<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 SEPTEMBER 30, 2001

                                       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  [ ]

NUMBER OF SHARES OF COMMON STOCK OUTSTANDING
  AS OF NOVEMBER 6, 2001 .........................................   15,297,745

NUMBER OF SHARES OF NONVOTING COMMON STOCK
  OUTSTANDING AS OF NOVEMBER 6, 2001 .............................            0

---------

*        The Registrant's Nonvoting Common Stock is convertible, on a
         share-for-share basis, into Common Stock.


<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 September 30, 2001
                     and December 31, 2000   ........................................  3

        Consolidated Statement of Income for the Three and Nine Months Ended
                     September 30, 2001 and 2000.....................................  4

        Consolidated Statement of Cash Flows for the Nine Months Ended
                     September 30, 2001 and 2000.....................................  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................... 21

                           PART II. OTHER INFORMATION

Item 5. Other Information............................................................ 22

Item 6. Exhibits and Reports on Form 8-K............................................. 22

        Signature.................................................................... 24

</Table>



                                       2
<PAGE>


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

<Table>
<Caption>
                                                                                 September 30,     December 31,
                                                                                     2001             2000
                                                                                 -------------     ------------
<S>                                                                              <C>               <C>
                                     ASSETS
Current assets:
  Cash and cash equivalents                                                      $      23,876     $      3,993
  Receivables, net of allowance for doubtful accounts and
    claims of $1,024 and $990 in 2001 and 2000, respectively                            26,615           24,214
  Inventories                                                                           14,056           29,072
  Prepaid expenses                                                                       1,080            1,253
  Deferred income taxes                                                                  6,263            3,251
  Other assets                                                                              --           21,600
                                                                                 -------------     ------------
        Total current assets                                                            71,890           83,383
Net assets of discontinued operations                                                       --           38,161
Property, plant and equipment, net                                                      93,953           75,659
                                                                                 -------------     ------------
        Total assets                                                             $     165,843     $    197,203
                                                                                 =============     ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                                               $      15,121     $     23,447
  Accrued compensation and benefits                                                      3,283            4,170
  Accrued income taxes                                                                   2,531            2,692
  Other accrued liabilities                                                              2,885            6,701
  Current portion of long-term debt                                                         --           20,000
  Interest payable - Seller's note                                                          --            8,345
                                                                                 -------------     ------------
        Total current liabilities                                                       23,820           65,355
Other long-term liabilities                                                              8,309               --
Deferred income taxes                                                                    9,462           14,354
                                                                                 -------------     ------------
        Total liabilities                                                               41,591           79,709
                                                                                 -------------     ------------
Commitments and contingencies                                                               --               --
                                                                                 -------------     ------------

Stockholders' equity:
  Common stock, $.01 par value, 36,310,000 shares authorized; 15,297,745 and
    9,135,802 shares issued and outstanding
    in 2001 and 2000, respectively                                                         153               92
  Nonvoting common stock, $.01 par value, 12,300,000 shares
    authorized; 0 and 6,150,118 shares issued and outstanding
    in 2001 and 2000, respectively                                                          --               61
  Additional paid-in capital                                                            31,980           31,884
  Retained earnings                                                                     92,119           85,457
                                                                                 -------------     ------------
        Total stockholders' equity                                                     124,252          117,494
                                                                                 -------------     ------------
        Total liabilities and stockholders' equity                               $     165,843     $    197,203
                                                                                 =============     ============
</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              Nine Months Ended
                                                                September 30,                   September 30,
                                                            2001            2000            2001             2000
                                                         ----------      ----------      ----------      ----------
<S>                                                      <C>             <C>             <C>             <C>
Net sales                                                $   56,503      $   70,010      $  179,556      $  225,480
Cost of goods sold (exclusive of depreciation
   shown separately below)                                   49,080          59,028         155,529         188,479
                                                         ----------      ----------      ----------      ----------
     Gross profit                                             7,423          10,982          24,027          37,001

Selling, general and administrative expenses                  1,482           2,089           4,424           6,002
Tender offer and other expenses                                 665              --           4,172              --
Depreciation expense                                          1,668           1,712           5,098           4,979
                                                         ----------      ----------      ----------      ----------
     Operating income                                         3,608           7,181          10,333          26,020

Other non-operating expenses                                     --              --             385              --
Interest (income) expense, net                                 (251)            326            (257)          1,147
                                                         ----------      ----------      ----------      ----------
     Income before income taxes                               3,859           6,855          10,205          24,873

