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

Form 10-Q

|    |  |                                                                                                                                                
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------
|[ü] |  | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2002, or  
|   
|o   |  | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from           to          .

Commission File No. 0-13787

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

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

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

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

At November 8, 2002 there were 25,491,178 shares of common stock, $0.10 par
value, outstanding.





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TABLE OF CONTENTS



|                                                                                              |                                                                         |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- |  |  |  |  |  |  | 
|Part I  Financial Information                                                               
|Item 1. Interim Condensed Consolidated Financial Statements (Unaudited)                      
|                                                                                              | Notes to Interim Condensed Consolidated Financial Statements(Unaudited)
|Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
|Item 3. Quantitative and Qualitative Disclosure about Market Risk                            
|Item 4. Controls and Procedures                                                              
|Part II  Other Information                                                                  
|Item 1. Legal Proceedings                                                                    
|Item 6. Exhibits and Reports on Form 8-K                                                     
|Signature                                                                                    
|Certifications                                                                               
|By-laws of INTERMET Corporation                                                              
|Certification of Chief Executive Officer                                                     
|Certification of Chief Financial Officer                                                     



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##### Table of Contents



TABLE OF CONTENTS

|               |  |                                                                                       | 
|-------------- |  | ------------------------------------------------------------------------------------- | 
|Part I        |  | Financial Information                                                                
|Item 1.        |  | Interim Condensed Consolidated Financial Statements (Unaudited)                      
|               |  | Notes to Interim Condensed Consolidated Financial Statements (Unaudited)             
|Item 2.        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations
|Item 3.        |  | Quantitative and Qualitative Disclosure about Market Risk                            
|Item 4.        |  | Controls and Procedures                                                              
|Part II       |  | Other Information                                                                    
|Item 1.        |  | Legal Proceedings                                                                    
|Item 6.        |  | Exhibits and Reports on Form 8-K                                                     
|Signature     
|Certifications
|Exhibit Index 
|Exhibit 3.2    |  | By-laws of INTERMET Corporation, as amended October 10, 2002                         
|Exhibit 99.1   |  | Certification of Chief Executive Officer                                             
|Exhibit 99.2   |  | Certification of Chief Financial Officer                                             

2



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INDEX

INTERMET Corporation

|         |  |             |  |                                                                                      
|-------- |  | ----------- |  | -------------------------------------------------------------------------------------
|Page No. |  | Description
|        
|4        |  | PART I.     |  | FINANCIAL INFORMATION                                                                
|4  7    |  | Item 1      |  | Interim Condensed Consolidated Financial Statements (Unaudited)                      
|8  27   |  |             |  | Notes to Interim Condensed Consolidated Financial Statements (Unaudited)             
|28  32  |  | Item 2      |  | Managements Discussion and Analysis of Financial Condition and Results of Operations
|32       |  | Item 3      |  | Quantitative and Qualitative Disclosures About Market Risk                           
|33       |  | Item 4      |  | Controls and Procedures                                                              
|34       |  | PART II.    |  | OTHER INFORMATION                                                                    
|34       |  | Item 1      |  | Legal Proceedings                                                                    
|35       |  | Item 6      |  | Exhibits and Reports on Form 8-K                                                     
|36       |  |             |  | Signature                                                                            
|37  38  |  |             |  | Certifications                                                                       
|39       |  |             |  | Exhibit List                                                                         

3



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Part I  Financial Information

Item 1. Financial Statements

INTERMET Corporation

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

|                                                                                                      |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |               |   |      |         |         |  
|----------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------- | ------ | -------------------------- | ------ | - | ------------------------- | ------- | ------ | ------------- | ---- | ------- | ------------- | - | ---- | ------- | ------- | -
|                                                                                                      |                                                                                                     |        | For the three months ended |        |   | For the nine months ended |        
|                                                                                                      |                                                                                                     |        |                            |        |   |                           |        
|                                                                                                      |                                                                                                     |        | September 30,              |        |   | September 30,             |         |        | September 30, |      |         | September 30, |  
|                                                                                                      |                                                                                                     |        | 2002                       |        |   | 2001                      |         |        | 2002          |      |         | 2001          |  
|                                                                                                      |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |               |  
|Net sales                                                                                             |                                                                                                     | $      | 196,564                    |        |   | $                         | 197,264 |        |               | $    | 620,618 |               |   | $    | 648,993 |        
|Cost of sales                                                                                         |                                                                                                     |        | 184,518                    |        |   |                           | 185,214 |        |               |      | 565,108 |               |   |      | 597,792 |        
|                                                                                                      |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |              
|Gross profit                                                                                          |                                                                                                     |        | 12,046                     |        |   |                           | 12,050  |        |               |      | 55,510  |               |   |      | 51,201  |        
|Operating expenses:                                                                                   |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |               |   |      |         |        
|                                                                                                      | Selling, general and administrative                                                                 |        |                            | 8,089  |   |                           |         | 6,929  |               |      |         | 24,774        |   |      |         | 23,268  |  
|                                                                                                      | Goodwill amortization                                                                               |        |                            |       |   |                           |         | 1,572  |               |      |         |              |   |      |         | 4,498   |  
|                                                                                                      | Other operating (income) expense                                                                    |        |                            | (460   | ) |                           |         | 279    |               |      |         | (223          | ) |      |         | 218     |  
|                                                                                                      |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |              
|                                                                                                      |                                                                                                     |        | 7,629                      |        |   |                           | 8,780   |        |               |      | 24,551  |               |   |      | 27,984  |        
|Operating profit                                                                                      |                                                                                                     |        | 4,417                      |        |   |                           | 3,270   |        |               |      | 30,959  |               |   |      | 23,217  |        
|Other income (expense):                                                                               |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |               |   |      |         |        
|                                                                                                      | Interest expense, net                                                                               |        |                            | (7,614 | ) |                           |         | (9,035 | )             |      |         | (20,373       | ) |      |         | (24,327 | )
|                                                                                                      | Other income (expense) , net                                                                        |        |                            | (511   | ) |                           |         | 260    |               |      |         | 116           |   |      |         | 2,476   |  
|                                                                                                      |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |              
|                                                                                                      |                                                                                                     |        | (8,125                     | )      |   |                           | (8,775  | )      |               |      | (20,257 | )             |   |      | (21,851 | )      
|(Loss) income before income taxes                                                                     |                                                                                                     |        | (3,708                     | )      |   |                           | (5,505  | )      |               |      | 10,702  |               |   |      | 1,366   |        
|Provision for income taxes (benefits)                                                                 |                                                                                                     |        | (2,695                     | )      |   |                           | (2,100  | )      |               |      | 2,007   |               |   |      | 1,106   |        
|                                                                                                      |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |              
|Net (loss) income before
extraordinary item and cumulative
effect of a change in accounting
principle |                                                                                                     |        | (1,013                     | )      |   |                           | (3,405  | )      |               |      | 8,695   |               |   |      | 260     |        
|Extraordinary item, net of tax                                                                        |                                                                                                     |        |                           |        |   |                           |        |        |               |      | (603    | )             |   |      |        |        
|Cumulative effect of a change in
accounting principle, net of tax                                     |                                                                                                     |        |                           |        |   |                           |        |        |               |      | 481     |               |   |      |        |        
|                                                                                                      |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |              
|Net (loss) income                                                                                     |                                                                                                     |        | ($1,013                    | )      |   |                           | ($3,405 | )      |               | $    | 8,573   |               |   | $    | 260     |        
|                                                                                                      |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |              
|(Loss) earnings per common share:                                                                     |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |               |   |      |         |        
|Basic                                                                                                 |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |               |   |      |         |        
|                                                                                                      | (Loss) earnings before
extraordinary item and cumulative
effect of a change in accounting
principle |        |                            | ($0.04 | ) |                           |         | ($0.13 | )             |      | $       | 0.34          |   |      | $       | 0.01    |  
|                                                                                                      | Extraordinary item                                                                                  |        |                            |       |   |                           |         |       |               |      |         | (0.02         | ) |      |         |        |  
|                                                                                                      | Cumulative effect of a change in
accounting principle                                               |        |                            |       |   |                           |         |       |               |      |         | 0.02          |   |      |         |        |  
|                                                                                                      |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |              
|(Loss) earnings per share  basic                                                                     |                                                                                                     |        | ($0.04                     | )      |   |                           | ($0.13  | )      |               | $    | 0.34    |               |   | $    | 0.01    |        
|                                                                                                      |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |              
|Diluted                                                                                               |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |               |   |      |         |        
|                                                                                                      | (Loss) earnings before
extraordinary item and cumulative
effect of a change in accounting
principle |        | ($0.04                     | )      |   |                           | ($0.13  | )      |               | $    | 0.33    |               |   | $    | 0.01    |        
|                                                                                                      | Extraordinary item                                                                                  |        |                           |        |   |                           |        |        |               |      | (0.02   | )             |   |      |        |        
|                                                                                                      | Cumulative effect of a change in
accounting principle                                               |        |                           |        |   |                           |        |        |               |      | 0.02    |               |   |      |        |        
|                                                                                                      |                                                                                                     |        |                            |        |   |                           |         |        |               |      |        
|(Loss) earnings per share  diluted                                                                   |                                                                                                     | ($0.04 | )                          |        |   | ($0.13                    | )       |        | $             | 0.33 |         |               | $ | 0.01 |        
|                                                                                                      |                                                                                                     |        |                            |        |   |                           |         |        |               |      |        
|Weighted average shares outstanding:                                                                  |                                                                                                     |        |                            |        |   |                           |         |        |               |      |         |               |   |      |        
|                                                                                                      | Basic                                                                                               |        |                            | 25,462 |   |                           |         | 25,373 |               |      |         | 25,430        |   |      |         | 25,370  |  
|                                                                                                      | Diluted                                                                                             |        |                            | 25,803 |   |                           |         | 25,373 |               |      |         | 25,747        |   |      |         | 25,459  |  

See accompanying notes.

