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United StatesSecurities and Exchange CommissionWashington, D.C. 20549

Form 10-Q

|      |  |                                                                                                                                         
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|[X]   |  | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2003, or
|     
|[   ] |  | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from             to  

Commission File No. 0-13787

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

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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [X] No [   ]

At August 6, 2003 there were 25,602,391 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)                      
|                                                | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                | Item 3 Quantitative and Qualitative Disclosures about Market Risk                            
|                                                | Item 4 Controls and Procedures                                                               
|Part II  Other Information                    
|                                                | Item 1. Legal Proceedings                                                                    
|                                                | Item 6. Exhibits and Reports on Form 8-K                                                     
|Signature                                      
|Exhibit Index                                  
|By-laws of Intermet Corp                       
|Waiver Under Five-Year Credit Agreement        
|Employement Agreement                          
|Certification of CEO Pursuant to Section 302   
|Certification of CFO Pursuant to Section 302   
|Certification of CEO & CFO Pursuant Section 906



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##### Table of Contents



TABLE OF CONTENTS

|                               |                                                                                                                                                                 |   
|------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------- | --
|Part I  Financial Information | 3                                                                                                                                                              
|Item 1.                        | Interim Condensed Consolidated Financial Statements (Unaudited)                                                                                                 | 3 
|                               | Notes to Interim Condensed Consolidated Financial Statements (Unaudited)                                                                                        | 7 
|Item 2.                        | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                                           | 27
|Item 3.                        | Quantitative and Qualitative Disclosure about Market Risk                                                                                                       | 32
|Item 4.                        | Controls and Procedures                                                                                                                                         | 32
|Part II  Other Information    | 33                                                                                                                                                             
|Item 1.                        | Legal Proceedings                                                                                                                                               | 33
|Item 6.                        | Exhibits and Reports on Form 8-K                                                                                                                                | 34
|Signature                      |                                                                                                                                                                 | 35
|Exhibit Index                  |                                                                                                                                                                 |   
|Exhibit 3.2                    | By-laws of INTERMET Corporation, as amended July 17, 2003                                                                                                       |   
|Exhibit 10.1                   | Waiver Under Five-Year Credit Agreement                                                                                                                         |   
|Exhibit 10.15                  | Employment Agreement between INTERMET Corporation and Gary F. Ruff dated July 23, 2003                                                                          |   
|Exhibit 31.1                   | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                              |   
|Exhibit 31.2                   | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                              |   
|Exhibit 32.1                   | Certification of Periodic Financial Report by the Chief Executive Officer and Chief
Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |   

2



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##### Table of Contents






Part I  Financial Information




Item 1. Financial Statements

INTERMET Corporation
Interim Condensed Consolidated Statements of Operations
(Unaudited)

|                                                                               |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |        |  
|------------------------------------------------------------------------------ | ---------------------------------------------------------------------------- | - | ---------------------------------------------------- | ------ | ---------------- | - | ------------- | ------ | ------------- | - | ------- | ------ | - | - | ------- | ------ | -
|                                                                               |                                                                              |   | Three Months Ended                                   |        | Six Months Ended
|                                                                               |                                                                              |   |                                                      |        |                 
|                                                                               |                                                                              |   | June 30, 2003                                        |        | June 30, 2002    |   | June 30, 2003 |        | June 30, 2002
|                                                                               |                                                                              |   |                                                      |        |                  |   |               |        |              
|                                                                               |                                                                              |   | (in thousands of dollars, other than per share data)
|Net sales                                                                      |                                                                              | $ | 196,766                                              |        |                  | $ | 217,958       |        |               | $ | 403,870 |        |   | $ | 424,054 |       
|Cost of sales                                                                  |                                                                              |   | 179,225                                              |        |                  |   | 195,013       |        |               |   | 365,047 |        |   |   | 380,590 |       
|                                                                               |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|Gross profit                                                                   |                                                                              |   | 17,541                                               |        |                  |   | 22,945        |        |               |   | 38,823  |        |   |   | 43,464  |       
|Operating expenses:                                                            |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|                                                                               | Selling, general and administrative                                          |   |                                                      | 7,766  |                  |   |               | 8,625  |               |   |         | 16,611 |   |   |         | 16,685 |  
|                                                                               | Restructuring and impairment charges                                         |   |                                                      | 11,592 |                  |   |               |       |               |   |         | 11,592 |   |   |         |       |  
|                                                                               | Other operating expense, net                                                 |   |                                                      | 1,590  |                  |   |               | 296    |               |   |         | 1,456  |   |   |         | 237    |  
|                                                                               |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|                                                                               |                                                                              |   | 20,948                                               |        |                  |   | 8,921         |        |               |   | 29,659  |        |   |   | 16,922  |       
|                                                                               |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|Operating (loss) profit                                                        |                                                                              |   | (3,407                                               | )      |                  |   | 14,024        |        |               |   | 9,164   |        |   |   | 26,542  |       
|Other expense (income):                                                        |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|                                                                               | Interest expense, net                                                        |   |                                                      | 7,819  |                  |   |               | 7,332  |               |   |         | 15,299 |   |   |         | 13,686 |  
|                                                                               | Other income, net                                                            |   |                                                      | (603   | )                |   |               | (81    | )             |   |         | (591   | ) |   |         | (627   | )
|                                                                               |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|                                                                               |                                                                              |   | 7,216                                                |        |                  |   | 7,251         |        |               |   | 14,708  |        |   |   | 13,059  |       
|                                                                               |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|(Loss) income before income taxes                                              |                                                                              |   | (10,623                                              | )      |                  |   | 6,773         |        |               |   | (5,544  | )      |   |   | 13,483  |       
|Income tax (benefit) expense                                                   |                                                                              |   | (4,034                                               | )      |                  |   | 2,023         |        |               |   | (2,107  | )      |   |   | 4,378   |       
|                                                                               |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|Net (loss) income before cumulative
effect of a change in accounting
principle |                                                                              |   | (6,589                                               | )      |                  |   | 4,750         |        |               |   | (3,437  | )      |   |   | 9,105   |       
|Cumulative effect of a change in
accounting principle, net of tax              |                                                                              |   |                                                     |        |                  |   |              |        |               |   |        |        |   |   | 481     |       
|                                                                               |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|Net (loss) income                                                              |                                                                              | $ | (6,589                                               | )      |                  | $ | 4,750         |        |               | $ | (3,437  | )      |   | $ | 9,586   |       
|                                                                               |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|(Loss) earnings per common share:                                              |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|                                                                               | Basic:                                                                       |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |        |  
|                                                                               | (Loss) earnings before cumulative
effect of a change in accounting
principle |   | $                                                    | (0.26  | )                |   | $             | 0.19   |               |   | $       | (0.13  | ) |   | $       | 0.36   |  
|                                                                               | Cumulative effect of a change in
accounting principle                        |   |                                                      |       |                  |   |               |       |               |   |         |       |   |   |         | 0.02   |  
|                                                                               |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|                                                                               | (Loss) earnings per share  basic                                            |   | $                                                    | (0.26  | )                |   | $             | 0.19   |               |   | $       | (0.13  | ) |   | $       | 0.38   |  
|                                                                               |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|                                                                               | Diluted:                                                                     |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |        |  
|                                                                               | (Loss) earnings before cumulative
effect of a change in accounting
principle |   | $                                                    | (0.26  | )                |   | $             | 0.18   |               |   | $       | (0.13  | ) |   | $       | 0.35   |  
|                                                                               | Cumulative effect of a change in
accounting principle                        |   |                                                      |       |                  |   |               |       |               |   |         |       |   |   |         | 0.02   |  
|                                                                               |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|                                                                               | (Loss) earnings per share  diluted                                          |   | $                                                    | (0.26  | )                |   | $             | 0.18   |               |   | $       | (0.13  | ) |   | $       | 0.37   |  
|                                                                               |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|Weighted average shares outstanding:                                           |                                                                              |   |                                                      |        |                  |   |               |        |               |   |         |        |   |   |         |       
|                                                                               | Basic                                                                        |   |                                                      | 25,589 |                  |   |               | 25,433 |               |   |         | 25,568 |   |   |         | 25,402 |  
|                                                                               | Diluted                                                                      |   |                                                      | 25,589 |                  |   |               | 25,880 |               |   |         | 25,568 |   |   |         | 25,712 |  

See accompanying notes.

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INTERMET Corporation

Interim Condensed Consolidated Balance Sheets

|                                       |                      |                                                                                         |         |                                                                                  |         |                           |         |                   |         |        |        | 
|-------------------------------------- | -------------------- | --------------------------------------------------------------------------------------- | ------- | -------------------------------------------------------------------------------- | ------- | ------------------------- | ------- | ----------------- | ------- | ------ | ------ | 
|                                       |                      |                                                                                         |         |                                                                                  |         | June 30, 2003             |         | December 31, 2002
|                                       |                      |                                                                                         |         |                                                                                  |         |                           |         |                  
|                                       |                      |                                                                                         |         |                                                                                  |         | (Unaudited)               |         |                  
|                                       |                      |                                                                                         |         |                                                                                  |         | (in thousands of dollars)
|Assets                                 |                      |                                                                                         |         |                                                                                  |         |                           |         |                  
|Current assets:                        |                      |                                                                                         |         |                                                                                  |         |                           |         |                  
|                                       |                      | Cash and cash equivalents                                                               |         | $                                                                                | 5,282   |                           |         | $                 | 3,298   |       
|                                       |                      | Accounts receivable:                                                                    |         |                                                                                  |         |                           |         |                   |         |       
|                                       |                      |                                                                                         |         | Trade, less allowance for
doubtful accounts of $8,098 in
2003 and $9,229 in 2002 |         |                           | 87,875  |                   |         |        | 74,025 | 
|                                       |                      |                                                                                         | Other   |                                                                                  |         | 12,343                    |         |                   |         | 12,754 |       
|                                       |                      |                                                                                         |         |                                                                                  |         |                           |         |                   |         |       
|                                       |                      |                                                                                         | 100,218 |                                                                                  |         |                           | 86,779  |                  
|                                       | Inventories          |                                                                                         |         | 65,025                                                                           |         |                           |         | 65,456            |        
|                                       | Other current assets |                                                                                         |         | 26,795                                                                           |         |                           |         | 24,875            |        
|                                       |                      |                                                                                         |         |                                                                                  |         |                           |         |                   |         |       
|Total current assets                   |                      |                                                                                         | 197,320 |                                                                                  |         |                           | 180,408 |                  
|Property, plant and equipment, at cost |                      |                                                                                         | 664,790 |                                                                                  |         |                           | 661,007 |                  
|Less:                                  |                      |                                                                                         |         |                                                                                  |         |                           |         |                  
|                                       |                      | Accumulated depreciation and
foreign industrial development
grants, net of amortization |         |                                                                                  | 357,450 |                           |         |                   | 328,973 |       
|                                       |                      |                                                                                         |         |                                                                                  |         |                           |         |                   |         |       
|Property, plant and equipment, net     |                      |                                                                                         | 307,340 |                                                                                  |         |                           | 332,034 |                  
|Goodwill                               |                      |                                                                                         | 217,016 |                                                                                  |         |                           | 217,016 |                  
|Other non-current assets               |                      |                                                                                         | 36,001  |                                                                                  |         |                           | 34,640  |                  
|                                       |                      |                                                                                         |         |                                                                                  |         |                           |         |                   |         |       
|Total assets                           |                      | $                                                                                       | 757,677 |                                                                                  |         | $                         | 764,098 |                  
|                                       |                      |                                                                                         |         |                                                                                  |         |                           |         |                   |         |       

See accompanying notes.

