##### Table of Contents



United States
Securities and Exchange Commission
Washington, D.C. 20549

Form 10-Q

|    |  |                                                                                         
|--- |  | ----------------------------------------------------------------------------------------
|[ü] |  | 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                                        
|    |  |                                                                                         
|o   |  | 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. 0-13787

INTERMET Corporation
(Exact name of registrant as specified in its charter)

|                                                |  |                    
|----------------------------------------------- |  | -------------------
|Georgia                                         |  | 58-1563873         
|(State or other jurisdiction of                 |  | (IRS Employer      
|incorporation or organization)                  |  | Identification No.)
|                                                |  |                    
|5445 Corporate Drive, Suite 200, Troy, Michigan |  | 48098-2683         
|(Address of principal executive offices)        |  | (Zip code)         

(248) 952-2500
(Registrants telephone number, including area code)

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

At August 7, 2002 there were 25,466,303 shares of common stock, $0.10 par value,
outstanding.





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TABLE OF CONTENTS



|                                                                                              |                                                                          |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ |  |  |  |  |  |  | 
|Part I  Financial Information                                                               
|Item 1. Interim Condensed Consolidated Financial Statements (Unaudited)                      
|                                                                                              | Notes to Interim Condensed Consolidated Financial Statements (Unaudited)
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                                                              | Item 3.   Quantitative and Qualitative Disclosures about Market Risk    
|Part II  Other Information                                                                  
|Item 1. Legal Proceedings                                                                    
|                                                                                              | Item 6.   Exhibits and Reports on Form 8-K                              
|                                                                                              | Signatures                                                              
|                                                                                              | Exhibit index                                                           
|Certification of Chief Executive Officer                                                     
|Certification of Chief Financial Officer                                                     



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##### Table of Contents



INDEX

INTERMET Corporation

|         |  |             |  |                                                                                      
|-------- |  | ----------- |  | -------------------------------------------------------------------------------------
|Page No. |  | Description
|         |  |            
|3        |  | PART I      |  | FINANCIAL INFORMATION                                                                
|         |  |             |  |                                                                                      
|3        |  | Item 1      |  | Interim Condensed Consolidated Financial Statements (Unaudited)                      
|         |  |             |  |                                                                                      
|8        |  |             |  | Notes to Interim Condensed Consolidated Financial Statements (Unaudited)             
|         |  |             |  |                                                                                      
|28       |  | Item 2      |  | Managements Discussion and Analysis of Financial Condition and Results of Operations
|         |  |             |  |                                                                                      
|32       |  | Item 3      |  | Quantitative and Qualitative Disclosures About Market Risk                           
|         |  |             |  |                                                                                      
|33       |  | PART II     |  | OTHER INFORMATION                                                                    
|         |  |             |  |                                                                                      
|33       |  | Item 1      |  | Legal Proceedings                                                                    
|         |  |             |  |                                                                                      
|34       |  | Item 6      |  | Exhibits and Reports on Form 8-K                                                     
|         |  |             |  |                                                                                      
|35       |  |             |  | Signatures                                                                           
|         |  |             |  |                                                                                      
|38       |  |             |  | Exhibit List                                                                         





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##### Table of Contents






Part I  Financial Information




Item 1. Financial Statements


Interim Condensed Consolidated Statements of Income
(Unaudited)
(in thousands of dollars, except for per share data)

|                                                                                               |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |          |         |       |          |      |         |   |        | 
|---------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------- | ----------------------------------- | ----------------------------------------------------- | ------- | ------ | -------------------------- | ------- | ---- | ------------------------ | - | ------- | -------- | ------- | ----- | -------- | ---- | ------- | - | ------ | 
|                                                                                               |                                                                                              |                                     |                                                       |         |        | For the three months ended |         |      | For the six months ended |  
|                                                                                               |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |  
|                                                                                               |                                                                                              |                                     |                                                       |         |        | June 30,                   |         |      | June 30,                 |   |         | June 30, |         |       | June 30, |     
|                                                                                               |                                                                                              |                                     |                                                       |         |        | 2002                       |         |      | 2001                     |   |         | 2002     |         |       | 2001     |     
|                                                                                               |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |          |         |       |          |     
|Net sales                                                                                      |                                                                                              | $                                   | 217,958                                               |         |        | $                          | 227,997 |      |                          | $ | 424,054 |          |         | $     | 451,729  |     
|Cost of sales                                                                                  |                                                                                              |                                     | 195,013                                               |         |        |                            | 206,191 |      |                          |   | 380,590 |          |         |       | 412,578  |     
|                                                                                               |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |         
|Gross profit                                                                                   |                                                                                              |                                     | 22,945                                                |         |        |                            | 21,806  |      |                          |   | 43,464  |          |         |       | 39,151   |     
|Operating expenses:                                                                            |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |          |         |       |          |     
|                                                                                               |                                                                                              | Selling, general and administrative |                                                       |         | 8,625  |                            |         |      | 8,448                    |   |         |          | 16,685  |       |          |      | 16,339  |  
|                                                                                               |                                                                                              | Goodwill amortization               |                                                       |         |       |                            |         |      | 1,558                    |   |         |          |        |       |          |      | 3,115   |  
|                                                                                               |                                                                                              | Other operating expense (income)    |                                                       |         | 296    |                            |         |      | (136                     | ) |         |          | 237     |       |          |      | (250    | )
|                                                                                               |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |         
|Operating profit                                                                               |                                                                                              |                                     | 14,024                                                |         |        |                            | 11,936  |      |                          |   | 26,542  |          |         |       | 19,947   |     
|Other income (expense):                                                                        |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |          |         |       |          |     
|                                                                                               |                                                                                              | Interest, net                       |                                                       |         | (6,405 | )                          |         |      | (7,363                   | ) |         |          | (12,759 | )     |          |      | (15,275 | )
|                                                                                               |                                                                                              | Other income, net                   |                                                       |         | 81     |                            |         |      | 354                      |   |         |          | 627     |       |          |      | 2,199   |  
|                                                                                               |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |         
|                                                                                               |                                                                                              |                                     | (6,324                                                | )       |        |                            | (7,009  | )    |                          |   | (12,132 | )        |         |       | (13,076  | )   
|Income before income taxes                                                                     |                                                                                              |                                     | 7,700                                                 |         |        |                            | 4,927   |      |                          |   | 14,410  |          |         |       | 6,871    |     
|Provision for income taxes                                                                     |                                                                                              |                                     | 2,347                                                 |         |        |                            | 2,062   |      |                          |   | 4,702   |          |         |       | 3,206    |     
|                                                                                               |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |         
|Net income before extraordinary item
and cumulative effect of a change in
accounting principle |                                                                                              |                                     | 5,353                                                 |         |        |                            | 2,865   |      |                          |   | 9,708   |          |         |       | 3,665    |     
|                                                                                              
|Extraordinary item, net of tax                                                                 |                                                                                              |                                     | (603                                                  | )       |        |                            |         |      |                          |   | (603    | )        |         |       |          |     
|Cumulative effect of a change in
accounting principle, net of tax                              |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   | 481     |          |         |       |          |     
|                                                                                               |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |         
|Net income                                                                                     |                                                                                              | $                                   | 4,750                                                 |         |        | $                          | 2,865   |      |                          | $ | 9,586   |          |         | $     | 3,665    |     
|                                                                                               |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |         
|Earnings per common share:                                                                     |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |          |         |       |          |     
|Basic                                                                                          |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |          |         |       |          |     
|                                                                                               | Earnings before extraordinary item
and cumulative effect of a change
in accounting principle |                                     | $                                                     | 0.21    |        |                            | $       | 0.11 |                          |   | $       | 0.38     |         |       | $        | 0.14 |        
|                                                                                               |                                                                                              |                                     | Extraordinary item                                    |         |        | (0.02                      | )       |      |                          |   |         |          |         | (0.02 | )        |      |         |   |       
|                                                                                               |                                                                                              |                                     | Cumulative effect of a change in
accounting principle |         |        |                            |         |      |                          |   |         |          |         | .02   |          |      |         |   |       
|                                                                                               |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |         
|Earnings per share  basic                                                                     |                                                                                              | $                                   | 0.19                                                  |         |        | $                          | 0.11    |      |                          | $ | 0.38    |          |         | $     | 0.14     |     
|                                                                                               |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |         
|Diluted                                                                                        |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |          |         |       |          |     
|Earnings before extraordinary item
and cumulative effect of a change in
accounting principle   |                                                                                              | $                                   | 0.20                                                  |         |        | $                          | 0.11    |      |                          | $ | 0.378   |          |         | $     | 0.14     |     
|                                                                                               | Extraordinary item                                                                           |                                     |                                                       | (0.02   | )      |                            |         |      |                          |   |         | (0.023   | )       |       |          |      |        
|                                                                                               | Cumulative effect of a change in
accounting principle                                        |                                     |                                                       |         |        |                            |         |      |                          |   |         | .019     |         |       |          |      |        
|                                                                                               |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |         
|Earnings per share  diluted                                                                   |                                                                                              | $                                   | 0.18                                                  |         |        | $                          | 0.11    |      |                          | $ | 0.374   |          |         | $     | 0.14     |     
|                                                                                               |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |         
|Weighted average shares outstanding:                                                           |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |          |         |       |          |     
|                                                                                               |                                                                                              |                                     |                                                       | Basic   |        |                            | 25,433  |      |                          |   | 25,371  |          |         |       | 25,402   |      |         |   | 25,368 | 
|                                                                                               |                                                                                              |                                     |                                                       | Diluted |        |                            | 25,880  |      |                          |   | 25,481  |          |         |       | 25,712   |      |         |   | 25,438 | 
|                                                                                               |                                                                                              |                                     |                                                       |         |        |                            |         |      |                          |   |         |         

See accompanying notes.





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INTERMET Corporation

Interim Condensed Consolidated Balance Sheets

|                                       |                                                                                         |                                                                                    |         |                           |        |   |              |         |        | 
|-------------------------------------- | --------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------- | ------- | ------------------------- | ------ | - | ------------ | ------- | ------ | 
|                                       |                                                                                         |                                                                                    |         | June 30,                  |        |   | December 31, |        
|                                       |                                                                                         |                                                                                    |         | 2002                      |        |   | 2001         |        
|                                       |                                                                                         |                                                                                    |         |                           |        |   |              |        
|                                       |                                                                                         |                                                                                    |         | (Unaudited)               |        |   |              |         |       
|                                       |                                                                                         |                                                                                    |         | (in thousands of dollars) |       
|Assets                                 |                                                                                         |                                                                                    |         |                           |        |   |              |        
|Current assets:                        |                                                                                         |                                                                                    |         |                           |        |   |              |        
|                                       | Cash and cash equivalents                                                               |                                                                                    | $       | 5,905                     |        |   | $            | 13,866  |       
|                                       | Accounts receivable:                                                                    |                                                                                    |         |                           |        |   |              |         |       
|                                       |                                                                                         | Trade, less allowance for
doubtful accounts of $10,402 in
2002 and $10,727 in 2001 |         |                           | 90,977 |   |              |         | 95,601 | 
|                                       |                                                                                         | Other                                                                              |         |                           | 13,555 |   |              |         | 16,439 | 
|                                       |                                                                                         |                                                                                    |         |                           |        |   |             
|                                       |                                                                                         |                                                                                    | 104,532 |                           |        |   | 112,040      |        
|                                       | Inventories                                                                             |                                                                                    |         | 65,855                    |        |   |              | 71,857  |       
|                                       | Other current assets                                                                    |                                                                                    |         | 33,862                    |        |   |              | 33,632  |       
|                                       |                                                                                         |                                                                                    |         |                           |        |  
|Total current assets                   |                                                                                         |                                                                                    | 210,154 |                           |        |   | 231,395      |        
|                                      
|Property, plant and equipment, at cost |                                                                                         |                                                                                    | 658,677 |                           |        |   | 646,637      |        
|Less:                                  |                                                                                         |                                                                                    |         |                           |        |   |              |        
|                                       | Accumulated depreciation and
foreign industrial development
grants, net of amortization |                                                                                    |         | 306,396                   |        |   |              | 275,881 |       
|                                       |                                                                                         |                                                                                    |         |                           |        |   |             
|Net property, plant and equipment      |                                                                                         |                                                                                    | 352,281 |                           |        |   | 370,756      |        
|Goodwill                               |                                                                                         |                                                                                    | 217,016 |                           |        |   | 217,016      |        
|Other noncurrent assets                |                                                                                         |                                                                                    | 33,793  |                           |        |   | 24,166       |        
|                                       |                                                                                         |                                                                                    |         |                           |        |  
|Total assets                           |                                                                                         | $                                                                                  | 813,244 |                           |        | $ | 843,333      |        
|                                       |                                                                                         |                                                                                    |         |                           |        |  

See accompanying notes.