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INTERMET Corporation

Interim Condensed Consolidated Balance Sheets

|                                       |                                                                                         |                                                                                   |         |                           |        |   |              |         |        | 
|-------------------------------------- | --------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ------- | ------------------------- | ------ | - | ------------ | ------- | ------ | 
|                                       |                                                                                         |                                                                                   |         | September 30,             |        |   | December 31, |        
|                                       |                                                                                         |                                                                                   |         | 2002                      |        |   | 2001         |        
|                                       |                                                                                         |                                                                                   |         |                           |        |   |              |        
|                                       |                                                                                         |                                                                                   |         | (Unaudited)               |        |   |              |         |       
|                                       |                                                                                         |                                                                                   |         | (in thousands of dollars) |       
|Assets                                 |                                                                                         |                                                                                   |         |                           |        |   |              |        
|Current assets:                        |                                                                                         |                                                                                   |         |                           |        |   |              |        
|                                       | Cash and cash equivalents                                                               |                                                                                   | $       | 5,676                     |        |   | $            | 13,866  |       
|                                       | Accounts receivable:                                                                    |                                                                                   |         |                           |        |   |              |         |       
|                                       |                                                                                         | Trade, less allowance for
doubtful accounts of $9,221 in
2002 and $10,727 in 2001 |         |                           | 90,149 |   |              |         | 95,601 | 
|                                       |                                                                                         | Other                                                                             |         |                           | 13,799 |   |              |         | 16,439 | 
|                                       |                                                                                         |                                                                                   |         |                           |        |  
|                                       |                                                                                         |                                                                                   | 103,948 |                           |        |   | 112,040      |        
|                                       | Inventories                                                                             |                                                                                   |         | 66,349                    |        |   |              | 71,857  |       
|                                       | Other current assets                                                                    |                                                                                   |         | 31,743                    |        |   |              | 33,632  |       
|                                       |                                                                                         |                                                                                   |         |                           |        |  
|Total current assets                   |                                                                                         |                                                                                   | 207,716 |                           |        |   | 231,395      |        
|Property, plant and equipment, at cost |                                                                                         |                                                                                   | 659,454 |                           |        |   | 646,637      |        
|Less:                                  |                                                                                         |                                                                                   |         |                           |        |   |              |        
|                                       | Accumulated depreciation and
foreign industrial development
grants, net of amortization |                                                                                   |         | 318,966                   |        |   |              | 275,881 |       
|                                       |                                                                                         |                                                                                   |         |                           |        |  
|Net property, plant and equipment      |                                                                                         |                                                                                   | 340,488 |                           |        |   | 370,756      |        
|Goodwill, net                          |                                                                                         |                                                                                   | 217,016 |                           |        |   | 217,016      |        
|Other noncurrent assets                |                                                                                         |                                                                                   | 34,122  |                           |        |   | 24,166       |        
|                                       |                                                                                         |                                                                                   |         |                           |        |  
|Total assets                           |                                                                                         | $                                                                                 | 799,342 |                           |        | $ | 843,333      |        
|                                       |                                                                                         |                                                                                   |         |                           |        |  

See accompanying notes.

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INTERMET Corporation

Interim Condensed Consolidated Balance Sheets

|                                           |                                        |   |                           |         |   |              |         |         |  
|------------------------------------------ | -------------------------------------- | - | ------------------------- | ------- | - | ------------ | ------- | ------- | -
|                                           |                                        |   | September 30,             |         |   | December 31, |        
|                                           |                                        |   | 2002                      |         |   | 2001         |        
|                                           |                                        |   |                           |         |   |              |        
|                                           |                                        |   | (Unaudited)               |         |   |              |         |        
|                                           |                                        |   | (in thousands of dollars) |        
|Liabilities and shareholders equity       |                                        |   |                           |         |   |              |         |        
|Current liabilities:                       |                                        |   |                           |         |   |              |         |        
|                                           | Accounts payable                       |   | $                         | 76,623  |   |              | $       | 81,244  |  
|                                           | Accrued liabilities                    |   |                           | 78,288  |   |              |         | 63,008  |  
|                                           | Long term debt due within one year     |   |                           | 1,587   |   |              |         | 173,352 |  
|                                           |                                        |   |                           |         |   |             
|Total current liabilities                  |                                        |   | 156,498                   |         |   |              | 317,604 |        
|Noncurrent liabilities:                    |                                        |   |                           |         |   |              |         |        
|                                           | Long term debt due after one year      |   |                           | 296,670 |   |              |         | 190,070 |  
|                                           | Retirement benefits                    |   |                           | 60,254  |   |              |         | 60,583  |  
|                                           | Other noncurrent liabilities           |   |                           | 17,660  |   |              |         | 21,796  |  
|                                           |                                        |   |                           |         |   |             
|Total noncurrent liabilities               |                                        |   | 374,584                   |         |   |              | 272,449 |        
|Shareholders equity:                      |                                        |   |                           |         |   |              |         |        
|                                           | Common stock                           |   |                           | 2,601   |   |              |         | 2,590   |  
|                                           | Capital in excess of par value         |   |                           | 57,133  |   |              |         | 56,761  |  
|                                           | Retained earnings                      |   |                           | 213,017 |   |              |         | 207,512 |  
|                                           | Accumulated other comprehensive income |   |                           | (4,413  | ) |              |         | (13,389 | )
|                                           | Unearned restricted stock              |   |                           | (78     | ) |              |         | (194    | )
|                                           |                                        |   |                           |         |   |              |        
|Total shareholders equity                 |                                        |   | 268,260                   |         |   |              | 253,280 |        
|                                           |                                        |   |                           |         |   |             
|Total liabilities and shareholders equity |                                        | $ | 799,342                   |         |   | $            | 843,333 |        
|                                           |                                        |   |                           |         |   |             

See accompanying notes.

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INTERMET Corporation

Interim Condensed Consolidated Statements of Cash Flows

|                                                                              |                                                                 |   |                           |          |   |               |         |          |  
|----------------------------------------------------------------------------- | --------------------------------------------------------------- | - | ------------------------- | -------- | - | ------------- | ------- | -------- | -
|                                                                              |                                                                 |   | Nine months ended         |         
|                                                                              |                                                                 |   |                           |         
|                                                                              |                                                                 |   | September 30,             |          |   | September 30, |        
|                                                                              |                                                                 |   | 2002                      |          |   | 2001          |        
|                                                                              |                                                                 |   |                           |          |   |               |        
|                                                                              |                                                                 |   | (Unaudited)               |         
|                                                                              |                                                                 |   | (in thousands of dollars) |         
|Operating activities:                                                         |                                                                 |   |                           |          |   |               |         |         
|Net income                                                                    |                                                                 | $ | 8,573                     |          |   | $             | 260     |         
|Adjustments to reconcile net income to cash provided by
operating activities: |                                                                 |   |                           |          |   |               |         |         
|                                                                              | Depreciation and amortization                                   |   |                           | 39,737   |   |               |         | 44,566   |  
|                                                                              | Results of equity investment                                    |   |                           | (692     | ) |               |         | (668     | )
|                                                                              | Net increase (decrease) in operating assets and liabilities     |   |                           | 20,039   |   |               |         | (12,502  | )
|                                                                              |                                                                 |   |                           |          |   |              
|Net cash provided by operating activities                                     |                                                                 |   | 67,657                    |          |   |               | 31,656  |         
|Investing activities:                                                         |                                                                 |   |                           |          |   |               |         |         
|                                                                              | Additions to property, plant and equipment                      |   |                           | (6,880   | ) |               |         | (31,509  | )
|                                                                              | Proceeds from insurance                                         |   |                           |         |   |               |         | 3,210    |  
|                                                                              | Additions to property, plant and equipment covered by
insurance |   |                           |         |   |               |         | (3,210   | )
|                                                                              | Other                                                           |   |                           | 360      |   |               |         |         |  
|                                                                              |                                                                 |   |                           |          |   |              
|Net cash used in investing activities                                         |                                                                 |   | (6,520                    | )        |   |               | (31,509 | )       
|Financing activities:                                                         |                                                                 |   |                           |          |   |               |         |         
|                                                                              | Payments on long-term debt                                      |   |                           | (171,750 | ) |               |         | (200,000 | )
|                                                                              | Proceeds from debt offering                                     |   |                           | 175,000  |   |               |         |         |  
|                                                                              | Proceeds from term loan                                         |   |                           |         |   |               |         | 182,750  |  
|                                                                              | Net (decrease) increase in other debt                           |   |                           | (68,461  | ) |               |         | 17,740   |  
|                                                                              | Payment of debt issue costs                                     |   |                           | (5,940   | ) |               |         |         |  
|                                                                              | Dividends paid                                                  |   |                           | (3,056   | ) |               |         | (3,048   | )
|                                                                              | Issuance of common stock                                        |   |                           | 490      |   |               |         | 65       |  
|                                                                              |                                                                 |   |                           |          |   |              
|Net cash used in financing activities                                         |                                                                 |   | (73,717                   | )        |   |               | (2,493  | )       
|Effect of exchange rate changes on cash and cash equivalents                  |                                                                 |   | 4,390                     |          |   |               | 1,059   |         
|                                                                              |                                                                 |   |                           |          |   |              
|Net decrease in cash and cash equivalents                                     |                                                                 |   | (8,190                    | )        |   |               | (1,287  | )       
|Cash and cash equivalents at beginning of period                              |                                                                 |   | 13,866                    |          |   |               | 19,737  |         
|                                                                              |                                                                 |   |                           |          |   |              
|Cash and cash equivalents at end of period                                    |                                                                 | $ | 5,676                     |          |   | $             | 18,450  |         
|                                                                              |                                                                 |   |                           |          |   |              

See accompanying notes.

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2002 (Unaudited)

1. Basis of Presentation

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

The balance sheet at December 31, 2001 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by accounting principles generally accepted in the
United States for complete financial statements. Refer to our 2001 Annual
Report and 10-K filing for complete financial statement and footnotes.

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

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

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

In June 2002, SFAS 146, Accounting for Costs Associated with Exit or Disposal
Activities, was issued, which supersedes Emerging Issues Task Force Issue No.
94-3, Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring). SFAS 146 requires companies to recognize costs associated with
exit or disposal activities when they are incurred rather than at the date of a
commitment to an exit or disposal plan. In addition, SFAS 146 establishes that
fair value is the objective for initial measurement of the liability. SFAS 146
will be effective for exit or disposal activities initiated after December 31,
2002.

