<PAGE>   1


================================================================================


                       SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C.  20549

                                   FORM 10-Q   

                                 -----------

(Mark One)

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

        For the quarterly period ended September 28, 1996

                                       OR

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

        For the transition period from                   to
                                       -----------------    -------------------

                       Commission File Number 33-67854
                                              --------
                            CMI INDUSTRIES, INC.

          ---------------------------------------------------------
           (Exact name of registrant as specified on its charter)

            Delaware                                            57-0836097
---------------------------------------------           -----------------------
(State or other jurisdiction of incorporation               (I.R.S. Employer 
or organization)                                           Identification No.)


1301 Gervais Street, Suite 700, Columbia, South Carolina                29201 
--------------------------------------------------------------------------------
(Address of principal executive office)                              (Zip Code)

Registrant's telephone number including area code:               (803) 771-4434
                                                                 --------------




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
                                                  ---      ---

As of November 12, 1996 there were 1,690,318 shares of $1 Par Value Common
Stock outstanding.

================================================================================

<PAGE>   2

PART I     FINANCIAL INFORMATION

Item 1.    Consolidated Financial Statements

                             CMI INDUSTRIES, INC.
                               AND SUBSIDIARIES

                      Consolidated Statements of Income

                     (000s omitted except per share data)
                                 (unaudited)

<TABLE>
<CAPTION>
                                                 THREE MONTHS ENDED           NINE MONTHS ENDED
                                                 ------------------           -----------------
                                                SEPT. 30,      SEPT. 28,      SEPT. 30,    SEPT. 28,
                                                 1995             1996          1995         1996
                                                ---------     ----------      --------     ---------
<S>                                              <C>            <C>            <C>         <C>
Net sales                                        $105,606       $98,969        $311,612    $277,088
Cost of sales                                      93,598        91,824         275,252     258,916
                                                 --------       -------        --------    --------
        Gross profit                               12,008         7,145          36,360      18,172
Selling, general and administrative expenses        7,922         7,433          23,819      22,498
Executive severance charges                         4,782            --           4,782          --
                                                 --------       --------       --------    ---------  
        Operating income (loss)                      (696)         (288)          7,759      (4,326)
                                                 
Other income (expenses):                         
        Interest expense                           (4,220)       (3,949)        (13,026)    (11,859)
        Other, net                                    243           523             299       1,323
                                                 --------       -------        --------    --------
          Total other expenses, net                (3,977)       (3,426)        (12,727)    (10,536)
                                                 
            Loss before income taxes               (4,673)       (3,714)         (4,968)    (14,862)
                                                 
Income tax benefit                                 (1,813)       (1,485)         (1,909)     (5,609)
                                                 --------       -------        --------    --------
            Net loss                             $ (2,860)      $(2,229)       $ (3,059)   $ (9,253)
                                                 ========       =======        ========    ========

Average shares outstanding during period            1,739         1,690           1,762       1,690

Net loss per share                               $  (1.64)      $ (1.32)       $  (1.74)   $  (5.48)

Depreciation and amortization included in
    the above costs and expenses:                $  5,993       $ 5,553        $ 17,409    $ 17,739
</TABLE>



                            See Accompanying Notes.

                                      2
<PAGE>   3

                              CMI INDUSTRIES, INC.
                                AND SUBSIDIARIES

                          Consolidated Balance Sheets
                    December 30, 1995 and September 28, 1996
                                 (000s omitted)

<TABLE>
<CAPTION>
                                                         DECEMBER 30,   SEPTEMBER 28,
                                                            1995            1996
                                                          -------         --------
                                                                         (unaudited)
<S>                                                       <C>             <C>
ASSETS                                                                   
                                                                         
  Current assets:                                                        
     Cash and cash equivalents                            $    227        $  1,108
                                                                         
     Receivables, less allowance for doubtful                            
       accounts of $1,729 and $1,769                        50,684          55,868
                                                                         
     Inventories: (note 3)                                               
       Raw materials                                         9,872          10,042
       Work-in-process                                      22,295          22,286
       Finished goods                                       29,603          22,459
       Supplies                                              5,281           4,936
                                                          --------        --------
                                                            67,051          59,723
                                                                         