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INTERMET Corporation

Interim Condensed Consolidated Balance Sheets

|                                           |                                      |   |                           |         |                   |   |         |         |  
|------------------------------------------ | ------------------------------------ | - | ------------------------- | ------- | ----------------- | - | ------- | ------- | -
|                                           |                                      |   | June 30, 2003             |         | December 31, 2002
|                                           |                                      |   |                           |         |                  
|                                           |                                      |   | (Unaudited)               |         |                  
|                                           |                                      |   | (in thousands of dollars)
|Liabilities and shareholders equity       |                                      |   |                           |         |                   |   |         |        
|Current liabilities:                       |                                      |   |                           |         |                   |   |         |        
|                                           | Accounts payable                     |   | $                         | 66,032  |                   |   | $       | 70,933  |  
|                                           | Accrued liabilities                  |   |                           | 56,426  |                   |   |         | 65,205  |  
|                                           | Long-term debt due within one year   |   |                           | 1,484   |                   |   |         | 1,567   |  
|                                           |                                      |   |                           |         |                   |   |         |         |  
|Total current liabilities                  |                                      |   | 123,942                   |         |                   |   | 137,705 |        
|Non-current liabilities:                   |                                      |   |                           |         |                   |   |         |        
|                                           | Long-term debt due after one year    |   |                           | 283,422 |                   |   |         | 278,536 |  
|                                           | Retirement benefits                  |   |                           | 79,305  |                   |   |         | 77,571  |  
|                                           | Other non-current liabilities        |   |                           | 13,996  |                   |   |         | 12,717  |  
|                                           |                                      |   |                           |         |                   |   |         |         |  
|Total non-current liabilities              |                                      |   | 376,723                   |         |                   |   | 368,824 |        
|Shareholders equity:                      |                                      |   |                           |         |                   |   |         |        
|                                           | Common stock                         |   |                           | 2,601   |                   |   |         | 2,601   |  
|                                           | Capital in excess of par value       |   |                           | 57,142  |                   |   |         | 57,124  |  
|                                           | Retained earnings                    |   |                           | 206,952 |                   |   |         | 212,437 |  
|                                           | Accumulated other comprehensive loss |   |                           | (9,585  | )                 |   |         | (14,562 | )
|                                           | Unearned restricted stock            |   |                           | (98     | )                 |   |         | (31     | )
|                                           |                                      |   |                           |         |                   |   |         |         |  
|Total shareholders equity                 |                                      |   | 257,012                   |         |                   |   | 257,569 |        
|                                           |                                      |   |                           |         |                   |   |         |         |  
|Total liabilities and shareholders equity |                                      | $ | 757,677                   |         |                   | $ | 764,098 |        
|                                           |                                      |   |                           |         |                   |   |         |         |  

See accompanying notes.

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INTERMET Corporation

Interim Condensed Consolidated Statements of Cash Flows

|                                                                                     |                                                      |                                          |        |                           |         |               |         |          |        |  
|------------------------------------------------------------------------------------ | ---------------------------------------------------- | ---------------------------------------- | ------ | ------------------------- | ------- | ------------- | ------- | -------- | ------ | -
|                                                                                     |                                                      |                                          |        | Six months ended         
|                                                                                     |                                                      |                                          |        |                          
|                                                                                     |                                                      |                                          |        | June 30, 2003             |         | June 30, 2002
|                                                                                     |                                                      |                                          |        |                           |         |              
|                                                                                     |                                                      |                                          |        | (Unaudited)              
|                                                                                     |                                                      |                                          |        | (in thousands of dollars)
|Operating activities:                                                                |                                                      |                                          |        |                           |         |               |         |         
|Net (loss) income before cumulative effect of a change in
accounting principle       |                                                      | $                                        | (3,437 | )                         |         | $             | 9,105   |         
|Adjustments to reconcile net (loss) income to cash provided
by operating activities: |                                                      |                                          |        |                           |         |               |         |         
|                                                                                     | Depreciation                                         |                                          |        | 25,251                    |         |               |         | 24,716   |       
|                                                                                     | Amortization of debt discount and issuance costs     |                                          |        | 1,196                     |         |               |         | 1,072    |       
|                                                                                     | Amortization of other assets                         |                                          |        | 329                       |         |               |         | 51       |       
|                                                                                     | Results of equity investment                         |                                          |        | (752                      | )       |               |         | (419     | )     
|                                                                                     | Restructuring and impairment charges                 |                                          |        | 11,592                    |         |               |         |         |       
|                                                                                     | Change in operating assets and liabilities:          |                                          |        |                           |         |               |         |          |       
|                                                                                     |                                                      | Accounts receivable                      |        |                           | (11,353 | )             |         |          | 9,949  |  
|                                                                                     |                                                      | Inventories                              |        |                           | (1,191  | )             |         |          | 6,845  |  
|                                                                                     |                                                      | Accounts payable and current liabilities |        |                           | (14,040 | )             |         |          | 7,987  |  
|                                                                                     |                                                      | Other assets and liabilities             |        |                           | (2,002  | )             |         |          | (6,953 | )
|                                                                                     |                                                      |                                          |        |                           |         |               |         |         
|Net cash provided by operating activities                                            |                                                      |                                          | 5,593  |                           |         |               | 52,353  |         
|Investing activities:                                                                |                                                      |                                          |        |                           |         |               |         |         
|                                                                                     | Additions to property, plant and equipment           |                                          |        | (6,470                    | )       |               |         | (3,376   | )     
|                                                                                     | Proceeds from sale of property, plant and equipment  |                                          |        |                          |         |               |         | 360      |       
|                                                                                     |                                                      |                                          |        |                           |         |               |         |         
|Net cash used in investing activities                                                |                                                      |                                          | (6,470 | )                         |         |               | (3,016  | )       
|Financing activities:                                                                |                                                      |                                          |        |                           |         |               |         |         
|                                                                                     | Net increase (decrease) in revolving credit facility |                                          |        | 6,000                     |         |               |         | (58,000  | )     
|                                                                                     | Proceeds from debt offering                          |                                          |        |                          |         |               |         | 175,000  |       
|                                                                                     | Repayment of term loan                               |                                          |        |                          |         |               |         | (171,750 | )     
|                                                                                     | Repayments of other debts                            |                                          |        | (1,226                    | )       |               |         | (898     | )     
|                                                                                     | Payments of revolving credit facility fees           |                                          |        | (405                      | )       |               |         |         |       
|                                                                                     | Payment of debt issuance costs                       |                                          |        |                          |         |               |         | (5,100   | )     
|                                                                                     | Dividends paid                                       |                                          |        | (2,044                    | )       |               |         | (2,034   | )     
|                                                                                     | Issuance of common stock                             |                                          |        | 18                        |         |               |         | 402      |       
|                                                                                     |                                                      |                                          |        |                           |         |               |         |         
|Net cash provided by (used in) financing activities                                  |                                                      |                                          | 2,343  |                           |         |               | (62,380 | )       
|Effect of exchange rate changes on cash and cash equivalents                         |                                                      |                                          | 518    |                           |         |               | 5,082   |         
|                                                                                     |                                                      |                                          |        |                           |         |               |         |         
|Net increase (decrease) in cash and cash equivalents                                 |                                                      |                                          | 1,984  |                           |         |               | (7,961  | )       
|Cash and cash equivalents at beginning of period                                     |                                                      |                                          | 3,298  |                           |         |               | 13,866  |         
|                                                                                     |                                                      |                                          |        |                           |         |               |         |         
|Cash and cash equivalents at end of period                                           |                                                      | $                                        | 5,282  |                           |         | $             | 5,905   |         
|                                                                                     |                                                      |                                          |        |                           |         |               |         |         

See accompanying notes.

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements

June 30, 2003 (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 three-month period and six-month period ended June
30, 2003 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2003.

The balance sheet at December 31, 2002 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. Refer to our 2002 Annual
Report and Form 10-K for complete financial statement and footnotes.

Stock-Based Compensation

We grant stock options to employees and directors with exercise prices equal to
the fair values of the shares at the dates of grant. We account for stock
option grants in accordance with Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees, and, accordingly, we recognize no
compensation expense for the stock option grants. Had compensation expense
been determined based on the fair values of these stock options at the grant
dates consistent with the method of Statement of Financial Accounting Standards
(SFAS) No. 123, Accounting for Stock-Based Compensation, our pro forma net
(loss) income, basic (loss) earnings per share and diluted (loss) earnings per
share would have been the following:

|                               |                                                                                                                               |   |                                                      |       |                  |   |          |      |          |   |        |       |   |   |       |      |  
|------------------------------ | ----------------------------------------------------------------------------------------------------------------------------- | - | ---------------------------------------------------- | ----- | ---------------- | - | -------- | ---- | -------- | - | ------ | ----- | - | - | ----- | ---- | -
|                               |                                                                                                                               |   | Three Months Ended                                   |       | Six Months Ended
|                               |                                                                                                                               |   |                                                      |       |                 
|                               |                                                                                                                               |   | June 30,                                             |       | June 30,         |   | June 30, |      | June 30,
|                               |                                                                                                                               |   | 2003                                                 |       | 2002             |   | 2003     |      | 2002    
|                               |                                                                                                                               |   |                                                      |       |                  |   |          |      |         
|                               |                                                                                                                               |   | (in thousands of dollars, other than per share data)
|Net (loss) income, as reported |                                                                                                                               | $ | (6,589                                               | )     |                  | $ | 4,750    |      |          | $ | (3,437 | )     |   | $ | 9,586 |     
|Less:                          | Total stock-based
employee compensation expense
determined under fair value
method for all awards, net of
related tax effects |   |                                                      | (116  | )                |   |          | (215 | )        |   |        | (405  | ) |   |       | (418 | )
|                               |                                                                                                                               |   |                                                      |       |                  |   |          |      |          |   |        |       |   |   |       |     
|Pro forma net (loss) income    |                                                                                                                               | $ | (6,705                                               | )     |                  | $ | 4,535    |      |          | $ | (3,842 | )     |   | $ | 9,168 |     
|                               |                                                                                                                               |   |                                                      |       |                  |   |          |      |          |   |        |       |   |   |       |     
|(Loss) earnings per share:     |                                                                                                                               |   |                                                      |       |                  |   |          |      |          |   |        |       |   |   |       |     
|                               | Basic  as reported                                                                                                           |   | $                                                    | (0.26 | )                |   | $        | 0.19 |          |   | $      | (0.13 | ) |   | $     | 0.38 |  
|                               | Basic  pro forma                                                                                                             |   | $                                                    | (0.26 | )                |   | $        | 0.18 |          |   | $      | (0.15 | ) |   | $     | 0.36 |  
|                               | Diluted  as reported                                                                                                         |   | $                                                    | (0.26 | )                |   | $        | 0.18 |          |   | $      | (0.13 | ) |   | $     | 0.37 |  
|                               | Diluted  pro forma                                                                                                           |   | $                                                    | (0.26 | )                |   | $        | 0.18 |          |   | $      | (0.15 | ) |   | $     | 0.36 |  

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INTERMET Corporation

Notes to Interim Condensed
Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

2.     Restructuring and Impairment Charges

In May 2003, due to changes in market conditions and production technology, as
well as a substantial investment necessary for continued operation, we decided
to permanently close our shell-molding plant in Radford, Virginia. We currently
anticipate that the closure will occur on or about September 30, 2003. The
Radford Foundry manufactures gray-iron and ductile-iron components for the
automotive industry. It currently employs 41 salaried employees and 333 hourly
employees, substantially all of whom are expected to be terminated. For the
six-month period ended June 30, 2003, Radford Foundry had revenues of $21.6
million and net losses of $9.1 million, including after tax restructuring and
impairment charges of $7.2 million. The facility is included in the Ferrous
Metals segment in Note 10, Reporting for Business Segments.

As a result of this decision, we recorded $11.6 million pretax restructuring
and impairment charges in the accompanying statements of operations for the
second quarter of 2003. The restructuring and impairment charges included a
write-down of $9.9 million to reduce the capital assets and inventories to
their fair values, $1.4 million for employee severance and related
contractually guaranteed benefit costs, and $0.3 million for the employee
pension costs. The accruals for employee severance and related contractually
guaranteed benefit costs and for employee pension costs are included in
Accrued liabilities and Retirement benefits, respectively, in the
accompanying balance sheet at June 30, 2003. We expect to accrue an additional
$0.2 million employee benefit costs and to reduce the other postretirement
benefit obligations when the employees are terminated. The reduction of
postretirement benefit obligations is expected to be within the range of $2.0
million to $2.5 million. We also expect to incur approximately $0.4 million
for environmental remediation when Radford Foundry is closed, in addition to
the environmental remediation costs that we have already reserved for as
discussed in Note 11, Environmental and Legal Matters.

