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UNITEDSTATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORTPURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF1934

FOR QUARTERLY PERIOD ENDED JUNE 27, 2004COMMISSION FILE NUMBER 1-12068

METALDYNECORPORATION(Exact name of registrant asspecified in its charter)

|                                                              |  |                                     |  |  |  |  |
|--------------------------------------------------------------|--|-------------------------------------|--|--|--|--|
| Delaware                                                     |  | 38-2513957                          |
| (Stateor other jurisdiction ofincorporation or organization) |  | (I.R.S. EmployerIdentification No.) |
| 47659Halyard Drive, Plymouth, Michigan                       |  | 48170-2429                          |
| (Addressof principal executive offices)                      |  | (ZipCode)                           |
|                                                              |

(734) 207-6200

(Registrant's telephonenumber)

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

Indicate by check mark whether the registrant is anaccelerated filer (as defined in Rule 12b-2 of the ExchangeAct).    Yes                 No      X   

There is currently no public market for theregistrant's common stock.

Indicate the number ofshares outstanding of each of the issuer's classes of commonstock, as of the latest practical date.

|                                     |  |                                       |            |        |  |  |
|-------------------------------------|--|---------------------------------------|------------|--------|--|--|
| Class                               |  | Sharesoutstanding at November 1, 2004 |
| Common stock,par value $1 per share |  |                                  | 42,844,760 |   |
|                                     |

    

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METALDYNE CORPORATION

INDEX

|         |  |                                                                                                                                 |  |         |       |        |  |  |  |  |
|---------|--|---------------------------------------------------------------------------------------------------------------------------------|--|---------|-------|--------|--|--|--|--|
|    |  |                                                                                                                            |  | PageNo. |
| Part I. |  | FinancialInformation                                                                                                            |  |
| Item 1. |  | FinancialStatements                                                                                                             |  |
|    |  | Consolidated Balance Sheets– June 27, 2004 and December 28, 2003                                                          |  |    | 2     |   |
|    |  | Consolidated Statements of Operations for the Threeand Six Months     Ended June 27, 2004 and June 29, 2003 |  |    | 3     |   |
|    |  | Consolidated Statements of CashFlows for the Three and Six Months     Ended June 27, 2004 andJune 29, 2003  |  |    | 4     |   |
|    |  | Notes toConsolidated Financial Statements                                                                                       |  |    | 5-27  |   |
| Item2.  |  | Management's Discussion and Analysis of FinancialCondition and    Results of Operations                     |  |    | 28-52 |   |
| Item 3. |  | Quantitative and Qualitative Disclosure AboutMarket Risk                                                                        |  |    | 52    |   |
| Item 4. |  | Controlsand Procedures                                                                                                          |  |    | 53-55 |   |
| PartII. |  | Other Information and Signature                                                                                                 |  |    | 56-57 |   |
|         |

1

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PART I. FINANCIALINFORMATION ITEM 1. Financial Statements

METALDYNECORPORATION CONSOLIDATED BALANCE SHEET June 27, 2004 andDecember 28, 2003 (Dollars In Thousands Except Per ShareAmounts)

|                                                                                                             |  |              |           |                  |  |        |           |         |  |  |
|-------------------------------------------------------------------------------------------------------------|--|--------------|-----------|------------------|--|--------|-----------|---------|--|--|
|                                                                                                        |  | June27, 2004 |           | December 28,2003 |
|                                                                                                        |  | (Unaudited)  |           |             |
| **ASSETS**                                                                                                  |  |         |      |             |  |   |      |    |
| Currentassets:                                                                                              |  |         |      |             |  |   |      |    |
| Cash and cashequivalents                                                                                    |  | $            | —   |             |  | $      | 13,820    |    |
| Receivables:                                                                                                |  |         |      |             |  |   |      |    |
| Trade,net of allowance for doubtful accounts                                                                |  |         | 167,900   |             |  |   | 139,330   |    |
| TriMas                                                                                                      |  |         | 6,890     |             |  |   | 15,350    |    |
| Other                                                                                                       |  |         | 29,360    |             |  |   | 26,440    |    |
| Totalreceivables, net                                                                                       |  |         | 204,150   |             |  |   | 181,120   |    |
| Inventories                                                                                                 |  |         | 113,870   |             |  |   | 83,680    |    |
| Deferred andrefundable income taxes                                                                         |  |         | 8,120     |             |  |   | 9,110     |    |
| Prepaid expenses andother assets                                                                            |  |         | 44,470    |             |  |   | 36,280    |    |
| Totalcurrent assets                                                                                         |  |         | 370,610   |             |  |   | 324,010   |    |
| Equity and otherinvestments in affiliates                                                                   |  |         | 128,830   |             |  |   | 148,830   |    |
| Property and equipment,net                                                                                  |  |         | 892,570   |             |  |   | 707,450   |    |
| Excess of costover net assets of acquired companies                                                         |  |         | 582,760   |             |  |   | 584,390   |    |
| Intangible and otherassets                                                                                  |  |         | 227,370   |             |  |   | 247,180   |    |
| Totalassets                                                                                                 |  | $            | 2,202,140 |             |  | $      | 2,011,860 |    |
|                                                                                                        |  |         |      |             |  |   |      |    |
| **LIABILITIESAND SHAREHOLDERS'EQUITY**                                                                      |  |         |      |             |  |   |      |    |
|                                                                                                        |  |         |      |             |  |   |      |    |
| Currentliabilities:                                                                                         |  |         |      |             |  |   |      |    |
| Accountspayable                                                                                             |  | $            | 280,900   |             |  | $      | 201,240   |    |
| Accrued liabilities                                                                                         |  |         | 116,990   |             |  |   | 136,840   |    |
| Currentmaturities, long-term debt                                                                           |  |         | 8,580     |             |  |   | 10,880    |    |
| Totalcurrent liabilities                                                                                    |  |         | 406,470   |             |  |   | 348,960   |    |
| Long-termdebt                                                                                               |  |         | 853,410   |             |  |   | 766,930   |    |
| Deferred incometaxes                                                                                        |  |         | 121,540   |             |  |   | 121,520   |    |
| Minorityinterest                                                                                            |  |         | 800       |             |  |   | 800       |    |
| Other long-termliabilities                                                                                  |  |         | 146,810   |             |  |   | 153,760   |    |
| Redeemablepreferred stock, (aggregate liquidation value $149.4million)                                      |  |         | 147,480   |             |  |   | —   |    |
| Totalliabilities                                                                                            |  |         | 1,676,510 |             |  |   | 1,391,970 |    |
|                                                                                                        |  |         |      |             |  |   |      |    |
| Redeemablepreferred stock, (aggregate liquidation value $76.0 million)                                      |  |         | —   |             |  |   | 73,980    |    |
|                                                                                                        |  |         |      |             |  |   |      |    |
| Preferredstock (non-redeemable), $1 par, Authorized: 25million;Outstanding:None                             |  |         | —   |             |  |   | —   |    |
| Common stock,$1 par, Authorized: 250 million;Outstanding: 42.8 million and 42.7million shares, respectively |  |         | 42,830    |             |  |   | 42,730    |    |
| Paid-incapital                                                                                              |  |         | 693,540   |             |  |   | 692,400   |    |
| Accumulateddeficit                                                                                          |  |         | (243,170  | )           |  |   | (234,750  | )  |
| Accumulated othercomprehensiveincome                                                                        |  |         | 32,430    |             |  |   | 45,530    |    |
| Totalshareholders' equity                                                                                   |  |         | 525,630   |             |  |   | 545,910   |    |
| Totalliabilities, redeemable stock and shareholders' equity                                                 |  | $            | 2,202,140 |             |  | $      | 2,011,860 |    |
|                                                                                                        |  |         |      |             |  |   |      |    |
|                                                                                                             |

Seeaccompanying notes to the consolidated financial statements.

2

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METALDYNE CORPORATION CONSOLIDATEDSTATEMENT OF OPERATIONS (Dollars In Thousands Except Per ShareData)

|                                                              |  |                   |          |                  |  |               |          |              |  |        |           |         |  |        |          |         |  |  |
|--------------------------------------------------------------|--|-------------------|----------|------------------|--|---------------|----------|--------------|--|--------|-----------|---------|--|--------|----------|---------|--|--|
|                                                         |  | ThreeMonths Ended |          | Six Months Ended |
|                                                         |  | (Unaudited)       |          | (Unaudited)      |
|                                                         |  | June27, 2004      |          | June 29, 2003    |  | June 27, 2004 |          | June 29,2003 |
|                                                         |  |              |          | (Restated)       |  |          |          | (Restated)   |
| Netsales                                                     |  | $                 | 521,890  |             |  | $             | 390,540  |         |  | $      | 1,003,030 |    |  | $      | 772,460  |    |
| Costof sales                                                 |  |              | (469,500 | )           |  |          | (340,710 | )       |  |   | (898,430  | )  |  |   | (681,590 | )  |
| Grossprofit                                                  |  |              | 52,390   |             |  |          | 49,830   |         |  |   | 104,600   |    |  |   | 90,870   |    |
| Selling,general and administrativeexpenses                   |  |              | (31,250  | )           |  |          | (27,630  | )       |  |   | (62,470   | )  |  |   | (57,280  | )  |
| Restructuringcharges                                         |  |              | (1,520   | )           |  |          | (2,330   | )       |  |   | (1,710    | )  |  |   | (3,860   | )  |
| Losson disposition of manufacturing facilities               |  |              | —  |             |  |          | —  |         |  |   | (7,600    | )  |  |   | —  |    |
| Operatingprofit                                              |  |              | 19,620   |             |  |          | 19,870   |         |  |   | 32,820    |    |  |   | 29,730   |    |
|                                                         |  |              |     |             |  |          |     |         |  |   |      |    |  |   |     |    |
| Otherexpense, net:Interestexpense                            |  |              | (19,650  | )           |  |          | (17,280  | )       |  |   | (39,750   | )  |  |   | (35,200  | )  |
| Preferredstock dividends                                     |  |              | (4,710   | )           |  |          | —  |         |  |   | (8,970    | )  |  |   | —  |    |
| Non-cashgain on maturity of interest rate arrangements       |  |              | —  |             |  |          | —  |         |  |   | 6,590     |    |  |   | —  |    |
| Equitygain (loss) from affiliates, net                       |  |              | 2,980    |             |  |          | (80      | )       |  |   | 4,440     |    |  |   | (2,710   | )  |
| Other,net                                                    |  |              | (1,040   | )           |  |          | (2,110   | )       |  |   | (3,420    | )  |  |   | (5,770   | )  |
|                                                         |  |              |     |             |  |          |     |         |  |   |      |    |  |   |     |    |
| Otherexpense, net                                            |  |              | (22,420  | )           |  |          | (19,470  | )       |  |   | (41,110   | )  |  |   | (43,680  | )  |
|                                                         |  |              |     |             |  |          |     |         |  |   |      |    |  |   |     |    |
| Income(loss) before income taxes                             |  |              | (2,800   | )           |  |          | 400      |         |  |   | (8,290    | )  |  |   | (13,950  | )  |
| Incometax expense (benefit)                                  |  |              | 370      |             |  |          | (660     | )       |  |   | 130       |    |  |   | (3,950   | )  |
| Netincome (loss)                                             |  |              | (3,170   | )           |  |          | 1,060    |         |  |   | (8,420    | )  |  |   | (10,000  | )  |
| Preferredstock dividends                                     |  |              | —  |             |  |          | 2,280    |         |  |   | —   |    |  |   | 4,500    |    |
| Lossattributable to common stock                             |  | $                 | (3,170   | )           |  | $             | (1,220   | )       |  | $      | (8,420    | )  |  | $      | (14,500  | )  |
| Basicand diluted loss per share attributable to common stock |  | $                 | (0.07    | )           |  | $             | (0.03    | )       |  | $      | (0.20     | )  |  | $      | (0.34    | )  |
|                                                              |

Seeaccompanying notes to the consolidated financial statements.

3

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METALDYNE CORPORATION CONSOLIDATEDSTATEMENT OF CASH FLOWS (Dollars inthousands)

|                                                                                          |  |                |          |               |  |        |          |         |  |        |
|------------------------------------------------------------------------------------------|--|----------------|----------|---------------|--|--------|----------|---------|--|--------|
|                                                                                     |  | SixMonthsEnded |
|                                                                                     |  | (Unaudited)    |
|                                                                                     |  | June27,2004    |          | June 29, 2003 |
|                                                                                     |  |           |          | (Restated)    |
| Operatingactivities:                                                                     |  |           |     |          |  |   |     |    |  |   |   |   |
| Netloss                                                                                  |  | $              | (8,420   | )        |  | $      | (10,000  | )  |
| Adjustmentsto reconcile net loss to net cash provided by (used for) operatingactivities: |  |           |     |          |  |   |     |    |  |   |   |   |
| Depreciationandamortization                                                              |  |           | 64,000   |          |  |   | 52,240   |    |
| Non-cashstock award expense                                                              |  |           | 470      |          |  |   | 1,530    |    |
| Debtfee amortization                                                                     |  |           | 1,340    |          |  |   | 1,100    |    |
| Fixedasset losses                                                                        |  |           | 750      |          |  |   | 2,200    |    |
| Loss ondisposition of manufacturingfacilities                                            |  |           | 7,600    |          |  |   | —  |    |
| Deferredincome taxes                                                                     |  |           | (70      | )        |  |   | 3,100    |    |
| Preferredstock dividends                                                                 |  |           | 8,970    |          |  |   | —  |    |
| Non-cash interest expense(interestaccretion)                                             |  |           | —  |          |  |   | 3,500    |    |
| Non-cashgain on maturity of interest ratearrangements                                    |  |           | (6,590   | )        |  |   | —  |    |
| Equity(earnings) losses from affiliates, net ofdividends                                 |  |           | (4,440   | )        |  |   | 2,710    |    |
| Other,net                                                                                |  |           | (1,170   | )        |  |   | (1,610   | )  |
| Changesin assets and liabilities, net of acquisition/disposition ofbusiness:             |  |           |     |          |  |   |     |    |
| Receivables,net                                                                          |  |           | (77,820  | )        |  |   | (3,920   | )  |
| Net proceeds(redemption) of accounts receivable securitizationfacility                   |  |           | 47,000   |          |  |   | —  |    |
| Inventories                                                                              |  |           | (20,320  | )        |  |   | (3,600   | )  |
| Refundableincome taxes                                                                   |  |           | —  |          |  |   | 15,620   |    |
| Prepaidexpenses and otherassets                                                          |  |           | (8,780   | )        |  |   | (5,930   | )  |
| Accountspayable and accruedliabilities                                                   |  |           | 49,320   |          |  |   | (34,700  | )  |
| Netcash provided by operatingactivities                                                  |  |           | 51,840   |          |  |   | 22,240   |    |
| Investingactivities:                                                                     |  |           |     |          |  |   |     |    |
| Capitalexpenditures                                                                      |  |           | (63,970  | )        |  |   | (54,370  | )  |
| Proceedsfrom sale/leaseback of fixedassets                                               |  |           | 72,530   |          |  |   | 8,460    |    |
| Proceeds ondisposition of manufacturing facilities                                       |  |           | (500     | )        |  |   | 22,570   |    |
| Proceeds from sale ofTriMas shares                                                       |  |           | —  |          |  |   | 20,000   |    |
| Acquisition ofbusiness                                                                   |  |           | (217,850 | )        |  |   | (7,650   | )  |
| Proceedson sale of jointventure                                                          |  |           | 1,260    |          |  |   | —  |    |
| Investment injointventure                                                                |  |           | —  |          |  |   | (20,000  | )  |
| Netcash used for investingactivities                                                     |  |           | (208,530 | )        |  |   | (30,990  | )  |
| Financingactivities:                                                                     |  |           |     |          |  |   |     |    |
| Principal payments ofterm loanfacilities                                                 |  |           | (440     | )        |  |   | (500     | )  |
| Proceeds ofrevolving creditfacility                                                      |  |           | 117,090  |          |  |   | 180,000  |    |
| Principalpayments of revolving creditfacility                                            |  |           | (64,790  | )        |  |   | (180,000 | )  |
| Proceedsof senior subordinated notes, due 2014                                           |  |           | 31,750   |          |  |   | —  |    |
| Proceeds of otherdebt                                                                    |  |           | 780      |          |  |   | 1,420    |    |
| Principal payments ofother debt                                                          |  |           | (5,970   | )        |  |   | (4,220   | )  |
| Issuanceof Series A-1 preferred stock                                                    |  |           | 64,450   |          |  |   | —  |    |
| Netcash provided by (used for) financingactivities                                       |  |           | 142,870  |          |  |   | (3,300   | )  |
| Netdecrease incash                                                                       |  |           | (13,820  | )        |  |   | (12,050  | )  |
| Cashand cash equivalents, beginning ofperiod                                             |  |           | 13,820   |          |  |   | 19,130   |    |
| Cashand cash equivalents, end ofperiod                                                   |  | $              | —  |          |  | $      | 7,080    |    |
| Supplementary cash flowinformation:                                                      |  |           |     |          |  |   |     |    |
| Cash paid (refunded)for income taxes, net                                                |  | $              | 6,780    |          |  | $      | (12,440  | )  |
| Cash paid for interest                                                                   |  | $              | 37,680   |          |  | $      | 31,570   |    |
|                                                                                     |  |           |     |          |  |   |     |    |  |   |   |   |
|                                                                                          |

Seeaccompanying notes to the consolidated financialstatements.

4

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS

1.    Business andOther Information

Metaldyne Corporation("Metaldyne" or "theCompany") is a leading global manufacturer of highlyengineered metal components for the global light vehicle market. Ourproducts include metal-formed and precision-engineered components andmodular systems used in vehicle transmission, engine and chassisapplications.

The Company maintains a fifty-two/fifty-three weekfiscal year ending on the Sunday nearest to December 31. Fiscal years2004 and 2003 each comprise fifty-two weeks and end on January 2, 2005and December 28, 2003, respectively. All year and quarter referencesrelate to the Company's fiscal year and fiscal quarters unlessotherwise stated.

In the opinion of Company management, theunaudited financial statements contain all adjustments, includingadjustments of a normal recurring nature, necessary to present fairlythe financial position, results of operations and cash flows for theperiods presented. These statements should be read in conjunction withthe Company's financial statements included in the Annual Reporton Form 10-K for the fiscal year ended December 28, 2003 (the"2003 Form 10-K"). The results of operationsfor the period ended June 27, 2004 are not necessarily indicative ofthe results for the full year.

Certain prior year amounts havebeen reclassified to reflect current yearclassification.

2.    Restatement

In September 2004,the Company announced the completion of an independent investigationinto certain accounting matters ("IndependentInvestigation") and its determination that certainpreviously issued financial statements required restatement. TheCompany's financial statements for fiscal years 2001 and 2002have been restated in the 2003 Form 10-K. In addition, theCompany's quarterly financial information for the first threefiscal quarters of 2003 also has been restated to reflect adjustmentsto previously reported information on Form 10-Q, as described elsewhereherein.

The restatement arose primarily out of informationobtained through an investigation conducted by a special committee ofthe board of directors which was comprised of one independent directorof the Company. The special committee retained independent counsel,Sidley Austin Brown & Wood LLP("Sidley"), and in turn Sidley retainedDeloitte & Touche LLP ("D&T"), a firmwith forensic accounting expertise, to assist Sidley in theinvestigation. The Independent Investigation was initiated as a resultof certain admissions made by an employee of the Company andinformation obtained by the Company's internal audit staff. Theinvestigation expanded beyond its initial focus on thisemployee's admissions of intentional overstatements andunderstatements of income at the Company's Sintered division intoaccounting practices in other areas of the Company concerning thesmoothing of earnings through the use of accrual and allowance accountsand the recognition of tooling income. The restatement resulting fromthe Independent Investigation was limited to the periods from November30, 2000 through 2003.

Specifically, a former Sintered divisioncontroller admitted that, following the acquisition of the Company inNovember 2000, income at the Sintered division from 2000 through 2003was deliberately understated in an effort to disguise thisemployee's previous overstatements of income at the Sintereddivision during the period from 1996 through 1999. There were threeprimary admissions from the former Sintered divisional controllerrelated to the period 1996 to 1999. During this time, he asserted thatincome was overstated by (1)  overstating fixed assets,(2)  understating liabilities (notably accounts payable), and(3)  using a complex set of manual journal entries every month to"disguise" the effects of (1) and (2). Therestatement adjustments reflect the Company's correction of thesematters, based upon the findings of the Independent Investigation. Thecorrections of these Sintered division accounts indicate thatcumulative net losses for the periods investigated were actuallyunderstated as a result of these intentional actions.

Based uponcertain findings within the Sintered division, the investigation wasexpanded to encompass accounting practices in other areas of theCompany concerning the use of accrual and 

5

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

allowance accounts and the recognition oftooling income for the period from 2001 through 2003. Thisinvestigation involved an extensive review of journal entries of over aspecified amount made over a three year period. As a result of theexpanded investigation, the Company became aware of instances ofinappropriate accounting relating to allowances and accruals, which hadthe effect of "smoothing" earnings forcertain periods. Specifically, the Company concluded from theinvestigative findings that there were instances when accruals had beenestablished to cover unanticipated expenses, accruals had beenincreased or decreased based upon performance, and/or accruals had beenrecorded different from estimated or analyzed amounts. The Company alsoidentified from the investigative findings a few instances of incorrecttiming in the recognition of tooling income. The investigationcategorized journal entries from the relevant periods for analysis bythe Company and review by the Company with its current and formerindependent auditors. The Company analyzed those categories of entries,which the investigation determined to be either potentially inaccurate(i.e., warranting further review) or unknown (i.e., insufficientdocumentation for third party evaluation).

The restatementadjustments address (1) inappropriate actions taken at the Sintereddivision by correcting overstated balances for property, plant andequipment, recognizing lower related depreciation expense andrecognizing the continuing effect of adjustments made in prior periodson previously reported balances of other accounts such as accountspayable and accounts receivable; (2) the correction of certain journalentries, primarily relating to certain reserve and tooling accounts,identified as a result of the Independent Investigation; and (3)certain other adjustments not related to the Sintered investigation orthe review of the accrual and tooling accounts.

TotalAdjustments.    The following table presents the impact on netincome of the restatement adjustments for the three and six monthsended June 29, 2003:

|                                           |  |                                |       |                               |  |        |         |         |  |  |
|-------------------------------------------|--|--------------------------------|-------|-------------------------------|--|--------|---------|---------|--|--|
|                                      |  | (Inthousands)                  |
|                                      |  | ThreeMonths EndedJune 29, 2003 |       | Six Months EndedJune 29, 2003 |
| Net income (loss) as previouslyreported   |  | $                              | 480   |                          |  | $      | (8,890  | )  |
| Sinteredadjustments                       |  |                           | 1,000 |                          |  |   | (1,280  | )  |
| Tooling,accrual and allowance adjustmemts |  |                           | 90    |                          |  |   | (290    | )  |
| Other adjustments                         |  |                           | (150  | )                        |  |   | (220    | )  |
| Income tax effect                         |  |                           | (360  | )                        |  |   | 680     |    |
| Restatednet income (loss)                 |  | $                              | 1,060 |                          |  | $      | (10,000 | )  |
|                                           |

6

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

The following table summarizes the impacton net income of the restatement adjustments on the consolidatedstatement of operations for the three and six months ended June 29,2003:

|                                                              |  |                                 |          |                               |  |               |         |                      |  |               |          |            |  |        |          |         |  |        |         |         |  |        |          |         |  |  |
|--------------------------------------------------------------|--|---------------------------------|----------|-------------------------------|--|---------------|---------|----------------------|--|---------------|----------|------------|--|--------|----------|---------|--|--------|---------|---------|--|--------|----------|---------|--|--|
|                                                         |  |                            |          |                          |  | (Inthousands) |         |
|                                                         |  | ThreeMonths Ended June 29, 2003 |          | Six Months Ended June 29,2003 |
|                                                         |  | AsPreviouslyReported            |          | Restate-ments                 |  | AsRestated    |         | AsPreviouslyReported |  | Restate-ments |          | AsRestated |
|                                                         |  |                            |     |                          |  |          |    |                 |  |          |     |       |  |   |     |    |  |   |    |    |  |   |     |    |
| Netsales                                                     |  | $                               | 390,290  |                          |  | $             | 250     |                 |  | $             | 390,540  |       |  | $      | 771,620  |    |  | $      | 840     |    |  | $      | 772,460  |    |
| Costof goods sold                                            |  |                            | (340,780 | )                        |  |          | 70      |                 |  |          | (340,710 | )     |  |   | (680,580 | )  |  |   | (1,010  | )  |  |   | (681,590 | )  |
| Grossprofit                                                  |  |                            | 49,510   |                          |  |          | 320     |                 |  |          | 49,830   |       |  |   | 91,040   |    |  |   | (170    | )  |  |   | 90,870   |    |
|                                                         |  |                            |     |                          |  |          |    |                 |  |          |     |       |  |   |     |    |  |   |    |    |  |   |     |    |
| Selling,general and administrative expenses                  |  |                            | (27,630  | )                        |  |          | — |                 |  |          | (27,630  | )     |  |   | (57,280  | )  |  |   | — |    |  |   | (57,280  | )  |
| Restructuringcharges                                         |  |                            | (2,330   | )                        |  |          | — |                 |  |          | (2,330   | )     |  |   | (3,860   | )  |  |   | — |    |  |   | (3,860   | )  |
| Operatingprofit                                              |  |                            | 19,550   |                          |  |          | 320     |                 |  |          | 19,870   |       |  |   | 29,990   |    |  |   | (170    | )  |  |   | 29,730   |    |
|                                                         |  |                            |     |                          |  |          |    |                 |  |          |     |       |  |   |     |    |  |   |    |    |  |   |     |    |
| Otherexpense,net:                                            |  |                            |     |                          |  |          |    |                 |  |          |     |       |  |   |     |    |  |   |    |    |  |   |     |    |
| Interestexpense                                              |  |                            | (17,240  | )                        |  |          | (40     | )               |  |          | (17,280  | )     |  |   | (35,120  | )  |  |   | (80     | )  |  |   | (35,200  | )  |
| Equityloss from affiliates, net                              |  |                            | (80      | )                        |  |          | — |                 |  |          | (80      | )     |  |   | (2,710   | )  |  |   | — |    |  |   | (2,710   | )  |
| Other,net                                                    |  |                            | (2,760   | )                        |  |          | 650     |                 |  |          | (2,110   | )     |  |   | (4,220   | )  |  |   | (1,550  | )  |  |   | (5,770   | )  |
| Otherexpense, net                                            |  |                            | (20,080  | )                        |  |          | 610     |                 |  |          | (19,470  | )     |  |   | (42,050  | )  |  |   | (1,630  | )  |  |   | (43,680  | )  |
|                                                         |  |                            |     |                          |  |          |    |                 |  |          |     |       |  |   |     |    |  |   |    |    |  |   |     |    |
| Income(loss) before income taxes                             |  |                            | (530     | )                        |  |          | 930     |                 |  |          | 400      |       |  |   | (12,150  | )  |  |   | (1,800  | )  |  |   | (13,950  | )  |
| Incometax benefit                                            |  |                            | (1,010   | )                        |  |          | 350     |                 |  |          | (660     | )     |  |   | (3,260   | )  |  |   | 690     |    |  |   | (3,950   | )  |
| Netincome (loss)                                             |  | $                               | 480      |                          |  | $             | 580     |                 |  | $             | 1,060    |       |  | $      | (8,890   | )  |  | $      | (1,110  | )  |  | $      | (10,000  | )  |
|                                                         |  |                            |     |                          |  |          |    |                 |  |          |     |       |  |   |     |    |  |   |    |    |  |   |     |    |
| Basicand diluted loss per share attributable to common stock |  | $                               | (0.04    | )                        |  | $             | 0.01    |                 |  | $             | (0.03    | )     |  | $      | (0.31    | )  |  | $      | (0.03   | )  |  | $      | (0.34    | )  |
|                                                              |