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements

September 30, 2002 (Unaudited)

2. Inventories

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

|                      |  |               |        |  |              |   |        | 
|--------------------- |  | ------------- | ------ |  | ------------ | - | ------ | 
|                      |  | September 30, |        |  | December 31, |  
|                      |  | 2002          |        |  | 2001         |  
|                      |  |               |        |  |              |  
|Finished goods        |  | $             | 14,791 |  |              | $ | 15,756 | 
|Work in process       |  |               | 10,416 |  |              |   | 12,080 | 
|Raw materials         |  |               | 3,854  |  |              |   | 6,259  | 
|Supplies and patterns |  |               | 37,288 |  |              |   | 37,762 | 
|                      |  |               |        |  |              |  
|                      |  | $             | 66,349 |  |              | $ | 71,857 | 
|                      |  |               |        |  |              |  

3. Property, Plant and Equipment

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

|                           |  |               |         |  |              |   |         | 
|-------------------------- |  | ------------- | ------- |  | ------------ | - | ------- | 
|                           |  | September 30, |         |  | December 31, |  
|                           |  | 2002          |         |  | 2001         |  
|                           |  |               |         |  |              |  
|Land                       |  | $             | 5,225   |  |              | $ | 5,204   | 
|Buildings and improvements |  |               | 130,485 |  |              |   | 122,425 | 
|Machinery and equipment    |  |               | 512,307 |  |              |   | 505,025 | 
|Construction in progress   |  |               | 11,437  |  |              |   | 13,983  | 
|                           |  |               |         |  |              |  
|                           |  | $             | 659,454 |  |              | $ | 646,637 | 
|                           |  |               |         |  |              |  

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

4. Adoption of Accounting Policy

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

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

|                                                                                                              |                                               |                                               |         |                            |        |   |                           |        |        |               |       |      |               |   |       |      |      | 
|------------------------------------------------------------------------------------------------------------- | --------------------------------------------- | --------------------------------------------- | ------- | -------------------------- | ------ | - | ------------------------- | ------ | ------ | ------------- | ----- | ---- | ------------- | - | ----- | ---- | ---- | 
|                                                                                                              |                                               |                                               |         | For the three months ended |        |   | For the nine months ended |       
|                                                                                                              |                                               |                                               |         | September 30,              |        |   | September 30,             |        |        | September 30, |       |      | September 30, |  
|                                                                                                              |                                               |                                               |         | 2002                       |        |   | 2001                      |        |        | 2002          |       |      | 2001          |  
|                                                                                                              |                                               |                                               |         |                            |        |   |                           |        |        |               |       |      |               |  
|Reported net (loss) income after extraordinary
item and cumulative effect of a change in
accounting principle |                                               |                                               | ($1,013 | )                          |        |   | ($3,405                   | )      |        | $             | 8,573 |      |               | $ | 260   |     
|Add back: Goodwill amortization, net of taxes                                                                 |                                               |                                               |        |                            |        |   | 1,307                     |        |        |               |      |      |               |   | 3,733 |     
|                                                                                                              |                                               |                                               |         |                            |        |   |                           |        |        |               |       |     
|Adjusted net (loss) income                                                                                    |                                               |                                               | ($1,013 | )                          |        |   | ($2,098                   | )      |        | $             | 8,573 |      |               | $ | 3,993 |     
|                                                                                                              |                                               |                                               |         |                            |        |   |                           |        |        |               |       |     
|Basic (loss) earnings-per-share:                                                                              |                                               |                                               |         |                            |        |   |                           |        |        |               |       |      |               |   |       |     
|                                                                                                              | Reported net (loss) income                    |                                               |         | ($0.04                     | )      |   |                           | ($0.13 | )      |               | $     | 0.34 |               |   | $     | 0.01 |     
|                                                                                                              | Add back: Goodwill amortization, net of taxes |                                               |         |                           |        |   |                           | 0.05   |        |               |       |     |               |   |       | 0.15 |     
|                                                                                                              |                                               |                                               |         |                            |        |   |                           |        |        |               |       |     
|                                                                                                              |                                               | Adjusted net (loss) income                    |         |                            | ($0.04 | ) |                           |        | ($0.08 | )             |       | $    | 0.34          |   |       | $    | 0.16 | 
|                                                                                                              |                                               |                                               |         |                            |        |   |                           |        |        |               |       |     
|Diluted (loss) earnings-per-share:                                                                            |                                               |                                               |         |                            |        |   |                           |        |        |               |       |      |               |   |       |     
|                                                                                                              |                                               | Reported net (loss) income                    |         |                            | ($0.04 | ) |                           |        | ($0.13 | )             |       | $    | 0.33          |   |       | $    | 0.01 | 
|                                                                                                              |                                               | Add back: Goodwill amortization, net of taxes |         |                            |       |   |                           |        | 0.05   |               |       |      |              |   |       |      | 0.15 | 
|                                                                                                              |                                               |                                               |         |                            |        |   |                           |        |        |               |       |     
|                                                                                                              |                                               | Adjusted net (loss) income                    |         |                            | ($0.04 | ) |                           |        | ($0.08 | )             |       | $    | 0.33          |   |       | $    | 0.16 | 
|                                                                                                              |                                               |                                               |         |                            |        |   |                           |        |        |               |       |     

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

5. Debt

In July of 2001 we entered into an agreement with our banks providing for a new
term loan facility for $182.8 million, replacing an existing $200 million term
loan and a $15 million unsecured note. At the same time, we renegotiated
certain terms of our existing $300 million revolving credit facility. The
interest rate on our revolving credit facility is currently LIBOR plus 3.00%
(as of September 30, 2002 the rate was approximately 4.80%). The revolving
credit facility expires in November, 2004.

On June 13, 2002, we completed a senior note offering of $175 million. The
notes bear a fixed rate of interest at 9.75% and will mature on June 15, 2009.
Interest is due June 15 and December 15, commencing December 15, 2002. The
notes are unsecured and rank equally with all of our existing and future
unsecured senior debt. The net proceeds of the senior note offering were used
to pay the remaining balance on the bank term loan ($161.7 million) and for
working capital purposes. Debt issuance costs of $5.9 million capitalized in
connection with the debt offering are included in other noncurrent assets in
the accompanying balance sheet and are being amortized over seven years. See
note 12 for additional information regarding the senior unsecured notes.

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

|                                      |  |               |         |  |              |   |         | 
|------------------------------------- |  | ------------- | ------- |  | ------------ | - | ------- | 
|                                      |  | September 30, |         |  | December 31, |  
|                                      |  | 2002          |         |  | 2001         |  
|                                      |  |               |         |  |              |  
|Revolving credit facility             |  | $             | 81,000  |  |              | $ | 148,000 | 
|Term loan                             |  |               |        |  |              |   | 171,750 | 
|Industrial revenue bonds              |  |               | 40,200  |  |              |   | 41,050  | 
|Capitalized leases and other debt     |  |               | 2,057   |  |              |   | 2,622   | 
|Senior notes from June, 2002 offering |  |               | 175,000 |  |              |   |        | 
|                                      |  |               |         |  |              |  
|Total debt                            |  |               | 298,257 |  |              |   | 363,422 | 
|Less amounts due within one year      |  |               | 1,587   |  |              |   | 173,352 | 
|                                      |  |               |         |  |              |  
|Debt due after one year               |  | $             | 296,670 |  |              | $ | 190,070 | 
|                                      |  |               |         |  |              |  

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

|                           |  |   |         | 
|-------------------------- |  | - | ------- | 
|Twelve-month period ending
|September 30, 2003         |  | $ | 1,587   | 
|September 30, 2004         |  |   | 1,434   | 
|September 30, 2005         |  |   | 82,547  | 
|September 30, 2006         |  |   | 2,189   | 
|September 30, 2007         |  |   | 500     | 
|Thereafter                 |  |   | 210,000 | 
|                           |  |   |        
|                           |  | $ | 298,257 | 
|                           |  |   |        

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

6. Derivative Financial Instruments

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

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

In addition, we have foreign currency forward contracts to hedge our exposure
to Euro denominated loans from our European operation. We have designated these
forward contracts as fair value hedges. At September 30, 2002, the face value
of these foreign currency forward contracts was $12.2 million. The change in
the fair value of such contracts was not material to our financial statements.

7. Comprehensive Income

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

|                                        |                                         |  |                            |        |   |                           |         |       |               |   |        |               |  |   |       |        |  
|--------------------------------------- | --------------------------------------- |  | -------------------------- | ------ | - | ------------------------- | ------- | ----- | ------------- | - | ------ | ------------- |  | - | ----- | ------ | -
|                                        |                                         |  | For the three months ended |        |   | For the nine months ended |        
|                                        |                                         |  |                            |        |   |                           |        
|                                        |                                         |  | September 30,              |        |   | September 30,             |         |       | September 30, |   |        | September 30, | 
|                                        |                                         |  | 2002                       |        |   | 2001                      |         |       | 2002          |   |        | 2001          | 
|                                        |                                         |  |                            |        |   |                           |         |       |               |   |        |               | 
|Net (loss) income                       |                                         |  | ($1,013                    | )      |   |                           | ($3,405 | )     |               | $ | 8,573  |               |  | $ | 260   |       
|Other comprehensive (loss) income:      |                                         |  |                            |        |   |                           |         |       |               |   |        |               |  |   |       |       
|                                        | Fair value of interest rate swap        |  |                            | (99    | ) |                           |         | (557  | )             |   |        | 213           |  |   |       | (1,247 | )
|                                        | Foreign currency translation
adjustment |  |                            | (1,342 | ) |                           |         | 3,276 |               |   |        | 8,763         |  |   |       | 3,015  |  
|                                        |                                         |  |                            |        |   |                           |         |       |               |   |        |              
|Total other comprehensive (loss)
income |                                         |  | (1,441                     | )      |   |                           | 2,719   |       |               |   | 8,976  |               |  |   | 1,768 |       
|                                        |                                         |  |                            |        |   |                           |         |       |               |   |        |              
|Total comprehensive (loss) income       |                                         |  | ($2,454                    | )      |   |                           | ($686   | )     |               | $ | 17,549 |               |  | $ | 2,028 |       
|                                        |                                         |  |                            |        |   |                           |         |       |               |   |        |              

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

8. Reporting for Business Segments

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

|                                             |                         |  |         |         |   |              |                           |        |       |               |   |              |         |   |   |         |  
|-------------------------------------------- | ----------------------- |  | ------- | ------- | - | ------------ | ------------------------- | ------ | ----- | ------------- | - | ------------ | ------- | - | - | ------- | -
|                                             |                         |  | Ferrous |         |   |              |                           |        |       | Corporate and |   |              |         |   |  
|                                             |                         |  | Metals  |         |   | Light Metals |                           |        | Other |               |   | Consolidated |        
|                                             |                         |  |         |         |   |              |                           |        |       |               |   |              |        
|                                             |                         |  |         |         |   |              | (in thousands of dollars) |        |       |               |   |             
|Three-month period ended September 30, 2002: |                         |  |         |         |   |              |                           |        |       |               |   |              |         |   |   |        
|                                             | Net sales               |  | $       | 127,082 |   |              | $                         | 65,521 |       |               | $ | 3,961        |         |   | $ | 196,564 |  
|                                             |                         |  |         |         |   |              |                           |        |       |               |   |              |         |   |  
|                                             | Operating profit (loss) |  |         | 5,042   |   |              |                           | 2,335  |       |               |   | (2,960       | )       |   |   | 4,417   |  
|                                             | Interest expense, net   |  |         | (673    | ) |              |                           | (1,051 | )     |               |   | (5,890       | )       |   |   | (7,614  | )
|                                             | Other expense, net      |  |         |        |   |              |                           |       |       |               |   | (511         | )       |   |   | (511    | )
|                                             | Tax (expense) benefit   |  |         | (794    | ) |              |                           | (540   | )     |               |   | 4,029        |         |   |   | 2,695   |  
|                                             |                         |  |         |         |   |              |                           |        |       |               |   |              |         |   |  
|                                             |                         |  |         |         |   |              |                           |        |       | Net loss      |   |              | ($1,013 | )
|                                             |                         |  |         |         |   |              |                           |        |       |               |   |              |         |   |  
|Three-month period ended September 30, 2001: |                         |  |         |         |   |              |                           |        |       |               |   |              |         |   |   |        
|                                             | Net sales               |  | $       | 122,899 |   |              | $                         | 69,616 |       |               | $ | 4,749        |         |   | $ | 197,264 |  
|                                             |                         |  |         |         |   |              |                           |        |       |               |   |              |         |   |  
|                                             | Operating profit (loss) |  |         | 2,008   |   |              |                           | 2,961  |       |               |   | (1,699       | )       |   |   | 3,270   |  
|                                             | Interest expense, net   |  |         | (2,133  | ) |              |                           | (1,485 | )     |               |   | (5,417       | )       |   |   | (9,035  | )
|                                             | Other income, net       |  |         |        |   |              |                           |       |       |               |   | 260          |         |   |   | 260     |  
|                                             | Tax (expense) benefit   |  |         | 304     |   |              |                           | (610   | )     |               |   | 2,406        |         |   |   | 2,100   |  
|                                             |                         |  |         |         |   |              |                           |        |       |               |   |              |         |   |  
|                                             |                         |  |         |         |   |              |                           |        |       | Net loss      |   |              | ($3,405 | )
|                                             |                         |  |         |         |   |              |                           |        |       |               |   |              |         |   |  