3.     Inventories

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

|                      |  |          |        |              |  |   |        | 
|--------------------- |  | -------- | ------ | ------------ |  | - | ------ | 
|                      |  | June 30, |        | December 31,
|                      |  | 2003     |        | 2002        
|                      |  |          |        |             
|Finished goods        |  | $        | 14,009 |              |  | $ | 15,804 | 
|Work in process       |  |          | 10,988 |              |  |   | 9,059  | 
|Raw materials         |  |          | 6,051  |              |  |   | 6,794  | 
|Supplies and patterns |  |          | 33,977 |              |  |   | 33,799 | 
|                      |  |          |        |              |  |   |        | 
|                      |  | $        | 65,025 |              |  | $ | 65,456 | 
|                      |  |          |        |              |  |   |        | 

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

4.     Property, Plant and Equipment

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

|                                                                                              |  |          |         |              |  |   |         | 
|--------------------------------------------------------------------------------------------- |  | -------- | ------- | ------------ |  | - | ------- | 
|                                                                                              |  | June 30, |         | December 31,
|                                                                                              |  | 2003     |         | 2002        
|                                                                                              |  |          |         |             
|Land                                                                                          |  | $        | 5,088   |              |  | $ | 5,304   | 
|Buildings and improvements                                                                    |  |          | 134,128 |              |  |   | 135,191 | 
|Machinery and equipment                                                                       |  |          | 511,883 |              |  |   | 510,917 | 
|Construction in progress                                                                      |  |          | 13,691  |              |  |   | 9,595   | 
|                                                                                              |  |          |         |              |  |   |         | 
|Property, plant and equipment, at cost                                                        |  |          | 664,790 |              |  |   | 661,007 | 
|Less: Accumulated depreciation and
foreign industrial development grants, net
of amortization |  |          | 357,450 |              |  |   | 328,973 | 
|                                                                                              |  |          |         |              |  |   |         | 
|Property, plant and equipment, net                                                            |  | $        | 307,340 |              |  | $ | 332,034 | 
|                                                                                              |  |          |         |              |  |   |         | 

5.     Adoption of Accounting Policy

On January 1, 2003, we adopted SFAS No. 145, Rescission of FASB Statement No.
4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections.
This Statement requires certain gains and losses associated with the
extinguishment of debt previously treated as extraordinary items to be
classified as income or loss from continuing operations. As required under
SFAS No. 145, we reclassified pretax losses of $927,000 related to the
extinguishment of bank term loan in the 2002 Statement of Operations from
Extraordinary Item to Interest Expense, Net.

6.     Goodwill

We had goodwill consisting of costs in excess of net assets acquired of
$217.0 million at both June 30, 2003 and December 31, 2002. On January 1,
2002, we adopted SFAS No. 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 No. 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. During the second quarter of 2002, we performed our
initial impairment test on our goodwill. In addition, we performed our
annual impairment test as of November 30, 2002. Both tests apply a
combination of valuation techniques including an income method and a market
method. The results of our tests indicated that goodwill is not impaired.

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

7.     Debt

On June 13, 2002, we completed a senior note offering of $175 million. The
notes bear an annual fixed rate of interest of 9.75% and will mature on June
15, 2009. Interest is due June 15 and December 15 of each year, commencing
December 15, 2002. The notes are unsecured and rank equally with all of our
existing and future unsecured senior debt. The net proceeds of the senior note
offering were used to pay the remaining balance on a bank term loan ($161.7
million) and for working capital purposes. Debt issuance costs of $5.9 million
were capitalized in connection with the debt offering and are included in
other non-current assets in the accompanying balance sheet and are being
amortized over seven years. See note 11 for additional information regarding
the senior unsecured notes.

During the first quarter of 2003, we amended our secured bank revolving credit
agreement. The credit agreement facility was reduced from $300 million to $225
million. In addition, two financial covenants were modified to provide less
restrictive terms.

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

|                                         |  |          |         |              |  |   |         | 
|---------------------------------------- |  | -------- | ------- | ------------ |  | - | ------- | 
|                                         |  | June 30, |         | December 31,
|                                         |  | 2003     |         | 2002        
|                                         |  |          |         |             
|Revolving credit facility                |  | $        | 69,000  |              |  | $ | 63,000  | 
|Senior notes due 2009                    |  |          | 175,000 |              |  |   | 175,000 | 
|Industrial revenue bonds                 |  |          | 39,350  |              |  |   | 40,200  | 
|Capitalized leases and other debt        |  |          | 1,556   |              |  |   | 1,903   | 
|                                         |  |          |         |              |  |   |         | 
|Total debt                               |  |          | 284,906 |              |  |   | 280,103 | 
|Less: Long-term debt due within one year |  |          | 1,484   |              |  |   | 1,567   | 
|                                         |  |          |         |              |  |   |         | 
|Long-term debt due after one year        |  | $        | 283,422 |              |  | $ | 278,536 | 
|                                         |  |          |         |              |  |   |         | 

Maturities of long-term debt at June 30, 2003 and for each twelve-month period
thereafter are as follows (in thousands of dollars):

|                           |  |   |         | 
|-------------------------- |  | - | ------- | 
|Twelve-month period ending |  |   |         | 
|June 30, 2004              |  | $ | 1,484   | 
|June 30, 2005              |  |   | 70,627  | 
|June 30, 2006              |  |   | 2,295   | 
|June 30, 2007              |  |   | 500     | 
|Thereafter                 |  |   | 210,000 | 
|                           |  |   |         | 
|                           |  | $ | 284,906 | 
|                           |  |   |         | 

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

8.     Derivative Financial Instruments

We enter into various derivative transactions pursuant to our risk management
policies. We do not use derivative financial instruments for trading purposes.

We have an interest rate swap agreement with a notional amount of $50 million
to manage our exposure to the interest rate risk associated with our debt. We
have designated this swap transaction as a cash flow hedge. This hedge is
considered to be perfectly effective. Therefore, the entire change in the fair
value of the swap agreement has been recognized in Other Comprehensive (Loss)
Income, and no hedge ineffectiveness is recorded in earnings.

To hedge foreign currency risks, we periodically use over-the-counter forward
contracts. At June 30, 2003, we had outstanding foreign exchange contracts with
a notional amount of $14.8 million (12.9 million Euros) to hedge our European
operations. We have designated these forward contracts as fair value hedges.
The fair value of such foreign exchange contracts was minimal at June 30, 2003.

9.     Comprehensive Income (Loss)

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

|                                   |                                         |   |                    |       |                  |   |          |        |          |   |        |       |  |   |        |        | 
|---------------------------------- | --------------------------------------- | - | ------------------ | ----- | ---------------- | - | -------- | ------ | -------- | - | ------ | ----- |  | - | ------ | ------ | 
|                                   |                                         |   | Three Months Ended |       | Six Months Ended
|                                   |                                         |   |                    |       |                 
|                                   |                                         |   | June 30,           |       | June 30,         |   | June 30, |        | June 30,
|                                   |                                         |   | 2003               |       | 2002             |   | 2003     |        | 2002    
|                                   |                                         |   |                    |       |                  |   |          |        |         
|Net (loss) income                  |                                         | $ | (6,589             | )     |                  | $ | 4,750    |        |          | $ | (3,437 | )     |  | $ | 9,586  |       
|Other comprehensive (loss) income: |                                         |   |                    |       |                  |   |          |        |          |   |        |       |  |   |        |       
|                                   | Fair value of interest rate swap        |   |                    | 253   |                  |   |          | (130   | )        |   |        | 625   |  |   |        | 312    | 
|                                   | Foreign currency translation
adjustment |   |                    | 3,322 |                  |   |          | 11,620 |          |   |        | 4,352 |  |   |        | 10,105 | 
|                                   |                                         |   |                    |       |                  |   |          |        |          |   |        |       |  |   |        |       
|Total other comprehensive income   |                                         |   | 3,575              |       |                  |   | 11,490   |        |          |   | 4,977  |       |  |   | 10,417 |       
|                                   |                                         |   |                    |       |                  |   |          |        |          |   |        |       |  |   |        |       
|Total comprehensive (loss) income  |                                         | $ | (3,014             | )     |                  | $ | 16,420   |        |          | $ | 1,540  |       |  | $ | 20,003 |       
|                                   |                                         |   |                    |       |                  |   |          |        |          |   |        |       |  |   |        |       

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

10.     Reporting for Business Segments

We individually evaluate the operating performance of our business units.
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 Metals segment consists of ferrous foundry operations
and their related machining operations, including the operations of
PortCast-Fundicao Nodular, S.A. (PortCast), our 50% owned Portuguese equity
investment. In June 2003, the Company entered into an agreement to acquire
100% of the shares of PortCast by July 2004. See Note 15, Subsequent Events,
for further details. Our equity in earnings of PortCast in the second
quarter of 2003 and 2002 was $492,000 and $244,000, respectively. For the six
months ended June 30, 2003 and 2002, our equity in earnings of PortCast was
$752,000 and $419,000, respectively. The Light Metals segment consists of
aluminum, magnesium and zinc casting operations and their related machining
operations. The Corporate and Other segment includes operations that do not
fall within the Ferrous Metals or Light Metals segments, and includes the
corporate business unit and its related expenses and eliminations. Certain
administrative costs such as interest and amortization are included within
the Corporate and Other segment. 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, 2003: |                         |  |                           |         |              |  |       |        |               |            |   |        |        |   |   |        
|                                        | Net sales               |  | $                         | 135,513 |              |  | $     | 57,978 |               |            | $ | 3,275  |        |   | $ | 196,766 |  
|                                        |                         |  |                           |         |              |  |       |        |               |            |   |        |        |   |   |         |  
|                                        | Operating (loss) profit |  | $                         | (5,470  | )            |  | $     | 2,869  |               |            | $ | (806   | )      |   | $ | (3,407  | )
|                                        | Interest expense, net   |  |                           | (1,046  | )            |  |       | (1,207 | )             |            |   | (5,566 | )      |   |   | (7,819  | )
|                                        | Other income, net       |  |                           |        |              |  |       |       |               |            |   | 603    |        |   |   | 603     |  
|                                        | Tax benefit (expense)   |  |                           | 2,413   |              |  |       | (723   | )             |            |   | 2,344  |        |   |   | 4,034   |  
|                                        |                         |  |                           |         |              |  |       |        |               |            |   |        |        |   |   |         |  
|                                        |                         |  |                           |         |              |  |       |        |               | Net loss   |   | $      | (6,589 | )
|                                        |                         |  |                           |         |              |  |       |        |               |            |   |        |        |   |   |         |  
|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 expense, net   |  |                           | (965    | )            |  |       | (1,038 | )             |            |   | (5,329 | )      |   |   | (7,332  | )
|                                        | Other income, net       |  |                           |        |              |  |       |       |               |            |   | 81     |        |   |   | 81      |  
|                                        | Tax (expense) benefit   |  |                           | (2,611  | )            |  |       | (2,502 | )             |            |   | 3,090  |        |   |   | (2,023  | )
|                                        |                         |  |                           |         |              |  |       |        |               |            |   |        |        |   |   |         |  
|                                        |                         |  |                           |         |              |  |       |        |               | Net income |   | $      | 4,750  |  
|                                        |                         |  |                           |         |              |  |       |        |               |            |   |        |        |   |   |         |  

