<PAGE>

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

                                    FORM 10-Q

|X|             Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002

                                       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 NO. 1-13394

                              CHASE INDUSTRIES INC.
             (Exact name of Registrant as specified in its charter)

            DELAWARE                                            51-0328047
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                           Identification Number)

                 14212 COUNTY ROAD M-50, MONTPELIER, OHIO 43543
          (Address of principal executive offices, including Zip Code)

       Registrant's telephone number, including area code: (419) 485-3193

                                 Not Applicable
      (Former name, former address and former fiscal year, if changed since
                                  last report)

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 | |

<TABLE>
<S>                                                                                  <C>
NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AS OF AUGUST 9, 2002..................  15,322,055
NUMBER OF SHARES OF NONVOTING COMMON STOCK OUTSTANDING AS OF AUGUST 9, 2002........           0
</TABLE>

================================================================================
<PAGE>
                              CHASE INDUSTRIES INC.

                                TABLE OF CONTENTS

                          PART I. FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                             Page
                                                                             ----
<S>                                                                          <C>
Item 1. Financial Statements (Unaudited):

        Consolidated Balance Sheet as of June 30, 2002
            and December 31, 2001 .........................................    3

        Consolidated Statement of Income for the Three and Six Months
            Ended June 30, 2002 and 2001 ..................................    4

        Consolidated Statement of Cash Flows for the Six Months Ended
            June 30, 2002 and 2001 ........................................    5

        Notes to Consolidated Financial Statements ........................    6

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations .........................................   13

Item 3. Quantitative and Qualitative Disclosures About Market Risk ........   23

                           PART II. OTHER INFORMATION

Item 5. Other Information .................................................   23

Item 6. Exhibits and Reports on Form 8-K ..................................   24

        Signature .........................................................   26
</TABLE>


                                       2
<PAGE>
                              CHASE INDUSTRIES INC.
                           CONSOLIDATED BALANCE SHEET
               (UNAUDITED; IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
                                                                         June 30,        December 31,
                                                                           2002              2001
                                                                        ---------        ------------
<S>                                                                     <C>              <C>
                                            ASSETS
Current assets:
  Cash and cash equivalents                                             $   9,907         $  18,206
  Receivables, net of allowance for doubtful accounts and
    claims of $949 and $916 in 2002 and 2001, respectively                 28,101            22,044
  Inventories                                                              12,203            17,491
  Prepaid expenses                                                            654               880
  Deferred income taxes                                                     4,564             4,524
  Other assets                                                                 --             2,831
                                                                        ---------         ---------
      Total current assets                                                 55,429            65,976
Property, plant and equipment, net                                        118,476           107,644
Pension intangible asset                                                      668               668
                                                                        ---------         ---------
      Total assets                                                      $ 174,573         $ 174,288
                                                                        =========         =========

                              LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                                      $  14,290         $  19,755
  Accrued compensation and benefits                                         2,306             3,907
  Accrued income taxes                                                      2,589             2,638
  Other accrued liabilities                                                 2,222             2,126
                                                                        ---------         ---------
      Total current liabilities                                            21,407            28,426
Environmental and other related liabilities                                 8,207             8,230
Deferred income taxes                                                      11,913            10,693
Other liabilities                                                           2,553             2,553
                                                                        ---------         ---------
      Total liabilities                                                    44,080            49,902
                                                                        ---------         ---------
Commitments and contingencies                                                  --                --
                                                                        ---------         ---------

Stockholders' equity:
  Common stock, $.01 par value, 36,310,000 shares authorized;
    15,321,455 and 15,297,745 shares issued and outstanding
    in 2002 and 2001, respectively                                            153               153
  Nonvoting common stock, $.01 par value, 12,300,000 shares
    authorized; 0 shares issued and outstanding in 2002 and 2001               --                --
  Additional paid-in capital                                               32,173            31,980
  Retained earnings                                                        99,383            93,469
  Accumulated other comprehensive loss                                     (1,216)           (1,216)
                                                                        ---------         ---------
      Total stockholders' equity                                          130,493           124,386
                                                                        ---------         ---------
      Total liabilities and stockholders' equity                        $ 174,573         $ 174,288
                                                                        =========         =========
</TABLE>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.


                                       3
<PAGE>
                              CHASE INDUSTRIES INC.
                        CONSOLIDATED STATEMENT OF INCOME
             (UNAUDITED; IN THOUSANDS, EXCEPT PER SHARE INFORMATION)

<TABLE>
<CAPTION>
                                                   Three Months Ended June 30,        Six Months Ended June 30,
                                                       2002           2001              2002              2001
                                                     -------        --------         ---------         ---------
<S>                                                  <C>            <C>              <C>               <C>
Net sales                                            $61,659        $ 56,846         $ 122,525         $ 123,053

Cost of goods sold (exclusive of depreciation
   shown separately below)                            53,100          48,660           105,694           106,449
                                                     -------        --------         ---------         ---------

    Gross profit                                       8,559           8,186            16,831            16,604

Selling, general and administrative expenses           1,597           1,491             3,296             2,942

Tender offer and other expense                         1,600             948             1,600             3,507

Depreciation expense                                   2,485           1,723             4,516             3,430
                                                     -------        --------         ---------         ---------

    Operating income                                   2,877           4,024             7,419             6,725

Other non-operating expenses                              --             385                --               385

Interest expense (income), net                             3            (189)              (30)               (6)
                                                     -------        --------         ---------         ---------

    Income before income taxes                         2,874           3,828             7,449             6,346

Provision for income taxes                             1,020           1,359             2,644             2,253
                                                     -------        --------         ---------         ---------

Income from continuing operations                      1,854           2,469             4,805             4,093

Discontinued operations (Note 5):
    Income, net of income taxes                           --              --                --                79
    Additional tax benefit from disposal               1,109              --             1,109                --
                                                     -------        --------         ---------         ---------
                Net income                           $ 2,963        $  2,469         $   5,914         $   4,172
                                                     =======        ========         =========         =========

Average shares outstanding:
    Basic                                             15,309          15,298            15,303            15,294
    Diluted                                           15,586          15,478            15,556            15,483

Earnings per share - Basic:
    Income from continuing operations                $  0.12        $   0.16         $    0.32         $    0.27
    Income from discontinued operations                   --              --                --                --
    Additional tax benefit from disposal                0.07              --              0.07                --
                                                     -------        --------         ---------         ---------
                Net income                           $  0.19        $   0.16         $    0.39         $    0.27
                                                     =======        ========         =========         =========

Earnings per share - Diluted:
    Income from continuing operations                $  0.12        $   0.16         $    0.31         $    0.26
    Income from discontinued operations                   --              --                --              0.01
    Additional tax benefit from disposal                0.07              --              0.07                --
                                                     -------        --------         ---------         ---------
                Net income                           $  0.19        $   0.16         $    0.38         $    0.27
                                                     =======        ========         =========         =========
</TABLE>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.