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

|                                            |                                                       |  |         |         |   |              |                           |         |       |               |   |              |       |  |   |         |  
|------------------------------------------- | ----------------------------------------------------- |  | ------- | ------- | - | ------------ | ------------------------- | ------- | ----- | ------------- | - | ------------ | ----- |  | - | ------- | -
|                                            |                                                       |  | Ferrous |         |   |              |                           |         |       | Corporate and |   |              |       |  |  
|                                            |                                                       |  | Metals  |         |   | Light Metals |                           |         | Other |               |   | Consolidated |      
|                                            |                                                       |  |         |         |   |              |                           |         |       |               |   |              |      
|                                            |                                                       |  |         |         |   |              | (in thousands of dollars) |         |       |               |   |             
|Nine-month period ended September 30, 2002: |                                                       |  |         |         |   |              |                           |         |       |               |   |              |       |  |   |        
|                                            | Net sales                                             |  | $       | 400,864 |   |              | $                         | 208,930 |       |               | $ | 10,824       |       |  | $ | 620,618 |  
|                                            |                                                       |  |         |         |   |              |                           |         |       |               |   |              |       |  |  
|                                            | Operating profit (loss)                               |  |         | 21,745  |   |              |                           | 15,979  |       |               |   | (6,765       | )     |  |   | 30,959  |  
|                                            | Interest expense, net                                 |  |         | (3,052  | ) |              |                           | (3,278  | )     |               |   | (14,043      | )     |  |   | (20,373 | )
|                                            | Other income, net                                     |  |         |        |   |              |                           |        |       |               |   | 116          |       |  |   | 116     |  
|                                            | Tax (expense) benefit                                 |  |         | (5,605  | ) |              |                           | (5,107  | )     |               |   | 8,705        |       |  |   | (2,007  | )
|                                            | Extraordinary item                                    |  |         |        |   |              |                           |        |       |               |   | (603         | )     |  |   | (603    | )
|                                            | Cumulative effect of a
change in accounting
principle |  |         | 481     |   |              |                           |        |       |               |   |             |       |  |   | 481     |  
|                                            |                                                       |  |         |         |   |              |                           |         |       |               |   |              |       |  |  
|                                            |                                                       |  |         |         |   |              |                           |         |       | Net income    |   | $            | 8,573 | 
|                                            |                                                       |  |         |         |   |              |                           |         |       |               |   |              |       |  |  
|Nine-month period ended September 30, 2001: |                                                       |  |         |         |   |              |                           |         |       |               |   |              |       |  |   |        
|                                            | Net sales                                             |  | $       | 406,028 |   |              | $                         | 230,231 |       |               | $ | 12,734       |       |  | $ | 648,993 |  
|                                            |                                                       |  |         |         |   |              |                           |         |       |               |   |              |       |  |  
|                                            | Operating profit (loss)                               |  |         | 23,350  |   |              |                           | 9,891   |       |               |   | (10,024      | )     |  |   | 23,217  |  
|                                            | Interest expense, net                                 |  |         | (5,119  | ) |              |                           | (4,661  | )     |               |   | (14,547      | )     |  |   | (24,327 | )
|                                            | Other income, net                                     |  |         | 1,555   |   |              |                           |        |       |               |   | 921          |       |  |   | 2,476   |  
|                                            | Tax (expense) benefit                                 |  |         | (6,451  | ) |              |                           | (2,445  | )     |               |   | 7,790        |       |  |   | (1,106  | )
|                                            |                                                       |  |         |         |   |              |                           |         |       |               |   |              |       |  |  
|                                            |                                                       |  |         |         |   |              |                           |         |       | Net income    |   | $            | 260   | 
|                                            |                                                       |  |         |         |   |              |                           |         |       |               |   |              |       |  |  

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

9. Environmental and Legal Matters

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

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

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

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

10. Earnings per Share

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

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

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

|                                        |                                                                    |                                                                                                               |        |                            |        |  |                           |         |        |                    |      |        |                    |   |      |        |        | 
|--------------------------------------- | ------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------- | ------ | -------------------------- | ------ |  | ------------------------- | ------- | ------ | ------------------ | ---- | ------ | ------------------ | - | ---- | ------ | ------ | 
|                                        |                                                                    |                                                                                                               |        | For the three months ended |        |  | For the nine months ended |        
|                                        |                                                                    |                                                                                                               |        |                            |        |  |                           |        
|                                        |                                                                    |                                                                                                               |        | September 30, 2002         |        |  | September 30, 2001        |         |        | September 30, 2002 |      |        | September 30, 2001 |  
|                                        |                                                                    |                                                                                                               |        |                            |        |  |                           |         |        |                    |      |        |                    |  
|Numerator:                              |                                                                    |                                                                                                               |        |                            |        |  |                           |         |        |                    |      |        |                    |   |      |       
|                                        | Net (loss) income                                                  |                                                                                                               |        | ($1,013                    | )      |  |                           | ($3,405 | )      |                    | $    | 8,573  |                    |   | $    | 260    |       
|                                        |                                                                    |                                                                                                               |        |                            |        |  |                           |         |        |                    |      |       
|Denominator:                            |                                                                    |                                                                                                               |        |                            |        |  |                           |         |        |                    |      |        |                    |   |      |       
|                                        | Denominator for basic earnings
per share  weighted average
shares |                                                                                                               |        | 25,462                     |        |  |                           | 25,373  |        |                    |      | 25,430 |                    |   |      | 25,370 |       
|                                        |                                                                    |                                                                                                               |        |                            |        |  |                           |         |        |                    |      |       
|                                        | Effect of dilutive securities:                                     |                                                                                                               |        |                            |        |  |                           |         |        |                    |      |        |                    |   |      |        |       
|                                        |                                                                    | Employee stock options and
unearned restricted stock                                                          |        |                            | 341    |  |                           |         |       |                    |      |        | 317                |   |      |        | 89     | 
|                                        |                                                                    |                                                                                                               |        |                            |        |  |                           |         |        |                    |      |        |                   
|                                        |                                                                    | Denominator for diluted
earnings per share 
adjusted weighted average
shares and assumed exercise
of options |        |                            | 25,803 |  |                           |         | 25,373 |                    |      |        | 25,747             |   |      |        | 25,459 | 
|                                        |                                                                    |                                                                                                               |        |                            |        |  |                           |         |        |                    |      |        |                   
|Basic (loss) earnings per share         |                                                                    |                                                                                                               | ($0.04 | )                          |        |  | ($0.13                    | )       |        | $                  | 0.34 |        |                    | $ | 0.01 |       
|                                        |                                                                    |                                                                                                               |        |                            |        |  |                           |         |        |                    |      |       
|Fully diluted (loss) earnings
per share |                                                                    |                                                                                                               | ($0.04 | )                          |        |  | ($0.13                    | )       |        | $                  | 0.33 |        |                    | $ | 0.01 |       
|                                        |                                                                    |                                                                                                               |        |                            |        |  |                           |         |        |                    |      |       

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

11. Impairment of Assets and Shutdown

We permanently closed our Alexander City lost foam aluminum plant on December
21, 2001. The Alexander City plant assets are being held for sale. Alexander
City is included in the light metals segment of the Reporting For Business
Segments footnote. The plant was purchased in 1995 and had employed 117
people. Alexander City had revenues and operating losses of $32.3 million and
$2.8 million, respectively, for the nine months ended September 30, 2001.

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

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

12. Supplemental Condensed Consolidating Financial Information

On June 13, 2002, we issued $175 million of senior notes, which will mature in
2009. The senior notes are guaranteed by certain of our domestic wholly-owned
subsidiaries (Combined Guarantor Subsidiaries). The guarantees are
unconditional and joint and several. The senior notes are effectively
subordinated to the secured debt of the Company (Parent). Restrictions
contained in the indenture covering the senior notes include, but are not
limited to, restrictions on incurring additional secured debt, repurchasing of
our capital stock, disposal of assets, affiliate transactions, and transfer of
assets. As of September 30, 2002, the Parent and the Combined Guarantor
Subsidiaries had approximately $120.2 million of secured debt outstanding and
approximately $161.7 million of unused commitments, net of outstanding letters
of credit, under our credit facility. The secured debt of the Parent is also
guaranteed by each of the Combined Guarantor Subsidiaries.

Certain of our domestic subsidiaries (Intermet International, Inc., Intermet
Holding Company, Transnational Indemnity Company, and Western Capital
Corporation) and all of our foreign subsidiaries are not guarantors of the
notes (Combined Non-Guarantor Subsidiaries). The Combined Non-Guarantor
Subsidiaries had approximately $0.3 million of debt outstanding as of September
30, 2002.