7

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

The following table summarizes the impacton cash flow for the restatement adjustments for the six months endedJune 29,2003:

|                                                     |  |                      |          |              |  |            |         |         |  |        |          |         |  |  |
|-----------------------------------------------------|--|----------------------|----------|--------------|--|------------|---------|---------|--|--------|----------|---------|--|--|
|                                                |  | (Inthousands)        |
|                                                |  | AsPreviouslyReported |          | Restatements |  | AsRestated |
|                                                |  |                 |     |         |  |       |    |    |  |   |     |    |
| Cashflows from operatingactivities:                 |  |                 |     |         |  |       |    |    |  |   |     |    |
| Net cash usedfor operating activities               |  | $                    | 23,900   |         |  | $          | (1,660  | )  |  | $      | 22,240   |    |
|                                                |  |                 |     |         |  |       |    |    |  |   |     |    |
| Cashflows from investingactivities:                 |  |                 |     |         |  |       |    |    |  |   |     |    |
| Capitalexpenditures                                 |  |                 | (56,100  | )       |  |       | 1,730   |    |  |   | (54,370  | )  |
| Proceedsfrom sale/leaseback of fixed assets         |  |                 | 8,460    |         |  |       | — |    |  |   | 8,460    |    |
| Dispositionof businesses to a related party         |  |                 | 22,570   |         |  |       | — |    |  |   | 22,570   |    |
| Proceedsform sale of TriMas shares                  |  |                 | 20,000   |         |  |       | — |    |  |   | 20,000   |    |
| Acquisitionof business, net                         |  |                 | (7,650   | )       |  |       | — |    |  |   | (7,650   | )  |
| Investmentin joint venture                          |  |                 | (20,000  | )       |  |       | — |    |  |   | (20,000  | )  |
| Netcash provided by (used for) investing activities |  |                 | (32,720  | )       |  |       | 1,730   |    |  |   | (30,990  | )  |
|                                                |  |                 |     |         |  |       |    |    |  |   |     |    |
| Cashflows from financingactivities:                 |  |                 |     |         |  |       |    |    |  |   |     |    |
| Principalpayments of term loan facilities           |  |                 | (500     | )       |  |       | — |    |  |   | (500     | )  |
| Proceeds ofrevolving credit facility                |  |                 | 180,000  |         |  |       | — |    |  |   | 180,000  |    |
| Principalpayments of revolving credit facility      |  |                 | (180,000 | )       |  |       | — |    |  |   | (180,000 | )  |
| Proceedsof other debt                               |  |                 | 1,420    |         |  |       | — |    |  |   | 1,420    |    |
| Principalpayments of other debt                     |  |                 | (4,150   | )       |  |       | (70     | )  |  |   | (4,220   | )  |
| Netcash provided by (used for) financing activities |  |                 | (3,230   | )       |  |       | (70     | )  |  |   | (3,300   | )  |
|                                                |  |                 |     |         |  |       |    |    |  |   |     |    |
| Netincrease (decrease) in cash                      |  |                 | (12,050  | )       |  |       | — |    |  |   | (12,050  | )  |
| Cashand cash equivalents, beginning of period       |  |                 | 19,130   |         |  |       | — |    |  |   | 19,130   |    |
| Cashand cash equivalents, end of period             |  | $                    | 7,080    |         |  | $          | — |    |  | $      | 7,080    |    |
|                                                     |

3.    StockOptions and Awards

The following disclosure for the financialstatements for the period ended June 27, 2004 is based on the Companycontinuing to account for stock-based employee compensation using theintrinsic value method under Accounting Principles Board("APB") No. 25 and relatedinterpretations.

The Company has one stock-based employeecompensation plan. No stock-based employee compensation cost isreflected in net income, as all options granted under this plan had anexercise price equal to the market value of the underlying common stockon the date of grant. The following table illustrates the effect on netincome and earnings per share if the Company had applied the fair valuerecognition provisions of SFAS No. 123, "Accounting forStock-Based Compensation," to stock-based employeecompensation.

8

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

|                                                                                                                                           |  |                                       |        |                 |  |               |        |              |  |        |        |         |  |        |         |         |  |  |
|-------------------------------------------------------------------------------------------------------------------------------------------|--|---------------------------------------|--------|-----------------|--|---------------|--------|--------------|--|--------|--------|---------|--|--------|---------|---------|--|--|
|                                                                                                                                      |  | (Inthousands except per shareamounts) |
|                                                                                                                                      |  | ThreeMonths Ended                     |        | Six MonthsEnded |
|                                                                                                                                      |  | June 27,2004                          |        | June 29, 2003   |  | June 27, 2004 |        | June 29,2003 |
|                                                                                                                                      |  |                                  |        | (Restated)      |  |          |        | (Restated)   |
| Netloss attributable to common stock, as reported                                                                                         |  | $                                     | (3,170 | )          |  | $             | 1,060  |         |  | $      | (8,420 | )  |  | $      | (10,000 | )  |
| Deduct:Total stock-based employee compensation expense determined under fairvalue based method for all awards, net of related tax effects |  |                                  | (50    | )          |  |          | (470   | )       |  |   | (170   | )  |  |   | (940    | )  |
| Proforma net loss attributable to commonstock                                                                                             |  | $                                     | (3,220 | )          |  | $             | 590    |         |  | $      | (8,590 | )  |  | $      | (10,940 | )  |
| Losspershare:                                                                                                                             |  |                                  |   |            |  |          |   |         |  |   |   |    |  |   |    |    |
| Basicand diluted – as reported                                                                                                      |  | $                                     | (0.07  | )          |  | $             | (0.03  | )       |  | $      | (0.20  | )  |  | $      | (0.34   | )  |
| Basicand diluted – pro forma for stock-basedcompensation                                                                            |  | $                                     | (0.07  | )          |  | $             | (0.04  | )       |  | $      | (0.20  | )  |  | $      | (0.36   | )  |
|                                                                                                                                      |  |                                  |   |            |  |          |   |         |  |   |   |    |  |   |    |    |
|                                                                                                                                           |

Beginningin 2004, the Company offered eligible employees the opportunity toparticipate in a new Voluntary Stock Option Exchange Program (the"Program"), to exchange all of theiroutstanding options to purchase shares of the Company's commonstock granted under the Long Term Equity Incentive Plan (the"Plan") for new stock options and restrictedstock units to be granted under the Plan. Participation in the Programis voluntary; however, elections were required to be received byJanuary 14, 2004, with new stock options to be granted on or after July15, 2004 and restricted stock units granted on January 15, 2004.Non-eligible participants in the existing Plan and those eligibleemployees not electing to participate in the new Program will continueto be eligible to participate in the existing Plan. Stock compensationexpense for the six months ended June 27, 2004 was $0.5 million.

4.    Accounts Receivable Securitization and FactoringAgreements

The Company has entered into an arrangement to sell,on an ongoing basis, the trade accounts receivable of substantially alldomestic business operations to MTSPC, Inc.("MTSPC"), a wholly owned subsidiary of theCompany. MTSPC from time to time may sell an undivided fractionalownership interest in the pool of receivables up to approximately $150million to a third party multi-seller receivables funding company. Thenet proceeds of sale are less than the face amount of accountsreceivable sold by an amount that approximates the purchaser'sfinancing costs, which amounted to a total of $2.3 million and $2.0million for the six months ended June 27, 2004 and June 29, 2003 (asrestated), respectively, and is included in other expense, net in theCompany's consolidated statement of operations. At June 27, 2004,the Company's funding under the facility was $47.0 million with$44.5 million available but not utilized. The discount rate at June 27,2004 was 2.24% compared to 2.14% at December 28, 2003.The usage fee under the facility is 1.5%. In addition, theCompany is required to pay a fee of 0.5% on the unused portionof the facility. This facility expires in November 2005.

TheCompany has entered into agreements with international invoicefactoring companies to sell customer accounts receivable of Metaldyneforeign locations in France, Germany, Spain, United Kingdom and Mexicoon a non-recourse basis. As of June 27, 2004, the Company had availableapproximately $67 million from these commitments, and approximately$57.8 million of receivables were sold under these programs. TheCompany pays a commission to the factoring company plus interest fromthe date the receivables are sold to the date of customer payment.Commission expense related to these agreements are recorded in otherexpense, net on the Company's consolidated statement ofoperations.

To facilitate the collection of funds from operatingactivities, the Company has entered into accelerated payment collectionprograms with its largest customers. At June 27, 2004, the Company

9

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

received approximately $57 million under theaccelerated collection programs. The Company was recently notified thata portion of this program would expire in 2004, with the majority ofthe program expiring in 2005. While the impact of the discontinuance ofthese programs may be partially offset by a greater utilization of theaccounts receivable securitization facility, the Company is examiningother alternative programs in the marketplace, as well as enhancedterms directly from its customers. However, the Company may not be ableto reach a favorable resolution in a timely manner, and the newarrangements may be less advantageous to the Company. If the Company isunable to replace these arrangements, it could adversely affect itsliquidity and future covenant compliance under its senior securedcredit facility. In addition, if the Company fails to renew itsaccounts receivable securitization agreement, which expires in November2005, it could have adverse effects on the Company's liquidityand future covenant compliance. However, the Company had approximately$87  million of undrawn and available commitments on itsrevolving credit facility at June  27, 2004.

5.    Inventories

Inventories by component are asfollows:

|                 |  |               |         |                   |  |        |        |        |  |  |
|-----------------|--|---------------|---------|-------------------|--|--------|--------|--------|--|--|
|            |  | (Inthousands) |
|            |  | June 27,2004  |         | December 28, 2003 |
| Finished goods  |  | $             | 32,630  |              |  | $      | 25,710 |   |
| Work in process |  |          | 27,260  |              |  |   | 29,480 |   |
| Raw materials   |  |          | 53,980  |              |  |   | 28,490 |   |
|            |  | $             | 113,870 |              |  | $      | 83,680 |   |
|                 |

6.    Goodwilland Other Intangible Assets

At June 27, 2004, the goodwillbalance was approximately $583 million. For purposes of testing thisgoodwill for potential impairment, fair values were determined basedupon the discounted cash flows of the reporting units using a9.5% discount rate as of December 28, 2003. This assessment wascompleted for the year ended December 28, 2003, which indicated thatthe fair value of these units exceeded their carrying values.

10

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

Acquired Intangible Assets

Thechange in the gross carrying amount of acquired intangible assets isprimarily attributable to the exchange impact from foreigncurrency.

|                                                           |  |                                            |         |                         |  |                     |         |                     |  |                         |  |                     |         |        |  |        |         |         |  |           |  |  |  |  |  |  |
|-----------------------------------------------------------|--|--------------------------------------------|---------|-------------------------|--|---------------------|---------|---------------------|--|-------------------------|--|---------------------|---------|--------|--|--------|---------|---------|--|-----------|--|--|--|--|--|--|
|                                                      |  | (Inthousands, except weighted averagelife) |
|                                                      |  | As ofJune 27, 2004                         |         | As of December 28,2003  |
|                                                      |  | GrossCarryingAmount                        |         | AccumulatedAmortization |  | WeightedAverageLife |         | GrossCarryingAmount |  | AccumulatedAmortization |  | WeightedAverageLife |
| AmortizedIntangibleAssets:                                |  |                                       |    |                    |  |                |    |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| CustomerContracts                                         |  | $                                          | 93,700  |                    |  | $                   | (36,010 | )              |  | 8.2years                |  | $                   | 94,420  |   |  | $      | (31,050 | )  |  | 8.2years  |
| Technology and Other                                      |  |                                       | 163,870 |                    |  |                | (40,440 | )              |  | 14.9years               |  |                | 165,280 |   |  |   | (35,290 | )  |  | 14.9years |
| Total                                                     |  | $                                          | 257,570 |                    |  | $                   | (76,450 | )              |  | 13.6years               |  | $                   | 259,700 |   |  | $      | (66,340 | )  |  | 13.6years |
|                                                      |  |                                       |    |                    |  |                |    |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| AggregateAmortization Expense (Included in Cost ofSales): |  |                                       |    |                    |  |                |    |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| Forthe six months endedJune 27, 2004                      |  |                                       |    |                    |  | $                   | 11,890  |                |  |                    |  |                |    |   |  |   |    |    |  |      |
|                                                      |  |                                       |    |                    |  |                |    |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| EstimatedAmortizationExpense:                             |  |                                       |    |                    |  |                |    |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| Forthe year endingJanuary 2, 2005                         |  |                                       |    |                    |  |                | 23,500  |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| Forthe year ending December 31, 2005                      |  |                                       |    |                    |  |                | 23,100  |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| Forthe year ending December 31, 2006                      |  |                                       |    |                    |  |                | 23,100  |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| Forthe year ending December 31, 2007                      |  |                                       |    |                    |  |                | 22,300  |                |  |                    |  |                |    |   |  |   |    |    |  |      |
| Forthe year ending December 31,2008                       |  |                                       |    |                    |  |                | 21,600  |                |  |                    |  |                |    |   |  |   |    |    |  |      |
|                                                           |

Goodwill

The changes in the carrying amount of goodwill for the six monthsended June 27, 2004 are asfollows:

|                                      |  |               |         |           |  |        |         |         |  |        |         |         |  |        |         |         |  |  |
|--------------------------------------|--|---------------|---------|-----------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                 |  | (Inthousands) |
|                                 |  | Chassis       |         | Driveline |  | Engine |         | Total   |
| Balanceas of December 28, 2003       |  |          | 61,630  |      |  |   | 371,010 |    |  |   | 151,750 |    |  |   | 584,390 |    |
| Exchangeimpact from foreign currency |  |          | — |      |  |   | (1,290  | )  |  |   | (340    | )  |  |   | (1,630  | )  |
| Balanceas of June 27, 2004           |  | $             | 61,630  |      |  | $      | 369,720 |    |  | $      | 151,410 |    |  | $      | 582,760 |    |
|                                      |

7.    DerivativeFinancial Instruments

The Company manages its exposure tochanges in interest rates through the use of interest rate protectionagreements. These interest rate derivatives are designated as cash flowhedges. The effective portion of each derivative's gain or lossis initially reported as a component of other comprehensive income(loss) and subsequently reclassified into earnings when the forecastedtransaction affects earnings. The Company does not use derivatives forspeculative purposes.

In February 2001, the Company entered intointerest rate protection agreements with various financial institutionsto hedge a portion of its interest rate risk related to the term loanborrowings under 

11

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

its credit facility. These agreements includetwo interest rate collars with a term of three years, a total notionalamount of $200 million as of December 28, 2003, and a three-month LIBORinterest rate cap and floor of 7% and approximately 4.5%,respectively. The agreements also include four interest rate capsat a three-month LIBOR interest rate of 7% with a totalnotional amount of $301 million as of December 28, 2003.

All of the Company's interest rate protection arrangementsmatured in February 2004 and, as a result of their maturity, acumulative pre-tax non-cash gain of $6.6 million was recorded and isreflected as a non-cash gain on maturity of interest rate arrangementsin the Company's consolidated statement of operations for the sixmonths ended June 27, 2004. Prior to their maturity, $6.6million was included in accumulated other comprehensive income relatedto these arrangements. Prior to the expiration of these agreements, theCompany recognized additional interest expense of $1.1 million duringthe six months ended June 27, 2004.

8.    SegmentInformation

The Company has defined a segment as a componentwith business activity resulting in revenue and expense that hasseparate financial information evaluated regularly by theCompany's chief operating decision maker and its board ofdirectors in determining resource allocation and assessingperformance.

The Company has established Adjusted EarningsBefore Interest Taxes Depreciation and Amortization("Adjusted EBITDA") as a key indicator offinancial operating performance and as a measure of cash generatingcapability. The Company defines Adjusted EBITDA as net income (loss)before cumulative effect of accounting change and before interest,taxes, depreciation, amortization, asset impairment, non-cash losses onsale-leaseback of property and equipment and non-cash restricted stockaward expense. Adjusted EBITDA is a non-GAAP measure and thereforecaution must be exercised in using Adjusted EBITDA as an analyticaltool and should not be used in isolation or as a substitute foranalysis of our results as reported under GAAP. In evaluating AdjustedEBITDA, management deems it important to consider the quality of theCompany's underlying earnings by separately identifying certaincosts undertaken to improve the Company's results, such as costsrelated to consolidating facilities and businesses in an effort toeliminate duplicative costs or achieve efficiencies, costs related tointegrating acquisitions and restructuring costs related to expensereduction efforts.

The Company is comprised of three reportablesegments: Chassis, Driveline and Engine. In 2003, the Company moved oneof its European operations that had historically been part of theChassis segment to the Engine segment, and moved one of its domesticoperations that had historically been part of the Driveline segment tothe Engine segment. In 2004, the Company moved one of its NorthAmerican operations that had historically been part of the Enginesegment to the Chassis segment. The prior year amounts have beenrestated to reflect these changes for comparison purposes.

CHASSIS — Manufactures components, modules and systems used ina variety of engineered chassis applications, including fittings,wheel-ends, axle shaft, knuckles and mini-corner assemblies. Thissegment utilizes a variety of processes including hot, warm and coldforging, powder metal forging and machinery and assembly.

DRIVELINE — Manufactures components, modules and systems,including precision shafts, hydraulic controls, hot and cold forgingsand integrated program management used in a broad range of transmissionapplications. These applications include transmission and transfer caseshafts, transmission valve bodies, cold extrusion and Hatebur hotforgings.

ENGINE — Manufactures a broad range of enginecomponents, modules and systems, including sintered metal, powdermetal, forged and tubular fabricated products used for a variety ofapplications. These applications include balance shaft modules andfront cover assemblies.

12

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

Segment activity for the three and sixmonths ended June 27, 2004 and June 29, 2003 (as restated) is asfollows:

|                                                |  |                   |         |                 |  |               |         |             |  |        |           |         |  |        |         |         |  |  |
|------------------------------------------------|--|-------------------|---------|-----------------|--|---------------|---------|-------------|--|--------|-----------|---------|--|--------|---------|---------|--|--|
|                                           |  | (Inthousands)     |
|                                           |  | ThreeMonths Ended |         | Six MonthsEnded |
|                                           |  | June27, 2004      |         | June 29,2003    |  | June 27, 2004 |         | June29,2003 |
|                                           |  |              |         | (Restated)      |  |          |         | (Restated)  |
| Sales                                          |  |
| Chassis                                        |  | $                 | 155,930 |            |  | $             | 37,600  |        |  | $      | 284,250   |    |  | $      | 77,470  |    |
| Driveline                                      |  |              | 202,810 |            |  |          | 202,860 |        |  |   | 398,240   |    |  |   | 403,180 |    |
| Engine                                         |  |              | 163,150 |            |  |          | 150,080 |        |  |   | 320,540   |    |  |   | 291,810 |    |
| Totalsales                                     |  | $                 | 521,890 |            |  | $             | 390,540 |        |  | $      | 1,003,030 |    |  | $      | 772,460 |    |
| AdjustedEBITDA                                 |  |              |    |            |  |          |    |        |  |   |      |    |  |   |    |    |
| Chassis                                        |  | $                 | 15,340  |            |  | $             | 3,780   |        |  | $      | 24,610    |    |  | $      | 7,470   |    |
| Driveline                                      |  |              | 18,110  |            |  |          | 22,690  |        |  |   | 40,380    |    |  |   | 41,480  |    |
| Engine                                         |  |              | 27,080  |            |  |          | 25,040  |        |  |   | 54,160    |    |  |   | 44,620  |    |
| OperatingEBITDA                                |  |              | 60,530  |            |  |          | 51,510  |        |  |   | 119,150   |    |  |   | 93,570  |    |
| Centralizedresources ("Corporate")             |  |              | (7,770  | )          |  |          | (4,860  | )      |  |   | (13,860   | )  |  |   | (12,290 | )  |
| TotalAdjusted EBITDA                           |  |              | 52,760  |            |  |          | 46,650  |        |  |   | 105,290   |    |  |   | 81,280  |    |
| Depreciation& amortization                 |  |              | (32,470 | )          |  |          | (27,290 | )      |  |   | (64,000   | )  |  |   | (52,240 | )  |
| Non-cashstock award expense                    |  |              | (240    | )          |  |          | (630    | )      |  |   | (470      | )  |  |   | (1,530  | )  |
| Losson disposition of manufacturing facilities |  |              | — |            |  |          | — |        |  |   | (7,600    | )  |  |   | — |    |
| Other,net included in Adjusted EBITDA          |  |              | (430    | )          |  |          | 1,140   |        |  |   | (400      | )  |  |   | 2,220   |    |
| Operatingprofit                                |  | $                 | 19,620  |            |  | $             | 19,870  |        |  | $      | 32,820    |    |  | $      | 29,730  |    |
|                                                |

|                 |  |               |           |                   |  |        |           |        |  |  |
|-----------------|--|---------------|-----------|-------------------|--|--------|-----------|--------|--|--|
|            |  | (Inthousands) |
|            |  | June 27,2004  |           | December 28, 2003 |
| **TotalAssets** |  |          |      |              |  |   |      |   |
| Chassis         |  | $             | 392,430   |              |  | $      | 121,260   |   |
| Driveline       |  |          | 987,010   |              |  |   | 953,520   |   |
| Engine          |  |          | 759,130   |              |  |   | 733,920   |   |
| Corporate(1)    |  |          | 64,020    |              |  |   | 203,160   |   |
| Total           |  | $             | 2,202,590 |              |  | $      | 2,011,860 |   |
|                 |

|                         |  |                 |        |               |  |        |        |        |  |  |
|-------------------------|--|-----------------|--------|---------------|--|--------|--------|--------|--|--|
|                    |  | SixMonths Ended |
|                    |  | June 27,2004    |        | June 29, 2003 |
| **CapitalExpenditures** |  |            |   |          |  |   |   |   |
| Chassis                 |  | $               | 21,710 |          |  | $      | 7,890  |   |
| Driveline               |  |            | 17,090 |          |  |   | 29,210 |   |
| Engine                  |  |            | 24,710 |          |  |   | 14,290 |   |
| Corporate               |  |            | 1,000  |          |  |   | 2,980  |   |
| Total                   |  | $               | 63,970 |          |  | $      | 54,370 |   |
|                         |

Intercompanysales for the quarter ended June 27, 2004 were $2.1 million and $0.6million for the Driveline and Engine segment, respectively.Intercompany sales for the quarter ended June 29, 2003 were $0.8million for the Engine segment. Intercompany sales for the six monthsended June 27, 2004 were $4  million and $1.5 million for theDriveline and Engine segments, respectively. Intercompany sales for thesix months ended June 29, 2003 were $1.6 million for the Enginesegment.

|     |                                                                                                                                                                                                |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Corporatetotal assets reflect the obligations associated with the AccountsReceivable Securitization program as discussed in Note 4, AccountsReceivable Securitization and FactoringAgreements. |

13

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

9.    Acquisitions

In thefirst quarter of 2004, effective December 31, 2003, the Companycompleted a transaction with DaimlerChrysler Corporation("DaimlerChrysler") that transferred fullownership of the New Castle Machining and Forge ("NewCastle") manufacturing operations to Metaldyne. SinceJanuary 2003, New Castle has been managed as a joint venture betweenMetaldyne and DaimlerChrysler; at December  28, 2003, theCompany's investment in this joint venture was approximately$22  million. The New Castle facility manufactures suspension andpowertrain components for Chrysler, Jeep and Dodge vehicles;additionally, Metaldyne has launched initiatives to expand the customerbase beyond DaimlerChrysler. The New Castle manufacturing operationsare part of the Company's Chassis segment.

As part of theNew Castle transaction, Metaldyne acquired Class A and Class B unitsrepresenting DaimlerChrysler's entire joint venture interest inNew Castle. In exchange, Metaldyne delivered to DaimlerChrysler $215million (before fees and expenses of approximately $5 million),comprised of $118.8 million in cash; $31.7 million in aggregateprincipal amount of a new issue of its 10% senior subordinatednotes; and $64.5 million in aggregate liquidation preference of itsSeries A-1 preferred stock. Included in the $5  million fees andexpenses is a $2.4  million transaction fee paid to HeartlandIndustrial Partners ("Heartland") pursuant tothe acquisition of New Castle. The cash portion of the considerationwas funded in part by the net cash proceeds of approximately $65million from the sale-leaseback of certain machinery and equipment witha third-party lessor, with the remainder funded throughMetaldyne's revolving credit facility.

The assets andliabilities of New Castle at December 31, 2003 consisted of thefollowing (inthousands):

|                            |  |        |         |        |  |  |
|----------------------------|--|--------|---------|--------|--|--|
| Currentassets              |  | $      | 13,370  |   |
| Property and equipment,net |  |   | 240,720 |   |
| Totalassets                |  |   | 254,090 |   |
| Totalliabilities           |  |   | 14,110  |   |
| Netassets                  |  | $      | 239,980 |   |
|                            |

The aboveassets and liabilities at the acquisition date, and are subject tochange based upon the final valuation and allocation of purchaseprice.

On May 30, 2003, the Company acquired a facility inGreensboro, North Carolina, from Dana Corporation("Dana") for approximately $7.7 million atclosing and agreed to pay an additional $1.4 million in cash over aperiod of time ending on December 31, 2004. The Company may also beobligated to pay up to an additional $1.4 million in cash on December31, 2004 depending upon the extent of new business awards at thefacility. The Greensboro facility became part of the Drivelinesegment's Transmission and Program Management division. TheGreensboro operation, which employs approximately 150 people, machinescast iron and aluminum castings, including various steering knucklesand aluminum carriers for light truck applications. The results ofoperations of the facility have been included in the consolidatedfinancial statements since that date.

As part of the agreementwith Dana, the Company agreed to obtain a third party buyer of theGreensboro facility and agreed to sign a lease agreement with thisparty. If the Company failed to obtain a third party buyer for thisproperty within 60 days of the acquisition, it agreed to pay Dana $10million to purchase the facility. To secure this arrangement, theCompany gave Dana a letter of credit of $10 million. On July 14, 2003,the Company subsequently entered in a long-term lease agreement with athird party, thereby releasing the Company from the $10 million letterof credit.

In addition, the Company signed a seven-year supplyagreement with Dana covering all existing business at Greensboro,including a right of last refusal on successor programs, as well as acommitment to award $20 million of new forging business to the Company.Dana has also issued purchase orders, to 

14

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

be satisfied at other of our facilities, forincremental other tube, gear and carrier business for a number ofplatforms. In September 2004, the Company terminated the supplyagreement with Dana.