                                       4
<PAGE>
                              CHASE INDUSTRIES INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                            (UNAUDITED; IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                           Six Months Ended June 30,
                                                                             2002             2001
                                                                           --------         --------
<S>                                                                        <C>              <C>
Operating activities:
     Income from continuing operations                                     $  4,805         $  4,093
     Adjustments to reconcile income from continuing operations
        to net cash used in operating activities:
        Depreciation                                                          4,516            3,430
        Deferred income tax expense                                           1,180            2,303
        BP settlement                                                            --           (2,000)
        Changes in assets and liabilities:
           (Increase) in receivables                                         (6,057)            (705)
           Decrease in inventories                                            5,288            6,574
           Decrease in prepaid expenses                                         226              184
           Decrease in other assets                                           2,831               --
           (Decrease) in accounts payable                                    (5,465)          (8,476)
           (Decrease) in accrued liabilities                                 (1,577)          (3,249)
                                                                           --------         --------

           Net cash provided by activities of continuing operations           5,747            2,154
                                                                           --------         --------

     Discontinued operations:
        Additional income tax benefit from disposal                           1,109               --
        Cash (used in) discontinued operation                                    --           (1,515)
                                                                           --------         --------
           Net cash provided by (used in) discontinued operations             1,109           (1,515)
                                                                           --------         --------

                Net cash provided by operating activities                     6,856              639
                                                                           --------         --------

Investing activities:
     Proceeds from sale of subsidiary                                            --           29,846
     Expenditures for property, plant and equipment                          (4,932)         (14,355)
     Purchase of leased equipment                                           (10,416)              --
                                                                           --------         --------
                Net cash (used in) provided by investing activities         (15,348)          15,491
                                                                           --------         --------

Financing activities:
     Issuance of common stock - options exercised                               193               96
                                                                           --------         --------
                Net cash provided by financing activities                       193               96
                                                                           --------         --------

Net (decrease) increase in cash and cash equivalents                         (8,299)          16,226

Cash and cash equivalents, beginning of period                               18,206            3,993
                                                                           --------         --------

Cash and cash equivalents, end of period                                   $  9,907         $ 20,219
                                                                           ========         ========

Supplemental disclosures:
     Income tax refunds received                                           $  4,815         $     --
                                                                           ========         ========
     Income taxes paid                                                     $  2,340         $    356
                                                                           ========         ========
</TABLE>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.


                                       5
<PAGE>
                              CHASE INDUSTRIES INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)


1.    SIGNIFICANT ACCOUNTING POLICIES:

      PRINCIPLES OF CONSOLIDATION AND INTERIM FINANCIAL INFORMATION

      The consolidated balance sheet as of June 30, 2002, and December 31, 2001,
and the consolidated statements of income and cash flows for the three and six
months ended June 30, 2002 and 2001, include the accounts of Chase Industries
Inc. (the "Company"), a Delaware corporation, and its wholly-owned subsidiary,
Chase Brass & Copper Company, Inc. ("CBCC"), a Delaware corporation. All
significant intercompany transactions have been eliminated in consolidation.

      The accompanying consolidated financial statements have been prepared in
accordance with instructions for Form 10-Q and do not include all the
information and footnote disclosures required by generally accepted accounting
principles. The financial information for June 30, 2002 and 2001, included
herein is unaudited and, in the opinion of management, reflects all adjustments
necessary for a fair presentation of such financial information.

      The results of operations for the three and six months ended June 30,
2002, are not necessarily indicative of the results of operations that may be
expected for the year ending December 31, 2002. This quarterly report on Form
10-Q should be read in conjunction with the annual consolidated financial
statements included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2001.

      In fourth quarter 2000, the Company decided to divest Leavitt Tube
Company, Inc. ("Leavitt"), a Delaware corporation. On March 15, 2001, the
Company signed a definitive agreement to sell the assets and operations of
Leavitt, including the stock of Holco Corporation ("Holco"), an Illinois
corporation and wholly-owned subsidiary of Leavitt, to privately-held Pinkert
Industrial Group, LLC, headquartered in Chicago, for $31.7 million, before
closing costs and fees of $1.9 million. The sale closed on March 30, 2001.
Leavitt has previously been reported in the consolidated financial statements as
a discontinued operation. For additional discussion on the discontinued
operation, see Note 5, Discontinued Operations.

      On August 24, 1990, the Company acquired, through CBCC, the assets and
operations of a Delaware corporation formerly named Chase Brass & Copper
Company, Incorporated ("Old Chase"), pursuant to the Asset Purchase Agreement
("CBCC Purchase Agreement") dated May 10, 1990, by and between the Company,
CBCC, Old Chase, BP Exploration (Alaska) Inc. ("BPE") and The Standard Oil
Company (the "CBCC Acquisition"). BPE and The Standard Oil Company own all the
stock of Old Chase. BPE, The Standard Oil Company and Old Chase are sometimes
referred to herein collectively as "BP." The CBCC Acquisition was accounted for
as a purchase.

      REVENUE RECOGNITION

      Net sales represent gross sales of brass rod less sales discounts and are
recorded at the time of shipment. The gross sales price of brass rod consists of
a metal price charged to the customers and a fabrication price as separate
components. In addition, approximately 11% of pounds sold by CBCC are made on a
"tolling" basis, where the customer consigns brass scrap to CBCC and is only
charged


                                       6
<PAGE>
                              CHASE INDUSTRIES INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)

a fabrication price for processing the brass scrap into finished rod. For
tolling sales, the brass metal value is not included in net sales or cost of
goods sold.

      RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      In June 2001, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" ("SFAS 142"). This statement eliminates the amortization of
goodwill, among other things, and replaces it with an annual impairment test.
The adoption of SFAS 142, effective January 1, 2002, did not have any effect on
the Company's financial position or results of operations.

      In June 2001, the FASB issued Statement of Financial Accounting Standards
No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143"). SFAS 143
addresses financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset retirement
costs. It applies to legal obligations associated with the retirement of
long-lived assets that result from the acquisition, construction, development,
and/or the normal operation of a long-lived asset, except for certain
obligations of lessees. The adoption of SFAS 143, effective January 1, 2002, did
not have any effect on the Company's financial position or results of
operations.

      In August 2001, the FASB issued Statement of Financial Accounting
Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets" ("SFAS 144"). SFAS 144 requires that one accounting model be used for
long-lived assets to be disposed of by sale, whether previously held and used or
newly acquired, and broadens the presentation of discontinued operations to
include more disposal transactions. The adoption of SFAS 144, effective January
1, 2002, did not have any effect on the Company's financial position or results
of operations.

      In April 2002, the FASB issued Statement of Financial Accounting Standards
No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections" ("SFAS 145"). SFAS 145 rescinds
Statement of Financial Accounting Standards No. 4, "Reporting Gains and Losses
from Extinguishment of Debt," and an amendment of that Statement, Statement of
Financial Accounting Standards No. 64, "Extinguishments of Debt Made to Satisfy
Sinking-Fund Requirements." SFAS 145 also rescinds Statement of Financial
Accounting Standards No. 44, "Accounting for Intangible Assets of Motor
Carriers." SFAS 145 amends Statement of Financial Accounting Standards No. 13,
"Accounting for Leases," to eliminate an inconsistency between the required
accounting for sale-leaseback transactions and the required accounting for
certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. SFAS 145 also amends other existing authoritative
pronouncements to make various technical corrections, clarify meanings, or
describe their applicability under changed conditions. The adoption of SFAS 145,
in second quarter 2002, did not have any effect on the Company's financial
position or results of operations.

      In June 2002, the FASB issued Statement of Financial Accounting Standards
No. 146, "Accounting for Costs Associated with Exit or Disposal Activities"
("SFAS 146"), which is effective for exit or disposal activities that are
initiated after December 31, 2002. SFAS 146 addresses financial accounting and
reporting for costs associated with exit or disposal activities and nullifies


                                       7
<PAGE>
                              CHASE INDUSTRIES INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)

Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (Including
Certain Costs Incurred in a Restructuring)." Management of the Company believes
SFAS 146 will not have a material effect on the Company's financial position or
results of operations.