Provision for income taxes                                    1,369           2,605           3,622           9,451
                                                         ----------      ----------      ----------      ----------
Income from continuing operations                             2,490           4,250           6,583          15,422

Discontinued operations (Note 5):
     Income (loss), net of income taxes                          --             (89)             79            (653)
                                                         ----------      ----------      ----------      ----------
          Net income                                     $    2,490      $    4,161      $    6,662      $   14,769
                                                         ==========      ==========      ==========      ==========
Average shares outstanding:
     Basic                                                   15,298          15,276          15,295          15,256
     Diluted                                                 15,461          15,407          15,476          15,382

Earnings per share - Basic:
     Income from continuing operations                   $     0.16      $     0.28      $     0.43      $     1.01
     Income (loss) from discontinued operations                  --           (0.01)           0.01           (0.04)
                                                         ----------      ----------      ----------      ----------
          Net income                                     $     0.16      $     0.27      $     0.44      $     0.97
                                                         ==========      ==========      ==========      ==========
Earnings per share - Diluted:
     Income from continuing operations                   $     0.16      $     0.28      $     0.43      $     1.00
     Income (loss) from discontinued operations                  --           (0.01)             --           (0.04)
                                                         ----------      ----------      ----------      ----------
          Net income                                     $     0.16      $     0.27      $     0.43      $     0.96
                                                         ==========      ==========      ==========      ==========
</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>
                                                                                    Nine Months Ended
                                                                                      September 30,
                                                                                  2001            2000
                                                                               ----------      ----------
<S>                                                                            <C>             <C>
Operating activities:
    Income from continuing operations                                          $    6,583      $   15,422
    Adjustments to reconcile income from continuing operations
         to net cash provided by operating activities:
         Depreciation expense                                                       5,098           4,979
         Deferred income tax expense                                                3,482           4,858
         BP settlement                                                             (2,000)             --
         Changes in assets and liabilities:
             (Increase) in receivables                                             (2,401)         (5,582)
             Decrease (increase) in inventories                                    15,016          (6,184)
             (Decrease) in accounts payable                                        (8,326)         (3,167)
             (Decrease) in accrued liabilities                                     (2,133)         (1,740)
             Other, net                                                              (471)          3,418
                                                                               ----------      ----------
             Net cash provided by activities of continuing operations              14,848          12,004
    Net cash (used in) provided by discontinued operations                         (1,515)          3,534
                                                                               ----------      ----------
                  Net cash provided by operating activities                        13,333          15,538
                                                                               ----------      ----------

Investing activities:
    Proceeds from sale of discontinued operations, net of fees                     29,846              --
    Expenditures for property, plant and equipment                                (23,392)        (11,665)
                                                                               ----------      ----------
                  Net cash provided by (used in) investing activities               6,454         (11,665)
                                                                               ----------      ----------

Financing activities:
    Net repayments of debt                                                             --          (7,000)
    Issuance of common stock - options exercised                                       96             324
                                                                               ----------      ----------
                  Net cash provided by (used in) financing activities                  96          (6,676)
                                                                               ----------      ----------

Net increase (decrease) in cash and cash equivalents                               19,883          (2,803)

Cash and cash equivalents, beginning of period                                      3,993           9,131
                                                                               ----------      ----------
Cash and cash equivalents, end of period                                       $   23,876      $    6,328
                                                                               ==========      ==========
Supplemental disclosures:
    Interest and bank fees paid                                                $      233      $      384
                                                                               ==========      ==========
    Income taxes paid                                                          $      336      $       53
                                                                               ==========      ==========
</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 September 30, 2001, and December 31,
2000, and the consolidated statements of income and cash flows for the three and
nine months ended September 30, 2001 and 2000, 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 September 30, 2001 and 2000, 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 nine months ended September 30,
2001, are not necessarily indicative of the results of operations that may be
expected for the year ending December 31, 2001. 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, 2000.

   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 approximately $31.5 million, subject to
closing adjustments. The sale closed on March 30, 2001. Leavitt has been
reflected 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.


                                       6
<PAGE>
                              CHASE INDUSTRIES INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


   REVENUE RECOGNITION

   Net sales represent gross sales of brass rod 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 10% of pounds sold by CBCC are made on a "tolling" basis, where
the customer consigns brass scrap to CBCC and is only charged 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 1998, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"), which was originally effective
for years beginning after June 15, 1999. In June 1999, the FASB issued Statement
of Financial Accounting Standards No. 137 delaying the effective date of SFAS
133 by one year. SFAS 133 was amended by Statement of Financial Accounting
Standards No. 138, "Accounting for Certain Derivative Instruments and Certain
Hedging Activities," which was issued in June 2000. The new standards require
companies to record derivatives on the balance sheet as assets or liabilities,
measured at fair value. The adoption of SFAS 133, as amended, in first quarter
2001, did not have a material effect on the Company's financial position or
results of operations.

