<PAGE>   1
================================================================================

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

                                   FORM 10-K
 [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 [FEE REQUIRED]

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
                                       OR
 [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                          COMMISSION FILE NO. 1-13394

                          CHASE BRASS INDUSTRIES, INC.
             (Exact name of Registrant as specified in its charter)

                 DELAWARE                                      51-0328047
         (State of Incorporation)                           (I.R.S. Employer
                                                           Identification No.)
          14212 COUNTY ROAD M-50
             MONTPELIER, OHIO                                     43543
 (Address of principal executive offices)                      (Zip Code)

                                 (419) 485-3193
              (Registrant's telephone number, including area code)

          Securities Registered Pursuant to Section 12(b) of the Act:

                                                        Name of each exchange
        Title of each class                              on which registered
        -------------------                              -------------------

COMMON STOCK, PAR VALUE $.01 PER SHARE                 NEW YORK STOCK EXCHANGE

       Securities Registered Pursuant to Section 12(g) of the Act:  NONE

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

       Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Section 229.405) of this chapter) is not contained
herein, and will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. [X]
<TABLE>
   <S>                                                                                             <C>
   AGGREGATE MARKET VALUE OF OUTSTANDING COMMON STOCK HELD BY NON-AFFILIATES OF THE REGISTRANT,
   AS OF MARCH 18, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    $93,101,364

   NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AS OF MARCH 18, 1997  . . . . . . . . . . . . .      5,982,521
   NUMBER OF SHARES OF NONVOTING COMMON STOCK OUTSTANDING AS OF MARCH 18, 1997  . . . . . . . .      4,100,079*
</TABLE>

-----------
*      The Registrant's Nonvoting Common Stock is convertible, on a
       share-for-share basis, into Common Stock.

                      DOCUMENTS INCORPORATED BY REFERENCE

       The Registrant's definitive proxy statement to be filed pursuant to
Regulation 14A involving the election of directors at the 1997 annual
stockholders' meeting is incorporated by reference in Part III hereof.

===============================================================================
<PAGE>   2
                                     PART I

ITEM 1.  BUSINESS

GENERAL

         Chase Brass Industries, Inc. (the "Company"), through its wholly owned
subsidiaries Chase Brass & Copper Company, Inc. ("CBCC"), and Leavitt Tube
Company, Inc. ("Leavitt"), is a leading manufacturer of free-machining and
forging brass rod and structural and mechanical steel tubing.  The Company's
principal executive offices are located at 14212 County Road M-50, Post Office
Box 152, Montpelier, Ohio 43543, and its telephone number is (419) 485-3193.

         The Company's business strategy is to increase profitability through
capital investment and continuous productivity improvement programs, maintain
its low-cost position while retaining high standards of quality, on-time
delivery and service and expand its product offerings into complementary as
well as other industries through acquisitions and joint ventures that
capitalize on the Company's operating strengths, management experience and
entrepreneurial philosophy.  The objectives of the Company's strategy are to
enable the Company to maximize operating profitability, respond to increased
demand for its products, strengthen its leading industry position and enhance
and capitalize on its strong reputation for high-quality products and extensive
customer service.

         CBCC.  CBCC is an ISO 9002 certified manufacturer and supplier of
free-machining and forging brass rod in the United States and Canada.
Free-machining and forging brass rod, which CBCC estimates represent
approximately 80% and 12%, respectively, of annual copper alloy rod shipments
by U.S. mills, are the two primary types of copper alloy rod used in the United
States and Canada.  CBCC is one of the largest manufacturers and suppliers in
the United States and Canada of free-machining brass rod, which accounted for
approximately 95% of the Company's total shipments and net sales in 1996 and
1995.  Its diverse customer base of more than 250 companies uses Chase's "Blue
Dot" trademark brass rod to produce a variety of products, such as faucets,
plumbing fittings, heating and air conditioning components, industrial valves,
automotive parts, and numerous hardware components.

