<Page>

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-------------------------------------------------------------------------------

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 31, 2002.
                               -----------------

                                       or

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934
For the transition period from           to


Commission file number: 333-48245
                       --------------------

                           RENCO STEEL HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)


             Ohio                                34-1854775
(State or other jurisdiction of               (I.R.S. Employer
 incorporation or organization)              Identification No.)


1040 Pine Ave., S.E., Warren, Ohio                44483-6528
(Address of principal executive offices)          (Zip Code)

                                 (330) 399-6884
              (Registrant's telephone number, including area code)


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

         Note:  The Registrant files pursuant to an indenture but is not
otherwise subject to Section 13 or 15(d) filing requirements.

         As of March 18, 2002, the registrant had 100 shares of its common
stock, no par value, $.01 stated value, outstanding.

--------------------------------------------------------------------------------

<Page>

PAGE 2

                   RENCO STEEL HOLDINGS, INC. AND SUBSIDIARIES

                                      INDEX
                        --------------------------------

<Table>
<Caption>
                                                                             Page No.
                                                                             --------
<S>                                                                          <C>
PART I        FINANCIAL INFORMATION
-----------------------------------

  Item 1.     Financial Statements of Renco Steel Holdings, Inc.

              Consolidated Balance Sheets as of
              January 31, 2002 and October 31, 2001.                             3

              Consolidated Statements of Operations for the
              three months ended January 31, 2002 and 2001.                      4

              Consolidated Statements of Cash Flows for the
              three months ended January 31, 2002 and 2001.                      5

              Notes to Consolidated Financial Statements.                        6


              Financial Statements of WCI Steel, Inc.

              Consolidated Balance Sheets as of
              January 31, 2002 and October 31, 2001.                            10

              Consolidated Statements of Operations for the
              three months ended January 31, 2002 and 2001.                     11

              Consolidated Statements of Cash Flows for the
              three months ended January 31, 2002 and 2001.                     12

              Notes to Consolidated Financial Statements.                       13


  Item 2.     Management's Discussion and Analysis of Financial
              Condition and Results of Operations                               18

  Item 3.     Quantitative and Qualitative Disclosure About
              Market Risk                                                       26

PART II       OTHER INFORMATION
-----------------------------------

  Item 1.     Legal Proceedings                                                 27

  Item 4.     Submission of Matters to a Vote of Security Holders               27

  Item 6.     Exhibits and Reports on Form 8-K                                  27

              Signatures                                                        28

              Exhibit Index                                                     29
</Table>


<Page>

PAGE 3

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                   RENCO STEEL HOLDINGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                 (Dollars in thousands, except per share amount)

<Table>
<Caption>

                                                               January 31,        October 31,
                                                                  2002                2001
                                                              -------------------------------
                                                              (Unaudited)
<S>                                                           <C>                  <C>
ASSETS
Current assets
  Cash and cash equivalents......................              $       8           $      25
  Restricted cash and cash equivalents ..........                  1,816              32,244
  Accounts receivable, less allowance for
    doubtful accounts of $3,100..................                 44,972              48,875
  Inventories....................................                 94,367              87,847
  Prepaid expenses...............................                  5,371               1,049
                                                               ---------           ---------
      Total current assets.......................                146,534             170,040
Property, plant and equipment, net...............                231,961             233,267
Intangible pension asset, net....................                 34,954              36,470
Other assets, net................................                  5,773               6,127
                                                               ---------           ---------
      Total assets...............................              $ 419,222           $ 445,904
                                                               =========           =========
LIABILITIES and SHAREHOLDER'S DEFICIT
Current liabilities
  Current portion of long-term debt..............              $ 121,173           $ 120,334
  Accounts payable...............................                 42,475              45,939
  Accrued liabilities............................                 79,299              79,607
  Due to related party...........................                  1,149               1,125
                                                               ---------           ---------
      Total current liabilities..................                244,096             247,005

Long-term debt, excluding current portion........                310,447             301,111
Postretirement health care benefits..............                120,368             118,214
Pension benefits, excluding current portion......                 28,666              35,062
Other liabilities................................                 10,042              10,063
                                                               ---------           ---------
      Total liabilities..........................                713,619             711,455
                                                               ---------           ---------
Shareholder's deficit
  Common stock, no par value, stated value
    $.01 per share, 850 shares authorized,
    100 shares issued and outstanding ...........                      -                   -
  Additional paid-in capital.....................                  6,731               5,118
  Accumulated deficit............................               (301,128)           (270,669)
                                                               ---------           ---------
      Total shareholder's deficit................               (294,397)           (265,551)
Commitments and contingencies....................                      -                   -
                                                               ---------           ---------
      Total liabilities and
          shareholder's deficit..................              $ 419,222           $ 445,904
                                                               =========           =========
</Table>

See accompanying notes to consolidated financial statements.

<Page>

PAGE 4

                      RENCO STEEL HOLDINGS, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Dollars in thousands)
                                       (Unaudited)


<Table>
<Caption>

                                                                 Three months
                                                               ended January 31,
                                                         2002                      2001
                                                      ------------------------------------
<S>                                                   <C>                        <C>
Net sales..............................               $  89,604                  $ 98,191

Operating costs and expenses
 Cost of products sold.................                 100,136                   101,969
 Depreciation and amortization.........                   5,477                     6,606
 Selling, general and
  administrative expenses..............                   3,401                     5,828
                                                      ---------                  ---------
                                                        109,014                   114,403
                                                      ---------                  ---------
Operating loss.........................                 (19,410)                  (16,212)
                                                      ---------                  ---------
Other income (expense)
 Interest expense......................                 (11,489)                  (11,398)
 Interest, investment
  and other income (expense), net......                     440                    (9,324)
                                                      ---------                  ---------
                                                        (11,049)                  (20,722)
                                                      ---------                  ---------
Loss before income taxes...............                 (30,459)                  (36,934)
Income tax (benefit) expense...........                       -                         -
                                                      ---------                  ---------
  Net loss ............................               $ (30,459)                 $(36,934)
                                                      =========                  =========

</Table>

The accompanying notes are an integral part of these consolidated financial
statements.

<Page>

PAGE 5

                       RENCO STEEL HOLDINGS, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Dollars in thousands)
                                       (Unaudited)


<Table>
<Caption>

                                                                         Three months
                                                                       ended January 31,
                                                                2002                      2001
                                                             ------------------------------------
<S>                                                          <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss...........................................        $ (30,459)                $ (36,934)
  Adjustments to reconcile net loss
   to net cash used by operating activities
         Depreciation and amortization...............            5,477                     5,867
         Amortization of deferred maintenance costs..                -                       739
         Amortization of financing costs.............              489                       473
         Postretirement health care benefits.........            2,254                     2,935
         Pension benefits............................            1,394                     1,941
         Provision for losses on accounts receivable.                -                     2,050
         Gain on other investments...................                -                      (140)
         Other.......................................               33                        32
         Impairment of other assets..................                -                    10,836
  Cash provided (used) by changes in certain
   assets and liabilities
         Accounts receivable.........................            3,903                       428
         Inventories.................................           (6,519)                     (783)
         Prepaid expenses and other assets ..........           (4,474)                   (3,152)
         Accounts payable............................           (3,464)                   (3,520)
         Accrued liabilities.........................           (6,682)                   (3,584)
         Other liabilities...........................              (21)                      581
         Due to parent...............................               25                         -
                                                             ---------                  ---------
         Net cash used by operating activities.......          (38,044)                  (22,231)
                                                             ---------                 ---------
CASH FLOWS FROM INVESTING ACTIVITIES
  Additions to property, plant and equipment.........           (4,173)                   (2,197)
  Other investments, net.............................                -                     5,800
                                                             ---------                 ---------
         Net cash (used) provided by
          investing activities.......................           (4,173)                    3,603
                                                             ---------                 ---------
CASH FLOWS FROM FINANCING ACTIVITIES
  Net change in long-term debt.......................           10,159                       (31)
  Capital contribution by parent.....................            1,613                         -
                                                             ---------                 ---------
         Net cash provided (used) by
          financing activities.......................           11,772                       (31)
                                                             ---------                 ---------
Net decrease in cash and cash equivalents............          (30,445)                  (18,659)
Total cash and cash equivalents at
 beginning of period.................................           32,269                    90,607
                                                             ---------                 ---------
Total cash and cash equivalents at
 end of period.......................................        $   1,824                 $  71,948
                                                             =========                 =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Cash paid for interest.............................           15,208                 $  15,155
  Cash paid for income taxes.........................                -                         -

</Table>

The accompanying notes are an integral part of these consolidated financial
statements.