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INTERMET Corporation

Interim Condensed Consolidated Balance Sheets

|                                           |                                            |   |                           |         |   |              |         |         |  
|------------------------------------------ | ------------------------------------------ | - | ------------------------- | ------- | - | ------------ | ------- | ------- | -
|                                           |                                            |   | June 30,                  |         |   | December 31, |        
|                                           |                                            |   | 2002                      |         |   | 2001         |        
|                                           |                                            |   |                           |         |   |              |        
|                                           |                                            |   | (Unaudited)               |         |   |              |         |        
|                                           |                                            |   | (in thousands of dollars) |        
|Liabilities and shareholders equity       |                                            |   |                           |         |   |              |         |        
|Current liabilities:                       |                                            |   |                           |         |   |              |         |        
|                                           | Accounts payable                           |   | $                         | 78,808  |   |              | $       | 81,244  |  
|                                           | Income taxes and other accrued liabilities |   |                           | 76,434  |   |              |         | 63,008  |  
|                                           | Long term debt due within one year         |   |                           | 1,606   |   |              |         | 173,352 |  
|                                           |                                            |   |                           |         |   |             
|Total current liabilities                  |                                            |   | 156,848                   |         |   |              | 317,604 |        
|Noncurrent liabilities:                    |                                            |   |                           |         |   |              |         |        
|                                           | Long term debt due after one year          |   |                           | 306,220 |   |              |         | 190,070 |  
|                                           | Retirement benefits                        |   |                           | 60,392  |   |              |         | 60,583  |  
|                                           | Other noncurrent liabilities               |   |                           | 18,132  |   |              |         | 21,796  |  
|                                           |                                            |   |                           |         |   |             
|Total noncurrent liabilities               |                                            |   | 384,744                   |         |   |              | 272,449 |        
|                                          
|Shareholders equity:                      |                                            |   |                           |         |   |              |         |        
|                                           | Common stock                               |   |                           | 2,599   |   |              |         | 2,590   |  
|                                           | Capital in excess of par value             |   |                           | 57,058  |   |              |         | 56,761  |  
|                                           | Retained earnings                          |   |                           | 215,056 |   |              |         | 207,512 |  
|                                           | Accumulated other comprehensive income     |   |                           | (2,972  | ) |              |         | (13,389 | )
|                                           | Unearned restricted stock                  |   |                           | (89     | ) |              |         | (194    | )
|                                           |                                            |   |                           |         |   |              |        
|Total shareholders equity                 |                                            |   | 271,652                   |         |   |              | 253,280 |        
|                                           |                                            |   |                           |         |   |              |        
|Total liabilities and shareholders equity |                                            | $ | 813,244                   |         |   | $            | 843,333 |        
|                                           |                                            |   |                           |         |   |             

See accompanying notes.





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INTERMET Corporation

Interim Condensed Consolidated Statements of Cash Flows

|                                                                                        |                                                                 |   |                           |          |   |          |         |         |  
|--------------------------------------------------------------------------------------- | --------------------------------------------------------------- | - | ------------------------- | -------- | - | -------- | ------- | ------- | -
|                                                                                        |                                                                 |   | For the six months ended  |         
|                                                                                        |                                                                 |   |                           |         
|                                                                                        |                                                                 |   | June 30,                  |          |   | June 30, |        
|                                                                                        |                                                                 |   | 2002                      |          |   | 2001     |        
|                                                                                        |                                                                 |   |                           |          |   |          |        
|                                                                                        |                                                                 |   | (Unaudited)               |         
|                                                                                        |                                                                 |   | (in thousands of dollars) |         
|Operating activities:                                                                   |                                                                 |   |                           |          |   |          |         |        
|Net income                                                                              |                                                                 | $ | 9,586                     |          |   | $        | 3,665   |        
|Adjustments to reconcile net income to cash provided by (used
in) operating activities: |                                                                 |   |                           |          |   |          |         |        
|                                                                                        | Depreciation and amortization                                   |   |                           | 25,839   |   |          |         | 29,177  |  
|                                                                                        | Results of equity investment                                    |   |                           | (419     | ) |          |         | (504    | )
|                                                                                        | Net increase (decrease) in operating assets and liabilities     |   |                           | 17,347   |   |          |         | (32,408 | )
|                                                                                        |                                                                 |   |                           |          |   |         
|Net cash provided by (used in) operating activities                                     |                                                                 |   | 52,353                    |          |   |          | (70     | )      
|Investing activities:                                                                   |                                                                 |   |                           |          |   |          |         |        
|                                                                                        | Additions to property, plant and equipment                      |   |                           | (3,376   | ) |          |         | (21,853 | )
|                                                                                        | Proceeds from insurance                                         |   |                           |         |   |          |         | 2,179   |  
|                                                                                        | Additions to property, plant and equipment covered by
insurance |   |                           |          |   |          |         | (2,179  | )
|                                                                                        | Other                                                           |   |                           | 360      |   |          |         |        |  
|                                                                                        |                                                                 |   |                           |          |   |         
|Net cash used in investing activities                                                   |                                                                 |   | (3,016                    | )        |   |          | (21,853 | )      
|Financing activities:                                                                   |                                                                 |   |                           |          |   |          |         |        
|                                                                                        | Payments on term debt                                           |   |                           | (171,750 | ) |          |         |        |  
|                                                                                        | Proceeds from debt offering                                     |   |                           | 175,000  |   |          |         |        |  
|                                                                                        | Net (decrease) increase in debt                                 |   |                           | (58,898  | ) |          |         | 93,027  |  
|                                                                                        | Payment of debt issue costs                                     |   |                           | (5,100   | ) |          |         |        |  
|                                                                                        | Dividends paid                                                  |   |                           | (2,034   | ) |          |         | (2,032  | )
|                                                                                        | Issuance of common stock                                        |   |                           | 402      |   |          |         |        |  
|                                                                                        |                                                                 |   |                           |          |   |         
|Net cash (used in) provided by financing activities                                     |                                                                 |   | (62,380                   | )        |   |          | 90,995  |        
|Effect of exchange rate changes on cash and cash equivalents                            |                                                                 |   | 5,082                     |          |   |          | 1,038   |        
|                                                                                        |                                                                 |   |                           |          |   |         
|Net (decrease) increase in cash and cash equivalents                                    |                                                                 |   | (7,961                    | )        |   |          | 70,110  |        
|Cash and cash equivalents at beginning of period                                        |                                                                 |   | 13,866                    |          |   |          | 19,737  |        
|                                                                                        |                                                                 |   |                           |          |   |         
|Cash and cash equivalents at end of period                                              |                                                                 | $ | 5,905                     |          |   | $        | 89,847  |        
|                                                                                        |                                                                 |   |                           |          |   |         

See accompanying notes.





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements

June 30, 2002 (Unaudited)

1.   Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with accounting principles generally accepted in
the United States for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by accounting principles
generally accepted in the United States for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the six-month period ended June 30, 2002 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2002.

The balance sheet at December 31, 2001 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by accounting principles generally accepted in the
United States for complete financial statements.

The data provided for the three and six months ended June 30, 2001 vary from
amounts previously reported on the INTERMET Form 10-Q for the quarter ended
June 30, 2001. See note 13 to the audited financial statements contained in
the INTERMET Form 10-K for the year ended December 31, 2001 for a
reconciliation of the amounts given with those previously reported.

For further information, refer to the consolidated financial statements and
footnotes thereto included in the INTERMET annual report on Form 10-K for the
year ended December 31, 2001.

In April 2002, Statement of Financial Accounting Standards (SFAS) No. 145,
Rescission of FASB Statement 4, 44 and 64, Amendment of FASB Statement No. 13
and Technical Corrections, was issued. For most companies, SFAS 145 will
require gains and losses associated with the extinguishment of debt be
classified as income or loss from continuing operations rather than as
extraordinary items. We will be required to adopt SFAS 145 on January 1, 2003.
Upon adoption, any gain or loss on extinguishment of debt previously
classified as an extraordinary item in prior periods presented that does not
meet the criteria for such classification will be reclassified to a component
of continuing operations.





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements

June 30, 2002 (Unaudited)

2.   Inventories

Net inventories consist of the following (in thousands of dollars):

|                      |  |          |        |  |              |   |        | 
|--------------------- |  | -------- | ------ |  | ------------ | - | ------ | 
|                      |  | June 30, |        |  | December 31, |  
|                      |  | 2002     |        |  | 2001         |  
|                      |  |          |        |  |              |  
|Finished goods        |  | $        | 14,622 |  |              | $ | 15,756 | 
|Work in process       |  |          | 9,230  |  |              |   | 12,080 | 
|Raw materials         |  |          | 4,355  |  |              |   | 6,259  | 
|Supplies and patterns |  |          | 37,648 |  |              |   | 37,762 | 
|                      |  |          |        |  |              |  
|                      |  | $        | 65,855 |  |              | $ | 71,857 | 
|                      |  |          |        |  |              |  





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

3.   Property, Plant and Equipment

Gross property, plant and equipment consist of the following (in thousands of
dollars):

|                           |  |          |         |  |              |   |         | 
|-------------------------- |  | -------- | ------- |  | ------------ | - | ------- | 
|                           |  | June 30, |         |  | December 31, |  
|                           |  | 2002     |         |  | 2001         |  
|                           |  |          |         |  |              |  
|Land                       |  | $        | 5,228   |  |              | $ | 5,204   | 
|Buildings and improvements |  |          | 130,702 |  |              |   | 122,425 | 
|Machinery and equipment    |  |          | 512,943 |  |              |   | 505,025 | 
|Construction in progress   |  |          | 9,804   |  |              |   | 13,983  | 
|                           |  |          |         |  |              |  
|                           |  | $        | 658,677 |  |              | $ | 646,637 | 
|                           |  |          |         |  |              |  

4.   Adoption of Accounting Policy

We have goodwill which consists of costs in excess of net assets acquired of
$217.0 million which is net of accumulated amortization of $21.9 million at
both June 30, 2002 and December 31, 2001. On January 1, 2002, we adopted SFAS
142, Goodwill and Other Intangible Assets. Under this statement, goodwill is
no longer amortized but is subject to annual impairment tests (or more frequent
tests if impairment indicators arise). As required under SFAS 142, we wrote
off negative goodwill of $481,000, net of taxes, in the first quarter of 2002
as a cumulative effect of a change in accounting principle. In addition, we
performed impairment tests of our goodwill as required and determined that no
impairment of the goodwill existed at the effective date of adoption.