10.    Asset Impairments andRestructuring Related Integration Actions

In fiscal 2003, theCompany entered into several restructuring arrangements whereby itincurred approximately $13.1 million of costs associated with severanceand facility closures. These actions include the completion of theEngine segment's European operation reorganization that wasinitiated in fiscal 2002 and completed in the first quarter of 2003 andactions within the Driveline segment's forging operations andadministrative departments to eliminate redundant headcount and adjustcosts to reflect the decline in the Company's forging revenue in2003. Also included in this charge are the severance costs to replacecertain members of the Company's executive management team andthe costs to restructure several departments in the Company'scorporate office, including the sales, human resources and informationtechnology departments. Restructuring costs incurred for the six monthsended June 27, 2004 are as follows: Driveline Group $1.1 million;Chassis Group $0.1 million; and Corporate $0.5 million. The Companyexpects to realize additional savings from these restructuring actionsin 2004 as reductions in employee-related expenses recognized in bothcost of goods sold and selling, general and administrative expense.

In the fourth quarter of 2003, the Company performed its FAS 144long-lived asset impairment test and recorded a pre-tax, non-cashimpairment write-down of $4.9 million. This charge was recorded toreduce the net book value of two facilities with negative operatingperformance to their current fair market value. These two facilitieswere sold on February 1, 2004 to an independent third party of whomthis sales price was used to determine the fair market value of thesetwo facilities. This assessment did not result in any asset impairmentfor the remaining Metaldyne locations (see Note 11).

The belowamounts represent total estimated cash payments, of which $5.4 millionand $6.6 million are recorded in accrued liabilities, with $1.3 million(which will primarily be paid out in 2005) and $2.6 million recorded inother long-term liabilities in the Company's consolidated balancesheet at June 27, 2004 and December 28, 2003, respectively. This tableprovides a rollforward of the restructuring accrual related to theabove restructuring actions as of June 27, 2004.

|                               |  |                    |         |                                           |  |                                           |         |                                           |  |        |         |         |  |        |         |         |  |        |        |          |  |  |
|-------------------------------|--|--------------------|---------|-------------------------------------------|--|-------------------------------------------|---------|-------------------------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--------|--------|----------|--|--|
|                          |  |               |         |                                      |  | (Inthousands)                             |         |
|                          |  | AcquisitionRelated |         |
|                          |  | SeveranceCosts     |         | 2002AdditionalSeveranceandOtherExit Costs |  | 2003AdditionalSeveranceandOtherExit Costs |         | 2004AdditionalSeveranceandOtherExit Costs |  | Total  |
| Balance atDecember 28, 2003   |  | $                  | 1,380   |                                      |  | $                                         | 360     |                                      |  | $      | 7,310   |    |  | $      | — |    |  | $      | 9,050  |     |
| Charges toexpense             |  |               | — |                                      |  |                                      | — |                                      |  |   | — |    |  |   | 1,710   |    |  |   | 1,710  |     |
| Cashpayments                  |  |               | (250    | )                                    |  |                                      | (230    | )                                    |  |   | (2,920  | )  |  |   | (580    | )  |  |   | (3,980 | ))  |
| Reversalof unutilized amounts |  |               | (80     | )                                    |  |                                      | — |                                      |  |   | — |    |  |   | — |    |  |   | (80    | )   |
| Balanceat June 27, 2004       |  | $                  | 1,050   |                                      |  | $                                         | 130     |                                      |  | $      | 4,390   |    |  | $      | 1,130   |    |  | $      | 6,700  |     |
|                               |

11.    Dispositions

On February 1, 2004, the Company sold its ownership of its BedfordHeights, Ohio and Rome, Georgia manufacturing operations to Lester PDC,a Kentucky-based aluminum die casting and machining company. These twoplants had combined 2003 sales of approximately $62 million and anoperating loss of approximately $14 million. For the first six monthsof 2003, these plants had sales of approximately $32 million and anoperating loss of approximately $3 million. The Company retained aninterest in approximately $5.6 million in working capital (principallyaccounts receivable). Cash paid in the transaction to buy out theremaining portion of the equipment that had previously been sold underan operating lease arrangement by the Company was approximately $6.1million, net of proceeds from Lester  PDC of $4.1 million. Thebuyer also agreed to sub-lease both the Bedford Heights, Ohio and the

15

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

Rome, Georgia facilities from the Companyfor an annual lease payment of approximately $600,000. Bothmanufacturing operations were part of the Company's Drivelinesegment. In connection with the disposition of these manufacturingfacilities, the Company recognized a charge of $7.6 million on theCompany's consolidated statement of operations as of June 27,2004. The charge represents the book value of approximately $12 millionin fixed assets and deferred financing fees offset by the $4.1 millionin cash consideration paid by Lester PDC for the assets.

On May9, 2003, the Company sold its Chassis Group's Fittings divisionto TriMas Corporation ("TriMas") for $22.6million plus the assumption of an operating lease. This transaction wasaccounted for as a sale of entities under common control, due to commonownership between TriMas and the Company. Therefore, the proceeds, inexcess of the book value, amounting to $6.3 million were recorded asequity and other investments in affiliates in the Company'sconsolidated balance sheet as of December 28, 2003. The Fittingsdivision, which is a leading manufacturer of specialized fittings andcold-headed parts used in automotive and industrial applications,became part of the TriMas Fastening Systems Group.

In April2003, TriMas exercised its right to repurchase 1 million shares of itscommon stock from the Company at $20 per share, the same price that itwas valued on June 6, 2002, the date of the Company's sale ofTriMas. As a result of this repurchase by TriMas, and as a result ofacquisitions performed by TriMas in 2003, the Company's ownershipin TriMas decreased to 5.75 million shares or approximately 28%of TriMas as of June 27, 2004.

12.    Mandatorily RedeemablePreferred Stock

As part of the New Castle transaction,Metaldyne issued 644,540 shares of $64.5 million in liquidation valueof redeemable Series A-1 preferred stock in exchange for interests inNew Castle held by DaimlerChrysler Corporation. The redeemable SeriesA-1 preferred shares are mandatorily redeemable on December 31, 2013.The Series A-1 preferred stockholders are entitled to receive, when, asand if declared by the Company's Board of Directors, cumulativequarterly cash dividends at a rate of 11% per annum plus2% per annum for any period for which there are any accrued andunpaid dividends. The preferred stock issued was valued at $64.5million as a preliminary estimate of the fair value of this security,pending the final valuation.

The Company has outstanding 361,001shares of $36.1 million in liquidation value ($34.1 million estimatedcarrying value for accounting purposes) of Series A preferred stock parvalue $1 and authorized 370,000 shares to Masco Corporation. TheCompany will accrete from the carrying value to the liquidation valueratably over the twelve-year period. The preferred stock is mandatorilyredeemable on December 31, 2012. Series A preferred stockholders areentitled to receive, when, as and if declared by the Company'sboard of directors, cumulative quarterly cash dividends at a rate of13% per annum for periods ending on or prior to December 31,2005 and 15% per annum for periods after December 31, 2005 plus2% per annum for any period for which there are any accrued andunpaid dividends.

The Company has outstanding 184,153 sharesvalued at $18.5 million of redeemable Series B preferred stock inexchange for interests in GMTI. The redeemable Series B preferredshares issued are mandatory redeemable on June 15, 2013. The Series Bpreferred stockholders are entitled to receive, when, as and ifdeclared by the Company's Board of Directors, cumulativesemi-annual cash dividends at a rate of 11.5% per annum. OnDecember 31, 2003, Heartland Industrial Partners, L.P.,Metaldyne's parent company, purchased all of the outstanding184,153 shares of redeemable Series B preferred stock from former GMTIshareholders.

Preferred stock dividends were $9.0 million and$4.7 million, while dividend cash payment were zero, for the six monthsended June 27, 2004 and June 29, 2003, respectively. Thus, unpaidaccrued dividends were $30.4 million and $18.4 million as of June 27,2004 and December 28, 2003, respectively. Redeemable preferred stock,consisting of outstanding shares and unpaid dividends, was $147.5million and $74.0 million in the Company's consolidated balancesheet at June 27, 2004 and December 28, 2003, respectively. As a resultof the Company's implementation of SFAS No. 150,"Accounting for Certain 

16

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

Financial Instruments with Characteristicsof both Liabilities and Equity," redeemable preferredstock has been reclassified as a long-term liability effectivebeginning in 2004.

13.    Earnings Per Share

Thefollowing reconciles the numerators and denominators used in thecomputations of basic and diluted earnings per common share:

|                                                               |  |                                       |         |                  |  |               |         |              |  |        |         |         |  |        |         |         |  |  |
|---------------------------------------------------------------|--|---------------------------------------|---------|------------------|--|---------------|---------|--------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                          |  | (Inthousands except per shareamounts) |
|                                                          |  | ThreeMonths Ended                     |         | Six Months Ended |
|                                                          |  | June 27, 2004                         |         | June 29,2003     |  | June 27, 2004 |         | June 29,2003 |
|                                                          |  |                                  |         | (Restated)       |  |          |         | (Restated)   |
|                                                          |  |                                  |    |             |  |          |    |         |  |   |    |    |  |   |    |    |
| Weightedaverage number of shares outstanding                  |  |                                  | 42,800  |             |  |          | 42,730  |         |  |   | 42,800  |    |  |   | 42,730  |    |
|                                                          |  |                                  |    |             |  |          |    |         |  |   |    |    |  |   |    |    |
| Netincome (loss)                                              |  | $                                     | (3,170  | )           |  | $             | 1,060   |         |  | $      | (8,420  | )  |  | $      | (10,000 | )  |
| Less:Preferred stock dividends                                |  |                                  | — |             |  |          | 2,280   |         |  |   | — |    |  |   | 4,500   |    |
| Lossused for basic and diluted earnings per share computation |  | $                                     | (3,170  | )           |  | $             | (1,220  | )       |  | $      | (8,420  | )  |  | $      | (14,500 | )  |
|                                                          |  |                                  |    |             |  |          |    |         |  |   |    |    |  |   |    |    |
| Basicloss per share attributable to common stock              |  | $                                     | (0.07   | )           |  | $             | (0.03   | )       |  | $      | (0.20   | )  |  | $      | (0.34   | )  |
| Total shares used for basicearnings per share computation     |  |                                  | 42,800  |             |  |          | 42,730  |         |  |   | 42,800  |    |  |   | 42,730  |    |
| Contingentlyissuable shares                                   |  |                                  | — |             |  |          | — |         |  |   | — |    |  |   | — |    |
| Totalshares used for diluted earnings per share computation   |  |                                  | 42,800  |             |  |          | 42,730  |         |  |   | 42,800  |    |  |   | 42,730  |    |
|                                                          |  |                                  |    |             |  |          |    |         |  |   |    |    |  |   |    |    |
| Dilutedloss per share attributable to common stock            |  | $                                     | (0.07   | )           |  | $             | (0.03   | )       |  | $      | (0.20   | )  |  | $      | (0.34   | )  |
|                                                               |

Excluded from thecalculation of diluted loss per share are stock options representing911,700 and 2,570,000 of common shares as they are anti-dilutive atJune 27, 2004 and June 29, 2003 (as restated), respectively.

Contingently issuable shares, representing approximately 50,000 and920,000 restricted common shares, have an anti-dilutive effect onearnings per share for the three and six months ended June 27, 2004 andJune 29, 2003 (as restated), respectively.

14.    Comprehensive Income (Loss)

The Company'stotal comprehensive income (loss) for the period was as follows:

|                                                                  |  |                   |         |                 |  |               |        |              |  |        |         |         |  |        |         |         |  |  |
|------------------------------------------------------------------|--|-------------------|---------|-----------------|--|---------------|--------|--------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                             |  | (Inthousands)     |
|                                                             |  | ThreeMonths Ended |         | Six MonthsEnded |
|                                                             |  | June 27,2004      |         | June 29, 2003   |  | June 27, 2004 |        | June 29,2003 |
|                                                             |  |              |         | (Restated)      |  |          |        | (Restated)   |
| Netincome (loss)                                                 |  | $                 | (3,170  | )          |  | $             | 1,060  |         |  | $      | (8,420  | )  |  | $      | (10,000 | )  |
| Othercomprehensive income(loss):                                 |  |              |    |            |  |          |   |         |  |   |    |    |  |   |    |    |
| Foreigncurrency translationadjustment                            |  |              | (1,560  | )          |  |          | 20,810 |         |  |   | (6,510  | )  |  |   | 27,510  |    |
| Interestrate agreements fair value adjustments (realized in2004) |  |              | — |            |  |          | 90     |         |  |   | (6,590  | )  |  |   | 390     |    |
| Totalother comprehensive income (loss)                           |  |              | (1,560  | )          |  |          | 20,900 |         |  |   | (13,100 | )  |  |   | 27,900  |    |
| Totalcomprehensive income (loss)                                 |  | $                 | (4,730  | )          |  | $             | 21,960 |         |  | $      | (21,520 | )  |  | $      | 17,900  |    |
|                                                                  |

17

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

15.    Employee BenefitPlans

**PensionBenefits**:

|                                            |  |                           |        |                         |  |               |         |              |  |        |        |         |  |        |         |         |  |  |
|--------------------------------------------|--|---------------------------|--------|-------------------------|--|---------------|---------|--------------|--|--------|--------|---------|--|--------|---------|---------|--|--|
|                                       |  | (Inthousands)             |
|                                       |  | Forthe three months ended |        | For the six monthsended |
|                                       |  | June 27,2004              |        | June 29, 2003           |  | June 27, 2004 |         | June 29,2003 |
| **Components of Net Periodic BenefitCost** |  |                      |   |                    |  |          |    |         |  |   |   |    |  |   |    |    |
| Servicecost                                |  | $                         | 780    |                    |  | $             | 800     |         |  | $      | 1,560  |    |  | $      | 1,600   |    |
| Interestcost                               |  |                      | 4,340  |                    |  |          | 4,280   |         |  |   | 8,680  |    |  |   | 8,560   |    |
| Expectedreturn on planassets               |  |                      | (4,350 | )                  |  |          | (4,140  | )       |  |   | (8,700 | )  |  |   | (8,280  | )  |
| Amortizationof prior servicecost           |  |                      | 40     |                    |  |          | 30      |         |  |   | 80     |    |  |   | 60      |    |
| Amortizationof net (gain)loss              |  |                      | 620    |                    |  |          | 170     |         |  |   | 1,240  |    |  |   | 340     |    |
| Curtailment(gain) loss                     |  |                      | (1,470 | )                  |  |          | — |         |  |   | (1,470 | )  |  |   | — |    |
| Netperiodic benefitcost                    |  | $                         | (40    | )                  |  | $             | 1,140   |         |  | $      | 1,390  |    |  | $      | 2,280   |    |
|                                            |

**OtherBenefits**:

|                                            |  |                           |         |                         |  |               |         |              |  |        |         |         |  |        |         |         |  |  |
|--------------------------------------------|--|---------------------------|---------|-------------------------|--|---------------|---------|--------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                       |  | (Inthousands)             |
|                                       |  | Forthe three months ended |         | For the six monthsended |
|                                       |  | June 27,2004              |         | June 29, 2003           |  | June 27, 2004 |         | June 29,2003 |
| **Components of Net Periodic BenefitCost** |  |                      |    |                    |  |          |    |         |  |   |    |    |  |   |    |    |
| Servicecost                                |  | $                         | 300     |                    |  | $             | 260     |         |  | $      | 600     |    |  | $      | 520     |    |
| Interestcost                               |  |                      | 780     |                    |  |          | 750     |         |  |   | 1,560   |    |  |   | 1,500   |    |
| Expectedreturn on planassets               |  |                      | — |                    |  |          | — |         |  |   | — |    |  |   | — |    |
| Amortizationof prior servicecost           |  |                      | (60     | )                  |  |          | (30     | )       |  |   | (120    | )  |  |   | (60     | )  |
| Amortizationof net (gain)loss              |  |                      | 140     |                    |  |          | 70      |         |  |   | 280     |    |  |   | 140     |    |
| Curtailment(gain) loss                     |  |                      | (480    | )                  |  |          | — |         |  |   | (480    | )  |  |   | — |    |
| Netperiodic benefitcost                    |  | $                         | 680     |                    |  | $             | 1,050   |         |  | $      | 1,840   |    |  | $      | 2,100   |    |
|                                            |

Thecurtailment gain of $1.5  million relates to the disposition ofthe manufacturing facilities discussed in Note  11 to theconsolidated financial statements.

Employer Contributions

Metaldyne previously disclosed in its financial statements for theyear ended December 28, 2003, that it expected to contribute $17.5million to its defined benefit pension plans in 2004. As of June 27,2004, approximately $5 million of contributions have been made.

The Company also disclosed in its financial statements for the yearended December 28, 2003, that it expected to contribute approximately$9.1 million to its defined contribution (profit-sharing and 401(k)matching contribution) plans in 2004. The Company contributedapproximately $1.7 million to its defined contribution plans as of June27, 2004.

16.    Commitments and Contingencies

TheCompany is subject to claims and litigation in the ordinary course ofits business, but does not believe that any such claim or litigationwill have a material adverse effect on its financial position orresults of operation.

There are no material pending legalproceedings, other than ordinary routine litigation incidental to theCompany's business, to which it is aware that would have amaterial adverse effect on the Company's financial position orresults of operations.

17.    New AccountingPronouncements

In May 2003, the FASB issued SFAS No. 150,"Accounting for Certain Financial Instruments withCharacteristics of both Liabilities and Equity." ThisStatement establishes standards for how an issuer classifies andmeasures certain financial instruments with characteristics of bothliabilities and equity. This 

18

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

Statement is effective for financialinstruments entered into or modified after May 31, 2003, and otherwiseis effective at the beginning of the first interim period beginningafter June 15, 2003, except for mandatorily redeemable financialinstruments of nonpublic entities, for which it is effective for thefirst fiscal period beginning after December 15, 2003. Due to theCompany being a nonpublic entity as defined in SFAS No. 150, it hasadopted this Statement effective for the quarter ended March 28, 2004.As a result of the Company's adoption of SFAS No. 150, theCompany's redeemable preferred stock is classified as a long-termliability on the Company's consolidated balance sheet effectiveas of the quarter ended March 28, 2004, and preferred stock dividendsassociated with this redeemable preferred stock are classified as otherexpense, net on the Company's consolidated statement ofoperations beginning with the quarter ended March 28, 2004.

18.    Subsequent Event

In July 2004, the Companyreceived an IRS tax refund of $27 million that resulted from a claimfiled in 2002. This claim was based on a 2002 change in the US TreasuryRegulations that permitted the Company to utilize a previouslydisallowed capital loss that primarily resulted from the sale of asubsidiary in 2000. The amount received in excess of the refundpreviously recorded will be considered in the tax provision for thethird quarter of 2004.

19.    Condensed ConsolidatingFinancial Statements of Guarantors of Senior Subordinated Notes

The following condensed consolidating financial informationpresents:

|           |                                                                                                                                                                                                                                                                                                                                                 |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)  | Condensed consolidatingfinancial statements as of June 27, 2004 and December 28, 2003, and forthe three and six months ended June 27, 2004 and June 29, 2003 (asrestated) of (a) Metaldyne Corporation, the parent and issuer, (b) theguarantor subsidiaries, (c) the non-guarantor subsidiaries and (d) theCompany on a consolidated basis,and |

|           |                                                                                                                              |
|-----------|------------------------------------------------------------------------------------------------------------------------------|
| (2)  | Elimination entries necessary toconsolidate Metaldyne Corporation, the parent, with guarantor andnon-guarantor subsidiaries. |

The condensed consolidatingfinancial statements are presented on the equity method. Under thismethod, the investments in subsidiaries are recorded at cost andadjusted for the Company's share of the subsidiaries'cumulative results of operations, capital contributions, distributionsand other equity changes. The principal elimination entries eliminateinvestments in subsidiaries and intercompany balances andtransactions.

All investments in non-domestic subsidiaries areheld directly at Metaldyne Company LLC, a wholly owned subsidiary ofMetaldyne Corporation and the guarantor subsidiaries. Equity innon-domestic subsidiary investees is included in the guarantor columnof the accompanying consolidating financial information.

19

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

Guarantor/Non-GuarantorCondensedConsolidating Balance Sheets June 27, 2004(Unaudited)

|                                                             |  |        |          |           |  |               |           |              |  |              |         |        |  |        |          |         |  |        |           |         |  |  |
|-------------------------------------------------------------|--|--------|----------|-----------|--|---------------|-----------|--------------|--|--------------|---------|--------|--|--------|----------|---------|--|--------|-----------|---------|--|--|
| (Inthousands)                                               |  |   |          |
|                                                        |  | Parent |          | Guarantor |  | Non-Guarantor |           | Eliminations |  | Consolidated |
| **Assets**                                                  |  |   |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Currentassets:                                              |  |   |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Cashand cash equivalents                                    |  | $      | —  |      |  | $             | (2,450    | )       |  | $            | 2,450   |   |  | $      | —  |    |  | $      | —   |    |
| Totalreceivables, net                                       |  |   | —  |      |  |          | 124,570   |         |  |         | 79,580  |   |  |   | —  |    |  |   | 204,150   |    |
| Inventories                                                 |  |   | —  |      |  |          | 84,170    |         |  |         | 29,700  |   |  |   | —  |    |  |   | 113,870   |    |
| Deferredand refundable income taxes                         |  |   | —  |      |  |          | 6,950     |         |  |         | 1,170   |   |  |   | —  |    |  |   | 8,120     |    |
| Prepaidexpenses and other assets                            |  |   | —  |      |  |          | 35,390    |         |  |         | 9,080   |   |  |   | —  |    |  |   | 44,470    |    |
| Totalcurrent assets                                         |  |   | —  |      |  |          | 248,630   |         |  |         | 121,980 |   |  |   | —  |    |  |   | 370,610   |    |
| Equityinvestments in affiliates                             |  |   | 128,830  |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 128,830   |    |
| Propertyand equipment, net                                  |  |   | —  |      |  |          | 667,460   |         |  |         | 225,110 |   |  |   | —  |    |  |   | 892,570   |    |
| Excessof cost over net assets of acquired companies         |  |   | —  |      |  |          | 442,700   |         |  |         | 140,060 |   |  |   | —  |    |  |   | 582,760   |    |
| Investmentin subsidiaries                                   |  |   | 544,280  |      |  |          | 229,990   |         |  |         | — |   |  |   | (774,270 | )  |  |   | —   |    |
| Intangibleand other assets                                  |  |   | —  |      |  |          | 207,240   |         |  |         | 20,130  |   |  |   | —  |    |  |   | 227,370   |    |
| Totalassets                                                 |  | $      | 673,110  |      |  | $             | 1,796,020 |         |  | $            | 507,280 |   |  | $      | (774,270 | )  |  | $      | 2,202,140 |    |
| **LiabilitiesAnd Shareholders'Equity**                      |  |   |     |      |  |          |      |         |  |         |    |   |  |   |     |    |
| Currentliabilities:                                         |  |   |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Accountspayable                                             |  | $      | —  |      |  | $             | 207,600   |         |  | $            | 73,300  |   |  | $      | —  |    |  | $      | 280,900   |    |
| Accruedliabilities                                          |  |   | —  |      |  |          | 82,770    |         |  |         | 34,220  |   |  |   | —  |    |  |   | 116,990   |    |
| Currentmaturities, long-term debt                           |  |   | —  |      |  |          | 4,060     |         |  |         | 4,520   |   |  |   | —  |    |  |   | 8,580     |    |
| Totalcurrent liabilities                                    |  |   | —  |      |  |          | 294,430   |         |  |         | 112,040 |   |  |   | —  |    |  |   | 406,470   |    |
| Long-termdebt                                               |  |   | 431,750  |      |  |          | 416,450   |         |  |         | 5,210   |   |  |   | —  |    |  |   | 853,410   |    |
| Deferredincome taxes                                        |  |   | —  |      |  |          | 100,000   |         |  |         | 21,540  |   |  |   | —  |    |  |   | 121,540   |    |
| Minorityinterest                                            |  |   | —  |      |  |          | —   |         |  |         | 800     |   |  |   | —  |    |  |   | 800       |    |
| Otherlong-term liabilities                                  |  |   | —  |      |  |          | 140,200   |         |  |         | 6,610   |   |  |   | —  |    |  |   | 146,810   |    |
| Redeemablepreferred stock                                   |  |   | 147,480  |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 147,480   |    |
| Intercompanyaccounts, net                                   |  |   | (431,750 | )    |  |          | 300,660   |         |  |         | 131,090 |   |  |   | —  |    |  |   | —   |    |
| Totalliabilities                                            |  |   | 147,480  |      |  |          | 1,251,740 |         |  |         | 277,290 |   |  |   | —  |    |  |   | 1,676,510 |    |
| Shareholders'equity:                                        |  |   |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Preferredstock                                              |  |   | —  |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | —   |    |
| Commonstock                                                 |  |   | 42,830   |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 42,830    |    |
| Paid-incapital                                              |  |   | 693,540  |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 693,540   |    |
| Accumulateddeficit                                          |  |   | (243,170 | )    |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | (243,170  | )  |
| Accumulatedother comprehensiveincome                        |  |   | 32,430   |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 32,430    |    |
| Investmentby Parent/Guarantor                               |  |   | —  |      |  |          | 544,280   |         |  |         | 229,990 |   |  |   | (774,270 | )  |  |   | —   |    |
| Totalshareholders' equity                                   |  |   | 525,630  |      |  |          | 544,280   |         |  |         | 229,990 |   |  |   | (774,270 | )  |  |   | 525,630   |    |
| Totalliabilities, redeemable stock and shareholders' equity |  | $      | 673,110  |      |  | $             | 1,796,020 |         |  | $            | 507,280 |   |  | $      | (774,270 | )  |  | $      | 2,202,140 |    |
|                                                             |