2.    INVENTORIES:

      Inventories are stated at the lower of cost-or-market, with cost
determined on the last-in, first-out (LIFO) basis. In prior periods inventories
have been written down to lower of cost-or-market and such reduced amounts are
considered cost for subsequent years.

      If the first-in, first out (FIFO) method for determining cost had been
used, inventories would have been approximately $0.4 million higher at June 30,
2002, and $1.0 million lower at December 31, 2001. Inventories consisted of the
following (in thousands):

<TABLE>
<CAPTION>
                                               June 30,        December 31,
                                                 2002              2001
                                               --------        ------------
<S>                                            <C>             <C>
      Raw materials                            $  2,068          $  3,026
      Work in progress                            3,751             8,613
      Finished goods                              7,286             7,218
                                               --------          --------
                                                 13,105            18,857
      Tolling metal due customers                  (902)           (1,366)
                                               --------          --------
                                               $ 12,203          $ 17,491
                                               ========          ========
</TABLE>

3.    COMMON STOCK AND EARNINGS PER SHARE:

      The following is a reconciliation of the denominator used in the
computation of basic and diluted earnings per share. Average shares were as
follows:

<TABLE>
<CAPTION>
                                      Three Months Ended June 30,
                                      ---------------------------
                                      2002                      2001
                                      ----                      ----
                              Shares        EPS         Shares        EPS
                              ------        ---         ------        ---
<S>                         <C>            <C>        <C>            <C>
      Basic                 15,308,780     $0.19      15,297,704     $0.16
      Stock options            277,367        --         180,775        --
                            ----------     -----      ----------     -----
      Diluted               15,586,147     $0.19      15,478,479     $0.16
                            ==========     =====      ==========     =====
</TABLE>

<TABLE>
<CAPTION>
                                       Six Months Ended June 30,
                                       -------------------------
                                      2002                      2001
                                      ----                      ----
                              Shares        EPS         Shares        EPS
                              ------        ---         ------        ---
<S>                         <C>            <C>        <C>            <C>
      Basic                 15,303,379     $0.39      15,293,920     $0.27
      Stock options            252,492     (0.01)        189,221        --
                            ----------     -----      ----------     -----
      Diluted               15,555,871     $0.38      15,483,141     $0.27
                            ==========     =====      ==========     =====
</TABLE>


                                       8
<PAGE>
                              CHASE INDUSTRIES INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)

      At June 30, 2002, and December 31, 2001, the Company had no preferred
stock issued or outstanding. In conjunction with its initial public offering in
November 1994, the Company authorized 1,000,000 shares of preferred stock, none
of which has been issued. The preferences and rights of such preferred stock may
be determined by the Board of Directors at any time prior to issuance. Of the
1,000,000 shares of authorized preferred stock, 36,310 have been designated
Series A Junior Participating Preferred Stock, which are reserved for issuance
pursuant to the rights as described below.

      On December 26, 2000, the Board of Directors declared a dividend
distribution of one preferred share purchase right (a "right") for each share of
the Company's common stock outstanding on January 5, 2001. Each right would
entitle shareholders to purchase from the Company one one-thousandth of a share
of Series A Junior Participating Preferred Stock, $.01 par value, of the Company
at a price of $30 per one one-thousandth of a Preferred Share, subject to
adjustment. The rights are not currently exercisable, but would become
exercisable if certain events occurred relating to a person or group acquiring
or attempting to acquire 20 percent or more of the outstanding shares of common
stock. The rights expire on December 26, 2010, unless the expiration date is
extended or the rights are redeemed or exchanged by the Company earlier.

4.    COMMITMENTS AND CONTINGENCIES:

      The Company is subject to certain contingent environmental liabilities
with respect to CBCC's facility. CBCC is in the process of developing a
remediation plan for in situ remediation at two areas of its site that are
contaminated with certain volatile organic compounds ("VOC"s). Based on
preliminary cost estimates provided by CBCC's independent environmental
consultant, and subject to the development by the consultant of a remediation
plan for these areas of the site and the receipt of bids for the remediation
activities required under such plan, the Company estimates the cost for this
project to approximate $3.0 million, based upon capital and operating costs for
a period of five years. However, subject to pilot testing and operating
experience, costs may increase or decrease depending on the scale and operating
period.

      As of December 31, 2000, the reserve for remediation activities was $4.0
million, including $3.0 million for the in situ remediation plan, $0.6 million
for environmental consulting and $0.4 million for final payments to be made on
remediation activities completed in 2000. In first quarter 2001, as a result of
the settlement of the Company's litigation with BP discussed below, the Company
recorded an additional $4.8 million of environmental reserves relating to
obligations retained by the Company. The Company had remediation spending of
$0.6 million for the twelve months ended December 31, 2001, including the
payment of the $0.4 million for activities completed in 2000. The Company had
less than $0.1 million remediation spending in the first six months of 2002. As
a result of the foregoing, the environmental reserve totaled $8.2 million at
June 30, 2002.

      Based on currently available data, the Company believes that upon
completion of the remediation activities at the two areas described above, CBCC
will have substantially completed the remediation activities that the Company
believes are necessary to address contamination at its site. However, until the
completion of these remedial and associated investigatory activities and
approval from the Ohio Environmental Protection Agency ("EPA") of CBCC's
activities to remediate this contamination, as well as remediation activities
previously conducted, the Company cannot be


                                       9
<PAGE>
                              CHASE INDUSTRIES INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)

certain that further remediation activities will not be required at its site. To
the extent regulatory agencies require additional remediation at those areas of
CBCC's site where CBCC previously has undertaken remediation activities, or
require excavation of soil at the two areas for which CBCC currently is
developing a remediation plan for in situ remediation, as part of the settlement
of litigation with BP in first quarter 2001, discussed below, BP has retained
responsibility for such remediation activities.

      The Company believes it will be able to fund cleanup costs related to
anticipated future remediation activities at its manufacturing facility with
cash on hand and borrowings under its existing bank credit facility. Therefore,
the Company does not believe that funding these remediation activities will have
a material effect on the Company's financial condition, results of operations or
liquidity.

      Other than as described above, no reserves have been established regarding
the aforementioned matters. Additionally, the Company expects no material impact
on its financial position, results of operations or liquidity as a result of the
existence of any other environmental conditions related to CBCC.

      CBCC and/or other entities named "Chase Brass & Copper Co." (which may
include Old Chase or divisions of Old Chase) have been named by governmental
agencies and/or private parties as a potentially responsible party ("PRP") under
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA") and/or state laws with respect to four sites (and possibly a fifth
site). The Company believes that CBCC has no liability for the cleanup costs
related to these sites because (a) such liability is attributable to an entity
that had the same or similar name to that of CBCC, such as a division or a
subsidiary of BP (other than the brass rod division of Old Chase), or (b) such
liability arose from acts that occurred prior to the CBCC Acquisition and,
therefore, BP retained such liability under the CBCC Purchase Agreement and is
contractually obligated to indemnify the Company for such liabilities. To the
extent CBCC incurs any cleanup costs with respect to these sites, it intends to
enforce its rights under the CBCC Purchase Agreement to recover such amounts
from BP.