The following table is presented as if goodwill was no longer amortized as of
January 1, 2001 (in thousands of dollars, except per share data):

|                                                                                                       |                                               |   |                            |      |  |                          |       |      |               |   |       |               |  |   |       |      | 
|------------------------------------------------------------------------------------------------------ | --------------------------------------------- | - | -------------------------- | ---- |  | ------------------------ | ----- | ---- | ------------- | - | ----- | ------------- |  | - | ----- | ---- | 
|                                                                                                       |                                               |   | For the three months ended |      |  | For the six months ended |      
|                                                                                                       |                                               |   |                            |      |  |                          |      
|                                                                                                       |                                               |   | June 30, 2002              |      |  | June 30, 2001            |       |      | June 30, 2002 |   |       | June 30, 2001 | 
|                                                                                                       |                                               |   |                            |      |  |                          |       |      |               |   |       |               | 
|Reported net income after extraordinary item and
cumulative effect of a change in accounting
principle |                                               | $ | 4,750                      |      |  | $                        | 2,865 |      |               | $ | 9,586 |               |  | $ | 3,665 |     
|Add back: Goodwill amortization, net of taxes                                                          |                                               |   |                           |      |  |                          | 1,413 |      |               |   |      |               |  |   | 2,426 |     
|                                                                                                       |                                               |   |                            |      |  |                          |       |      |               |   |       |              
|Adjusted net income                                                                                    |                                               | $ | 4,750                      |      |  | $                        | 4,278 |      |               | $ | 9,586 |               |  | $ | 6,091 |     
|                                                                                                       |                                               |   |                            |      |  |                          |       |      |               |   |       |              
|Basic earnings-per-share:                                                                              |                                               |   |                            |      |  |                          |       |      |               |   |       |               |  |   |       |     
|                                                                                                       | Reported net income                           |   | $                          | 0.19 |  |                          | $     | 0.11 |               |   | $     | 0.38          |  |   | $     | 0.14 | 
|                                                                                                       | Add back: Goodwill amortization, net of taxes |   |                            |     |  |                          |       | 0.06 |               |   |       |              |  |   |       | 0.10 | 
|                                                                                                       |                                               |   |                            |      |  |                          |       |      |               |   |       |              
|                                                                                                       | Adjusted net income                           |   | $                          | 0.19 |  |                          | $     | .17  |               |   | $     | 0.38          |  |   | $     | 0.24 | 
|                                                                                                       |                                               |   |                            |      |  |                          |       |      |               |   |       |              
|Diluted earnings-per-share:                                                                            |                                               |   |                            |      |  |                          |       |      |               |   |       |               |  |   |       |     
|                                                                                                       | Reported net income                           |   | $                          | 0.18 |  |                          | $     | 0.11 |               |   | $     | 0.37          |  |   | $     | 0.14 | 
|                                                                                                       | Add back: Goodwill amortization, net of taxes |   |                            |     |  |                          |       | 0.06 |               |   |       |              |  |   |       | 0.10 | 
|                                                                                                       |                                               |   |                            |      |  |                          |       |      |               |   |       |              
|                                                                                                       | Adjusted net income                           |   | $                          | 0.18 |  |                          | $     | 0.17 |               |   | $     | 0.37          |  |   | $     | 0.24 | 
|                                                                                                       |                                               |   |                            |      |  |                          |       |      |               |   |       |              





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

5.   Debt

In July of 2001 we entered into an agreement with our banks providing for a new
term loan facility for $182.8 million, replacing an existing $200 million term
loan and a $15 million unsecured note held by Scotia Bank. At the same time, we
renegotiated certain terms of our existing $300 million revolving credit
facility. The interest rate on our revolving credit facility is currently LIBOR
plus 3.25% (as of June 30, 2002 the rate was approximately 5.1%). The
revolving credit loan facility expires in November, 2004.

On June 13, 2002, we completed a seven-year senior note offering of $175
million. The notes bear a fixed rate of interest at 9.75% and will mature on
June 15, 2009. Interest is due June 15 and December 15, commencing December
15, 2002. The notes are unsecured and will rank equally with all of our
existing and future unsecured senior debt. The net proceeds of the senior note
offering were used to pay off the remaining balance on the bank term loan
($161.7 million) and for working capital purposes. At June 30, 2002, $46
million was accessible to us under our most restrictive covenants.
Debt issuance costs of $5.1 million capitalized in connection with
the debt offering are included in other noncurrent assets
in the accompanying balance sheet and will be amortized over seven
years. See note 11
for additional information regarding the senior unsecured notes.

Long term debt consists of the following (in thousands of dollars):

|                                           |  |          |         |  |              |   |         | 
|------------------------------------------ |  | -------- | ------- |  | ------------ | - | ------- | 
|                                           |  | June 30, |         |  | December 31, |  
|                                           |  | 2002     |         |  | 2001         |  
|                                           |  |          |         |  |              |  
|Revolving credit facility                  |  | $        | 90,000  |  |              | $ | 148,000 | 
|Term loan                                  |  |          |        |  |              |   | 171,750 | 
|Industrial revenue bonds                   |  |          | 40,550  |  |              |   | 41,050  | 
|Capitalized leases and other debt          |  |          | 2,276   |  |              |   | 2,622   | 
|Senior notes from June, 2002 bond offering |  |          | 175,000 |  |              |   |        | 
|                                           |  |          |         |  |              |  
|Total debt                                 |  |          | 307,826 |  |              |   | 363,422 | 
|Less amounts due within one year           |  |          | 1,606   |  |              |   | 173,352 | 
|                                           |  |          |         |  |              |  
|Debt due after one year                    |  | $        | 306,220 |  |              | $ | 190,070 | 
|                                           |  |          |         |  |              |  

Maturities of long-term debt at June 30, 2002 and for each twelve-month period
ending
June 30 are as follows (in thousands of dollars):

|           |  |   |         | 
|---------- |  | - | ------- | 
|2003       |  | $ | 1,606   | 
|2004       |  |   | 1,475   | 
|2005       |  |   | 91,432  | 
|2006       |  |   | 2,813   | 
|2007       |  |   | 500     | 
|Thereafter |  |   | 210,000 | 
|           |  |   |        
|           |  | $ | 307,876 | 
|           |  |   |        





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

6.   Comprehensive Income

Total comprehensive income consisted of the following (in thousands of
dollars):

|                                        |                                         |   |                            |        |   |                          |       |      |          |   |        |          |  |   |       |      |  
|--------------------------------------- | --------------------------------------- | - | -------------------------- | ------ | - | ------------------------ | ----- | ---- | -------- | - | ------ | -------- |  | - | ----- | ---- | -
|                                        |                                         |   | For the three months ended |        |   | For the six months ended |      
|                                        |                                         |   |                            |        |   |                          |      
|                                        |                                         |   | June 30,                   |        |   | June 30,                 |       |      | June 30, |   |        | June 30, | 
|                                        |                                         |   | 2002                       |        |   | 2001                     |       |      | 2002     |   |        | 2001     | 
|                                        |                                         |   |                            |        |   |                          |       |      |          |   |        |          | 
|Net income                              |                                         | $ | 4,750                      |        |   | $                        | 2,865 |      |          | $ | 9,586  |          |  | $ | 3,665 |     
|Other comprehensive income (loss):      |                                         |   |                            |        |   |                          |       |      |          |   |        |          |  |   |       |     
|                                        | Fair value of interest rate swap        |   |                            | (130   | ) |                          |       | (278 | )        |   |        | 312      |  |   |       | (690 | )
|                                        | Foreign currency translation
adjustment |   |                            | 11,620 |   |                          |       | (551 | )        |   |        | 10,105   |  |   |       | (261 | )
|                                        |                                         |   |                            |        |   |                          |       |      |          |   |        |         
|Total other comprehensive income
(loss) |                                         |   | 11,490                     |        |   |                          | (829  | )    |          |   | 10,417 |          |  |   | (951  | )   
|                                        |                                         |   |                            |        |   |                          |       |      |          |   |        |         
|Total comprehensive income              |                                         | $ | 16,240                     |        |   | $                        | 2,036 |      |          | $ | 20,003 |          |  | $ | 2,714 |     
|                                        |                                         |   |                            |        |   |                          |       |      |          |   |        |         





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

7.   Reporting for Business Segments

We evaluate the operating performance of our business units individually.
Under the provisions of SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information, we have aggregated operating segments
that have similar characteristics, including manufacturing processes and raw
materials. The ferrous-metalssegment consists of ferrous foundry operations
and their related machining operations. The light-metalssegment consists of
aluminum, magnesium and zinc casting operations and their related machining
operations. Corporate and otherconsists of operations that do not fall
within the other segments and has been combined with the corporate business
unit and its related expenses and eliminations. This information is displayed
in the following table:

|                                        |                         |  |         |         |   |              |                           |        |       |               |   |              |   |  |   |         |  
|--------------------------------------- | ----------------------- |  | ------- | ------- | - | ------------ | ------------------------- | ------ | ----- | ------------- | - | ------------ | - |  | - | ------- | -
|                                        |                         |  | Ferrous |         |   |              |                           |        |       | Corporate and |   |              |   |  |  
|                                        |                         |  | Metals  |         |   | Light Metals |                           |        | Other |               |   | Consolidated |  
|                                        |                         |  |         |         |   |              |                           |        |       |               |   |              |  
|                                        |                         |  |         |         |   |              | (in thousands of dollars) |        |       |               |   |             
|Three-month period ended June 30, 2002: |                         |  |         |         |   |              |                           |        |       |               |   |              |   |  |   |        
|                                        | Net sales               |  | $       | 140,145 |   |              | $                         | 74,202 |       |               | $ | 3,611        |   |  | $ | 217,958 |  
|                                       
|                                        | Operating profit (loss) |  |         | 8,986   |   |              |                           | 7,326  |       |               |   | (2,288       | ) |  |   | 14,024  |  
|                                        | Interest, net           |  |         | (965    | ) |              |                           | (1,038 | )     |               |   | (4,402       | ) |  |   | (6,405  | )
|                                        | Other, net              |  |         |        |   |              |                           |       |       |               |   | 81           |   |  |   | 81      |  
|                                        | Taxes                   |  |         | (2,611  | ) |              |                           | (2,502 | )     |               |   | 2,766        |   |  |   | (2,347  | )
|                                        | Extraordinary item      |  |         |        |   |              |                           |       |       |               |   | (603         | ) |  |   | (603    | )
|                                        |                         |  |         |         |   |              |                           |        |       |               |   |              |   |  |  
|                                        | Net income              |  |         |         |   |              |                           |        |       |               |   |              |   |  | $ | 4,750   |  
|                                        |                         |  |         |         |   |              |                           |        |       |               |   |              |   |  |  
|Three-month period ended June 30, 2001: |                         |  |         |         |   |              |                           |        |       |               |   |              |   |  |   |        
|                                        | Net sales               |  | $       | 142,024 |   |              | $                         | 81,750 |       |               | $ | 4,223        |   |  | $ | 227,997 |  
|                                       
|                                        | Operating profit (loss) |  |         | 11,070  |   |              |                           | 5,875  |       |               |   | (5,009       | ) |  |   | 11,936  |  
|                                        | Interest, net           |  |         | (1,526  | ) |              |                           | (1,609 | )     |               |   | (4,228       | ) |  |   | (7,363  | )
|                                        | Other, net              |  |         |        |   |              |                           |       |       |               |   | 354          |   |  |   | 354     |  
|                                        | Taxes                   |  |         | (3,246  | ) |              |                           | (1,814 | )     |               |   | 2,998        |   |  |   | (2,062  | )
|                                        |                         |  |         |         |   |              |                           |        |       |               |   |              |   |  |  
|                                        | Net income              |  |         |         |   |              |                           |        |       |               |   |              |   |  | $ | 2,865   |  
|                                        |                         |  |         |         |   |              |                           |        |       |               |   |              |   |  |  





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

|                                      |                                                       |  |         |         |   |              |                           |         |       |               |   |              |   |  |   |         |  
|------------------------------------- | ----------------------------------------------------- |  | ------- | ------- | - | ------------ | ------------------------- | ------- | ----- | ------------- | - | ------------ | - |  | - | ------- | -
|                                      |                                                       |  | Ferrous |         |   |              |                           |         |       | Corporate and |   |              |   |  |  
|                                      |                                                       |  | Metals  |         |   | Light Metals |                           |         | Other |               |   | Consolidated |  
|                                      |                                                       |  |         |         |   |              |                           |         |       |               |   |              |  
|                                      |                                                       |  |         |         |   |              | (in thousands of dollars) |         |       |               |   |             
|Six-month period ended June 30, 2002: |                                                       |  |         |         |   |              |                           |         |       |               |   |              |   |  |   |        
|                                      | Net sales                                             |  | $       | 273,782 |   |              | $                         | 143,409 |       |               | $ | 6,863        |   |  | $ | 424,054 |  
|                                     
|                                      | Operating profit (loss)                               |  |         | 16,703  |   |              |                           | 13,644  |       |               |   | (3,805       | ) |  |   | 26,542  |  
|                                      | Interest, net                                         |  |         | (2,379  | ) |              |                           | (2,227  | )     |               |   | (8,153       | ) |  |   | (12,759 | )
|                                      | Other, net                                            |  |         |        |   |              |                           |        |       |               |   | 627          |   |  |   | 627     |  
|                                      | Taxes                                                 |  |         | (4,811  | ) |              |                           | (4,567  | )     |               |   | 4,676        |   |  |   | (4,702  | )
|                                      | Extraordinary item                                    |  |         |        |   |              |                           |        |       |               |   | (603         | ) |  |   | (603    | )
|                                      | Cumulative effect of a
change in accounting
principle |  |         | 481     |   |              |                           |        |       |               |   |             |   |  |   | 481     |  
|                                      |                                                       |  |         |         |   |              |                           |         |       |               |   |              |   |  |  
|                                      | Net income                                            |  |         |         |   |              |                           |         |       |               |   |              |   |  | $ | 9,586   |  
|                                      |                                                       |  |         |         |   |              |                           |         |       |               |   |              |   |  |  
|Six-month period ended June 30, 2001: |                                                       |  |         |         |   |              |                           |         |       |               |   |              |   |  |   |        
|                                      | Net sales                                             |  | $       | 283,129 |   |              | $                         | 160,615 |       |               | $ | 7,985        |   |  | $ | 451,729 |  
|                                     
|                                      | Operating profit (loss)                               |  |         | 21,342  |   |              |                           | 6,930   |       |               |   | (8,325       | ) |  |   | 19,947  |  
|                                      | Interest, net                                         |  |         | (2,986  | ) |              |                           | (3,176  | )     |               |   | (9,113       | ) |  |   | (15,275 | )
|                                      | Other, net                                            |  |         | 1,555   |   |              |                           |        |       |               |   | 644          |   |  |   | 2,199   |  
|                                      | Taxes                                                 |  |         | (6,755  | ) |              |                           | (1,835  | )     |               |   | 5,384        |   |  |   | (3,206  | )
|                                      |                                                       |  |         |         |   |              |                           |         |       |               |   |              |   |  |  
|                                      | Net income                                            |  |         |         |   |              |                           |         |       |               |   |              |   |  | $ | 3,665   |  
|                                      |                                                       |  |         |         |   |              |                           |         |       |               |   |              |   |  |  





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

8.   Environmental and Legal Matters

INTERMET and its subsidiaries are a party to a number of environmental matters
and legal proceedings in the ordinary course of business.