     Tax benefit                                                --           2,532
     Other current assets                                    5,319             614                                   
                                                          --------        --------
            Total current assets                           123,281         119,845     
                                                                                       
Property, plant and equipment: (note 4)                                                
     Land and land improvements                              3,813           3,536     
     Buildings                                              39,455          38,268     
     Machinery and equipment                               203,648         195,683     
     Construction in progress                                1,346           2,641     
                                                          --------        --------
                                                           248,262         240,128     
     Less accumulated depreciation and amortization       (122,488)       (125,602)    
                                                          --------        --------
                                                           125,774         114,526     
                                                                                       
Other assets:                                                                          
     Cash value of life insurance, intangibles,                                        
     deferred charges, and other assets                      8,053           8,189     
                                                          --------        --------
                                                          $257,108        $242,560     
                                                          ========        ========     
</TABLE>

                             See Accompanying Notes


                                      3
<PAGE>   4



                              CMI INDUSTRIES, INC.
                                AND SUBSIDIARIES

                          Consolidated Balance Sheets
                    December 30, 1995 and September 28, 1996
                                 (000s omitted)



LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                         DECEMBER 30,      SEPTEMBER 28,
                                                                           1995               1996
                                                                          ------             ------
                                                                                            (unaudited)
    <S>                                                                   <C>                <C>
    Current liabilities:
       Payable - book overdraft                                           $ 13,226           $  5,089
       Current portion of long-term debt (note 2)                              853              4,000
       Accounts payable                                                     13,471             16,965
       Accrued expenses                                                     15,189             17,592
                                                                          --------           --------
          Total current liabilities                                         42,739             43,646
   
    Long-term debt (note 2)                                                154,245            151,637
   
    Deferred income taxes                                                    3,352                 --
   
    Other liabilities                                                       14,264             14,022
   
    Stockholders' equity:
       Common stock of $1 par value per share;
       2,100,000 shares authorized, 1,690,318 shares issued                  1,690              1,690
       Paid-in capital                                                      11,350             11,350
       Retained earnings (note 2)                                           29,468             20,215
                                                                          --------           --------   

          Total stockholders' equity                                        42,508             33,255
                                                                          --------           --------
   
                                                                          $257,108           $242,560
                                                                          ========           ========
</TABLE>


                            See Accompanying Notes.


                                      4

<PAGE>   5

                             CMI INDUSTRIES, INC.
                               AND SUBSIDIARIES

                    Consolidated Statements of Cash Flows
     For the nine months ended September 30, 1995 and September 28, 1996
                                (000s omitted)
<TABLE>
<CAPTION>
                                                                       SEPTEMBER 30,            SEPTEMBER 28,
                                                                           1995                     1996
                                                                          ------                  -------
<S>                                                                      <C>                     <C>
Cash flows from operating activities:                                    (unaudited)             (unaudited)
   Net loss                                                                $(3,059)               $(9,253)
   Adjustments to reconcile net loss to
      net cash provided by operating activities:
      Depreciation and amortization                                         17,409                 17,739
      Changes in assets and liabilities:
         Receivables                                                        (6,568)                (5,184)
         Inventories                                                        (1,323)                 7,328
         Other current assets                                                4,300                  4,705
         Other assets                                                       (1,050)                  (529)
         Accounts payable                                                      634                  3,494
         Accrued expenses                                                    3,421                  2,403
         Tax benefit                                                            --                 (2,532)
         Income taxes                                                          695                     --
         Deferred income taxes                                              (3,224)                (3,352)
         Other liabilities                                                   4,822                   (242)
                                                                           -------                -------
      Net cash provided by operating activities                             16,057                 14,577
                                                                           -------                -------   
Cash flows from investing activities:
     Cost of United Elastic acquisition, net of Chesterfield
         disposal and cash acquired                                        (20,052)                    --
     Capital expenditures, net                                              (6,060)                (6,026)
                                                                           -------                -------
              Net cash used in investing activities                        (26,112)                (6,026)
                                                                           -------                -------
Cash flows from financing activities:
     Net borrowings on revolving credit facilities                           9,672                    467
     Increase (decrease) in payable-book overdraft                           3,018                 (8,137)
     Retirement of common stock                                             (3,320)                    --
                                                                           -------                -------
            Net cash provided by (used in) financing activities              9,370                 (7,670)
                                                                           -------                -------             