   In September 2000, the FASB issued Statement of Financial Accounting
Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities" ("SFAS 140"). SFAS 140 replaces Statement of
Financial Accounting Standards No. 125, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishment of Liabilities" ("SFAS 125") and is
effective for transfers and servicing of financial assets and extinguishments of
liabilities occurring after June 30, 2001. The adoption of SFAS 140, in third
quarter 2001, did not have any effect on the Company's financial position or
results of operations.

   In July 2001, the FASB issued Statement of Financial Accounting Standards No.
141, "Business Combinations" ("SFAS 141"). SFAS 141 requires that all business
combinations be accounted for under the purchase method. Use of the
pooling-of-interests method is no longer permitted. SFAS 141 is effective for
business combinations initiated after June 30, 2001. The adoption of SFAS 141,
in third quarter 2001, did not have any effect on the Company's financial
position or results of operations.

   In July 2001, the FASB issued Statement of Financial Accounting Standards No.
142, "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 142 requires that
goodwill no longer be amortized to earnings, but instead be reviewed for
impairment. SFAS 142 must be adopted on or before January 1, 2002. The
amortization of goodwill ceases upon adoption of SFAS 142. Management of the
Company believes SFAS 142 will not have any effect on the Company's financial
position or results of operations as it has no goodwill or other intangible
assets.

                                       7
<PAGE>
                              CHASE INDUSTRIES INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


   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. It is effective for financial statements issued for
fiscal years beginning after June 15, 2002. Management of the Company believes
SFAS 143 will not have a material 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. It is effective for financial statements issued for
fiscal years beginning after December 15, 2001, and interim periods within those
fiscal years. Management of the Company believes SFAS 144 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 $1.7 million lower at September 30,
2001, and $0.4 million higher at December 31, 2000. Inventories consisted of the
following (in thousands):

<Table>
<Caption>
                                                    September 30,       December 31,
                                                         2001               2000
                                                    -------------      -------------
<S>                                                 <C>                <C>
            Raw materials                           $       3,815      $       5,703
            Work in progress                                3,613             11,224
            Finished goods                                  7,704             13,699
                                                    -------------      -------------
                                                           15,132             30,626
            Tolling metal due customers                    (1,076)            (1,554)
                                                    -------------      -------------
                                                    $      14,056      $      29,072
                                                    =============      =============
</Table>


                                       8
<PAGE>
                              CHASE INDUSTRIES INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


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 September 30,
                                       --------------------------------------------------------
                                                 2001                           2000
                                       -------------------------      -------------------------
                                         Shares           EPS           Shares           EPS
                                       ----------     ----------      ----------     ----------
<S>                                    <C>            <C>             <C>            <C>
         Basic                         15,297,745     $     0.16      15,276,258     $     0.27
         Stock options                    163,326             --         131,155             --
                                       ----------     ----------      ----------     ----------
         Diluted                       15,461,071     $     0.16      15,407,413     $     0.27
                                       ==========     ==========      ==========     ==========
</Table>

<Table>
<Caption>
                                                    Nine Months Ended September 30,
                                       --------------------------------------------------------
                                                 2001                           2000
                                       -------------------------      -------------------------
                                         Shares           EPS           Shares           EPS
                                       ----------     ----------      ----------     ----------
<S>                                    <C>            <C>             <C>            <C>
         Basic                         15,295,209     $     0.44      15,256,419     $     0.97
         Stock options                    180,924          (0.01)        125,334          (0.01)
                                       ----------     ----------      ----------     ----------
         Diluted                       15,476,133     $     0.43      15,381,753     $     0.96
                                       ==========     ==========      ==========     ==========
</Table>


   All shares of Common Stock and Nonvoting Common Stock are identical, except
that holders of Nonvoting Common Stock have no voting rights. All of the
6,150,118 shares of Nonvoting Common Stock outstanding at June 30, 2001, were
converted into 6,150,118 shares of Common Stock during third quarter 2001 and,
as of September 30, 2001, there were no shares of Nonvoting Common Stock
outstanding.

   At September 30, 2001, and December 31, 2000, the Company had no preferred
stock issued or outstanding. In conjunction with the 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

                                       9
<PAGE>
                              CHASE INDUSTRIES INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


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 ("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 the cost for this project to approximate $3 million, based
upon capital and operating costs for a period of five years. However, subject to
pilot testing and operating experience, costs may increase if a longer operating
period is necessary.

