##### Table of Contents



The following items were the subject of a Form12b-25 and are included herein:Part I, Item 1Part I, Item 2Part I, Item 3Part I, Item 4Information required by Part II of Form 10-Q waspreviously filed on our Quarterly Report on Form 10-Qfor the period ended September 30, 2004 filedNovember 9, 2004. That information is supercededby the Part II information included in this report.
 United States
Securities and Exchange Commission Washington, D.C. 20549
 Form 10-Q/A þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the quarterly period ended September 30, 2004, oro
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934For the transition period from     to     .
 Commission File No. 0-13787 INTERMET Corporation  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 o No þ Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Act). Yes þ No o At May 31, 2005 there were 25,665,257 shares of common stock, $0.10 par value, outstanding.




---



TABLE OF CONTENTS Part I -
    
    Financial InformationItem 1.
    
    Interim Condensed Consolidated Financial Statements (Unaudited)Notes to Interim Condensed Consolidated Financial Statements (Unaudited)Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3.
    
    Quantitative and Qualitative Disclosures about Market RisksItem 4.
    
    Controls and ProceduresPart II-
    
    Other InformationItem 1.
    
    Legal ProceedingsItem 4.
    
    Submission of Matters to a Vote of Securities HoldersItem 6.
    
    Exhibits and Reports on Form 8-KSignaturesCertificationsExhibit IndexCertification of Chief Executive Officer Pursuant to Section 302Certification of Chief Financial Officer Pursuant to Section 302Certification of Periodic Financial Report by the Chief Executive Officer and Chief Financial Officer Pursuant to Section 906
  2




---



##### Table of Contents



Part I  Financial Information 
 Item 1. Financial Statements INTERMET Corporation
Interim Condensed Consolidated Statements of Operations Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2004
    
    
    2003
    
    
    2004
    
    
    2003(Unaudited)(in thousands of dollars, except per share data)Net sales
    
    $
    197,713
    
    
    $
    172,700
    
    
    $
    625,544
    
    
    $
    547,858Cost of sales
    
    
    202,057
    
    
    
    157,971
    
    
    
    603,686
    
    
    
    493,965Gross (loss) profit
    
    
    (4,344
    )
    
    
    14,729
    
    
    
    21,858
    
    
    
    53,893Selling, general and administrative expenses
    
    
    12,228
    
    
    
    9,483
    
    
    
    33,729
    
    
    
    25,626Reorganization charges
    
    
    5,970
    
    
    
    
    
    
    
    5,970
    
    
    
    Goodwill impairment charge
    
    
    165,933
    
    
    
    
    
    
    
    165,933
    
    
    
    Restructuring and impairment charges
    
    
    26,931
    
    
    
    
    
    
    
    28,096
    
    
    
    Operating (loss) profit
    
    
    (215,406
    )
    
    
    5,246
    
    
    
    (211,870
    )
    
    
    28,267Other expense:Interest expense, net
    
    
    7,858
    
    
    
    7,719
    
    
    
    25,051
    
    
    
    22,646Other expense (income), net
    
    
    38
    
    
    
    (1,475
    )
    
    
    (407
    )
    
    
    (1,314
    )7,896
    
    
    
    6,244
    
    
    
    24,644
    
    
    
    21,332(Loss) income from continuing operations
before income taxes and equity interest in
a joint venture
    
    
    (223,302
    )
    
    
    (998
    )
    
    
    (236,514
    )
    
    
    6,935Income tax (expense) benefit
    
    
    (1,067
    )
    
    
    293
    
    
    
    (195
    )
    
    
    (2,997
    )Equity interest in a joint venture
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    752(Loss) income from continuing operations
    
    
    (224,369
    )
    
    
    (705
    )
    
    
    (236,709
    )
    
    
    4,690(Loss) income from discontinued operations,
net of tax
    
    
    (677
    )
    
    
    655
    
    
    
    (2,644
    )
    
    
    (8,177
    )Net loss
    
    ($
    225,046
    )
    
    ($
    50
    )
    
    ($
    239,353
    )
    
    ($
    3,487
    )Net (loss) income per common share:Basic:(Loss) income from continuing operations
    
    ($
    8.76
    )
    
    ($
    0.03
    )
    
    ($
    9.25
    )
    
    $
    0.18(Loss) income from discontinued
operations, net of tax
    
    
    (0.03
    )
    
    
    0.03
    
    
    
    (0.10
    )
    
    
    (0.32
    )Net loss per share  basic
    
    ($
    8.79
    )
    
    $
    
    
    
    ($
    9.35
    )
    
    ($
    0.14
    )Diluted:(Loss) income from continuing operations
    
    ($
    8.76
    )
    
    ($
    0.03
    )
    
    ($
    9.25
    )
    
    $
    0.18(Loss) income from discontinued
operations, net of tax
    
    
    (0.03
    )
    
    
    0.03
    
    
    
    (0.10
    )
    
    
    (0.32
    )Net loss per share  diluted
    
    ($
    8.79
    )
    
    $
    
    
    
    ($
    9.35
    )
    
    
    (0.14
    )Dividends declared per common share
    
    $
    0.00
    
    
    $
    0.04
    
    
    $
    0.08
    
    
    $
    0.12Weighted average shares outstanding:Basic
    
    
    25,614
    
    
    
    25,591
    
    
    
    25,603
    
    
    
    25,576Diluted
    
    
    25,614
    
    
    
    25,725
    
    
    
    25,603
    
    
    
    25,576
 See accompanying notes. 3




---



##### Table of Contents



INTERMET Corporation
Interim Consolidated Statements of Comprehensive Income Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2004
    
    
    2003
    
    
    2004
    
    
    2003(Unaudited)(in thousands of dollars)Net loss
    
    ($
    225,046
    )
    
    ($
    50
    )
    
    ($
    239,353
    )
    
    ($
    3,487
    )Other comprehensive (loss) income, net of
tax:Foreign currency translation adjustment
    
    
    1,694
    
    
    
    (426
    )
    
    
    (1,109
    )
    
    
    3,926Interest rate swap fair value adjustment
    
    
    
    
    
    
    608
    
    
    
    
    
    
    
    1,2331,694
    
    
    
    182
    
    
    
    (1,109
    )
    
    
    5,159Total comprehensive (loss) income
    
    ($
    223,352
    )
    
    $
    132
    
    
    ($
    240,462
    )
    
    $
    1,672
 See accompanying notes. 4




---



##### Table of Contents



INTERMET Corporation
Interim Condensed Consolidated Balance Sheets September 30,
    
    
    December 31,2004
    
    
    2003(Unaudited)(in thousands of dollars)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    25,663
    
    
    $
    1,035Restricted cash
    
    
    35,885
    
    
    
    Accounts receivable:Trade, less allowance of $7,314 in 2004 and $6,528 in 2003
    
    
    99,771
    
    
    
    76,218Other
    
    
    6,989
    
    
    
    10,555106,760
    
    
    
    86,773Inventories
    
    
    71,634
    
    
    
    77,411Other current assets
    
    
    8,388
    
    
    
    10,748Total current assets
    
    
    248,330
    
    
    
    175,967Property, plant and equipment, net
    
    
    278,719
    
    
    
    324,080Goodwill
    
    
    
    
    
    
    165,933Other non-current assets
    
    
    23,250
    
    
    
    20,704Total assets
    
    $
    550,299
    
    
    $
    686,684LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable
    
    $
    23,477
    
    
    $
    80,737Accrued liabilities
    
    
    56,567
    
    
    
    59,542Current portion of retirement benefits
    
    
    11,855
    
    
    
    14,542Short-term lines of credit
    
    
    10,424
    
    
    
    9,992Long-term debt due within one year
    
    
    200,588
    
    
    
    4,303Total current liabilities
    
    
    302,911
    
    
    
    169,116Liabilities subject to compromise
    
    
    252,686
    
    
    
    Non-current liabilities:Long-term debt due after one year
    
    
    3,811
    
    
    
    279,248Retirement benefits
    
    
    67,099
    
    
    
    70,767Other non-current liabilities
    
    
    4,438
    
    
    
    5,416Total non-current liabilities
    
    
    75,348
    
    
    
    355,431Shareholders equity (deficit):Common stock
    
    
    2,606
    
    
    
    2,601Capital in excess of par value
    
    
    57,276
    
    
    
    57,165Retained earnings (deficit)
    
    
    (132,234
    )
    
    
    109,428Accumulated other comprehensive loss
    
    
    (8,103
    )
    
    
    (6,994
    )Unearned restricted stock
    
    
    (191
    )
    
    
    (63
    )Total shareholders equity (deficit)
    
    
    (80,646
    )
    
    
    162,137Total liabilities and shareholders equity (deficit)
    
    $
    550,299
    
    
    $
    686,684
 See accompanying notes. 5




---



##### Table of Contents



INTERMET Corporation
Interim Condensed Consolidated Statements of Cash Flows Nine Months EndedSeptember 30,
    
    
    September 30,2004
    
    
    2003(Unaudited)(in thousands of dollars)OPERATING ACTIVITIES:(Loss) income from continuing operations
    
    
    ($236,709
    )
    
    $
    4,690Adjustments to reconcile (loss) income from continuing
operations to cash (used in) provided by operating
activities:Depreciation and amortization
    
    
    37,224
    
    
    
    34,262Amortization of debt discount and issuance costs
    
    
    6,536
    
    
    
    1,496Restructuring and impairment charges
    
    
    28,096
    
    
    
    Goodwill impairment charge
    
    
    165,933
    
    
    
    Results of equity investment
    
    
    
    
    
    
    (752
    )Gain on disposal of property, plant and equipment
    
    
    (120
    )
    
    
    Change in operating assets and liabilities:Accounts receivable
    
    
    (22,385
    )
    
    
    (4,082
    )Inventories
    
    
    5,147
    
    
    
    (1,828
    )Accounts payable and current liabilities
    
    
    20,723
    
    
    
    (14,651
    )Other assets and liabilities
    
    
    (13,990
    )
    
    
    (2,663
    )Net cash (used in) provided by continuing operating activities
    
    
    (9,545
    )
    
    
    16,472Net cash (used in) provided by discontinued operations
    
    
    (354
    )
    
    
    5,609Net cash (used in) provided by operating activities
    
    
    (9,899
    )
    
    
    22,081INVESTING ACTIVITIES:Additions to property, plant and equipment
    
    
    (19,047
    )
    
    
    (11,467
    )Additions to property, plant and equipment by discontinued
operations
    
    
    
    
    
    
    (145
    )Purchase of shares of a subsidiary
    
    
    (2,984
    )
    
    
    (5,571
    )Proceeds from sale of assets of a subsidiary
    
    
    
    
    
    
    3,925Proceeds from sale of property, plant and equipment
    
    
    679
    
    
    
    1,700Net cash used in investing activities
    
    
    (21,352
    )
    
    
    (11,558
    )FINANCING ACTIVITIES:Net decrease in lines of credit
    
    
    (18,393
    )
    
    
    (1,000
    )Proceeds from term loan
    
    
    120,000
    
    
    
    Repayment of term loan and other debts
    
    
    (3,008
    )
    
    
    (4,085
    )Funding of restricted cash
    
    
    (35,885
    )
    
    
    Payments of debt issuance costs
    
    
    (3,359
    )
    
    
    (405
    )Dividends paid
    
    
    (3,078
    )
    
    
    (3,072
    )Issuance of common stock
    
    
    16
    
    
    
    12Net cash provided by (used in) financing activities
    
    
    56,293
    
    
    
    (8,550
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (414
    )
    
    
    (283
    )Net increase in cash and cash equivalents
    
    
    24,628
    
    
    
    1,690Cash and cash equivalents at beginning of period
    
    
    1,035
    
    
    
    3,298Cash and cash equivalents at end of period
    
    $
    25,663
    
    
    $
    4,988
 See accompanying notes. 6




---



##### Table of Contents



INTERMET Corporation 
 Notes to Interim Condensed Consolidated Financial Statements September 30, 2004 (Unaudited) 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of INTERMET Corporation 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 nine-month period ended September 30, 2004 are not necessarily indicative of the results that
may be expected for the year ending December 31, 2004. The balance sheet at December 31, 2003 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. See our 2003
Annual Report and our Annual Report on Form 10-K for the year ended December 31, 2003 for complete
financial statement and footnotes. On September 29, 2004, INTERMET Corporation and 17 of its wholly-owned domestic subsidiaries filed
voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code, (the
Bankruptcy Code) in the United States Bankruptcy Court for the Eastern District of Michigan (the
Bankruptcy Court). These Chapter 11 cases have been consolidated for the purposes of joint
administration as In re: INTERMET Corporation, et al. (Case No. 04-67597). We have
continued to operate our U.S. businesses as debtors-in-possession under Bankruptcy Court protection
from creditors. See additional discussion in Note 3, Voluntary Reorganization Under Chapter 11 and
Administration. The accompanying consolidated financial statements have been prepared in accordance with AICPA
Statement of Position 90-7, Financial Reporting by Entities in Reorganization under the Bankruptcy
Code (SOP 90-7) using a going concern assumption. However, as a result of the Chapter 11
proceedings, such realization of assets and liquidation of liabilities, without substantial
adjustments and/or change of ownership, is highly uncertain. Given this uncertainty, there is
substantial doubt about our ability to continue as a going concern. However, we expect to propose a
plan of reorganization to the Bankruptcy Court by June 27, 2005. When filed, the plan of
reorganization will set forth the means for treating claims, including liabilities subject to
compromise. The plan of reorganization may result in, among other things, significant dilution of
equity interests as a result of issuance of equity securities to creditors or new investors. The
confirmation of any plan of reorganization will require creditor acceptance as required under the
Bankruptcy Code and approval of the Bankruptcy Court. Further, the plan of reorganization could
materially change the amounts and classifications in our historical consolidated financial
statements. While operating the businesses as debtors-in-possession, we and our subsidiaries may
dispose of assets or settle liabilities for amounts materially different from those in the
accompanying consolidated financial statements. The appropriateness of using a going concern
assumption in the preparation of the accompanying consolidated financial statements is dependent
upon, among other things, our ability to comply with the covenants of our secured
debtor-in-possession revolving credit facility and our ability to generate cash from operations. 7