            Net (decrease) increase in cash                                   (685)                   881

Cash and cash equivalents at beginning of year                               3,145                    227
                                                                           -------                -------

Cash and cash equivalents at end of period                                 $ 2,460                $ 1,108
                                                                           =======                =======
Supplemental disclosures of cash flow information:
     Cash paid during the period for:
         Interest                                                          $ 9,571                $ 8,659
                                                                           =======                =======
         Income taxes                                                      $   482                $    --
                                                                           =======                =======
</TABLE>

                            See Accompanying Notes.

                                      5

<PAGE>   6



Notes to Consolidated Financial Statements


Note 1:

Basis of Presentation:

         The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries.  All significant intercompany
balances and transactions have been eliminated. In the opinion of management,
the accompanying unaudited consolidated financial statements include all
adjustments necessary to present fairly the Consolidated Balance Sheet as of
Septemer 28, 1996, the Consolidated Statements of Cash Flows for the nine
months ended September 30, 1995 and September 28, 1996, and the Consolidated
Statements of Income for the three months and nine months then ended. All
dollar amounts are rounded to thousands. The Consolidated Balance Sheet as of
December 30, 1995 has been audited, but the auditor's report is not included
herein. The disclosures accompanying these interim financial statements are
condensed and should be read in conjunction with the disclosures in the annual
financial statements.


Note 2:

Long-Term Debt:

         In October 1993, the Company completed a public offering ("the
Offering") of $125,000 in aggregate principal amount of 9 1/2% Senior
Subordinated Notes ("Notes") due October 1, 2003. The Notes are general
unsecured obligations of the Company. Interest on the Notes is payable
semiannually, and are redeemable at the option of the Company at any time after
October 1, 1998. Redemption prices commence at 104-3/4% of the principal
amount, declining annually to 100% of the principal amount in October 2000,
plus accrued interest. The recorded balance of $124,317 at September 28, 1996,
is presented net of $683 of unamortized bond issue discount that is being
amortized over the period to maturity. The latest information available
indicates the fair value of the Notes was $112,500 at September 28, 1996. The
fair value presented herin is not necessarily indicative of the amounts that
the Company would realize in a current market exchange.


         The Company had a credit agreement at December 30, 1995 which provided
an unsecured revolving credit facility of $92,000 due January 15, 1998, and a
credit facility from Wachovia Bank of South Carolina, which provided an
unsecured, uncommitted line of credit of $4,000. Effective March 19, 1996, the
Company replaced the unsecured revolving credit facility with a new credit
agreement. The new credit agreement provides for a revolving credit facility of
up to $80,000, including a letter of credit facility of up to $5,000. The
borrowings under the new credit agreement are secured by all inventories, all
receivables, and certain intangibles. The new credit agreement matures on
January 18, 1998.


                                      6

<PAGE>   7


         Long-term debt at December 30, 1995 and September 28, 1996 consisted
of:

<TABLE>
<CAPTION>
                                                      DEC. 30, 1995           SEPT. 28, 1996
                                                      -------------           --------------
<S>                                                       <C>                    <C>
Borrowings under credit agreements:                 
     Unsecured revolving credit facility                   $ 30,000               $     --
     Secured revolving credit facility                           --                 27,320
     Unsecured Wachovia Bank of SC facility                     853                  4,000
Senior subordinated notes, net                              124,245                124,317
                                                           --------               --------
                                                            155,098                155,637

Less current portion                                            853                  4,000
                                                           --------               --------

     Long-term debt                                        $154,245               $151,637
                                                           ========               ========
</TABLE>

         The new credit agreement requires a commitment fee of 3/8 of 1% per
annum on all unused amounts and as of September 28, 1996, the Company could
have borrowed an additional $41,239 under the facility. Interest on the
revolving credit facility is based on a floating prime rate or an eurodollar
rate plus 1 1/2%. At September 28, 1996, the average interest rate on the
revolving credit facility was 7.0%. The Wachovia Bank of South Carolina
facility is unsecured, requires no commitment fee and may be terminated by the
bank with 100 days notice. Interest on the Wachovia Bank of South Carolina
facility accrues at an amount based on the daily Federal Funds rate, which was
7.2% at September 28, 1996.