20

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS   

Guarantor/Non-Guarantor Condensed Consolidating Balance SheetsDecember 28, 2003

(Inthousands)

|                                                             |  |        |          |           |  |               |           |              |  |              |         |        |  |        |          |         |  |        |           |         |  |  |
|-------------------------------------------------------------|--|--------|----------|-----------|--|---------------|-----------|--------------|--|--------------|---------|--------|--|--------|----------|---------|--|--------|-----------|---------|--|--|
|                                                        |  | Parent |          | Guarantor |  | Non-Guarantor |           | Eliminations |  | Consolidated |
| **Assets**                                                  |  |   |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Currentassets:                                              |  |   |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Cashand cash equivalents                                    |  | $      | —  |      |  | $             | 10,750    |         |  | $            | 3,070   |   |  | $      | —  |    |  | $      | 13,820    |    |
| Totalreceivables, net                                       |  |   | —  |      |  |          | 151,940   |         |  |         | 29,180  |   |  |   | —  |    |  |   | 181,120   |    |
| Inventories                                                 |  |   | —  |      |  |          | 54,080    |         |  |         | 29,600  |   |  |   | —  |    |  |   | 83,680    |    |
| Deferredand refundable income taxes                         |  |   | —  |      |  |          | 7,900     |         |  |         | 1,210   |   |  |   | —  |    |  |   | 9,110     |    |
| Prepaidexpenses and other assets                            |  |   | —  |      |  |          | 27,880    |         |  |         | 8,400   |   |  |   | —  |    |  |   | 36,280    |    |
| Totalcurrent assets                                         |  |   | —  |      |  |          | 252,550   |         |  |         | 71,460  |   |  |   | —  |    |  |   | 324,010   |    |
| Equityand other investments in affiliates                   |  |   | 148,830  |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 148,830   |    |
| Propertyand equipment, net                                  |  |   | —  |      |  |          | 478,760   |         |  |         | 228,690 |   |  |   | —  |    |  |   | 707,450   |    |
| Excessof cost over net assets of acquired companies         |  |   | —  |      |  |          | 441,920   |         |  |         | 142,470 |   |  |   | —  |    |  |   | 584,390   |    |
| Investmentin subsidiaries                                   |  |   | 471,060  |      |  |          | 229,590   |         |  |         | — |   |  |   | (700,650 | )  |  |   | —   |    |
| Intangibleand other assets                                  |  |   | —  |      |  |          | 225,400   |         |  |         | 21,780  |   |  |   | —  |    |  |   | 247,180   |    |
| Totalassets                                                 |  | $      | 619,890  |      |  | $             | 1,628,220 |         |  | $            | 464,400 |   |  | $      | (700,650 | )  |  | $      | 2,011,860 |    |
| **LiabilitiesAnd Shareholders'Equity**                      |  |   |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Currentliabilities:                                         |  |   |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Accountspayable                                             |  | $      | —  |      |  | $             | 128,960   |         |  | $            | 72,280  |   |  | $      | —  |    |  | $      | 201,240   |    |
| Accruedliabilities                                          |  |   | —  |      |  |          | 96,040    |         |  |         | 40,800  |   |  |   | —  |    |  |   | 136,840   |    |
| Currentmaturities, long-term debt                           |  |   | —  |      |  |          | 4,820     |         |  |         | 6,060   |   |  |   | —  |    |  |   | 10,880    |    |
| Totalcurrent liabilities                                    |  |   | —  |      |  |          | 229,820   |         |  |         | 119,140 |   |  |   | —  |    |  |   | 348,960   |    |
| Long-termdebt                                               |  |   | 400,000  |      |  |          | 360,740   |         |  |         | 6,190   |   |  |   | —  |    |  |   | 766,930   |    |
| Deferredincome taxes                                        |  |   | —  |      |  |          | 95,530    |         |  |         | 25,990  |   |  |   | —  |    |  |   | 121,520   |    |
| Minorityinterest                                            |  |   | —  |      |  |          | —   |         |  |         | 800     |   |  |   | —  |    |  |   | 800       |    |
| Otherlong-term liabilities                                  |  |   | —  |      |  |          | 148,620   |         |  |         | 5,140   |   |  |   | —  |    |  |   | 153,760   |    |
| Intercompanyaccounts, net                                   |  |   | (400,000 | )    |  |          | 322,450   |         |  |         | 77,550  |   |  |   | —  |    |  |   | —   |    |
| Totalliabilities                                            |  |   | —  |      |  |          | 1,157,160 |         |  |         | 234,810 |   |  |   | —  |    |  |   | 1,391,970 |    |
| Redeemablepreferred stock                                   |  |   | 73,980   |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 73,980    |    |
| Shareholders'equity:                                        |  |   |     |      |  |          |      |         |  |         |    |   |  |   |     |    |  |   |      |    |
| Preferredstock                                              |  |   | —  |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | —   |    |
| Commonstock                                                 |  |   | 42,730   |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 42,730    |    |
| Paid-incapital                                              |  |   | 692,400  |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 692,400   |    |
| Accumulateddeficit                                          |  |   | (234,750 | )    |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | (234,750  | )  |
| Accumulatedother comprehensive income                       |  |   | 45,530   |      |  |          | —   |         |  |         | — |   |  |   | —  |    |  |   | 45,530    |    |
| Investmentby Parent/Guarantor                               |  |   | —  |      |  |          | 471,060   |         |  |         | 229,590 |   |  |   | (700,650 | )  |  |   | —   |    |
| Totalshareholders' equity                                   |  | $      | 545,910  |      |  | $             | 471,060   |         |  | $            | 229,590 |   |  | $      | (700,650 | )  |  | $      | 545,910   |    |
| Totalliabilities, redeemable stock and shareholders' equity |  | $      | 619,890  |      |  | $             | 1,628,220 |         |  | $            | 464,400 |   |  | $      | (700,650 | )  |  | $      | 2,011,860 |    |
|                                                             |

21

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

Guarantor/Non-GuarantorCondensedConsolidating Statement Of OperationsThree Months Ended June 27,2004(Unaudited)

(In thousands)

|                                             |  |        |         |           |  |               |          |              |  |              |         |         |  |        |         |         |  |        |          |         |  |  |
|---------------------------------------------|--|--------|---------|-----------|--|---------------|----------|--------------|--|--------------|---------|---------|--|--------|---------|---------|--|--------|----------|---------|--|--|
|                                        |  | Parent |         | Guarantor |  | Non-Guarantor |          | Eliminations |  | Consolidated |
| Net sales                                   |  | $      | — |      |  | $             | 416,350  |         |  | $            | 105,540 |    |  | $      | — |    |  | $      | 521,890  |    |
| Costof sales                                |  |   | — |      |  |          | (386,290 | )       |  |         | (83,210 | )  |  |   | — |    |  |   | (469,500 | )  |
| Grossprofit                                 |  |   | — |      |  |          | 30,060   |         |  |         | 22,330  |    |  |   | — |    |  |   | 52,390   |    |
| Selling,general and administrative expenses |  |   | — |      |  |          | (25,790  | )       |  |         | (5,460  | )  |  |   | — |    |  |   | (31,250  | )  |
| Restructuringcharges                        |  |   | — |      |  |          | (660     | )       |  |         | (860    | )  |  |   | — |    |  |   | (1,520   | )  |
| Operatingprofit                             |  |   | — |      |  |          | 3,610    |         |  |         | 16,010  |    |  |   | — |    |  |   | 19,620   |    |
| Otherexpense,net:                           |  |   |    |      |  |          |     |         |  |         |    |    |  |   |    |    |  |   |     |    |
| Interestexpense                             |  |   | — |      |  |          | (17,310  | )       |  |         | (2,340  | )  |  |   | — |    |  |   | (19,650  | )  |
| Preferredstock dividends                    |  |   | (4,710  | )    |  |          | —  |         |  |         | — |    |  |   | — |    |  |   | (4,710   | )  |
| Equityincome (loss) from affiliates, net    |  |   | 2,980   |      |  |          | —  |         |  |         | — |    |  |   | — |    |  |   | 2,980    |    |
| Other,net                                   |  |   | — |      |  |          | (2,360   | )       |  |         | 1,320   |    |  |   | — |    |  |   | (1,040   | )  |
| Otherexpense, net                           |  |   | (1,730  | )    |  |          | (19,670  | )       |  |         | (1,020  | )  |  |   | — |    |  |   | (22,420  | )  |
| Income(loss) before incometaxes             |  |   | (1,730  | )    |  |          | (16,060  | )       |  |         | 14,990  |    |  |   | — |    |  |   | (2,800   | )  |
| Incometax expense (benefit)                 |  |   | — |      |  |          | (3,840   | )       |  |         | 4,210   |    |  |   | — |    |  |   | 370      |    |
| Equityin net income of subsidiaries         |  |   | (1,440  | )    |  |          | 10,780   |         |  |         | — |    |  |   | (9,340  | )  |  |   | —  |    |
| Earnings(loss) attributable to common stock |  | $      | (3,170  | )    |  | $             | (1,440   | )       |  | $            | 10,780  |    |  | $      | (9,340  | )  |  | $      | (3,170   | )  |
|                                             |

22

----

METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

Guarantor/Non-Guarantor CondensedConsolidating Statement Of Operations Three Months Ended June 29,2003 (Unaudited) (Restated)

(Inthousands)

|                                             |  |        |         |           |  |               |          |              |  |              |         |         |  |        |         |         |  |        |          |         |  |  |
|---------------------------------------------|--|--------|---------|-----------|--|---------------|----------|--------------|--|--------------|---------|---------|--|--------|---------|---------|--|--------|----------|---------|--|--|
|                                        |  | Parent |         | Guarantor |  | Non-Guarantor |          | Eliminations |  | Consolidated |
| Net sales                                   |  | $      | — |      |  | $             | 300,090  |         |  | $            | 90,450  |    |  | $      | — |    |  | $      | 390,540  |    |
| Costof sales                                |  |   | — |      |  |          | (268,880 | )       |  |         | (71,830 | )  |  |   | — |    |  |   | (340,710 | )  |
| Grossprofit                                 |  |   | — |      |  |          | 31,210   |         |  |         | 18,620  |    |  |   | — |    |  |   | 49,830   |    |
| Selling,general and administrative expenses |  |   | — |      |  |          | (25,930  | )       |  |         | (1,700  | )  |  |   | — |    |  |   | (27,630  | )  |
| Restructuringcharges                        |  |   | — |      |  |          | (2,330   | )       |  |         | — |    |  |   | — |    |  |   | (2,330   | )  |
| Operatingprofit                             |  |   | — |      |  |          | 2,950    |         |  |         | 16,920  |    |  |   | — |    |  |   | 19,870   |    |
| Otherexpense,net:                           |  |   |    |      |  |          |     |         |  |         |    |    |  |   |    |    |  |   |     |    |
| Interestexpense                             |  |   | — |      |  |          | (16,910  | )       |  |         | (370    | )  |  |   | — |    |  |   | (17,280  | )  |
| Equityincome (loss) from affiliates, net    |  |   | (80     | )    |  |          | —  |         |  |         | — |    |  |   | — |    |  |   | (80      | )  |
| Other,net                                   |  |   | — |      |  |          | (850     | )       |  |         | (1,260  | )  |  |   | — |    |  |   | (2,110   | )  |
| Otherincome (expense), net                  |  |   | (80     | )    |  |          | (17,760  | )       |  |         | (1,630  | )  |  |   | — |    |  |   | (19,470  | )  |
| Income(loss) before incometaxes             |  |   | (80     | )    |  |          | (14,810  | )       |  |         | 15,290  |    |  |   | — |    |  |   | 400      |    |
| Incometax expense (benefit)                 |  |   | — |      |  |          | (4,790   | )       |  |         | 4,130   |    |  |   | — |    |  |   | (660     | )  |
| Equityin net income ofsubsidiaries          |  |   | 1,140   |      |  |          | 11,160   |         |  |         | — |    |  |   | (12,300 | )  |  |   | —  |    |
| Netincome (loss)                            |  | $      | 1,060   |      |  | $             | 1,140    |         |  | $            | 11,160  |    |  | $      | (12,300 | )  |  | $      | 1,060    |    |
| Preferredstock dividends                    |  |   | 2,280   |      |  |          | —  |         |  |         | — |    |  |   | — |    |  |   | 2,280    |    |
| Earnings(loss) attributable to common stock |  | $      | (1,220  | )    |  | $             | 1,140    |         |  | $            | 11,160  |    |  | $      | (12,300 | )  |  | $      | (1,220   | )  |
|                                             |

23

----

METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

Guarantor/Non-Guarantor CondensedConsolidating Statement Of Operations Six Months Ended June 27,2004 (Unaudited)

(Inthousands)

|                                                          |  |        |         |           |  |               |          |              |  |              |          |         |  |        |         |         |  |        |           |         |  |  |
|----------------------------------------------------------|--|--------|---------|-----------|--|---------------|----------|--------------|--|--------------|----------|---------|--|--------|---------|---------|--|--------|-----------|---------|--|--|
|                                                     |  | Parent |         | Guarantor |  | Non-Guarantor |          | Eliminations |  | Consolidated |
| Net sales                                                |  | $      | — |      |  | $             | 794,860  |         |  | $            | 208,170  |    |  | $      | — |    |  | $      | 1,003,030 |    |
| Costof sales                                             |  |   | — |      |  |          | (732,850 | )       |  |         | (165,580 | )  |  |   | — |    |  |   | (898,430  | )  |
| Grossprofit                                              |  |   | — |      |  |          | 62,010   |         |  |         | 42,590   |    |  |   | — |    |  |   | 104,600   |    |
| Selling,general and administrative expenses              |  |   | — |      |  |          | (51,520  | )       |  |         | (10,950  | )  |  |   | — |    |  |   | (62,470   | )  |
| Restructuringcharges                                     |  |   | — |      |  |          | (850     | )       |  |         | (860     | )  |  |   | — |    |  |   | (1,710    | )  |
| Proceedson disposition of manufacturing facilities       |  |   | — |      |  |          | (7,600   | )       |  |         | —  |    |  |   | — |    |  |   | (7,600    | )  |
| Operatingprofit                                          |  |   | — |      |  |          | 2,040    |         |  |         | 30,780   |    |  |   | — |    |  |   | 32,820    |    |
| Otherexpense,net:                                        |  |   |    |      |  |          |     |         |  |         |     |    |  |   |    |    |  |   |      |    |
| Interestexpense                                          |  |   | — |      |  |          | (35,300  | )       |  |         | (4,450   | )  |  |   | — |    |  |   | (39,750   | )  |
| Preferredstock dividends                                 |  |   | (8,970  | )    |  |          | —  |         |  |         | —  |    |  |   | — |    |  |   | (8,970    | )  |
| Non-cashgain on interest rate arrangements upon maturity |  |   | — |      |  |          | 6,590    |         |  |         | —  |    |  |   | — |    |  |   | 6,590     |    |
| Equityincome (loss) from affiliates, net                 |  |   | 4,440   |      |  |          | —  |         |  |         | —  |    |  |   | — |    |  |   | 4,440     |    |
| Other,net                                                |  |   | — |      |  |          | (2,170   | )       |  |         | (1,250   | )  |  |   | — |    |  |   | (3,420    | )  |
| Otherexpense, net                                        |  |   | (4,530  | )    |  |          | (30,880  | )       |  |         | (5,700   | )  |  |   | — |    |  |   | (41,110   | )  |
| Income(loss) before incometaxes                          |  |   | (4,530  | )    |  |          | (28,840  | )       |  |         | 25,080   |    |  |   | — |    |  |   | (8,290    | )  |
| Incometax expense (benefit)                              |  |   | — |      |  |          | (7,200   | )       |  |         | 7,330    |    |  |   | — |    |  |   | 130       |    |
| Equityin net income of subsidiaries                      |  |   | (3,890  | )    |  |          | 17,750   |         |  |         | —  |    |  |   | (13,860 | )  |  |   | —   |    |
| Earnings(loss) attributable to common stock              |  | $      | (8,420  | )    |  | $             | (3,890   | )       |  | $            | 17,750   |    |  | $      | (13,860 | )  |  | $      | (8,420    | )  |
|                                                          |

24

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

Guarantor/Non-Guarantor CondensedConsolidating Statement Of Operations Six Months Ended June 29,2003 (Unaudited) (Restated)

(Inthousands)

|                                             |  |        |         |           |  |               |          |              |  |              |          |         |  |        |         |         |  |        |          |         |  |  |
|---------------------------------------------|--|--------|---------|-----------|--|---------------|----------|--------------|--|--------------|----------|---------|--|--------|---------|---------|--|--------|----------|---------|--|--|
|                                        |  | Parent |         | Guarantor |  | Non-Guarantor |          | Eliminations |  | Consolidated |
| Net sales                                   |  | $      | — |      |  | $             | 595,560  |         |  | $            | 176,900  |    |  | $      | — |    |  | $      | 772,460  |    |
| Costof sales                                |  |   | — |      |  |          | (541,320 | )       |  |         | (140,270 | )  |  |   | — |    |  |   | (681,590 | )  |
| Grossprofit                                 |  |   | — |      |  |          | 54,240   |         |  |         | 36,630   |    |  |   | — |    |  |   | 90,870   |    |
| Selling,general and administrative expenses |  |   | — |      |  |          | (51,760  | )       |  |         | (5,520   | )  |  |   | — |    |  |   | (57,280  | )  |
| Restructuringcharges                        |  |   | — |      |  |          | (2,330   | )       |  |         | (1,530   | )  |  |   | — |    |  |   | (3,860   | )  |
| Operatingprofit                             |  |   | — |      |  |          | 150      |         |  |         | 29,580   |    |  |   | — |    |  |   | 29,730   |    |
| Otherexpense,net:                           |  |   |    |      |  |          |     |         |  |         |     |    |  |   |    |    |  |   |     |    |
| Interestexpense                             |  |   | — |      |  |          | (34,340  | )       |  |         | (860     | )  |  |   | — |    |  |   | (35,200  | )  |
| Equityincome (loss) from affiliates, net    |  |   | (2,710  | )    |  |          | —  |         |  |         | —  |    |  |   | — |    |  |   | (2,710   | )  |
| Other,net                                   |  |   | — |      |  |          | (530     | )       |  |         | (5,240   | )  |  |   | — |    |  |   | (5,770   | )  |
| Otherincome (expense), net                  |  |   | (2,710  | )    |  |          | (34,870  | )       |  |         | (6,100   | )  |  |   | — |    |  |   | (43,680  | )  |
| Income(loss) before incometaxes             |  |   | (2,710  | )    |  |          | (34,720  | )       |  |         | 23,480   |    |  |   | — |    |  |   | (13,950  | )  |
| Incometax expense (benefit)                 |  |   | — |      |  |          | (13,210  | )       |  |         | 9,260    |    |  |   | — |    |  |   | (3,950   | )  |
| Equityin net income ofsubsidiaries          |  |   | (7,290  | )    |  |          | 14,220   |         |  |         | —  |    |  |   | (6,930  | )  |  |   | —  |    |
| Netincome (loss)                            |  | $      | (10,000 | )    |  | $             | (7,290   | )       |  | $            | 14,220   |    |  | $      | (6,930  | )  |  | $      | (10,000  | )  |
| Preferredstock dividends                    |  |   | 4,500   |      |  |          | —  |         |  |         | —  |    |  |   | — |    |  |   | 4,500    |    |
| Earnings(loss) attributable to common stock |  | $      | (14,500 | )    |  | $             | (7,290   | )       |  | $            | 14,220   |    |  | $      | (6,930  | )  |  | $      | (14,500  | )  |
|                                             |

25

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONTINUED)

Guarantor/Non-Guarantor CondensedConsolidating Statement Of Cash Flows Six Months Ended June 27,2004 (Unaudited)

(Inthousands)

|                                                     |  |        |         |           |  |               |          |              |  |              |         |         |  |        |                     |        |  |        |          |         |  |  |
|-----------------------------------------------------|--|--------|---------|-----------|--|---------------|----------|--------------|--|--------------|---------|---------|--|--------|---------------------|--------|--|--------|----------|---------|--|--|
|                                                |  | Parent |         | Guarantor |  | Non-Guarantor |          | Eliminations |  | Consolidated |
| Cash flows from operatingactivities:                |  |   |    |      |  |          |     |         |  |         |    |    |  |   |                |   |  |   |     |    |
| Netcash provided by (used for) operating activities |  | $      | — |      |  | $             | 94,210   |         |  | $            | (42,370 | )  |  | $      |   — |   |  | $      | 51,840   |    |
| Cashflows from investingactivities:                 |  |   |    |      |  |          |     |         |  |         |    |    |  |   |                |   |  |   |     |    |
| Capitalexpenditures                                 |  |   | — |      |  |          | (49,290  | )       |  |         | (14,680 | )  |  |   | —             |   |  |   | (63,970  | )  |
| Proceedsfrom sale/leaseback of fixed assets         |  |   | — |      |  |          | 72,530   |         |  |         | — |    |  |   | —             |   |  |   | 72,530   |    |
| Proceedson disposition of manufacturing facilities  |  |   | — |      |  |          | (500     | )       |  |         | — |    |  |   | —             |   |  |   | (500     | )  |
| Acquisitionofbusiness                               |  |   | — |      |  |          | (217,850 | )       |  |         | — |    |  |   | —             |   |  |   | (217,850 | )  |
| Dispositionof joint venture                         |  |   | — |      |  |          | 1,260    |         |  |         | — |    |  |   | —             |   |  |   | 1,260    |    |
| Netcash used for investing activities               |  |   | — |      |  |          | (193,850 | )       |  |         | (14,680 | )  |  |   | —             |   |  |   | (208,530 | )  |
|                                                |  |   |    |      |  |          |     |         |  |         |    |    |  |   |                |   |  |   |     |    |
| Cashflows from financingactivities:                 |  |   |    |      |  |          |     |         |  |         |    |    |  |   |                |   |  |   |     |    |
| Principalpayments of term loan facilities           |  |   | — |      |  |          | (440     | )       |  |         | — |    |  |   | —             |   |  |   | (440     | )  |
| Proceedsof revolving credit facility                |  |   | — |      |  |          | 117,090  |         |  |         | — |    |  |   | —             |   |  |   | 117,090  |    |
| Principalpayments of revolving credit facility      |  |   | — |      |  |          | (64,790  | )       |  |         | — |    |  |   | —             |   |  |   | (64,790  | )  |
| Proceedsof senior subordinated notes, due 2014      |  |   | 31,750  |      |  |          | —  |         |  |         | — |    |  |   | —             |   |  |   | 31,750   |    |
| Proceedsof other debt                               |  |   | — |      |  |          | —  |         |  |         | 780     |    |  |   | —             |   |  |   | 780      |    |
| Principalpayments of other debt                     |  |   | — |      |  |          | (2,660   | )       |  |         | (3,310  | )  |  |   | —             |   |  |   | (5,970   | )  |
| Issuanceof Series A-1 preferredstock                |  |   | 64,450  |      |  |          | —  |         |  |         | — |    |  |   | —             |   |  |   | 64,450   |    |
| Changein intercompany accounts                      |  |   | (96,200 | )    |  |          | 39,690   |         |  |         | 56,510  |    |  |   | —             |   |  |   | —  |    |
| Netcash provided by financing activities            |  |   | — |      |  |          | 88,890   |         |  |         | 53,980  |    |  |   | —             |   |  |   | 142,870  |    |
| Netincrease (decrease) in cash                      |  |   | — |      |  |          | (10,750  | )       |  |         | (3,070  | )  |  |   | —             |   |  |   | (13,820  | )  |
| Cashand cash equivalents, beginning ofperiod        |  |   | — |      |  |          | 10,750   |         |  |         | 3,070   |    |  |   | —             |   |  |   | 13,820   |    |
| Cashand cash equivalents, end of period             |  | $      | — |      |  | $             | —  |         |  | $            | — |    |  | $      | —             |   |  | $      | —  |    |
|                                                     |

26

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METALDYNECORPORATION NOTES TO CONSOLIDATED FINANCIALSTATEMENTS    (CONCLUDED)

Guarantor/Non-Guarantor CondensedConsolidating Statement Of Cash Flows Six Months Ended June 29,2003 (Unaudited) (Restated)

(Inthousands)

|                                                     |  |        |         |           |  |               |          |              |  |              |         |         |  |        |                     |        |  |        |          |         |  |  |
|-----------------------------------------------------|--|--------|---------|-----------|--|---------------|----------|--------------|--|--------------|---------|---------|--|--------|---------------------|--------|--|--------|----------|---------|--|--|
|                                                |  | Parent |         | Guarantor |  | Non-Guarantor |          | Eliminations |  | Consolidated |
| Cash flows from operatingactivities:                |  |   |    |      |  |          |     |         |  |         |    |    |  |   |                |   |  |   |     |    |
| Netcash provided by (used for) operating activities |  | $      | — |      |  | $             | 41,300   |         |  | $            | (19,060 | )  |  | $      |   — |   |  | $      | 22,240   |    |
| Cashflows from investingactivities:                 |  |   |    |      |  |          |     |         |  |         |    |    |  |   |                |   |  |   |     |    |
| Capitalexpenditures                                 |  |   | — |      |  |          | (42,040  | )       |  |         | (12,330 | )  |  |   | —             |   |  |   | (54,370  | )  |
| Proceedsfrom sale/leaseback of fixed assets         |  |   | — |      |  |          | 8,460    |         |  |         | — |    |  |   | —             |   |  |   | 8,460    |    |
| Dispositionofbusinesses                             |  |   | — |      |  |          | —  |         |  |         | 22,570  |    |  |   | —             |   |  |   | 22,570   |    |
| Proceedsfrom sale of TriMas shares                  |  |   | 20,000  |      |  |          | —  |         |  |         | — |    |  |   | —             |   |  |   | 20,000   |    |
| Acquisitionof business, net of cash received        |  |   | — |      |  |          | (7,650   | )       |  |         | — |    |  |   | —             |   |  |   | (7,650   | )  |
| Investmentin jointventure                           |  |   | — |      |  |          | (20,000  | )       |  |         | — |    |  |   | —             |   |  |   | (20,000  | )  |
| Netcash provided by (used for) investing activities |  |   | 20,000  |      |  |          | (61,230  | )       |  |         | 10,240  |    |  |   | —             |   |  |   | (30,990  | )  |
| Cashflows from financingactivities:                 |  |   |    |      |  |          |     |         |  |         |    |    |  |   |                |   |  |   |     |    |
| Principalpayments of term loan facilities           |  |   | — |      |  |          | (500     | )       |  |         | — |    |  |   | —             |   |  |   | (500     | )  |
| Proceedsof revolving credit facility                |  |   | — |      |  |          | 180,000  |         |  |         | — |    |  |   | —             |   |  |   | 180,000  |    |
| Principalpayments of revolving credit facility      |  |   | — |      |  |          | (180,000 | )       |  |         | — |    |  |   | —             |   |  |   | (180,000 | )  |
| Proceedsof other debt                               |  |   | — |      |  |          | —  |         |  |         | 1,420   |    |  |   | —             |   |  |   | 1,420    |    |
| Principalpayments of other debt                     |  |   | — |      |  |          | (1,920   | )       |  |         | (2,300  | )  |  |   | —             |   |  |   | (4,220   | )  |
| Changein intercompany accounts                      |  |   | (20,000 | )    |  |          | 14,610   |         |  |         | 5,390   |    |  |   | —             |   |  |   | —  |    |
| Netcash provided by (used for) financing activities |  |   | (20,000 | )    |  |          | 12,190   |         |  |         | 4,510   |    |  |   | —             |   |  |   | (3,300   | )  |
| Netincrease (decrease) in cash                      |  |   | — |      |  |          | (7,740   | )       |  |         | (4,310  | )  |  |   | —             |   |  |   | (12,050  | )  |
| Cashand cash equivalents, beginning of period       |  |   | — |      |  |          | 14,610   |         |  |         | 4,520   |    |  |   | —             |   |  |   | 19,130   |    |
| Cashand cash equivalents, end of period             |  | $      | — |      |  | $             | 6,870    |         |  | $            | 210     |    |  | $      | —             |   |  | $      | 7,080    |    |
|                                                     |

27

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|              |                                                                                      |
|--------------|--------------------------------------------------------------------------------------|
| ITEM2.  | MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS |

ExecutiveSummary

We are a leading global manufacturer of highlyengineered metal components for the global light vehicle market with2003 sales of approximately $1.5 billion. We operate three segmentsfocused on the global light vehicle market. The Chassis, Driveline andEngine segments manufacture, design, engineer and assemble metal-formedand precision-engineered components and modular systems used in thetransmissions, engines and chassis of vehicles. We serve approximately200 automotive and industrial customers and our top ten customersrepresent approximately 65% of total 2003 sales. Prior toNovember 2000, we were a public company. Since we were acquired inNovember 2000 by a private investor group, we have actively pursuedopportunities for internal growth and strategic acquisitions that wereunavailable to us when the majority of our shares were publicly traded.Since November 2000, we have completed four acquisitions —Simpson in December 2000, GMTI effective January 2001, DanaCorporation's Greensboro, NC operation in May 2003, andDaimlerChrysler's New Castle operation at the beginning of ourfiscal 2004. Each of these acquisitions has added to the full service,integrated metal supply capabilities of our automotive operations.Additionally we split off our non-automotive operations, divesting ourformer TriMas subsidiary in June 2002 and our Fittings operation inApril 2003.