         CBCC traces its roots to a brass button-making business started in
1837 in Waterbury, Connecticut ("Old Chase"), which began brass rod operations
in 1917.  The Company was formed in 1990 by Martin V. Alonzo, the Company's
Chairman, President and Chief Executive Officer, and Citicorp Venture Capital
Ltd. ("CVC") and certain affiliates of CVC for the purpose of acquiring the
assets and operations of the brass rod division of Old Chase, then a subsidiary
of BP America, Inc. (the "CBCC Acquisition").  The CBCC Acquisition was
consummated August 24, 1990, at which time the Company began operations.





                                       2
<PAGE>   3
         Leavitt.  On August 30, 1996, the Company acquired, through Leavitt,
the assets and operations of the steel tube division ("Old Leavitt") of UNR
Industries, Inc. ("UNR"), (the "Leavitt Acquisition").  Upon consummation of
the Leavitt Acquisition, Leavitt continued operations in the manufacture and
sale of structural and mechanical steel tubing and is a leading producer and
supplier in the United States.  Structural steel tubing is used in farm
equipment, non-residential construction and other structural applications.
The mechanical steel tubing is used in a broad range of consumer and commercial
products, including furniture and fixtures, lawn-care products, storage racks,
exercise equipment, bicycles and machine tools.

PRODUCTS

         CBCC.  CBCC principally produces round and hexagonal shaped brass rod
in sizes ranging from 5/16 inch to 4 inches in diameter, which are the primary
shapes and sizes used by consumers of free-machining and forging brass rod.
The main attributes of copper alloy rod are its excellent corrosion resistance,
the ease with which it can be machined or forged into a variety of shapes and
its moderate strength.  Free-machining brass rod is used to produce brass
products, such as valves and fittings, by a machining process during which the
brass rod is formed, drilled and cut.  Forging brass is used to produce brass
products by a process during which a heated slug cut from a rod is pressed into
an impression die and then machined.

         Leavitt.  Leavitt produces structural and mechanical electric
resistance welded steel tubing in round, square and rectangular shapes in sizes
ranging from 3/8 inch to 12 3/4 inches in outer diameter for round sizes and
1/2 inch to 10 inch squares and equivalent rectangles.  Leavitt's structural
steel tubing is used in farm equipment, non- residential construction and other
structural applications.  The advantages of structural steel tubing over other
structural products such as beams and channels include its high
strength-to-weight ratio, low surface area, low wind resistance, hollow
interior, good aesthetics and ease of fabrication.  The mechanical steel tubing
is used in a broad range of consumer and commercial products, including
furniture and fixtures, lawn-care products, storage racks, exercise equipment,
bicycles and machine tools.

BUSINESS STRATEGY

         The Company's business strategy is to increase profitability and
shareholder value through internal growth as well as through acquisitions.
Internal growth strategies focus on capital investment and continuous
productivity improvement programs and maintaining the Company's low-cost
position while retaining high standards of quality, on-time delivery and
service.  The Company's acquisition strategy focuses on continually expanding
its product offerings into complementary as well as other industries through
acquisitions and joint ventures that capitalize on the Company's operating
strengths, management experience and entrepreneurial philosophy in becoming an
engineered materials company.





                                       3
<PAGE>   4
Capital Investment and Continuing Productivity Improvement Programs

         CBCC.  CBCC  is committed to identifying and implementing programs
designed to increase plant utilization, productivity and profitability.  Since
the CBCC Acquisition, certain aspects of the manufacturing process have been
improved through reallocation of employee responsibilities and in-house
modifications of the manufacturing operations.  The Company also has spent more
than $16.9 million for capital improvements which have improved the reliability
and enhanced the production capacity and productivity of CBCC's manufacturing
facility.  The most significant project, a $2.7 million foundry expansion, was
completed in December 1995.