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements September 30, 2004 (Unaudited) 1. Basis of Presentation (continued) Restricted Cash In accordance with a letter of credit facility agreement and cash collateral agreement dated
January 8, 2004, $35.7 million of cash, and certain interest income on this cash, were used as
collateral for $35.0 million of variable rate limited obligation revenue bonds issued in connection
with our Columbus Foundry. See Note 9, Debt, for further information. Restricted cash is excluded
from cash and cash equivalents in the accompanying balance sheets. On October 29, 2004 the bonds
were paid in full with the restricted cash and the letter of credit terminated. Stock-Based Compensation We grant stock options to employees and directors with an exercise price equal to the fair value of
the shares at the date 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,
recognize no compensation expense for the stock option grants. Had compensation expense for these
stock option grants been determined based on the fair values at the grant dates for awards under
the stock option plans consistent with the method of SFAS No. 123, Accounting for Stock-Based
Compensation, our pro forma net loss, basic loss per share and diluted loss per share would be as
follows: Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2004
    
    
    2003
    
    
    2004
    
    
    2003(in thousands of dollars, except per share data)Net loss, as reported
    
    ($
    225,046
    )
    
    ($
    50
    )
    
    ($
    239,353
    )
    
    ($
    3,487
    )Less: Total stock-based
employee compensation
expense determined under
fair value method for all
awards, net of related tax
effects
    
    
    (203
    )
    
    
    (214
    )
    
    
    (745
    )
    
    
    (847
    )Pro forma net loss
    
    ($
    225,249
    )
    
    ($
    264
    )
    
    ($
    240,098
    )
    
    ($
    4,334
    )Loss per share:Basic - as reported
    
    ($
    8.79
    )
    
    $
    
    
    
    ($
    9.35
    )
    
    ($
    0.14
    )Basic - pro forma
    
    ($
    8.80
    )
    
    ($
    0.01
    )
    
    ($
    9.38
    )
    
    ($
    0.17
    )Diluted - as reported
    
    ($
    8.79
    )
    
    $
    
    
    
    ($
    9.35
    )
    
    ($
    0.14
    )Diluted - pro forma
    
    ($
    8.80
    )
    
    ($
    0.01
    )
    
    ($
    9.38
    )
    
    ($
    0.17
    )
 8




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements September 30, 2004 (Unaudited) 2. Balance Sheet Details Inventories The components of inventories are as follows (in thousands of dollars): September 30,
    
    
    December 31,2004
    
    
    2003Finished goods
    
    $
    21,508
    
    
    $
    22,433Work in process
    
    
    9,628
    
    
    
    8,198Raw materials
    
    
    9,291
    
    
    
    8,113Supplies and patterns
    
    
    31,207
    
    
    
    38,667Total inventories
    
    $
    71,634
    
    
    $
    77,411
 Property, Plant and Equipment, Net The components of net property, plant and equipment are as follows (in thousands of dollars): September 30,
    
    
    December 31,2004
    
    
    2003Land
    
    $
    6,650
    
    
    $
    6,681Buildings and improvements
    
    
    139,424
    
    
    
    143,382Machinery and equipment
    
    
    528,337
    
    
    
    517,846Construction in progress
    
    
    28,661
    
    
    
    26,443Property, plant and equipment, at cost
    
    
    703,072
    
    
    
    694,352Less: Accumulated depreciation
    
    
    424,353
    
    
    
    370,272Property, plant and equipment, net
    
    $
    278,719
    
    
    $
    324,080
 9




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements September 30, 2004 (Unaudited) 3. Voluntary Reorganization under Chapter 11 and Administration On September 29, 2004, INTERMET and 17 of its wholly-owned domestic subsidiaries filed voluntary
petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court for the Eastern District of Michigan. These Chapter 11 cases have been
consolidated for the purposes of joint administration as In re: INTERMET Corporation, et
al. (Case No. 04-67597). INTERMETs subsidiaries for which bankruptcy petitions were filed are Alexander City Casting
Company, Inc., Cast-Matic Corporation, Columbus Foundry, L.P., Diversified Diemakers, Inc., Ganton
Technologies, Inc., INTERMET Holding Company, INTERMET Illinois, Inc., INTERMET International,
Inc., INTERMET U.S. Holding, Inc., Ironton Iron, Inc., Lynchburg Foundry Company, Northern Castings
Corporation, Sudbury, Inc., SUDM, Inc., Tool Products, Inc., Wagner Castings Company and Wagner
Havana, Inc., all of which, together with INTERMET, are currently operating as debtors and
debtors-in-possession. Other INTERMET subsidiaries, including foreign subsidiaries, are not
parties to the Chapter 11 proceedings and are operating in the normal course. Our bankruptcy proceedings were initiated primarily in response to substantial and unprecedented
increases in the cost of raw materials, especially scrap steel. The price of scrap steel, which is
our primary raw material, increased from approximately $160 per net ton at the beginning of 2003,
to approximately $210 per net ton at the end of 2003, and to approximately $380 per net ton at
September 30, 2004. This included record increases of $85 per gross ton ($75 per net ton) and $65 per gross ton ($58 per net ton) in
July and August of 2004, respectively. Because of pre-existing contractual pricing terms with most
of our customers, we were limited in our ability to pass these cost increases to our customers. At
the same time, some of our largest trade creditors began to tighten or eliminate credit terms,
which increased our working capital requirements. We also experienced operational difficulties at
our Pulaski, Tennessee and Racine, Wisconsin light-metals plants. These financial and operational difficulties impaired our ability to continue to draw on our
pre-petition revolving credit facility. In an effort to avoid anticipated defaults under our loan
covenants, which would have occurred as of September 30, 2004, we entered into discussions with the
agent for our pre-petition lenders, seeking waivers of certain conditions contained in the
pre-petition credit facility. We were unable to obtain waivers on acceptable terms and,
consequently, the Chapter 11 cases were filed on September 29, 2004. We have continued to operate our U.S. businesses as debtors-in-possession under bankruptcy court
protection from creditors. We continue to review all aspects of our business for opportunities to
improve performance, while seeking to restructure our secured and unsecured debt, rationalize our
facilities and cost structure and effect a customer strategy focused on scrap steel cost recovery
and other commercial and financial issues. Liabilities Subject to Compromise Liabilities subject to compromise refers to liabilities of the debtors incurred prior to September
29, 2004, and represent the estimates of known or potential pre-petition claims to be resolved in
connection with the bankruptcy proceedings. Such claims remain subject to future proceedings.
Payment terms for these claims will be established in connection with the bankruptcy proceedings. 10




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements September 30, 2004 (Unaudited) 3. Voluntary Reorganization Under Chapter 11 and Administration (continued) The amounts of the various liabilities that are subject to compromise are set forth below (in
thousands of dollars): September 30,2004Senior notes payable
    
    $
    177,000Accounts payable
    
    
    64,838Accrued payroll and benefits
    
    
    903Interest payable
    
    
    5,000Other accrued liabilities
    
    
    4,945Subtotal
    
    
    252,686Intercompany Payables to Affiliates
    
    
    178,387Total liabilities subject to compromise
    
    $
    431,073
 Debtors Financial Statements The condensed consolidated financial statements of the debtors are presented below. These
statements reflect the financial position, results of operations and cash flows of the combined
Debtor companies, including certain amounts and activities between Debtor and non-Debtor
subsidiaries of the Company, which are eliminated in the consolidated financial statements. 11




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements September 30, 2004 (Unaudited) 3. Voluntary Reorganization under Chapter 11 and Administration (continued) Debtors Condensed Consolidated Statements of Operations
(in thousands of dollars) Nine MonthsEndedSeptember 30,2004Net sales
    
    $
    498,113Cost of sales
    
    
    493,508Gross profit
    
    
    4,605Operating expenses:Selling, general and administrative
    
    
    23,843Management fee income from non-Debtors
    
    
    (608
    )Reorganization charges
    
    
    5,970Goodwill impairment charge
    
    
    164,671Restructuring and impairment charges
    
    
    28,096Total operating expenses
    
    
    221,972Operating loss
    
    
    (217,367
    )Other expenses (income):Interest expense, net
    
    
    25,505Other income, net
    
    
    (405
    )Net total other expenses
    
    
    25,100Loss from continuing operations before income taxes and
equity income of non-Debtor subsidiaries
    
    
    (242,467
    )Income tax benefit
    
    
    1,298Loss from continuing operations before equity loss of
non-Debtor subsidiaries
    
    
    (241,169
    )Equity income from continuing operations of non-Debtor
subsidiaries
    
    
    4,460Loss from continuing operations
    
    
    (236,709
    )Loss from discontinued operations, net of tax
    
    
    (2,644
    )Net loss
    
    $
    (239,353
    )
 12




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements September 30, 2004 (Unaudited) 3. Voluntary Reorganization under Chapter 11 and Administration (continued) Debtors Condensed Consolidated Balance Sheet
(in thousands of dollars) As ofSeptember 30,2004ASSETSCurrent assets:Cash and cash equivalents
    
    $
    13,931Restricted cash
    
    
    35,885Accounts receivable, net
    
    
    75,292Accounts receivable, non-Debtors
    
    
    68,284Inventories
    
    
    48,501Other current assets
    
    
    7,817Total current assets
    
    
    249,710Property, plant and equipment, net
    
    
    208,673Investment in non-Debtors
    
    
    57,722Loan receivable from non-Debtors
    
    
    139,894Deferred income tax assets
    
    
    3,985Other noncurrent assets
    
    
    18,241Total noncurrent assets
    
    
    428,515Total assets
    
    $
    678,225LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable
    
    $
    3,238Accounts payable, non-Debtors
    
    
    21Accrued payroll and benefits
    
    
    22,970Other accrued liabilities
    
    
    32,561Short-term lines of credit
    
    
    Long-term debt due within one year
    
    
    197,510Total current liabilities
    
    
    256,300Liabilities subject to compromise
    
    
    431,073Noncurrent liabilities:Long-term debt due after one year
    
    
    5Retirement benefits
    
    
    67,099Other noncurrent liabilities
    
    
    4,394Total noncurrent liabilities
    
    
    71,498Shareholders equity (deficit)
    
    
    (80,646
    )Total liabilities and shareholders equity (deficit)
    
    $
    678,225
 13




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements September 30, 2004 (Unaudited) 3. Voluntary Reorganization under Chapter 11 and Administration (continued) Debtors Condensed Consolidated Statement of Cash Flows
(in thousands of dollars) Nine MonthsEndedSeptember 30,2004Cash (used in) provided by operating activities
    
    $
    (24,839
    )INVESTING ACTIVITIES:Additions to property, plant and equipment
    
    
    (16,580
    )Proceeds from sale of property, plant and equipment
    
    
    679Cash used in investing activities
    
    
    (15,901
    )FINANCING ACTIVITIES:Net decrease in revolving credit facility
    
    
    (19,000
    )Proceeds from term loan
    
    
    120,000Funding of restricted cash
    
    
    (35,885
    )Repayments of other debts
    
    
    (1,509
    )Payments of debt issuance costs
    
    
    (3,359
    )Issuance of common stock
    
    
    16Dividends paid
    
    
    (3,078
    )Cash provided by financing activities
    
    
    57,185Effect of foreign currency exchange rate changes
    
    
    Net increase in cash and cash equivalents
    
    
    16,445Cash and cash equivalents at beginning of year
    
    
    (2,514
    )Cash and cash equivalents at end of year
    
    $
    13,931
 4. Acquisition On June 25, 2003, we
entered into an agreement with Melfina - Estudos, Servicos e Participacoes,
S.A. to acquire 100% ownership of the shares of Fundicao Nodular, S.A. (Porto Foundry), which is
located in Porto, Portugal. Previously we owned a 50% interest in the Porto Foundry. The Porto
Foundry is a caster of various ductile-iron automotive components. Under the terms of the
agreement, we acquired an additional 25% of the Porto Foundrys shares for a cash investment of
Euro 4.9 million (approximately $5.6 million) on July 1, 2003, increasing our ownership from 50% to
75%. We had a call option to acquire, and Melfina - Estudos, Servicos e Participacoes, S.A. had a
put option, requiring us to buy the remaining 25% ownership for an additional cash investment of
Euro 4.9 million (approximately $6.2 million based on the exchange rate on December 31, 2003) on
July 1, 2004. Because of the put option, we recorded $6.0 million, the net present value of the
$6.2 million future cash investment, as Accounts payable in the accompanying balance sheet as of
December 31, 2003. 14




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements September 30, 2004 (Unaudited) 4. Acquisition (continued) On July 1, 2004, we exercised the call option to acquire the remaining 25% ownership of the Porto
Foundry. The purchase price of approximately Euro 4.9 million (approximately $6.2 million at the
exchange rates at the time of the payments) together with interest accruing at European Interbank
Offered Rate (EURIBOR) was paid in six equal monthly installments beginning July 2004. We accounted for the acquisition of additional shares using the purchase accounting method. The
purchase price has been allocated to the assets purchased and liabilities assumed based upon the
estimated fair values at the date of acquisition. As the Porto Foundry became our consolidated
subsidiary at July 1, 2003, the results of its operations from that date are included in our
consolidated results of operations. Our equity in the net income of the Porto Foundry for the
period before July 1, 2003 is included in Equity interest in a joint venture in the accompanying
statements of operations. The pro forma effects of this acquisition are not material to our
consolidated results of operations. 5. Discontinued Operations Frisby On July 24, 2003, we sold substantially all the assets of Frisby P.M.C., Incorporated (Frisby)
for $5.3 million, consisting of $3.9 million in cash and $1.4 million in the form of a promissory
note, the balance of which is due to be paid in full by July 31, 2008. This transaction resulted
in a loss on sale of $0.1 million, net of taxes. Frisby was a non-core operation and is included in
our Corporate and Other segment in Note 14, Reporting for Business Segments. The results of operations of Frisby are summarized as follows (in thousands of dollars): Three Months Ended
    