<Page>

PAGE 6

                   RENCO STEEL HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  Three months ended January 31, 2002 and 2001
                                  ( Unaudited )

NOTE 1:  BASIS OF PRESENTATION

         Renco Steel Holdings, Inc. (Renco Steel) is a holding company
incorporated in the state of Ohio on January 20, 1998 and is a wholly owned
subsidiary of The Renco Group, Inc. (Renco).  On January 29, 1998, Renco
contributed to Renco Steel its interest in its wholly owned subsidiary WCI
Steel, Inc. (WCI).  Accordingly the accompanying financial statements include
the accounts of Renco Steel and WCI (collectively, the Company).

         The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
statement of results for the interim periods. The results of operations for
the three months ended January 31, 2002 are not necessarily indicative of the
results to be expected for the full year.

         These interim consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Form 10-K for the fiscal year ended October 31, 2001.

NOTE 2:  CASH AND CASH EQUIVALENTS

         Cash and cash equivalents of Renco Steel and WCI include cash on hand
and short-term investments with maturities of three months or less from the
date of acquisition.  Renco Steel is generally restricted from utilizing the
cash and cash equivalents of WCI under the terms of the indenture governing
WCI's 10% Senior Secured Notes due 2004, except as permitted for the
distribution of dividends to Renco Steel.

NOTE 3:  INVENTORIES

         Inventories are stated at the lower of cost or market. Cost is
determined by the last-in, first-out (LIFO) method. The composition of
inventories at January 31, 2002 and October 31, 2001 was as follows:


<Table>
<Caption>

                                              January 31,
                                                 2002                    October 31,
                                              (Unaudited)                    2001
                                              -----------                ----------
<S>                                           <C>                        <C>
                                                        (Dollars in thousands)

Raw materials.........................        $    33,887                $   33,710
Finished and semi-finished product....             60,386                    54,042
Supplies..............................                 94                        95
                                              -----------                ----------
                                                   94,367                    87,847
Less LIFO reserve.....................                  -                         -
                                              -----------                ----------
                                              $    94,367                $   87,847
                                              ===========                ==========

</Table>

<Page>

PAGE 7

NOTE 4:  RELATED PARTY TRANSACTIONS

         On February 27, 2002, Renco Steel borrowed $3.4 million from Renco
under terms of a promissory note.  On July 30, 2001, Renco Steel also borrowed
$1.1 million from Renco under the terms of a promissory note. Renco's right to
payment under both loans is contractually subordinated to Renco Steel's
10 7/8% Senior Secured Notes due 2005 ("Senior Secured Notes").  Both loans bear
interest at a rate of 8.75% and are payable upon demand.  The loans and
accrued interest thereon are reflected as Due to related party on the
Consolidated Balance Sheet at January 31, 2002.

         As of January 31, 2002 and the date hereof, Renco owns $59,320,000
principal amount of Renco Steel's Senior Secured Notes.  Renco has irrevocably
waived its right to receive interest in regard to its ownership of the Senior
Secured Notes from February 1, 2001 to and including Janaury 31, 2002.
Accordingly, a capital contribution of $1.6 million has been recorded in the
three months ended January 31, 2002 and interest expense of the same amount
was recorded in the Company's Statement of Operations for the same period.

NOTE 5:  ENVIRONMENTAL MATTERS and OTHER CONTINGENCIES

         In common with much of the steel industry, WCI's facilities are
located on sites that have been used for heavy industrial purposes for
decades.  WCI is and will continue to be subject to numerous federal, state
and local environmental laws and regulations governing, among other things,
air emissions, waste water discharge and solid and hazardous waste management.
WCI has made and intends to continue to make the necessary expenditures for
environmental remediation and compliance with environmental laws and
regulations.  Environmental laws and regulations continue to change and have
generally become more stringent, and WCI may be subject to more stringent
environmental laws and regulations in the future.  Compliance with more
stringent environmental laws and regulations could have a material adverse
effect on WCI's financial condition and results of operations.

         WCI is subject to a consent decree as a result of a civil action
instituted by the Department of Justice (DOJ), on behalf of the Environmental
Protection Agency (EPA).  The consent decree requires WCI to complete certain
supplemental environmental projects estimated to cost $1.8 million that will
be expended by late 2002.  These projects include sediment removal from the
Mahoning River at an estimated remaining cost of $0.8 million and the
installation of a liner for a surface impoundment estimated to cost $1.0
million.  The consent decree also provides for stipulated penalties in the
event of noncompliance which WCI does not believe will be material.

         As a condition of a previous Resource Conservation and Recovery Act
(RCRA) operating permit, WCI is required to undertake a corrective action
program with respect to historical material handling practices at the Warren
facility.  WCI has completed the initial phase of the first investigation step
of the corrective action program, the RCRA Facility Investigation (RFI), and
has submitted its report to the EPA. WCI and the EPA agreed that additional
sampling would be required to complete a full RFI which is expected to be
completed by the end of 2003.  The RFI workplan identifies thirteen
historical solid waste

<Page>

PAGE 8

management units to be investigated.  The final scope of corrective action
required to remediate any contamination that may be present at or emanating
from the Warren facility is dependent upon the completion and findings of the
RFI and the development and approval of a corrective action program.
Accordingly, WCI is unable at this time to estimate the final cost of the
corrective action program or the period over which such costs may be incurred
and there can be no assurance that any such corrective action program would
not have a material adverse effect on the operating results or financial
condition of WCI.

         On January 23, 1996, two retired employees instituted an action
against WCI and the United Steelworkers of America (USWA) in the United States
District Court for the Northern District of Ohio alleging in substance that
certain distributions made by WCI to employees and benefit plans violated
certain agreements, the Employee Retirement Income Security Act (ERISA), the
National Labor Relations Act (NLRA) and common law.  On July 31, 1997, the
court granted WCI's motion to dismiss this action and entered judgement in
favor of WCI and the USWA. The Plaintiffs filed an appeal regarding the
court's decision to dismiss, which was heard in June 1998.  In March 1999, the
appellate court upheld the dismissal of the claims under ERISA and common law,
but reversed the dismissal of the NLRA claim and remanded to the district
court for further proceedings.  On October 9, 2000 the court granted WCI's
motion to dismiss this action and entered judgement in favor of WCI and the
USWA.  The plaintiffs filed an appeal regarding the court's decision to
dismiss.  The Federal Appeals Court has scheduled oral arguments for April 23,
2002.