As discussed elsewhere in this filing or in our 2003Form 10K, an independent investigation into certain accounting mattersat the Company was completed in late September 2004. TheCompany's quarterly financial information for the first threefiscal quarters of 2003 have been restated to reflect adjustments tothe Company's previously reported financial information on Form10-Q for the first three fiscal quarters of 2003. The restatement aroseprimarily out of information obtained through an independentinvestigation. The investigation was initiated as a result of certainallegations made by an employee of the Company and information obtainedby the Company's internal audit staff. This investigationexpanded beyond its initial allegations into overstatements andunderstatements of income at the Company's Sintered Division intoaccounting practices in other areas of the Company concerning the useof reserves and accrual accounts and the recognition of tooling income.Refer to Item 4 for a discussion of the investigation, its findings andactions taken and to be taken by the Company in response thereto.

Key Factors Affecting our Reported Results

Weoperate in extremely competitive markets. Our customers select us basedupon numerous factors including technology, quality and price. Supplierselection is generally finalized several years prior to the start ofvehicle production, and as a result business that we win will generallynot start production for two years or beyond. In addition, our resultsare heavily dependent on global vehicle production, and in particularthe North American vehicle production of the Big 3 domesticmanufacturers (GM, Ford, and DaimlerChrysler). Our customers generallyrequire that we offer annual productivity and efficiency related pricedecreases on products we sell them. Critical factors to be successfulin this market include global low cost production facilities, leadingservice and parts quality, and differentiated product and processtechnology. Thus, we focus on managing our global manufacturingfootprint in line with our customer needs and local marketmanufacturing cost differences, improving operating efficiency andproduction quality of our plants, fixing or eliminating unprofitablefacilities and reducing our overall material costs. In addition, wespend considerable time and resources developing new technology andproducts to enhance performance and/or decrease cost of the products wesell to our customers. See "Results ofOperations" for more details as to the factors that driveyear over year performance.

The rise in material costs,especially steel, continues to negatively impact our results. This andother increases in our raw material costs increased our cost of goodssold by approximately $16 million through the second quarter of 2004(approximately $11 million related to steel increases). Note that thesteel price increases primarily relate to our Forging operations withinthe Driveline Group while the remaining increases are spread across allof our other businesses and is related to numerous raw materialincreases such as energy, Molybdenum and casting components wepurchase. Raw material costs have continued to 

28

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increase throughout the year and we currentlyexpect these costs to increase our cost of goods sold by approximately$50 million in 2004. However, we currently anticipate recoveringapproximately $30 million of this increase through steel scrap sales,steel resourcing efforts and negotiated or contractual price recoveryfrom our customers. However, our ability to fully execute this recoveryis not guaranteed. Additionally, it appears that raw material costswill continue to increase in 2005 and although we have initiatives inplace to offset these expected increases, there is no guarantee thatthese efforts will be successful.

Our strategy is centered ongrowth through new business awards and acquisitions. We have asignificant new project backlog and have completed several recentacquisitions that we believe will enable us to better serve ourcustomer base and provide enhanced returns for our stakeholders. Inorder to finance a large portion of this activity, we incurredsignificant issuance of new debt. As such, we have significant leverageand are constrained by various covenant limitations (see"— Financial Covenants" for moredetails surrounding these covenants). As we continue to invest in theresources to produce our new business backlog and thus grow ourbusiness, a significant portion of our operating cash flow will be usedto buy new capital equipment, expand production capacity and invest innew technology in addition to servicing principal and interest paymentson our debt obligations. Therefore, we are focused on our cashgeneration ability (we monitor this internally through"Adjusted EBITDA." See discussion below in"Non GAAP Financial Measures" forexplanation), and working capital and fixed asset efficiency to assessour ability to profitably finance our new business backlog.

Netsales for the first six months of 2004 net sales were $1,003 millionversus $772 for the first six months of 2003 (as restated). The primarydriver of the increase in our 2004 sales was our New Castleacquisition, which contributed $212 million in the first six months of2004. In addition, we had approximately $37 million in additionalvolume related to new product launches and ramp up of existing programsas well as a $17 million benefit from foreign exchange movements.However, these increases were partially offset by approximately $32million related to our divestiture of two aluminum die castingfacilities within our Driveline segment and a 2.9% decrease inNorth American vehicles production from our three largest customers(Ford, GM and DaimlerChrysler). Operating profit for the first sixmonths increased from $29.7 million in 2003 (as restated) to $32.8million in 2004. The increase in 2004 operating profit is primarily theresult of an approximate $13 million contribution from our New Castleacquisition, which was offset by approximately $7 million in fees andexpenses relating to the Independent Investigation described in Note 2to the consolidated financial statements included herein and a $7.6million charge taken in connection with our divestiture of twomanufacturing facilities within our Driveline segment. The netremaining increase is primarily driven by the decrease in our selling,general and administrative costs in 2004.

Key Indicators ofPerformance (Non-GAAP Financial Measures)

In evaluating ourbusiness, our management considers Adjusted EBITDA as a key indicatorof financial operating performance and as a measure of cash generatingcapability.

We define Adjusted EBITDA as net income (loss)before cumulative effect of accounting change and before interest,taxes, depreciation, amortization, asset impairment, preferred stockdividends, non-cash losses on sale-leaseback of property and equipmentand non-cash restricted stock award expense. In evaluating AdjustedEBITDA, our management deems it important to consider the quality ofour underlying earnings by separately identifying certain costsundertaken to improve our results, such as costs related toconsolidating facilities and business in an effort to eliminateduplicative costs or achieve efficiencies, costs related to integratingacquisitions and restructuring costs related to expense reductionefforts. Although our consolidation, restructuring and integrationefforts are continuing and driven in part by our acquisition activity,our management eliminates these costs to evaluate underlying businessperformance. Caution must be exercised in eliminating these items asthey include substantially (but not necessarily entirely) cash costsand there can be no assurance that we will ultimately realize thebenefits of these efforts. Moreover, even if the anticipated benefitsare realized, they may be offset by other business performance orgeneral economic issues.

By selecting Adjusted EBITDA,management believes that it is the best indicator (together with acareful review of the aforementioned items) of our ability to serviceand/or incur indebtedness as we are 

29

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a highly leveraged company. We use AdjustedEBITDA as a key performance measure because we believe it facilitatesoperating performance comparisons from period to period and company tocompany by backing out potential differences caused by variations incapital structures (affecting interest expense), tax positions (such asthe impact on periods or companies of changes in effective tax rates ornet operating losses) and the impact of purchase accounting and SFASNo. 142 (affecting depreciation and amortization expense). BecauseAdjusted EBITDA facilitates internal comparisons of our historicaloperating performance on a more consistent basis, we also use AdjustedEBITDA for business planning purposes, to incent and compensate ourmanagement personnel, in measuring our performance relative to that ofour competitors and in evaluating acquisition opportunities. Inaddition, we believe Adjusted EBITDA or similar measures are widelyused by investors, securities analysts, ratings agencies and otherinterested parties as a measure of financial performance anddebt-service capabilities. Our use of Adjusted EBITDA has limitationsas an analytical tool, and you should not consider it in isolation oras a substitute for analysis of our results as reported under GAAP.Some of these limitationsare:

|              |                                                                                           |
|--------------|-------------------------------------------------------------------------------------------|
| •  | It does not reflect ourcash expenditures for capital equipment or contractualcommitments; |

|              |                                                                                                                                                                                                                          |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Althoughdepreciation and amortization are non-cash charges, the assets beingdepreciated and amortized may have to be replaced in the future, andAdjusted EBITDA does not reflect cash requirements for suchreplacements; |

|              |                                                                                    |
|--------------|------------------------------------------------------------------------------------|
| •  | It does notreflect changes in, or cash requirements for, our working capitalneeds; |

|              |                                                                                                                                          |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------|
| •  | It does not reflect theinterest expense or the cash requirements necessary to service interestor principal payments on our indebtedness; |

|              |                                                                                                                                                                                                                                                       |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | It includes amounts resultingfrom matters we consider not to be indicative of underlying performanceof our fundamental business operations, as discussed in"Management's Discussion and Analysis of FinancialCondition and Results of Operations";and |

|              |                                                                                                                                                              |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Other companies, includingcompanies in our industry, may calculate these measures differentlythan we do, limiting their usefulness as a comparative measure. |

Because of these limitations, Adjusted EBITDA should not beconsidered a measure of discretionary cash available to us to invest inthe growth of our business. We compensate for these limitations byrelying primarily on our GAAP results and using Adjusted EBITDA onlysupplementally. We carefully review our operating profit margins(operating profit as a percentage of net sales) at a segment level,which are discussed in detail in our year-to-year comparison ofoperating results.

The following is a reconciliation ofour Adjusted EBITDA to net income (loss) for the three and six monthsended June 27, 2004 and June 29, 2003 (asrestated):

|                                                       |  |                   |         |                 |  |        |         |            |  |        |         |         |  |        |         |         |  |  |
|-------------------------------------------------------|--|-------------------|---------|-----------------|--|--------|---------|------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                  |  | (Inthousands)     |
|                                                  |  | ThreeMonths Ended |         | Six MonthsEnded |
|                                                  |  | 2004              |         | 2003            |  | 2004   |         | 2003       |
|                                                  |  |              |         | (Restated)      |  |   |         | (Restated) |
| Netincome (loss)                                      |  | $                 | (3,170  | )          |  | $      | 1,060   |       |  | $      | (8,420  | )  |  | $      | (10,000 | )  |
| Incometax expense (benefit)                           |  |              | 370     |            |  |   | (660    | )     |  |   | 130     |    |  |   | (3,950  | )  |
| Interestexpense                                       |  |              | 19,650  |            |  |   | 17,280  |       |  |   | 39,750  |    |  |   | 35,200  |    |
| Depreciationand amortization in operating profit      |  |              | 32,470  |            |  |   | 27,290  |       |  |   | 64,000  |    |  |   | 52,240  |    |
| Non-cashstock award expense                           |  |              | 240     |            |  |   | 630     |       |  |   | 470     |    |  |   | 1,530   |    |
| Preferredstockdividends                               |  |              | 4,710   |            |  |   | — |       |  |   | 8,970   |    |  |   | — |    |
| Non-cashgain on maturity of interest ratearrangements |  |              | — |            |  |   | — |       |  |   | (6,590  | )  |  |   | — |    |
| Losson disposition of manufacturing facilities        |  |              | — |            |  |   | — |       |  |   | 7,600   |    |  |   | — |    |
| Equity(gain) loss fromaffiliates                      |  |              | (2,980  | )          |  |   | 80      |       |  |   | (4,440  | )  |  |   | 2,710   |    |
| Certainitems within Other,Net(1)                      |  |              | 1,470   |            |  |   | 970     |       |  |   | 3,820   |    |  |   | 3,550   |    |
| AdjustedEBITDA                                        |  | $                 | 52,760  |            |  | $      | 46,650  |       |  | $      | 105,290 |    |  | $      | 81,280  |    |
|                                                       |

30

----

|  |
|--|
|  |  |
|  |

(1)    Reconciliationof OtherExpense

|                                                                                                                        |  |                   |       |                 |  |        |       |            |  |        |       |         |  |        |       |        |  |  |
|------------------------------------------------------------------------------------------------------------------------|--|-------------------|-------|-----------------|--|--------|-------|------------|--|--------|-------|---------|--|--------|-------|--------|--|--|
|                                                                                                                   |  | (Inthousands)     |
|                                                                                                                   |  | ThreeMonths Ended |       | Six MonthsEnded |
|                                                                                                                   |  | 2004              |       | 2003            |  | 2004   |       | 2003       |
|                                                                                                                   |  |              |       | (Restated)      |  |   |       | (Restated) |
| Itemsdeducted from net loss in determining Adjusted EBITDA (amortization offinancing fees and A/R securitization fees) |  | $                 | 1,470 |            |  | $      | 970   |       |  | $      | 3,820 |    |  | $      | 3,550 |   |
| Itemsincluded in determining Adjusted EBITDA (includes foreign currency,royalties and interestincome)                  |  |              | (430  | )          |  |   | 1,140 |       |  |   | (400  | )  |  |   | 2,220 |   |
| Totalother, net                                                                                                        |  | $                 | 1,040 |            |  | $      | 2,110 |       |  | $      | 3,420 |    |  | $      | 5,770 |   |
|                                                                                                                        |

Thefollowing details certain items relating to our consolidation,restructuring and integration efforts and other charges not eliminatedin determining Adjusted EBITDA, but that we would eliminate inevaluating the quality of our Adjusted EBITDA:

|                               |  |                   |        |                 |  |        |         |            |  |        |        |         |  |        |         |         |  |  |
|-------------------------------|--|-------------------|--------|-----------------|--|--------|---------|------------|--|--------|--------|---------|--|--------|---------|---------|--|--|
|                          |  | (Inthousands)     |
|                          |  | ThreeMonths Ended |        | Six MonthsEnded |
|                          |  | 2004              |        | 2003            |  | 2004   |         | 2003       |
|                          |  |              |        | (Restated)      |  |   |         | (Restated) |
| Restructuringcharges          |  | $                 | (1,520 | )          |  | $      | (2,330  | )     |  | $      | (1,710 | )  |  | $      | (3,860  | )  |
| Fixedasset disposal losses    |  |              | (430   | )          |  |   | (990    | )     |  |   | (750   | )  |  |   | (2,200  | )  |
| Foreigncurrency losses        |  |              | (290   | )          |  |   | (200    | )     |  |   | (720   | )  |  |   | (1,430  | )  |
| IndependentInvestigation fees |  |              | (5,260 | )          |  |   | — |       |  |   | (6,430 | )  |  |   | — |    |
|                               |

Resultsof Operations

Quarter Ended June 27, 2004 versus June 29,2003 (As Restated)

Net Sales.    Net sales bysegment and in total for the three months ended June 27, 2004 and June29, 2003 (as restated)were:

|                                      |  |                   |         |                   |  |        |         |        |  |  |
|--------------------------------------|--|-------------------|---------|-------------------|--|--------|---------|--------|--|--|
|                                 |  | (Inthousands)     |
|                                 |  | ThreeMonths Ended |         | Three MonthsEnded |
|                                 |  | June27, 2004      |         | June 29,2003      |
|                                 |  |              |         | (Restated)        |
| **Segment**                          |  |
| ChassisSegment                       |  | $                 | 155,930 |              |  | $      | 37,600  |   |
| DrivelineSegment                     |  |              | 202,810 |              |  |   | 202,860 |   |
| EngineSegment                        |  |              | 163,150 |              |  |   | 150,080 |   |
|     TotalCompany |  | $                 | 521,890 |              |  | $      | 390,540 |   |
|                                      |

Oursecond quarter 2004 net sales were $522 million versus second quarter2003 (as restated) net sales of $391 million. The primary driver of theincrease in our 2004 automotive sales was our New Castle acquisition,which contributed $119 million in the second quarter of 2004. Inaddition we had approximately $20 million in additional volume relatedto new product launches and ramp up of existing programs as well as a$5 million benefit from foreign exchange movements. However, theseincreases were partially offset by an approximate $17 million decreaserelated to our divestiture of two aluminum die casting facilitieswithin our Driveline segment and a 1.3% decrease in NorthAmerican vehicles production from our three largest customers (Ford,General Motors and DaimlerChrysler). The specific sales differences arefurther explained in the segment information section.

31

----

Gross profit**.**    Grossprofit by segment and in total for the three months ended June 27, 2004and June 29, 2003 (as restated)were:

|                                      |  |                   |        |                   |  |        |        |         |  |  |
|--------------------------------------|--|-------------------|--------|-------------------|--|--------|--------|---------|--|--|
|                                 |  | (Inthousands)     |
|                                 |  | ThreeMonths Ended |        | Three MonthsEnded |
|                                 |  | June27, 2004      |        | June 29,2003      |
|                                 |  |              |        | (Restated)        |
| **Segment**                          |  |
| ChassisSegment                       |  | $                 | 12,510 |              |  | $      | 3,720  |    |
| DrivelineSegment                     |  |              | 16,460 |              |  |   | 24,630 |    |
| EngineSegment                        |  |              | 26,900 |              |  |   | 24,470 |    |
| Corporate/centralizedresources       |  |              | (3,480 | )            |  |   | (2,990 | )  |
|     TotalCompany |  | $                 | 52,390 |              |  | $      | 49,830 |    |
|                                      |

Ourgross profit was $52.4 million, or 10.0% of net sales for 2004compared to $49.8 million, or 12.8% of net sales for 2003 (asrestated). The $2.6 million increase was primarily due to the salesincrease noted above. The 2.8% margin decline is primarilyexplained by a $10 million year over year decline in our North Americanforging operation (primarily related to an approximate $9 millionincrease in steel prices during the second quarter), which is part ofour Driveline segment, and a $3 million one-time payment made to acustomer relating to the award of a future business contract. Boththese items are explained further in our segment discussion for theDriveline Group.

Selling, General andAdministrative**.**    Selling, general and administrativeexpenses were $31.3 million or 6.0% of net sales for 2004compared to $27.6 million, or 7.1% of net sales for 2003 The$3.7 million increase from 2003 to 2004 is primarily related toapproximately $5 million of expense associated with the IndependentInvestigation described in Note 2 to the consolidated financialstatements included herein. The reduction in selling, general andadministrative expenses as a percentage of net sales reflects thebenefits from restructuring efforts initiated in 2003 and the fact thatthe New Castle facility was able to integrate into our operationwithout significant additional investment in these activities.

Depreciation and Amortization**.**    Depreciation andamortization expense by segment and in total for the three months endedJune 27, 2004 and June 29, 2003 (as restated)were:

|                                      |  |                   |        |                   |  |        |        |        |  |  |
|--------------------------------------|--|-------------------|--------|-------------------|--|--------|--------|--------|--|--|
|                                 |  | (Inthousands)     |
|                                 |  | ThreeMonths Ended |        | Three MonthsEnded |
|                                 |  | June27, 2004      |        | June 29,2003      |
|                                 |  |              |        | (Restated)        |
| **Segment**                          |  |
| ChassisSegment                       |  | $                 | 6,610  |              |  | $      | 1,820  |   |
| DrivelineSegment                     |  |              | 14,600 |              |  |   | 12,870 |   |
| EngineSegment                        |  |              | 10,060 |              |  |   | 10,690 |   |
| Corporate/centralizedresources       |  |              | 1,200  |              |  |   | 1,910  |   |
|     TotalCompany |  | $                 | 32,470 |              |  | $      | 27,290 |   |
|                                      |

Thenet increase in depreciation and amortization of approximately $5.2million is principally explained by $4.7 million of depreciation andamortization expense associated with our New Castle acquisition.

Restructuring Charges**.**    We incurred $1.5 millionof restructuring charges in the second quarter of 2004 compared to $2.3million incurred in the second quarter of 2003. Of the 2004 charges,approximately $0.9 million related to our Driveline segment, where themajority of the charge related to the closure of a facility in Europe.An additional $0.5 million relates to costs to reduce headcount in ourCorporate center, and the remaining $0.1 million relates to headcountreductions in our Chassis segment. Net restructuring activity in thesecond quarter of 2004 is as follows:

32

----

|                         |  |                |        |         |  |  |
|-------------------------|--|----------------|--------|---------|--|--|
|                    |  | (Inthousands)  |
|                    |  | SeveranceCosts |
| BalanceMarch 28, 2004   |  | $              | 5,860  |    |
| Charges toexpense       |  |           | 1,520  |    |
| Cash payments           |  |           | (1,730 | )  |
| Balance at June 27,2004 |  | $              | 5,650  |    |
|                         |

OperatingProfit.    Operating profit was $19.6 million, or 3.8% ofsales, for the second quarter of 2004 compared to $19.9 million, or5.1% of sales, for the same period in 2003 (as restated). The$0.3 million decrease is principally explained by an $10 millioncontribution from our New Castle acquisition (before corporate expenseallocations to the segments relating to services performed at Corporatefor the benefit of the operations), approximately $0.8 million decreasein restructuring expense, $1.5 million pension curtailment gain, and $6million from new launches and ramp up from existing programs. However,these improvements were offset by $10 million of issues surrounding ourforging operations (primarily related to an approximate $9 millionincrease in steel prices during the second quarter), a $3 millionone-time payment to a customer relating to the launch of an upcomingprogram, and approximately $5 million in fees and expenses forprofessional services provided related to the Independent Investigationand restatement described in Note 2 to the consolidated financialstatements included herein. These items are further explained in thesections above and in the segment discussion that follows. Operatingprofit by segment for the three months ended June 27, 2004 and June 29,2003 (as restated) is asfollows:

|                                      |  |                   |        |                   |  |        |        |         |  |  |
|--------------------------------------|--|-------------------|--------|-------------------|--|--------|--------|---------|--|--|
|                                 |  | (Inthousands)     |
|                                 |  | ThreeMonths Ended |        | Three MonthsEnded |
|                                 |  | June27, 2004      |        | June 29,2003      |
|                                 |  |              |        | (Restated)        |
| **Segment**                          |  |
| ChassisSegment                       |  | $                 | 8,730  |              |  | $      | 1,960  |    |
| DrivelineSegment                     |  |              | 3,510  |              |  |   | 9,820  |    |
| EngineSegment                        |  |              | 17,020 |              |  |   | 14,350 |    |
| Corporate/centralizedresources       |  |              | (9,640 | )            |  |   | (6,260 | )  |
|     TotalCompany |  | $                 | 19,620 |              |  | $      | 19,870 |    |
|                                      |

AdjustedEBITDA**.**    Management reviews our segment operatingresults based upon the Adjusted EBITDA definition as discussed in the"Key Indicators of Performance (Non-GAAP FinancialMeasures)" section. Accordingly, we have separatelypresented such amounts in the table below. Adjusted EBITDA increased to$52.8 million in 2004 from $46.7 million in 2003 (as restated). Theprimary drivers of this increase are explained above in the operatingprofit and depreciation and amortization discussions, and will befurther detailed in the segment detail that follows. Additionally, in"— Segment Information" below, weprovide a reconciliation between Adjusted EBITDA and operatingprofit.

|                                                                                             |  |                   |        |                   |  |        |        |         |  |  |
|---------------------------------------------------------------------------------------------|--|-------------------|--------|-------------------|--|--------|--------|---------|--|--|
|                                                                                        |  | (Inthousands)     |
|                                                                                        |  | ThreeMonths Ended |        | Three MonthsEnded |
|                                                                                        |  | June27, 2004      |        | June 29,2003      |
|                                                                                        |  |              |        | (Restated)        |
| **Segment**                                                                                 |  |
| ChassisSegment                                                                              |  | $                 | 15,340 |              |  | $      | 3,780  |    |
| DrivelineSegment                                                                            |  |              | 18,110 |              |  |   | 22,690 |    |
| EngineSegment                                                                               |  |              | 27,080 |              |  |   | 25,040 |    |
| Corporate/centralizedresources                                                              |  |              | (7,770 | )            |  |   | (4,860 | )  |
| TotalCompany                                                                                |  | $                 | 52,760 |              |  | $      | 46,650 |    |
|                                                                                        |  |              |   |              |  |   |   |    |
| Memo:Fixed asset losses included in calculation of both operating profit andAdjusted EBITDA |  | $                 | 430    |              |  | $      | 990    |    |
| Memo:Other, net (income) loss included in calculation of AdjustedEBITDA                     |  | $                 | (430   | )            |  | $      | 1,140  |    |
|                                                                                             |

33

----

Interest Expense.    Interestexpense increased from $17.3 million in the second quarter of 2003 (asrestated) to approximately $19.7 million in 2004. The increase isprincipally due to $0.8 million in interest arising from the 10%senior subordinated notes from our New Castle acquisition and $3.8million in interest arising from our 10% senior notes issued inOctober 2003. These increases were offset by a decrease of $1.1 millionin interest expense related to the redemption of the $98.5 millionoutstanding balance on the 4.5% subordinated debentures and adecrease of $0.6 million in interest expense related to the repaymentof $46.6 million of term loan debt in the fourth quarter of 2003.

Equity Loss from Affiliates.    Equity earnings (loss)from affiliates were $3.0 million in the second quarter of 2004. Theimprovement versus our second quarter 2003 loss of $0.1 millionreflects the improved operating results of our equity affiliates.

Other, Net.    Other, net decreased to a loss of $1.0million in the second quarter of 2004 versus a loss of approximately$2.1 million in the second quarter of 2003 (as restated). This decreaseis due primarily to a $1.2 million gain recognized on the dispositionof a joint venture in Korea in the second quarter of 2004.

Preferred Stock Dividends.    Preferred stock dividendswere $4.7 million in the second quarter of 2004 as compared to $2.3million for the same period in 2003. This increase is due to dividendson the $64.5 million of preferred stock issued in connection with theNew Castle acquisition and compounded interest on preexisting preferredstock. Due to our adoption of SFAS No. 150, "Accountingfor Certain Financial Instruments with Characteristics of bothLiabilities and Equity" in the first quarter of 2004,preferred stock dividends are included as other expense, net on ourconsolidated statement of operations beginning in 2004.

Taxes.     The provision for income taxes for the secondquarter of 2004 was an expense of $0.5 million as compared with abenefit of $0.7 million for the second quarter of 2003 (as restated).The primary reasons for the Company's effective tax rate beingdifferent from its statutory rate are non-deductible preferred stockdividends, foreign losses for which losses are not recognized andforeign tax rates in excess of the U.S. rate as well as the provisionfor unremitted earnings of a foreign subsidiary.

SegmentInformation

Chassis Segment.    Sales for ourChassis Segment increased in the second quarter of 2004 to $155.9million versus $37.6 million in the prior period (as restated). Theprimary driver of the approximate $118 million increase in sales wasthe New Castle acquisition, which contributed $119 million during theperiod. Adjusted EBITDA for the segment increased from $3.8 million inthe second quarter of 2003 (as restated) to $15.3 million in 2004. Theincrease is primarily due to an approximate $14 million increase fromour New Castle acquisition (results are net of approximately $2.5million in operating leases used to finance the acquisition), offsetpartially by approximately $0.5 million from the divestiture of ourFittings operation, $1.5 million of customer pricing concessions andcommodity price increases, and $0.5 million of additional lease expenserelated to sale leaseback activities completed in 2003 and firstquarter of 2004. Operating profit increased by $6.8 million in thesecond quarter of 2004 due to the above factors but was offset by anincrease of $4.7 million in depreciation and amortization expense thatprimarily relates to the New Castle acquisition.