    
    Nine Months EndedSeptember 30, 2003
    
    
    September 30, 2003Sales
    
    $
    915
    
    
    $
    8,007Cost of sales
    
    
    881
    
    
    
    7,615Gross profit
    
    
    34
    
    
    
    392Expenses
    
    
    63
    
    
    
    526Loss before income taxes
    
    
    (29
    )
    
    
    (134
    )Income tax benefit
    
    
    11
    
    
    
    53Loss from discontinued operation, net of tax
    
    ($
    18
    )
    
    ($
    81
    )
 Radford In May 2003, we decided to close our facility in Radford, Virginia due to changes in market
conditions and production technology, as well as the fact that substantial investment in
environmental controls would have been necessary for continued operation of this facility. The
Radford facility manufactured gray-iron and ductile-iron
components for the automotive industry and had approximately 41 salaried and 333 hourly employees.
The facility is included in the Ferrous Metals segment in Note 14, Reporting for Business Segments. 15




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements September 30, 2004 (Unaudited) 5. Discontinued Operations (continued) As a result of this decision, we recorded an $11.6 million pre-tax restructuring and impairment
charge during the second quarter of 2003. The charge 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 employee pension
costs. In the fourth quarter of 2003, we accrued for an additional $0.1 million for
employee severance costs. The accruals for the employee severance and benefit costs are included in
Accrued liabilities in the accompanying balance sheet at September 30, 2004. No material
additional restructuring charge was recorded in the first nine months of 2004. In addition, we recorded pre-tax gains of $1.3 million and $0.7 million on the reduction of
postretirement benefit obligations when the employees were terminated in the third and fourth
quarter of 2003, respectively. By December 2003, the Radford Foundry was closed and substantially
all of the employees were terminated. At September 30, 2004, we had $2.3 million accrued for
environmental remediation at the Radford Foundry. See additional discussion in Note 11,
Commitments and Contingencies. The after-tax results of operations of the Radford Foundry for all
periods presented have been reported as Loss from discontinued operations, net of tax in the
accompanying statements of operations. Activities relating to the restructuring charges and liabilities arising from to the Radford
Foundry closure are as follows (in thousands of dollars): Impairment
    
    
    Write-
    
    
    Employee
    
    
    Employeeof
    
    
    down of
    
    
    Termination
    
    
    Postretirementfixed assets
    
    
    inventory
    
    
    Benefits
    
    
    Benefits
    
    
    Other
    
    
    TotalInitial charge in second
quarter of 2003
    
    $
    7,554
    
    
    $
    2,351
    
    
    $
    1,336
    
    
    $
    301
    
    
    $
    50
    
    
    $
    11,592Additional charge
    
    
    
    
    
    
    
    
    
    
    138
    
    
    
    
    
    
    
    
    
    
    
    138Noncash charges
    
    
    (7,554
    )
    
    
    (2,351
    )
    
    
    
    
    
    
    (301
    )
    
    
    
    
    
    
    (10,206
    )Reduction of
post-retirement obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,997
    )
    
    
    
    
    
    
    (1,997
    )Noncash credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,997
    
    
    
    
    
    
    
    1,997Cash payments
    
    
    
    
    
    
    
    
    
    
    (920
    )
    
    
    
    
    
    
    (50
    )
    
    
    (970
    )Balance at December 31, 2003
    
    
    
    
    
    
    
    
    
    
    554
    
    
    
    
    
    
    
    
    
    
    
    554Additional charge
    
    
    
    
    
    
    120
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120Noncash charge
    
    
    
    
    
    
    (120
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (120
    )Cash payments
    
    
    
    
    
    
    
    
    
    
    (467
    )
    
    
    
    
    
    
    
    
    
    
    (467
    )Balance at September 30,
2004
    
    $
    
    
    
    $
    
    
    
    $
    87
    
    
    $
    
    
    
    $
    
    
    
    $
    87
 16




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements September 30, 2004 (Unaudited) 5. Discontinued Operations (continued) Major classes of assets and liabilities of the Radford Foundry are as follows (in thousands of
dollars): September 30,
    
    
    December 31,2004
    
    
    2003Accounts receivable
    
    $
    44
    
    
    $
    2,052Inventory
    
    
    139
    
    
    
    429Other current assets
    
    
    
    
    
    
    514Property, plant and equipment, net
    
    
    561
    
    
    
    673Total assets
    
    $
    744
    
    
    $
    3,668Accounts payable
    
    $
    5
    
    
    $
    491Accrued liabilities
    
    
    1,115
    
    
    
    1,611Retirement benefits
    
    
    2,319
    
    
    
    1,959Other non-current liabilities
    
    
    2,299
    
    
    
    2,508Total liabilities
    
    $
    5,738
    
    
    $
    6,569
 The results of operations of the Radford Foundry are summarized as follows (in thousands of
dollars): Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2004
    
    
    2003
    
    
    2004
    
    
    2003Sales
    
    ($
    14
    )
    
    $
    9,354
    
    
    $
    19
    
    
    $
    30,974Cost of sales
    
    
    663
    
    
    
    9,361
    
    
    
    2,612
    
    
    
    31,680Gross loss
    
    
    (677
    )
    
    
    (7
    )
    
    
    (2,593
    )
    
    
    (706
    )Expenses
    
    
    
    
    
    
    71
    
    
    
    51
    
    
    
    13,496Loss before income taxes
    
    
    (677
    )
    
    
    (78
    )
    
    
    (2,644
    )
    
    
    (14,202
    )Income tax benefit
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    5,356(Loss) income from
discontinued operation,
net of tax
    
    ($
    677
    )
    
    $
    22
    
    
    ($
    2,644
    )
    
    ($
    8,846
    )
 Corporate interest expense was allocated to Frisby and the Radford Foundry based on the ratio of
their net assets to our consolidated net assets plus consolidated debt, excluding the net assets of
our European subsidiaries. The European subsidiaries were excluded because they were cash flow
positive and did not directly use the proceeds from the debt outstanding during the periods covered
by the financial statements. The total corporate interest expense allocated to Frisby and the
Radford Foundry for the three months and nine months ended September 30, 2003 was $71,000 and
$443,000, respectively. No corporate interest expense was allocated to Frisby or Radford Foundry
for the three months and nine months ended September 30, 2004. 17




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements September 30, 2004 (Unaudited) 5. Discontinued Operations (continued) SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, provides that the
results of operations of a component of an entity that has been disposed of should be reported as a
discontinued operation when the operations and cash flows of the component have been eliminated
from the ongoing operations of the entity and the entity will not have any significant continuing
involvement in the operations of the component after the disposal transaction. This occurred when
Frisby was sold in July 2003 and when the Radford Foundry was closed in December 2003. As a result,
the results of operations of both Frisby and the Radford Foundry for all periods presented have
been reported as discontinued operations in the accompanying statements of operations. 6. Restructuring and Impairment Charges Racine Closure In December 2004, we announced the closure of our Racine Plant and Racine Machining Plant, both of
which are located in Sturtevant, Wisconsin. We closed these plants during the second quarter of
2005. We recognized asset impairment charges in September 2004 of $6.5 million. See Note 18,
Subsequent Events, for further details. Columbus Machining Closure In October 2004, we announced the closure of our Columbus Machining Plant, located in Midland,
Georgia. We closed this plant during the first quarter of 2005. See Note 18, Subsequent Events,
for further details. Havana Plant Closure In December 2003, we decided to close our ductile iron foundry in Havana, Illinois, in order to
improve our capacity utilization. The Havana Foundry manufactured ductile iron components for the
automotive industry, and had approximately 33 salaried and 141 hourly employees. The plant closure
was completed in June, 2004. We recognized a $1.7 million pre-tax charge during the second and
third quarter of 2004 due to the closing. This charge is included in the Restructuring and
impairment charges in the accompanying statements of operations and is in addition to the $8.5
million and $4.9 million charges detailed below. Due to the announced closing, we recorded an $8.5 million pretax charge during the fourth quarter
of 2003. The amount included a write-down of $8.0 million to reduce the capital assets and
inventories to their fair values and $0.5 million for employee severance and related contractually
guaranteed benefit costs. During the second quarter of 2004, we recorded a $1.2 million pre-tax
charge which included $1.1 million for facility closure costs and costs of product testing and
validation required to transfer production of products to our other facilities, and $0.1 million
for employee separation costs. During the third quarter of 2004, we recorded another $0.5 million
restructuring charge related to facility closure costs as well as product testing and validation
costs. These charges are included in Restructuring and impairment charges in the accompanying
statements of operations. The accruals for the employee severance and benefit costs are included in
Accrued payroll and benefits in the accompanying balance sheet at December 31, 2003. The facility is included in the Ferrous Metals segment in Note 14, Reporting for Business Segments.
The Havana Foundry had revenues of $25.7 million and $27.3 million and net losses of $5.0 million
and $2.2 million for the years ended December 31, 2003 and 2002, respectively. 18




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements September 30, 2004 (Unaudited) 6. Restructuring and Impairment Charges (continued) Other Long-Lived Assets Impairment Long-lived assets other than goodwill are tested for recoverability if certain events or changes in
circumstances indicate that the carrying value may not be recoverable. The carrying amounts of
long-lived assets are considered to be not recoverable if they exceed our estimates of their
undiscounted future cash flows, which are affected by our operations forecasts and strategic
planning. The annual growth rate of each segment was decreased from the prior year because of the uncertainties
and risks associated with our bankruptcy proceedings, compounded with changing market conditions. During our impairment review in the third quarter of 2004, we identified certain tangible
fixed assets with carrying values not recoverable and exceeding their fair values as of September
30, 2004. As a result, we recorded a pre-tax impairment charge of $26.4 million for idle asset
impairment at our Decatur, Illinois facility ($10.9 million), Racine, Wisconsin facility ($6.5
million), Havana, Illinois facility ($4.9 million), Alexander City, Alabama facility ($1.6
million), Monroe City, Missouri facilities ($0.5 million), Columbus, Georgia facility ($0.4
million) and $1.6 million at various other locations. These amounts were reported as Restructuring
and impairment charges in the accompanying statements of operations in 2004. In the fourth quarter of 2003, in addition to the impairment charge for the Havana Foundry, we
recorded a pre-tax impairment loss of $1.5 million, which is reported as `Restructuring and
impairment charges in the accompanying statements of operations. 7. Goodwill In December 2004, with the assistance of an independent valuation firm, we performed our annual
impairment test of goodwill as of September 30, 2004. Under the first step of the impairment test,
the fair values of our Ferrous Metals reporting unit and Light Metals reporting unit were
determined based on a combination of an income method, which estimates the fair value based on the
future discounted cash flows, and a market method, which estimates the fair values based on
comparable market prices. Under the income method, we assumed a cash flow period of 10 years, a
discount rate of 16.0%, a compound annual growth rate of 1.6% and 0.4% for the Ferrous Metals
reporting unit and Light Metals reporting unit, respectively, for the ten year period and a
terminal growth rate of 1.1%. The discount rate was increased and the annual growth rate was
decreased from the prior year because of the uncertainties and risks associated with our bankruptcy
proceedings. Because of the erosion of the profitability of the Ferrous Metals reporting unit (due
primarily to increased costs for scrap steel and other raw materials), operational difficulties in
the Light Metals reporting unit, the filing of our bankruptcy petitions and the revision of our
forecast and assumptions as a result of changing market conditions, our estimated discounted cash
flows from the Ferrous and Light Metals reporting units and estimated values using the market
method decreased compared to the results of our impairment tests performed in 2003. Based on the
first step of the impairment test, we determined that the carrying amounts of the Ferrous and Light
Metals reporting units were in excess of their fair value as of September 30, 2004. Accordingly, we
were required to perform the second step of the impairment test on each of these reporting units to
determine the amount of the impairment. The second step indicated that the total goodwill of both
units was fully impaired. The amount of pre-tax goodwill impairment charge was $59.7 million for
the Ferrous Metals unit and $106.2 million for the Light Metals unit, which are reported as
Goodwill Impairment Charge in the accompanying statements of operations for 2004. 19




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 8. Short-term Lines of Credit Columbus Neunkirchen Foundry GmbH, our wholly owned European subsidiary, has various revolving
lines of credit which are payable upon demand. These credit lines provide for borrowings up to
Euro 4.5 million (approximately $5.6 million) at September 30, 2004. There were no outstanding
borrowings under these agreements as of September 30, 2004. Portcast Fundicao Nodular, SA, our wholly-owned foreign subsidiary, has various lines of credit for
up to Euro 16.3 million (approximately $20.2 million). There was approximately $10.4 million
outstanding under these credit lines as of September 30, 2004. Annual interest accrues at various
rates from approximately 3% to 4% and is payable monthly. On October 22, 2004, we entered into a $60.0 million debtor-in-possession credit facility, as
amended by seven amendments through May 31, 2005 (the DIP Facility), to supplement our liquidity
and fund operations during our bankruptcy proceedings. See addition discussion regarding the DIP
Facility in Note 18, Subsequent Events. 9. Debt Long-term debt consists of the following (in thousands of dollars): September 30,
    
    
    December 31,2004
    
    
    2003INTERMET:Revolving credit facility
    
    $
    41,000
    
    
    $
    60,000Senior notes
    
    
    
    
    
    
    175,000Term loan
    
    
    119,400
    
    
    
    Domestic subsidiaries:Industrial development bonds
    
    
    36,500
    
    
    
    39,350Capitalized leases
    
    
    615
    
    
    
    974Foreign subsidiaries:Bank term note
    
    
    6,381
    
    
    
    7,629Capitalized leases
    
    
    503
    
    
    
    598Total
    
    
    204,399
    
    
    