On March 14, 2002, we entered into a Consent Order with the U.S. Environmental
Protection Agency, which will require investigation of the nature and extent of
any hazardous waste disposed of at our Radford, Virginia facilities. We have
entered into this Consent Order in connection with the U.S. EPAs Corrective
Action Program. The Corrective Action Program is being undertaken on a
nationwide basis by U.S. EPA pursuant to the Resource Conservation and Recovery
Act of 1976. The Corrective Action Program requires facilities that have
historically generated or handled hazardous waste to determine whether those
activities have or could adversely affect groundwater or adversely affect human
health. We are in the early stages of this investigation. Because we
historically disposed of waste material at this site, it is possible that fines
or penalties could be assessed, or that remedial action could be required, with
respect to that on-site disposal. At this time we cannot predict the amount of
potential fines or penalties or the cost of remedial action, if any.

On March 5, 2000 we suffered a catastrophic
accidental explosion and fire at our New River Foundry, located in Radford, Virginia. Three employees were
fatally injured and others were injured, several seriously. On March 2, 2002
the representatives of the three deceased employees, and three of the injured
employees, filed lawsuits seeking damages from us and others in the Circuit
Court for the City of Radford, Virginia City Court. It is also possible that
one or more of the other defendants in these cases might assert cross-claims
against us. We intend to defend these lawsuits on the ground that, among other
things, the claims asserted against us are barred by the laws of Virginia
governing workers compensation. We have both primary and excess liability
insurance policies covering potential liability to employees and others and
believes that it is adequately insured against any likely liability for the
deaths or injuries arising out of this incident. However, if we were held to
be liable in these cases, and if its insurance policies did not provide
coverage for the damages, the amounts that could be incurred could be material.





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

We are also a party to a number of other legal proceedings in the ordinary
course of business. We do not believe that such other pending or threatened
legal proceedings to which we are a party, or to which any of our property is
subject, will have a material adverse effect on our consolidated financial
position, results of operations or liquidity taken as a whole.

9. Earnings per Share

Basic earnings per share is computed by dividing income available to
shareholders of common stock by the weighted average number of common shares
outstanding for the period. The dilutive earnings per share calculation
reflects the assumed exercise of stock options and issuance of unearned
restricted stock.





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)
(in thousands of dollars, except per share data)

|                                 |                                                                                                               |   |      |        |                            |   |      |                          |  |   |          |        |   |          |      |        |  |  | 
|-------------------------------- | ------------------------------------------------------------------------------------------------------------- | - | ---- | ------ | -------------------------- | - | ---- | ------------------------ |  | - | -------- | ------ | - | -------- | ---- | ------ |  |  | 
|                                 |                                                                                                               |   |      |        | For the three months ended |   |      | For the six months ended | 
|                                 |                                                                                                               |   |      |        |                            |   |      |                          | 
|                                 |                                                                                                               |   |      |        | June 30,                   |   |      | June 30,                 |  |   | June 30, |        |   | June 30, |     
|                                 |                                                                                                               |   |      |        | 2002                       |   |      | 2001                     |  |   | 2002     |        |   | 2001     |     
|                                 |                                                                                                               |   |      |        |                            |   |      |                          |  |   |          |        |   |          |     
|Numerator:                       |                                                                                                               |   |      |        |                            |   |      |                          |  |   |          |        |   |          |      |       
|                                 | Net Income                                                                                                    |   | $    | 4,750  |                            |   | $    | 2,865                    |  |   | $        | 9,586  |   |          | $    | 3,665  | 
|Denominator:                     |                                                                                                               |   |      |        |                            |   |      |                          |  |   |          |        |   |          |      |       
|                                 | Denominator for basic earnings
per share  weighted average
shares                                            |   |      | 25,444 |                            |   |      | 25,371                   |  |   |          | 25,413 |   |          |      | 25,368 | 
|                                 | Effect of shares held in
deferred compensation plan                                                           |   |      | (11    | )                          |   |      |                         |  |   |          | (11    | ) |          |      |       | 
|                                 |                                                                                                               |   |      |        |                            |   |      |                          |  |   |          |        |  
|                                 | Denominator for basic earnings
per share  adjusted weighted
average shares                                   |   |      | 25,433 |                            |   |      | 25,371                   |  |   |          | 25,402 |   |          |      | 25,368 | 
|                                 |                                                                                                               |   |      |        |                            |   |      |                          |  |   |          |        |  
|                                 | Effect of dilutive securities:                                                                                |   |      |        |                            |   |      |                          |  |   |          |        |   |          |      |        | 
|                                 | Shares held in deferred
compensation plan                                                                     |   |      | 11     |                            |   |      |                         |  |   |          | 11     |   |          |      |       | 
|                                 | Employee stock options and
unearned restricted stock                                                          |   |      | 436    |                            |   |      | 110                      |  |   |          | 299    |   |          |      | 70     | 
|                                 |                                                                                                               |   |      |        |                            |   |      |                          |  |   |          |        |  
|                                 | Denominator for diluted earnings
per share  adjusted weighted
average shares and assumed exercise of options |   |      | 25,880 |                            |   |      | 25,481                   |  |   |          | 25,712 |   |          |      | 25,438 | 
|                                 |                                                                                                               |   |      |        |                            |   |      |                          |  |   |          |        |  
|Basic earnings per share         |                                                                                                               | $ | 0.19 |        |                            | $ | 0.11 |                          |  | $ | 0.38     |        |   | $        | 0.14 |       
|                                 |                                                                                                               |   |      |        |                            |   |      |                          |  |   |          |       
|Fully diluted earnings per share |                                                                                                               | $ | 0.18 |        |                            | $ | 0.11 |                          |  | $ | 0.37     |        |   | $        | 0.14 |       
|                                 |                                                                                                               |   |      |        |                            |   |      |                          |  |   |          |       





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

10.   Impairment of Assets and Shutdown

We permanently closed our Alexander City lost foam aluminum plant (Alexander
City) on December 21, 2001. The Alexander City plant assets are being held for
sale. Alexander City is included in the light metals segment of the Reporting
For Business Segments footnote. The plant was purchased in 1995 and had
employed 117 people. Alexander City had significant operational difficulties
with the launches of complex components in late 2000 through the first quarter
of 2001. This caused its two principal customers to question the long-term
viability of the facility. They began a re-sourcing process that became too
difficult and expensive to be retracted once the turnaround at the plant had
occurred. Alexander City had revenues and operating losses of $23 million and
$3 million, respectively, for the six months ended June 30, 2001.

The decision to close this foundry was the principal reason for recording an
$11.7 million charge for impairment of assets and a $1.2 million charge for
shutdown costs in the fourth quarter of 2001. The accrual for shutdown costs
which is included in Accrued liabilities in the accompanying balance sheets
as of December 31, 2001 consisted of $0.7 million for site remediation and
disposal costs, $0.4 million for severance (for 18 salaried employees) and
employee pay related costs, and $0.1 million in legal costs. During the six
months ended June 30, 2002, Intermet paid all of the $0.4 million of severance
accrued for at December 31, 2001.





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

11.   Supplemental Condensed Consolidating Financial Information

On June 13, 2002, we issued $175 million of senior notes, which will mature in
2009. The senior notes are guaranteed by each of our domestic wholly-owned
subsidiaries other than Intermet International, Inc., Intermet Holding Company,
Transnational Indemnity Company, and Western Capital Corporation (Combined
Guarantor Subsidiaries). The guarantees are unconditional and joint and
several. The senior notes are subordinated to any secured debt of the Company.

As of June 30, 2002, we and the guarantors had approximately $132.4 million of
secured debt outstanding and approximately $155.7 million of unused
commitments, net of outstanding letters of credit, under our credit facility.
Some of our subsidiaries, including all of our foreign subsidiaries, are not
guarantors of the notes (Combined Non-Guarantor Subsidiaries). The notes are
also effectively subordinated to any debt and other liabilities of our
subsidiaries that are not guarantors. Our non-guarantor subsidiaries had
approximately $0.4 million of debt outstanding as of June 30, 2002. Under the
terms of the indenture covering the notes, we are permitted to incur additional
secured debt up to an amount as defined in the offering, which was $232.6
million at June 30, 2002. Other restrictions include restricted payments,
repurchasing our capital stock, disposal of assets, affiliate transactions, and
transfer of assets.

Presented below are summarized condensed consolidating financial information
for the Company (Parent), the Combined Guarantor Subsidiaries, the Combined
Non-Guarantor Subsidiaries and the Company on a consolidated basis as of June
30, 2002 and December 31, 2001, and for the three and six months ended June 30,
2002 and 2001.

Investments in subsidiaries are presented using the equity method of
accounting. Separate financial statements of the Combined Guarantor
Subsidiaries are not provided as the consolidating condensed financial
information contained herein provides a more meaningful disclosure to allow
investors to determine the nature of the assets held by and the operations of
the combined groups.





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|                                            |                                |   |                                  |        |   |              |           |        |              |               |        |              |  |   |              |   |  |   |         |        |  
|------------------------------------------- | ------------------------------ | - | -------------------------------- | ------ | - | ------------ | --------- | ------ | ------------ | ------------- | ------ | ------------ |  | - | ------------ | - |  | - | ------- | ------ | -
|                                            |                                |   | Three months ended June 30, 2002 |       
|                                            |                                |   |                                  |       
|                                            |                                |   |                                  |        |   |              | Combined  |        |              | Combined      |        |              |  |   |              |   |  |   |        
|                                            |                                |   |                                  |        |   |              | Guarantor |        |              | Non-Guarantor |        |              |  |   |              |   |  |   |        
|                                            |                                |   | Parent                           |        |   | Subsidiaries |           |        | Subsidiaries |               |        | Eliminations |  |   | Consolidated |  
|                                            |                                |   |                                  |        |   |              |           |        |              |               |        |              |  |   |              |  
|                                            |                                |   | (in thousands of dollars)        |       
|INCOME STATEMENT DATA                       |                                |   |                                  |        |   |              |           |        |              |               |        |              |  |   |              |   |  |   |         |       
|Net sales                                   |                                | $ |                                 |        |   | $            | 198,388   |        |              | $             | 23,318 |              |  | $ | (3,748       | ) |  | $ | 217,958 |       
|Cost of sales                               |                                |   | (54                              | )      |   |              | 178,664   |        |              |               | 20,160 |              |  |   | (3,757       | ) |  |   | 195,013 |       
|                                            |                                |   |                                  |        |   |              |           |        |              |               |        |              |  |   |             
|Gross profit                                |                                |   | 54                               |        |   |              | 19,724    |        |              |               | 3,158  |              |  |   | 9            |   |  |   | 22,945  |       
|Selling, general and administrative         |                                |   | 1,598                            |        |   |              | 5,396     |        |              |               | 1,440  |              |  |   | 191          |   |  |   | 8,625   |       
|Other operating (income) expenses           |                                |   | 35                               |        |   |              | 11        |        |              |               | 440    |              |  |   | (190         | ) |  |   | 296     |       
|                                            |                                |   |                                  |        |   |              |           |        |              |               |        |              |  |   |             
|Operating (loss) profit                     |                                |   | (1,579                           | )      |   |              | 14,317    |        |              |               | 1,278  |              |  |   | 8            |   |  |   | 14,024  |       
|Other income and expenses:                  |                                |   |                                  |        |   |              |           |        |              |               |        |              |  |   |              |   |  |   |         |       
|                                            | Interest (expense) income, net |   |                                  | (4,316 | ) |              |           | (2,194 | )            |               |        | 105          |  |   |              |  |  |   |         | (6,405 | )
|                                            | Other, net                     |   |                                  | (264   | ) |              |           | 182    |              |               |        | 163          |  |   |              |  |  |   |         | 81     |  
|                                            |                                |   |                                  |        |   |              |           |        |              |               |        |              |  |   |             
|Income (loss) before income taxes           |                                |   | (6,159                           | )      |   |              | 12,305    |        |              |               | 1,546  |              |  |   | 8            |   |  |   | 7,700   |       
|Income tax (benefit) expense                |                                |   | (2,562                           | )      |   |              | 4,837     |        |              |               | 72     |              |  |   |             |   |  |   | 2,347   |       
|                                            |                                |   |                                  |        |   |              |           |        |              |               |        |              |  |   |             
|Net (loss) income before extraordinary item |                                |   | (3,597                           | )      |   |              | 7,468     |        |              |               | 1,474  |              |  |   | 8            |   |  |   | 5,353   |       
|Extraordinary item, net of tax              |                                |   | (603                             | )      |   |              |           |        |              |               |        |              |  |   |              |   |  |   | (603    | )     
|                                            |                                |   |                                  |        |   |              |           |        |              |               |        |              |  |   |             
|Net (loss) income                           |                                | $ | (4,200                           | )      |   | $            | 7,468     |        |              | $             | 1,474  |              |  | $ | 8            |   |  | $ | 4,750   |       
|                                            |                                |   |                                  |        |   |              |           |        |              |               |        |              |  |   |             