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

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

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

|                                    |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |              |   |  |   |         |        |  
|----------------------------------- | ------------------------------ | - | ------------------------------------- | ------ | - | ------------ | --------- | ------ | ------------ | ------------- | ------------------------- | ------------ | - | - | ------------ | - |  | - | ------- | ------ | -
|                                    |                                |   | Three months ended September 30, 2002 |       
|                                    |                                |   |                                       |       
|                                    |                                |   |                                       |        |   |              | Combined  |        |              | Combined      |                           |              |   |   |              |   |  |   |        
|                                    |                                |   |                                       |        |   |              | Guarantor |        |              | Non-Guarantor |                           |              |   |   |              |   |  |   |        
|                                    |                                |   | Parent                                |        |   | Subsidiaries |           |        | Subsidiaries |               |                           | Eliminations |   |   | Consolidated |  
|                                    |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |              |  
|                                    |                                |   |                                       |        |   |              |           |        |              |               | (in thousands of dollars) |              |   |   |              |  
|INCOME STATEMENT DATA               |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |              |   |  |   |         |       
|Net sales                           |                                | $ |                                      |        |   | $            | 180,003   |        |              | $             | 21,154                    |              |   | $ | (4,593       | ) |  | $ | 196,564 |       
|Cost of sales                       |                                |   |                                      |        |   |              | 169,552   |        |              |               | 19,550                    |              |   |   | (4,584       | ) |  |   | 184,518 |       
|                                    |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |             
|Gross (loss) profit                 |                                |   |                                      |        |   |              | 10,451    |        |              |               | 1,604                     |              |   |   | (9           | ) |  |   | 12,046  |       
|Selling, general and administrative |                                |   | 883                                   |        |   |              | 5,364     |        |              |               | 1,652                     |              |   |   | 190          |   |  |   | 8,089   |       
|Other operating (income) expenses   |                                |   | 4                                     |        |   |              | 19        |        |              |               | (294                      | )            |   |   | (189         | ) |  |   | (460    | )     
|                                    |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |             
|Operating (loss) profit             |                                |   | (887                                  | )      |   |              | 5,068     |        |              |               | 246                       |              |   |   | (10          | ) |  |   | 4,417   |       
|Other income and expenses:          |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |              |   |  |   |         |       
|                                    | Interest (expense) income, net |   |                                       | (5,806 | ) |              |           | (1,976 | )            |               |                           | 168          |   |   |              |  |  |   |         | (7,614 | )
|                                    | Other (expense) income , net   |   |                                       | (127   | ) |              |           | (140   | )            |               |                           | (244         | ) |   |              |  |  |   |         | (511   | )
|                                    |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |             
|(Loss) income before income taxes   |                                |   | (6,820                                | )      |   |              | 2,952     |        |              |               | 170                       |              |   |   | (10          | ) |  |   | (3,708  | )     
|Income tax (benefit) expense        |                                |   | (3,342                                | )      |   |              | 1,259     |        |              |               | (612                      | )            |   |   |             |   |  |   | (2,695  | )     
|                                    |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |             
|Net (loss) income                   |                                | $ | (3,478                                | )      |   | $            | 1,693     |        |              | $             | 782                       |              |   | $ | (10          | ) |  | $ | (1,013  | )     
|                                    |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |             

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

|                                    |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |              |   |  |   |         |        |  
|----------------------------------- | ------------------------------ | - | ------------------------------------- | ------ | - | ------------ | --------- | ------ | ------------ | ------------- | ------------------------- | ------------ | - | - | ------------ | - |  | - | ------- | ------ | -
|                                    |                                |   | Three months ended September 30, 2001 |       
|                                    |                                |   |                                       |       
|                                    |                                |   |                                       |        |   |              | Combined  |        |              | Combined      |                           |              |   |   |              |   |  |   |        
|                                    |                                |   |                                       |        |   |              | Guarantor |        |              | Non-Guarantor |                           |              |   |   |              |   |  |   |        
|                                    |                                |   | Parent                                |        |   | Subsidiaries |           |        | Subsidiaries |               |                           | Eliminations |   |   | Consolidated |  
|                                    |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |              |  
|                                    |                                |   |                                       |        |   |              |           |        |              |               | (in thousands of dollars) |              |   |   |              |  
|INCOME STATEMENT DATA               |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |              |   |  |   |         |       
|Net sales                           |                                | $ |                                      |        |   | $            | 178,517   |        |              | $             | 21,624                    |              |   | $ | (2,877       | ) |  | $ | 197,264 |       
|Cost of sales                       |                                |   | (61                                   | )      |   |              | 169,776   |        |              |               | 18,286                    |              |   |   | (2,787       | ) |  |   | 185,214 |       
|                                    |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |             
|Gross (loss) profit                 |                                |   | 61                                    |        |   |              | 8,741     |        |              |               | 3,338                     |              |   |   | (90          | ) |  |   | 12,050  |       
|Selling, general and administrative |                                |   | 694                                   |        |   |              | 6,497     |        |              |               | 1,276                     |              |   |   | 34           |   |  |   | 8,501   |       
|Other operating (income) expenses   |                                |   | 183                                   |        |   |              | 111       |        |              |               | 19                        |              |   |   | (34          | ) |  |   | 279     |       
|                                    |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |             
|Operating (loss) profit             |                                |   | (816                                  | )      |   |              | 2,133     |        |              |               | 2,043                     |              |   |   | (90          | ) |  |   | 3,270   |       
|Other income and expenses:          |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |              |   |  |   |         |       
|                                    | Interest (expense) income, net |   |                                       | (5,260 | ) |              |           | (3,484 | )            |               |                           | (291         | ) |   |              |  |  |   |         | (9,035 | )
|                                    | Other (expense) income, net    |   |                                       |       |   |              |           | (18    | )            |               |                           | 278          |   |   |              |  |  |   |         | 260    |  
|                                    |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |             
|(Loss) income before income taxes   |                                |   | (6,076                                | )      |   |              | (1,369    | )      |              |               | 2,030                     |              |   |   | (90          | ) |  |   | (5,505  | )     
|Income tax (benefit) expense        |                                |   | (2,030                                | )      |   |              | (412      | )      |              |               | 342                       |              |   |   |             |   |  |   | (2,100  | )     
|                                    |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |             
|Net (loss) income                   |                                | $ | (4,046                                | )      |   | $            | (957      | )      |              | $             | 1,688                     |              |   | $ | (90          | ) |  | $ | (3,405  | )     
|                                    |                                |   |                                       |        |   |              |           |        |              |               |                           |              |   |   |             

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

|                                                                                                    |                                |   |                                      |         |   |              |           |        |              |               |                           |              |  |   |              |   |  |   |         |         |  
|--------------------------------------------------------------------------------------------------- | ------------------------------ | - | ------------------------------------ | ------- | - | ------------ | --------- | ------ | ------------ | ------------- | ------------------------- | ------------ |  | - | ------------ | - |  | - | ------- | ------- | -
|                                                                                                    |                                |   | Nine months ended September 30, 2002 |        
|                                                                                                    |                                |   |                                      |        
|                                                                                                    |                                |   |                                      |         |   |              | Combined  |        |              | Combined      |                           |              |  |   |              |   |  |   |        
|                                                                                                    |                                |   |                                      |         |   |              | Guarantor |        |              | Non-Guarantor |                           |              |  |   |              |   |  |   |        
|                                                                                                    |                                |   | Parent                               |         |   | Subsidiaries |           |        | Subsidiaries |               |                           | Eliminations |  |   | Consolidated |  
|                                                                                                    |                                |   |                                      |         |   |              |           |        |              |               |                           |              |  |   |              |  
|                                                                                                    |                                |   |                                      |         |   |              |           |        |              |               | (in thousands of dollars) |              |  |   |              |  
|INCOME STATEMENT DATA                                                                               |                                |   |                                      |         |   |              |           |        |              |               |                           |              |  |   |              |   |  |   |         |        
|Net sales                                                                                           |                                | $ |                                     |         |   | $            | 565,327   |        |              | $             | 66,775                    |              |  | $ | (11,484      | ) |  | $ | 620,618 |        
|Cost of sales                                                                                       |                                |   | (35                                  | )       |   |              | 517,727   |        |              |               | 58,891                    |              |  |   | (11,475      | ) |  |   | 565,108 |        
|                                                                                                    |                                |   |                                      |         |   |              |           |        |              |               |                           |              |  |   |             
|Gross (loss) profit                                                                                 |                                |   | 35                                   |         |   |              | 47,600    |        |              |               | 7,884                     |              |  |   | (9           | ) |  |   | 55,510  |        
|Selling, general and administrative                                                                 |                                |   | 3,296                                |         |   |              | 16,201    |        |              |               | 4,706                     |              |  |   | 571          |   |  |   | 24,774  |        
|Other operating (income) expenses                                                                   |                                |   | 105                                  |         |   |              | 18        |        |              |               | 223                       |              |  |   | (569         | ) |  |   | (223    | )      
|                                                                                                    |                                |   |                                      |         |   |              |           |        |              |               |                           |              |  |   |             
|Operating (loss) profit                                                                             |                                |   | (3,366                               | )       |   |              | 31,381    |        |              |               | 2,955                     |              |  |   | (11          | ) |  |   | 30,959  |        
|Other income and expenses:                                                                          |                                |   |                                      |         |   |              |           |        |              |               |                           |              |  |   |              |   |  |   |         |        
|                                                                                                    | Interest (expense) income, net |   |                                      | (13,792 | ) |              |           | (6,902 | )            |               |                           | 321          |  |   |              |  |  |   |         | (20,373 | )
|                                                                                                    | Other (expense) income, net    |   |                                      | (391    | ) |              |           | 239    |              |               |                           | 268          |  |   |              |  |  |   |         | 116     |  
|                                                                                                    |                                |   |                                      |         |   |              |           |        |              |               |                           |              |  |   |             
|(Loss) income before income taxes                                                                   |                                |   | (17,549                              | )       |   |              | 24,718    |        |              |               | 3,544                     |              |  |   | (11          | ) |  |   | 10,702  |        
|Income tax (benefit) expense                                                                        |                                |   | (7,642                               | )       |   |              | 9,881     |        |              |               | (232                      | )            |  |   |             |   |  |   | 2,007   |        
|                                                                                                    |                                |   |                                      |         |   |              |           |        |              |               |                           |              |  |   |             
|Net (loss) income before extraordinary item and
cumulative effect of change in accounting principle |                                |   | (9,907                               | )       |   |              | 14,837    |        |              |               | 3,776                     |              |  |   | (11          | ) |  |   | 8,695   |        
|Extraordinary item, net of tax                                                                      |                                |   | (603                                 | )       |   |              |          |        |              |               |                          |              |  |   |             |   |  |   | (603    | )      
|Cumulative effect of change in accounting principle,
net of tax                                     |                                |   |                                     |         |   |              |          |        |              |               | 481                       |              |  |   |             |   |  |   | 481     |        
|                                                                                                    |                                |   |                                      |         |   |              |           |        |              |               |                           |              |  |   |             
|Net (loss) income                                                                                   |                                | $ | (10,510                              | )       |   | $            | 14,837    |        |              | $             | 4,257                     |              |  | $ | (11          | ) |  | $ | 8,573   |        
|                                                                                                    |                                |   |                                      |         |   |              |           |        |              |               |                           |              |  |   |             