         CBCC recently launched a proposed capital project to begin in 1997
referred to as "Project 400."  The project would increase foundry, extrusion
and finishing capabilities with an ultimate goal of increasing finished brass
rod shipments to approximately 400 million pounds annually by the year 2000, a
one-third increase over current production levels.  The first phase of the
project, which is expected to be completed near the end of 1997, has a total
cost of approximately $12 million.  The Company anticipates that this capital
project will be paid for with cash flow provided by operating activities.

         Leavitt. Since acquiring Leavitt in August 1996, approximately
$500,000 has been spent on capital improvements.  Leavitt's 1997 capital
investment plan includes approximately $5 million for replacement of older
manufacturing equipment, purchase of new material handing equipment and various
maintenance projects.  Additionally, management intends to review the
manufacturing processes at each plant in order to identify capital improvement
projects that will improve the efficiency and productivity of the facilities
and the operations of Leavitt as a whole.

ISO 9002 Certification

         CBCC has significant quality procedures and controls in place in all
aspects of its operations.  Effective February 11, 1996, CBCC became the first
U.S. brass rod mill to receive an ISO 9002 quality system certification.  ISO
9002 is a quality system standard for manufacturers that has been adopted by at
least 74 nations.  The ISO 9002 quality system certification signifies that
CBCC's quality system adheres to the internationally recognized ISO standards.
Since the Leavitt Acquisition, management has been evaluating Leavitt's control
processes and is taking the necessary steps to obtain ISO 9002 quality system
certification by mid-1998.

Acquisitions

          The Leavitt Acquisition was the Company's first step in its strategy
to further grow earnings by becoming an engineered materials company.  The
Company has reviewed and continues to search for additional acquisition
opportunities that will further increase its product offerings and capitalize
on the Company's management skills.  The Company intends to pursue acquisitions
and joint ventures within its current as well as related products manufacturing
industries, as well as in other





                                       4
<PAGE>   5
manufacturing industries, that utilize the Company's operating strengths,
management experience and entrepreneurial philosophy.  In recent years the
Company has investigated several domestic and international acquisition
opportunities.  However, future acquisitions will be consummated only if the
opportunities investigated have the specific operating and financial
characteristics which management believes are essential to further the
Company's business strategy and increase shareholder value.

MARKETING AND DISTRIBUTION

         The Company markets its products through a direct sales force whose
territory covers the United States and Canada.  Management believes that its
experienced sales force provides an important link with its customers and
increases the quality of its service.  The Company distributes its products to
a diverse customer base of over 700 companies in the United States and Canada.
The Company's customers include original equipment manufacturers, independent
fabricators, distributors and service centers.  CBCC's original equipment
manufacturing customers primarily are in the construction and remodeling,
industrial machinery and equipment, electrical and electronic, transportation
and consumer durable goods industries.  Leavitt's original equipment
manufacturing customers are in the farm equipment, non-residential construction
and consumer and commercial products industries.  Independent fabricators
produce products for sale to original equipment manufacturers, while
distribution and service centers supply products to original equipment
manufacturers and independent fabricators.   The Company's products are
distributed either by direct shipment from the manufacturing facilities or by
shipment from the Company's warehouse.  See "Item 2.  Properties."

COMPETITION

         The industry in which the Company operates is highly competitive.
Based on available industry data, the Company estimates that it supplied
approximately 34% of copper alloy rod and 9% of structural steel tubing shipped
by U.S. mills in 1996.  In addition to CBCC, there currently are six U.S.
companies operating a total of seven U.S. copper alloy rod mills, all of which
produce both free-machining and forging brass rod.  These competitors are Cerro
Metal Products Company, Inc., Mueller Brass Co., Inc., Extruded Metals Inc.,
Chicago Extruded Metals Company, Ansonia Copper & Brass, Inc., and Olin
Corporation.  The steel tubing industry's capacity exceeds demand, primarily
due to the many new market entrants in recent years.  Leavitt's primary
competitors in steel tubing include Welded Tube of America, Copperweld
Corporations' Tube Division and Bull Moose Tube Company.  Although the Company
competes with other manufacturers, the Company is unable to determine the
extent to which its competitors' product lines compete directly with the
Company's products because the competitors also produce products that the
Company does not produce.