   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
$0.5 million for the nine months ended September 30, 2001, including the payment
of $0.4 million for activities completed in 2000. As a result of the foregoing,
the environmental reserve totaled $8.3 million at September 30, 2001.

   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 receipt of 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 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 requires 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


                                       10
<PAGE>
                              CHASE INDUSTRIES INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


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 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 $17.1
million at September 30, 2001.


                                       11
<PAGE>
                              CHASE INDUSTRIES INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


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 with the Company
receiving $31.5 million, before estimated closing costs and fees of $1.7
million, subject to closing adjustments. 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. The disposal of the assets and operations
of Leavitt represented the disposal of a business segment. Consequently, the
consolidated financial statements reflect Leavitt as a discontinued operation.

   The operating results of discontinued operations were as follows (in
thousands):

<Table>
<Caption>
                                                Three Months Ended               Nine Months Ended
                                                   September 30,                   September 30,
                                                2001           2000            2001             2000
                                             ----------     ----------      ----------      ----------
<S>                                          <C>            <C>             <C>             <C>
Net sales                                    $       --     $   28,558      $   23,251      $   93,280
                                             ==========     ==========      ==========      ==========
Income (loss) before taxes                   $       --     $     (143)     $      123      $   (1,053)
Provision for income (taxes) benefit                 --             54             (44)            400
                                             ----------     ----------      ----------      ----------
Net income (loss)                            $       --     $      (89)     $       79      $     (653)
                                             ==========     ==========      ==========      ==========
</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.


                                       12
<PAGE>

                              CHASE INDUSTRIES INC.


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

GENERAL

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 with the Company
receiving $31.5 million, before estimated closing costs and fees of $1.7
million, subject to closing adjustments. 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. The disposal of the assets and operations
of Leavitt represented the disposal of a business segment. Consequently, the
consolidated financial statements reflect Leavitt 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 assets
and operations of Leavitt were disposed of on March 30, 2001, and are classified
as a discontinued operation for all periods presented. CBCC is a leading
manufacturer of free-machining and forging brass rod.

            CBCC is an ISO 9002 certified manufacturer and supplier of
free-machining and forging brass rod in the United States and Canada. 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 at which 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 September 2001,
there can be no assurance that such discounts will continue. Decreasing imports
of brass rod and increasing demand for brass scrap could cause free-market brass
scrap prices to increase, and


                                       13
<PAGE>
                              CHASE INDUSTRIES INC.


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 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 10% 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.

            In October 2001, Chase reduced brass metal prices to the lowest
levels in 14 years. This decrease may result in a lower of cost-or-market
inventory writedown of approximately $1.0 to $1.5 million in fourth quarter 2001
unless brass prices recover, but should not otherwise affect margins.

General Economic and Industry Conditions

            The demand for the Company's products in the United States and
Canada generally is dependent upon business conditions in the industries which
use products made from brass rod. Manufacturers of products used in building and
construction and manufacturers of industrial machinery and equipment are the
primary users of brass rod. Therefore, the Company's operating results during
any given period depend significantly on business conditions in these
industries. These industries, in turn, are sensitive to fluctuations in overall
economic activity, movement in interest rates and availability of short-and
long-term financing. The Company's operating results also depend on its
manufacturing capacity, as well as industry production levels and other market
factors.

            The softness from the fourth quarter 2000 and first quarter 2001
continued into second quarter 2001 as the brass rod industry experienced
"recession-like" conditions. Industry shipments were off 22% in second quarter
2001 compared with second quarter 2000 which followed a decline in industry
shipments of 19% in first quarter 2001 compared with the prior year. These
declines were greater than the fourth quarter 2000 decline of 13%. The economic
downturn in the brass rod industry, which began in the third quarter of 2000,
appears to have reached its low-point in the second quarter. CBCC experienced a
modest recovery in volume in the third quarter as it shipped 3% more brass rod
than in the second quarter. While shipments continued to lag below 2000 levels,


                                       14
<PAGE>

                              CHASE INDUSTRIES INC.


the magnitude of the decline has diminished. Prior to September 11th, many of
CBCC's customers were expressing optimism for a recovery in the demand for their
products and in turn increased demand for brass rod by the end of the first
quarter 2002. However, the tragic events of September 11 have clouded the
nation's economic picture and made near-term forecasting of the demand for brass
rod very challenging. While demand for brass rod has not yet exhibited any
measurable consequences of these acts, the timing of economic recovery and the
outlook for the fourth quarter and first quarter 2002 are more uncertain now as
the large number of layoffs nationwide is likely to affect the entire economy,
including housing and remodeling activity. To the extent the end use markets for
the products manufactured from brass rod remain depressed or experience further
weakening, including as a result of the events of September 11th, further
terrorist activities and military and other responses to terrorist activity, the
Company expects that demand for its brass rod and unit margins will be adversely
affected.