      On January 7, 1998, a lawsuit entitled Ken-Chas Reserve Company and BP
Exploration (Alaska) Inc. and The Standard Oil Company v. Chase Industries Inc.
and Chase Brass & Copper Company, Inc. was filed in the Court of Common Pleas in
Cuyahoga County, Ohio. The Company and BP entered into a Settlement Agreement
and Mutual Release dated February 22, 2001 (the "Settlement Agreement"),
pursuant to which the Company and BP resolved and settled the claims between
them that were the subject of the lawsuit. Pursuant to the Settlement Agreement,
(1) the Company paid to BP $2 million, (2) the $20 million promissory note
issued to Old Chase as part of the consideration for the CBCC Acquisition (the
"BP Note") was deemed paid in full, (3) the Company retained responsibility and
financial liability for completing in situ remediation at the two remaining
areas of CBCC's site where additional remediation activities currently are
contemplated to be required and (4) BP retained financial liability for (A)
excavation activities that may be required by regulatory agencies at these two
remaining sites and (B) additional remediation activities that may be required
by regulatory agencies at the remaining areas of CBCC's site, including areas
where remediation activities previously have been conducted. BP also retained
and reaffirmed its obligations under the CBCC Purchase Agreement to indemnify
the Company and CBCC for any


                                       10
<PAGE>
                              CHASE INDUSTRIES INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)

claim made against the Company or CBCC in respect of any liability or obligation
of BP which was not assumed by the Company or CBCC as part of the CBCC
Acquisition, including without limitation claims related to off-site
contamination and third party claims.

      At the time of the BP settlement, the Company had a $21.8 million
receivable from BP, a note payable of $20.0 million and accrued interest on the
BP Note aggregating $8.6 million. In February 2001, these amounts were settled
with a payment of $2.0 million to BP. As a result of the settlement and the
obligations retained by the Company, an additional environmental liability
totaling $4.8 million was accrued.

      In addition to the above, the Company has outstanding purchase commitments
for capital equipment and building construction totaling approximately $6.5
million at June 30, 2002.

5.    DISCONTINUED OPERATIONS:

      In fourth quarter 2000, the Company decided to divest Leavitt. On March
15, 2001, the Company signed a definitive agreement to sell the assets and
operations of Leavitt to privately-held Pinkert Industrial Group, LLC,
headquartered in Chicago. The sale closed on March 30, 2001. The Company
received $31.7 million in cash, before closing costs and fees of $1.9 million.
In fourth quarter 2000, the Company recorded an estimated loss on the sale of
Leavitt of $36.0 million, including income tax benefit of $11.3 million. As a
result of the additional costs associated with certain post-closing liabilities
maintained by the Company, in fourth quarter 2001, the Company recorded an
additional $0.2 million loss on the sale of Leavitt, including income tax
benefit of $0.1 million. In second quarter 2002, upon completion of the federal
income tax return for the year ended December 31, 2001, the Company determined
that the tax benefit from the loss on the sale of Leavitt was $12.5 million, as
compared to the $11.4 million previously recorded. As a result, an additional
$1.1 million was recorded as income from discontinued operations in second
quarter 2002. The disposal of the assets and operations of Leavitt represented
the disposal of a business segment and was previously reflected in the
consolidated financial statements as a discontinued operation.

      The operating results of discontinued operations for the six months ended
June 30, 2001, were as follows (in thousands):

<TABLE>
<S>                                          <C>
      Net sales                              $ 23,251
                                             ========

      Income before taxes                    $    123

      Provision for income taxes                  (44)
                                             --------

      Net income                             $     79
                                             ========
</TABLE>

      A portion of the Company's interest expense has been allocated to
discontinued operations based on the debt outstanding on Leavitt's balance
sheet. Income taxes on results of the discontinued operations have been
allocated using the same overall rate incurred by the Company in each year
presented.


                                       11
<PAGE>
                              CHASE INDUSTRIES INC.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)


6.    OLIN CORPORATION TO ACQUIRE CHASE INDUSTRIES:

      On May 8, 2002, Olin Corporation ("Olin"), a Virginia corporation,
announced it had agreed to acquire the Company. The Company's shareholders will
receive a fixed exchange ratio of 0.64 shares of Olin common stock for each
outstanding share of the Company's common stock in a tax-free exchange. The
transaction is conditioned on shareholder approval of both companies, regulatory
clearance and other customary closing conditions. Citicorp Venture Capital,
which owns approximately 48% of Chase's outstanding common shares, has agreed to
vote its shares in favor of this transaction. The transaction is expected to
close late in the third quarter or early in the fourth quarter, 2002, excluding
any unanticipated delays.

7.    SUBSEQUENT EVENT:

      In late July 2002, the Company signed a memorandum of understanding to
settle a lawsuit with its insurance carriers related to a business interruption
claim attributable to damage to a holding furnace in 1998. As a result, the
Company anticipates collecting $1.5 million in August 2002.


                                       12
<PAGE>

                              CHASE INDUSTRIES INC.

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

GENERAL

Olin Corporation to Acquire Chase Industries

On May 8, 2002, Olin Corporation ("Olin"), a Virginia corporation, announced it
had agreed to acquire the Company. The Company's shareholders will receive a
fixed exchange ratio of 0.64 shares of Olin common stock for each outstanding
share of the Company's common stock in a tax-free exchange. The transaction is
conditioned on shareholder approval of both companies, regulatory clearance and
other customary closing conditions. Citicorp Venture Capital, which owns
approximately 48% of Chase's outstanding common shares, has agreed to vote its
shares in favor of this transaction. The transaction is expected to close late
in the third quarter or early in the fourth quarter, 2002, excluding any
unanticipated delays.

Settlement of Lawsuit

      In late July 2002, the Company signed a memorandum of understanding to
settle a lawsuit with its insurance carriers related to a business interruption
claim attributable to damage to a holding furnace in 1998. As a result, the
Company anticipates collecting $1.5 million in August 2002.

Sale of Leavitt Tube

      In fourth quarter 2000, the Company decided to divest Leavitt. On March
15, 2001, the Company signed a definitive agreement to sell the assets and
operations of Leavitt to privately-held Pinkert Industrial Group, LLC,
headquartered in Chicago. The sale closed on March 30, 2001. The Company
received $31.7 million in cash, before closing costs and fees of $1.9 million.
In fourth quarter 2000, the Company recorded an estimated loss on the sale of
Leavitt of $36.0 million, including income tax benefit of $11.3 million. As a
result of the additional costs associated with certain post-closing liabilities
maintained by the Company, in fourth quarter 2001, the Company recorded an
additional $0.2 million loss on the sale of Leavitt, including income tax
benefit of $0.1 million. In second quarter 2002, upon completion of the federal
income tax return for the year ended December 31, 2001, the Company determined
that the tax benefit from the loss on the sale of Leavitt was $12.5 million, as
compared to the $11.4 million previously recorded. As a result, an additional
$1.1 million income tax benefit was recorded as income from discontinued
operations in second quarter 2002. The disposal of the assets and operations of
Leavitt represented the disposal of a business segment and was previously
reflected in the consolidated financial statements as a discontinued operation.

Operations

      The Company has a brass products segment operated by CBCC and, prior to
March 30, 2001, had a steel products segment operated by Leavitt. The Company is
a leading manufacturer of free-machining and forging brass rod.


                                       13
<PAGE>
                              CHASE INDUSTRIES INC.