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

|                                    |                                |   |                                  |        |   |              |           |        |              |               |        |              |   |   |              |   |  |   |         |        |  
|----------------------------------- | ------------------------------ | - | -------------------------------- | ------ | - | ------------ | --------- | ------ | ------------ | ------------- | ------ | ------------ | - | - | ------------ | - |  | - | ------- | ------ | -
|                                    |                                |   | Three months ended June 30, 2001 |       
|                                    |                                |   |                                  |       
|                                    |                                |   |                                  |        |   |              | Combined  |        |              | Combined      |        |              |   |   |              |   |  |   |        
|                                    |                                |   |                                  |        |   |              | Guarantor |        |              | Non-Guarantor |        |              |   |   |              |   |  |   |        
|                                    |                                |   | Parent                           |        |   | Subsidiaries |           |        | Subsidiaries |               |        | Eliminations |   |   | Consolidated |  
|                                    |                                |   |                                  |        |   |              |           |        |              |               |        |              |   |   |              |  
|                                    |                                |   | (in thousands of dollars)        |       
|INCOME STATEMENT DATA               |                                |   |                                  |        |   |              |           |        |              |               |        |              |   |   |              |   |  |   |         |       
|Net sales                           |                                | $ |                                 |        |   | $            | 209,286   |        |              | $             | 22,699 |              |   | $ | (3,988       | ) |  | $ | 227,997 |       
|Cost of sales                       |                                |   | 431                              |        |   |              | 190,875   |        |              |               | 18,117 |              |   |   | (3,232       | ) |  |   | 206,191 |       
|                                    |                                |   |                                  |        |   |              |           |        |              |               |        |              |   |   |             
|Gross profit                        |                                |   | (431                             | )      |   |              | 18,411    |        |              |               | 4,582  |              |   |   | (756         | ) |  |   | 21,806  |       
|Selling, general and administrative |                                |   | 1,564                            |        |   |              | 6,613     |        |              |               | 1,796  |              |   |   | 33           |   |  |   | 10,006  |       
|Other operating (income) expenses   |                                |   | (27                              | )      |   |              | 674       |        |              |               | (750   | )            |   |   | (33          | ) |  |   | (136    | )     
|                                    |                                |   |                                  |        |   |              |           |        |              |               |        |              |   |   |             
|Operating (loss) profit             |                                |   | (1,968                           | )      |   |              | 11,124    |        |              |               | 3,536  |              |   |   | (756         | ) |  |   | 11,936  |       
|Other income and expenses:          |                                |   |                                  |        |   |              |           |        |              |               |        |              |   |   |              |   |  |   |         |       
|                                    | Interest (expense) income, net |   |                                  | (4,452 | ) |              |           | (3,082 | )            |               |        | 171          |   |   |              |  |  |   |         | (7,363 | )
|                                    | Other, net                     |   |                                  | 10     |   |              |           | 389    |              |               |        | (45          | ) |   |              |  |  |   |         | 354    |  
|                                    |                                |   |                                  |        |   |              |           |        |              |               |        |              |   |   |             
|Income (loss) before income taxes   |                                |   | (6,410                           | )      |   |              | 8,431     |        |              |               | 3,662  |              |   |   | (756         | ) |  |   | 4,927   |       
|Income tax (benefit) expense        |                                |   | (1,911                           | )      |   |              | 3,466     |        |              |               | 765    |              |   |   | (258         | ) |  |   | 2,062   |       
|                                    |                                |   |                                  |        |   |              |           |        |              |               |        |              |   |   |             
|Net (loss) income                   |                                | $ | (4,499                           | )      |   | $            | 4,965     |        |              | $             | 2,897  |              |   | $ | (498         | ) |  | $ | 2,865   |       
|                                    |                                |   |                                  |        |   |              |           |        |              |               |        |              |   |   |             





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

|                                                                                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |              |   |  |   |         |         |  
|--------------------------------------------------------------------------------------------------- | ------------------------------ | - | ------------------------------ | ------ | - | ------------ | --------- | ------ | ------------ | ------------- | ------ | ------------ |  | - | ------------ | - |  | - | ------- | ------- | -
|                                                                                                    |                                |   | Six months ended June 30, 2002 |       
|                                                                                                    |                                |   |                                |       
|                                                                                                    |                                |   |                                |        |   |              | Combined  |        |              | Combined      |        |              |  |   |              |   |  |   |        
|                                                                                                    |                                |   |                                |        |   |              | Guarantor |        |              | Non-Guarantor |        |              |  |   |              |   |  |   |        
|                                                                                                    |                                |   | Parent                         |        |   | Subsidiaries |           |        | Subsidiaries |               |        | Eliminations |  |   | Consolidated |  
|                                                                                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |              |  
|                                                                                                    |                                |   | (in thousands of dollars)      |       
|INCOME STATEMENT DATA                                                                               |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |              |   |  |   |         |        
|Net sales                                                                                           |                                | $ |                               |        |   | $            | 385,324   |        |              | $             | 45,621 |              |  | $ | (6,891       | ) |  | $ | 424,054 |        
|Cost of sales                                                                                       |                                |   | (35                            | )      |   |              | 348,175   |        |              |               | 39,341 |              |  |   | (6,891       | ) |  |   | 380,590 |        
|                                                                                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |             
|Gross profit                                                                                        |                                |   | 35                             |        |   |              | 37,149    |        |              |               | 6,280  |              |  |   |             |   |  |   | 43,464  |        
|Selling, general and administrative                                                                 |                                |   | 2,413                          |        |   |              | 10,837    |        |              |               | 3,054  |              |  |   | 381          |   |  |   | 16,685  |        
|Other operating (income) expenses                                                                   |                                |   | 101                            |        |   |              | (1        | )      |              |               | 517    |              |  |   | (380         | ) |  |   | 237     |        
|                                                                                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |             
|Operating (loss) profit                                                                             |                                |   | (2,479                         | )      |   |              | 26,313    |        |              |               | 2,709  |              |  |   | (1           | ) |  |   | 26,542  |        
|Other income and expenses:                                                                          |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |              |   |  |   |         |        
|                                                                                                    | Interest (expense) income, net |   |                                | (7,986 | ) |              |           | (4,926 | )            |               |        | 153          |  |   |              |  |  |   |         | (12,759 | )
|                                                                                                    | Other, net                     |   |                                | (264   | ) |              |           | 379    |              |               |        | 512          |  |   |              |  |  |   |         | 627     |  
|                                                                                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |             
|Income (loss) before income taxes                                                                   |                                |   | (10,729                        | )      |   |              | 21,766    |        |              |               | 3,374  |              |  |   | (1           | ) |  |   | 14,410  |        
|Income tax (benefit) expense                                                                        |                                |   | (4,300                         | )      |   |              | 8,622     |        |              |               | 380    |              |  |   |             |   |  |   | 4,702   |        
|                                                                                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |             
|Net (loss) income before extraordinary item and
cumulative effect of change in accounting principle |                                |   | (6,429                         | )      |   |              | 13,144    |        |              |               | 2,994  |              |  |   | (1           | ) |  |   | 9,708   |        
|Extraordinary item, net of tax                                                                      |                                |   | (603                           | )      |   |              |          |        |              |               |       |              |  |   |             |   |  |   | (603    | )      
|Cumulative effect of change in accounting principle,
net of tax                                     |                                |   |                               |        |   |              |          |        |              |               | 481    |              |  |   |             |   |  |   | 481     |        
|                                                                                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |             
|Net (loss) income                                                                                   |                                | $ | (7,032                         | )      |   | $            | 13,144    |        |              | $             | 3,475  |              |  | $ | (1           | ) |  | $ | 9,586   |        
|                                                                                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |             





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

|                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |              |   |  |   |         |         |  
|----------------------------------- | ------------------------------ | - | ------------------------------ | ------ | - | ------------ | --------- | ------ | ------------ | ------------- | ------ | ------------ |  | - | ------------ | - |  | - | ------- | ------- | -
|                                    |                                |   | Six months ended June 30, 2001 |       
|                                    |                                |   |                                |       
|                                    |                                |   |                                |        |   |              | Combined  |        |              | Combined      |        |              |  |   |              |   |  |   |        
|                                    |                                |   |                                |        |   |              | Guarantor |        |              | Non-Guarantor |        |              |  |   |              |   |  |   |        
|                                    |                                |   | Parent                         |        |   | Subsidiaries |           |        | Subsidiaries |               |        | Eliminations |  |   | Consolidated |  
|                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |              |  
|                                    |                                |   | (in thousands of dollars)      |       
|INCOME STATEMENT DATA               |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |              |   |  |   |         |        
|Net sales                           |                                | $ |                               |        |   | $            | 413,560   |        |              | $             | 48,245 |              |  | $ | (10,076      | ) |  | $ | 451,729 |        
|Cost of sales                       |                                |   | 890                            |        |   |              | 382,833   |        |              |               | 38,085 |              |  |   | (9,230       | ) |  |   | 412,578 |        
|                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |             
|Gross profit                        |                                |   | (890                           | )      |   |              | 30,727    |        |              |               | 10,160 |              |  |   | (846         | ) |  |   | 39,151  |        
|Selling, general and administrative |                                |   | 2,526                          |        |   |              | 13,326    |        |              |               | 3,455  |              |  |   | 147          |   |  |   | 19,454  |        
|Other operating (income) expenses   |                                |   | 575                            |        |   |              | 62        |        |              |               | (740   | )            |  |   | (147         | ) |  |   | (250    | )      
|                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |             
|Operating (loss) profit             |                                |   | (3,991                         | )      |   |              | 17,339    |        |              |               | 7,445  |              |  |   | (846         | ) |  |   | 19,947  |        
|Other income and expenses:          |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |              |   |  |   |         |        
|                                    | Interest (expense) income, net |   |                                | (9,172 | ) |              |           | (6,593 | )            |               |        | 490          |  |   |              |  |  |   |         | (15,275 | )
|                                    | Other, net                     |   |                                | 30     |   |              |           | 395    |              |               |        | 1,774        |  |   |              |  |  |   |         | 2,199   |  
|                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |             
|Income (loss) before income taxes   |                                |   | (13,133                        | )      |   |              | 11,141    |        |              |               | 9,709  |              |  |   | (846         | ) |  |   | 6,871   |        
|Income tax (benefit) expense        |                                |   | (3,940                         | )      |   |              | 4,858     |        |              |               | 2,546  |              |  |   | (258         | ) |  |   | 3,206   |        
|                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |             
|Net (loss) income                   |                                | $ | (9,193                         | )      |   | $            | 6,283     |        |              | $             | 7,163  |              |  | $ | (588         | ) |  | $ | 3,665   |        
|                                    |                                |   |                                |        |   |              |           |        |              |               |        |              |  |   |             