         The Company also is subject to competition from imported products and
alternative materials, such as, with respect to CBCC, ceramics, plastics and
steel and, with respect to Leavitt, steel I-beams, channels and pre-cast
concrete.  The principal competitive factors in the Company's business are
price, quality, on-time delivery and service.  The Company believes that it is
an industry





                                       5
<PAGE>   6
leader as a result of its ability to consistently provide a broad range of
high-quality products, on-time delivery and superior service at competitive
prices.  See "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations -- General Economic and Industry
Conditions."

RAW MATERIALS AND SUPPLIERS

         The principal raw materials used by the Company are brass scrap and
carbon steel coils.  The Company believes adequate supplies of these raw
materials are available to the Company.  The Company does not rely on any one
supplier of raw materials and it does not believe that the loss of any one
source would have a material impact on its business.  See "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations --
General -- Operations."

CUSTOMERS

         Neither CBCC nor Leavitt depends on any single customer or group of
customers, the loss of any one or more of which would have a material adverse
effect on CBCC or Leavitt, respectively.  Also, during 1996, no customer or any
affiliated group of customers accounted for more than 10% of the Company's net
sales, and the Company does not anticipate that any customer or affiliated
group of customers will account for more than 10% of the Company's net sales in
1997.

BACKLOG ORDERS

         As of March 18, 1997, the Company had backlog orders totaling $57.1
million.  As of March 18, 1996, the Company had backlog orders totaling $33.3
million.  The increase from March 1996 to March 1997 is attributed primarily to
the acquisition of Leavitt, which had backlog orders totaling $16.5 million as
of the Leavitt Acquisition date, August 30, 1996.  See "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations --
General -- General Economic and Industry Conditions."  The Company anticipates
that all current backlog orders will be filled during 1997, but is unable to
estimate the amount of backlog that will exist as of year end 1997.

TRADEMARKS

         The Company owns the registered trademarks CHASE and a centaur design
(which is CBCC's logo) in the United States and Canada, and the registered
trademark "BLUE DOT" and its design in the United States and Mexico, for use in
connection with CBCC's products.  The Company also owns the registered
trademarks CHASE BRASS & COPPER CO. and a centaur design in Mexico.  Because of
the recognition of these trademarks in the marketplace, the Company considers
these intellectual property rights important to its business.





                                       6
<PAGE>   7
EMPLOYEES

         At December 31, 1996, the Company had approximately 700 full-time
employees, of whom approximately 250 were salaried and approximately 450 were
hourly.  The Company believes that its relations with its employees are good
and currently does not anticipate any work stoppages.

REGULATION

Regulation of Lead in Drinking Water

        Effective August 6, 1996, amendments to the Safe Drinking Water Act
were enacted to regulate lead leachate and the lead content of plumbing
fittings and fixtures. The legislation calls for the establishment of a
voluntary lead leaching standard within one year of the effective date of the
statute.  In the event that a voluntary standard is not established, the
legislation mandates that the U.S. Environmental Protection Agency (the "U.S.
EPA") promulgate such standards within two years after the effective date of
the statute, with such standards to become effective five years from the date
of their final promulgation.  Should the U.S. EPA fail to promulgate standards
within five years of the effective date, lead content levels in new brass
plumbing fittings and fixtures used for dispensing water intended for human
consumption cannot exceed 4% lead by dry weight on the fifth anniversary of the
effective date.

         The American Society for Testing and Materials' current standards for
lead content in free-machining brass rod allow a range of 2.5% to 3.7%, with
1.5% to 2.5% for forging brass rod.  Current CBCC production of free-machining
brass rod has a lead content between 2.5% and 3.0%, while the forging alloy rod
has a lead content between 1.5% and 2.1%.  CBCC also has demonstrated the
capability of manufacturing brass rod with a lower lead content.  Based on the
above, the Company does not believe that such legislation will have a material
adverse effect on its business.