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

10.     Reporting for Business Segments (continued)

|                                      |                                                       |  |                           |         |              |  |       |         |                     |            |   |         |        |   |   |         |  
|------------------------------------- | ----------------------------------------------------- |  | ------------------------- | ------- | ------------ |  | ----- | ------- | ------------------- | ---------- | - | ------- | ------ | - | - | ------- | -
|                                      |                                                       |  | Ferrous                   |         |              |  |       |         | Corporate and Other |            |   |         |       
|                                      |                                                       |  | Metals                    |         | Light Metals |  | Other |         | Consolidated       
|                                      |                                                       |  |                           |         |              |  |       |         |                    
|                                      |                                                       |  | (in thousands of dollars)
|Six-month period ended
June 30, 2003: |                                                       |  |                           |         |              |  |       |         |                     |            |   |         |        |   |   |        
|                                      | Net sales                                             |  | $                         | 275,901 |              |  | $     | 120,877 |                     |            | $ | 7,092   |        |   | $ | 403,870 |  
|                                      |                                                       |  |                           |         |              |  |       |         |                     |            |   |         |        |   |   |         |  
|                                      | Operating profit (loss)                               |  | $                         | 4,614   |              |  | $     | 6,912   |                     |            | $ | (2,362  | )      |   | $ | 9,164   |  
|                                      | Interest expense, net                                 |  |                           | (2,046  | )            |  |       | (2,356  | )                   |            |   | (10,897 | )      |   |   | (15,299 | )
|                                      | Other income, net                                     |  |                           |        |              |  |       |        |                     |            |   | 591     |        |   |   | 591     |  
|                                      | Tax (expense) benefit                                 |  |                           | (763    | )            |  |       | (1,895  | )                   |            |   | 4,765   |        |   |   | 2,107   |  
|                                      |                                                       |  |                           |         |              |  |       |         |                     |            |   |         |        |   |   |         |  
|                                      |                                                       |  |                           |         |              |  |       |         |                     | Net loss   |   | $       | (3,437 | )
|                                      |                                                       |  |                           |         |              |  |       |         |                     |            |   |         |        |   |   |         |  
|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 expense, net                                 |  |                           | (2,379  | )            |  |       | (2,227  | )                   |            |   | (9,080  | )      |   |   | (13,686 | )
|                                      | Other income, net                                     |  |                           |        |              |  |       |        |                     |            |   | 627     |        |   |   | 627     |  
|                                      | Tax (expense) benefit                                 |  |                           | (4,811  | )            |  |       | (4,567  | )                   |            |   | 5,000   |        |   |   | (4,378  | )
|                                      | Cumulative effect of a
change in accounting
principle |  |                           | 481     |              |  |       |        |                     |            |   |        |        |   |   | 481     |  
|                                      |                                                       |  |                           |         |              |  |       |         |                     |            |   |         |        |   |   |         |  
|                                      |                                                       |  |                           |         |              |  |       |         |                     | Net income |   | $       | 9,586  |  
|                                      |                                                       |  |                           |         |              |  |       |         |                     |            |   |         |        |   |   |         |  

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

11.     Environmental and Legal Matters

On March 14, 2002, we entered into a Consent Order with the U.S. Environmental
Protection Agency (USEPA), 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 USEPAs
Corrective Action Program, which is being undertaken on a nationwide basis by
USEPA 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. 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. During the second quarter of 2003, we
provided for an additional $1.6 million reserve for the estimated cost of
remedial action at the Radford facilities.

We are subject to federal, state, local and foreign environmental laws and
regulations concerning, among other things, air emissions, effluent discharges,
storage treatment and disposal of hazardous materials and remediation of
contaminated soil and groundwater. At some of our industrial sites, hazardous
materials have been managed for many years. Consequently, we are subject to
various environmental laws that impose compliance obligations and can create
liability for historical releases of hazardous substances. It is likely that we
will be subject to increasingly stringent environmental standards in the future
and that we will be required to make additional expenditures, which could be
significant, relating to environmental matters on an ongoing basis.

The 1990 amendments to the Federal Clean Air Act and regulations promulgated
thereunder are expected to have a major impact on the compliance cost of many
U.S. companies, including foundries of the type we own. Until federal and
state governments adopt final regulations, including Maximum Achievable Control
Technology standards for our industry, and until we are able to evaluate
necessary control measures, it is not possible to estimate these costs.

We also have current and former operating entities (for which we may be
responsible) that are potentially responsible for cleanup of known
environmental sites. These include third-party-owned sites, as well as sites
that are currently owned, or formerly owned, by us or our subsidiaries. As of
June 30, 2003, we have accrued $7.1 million to cover estimated future
environmental expenditures for known environmental sites, including the $1.6
million additional reserve for Radford facilities provided for during the
second quarter of 2003. The $7.1 million reserve also includes a $3.2 million
cash escrow account acquired as a part of the acquisition of Ganton
Technologies in 1999 that is being used to fund the clean-up of an inactive
property located in Addison, Illinois. There can be no assurance that costs in
excess of these accruals will not be incurred, or that unknown conditions will
not be discovered that result in material additional expenditures by us for
environmental matters.

We are a party to a number of other legal proceedings associated with
environmental, employment, commercial, product liability and other matters in
the ordinary course of our business. We do not believe that such 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 or results of operations or liquidity, taken as a whole. It
is possible, however, that future results of operations for any particular
quarterly or annual period could be materially affected by changes in our
assumptions related to these proceedings.

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

12.     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.

|                                        |                                                                                                                      |   |                                                  |        |                  |   |          |        |          |   |       |        |   |   |      |        |  
|--------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | - | ------------------------------------------------ | ------ | ---------------- | - | -------- | ------ | -------- | - | ----- | ------ | - | - | ---- | ------ | -
|                                        |                                                                                                                      |   | Three Months Ended                               |        | Six Months Ended
|                                        |                                                                                                                      |   |                                                  |        |                 
|                                        |                                                                                                                      |   | June 30,                                         |        | June 30,         |   | June 30, |        | June 30,
|                                        |                                                                                                                      |   | 2003                                             |        | 2002             |   | 2003     |        | 2002    
|                                        |                                                                                                                      |   |                                                  |        |                  |   |          |        |         
|                                        |                                                                                                                      |   | (in thousands of dollars, except per share data)
|Numerator:                              |                                                                                                                      |   |                                                  |        |                  |   |          |        |          |   |       |        |   |   |      |       
|                                        | Net (loss) income                                                                                                    |   | $                                                | (6,589 | )                |   | $        | 4,750  |          |   | $     | (3,437 | ) |   | $    | 9,586  |  
|                                        |                                                                                                                      |   |                                                  |        |                  |   |          |        |          |   |       |        |   |   |      |        |  
|Denominator:                            |                                                                                                                      |   |                                                  |        |                  |   |          |        |          |   |       |        |   |   |      |       
|                                        | Denominator for basic (loss) earnings per share 
weighted average shares                                            |   |                                                  | 25,589 |                  |   |          | 25,444 |          |   |       | 25,568 |   |   |      | 25,413 |  
|                                        | Effect of shares held in deferred compensation plan                                                                  |   |                                                  |       |                  |   |          | (11    | )        |   |       |       |   |   |      | (11    | )
|                                        |                                                                                                                      |   |                                                  |        |                  |   |          |        |          |   |       |        |   |   |      |        |  
|                                        | Denominator for basic (loss) earnings per share 
weighted average shares                                            |   |                                                  | 25,589 |                  |   |          | 25,433 |          |   |       | 25,568 |   |   |      | 25,402 |  
|                                        |                                                                                                                      |   |                                                  |        |                  |   |          |        |          |   |       |        |   |   |      |        |  
|Effect of dilutive securities:          |                                                                                                                      |   |                                                  |        |                  |   |          |        |          |   |       |        |   |   |      |       
|                                        | Effect of shares held in deferred compensation plan                                                                  |   |                                                  |       |                  |   |          | 11     |          |   |       |       |   |   |      | 11     |  
|                                        | Employee stock options and unearned restricted
stock                                                                 |   |                                                  |       |                  |   |          | 436    |          |   |       |       |   |   |      | 299    |  
|                                        |                                                                                                                      |   |                                                  |        |                  |   |          |        |          |   |       |        |   |   |      |        |  
|                                        | Denominator for diluted (loss) earnings per share
 adjusted weighted average shares and assumed
exercise of options |   |                                                  | 25,589 |                  |   |          | 25,880 |          |   |       | 25,568 |   |   |      | 25,712 |  
|                                        |                                                                                                                      |   |                                                  |        |                  |   |          |        |          |   |       |        |   |   |      |        |  
|Basic (loss) earnings per share         |                                                                                                                      | $ | (0.26                                            | )      |                  | $ | 0.19     |        |          | $ | (0.13 | )      |   | $ | 0.38 |       
|                                        |                                                                                                                      |   |                                                  |        |                  |   |          |        |          |   |       |        |   |   |      |        |  
|Fully diluted (loss) earnings per share |                                                                                                                      | $ | (0.26                                            | )      |                  | $ | 0.18     |        |          | $ | (0.13 | )      |   | $ | 0.37 |       
|                                        |                                                                                                                      |   |                                                  |        |                  |   |          |        |          |   |       |        |   |   |      |        |  

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

13.     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 certain of our domestic wholly-owned
subsidiaries (Combined Guarantor Subsidiaries). The guarantees are
unconditional and joint and several. The senior notes are effectively
subordinated to the secured debt of the Company (Parent). Restrictions
contained in the indenture covering the senior notes include, but are not
limited to, restrictions on incurring additional secured debt, repurchasing of
our capital stock, disposal of assets, affiliate transactions, and transfer of
assets. As of June 30, 2003, the Parent and the Combined Guarantor
Subsidiaries had approximately $107.3 million of secured debt outstanding and
approximately $96.9 million of unused commitments, net of outstanding letters
of credit, under our credit facility. The secured debt of the Parent is also
guaranteed by each of the Combined Guarantor Subsidiaries.

Certain of our domestic subsidiaries (Intermet International, Inc., Intermet
Holding Company, Transnational Indemnity Company, and Western Capital
Corporation) and all of our foreign subsidiaries are not guarantors of the
notes (Combined Non-Guarantor Subsidiaries). The Combined Non-Guarantor
Subsidiaries had approximately $0.3 million of debt outstanding as of June 30,
2003.

Presented below is summarized condensed consolidating financial information for
the Parent, the Combined Guarantor Subsidiaries, the Combined Non-Guarantor
Subsidiaries, and the Company on a consolidated basis as of June 30, 2003 and
December 31, 2002, and for the three and six months ended June 30, 2003 and
2002.

Investments in subsidiaries are presented using the equity method of
accounting. Separate financial statements of the Combined Guarantor
Subsidiaries are not provided as the condensed consolidating 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 group.

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

13.     Supplemental Condensed Consolidating Financial Information (continued)

|                                     |                                |   |                                  |        |              |   |              |        |               |   |              |     |  |   |        |   |  |   |         |        |  
|------------------------------------ | ------------------------------ | - | -------------------------------- | ------ | ------------ | - | ------------ | ------ | ------------- | - | ------------ | --- |  | - | ------ | - |  | - | ------- | ------ | -
|                                     |                                |   | Three months ended June 30, 2003
|                                     |                                |   |                                 
|                                     |                                |   |                                  |        |              |   | Combined     |        | Combined      |   |              |     |  |   |        |   | 
|                                     |                                |   |                                  |        |              |   | Guarantor    |        | Non-Guarantor |   |              |     |  |   |        |   | 
|                                     |                                |   | Parent                           |        | Subsidiaries |   | Subsidiaries |        | Eliminations  |   | Consolidated
|                                     |                                |   |                                  |        |              |   |              |        |               |   |             
|                                     |                                |   | (in thousands of dollars)       
|INCOME STATEMENT DATA                |                                |   |                                  |        |              |   |              |        |               |   |              |     |  |   |        |   |  |   |         |       
|Net sales                            |                                | $ |                                 |        |              | $ | 177,034      |        |               | $ | 25,748       |     |  | $ | (6,016 | ) |  | $ | 196,766 |       
|Cost of sales                        |                                |   |                                 |        |              |   | 162,835      |        |               |   | 22,406       |     |  |   | (6,016 | ) |  |   | 179,225 |       
|                                     |                                |   |                                  |        |              |   |              |        |               |   |              |     |  |   |        |   |  |   |         |       
|Gross profit                         |                                |   |                                 |        |              |   | 14,199       |        |               |   | 3,342        |     |  |   |       |   |  |   | 17,541  |       
|Selling, general and administrative  |                                |   | 115                              |        |              |   | 6,050        |        |               |   | 1,766        |     |  |   | (165   | ) |  |   | 7,766   |       
|Restructuring and impairment charges |                                |   |                                 |        |              |   | 11,592       |        |               |   |             |     |  |   |       |   |  |   | 11,592  |       
|Other operating expenses             |                                |   | 66                               |        |              |   | 1,308        |        |               |   | 51           |     |  |   | 165    |   |  |   | 1,590   |       
|                                     |                                |   |                                  |        |              |   |              |        |               |   |              |     |  |   |        |   |  |   |         |       
|Operating (loss) profit              |                                |   | (181                             | )      |              |   | (4,751       | )      |               |   | 1,525        |     |  |   |       |   |  |   | (3,407  | )     
|Other income and expenses:           |                                |   |                                  |        |              |   |              |        |               |   |              |     |  |   |        |   |  |   |         |       
|                                     | Interest (expense) income, net |   |                                  | (5,464 | )            |   |              | (2,453 | )             |   |              | 98  |  |   |        |  |  |   |         | (7,819 | )
|                                     | Other income, net              |   |                                  | 31     |              |   |              | 2      |               |   |              | 570 |  |   |        |  |  |   |         | 603    |  
|                                     |                                |   |                                  |        |              |   |              |        |               |   |              |     |  |   |        |   |  |   |         |       
|(Loss) income before income taxes    |                                |   | (5,614                           | )      |              |   | (7,202       | )      |               |   | 2,193        |     |  |   |       |   |  |   | (10,623 | )     
|Income tax (benefit) expense         |                                |   | (2,154                           | )      |              |   | (2,603       | )      |               |   | 723          |     |  |   |       |   |  |   | (4,034  | )     
|                                     |                                |   |                                  |        |              |   |              |        |               |   |              |     |  |   |        |   |  |   |         |       
|Net (loss) income                    |                                | $ | (3,460                           | )      |              | $ | (4,599       | )      |               | $ | 1,470        |     |  | $ |       |   |  | $ | (6,589  | )     
|                                     |                                |   |                                  |        |              |   |              |        |               |   |              |     |  |   |        |   |  |   |         |       