         In addition to the above-described matters, WCI is contingently
liable with respect to lawsuits and other claims incidental to the ordinary
course of its business.  A liability has been established for an amount, which
WCI believes is adequate, based on information currently available, to cover
the costs to resolve the above described matters, including remediation, if
any, except for any costs of corrective action that may result from the RFI
for which no estimate can currently be made.  The outcome of the above
described matters could have a material adverse effect on the future operating
results of WCI in a particular quarter or annual period; however, WCI believes
that the effect of such matters will not have a material adverse effect on
WCI's consolidated financial position.

NOTE 6:  SEGMENT REPORTING

         The Company applies Statement of Financial Accounting Standards No.
131, "Disclosures About Segments of an Enterprise and Related Information,"
which requires that companies disclose segment data based on how management
makes resource allocation decisions and evaluates segment operating
performance.

         In applying the Statement, the Company considered its operating and
management structure and the types of information subject to regular review by
its "chief operating decision maker."  On this basis, the Company's only
reportable segment is WCI.  The segment disclosure is presented on this basis
for the three months ended January 31, 2002 and January 31, 2001, respectively.

<Page>

PAGE 9

         All revenues are generated by WCI.  Geographic revenues are based on
the region in which the customer invoice was generated and all revenue was
generated within the United States.  The Company measures segment profit for
internal reporting purposes as net income (loss).

         A reconciliation of segment loss to consolidated net loss is
presented below for the three months ended January 31, 2002 and 2001:


<Table>
<Caption>

                                                        Three months ended
                                                            January 31,
                                                     2002                 2001
                                                  ---------             --------
         <S>                                      <C>                   <C>
         WCI................................      $ (25,556)            $ (32,510)
         Other..............................         (4,903)               (4,424)
                                                  ---------             ---------
              Total consolidated
               net loss.....................      $ (30,459)            $ (36,934)
                                                  =========             =========

</Table>

NOTE 7:  OTHER MATTERS

         Renco Steel did not pay interest on the Senior Secured Notes on
February 1, 2002, the scheduled interest payment date, due to insufficient
liquidity.  On February 28, 2002, Renco Steel paid the overdue interest plus
interest on the overdue interest to all holders other than Renco.  Such
payment was within the grace period afforded under the terms of the Senior
Secured Notes indenture.  Renco previously irrevocably waived its right to
collect interest on the Senior Secured Notes it owns for the period from
August 1, 2001 to January 31, 2002.  Funding for the February 28, 2002
interest payment was provided by a loan from Renco of $3.4 million  (see Note
4: Related Party Transaction).  Further, Renco continues to seek additional
Senior Secured Notes to purchase.

         Renco Steel's sole source of liquidity has become advances and
contributions from its parent, Renco, since its two former primary sources are
no longer available.  Renco Steel's investments in limited partnership
investments were liquidated in 2001 and dividend payments from WCI are
currently prohibited under the terms of the indenture governing the Senior
Secured Notes of WCI due to WCI's significant cumulative losses, as defined.
WCI is required to earn in excess of its cumulative losses before it is
permitted to resume dividend payments to Renco Steel.  At January 31, 2002,
cumulative losses were $134.2 million and are expected to increase further in
2002 based upon WCI's outlook (see Note 5 to the consolidated financial
statements of WCI).  It is not anticipated that WCI will be able to generate
earnings in excess of its cumulative losses in the foreseeable future and
therefore, Renco Steel does not expect to receive any dividends from WCI.
Support from Renco will be necessary for Renco Steel to meet its debt service,
and to a much lesser extent, its administrative requirements.  As of January
31, 2002, Renco has provided loans amounting to $4.5 million and has
irrevocably waived its right to collect interest on the Senior Secured Notes
it owns resulting in a cash flow savings to Renco Steel of $6.5 million in the
aggregate. Renco may make future advances or contributions to Renco Steel and
may waive its right to future interest payments on the Senior Secured Notes it
owns, however, Renco has no obligation to do so.

<Page>

PAGE 10

                         WCI STEEL, INC. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS
                 (Dollars in thousands, except per share amount)


<Table>
<Caption>

                                                       January 31,        October 31,
                                                          2002               2001
                                                       ----------         ----------
<S>                                                   <C>                 <C>
                                                      (Unaudited)
ASSETS
Current assets
  Cash and cash equivalents....................        $   1,816          $  32,244
  Accounts receivable, less allowance
   for doubtful accounts of $3,100.............           44,972             48,875
  Inventories..................................           94,367             87,075
  Prepaid expenses and other current assets....            5,371              1,049
                                                       ---------          ---------
         Total current assets..................          146,526            169,243
Property, plant and equipment, net.............          192,913            193,453
Intangible pension asset, net..................           37,962             39,556
Other assets, net..............................            4,144              4,361
                                                       ---------          ---------
         Total assets..........................        $ 381,545          $ 406,613
                                                       =========          =========
LIABILITIES and SHAREHOLDER'S EQUITY
Current liabilities
  Current portion of long-term debt............        $   1,359          $     536
  Accounts payable.............................           42,475             45,939
  Accrued liabilities..........................           75,721             77,679
                                                       ---------          ---------
         Total current liabilities.............          119,555            124,154

Long-term debt, excluding current portion......          310,447            301,111
Postretirement health care benefits............          119,885            117,719
Pension benefits...............................           28,606             35,000
Other liabilities..............................           10,042             10,063
                                                       ---------          ---------
Total liabilities..............................          588,535            588,047

Shareholder's equity (deficit)
  Preferred stock, par value $1,000 per share,
    5,000 shares authorized, none issued.......                -                  -
  Common stock, no par value, stated value
    $.01 per share, 40,000,000 shares
    authorized, 100 shares issued and
    outstanding................................                -                  -
  Additional paid-in capital...................              279                279
  Accumulated deficit..........................         (207,269)          (181,713)
                                                       ---------          ---------
         Total shareholder's equity (deficit)..         (206,990)          (181,434)
Commitments and contingencies..................                -                  -
                                                       ---------          ---------
         Total liabilities and
           shareholder's equity (deficit)......        $ 381,545          $ 406,613
                                                       =========          =========

</Table>

See accompanying notes to consolidated financial statements.


<Page>

PAGE 11

                          WCI STEEL, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                               (Dollars in thousands)
                                     (Unaudited)


<Table>
<Caption>

                                                            Three months
                                                          ended January 31,
                                                     2002                       2001
                                                  ---------                  ---------
<S>                                              <C>                         <C>
Net sales...............................          $  89,604                  $  98,191
  Operating costs and expenses
    Cost of products sold...............             99,454                    102,040
    Depreciation and amortization.......              4,711                      5,705
    Selling, general and
     administrative expenses............              3,384                      5,821
    Unusual charges.....................                  -                          -
                                                  ---------                  ---------
                                                    107,549                    113,566
                                                  ---------                  ---------
Operating income (loss).................            (17,945)                   (15,375)
                                                  ---------                  ---------
Other income (expense)
  Interest expense......................             (8,051)                    (7,985)
  Interest income and other
    income (expense), net...............                440                     (9,150)
                                                  ---------                  ---------
                                                     (7,611)                   (17,135)
                                                  ---------                  ---------
Income (loss) before income taxes.......            (25,556)                   (32,510)
Income tax (benefit) expense............                  -                          -
                                                  ---------                  ---------
         Net income (loss)..............          $ (25,556)                 $ (32,510)
                                                  =========                  =========

</Table>

See accompanying notes to consolidated financial statements.