RESULTS OF OPERATIONS

Three Months Ended September 30, 2001, Compared with Three Months Ended
September 30, 2000

            Net sales decreased $13.5 million, or 19.3%, to $56.5 million in
third quarter 2001. Net sales decreased mainly as a result of a 9% decrease in
brass rod shipments. Also contributing to this decrease was a 12% decline in the
brass rod Metal Selling Price. The softness from the fourth quarter 2000 and
first half 2001 continued into third quarter 2001 as the brass rod industry is
experiencing "recession-like" conditions. Industry shipments were off 16% in
third quarter 2001 compared with third quarter 2000 which followed a decline in
industry shipments of 20% in first half 2001 compared with the prior year. These
declines were greater than the fourth quarter 2000 decline of 13%. Imports of
rod continued to abate as imports through August 2001, the most recent data
available, are down over 50% compared with the prior year. Customers in the
building and construction, transportation, industrial machinery and equipment,
and electronics and distribution industries had much lower demand from the
levels experienced in third quarter 2000. Inventory corrections throughout the
supply-chain also adversely affected the demand for brass rod.

            Gross profit decreased $3.6 million, or 32.7%, to $7.4 million in
third quarter 2001 due to lower brass rod shipments and lower unit profit
margins. Fabrication prices decreased due to competitive pressures in the
market. In response to lower profitability, the Company implemented cost
controls in first quarter 2001, including significantly curtailing overtime and
discretionary spending. These cost controls resulted in lower manufacturing
costs in third quarter 2001 compared with the prior year despite increased costs
for electricity and natural gas, higher health-care expenses, and contractual
labor rate increases.

            Selling, general and administrative ("SG&A") expenses decreased $0.6
million, or 28.6%, to $1.5 million for third quarter 2001. The decrease was
primarily attributable to lower legal fees in 2001 due to the settlement, in
February 2001, of the litigation with BP. Also, the decrease was due to spending
controls and cost reductions, which included reduced professional and consulting
expenses, lower management incentives and decreased franchise taxes.


                                       15
<PAGE>
                              CHASE INDUSTRIES INC.


            In third quarter 2001, tender offer and other expenses aggregating
$0.7 million were attributable to costs associated with an executive severance
package and incremental consulting and legal expenses as a result of the
unsolicited tender offer which expired on January 31, 2001, and activities
related thereto.

            Depreciation expense of $1.7 million was flat with 2000.

            As a result of the above factors, operating income decreased $3.6
million, or 50%, to $3.6 million in third quarter 2001.

            Interest income of $0.3 million in 2001 compares with interest
expense of $0.3 million in 2000. This $0.6 million difference primarily resulted
from the elimination of $20 million of debt in conjunction with the settlement
of the litigation with BP in February 2001. This settlement and the sale of
Leavitt in first quarter 2001 eliminated all borrowings.

            Based on the preceding explanations, income from continuing
operations before taxes decreased by $3.0 million, or 43.5%, to $3.9 million in
third quarter 2001 from $6.9 million in third quarter 2000.

            Income tax expense decreased by $1.2 million, or 46.2%, to $1.4
million as a result of the decrease of $3.0 million in income before taxes and a
reduction in the effective tax rate from 38% in 2000 to 35.5% in 2001. The
effective rate was lower in 2001 due to the state tax consequences resulting
from the sale of Leavitt and other state tax planning initiatives including tax
incentives related to CBCC's Project 400 capital investment.

            As a result of the above factors, income from continuing operations
decreased by $1.8 million, or 41.9%, to $2.5 million in third quarter 2001 from
$4.3 million in third quarter 2000.

            Net income for third quarter 2001 was $2.5 million, or $0.16 per
diluted share, compared with net income for third quarter 2000 of $4.2 million,
or $0.27 per diluted share. Excluding the impact of expenses related to the
unsolicited tender offer and other expenses, earnings per share for third
quarter 2001 were $0.19 per diluted share, compared with $0.27 per diluted share
in third quarter 2000.