34

----

|                                                                                            |  |                   |         |                   |  |        |         |        |  |  |
|--------------------------------------------------------------------------------------------|--|-------------------|---------|-------------------|--|--------|---------|--------|--|--|
|                                                                                       |  | (Inthousands)     |
|                                                                                       |  | ThreeMonths Ended |         | Three MonthsEnded |
|                                                                                       |  | June27, 2004      |         | June 29,2003      |
|                                                                                       |  |              |         | (Restated)        |
| **ChassisSegment**                                                                         |  |
| Sales                                                                                      |  | $                 | 155,930 |              |  | $      | 37,600  |   |
|                                                                                       |  |              |    |              |  |   |    |   |
| Operatingprofit                                                                            |  | $                 | 8,730   |              |  | $      | 1,960   |   |
| Depreciationand amortization                                                               |  |              | 6,610   |              |  |   | 1,820   |   |
| AdjustedEBITDA                                                                             |  | $                 | 15,340  |              |  | $      | 3,780   |   |
|                                                                                       |  |              |    |              |  |   |    |   |
| Memo:Fixed asset gains included in calculation of both operating profit andAdjusted EBITDA |  | $                 | (530    | )            |  | $      | — |   |
|                                                                                            |

Driveline Segment.    Salesfor our Driveline segment were $202.8 million in the second quarter of2004 versus $202.9 million in 2003 (as restated). Sales decreased $17million related to the divestiture of two aluminum die castingfacilities but was primarily offset by a $3 million benefit in foreignexchange fluctuations and a $9 million benefit from new launches andramp up of existing business. Adjusted EBITDA for the segment decreasedto $18.1 million from $22.7 million in the prior year. Approximately$10 million of the decrease relates to our forging operation'sissues surrounding steel price increases (approximate $9 millionincrease during the second quarter), lost business and the full yearimpact of customer productivity concessions agreed to in 2003.Additionally, $3 million of the decrease relates to a one-time paymentmade to a customer in return for a contract award launching in 2005.This program award is for production of two key modules in a newsix-speed transmission and has annual peak sales of approximately $35million. Somewhat offsetting these decreases were approximately $2.5million in additional profits from the launching and ramp up salesdescribed above, approximately $4.5 million from cost reductionactivities, and approximately $0.5 million related to foreign exchangefluctuations. Operating profit decreased from $9.8 million in 2003 (asrestated) to $3.5 million in 2004. In addition to the factors discussedabove influencing Adjusted EBITDA, the decrease is primarilyattributable to a $1.7 million increase in depreciation andamortization expense.

|                                                                                            |  |                   |         |                   |  |        |         |         |  |  |
|--------------------------------------------------------------------------------------------|--|-------------------|---------|-------------------|--|--------|---------|---------|--|--|
|                                                                                       |  | (Inthousands)     |
|                                                                                       |  | ThreeMonths Ended |         | Three MonthsEnded |
|                                                                                       |  | June27, 2004      |         | June 29,2003      |
|                                                                                       |  |              |         | (Restated)        |
| **DrivelineSegment**                                                                       |  |
| Sales                                                                                      |  | $                 | 202,810 |              |  | $      | 202,860 |    |
|                                                                                       |  |              |    |              |  |   |    |    |
| Operatingprofit                                                                            |  | $                 | 3,510   |              |  | $      | 9,820   |    |
| Depreciationand amortization                                                               |  |              | 14,600  |              |  |   | 12,870  |    |
| AdjustedEBITDA                                                                             |  | $                 | 18,110  |              |  | $      | 22,690  |    |
| Memo:Fixed asset gains included in calculation of both operating profit andAdjusted EBITDA |  | $                 | (50     | )            |  | $      | (10     | )  |
|                                                                                            |

Engine Segment.    Sales forour Engine Segment increased to $163.2 million in the second quarter of2004 or 8.7% over 2003 (as restated) sales of $150.1 million**.**The $13.1 million increase primarily reflects approximately $11million in additional volume from new product launches and a $2.5million benefit related to foreign exchange movements. Adjusted EBITDAincreased from $25.0 million in the first quarter of 2003 (as restated)to $27.1 million in 2004. The increase primarily relates to profit fromadditional sales volume, but is also aided by an approximate $0.5million benefit related to foreign exchange movements. Operating profitincreased to $17.0 million in the second quarter of 2004 from $14.4million in 2003 (as restated). In addition to the factors discussedabove, operating profit was positively affected by a $0.6 millionreduction in depreciation and amortization expense.

35

----

|                                                                                             |  |                   |         |                   |  |        |         |        |  |  |
|---------------------------------------------------------------------------------------------|--|-------------------|---------|-------------------|--|--------|---------|--------|--|--|
|                                                                                        |  | (Inthousands)     |
|                                                                                        |  | ThreeMonths Ended |         | Three MonthsEnded |
|                                                                                        |  | June27, 2004      |         | June 29,2003      |
|                                                                                        |  |              |         | (Restated)        |
| **EngineSegment**                                                                           |  |
| Sales                                                                                       |  | $                 | 163,150 |              |  | $      | 150,080 |   |
|                                                                                        |  |              |    |              |  |   |    |   |
| Operatingprofit                                                                             |  | $                 | 17,020  |              |  | $      | 14,350  |   |
| Depreciationand amortization                                                                |  |              | 10,060  |              |  |   | 10,690  |   |
| AdjustedEBITDA                                                                              |  | $                 | 27,080  |              |  | $      | 25,040  |   |
| Memo:Fixed asset losses included in calculation of both operating profit andAdjusted EBITDA |  | $                 | 80      |              |  | $      | 1,000   |   |
|                                                                                             |

Corporate/CentralizedResources.    Adjusted EBITDA for Corporate/CentralizedResources was a loss of $7.8 million in the second quarter of 2004versus a loss of $4.9 million in the prior period (as restated). Thisincreased loss is primarily attributable to the approximate $5 millionin fees incurred in the quarter surrounding the IndependentInvestigation described in Note 2 to the consolidated financialstatements included herein. After adjusting for these one-time fees,Corporate expenses decreased by approximately $2 million. Thisreduction is principally explained by restructuring activitiesinitiated in 2003 and a reduction of approximately $1.6 million inother expense, net, primarily related to a gain on the disposition of ajoint venture in Korea during the second quarter of 2004 but is offsetby approximately $0.9 million increase in fixed asset losses).Operating profit decreased by $3.4 million in 2004, which is alsoexplained by the factors describedabove.

|                                                                                             |  |                   |        |                   |  |        |         |         |  |  |
|---------------------------------------------------------------------------------------------|--|-------------------|--------|-------------------|--|--------|---------|---------|--|--|
|                                                                                        |  | (Inthousands)     |
|                                                                                        |  | ThreeMonths Ended |        | Three MonthsEnded |
|                                                                                        |  | June27, 2004      |        | June 29,2003      |
|                                                                                        |  |              |        | (Restated)        |
| **Corporate/CentralizedResources**                                                          |  |
| Operating profit                                                                            |  | $                 | (9,640 | )            |  | $      | (6,260  | )  |
|                                                                                        |  |              |   |              |  |   |    |    |
| Non-cashstock award expense                                                                 |  |              | 240    |              |  |   | 630     |    |
| Depreciation andamortization                                                                |  |              | 1,200  |              |  |   | 1,910   |    |
| Other,net                                                                                   |  |              | 430    |              |  |   | (1,140  | )  |
| AdjustedEBITDA                                                                              |  | $                 | (7,770 | )            |  | $      | (4,860  | )  |
| Memo:Fixed asset losses included in calculation of both operating profit andAdjusted EBITDA |  | $                 | 930    |              |  | $      | — |    |
| Memo:Other, net (income) loss included in calculation of AdjustedEBITDA                     |  | $                 | (430   | )            |  | $      | 1,140   |    |
|                                                                                             |

36

----

Six Months Ended June 27, 2004versus June 29, 2003 (As Restated)

NetSales.    Net sales by segment and in total for the six monthsended June 27, 2004 and June 29, 2003 (as restated)were:

|                                      |  |                 |           |                 |  |        |         |        |  |  |
|--------------------------------------|--|-----------------|-----------|-----------------|--|--------|---------|--------|--|--|
|                                 |  | (Inthousands)   |
|                                 |  | Six MonthsEnded |           | Six MonthsEnded |
|                                 |  | June27, 2004    |           | June 29,2003    |
|                                 |  |            |           | (Restated)      |
| **Segment**                          |  |
| ChassisSegment                       |  | $               | 284,250   |            |  | $      | 77,470  |   |
| DrivelineSegment                     |  |            | 398,240   |            |  |   | 403,180 |   |
| EngineSegment                        |  |            | 320,540   |            |  |   | 291,810 |   |
|     TotalCompany |  | $               | 1,003,030 |            |  | $      | 772,460 |   |
|                                      |

Netsales for the first six months of 2004 were $1,003 million versus $772for the first six months of 2003 (as restated). The primary driver ofthe increase in our 2004 automotive sales was our New Castleacquisition, which contributed $212 million in the first six months of2004. In addition we had approximately $37 million in additional volumerelated to new product launches and ramp up of existing programs aswell as a $17 million benefit from foreign exchange movements. However,these increases were partially offset by approximately $32 millionrelated to our divestiture of two aluminum die casting facilitieswithin our Driveline segment, and a 2.9% decrease in NorthAmerican vehicle production from our three largest customers (Ford,General Motors and DaimlerChrysler).

Grossprofit**.**    Gross margin by segment and in total for thesix months ended June 27, 2004 and June 29, 2003 (as restated)were:

|                                      |  |                 |         |                 |  |        |        |         |  |  |
|--------------------------------------|--|-----------------|---------|-----------------|--|--------|--------|---------|--|--|
|                                 |  | (Inthousands)   |
|                                 |  | Six MonthsEnded |         | Six MonthsEnded |
|                                 |  | June27, 2004    |         | June 29,2003    |
|                                 |  |            |         | (Restated)      |
| **Segment**                          |  |
| ChassisSegment                       |  | $               | 19,840  |            |  | $      | 7,850  |    |
| DrivelineSegment                     |  |            | 37,150  |            |  |   | 43,310 |    |
| EngineSegment                        |  |            | 55,420  |            |  |   | 46,510 |    |
| Corporate/centralizedresources       |  |            | (7,810  | )          |  |   | (6,800 | )  |
|     TotalCompany |  | $               | 104,600 |            |  | $      | 90,870 |    |
|                                      |

Ourgross profit was $104.6 million, or 10.4% of net sales, for 2004compared to $90.9 million or 11.8% of net sales for 2003 (asrestated). The increase of $13.7 million was primarily due to the salesincrease noted above. The 1.4% margin decline is primarilyexplained by two issues within our Driveline segment. The first issuesurrounds a $10 million decline in our forging operations (primarilyrelates to an $11 million increase in steel cost during the first sixmonths of 2004) and the second issue involves a $3 million one-timepayment made to one of our customers relating to a new business award.Both these items are further explained in the segment discussion thatfollows.

Selling, General andAdministrative**.**    Selling, general and administrativeexpenses were $62.5 million, or 6.2% of net sales, for 2004compared to $57.3 million or 7.4% of sales in 2003 . The $5.2million increase from 2003 to 2004 is primarily explained by theapproximately $6 million in fees relating to the IndependentInvestigation described in Note 2 to the consolidated financialstatements included herein. The reduction in selling, general andadministrative expenses as a percentage of net sales additionallyreflects the fact that the New Castle facility was able to integrateinto our operation without significant additional investment in theseactivities, and reflects the benefits of our restructuring activityinitiatives in late 2003

Depreciation andAmortization**.**    Depreciation and amortization expense bysegment and in total for the six months ended June 27, 2004 and June29, 2003 (as restated) were:

37

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|                                      |  |                 |        |                 |  |        |        |        |  |  |
|--------------------------------------|--|-----------------|--------|-----------------|--|--------|--------|--------|--|--|
|                                 |  | (Inthousands)   |
|                                 |  | Six MonthsEnded |        | Six MonthsEnded |
|                                 |  | June27, 2004    |        | June 29,2003    |
|                                 |  |            |        | (Restated)      |
| **Segment**                          |  |
| ChassisSegment                       |  | $               | 12,800 |            |  | $      | 3,700  |   |
| DrivelineSegment                     |  |            | 27,950 |            |  |   | 25,780 |   |
| EngineSegment                        |  |            | 18,910 |            |  |   | 18,940 |   |
| Corporate/centralizedresources       |  |            | 4,340  |            |  |   | 3,820  |   |
|     TotalCompany |  | $               | 64,000 |            |  | $      | 52,240 |   |
|                                      |

Thenet increase in depreciation and amortization of approximately $11.8million is principally explained by $9.2 million of depreciation andamortization expense associated with our New Castle acquisition.Additionally, for the past several years capital spending has been inexcess of our depreciation expense. Thus, the additional capitalspending accounts for the remaining increase in depreciationexpense.

Restructuring Charges**.**    We incurred$1.7 million of additional restructuring charges in the first sixmonths of 2004 compared to $3.9 million incurred in the first sixmonths of 2003. Of the 2004 charges, approximately $1.1 million relatesto our Driveline segment, where the majority of the charge relates tothe closure of a facility in Europe. An additional $0.5 million relatesto costs to reduce headcount in our Corporate center, and the remaining$0.1 million relates to headcount reductions in our Chassis segment.Net restructuring activity in the first six months of 2004 is asfollows:

|                          |  |                |        |         |  |  |
|--------------------------|--|----------------|--------|---------|--|--|
|                     |  | (Inthousands)  |
|                     |  | SeveranceCosts |
| BalanceDecember 28, 2003 |  | $              | 7,670  |    |
| Charges toexpense        |  |           | 1,710  |    |
| Cash payments            |  |           | (3,730 | )  |
| Balance at June 27,2004  |  | $              | 5,650  |    |
|                          |

Disposition ofManufacturing Facilities**.**    In connection with our saleof two aluminum die casting facilities in our Driveline segment, weincurred a $7.6 million charge in the first six months of 2004. Thischarge represents approximately a book value of $12 million in fixedassets and deferred financing fees offset by the $4.1 million in cashconsideration paid by Lester PDC for the assets. See Note  11 tothe consolidated financial statements included herein.

Operating Profit.    Operating profit was $32.8 million,or 3.3% of sales, for the first six months of 2004 compared to$29.7 million, or 3.9% of sales, for the same period in 2003 (asrestated). This includes a $7.6 million charge relating to thedisposition of two manufacturing facilities discussed above from 2004.This resulting increase is principally explained by the significantincrease in sales and the decrease in selling, general andadministrative expenses as a percentage of sales. The makeup of each ofthese differences is discussed in greater detail above and in thesegment discussion that follows. Operating profit by segment for thesix months ended June 27, 2004 and June 29, 2003 (as restated) is asfollows:

|                                      |  |                 |         |                 |  |        |         |         |  |  |
|--------------------------------------|--|-----------------|---------|-----------------|--|--------|---------|---------|--|--|
|                                 |  | (Inthousands)   |
|                                 |  | Six MonthsEnded |         | Six MonthsEnded |
|                                 |  | June27, 2004    |         | June 29,2003    |
|                                 |  |            |         | (Restated)      |
| **Segment**                          |  |
| ChassisSegment                       |  | $               | 11,810  |            |  | $      | 3,770   |    |
| DrivelineSegment                     |  |            | 4,830   |            |  |   | 15,700  |    |
| EngineSegment                        |  |            | 35,250  |            |  |   | 25,680  |    |
| Corporate/centralizedresources       |  |            | (19,070 | )          |  |   | (15,420 | )  |
|     TotalCompany |  | $               | 32,820  |            |  | $      | 29,730  |    |
|                                      |

38

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AdjustedEBITDA**.**    Management reviews our segment operatingresults based upon the Adjusted EBITDA definition as discussed in the"Key Indicators of Performance (Non-GAAP FinancialMeasures)" section. Accordingly, we have separatelypresented such amounts in the table below. Adjusted EBITDA increased to$105.3 million in 2004 from $81.3 million in 2003 (as restated) Theprimary drivers of this increase are explained above in the operatingprofit and depreciation and amortization discussions, and will befurther detailed in the segment detail that follows. Additionally, in"— Segment Information" below, weprovide a reconciliation between Adjusted EBITDA and operatingprofit.

|                                                                                             |  |                 |         |                 |  |        |         |         |  |  |
|---------------------------------------------------------------------------------------------|--|-----------------|---------|-----------------|--|--------|---------|---------|--|--|
|                                                                                        |  | (Inthousands)   |
|                                                                                        |  | Six MonthsEnded |         | Six MonthsEnded |
|                                                                                        |  | June27, 2004    |         | June 29,2003    |
|                                                                                        |  |            |         | (Restated)      |
| **Segment**                                                                                 |  |
| ChassisSegment                                                                              |  | $               | 24,610  |            |  | $      | 7,470   |    |
| DrivelineSegment                                                                            |  |            | 40,380  |            |  |   | 41,480  |    |
| EngineSegment                                                                               |  |            | 54,160  |            |  |   | 44,620  |    |
| Corporate/centralizedresources                                                              |  |            | (13,860 | )          |  |   | (12,290 | )  |
|     TotalCompany                                                        |  | $               | 105,290 |            |  | $      | 81,280  |    |
|                                                                                        |  |            |    |            |  |   |    |    |
| Memo:Fixed asset losses included in calculation of both operating profit andAdjusted EBITDA |  | $               | 750     |            |  | $      | 2,200   |    |
| Memo:Other, net (income) loss included in calculation of AdjustedEBITDA                     |  | $               | (400    | )          |  | $      | 2,220   |    |
|                                                                                             |

InterestExpense.    Interest expense increased from $35.2 million in thefirst six months of 2003 (as restated) to approximately $39.8 millionin 2004. The increase is principally due to $1.6 million in interestarising from the 10% senior subordinated notes from our NewCastle acquisition and $7.5 million in interest arising from our10% senior notes issued in October 2003. These increases wereoffset by a decrease of $2.2 million in interest expense related to theredemption of the $98.5 million outstanding balance on the 4.5%subordinated debentures and a decrease of approximately $1.3 million ininterest expense related to the repayment of $46.6 million of term loandebt in the fourth quarter of 2004.

Equity Loss fromAffiliates.    Equity earnings (loss) from affiliates were $4.4million in the first six months of 2004. The improvement versus our2003 loss of $2.7 million reflects the improved operating results ofour equity affiliates.

Other, Net.    Other, netexpense decreased to a $3.4 million loss in the first six months of2004 versus a loss of approximately $5.8 million in the first sixmonths of 2003 (as restated). This decrease is primarily due to areduction in foreign currency losses in 2004 versus 2003 and a $1.2million gain on the disposition of a joint venture in Korea during thesecond quarter of 2004.

Preferred StockDividends.    Preferred stock dividends were $9.0 million in thefirst six months of 2004 as compared to $4.5 million for the sameperiod in 2003 . This increase is due to dividends on the $64.5 millionof preferred stock issued in connection with the New Castle acquisitionand compounded interest on preexisting preferred stock. Due to ouradoption of SFAS No. 150, "Accounting for CertainFinancial Instruments with Characteristics of both Liabilities andEquity" as of the first quarter of 2004, preferred stockdividends are included as "other expense,net" on our consolidated statement of operations beginningin 2004.

Taxes.    The tax provision for the firstsix months of 2004 was an expense of $0.2 million as compared to $4.0million for the same period of 2003 (as restated). The primary reasonsfor the Company's effective tax rate being different from itsstatutory rate are non-deductible preferred stock dividends, foreignlosses for which losses are not recognized and foreign tax rates inexcess of the U.S. rate as well as the provision for unremittedearnings of a foreign subsidiary.

In July 2004, the Companyreceived a $27 million tax refund from the IRS that resulted from aclaim filed by the Company in 2002. This claim was based on a 2002change in the U.S. Treasury Regulations, 

39

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which permitted the Company to utilize apreviously disallowed capital loss that primarily resulted from thesale of a subsidiary in 2000. The amount received in excess of therefund previously recorded will be considered in the tax provision forthe third quarter of 2004.

Segment Information

Chassis Segment.    Sales for our Chassis Segment increasedin the first six months of 2004 to $284.3 million versus $77.5 millionin the prior period (as restated). The primary driver of theapproximate $206.8 million increase in sales is a $212 million increasefrom the acquisition of New Castle offset by $6 million decrease due tothe divestiture of our Fittings operation in April 2003. AdjustedEBITDA for the segment increased from $7.5 million in the first sixmonths of 2003 (as restated) to $24.6 million in 2004. The increase isprimarily due to an approximate $21 million increase from our NewCastle acquisition (results are net of approximately $5 in operatingleases used to finance the acquisition), offset partially byapproximately $1.5 million from the divestiture of our Fittingsoperation, $2 million in customer price concessions, and approximately$1 million of additional lease expense related to sale leasebackactivities completed in 2003. Operating profit increased by **$**8million in the first six months of 2004 due to the above factors butwas offset by an increase of **$**9.1 million in depreciation andamortization expense primarily relating to the New Castleacquisition.

|                                                                                                     |  |                 |         |                 |  |        |        |        |  |  |
|-----------------------------------------------------------------------------------------------------|--|-----------------|---------|-----------------|--|--------|--------|--------|--|--|
|                                                                                                |  | (Inthousands)   |
|                                                                                                |  | Six MonthsEnded |         | Six MonthsEnded |
|                                                                                                |  | June27, 2004    |         | June 29,2003    |
|                                                                                                |  |            |         | (Restated)      |
| **ChassisSegment**                                                                                  |  |
| Sales                                                                                               |  | $               | 284,250 |            |  | $      | 77,470 |   |
|                                                                                                |  |            |    |            |  |   |   |   |
| Operatingprofit                                                                                     |  | $               | 11,810  |            |  | $      | 3,770  |   |
| Depreciationand amortization                                                                        |  |            | 12,800  |            |  |   | 3,700  |   |
| AdjustedEBITDA                                                                                      |  | $               | 24,610  |            |  | $      | 7,470  |   |
| Memo:Fixed asset (gains) losses included in calculation of both operatingprofit and Adjusted EBITDA |  | $               | (530    | )          |  | $      | 140    |   |
|                                                                                                     |

DrivelineSegment.    Sales for our Driveline segment were $398.2 millionin the first six months of 2004 versus $403.2 million in 2003 (asrestated). Sales decreased $32 million related to the divestiture oftwo aluminum die casting facilities but were offset by a $9 millionbenefit in foreign exchange fluctuations and a $16 million benefit fromnew launches and ramp up of existing business. Adjusted EBITDA for thesegment decreased $1.1 million to $40.4 million as compared with theprior year (as restated). Cost savings and profits from new businessprimarily offset issues within the Forging operation (primary issue wasan approximate $11 million increase in the price to procure steelduring the first six months of 2004 compared to the same period in2003). Operating profit decreased from $15.7 million in 2003 (asrestated) to $4.8 million in 2004. This decrease is primarilyattributable to the $7.6 million disposition of two manufacturingfacilities discussed earlier and approximately $2.2 million ofincremental depreciation and amortization expense.

40

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|                                                                                             |  |                 |         |                 |  |        |         |        |  |  |
|---------------------------------------------------------------------------------------------|--|-----------------|---------|-----------------|--|--------|---------|--------|--|--|
|                                                                                        |  | (Inthousands)   |
|                                                                                        |  | Six MonthsEnded |         | Six MonthsEnded |
|                                                                                        |  | June27, 2004    |         | June 29,2003    |
|                                                                                        |  |            |         | (Restated)      |
| **DrivelineSegment**                                                                        |  |
| Sales                                                                                       |  | $               | 398,240 |            |  | $      | 403,180 |   |
|                                                                                        |  |            |    |            |  |   |    |   |
| Operatingprofit                                                                             |  | $               | 4,830   |            |  | $      | 15,700  |   |
| Assetimpairment                                                                             |  |            | 7,600   |            |  |   | — |   |
| Depreciation andamortization                                                                |  |            | 27,950  |            |  |   | 25,780  |   |
| AdjustedEBITDA                                                                              |  | $               | 40,380  |            |  | $      | 41,480  |   |
| Memo:Fixed asset losses included in calculation of both operating profit andAdjusted EBITDA |  | $               | 190     |            |  | $      | 10      |   |
|                                                                                             |

Engine Segment.    Sales for ourEngine Segment increased to $320.5 million in the first six months of2004 or 9.8% over 2003 (as restated) sales of $291.8 million**.**The $28.7 million increase primarily reflects $25 million inadditional volume from new product launches and a $8 million benefitrelated to foreign exchange movements. Adjusted EBITDA increased from$44.6 million in the first six months of 2003 (as restated) to $54.2million in 2004. The increase primarily relates to additional salesvolume, but is also aided by an approximate $0.5 million benefitrelated to foreign exchange movements. Operating profit increased to$35.2 million in the first six months of 2004 from $25.7 million in2003 (as restated). The explanations for this change are describedabove.

|                                                                                             |  |                 |         |                 |  |        |         |        |  |  |
|---------------------------------------------------------------------------------------------|--|-----------------|---------|-----------------|--|--------|---------|--------|--|--|
|                                                                                        |  | (Inthousands)   |
|                                                                                        |  | Six MonthsEnded |         | Six MonthsEnded |
|                                                                                        |  | June27, 2004    |         | June 29,2003    |
|                                                                                        |  |            |         | (Restated)      |
| **EngineSegment**                                                                           |  |
| Sales                                                                                       |  | $               | 320,540 |            |  | $      | 291,810 |   |
|                                                                                        |  |            |    |            |  |   |    |   |
| Operatingprofit                                                                             |  | $               | 35,250  |            |  | $      | 25,680  |   |
| Depreciationand amortization                                                                |  |            | 18,910  |            |  |   | 18,940  |   |
| AdjustedEBITDA                                                                              |  | $               | 54,160  |            |  | $      | 44,620  |   |
| Memo:Fixed asset losses included in calculation of both operating profit andAdjusted EBITDA |  | $               | 160     |            |  | $      | 1,170   |   |
|                                                                                             |

Corporate/CentralizedResources.    Adjusted EBITDA for Corporate/CentralizedResources was a loss of $13.9 million in the first six months of 2004versus a loss of $12.3 million in the prior period. We incurred $6million of expenses associated with our Independent Investigationdiscussed in Note 2 to the consolidated financial statements containedherein. After adjusting for these one time expenses, corporate expensesdecreased by approximately $4.4 million. The remaining reduction isprincipally explained by restructuring activities initiated in 2003, apension curtailment gain of approximately $1.5 million recognized inthe second quarter of 2004 and a decrease of $2.6 million in Other,Net. Operating profit decreased by $3.7 million in 2004, which is alsoexplained by the factors described above.

41

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|                                                                                             |  |                 |         |                 |  |        |         |         |  |  |
|---------------------------------------------------------------------------------------------|--|-----------------|---------|-----------------|--|--------|---------|---------|--|--|
|                                                                                        |  | (Inthousands)   |
|                                                                                        |  | Six MonthsEnded |         | Six MonthsEnded |
|                                                                                        |  | June27, 2004    |         | June 29,2003    |
|                                                                                        |  |            |         | (Restated)      |
| **Corporate/CentralizedResources**                                                          |  |
| Operating profit                                                                            |  | $               | (19,070 | )          |  | $      | (15,420 | )  |
|                                                                                        |  |            |    |            |  |   |    |    |
| Non-cashstock award expense                                                                 |  |            | 470     |            |  |   | 1,530   |    |
| Depreciation andamortization                                                                |  |            | 4,340   |            |  |   | 3,820   |    |
| Other,net                                                                                   |  |            | 400     |            |  |   | (2,220  | )  |
| AdjustedEBITDA                                                                              |  | $               | (13,860 | )          |  | $      | (12,290 | )  |
| Memo:Fixed asset losses included in calculation of both operating profit andAdjusted EBITDA |  | $               | 930     |            |  | $      | 900     |    |
| Memo:Other, net (income) loss included in calculation of AdjustedEBITDA                     |  | $               | (400    | )          |  | $      | 2,220   |    |
|                                                                                             |

Liquidityand Capital Resources

Overview of CapitalStructure.    Our objective is to appropriately finance ourbusiness through a mix of long-term and short-term debt and to ensurethat we have adequate access to liquidity. Our principal sources ofliquidity are cash flow from operations, our revolving credit facilityand our accounts receivable securitization facility. We havesignificant unutilized capacity under our revolving credit facilitythat may be utilized for acquisitions, investments or capitalexpenditure needs. Our cash flows during the year are impacted by thevolume and timing of vehicle production, which includes a halt in ourNorth American customers for approximately two weeks in July and oneweek in December and reduced production in July and August for certainEuropean customers. We believe that our liquidity and capital resourcesincluding anticipated cash flow from operations will be sufficient tomeet debt service, capital expenditure and other short-term andlong-term obligations and needs, but we are subject to unforeseeableevents and the risk that we are not successful in implementing ourbusiness strategies.