<Page>

PAGE 12

                        WCI STEEL, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                             (Dollars in thousands)
                                   (Unaudited)


<Table>
<Caption>

                                                                   Three months ended
                                                                       January 31,
                                                                2002                2001
                                                            ------------------------------
<S>                                                         <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)..................................       $ (25,556)           $ (32,510)
  Adjustment to reconcile net income (loss)
   to net cash provided (used) by operating
   activities:
         Depreciation and amortization...............           4,711                4,966
         Amortization of deferred maintenance costs..               -                  739
         Amortization of financing costs.............             338                  323
         Postretirement health care benefits.........           2,166                2,948
         Pension benefits............................           1,473                2,019
         Provision for losses on accounts
          receivable.................................               -                2,050
         Asset impairment and other charges..........               -               10,484
         Other.......................................              33                   32
  Cash provided (used) by changes in certain
   assets and liabilities
         Accounts receivable.........................           3,903                  428
         Inventories.................................          (7,292)                (802)
         Prepaid expenses and other assets...........          (4,474)              (3,152)
         Accounts payable............................          (3,464)              (3,520)
         Accrued liabilities.........................          (8,231)              (6,784)
         Other liabilities...........................             (21)                 580
                                                            ---------            ---------
         Net cash provided (used) by
          operating activities.......................         (36,414)             (22,199)
                                                            ---------            ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property, plant and equipment.........          (4,173)              (2,197)
                                                            ---------            ---------
         Net cash used by investing activities.......          (4,173)              (2,197)
                                                            ---------            ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net change in long-term debt.......................          10,159                  (31)
                                                            ---------            ---------
         Net cash provided (used) by
          financing activities.......................          10,159                  (31)
                                                            ---------            ---------
  Net increase (decrease) in cash and cash
   equivalents.......................................         (30,428)             (24,427)
  Cash and cash equivalents at beginning
   of year...........................................          32,244               89,478
                                                            ---------            ---------
  Cash and cash equivalents at end of period.........       $   1,816            $  65,051
                                                            =========            =========
  Supplemental disclosure of cash flow information
         Cash paid for interest......................       $  15,208            $  15,155
         Cash paid for income taxes..................               -                    -

</Table>

See accompanying notes to consolidated financial statements.

<Page>

PAGE 13

                        WCI STEEL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  Three months ended January 31, 2002 and 2001
                                  (Unaudited)

NOTE 1:  BASIS OF PRESENTATION

         WCI Steel, Inc. (Company or WCI) is a wholly-owned subsidiary of
Renco Steel Holdings, Inc. (Renco Steel) and an indirect wholly-owned
subsidiary of The Renco Group, Inc. (Renco).  The financial information
included herein is unaudited; however, such information reflects all
adjustments (consisting solely of normal recurring adjustments) which are, in
the opinion of management, necessary for a fair statement of results for the
interim periods.  The results of operations for the three months ended January
31, 2002 are not necessarily indicative of the results to be expected for the
full year.

         These interim consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Form 10-K for the fiscal year ended October 31, 2001.


NOTE 2:  INVENTORIES

         Inventories are stated at the lower of cost or market. Cost is
determined by the last-in, first-out (LIFO) method.  Market value is
determined based on expected selling price of each product. Inventories
consist of the following:


<Table>
<Caption>

                                                  January 31,        October 31,
                                                     2002               2001
                                                  -----------        ----------
<S>                                               <C>                <C>
                                                  (Unaudited)
                                                     (Dollars in Thousands)
Raw materials.........................             $  33,887         $  33,542
Finished and semi-finished product....                60,386            53,438
Supplies..............................                    94                95
                                                   ---------         ---------
                                                      94,367            87,075
Less LIFO reserve.....................                     -                 -
                                                   ---------         ---------
                                                   $  94,367         $  87,075
                                                   =========         =========

</Table>

<Page>

PAGE 14


NOTE 3:  LONG-TERM DEBT

         Long-term debt consists of the following:

<Table>
<Caption>
                                                   January 31,               October 31,
                                                      2002                      2001
                                                  -----------                -----------
                                                  (Unaudited)
                                                            (Dollars in Thousands)
         <S>                                      <C>                        <C>
         Senior Secured Notes with
           interest at 10% payable semi-
           annually, due 2004..................    $ 300,000                  $ 300,000
         Revolving Credit Facility
           (Revolver) with interest at prime
           rate plus 1.5% (6.25% at January
           31, 2002) payable monthly...........       10,209                          -
         Other.................................        1,597                      1,647
                                                   ---------                  ---------
                                                     311,806                    301,647
         Less current portion of
           long-term debt......................        1,359                        536
                                                   ---------                  ---------
                                                   $ 310,447                  $ 301,111
                                                   =========                  =========
</Table>


         The $300 million 10% Senior Secured Notes due 2004 (Senior Secured
Notes) are secured by a second priority lien on substantially all of the
existing property, plant and equipment of the Company which will become a
first priority lien when all of the 10.5% Senior Notes due 2002 (Senior
Notes) are extinguished ($0.3 million currently outstanding).  A Voluntary
Employee Beneficiaries Association trust fund, established to hold Company
contributions to fund postretirement health care and life insurance
obligations for the benefit of hourly employees, also holds a second priority
lien on the security for the Senior Secured Notes, which lien will remain a
second priority lien even if the lien in favor of the Senior Secured Notes
becomes a first priority lien.

         The Company has a $100,000,000 Revolver secured by inventories and
receivables and subject to eligibility requirements, as defined, reduced by
any outstanding letters of credit.  The Revolver is subject to a monthly
service fee of $15,000 and an annual commitment fee of 0.5% of the unused
balance up to $60,000,000 payable monthly. There were borrowings of
$10,209,000 outstanding under the Revolver as of January 31, 2002. The
Revolver, which expires December 29, 2003, also provides for up to an
aggregate amount of $20,000,000 in letters of credit. The Company had
borrowing availability of $64,785,000 based on eligible inventory and
receivables net of $10,209,000 borrowings outstanding and $14,900,000 in
letters of credit outstanding or committed at January 31, 2002 and subject to
a $25 million minimum borrowing availability covenant as discussed below.
The Revolver is subject to a penalty of $250,000 if terminated before October
31, 2003.

         The Company's Revolver and Senior Secured Notes contain certain
financial and other covenants, including maintenance of specified levels of
net worth as defined, working capital, and debt service and limitations on
capital expenditures. Additional covenants limit the incurrence of additional
indebtedness, payments affecting subsidiaries, transactions with affiliates,
sale/leaseback transactions, impairment

<Page>

PAGE 15


of security interest, consolidations, mergers and transfer of the Company's
assets.  On January 25, 2002 the Company and its lenders under the Revolver
agreed to amend the loan agreement to require the Company to maintain a
minimum net worth, as defined, of not less than the following for each period
indicated:  negative $225 million through January 31, 2002, negative $240
million from February 1, 2002 through April 30, 2002, negative $255 million
from May 1, 2002 through July 31, 2002, and negative $260 million on August
1, 2002 and thereafter.  In addition, the Company is required to maintain
minimum borrowing availability under the Revolver of $25 million.  This
amendment also changes the interest charged from prime rate to prime rate
plus 1.5% which is currently 6.25%.  The Company is permitted to declare and
pay dividends, and make other transactions with affiliates provided no
condition of default exists or will exist, and the accumulated amount of such
transactions is no greater than fifty percent (50%) of the consolidated net
income as defined (less 100% of any consolidated net loss) earned for periods
subsequent to October 31, 1996 when taken as a single accounting period less
management fees paid to Renco in excess of $1,200,000 annually for the same
period.  Under these agreements, there were no amounts available for
dividends and other transactions with affiliates at January 31, 2002.