    283,551Less: Long-term debt due within one year
    
    
    200,588
    
    
    
    4,303Long-term debt due after one year
    
    $
    3,811
    
    
    $
    279,248
 Due to the bankruptcy proceedings, unsecured pre-petition long-term debt has been reclassified to
Liabilities subject to compromise in the September 30, 2004 consolidated balance sheet. The
following is the long-term debt included in liabilities subject to compromise (in thousands of
dollars): September 30,2004Senior notes
    
    $
    175,000Industrial development bonds
    
    
    2,000Total debt included in liabilities subject to compromise
    
    $
    177,000
 20




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 9. Debt (continued) Bank Credit Agreement On January 8, 2004, we refinanced our then-existing bank credit agreement by entering into a
First Amended and Restated Credit Agreement, subsequently amended through April 13, 2004 (Bank
Credit Agreement), which provided for a $90.0 million revolving credit line and a $120.0 million
term loan. The Bank Credit Agreement is secured by substantially all of our domestic assets and
a pledge of 65% of the stock of our foreign subsidiaries. The $90.0 million revolving credit
portion has a maturity date of January 8, 2009, and the $120 million term loan has a maturity
date of January 8, 2010. During 2004, principal payments of $0.6 million had been made towards
the term loan before the filing of our bankruptcy proceedings. Due to the filing of our
bankruptcy proceedings, we are in default under the Bank Credit Agreement. As a result, effective
September 30, 2004 pricing on the revolving loan and term loan were modified to a floating rate.
The annual interest rates as of September 30, 2004 were 6.0% for the revolving credit line and
6.1% for the term loan. Interest is payable monthly on both loans. In addition, and also
effective as of September 30, 2004, we are required to accrue additional interest at an annual
rate of 1.5%, which is added monthly to the outstanding loan balances for both the revolver and
term loan. In addition to borrowings under the $90.0 million credit line, we also had standby letters of
credit outstanding totaling $26.9 million as of September 30, 2004. These letters of credit are
used to guarantee the payment or performance of various obligations that we have, such as workers
compensation and environmental remediation. These letters of credit are issued with one year
maturity dates and re-issued for an additional year upon each maturity date. Any draws under the
letters of credit increase the bank revolver balance and have a corresponding decrease in the
outstanding letter of credit amounts. Both the term loan and the revolver have covenants that
require us to maintain certain financial ratios, place restrictions on the amount that we can pay
in dividends, as well as impose other covenants and restrictions. At September 30, 2004 and
December 31, 2004, we were not in compliance with these covenants and the outstanding balances
were included in Long-term debt due within one year in the consolidated balance sheet. As a
result of entering into the Bank Credit Agreement, we incurred debt issuance costs during the
first quarter and second quarter of 2004 of $2.4 million and $1.0 million, respectively. These
costs are capitalized and included in Other non-current assets in the accompanying balance
sheet as of September 30, 2004. In addition, capitalized debt issuance costs of $1.4 million
related to our previous bank financing were written off in January 2004. Also on January 8, 2004, we entered into a $35.7 million Letter of Credit Facility Agreement as
well as a Cash Collateral agreement of the same amount. Under these agreements, we used $35.7
million of the proceeds from the Bank Credit Agreement term loan as cash collateral for the
issuance of a $35.7 million letter of credit to continue a guaranty of payment on our Columbus
Foundry revenue bonds in the amount of $35.0 million. These bonds were issued on December 23, 1999
by the Development Authority of Columbus, Georgia in connection with an expansion project at our
Columbus Foundry. Because we were in default of our obligations, on October 29,
2004 these bonds were paid in full by a draw of the letter of credit and, subsequently, we released
the cash collateral to our pre-petition lenders. 21




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 9. Debt (continued) Senior Notes On June 13, 2002, we completed an unsecured senior note offering of $175.0 million (the Senior
Notes). The Senior Notes bear a fixed rate of interest of 9.75% and mature on June 15,
2009. The net proceeds of the Senior Note offering were used to pay the remaining balance on a
then-existing bank term loan and for working capital purposes. Debt issuance costs of $5.9 million
were capitalized in connection with the note offering and were included in Other noncurrent
assets in the accompanying balance sheet and were being amortized over seven years. Interest on
the Senior Notes is due each June 15 and December 15. The Senior Notes are unsecured and rank
equally with all of our existing and future unsecured senior debt. We are in default under the
Senior Notes and the balance due together with interest has been classified as Liabilities subject
to compromise in the September 30, 2004 consolidated balance sheet. In September 2004, the
remaining $4.0 million of capitalized debt issuance costs were written off and has been classified as Reorganization charges in the September
31, 2004 consolidated income statement. See Note 10,
Supplemental Condensed Consolidating Financial Information, for additional information regarding
the Senior Notes. Due to our Chapter 11 filing, interest that was due on December 15, 2004 was not
paid. Columbus Foundry Revenue Bonds On December 23, 1999 the Development Authority of Columbus Georgia issued $35.0 million in revenue
bonds in connection with an expansion project at our Columbus Foundry. Certain equipment financed
with proceeds of these bonds, together with the real property on which the foundry is situated, was
leased by Columbus Foundry, L.P. from the development authority. We were required to maintain a
letter of credit to secure payment of our obligations. As described above, on October 29, 2004 these bonds were paid in full with
a draw of the letter of credit. Lynchburg Foundry Company Revenue Bonds Under the terms of an unsecured bond indenture, Lynchburg Foundry Company, our wholly-owned
subsidiary, is required to make partial redemption of certain industrial development revenue bonds
on an annual basis through June 2006. The redemption amount is $0.4 million per year, with a final
payment at maturity of $1.7 million. The balance outstanding as of September 30, 2004 was $2.0
million. Lynchburg Foundry Company is in default of its obligations under these bonds. No letters
of credit have been issued to secure payment of these bonds and they are otherwise unsecured. The
bonds are subject to optional redemption prior to maturity and bear interest at an annual rate of
7.0%. Interest is paid semi-annually, however, the interest payment that was due in December 2004
was not paid due to the Chapter 11 filing. The outstanding balance together with interest has been
classified as Liabilities subject to compromise in the September 30, 2004 consolidated balance
sheet. 22




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 9. Debt (continued) Tool Products, Inc. Revenue Bonds As part of our acquisition of Tool Products, Inc. in 1998, we assumed $4.5 million in obligations
in connection with industrial development revenue bonds issued by the Industrial Development Board
of the City of Jackson, Tennessee. These bonds were issued in connection with an expansion project
at our Jackson, Tennessee facility. Certain equipment and real estate financed with the proceeds of
these bonds was leased from the development board. We were required to maintain a letter of credit
to secure payment of our obligations under these bonds. Terms of the indenture governing these
bonds required us to make annual principal payments of $0.5 million every January, with a final
maturity date of January 1, 2007. Because we were in default of our obligations,
the letter of credit was drawn and these bonds were paid in full on December 1, 2004 in the amount
of $1.5 million, which increased the balance under our bank revolving loan by the same amount. Maturities of long-term debt at September 30, 2004 and for each twelve-month period thereafter are
as follows (in thousands of dollars): Twelve-month period ending:September 30, 2005
    
    $
    200,588September 30, 2006
    
    
    2,490September 30, 2007
    
    
    700September 30, 2008
    
    
    621Thereafter
    
    
    $
    204,399
 23




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 10. Supplemental Condensed Consolidating Financial Information On June 13, 2002, we
issued $175.0 million of senior notes, which will mature in 2009
(the Senior Notes). The Senior
Notes are guaranteed by certain of our wholly-owned domestic subsidiaries (Combined Guarantor
Subsidiaries). The guarantees are unconditional and joint and several. The Senior Notes are
effectively subordinated to the secured debt of INTERMET Corporation (Parent). Restrictions
contained in the indenture covering the Senior Notes include, but are not limited to, restrictions
on incurring additional secured debt, repurchasing our capital stock, disposing assets, engaging in
affiliate transactions and transferring assets. As of September 30, 2004, the Parent and the
Combined Guarantor Subsidiaries had $161.9 million of secured debt outstanding and $52.5 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 Senior Notes (Combined Non-Guarantor Subsidiaries). The
Combined Non-Guarantor Subsidiaries had $17.3 million of debt outstanding as of September 30, 2004. Presented below are summarized condensed consolidating financial information for the Parent, the
Combined Guarantor Subsidiaries, the Combined Non-Guarantor Subsidiaries and INTERMET on a
consolidated basis as of September 30, 2004 and December 31, 2003, and for the three months and
nine months ended September 30, 2004 and 2003. 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. The senior notes are unsecured pre-petition obligations. Under the Bankruptcy Code, actions to
collect pre-petition indebtedness, as well as most other pending litigation, are stayed and other
contractual obligations against us may not be enforced. On September 29, 2004 we ceased accruing
interest on the Senior Notes and other liabilities subject to compromise in accordance with SOP
90-7. 24




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 10. Supplemental Condensed Consolidating Financial Information (continued) Three Months Ended September 30, 2004Combined
    
    
    CombinedGuarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(in thousands of dollars)INCOME STATEMENT DATANet sales
    
    $
    
    
    
    $
    160,050
    
    
    $
    40,867
    
    
    ($
    3,204
    )
    
    $
    197,713Cost of sales
    
    
    
    
    
    
    168,486
    
    
    
    36,775
    
    
    
    (3,204
    )
    
    
    202,057Gross (loss) profit
    
    
    
    
    
    
    (8,436
    )
    
    
    4,092
    
    
    
    
    
    
    
    (4,344
    )Selling, general and administrative expenses
    
    
    5,364
    
    
    
    3,252
    
    
    
    3,612
    
    
    
    
    
    
    
    12,228Reorganization charges
    
    
    5,970
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,970Goodwill impairment charge
    
    
    
    
    
    
    164,671
    
    
    
    1,262
    
    
    
    
    
    
    
    165,933Restructuring and impairment charges
    
    
    
    
    
    
    26,931
    
    
    
    
    
    
    
    
    
    
    
    26,931Operating (loss) profit
    
    
    (11,334
    )
    
    
    (203,290
    )
    
    
    (782
    )
    
    
    
    
    
    
    (215,406
    )Other (income) expenses, net:Interest expense, net
    
    
    5,460
    
    
    
    2,162
    
    
    
    236
    
    
    
    
    
    
    
    7,858Other (income) expense, net
    
    
    (13
    )
    
    
    (18
    )
    
    
    69
    
    
    
    
    
    
    
    38(Loss) income from continuing operations before
income taxes
    
    
    (16,781
    )
    
    
    (205,434
    )
    
    
    (1,087
    )
    
    
    
    
    
    
    (223,302
    )Income tax expense
    
    
    (107
    )
    
    
    (343
    )
    
    
    (617
    )
    
    
    
    
    
    
    (1,067
    )Loss from continuing operations
    
    
    (16,888
    )
    
    
    (205,777
    )
    
    
    (1,704
    )
    
    
    
    
    
    
    (224,369
    )Loss from discontinued operations, net of tax
    
    
    
    
    
    
    (677
    )
    
    
    
    
    
    
    
    
    
    
    (677
    )Equity in net income (loss) of subsidiaries
    
    
    (208,158
    )
    
    
    (1,704
    )
    
    
    
    
    
    
    209,862
    
    
    
    Net loss
    
    ($
    225,046
    )
    
    ($
    208,158
    )
    
    ($
    1,704
    )
    
    $
    209,862
    
    
    ($
    225,046
    )
 25




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 10. Supplemental Condensed Consolidating Financial Information (continued) Three Months Ended September 30, 2003Combined
    
    
    CombinedGuarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(in thousands of dollars)INCOME STATEMENT DATANet sales
    
    $
    
    
    
    $
    145,911
    
    
    $
    29,475
    
    
    ($
    2,686
    )
    
    $
    172,700Cost of sales
    
    
    
    
    
    
    135,868
    
    
    
    24,789
    
    
    
    (2,686
    )
    
    
    157,971Gross profit
    
    
    
    
    
    
    10,043
    
    
    
    4,686
    
    
    
    
    
    
    
    14,729Selling, general and administrative
expenses
    
    
    493
    
    
    
    5,711
    
    
    
    3,279
    
    
    
    
    
    
    
    9,483Operating (loss) profit
    
    
    (493
    )
    
    
    4,332
    
    
    
    1,407
    
    
    
    
    
    
    
    5,246Other (income) expenses, net:Interest expense, net
    
    
    5,102
    
    
    
    2,237
    
    
    
    380
    
    
    
    
    
    
    
    7,719Other income, net
    
    
    (1,060
    )
    
    
    (6
    )
    
    
    (409
    )
    
    
    
    
    
    
    (1,475
    )(Loss) income from continuing operations
before income taxes
    
    
    (4,535
    )
    
    
    2,101
    
    
    
    1,436
    
    
    
    
    
    
    
    (998
    )Income tax benefit (expense)
    
    
    2,274
    
    
    
    (1,562
    )
    
    
    (419
    )
    
    
    
    
    
    
    293(Loss) income from continuing operations
    
    
    (2,261
    )
    
    
    539
    
    
    
    1,017
    
    
    
    
    
    
    
    (705
    )Income from discontinued operations, net
of tax
    
    
    
    
    
    
    655
    
    
    
    
    
    
    
    
    
    
    
    655Equity in net income (loss) of
subsidiaries
    
    
    2,211
    
    
    
    1,017
    
    
    
    
    
    
    
    (3,228
    )
    
    
    Net (loss) income
    
    ($
    50
    )
    
    $
    2,211
    
    
    $
    1,017
    
    
    $
    (3,228
    )
    
    ($
    50
    )
 26




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 10. Supplemental Condensed Consolidating Financial Information (continued) Nine Months Ended September 30, 2004Combined
    
    
    CombinedGuarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(in thousands of dollars)INCOME STATEMENT DATANet sales
    
    $
    
    
    
    $
    507,563
    
    
    $
    127,431
    
    
    ($
    9,450
    )
    