To facilitate the collection of funds fromoperating activities, we have sold receivables under our accountsreceivable facility and have entered into accelerated paymentcollection programs with our largest customers. If these additionalliquidity sources were to become unavailable or limited by customerconcentration, credit quality or otherwise, we would require additionalborrowing capacity through similar means or other lines of credit. AtJune 27, 2004, we received approximately $57 million under theaccelerated collection programs. We were recently notified that aportion of this program will expire in 2004, with the majority of theprogram expiring in 2005. While the impact of the discontinuance ofthese programs may be partially offset by a greater utilization of ouraccounts receivable securitization facility, we are examining otheralternative programs in the marketplace, as well as enhanced termsdirectly from our customers. However, we may not be able to reach afavorable resolution in a timely manner, and the new arrangements maybe less advantageous to the Company. If we are unable to replace thesearrangements, it could adversely affect our liquidity and futurecovenant compliance under our senior secured credit facility. Inaddition, if we fail to renew our accounts receivable securitizationagreement, which expires in November 2005, we could have adverseeffects on our liquidity and future covenant compliance. However, wehad $87  million of undrawn and available commitments on ourrevolving credit facility at June  27, 2004.

Our capitalplanning process is focused on ensuring that we use our cash flowgenerated from our operations in ways that enhance the value of ourcompany. Historically, we have used our cash for a mix of activitiesfocused on revenue growth, cost reduction and balance sheetstrengthening. In the first six months of 2004, we have used our cashprimarily to service our debt obligations, fund our capital expenditurerequirements, and make the New Castle acquisition.

42

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Liquidity**.**    AtJune  27, 2004, we had approximately $87 million and $52 ofundrawn and available commitments from our revolving credit facilityand accounts receivable facility, respectively. Thus, our totalliquidity including revolver and accounts receivable facilities wasapproximately $139 million at June 27, 2004.

Effect ofIndependent Investigation on Covenants and Liquidity.    Due tothe delay in filing our financial statements, as a result of theIndependent Investigation and the restatement (see Note 2 to theconsolidated financial statements included herein), we were required toseek a waiver from our senior bank group, accounts receivable financingproviders and certain lessors under sale-leaseback arrangements.Furthermore, prior to this filing, we did not comply with a covenantrelated to the deliver of financial statements for our 11%senior subordinated notes due in 2012 and the 10% subordinatednotes due in 2013. However, we have not received a notice of defaultfrom either the trustee or the holders of such notes for either ofthese two securities. During this time period, we have continued tohave adequate access to our accounts receivable securitization andrevolving credit facilities. Upon completion and delivery of ourfinancial statement with the SEC (2003 Form 10-K and 2004 Form 10-Q forthe first and second quarters), we will no longer require extensions ofthese waivers, or be in violation of any covenants on our notesdiscussed above.

TriMas Common Stock.    As of June27, 2004, our remaining shares outstanding in TriMas were 5.75 million,representing a book value of $121.5 million that are recorded as"equity and other investments in affiliates"in the Company's consolidated balance sheet as of June 27, 2004.We continue to monitor opportunities to liquidate all or a portion ofthis interest to assist in funding operations, repaying debt and makingstrategic investments and/or acquisitions.

Debt,Capitalization and Available Financing Sources.    On October20, 2003, we issued $150 million of 10% senior notes due 2013 ina private placement under Rule 144A and Regulation S of the SecuritiesAct of 1933, as amended. As these notes were not registered within 210days from the closing date, the annual interest rate increased by1% and will remain so until the registration statement isdeclared effective. The net proceeds from this offering were used toredeem the balance of the $98.5 million aggregate principal amount ofthe outstanding 4.5% subordinated debentures that were due inDecember 2003 and to repay $46.6 million of term loan debt under ourcredit facility. As a result of this term loan repayment, oursemi-annual principal installments on the term loan facility weredecreased to $0.4 million with the remaining outstanding balance dueDecember 31, 2009. Due to this financing, we agreed with our banks todecrease our revolver facility to $200million.

|                                                                             |  |              |        |               |  |        |         |        |  |  |
|-----------------------------------------------------------------------------|--|--------------|--------|---------------|--|--------|---------|--------|--|--|
|                                                                        |  | (Inmillions) |
|                                                                        |  | June27, 2004 |        | June 29, 2003 |
| Seniorcredit facilities:                                                    |  |         |   |          |  |   |    |   |
|     Termloan                                            |  | $            | 352    |          |  | $      | 352     |   |
|     Revolvingcredit facility                            |  |         | 52     |          |  |   | — |   |
| Totalsenior credit facility                                                 |  | $            | 404    |          |  | $      | 352     |   |
| 11% senior subordinatednotes, with interest payable semi-annually, due 2012 |  |         | 250    |          |  |   | 250     |   |
| 10% senior notes, withinterest payable semi-annually, due2013               |  |         | 150    |          |  |   | 150     |   |
| 10% seniorsubordinated notes, with interest payable semi-annually, due2014  |  |         | 32     |          |  |   | — |   |
| Other debt                                                                  |  |         | 26     |          |  |   | 26      |   |
| Total                                                                       |  | $            | 862    |          |  | $      | 778     |   |
| Less current maturities                                                     |  |         | 9      |          |  |   | 11      |   |
| Long-termdebt                                                               |  | $            | 853    |          |  | $      | 767     |   |
|                                                                             |

At June29, 2004, we were contingently liable for standby letters of credittotaling $61.3 million issued on our behalf by financial institutions.These letters of credit are used for a variety of purposes, includingmeeting requirements to self-insure workers' compensationclaims.

43

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Our senior credit facility containscovenants and requirements affecting us and our subsidiaries, includinga financial covenant requirement for an EBITDA to cash interest expensecoverage ratio to exceed 2.25 through July 3, 2005; and a debt toEBITDA leverage ratio not to exceed 5.00 and 4.75 for the quartersended June 27, 2004 and October 3, 2004, respectively. The accountsreceivable facility is included in computing debt for the purposes ofthese covenant calculations. We were in compliance with the precedingfinancial covenants throughout the quarter and obtained waiversassociated with the timely submission of financial statements andassociated representations and warranties through November 15, 2004.Our most restrictive covenant is the leverage ratio. The permittedleverage ratio (as modified on September 30, 2004) becomes morerestrictive in future periods, is 5.00 in the second fiscal quarter of2004, declining to 4.75 in the third fiscal quarter of 2004, 4.50 inthe first fiscal quarter of 2005, 4.25 in the third fiscal quarter of2005, 3.75 in the fourth fiscal quarter of 2005, 3.00 in the firstfiscal quarter of 2006 and 2.75 in the fourth fiscal quarter of 2006and thereafter.

New Castle Acquisition.    Wesuccessfully completed our purchase of DaimlerChrysler's commonand preferred interests in NC-M Chassis ("NewCastle") on December 31, 2003 (subsequent to our 2003 yearend of December 28th). We financed this acquisition with $118.8 millionin cash, $31.7 million in aggregate principal amount of a new issue of10% senior subordinated notes and $64.5 million in aggregateliquidation preference Series A-1 redeemable preferred stock. The cashportion of the consideration was funded in part with the net cashproceeds of approximately $65 million from the sale to and subsequentleaseback of certain equipment from General Electric CapitalCorporation, and the remainder was funded through the Company'srevolving credit facility.

Interest Rate HedgingArrangements**.**    In February 2001, we entered intointerest rate protection agreements with various financial institutionsto hedge a portion of our interest rate risk related to the term loanborrowings under our credit facility. These agreements included twointerest rate collars with a term of three years, a total notionalamount of $200 million and a three month LIBOR interest rate cap andfloor of 7% and 4.5%, respectively, and four interestrate caps at a three month LIBOR interest rate of 7% with atotal notional amount of $301 million. As a result of our earlyretirement of our term loans in June 2002, we recorded a cumulativenon-cash loss of $7.5 million, which is included in our consolidatedstatement of operations for the year ended December 29, 2002. The twointerest rate collars and two of the interest rate caps totaling $200million were immediately redesignated to our new term loan borrowingsin June 2002. The remaining two interest rate caps totaling $101million no longer qualify for hedge accounting. Therefore, anyunrealized gain or loss is recorded as other income or expense in theconsolidated statement of operations beginning June 20, 2002.

The two interest rate collars expired in the first quarter of 2004,and accordingly we recognized a pre-tax non-cash gain of approximately$6.6 million, which reflects the reversal of the majority of thenon-realized charge reflected in our 2002 results and explained in theabove paragraph. Prior to the expiration of these interest ratecollars, we recognized approximately $1.1 million as additionalinterest expense in 2004. Prior to their maturity, $6.6  millionwas included in accumulated other comprehensive income related to thesearrangements.

Off-Balance Sheet Arrangements

Our Receivables Facility.    We have entered into anagreement to sell, on an ongoing basis, the trade accounts receivableof certain business operations to a bankruptcy-remote, special purposessubsidiary, MTSPC, wholly owned by us. MTSPC has sold and, subject tocertain conditions, may from time to time sell an undivided fractionalownership interest in the pool of domestic receivables, up toapproximately $150 million, to a third party multi-seller receivablesfunding company, or conduit. Upon sale to the conduit, MTSPC holds asubordinated retained interest in the receivables. Under the terms ofthe agreement, new receivables are added to the pool as collectionsreduce previously sold receivables. We service, administer and collectthe receivables on behalf of MTSPC and the conduit. The facility is animportant source of liquidity to the Company. The receivables facilityresulted in net expense of $2.3 million in 2004.

The facility issubject to customary termination events, including, but not limited to,breach of representations or warranties, the existence of any eventthat materially adversely affects the collectibility 

44

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of receivables or performance by a sellerand certain events of bankruptcy or insolvency. At June 27, 2004, wehad utilized $47 million of the facility with $44.5 million availablebut not utilized. The proceeds of sale are less than the face amount ofaccounts receivable sold by an amount that approximates thepurchaser's financing costs. The agreement expires in November2005. If we are unable to renew or replace this facility, it couldadversely affect our liquidity and capital resources.

We haveentered into agreements with international invoice factoring companiesto sell customer accounts receivable of Metaldyne foreign locations inFrance, Germany, Spain, United Kingdom and Mexico on a non-recoursebasis. As of June 27, 2004, we had available approximately $67 millionfrom these commitments, and approximately $57.8 million of receivableswere sold under these programs. We pay a commission to the factoringcompany plus interest from the date the receivables are sold to thedate of customer payment. Commission expense related to theseagreements are recorded in other expense, net on the Company'sconsolidated statement of operations. The net expense of this programfor six months amounted to approximately $2.3  million throughJune  27, 2004.

Certain OtherCommitments.    We have other cash commitments not relating todebt as well, such as those in respect of leases and redeemablepreferred stock.

Sale-Leaseback Arrangements.    OnJune 17, 2004, the Company entered into a sale-leaseback transactionfor machinery and equipment with a third party lessor. The Companyreceived $7.5 million cash as part of this transaction. In the firstquarter of 2004, we entered into two sale-leaseback arrangements. OnDecember 31, 2003 we entered into a sale-leaseback with proceeds ofapproximately $4.5 million. This lease was accounted for as a capitallease and the present value of our lease payments is thereforereflected in our debt balance. We also entered into a $65 millionsale-leaseback on December 31, 2003, as part of our financing relatedto the purchase of New Castle. This lease for New Castle equipment isaccounted for as an operating lease and the annual lease expense isapproximately $10 million.

In March 2003, we entered into asale-leaseback transaction with respect to certain manufacturingequipment for proceeds of approximately $8.5 million, and in October2003, we entered into a sale-leaseback transaction for machinery andequipment for additional proceeds of $8.5 million. In July 2003, weentered into an approximate $10 million operating lease associated withthe acquisition of our Greensboro, North Carolina facility. Theproceeds from this lease were used to finance a portion of theacquisition of this facility from Dana Corporation. All of these leasesare accounted for as operating leases. The sale-leasebacks initiated in2003 contribute an additional $3.8 million in annualized lease expensegoing forward, which is included in our "Contractual CashObligations," below. We continue to look to sale-leasebackand other leasing opportunities as a source of cash for debt reductionand other uses. Our total obligations under lease agreements aresummarized in the Contractual Cash Obligation table that follows.

Redeemable Preferred Stock.    We have outstanding $147million in aggregate liquidation value of Series A, B and A-1redeemable preferred stock in respect of which we have the option topay cash dividends, subject to the terms of our debt instruments, atrates of 13%, 11.5% and 11%, respectively, perannum initially and to effect a mandatory redemption in December 2012,June 2013 and December 2013, respectively. For periods that we do notpay cash dividends on the Series A and Series A-1 preferred stock, anadditional 2% per annum of dividends is accrued. No cashdividends were paid in 2003 or 2004. In the event of a change incontrol or certain qualified equity offerings, we may be required tomake an offer to repurchase our outstanding preferred stock. We may notbe permitted to do so and may lack the financial resources to satisfythese obligations. Consequently, upon these events, it may becomenecessary to recapitalize our company or secure consents.

Saturn-Related Obligations.    In the November 2000recapitalization of the Company, our shares were converted into theright to receive $16.90 in cash plus additional cash amounts based uponthe net proceeds of the disposition of the stock of Saturn Electronics& Engineering Inc. held by Metaldyne. We hold 1,796,800 shares ofClass A common stock and 1,796,800 shares of Class B common stock ofSaturn, a privately held corporation. As such, there is no readilyavailable market value of these shares. However, the value of thisinvestment as recorded on the Company's books was $6.0 million asof December 28, 2003 and $7.3 million at June 27, 2004. We have notidentified any indicators of impairment.

45

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Although no disposition of the stock ofSaturn was made prior to the recapitalization or has been made to date,former holders of our common stock as of the merger will be entitled toamounts based upon the net proceeds, if any, from any futuredisposition of that stock if and when a disposition is completed. Theamount which will be paid to such former stockholders will equal theproceeds in excess of $18 million and less than or equal to $40million, any proceeds in excess of $55.7 million and less than or equalto $56.7 million as well as 60% of any such proceeds in excessof $56.7 million. We are not responsible to disburse any funds to theprevious holders of the Company's common stock if the saleproceeds are less than $18 million. Any sale of the stock of Saturnrequires approval from a committee representing the interests of theformer shareholders of the Company. Thus, the Company does not controlthe timing of the sale of the stock of Saturn. Therefore, it ispossible that the Company may choose to agree to accept an amount lessthan that indicated above in order to accelerate a disposition of theholdings of the stock of Saturn.

CreditRating.    Metaldyne is rated by Standard & Poor's andMoody's Ratings. We currently have long-term ratings of BB/B2 onour senior credit facility, B/B3 on our 10% senior notes due2013 and B/Caa1 on our 11% senior subordinated notes due 2012.Our goal is to decrease our total leverage and thus improve our creditratings. In the event of a credit downgrade, we believe we wouldcontinue to have access to additional credit sources. However, ourborrowing costs would further increase and our ability to tap certainfinancial markets may be limited.

CapitalExpenditures.    Our capital expenditure program promotes ourgrowth-oriented business strategy by investing in our core areas, whereefficiencies and profitability can be enhanced. Capital expenditures byproduct segment for the periods presentedwere:

|                               |  |               |        |              |  |        |        |        |  |  |
|-------------------------------|--|---------------|--------|--------------|--|--------|--------|--------|--|--|
|                          |  | (Inthousands) |
|                          |  | June27, 2004  |        | June 29,2003 |
|                          |  |          |        | (Restated)   |
| CapitalExpenditures:          |  |          |   |         |  |   |   |   |
| Chassis                       |  | $             | 21,170 |         |  | $      | 7,890  |   |
| Driveline                     |  |          | 17,090 |         |  |   | 29,210 |   |
| Engine                        |  |          | 24,710 |         |  |   | 14,290 |   |
| Corporate                     |  |          | 1,000  |         |  |   | 2,980  |   |
|     Total |  | $             | 63,970 |         |  | $      | 54,370 |   |
|                               |

CashFlows

Operating activities — Net cashprovided by operating activities totaled $51.8 million for the sixmonths ended June 27, 2004, compared to a $22.2 million increase in2003 (as restated). Adjusting 2004 results by the $47 million increaseduse of the accounts receivable securitization facility, the 2004operating cash flow would have approximated a $5 million inflow, or anapproximate $17 million decrease versus 2003 (as restated). The primarydriver of this decline is improved operational performance offset by anapproximate $25 million increase in investment in working capital(excluding accounts receivable securitization facility). This increasein working capital is explained by the 30% increase in sales in2004 (driven largely by the New Castle Acquisition), higher inventorylevels (largely driven by the increase in raw material pricing combinedwith higher safety stock to compensate for the decrease in supply) andan increase in our accounts receivable (due to the increase in oursales, slower payment practices from our customers, and an approximate$5 million decline in our ability to use our accelerated paymentcollection programs).

Investing activities — Cashflows used in investing activities totaled $208.5 million for the sixmonths ended June 27, 2004, compared to a use of cash of $31.0 millionin 2003 (as restated). Capital expenditures were higher in 2004 byapproximately $9.6 million than in 2003 (as restated) primarily relatedto increased new business launch activity. Additionally, we acquiredthe New Castle facility in 2004 for approximately $218 millionincluding fees and offset by proceeds from a sale-leaseback ofapproximately $65 million on New Castle's equipment. In 2003, weinvested $20 million in NC-M Chassis Systems, LLC, a joint venture withDaimlerChrysler Corporation. Proceeds from sale-leaseback transactionswith respect to equipment and real property represented a source ofcash of $8.5 million in 2003.

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Financing activities — Cashflows from financing activities totaled $142.9 million for the sixmonths ended June 27, 2004, compared to a use of cash of $3.3 millionin 2003 (as restated). In 2004, we issued $96 million in new debt andpreferred stock to acquire New Castle and ended the quarter withapproximately $52 million outstanding on our revolving credit facilityversus zero outstanding at December  28, 2003.

Outlook

Automotive vehicle production in 2004 isexpected to be slightly below 2003 production levels in North Americaand slightly higher in Europe, but there are several factors that couldalter this outlook, including a change in interest rates or an increasein vehicle incentives offered to consumers.

Our principal use offunds from operating activities and borrowings for the next severalyears are expected to fund interest and principal payments on ourindebtedness, growth related capital expenditures and working capitalincreases, strategic acquisitions and lease expense. Managementbelieves cash flow from operations and debt financing and refinancingthat occurred in October 2003 will provide us with adequate sources ofliquidity for the foreseeable future. However, our sources of liquiditymay be inadequate if we are unable to obtain operating targets, whichwould cause us to seek covenant relief from existing lenders in thenear future. In addition, matters affecting the credit quality of oursignificant customers could adversely impact the availability of ourreceivables arrangements and our liquidity. We continue to exploreother sources of liquidity, including additional debt, but existingdebt instruments may limit our ability to incur additional debt.Therefore, we may be unable to secure equity or other financing. Wewere recently notified that a portion of the accelerated accountsreceivable programs with our largest customers will expire in 2004,while the majority will expire in 2005. These programs acceleratedapproximately $57  million at June  27, 2004. We areactively working to find substitutes to replace these programs, butthere is no certainty that we will be successful. However, we had$87  million of undrawn and available commitments on ourrevolving credit facility at June  27, 2004.

On December31, 2003, we completed our acquisition of DaimlerChrysler's NewCastle facility. Based on our new, more favorable agreement with theUAW and the supply contract with Daimler Chrysler, we anticipate 2004Adjusted EBITDA for this facility of between $35 and $40 million, netof approximately $10 million in operating lease expense associated witha $65 million sale-leaseback of New Castle equipment used to financethe acquisition.

Two of our largest suppliers have recentlydeclared bankruptcy and are in the process of reorganizing. The effecton the Company from these bankruptcies is unknown, but they couldresult in the Company paying higher prices, having less favorablepayment terms and/or having interrupted supply of parts.

Consistent with operating in the global vehicle industry, weanticipate competitive pressures and thus expect to face significantprice reduction pressures from our customer base. In 2003, though, weinvested significantly in automation and underwent restructuringactivities to help offset these pricing pressures. In addition, we arefacing significant increases in the cost to procure certain materialsutilized in our manufacturing processes such as steel, energy,Molybdenum and nickel. In general, steel prices have recently risen byas much as 60-100% and have thus created significant tensionbetween steel producers, suppliers and end customers. Based on currentprices, our steel costs could increase approximately $50 million in2004. However, we anticipate several initiatives such as steel scrapsales, steel resourcing efforts, contractual steel surcharge passthrough agreements with customers and reducing or eliminating 2004scheduled price downs to our customers will offset approximately $30million of these increased costs. Additionally, we are actively workingwith our customers to 1) obtain additional business to help offsetthese prices through better utilization of our capacity, 2) negotiate asurcharge to reflect the increased material costs, and/or 3) resourcecertain of our products made unprofitable by these increases inmaterial costs. We will actively work to mitigate the effect of thesesteel increases throughout 2004.

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Contractual CashObligations

Under various agreements, we are obligated tomake future cash payments in fixed amounts. These include paymentsunder our long-term debt agreements, rent payments required under leaseagreements and various severance obligations undertaken. The followingtable summarizes our fixed cash obligations over various future periodsas of June 27,2004.

|                                                       |  |              |        |                       |  |          |         |          |  |             |         |        |  |        |         |        |  |        |         |        |  |  |
|-------------------------------------------------------|--|--------------|--------|-----------------------|--|----------|---------|----------|--|-------------|---------|--------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                                                  |  | (Inmillions) |
|                                                  |  |         |        | PaymentsDue byPeriods |
|                                                  |  | Total        |        | LessThanOneYear       |  | 1-3Years |         | 3-5Years |  | After5Years |
|                                                  |  |         |   |                  |  |     |    |     |  |        |    |   |  |   |    |   |  |   |    |   |
| Long-termdebt                                         |  | $            | 404    |                  |  | $        | 1       |     |  | $           | 2       |   |  | $      | 54      |   |  | $      | 347     |   |
| 11%Senior subordinated notes due2012                  |  |         | 250    |                  |  |     | — |     |  |        | — |   |  |   | — |   |  |   | 250     |   |
| 10%Senior notes due2013                               |  |         | 150    |                  |  |     | — |     |  |        | — |   |  |   | — |   |  |   | 150     |   |
| 10%Senior subordinated notes due 2014                 |  |         | 32     |                  |  |     | — |     |  |        | — |   |  |   | — |   |  |   | 32      |   |
| Otherdebt                                             |  |         | 14     |                  |  |     | 3       |     |  |        | 3       |   |  |   | — |   |  |   | 8       |   |
| Capitallease obligations                              |  |         | 12     |                  |  |     | 5       |     |  |        | 5       |   |  |   | 1       |   |  |   | 1       |   |
| Operatinglease obligations (1)                        |  |         | 336    |                  |  |     | 47      |     |  |        | 83      |   |  |   | 76      |   |  |   | 130     |   |
| Redeemablepreferred stock, including accrueddividends |  |         | 147    |                  |  |     | — |     |  |        | — |   |  |   | — |   |  |   | 147     |   |
| Pensioncontributions (data available through 2004)    |  |         | 17     |                  |  |     | 17      |     |  |        | — |   |  |   | — |   |  |   | — |   |
| Contractualseverance                                  |  |         | 5      |                  |  |     | 4       |     |  |        | 1       |   |  |   | — |   |  |   | — |   |
| Totalcontractual obligations(2)                       |  | $            | 1,367  |                  |  | $        | 77      |     |  | $           | 94      |   |  | $      | 131     |   |  | $      | 1,065   |   |
|                                                       |

|  |
|--|
|  |  |
|  |

|     |                                                                            |
|-----|----------------------------------------------------------------------------|
| (1) | Operatinglease expense is included in the determination of AdjustedEBITDA. |

|     |                                                                               |
|-----|-------------------------------------------------------------------------------|
| (2) | Totalcontractual obligations exclude accounts payable and accruedliabilities. |

At June 27, 2004, we were contingently liablefor standby letters of credit totaling $61.3 million issued on ourbehalf by financial institutions. We are also contingently liable forfuture product warranty claims. We believe that our product warrantyexposure is immaterial; however, it is continuously monitored forpotential warranty implications of new and current business.

Critical Accounting Policies

The expenses and accruedliabilities or allowances related to certain policies are initiallybased on our best estimates at the time of original entry in ouraccounting records. Adjustments are recorded when our actual experiencediffers from the expected experience underlying the estimates. We makefrequent comparisons of actual versus expected experience to mitigatethe likelihood of material adjustments.

Goodwill.    In June 2001, the Financial AccountingStandards Board ("FASB") approved Statementof Financial Accounting Standards ("SFAS")No. 142 "Goodwill and Other IntangibleAssets" which was effective for us on January 1, 2002.Under SFAS No. 142, we ceased the amortization of goodwill. Beginningin 2002, we test goodwill for impairment on an annual basis, unlessconditions exist which would require a more frequent evaluation. Inassessing the recoverability of goodwill, projections regardingestimated future cash flows and other factors are made to determine thefair value of the respective assets. We may be required to recordimpairment charges for goodwill if these estimates or relatedprojections change in the future.

At adoption and again during2002 and 2003, we determined that our goodwill was not impaired as fairvalues continue to exceed their carrying value. Fair value of ourgoodwill is determined based upon the discounted cash flows of thereporting units using a 9.5% discount. Assuming an increase inthe discount rate to 12%, fair value would continue to exceedthe respective carrying value of each automotive segment.

Receivables And Revenue Recognition.

The Companyrecognizes revenue when there is evidence of a sale, the delivery hasoccurred or services have been rendered, the sales price is fixed ordeterminable and the collectibility of receivables 

48

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is reasonably assured. Consequently, salesare generally recorded upon shipment of product to customers andtransfer of title under standard commercial terms. Significantretroactive price adjustments are recognized in the period in whichsuch amounts become probable.

Valuation of Long-LivedAssets.    Metaldyne periodically evaluates the carrying valueof long-lived assets to be held and used including intangible assets,when events or circumstances warrant such a review. The carrying valueof a long-lived asset to be held and used is considered impaired whenthe anticipated separately identifiable undiscounted cash flows fromsuch an asset are less than the carrying value of the asset. In thatevent, a loss is recognized based on the amount by which the carryingvalue exceeds that fair value of the long-lived asset. Fair value isdetermined primarily using the anticipated cash flows discounted at arate commensurate with the risk involved. Impairment losses onlong-lived assets are held for sale are determined in a similar manner,except that fair values are reduced for the cost to dispose of theassets.