NOTE 4:   ENVIRONMENTAL MATTERS and OTHER CONTINGENCIES

         In common with much of the steel industry, the Company's facilities
are located on sites that have been used for heavy industrial purposes for
decades.  The Company is and will continue to be subject to numerous federal,
state and local environmental laws and regulations governing, among other
things, air emissions, waste water discharge and solid and hazardous waste
management.  The Company has made and intends to continue to make the
necessary expenditures for environmental remediation and compliance with
environmental laws and regulations.  Environmental laws and regulations
continue to change and have generally become more stringent, and the Company
may be subject to more stringent environmental laws and regulations in the
future. Compliance with more stringent environmental laws and regulations
could have a material adverse effect on the Company's financial condition and
results of operations.

         The Company is subject to a consent decree as a result of a civil
action instituted by the Department of Justice (DOJ), on behalf of the
Environmental Protection Agency (EPA).  The consent decree requires the
Company to complete certain supplemental environmental projects estimated to
cost $1.8 million that will be expended by late 2002. These projects include
sediment removal from the Mahoning River at an estimated remaining cost of
$0.8 million and the installation of a liner for a surface impoundment
estimated to cost approximately $1.0 million.  The consent decree also
provides for stipulated penalties in the event of noncompliance which the
Company does not believe will be material.

         As a condition of a previous Resource Conservation and Recovery Act
(RCRA) operating permit, the Company is required to undertake a corrective
action program with respect to historical material handling practices at the
Warren facility.  The Company has completed the initial phase of the first
investigation step of the corrective action program, the RCRA Facility
Investigation (RFI), and has submitted its

<Page>

PAGE 16


report to the EPA. The Company and the EPA agreed that additional sampling
would be required to complete a full RFI which is expected to be completed by
the end of 2003.   The RFI workplan identifies thirteen historical solid
waste management units to be investigated.  The final scope of corrective
action required to remediate any contamination that may be present at or
emanating from the Warren facility is dependent upon the completion and
findings of the RFI and the development and approval of a corrective action
program.  Accordingly, the Company is unable at this time to estimate the
final cost of the corrective action program or the period over which such
costs may be incurred and there can be no assurance that any such corrective
action program would not have a material adverse effect on the operating
results or financial condition of the Company.

         On January 23, 1996, two retired employees instituted an action
against the Company and the United Steelworkers of America (USWA) in the
United States District Court for the Northern District of Ohio alleging in
substance that certain distributions made by the Company to employees and
benefit plans violated certain agreements, the Employee Retirement Income
Security Act (ERISA), the National Labor Relations Act (NLRA) and common law.
On July 31, 1997, the court granted the Company's motion to dismiss this
action and entered judgement in favor of the Company and the USWA.  The
Plaintiffs filed an appeal regarding the court's decision to dismiss, which
was heard in June 1998.  In March 1999, the appellate court upheld the
dismissal of the claims under ERISA and common law, but reversed the
dismissal of the NLRA claim and remanded to the district court for further
proceedings.  On October 9, 2000 the court granted the Company's motion to
dismiss this action and entered judgement in favor of the Company and the
USWA.  The plaintiffs filed an appeal regarding the court's decision to
dismiss. The Federal Appeals Court has scheduled oral arguments for April 23,
2002.

         In addition to the above-described matters, the Company is
contingently liable with respect to lawsuits and other claims incidental to
the ordinary course of its business.  A liability has been established for an
amount, which the Company believes is adequate, based on information
currently available, to cover the costs to resolve the above described
matters, including remediation, if any, except for any costs of corrective
action that may result from the RFI for which no estimate can currently be
made.  The outcome of the above described matters could have a material
adverse effect on the future operating results of the Company in a particular
quarter or annual period; however, the Company believes that the effect of
such matters will not have a material adverse effect on the Company's
consolidated financial position.

NOTE 5:  OTHER MATTERS

         WCI has experienced a significant increase in its order intake rate
and backlog beginning in December 2001 which has resulted from the
expectation of lower imports due to the pending Section 201 investigation,
the recent closure of a competitor, a conclusion to inventory reductions by
customers and the beginning of an economic recovery.  WCI's order backlog was
approximately 250,000 tons at January 31, 2002 compared to 135,000 tons at
October 31, 2001.  With the increasing order entry rate and backlog, the
Company and most other

<Page>

PAGE 17


flat rolled steel producers announced price increases effective during the
second calendar quarter 2002 totaling $50 per ton on hot-rolled, $30 per ton
on cold-rolled, and $20 per ton on galvanized products. Due to these factors,
the Company expects shipping volume in the second quarter 2002 to be
approximately 315,000 tons and the third quarter 2002 to be approximately
330,000 tons.  WCI expects net sales per ton shipped to be flat in the second
quarter compared to the first quarter with net selling prices rising and
being offset by lower revenue from steam sales to the LTV coke plant adjacent
to WCI's facility.  Net sales per ton shipped are expected to increase by
approximately $25 in the third quarter compared to the second quarter.  In
addition, WCI expects cost of products sold per ton to decline approximately
7% in the second quarter compared to the first quarter as capacity
utilization increases and inventory valuation reserves are reduced. Despite
these improvements, WCI expects to incur a significant net loss during fiscal
2002 for which WCI believes it has adequate availability of cash resources to
maintain operations through at least fiscal 2002. However, if the volume or
price increases expected to be realized during the second and third quarters
of fiscal 2002 are not realized or sustained for the balance of fiscal 2002,
it is likely that WCI will not have adequate availability under its existing
financing arrangements and will require additional sources of financing.  WCI
cannot assure that it has the ability to obtain such additional financing, or
what the terms of any additional financing might be. Failure to obtain
additional financing in these circumstances would likely have a material
adverse effect on WCI's operations.  For periods beyond fiscal 2002, further
price improvements will be necessary for the Company to have sufficient cash
resources to maintain its operations.

<Page>

PAGE 18


ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS.

RESULTS OF OPERATION

         Three months ended January 31, 2002 compared to
         Three months ended January 31, 2001

         Net sales for the three months ended January 31, 2002 were $89.6
million on 244,818 tons shipped, representing an 8.7% decrease in net sales
and a 3.3% increase in tons shipped compared to the three months ended
January 31, 2001.  Shipping volume for the three months ended January 31,
2002 was slightly higher than the comparable period in 2001 but was 13.9%
lower when compared to the prior quarter ended October 31, 2001 as the steel
market continued to suffer from the effects of a weak economy.  Net sales per
ton shipped decreased 11.6% to $366 for the three months ended January 31,
2002 compared to $414 for the three months ended January 31, 2001, with net
selling prices down 8.5%. Shipments of custom carbon, alloy and electrical
steels accounted for 46.4% of total shipments for the three months ended
January 31, 2002 compared to 52.3% the three months ended January 31, 2001.

         The table below shows WCI's product mix for the three months ended
January 31, 2002 and January 31, 2001.

<Table>
<Caption>
                                     Net Tons Shipped              Percent of Total
                                  ----------------------        ----------------------
                                   Three Months Ended             Three Months Ended
                                        January 31,                   January 31,
                                    2002          2001           2002            2001
                                  -------        -------        -------        -------
<S>                               <C>            <C>            <C>            <C>
CUSTOM PRODUCTS:
     Hot Rolled................    69,744         76,963          28.5%          32.5%
     Cold Rolled...............     6,061          4,049           2.5%           1.7%
     Coated products...........    37,670         42,883          15.4%          18.1%
                                  -------        -------        -------        -------

Total Custom Products..........   113,475        123,895          46.4%          52.3%

Total Commodity Products.......   131,343        113,128          53.6%          47.7%
                                  -------        -------        -------        -------

Total Steel Products...........   244,818        237,023         100.0%         100.0%
                                  =======        =======        =======        =======
</Table>


<Page>

PAGE 19


         The following table sets forth the percentage of WCI's net tons
shipped to various markets for the three months ended January 31, 2002 and
January 31, 2001.