        The credit agreements contain various restrictive covenants and
conditions requiring, among other things, minimum levels of net worth, certain
interest coverage ratios, prohibitions against certain borrowings and advances,
and a negative covenant limiting the Company's right to grant security
interests or other liens on its assets. In addition, the credit agreements and
the indenture pursuant to which the Notes were issued contain restrictions on
the Company's ability to pay cash dividends or purchase its capital stock.
Under the most restrictive covenant, as of September 28, 1996, the Company was
not authorized to pay any cash dividends or purchase its capital stock. At
September 28, 1996, the Company was in compliance with, or had received waivers
for, all covenants under all credit agreements.

         As part of the Company's workers' compensation insurance agreements in
South Carolina, Alabama, Georgia and Virginia, the Company has obtained letters
of credit for $750, $200, $250 and $50. The letters of credit expire on
February 10, 1997, June 30, 1997, January 11, 1997 and April 10, 1997,
respectively. At September 28, 1996, the Company owed no amount under these
letters of credit.

Note 3:

Inventories:

         Inventories at December 30, 1995 and September 28, 1996 are stated at
the lower of cost (first-in, first-out) or market, and include the costs of raw
materials, direct labor, and manufacturing overhead.



                                      7

<PAGE>   8



Note 4:

Property, Plant and Equipment:

         All additions to property, plant and equipment are stated at cost.
Depreciation is calculated for financial reporting purposes by the
straight-line method over the estimated useful lives of the respective assets.


Note 5:

Restructuring Charges and Other Nonrecurring Items:

         In December 1995, the Company approved a plan to pursue restructuring
initiatives in all divisions. These initiatives are expected to be completed by
the end of the 1996 fiscal year. In the Greige Fabrics Division, the Company
closed one of its manufacturing facilities and disposed of idle equipment and
inventories. In the Finished Fabrics Division, the Company consolidated certain
operations and also disposed of idle equipment and inventories. The Company
also downsized its corporate operations. The restructuring charges also consist
of costs for the severance and retirement of approximately 700 associates,
including the termination of consulting contracts, insurance, vacation and
related expenses. Related to this decision, the Company reported a $12,900
charge to earnings in 1995 and has reserved for the following items:

<TABLE>
<CAPTION>
                                                              December 30,         September 28,
       Restructuring items:                                      1995                  1996
                                                                ------                ------
       <S>                                                       <C>                 <C>
          CRIP early retirement window                           $ 1,299             $1,299
          Termination of consulting contracts                                         
           and other items                                         1,345                842
          Severance and related benefit costs                      2,404                936
                                                                 -------             ------
                                                                   5,048              3,077
       Other nonrecurring asset write-offs related                                    
       to the restructuring:                                                          
          Inventory write-offs                                     2,915                943
          Property, plant and equipment write-offs                 4,937              2,604
                                                                 -------             ------
                                                                 $12,900             $6,624
                                                                 =======             ======
</TABLE>                                               

         Included in the $12,900 of restructuring and related nonrecurring
amounts at December 30, 1995, were approximately $5,048 of incremental cash
expenditures. The Company expects to fund the early retirement amount from
assets in the Company's defined benefit plan and the balance, $1,778, from
operations or amounts available under the new credit agreement. During the nine
months ended September 28, 1996, the Company funded $1,971 of cash related
restructuring items and disposed of $4,305 of assets related to the
restructuring.