Pension and Postretirement Benefits Other ThanPensions.    The determination of our obligation and expense forour pension and postretirement benefits, such as retiree healthcare andlife insurance, is dependent on our selection of certain assumptionsused by actuaries in calculating such amounts. These assumptions aredescribed in Note 25, Employee Benefit Plans, of our consolidatedfinancial statements for the year ended December 28, 2003, whichinclude, among others, discount rate, expected long-term rate of returnon plan assets and rate of increase in compensation and health carecosts. While we believe that our assumptions are appropriate,significant differences in our actual experience or assumptions maymaterially affect our pension and postretirement benefits other thanbenefits and our future expense. Our actual return on pension planassets was 6.5% for the year ended December 28, 2003. Incomparison, our expected long-term return on pension plan assets was8.96% for the year ended December 28, 2003. The expected returnon plan assets was established by analyzing the long-term returns forsimilar assets, and as such, no revisions have been made to adjust toactual performance of the plan assets.

New AccountingPronouncements.

In May 2003, the FASB issued SFAS No. 150,"Accounting for Certain Financial Instruments withCharacteristics of both Liabilities and Equity." ThisStatement establishes standards for how an issuer classifies andmeasures certain financial instruments with characteristics of bothliabilities and equity. This Statement is effective for financialinstruments entered into or modified after May 31, 2003, and otherwiseis effective at the beginning of the first interim period beginningafter June 15, 2003, except for mandatorily redeemable financialinstruments of nonpublic entities, for which it is effective for thefirst fiscal period beginning after December 15, 2003. Due to theCompany being a nonpublic entity as defined in SFAS No. 150, we adoptedthis Statement effective for the quarter ended March 28, 2004. As aresult of the Company's adoption of SFAS No. 150, theCompany's redeemable preferred stock is classified as a long-termliability on the Company's consolidated balance sheet effectiveas of the quarter ended March 28, 2004, and preferred stock dividendsassociated with this redeemable preferred stock are classified as otherexpense, net on the Company's consolidated statement ofoperations beginning with the quarter ended March 28, 2004.

OnDecember 8, 2003, the Medicare Prescription Drug, Improvement andModernization Act was signed into law. This law provides for a federalsubsidy to sponsors of retiree health care benefit plans that provide abenefit that is at least actuarially equivalent to the benefitestablished by the law. The Company provides retiree drug benefits thatexceed the value of the benefits that will be provided by Medicare PartD, and the Company's eligible retirees generally pay a premiumfor this benefit that is less than the Part D premium. Therefore, theCompany has concluded that these benefits are at least actuariallyequivalent to the Part D program so that Metaldyne will be eligible forthe basic Medicare Part D subsidy.

In the second quarter of 2004,a Financial Accounting Board (FASB) Staff Position (FSP FAS 106-2,"Accounting and Disclosure Requirements Related to theMedicare Prescription Drug Improvement and Modernization Act of2003") was issued providing guidance on the accounting forthe effects of the Act for employers that sponsor postretirement healthcare plans that provide prescription drug benefits. The FSP iseffective for the first interim or annual period beginning after June15, 2004. The Company estimates the federal subsidy included in the lawwill ultimately result in an approximate $4.5 million to 

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$6.0 million reduction in Metaldyne'spostretirement benefit obligation. However, the reduction is notreflected in the Company's postretirement benefit obligation atthe balance sheet date, since this information is as of theCompany's September  30, 2003 measurement date. For 2004,the Company expects a net reduction in our postretirement expense whencompared to 2003. This decrease reflects the favorable impact of theMedicare legislation and changes to the plans that eliminated somecoverage, offset by a 50 basis point decline in the discount rate andadverse experience in health care trends.

Other Matters

Fiscal Year

Our fiscal year will end on the Sunday nearestto December 31.

Caution Concerning Forward Looking Statementsand Certain Risks Related to Our Business and Our Company — SafeHarbor Statements

This report contains statements reflectingthe Company's views about its future performance, its financialcondition, its markets and many other matters that constitute"forward-looking statements." These viewsinvolve risks and uncertainties that are difficult to predict and maycause the Company's actual results and/or expectations aboutvarious matters to differ significantly from those discussed in suchforward-looking statements. All statements, other than statements ofhistorical fact included in this quarterly report, regarding ourstrategy, future operations, financial condition, expected results andcosts, new business, estimated revenues and losses, prospects and plansare forward-looking statements. When used in this quarterly report, thewords "will,""believe,""anticipate,""intend,""estimate,""expect," "project"and similar expressions are intended to identify forward-lookingstatements, although not all forward-looking statements contain suchidentifying words. You should not place undue reliance on theseforward-looking statements. All forward-looking statements speak onlyas of the date of this quarterly report and we undertake no obligationto update such information. Readers should consider that variousfactors may affect whether actual results and experience correspondwith our forward-looking statements and that many of these factors alsorepresent risks attendant to owning securities in the Company,including the following:

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Dependenceon Automotive Industry and Industry Cyclicality — Theindustries in which we operate depend upon general economic conditionsand are highly cyclical. Our performance is affected particularly bynew vehicle sales, which can be highly sensitive to changes in interestrates, consumer confidence and fuel costs. We experience sales declinesduring the third calendar quarter as a result of scheduled OEMshutdowns. |

|              |                                                                                                                                                                                                                                                                                                                                                                        |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | CustomerConcentration — Our base of customers is concentrated amongoriginal equipment manufacturers in North America, particularly thelarge automotive manufacturers, and the loss of business from a majorcustomer, the discontinuance of particular vehicle models or a changein regulations or auto consumer preferences could materially adverselyaffect us. |

|              |                                                                                                                                                                                                                                                                                                                                                                                          |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Ability to FinanceCapital Requirements — Our business is capital intensive. Wehave made substantial capital investments to improve capacity andproductivity and to meet customer requirements. More investment isrequired to maintain and expand our future business awards. If we areunable to meet future capital requirements, our business may bematerially adverselyaffected. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Increases in Costs Due toOur Supply Base and Raw Materials — Increases in our rawmaterial or energy costs or the loss of a substantial number of oursuppliers could negatively affect our financial health and results. Inparticular, we have been recently adversely impacted by steel costs,which we have been unable to wholly mitigate. In addition, certain ofour suppliers have suffered financial distress, which may materiallyadversely impact us as well in terms of the potential for interruptedsupply, unfavorable payment terms and/or higher prices. Specifically,two of our largest suppliers have recently declared bankruptcy, and arein the process of reorganizing. The effect on the Company from thesebankruptcies is unknown, but they could result in the Company payinghigher prices, having less favorable payment terms and/or havinginterrupted supply of parts. |

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|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | OurIndustries are Highly Competitive — Continuing trends amongour customers will increase competitive pressures in our businesses.Certain of our competitors have greater financial resources and, insome cases, we compete with our own customers. The continuing trendtowards limiting outside suppliers involves significant risks, as wellas opportunities, and has increased competition. We have experiencedand may continue to experience adverse pricing pressures as aresult. |

|              |                                                                                                                                                                                                                                                                                                                                                                         |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Changing Technology— Our products are subject to changing technology, which couldplace us at a competitive disadvantage relative to alternative productsintroduced by competitors. We may require significant ongoing andrecurring additional capital expenditures and investment in researchand development, manufacturing and other areas to remaincompetitive. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Challenges ofAcquisition Strategy — We intend to actively pursueacquisitions and/or joint ventures but we may not be able to identifyattractive acquisition and/or joint venture candidates, successfullyintegrate our acquired operations or realize the intended benefits ofour acquisitions and/or joint ventures, particularly with respect toany acquisitions outside NorthAmerica. |

|              |                                                                                                                                                                                                                                                                                                                                 |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Dependence on KeyPersonnel and Relationships — We depend on the services ofkey individuals, particularly our executive officers, and ourrelationship with our controlling stockholder. The loss of any keyindividual or change in our relationship with our controllingstockholder could materially and adversely harmus. |

|              |                                                                                                                                                                                          |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Labor Stoppages AffectingOEMs — We may be subject to work stoppages at our facilitiesor those of our principal customers or suppliers, which couldmaterially and adversely harmus. |

|              |                                                                                                                                                                                                                                                            |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Outsourcing Trend —Our strategies may not succeed if anticipated outsourcing amongautomotive manufacturers fails to materialize to the extent we haveassumed. Principal risks to continued outsourcing are union/laborconsiderations and objections. |

|              |                                                                                                                                                                                                                                                                                |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | International Sales — Agrowing portion of our revenue may be derived from internationalsources, which exposes us to certain risks, such as foreign traderestrictions, government embargoes, tariffs, foreign currency risks,expatriation risks and politicalinstability. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Product Liabilityand Warranty Claims -- We may incur material losses and costs asa result of product liability and warranty claims that may be broughtagainst us in the event that the use of our current and formerlymanufactured or sold products results, or is alleged to result, inbodily injury and/or property damage. In addition, claims may beasserted against us in respect of formerly owned operations, such asTriMas, for which we are indemnified. In the event of financialdifficulties, TriMas may be unable to satisfy indemnificationclaims. |

|              |                                                                                                                                                                      |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Environmental Matters— Our business may be materially and adversely affected bycompliance obligations and liabilities under environmental laws andregulations. |

|              |                                                                                                                                                             |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Control by PrincipalStockholder — We are controlled by Heartland, whose interestsin our business may be different than other investors in theCompany. |

|              |                                                                                                                                                                                                                                                                                                                                                               |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Terms of StockholdersAgreement — Provisions of a stockholders agreement among themajority of our stockholders impose significant operating and financialrestrictions on our business without certain stockholder agreement. Inthe event our significant stockholders are unable to agree on certainactions, we may be materially and adverselyimpacted. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Leverage; Ability toService Debt — We may not be able to manage our business aswe might otherwise do so due to our high degree of leverage. Our highdegree of leverage means that we must dedicate significant cash flow todebt service. By doing so, we will have greater difficulty in meetingother important commercial and financial obligations or in pursuingvarious strategies andopportunities. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | SubstantialRestrictions and Covenants — Restrictions in our debtinstruments limit our ability to take certain actions, including toincur further debt, finance capital expenditures, pay dividends andsell or acquire assets or businesses. These restrictions may prevent usfrom taking actions in the interests of our securityholders. Inaddition, our ability to comply with our financial |

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|        |                                                                                                                                                                                         |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | covenants in our debt instruments may beimpacted by numerous matters, including matters beyond our control. Inthe event, we are in default, we may be materially and adverselyimpacted. |

|              |                                                                                                                                                                                                                                                                                                                                                               |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Implementation of ControlImprovements — We have not yet completed implementation ofour current plans to improve our internal controls and may be unable toremedy certain internal control weaknesses identified by ourindependent auditors and take other actions to meet our 2005 compliancedeadline for Section 404 of the Sarbanes-Oxley Act of2002. |

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Impact of Restatement —The disclosure of the restatement and weaknesses in our internalcontrol over financial reporting may adversely impact the confidence ofthose with whom we have commercial or financial relationships. Ourconclusions and actions relative to the restatement and our controlweaknesses is subject to scrutiny in the future, including review bythe Securities and Exchange Commission in connection with its ordinarycourse review of our public filings and disclosures or otherwise. |

We undertake no obligation to update publicly any forward-lookingstatements, whether as a result of new information, future events orotherwise.

There are few published independent sources for datarelated to the markets for many of our products. To the extent we areable to obtain or derive data from independent sources, we have doneso. In particular, we used a report produced by the Ducker ResearchCompany, Inc. profiling North American Forging, Foundry and MachineryIndustries prepared in 2000 for Heartland Industrial Partners, L.P.,our largest shareholder. To the extent information in the Ducker Reportis dated, we have expressed our belief by extrapolating data from theDucker Report using other publicly available information about thecompetitors and products addressed in the Ducker Report. To the extentinformation is otherwise not obtained or derived from independentsources, we have expressed our belief based on our own internalanalyses and estimates of our and our competitors' products andcapabilities. We note that many of the industries in which we competeare characterized by competition among a small number of largesuppliers. Industry publications and surveys and forecasts that we haveused generally state that the information contained therein has beenobtained from sources believed to be reliable. We have notindependently verified any of the data from third-party sources norhave we ascertained the underlying assumptions or bases for any suchinformation. In general, when we say we are a"leader" or a"leading" manufacturer or make similarstatements about ourselves, we are expressing our belief that weformulated principally from our estimates and experiences in, andknowledge of, the markets in which we compete. In some cases, wepossess independent data to support our position, but that data may notbe sufficient in isolation for us to reach the conclusions that we havereached without our knowledge of our markets and businesses.

Inaddition to the foregoing, readers of this quarterly report arecautioned that, prior to the announcement of the IndependentInvestigation referred to herein, the Commission provided the Companywith comments in the ordinary course on its filings under theSecurities Exchange Act of 1934 as amended. The Company believes thatit has supplementally or in this report adequately responded to theStaff's comments on the Company's filings. However, it isentirely possible that disclosure may change as a result of theCommission's review of this filing and the Company'sresponses to those comments. Further, the Company has not includedcertain historical selected financial data in its Annual Report, andthe Commission may comment that the Company's Form  10-Kmust be amended for the inclusion of such information.

ITEM3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, we are exposed to market riskassociated with fluctuations in foreign exchange rates. We are alsosubject to interest risk as it relates to long-term debt. See"Management's Discussion and Analysis of FinancialCondition and Results of Operations" for details about ourprimary market risks, and the objectives and strategies used to managethese risks. Also see Note 15 "Long-TermDebt" in the notes to the consolidated financialstatements for additional information in our 2003 Form 10-K.

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ITEM 4.    CONTROLS ANDPROCEDURES

The Company's quarterly financial informationhas been restated to reflect adjustments to the Company'spreviously reported financial information on Form 10-Q for the firstthree fiscal quarters of 2003. Reference is made to Note  2 tothe Company's financial statements, and Note 2 to our 2003 Form10K, for greater detail on the restatement adjustments.

Therestatement arose primarily out of information obtained through aninvestigation conducted by an independent director of the Company,Marshall Cohen, with the assistance of an independent counsel, SidleyAustin Brown & Wood LLP, and the forensic accounting group ofDeloitte & Touche LLP. The investigation was initiated as a resultof certain allegations made by an employee of the Company andinformation obtained by the Company's internal audit staff. Asdiscussed below, the Company has implemented, or adopted plans toimplement, a number of measures intended to address matters of concernthat have been identified through the investigation and is continuingto consider further measures.

In 2003, a plant controller at theSintered division's St. Mary's, Pennsylvania facilityencountered difficulties in understanding certain accounting practicesand documentation. In December 2003, he notified the Company'sindependent auditors, KPMG LLP, that, among other things, he was unableto reconcile certain of the plant's general ledger accounts andto find appropriate documentation for certain entries and indicatedthat he had concerns regarding the division controller. TheCompany's Chief Financial Officer initiated an immediate reviewby the Company's internal audit department of accountingprocedures and financial accounting at the domestic plants within theSintered division. Shortly thereafter, the Company and its Board ofDirectors authorized the independent investigation into certainaccounting practices at the Sintered division from 2001 through2003.

During the initial stages of the investigation, theCompany was made aware of errors with respect to the recording ofcertain entries which it attempted to analyze. While the Company wasperforming these analyses, in February 2004, the Sintered divisioncontroller made the following allegations concerning actions in whichhe admittedly participated. He alleged that, following the acquisitionof the Company in November 2000, income at the Sintered division from2000 through 2003 was deliberately understated by up to approximately$10 million in the aggregate. He alleged that these understatementswere part of an effort to disguise previous overstatements of income byapproximately $20 million in aggregate at the Sintered division duringthe period from 1996 through 1999, which was prior to the acquisition.There were three primary allegations from the former Sintereddivisional controller related to the period 1996 to 1999. During thistime, he stated income was overstated by (1)  overstating fixedassets, (2)  understating liabilities (notably accounts payable),and (3)  using a complex set of manual journal entries everymonth to "disguise" the effects of (1) and(2). Following the acquisition in late 2000, he stated that income wasunderstated through similar actions. The Company concluded that theSintered division controller's allegations concerning theseactions were correct, although the amounts impacted by the actionsfollowing the Acquisition vary from the allegations. The Sintereddivision investigation revealed deficiencies, circumventions andbreakdowns that occurred in controls and procedures at the Company.

Based upon certain findings within the Sintered division, theinvestigation was expanded to encompass accounting practices in otherareas of the Company concerning the use of reserves and accrualaccounts and the recognition of tooling income for the period from 2001through 2003. This investigation involved an extensive review by thoseconducting the investigation of journal entries of over a specifiedamount made over a three year period. As a result of the expandedinvestigation, the Company became aware of instances of inappropriateaccounting relating to reserves and accruals, which had the effect of"smoothing" earnings for certain periods.Specifically, the Company concluded from the investigative findingsthat there were instances when reserves had been established to coverunanticipated expenses, reserves had been increased or decreased basedupon performance, and/or accruals or reserves had been recordeddifferent from estimated or analyzed amounts. The Company alsoidentified from the investigative findings a few instances of incorrecttiming in the recognition of tooling income. The investigationcategorized journal entries from the relevant periods for analysis bythe Company and review by the Company with its current and formerindependent auditors. The Company analyzed those categories of entrieswhich the investigation determined to be either potentially inaccurate(i.e., 

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warranting further review) or unknown (i.e.,insufficient documentation for third party evaluation). Based upon theCompany's review of these categories of entries, the Companybelieves that the net impact on pretax earnings of the entriesdetermined to be inappropriate and the tooling income issue discussedabove was less than $0.6 million in 2003 and no quarter was affected bymore than that amount.

Through the work of the investigation, anumber of concerns with financial controls and procedures have beenidentified. Control concerns specifically identified by thoseconducting the investigation include, but are not limited to, instancesof disregard for, or lack of understanding of, proper accrualaccounting under GAAP, particularly in relation to reserve accounts;inconsistent policies and procedures concerning the recognition oftooling income; inadequate training of personnel within key accountingand operations functions; undue pressure on certain accountingpersonnel relative to operating results; issues in properly reviewinginternal reporting packages and questionnaires; a failure to properlyaccount for fixed assets; a lack of timely and adequate monitoring ofintercompany balances, management review of general ledger, accountreconciliation and manual journal entries; and insufficient informationsystems safeguards and security controls.

In October 2004, KPMGadvised the Company that the following items constituted materialweaknesses: management's focus on internal controls, specificallyreferencing those control issues identified by the investigation; theextent to which manual journal entries were able to be made withoutappropriate review or supporting documentation; the extent to whichmanual corporate level adjustments were required in the consolidationand financial reporting/close process; the need to improve controls tolimit access to accounts payable and vendor files; and the need toenhance controls related to fixed and leased assets to ensure, amongother things, timely asset classifications. These material weaknesses,if unaddressed, could result in material errors in the Company'sfinancial statements. In addition, KPMG advised the Company that it hadidentified reportable conditions relating to intercompany accountreconciliation; the need to reduce decentralization relative tointernational subsidiaries; and the need to devote greater resources toincome tax accounting. KPMG has made a number of businessrecommendations relating to the above-referenced reportable conditionsand material weaknesses. The Company has implemented several remedialmeasures to compensate for these weaknesses, including additionaloversight, centralized reconciliations and personnel reassignments.

The Company believes that certain of the issues highlighted by theinvestigation derive from the Company's history of acquisitionsand the attendant employment of personnel from different predecessorcompanies who continued prior accounting practices. In some instances,the Company believes control issues have been exacerbated by thepredecessor companies' previously highly decentralized structurewhich current management has been addressing over time since theacquisition.

The Company has devoted substantial resources tothe improvement and review of its control processes and procedures andsuch review is ongoing. Those conducting the investigation have madeobservations concerning corrective actions based on the matters thathave come to their attention, which the Company has reviewed. TheCompany has taken actions or considered actions to address concerns andissues referred to above, and intends to continue taking actions asnecessary to further address such concerns and issues, by (1)making personnel and organizational changes; (2) improvingcommunications and internal reporting; (3) simplifying and makingconsistent various accounting policies and procedures and enhancingrelated documentation; (4) significantly expanding its trainingprograms for both accounting and non-accounting employees related toaccounting matters; (5) increasing management's focus on internalcontrols and improving the extent and timing of management oversight ina number of areas; and (6) implementing processes and procedures toreduce manual interventions and adjustments and more appropriatelylimit access to certain files and systems. The Company's AuditCommittee and its Board of Directors have reviewed the actionsundertaken to date in response to the findings arising from theinvestigation and authorized other actions to improve control processesand procedures. Specific remedial actions have been undertaken sincethe beginning of 2004 and include thefollowing:

|              |                                                   |
|--------------|---------------------------------------------------|
| •  | the termination orresignation of seven employees; |

|              |                                                                                                                                                 |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | theupgrading of various personnel, including hiring a new Sintereddivision controller, a new corporate controller and a new fixed assetmanager; |

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|              |                                                                                                          |
|--------------|----------------------------------------------------------------------------------------------------------|
| •  | substantialadditional training of accounting personnel and non-accountingpersonnel in accountingmatters; |

|              |                                                                                                                         |
|--------------|-------------------------------------------------------------------------------------------------------------------------|
| •  | revised incentivecompensation system to eliminate plant specific performance criteria infavor of division-widecriteria; |

|              |                                                                                                |
|--------------|------------------------------------------------------------------------------------------------|
| •  | instituted a number of fixedasset inventory and construction-in-progress analysisimprovements; |

|              |                                                                    |
|--------------|--------------------------------------------------------------------|
| •  | improved corporateaccounting policies and proceduresdocumentation; |

|              |                                              |
|--------------|----------------------------------------------|
| •  | enhanced validation ofintercompany balances; |

|              |                                                                                                                 |
|--------------|-----------------------------------------------------------------------------------------------------------------|
| •  | separatedassignments, responsibility and access between the accounts payablegroup and central procurementgroup; |

|              |                                                                                            |
|--------------|--------------------------------------------------------------------------------------------|
| •  | expanded review processes ofinformation supplied by plant and division level personnel;and |

|              |                                                                            |
|--------------|----------------------------------------------------------------------------|
| •  | improved procedures and review ofrelative to plant manual journal entries. |

The Company willcontinue to evaluate the effectiveness of its controls and procedureson an ongoing basis, including consideration of internal controlweaknesses and business recommendations identified by its auditors andsuggestions made by those that conducted the investigation, and,consequently, intends to implement further actions in its continuingefforts to strengthen the control process.

In addition, theCompany is undertaking a thorough review of its internal controls,including information technology systems and financial reporting aspart of the Company's preparation for compliance with therequirements of Section 404 of the Sarbanes-Oxley Act. Given the needto fully remedy the internal control weaknesses identified by KPMG,there can be no assurance that the Company will be able to remedy theseweaknesses and take other actions required for compliance with Section404 of the Sarbanes-Oxley Act by the required compliance date, thefiling date for its fiscal 2005 audit in early 2006.

DisclosureControls and Procedures

The evaluation and investigationdescribed above included an evaluation by management with theparticipation of our Chief Executive Officer and Chief FinancialOfficer, of the effectiveness of our disclosure controls and procedures(as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) of theSecurities Exchange Act of 1934) pursuant to Rule 13a-15 of theExchange Act. Our disclosure controls and procedures are designed onlyto provide reasonable assurance that they will meet their objectives.Based upon that evaluation, and the investigation, the Chief ExecutiveOfficer and Chief Financial Officer concluded that (a) as ofJune  27, 2004, the Company's disclosure controls andprocedures were not effective to provide reasonable assurance that theywould meet their objectives, and (b) taking into account the remedialmeasures implemented by the Company, as of November 10, 2004,notwithstanding the material weaknesses and reportable conditionssummarized above, the Company's disclosure controls andprocedures are effective to provide reasonable assurance that they willmeet their objectives.

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PART II. OTHERINFORMATION

METALDYNE CORPORATION

Items 1, 2,3, 4 and 5 are not applicable.

Item 6. Exhibits.

|              |  |                                                                                                                       |  |  |  |  |
|--------------|--|-----------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| Exhibit3.1   |  | Restated Certificate ofIncorporation of MascoTech, Inc.(1)                                                            |
| Exhibit 3.2  |  | Bylaws of MetaldyneCorporation.(2)                                                                                    |
| Exhibit12    |  | Computation of Ratio of Earnings to Combined Fixed Chargesand Preferred Stock Dividends.                              |
| Exhibit31.1  |  | Certification pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 302 of the Sarbanes-Oxley Act of2002. |
| Exhibit 31.2 |  | Certification pursuantto 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of theSarbanes-Oxley Act of 2002. |
| Exhibit32.1  |  | Certification pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002. |
| Exhibit 32.2 |  | Certification pursuantto 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of2002.  |
|              |

|  |
|--|
|  |  |
|  |

|           |                                                                                                                                              |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------|
| (1)  | Incorporatedby reference from the Exhibits filed with Metaldyne Corporation'sAnnual Report on Form 10-K for the year ended December 31,2000. |

|           |                                                                                                                                                                        |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)  | Incorporated by referencefrom the Exhibits filed with MascoTech, Inc.'s (now known asMetaldyne Corporation) Registration Statement on Form S-1 filedDecember 27, 2000. |

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SIGNATURE

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

|  | METALDYNE CORPORATION (Registrant) |
|--|------------------------------------|

Date: November 10,2004

|  | BY:    /s/ Jeffrey M.Stafeil                 |
|--|--------------------------------------------------------------------------------------------------------------------------------------------------|

|  | JeffreyM. Stafeil Executive Vice President and Chief FinancialOfficer (Chief Accounting Officer and AuthorizedSignatory) |
|--|--------------------------------------------------------------------------------------------------------------------------|

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METALDYNECORPORATION

EXHIBIT INDEX

|              |  |                                                                                                                       |  |  |  |  |
|--------------|--|-----------------------------------------------------------------------------------------------------------------------|--|--|--|--|
| Exhibit      |  |                                                                                                                  |
| Exhibit3.1   |  | RestatedCertificate of Incorporation of MascoTech,Inc.(1)                                                             |
| Exhibit 3.2  |  | Bylaws ofMetaldyne Corporation.(2)                                                                                    |
| Exhibit12    |  | Computation of Ratio of Earnings to Combined Fixed Chargesand Preferred Stock Dividends.                              |
| Exhibit31.1  |  | Certification pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 302 of the Sarbanes-Oxley Act of2002. |
| Exhibit 31.2 |  | Certification pursuantto 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of theSarbanes-Oxley Act of 2002. |
| Exhibit32.1  |  | Certification pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002. |
| Exhibit 32.2 |  | Certification pursuantto 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of theSarbanes-Oxley Act of2002.  |
|              |

|  |
|--|
|  |  |
|  |

|     |                                                                                                                                              |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Incorporatedby reference from the Exhibits filed with Metaldyne Corporation'sAnnual Report on Form 10-K for the year ended December 31,2000. |

|     |                                                                                                                                                                        |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Incorporated by referencefrom the Exhibits filed with MascoTech, Inc.'s (now known asMetaldyne Corporation) Registration Statement on Form S-1 filedDecember 27, 2000. |

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