<Table>
<Caption>
                                                         Three Months Ended
                                                             January 31,
                  CUSTOMER CATEGORY                    2002              2001
         ----------------------------------------     ------            ------
         <S>                                          <C>               <C>
         Conversion / further processing.........      57.8%             52.1%
         Steel service centers...................      14.3%             22.2%
         Construction............................      12.2%             11.4%
         Electrical equipment....................       4.6%              4.9%
         Direct automotive.......................       5.2%              5.1%
         Other...................................       5.9%              4.3%
                                                      ------            ------
           Total.................................     100.0%            100.0%
                                                      ======            ======
</Table>


         Gross margin (loss) (sales less cost of products sold) was ($10.5)
million for the three months ended January 31, 2002 compared to gross margin
(loss) of ($3.8) million for the three months ended January 31, 2001.  The
decrease in gross margin reflects the lower transaction prices discussed
above partially offset by lower production costs resulting from a higher
production volume and its effect on fixed operating costs per ton.
Production volume for the three months ended January 31, 2002 was
approximately 77% of operating capacity compared to approximately 63% for the
three months ended January 31, 2001.

         Operating income (loss) was ($19.4) million, or ($79) per ton, for
the three months ended January 31, 2002 compared to operating income (loss)
of ($16.2) million, or ($68) per ton, for the three months ended January 31,
2001.  The increase in operating loss reflects the lower gross margin
discussed above offset somewhat by lower depreciation expense and bad debt
expense.  The operating loss for the 2001 period included a charge of $2.1
million to establish a reserve for amounts due from a financially distressed
steel company. Excluding this charge, the operating loss was ($14.1) million,
or ($59) per ton for the three months ended January 31, 2001.

         Interest, investment and other income (expense), net was $0.4
million for the three months ended January 31, 2002 compared to ($9.3)
million for the three months ended January 31, 2001.  In the 2001 period the
Company recorded a charge of $10.8 million to write down the carrying value
of Acme Metals, Inc. 10.875% Senior Unsecured Notes predominantly owned by
WCI and, to a much lesser extent, by Renco Steel.  Interest income was
$46,000 for the three months ended January 31, 2002 compared to interest
income of $1.2 million for the three months ended January 31, 2001. The
decrease in interest income was due primarily to lower cash balances for the
three months ended January 31, 2002 compared to the three months ended
January 31, 2001.

         As a result of the items discussed above, the Company had a loss
before taxes of $30.5 million for the three months ended January 31, 2002
compared to a loss before taxes of $36.9 million for the three months ended
January 31, 2001.


<Page>

PAGE 20


         Effective November 1, 1998, the Company was designated as a
qualified subchapter S subsidiary by Renco.  Accordingly, the Company
is generally not subject to income taxes.


LIQUIDITY AND CAPITAL RESOURCES

Renco Steel

         In February 1998, Renco Steel issued $120.0 million 10 7/8% Senior
Secured Notes due 2005 ("Senior Secured Notes") which are secured by the
stock of WCI.  Interest on the Senior Secured Notes is payable semi-annually
in arrears on February 1, and August 1 of each year.

         Renco Steel did not make the interest payment that was due on
February 1, 2002 on the Senior Secured Notes due to insufficient liquidity.
On February 28, 2002, Renco Steel paid the overdue interest and interest on
the overdue interest to all holders other than Renco, which was within the
grace period afforded under the terms of the Senior Secured Notes indenture.
Funding for the February 28, 2002 payment was provided by a loan of $3.4
million from Renco.

         As of January 31, 2002, and the date hereof, Renco owns $59,320,000
face value of Renco Steel's Senior Secured Notes.  Renco continues to seek
additional Senior Secured Notes to purchase.  Renco is entitled to receive
interest payments from Renco Steel in accordance with the terms of the
indenture governing the Senior Secured Notes, however, Renco irrevocably
waived its right to collect interest for the payment that was due on February
1, 2002.  This waiver has been recorded as a capital contribution of $1.6
million in the three months ended January 31, 2002 and interest expense of
the same amount was also recorded in the Company's statement of operations
for the same three month period.  As of January 31, 2002, in the aggregate,
Renco has waived a total of $6.5 million of interest.

         Renco Steel's liquidity requirements result from its debt service
obligations related to the Senior Secured Notes, as well as to a nominal
extent general corporate overhead.  In the past, Renco Steel has met these
requirements through distributions from WCI, from its cash and limited
partnership investments, and from Renco support in the form of a loan and
waiver of its right to collect certain interest (from February 1, 2001 to
January 31, 2002) on the Senior Secured Notes it owns.  Due to significant
losses incurred by WCI in the last five quarters, WCI does not expect to pay
dividends to Renco Steel in the foreseeable future.  WCI's ability to pay
dividends to Renco Steel is restricted by the terms of the indenture
governing WCI's 10% Senior Secured Notes due 2004 (Senior Secured Notes of
WCI).  Pursuant to the indenture, dividends are generally limited to 50% of
WCI's cumulative earnings since October 31, 1996 (Dividend Basket).  As of
January 31, 2002, WCI had a negative Dividend Basket of $134.2 million,
therefore, WCI will not be permitted to pay dividends to Renco Steel until
its earnings exceed such amount.  Other than allowable dividends, WCI's
assets may not be utilized by Renco Steel.  Renco Steel's ability to meet its
debt service and working capital needs, given WCI's inability to provide
dividends in the foreseeable future, will be completely dependent upon future
support from Renco.  Renco may make future advances or contributions to Renco
Steel and may waive its right to

<Page>

PAGE 21


future interest payments on the Senior Secured Notes, however, Renco has no
obligation to do so.

         The indenture governing the Senior Secured Notes contains numerous
covenants and prohibitions that limit the financial activities of Renco
Steel, including, among others, limitations on the incurrence of additional
indebtedness and additional liens.  The ability of Renco Steel to comply with
such covenants will be completely dependent upon future support from Renco.
The limitation on the incurrence of additional indebtedness is $15.0 million
from a related party and $15.0 million from other sources that may include
related parties.  Based upon the outstanding principal and accrued interest
of the two Renco loans, approximately $25.5 million is available for future
borrowing.

         At January 31, 2002 Renco Steel was in compliance with the terms of
the indenture governing the Senior Secured Notes.  The Senior Secured Notes
have been classified as a current liability on the Company's consolidated
balance sheet as of January 31, 2002 and October 31, 2001 due to Renco
Steel's insufficient liquidity position.

         Renco Steel's ability to meet its debt service and working capital
obligations is completely dependent upon support from Renco.  Failure to
receive such support will have a material adverse effect on Renco Steel's
financial condition and liquidity position.

         Cash used by operating activities was $38.0 million for the three
months ended January 31, 2002 compared to $22.2 million for the 2000 period.
The decreased operating cash flow in the 2001 period compared to the 2000
period resulted primarily from a decrease in income before taxes (after
adjusting the 2001 period loss to exclude non recurring, non-cash charges)
and changes in working capital.