      CBCC is an ISO 9002 certified manufacturer and supplier of free-machining
and forging brass rod in the United States, Canada and Mexico. CBCC's net sales
represent gross sales of brass rod less sales discounts. The gross sales price
of brass rod consists of a metal price charged to customers and a fabrication
price as separate components. Cost of goods sold includes freight delivery
costs, the cost of brass scrap, which is the principal raw material used in the
manufacturing process and the primary component of cost of goods sold, as well
as the costs of labor, energy and other materials and supplies used in
fabricating the brass scrap into finished rod. Therefore, CBCC's profit levels
depend primarily on the amount of finished rod shipped, fabrication prices and
the difference between the metal price charged to customers and CBCC's cost of
brass scrap.

      CBCC obtains approximately 75% of the brass scrap used in its operations
from its customers through purchase and tolling arrangements. The metal price
charged to customers (the "Metal Selling Price") has been eight cents per pound
higher than the price that brass scrap is purchased from customers (the "Metal
Buying Price") since September 1999. CBCC also purchases approximately 25% of
its brass scrap from scrap dealers at prevailing free-market prices. Free-market
prices of brass scrap fluctuate based on the supply of and demand for brass
scrap and the prices for copper and zinc (the major components of brass), and
generally are less than the Metal Buying Price. Since 1990, free-market prices,
as compared to Metal Buying Prices, have been favorable to CBCC by historical
standards and the supply of brass scrap in the United States has been readily
available. Although the supply of brass scrap has resulted in continued
favorable free-market scrap prices through June 2002, there can be no assurance
that such favorable prices will continue. Decreasing imports of brass rod and
increasing demand for brass scrap could cause free-market brass scrap prices to
increase, and increased pressure from customers to purchase brass scrap directly
from them at the Metal Buying Price could reduce CBCC's ability to take
advantage of free-market discounts.

      As noted above, CBCC's pricing structure consists of the Metal Selling
Price and the fabrication price as separate components. The Metal Selling Price
is determined at the time of shipment based on the then-current Metal Buying
Price and is not directly affected by fluctuations in free-market brass scrap
prices. As a result of this pricing structure, increases and decreases in the
Metal Selling Price will affect net sales levels and gross profit as a
percentage of sales, even in the absence of an increase or a decrease in
shipments or the fabrication prices charged to customers, but will have little
impact on gross profit levels. However, the quantity of free-market brass scrap
purchased by CBCC and changes in the difference between the free-market prices
paid for brass scrap and the Metal Buying Price will affect gross profit, even
in the absence of an increase or a decrease in shipments or net sales levels.

      In addition to sales made under the pricing structure described above,
approximately 11% of pounds sold are made on a tolling basis, where the customer
consigns brass scrap to CBCC and is charged a fabrication price for processing
the brass scrap into finished rod. Tolling transactions affect net sales by the
Metal Selling Price that otherwise would be charged to the customer in a sale of
finished brass rod. To a lesser degree, tolling transactions also affect gross
profit to the extent CBCC is unable to take advantage of the pricing
differential on brass scrap purchased and sold. To partially offset the effect
of tolling transactions on gross profit, CBCC requires tolling customers to
deliver additional pounds of brass scrap in exchange for each pound of finished
rod shipped.


                                       14
<PAGE>
                              CHASE INDUSTRIES INC.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2002, Compared with Three Months Ended June 30, 2001

      Net sales increased $4.9 million, or 8.6%, to $61.7 million in second
quarter 2002. Net sales increased mainly as a result of a 14% increase in brass
rod shipments which was partially offset by lower metal prices and lower
fabrication prices. CBCC's plumbing, building and construction customers
continued to show strength in the second quarter with shipments up 16%, while
independent fabricators continue to lag behind other CBCC customers with
shipments up only 4% for the second quarter 2002.

      During the second quarter 2002, industry shipments were up 11% compared
with the prior year. Net imports continued to decrease year-to-date May 2002,
the most recent available, down 46% compared with the prior year. Second quarter
2002 was consistent with the Company's projections of strengthening demand. The
Company continues to forecast a 10% increase in consumption of brass rod for all
of 2002.

      Gross profit increased $0.4 million, or 4.9%, to $8.6 million in second
quarter 2002. The increase was primarily attributable to higher shipments
partially offset by a decrease in fabrication prices due to competitive
pressures in the market. Unit manufacturing costs decreased 3% in second quarter
2002 as compared with second quarter 2001. This was achieved despite increases
in contractual labor rates and healthcare costs. As volume increased and the
Company obtained regular production from the two new finishing lines and the new
extrusion press, fixed costs were leveraged to lower per unit costs.

      Selling, general and administrative ("SG&A") expenses increased $0.1
million, or 6.7%, to $1.6 million for second quarter 2002. SG&A expenses were
higher mainly due to management incentive costs and increased tax consulting
expense, partially offset by management personnel reductions.

      In second quarter 2002, the Company recorded $1.6 million of consulting
and legal fees related to the pending acquisition of the Company by Olin. As the
Company is the organization being acquired, these types of costs were recognized
as current expenses. In second quarter 2001, tender offer expenses aggregating
$0.9 million were attributable to incremental consulting and legal expenses as a
result of an unsolicited tender offer, which expired January 31, 2001.

      Depreciation expense increased by $0.8 million, or 47.1%, to $2.5 million
as a result of depreciation on Phase III of Project 400 buildings and equipment.

      As a result of the above factors, operating income decreased $1.1 million,
or 27.5%, to $2.9 million in second quarter 2002.

      In second quarter 2001, other non-operating expenses of $0.4 million
consisted of the Company's write-off of its investment in MetalSpectrum LLC, a
consortium of major metals-related companies that provided business-to-business
internet services. MetalSpectrum ceased operations in June 2001 due to low
demand for its services and economic conditions.


                                       15
<PAGE>
                              CHASE INDUSTRIES INC.

      Interest expense of $3,000 in second quarter 2002 compares with interest
income of $0.2 million in second quarter 2001. In second quarter 2002, interest
earned on investing was offset by quarterly banking fees. In second quarter
2001, interest income was attributable to investing activity following the sale
of Leavitt in first quarter 2001.

      As a result of the above factors, income from continuing operations before
taxes decreased by $0.9 million, or 23.7%, to $2.9 million in second quarter
2002 from $3.8 million in second quarter 2001.

      Income tax expense decreased by $0.4 million, or 28.6%, to $1.0 million as
a result of the decrease of $0.9 million in income from continuing operations
before taxes. The effective income tax rate was the same for both periods at
35.5%.

      As a result of the above factors, income from continuing operations
decreased by $0.6 million, or 24.0%, to $1.9 million in second quarter 2002 from
$2.5 million in second quarter 2001.

      In June 2002, the Company filed its 2001 federal income tax return and
carried back the loss from the sale of Leavitt to the prior years, resulting in
a refund of $4.7 million. In conjunction with completing the tax return, the
Company determined that the tax benefit from loss on the sale of Leavitt was
$12.5 million as compared to the $11.4 million recorded in prior years. The
Company recorded an additional income tax benefit totaling $1.1 million from
the disposal of discontinued operations in the second quarter 2002, which
equaled $0.07 per diluted share.

      Net income for second quarter 2002 was $3.0 million, or $0.19 per diluted
share, compared with net income for second quarter 2001 of $2.5 million, or
$0.16 per diluted share. Second quarter 2002 net income included a $1.1 million
additional tax benefit on the loss from discontinued operations, or $0.07 per
diluted share. Also, net income for second quarter 2002 included costs and
expenses related to the pending acquisition of Chase by Olin totaling $1.0
million, net of taxes, or $0.07 per diluted share. Excluding the impact of
expenses related to the unsolicited tender offer, earnings for second quarter
2001 were $0.20 per diluted share.