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

13.     Supplemental Condensed Consolidating Financial Information (continued)

|                                    |                                |   |                                  |        |              |   |              |        |               |   |              |     |  |   |        |   |  |   |         |        |  
|----------------------------------- | ------------------------------ | - | -------------------------------- | ------ | ------------ | - | ------------ | ------ | ------------- | - | ------------ | --- |  | - | ------ | - |  | - | ------- | ------ | -
|                                    |                                |   | 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 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 |   |                                  | (5,243 | )            |   |              | (2,194 | )             |   |              | 105 |  |   |        |  |  |   |         | (7,332 | )
|                                    | Other (expense) income, net    |   |                                  | (264   | )            |   |              | 182    |               |   |              | 163 |  |   |        |  |  |   |         | 81     |  
|                                    |                                |   |                                  |        |              |   |              |        |               |   |              |     |  |   |        |   |  |   |         |       
|(Loss) income before income taxes   |                                |   | (7,086                           | )      |              |   | 12,305       |        |               |   | 1,546        |     |  |   | 8      |   |  |   | 6,773   |       
|Income tax (benefit) expense        |                                |   | (2,886                           | )      |              |   | 4,837        |        |               |   | 72           |     |  |   |       |   |  |   | 2,023   |       
|                                    |                                |   |                                  |        |              |   |              |        |               |   |              |     |  |   |        |   |  |   |         |       
|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, 2003 (Unaudited)

13.     Supplemental Condensed Consolidating Financial Information (continued)

|                                     |                               |   |                                |         |              |   |              |        |               |   |              |     |  |   |         |   |  |   |         |         |  
|------------------------------------ | ----------------------------- | - | ------------------------------ | ------- | ------------ | - | ------------ | ------ | ------------- | - | ------------ | --- |  | - | ------- | - |  | - | ------- | ------- | -
|                                     |                               |   | Six months ended June 30, 2003
|                                     |                               |   |                               
|                                     |                               |   |                                |         |              |   | Combined     |        | Combined      |   |              |     |  |   |         |   | 
|                                     |                               |   |                                |         |              |   | Guarantor    |        | Non-Guarantor |   |              |     |  |   |         |   | 
|                                     |                               |   | Parent                         |         | Subsidiaries |   | Subsidiaries |        | Eliminations  |   | Consolidated
|                                     |                               |   |                                |         |              |   |              |        |               |   |             
|                                     |                               |   | (in thousands of dollars)     
|INCOME STATEMENT DATA                |                               |   |                                |         |              |   |              |        |               |   |              |     |  |   |         |   |  |   |         |        
|Net sales                            |                               | $ |                               |         |              | $ | 362,584      |        |               | $ | 52,715       |     |  | $ | (11,429 | ) |  | $ | 403,870 |        
|Cost of sales                        |                               |   |                               |         |              |   | 330,002      |        |               |   | 46,474       |     |  |   | (11,429 | ) |  |   | 365,047 |        
|                                     |                               |   |                                |         |              |   |              |        |               |   |              |     |  |   |         |   |  |   |         |        
|Gross profit                         |                               |   |                               |         |              |   | 32,582       |        |               |   | 6,241        |     |  |   |        |   |  |   | 38,823  |        
|Selling, general and administrative  |                               |   | 1,381                          |         |              |   | 11,534       |        |               |   | 3,638        |     |  |   | 58      |   |  |   | 16,611  |        
|Restructuring and impairment charges |                               |   |                               |         |              |   | 11,592       |        |               |   |             |     |  |   |        |   |  |   | 11,592  |        
|Other operating expenses (income)    |                               |   | 116                            |         |              |   | 1,318        |        |               |   | 80           |     |  |   | (58     | ) |  |   | 1,456   |        
|                                     |                               |   |                                |         |              |   |              |        |               |   |              |     |  |   |         |   |  |   |         |        
|Operating (loss) profit              |                               |   | (1,497                         | )       |              |   | 8,138        |        |               |   | 2,523        |     |  |   |        |   |  |   | 9,164   |        
|Other income and expenses:           |                               |   |                                |         |              |   |              |        |               |   |              |     |  |   |         |   |  |   |         |        
|                                     | Interest
(expense) income,net |   |                                | (10,708 | )            |   |              | (4,774 | )             |   |              | 183 |  |   |         |  |  |   |         | (15,299 | )
|                                     | Other
(expense) income, net   |   |                                | (187    | )            |   |              | 7      |               |   |              | 771 |  |   |         |  |  |   |         | 591     |  
|                                     |                               |   |                                |         |              |   |              |        |               |   |              |     |  |   |         |   |  |   |         |        
|(Loss) income before income taxes    |                               |   | (12,392                        | )       |              |   | 3,371        |        |               |   | 3,477        |     |  |   |        |   |  |   | (5,544  | )      
|Income tax (benefit) expense         |                               |   | (4,537                         | )       |              |   | 1,534        |        |               |   | 896          |     |  |   |        |   |  |   | (2,107  | )      
|                                     |                               |   |                                |         |              |   |              |        |               |   |              |     |  |   |         |   |  |   |         |        
|Net (loss) income                    |                               | $ | (7,855                         | )       |              | $ | 1,837        |        |               | $ | 2,581        |     |  | $ |        |   |  | $ | (3,437  | )      
|                                     |                               |   |                                |         |              |   |              |        |               |   |              |     |  |   |         |   |  |   |         |        

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

13.     Supplemental Condensed Consolidating Financial Information (continued)

|                                                                             |                             |   |                                |        |              |   |              |        |               |   |              |     |  |   |        |   |  |   |         |         |  
|---------------------------------------------------------------------------- | --------------------------- | - | ------------------------------ | ------ | ------------ | - | ------------ | ------ | ------------- | - | ------------ | --- |  | - | ------ | - |  | - | ------- | ------- | -
|                                                                             |                             |   | 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 expenses (income)                                            |                             |   | 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 |   |                                | (8,913 | )            |   |              | (4,926 | )             |   |              | 153 |  |   |        |  |  |   |         | (13,686 | )
|                                                                             | Other(expense)income,net    |   |                                | (264   | )            |   |              | 379    |               |   |              | 512 |  |   |        |  |  |   |         | 627     |  
|                                                                             |                             |   |                                |        |              |   |              |        |               |   |              |     |  |   |        |   |  |   |         |        
|(Loss) income before income taxes                                            |                             |   | (11,656                        | )      |              |   | 21,766       |        |               |   | 3,374        |     |  |   | (1     | ) |  |   | 13,483  |        
|Income tax (benefit) expense                                                 |                             |   | (4,624                         | )      |              |   | 8,622        |        |               |   | 380          |     |  |   |       |   |  |   | 4,378   |        
|                                                                             |                             |   |                                |        |              |   |              |        |               |   |              |     |  |   |        |   |  |   |         |        
|Net (loss) income before cumulative effect of
change in accounting principle |                             |   | (7,032                         | )      |              |   | 13,144       |        |               |   | 2,994        |     |  |   | (1     | ) |  |   | 9,105   |        
|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, 2003 (Unaudited)

13.     Supplemental Condensed Consolidating Financial Information (continued)

|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 
|------------------------------------------ | ---------------------------------- | - | ------------------------- | ------- | ------------ | - | ------------ | ------- | ------------- | - | ------------ | ------- | - | - | -------- | -------- | - | - | ------- | ------- | 
|                                           |                                    |   | As of June 30, 2003      
|                                           |                                    |   |                          
|                                           |                                    |   |                           |         |              |   | Combined     |         | Combined      |   |              |         |   |   |          |          |  
|                                           |                                    |   |                           |         |              |   | Guarantor    |         | Non-Guarantor |   |              |         |   |   |          |          |  
|                                           |                                    |   | Parent                    |         | Subsidiaries |   | Subsidiaries |         | Eliminations  |   | Consolidated
|                                           |                                    |   |                           |         |              |   |              |         |               |   |             
|                                           |                                    |   | (in thousands of dollars)
|BALANCE SHEET DATA                         |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |        
|ASSETS                                     |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |        
|Current assets:                            |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |        
|                                           | Cash and cash equivalents          |   | $                         | 119     |              |   | $            | 1,943   |               |   | $            | 3,220   |   |   | $        |         |   |   | $       | 5,282   | 
|                                           | Accounts receivable, net           |   |                           | (6      | )            |   |              | 73,822  |               |   |              | 26,402  |   |   |          |         |   |   |         | 100,218 | 
|                                           | Inventories                        |   |                           |        |              |   |              | 56,691  |               |   |              | 8,393   |   |   |          | (59      | ) |   |         | 65,025  | 
|                                           | Other current assets               |   |                           | 22,145  |              |   |              | 4,229   |               |   |              | 420     |   |   |          | 1        |   |   |         | 26,795  | 
|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 
|                                           | Total current assets               |   |                           | 22,258  |              |   |              | 136,685 |               |   |              | 38,435  |   |   |          | (58      | ) |   |         | 197,320 | 
|Property, plant and equipment, net         |                                    |   | 4,670                     |         |              |   | 270,913      |         |               |   | 31,214       |         |   |   | 543      |          |   |   | 307,340 |        
|Other assets:                              |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |        
|                                           | Goodwill                           |   |                           |        |              |   |              | 217,016 |               |   |              |        |   |   |          |         |   |   |         | 217,016 | 
|                                           | Other non-current assets           |   |                           | 18,109  |              |   |              | 4,015   |               |   |              | 12,434  |   |   |          | 1,443    |   |   |         | 36,001  | 
|                                           | Intercompany, net                  |   |                           | (41,225 | )            |   |              | 67,165  |               |   |              | (27,491 | ) |   |          | 1,551    |   |   |         |        | 
|                                           | Investments in subsidiaries        |   |                           | 601,484 |              |   |              |        |               |   |              |        |   |   |          | (601,484 | ) |   |         |        | 
|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 
|Total assets                               |                                    | $ | 605,296                   |         |              | $ | 695,794      |         |               | $ | 54,592       |         |   | $ | (598,005 | )        |   | $ | 757,677 |        
|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 
|LIABILITIES AND SHAREHOLDERS EQUITY       |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |        
|Current liabilities:                       |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |        
|                                           | Accounts payable                   |   | $                         | 1,370   |              |   | $            | 59,567  |               |   | $            | 5,524   |   |   | $        | (429     | ) |   | $       | 66,032  | 
|                                           | Accrued liabilities                |   |                           | 15,124  |              |   |              | 36,185  |               |   |              | 4,881   |   |   |          | 236      |   |   |         | 56,426  | 
|                                           | Long-term debt due within
one year |   |                           | 350     |              |   |              | 1,041   |               |   |              | 93      |   |   |          |         |   |   |         | 1,484   | 
|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 
|                                           | Total current liabilities          |   |                           | 16,844  |              |   |              | 96,793  |               |   |              | 10,498  |   |   |          | (193     | ) |   |         | 123,942 | 
|Long-term debt due after one year          |                                    |   | 246,000                   |         |              |   | 37,237       |         |               |   | 185          |         |   |   |         |          |   |   | 283,422 |        
|Retirement benefits                        |                                    |   | 78,855                    |         |              |   | 450          |         |               |   |             |         |   |   |         |          |   |   | 79,305  |        
|Other non-current liabilities              |                                    |   | 6,585                     |         |              |   | 6,947        |         |               |   | (292         | )       |   |   | 756      |          |   |   | 13,996  |        
|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 
|                                           | Total non-current liabilities      |   |                           | 331,440 |              |   |              | 44,634  |               |   |              | (107    | ) |   |          | 756      |   |   |         | 376,723 | 
|Shareholders equity                       |                                    |   | 257,012                   |         |              |   | 554,367      |         |               |   | 44,201       |         |   |   | (598,568 | )        |   |   | 257,012 |        
|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 
|Total liabilities and shareholders equity |                                    | $ | 605,296                   |         |              | $ | 695,794      |         |               | $ | 54,592       |         |   | $ | (598,005 | )        |   | $ | 757,677 |        
|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