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |     |         |         |         |         | 
|------------------------------------------ | ---------------------------------- | ------------------------- | -------------------- | ------- | ------------------------- | ------ | ------- | ------------ | --------- | ------- | ------------ | ------------- | ------ | ------------ | -------- | -------- | ------------ | --- | ------- | ------- | ------- | ------- | 
|                                           |                                    |                           |                      |         | June 30, 2002             |       
|                                           |                                    |                           |                      |         |                           |       
|                                           |                                    |                           |                      |         |                           |        |         |              | Combined  |         |              | Combined      |        |              |          |          |              |     |         |         |        
|                                           |                                    |                           |                      |         |                           |        |         |              | Guarantor |         |              | Non-Guarantor |        |              |          |          |              |     |         |         |        
|                                           |                                    |                           |                      |         | Parent                    |        |         | Subsidiaries |           |         | Subsidiaries |               |        | Eliminations |          |          | Consolidated |    
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |    
|                                           |                                    |                           |                      |         | (in thousands of dollars) |       
|BALANCE SHEET DATA                         |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |     |         |        
|ASSETS                                     |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |     |         |        
|Current assets:                            |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |     |         |        
|                                           | Cash and cash equivalents          |                           | $                    | 1,394   |                           |        | $       | 2,079        |           |         | $            | 2,432         |        |              | $        |         |              |     | $       | 5,905   |        
|                                           | Accounts receivable, net           |                           |                      | 149     |                           |        |         | 78,273       |           |         |              | 26,110        |        |              |          |         |              |     |         | 104,532 |        
|                                           | Inventories, net                   |                           |                      |        |                           |        |         | 56,925       |           |         |              | 8,989         |        |              |          | (59      | )            |     |         | 65,855  |        
|                                           | Other current assets               |                           |                      | 30,103  |                           |        |         | 3,102        |           |         |              | 656           |        |              |          | 1        |              |     |         | 33,862  |        
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |         
|                                           |                                    |                           | Total current assets |         |                           | 31,646 |         |              |           | 140,379 |              |               |        | 38,187       |          |          |              | (58 | )       |         |         | 210,154 | 
|Property, plant and equipment, net         |                                    |                           | 3,473                |         |                           |        | 315,655 |              |           |         | 32,591       |               |        |              | 562      |          |              |     | 352,281 |        
|Other assets:                              |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |     |         |        
|                                           | Goodwill                           |                           |                      |        |                           |        |         | 217,016      |           |         |              |              |        |              |          |         |              |     |         | 217,016 |        
|                                           | Other noncurrent assets            |                           |                      | 20,123  |                           |        |         | 3,327        |           |         |              | 8,900         |        |              |          | 1,443    |              |     |         | 33,793  |        
|                                           | Intercompany, net                  |                           |                      | (12,744 | )                         |        |         | 39,021       |           |         |              | (27,879       | )      |              |          | 1,602    |              |     |         |        |        
|                                           | Investments in subsidiaries        |                           |                      | 587,845 |                           |        |         |             |           |         |              |              |        |              |          | (587,845 | )            |     |         |        |        
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |         
|Total assets                               |                                    | $                         | 630,343              |         |                           | $      | 715,398 |              |           | $       | 51,799       |               |        | $            | (584,296 | )        |              | $   | 813,244 |        
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |         
|LIABILITIES AND SHAREHOLDERS
EQUITY       |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |     |         |        
|Current liabilities:                       |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |     |         |        
|                                           | Accounts payable                   |                           | $                    | 1,393   |                           |        | $       | 72,499       |           |         | $            | 5,731         |        |              | $        | (815     | )            |     | $       | 78,808  |        
|                                           | Accrued expenses and other         |                           |                      | 18,059  |                           |        |         | 42,677       |           |         |              | 15,068        |        |              |          | 630      |              |     |         | 76,434  |        
|                                           | Long-term debt due within
one year |                           |                      | 350     |                           |        |         | 1,097        |           |         |              | 159           |        |              |          |         |              |     |         | 1,606   |        
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |         
|                                           |                                    | Total current liabilities |                      |         | 19,802                    |        |         |              | 116,273   |         |              |               | 20,958 |              |          |          | (185         | )   |         |         | 156,848 |        
|Long-term debt                             |                                    |                           | 267,700              |         |                           |        | 38,278  |              |           |         | 242          |               |        |              |         |          |              |     | 306,220 |        
|Retirement benefits                        |                                    |                           | 54,680               |         |                           |        | 5,712   |              |           |         |             |               |        |              |         |          |              |     | 60,392  |        
|Other non-current liabilities              |                                    |                           | 16,509               |         |                           |        | 7,113   |              |           |         | (6,237       | )             |        |              | 747      |          |              |     | 18,132  |        
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |         
|                                           | Total long-term liabilities        |                           |                      | 338,889 |                           |        |         | 51,103       |           |         |              | (5,995        | )      |              |          | 747      |              |     |         | 384,744 |        
|Shareholders equity                       |                                    |                           | 271,652              |         |                           |        | 548,022 |              |           |         | 36,836       |               |        |              | (584,858 | )        |              |     | 271,652 |        
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |         
|Total liabilities and shareholders equity |                                    | $                         | 630,343              |         |                           | $      | 715,398 |              |           | $       | 51,799       |               |        | $            | (584,296 | )        |              | $   | 813,244 |        
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |         





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |     |         |         |         |         | 
|------------------------------------------ | ---------------------------------- | ------------------------- | -------------------- | ------- | ------------------------- | ------ | ------- | ------------ | --------- | ------- | ------------ | ------------- | ------ | ------------ | -------- | -------- | ------------ | --- | ------- | ------- | ------- | ------- | 
|                                           |                                    |                           |                      |         | December 31, 2001         |       
|                                           |                                    |                           |                      |         |                           |       
|                                           |                                    |                           |                      |         |                           |        |         |              | Combined  |         |              | Combined      |        |              |          |          |              |     |         |         |        
|                                           |                                    |                           |                      |         |                           |        |         |              | Guarantor |         |              | Non-Guarantor |        |              |          |          |              |     |         |         |        
|                                           |                                    |                           |                      |         | Parent                    |        |         | Subsidiaries |           |         | Subsidiaries |               |        | Eliminations |          |          | Consolidated |    
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |    
|                                           |                                    |                           |                      |         | (in thousands of dollars) |       
|BALANCE SHEET DATA                         |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |     |         |        
|ASSETS                                     |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |     |         |        
|Current assets:                            |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |     |         |        
|                                           | Cash and cash equivalents          |                           | $                    | 2,328   |                           |        | $       | 466          |           |         | $            | 11,072        |        |              | $        |         |              |     | $       | 13,866  |        
|                                           | Accounts receivable, net           |                           |                      | 820     |                           |        |         | 90,487       |           |         |              | 20,733        |        |              |          |         |              |     |         | 112,040 |        
|                                           | Inventories, net                   |                           |                      |        |                           |        |         | 64,758       |           |         |              | 7,158         |        |              |          | (59      | )            |     |         | 71,857  |        
|                                           | Other current assets               |                           |                      | 30,578  |                           |        |         | 2,414        |           |         |              | 639           |        |              |          | 1        |              |     |         | 33,632  |        
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |         
|                                           |                                    |                           | Total current assets |         |                           | 33,726 |         |              |           | 158,125 |              |               |        | 39,602       |          |          |              | (58 | )       |         |         | 231,395 | 
|Property, plant and equipment, net         |                                    |                           | 3,971                |         |                           |        | 335,448 |              |           |         | 30,757       |               |        |              | 580      |          |              |     | 370,756 |        
|Other assets:                              |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |     |         |        
|                                           | Goodwill                           |                           |                      |        |                           |        |         | 217,016      |           |         |              |              |        |              |          |         |              |     |         | 217,016 |        
|                                           | Other noncurrent assets            |                           |                      | 12,224  |                           |        |         | 5,053        |           |         |              | 6,889         |        |              |          |         |              |     |         | 24,166  |        
|                                           | Intercompany, net                  |                           |                      | 44,352  |                           |        |         | (26,627      | )         |         |              | (20,770       | )      |              |          | 3,045    |              |     |         |        |        
|                                           | Investments in subsidiaries        |                           |                      | 575,249 |                           |        |         |             |           |         |              |              |        |              |          | (575,249 | )            |     |         |        |        
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |         
|Total assets                               |                                    | $                         | 669,522              |         |                           | $      | 689,015 |              |           | $       | 56,478       |               |        | $            | (571,682 | )        |              | $   | 843,333 |        
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |         
|LIABILITIES AND SHAREHOLDERS
EQUITY       |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |     |         |        
|Current liabilities:                       |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |          |              |     |         |        
|                                           | Accounts payable                   |                           | $                    | 1,621   |                           |        | $       | 73,796       |           |         | $            | 6,498         |        |              | $        | (671     | )            |     | $       | 81,244  |        
|                                           | Accrued expenses and other         |                           |                      | 22,859  |                           |        |         | 27,248       |           |         |              | 12,414        |        |              |          | 487      |              |     |         | 63,008  |        
|                                           | Long-term debt due within
one year |                           |                      | 171,750 |                           |        |         | 1,084        |           |         |              | 518           |        |              |          |         |              |     |         | 173,352 |        
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |         
|                                           |                                    | Total current liabilities |                      |         | 196,230                   |        |         |              | 102,128   |         |              |               | 19,430 |              |          |          | (184         | )   |         |         | 317,604 |        
|Long-term debt                             |                                    |                           | 148,000              |         |                           |        | 39,097  |              |           |         | 2,973        |               |        |              |         |          |              |     | 190,070 |        
|Retirement benefits                        |                                    |                           | 54,824               |         |                           |        | 5,759   |              |           |         |             |               |        |              |         |          |              |     | 60,583  |        
|Other non-current liabilities              |                                    |                           | 17,188               |         |                           |        | 7,160   |              |           |         | (3,299       | )             |        |              | 747      |          |              |     | 21,796  |        
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |         
|                                           | Total long-term liabilities        |                           |                      | 220,012 |                           |        |         | 52,016       |           |         |              | (326          | )      |              |          | 747      |              |     |         | 272,449 |        
|Shareholders equity                       |                                    |                           | 253,280              |         |                           |        | 534,871 |              |           |         | 37,374       |               |        |              | (572,245 | )        |              |     | 253,280 |        
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |          |         
|Total liabilities and shareholders equity |                                    | $                         | 669,522              |         |                           | $      | 689,015 |              |           | $       | 56,478       |               |        | $            | (571,682 | )        |              | $   | 843,333 |        
|                                           |                                    |                           |                      |         |                           |        |         |              |           |         |              |               |        |              |         