Six Months Ended June 30, 2002, Compared with Six Months Ended June 30, 2001

      Net sales decreased slightly from $123.1 million in 2001 to $122.5 million
in 2002. The decrease was attributable to lower metal prices and lower
fabrication prices, which were substantially offset by a 9% increase in brass
rod shipments. CBCC's plumbing, building and construction customers continued to
show strength in the first six months of 2002 with shipments up 14% as compared
to the first six months of 2001. Independent fabricators continued to be weak
with a decrease in shipments of 5%. Industry shipments were up 7% compared with
the prior year.

      Gross profit, for the six months ended June 30, 2002, was basically flat
as compared to the six months ended June 30, 2001. The effect of increase in
brass rod shipments was substantially offset by lower fabrication prices.


                                       16
<PAGE>
                              CHASE INDUSTRIES INC.

      SG&A expenses increased $0.4 million, or 13.8%, to $3.3 million for the
six months ended June 30, 2002. The increase was primarily attributable to
management incentive costs and increased tax consulting fees, partially offset
by management personnel reductions.

      For the six months ended June 30, 2002, the Company recorded $1.6 million
of consulting and legal fees related to the pending acquisition of the Company
by Olin. For the six months ended June 30, 2001, tender offer expenses
aggregating $3.5 million were attributable to incremental consulting and legal
expenses as a result of an unsolicited tender offer, which expired on January
31, 2001.

      Depreciation increased $1.1 million, or 32.4%, due to depreciation on
Phase III of Project 400 buildings and equipment.

      As a result of the above factors, operating income, for the six months
ended June 30, 2002, increased $0.7 million, or 10.4%, to $7.4 million in 2002
from $6.7 million in 2001.

      In 2001, other non-operating expenses of $0.4 million consisted of the
Company's write-off of its investment in MetalSpectrum LLC, a consortium of
major metals-related companies that provided business-to-business internet
services. MetalSpectrum ceased operations in June 2001 due to low demand for its
services and economic conditions.

      Net interest income for the six months ended June 30, 2002 was flat,
compared to the same period in 2001, as the proportion of interest income to
interest expense was relatively unchanged.

      Income tax expense for the six months ended June 30, 2002, increased $0.3
million, or 13%, to $2.6 million as a result of the increase of $1.1 million, or
17.5%, in income before income taxes. The effective income tax rate was the same
for both periods at 35.5%.

      As a result of the above factors, income from continuing operations
increased by $0.7 million, or 17.1%, to $4.8 million in 2002 from $4.1 million
in 2001. Income from continuing operations for the first six months of 2002
included expenses related to the pending acquisition of the Company by Olin
totaling $1.0 million, net of taxes, or $0.07 per diluted share. Excluding these
costs, income from continuing operations would have been $0.38 per diluted share
for the first six months of 2002. Income from continuing operations for the
first six months of 2001 included expenses related to an unsolicited tender
offer totaling $2.3 million, net of taxes, or $0.15 per diluted share. Excluding
these costs, income from continuing operations for the first six months of 2001,
were $0.42 per diluted share.

      For the six months ended June 30, 2002, the Company recorded an
additional income tax benefit totaling $1.1 million from the disposal of
discontinued operations, which equaled $0.07 per diluted share. The sale of
Leavitt was previously discussed above under "General - Sale of Leavitt Tube."

                                       17
<PAGE>
                              CHASE INDUSTRIES INC.

      Income from discontinued operations, net of taxes, for the six months
ended June 30, 2001, of $0.1 million represented the results prior to the sale
of Leavitt on March 30, 2001.

      As a result of the above factors, net income increased $1.7 million, or
40.5%, to $5.9 million in 2002 from $4.2 million in 2001. Diluted earnings per
share increased to $0.38 from $0.27 in 2001.

LIQUIDITY AND CAPITAL RESOURCES

General

      Cash and cash equivalents totaled $9.9 million at June 30, 2002,
decreasing from $18.2 million at year end 2001.

      The Company currently is meeting its operational and liquidity needs with
cash on hand, internally generated funds and amounts available under the
revolving credit facility.

Working Capital

      At June 30, 2002, working capital was $34.0 million, a $3.6 million
decrease from $37.6 million at December 31, 2001. Decreases in cash and cash
equivalents of $8.3 million, inventory of $5.3 million and income taxes
receivable of $2.8 million were partially offset by increases in accounts
receivable of $6.1 million and a decrease in accounts payable and accrued
liabilities of $7.0 million. Deferred income tax assets as of June 30, 2002,
were basically unchanged from December 31, 2001.

      The increase in accounts receivable was partially due to a 23% increase in
net sales from the month of December 2001 to the month of June 2002. The
Company's December shipments are typically lower than other months due to
seasonal factors. The Company's days sales outstanding remained basically
unchanged from year-end. The decrease in inventory was due to management's
efforts to reduce inventory. The Company anticipates rebuilding most of the
inventory by year-end. Income taxes receivable decreased due to the federal tax
refund of $4.7 million that was received in second quarter 2002 from the carry
back of the 2001 tax loss on the sale of Leavitt. The decrease in accounts
payable and accrued liabilities was primarily attributable to decreased capital
expenditures in second quarter 2002 compared with fourth quarter 2001 as Phase
III of Project 400 neared completion. Also, accounts payable and accrued
liabilities were lower due to decreases in the accruals for employee benefits as
the payments for 2001 were made in 2002.

      The Company's current ratio was 2.59 at June 30, 2002, compared to 2.32 at
December 31, 2001.


                                       18
<PAGE>
                              CHASE INDUSTRIES INC.

Cash Flow Provided by Operating Activities

      For the six months ended June 30, 2002, net cash provided by operating
activities was $6.9 million, which included a decrease in assets and
liabilities, excluding cash, debt and deferred taxes of $4.8 million partially
offset by income from continuing operations of $4.8 million, depreciation
expense of $4.5 million and deferred tax expense of $1.2 million. The change in
working capital for the six months ended June 30, 2002 was explained above in
"Working Capital." Also included was cash provided by discontinued operations of
$1.1 million.

      For the six months ended June 30, 2001, net cash provided by operating
activities was $0.6 million, which included a decrease in assets and
liabilities, excluding cash, debt and deferred taxes of $5.7 million and the
settlement of the litigation with BP for $2.0 million, partially offset by
income from continuing operations of $4.1 million, depreciation expense of $3.4
million, and deferred tax expense of $2.3 million. Cash provided by continuing
operations of $2.2 million was partially offset by cash used in discontinued
operations of $1.5 million.

Cash Flow (Used in) Provided by Investing Activities

      Capital expenditures were $15.3 million for the six months ended June 30,
2002. In December 1997, CBCC entered into a six-year operating lease agreement
for certain manufacturing equipment. There were several options available to the
Company during or at the end of the lease term, which included renewal of the
lease, purchase of the equipment by CBCC or sale of the equipment. In March
2002, the Company purchased this leased equipment for $10.4 million. Also in
first half 2002, there were additional capital expenditures in the amount of
$4.9 million primarily for equipment and installation costs for a second
extrusion press and additional finishing lines. Capital expenditures in 2001 of
$14.4 million primarily related also to equipment and construction costs for a
second extrusion press and additional finishing lines.