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

|                                    |                                |   |                                      |         |   |              |           |         |              |               |                           |              |  |   |              |   |  |   |         |         |  
|----------------------------------- | ------------------------------ | - | ------------------------------------ | ------- | - | ------------ | --------- | ------- | ------------ | ------------- | ------------------------- | ------------ |  | - | ------------ | - |  | - | ------- | ------- | -
|                                    |                                |   | Nine months ended September 30, 2001 |        
|                                    |                                |   |                                      |        
|                                    |                                |   |                                      |         |   |              | Combined  |         |              | Combined      |                           |              |  |   |              |   |  |   |        
|                                    |                                |   |                                      |         |   |              | Guarantor |         |              | Non-Guarantor |                           |              |  |   |              |   |  |   |        
|                                    |                                |   | Parent                               |         |   | Subsidiaries |           |         | Subsidiaries |               |                           | Eliminations |  |   | Consolidated |  
|                                    |                                |   |                                      |         |   |              |           |         |              |               |                           |              |  |   |              |  
|                                    |                                |   |                                      |         |   |              |           |         |              |               | (in thousands of dollars) |              |  |   |              |  
|INCOME STATEMENT DATA               |                                |   |                                      |         |   |              |           |         |              |               |                           |              |  |   |              |   |  |   |         |        
|Net sales                           |                                | $ |                                     |         |   | $            | 592,077   |         |              | $             | 69,869                    |              |  | $ | (12,953      | ) |  | $ | 648,993 |        
|Cost of sales                       |                                |   | 829                                  |         |   |              | 552,609   |         |              |               | 56,371                    |              |  |   | (12,017      | ) |  |   | 597,792 |        
|                                    |                                |   |                                      |         |   |              |           |         |              |               |                           |              |  |   |             
|Gross (loss) profit                 |                                |   | (829                                 | )       |   |              | 39,468    |         |              |               | 13,498                    |              |  |   | (936         | ) |  |   | 51,201  |        
|Selling, general and administrative |                                |   | 3,220                                |         |   |              | 19,633    |         |              |               | 4,732                     |              |  |   | 181          |   |  |   | 27,766  |        
|Other operating (income) expenses   |                                |   | 758                                  |         |   |              | 363       |         |              |               | (722                      | )            |  |   | (181         | ) |  |   | 218     |        
|                                    |                                |   |                                      |         |   |              |           |         |              |               |                           |              |  |   |             
|Operating (loss) profit             |                                |   | (4,807                               | )       |   |              | 19,472    |         |              |               | 9,488                     |              |  |   | (936         | ) |  |   | 23,217  |        
|Other income and expenses:          |                                |   |                                      |         |   |              |           |         |              |               |                           |              |  |   |              |   |  |   |         |        
|                                    | Interest (expense) income, net |   |                                      | (14,432 | ) |              |           | (10,091 | )            |               |                           | 196          |  |   |              |  |  |   |         | (24,327 | )
|                                    | Other (expense) income, net    |   |                                      | 30      |   |              |           | 391     |              |               |                           | 2,055        |  |   |              |  |  |   |         | 2,476   |  
|                                    |                                |   |                                      |         |   |              |           |         |              |               |                           |              |  |   |             
|(Loss) income before income taxes   |                                |   | (19,209                              | )       |   |              | 9,772     |         |              |               | 11,739                    |              |  |   | (936         | ) |  |   | 1,366   |        
|Income tax (benefit) expense        |                                |   | (5,968                               | )       |   |              | 4,445     |         |              |               | 2,887                     |              |  |   | (258         | ) |  |   | 1,106   |        
|                                    |                                |   |                                      |         |   |              |           |         |              |               |                           |              |  |   |             
|Net (loss) income                   |                                | $ | (13,241                              | )       |   | $            | 5,327     |         |              | $             | 8,852                     |              |  | $ | (678         | ) |  | $ | 260     |        
|                                    |                                |   |                                      |         |   |              |           |         |              |               |                           |              |  |   |             

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

|                                           |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |              |          |   |   |         |         | 
|------------------------------------------ | ---------------------------------- | - | ------------------------ | ------- | - | ------------ | --------- | ------- | ------------ | ------------- | ------------------------- | ------------ | - | - | ------------ | -------- | - | - | ------- | ------- | 
|                                           |                                    |   | As of September 30, 2002 |        
|                                           |                                    |   |                          |        
|                                           |                                    |   |                          |         |   |              | Combined  |         |              | Combined      |                           |              |   |   |              |          |   |   |        
|                                           |                                    |   |                          |         |   |              | Guarantor |         |              | Non-Guarantor |                           |              |   |   |              |          |   |   |        
|                                           |                                    |   | Parent                   |         |   | Subsidiaries |           |         | Subsidiaries |               |                           | Eliminations |   |   | Consolidated |         
|                                           |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |              |         
|                                           |                                    |   |                          |         |   |              |           |         |              |               | (in thousands of dollars) |              |   |   |              |         
|BALANCE SHEET DATA                         |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |              |          |   |   |         |        
|ASSETS                                     |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |              |          |   |   |         |        
|Current assets:                            |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |              |          |   |   |         |        
|                                           | Cash and cash equivalents          |   | $                        | 1,635   |   |              | $         | 1,918   |              |               | $                         | 2,123        |   |   | $            |         |   |   | $       | 5,676   | 
|                                           | Accounts receivable, net           |   |                          | 114     |   |              |           | 79,927  |              |               |                           | 23,907       |   |   |              |         |   |   |         | 103,948 | 
|                                           | Inventories                        |   |                          |        |   |              |           | 58,299  |              |               |                           | 8,109        |   |   |              | (59      | ) |   |         | 66,349  | 
|                                           | Other current assets               |   |                          | 28,521  |   |              |           | 2,819   |              |               |                           | 402          |   |   |              | 1        |   |   |         | 31,743  | 
|                                           |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |             
|                                           | Total current assets               |   |                          | 30,270  |   |              |           | 142,963 |              |               |                           | 34,541       |   |   |              | (58      | ) |   |         | 207,716 | 
|Property, plant and equipment, net         |                                    |   | 2,907                    |         |   |              | 305,760   |         |              |               | 31,268                    |              |   |   | 553          |          |   |   | 340,488 |        
|Other assets:                              |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |              |          |   |   |         |        
|                                           | Goodwill                           |   |                          |        |   |              |           | 217,016 |              |               |                           |             |   |   |              |         |   |   |         | 217,016 | 
|                                           | Other noncurrent assets            |   |                          | 20,255  |   |              |           | 3,246   |              |               |                           | 9,178        |   |   |              | 1,443    |   |   |         | 34,122  | 
|                                           | Intercompany, net                  |   |                          | (23,602 | ) |              |           | 49,016  |              |               |                           | (27,016      | ) |   |              | 1,602    |   |   |         |        | 
|                                           | Investments in subsidiaries        |   |                          | 588,978 |   |              |           |        |              |               |                           |             |   |   |              | (588,978 | ) |   |         |        | 
|                                           |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |             
|Total assets                               |                                    | $ | 618,808                  |         |   | $            | 718,001   |         |              | $             | 47,971                    |              |   | $ | (585,438     | )        |   | $ | 799,342 |        
|                                           |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |             
|LIABILITIES AND SHAREHOLDERS EQUITY       |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |              |          |   |   |         |        
|Current liabilities:                       |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |              |          |   |   |         |        
|                                           | Accounts payable                   |   | $                        | 1,467   |   |              | $         | 71,662  |              |               | $                         | 4,000        |   |   | $            | (506     | ) |   | $       | 76,623  | 
|                                           | Accrued liabilities                |   |                          | 19,397  |   |              |           | 45,433  |              |               |                           | 13,136       |   |   |              | 322      |   |   |         | 78,288  | 
|                                           | Long-term debt due within
one year |   |                          |        |   |              |           | 1,457   |              |               |                           | 130          |   |   |              |         |   |   |         | 1,587   | 
|                                           |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |             
|                                           | Total current liabilities          |   |                          | 20,864  |   |              |           | 118,552 |              |               |                           | 17,266       |   |   |              | (184     | ) |   |         | 156,498 | 
|Long-term debt due after one year          |                                    |   | 258,700                  |         |   |              | 37,771    |         |              |               | 199                       |              |   |   |             |          |   |   | 296,670 |        
|Retirement benefits                        |                                    |   | 54,400                   |         |   |              | 5,854     |         |              |               |                          |              |   |   |             |          |   |   | 60,254  |        
|Other noncurrent liabilities               |                                    |   | 16,584                   |         |   |              | 6,098     |         |              |               | (5,769                    | )            |   |   | 747          |          |   |   | 17,660  |        
|                                           |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |             
|                                           | Total noncurrent liabilities       |   |                          | 329,684 |   |              |           | 49,723  |              |               |                           | (5,570       | ) |   |              | 747      |   |   |         | 374,584 | 
|Shareholders equity                       |                                    |   | 268,260                  |         |   |              | 549,726   |         |              |               | 36,275                    |              |   |   | (586,001     | )        |   |   | 268,260 |        
|                                           |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |             
|Total liabilities and shareholders equity |                                    | $ | 618,808                  |         |   | $            | 718,001   |         |              | $             | 47,971                    |              |   | $ | (585,438     | )        |   | $ | 799,342 |        
|                                           |                                    |   |                          |         |   |              |           |         |              |               |                           |              |   |   |             