Environmental Regulation

         The Company's operations are subject to federal, state and local
pollution control laws and regulations relating to the discharge of hazardous
or regulated materials into the environment, the transport and sale of
hazardous materials and the disposal of certain materials and wastes.  These
laws and related regulations are changing constantly and, as a consequence, are
subject to differing interpretations by the agencies that administer them.
Moreover, increasingly stringent regulations often result in the mandatory
implementation of additional and/or modified pollution control procedures and
processes which may result in material increases in compliance costs.

         For the above reasons, the Company cannot predict with certainty its
aggregate future capital expenditures for pollution control.  However, the
Company currently estimates that it will incur capital expenditures for
pollution control of approximately $500,000 in 1997, a portion of which may be
subject to reimbursement by certain affiliates of BP America, Inc., as the
owners of the assets of the brass rod division of Old Chase prior to the CBCC
Acquisition (collectively, "BP") under the Remediation Agreement and the CBCC
Purchase Agreement discussed below.  In





                                       7
<PAGE>   8
addition, in connection with the implementation of phase one of the proposed
capacity expansion project at CBCC (see Business Strategy - Capital Investment
and Continuing Productivity Improvement Programs - CBCC), the Company may be
required to spend an additional approximately $200,000 for related pollution
control devices.  Estimates of capital expenditures for pollution control
purposes beyond 1997 are even more uncertain.  However, assuming no significant
manufacturing process changes and no significant changes in applicable laws or
regulations, the Company currently anticipates that its capital expenditures
for pollution control purposes for 1998 will be approximately $500,000, and
during the period of 1999-2001 will aggregate approximately $1 million.  These
estimates are exclusive of expenditures associated with on-site remediation
activities, which the Company anticipates will be paid for by BP as more fully
discussed below, and pollution control devices that may be required in
connection with additional phases of the capacity expansion program.  The
Company believes that expenditures for pollution control equipment will
continue to be required in the future for continued compliance with applicable
environmental laws and regulations.

         Any capital expenditures for pollution control will affect earnings to
some degree since funds expended for this purpose generally provide minimal, if
any, monetary return on investment and may divert capital from income-
producing activities.  However, the Company does not believe that the current
anticipated capital expenditures for this purpose will have a material impact
on the Company's earnings or consolidated financial position.

         CBCC.  In connection with the CBCC Acquisition, the Company and BP
entered into the Remediation Agreement.  The Remediation Agreement provides
for, among other things, BP to fund certain post-closing activities, including
the investigation and remediation of on-site contamination that existed as of
the CBCC Acquisition date at the location on which CBCC's manufacturing
facility is located and the construction of a new waste water treatment plant
to enable CBCC to comply with its waste water discharge permit (the "Permit").
In addition, under the Asset Purchase Agreement (the "CBCC Purchase Agreement")
pursuant to which the CBCC Acquisition was consummated, BP is obligated to
indemnify the Company for liabilities arising out of certain environmental
conditions that existed as of the CBCC Acquisition date.

         While CBCC's waste water treatment plant has been in operation since
May 1993, CBCC is still experiencing exceedances to certain limitations
contained in the Permit, resulting in violations of the Clean Water Act.  The
Ohio Environmental Protection Agency ("Ohio EPA") has not initiated any
enforcement action against CBCC for prior exceedances, but has indicated that
it may do so if violations of the Permit limits continue after January 31,
1997.  In February 1997, CBCC completed a control project designed to eliminate
exceedances to the Permit limits and currently is monitoring its waste water
discharge to determine if the exceedances have been eliminated.