    $
    625,544Cost of sales
    
    
    
    
    
    
    502,958
    
    
    
    110,178
    
    
    
    (9,450
    )
    
    
    603,686Gross profit
    
    
    
    
    
    
    4,605
    
    
    
    17,253
    
    
    
    
    
    
    
    21,858Selling, general and administrative expenses
    
    
    8,959
    
    
    
    14,276
    
    
    
    10,494
    
    
    
    
    
    
    
    33,729Reorganization charges
    
    
    5,970
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,970Goodwill impairment charge
    
    
    
    
    
    
    164,671
    
    
    
    1,262
    
    
    
    
    
    
    
    165,933Restructuring and impairment charges
    
    
    
    
    
    
    28,096
    
    
    
    
    
    
    
    
    
    
    
    28,096Operating (loss) profit
    
    
    (14,929
    )
    
    
    (202,438
    )
    
    
    5,497
    
    
    
    
    
    
    
    (211,870
    )Other (income) expenses, net:Interest expense, net
    
    
    17,077
    
    
    
    6,952
    
    
    
    1,022
    
    
    
    
    
    
    
    25,051Other (income) expense , net
    
    
    (357
    )
    
    
    (112
    )
    
    
    62
    
    
    
    
    
    
    
    (407
    )(Loss) income from continuing operations before
income taxes
    
    
    (31,649
    )
    
    
    (209,278
    )
    
    
    4,413
    
    
    
    
    
    
    
    (236,514
    )Income tax benefit (expense)
    
    
    1,965
    
    
    
    (667
    )
    
    
    (1,493
    )
    
    
    
    
    
    
    (195
    )(Loss) income from continuing operations
    
    
    (29,684
    )
    
    
    (209,945
    )
    
    
    2,920
    
    
    
    
    
    
    
    (236,709
    )Loss from discontinued operations, net of tax
    
    
    
    
    
    
    (2,644
    )
    
    
    
    
    
    
    
    
    
    
    (2,644
    )Equity in net income (loss) of subsidiaries
    
    
    (209,669
    )
    
    
    2,920
    
    
    
    
    
    
    
    206,749
    
    
    
    Net (loss) income
    
    ($
    239,353
    )
    
    ($
    209,669
    )
    
    $
    2,920
    
    
    $
    206,749
    
    
    ($
    239,353
    )
 27




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 10. Supplemental Condensed Consolidating Financial Information (continued) Nine Months Ended September 30, 2003Combined
    
    
    CombinedGuarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(in thousands of dollars)INCOME STATEMENT DATANet sales
    
    $
    
    
    
    $
    479,783
    
    
    $
    82,190
    
    
    ($
    14,115
    )
    
    $
    547,858Cost of sales
    
    
    
    
    
    
    436,817
    
    
    
    71,263
    
    
    
    (14,115
    )
    
    
    493,965Gross profit
    
    
    
    
    
    
    42,966
    
    
    
    10,927
    
    
    
    
    
    
    
    53,893Selling, general and administrative expenses
    
    
    1,990
    
    
    
    16,639
    
    
    
    6,997
    
    
    
    
    
    
    
    25,626Operating (loss) profit
    
    
    (1,990
    )
    
    
    26,327
    
    
    
    3,930
    
    
    
    
    
    
    
    28,267Other (income) expenses, net:Interest expense, net
    
    
    15,810
    
    
    
    6,639
    
    
    
    197
    
    
    
    
    
    
    
    22,646Other income, net
    
    
    (873
    )
    
    
    (13
    )
    
    
    (428
    )
    
    
    
    
    
    
    (1,314
    )(Loss) income from continuing operations
before income taxes and equity interest in
a joint venture
    
    
    (16,927
    )
    
    
    19,701
    
    
    
    4,161
    
    
    
    
    
    
    
    6,935Income tax benefit (expense)
    
    
    6,811
    
    
    
    (8,493
    )
    
    
    (1,315
    )
    
    
    
    
    
    
    (2,997
    )Equity interest in a joint venture
    
    
    
    
    
    
    
    
    
    
    752
    
    
    
    
    
    
    
    752(Loss) income from continuing operations
    
    
    (10,116
    )
    
    
    11,208
    
    
    
    3,598
    
    
    
    
    
    
    
    4,690Loss from discontinued operations, net of
tax
    
    
    
    
    
    
    (8,177
    )
    
    
    
    
    
    
    
    
    
    
    (8,177
    )Equity in net income (loss) of subsidiaries
    
    
    6,629
    
    
    
    3,598
    
    
    
    
    
    
    
    (10,227
    )
    
    
    Net (loss) income
    
    ($
    3,487
    )
    
    $
    6,629
    
    
    $
    3,598
    
    
    $
    (10,227
    )
    
    ($
    3,487
    )
 28




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 10. Supplemental Condensed Consolidating Financial Information (continued) As of September 30, 2004CombinedCombined Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(in thousands of dollars)BALANCE SHEET DATAASSETSCurrent assets:Cash and cash equivalents
    
    $
    13,844
    
    
    $
    87
    
    
    $
    11,732
    
    
    $
    
    
    
    $
    25,663Restricted cash
    
    
    35,885
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,885Accounts receivable, net
    
    
    458
    
    
    
    74,839
    
    
    
    31,463
    
    
    
    
    
    
    
    106,760Inventories
    
    
    
    
    
    
    48,559
    
    
    
    23,134
    
    
    
    (59
    )
    
    
    71,634Other current assets
    
    
    
    
    
    
    603
    
    
    
    10,016
    
    
    
    (2,231
    )
    
    
    8,388Total current assets
    
    
    50,187
    
    
    
    124,088
    
    
    
    76,345
    
    
    
    (2,290
    )
    
    
    248,330Other assets:Property, plant and equipment, net
    
    
    5,099
    
    
    
    202,709
    
    
    
    70,046
    
    
    
    865
    
    
    
    278,719Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other non-current assets
    
    
    13,073
    
    
    
    8,565
    
    
    
    977
    
    
    
    635
    
    
    
    23,250Intercompany, net
    
    
    (88,041
    )
    
    
    115,225
    
    
    
    (30,945
    )
    
    
    3,761
    
    
    
    Investments in subsidiaries
    
    
    302,748
    
    
    
    56,604
    
    
    
    
    
    
    
    (359,352
    )
    
    
    Total assets
    
    $
    283,066
    
    
    $
    507,191
    
    
    $
    116,423
    
    
    ($
    356,381
    )
    
    $
    550,299LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)Current liabilities:Accounts payable
    
    $
    
    
    
    $
    3,399
    
    
    $
    20,175
    
    
    ($
    97
    )
    
    $
    23,477Accrued liabilities
    
    
    10,026
    
    
    
    35,879
    
    
    
    22,336
    
    
    
    181
    
    
    
    68,422Short-term lines of credit
    
    
    
    
    
    
    
    
    
    
    10,424
    
    
    
    
    
    
    
    10,424Long-term debt due within one year
    
    
    160,400
    
    
    
    37,110
    
    
    
    3,078
    
    
    
    
    
    
    
    200,588Total current liabilities
    
    
    170,426
    
    
    
    76,388
    
    
    
    56,013
    
    
    
    84
    
    
    
    302,911Liabilities subject to compromise
    
    
    187,945
    
    
    
    64,741
    
    
    
    
    
    
    
    
    
    
    
    252,686Non-current liabilitiesLong-term debt due after one year
    
    
    
    
    
    
    5
    
    
    
    3,806
    
    
    
    
    
    
    
    3,811Retirement benefits
    
    
    4,737
    
    
    
    62,362
    
    
    
    
    
    
    
    
    
    
    
    67,099Other non-current liabilities
    
    
    604
    
    
    
    3,834
    
    
    
    
    
    
    
    
    
    
    
    4,438Total non-current liabilities
    
    
    5,341
    
    
    
    66,201
    
    
    
    3,806
    
    
    
    
    
    
    
    75,348Shareholders equity (deficit)
    
    
    (80,646
    )
    
    
    299,861
    
    
    
    56,604
    
    
    
    (356,465
    )
    
    
    (80,646
    )Total liabilities and shareholders equity (deficit)
    
    $
    283,066
    
    
    $
    507,191
    
    
    $
    116,423
    
    
    ($
    356,381
    )
    
    $
    550,299
 29




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 10. Supplemental Condensed Consolidating Financial Information (continued) As of December 31, 2003CombinedCombined Guarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(in thousands of dollars)BALANCE SHEET DATAASSETSCurrent assets:Cash and cash equivalents
    
    ($
    2,674
    )
    
    $
    127
    
    
    $
    3,582
    
    
    $
    
    
    
    $
    1,035Accounts receivable, net
    
    
    7
    
    
    
    64,457
    
    
    
    22,309
    
    
    
    
    
    
    
    86,773Inventories
    
    
    
    
    
    
    58,030
    
    
    
    19,440
    
    
    
    (59
    )
    
    
    77,411Other current assets
    
    
    7,319
    
    
    
    1,677
    
    
    
    1,751
    
    
    
    1
    
    
    
    10,748Total current assets
    
    
    4,652
    
    
    
    124,291
    
    
    
    47,082
    
    
    
    (58
    )
    
    
    175,967Non-current assets:Property, plant and equipment, net
    
    
    3,765
    
    
    
    247,681
    
    
    
    71,766
    
    
    
    868
    
    
    
    324,080Goodwill
    
    
    
    
    
    
    164,671
    
    
    
    1,262
    
    
    
    
    
    
    
    165,933Other non-current assets
    
    
    9,337
    
    
    
    9,318
    
    
    
    2,049
    
    
    
    
    
    
    
    20,704Intercompany, net
    
    
    (101,560
    )
    
    
    122,510
    
    
    
    (24,711
    )
    
    
    3,761
    
    
    
    Investments in subsidiaries
    
    
    515,513
    
    
    
    54,769
    
    
    
    
    
    
    
    (570,282
    )
    
    
    Total assets
    
    $
    431,707
    
    
    $
    723,240
    
    
    $
    97,448
    
    
    ($
    565,711
    )
    
    $
    686,684LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    2,151
    
    
    $
    58,504
    
    
    $
    20,398
    
    
    ($
    316
    )
    
    $
    80,737Accrued liabilities
    
    
    28,377
    
    
    
    42,877
    
    
    
    224
    
    
    
    2,606
    
    
    
    74,084Short-term lines of credit
    
    
    
    
    
    
    
    
    
    
    9,992
    
    
    
    
    
    
    
    9,992Long-term debt due within one year
    
    
    350
    
    
    
    983
    
    
    
    2,970
    
    
    
    
    
    
    
    4,303Total current liabilities
    
    
    30,878
    
    
    
    102,364
    
    
    
    33,584
    
    
    
    2,290
    
    
    
    169,116Non-current liabilitiesLong-term debt due after one year
    
    
    237,000
    
    
    
    36,991
    
    
    
    5,257
    
    
    
    
    
    
    
    279,248Retirement benefits
    
    
    5,765
    
    
    
    65,002
    
    
    
    
    
    
    
    
    
    
    
    70,767Other non-current liabilities
    
    
    (4,073
    )
    
    
    4,843
    
    
    
    3,838
    
    
    
    808
    
    
    
    5,416Total non-current liabilities
    
    
    238,692
    
    
    
    106,836
    
    
    
    9,095
    
    
    
    808
    
    
    
    355,431Shareholders equity
    
    
    162,137
    
    
    
    514,040
    
    
    
    54,769
    
    
    
    (568,809
    )
    
    
    162,137Total liabilities and shareholders equity
    
    $
    431,707
    
    
    $
    723,240
    
    
    $
    97,448
    
    
    ($
    565,711
    )
    
    $
    686,684
 30




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 10. Supplemental Condensed Consolidating Financial Information (continued) Nine Months Ended September 30, 2004Combined
    

    
    CombinedGuarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(in thousands of dollars)CASH FLOW DATACash (used in) provided by continuing
operating activities
    
    ($
    40,980
    )
    
    $
    16,528
    
    
    $
    14,907
    
    
    $
    
    
    
    ($
    9,545
    )Cash used in discontinued operations
    
    
    
    
    
    
    (354
    )
    
    
    
    
    
    
    
    
    
    
    (354
    )Net cash (used in) provided by operating
activities
    
    
    (40,980
    )
    
    
    16,174
    
    
    
    14,907
    
    
    
    
    
    
    
    (9,899
    )Investing activities:Additions to property, plant and equipment
    
    
    (1,196
    )
    
    
    (15,384
    )
    
    
    (2,467
    )
    
    
    
    
    
    
    (19,047
    )Purchase of shares of a subsidiary
    
    
    
    
    
    
    
    
    
    
    (2,984
    )
    
    
    
    
    
    
    (2,984
    )Proceeds from sale of property, plant and
equipment
    
    
    300
    
    
    
    379
    
    
    
    
    
    
    
    
    
    
    
    679Net cash used in investing activities
    
    
    (896
    )
    
    
    (15,005
    )
    
    
    (5,451
    )
    
    
    
    
    
    
    (21,352
    )Financing activities:Net (decrease) increase in lines of credit
    
    
    (19,000
    )
    
    
    
    
    
    
    607
    
    
    
    
    
    
    
    (18,393
    )Proceeds from term loan
    
    
    120,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120,000Repayment of term loan and other debts
    
    
    (300
    )
    
    
    (1,209
    )
    
    
    (1,499
    )
    
    
    
    
    
    
    (3,008
    )Funding of restricted cash
    
    
    (35,885
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,885
    )Payment of debt issuance costs
    
    
    (3,359
    )
    
    
    
    
    
    
    
    
    
    

    
    
    
    
    (3,359
    )Dividends paid
    
    
    (3,078
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,078
    )Issuance of common stock
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16Net cash provided by (used in) financing
activities
    
    
    58,394
    
    
    
    (1,209
    )
    
    
    (892
    )
    
    
    
    
    
    
    56,293Effect of exchange rate changes on cash and
cash equivalents
    
    
    
