental remediation at its foreign facilities. Of this amount,
no material expenditures are anticipated through 2002.

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<PAGE>   20

        ITEM 3 -- QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK

     Refer to the Market Risk and Risk Management Policies section of
Management's Discussion and Analysis of Financial Condition and Results of
Operations included in Metallurg's annual report on Form 10-K for the year ended
January 31, 2000, which is incorporated by reference herein.

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<PAGE>   21

                          PART II -- OTHER INFORMATION

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

(A) EXHIBITS:

<TABLE>
<S>      <C>  <C>
         10.  First Amendment to Amended and Restated Loan Agreement
              (dated as of October 29, 1999), dated as of October 11,
              2000, among Metallurg, Inc., Shieldalloy Metallurgical
              Corporation and Metallurg International Resources, Inc. as
              Borrowers, Metallurg Services, Inc., Metallurg Holdings
              Corporation and MIR (China), Inc. as Guarantors, and Fleet
              National Bank (formerly BankBoston, N.A.) as Agent for
              itself and other financial institutions parties thereto, and
              the banks named therein.

         27.  Financial Data Schedule
</TABLE>

(B) REPORTS ON FORM 8-K:

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

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<PAGE>   22

                                   SIGNATURES

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

                                          METALLURG, INC.

                                          /s/ BARRY C. NUSS
                                          --------------------------------------
                                          Barry C. Nuss
                                          Chief Financial Officer
                                          (Principal Financial Officer and
                                          Principal Accounting Officer)

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