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

|                                                     |                                            |   |                                |          |   |              |           |        |              |               |        |              |   |   |              |   |  |   |         |          |  
|---------------------------------------------------- | ------------------------------------------ | - | ------------------------------ | -------- | - | ------------ | --------- | ------ | ------------ | ------------- | ------ | ------------ | - | - | ------------ | - |  | - | ------- | -------- | -
|                                                     |                                            |   | Six months ended June 30, 2002 |         
|                                                     |                                            |   |                                |         
|                                                     |                                            |   |                                |          |   |              | Combined  |        |              | Combined      |        |              |   |   |              |   |  |   |        
|                                                     |                                            |   |                                |          |   |              | Guarantor |        |              | Non-Guarantor |        |              |   |   |              |   |  |   |        
|                                                     |                                            |   | Parent                         |          |   | Subsidiaries |           |        | Subsidiaries |               |        | Eliminations |   |   | Consolidated |  
|                                                     |                                            |   |                                |          |   |              |           |        |              |               |        |              |   |   |              |  
|                                                     |                                            |   | (in thousands of dollars)      |         
|CASH FLOW DATA                                       |                                            |   |                                |          |   |              |           |        |              |               |        |              |   |   |              |   |  |   |         |         
|Net cash provided by (used in)                       |                                            |   |                                |          |   |              |           |        |              |               |        |              |   |   |              |   |  |   |         |         
|                                                     | operating activities                       |   | $                              | 60,646   |   |              | $         | 4,680  |              |               | $      | (12,973      | ) |   | $            |  |  |   | $       | 52,353   |  
|Investing activities:                                |                                            |   |                                |          |   |              |           |        |              |               |        |              |   |   |              |   |  |   |         |         
|                                                     | Additions to property, plant and
equipment |   |                                | (98      | ) |              |           | (2,621 | )            |               |        | (657         | ) |   |              |  |  |   |         | (3,376   | )
|                                                     | Other                                      |   |                                |         |   |              |           | 360    |              |               |        |             |   |   |              |  |  |   |         | 360      |  
|                                                     |                                            |   |                                |          |   |              |           |        |              |               |        |              |   |   |             
|Cash used in investing activities                    |                                            |   | (98                            | )        |   |              | (2,261    | )      |              |               | (657   | )            |   |   |             |   |  |   | (3,016  | )       
|Financing activities:                                |                                            |   |                                |          |   |              |           |        |              |               |        |              |   |   |              |   |  |   |         |         
|                                                     | Proceeds from debt offering                |   |                                | 175,000  |   |              |           |       |              |               |        |             |   |   |              |  |  |   |         | 175,000  |  
|                                                     | Payments of term debt                      |   |                                | (171,750 | ) |              |           |       |              |               |        |             |   |   |              |  |  |   |         | (171,750 | )
|                                                     | Net increase (decrease) in other debt      |   |                                | (58,000  | ) |              |           | (806   | )            |               |        | (92          | ) |   |              |  |  |   |         | (58,898  | )
|                                                     | Payment of debt issue costs                |   |                                | (5,100   | ) |              |           |        |              |               |        |              |   |   |              |   |  |   |         | (5,100   | )
|                                                     | Dividends paid                             |   |                                | (2,034   | ) |              |           |        |              |               |        |              |   |   |              |   |  |   |         | (2,034   | )
|                                                     | Issuance of common stock                   |   |                                | 402      |   |              |           |       |              |               |        |             |   |   |              |  |  |   |         | 402      |  
|                                                     |                                            |   |                                |          |   |              |           |        |              |               |        |              |   |   |             
|Cash used in financing activities                    |                                            |   | (61,482                        | )        |   |              | (806      | )      |              |               | (92    | )            |   |   |             |   |  |   | (62,380 | )       
|Effect of exchange rate on cash and
cash equivalents |                                            |   |                               |          |   |              |          |        |              |               | 5,082  |              |   |   |             |   |  |   | 5,082   |         
|                                                     |                                            |   |                                |          |   |              |           |        |              |               |        |              |   |   |             
|Net increase (decrease) in cash and
cash equivalents |                                            | $ | (934                           | )        |   | $            | 1,613     |        |              | $             | (8,640 | )            |   | $ |             |   |  | $ | (7,961  | )       
|                                                     |                                            |   |                                |          |   |              |           |        |              |               |        |              |   |   |             





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

|                                                     |                                                                 |   |                                |        |   |              |           |         |              |               |        |              |   |   |              |   |  |   |         |         |  
|---------------------------------------------------- | --------------------------------------------------------------- | - | ------------------------------ | ------ | - | ------------ | --------- | ------- | ------------ | ------------- | ------ | ------------ | - | - | ------------ | - |  | - | ------- | ------- | -
|                                                     |                                                                 |   | Six months ended June 30, 2001 |       
|                                                     |                                                                 |   |                                |       
|                                                     |                                                                 |   |                                |        |   |              | Combined  |         |              | Combined      |        |              |   |   |              |   |  |   |        
|                                                     |                                                                 |   |                                |        |   |              | Guarantor |         |              | Non-Guarantor |        |              |   |   |              |   |  |   |        
|                                                     |                                                                 |   | Parent                         |        |   | Subsidiaries |           |         | Subsidiaries |               |        | Eliminations |   |   | Consolidated |  
|                                                     |                                                                 |   |                                |        |   |              |           |         |              |               |        |              |   |   |              |  
|                                                     |                                                                 |   | (in thousands of dollars)      |       
|CASH FLOWS DATA                                      |                                                                 |   |                                |        |   |              |           |         |              |               |        |              |   |   |              |   |  |   |         |        
|Net cash provided by (used in)
operating activities  |                                                                 | $ | (24,294                        | )      |   | $            | 16,049    |         |              | $             | 8,175  |              |   | $ |             |   |  | $ | (70     | )      
|Investing activities:                                |                                                                 |   |                                |        |   |              |           |         |              |               |        |              |   |   |              |   |  |   |         |        
|                                                     | Additions to property, plant and
Equipment                      |   |                                | (385   | ) |              |           | (14,822 | )            |               |        | (6,646       | ) |   |              |  |  |   |         | (21,853 | )
|                                                     | Proceeds from insurance                                         |   |                                |       |   |              |           |        |              |               |        | 2,179        |   |   |              |  |  |   |         | 2,179   |  
|                                                     | Additions to property, plant and
equipment covered by insurance |   |                                |       |   |              |           |        |              |               |        | (2,179       | ) |   |              |  |  |   |         | (2,179  | )
|                                                     |                                                                 |   |                                |        |   |              |           |         |              |               |        |              |   |   |             
|Cash used in investing activities                    |                                                                 |   | (385                           | )      |   |              | (14,822   | )       |              |               | (6,646 | )            |   |   |             |   |  |   | (21,853 | )      
|Financing activities:                                |                                                                 |   |                                |        |   |              |           |         |              |               |        |              |   |   |              |   |  |   |         |        
|                                                     | Net increase (decrease) in other debt                           |   |                                | 94,098 |   |              |           | (780    | )            |               |        | (291         | ) |   |              |  |  |   |         | 93,027  |  
|                                                     | Dividends paid                                                  |   |                                | (2,032 | ) |              |           |        |              |               |        |             |   |   |              |  |  |   |         | (2,032  | )
|                                                     |                                                                 |   |                                |        |   |              |           |         |              |               |        |              |   |   |             
|Cash provided by (used in) financing
activities      |                                                                 |   | 92,066                         |        |   |              | (780      | )       |              |               | (291   | )            |   |   |             |   |  |   | 90,995  |        
|Effect of exchange rate on cash and
cash equivalents |                                                                 |   |                               |        |   |              |          |         |              |               | 1,038  |              |   |   |             |   |  |   | 1,038   |        
|                                                     |                                                                 |   |                                |        |   |              |           |         |              |               |        |              |   |   |             
|Net increase in cash and cash
equivalents            |                                                                 | $ | 67,387                         |        |   | $            | 447       |         |              | $             | 2,276  |              |   | $ |             |   |  | $ | 70,110  |        
|                                                     |                                                                 |   |                                |        |   |              |           |         |              |               |        |              |   |   |             





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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2002 (Unaudited)

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

Managements Discussion and Analysis of Financial Condition and Results of
Operations and the Quantitative and Qualitative Disclosures about Market Risk
contain forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. When used in these sections, the words
anticipate, believe, estimate and expect and similar expressions are
generally intended to identify forward-looking statements. Readers are
cautioned that any forward-looking statements, including statements regarding
the intent, belief or current expectations of INTERMET or its management, are
not guarantees of future performance and involve risks and uncertainties.
Actual results may differ materially from those in the forward-looking
statements as a result of various factors including, but not limited to:



| |  | General economic conditions, including any economic downturn in the markets in which we operate, including the effects of
the September 11, 2001 terrorist attacks on the economy   
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Fluctuations in worldwide or regional automobile and light and heavy truck production                                                                                               
| 
| |  | Changes in practices or policies of our significant customers toward outsourcing their requirements for automotive
components                                                       
| 
| |  | Changes in the sourcing and pricing practices of our major customers, including demands for price concessions as a
condition to retaining current business or obtaining new business
| 
| |  | Fluctuations in foreign currency exchange rates                                                                                                                                     
| 
| |  | Fluctuations in interest rates that may affect our borrowing costs                                                                                                                  
| 
| |  | Fluctuations in the cost of raw materials, including the cost of energy, and our ability, if any, to pass those costs on to
our customers                                           
| 
| |  | Work stoppages or other labor disputes that could disrupt production at our facilities or those of our major customers                                                              
| 
| |  | Factors or presently unknown circumstances that may affect the charges related to the impairment of assets                                                                          
| 
| |  | Our ability to fully utilize the capacity available from the rebuilding of our New River facility within the timeframes we
are projecting                                           

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| |  | Our ability to meet the financial covenants set forth in our debt agreements.                       
|- |  | ----------------------------------------------------------------------------------------------------
| 
| |  | Other risks as detailed from time to time in our filings with the Securities and Exchange Commission

We do not intend to update these forward-looking statements.

Material Changes in Financial Condition, Liquidity and Capital Resources

Through the second quarter of 2002 INTERMET generated cash from operations of $
52.4 million while using $0.1 million for the same period last year.
Depreciation and amortization expense was $25.8 million year to date. For the
six month period ended June 30, 2002, accounts receivable decreased $9.9
million while inventory decreased $6.8 million compared to the same period last
year. The accounts receivable fluctuation is a result of accelerated
collections at some of our major customers. Accounts payable and accrued taxes
increased $8.0 million during the six months ended June 30, 2002 compared to
the same period last year, due partially to higher company earnings. During the
first six months we spent $3.4 million for the purchase of property, plant and
equipment. Investing activities for the first six months of 2002 used cash of
$3.0 million. Borrowings under our bank revolving credit facility decreased by
$58 million. The term loan with an outstanding balance of $171.7 million was
paid-off in June of 2002 with a $175 million senior note issue (see footnote
5, Debt, for further detail). Additionally, we paid $2.0 million in dividends
during the first six months of 2002. The Company has committed capital not yet
spent of approximately $3.9 million as of June 30, 2002. We anticipate that
the funds needed for the committed capital spending will come from operations.

At June 30, 2002 we have a secured revolving credit agreement with a bank group
that provides for loans up to $300 million in the aggregate, of which $90
million is outstanding. At June 30, 2002, $46 million was available to us
under the most restrictive covenants of our credit agreements. In addition, we
have a senior note issue with a balance of $175 million and other debt of
approximately $42.8 million.

Our consolidated EBITDA for the quarter ended June 30, 2002 was $26.2 million
versus $27.3 million for the same period last year. EBITDA per our bank
agreement is calculated as the sum of net income, income taxes, interest
expense, depreciation and amortization. For the purpose of this calculation,
amortization of financing costs is included in interest expense. EBITDA after
adjustments allowed by the bank agreement for plant closings, sales and write down of non-core assets, and
workforce reduction charges was $26.2 million and $27.3 million for the
quarters ending June 30, 2002 and June 30, 2001 respectively. Our bank debt
agreements require us to maintain certain financial ratios. We are in
compliance with our debt covenants as of June 30, 2002. The bank financial covenant
ratios as of June 30, 2002 are provided below.

|                                   |  |               |  |         
|---------------------------------- |  | ------------- |  | --------
|Financial Covenant                 |  | Requirement   |  | Actual  
|                                   |  |               |  |         
|Fixed charge coverage ratio        |  | >    1.00 : 1 |  | 1.51 : 1
|Consolidated EBITDA to             |  |               |  |         
|Consolidated interest expense      |  | >    2.75 : 1 |  | 3.07 : 1
|Funded Debt to Consolidated EBITDA |  | <    4.25 : 1 |  | 3.72 : 1
|Capital expenditures              |  | <   $50,000   |  | $17,811 

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For financial covenant purposes, the ratios are calculated based on the last
twelve months (LTM) activities. Adjusted EBITDA, although not a measure
prepared in accordance with accounting principles generally accepted in the
United States, has been presented because the Company uses it to evaluate its
operating performance relative to its bank debt agreement. Adjusted EBITDA
should not be considered a substitute for income from operations, net income,
cash flows or other measure of financial performance prepared in accordance
with accounting principles generally accepted in the United States.

Material Changes in Results of Operations  Three months ended June 30, 2002

Sales for the second quarter of 2002 were $218.0 million. Excluding the
Alexander City closure effect ($12.6 million), sales were up $2.6 million or
1.2% from the second quarter of 2001. This increase is attributable mainly to
the increase in sales from our new business in pressure-counter-pressure
casting (PCPC) knuckles. Although North America automotive production was up 7%
overall versus a year ago, our largest customers production was down 1.9% and
our second largest customers production was up 3.7%. Ferrous-metals segment
saleswere $140.1 million during the second quarter of 2002 compared to $142.0
million for the same period last year. This represents a decrease in sales of
$1.9 million or 1.3% driven principally by less demand from specific customer
platforms (Chrysler RS, XJ, and PL/PT and Ford PN96, PN131, and UN93/173) and
an engine model (General Motors 3.5L) and higher pricing productivity more than
off-setting the increase in demand from the higher North American production.
Light-metals segment saleswere $74.2 million during the second quarter of 2002
compared to $69.1 million during the second quarter of 2001 exclusive of the
Alexander City closure effect. This represented an increase of $5.1 million or
7.4% for the three months ended June 30, 2002 as compared to the same period
last year mainly due to the increase in sales from our new business in PCPC
knuckles.