    
    
    
    
    
    
    
    (414
    )
    
    
    
    
    
    
    (414
    )Net increase (decrease) in cash and cash
equivalents
    
    $
    16,518
    
    
    ($
    40
    )
    
    $
    8,150
    
    
    $
    
    
    
    $
    24,628
 31




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 10. Supplemental Condensed Consolidating Financial Information (continued) Nine Months Ended September 30, 2003Combined
    
    
    CombinedGuarantor
    
    
    Non-GuarantorParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    Consolidated(in thousands of dollars)CASH FLOW DATACash provided by continuing operating
activities
    
    $
    6,018
    
    
    $
    485
    
    
    $
    9,969
    
    
    $
    
    
    
    $
    16,472Cash provided by discontinued operations
    
    
    
    
    
    
    5,609
    
    
    
    
    
    
    
    
    
    
    
    5,609Net cash provided by operating activities
    
    
    6,018
    
    
    
    6,094
    
    
    
    9,969
    
    
    
    
    
    
    
    22,081Investing activities:Additions to property, plant and
equipment
    
    
    (1,365
    )
    
    
    (8,315
    )
    
    
    (1,787
    )
    
    
    
    
    
    
    (11,467
    )Additions to property, plant and
equipment by discontinued operations
    
    
    
    
    
    
    (145
    )
    
    
    
    
    
    
    
    
    
    
    (145
    )Purchase of shares of a subsidiary
    
    
    
    
    
    
    
    
    
    
    (5,571
    )
    
    
    
    
    
    
    (5,571
    )Proceeds from sale of assets of a
subsidiary
    
    
    
    
    
    
    3,925
    
    
    
    
    
    
    
    
    
    
    
    3,925Proceeds from sale of property, plant
and equipment
    
    
    1,700
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,700Net cash provided by (used in) investing
activities
    
    
    335
    
    
    
    (4,535
    )
    
    
    (7,358
    )
    
    
    
    
    
    
    (11,558
    )Financing activities:Net decrease in revolving credit facility
    
    
    (1,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,000
    )Repayment of other debts
    
    
    
    
    
    
    (1,313
    )
    
    
    (2,772
    )
    
    
    
    
    
    
    (4,085
    )Payment of debt issuance costs
    
    
    (405
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (405
    )Dividends paid
    
    
    (3,072
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,072
    )Issuance of common stock
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12Net cash used in financing activities
    
    
    (4,465
    )
    
    
    (1,313
    )
    
    
    (2,772
    )
    
    
    
    
    
    
    (8,550
    )Effect of exchange rate changes on cash and
cash equivalents
    
    
    
    
    
    
    
    
    
    
    (283
    )
    
    
    
    
    
    
    (283
    )Net increase (decrease) in cash and cash
equivalents
    
    $
    1,888
    
    
    $
    246
    
    
    ($
    444
    )
    
    $
    
    
    
    $
    1,690
 32




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 11. Commitments and Contingencies 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. We are in the process of reviewing Maximum Achievable Control Technology
Standards that will be applicable to our industry. We also have current and former operating entities (for which we may be responsible) that are
potentially responsible for clean-up 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.
For known environmental sites, we have recorded reserves, on an undiscounted basis, to cover
estimated future environmental expenditures. Environmental reserves were $6.6 million as of
September 30, 2004. These reserves include a $3.1 million cash escrow account acquired as a part of
our acquisition of Ganton Technologies in 1999 that is being used to fund the clean-up of an
inactive property located in Addison, Illinois. We expect the clean-up will occur in 2005. The
reserves also include $2.3 million for the now-closed Radford Foundry, which is discussed below.
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. 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 Foundry. We 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 human health. Because we
historically disposed of waste material at this site, it is probable that remedial action will be
required with respect to that on-site disposal. We have accrued $2.3 million for such remediation
activity based on our investigation to date. However, our investigation of this site will continue
and it is possible that ultimate remediation costs could exceed the amounts that we have accrued. We are also a party to other legal proceedings in the ordinary course of our business, most of
which were stayed with the filing of our bankruptcy cases on September 29, 2004. At the present
time, we do not believe that any of these proceedings will have a material adverse effect on our
results of operations. We self-insure a significant portion of our health care and property and casualty insurance risks.
However, we purchase additional insurance for catastrophic losses. We carry a $2.5 million
property deductible per occurrence. 33




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 12. Retirement Benefits We maintain six noncontributory defined benefit pension plans for certain of our U.S. employees.
Our policy is to fund amounts as required under applicable laws and regulations. In addition, we
provide health care and life insurance benefits to certain retired U.S. employees and their
dependents. The components of net periodic benefit cost are as follows (in thousands of dollars): OtherPension Benefits
    
    
    Postretirement BenefitsThree Months Ended September 30,2004
    
    
    2003
    
    
    2004
    
    
    2003Service cost
    
    $
    587
    
    
    $
    611
    
    
    $
    112
    
    
    $
    255Interest cost
    
    
    1,557
    
    
    
    1,505
    
    
    
    608
    
    
    
    686Expected return on plan assets
    
    
    (1,421
    )
    
    
    (1,413
    )
    
    
    
    
    
    
    Amortization of prior service
cost
    
    
    230
    
    
    
    184
    
    
    
    (91
    )
    
    
    (15
    )Amortization of loss (gain)
    
    
    537
    
    
    
    325
    
    
    
    38
    
    
    
    (52
    )Curtailment gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,278
    )Net periodic benefit cost
    
    $
    1,490
    
    
    $
    1,212
    
    
    $
    667
    
    
    ($
    404
    )
 OtherPension Benefits
    
    
    Postretirement BenefitsNine Months Ended September 30,2004
    
    
    2003
    
    
    2004
    
    
    2003Service cost
    
    $
    1,761
    
    
    $
    1,832
    
    
    $
    335
    
    
    $
    763Interest cost
    
    
    4,673
    
    
    
    4,514
    
    
    
    1,825
    
    
    
    2,059Expected return on plan assets
    
    
    (4,264
    )
    
    
    (4,237
    )
    
    
    
    
    
    
    Amortization of prior service
cost
    
    
    689
    
    
    
    551
    
    
    
    (273
    )
    
    
    (44
    )Amortization of loss (gain)
    
    
    1,611
    
    
    
    977
    
    
    
    113
    
    
    
    (156
    )Curtailment loss (gain)
    
    
    
    
    
    
    301
    
    
    
    
    
    
    
    (1,278
    )Net periodic benefit cost
    
    $
    4,470
    
    
    $
    3,938
    
    
    $
    2,000
    
    
    $
    1,344
 We disclosed in our 2003 annual report that we expected to contribute $14.9 million to our pension
plans in 2004. As of September 30, 2004, we had made contributions of $8.8 million. There were no
additional contributions to fund our pension plans in 2004. Our measurement of the Wagner Castings Company postretirement medical obligations includes the anticipated impact of the federal subsidy enabled by
the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. These effects are measured in accordance with the Financial Accounting Standards Board Staff Position (FSP FAS106-2) as
of the third quarter 2004 quarter-end disclosure. For expense, the impact is to be recognized prospectively, beginning with the 2005 fiscal year expense. While final regulations have not
been issued on qualifications for the subsidy or the determination of
actuarial equivalence, these measurements are believed to be
reasonable best estimates based on the two-pronged approach to subsidy determination set forth in proposed regulations. Under this standard, the Wagner Casting
Companys post-Medicare prescription drug plan is
actuarially equivalent for all retirees receiving medical
benefits after 65 years of age (except for hourly participants who
retired prior to June 1, 1980) as the value of the plan benefits exceeds the value of Medicare Part D benefits less participant premiums. The annual Medicare subsidy is projected to be $623 per person starting in 2006.
This average subsidy amount is assumed to increase at a rate of 8.12% in 2007 decreasing to 5.0% in 2022 and thereafter. With respect to our other (non-Wagner) retiree medical plans, because we do not provide prescription
drug benefits to retirees after age 65, it is assumed that the employer will not qualify for the federal subsidy. The Act had no impact on disclosed results. 13. Income Taxes As a result of the
accumulation of losses in the past three years, the deferred tax asset derived from the pre-tax
loss of our domestic operations is fully reserved. During the second quarter of 2004, we recorded tax refunds of $2.7 million. These tax refunds were
identified after the United States Internal Revenue Service completed their examination of our tax
year 2001. 34




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 14. Reporting for Business Segments We evaluate our financial results in two business segments, the Ferrous Metals segment and the
Light Metals segment. Our segment reporting is consistent with the manner in which our business
is managed and our resources are allocated by management. The Ferrous Metals segment consists of
ferrous foundry operations and their related machining operations. 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 segment or Light Metals segment, and the corporate business unit and its related
expenses and eliminations. Selected financial information of each of our business segments is as
follows: Ferrous
    
    
    Light
    
    
    CorporateMetals
    
    
    Metals
    
    
    and Other
    
    
    Consolidated(in thousands of dollars)Three-month period ended September 30, 2004:Net sales
    
    $
    128,867
    
    
    $
    68,846
    
    
    $
    
    
    
    $
    197,713Operating loss (a)(b)
    
    ($
    85,341
    )
    
    ($
    119,082
    )
    
    ($
    (10,983
    )
    
    ($
    215,406
    )Interest expense, net
    
    
    (224
    )
    
    
    (17
    )
    
    
    (7,617
    )
    
    
    (7,858
    )Other (expense) income, net
    
    
    (41
    )
    
    
    (17
    )
    
    
    20
    
    
    
    (38
    )Income tax expense
    
    
    (754
    )
    
    
    (136
    )
    
    
    (177
    )
    
    
    (1,067
    )Loss from discontinued operations, net of tax
    
    
    (677
    )
    
    
    
    
    
    
    
    
    
    
    (677
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    ($
    225,046
    )Three-month period ended September 30, 2003:Net sales
    
    $
    115,127
    
    
    $
    57,573
    
    
    $
    
    
    
    $
    172,700Operating profit (loss)
    
    $
    2,191
    
    
    $
    3,944
    
    
    ($
    889
    )
    
    $
    5,246Interest expense, net
    
    
    (1,376
    )
    
    
    (1,229
    )
    
    
    (5,114
    )
    
    
    (7,719
    )Other income, net
    
    
    415
    
    
    
    
    
    
    
    1,060
    
    
    
    1,475Income tax (expense) benefit
    
    
    (251
    )
    
    
    (630
    )
    
    
    1,174
    
    
    
    293Income (loss) from discontinued operations,
net of tax
    
    
    714
    
    
    
    
    
    
    
    (59
    )
    
    
    655Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    ($
    50
    )
 
 (a)
    
    We recorded pretax restructuring and asset impairment charges, excluding goodwill, of
$26.9 million in the three months ended September 2004. The amount of pre-tax restructuring
and asset impairment charges was $17.1 million for the Ferrous Metals unit, $7.5 million for
the Light Metals unit and $2.3 million for Corporate and Other. For further discussion about
asset impairment see Note 5, Restructuring and Impairment Charges.(b)
    
    We recorded pretax goodwill impairment charges of $165.9 million in September 2004. The
amount of pre-tax goodwill impairment charge was $59.7 million for the Ferrous Metals unit and
$106.2 million for the Light Metals unit. For further discussion about the goodwill impairment
charge, see Note 6, Goodwill. 35




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 14. Reporting for Business Segments (continued) Ferrous
    
    
    Light
    
    
    CorporateMetals
    
    
    Metals
    
    
    and Other
    
    
    Consolidated(in thousands of dollars)Nine-month period ended September 30, 2004:Net sales
    
    $
    415,400
    
    
    $
    210,144
    
    
    $
    
    
    
    $
    625,544Operating loss (a)(b)
    
    ($
    78,747
    )
    
    ($
    117,451
    )
    
    ($
    15,672
    )
    
    ($
    211,870
    )Interest expense, net
    
    
    (995
    )
    
    
    (57
    )
    
    
    (23,999
    )
    
    
    (25,051
    )Other income (expense), net
    
    
    71
    
    
    
    (21
    )
    
    
    357
    
    
    
    407Income tax (expense) benefit
    
    
    (1,766
    )
    
    
    (324
    )
    
    
    1,895
    
    
    
    (195
    )Loss from discontinued operations, net of tax
    
    
    (2,644
    )
    
    
    
    
    
    
    
    
    
    
    (2,644
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    ($
    239,353
    )As of September 30, 2004:Total assets
    
    $
    329,053
    
    
    $
    167,119
    
    
    $
    54,127
    
    
    $
    550,299Nine-month period ended September 30, 2003:Net sales
    
    $
    369,408
    
    
    $
    178,450
    
    
    $
    
    
    
    $
    547,858Operating profit (loss)
    
    $
    20,719
    
    
    $
    10,856
    
    
    ($
    3,308
    )
    
    $
    28,267Interest expense, net
    
    
    (3,212
    )
    
    
    (3,585
    )
    
    
    (15,849
    )
    
    
    (22,646
    )Other income, net
    
    
    214
    
    
    
    
    
    
    
    1,100
    
    
    
    1,314Income tax (expense) benefit
    
    
    (6,370
    )
    
    
    (2,525
    )
    
    
    5,898
    
    
    
    (2,997
    )Equity interest in a joint venture
    
    
    752
    
    
    
    
    
    
    
    
    
    
    
    752Loss from discontinued operations, net of tax
    
    
    (8,055
    )
    
    
    
    
    
    
    (122
    )
    
    
    (8,177
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    ($
    3,487
    )As of December 31, 2003:Total assets
    
    $
    372,812
    
    
    $
    281,396
    
    
    $
    32,476
    
    

    $
    686,684
 
 (a)
    
    We recorded pretax restructuring and asset impairment charges, excluding goodwill, of
$28.1 million in the nine months ended September 2004. The amount of pre-tax restructuring and
asset impairment charges was $18.3 million for the Ferrous Metals unit, $7.5 million for the
Light Metals unit and $2.3 million for Corporate and Other. For further discussion about asset
impairment see Note 5, Restructuring and Impairment Charges.(b)
    