13.     Supplemental Condensed Consolidating Financial Information (continued)

|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 
|------------------------------------------ | ---------------------------------- | - | ------------------------- | ------- | ------------ | - | ------------ | ------- | ------------- | - | ------------ | ------- | - | - | -------- | -------- | - | - | ------- | ------- | 
|                                           |                                    |   | As of December 31, 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          |   | $                         | 1,122   |              |   | $            | 167     |               |   | $            | 2,009   |   |   | $        |         |   |   | $       | 3,298   | 
|                                           | Accounts receivable, net           |   |                           | 162     |              |   |              | 63,336  |               |   |              | 23,281  |   |   |          |         |   |   |         | 86,779  | 
|                                           | Inventories                        |   |                           |        |              |   |              | 57,376  |               |   |              | 8,139   |   |   |          | (59      | ) |   |         | 65,456  | 
|                                           | Other current assets               |   |                           | 21,291  |              |   |              | 2,901   |               |   |              | 682     |   |   |          | 1        |   |   |         | 24,875  | 
|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 
|                                           | Total current assets               |   |                           | 22,575  |              |   |              | 123,780 |               |   |              | 34,111  |   |   |          | (58      | ) |   |         | 180,408 | 
|Property, plant and equipment, net         |                                    |   | 4,598                     |         |              |   | 294,781      |         |               |   | 32,112       |         |   |   | 543      |          |   |   | 332,034 |        
|Other assets:                              |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |        
|                                           | Goodwill                           |   |                           |        |              |   |              | 217,016 |               |   |              |        |   |   |          |         |   |   |         | 217,016 | 
|                                           | Other non-current assets           |   |                           | 18,749  |              |   |              | 3,867   |               |   |              | 10,581  |   |   |          | 1,443    |   |   |         | 34,640  | 
|                                           | Intercompany, net                  |   |                           | (40,038 | )            |   |              | 63,759  |               |   |              | (25,323 | ) |   |          | 1,602    |   |   |         |        | 
|                                           | Investments in subsidiaries        |   |                           | 592,765 |              |   |              |        |               |   |              |        |   |   |          | (592,765 | ) |   |         |        | 
|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 
|Total assets                               |                                    | $ | 598,649                   |         |              | $ | 703,203      |         |               | $ | 51,481       |         |   | $ | (589,235 | )        |   | $ | 764,098 |        
|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 
|LIABILITIES AND SHAREHOLDERS EQUITY       |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |        
|Current liabilities:                       |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |        
|                                           | Accounts payable                   |   | $                         | 2,462   |              |   | $            | 63,399  |               |   | $            | 5,337   |   |   | $        | (265     | ) |   | $       | 70,933  | 
|                                           | Accrued liabilities                |   |                           | 19,603  |              |   |              | 34,480  |               |   |              | 11,041  |   |   |          | 81       |   |   |         | 65,205  | 
|                                           | Long-term debt due within
one year |   |                           | 350     |              |   |              | 1,107   |               |   |              | 110     |   |   |          |         |   |   |         | 1,567   | 
|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 
|                                           | Total current liabilities          |   |                           | 22,415  |              |   |              | 98,986  |               |   |              | 16,488  |   |   |          | (184     | ) |   |         | 137,705 | 
|Long-term debt due after one year          |                                    |   | 240,350                   |         |              |   | 37,974       |         |               |   | 212          |         |   |   |         |          |   |   | 278,536 |        
|Retirement benefits                        |                                    |   | 70,812                    |         |              |   | 6,759        |         |               |   |             |         |   |   |         |          |   |   | 77,571  |        
|Other non-current liabilities              |                                    |   | 7,503                     |         |              |   | 6,955        |         |               |   | (2,488       | )       |   |   | 747      |          |   |   | 12,717  |        
|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 
|                                           | Total non-current liabilities      |   |                           | 318,665 |              |   |              | 51,688  |               |   |              | (2,276  | ) |   |          | 747      |   |   |         | 368,824 | 
|Shareholders equity                       |                                    |   | 257,569                   |         |              |   | 552,529      |         |               |   | 37,269       |         |   |   | (589,798 | )        |   |   | 257,569 |        
|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 
|Total liabilities and shareholders equity |                                    | $ | 598,649                   |         |              | $ | 703,203      |         |               | $ | 51,481       |         |   | $ | (589,235 | )        |   | $ | 764,098 |        
|                                           |                                    |   |                           |         |              |   |              |         |               |   |              |         |   |   |          |          |   |   |         |         | 

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

13.     Supplemental Condensed Consolidating Financial Information (continued)

|                                                             |                                            |   |                                |        |              |   |              |        |               |   |              |       |   |   |   |   |  |   |        |        |  
|------------------------------------------------------------ | ------------------------------------------ | - | ------------------------------ | ------ | ------------ | - | ------------ | ------ | ------------- | - | ------------ | ----- | - | - | - | - |  | - | ------ | ------ | -
|                                                             |                                            |   | Six months ended June 30, 2003
|                                                             |                                            |   |                               
|                                                             |                                            |   |                                |        |              |   | Combined     |        | Combined      |   |              |       |   |   |   |   | 
|                                                             |                                            |   |                                |        |              |   | Guarantor    |        | Non-Guarantor |   |              |       |   |   |   |   | 
|                                                             |                                            |   | Parent                         |        | Subsidiaries |   | Subsidiaries |        | Eliminations  |   | Consolidated
|                                                             |                                            |   |                                |        |              |   |              |        |               |   |             
|                                                             |                                            |   | (in thousands of dollars)     
|CASH FLOW DATA                                               |                                            |   |                                |        |              |   |              |        |               |   |              |       |   |   |   |   |  |   |        |       
|Net cash (used in) provided by operating
activities          |                                            | $ | (2,925                         | )      |              | $ | 8,456        |        |               | $ | 62           |       |   | $ |  |   |  | $ | 5,593  |       
|Investing activities:                                        |                                            |   |                                |        |              |   |              |        |               |   |              |       |   |   |   |   |  |   |        |       
|                                                             | Additions to property, plant and
equipment |   |                                | (547   | )            |   |              | (5,527 | )             |   |              | (396  | ) |   |   |  |  |   |        | (6,470 | )
|                                                             |                                            |   |                                |        |              |   |              |        |               |   |              |       |   |   |   |   |  |   |        |       
|Net cash used in investing activities                        |                                            |   | (547                           | )      |              |   | (5,527       | )      |               |   | (396         | )     |   |   |  |   |  |   | (6,470 | )     
|Financing activities:                                        |                                            |   |                                |        |              |   |              |        |               |   |              |       |   |   |   |   |  |   |        |       
|                                                             | Net increase in revolving credit facility  |   |                                | 6,000  |              |   |              |       |               |   |              |      |   |   |   |  |  |   |        | 6,000  |  
|                                                             | Net (decrease) increase in other debts     |   |                                | (1,100 | )            |   |              | (1,153 | )             |   |              | 1,027 |   |   |   |  |  |   |        | (1,226 | )
|                                                             | Payments of revolving credit facility
fees |   |                                | (405   | )            |   |              |       |               |   |              |      |   |   |   |  |  |   |        | (405   | )
|                                                             | Dividends paid                             |   |                                | (2,044 | )            |   |              |       |               |   |              |      |   |   |   |  |  |   |        | (2,044 | )
|                                                             | Issuance of common stock                   |   |                                | 18     |              |   |              |       |               |   |              |      |   |   |   |  |  |   |        | 18     |  
|                                                             |                                            |   |                                |        |              |   |              |        |               |   |              |       |   |   |   |   |  |   |        |       
|Net cash provided by (used in) financing
activities          |                                            |   | 2,469                          |        |              |   | (1,153       | )      |               |   | 1,027        |       |   |   |  |   |  |   | 2,343  |       
|Effect of exchange rate changes on cash
and cash equivalents |                                            |   |                               |        |              |   |             |        |               |   | 518          |       |   |   |  |   |  |   | 518    |       
|                                                             |                                            |   |                                |        |              |   |              |        |               |   |              |       |   |   |   |   |  |   |        |       
|Net (decrease) increase in cash and cash
equivalents         |                                            | $ | (1,003                         | )      |              | $ | 1,776        |        |               | $ | 1,211        |       |   | $ |  |   |  | $ | 1,984  |       
|                                                             |                                            |   |                                |        |              |   |              |        |               |   |              |       |   |   |   |   |  |   |        |       

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

June 30, 2003 (Unaudited)

13.     Supplemental Condensed Consolidating Financial Information (continued)

|                                                             |                                                     |   |                                |          |              |   |              |        |               |   |              |      |   |   |   |   |  |   |         |          |  
|------------------------------------------------------------ | --------------------------------------------------- | - | ------------------------------ | -------- | ------------ | - | ------------ | ------ | ------------- | - | ------------ | ---- | - | - | - | - |  | - | ------- | -------- | -
|                                                             |                                                     |   | 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   | )
|                                                             | Proceeds from sale of property, plant
and equipment |   |                                |         |              |   |              | 360    |               |   |              |     |   |   |   |  |  |   |         | 360      |  
|                                                             |                                                     |   |                                |          |              |   |              |        |               |   |              |      |   |   |   |   |  |   |         |         
|Net cash used in investing activities                        |                                                     |   | (98                            | )        |              |   | (2,261       | )      |               |   | (657         | )    |   |   |  |   |  |   | (3,016  | )       
|Financing activities:                                        |                                                     |   |                                |          |              |   |              |        |               |   |              |      |   |   |   |   |  |   |         |         
|                                                             | Net decrease in revolving credit facility           |   |                                | (58,000  | )            |   |              |       |               |   |              |     |   |   |   |  |  |   |         | (58,000  | )
|                                                             | Proceeds from debt offering                         |   |                                | 175,000  |              |   |              |       |               |   |              |     |   |   |   |  |  |   |         | 175,000  |  
|                                                             | Repayment of term loan                              |   |                                | (171,750 | )            |   |              |       |               |   |              |     |   |   |   |  |  |   |         | (171,750 | )
|                                                             | Repayments of other debts                           |   |                                |         |              |   |              | (806   | )             |   |              | (92  | ) |   |   |  |  |   |         | (898     | )
|                                                             | Payments of debt issuance costs                     |   |                                | (5,100   | )            |   |              |       |               |   |              |     |   |   |   |  |  |   |         | (5,100   | )
|                                                             | Dividends paid                                      |   |                                | (2,034   | )            |   |              |       |               |   |              |     |   |   |   |  |  |   |         | (2,034   | )
|                                                             | Issuance of common stock                            |   |                                | 402      |              |   |              |       |               |   |              |     |   |   |   |  |  |   |         | 402      |  
|                                                             |                                                     |   |                                |          |              |   |              |        |               |   |              |      |   |   |   |   |  |   |         |         
|Net cash used in financing activities                        |                                                     |   | (61,482                        | )        |              |   | (806         | )      |               |   | (92          | )    |   |   |  |   |  |   | (62,380 | )       
|Effect of exchange rate changes on cash
and cash equivalents |                                                     |   |                               |          |              |   |             |        |               |   | 5,082        |      |   |   |  |   |  |   | 5,082   |         
|                                                             |                                                     |   |                                |          |              |   |              |        |               |   |              |      |   |   |   |   |  |   |         |         
|Net (decrease) increase 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, 2003 (Unaudited)

14.     Related Party Transactions

We receive management and technical support fees from PortCast, our 50% owned
Portuguese joint venture, for providing administrative service and technical
support to them. These fees are reviewed by PortCast and us annually. We also
have outstanding interest-bearing loan and other receivables from PortCast,
mainly comprising management and technical support fees receivables and
advances made to finance PortCasts operations. Interest rates on these loan
and other receivables range from three-month European Interbank Offered Rate
(EURIBOR) plus 0.8% to three-month EURIBOR plus 1.0%. On June 25, 2003, we
entered into an agreement to acquire 100% of the shares of PortCast by July
2004. See Note 15, Subsequent Events, for further details.