Domestic salesfor the second quarter were $194.6 million, down from $205.3
million for the same period last year. This decrease of $10.7 million is
largely explained by the closing of our Alexander City aluminum plant in
December, 2001. For operations in place both years, sales increased $2.0
million or 1.0% due principally to the increase in sales from our new business
in PCPC knuckles. European salesduring the three months ended June 30, 2002
were $23.3 million. The effect of changes in the exchange rates on
consolidated European sales was a favorable $1.8 million for the three-month
period ended June 30, 2002, when compared using exchange rates for the same
period in 2001.

Gross profit for the quarters ended June 30, 2002 and 2001 was $22.9 million
and $21.8 million, respectively. During the second quarter of 2002, we
experienced price increases in scrap steel and secondary aluminum, both of
which are primary raw materials used in our operations. Despite these
increases negatively affecting the second quarter 2002 by $2.8 million, gross
profit as a percentage of sales for the three months ended June 30, 2002 and
2001 was 10.5% and 9.6%, respectively. Excluding the results of Alexander City
which closed in December, 2001, gross profit as a percentage of sales would
have been 10.6% and 10.0%, respectively. Higher gross profit on lower sales is
a direct reflection of an improved cost structure and improved fundamental
earning power.

Selling, general and administrative expenses were 4.0% of sales for the three
months ended June 30, 2002 and 2001. Other operating expenses were $0.4 million
higher in the current period due to a foreign exchange loss included in second quarter 2002.
Interest expense at $6.4 million is down $1.0 million from the
previous year as a result of debt reduction.

Other income of $0.1 million has decreased from the same period of 2001. The
effective income tax rate was 30.5% and 46.7% for the second quarter of 2002
and 2001, respectively. The effective rate in second quarter 2001 differs
from the statutory rates as a result of the nondeductible goodwill the
Company amortized related to various acquisitions INTERMET has completed.
Goodwill amortization in second quarter 2001 was $1.4 million, net of taxes.

An extraordinary item related to the extinguishment of the bank term loan of
$0.6 million, net of taxes, was recorded in second quarter, 2002.

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Material Changes in Results of Operations  Six months ended June 30, 2002

Sales for the six months ended June 30, 2002 were $424.1 million. Excluding
the Alexander City closure effect ($23.3 million), sales decreased $4.4 million
or 1.0% from the six months ended June 30, 2001. This decrease is attributable
mainly to less demand from specific customer platforms (Chrysler RS, XJ and
PL/PT and Ford PN96, PN 131 and UN93/173) and engine models (General Motors
3.5L and Ford I5/I4) and higher pricing productivity more than off-setting the
increase in demand from the higher North American production. Ferrous-metals
segment saleswere $273.8 million during the six months ended June 30, 2002
compared to $283.1 million for the same period last year. This represents a
decrease of $9.3 million or 3.3%. This decline was a result of lower demand on
very specific customer platforms and engines as mentioned above as well as
lower product pricing with productivity give-backs more than off-setting the
increase in demand from the higher North American production. Light-metals
segment salesdecreased $17.2 million (10.7%) for the six months ended June 30,
2002 as compared to the same period last year due to the closing of our
Alexander City aluminum plant in December, 2001. Excluding the Alexander City
closure effect ($23.3 million), sales were up $6.1 million or 4.5% from the
same period last year reflecting the new business in the PCPC knuckles and
higher production demand in North America.

Domestic salesfor the six months ended June 30, 2002 were $378.4 million, down
from $406.1 million for the same period last year. This decrease of $27.7
million is again largely explained by the closing of our Alexander City
aluminum plant in December, 2001. For operations in place both years, sales
decreased $4.4 million or 1.0% due to lower demand on specific platforms as
mentioned above. European salesduring the six months ended June 30, 2002 were
$45.6 million. The effect of changes in the exchange rates on consolidated
European sales was a favorable $1.7 million for the six-month period ended June
30, 2002, when compared using exchange rates for the same period in 2001.

Gross profit for the six months ended June 30, 2002 and 2001 was $43.5 million
and $39.1 million, respectively. Gross profit as a percentage of sales for the
six months ended June 30, 2002 and 2001 was 10.2% and 8.7%, respectively.
Excluding the results of Alexander City which closed in December, 2001, gross
profit as a percentage of sales would have been 10.3% and 9.8%, respectively.
Higher gross profit on lower sales is a direct reflection of an improved cost
structure and improved fundamental earning power.

Selling, general and administrative expenses were 4% of sales for the six
months ended June 30, 2002 and June 30, 2001. Other operating expenses were
$0.5 million higher in the current period due to a
foreign exchange loss
included in second quarter 2002. Interest expense at $12.8 million is down $2.5
million from the previous year as a result of debt reduction.

Other income of $0.6 million has decreased from the same period of 2001. The
effective income tax rate was 32.6% and 49.3% for the first six months of 2002
and 2001, respectively. The effective rate for the first six months of 2001
differs from the statutory rates as a result of the nondeductible goodwill the
Company amortized related to various acquisitions INTERMET has completed. The
cumulative effect of a change in accounting principle is discussed below in the
paragraph related to the impact of adopting SFAS 142. No adjustment was made
for impairment of goodwill based on the impairment tests performed by INTERMET.

An extraordinary item related to the extinguishment of the bank term loan of
$0.6 million, net of taxes, was recorded in second quarter, 2002.

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The Impact of Adopting SFAS 142

On January 1, 2002, we adopted SFAS 142, Goodwill and Other Intangible
Assets. Under this statement, goodwill is no longer amortized but is subject
to annual impairment analysis (or more frequent tests if impairment indicators
arise). As required under SFAS 142, we wrote off negative goodwill of
$482,000, net of taxes, as a cumulative effect of a change in accounting
principle. In addition, we performed impairment tests of its goodwill as
required and determined that no impairment of the goodwill existed at the
effective date of adoption. See note 4 in the accompanying notes to interim
condensed consolidated financial statements for further discussion.

Critical Accounting Policies and Estimates

Our interim condensed consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States,
which require us to make estimates, judgments and assumptions that affect the
reported amounts of certain assets, liabilities, revenues, expenses and related
disclosures and contingencies. We evaluate estimates used in preparation of
our financial statements on a continual basis. Our critical accounting
policies as previously disclosed in Item 7. Management Discussion and Analysis
of Financial Condition and Results of Operations  Critical Accounting
Policies,as described in our annual report on Form 10-K for the year ended
December 31, 2001, have not changed with the exception of goodwill due to the
adoption of SFAS 142 as previously described.




Item 3.   Quantitative and Qualitative Disclosures about Market Risk

We have exposure to four types of market risk. The first is the risk of
interest rate changes and how it impacts our current results. Second, we have
risk with regard to foreign currency and its impact on our international
operating results. Third, we have risk related to commodity pricing where we
experienced price increases in both scrap steel and secondary aluminum, both of
which are primary raw materials used in our operations. These increases
negatively affected second quarter 2002 by approximately $2.8 million on a
pre-tax basis. We expect that these increases will be mitigated in the third
quarter due to customer contracts that provide for pass-through of cost
increases. These pass-through provisions typically have a 60-90 day lag before
becoming effective. Though we have seen a softening of these costs, the
overall trend does represent a risk to our operating results. We also have
risk related to commodity pricing in energy costs. Last, we have consumer
risk. We operate principally in the cyclical automotive industry. A weakening
of the economy represents a risk to our operating results.

There has been no material change in market risk since December 31, 2001 with
the exception of the raw material costs discussed in the previous paragraph.

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Part II  Other Information




Item 1.   Legal Proceedings

On March 14, 2002, we entered into a Consent Order with the U.S. Environmental
Protection Agency, which will require investigation of the nature and extent of
any hazardous waste disposed of at our Radford, Virginia facilities. We have
entered into this Consent Order in connection with the U.S. EPAs Corrective
Action Program. The Corrective Action Program is being undertaken on a
nationwide basis by U.S. EPA pursuant to the Resource Conservation and Recovery
Act of 1976. The Corrective Action Program requires facilities that have
historically generated or handled hazardous waste to determine whether those
activities have or could adversely affect groundwater or adversely affect human
health. We are in the early stages of this investigation. Because we
historically disposed of waste material at this site, it is possible that fines
or penalties could be assessed, or that remedial action could be required, with
respect to that on-site disposal. At this time we cannot predict the amount of
any potential fines or penalties or the cost of remedial action, if any.

On March 5, 2000 we suffered a catastrophic accidental explosion and fire at
its New River Foundry, located in Radford, Virginia. Three employees were
fatally injured and others were injured, several seriously. On March 2, 2002
the representatives of the three deceased employees, and three of the injured
employees, filed lawsuits seeking damages from the Company and others in the
Circuit Court for the City of Radford, Virginia City Court. It is also
possible that one or more of the other defendants in these cases might assert
cross-claims against us. We intend to defend these lawsuits on the ground
that, among other things, the claims asserted against us are barred by the laws
of Virginia governing workers compensation. We have both primary and excess
liability insurance policies covering potential liability to employees and
others and believes that it is adequately insured against any likely liability
for the deaths or injuries arising out of this incident. However, if we were
held to be liable in these cases, and if its insurance policies did not provide
coverage for the damages, the amounts that could be incurred could be material.

We are engaged in various other legal proceedings and other matters incidental
to our normal business activities. We do not believe there are any other
pending or threatened legal proceedings to which we are a party, or to which
any of our property is subject, that will have a material effect on our
consolidated financial position, results of operations or liquidity taken as a
whole.

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There have been no other material changes in matters reported in the Form 10-K
for the year ended December 31, 2001.

Item 2.  Changes in Securities and Use of Proceeds

None.

Item 3.  Defaults upon Senior Securities

None.

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

None.

Item 5.  Other Information

None.




Item 6.   Exhibits and Reports on Form 8-K

(a)  Exhibit Index.



| |                                  
| | ---------------------------------
| | See Exhibit List presented below.

(b)  Reports on Form 8-K



| |                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------
| | A current report on Form 8-K was filed by the Company on May 23, 2002
announcing the offering of $175 million of senior notes due 2009.



| |                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | A current report on Form 8-K was filed by the Company on June 18, 2002
announcing the pricing and the closing of the placement of the $175 million
senior notes due 2009.

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Signatures

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

| |  |                      |  |                                                      
| |  | -------------------- |  | -----------------------------------------------------
| |  | INTERMET Corporation
| |  |                      |  |                                                      
| |  | By:                  |  | /s/ Doretha Christoph                                
| |  |                      |  |                                                      
| |  |                      |  | Doretha Christoph,                                   
| |  |                      |  | Vice President of Finance and Chief Financial Officer
| |  | Date:                |  | August 7, 2002                                       

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EXHIBIT INDEX

|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Document                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4.1         |  | Indenture dated as of June 13, 2002 among INTERMET Corporation,
U.S. Bank National Association and the guarantors named therein
(incorporated by reference to Exhibit 4.1 to the registrants
Form S-4 filed July 29, 2002 (No. 333-97245).                                                                                                                                                                                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4.2         |  | Forms of 9 3/4% Senior Notes due 2009 (incorporated by
reference to Exhibits A and B to the Indenture filed as Exhibit
4.1 to the registrants Form S-4 filed July 29, 2002 (No.
333-97245).                                                                                                                                                                                                                                                                                                     
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4.3         |  | Registration Rights Agreement dated as of June 13, 2002 among
INTERMET Corporation and the Guarantors named therein, and
Deutsche Bank Securities Inc., Banc of America Securities LLC,
Scotia Capital (USA) Inc., SunTrust Capital Markets, Inc., Banc
One Capital Markets, Inc., Comerica Securities, Inc., and ABN
AMRO Incorporated (incorporated by reference to Exhibit 4.3 to
the registrants Form S-4 filed July 29, 2002 (No. 333-97245).                                              
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.17       |  | Fifth Amendment and Waiver under the $300,000,000 Conformed
Five-Year Credit Agreement, dated November 5, 1999, as amended
through the Fourth Amendment dated as of July 17, 2001, by and
among INTERMET, The Bank of Nova Scotia as lender,
administrative agent and collateral agent, and the various
lenders named therein, including contents of omitted schedules
and exhibits (incorporated by reference to Exhibit 10.17 to the
registrants Form S-4 filed July 29, 2002 (No. 333-97245).
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|99.1        |  | Certification of Chief Executive Officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|99.2        |  | Certification of Chief Financial Officer.                                                                                                                                                                                                                                                                                                                                                                                                                                                        

10