         Cash used by investing activities was $4.2 million in the three
months ended January 31, 2002 compared to cash provided by investing
activities of $3.6 million in the 2001 period.  Capital expenditures of $4.2
million in 2002 were $2.0 million higher than the comparable 2001 period.  In
2001, Renco Steel redeemed a portion of its investment in a limited
partnership investment and received proceeds of $5.8 million.

         Cash provided by financing activities was $10.2 million in the three
months ended January 31, 2002 due to borrowing by WCI under its $100 million
revolving credit agreement (WCI Revolver).  WCI did not borrow under the WCI
Revolver in 2001.

         Renco Steel paid no dividends and was not permitted to do so under
the Senior Secured Notes indenture during the three months ended January 31,
2002.

WCI

         WCI's liquidity requirements result from capital investments,
working capital requirements, postretirement health care and pension funding,
interest expense and, to a lesser extent, principal payments on its
indebtedness.  WCI's primary sources of liquidity as of January 31, 2002
consisted of cash and cash equivalents of $1.8 million and available borrowing
under the WCI Revolver.

<Page>

PAGE 22


         The WCI Revolver has a maximum borrowing limit of $100 million, is
secured by inventories and receivables and subject to eligibility
requirements, as defined therein, and expires on December 29, 2003.  As of
January 31, 2002, WCI had borrowing availability of $65.5 million based on
eligible inventories and receivables net of $10.2 million borrowings
outstanding and $14.9 million in letters of credit outstanding or committed
and subject to a $25 million minimum borrowing availability covenant.

         Cash from Operations

         Cash provided (used) by WCI's operating activities was ($36.4)
million for the three months ended January 31, 2002 compared to ($22.2)
million for the three months ended January 31, 2001.  The decreased operating
cash flow for the 2002 period compared to the 2001 period resulted primarily
from a decrease in income before taxes (after adjusting the 2001 period loss
to exclude non-recurring, non-cash charges) and changes in working capital.

         Capital Expenditures

         Capital expenditures were $4.2 million and $2.2 million for the
three months ended January 31, 2002 and January 31, 2001, respectively.
Capital expenditures are expected to be approximately $9 million for all of
fiscal 2002.  At January 31, 2002, WCI had commitments for capital
expenditures of approximately $1.8 million.

         Debt Covenants

         The WCI Revolver and the indenture governing the Senior Secured
Notes of WCI contain numerous covenants and prohibitions that limit the
financial activities of WCI, including requirements that WCI satisfy certain
financial ratios and limitations on the incurrence of additional
indebtedness. On January 25, 2002 WCI and its lenders under the WCI Revolver
agreed to amend the loan agreement to require WCI to maintain a minimum net
worth, as defined, of not less than the following for each period indicated:
negative $225 million through January 31, 2002, negative $240 million from
February 1, 2002 through April 30, 2002, negative $255 million from May 1,
2002 through July 31, 2002, and negative $260 million on August 1, 2002 and
thereafter.  In addition, WCI is required to maintain minimum availability
under the WCI Revolver of $25 million. The ability of WCI to meet its debt
service requirements and to comply with such covenants will be dependent upon
future operating performance and financial results of WCI, which will be
subject to financial, economic, political, competitive and other factors
affecting WCI, many of which are beyond its control.

         Dividends

         WCI paid no dividends and was not permitted to do so under the
Senior Secured Notes of WCI indenture during the three months ended January
31, 2002. WCI does not expect to be permitted to pay dividends for the
foreseeable future based on limitations under the Senior Secured Notes of WCI
indenture.

<Page>

PAGE 23


         Defined Benefit Pension Plan

         WCI has a defined benefit pension plan (DBP) which covers
substantially all bargained for employees.  WCI expects to contribute
approximately $29.6 million, $26.3 million and $21.1 million to the DBP
during 2002, 2003 and 2004, respectively, which is expected to satisfy the
minimum funding requirements of ERISA for those periods.  This funding
reflects the results of the actuarial valuation completed as of November 1,
2001.  Due primarily to the reduction in the offset from the frozen defined
contribution plan resulting from adverse investment experience and from
changes in the status of plan participants different from assumptions WCI's
projected benefit obligation increased from $98.7 million as reported in
WCI's 10-K as of October 31, 2001 to $114.9 million and caused an increase in
the minimum funding.  WCI contributed $7.2 million, $4.2 million and $6.7
million to the DBP during the fiscal years ended October 31, 2001, 2000 and
1999, respectively.

Outlook

         During the last four years steel imports into the U.S. have
adversely affected shipping volume and has contributed significantly to the
depressed pricing environment in the current market.  During this period, WCI
and the steel industry have filed various trade cases against hot-rolled and
cold-rolled carbon steel flat products from various countries (certain of
which are pending before the ITC) in response to this increase in imports.
While various duties have been imposed on these products from certain
countries, to date these duties have been ineffective in reducing overall
steel imports to the U.S.

         As a result of the distortion of steel supply created by the surge
of imports of flat rolled steel products and the lower demand for steel
products during 2001 due to the slumping economy, competition has intensified
in WCI's high carbon and alloy product markets, particularly from minimills.
This increased competition has influenced the pricing structure of these
products and has reduced the premium WCI is currently able to receive on
these products compared to commodity products.

         In response to the surging imports, in June 2001 the U.S. Trade
Representative, at the direction of President Bush, requested an
investigation by the International Trade Commission under Section 201 of the
Trade Act of 1974 to determine whether steel is being imported into the U.S.
in such quantities as to be a substantial cause of serious injury to the U.S.
steel industry.  This request included the investigation of carbon and alloy
flat rolled products among other products.  On October 22, 2001 the ITC
determined that the requisite injury had been demonstrated related to carbon
and alloy slabs, hot-rolled, cold-rolled and coated products.  These
determinations pertain to imports from all countries except Canada. On
December 19, 2001 the ITC forwarded its remedy recommendations to President
Bush.

         On March 5, 2002 President Bush issued his remedy regarding the
Section 201 investigation.  This remedy includes a tariff rate quota on
carbon and alloy slabs of 30% in excess of 5.4 million tons per year
adjusting over a three year period to 18% on imports in excess of 6.4 million
tons and a 30% tariff on hot-rolled, cold-rolled and coated sheet and strip
declining over a three year period to 18%. These

<Page>

PAGE 24


remedies pertain to imports from all countries except Canada, Mexico, Jordan,
Israel and certain developing countries and is expected to be effective on or
about March 20, 2002.

         For the longer term, the shipping levels and realized selling prices
of WCI products will be influenced by the levels of imported steel, the
strength of the manufacturing sector of the domestic economy and production
capacity changes by domestic competitors.  Domestic flat rolled steel
production capacity has been reduced by the closing of seven producers during
the past two years with total hot strip mill capacity of 16.7 million tons.
This has contributed to the recent increase in order intake discussed below.
The impact of this closed capacity may be reversed if the facilities are
restarted as has frequently happened with idled steel capacity in the past.