Cash Flow Provided by Financing Activities

      Cash provided by financing activities of $193,000 and $96,000 for the six
months ended June 30, 2002 and 2001, respectively, resulted from stock option
exercises.

Capital Resources

      In 1996, CBCC launched a capital project referred to as "Project 400." The
project is designed to increase foundry, extrusion and finishing capabilities
with an ultimate goal of increasing finished brass rod production capability by
one-third to more than 400 million pounds annually. The first phase of the
project was completed in early 1998 with the installation of three new billet
heaters that increased finished brass rod capacity by about 17 percent. The new
billet heaters have increased productivity and improved quality. The total cost
of the first phase of the project was approximately $12.0 million and was
financed through a six-year operating lease. The Company purchased this leased
equipment for $10.4 million in the first quarter 2002.

      In second quarter 1998, the Company announced Phase II of Project 400,
which was a $30 million multi-year investment to construct an additional brass
foundry enabling CBCC to increase


                                       19
<PAGE>
                              CHASE INDUSTRIES INC.

casting capacity and to provide customers with multiple alloys. The new brass
foundry began producing billets on a trial basis in February 2000 and is now
producing billets at expected production rates. The new foundry has reduced
metal costs and increased production capacity.

      In fourth quarter 1999, the Company announced Phase III of Project 400,
which is a $50 million multi-year investment for a second extrusion press and
additional finishing equipment. Phase III increases CBCC's production capacity
by about one-third to more than 400 million pounds annually. As of June 30,
2002, $47.9 million had been spent and all of the new equipment was in
operation. The Company anticipates that capital projects will be paid for with
cash flows provided by operating activities and cash on hand.

Bank Credit Facility

      As of June 30, 2002, there were no amounts outstanding under the Company's
$50 million revolving credit facility. Total availability under the revolving
credit facility was $47.9 million as of June 30, 2002. The existing revolving
credit facility expires on August 30, 2002. The Company is in the process of
negotiating a new credit facility and does not anticipate any problems in
obtaining an adequate credit facility.

CONTINGENCIES - ENVIRONMENTAL MATTERS

      As discussed in Note 4 of Notes to Consolidated Financial Statements
included in Part I, Item 1, CBCC is subject to certain contingent liabilities
relating to environmental conditions at its manufacturing facility.

      CBCC is in the process of developing a remediation plan for in situ
remediation at two areas of its site contaminated with certain volatile organic
compounds (VOCs). Based on preliminary cost estimates provided by CBCC's
independent environmental consultant, and subject to the development by the
consultant of a remediation plan for these areas of the site and the receipt of
bids for the remediation activities required under such plan, the Company
estimates that the costs for this project will be approximately $3.0 million,
based upon capital and operating costs for a period of five years. A reserve for
this amount previously has been established. However, subject to pilot testing
and operating experience, costs may increase or decrease depending on the scale
and operating period.

      In first quarter 2001, the Company settled certain matters with BP which
are discussed in Note 4 of Notes to Consolidated Financial Statements included
in Part I, Item 1. In conjunction with the BP settlement, the Company recorded a
$4.8 million environmental reserve. The Company had minimal remediation spending
in first quarter 2002. The environmental reserve totaled $8.2 million at June
30, 2002.

      Based on currently available data, the Company believes that, upon
completion of the remediation activities described above, CBCC will have
substantially completed the remediation activities at its site that are
necessary to address contamination of which CBCC currently is aware. However,
until completion of these remedial and associated investigatory activities and
receipt of approval from the Ohio EPA of CBCC's activities to remediate this
contamination, as well as


                                       20
<PAGE>
                              CHASE INDUSTRIES INC.

remediation activities previously conducted, the Company cannot be certain that
further remediation activities will not be required at CBCC's site. To the
extent regulatory agencies require additional remediation at those areas of
CBCC's site where CBCC previously has undertaken remediation activities, or
require excavation of soil at the two areas for which CBCC currently is
developing a remediation plan for in situ remediation, as a part of the
settlement of the litigation with BP in first quarter 2001, BP has retained
financial responsibility for such remediation activities.

      The Company expects to fund cleanup costs related to the remaining
remediation activities at its manufacturing facility with cash on hand and
borrowings under its existing bank credit facility. Therefore, the Company does
not believe that funding these remediation activities will have a material
adverse effect on the Company's financial condition, results of operations or
liquidity.

      The statements set forth herein regarding anticipated expenditures for
environmental matters are forward-looking, are based on sampling results
currently available to the Company, remediation plans in the process of being
developed by independent consultants of CBCC (which plans are subject to
assumptions regarding applicable cleanup standards and methodologies) and
preliminary cost estimates for completion of the remediation activities. Actual
costs required to be expended by the Company with respect to such matters may
differ materially from current expectations depending on the final resolution of
known uncertainties, including finalization of remediation plans for the two
remaining areas of CBCC's site as discussed above, completion of proposed
remediation activities, acceptance by applicable governmental agencies of
cleanup standards relied upon in developing remediation plans and conducting
remediation activities, discovery of additional contaminants during remediation,
and any change in CBCC's proposed use of its property which affects any
applicable cleanup standard.

CONTINGENCIES - LEGAL PROCEEDINGS

      As discussed in Note 4 of Notes to Consolidated Financial Statements
included in Part I, Item 1 and in Contingencies - Environmental Matters included
in Part I, Item 2, in February 2001, the Company and CBCC settled a lawsuit with
BP, originally filed in January 1998, regarding amounts payable under the BP
Note.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

      The timing of contractual obligations and commercial commitments of the
Company, at June 30, 2002, related to operating leases, purchases of capital
equipment and stand-by letters of credit, is as follows (in thousands):

<TABLE>
<CAPTION>
                                    2002       2003      2004      2005     2006
                                    ----       ----      ----      ----     ----
<S>                                <C>        <C>       <C>       <C>       <C>
Operating leases                   $  171     $ 335     $ 250     $ 224     $112
Purchases of capital equipment      6,520
Stand-by letters of credit          2,064
</TABLE>


                                       21
<PAGE>
                              CHASE INDUSTRIES INC.

FORWARD-LOOKING STATEMENTS

      This document contains forward-looking statements regarding the operations
of the Company and the industries in which it operates. These statements are
identified by the use of words such as "believe," "expects," "anticipates,"
"may, " "will," "should" and other words referring to events to occur in the
future. Management uses estimates and assumptions in forming the basis for such
forward-looking statements. Such estimates and assumptions, including forecasts
regarding demand and pricing for the Company's products, are subject to risks
and uncertainties which could cause actual results to differ materially from
historical results or those anticipated, as described in the forward-looking
statements. Actual results may be affected by general economic and industry
conditions in the end use markets for the Company's products as well as the
impact of competitive products and pricing, including without limitation the
impact of imports. Foreign economic activity and the relationship of the U. S.
dollar to other currencies also may affect import levels and exports of U.S.
manufactured products containing parts made from brass rod. The Company's
shipments also may be affected by its ability to maintain manufacturing
operations at its current levels without significant interruption. Given these
uncertainties, you should not place undue reliance upon the forward-looking
statements in this document.


                                       22
<PAGE>
                              CHASE INDUSTRIES INC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

      The Company has no financial instruments or agreements that require
disclosure pursuant to this item.