Nine Months Ended September 30, 2001, Compared with Nine Months Ended September
30, 2000

            Net sales decreased $45.9 million, or 20.4%, to $179.6 million in
2001. Net sales decreased mainly as a result of a 13% decrease in the brass rod
shipments and a 7% decrease in the brass rod Metal Selling Price.

             Gross profit for the nine months ended September 30, 2001,
decreased $13.0 million from 2000, or 35.1%, to $24.0 million. Lower brass rod
shipments and lower unit profit margins adversely affected gross profit.
Fabrication prices decreased due to competitive pressures in the market. Cost
controls implemented in 2001, including the significant curtailment of overtime
and discretionary spending, resulted in decreasing manufacturing costs which
partially offset the decline in gross profit. These cost reductions were
achieved despite contractual labor rate increases and significantly higher
utility rates and medical costs.

             SG&A expenses decreased $1.6 million, or 26.7%, to $4.4


                                       16
<PAGE>
                              CHASE INDUSTRIES INC.


million for the nine months ended September 30, 2001. The decrease was due to
spending controls and cost reductions, which included reduced professional and
consulting expenses, lower management incentives and decreased franchise taxes.
Additionally, legal fees were lower in 2001 due to the settlement, in February
2001, of the litigation with BP.

            For the nine months ended September 30, 2001, tender offer and other
expenses aggregating $4.2 million were mainly attributable to incremental
consulting and legal expenses as a result of the unsolicited tender offer which
expired on January 31, 2001, and activities related thereto.

            Depreciation increased $0.1 million, or 2.0%, primarily due to
depreciation on the new brass foundry capitalized in 2000.

            As a result of the above factors, operating income for the nine
months ended September 30, 2001, decreased $15.7 million, or 60.4%, to $10.3
million in 2001.

            For the nine months ended September 30, 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 due to low demand for its services and economic conditions.

            Interest income of $0.3 million in 2001 compares with interest
expense of $1.1 million in 2000. This $1.4 million difference primarily resulted
from the elimination of $20 million of debt in conjunction with the settlement
of the litigation with BP and the sale of Leavitt in first quarter 2001.

            Income tax expense for the nine months ended September 30, 2001,
decreased $5.9 million, or 62.1%, to $3.6 million as a result of the decrease of
$14.7 million, or 59.0%, in income before income taxes and a reduction in the
effective tax rate from 38% to 35.5% in 2001. The effective tax rate was lower
in 2001 due to the state tax consequences resulting from the sale of Leavitt and
other state tax planning initiatives including tax incentives related to CBCC's
Project 400 capital investment.

            Based on the preceding explanations, income from continuing
operations decreased by $8.8 million, or 57.1%, to $6.6 million in 2001 from
$15.4 million in 2000. Excluding the impact of 2001 expenses, net of taxes,
related to the Company's response to an unsolicited tender offer and other
expenses and to the write-off of the Company's investment in MetalSpectrum,
income from continuing operations was $9.5 million for the nine months ended
September 30, 2001, a decrease of $5.9 million, or 38.3%, from the nine months
ended September 30, 2000.

            Income from discontinued operations, net of taxes, of $0.1 million,
prior to the sale of Leavitt on March 30, 2001, for the nine months ended
September 30, 2001, compares to a loss of $0.7 million for the nine months ended
September 30, 2000.

            As a result of the above factors, net income decreased $8.1 million,
or 54.7%, to $6.7 million in 2001 from $14.8 million in 2000. Diluted earnings
per share decreased to $0.43 from $0.96 in 2000. Income from continuing
operations excluding tender offer and other expenses were $0.60 per diluted
share compared with $1.00 for the same period last year.



                                       17
<PAGE>
                              CHASE INDUSTRIES INC.


LIQUIDITY AND CAPITAL RESOURCES

General

            At September 30, 2001, the Company had no debt, a $20 million
decrease from December 31, 2000. Cash and cash equivalents totaled $23.9
million, increasing from $4 million at year end 2000.

            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 September 30, 2001, working capital was $48.1 million, a $30.1
million increase from $18 million at December 31, 2000. Working capital at
December 31, 2000, included a $21.6 million receivable from BP and the BP Note
payable of $20 million and interest accrued on the BP Note aggregating $8.3
million. These amounts were settled in February 2001 with a CBCC payment of $2
million to BP. See further discussion of the BP settlement at Note 4 of Notes to
Consolidated Financial Statements. Working capital at September 30, 2001, was
$48.1 million, a $23.3 million, or 94.0%, increase from $24.8 million at
December 31, 2000, excluding the BP related amounts. Increases in cash and cash
equivalents of $19.9 million, accounts receivable of $2.4 million, and deferred
income taxes of $3.0 million and a decrease in accounts payable and accrued
liabilities of $13.2 million were partially offset by a decrease in inventory of
$15.0 million.