    We recorded pretax goodwill impairment charges of $165.9 million in September 2004. The
amount of pre-tax goodwill impairment charge was $59.7 million for the Ferrous Metals unit and
$106.2 million for the Light Metals unit. For further discussion about the goodwill impairment charge, see Note
6, Goodwill. 36




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 15. Loss per Share Loss per share is computed as follows: Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2004
    
    
    2003
    
    
    2004
    
    
    2003(in thousands of dollars, except per share data)Numerator:Net loss
    
    ($
    225,046
    )
    
    ($
    50
    )
    
    ($
    239,353
    )
    
    ($
    3,487
    )Denominator:Denominator for
basic and diluted
loss per share 
weighted average
shares
    
    
    25,614
    
    
    
    25,591
    
    
    
    25,603
    
    
    
    25,576Basic and fully
diluted loss per
share
    
    ($
    8.79
    )
    
    $
    
    
    
    ($
    9.35
    )
    
    ($
    0.14
    )
 The impact on fully diluted loss per share of the assumed exercise of stock options and unearned
restricted stock was not material. 16. Derivative Financial Instruments Under our risk management policy, the use of derivatives for managing risk is confined to hedging
the exposure related to variable rate funding activities, hedging the foreign currency exposure of
inter-company payables and receivables and hedging purchase commitments relating to raw materials
used in our production processes and related energy costs. Specifically, we review our liability
structure on a recurring basis and make the determination as to whether our risk exposure should be
adjusted using derivative instruments. We do not participate in speculative derivatives trading. In addition to these derivative financial instruments, we have other contracts for the purchase of
raw materials and energy that have the characteristics of derivatives but are not required to be
accounted for as derivatives. These contracts for the physical delivery of commodities qualify for
the normal purchases and normal sales exception under SFAS No. 133 as we take physical delivery of
the commodity and use it in the production process. This exception is an election and, if not
elected, these contracts would be carried on our balance sheet at fair value with changes in the
fair value reflected in earnings. 17. Employee Retention Plan On September 20, 2004, our Board of Directors adopted an Amended and Restated Key Employee Retention Plan to retain certain key employees during our bankruptcy proceedings. We estimate that the total amount payable to participants will be approximately $5.2 million. See additional discussion in Note 18, Subsequent Events. 37




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 18. Subsequent Events Debtor-in-Possession Credit Agreement On October 22, 2004, we entered into a $60.0 million debtor-in-possession credit facility, as
amended by seven amendments through May 31, 2005 (the DIP Facility), to supplement our liquidity
and fund operations during our bankruptcy proceedings. Available borrowings under the DIP Facility
are determined based on a budget that is subject to approval by the collateral and administrative
agents, and are subject to a borrowing base calculated as a percentage of our accounts receivable,
inventory and fixed assets, less reserves and fees. Interest on borrowings made under the DIP
Facility is a base rate plus 2.0% per annum or a Eurodollar rate plus 3.0% per annum. Principal
repayments are made on a daily basis from our cash collections. Borrowings under the DIP Facility
are secured by a first priority lien on substantially all of our domestic assets and a pledge of
65% of the stock of our foreign subsidiaries. The maturity date of the DIP Facility is the earlier
of October 21, 2005 or the dates of certain accelerating events. In addition, the DIP Facility
requires us to maintain certain financial covenants. The key financial covenants are limitations
on capital expenditures and requirements that we achieve certain minimum consolidated EBITDA
thresholds. At December 31, 2004 and April 30, 2005, we were in compliance with all debt covenants
under our DIP Facility. As a result of entering into the DIP credit facility, we incurred $1.8
million of debt issuance costs in October 2004 which were capitalized as Other non-current assets
in the balance sheet. Delisting from NASDAQ On October 1, 2004, we received a written notice from The NASDAQ Stock Market (Nasdaq) that our
shares of common stock would be delisted at the opening of business on October 12, 2004 in
accordance with Marketplace Rule 4815(a), based on Nasdaqs determination that we did not comply
with the continued listing requirements under Marketplace Rules 4300 and 4450(f). Since October
12, 2004, our common stock, $0.10 par value, has been traded on the Pink Sheets under the symbol
INMTQ and had a closing price of $0.13 on June 14, 2005. On June 14, 2005, there were
approximately 460 record holders of our common stock. Employee Retention Plan On December 8, 2004, our Board of Directors adopted an Amended and Restated Key Employee Retention
Plan in order to retain certain key employees during our bankruptcy proceedings.
The number of employees who are participants in the Amended Plan is approximately 100, and we estimate that the total amount payable to
participants will be approximately $5.2 million. The Amended Plan provides
for the payment of bonuses to participants who remain employed by us through a successful reorganization or sale of the company.
One third (1/3) of each participant's payment is due following confirmation of a plan of reorganization and the remaining two thirds
(2/3) is due between January 1, 2006 and January 10, 2006. The plan also provides for severance benefits under certain conditions. 38




---



##### Table of Contents



INTERMET Corporation Notes to Interim Condensed Consolidated Financial Statements (continued) September 30, 2004 (Unaudited) 18. Subsequent Events (continued) Closure of Columbus Machining Plant On October 14, 2004, we announced our plan to close our Columbus Machining Plant in Midland,
Georgia, in order to improve our capacity utilization and to reduce operating costs. The Columbus
Machining Plant machines ductile iron and light metal castings for the automotive industry, and had
approximately 15 salaried and 71 hourly employees. We closed this plant during the first quarter
of 2005. The facility is included in the Ferrous Metals segment in Note 14, Reporting for Business
Segments, to our Consolidated Financial Statements. The Columbus Machining Plant had revenues of
$20.8 million, $26.8 million and $30.4 million, and net losses of $0.1 million, $2.5 million and
$1.7 million for the years ended December 31, 2003, 2002, and 2001, respectively. We recognized
plant closure costs of $0.3 million in the fourth quarter of 2004. Closure of Racine Plants On December 15, 2004, we announced our plan to close our Racine Die-Casting Plant and Racine
Machining Plant in Sturtevant, Wisconsin. The planned closure is due to the high operating costs
of the facilities and underutilization of capacity at these plants. The Racine Plants manufacture
and machine aluminum die-castings for the automotive industry, and have approximately 84 salaried
and 519 hourly employees. We closed these plants during the second quarter of 2005. The facility
is included in the Light Metals segment in Note 14, Reporting for Business Segments, to our
Consolidated Financial Statements. The Racine Plants had revenues of $68.2 million, $73.4 million
and $73.5 million, and net loss of $4.6 million, net income of $1.0 million and net income of $2.9
million for the years ended December 31, 2003, 2002, and 2001, respectively. We recognized asset
impairment charges of $6.5 million in the third quarter of 2004 to reduce capital assets to their
fair values. In addition, we recognized plant closure and asset impairment charges of $3.8 million
in the fourth quarter of 2004. The amount included a write-down of $2.4 million to reduce
inventories to their fair values, a pension curtailment expense of $1.2 million and $0.2 million
for employee severance and related contractually guaranteed benefit costs. Closure of Decatur Plant On March 29, 2005, we announced a plan to close our Decatur Foundry located in Decatur, Illinois
during the fourth quarter of 2005. Hannibal Plant Some customers of our Hannibal facility have informed us that present product programs will
end or they intend to move their magnesium die casting work from that facility to other suppliers or transition to alternative processes.
A portion of the work in that facility will end on or about July 1, 2005. If the customers proceed with plans to move the remaining work, we anticipate
that this would occur in late 2005 or early 2006. If we are unable to secure new business for the plant within that timeframe, we anticipate that
operations at the Hannibal plant would be suspended until the Company is able to utilize that capacity, and all remaining work would be transferred to the Palmyra facility, which also produces magnesium die
castings. 39




---



##### 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 Risks 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. We undertake no obligation to publicly update or revise any forward-looking statements.
The following factors are important and should be considered carefully in
connection with any evaluation of INTERMETs business, financial condition, results of operations
and prospects. The following factors could cause our actual results to differ materially from
those reflected in any forward-looking statements we may make from time to time. The factors
identified here do not represent an exhaustive list of potential risks involved in our business and
we undertake no obligation to publicly update or revise the following risk factors:  
    
    On September 29, 2004, we and seventeen of our wholly-owned
domestic subsidiaries filed voluntary bankruptcy petitions for
reorganization under Chapter 11 of the United States Bankruptcy
Code, and we are currently operating as debtors-in-possession
under the supervision of the bankruptcy court. Although we are
working to develop and obtain confirmation of a plan of
reorganization, we need to secure adequate equity and/or debt
financing to do so to fund payments under a plan and to provide
adequate liquidity for our post-bankruptcy operations. Our
inability to timely exit bankruptcy could materially and adversely
impact our business if it affects our ability to obtain new
product awards or renewals of existing product awards from our
customers.
    
    In connection with our September, 2004 bankruptcy filing we
entered into a debtor-in-possession revolving credit facility in
October, 2004 which expires October 2005. This facility contains a number of financial
covenants and other requirements. We rely on this facility to
fund our operations and provide necessary liquidity during the
pendency of our Chapter 11 proceeding. Our business would be
materially and adversely impacted if we were unable to borrow
under this facility due to our failure to meet the covenants and
other conditions required for continued borrowings under this
facility.
    
    Sales to the automotive industry accounted for substantially all
of our sales in 2004. In addition, our automotive sales are
highly concentrated among a few major customers, and our products
are generally sold for specific vehicle programs. Therefore, the
loss of any significant customer or vehicle program could have a
material adverse effect on our business. Additionally, sales of
our products are dependent on unit sales of the applicable vehicle
models and any reduction in sales or failure to meet sales
estimates of vehicle models could also have a material adverse
effect on our business.
    
    As is typical in the automotive supply industry, we have no
long-term contracts with our customers for most of the products that we supply. While our
customers provide annual estimates of their requirements and
update those estimates from time to time throughout the year,
most of our sales are made on a short-term purchase order basis,
which generally can be terminated by the customer.
    
    If one or more of our customers were to initiate bankruptcy or
insolvency proceedings, it could render a material portion of our
accounts receivable uncollectible or substantially impaired, which
could have a material adverse effect on our financial condition.
    
    A challenge that we and other automotive industry suppliers face
is the pressure from our customers to reduce the prices we charge
for our products. To the extent this trend continues, it puts
pressure on our margins and profitability, and could have a
material and adverse effect on our financial condition.
    
    The automotive industry is cyclical and dependent on consumer
spending. General economic factors that adversely affect
automotive sales could adversely impact our business. In
addition, our business is seasonal due 40




---



##### Table of Contents



to lower sales in the third
and fourth quarters due to the pass-through effect of plant
closings by OEMs for holidays, vacations and model changeovers.
Nevertheless, a substantial percentage of our costs are generally
not seasonal due to our need for continued expenditures for
capital equipment, product development and ongoing production
improvements and support, as well as other factors, making it
difficult for us to significantly reduce operating expenses in a
particular period even if our net sales forecasts for that period
are less than other periods.
    
    Our product lines are subject to change as OEMs introduce new or
redesigned products and vehicles. We compete for new business
both at the beginning of the development phase of new vehicles,
which generally begins two to five years prior to the marketing
and public sale of models based upon such vehicles, and upon
redesign of existing vehicles. Our sales would be adversely
affected if we fail to obtain business for new vehicles, or fail
to retain or increase business on redesigned existing vehicles.
    
    The substantial increases in scrap steel and other raw material
costs that we have experienced were the primary factors leading to
our bankruptcy filing in September of 2004. Energy costs have
also risen. If raw material and energy costs continue to
increase, and we are unable to pass a substantial portion of those
costs on to our customers on a timely basis, it could have a
material adverse effect on our financial condition.
    
    We are substantially leveraged and must generate enough cash to
make required interest and other payments under our
debtor-in-possession revolving credit facility. In the event we
do not generate enough cash, a default would occur under the
facility unless the lenders agreed to an amendment or a waiver.
Any default would have a material adverse effect on our business.
Additionally, our debt under the facility accrues interest at a
rate that varies with prevailing market rates. Therefore,
increases in market interest rates would increase our interest
payment obligations under the facility and could have a material
adverse effect on our financial condition.
    
    A substantial percentage of our hourly employees, as well as those
of our OEM and Tier 1 customers, are represented by labor unions
and work pursuant to collective bargaining agreements. Our
failure, or the failure of any of our significant customers, to
reach agreement with a labor union on a timely basis, resulting in
either a work stoppage or strike, could have a material adverse
effect on our business.
    
    We operate production facilities in Germany and Portugal, in
addition to our production facilities in the United States, that
expose us to the risks associated with non-U.S. operations,
including: (i) fluctuations in currency exchange rates; (ii)
compliance with the law and other regulatory requirements of
non-U.S. jurisdictions; (iii) overlapping and potentially
inconsistent tax structures; and (iv) possible restrictions or
limitations imposed on the repatriation of funds. Any of these
risks could lave a material adverse effect on our business or
financial condition.
    