                           Part II: Other Information

ITEM 5. OTHER INFORMATION

      The Company has filed the certifications required by Section 906 of the
Sarbanes-Oxley Act of 2002 as Exhibits 99.1 and 99.2 to this Form 10-Q.


                                       23
<PAGE>
                              CHASE INDUSTRIES INC.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

      (a)   EXHIBITS

            2.1    -    Agreement and Plan of Merger, dated as of May 7, 2002,
                        by and among the Company, Olin and Plumber Acquisition
                        Corp. (incorporated by reference to Exhibit 5.1 to the
                        Company's Current Report on Form 8-K dated May 9, 2002).

            3.1    -    Restated Certificate of Incorporation of the Company
                        (incorporated by reference to Exhibit 3.1 to the
                        Company's Quarterly Report on Form 10-Q for the quarter
                        ended June 30, 1998), as amended by the Certificate of
                        First Amendment to the Company's Restated Certificate of
                        Incorporation (incorporated by reference to Exhibit 3.2
                        to the Company's Current Report on Form 8-K dated May
                        14, 1997) and Certificate of Second Amendment to the
                        Company's Restated Certificate of Incorporation,
                        (incorporated by reference to Exhibit 3.2 to the
                        Company's Current Report on Form 8-K dated May 26,
                        1998).

            3.2    -    Certificate of Designation of Series A Junior
                        Participating Preferred Stock (incorporated herein by
                        reference to Exhibit 4.2 to the Company's Form 8-A dated
                        January 5, 2001, filed with the Securities and Exchange
                        Commission on January 5, 2001).

            3.3    -    By-Laws of the Company (incorporated by reference to
                        Exhibit 99.5 to the Company's Current Report on Form 8-K
                        dated December 26, 2000, filed with the Securities and
                        Exchange Commission on January 4, 2001).

            4.1    -    Specimen Common Stock Certificate (incorporated by
                        reference to Exhibit 4.1 to the Company's Registration
                        Statement on Form S-1 as filed with the Securities and
                        Exchange Commission on November 3, 1994, Registration
                        No. 33-83178).

            4.2    -    Exchange Agreement dated November 4, 1994, between the
                        Company and Citicorp Venture Capital Ltd. ("CVC")
                        (incorporated by reference to Exhibit 4.4 to the
                        Company's


                                       24
<PAGE>
                              CHASE INDUSTRIES INC.

                        Registration Statement on Form S-8 dated December 9,
                        1994, Registration No. 33-87278).

            4.3    -    Rights Agreement, dated as of December 28, 2000, between
                        the Company and Mellon Investor Services LLC
                        (incorporated by reference to Exhibit 99.1 to the
                        Company's Current Report on Form 8-K dated January 4,
                        2001, filed with the Securities and Exchange Commission
                        on January 4, 2001).

            4.4    -    Voting Agreement, dated as of May 7, 2002 between Olin
                        and Court Square Capital Limited (incorporated by
                        reference to Exhibit 5.2 to the Company's Current Report
                        on Form 8-K dated May 9, 2002).

            +99.1  -    Certificate of Chief Executive Officer required by
                        Section 906 of the Sarbanes-Oxley Act of 2002.

            +99.2  -    Certificate of Chief Financial Officer required by
                        Section 906 of the Sarbanes-Oxley Act of 2002.

----------
+ Filed herewith

      (b)   REPORTS ON FORM 8-K

            During the quarter ended June 30, 2002, the Company filed a Current
            Report on Form 8-K dated May 8, 2002, to report under Item 5, "Other
            Events," an agreement by Olin to acquire the Company.

            Also during the quarter ended June 30, 2002, the Company filed a
            Current Report on Form 8-K dated May 9, 2002, to report under Item
            5, "Other Events," an Agreement and Plan of Merger by and among
            Olin, Plumber Acquisition Corp. and the Company and a Voting
            Agreement between Olin and Court Square Capital Limited, an
            affiliate of CVC and under Item 7, "Exhibits," the Agreement and
            Plan of Merger by and among Olin, Plumber Acquisition Corp. and the
            Company and the Voting Agreement.


                                       25
<PAGE>
                              CHASE INDUSTRIES INC.

                                S I G N A T U R E

      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 hereto duly authorized.

                                        CHASE INDUSTRIES INC.


Date: August 14, 2002                   By: /S/ TODD A. SLATER
                                            ------------------------------------
                                            Todd A. Slater
                                            Vice President
                                            Chief Financial Officer
                                            (duly authorized officer and
                                            Principal Financial Officer)


                                       26
<PAGE>
                              CHASE INDUSTRIES INC.

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit
  No.                            Description of Exhibits
-------                          -----------------------
<S>         <C>
2.1    -    Agreement and Plan of Merger, dated as of May 7, 2002, by and among
            the Company, Olin and Plumber Acquisition Corp. (incorporated by
            reference to Exhibit 5.1 to the Company's Current Report on Form 8-K
            dated May 9, 2002).

3.1    -    Restated Certificate of Incorporation of the Company (incorporated
            by reference to Exhibit 3.1 to the Company's Quarterly Report on
            Form 10-Q for the quarter ended June 30, 1998), as amended by the
            Certificate of First Amendment to the Company's Restated Certificate
            of Incorporation (incorporated by reference to Exhibit 3.2 to the
            Company's Current Report on Form 8-K dated May 14, 1997) and
            Certificate of Second Amendment to the Company's Restated
            Certificate of Incorporation, (incorporated by reference to Exhibit
            3.2 to the Company's Current Report on Form 8-K dated May 26, 1998).

3.2    -    Certificate of Designation of Series A Junior Participating
            Preferred Stock (incorporated herein by reference to Exhibit 4.2 to
            the Company's Form 8-A dated January 5, 2001, filed with the
            Securities and Exchange Commission on January 5, 2001).

3.3    -    By-Laws of the Company (incorporated by reference to Exhibit 99.5 to
            the Company's Current Report on Form 8-K dated December 26, 2000,
            filed with the Securities and Exchange Commission on January 4,
            2001).

4.1    -    Specimen Common Stock Certificate (incorporated by reference to
            Exhibit 4.1 to the Company's Registration Statement on Form S-1 as
            filed with the Securities and Exchange Commission on November 3,
            1994, Registration No. 33-83178).

4.2    -    Exchange Agreement dated November 4, 1994, between the Company and
            Citicorp Venture Capital Ltd. ("CVC") (incorporated by reference to
            Exhibit 4.4 to the Company's Registration Statement on Form S-8
            dated December 9, 1994, Registration No. 33-87278).

4.3    -    Rights Agreement, dated as of December 28, 2000, between the Company
            and Mellon Investor Services LLC
</TABLE>
<PAGE>
                              CHASE INDUSTRIES INC.

<TABLE>
<S>         <C>
            (incorporated by reference to Exhibit 99.1 to the Company's Current
            Report on Form 8-K dated January 4, 2001, filed with the Securities
            and Exchange Commission on January 4, 2001).

4.4    -    Voting Agreement, dated as of May 7, 2002 between Olin and Court
            Square Capital Limited (incorporated by reference to Exhibit 5.2 to
            the Company's Current Report on Form 8-K dated May 9, 2002).

+99.1  -    Certificate of Chief Executive Officer required by Section 906 of
            the Sarbanes-Oxley Act of 2002.

+99.2  -    Certificate of Chief Financial Officer required by Section 906 of
            the Sarbanes-Oxley Act of 2002.
</TABLE>

----------
+ Filed herewith