                                      8


<PAGE>   9


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

         This report contains statements which to the extent that they are not
recitations of historical fact, may constitute "forward looking statements"
within the meaning of applicable federal securities laws. All forward looking
statements contained in this report are intended to be subject to the safe
harbor protection provided by applicable federal securities laws. For a
discussion identifying some important factors that could cause actual results
to vary materially from those anticipated in the forward looking statements
made by the Company, see the Company's Annual Report on Form 10-K for the year
ended December 30, 1995, including, but not limited to, the "Overview"
discussion to Management's Discussion and Analysis of Financial Condition and
Results of Operations on pages 18 and 19 of the Annual Report.


Results of Operations


Three Months Ended September 28, 1996
Compared with Three Months Ended September 30, 1995

Sales

         Sales for the three months ended September 28, 1996 were $99 million,
a decrease of $6.6 million or 6% from the corresponding period of 1995.  Sales
of the Greige Fabrics Division decreased $5.4 million, or 12%, while sales of
the Finished Fabrics Division decreased $1.2 million or 2%. The decrease in
sales of the Greige Fabrics Division may be attributed to poor market
conditions for printcloth fabrics used in the apparel and home furnishings
markets. Average selling prices for these fabrics during the period decreased
9.5% while volume decreased 4.7%.

         The sales decrease for the Finished Fabrics Division included a $2.1
million decrease in narrow elastic sales and a $4.3 million decrease in
consumer product sales which were partially offset by a $4.9 million increase
in furniture and automotive upholstery sales. The sales reductions may be
attributed to weak product demand and excess inventory levels in these specific
market segments.

Earnings

         Operating loss for the three month period ended September 28, 1996
decreased $0.4 million from an operating loss of $0.7 million in the
corresponding period of 1995 to an operating loss of $0.3 million. Excluding
the executive severence charges of $4.8 million relating to the retirement of
the Company's former President and Chief Executive Officer, which were
recognized the third quarter of 1995, operating income for the current third
quarter would have decreased $4.4 million from the previous period. The decline
in profitability may be attributed to the Greige Fabrics Division as the
decline in average selling prices reduced profitability almost dollar for
dollar. Additionally, the Company reported lower earnings in its narrow
elastics business in Stuart, Virginia as reduced sales volumes and related
manufacturing inefficiencies deteriorated margins. Aside from narrow elastics,
the Finished Fabrics Division continued to report improved levels of
profitability due to better manufacturing efficiencies and other operating
improvements.  These improvements, coupled with


                                      9

<PAGE>   10

lower corporate overhead costs, helped to partially offset the reduction
in earnings from the Greige Fabrics Division and narrow elastics business.

         Interest expense for the three months ended September 28, 1996 was
$3.9 million, a decrease of $0.3 million from the same period in 1995. The
decrease reflects the Company's effort to reduce its debt balances and lower
interest rates as compared to the same period a year ago.

         The benefit for income taxes decreased approximately $0.3 million.
This decrease is due to a $0.9 million decrease in the loss before taxes. The
foregoing resulted in the net loss decreasing by $0.7 million or 22% from a net
loss of $2.9 million in the third quarter of fiscal 1995 to a net loss of $2.2
million this period.


Nine Months Ended September 28, 1996
Compared with Nine Months Ended September 30, 1995

Sales

         Sales for the nine months ended September 28, 1996 were $277 million,
a decrease of $34.5 million, or 11%, from the corresponding period of 1995.
Sales of the Greige Fabrics Division decreased $23.7 million or 17%, while
sales of the Finished Fabrics Division decreased $10.8 million or 6%. The
decrease in sales of the Greige Fabrics Division may be attributed to poor
market conditions for printcloth fabrics used in the apparel and home
furnishings markets. The poor market conditions relate back to 1995 when
retailers began reacting to excess inventories and surplus capacity in the
marketplace. Customers have responded by rightsizing their inventories,
deferring shipments, limiting future orders, and taking advantage of the
opportunistic buying conditions. Consequently, average selling prices for these
fabrics have decreased 9.5% while volume decreased 9.4%.

         The sales decrease for the Finished Fabrics Division included a $9.3
million decrease in narrow elastic sales, a $5.5 million reduction in consumer
product sales, and a $3.7 decrease in furniture upholstery sales. These
declines were partially offset by a $8.3 million increase in automotive
upholstery sales. The sales reductions in the Finished Fabrics Division may
also be attributed to weak product demand and excess inventory levels that have
negatively affected market conditions in these market segments.