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

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

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

|                                                             |                                            |   |         |                                      |   |   |              |           |   |              |               |                           |              |   |   |              |  |   |         |          |   | 
|------------------------------------------------------------ | ------------------------------------------ | - | ------- | ------------------------------------ | - | - | ------------ | --------- | - | ------------ | ------------- | ------------------------- | ------------ | - | - | ------------ |  | - | ------- | -------- | - | 
|                                                             |                                            |   |         | Nine months ended September 30, 2002 |  
|                                                             |                                            |   |         |                                      |  
|                                                             |                                            |   |         |                                      |   |   |              | Combined  |   |              | Combined      |                           |              |   |   |              |  |   |         |         
|                                                             |                                            |   |         |                                      |   |   |              | Guarantor |   |              | Non-Guarantor |                           |              |   |   |              |  |   |         |         
|                                                             |                                            |   |         | Parent                               |   |   | Subsidiaries |           |   | Subsidiaries |               |                           | Eliminations |   |   | Consolidated | 
|                                                             |                                            |   |         |                                      |   |   |              |           |   |              |               |                           |              |   |   |              | 
|                                                             |                                            |   |         |                                      |   |   |              |           |   |              |               | (in thousands of dollars) |              |   |   |              | 
|CASH FLOW DATA                                               |                                            |   |         |                                      |   |   |              |           |   |              |               |                           |              |   |   |              |  |   |         |         
|Net cash provided by (used in) operating activities          |                                            | $ | 73,378  |                                      |   | $ | 6,457        |           |   | $            | (12,178       | )                         |              |   |  |              |  | $ | 67,657  |         
|Investing activities:                                        |                                            |   |         |                                      |   |   |              |           |   |              |               |                           |              |   |   |              |  |   |         |         
|                                                             | Additions to property, plant and
equipment |   |         | (1,465                               | ) |   |              | (4,561    | ) |              |               | (854                      | )            |   |   |             |  |   |         | (6,880   | )
|                                                             | Other                                      |   |         |                                     |   |   |              | 360       |   |              |               |                          |              |   |   |             |  |   |         | 360      |  
|                                                             |                                            |   |         |                                      |   |   |              |           |   |              |               |                           |              |   |  
|Net cash used in investing activities                        |                                            |   | (1,465  | )                                    |   |   | (4,201       | )         |   |              | (854          | )                         |              |   |  |              |  |   | (6,520  | )       
|Financing activities:                                        |                                            |   |         |                                      |   |   |              |           |   |              |               |                           |              |   |   |              |  |   |         |         
|                                                             | Proceeds from debt offering                |   |         | 175,000                              |   |   |              |          |   |              |               |                          |              |   |   |             |  |   |         | 175,000  |  
|                                                             | Payments of long-term debt                 |   |         | (171,750                             | ) |   |              |          |   |              |               |                          |              |   |   |             |  |   |         | (171,750 | )
|                                                             | Net decrease in other debt                 |   |         | (67,350                              | ) |   |              | (804      | ) |              |               | (307                      | )            |   |   |             |  |   |         | (68,461  | )
|                                                             | Payment of debt issue costs                |   |         | (5,940                               | ) |   |              |          |   |              |               |                          |              |   |   |             |  |   |         | (5,940   | )
|                                                             | Dividends paid                             |   |         | (3,056                               | ) |   |              |          |   |              |               |                          |              |   |   |             |  |   |         | (3,056   | )
|                                                             | Issuance of common stock                   |   |         | 490                                  |   |   |              |          |   |              |               |                          |              |   |   |             |  |   |         | 490      |  
|                                                             |                                            |   |         |                                      |   |   |              |           |   |              |               |                           |              |   |  
|Net cash used in financing activities                        |                                            |   | (72,606 | )                                    |   |   | (804         | )         |   |              | (307          | )                         |              |   |  |              |  |   | (73,717 | )       
|Effect of exchange rate changes on cash
and cash equivalents |                                            |   |        |                                      |   |   |             |           |   |              | 4,390         |                           |              |   |  |              |  |   | 4,390   |         
|                                                             |                                            |   |         |                                      |   |   |              |           |   |              |               |                           |              |   |   |              | 
|Net increase (decrease) in cash and cash equivalents         |                                            | $ | (693    | )                                    |   | $ | 1,452        |           |   | $            | (8,949        | )                         |              | $ |  |              |  | $ | (8,190  | )       
|                                                             |                                            |   |         |                                      |   |   |              |           |   |              |               |                           |              |   |   |              | 

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

|                                                             |                                                                 |   |                                      |          |   |              |                           |         |              |               |        |              |   |   |              |   |  |   |         |          |  
|------------------------------------------------------------ | --------------------------------------------------------------- | - | ------------------------------------ | -------- | - | ------------ | ------------------------- | ------- | ------------ | ------------- | ------ | ------------ | - | - | ------------ | - |  | - | ------- | -------- | -
|                                                             |                                                                 |   | Nine months ended September 30, 2001 |         
|                                                             |                                                                 |   |                                      |         
|                                                             |                                                                 |   |                                      |          |   |              | Combined                  |         |              | Combined      |        |              |   |   |              |   |  |   |        
|                                                             |                                                                 |   |                                      |          |   |              | Guarantor                 |         |              | Non-Guarantor |        |              |   |   |              |   |  |   |        
|                                                             |                                                                 |   | Parent                               |          |   | Subsidiaries |                           |         | Subsidiaries |               |        | Eliminations |   |   | Consolidated |  
|                                                             |                                                                 |   |                                      |          |   |              |                           |         |              |               |        |              |   |   |              |  
|                                                             |                                                                 |   |                                      |          |   |              | (in thousands of dollars) |         |              |               |        |             
|CASH FLOWS DATA                                              |                                                                 |   |                                      |          |   |              |                           |         |              |               |        |              |   |   |              |   |  |   |         |         
|Net cash provided by (used in) operating
activities          |                                                                 | $ | 5,481                                |          |   | $            | 26,577                    |         |              | $             | (402   | )            |   | $ |             |   |  | $ | 31,656  |         
|Investing activities:                                        |                                                                 |   |                                      |          |   |              |                           |         |              |               |        |              |   |   |              |   |  |   |         |         
|                                                             | Additions to property, plant and
equipment                      |   |                                      | (426     | ) |              |                           | (21,153 | )            |               |        | (9,930       | ) |   |              |  |  |   |         | (31,509  | )
|                                                             | Proceeds from insurance                                         |   |                                      |         |   |              |                           |        |              |               |        | 3,210        |   |   |              |  |  |   |         | 3,210    |  
|                                                             | Additions to property, plant and
equipment covered by insurance |   |                                      |         |   |              |                           |        |              |               |        | (3,210       | ) |   |              |  |  |   |         | (3,210   | )
|                                                             |                                                                 |   |                                      |          |   |              |                           |         |              |               |        |              |   |   |             
|Net cash used in investing activities                        |                                                                 |   | (426                                 | )        |   |              | (21,153                   | )       |              |               | (9,930 | )            |   |   |             |   |  |   | (31,509 | )       
|Financing activities:                                        |                                                                 |   |                                      |          |   |              |                           |         |              |               |        |              |   |   |              |   |  |   |         |         
|                                                             | Proceeds from term loan                                         |   |                                      | 182,750  |   |              |                           |        |              |               |        |             |   |   |              |  |  |   |         | 182,750  |  
|                                                             | Payments of long-term debt                                      |   |                                      | (200,000 | ) |              |                           |        |              |               |        |             |   |   |              |  |  |   |         | (200,000 | )
|                                                             | Net increase (decrease) in other debt                           |   |                                      | 18,935   |   |              |                           | (898    | )            |               |        | (297         | ) |   |              |  |  |   |         | 17,740   |  
|                                                             | Dividends paid                                                  |   |                                      | (3,048   | ) |              |                           |        |              |               |        |             |   |   |              |  |  |   |         | (3,048   | )
|                                                             | Issuance of common stock                                        |   |                                      | 65       |   |              |                           |        |              |               |        |             |   |   |              |  |  |   |         | 65       |  
|                                                             |                                                                 |   |                                      |          |   |              |                           |         |              |               |        |              |   |   |             
|Net cash used in financing activities                        |                                                                 |   | (1,298                               | )        |   |              | (898                      | )       |              |               | (297   | )            |   |   |             |   |  |   | (2,493  | )       
|Effect of exchange rate changes on cash
and cash equivalents |                                                                 |   |                                     |          |   |              |                          |         |              |               | 1,059  |              |   |   |             |   |  |   | 1,059   |         
|                                                             |                                                                 |   |                                      |          |   |              |                           |         |              |               |        |              |   |   |             
|Net increase (decrease) in cash and cash
equivalents         |                                                                 | $ | 3,757                                |          |   | $            | 4,526                     |         |              | $             | (9,570 | )            |   | $ |             |   |  | $ | (1,287  | )       
|                                                             |                                                                 |   |                                      |          |   |              |                           |         |              |               |        |              |   |   |             

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INTERMET Corporation

Notes to Interim Condensed Consolidated Financial Statements (continued)

September 30, 2002 (Unaudited)

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

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



| |  | General economic conditions                                                                                                                                          
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Fluctuations in worldwide or regional automobile and light and heavy truck production                                                                                
| 
| |  | Changes in practices or policies of our significant customers toward outsourcing their requirements for automotive
components                                        
| 
| |  | Sourcing and pricing practices of our major customers, including demands for price concessions as a condition to retaining
current business or obtaining new business
| 
| |  | Fluctuations in foreign currency exchange rates                                                                                                                      
| 
| |  | Fluctuations in interest rates that may affect our borrowing costs                                                                                                   
| 
| |  | Fluctuations in the cost of raw materials, including the cost of energy and scrap steel, and our ability, if any, to pass
those costs on to our customers            
| 
| |  | Work stoppages or other labor disputes that could disrupt production at our facilities or those of our major customers                                               
| 
| |  | Factors or presently unknown circumstances that may affect the charges related to the impairment of assets                                                           
| 
| |  | Our ability to meet the financial covenants set forth in our debt agreements                                                                                         
| 
| |  | Other risks as detailed from time to time in our filings with the Securities and Exchange Commission                                                                 

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

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Material Changes in Financial Condition, Liquidity and Capital Resources

Through the third quarter of 2002 cash flow from operations totaled $ 67.7
million compared to $31.7 million for the same period last year. Depreciation
and amortization expense for the nine months ended September 30, 2002 was $39.7
million. For the nine months ended September 30, 2002, after adjusted for the
effect of exchange rates, accounts receivable decreased by $10.3 million while
inventory decreased by $6.3 million compared to December 31, 2001. The
reduction in accounts receivable is a result of management efforts to improve
collection at some of our major customers. As of September 30, 2002, after
adjusted for the effect of exchange rates, accounts payable decreased by $5.3
million while accrued liabilities increased by $13.8 million compared to
December 31, 2001. The increase in accrued liabilities is due partially to the
accrued taxes on the earnings during the nine months ended September 30, 2002.
During the first nine months of 2002 we spent $6.9 million for the purchase of
property, plant and equipment. Borrowings under our bank revolving credit
facility decreased by $67 million during the first nine months of 2002. The
bank term loan, with an outstanding balance of $171.7 million, was repaid in
full in June of 2002 with the proceeds from our $175 million senior note issue
(see footnote 5, Debt, for further detail). Additionally, we paid $3.1 million
in dividends during the first nine months of 2002. The Company has committed
capital not yet spent of approximately $3.5 million as of September 30, 2002.
We anticipate that the funds needed for the committed capital spending will
come from operations.

At September 30, 2002, our revolving credit agreement provides for loans up to
$300 million in the aggregate, of which $81 million is outstanding. Revolving
credit agreement covenants limit our availability to access the entire $300
million. In addition, our senior note issue has a balance of $175 million and
we have other debt of approximately $42.3 million.

Our revolving credit agreement requires us to maintain certain financial
ratios. We are in compliance with these covenants as of September 30, 2002.
The revolving credit agreement financial covenant ratios as of September 30,
2002 are provided below.

|                                                     |  |             |          |  |        |   |          | 
|---------------------------------------------------- |  | ----------- | -------- |  | ------ | - | -------- | 
|Financial Covenant                                   |  | Requirement |          |  | Actual |  
|                                                     |  |             |          |  |        |  
|Fixed charge coverage ratio                          |  | >           | 1.00 : 1 |  |        |   | 1.68 : 1 | 
|Consolidated EBITDA to
Consolidated interest expense |  | >           | 3.00 : 1 |  |        |   | 3.19 : 1 | 
|Funded Debt to Consolidated EBITDA                   |  | <           | 4.00 : 1 |  |        |   | 3.68 : 1 | 
|Capital expenditures                                 |  | <           | $50,000  |  |        | $ | 14,461   | 

The above financial covenant ratios will change in the future over the
remaining term of our revolving credit agreement in accordance with the terms
set forth in the agreement.