            The increase in accounts receivable was partially due to a 6%
increase in net sales from the month of December 2000 to the month of September
2001. The Company's December shipments are typically lower than other months due
to customer shutdowns in December. Also, the increase in accounts receivable was
due to an increase in days sales outstanding which was attributable to the
economic slowdown that began in the last half of 2000. The decrease in inventory
was due to management's efforts to reduce finished goods and to match inventory
levels with current reduced shipment rates. Work in progress inventory was
reduced by selectively idling equipment during high electricity cost summer
months. The increase in the deferred income tax asset was due to the income tax
benefit recorded on the estimated loss on the sale of Leavitt. The decrease in
accounts payable primarily was due to reduced metal purchases resulting from
lower production requirements.

            The Company's current ratio was 3.02 at September 30, 2001, compared
to 1.28 at December 31, 2000.

Cash Flow Provided by Operating Activities

                  For the nine months ended September 30, 2001, net cash
provided by operating activities was $13.3 million, which included an increase
in assets and liabilities, excluding cash, debt and deferred taxes, of $1.7
million, the settlement of the litigation with BP for $2 million, income from
continuing operations of $6.6 million, depreciation of $5.1 million, and
deferred tax expense of $3.5 million. The change in working capital during the
nine months ended September 30, 2001 was


                                       18
<PAGE>
                              CHASE INDUSTRIES INC.


explained above in "Working Capital." Cash provided by continuing operations of
$14.8 million was partially offset by cash used in discontinued operations of
$1.5 million.

            For the nine months ended September 30, 2000, net cash provided by
operating activities was $15.5 million, which included a decrease in assets and
liabilities, excluding cash, debt and deferred taxes, of $13.3 million partially
offset by net income from continuing operations of $15.4 million and
depreciation of $5.0 million, and deferred tax expense of $4.9 million. Cash
provided by continuing operations was $12.0 million. Cash provided by
discontinued operations was $3.5 million.

Cash Flow Provided by (Used in) Investing Activities

            For the nine months ended September 30, 2001, the proceeds from the
sale of Leavitt provided cash flow from investing activities of $31.5 million,
before estimated closing costs and fees of $1.7 million. Capital expenditures
were $23.4 million for the nine months ended September 30, 2001, and $11.7
million for the nine months ended September 30, 2000. Capital expenditures in
2001 primarily related to equipment and construction costs for a second
extrusion press and additional finishing lines discussed below. Capital
expenditures for the nine months ended September 30, 2000, primarily related to
final installation and equipment costs for the new foundry and capital equipment
and construction costs for Phase III of Project 400 discussed below.

Cash Flow Provided by (Used in) Financing Activities

            Cash provided by financing activities of $96,000 for the nine months
ended September 30, 2001, resulted from stock option exercises. Cash used in
financing activities of $6.7 million for the nine months ended September, 2000,
consisted primarily of the repayment of the Term Loan ($7.0 million) and
borrowings under the revolving credit facility. The Term Loan was paid off in
June 2000, three years ahead of schedule.

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 approximately 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
million and was financed through a six-year operating lease.

            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 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. The new foundry produced approximately 18% of CBCC's billet
requirements in 2000.


                                       19
<PAGE>
                              CHASE INDUSTRIES INC.


            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. When Phase III comes on line, which is
expected to occur in second quarter 2002, CBCC's production capacity will
increase by about one-third to more than 400 million pounds annually. The
majority of the building construction and equipment foundations necessary to
accommodate the finishing lines and extrusion press have been completed. Most of
the new equipment has been delivered and is currently being installed. The
Company anticipates that capital projects will be paid for with cash flows
provided by operating activities, cash on hand, and the revolving credit
facility, as necessary.

Bank Credit Facility

            As of September 30, 2001, there were no amounts outstanding under
the Company's $50 million revolving credit facility. Total availability under
the revolving credit facility was $46.3 million as of September 30, 2001.

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 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 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
if a longer operating period is necessary.

            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 remediation
spending of $0.5 million for the nine months ended September 30, 2001. The
environmental reserve totaled $8.3 million at September 30, 2001.

            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 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 requires 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.

                                       20
<PAGE>
                              CHASE INDUSTRIES INC.


            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.