    We are subject to U.S. and non-U.S. environmental laws and
regulations governing the emission, discharge, generation,
handling, storage, transportation, treatment and disposal of
hazardous and waste materials and the clean-up of contaminated
property. Although we have made and continue to make expenditures
to comply with environmental laws and regulations, future
compliance with these laws may have a material adverse effect on
our business or financial condition. Additionally, if an improper
release of hazardous materials occurs on or from our property or
from any offsite disposal site that receives or has received such
materials from us or any of our predecessors, or if contamination
is discovered at any of our or our predecessors current or former
properties, we could be held liable for such release or for the
cost to remediate contaminated property, and such liability could
have a material adverse effect on our financial condition. 41




---



##### Table of Contents



Material Changes in Results of Operations  Three months ended September 30, 2004 Sales for the third quarter of 2004 were $197.7 million, an increase of $25.0 million or 14.5% as
compared to sales of $172.7 million in the same period in 2003. Ferrous Metals segment sales were
$128.9 million during the third quarter of 2004 compared to $115.1 million for the same period in
2003, representing an increase in sales of $13.8 million or 12.0%. Included as part of Ferrous
Metals segment sales, European sales during the three months ended September 30, 2004 were $40.9
million, an increase of $11.4 million or 38.6% as compared to European sales of $29.5 million for
the same period in 2003. The overall increase in Ferrous Metals segment sales is mainly
attributable to the growth in the European sales volume, favorable foreign currency exchange on
European sales of $3.2 million, as well as the surcharge on scrap steel price increase recovered
from our customers. Light Metals segment sales were $68.8 million during the third quarter of 2004,
an increase of $11.2 million or 19.4% compared to $57.6 million for the same period in 2003. The
increase in sales is mainly attributable to new product launches along with growth of our
pressure-counter-pressure casting (PCPCTM) process. Gross (loss) profit for the three months ended September 30, 2004 and 2003 were ($4.3) million and
$14.7 million, respectively. Gross (loss) profit as a percentage of sales for the three months
ended September 30, 2004 and 2003 was (2.2%) and 8.5%, respectively. The decrease in gross profit
margin is mainly due to the significant increase in scrap steel and other raw materials. For further discussion on the effects of high scrap steel
costs, see Item 3., Quantitative and Qualitative Disclosures about Market Risks. Our profit
margins were also negatively affected during the third quarter by productivity and quality issues
at certain Light Metals plants in North America. Selling, general and administrative expenses for the three months ended September 30, 2004 and 2003
were 6.2% and 5.5% of sales, respectively. The increase is mainly due to legal and consulting fees
incurred prior to the filing of our bankruptcy proceedings, as well as increased accounting fees as
a result of Sarbanes-Oxley Act requirements. A goodwill impairment charge of $165.9 million was recorded in the third quarter of 2004. This
impairment charge was determined during impairment testing in December 2004, which indicated that
the carrying value of both the Ferrous and the Light Metals reporting units were in excess of fair
value, causing the entire carrying value of goodwill of $165.9 million to be written off.
Restructuring and impairment charges of $26.9 million were also recorded in the three months ended
September 30, 2004. These charges consisted of the write-down of impaired fixed assets of $26.4
and an additional $0.5 million of costs relating to the Havana Plant closing that was announced in
2003. Impairment charges of $10.0 million were recorded in 2003, including an $8.5 million charge
for the closure of our Havana Foundry, and $1.5 million in write-downs of other long-lived assets.
Reorganization expenses of $6.0 million were also recorded in the third quarter of 2004. Net interest expense for the
third quarter of 2004 was $7.8 million, which was $0.1 million more
than the same period of 2003. In the third quarter of 2004,
the Company recorded tax expense of $1.1 million on a pre-tax
net loss of $223.3 million. The income tax expense in the third quarter of 2004 was mainly comprised of state
tax expense on our domestic operations and tax expense on our profitable foreign operations. No
federal tax benefit was recorded on the pre-tax loss of our domestic operations. As a result of the accumulation of losses in the
past three years, the deferred tax asset derived from the pre-tax loss of our domestic operations
is fully reserved. 42




---



##### Table of Contents



Material Changes in Results of Operations  Nine months ended September 30, 2004 Sales for the nine months ended September 30, 2004 were $625.5 million, an increase of $77.6
million or 14.2% as compared to sales of $547.9 million in the same period in 2003. Ferrous Metals
segment sales were $415.4 million during the nine months ended September 30, 2004 compared to
$369.4 million for the same period in 2003, representing an increase in sales of $46.0 million or
12.5%. Included as part of Ferrous Metals segment sales, European sales during the nine months
ended September 30, 2004 were $127.4 million, an increase of $45.2 million or 55.0% as compared to
European sales of $82.2 million for the same period in 2003. The overall increase in Ferrous Metals
segment sales is mainly attributable to the growth in the sales volume of our domestic and foreign
operations, favorable foreign currency exchange on European sales of $9.7 million, as well as the
surcharge on scrap steel price increase recovered from our customers. Light Metals segment sales
were $210.1 million during the nine months ended September 30, 2004, an increase of $31.6 million
or 17.7% compared to $178.5 million for the same period in 2003. The increase in sales is mainly
attributable to new product launches along with sales growth of our PCPCTM process. Gross profit for the nine months ended September 30, 2004 and 2003 was $21.9 million and $53.9
million, respectively. Gross profit as a percentage of sales for the nine months ended September
30, 2004 and 2003 was 3.5% and 9.8%, respectively. The decrease in gross profit margin is mainly
due to the significant increase in scrap steel and other raw materials costs, and to a lesser
extent lower selling prices of our products. Our margins were also negatively affected by productivity and quality issues at certain Light Metals
plants in North America. For further discussion on the effects of high scrap steel costs, see Item
3., Quantitative and Qualitative Disclosures about Market Risks. Selling, general and administrative expenses for the nine months ended September 30, 2004 and 2003
were 5.4% and 4.7% of sales, respectively. The increase is mainly due to the consolidation of the
Porto Foundrys financial results beginning July 2003, the new European Engineering Center
established in July 2003, and increased operating expenses, including accounting fees for
Sarbanes-Oxley Act compliance requirements, consulting fees, a reversal of a bonus accrual in third
quarter 2003 and legal and environmental expenses. A goodwill impairment charge of $165.9 million was recorded in the third quarter of 2004. This
impairment charge was determined during impairment testing during the third quarter, which
indicated that the carrying value of both the Ferrous and the Light Metals reporting units were in
excess of fair value, causing the entire carrying value of goodwill of $165.9 million to be written
off. Restructuring and impairment charges of $28.1 million were also recorded in the nine months
ended September 30, 2004. These charges consisted of the write-down of impaired fixed assets of
$26.4 and an additional $1.7 million of costs relating to the Havana Plant closing that was
announced in 2003. Impairment charges of $10.0 million were recorded in 2003, including an $8.5
million charge for the closure of our Havana Foundry, and $1.5 million in write-downs of other
long-lived assets. Bankruptcy expenses of $6.0 million were also recorded in the third quarter of
2004. Net interest expense for the
nine months ended September 30, 2004 was $25.1 million,
which was $2.5
million more than the same period last year. The increase was due to the write-off of $1.4 million
of capitalized debt issuance costs related to our prior bank revolving credit agreement during the
first quarter of 2004, amortization of the debt issuance costs incurred during the nine months ended
September 30, 2004, and the consolidation of the Porto Foundrys financial results beginning July
2003. 43




---



##### Table of Contents



For the nine months ended
September 30, 2004, the Company recorded tax expense of $0.2
million on a pre-tax loss of $236.5 million. The income tax benefit in the nine months ended September 30, 2004 reflected
the recording of tax refunds of $2.7 million identified after the United States Internal Revenue
Service completed their examination of our tax year 2001. Excluding this amount, income tax expense
in the nine months ended September 30, 2004 was $2.9 million which was mainly comprised of state
tax expense on our domestic operations and the income tax expense on our profitable foreign
operations. No federal tax benefit was recorded on the pre-tax loss of our domestic operations.
Federal tax expense or benefit will not be recorded until the pre-tax profit of our domestic
operations exceeds our accumulated tax loss and credits carryforward. The effective income tax rate
in the nine months ended September 30, 2003 was higher than the statutory rate due to state taxes. Material Changes in Financial Condition, Liquidity and Capital Resources Through the third quarter of 2004, net cash used in operations totaled $9.9 million compared to net
cash provided by operations of $22.1 million for the same period in 2003. Depreciation and
amortization expense for the nine months ended September 30, 2004 and 2003, excluding depreciation
expense related to our discontinued operations, was $37.2 million and $34.3 million, respectively.
For the nine months ended September 30, 2004, after adjusting for the effect of exchange rates,
accounts receivable increased by $22.4 million due to increased sales, inventory decreased by $5.1
million, accounts payable increased by $20.7 million, and accrued assets increased by $3.1 million
due to increased tooling and accrued other liabilities decreased $6.1 million due to a decrease in
retirement benefit obligations of $6.4 million compared to the same period in 2003. Cash and cash equivalents at September 30, 2004 were $25.7 million, as compared to $1.0 million at
December 31, 2003. This increase in our cash balances resulted from the fact that the cash receipts
of our European operations for a few days before September 30, 2004 had not yet been applied to reduce
our borrowings under our lines of credit. On September 29, 2004 we filed our bankruptcy proceedings. As a result of our filing, we are no
longer able to borrow under our bank revolving credit facility. For a description of our debt
arrangements following our bankruptcy filing, see Note 9, Debt and Note 18, Subsequent Events. On July 15, 2004 the Board of Directors declared a dividend of $0.01 per share for the third
quarter of 2004. However, on September 22, 2004, the Board of Directors decided, in view of the
Companys financial condition, to suspend payment of this dividend. Critical Accounting Policies and Use of Estimates Our interim condensed consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United States, which require management to make
estimates and assumptions that affect the amounts reported in the financial statements and
accompanying notes. We evaluate estimates used in the preparation of our financial statements on a
continual basis. Actual results may differ from the estimates. Our critical accounting policies,
and our methods and policies used to establish estimates and assumptions, previously disclosed in
Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations 
Critical Accounting Policies and Use of Estimates in our annual report on Form 10-K for the year
ended December 31, 2003, and have not changed. 
 Item 3. Quantitative and Qualitative Disclosures about Market Risks We have exposure to four types of market risk. The first is the risk of interest rate changes and
how it impacts our interest expense and 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, including energy costs, and the costs of scrap steel, aluminum, magnesium and
zinc. The cost of scrap steel has increased steadily since early 2002 and represents a significant
risk to our operating results, liquidity and ability to borrow. Lastly, we have consumer risk. We
operate principally in the cyclical automotive industry, which is affected by economic conditions
and consumer spending. A weakening of the economy represents a risk to our operating results. 44




---



##### Table of Contents



We continue to be affected by the high cost of scrap steel, which is the primary raw material used
in our Ferrous Metals segment. Our cost of scrap steel has increased from an average of
approximately $160 per net ton at the beginning of 2003, to approximately $210 per net ton at the
end of 2003, and to approximately $380 per net ton at September 30, 2004. Other than the continued volatility in the cost of scrap steel, there has been no material change
to our exposures to market risk since December 31, 2003. 
 Item 4. Controls and Procedures We carried out an evaluation, under the supervision and with the participation of management,
including our principal executive officer and principal financial officer, of the effectiveness of
the design and operation of our disclosure controls and procedures (as defined under Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of September 30,
2004. Based not upon that evaluation, our principal executive officer and principal financial officer
concluded that our disclosure controls and procedures are not effective in timely alerting them and our
management to information that is required to be included in our
periodic SEC reports and filings. We have reached this conclusion
because of the material weakness in internal control over financial
reporting described below. Except as noted above, there was no change in our internal control over financial reporting that occurred during the
quarter ended September 30, 2004 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting. Our annual report on Form 10-K for the year ended December 31, 2004 contains managements report on
internal controls over financial reporting as of December 31, 2004, which identified a material
weakness in internal controls over financial reporting relating to our financial statement closing
process. 45




---



##### Table of Contents



Part II  Other Information 
 Item 1. Legal Proceedings On September 29, 2004, INTERMET Corporation and seventeen of its domestic subsidiaries filed
voluntary petitions in the U.S. Bankruptcy Court for the Eastern District of Michigan seeking
relief under Chapter 11 of the United States Bankruptcy Code. Along with our subsidiaries that
filed for Chapter 11 protection, we are continuing to operate our businesses as
debtors-in-possession under the jurisdiction of the U.S. Bankruptcy Court and in accordance with
the provisions of the Bankruptcy Code. See Note 3, Voluntary Reorganization under Chapter 11 and
Administration, for further details. See Note 11, Commitments and Contingencies, incorporated herein by reference, for a description
of environmental matters, including environmental matters relating to our Radford Foundry. There have been no other material changes in matters reported in the Form 10-K for the year ended
December 31, 2003. We are a party to a number of
legal proceedings in the ordinary course of our business, most of
which were stayed upon the filing of our bankrupty cases on
September 29, 2004. We do
not believe that such pending or threatened legal proceedings, 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. Item 2. Changes in Securities and Use of Proceeds None. Item 3. Defaults upon Senior Securities See Note 9, Debt, incorporated herein by reference, for a description of defaults under various
credit agreements triggered by the voluntary bankruptcy petitions on September 29, 2004. 
 Item 4. Submission of Matters to a Vote of Securities Holders None. Item 5. Other Information None. 
 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits ExhibitNumber
    
    Description of Exhibit31.1
    
    Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 200232
    
    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
 46




---



##### Table of Contents



(b) Reports on Form 8-K On July 15, 2004, we filed a current report on Form 8-K containing a press release announcing the
financial results for the second quarter of 2004. On September 20, 2004, we filed a current report on Form 8-K containing a press release announcing
our projected third quarter loss and projected covenant default at the end of the third quarter. On September 24, 2004, we filed a current report on Form 8-K disclosing our adoption of an Employee
Retention Plan. On October 5, 2004, we filed a current report on Form 8-K disclosing our chapter 11 filing and the
resultant acceleration of debt under our credit agreement and outstanding notes. On October 7, 2004, we filed a current report on Form 8-K disclosing the delisting of our shares of
common stock from The NASDAQ Stock Market. On October 15, 2004, we filed a current report on Form 8-K disclosing our plan to close our
Columbus Machining Plant in Columbus, Georgia. On October 28, 2004, we filed a current report on Form 8-K disclosing our execution of a Debtor in
Possession Credit Agreement. 47




---



##### 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 CorporationBy:
    
    /s/ Robert E. BeltsRobert E. BeltsVice President of Finance andChief Financial OfficerDate:
    
    June 23, 2005
 48




---



##### Table of Contents



ExhibitNumber
    
    Description of Exhibit31.1
    
    Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 200232
    
    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