         WCI has experienced a significant increase in its order intake rate
and backlog beginning in December 2001 which resulted from the expectation of
lower imports due to the then pending Section 201 investigation, the recent
closure of a competitor, a conclusion to inventory reductions by customers
and the beginning of an economic recovery.  WCI's order backlog was
approximately 250,000 tons at January 31, 2002 compared to 135,000 tons at
October 31, 2001.  With the increasing order entry rate and backlog, WCI and
most other flat rolled steel producers announced price increases effective
during the second calendar quarter 2002 totaling $50 per ton on hot-rolled,
$30 per ton on cold-rolled, and $20 per ton on galvanized products.  Due to
these factors, WCI expects shipping volume in the second quarter 2002 to be
approximately 315,000 tons and the third quarter 2002 to be approximately
330,000 tons.  WCI expects net sales per ton shipped to be flat in the second
quarter compared to the first quarter with net selling prices rising and
being offset by lower revenue from steam sales to the LTV coke plant adjacent
to WCI's facility.  Net sales per ton shipped are expected to increase by
approximately $25 in the third quarter compared to the second quarter.  In
addition, WCI expects cost of products sold per ton to decline approximately
7% in the second quarter compared to the first quarter as capacity utilization
increases and inventory valuation reserves are reduced.  Despite these
improvements, WCI expects to incur a significant net loss during fiscal 2002
for which WCI believes it has adequate availability of cash resources to
maintain operations through at least fiscal 2002. However, if the volume or
price increases expected to be realized during the second and third quarters
of fiscal 2002 are not realized or sustained for the balance of fiscal 2002,
it is likely that WCI will not have adequate availability under its existing
financing arrangements and will require additional sources of financing.  WCI
cannot assure that it has the ability to obtain such additional financing, or
what the terms of any additional financing might be. Failure to obtain
additional financing in these circumstances would likely have a material
adverse effect on WCI's operations.  For periods beyond fiscal 2002, further
price improvements will be necessary for the Company to have sufficient cash
resources to maintain its operations.

         Renco Steel's sole source of liquidity has become advances and
contributions from its parent, Renco, since its two former primary sources
are no longer available.  Renco Steel's investments in limited partnership
investments were liquidated in 2001 and dividend payments from WCI are
currently prohibited under the terms of the indenture

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PAGE 25


governing the Senior Secured Notes of WCI due to WCI's significant cumulative
losses, as defined.  WCI is required to earn in excess of its cumulative
losses before it is permitted to resume dividend payments to Renco Steel.  At
January 31, 2002, cumulative losses were $134.2 million and are expected to
increase further in 2002 based upon WCI's outlook as discussed above.  It is
not anticipated that WCI will be able to generate earnings in excess of its
cumulative losses in the foreseeable future and therefore, Renco Steel does
not expect to receive any dividends from WCI.  Support from Renco will be
necessary for Renco Steel to meet its debt service, and to a much lesser
extent, its administrative requirements.  As of January 31, 2002, Renco has
provided loans amounting to $4.5 million and has irrevocably waived its right
to collect interest on the Senior Secured Notes it owns resulting in a cash
flow savings to Renco Steel of $6.5 million in the aggregate. Renco may make
future advances or contributions to Renco Steel and may waive its right to
future interest payments on the Senior Secured Notes it owns, however, Renco
has no obligation to do so.

Accounting Standards

         In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement No. 142, Goodwill and Other Intangible Assets. Statement 142
requires that goodwill and intangible assets with indefinite useful lives no
longer be amortized, but instead tested for impairment at least annually in
accordance with the provisions of Statement 142.  The Company adopted
Statement 142 effective November 1, 2001.  The adoption of Statement 142 did
not have a material effect on either financial position or results of
operations.

         In August 2001, the FASB issued Statement No. 143, Accounting for
Asset Retirement Obligations.  Statement 143 applies to legal obligations
associated with the retirement of certain long-lived assets.  It requires
companies to record the fair value of the liability for an asset retirement
obligation in the period in which it is incurred.  When the liability is
initially recorded, the company capitalizes a cost by increasing the carrying
amount of the related long-lived asset.  Over time, the liability is accreted
to its present value each period, and the capitalized cost is depreciated
over the useful life of the related asset.  Upon settlement of the liability,
the company either settles the obligation for its recorded amount or incurs a
gain or loss upon settlement.  Statement 143 is required to be adopted in
fiscal years beginning after June 15, 2002.  The Company has not yet
determined the effect, if any, that adopting Statement 143 will have on
future earnings and financial position.

         In August 2001, the FASB issued Statement No. 144, Accounting for
Impairment or Disposal of Long-Lived Assets.  This statement establishes a
single accounting model for long-lived assets to be disposed of by sale and
provides additional implementation guidance for assets to be held and used
and assets to be disposed of other than by sale.  The Company adopted the
Statement effective November 1, 2001. There was no financial implication
related to the adoption of Statement No. 144, and the guidance will be
applied on a prospective basis.

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PAGE 26


Forward-Looking Statements

         This report includes "forward-looking statements" which involve
known and unknown risks, uncertainties and other important factors that could
cause the actual results, performance or achievements of the Company to
differ materially from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such risks,
uncertainties and other important factors include, among others:  general
economic and business conditions; demand for Company products; changes in
industry capacity and levels of imports of steel or steel products; after
effects of the Section 201 ruling; industry trends, including product
pricing; competition; currency fluctuations; the loss of any significant
customers; availability of qualified personnel; major equipment failures;
future loans from Renco; future waivers of interest by Renco in regard to the
Senior Secured Notes it owns; changes in, or the failure or inability to comply
with, government regulation, including, without limitation, environmental
regulations; and the outcome of legal matters.  These forward-looking
statements speak only as of the date of this report.  The Company expressly
disclaims any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statement contained herein to reflect any
change in the Company's expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         WCI is exposed to commodity price risk with respect to natural gas
and zinc.  WCI uses forward purchase contracts to manage the volatility
related to the exposure.  No contracts are entered into for speculative
purposes.  WCI's market risk has not changed materially from that reported in
the Company's Form 10-K for the fiscal year ended October 31, 2001.

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PAGE 27


                           PART II - OTHER INFORMATION

                           RENCO STEEL HOLDINGS, INC.

ITEM 1.   LEGAL PROCEEDINGS

     For information as to the environmental matters and as to the employee
litigation described in the Company's Form 10-K for the year ended October
31, 2001, see Part I, Note 5 to Item 1, Financial Statements.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     On January 2, 2002, The Renco Group, Inc. as sole shareholder of Renco
Steel Holdings, Inc., executed a written consent, in lieu of an annual
meeting of shareholders, for the re-election of Ira Leon Rennert as chairman
and sole director of Renco Steel Holdings, Inc.

ITEM 6.   EXHIBITS and REPORTS ON FORM 8-K

     (a)  Exhibits:

          A list of the exhibits required to be filed as part of this Report
          on Form 10-Q is set forth in the "Exhibit Index" which immediately
          precedes such exhibits, and is incorporated herein by reference.


     (b)  Reports on Form 8-K:

          The Company filed a Form 8-K, Item 5, Other Events, on January 28,
          2002 to disclose the scheduled interest payment, due on February 1,
          2002 for the Senior Secured Notes, would not be made on the due date.


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PAGE 28


                           RENCO STEEL HOLDINGS, INC.

                                   SIGNATURES




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

                                       RENCO STEEL HOLDINGS, INC.
                                       (registrant)



Date:  March 18, 2002                  /s/ IRA L. RENNERT
                                       -------------------------------------
                                       Ira L. Rennert
                                       Chairman of the Board,
                                       President and Director
                                       (principal executive officer)




                                       /s/ ROGER L. FAY
                                       -------------------------------------
                                       Roger L. Fay
                                       Vice President and
                                       Chief Financial Officer
                                       (principal financial and
                                       accounting officer)

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PAGE 29


                           RENCO STEEL HOLDINGS, INC.

                                  EXHIBIT INDEX


Exhibit Number                           Description
--------------                           -----------
10.1.6                 Promissory Note dated February 27, 2002 between Renco
                       Steel Holdings, Inc. and The Renco Group, Inc.