The related party transactions with PortCast are summarized as follows (in
thousands of dollars):

|                      |  |                    |     |                  |  |               |     |               |  |   |     |  |  |   |     | 
|--------------------- |  | ------------------ | --- | ---------------- |  | ------------- | --- | ------------- |  | - | --- |  |  | - | --- | 
|                      |  | Three Months Ended |     | Six Months Ended
|                      |  |                    |     |                 
|                      |  | June 30, 2003      |     | June 30, 2002    |  | June 30, 2003 |     | June 30, 2002
|                      |  |                    |     |                  |  |               |     |              
|Management fee        |  | $                  | 81  |                  |  | $             | 101 |               |  | $ | 162 |  |  | $ | 163 | 
|Technical support fee |  |                    | 105 |                  |  |               | 131 |               |  |   | 210 |  |  |   | 211 | 
|Interest income       |  |                    | 49  |                  |  |               | 38  |               |  |   | 98  |  |  |   | 70  | 

|                 |  |                  |       |                      |  |   |       | 
|---------------- |  | ---------------- | ----- | -------------------- |  | - | ----- | 
|                 |  | At June 30, 2003 |       | At December 31, 2002
|                 |  |                  |       |                     
|Loan receivable  |  | $                | 885   |                      |  | $ | 812   | 
|Other receivable |  |                  | 4,724 |                      |  |   | 4,144 | 

There were no other material transactions with, or material balances due to or
from, any other related party.

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15.     Subsequent Events

On June 25, 2003, we entered into an agreement with Estudos, Servicos e
Participacoes, S.A. to acquire 100% of the shares of PortCast. Under the terms
of the agreement, we acquired 25% of the shares of PortCast for an investment
of $5.6 million (4.9 million Euros) on July 1, 2003, increasing our ownership
in PortCast from 50% to 75%. We will acquire the remaining 25% ownership for
an additional investment of $5.6 million (4.9 million Euros) on July 1, 2004.

On July 24, 2003, we sold the assets of Frisby P.M.C., Incorporated (Frisby),
which operated a machining plant located in Elk Grove Village, Illinois. The
plant manufactures precision-machined components primarily for the automotive,
truck and power tool markets. Frisby was a non-core operation, and is included
in our Corporate and Other segment in Note 10, Reporting for Business Segments.
The sale of the Frisby assets resulted in a pretax loss of approximately $1.2
million in the third quarter of 2003. As of June 30, 2003, the carrying amounts
of the major classes of assets and liabilities to be disposed of are as
follows:

|                              |  |                           |       | 
|----------------------------- |  | ------------------------- | ----- | 
|                              |  | (In thousands of dollars)
|Assets:                       |  |                           |       | 
|Accounts receivable           |  | $                         | 1,701 | 
|Inventory                     |  |                           | 1,750 | 
|Property, plant and equipment |  |                           | 4,522 | 
|Other assets                  |  |                           | 158   | 
|Liabilities:                  |  |                           |       | 
|Accounts payable              |  | $                         | 770   | 
|Accrued liabilities           |  |                           | 855   | 

26



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##### Table of Contents






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 downturn in the markets in which we operate                                                                                                             
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Fluctuations in worldwide or regional automobile and light- and heavy-truck production, which directly affect demand for
our products                                                              
| 
| |  | Changes in procurement practices and policies of our customers for automotive components, including the risk of the loss of
any of our major customers                                             
| 
| |  | Pricing practices of our customers, including demands for price concessions as a condition to retaining current business or
obtaining new business                                                 
| 
| |  | Deterioration in the market share of any of our major customers                                                                                                                                    
| 
| |  | 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, aluminum, zinc, magnesium and scrap steel, 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 customers                                                                                   
| 
| |  | Factors or presently unknown circumstances that may affect the charges related to the impairment of our long-lived assets                                                                          
| 
| |  | Changes in environmental regulations to which we are subject, including Maximum Achievable Control Technology standards
applicable to the foundry industry, and our ability to meet these standards
| 
| |  | Our ability to meet the financial covenants set forth in our debt agreements, and our ability to negotiate less restrictive
covenants if necessary                                                 
| 
| |  | 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.

27



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Material Changes in Financial Condition, Liquidity and Capital Resources

Through the second quarter of 2003 net cash provided by operations totaled $5.6
million compared to $52.4 million for the same period last year. Depreciation
and amortization expense for the six months ended June 30, 2003 and 2002 was
$25.6 million and $24.8 million, respectively. For the six months ended June
30, 2003, after adjusting for the effect of exchange rates, accounts receivable
increased by $11.4 million while inventory increased by $1.2 million. The
increase in accounts receivable is a result of higher sales volume in the
second quarter of 2003 as compared to the last quarter of 2002 in which sales
were lower due to fewer working days. For the six months ended June 30, 2003,
after adjusting for the effect of exchange rates, accounts payable decreased by
$5.4 million while accrued liabilities decreased by $8.6 million. The decrease
in accrued liabilities is due to the payment of European corporation and trade
taxes during the six months ended June 30, 2003. During the first six months of
2003 we spent $6.5 million for the purchase of property, plant and equipment.
Borrowings under our bank revolving credit facility increased by $6.0 million
during the first six months of 2003. Additionally, we paid $2.0 million in
dividends during the first six months of 2003. The Company has committed
capital not yet spent of approximately $5.5 million as of June 30, 2003. We
anticipate that the funds needed for the committed capital spending will come
from operations.

During the first quarter of 2003, we amended our revolving credit agreement.
The credit agreement facility was reduced from $300 million to $225 million, of
which $128.1 million was outstanding as of June 30, 2003, consisting of
borrowings of $69.0 million and letters of credit of $59.1 million. In
addition, two financial covenants were modified to provide less restrictive
terms. The secured bank revolving credit facility expires on November 5, 2004.
As of June 30, 2003, we had outstanding unsecured senior notes of $175 million
and other debt of approximately $40.9 million. The senior notes will be due on
June 15, 2009. At June 30, 2003, we had committed and uncommitted bank credit
facilities with unused borrowing capacity of $102.2 million. However, due to
loan covenants restrictions, our borrowing availability at June 30, 2003 was
$20.4 million.

We were in compliance with our revolving credit agreement covenants as of June
30, 2003. The revolving credit agreement financial covenant ratios as of June
30, 2003 are provided below.

|                                                     |  |             |                       |        |  |  |           | 
|---------------------------------------------------- |  | ----------- | --------------------- | ------ |  |  | --------- | 
|Financial Covenant                                   |  | Requirement |                       | Actual
|                                                     |  |             |                       |       
|Fixed charge coverage ratio                          |  |             | greater than 1.50 : 1 |        |  |  | 2.23 : 1  | 
|Consolidated EBITDA to
consolidated interest expense |  |             | greater than 2.50 : 1 |        |  |  | 2.70 :  1 | 
|Funded debt to consolidated EBITDA                   |  |             | less than 4.00 : 1    |        |  |  | 3.73 : 1  | 
|Capital expenditures (in thousands of dollars)       |  |             | less than $50,000     |        |  |  | $12,619   | 

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The reconciliations of EBITDA, Fixed Charges and Funded Debt, and the
calculations of financial covenant ratios are provided below:

|                                             |  |                           |        |  
|-------------------------------------------- |  | ------------------------- | ------ | -
|                                             |  | Twelve Months Ended      
|                                             |  | June 30, 2003            
|                                             |  |                          
|                                             |  | (In thousands of dollars)
|Net loss                                     |  | $                         | (4,020 | )
|Income tax benefit                           |  |                           | (5,155 | )
|Interest expense, net                        |  |                           | 30,454 |  
|Non-cash restructuring charge                |  |                           | 10,206 |  
|Depreciation and amortization                |  |                           | 50,819 |  
|                                             |  |                           |        |  
|Consolidated EBITDA                          |  |                           | 82,304 |  
|Capital expenditures                         |  |                           | 12,619 |  
|                                             |  |                           |        |  
|Consolidated EBITDA less capital expenditure |  | $                         | 69,685 |  
|                                             |  |                           |        |  
|Interest expense, net                        |  | $                         | 30,454 |  
|Revenue bonds principal payments             |  |                           | 850    |  
|                                             |  |                           |        |  
|Fixed charges                                |  | $                         | 31,304 |  
|                                             |  |                           |        |  

|                                                  |  |                           |         | 
|------------------------------------------------- |  | ------------------------- | ------- | 
|                                                  |  | At June 30, 2003         
|                                                  |  |                          
|                                                  |  | (In thousands of dollars)
|Total long-term debt                              |  | $                         | 284,906 | 
|Letters of credit excluding certain revenue bonds |  |                           | 22,112  | 
|                                                  |  |                           |         | 
|Funded debt                                       |  | $                         | 307,018 | 
|                                                  |  |                           |         | 

|                                                            |  |                           |         | 
|----------------------------------------------------------- |  | ------------------------- | ------- | 
|                                                            |  | Twelve Months Ended      
|                                                            |  | June 30, 2003            
|                                                            |  |                          
|                                                            |  | (In thousands of dollars,
|                                                            |  | except ratios)           
|Consolidated EBITDA less capital expenditures               |  | $                         | 69,685  | 
|Fixed charges                                               |  | $                         | 31,304  | 
|                                                            |  |                           |         | 
|Fixed charge coverage ratio (to 1)                          |  |                           | 2.23    | 
|                                                            |  |                           |         | 
|Consolidated EBITDA                                         |  | $                         | 82,304  | 
|Consolidated interest expense                               |  | $                         | 30,454  | 
|                                                            |  |                           |         | 
|Consolidated EBITDA to consolidated interest
expense (to 1) |  |                           | 2.70    | 
|                                                            |  |                           |         | 
|Funded debt                                                 |  | $                         | 307,018 | 
|Consolidated EBITDA                                         |  | $                         | 82,304  | 
|                                                            |  |                           |         | 
|Funded debt to consolidated EBITDA (to 1)                   |  |                           | 3.73    | 
|                                                            |  |                           |         | 

29



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##### Table of Contents



These ratios are calculated based on the last twelve months activities. EBITDA
is defined in our revolving credit agreement and is generally calculated as the
sum of net income (excluding certain non-cash charges), income taxes, interest
expense, and depreciation and amortization. EBITDA is adjusted for
acquisitions and dispositions. See our revolving credit agreement dated
November 5, 1999, as amended through the Fourth Amendment dated July 17, 2001,
included as Exhibit 4.14(a) to our quarterly report on Form 10-Q filed on
August 14, 2001, and subsequent amendments, for the complete definition of
EBITDA and other definitions as used in calculation of our financial covenant
compliance. EBITDA is not a measure prepared in accordance with accounting
principles generally accepted in the United States, but is being presented
because we and our lenders use it to evaluate our operating performance
relative to the financial covenants contained in our revolving credit
agreement. EBITDA should not be considered a substitute for income from
operations, net income, cash flows or other measures of financial performance
prepared in accordance with accounting principles generally accepted in the
United States.