FORWARD-LOOKING STATEMENTS

            This document, including the discussion above under General Economic
and Industry Conditions, 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," "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. These risks and uncertainties include the risk that
the tragedies of September 11, 2001, and their aftermath may have an adverse
effect on the economy and the end use markets for products manufactured from
brass rod and exacerbate the other risks and uncertainties described herein.
Actual results will 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 affect import levels and exports of U.S. manufactured
products containing parts made from brass rod. The Company's shipments also will
be affected by its ability to maintain manufacturing operations at its current
levels without significant interruption and successfully implement its capacity
expansion program.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

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


                                       21
<PAGE>
                              CHASE INDUSTRIES INC.


                           PART II. OTHER INFORMATION

ITEM 5. OTHER INFORMATION

            Effective September 1, 2001, Martin V. Alonzo retired as President
and Chief Executive Officer of the Company after serving in these positions
since the Company's formation in 1990. Mr. Alonzo also retired from his position
as Chairman of the Board, but remains on the Company's Board of Directors. Mr.
Alonzo was succeeded as President and Chief Executive Officer by John H.
Steadman, who has served as President and Chief Operation Officer of CBCC since
January 2000.

            In third quarter 2001, Michael T. Segraves resigned as Chief
Financial Officer of the Company to pursue other opportunities. He was succeeded
by Todd A. Slater who has been with the Company since 1992, most recently as
Controller.

            On September 17, 2001, Court Square Capital Limited converted all
6,150,118 shares of Nonvoting Common Stock of the Company held by it into
6,150,118 shares of common stock. After giving effect to the conversion, Court
Square Capital Limited owns of record 7,289,945 shares of common stock.

            At the regularly scheduled meeting of the Board of Directors of the
Company held on October 26, 2001, the Board of Directors increased the size of
the Board from seven to eight members and appointed Mr. Steadman to the Board to
fill the additional position.



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) EXHIBITS


     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 January 4, 2001,
            filed with the Securities and Exchange Commission on January 4,
            2001).


                                       22
<PAGE>
                              CHASE INDUSTRIES INC.


         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. (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 (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).

        10.1 - Amended and Restated Employment Agreement, dated as of September
               1, 2001, by and between the Company and John H. Steadman.

        10.2 - Change of Control Agreement, dated as of September 25, 2001, by
               and between the Company and Todd A. Slater.

        10.3 - Schedule identifying additional documents substantially identical
               to the Change of Control Agreement included as Exhibit 10.2

        10.4 - Severance Pay Agreement, dated as of September 1, 2001, by and
               between the Company and John H. Steadman.

        10.5 - Severance Pay Agreement, dated as of September 25, 2001, by and
               between the Company and Todd A. Slater.

        10.6 - Schedule identifying additional documents substantially identical
               to the Severance Pay Agreement included as Exhibit 10.5.

        10.7 - Severance Agreement, dated as of September 26, 2001, by and
               between the Company and Michael T. Segraves.



(b) REPORTS ON FORM 8-K

         No Current Report on Form 8-K was filed by the Company during the third
quarter of 2001.


                                       23
<PAGE>

                              CHASE INDUSTRIES INC.

                                    SIGNATURE

         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:  November 9, 2001                By:   /s/ TODD A. SLATER
                                             -----------------------------------
                                             Todd A. Slater
                                             Vice President
                                             Chief Financial Officer
                                             (duly authorized officer and
                                             Principal Financial Officer)






                                       24
<PAGE>



                              CHASE INDUSTRIES INC.


                               INDEX TO EXHIBITS

<Table>
<Caption>

EXHIBIT
NUMBER                          DESCRIPTION OF EXHIBITS
-------                         -----------------------
<S>       <C>
 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 January 4, 2001, 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. (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 (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).

10.1 -    Amended and Restated Employment Agreement, dated as of September 1, 2001,
          by and between the Company and John H. Steadman.
</Table>

<PAGE>

                              CHASE INDUSTRIES INC.

<Table>

<S>       <C>
10.2  -   Change of Control Agreement, dated as of September 25, 2001, by and
          between the Company and Todd A. Slater.

10.3  -   Schedule identifying additional documents substantially identical to the
          Change of Control Agreement included as Exhibit 10.2

10.4  -   Severance Pay Agreement, dated as of September 1, 2001, by and between
          the Company and John H. Steadman.

10.5  -   Severance Pay Agreement, dated as of September 25, 2001, by and between
          the Company and Todd A. Slater.

10.6  -   Schedule identifying additional documents substantially identical to the
          Severance Pay Agreement included as Exhibit 10.5.

10.7  -   Severance Agreement, dated as of September 26, 2001, by and between the
          Company and Michael T. Segraves.
</Table>