Earnings

         Operating income for the nine month period ended September 28, 1996
decreased $12.1 million, or 156%, from operating income of $7.8 million in the
first nine months of 1995 to an operating loss of $4.3 million. The decline in
profitability may be attributed to the Greige Fabrics Division as lower average
selling prices, reduced volumes earlier in the year, higher raw material costs
and inefficiencies associated with shutting down the Division's Lydia facility
all combined to significantly reduce margins. Despite lower sales volume, the
Finished Fabrics Division has reported improved levels of profitability due to
operating improvements and better product mix. These improvements, coupled with
lower corporate overhead costs, helped to partially offset the reduction in
earnings from the Greige Fabrics Division.  Other than lower corporate overhead
costs, the Company's


                                      10


<PAGE>   11

restructuring initiatives have not had a significant favorable impact on
operating income for the nine months ended September 28, 1996.

         Interest expense for the nine months ended September 28, 1996 was
$11.9 million, a decrease of $1.2 million over the same period in 1995.

         The benefit for income taxes increased approximately $3.7 million as a
result of the increase in the loss before income taxes of $9.9 million. The
foregoing resulted in the net loss increasing by $6.2 million or 203% from a
net loss of $3.1 million in 1995 to a net loss of $9.3 million this year.


Financial Condition

         For the nine months ended September 28, 1996, the Company generated
cash from operations of $14.6 million and increased its net borrowings by $0.5
million. These funds were primarily used to finance $6.0 million of capital
expenditures and reduce its payable-book overdraft by $8.1.

         At September 28, 1996, working capital was approximately $76.2 million
as compared to approximately $80.5 million at December 30, 1995. Management is
not aware of any present or potential impairments to the Company's liquidity.

         At September 28, 1996, long-term debt of approximately $151.6 million
represented 82% of total capital, compared to 78% at December 30, 1995.

         The Company believes that funds from operations and amounts available
under the loan agreements (see note 2 to consolidated financial statements) are
adequate to finance the Company's anticipated capital expenditures, in addition
to meeting working capital requirements, scheduled debt service payments and
amounts to be paid pursuant to the Company's restructuring initiatives (see
note 5 to consolidated financial statements).





                                      11
<PAGE>   12


PART II.  OTHER INFORMATION

Item 1. Legal Proceedings

         None Reportable

Item 2. Changes in Securities

         None

Item 3. Defaults Upon Senior Securities

         None

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

         None

Item 5. Other Information

         None

Item 6. Exhibits and Reports on Form 8-K

         a)   Exhibits

                 4.1 -  Waiver Letter dated October 11, 1996 between Registrant
                        and The First National Bank of Boston, as Agent, 
                        NationsBank of North Carolina, and Wachovia Bank of 
                        South Carolina, as Lenders.

                27.1 -  Financial Data Schedule. (for SEC use only)

         b)   Reports on Form 8-K

                 None



                                      12

<PAGE>   13





                            SIGNATURE OF REGISTRANT



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.



                                        CMI INDUSTRIES, INC.


Date:  November 7, 1996                 By /s/ JOSEPH L. GORGA
                                           ----------------------------------
                                        Joseph L. Gorga
                                        President and Chief Executive Officer


Date:  November 7, 1996                 By /s/ JAMES A. OVENDEN
                                           ----------------------------------
                                        James A. Ovenden
                                        Executive Vice President and Chief
                                        Financial Officer






                                      13


<PAGE>   14





PART III.  INDEX TO EXHIBITS


<TABLE>
<CAPTION>
 Exhibit No.                             Description                                   Page No.
 -----------                             -----------                                   --------
     <S>            <C>
     4.1            Waiver Letter dated October 11, 1996, between Registrant and The
                    First National Bank of Boston, As Agent, NationsBank of North
                    Carolina, and Wachovia Bank of South Carolina, as Lenders.

     27.1           Financial Data Schedule. (for SEC use only)
                                                               
</TABLE>













                                      14