For financial covenant purposes, the ratios are calculated based on the last
twelve months (LTM) activities. EBITDA is calculated as the sum of net income,
income taxes, interest expense, depreciation and amortization. For the purpose
of this calculation, amortization of financing costs is included in interest
expense. EBITDA per the revolving credit agreement was $17.4 million and $18.4 million for the three months
ended September 30, 2002 and September 30, 2001, respectively.

EBITDA is not a measure prepared in accordance with accounting principles
generally accepted in the United States, but has been presented because we use
it to evaluate our operating performance relative to our revolving credit
agreement. EBITDA should not be considered a substitute for income from
operations, net income, cash flows or other measure of financial performance
prepared in accordance with accounting principles generally accepted in the
United States.

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

Sales for the third quarter of 2002 were $196.6 million, an increase of $8.2
million or 4.4% as compared to sales in the same period in 2001 of $188.4
million, after excluding the sales revenue of the Alexander City plant of $8.9
million in the third quarter of 2001. The Alexander City plant was closed in
December 2001 (see footnote 11, Impairment of Assets and Shutdown, for
details). The increase in sales is attributable mainly to the launch of an
axle carrier program and the growth of our new business in steering knuckles
made with our pressure-counter-pressure casting (PCPCTM) process.
Ferrous-metals segment saleswere $127.1 million during the third quarter of
2002 compared to $122.9 million for the same period last year, representing an
increase in sales of $4.2 million or 3.4%. Light-metals segment saleswere
$65.5 million during the third quarter of 2002, an increase of $4.8 million or
7.9% compared to $60.7 million during the third quarter of 2001, after
excluding the sales revenue of the Alexander City plant of $8.9 million.

Domestic salesfor the third quarter were $175.4 million, slightly down from
$175.6 million for the same period last year. Domestic sales were $175.4
million in the third quarter of 2002, an increase of $8.6 million or 5.2%
compared to $166.8 million in the third quarter of 2001, after excluding the
sales revenue of the Alexander City plant. European salesduring the three
months ended September 30, 2002 were $21.2 million, slightly down from $21.6
million for the same period last year as a result of a soft European market
which reduced by 1.8% during the third quarter of 2002. The effect of changes
in the exchange rates on consolidated European sales was a favorable $2.4
million during the three-month period ended September 30, 2002.

Gross profit for the three months ended September 30, 2002 and 2001 was $12.0
million and $12.1 million, respectively. Gross profit as a percentage of sales
for the three months ended September 30, 2002 was 6.1%, same as that for the
same period in 2001. Excluding the results of Alexander City, which closed in
December, 2001, gross profit as a percentage of sales for the three months
ended September 30, 2002 and 2001 would have been 6.2% and 6.0%, respectively.
The slight increase in gross profit margin is due to improvement in production
efficiency.

In the third quarter of 2002, we charged $1.7 million to Cost of Sales for
the probable write-off of fixed assets at one of our facilities. During the
fourth quarter of 2002 we are going to complete the fixed assets inventory and
reconciliation at this location. A subsequent adjustment to the $1.7 million
amount recorded may be required.

Selling, general and administrative expenses for the three months ended
September 30, 2002 and 2001 were 4.1% and 3.5% of sales, respectively. As a
result of debt reduction, net interest expense for the third quarter 2002 was
$7.6 million, which was $1.4 million less than the same period last year.

The effective income tax benefit rate was 72.7% and 38.1% for the third quarter
of 2002 and 2001, respectively. The effective income tax benefit rate in the
third quarter of 2002 was higher than the statutory rate primarily because the
income tax benefits for the quarter included state tax and foreign tax
benefits. Also included were the release of tax reserves and the utilization of
one-time state tax credits. The effective income tax benefit rate in the third
quarter of 2001 was higher than the statutory rate mainly because of tax
planning in Europe, but the tax benefit was partially offset by the
nondeductible amortization of goodwill related to various acquisitions made in
the past. Goodwill amortization, net of taxes, in third quarter of 2001 was
$1.3 million.

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Material Changes in Results of Operations  Nine months ended September 30,
2002

Sales for the nine months ended September 30, 2002 were $620.6 million, an
increase of $3.9 million or 0.6% as compared to sales in the same period in
2001 of $616.7 million, after excluding the sales revenue of the Alexander City
plant of $32.3 million for the nine months ended September 30, 2001. This
increase in sales is attributable mainly to the launch of new products and the
growth of our new business in steering knuckles made with our PCPCTM process.
Ferrous-metals segment saleswere $400.9 million during the nine months ended
September 30, 2002 compared to $406.0 million for the same period last year,
representing a decrease of $5.1 million or 1.3% as a result of a softening
vehicle sales in the European market, which decreased by 3.7% during the nine
months ended September 30, 2002 as compared with the same period last year as
well as lower demand on certain customer platforms and engine models.
Light-metals segment saleswere $208.9 million for the nine months ended
September 30, 2002, an increase of $10.9 million or 5.5% compared to $198.0
million during the same period last year, which excluded the sales revenue of
the Alexander City plant of $32.3 million.

Domestic salesfor the nine months ended September 30, 2002 were $553.8
million, down from $579.1 million for the same period last year. Domestic sales
were $553.8 million for the nine months ended September 30, 2002, an increase
of $6.9 million or 1.3% compared to $546.9 million the same period in 2001,
after excluding the sales revenue of the Alexander City plant. European sales
during the nine months ended September 30, 2002 were $66.8 million, down from
$69.9 million for the same period last year. The effect of changes in the
exchange rates on consolidated European sales was a favorable $3.1 million for
the nine-month period ended September 30, 2002.

Gross profit for the nine months ended September 30, 2002 and 2001 was $55.5
million and $51.2 million, respectively. Gross profit as a percentage of sales
for the nine months ended September 30, 2002 and 2001 was 8.9% and 7.9%,
respectively. Excluding the results of Alexander City, which closed in
December, 2001, gross profit as a percentage of sales would have been 9.0% and
8.6%, respectively. The increase in gross profit margin is due to improvement
in production efficiency.

Selling, general and administrative expenses were 4.0% of sales for the nine
months ended September 30, 2002 and 2001. As a result of debt reduction and
lower interest rates, net interest expense for the nine months ended September
30, 2002 was $20.4 million, which was $4.0 million less than the same period
last year.

The effective income tax rate was 18.8% and 81.0% for the first nine months
of 2002 and 2001, respectively. The effective rate for the nine months ended September 30, 2002
was lower than the statutory rate partly because of the tax strategies in place to reduce various state
taxes in the United States, and partly because of tax planning in Europe. The effective rate for the first
nine months of 2001 was higher than the statutory rate primarily because of the nondeductible amortization of goodwill
related to various acquisitions made in the past. Goodwill amortization, net of taxes, during the nine months
ended September 30, 2001 was $3.7 million. The cumulative effect of a change in accounting principle is discussed below
in the paragraph The Impact of Adopting SFAS 142. No adjustment was made for the impairment of goodwill
during the nine months ended September 30, 2002 based on the impairment tests performed by INTERMET.

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

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The Impact of Adopting SFAS 142

On January 1, 2002, we adopted SFAS 142, Goodwill and Other Intangible
Assets. Under this statement, goodwill is no longer amortized but is subject
to annual impairment analysis (or more frequent tests if impairment indicators
arise). As required under SFAS 142, we wrote off negative goodwill of
$481,000, net of taxes, in the first quarter of 2002 as a cumulative effect of
a change in accounting principle. In addition, we performed impairment tests of
our goodwill as required and determined that no impairment of the goodwill
existed at the effective date of adoption. See note 4 in the accompanying
notes to interim condensed consolidated financial statements for further
discussion.

Critical Accounting Policies and Estimates

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




Item 3. Quantitative and Qualitative Disclosures about Market Risk

We have exposure to four types of market risk. The first is the risk of
interest rate changes and how it impacts our current results. Second, we have
risk with regard to foreign currency and its impact on our international
operating results. Third, we have risk related to commodity pricing where we
experienced price increases in scrap steel, which is one of the primary raw
materials used in our operations. These increases will be mitigated in the
fourth quarter due to customer contracts that provide for pass-through of cost
increases. These pass-through typically have a 60-90 day lag before becoming
effective. We also have risk related to commodity pricing in energy costs.
Last, we have consumer risk. We operate principally in the cyclical automotive
industry. A weakening of the economy represents a risk to our operating
results.

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

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Item 4. Controls and Procedures



|(a) |  | We have conducted an evaluation of our disclosure controls and
procedures, as such term is defined under Rules 13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934, as amended, within 90 days of the filing
date of this report. Based on our evaluation, our principal executive
officer and principal financial officer have concluded that our disclosure
controls and procedures are effective to ensure that information required
to be disclosed by us is recorded, processed, summarized and reported
within the required time periods.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | There have been no significant changes in our internal
controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation referenced in paragraph
(a) above.                                                                                                                                                                                                                                                                                                                                               

33



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##### Table of Contents









Part II  Other Information

Item 1. Legal Proceedings

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

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

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

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

Item 2. Changes in Securities and Use of Proceeds

None.

Item 3. Defaults upon Senior Securities

None.

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##### Table of Contents






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

On August 15, 2002, we filed a report on Form 8-K containing press releases
related to the resignation of our Chief Financial Officer and the appointment
of a new Chief Financial Officer.

On September 13, 2002, we filed a report on Form 8-K containing a press release
concerning our 3rd quarter 2002 earnings.

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##### Table of Contents






Signature

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

| |  |       |  |                                                                                         
| |  | ----- |  | ----------------------------------------------------------------------------------------
| |  |       |  | INTERMET Corporation                                                                    
|
| |  | By:   |  | /s/ Robert E. BeltsRobert E. Belts
Vice President of Finance and
Chief Financial Officer
| |  | Date: |  | November 13, 2002                                                                       

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##### Table of Contents






Certifications

I, John Doddridge, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of INTERMET
Corporation;                                                                                                                                                                                                                                                   
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |  |                                                       
|----------------------- |  | ------------------------------------------------------
|Date: November 13, 2002 |  | /s/ John DoddridgeChairman and Chief Executive Officer

37



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##### Table of Contents



Certifications

I, Robert E. Belts, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of INTERMET
Corporation;                                                                                                                                                                                                                                                   
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |  |                                                                         
|----------------------- |  | ------------------------------------------------------------------------
|Date: November 13, 2002 |  | /s/ Robert E. BeltsVice President of Finance and Chief
Financial Officer

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EXHIBIT INDEX

|            |  |          |                                                              |  | 
|----------- |  | -------- | ------------------------------------------------------------ |  | 
|Exhibit No. |  | Document |                                                             
|            |  |          |                                                             
|3.2         |  |          | By-laws of INTERMET Corporation, as amended October 10, 2002
|99.1        |  |          | Certification of Chief Executive Officer                    
|99.2        |  |          | Certification of Chief Financial Officer                    

39