The above financial covenant ratios become more restrictive over the term of
our revolving credit agreement in accordance with the terms of the agreement.

Material Changes in Results of Operations  Three months ended June 30, 2003

Sales for the second quarter of 2003 were $196.8 million, a decrease of $21.2
million or 9.7% as compared to sales in the same period in 2002 of $218.0
million. The decrease in sales is attributable mainly to weaker North American
and European automobile and light truck markets, along with lower selling
prices. Ferrous Metals segment sales were $135.5 million during the second
quarter of 2003 compared to $140.1 million for the same period last year,
representing a decrease in sales of $4.6 million or 3.3%. Included as part of
Ferrous Metals segment sales, European sales during the three months ended June
30, 2003 were $25.7 million, an increase of $2.4 million or 10.3% as compared
to European sales of $23.3 million for the same period last year. The overall
decrease in Ferrous Metals segment sales is attributable to a decrease in
vehicle production in North America and Europe by 9% and 3%, respectively,
partially offset by favorable foreign currency exchange on European sales.
Light Metals segment sales were $58.0 million during the second quarter of
2003, a decrease of $16.2 million or 21.8% compared to $74.2 million during the
second quarter of 2002. The decrease in sales is attributable to a combination
of the decrease of vehicle production, the loss of certain engine valve covers
business, and price reductions on certain programs.

Gross profit for the three months ended June 30, 2003 and 2002 was $17.5
million and $22.9 million, respectively. Gross profit as a percentage of sales
for the three months ended June 30, 2003 and 2002 was 8.9% and 10.5%,
respectively. The decrease in gross profit margin is due to the lower sales
volume and lower selling price, partially offset by cost reductions and
efficiency improvements.

Selling, general and administrative expenses for the three months ended June
30, 2003 and 2002 were 3.9% and 4.0% of sales, respectively, essentially level
year to year.

Restructuring and impairment charges of $11.6 million were recorded during the
second quarter of 2003. It was because of our decision to permanently close our
Radford Foundry due to changes in market conditions and production technology,
as well as a substantial investment necessary for continued operation. The
closure is expected to occur on or about September 30, 2003. The restructuring
and impairment charges included a write-down of $9.9 million to reduce the
capital assets and inventories to their fair values, $1.4 million for employee
severance and related contractually guaranteed benefit costs, and $0.3 million
for the employee pension costs.

As a result of higher interest rates on our senior notes issued in June 2002,
net interest expense for the second quarter 2003 was $7.8 million, which was
$0.5 million more than the same period last year.

The effective income tax rate was 38% and 30% for the second quarter of 2003
and 2002, respectively. State taxes are included in the income tax. The
effective income tax benefit rate in the second quarter of 2003 was higher than
the effective income tax expense rate in the second quarter of 2002, mainly
because both periods were positively impacted by the foreign tax benefits.

30



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Material Changes in Results of Operations  Six months ended June 30, 2003

Sales for the six months ended June 30, 2003 were $403.9 million, a decrease of
$20.2 million or 4.8% as compared to sales in the same period in 2002 of $424.1
million. The decrease in sales is attributable mainly to weaker North American
and European automobile and light truck markets, along with lower selling
price. Ferrous Metals segment sales were $275.9 million during the six months
ended June 30, 2003 compared to $273.8 million for the same period last year,
representing an increase in sales of $2.1 million or 0.8%. Included as part of
Ferrous Metals segment sales, European sales during the six months ended June
30, 2003 were $52.7 million, an increase of $7.1 million or 15.6% as compared
to European sales of $45.6 million for the same period last year. The overall
increase in Ferrous Metals segment sales is attributable to the favorable
foreign currency exchange on European sales, which more than offset a 1.5%
decrease in vehicle production in Europe for the six months ended June 30, 2003
as compared to the same period last year. Light Metals segment sales were
$120.9 million during the six months ended June 30, 2003, a decrease of $22.5
million or 15.7% compared to $143.4 million during the same period in 2002. The
decrease in sales is attributable mainly to the decrease in vehicle production
in North America of 3.6%, loss of certain business, and price reductions.

Gross profit for the six months ended June 30, 2003 and 2002 was $38.8 million
and $43.5 million, respectively. Gross profit as a percentage of sales for the
six months ended June 30, 2003 and 2002 was 9.6% and 10.2%, respectively. The
decrease in gross profit margin is due to lower sales volume and reduced
selling prices, but the impact is partly offset by continuous improvement in
production efficiency and cost reductions.

Selling, general and administrative expenses for the six months ended June 30,
2003 and 2002 were 4.1% and 3.9% of sales, respectively. The increase resulted
from costs that were required for the development and sale of certain products.

Restructuring and impairment charges of $11.6 million were recorded during the
six months ended June 30, 2003. It was because of our decision to permanently
close our Radford Foundry due to changes in market conditions and production
technology, as well as a substantial investment necessary for continued
operation. The closure is expected to occur on or about September 30, 2003.
The restructuring and impairment charges included a write-down of $9.9 million
to reduce the capital assets and inventories to their fair values, $1.4 million
for employee severance and related contractually guaranteed benefit costs, and
$0.3 million for the employee pension costs.

As a result of higher interest rates on our senior notes issued in June 2002,
net interest expense for the six-month period ended June 30, 2003 was $15.3
million, which was $1.6 million more than the same period last year.

The effective income tax rate was 38% and 32% for the six months ended June 30,
2003 and 2002, respectively. State taxes are included in the income tax. The
effective income tax benefit rate in the six months ended June 30, 2003 was
higher than the effective income tax expense rate in the same period of 2002,
mainly because both periods were positively impacted by the foreign tax
benefits.

Impact of Adopting SFAS 145

On January 1, 2003, we adopted SFAS No. 145, Rescission of FASB Statement No.
4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections.
This Statement requires certain gains and losses associated with the
extinguishment of debt previously treated as extraordinary items to be
classified as income or loss from continuing operations. As required under
SFAS No. 145, we reclassified pretax losses of $927,000 related to the
extinguishment of bank term loan in the 2002 Statement of Operations from
Extraordinary Item to Interest Expense, Net.

31



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##### Table of Contents



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 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,
2002, have not changed.




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 European operating
results. Third, we have risk related to commodity pricing which, based on
current pricing trends, has been immaterial to us with the exception of energy
costs, and costs of aluminum, magnesium and scrap steel. The cost of scrap
steel has increased steadily since early 2002 and the overall trend represents
a risk to our operating results. Lastly, 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 to our exposures to market risk since
December 31, 2002.




Item 4. Controls and Procedures



|(a) |  | We have conducted an evaluation of our disclosure controls and
procedures, as such term is defined under Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended, as of June 30,
2003. Based on our evaluation, our principal executive officer and
principal financial officer have concluded that our disclosure controls
and procedures are effective to ensure that information required to be
disclosed by us is recorded, processed, summarized and reported within the
required time periods.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | There have been no changes in our internal control over financial
reporting during the quarter ended June 30, 2003 that has materially
affected, or is reasonably likely to materially affect, our internal
control over financial reporting.                                                                                                                                                                                                                                                                                   

32



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##### Table of Contents






Part II  Other Information




Item 1. Legal Proceedings

See Note 11, Environmental and Legal Matters, for a description of
environmental matters at our Radford, Virginia facilities.

We are a party to a number of legal proceedings associated with
environmental, employment, commercial, product liability and other matters in
the ordinary course of our business. We do not believe that such 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 or results of operations or liquidity, taken as a whole.
It is possible, however, that future results of operations for any particular
quarterly or annual period could be materially affected by changes in our
assumptions related to these proceedings.

There have been no other material changes in matters reported in the Form 10-K
for the year ended December 31, 2002.

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

The Annual Meeting of Stockholders was held on April 16, 2003. At the meeting,
the following matters were submitted to a vote of the stockholders:



|(1) |  | The election of eleven directors to constitute the Board of Directors to
serve until the next annual meeting or until their successors are elected
and qualified. The vote with respect to each nominee was as follows:
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                   |  |     |            |          |  |  |         | 
|------------------ |  | --- | ---------- | -------- |  |  | ------- | 
|Nominee            |  | For |            | Withheld
|                   |  |     |            |         
|John Doddridge     |  |     | 23,835,782 |          |  |  | 267,147 | 
|John P. Crecine    |  |     | 23,887,281 |          |  |  | 215,648 | 
|Julia D. Darlow    |  |     | 23,719,726 |          |  |  | 383,203 | 
|Norman F. Ehlers   |  |     | 23,882,881 |          |  |  | 220,048 | 
|John R. Horne      |  |     | 23,882,881 |          |  |  | 220,048 | 
|Thomas H. Jeffs II |  |     | 23,880,505 |          |  |  | 222,424 | 
|Charles G. McClure |  |     | 23,881,981 |          |  |  | 220,948 | 
|Richard J. Peters  |  |     | 23,886,901 |          |  |  | 216,028 | 
|John H. Reed       |  |     | 23,883,901 |          |  |  | 219,028 | 
|Pamela E. Rodgers  |  |     | 23,881,435 |          |  |  | 221,494 | 
|Gary F. Ruff       |  |     | 23,887,481 |          |  |  | 215,448 | 



|(2) |  | The appointment of Ernst & Young as the independent auditors for 2003.
|--- |  | ----------------------------------------------------------------------

|           |  |         |         |         |  |  |        | 
|---------- |  | ------- | ------- | ------- |  |  | ------ | 
|For        |  | Against |         | Abstain
|           |  |         |         |        
|23,946,035 |  |         | 122,772 |         |  |  | 34,122 | 

33



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##### Table of Contents



Item 5. Other Information

None.




Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits

|            |  |                                                                                                                                                                                                            
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Document                                                                                                                                                                                                   
|            |  |                                                                                                                                                                                                            
|3.2         |  | By-laws of INTERMET Corporation, as amended July 17, 2003                                                                                                                                                  
|10.1        |  | Waiver Under Five-Year Credit Agreement                                                                                                                                                                    
|10.15       |  | Employment Agreement between INTERMET Corporation and Gary F.
Ruff dated July 23, 2003                                                                                                                     
|31.1        |  | Certification by the President and Chief Executive Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                       
|31.2        |  | Certification by the Vice President of Finance and Chief
Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002                                                                       
|32.1        |  | Certification of Periodic Financial Report by the President and
Chief Executive Officer and Vice President of Finance and Chief
Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002

(b)  Reports on Form 8-K

On May 29, 2003, we filed a current report on Form 8-K containing a press
release announcing the decision to close our Radford foundry.

On June 26, 2003, we filed a current report on Form 8-K containing a press
release announcing the acquisition of the remaining fifty percent interest in
our PortCast joint venture in Portugal.

On July 17, 2003, we filed a current report on Form 8-K containing a press
release announcing the financial results for the second quarter of 2003.

On July 25, 2003, we filed a current report on Form 8-K containing a press
release announcing the sale of the assets of our subsidiary, Frisby P.M.C.,
Incorporated.

34



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##### Table of Contents






Signature

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

| |                      |                                                                                      
| | -------------------- | -------------------------------------------------------------------------------------
| | INTERMET Corporation
|
| | By:                  | /s/ Robert E. Belts                                                                  
| | Date:                | Robert E. Belts
Vice President of Finance and
Chief Financial Officer
August 13, 2003

35



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10-Q EXHIBIT INDEX

|            |  |                                                                                                                                                                                                            
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT NO. |  | DESCRIPTION                                                                                                                                                                                                
|            |  |                                                                                                                                                                                                            
|EX   3.2   |  | By-laws of INTERMET Corporation, as amended July 17, 2003                                                                                                                                                  
|EX 10.1    |  | Waiver Under Five-Year Credit Agreement                                                                                                                                                                    
|EX 10.15   |  | Employment Agreement between INTERMET Corporation and Gary F.
Ruff dated July 23, 2003                                                                                                                     
|EX 31.1    |  | Certification by the President and Chief Executive Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                       
|EX 31.2    |  | Certification by the Vice President of Finance and Chief
Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002                                                                       
|EX 32.1    |  | Certification of Periodic Financial Report by the President and
Chief Executive Officer and Vice President of Finance and Chief
Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002