         Preliminary studies conducted immediately prior to the CBCC
Acquisition indicated that the site upon which CBCC's manufacturing facility is
located has been contaminated by certain volatile organic compounds, including
trichloroethylene, as well as total petroleum hydrocarbons and certain metals
from historical operating practices.  BP has conducted initial site
investigation activities to





                                       8
<PAGE>   9
determine the extent of contamination and appropriate cleanup methods.  CBCC
and BP are working together, with their respective consultants, to identify
additional sampling that is necessary to fully delineate the extent and
magnitude of contamination and to determine appropriate cleanup standards.
Until the completion of additional investigatory activities that are necessary
and the development of a remediation plan for the site, the Company will be
unable to estimate with any degree of certainty the extent of contamination or
the amount of cleanup costs associated therewith.

         Leavitt.  Prior to the Leavitt Acquisition, five underground storage
tanks ("UST's") were removed from Leavitt's facility in Hammond, Indiana.  It
is the Company's understanding that these UST's were used to contain waste oil,
waste oil residue and sludge, phenol and metals when the property was utilized
by prior owners as a bus barn.  Prior to removal, one or more of the UST's
released petroleum and other chemical constituents into the environment.  Some
contamination of groundwater and soil at the Hammond facility remains in place.
Prior to the Leavitt Acquisition, Old Leavitt had conducted sampling and had
requested the Indiana Department of Environment Management ("IDEM") to "close"
the UST removal project.  The IDEM has not yet issued a "closed" letter, and,
in February 1997, notified Leavitt that additional groundwater sampling will be
required prior to the IDEM considering closure.  Leavitt intends to begin
additional groundwater sampling in second quarter 1997.  Until such sampling is
conducted, and the results thereof provided to Leavitt, the Company is unable
to determine the current extent of contamination or what, if any, remedial
activities may be required.

         The Company is involved in certain environmental legal proceedings as
described in "Item 3. Legal Proceedings" and Note 14 of Notes to Consolidated
Financial Statements.

         The Company does not believe that costs that may be incurred in
connection with the investigation and cleanup associated with the environmental
matters discussed above will have a material adverse effect on the Company's
financial position, results of operations or liquidity.  For additional
information regarding the environmental matters referenced above, see "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Environmental Matters" and Note 14 of Notes to Consolidated
Financial Statements.

ITEM 2.  PROPERTIES

         The Company owns all of its facilities except as indicated below.  The
Company believes its plants are suitable for their purposes, are well
maintained and are adequately insured.

         CBCC.  CBCC's manufacturing facility and the Company's executive and
general offices are located on a 55-acre site owned by the Company in
Montpelier, Ohio, near the Indiana and Michigan borders.  CBCC's manufacturing
facility in Montpelier consists of one plant of approximately 134,000 square
feet.  The plant was constructed in 1965 expressly for the purpose of producing
free-machining brass rod and the Company believes that it is the most modern
brass rod facility in the United States.





                                       9
<PAGE>   10
         CBCC also leases a warehouse in Los Angeles, California, that contains
approximately 47,000 square feet of storage space.  The Los Angeles warehouse
lease expires in 2001.  The Los Angeles warehouse lease does not contain any
express renewal provisions, but the Company believes that the lease can be
renewed or comparable facilities can be obtained on terms acceptable to the
Company.

         CBCC manufactures substantially all of the brass rod it ships.  CBCC's
manufacturing facility has operated seven days a week, 24 hours a day, since
1981 (except for downtime relating to regular maintenance, capital improvements
and minor mechanical failures).  CBCC completed a $2.7 million foundry
expansion in December 1995.  CBCC has proposed a capital improvements project
to begin in 1997 that would further increase finished brass rod capacity
one-third to 400 million pounds annually.  See "Item 1. Business - Business
Strategy - Capital Investment and Continuing Productivity Improvement Programs
- CBCC."

         Leavitt.  Leavitt operates four manufacturing facilities, two in
Chicago, Illinois, one in Hammond, Indiana, and one in Jackson, Mississippi.
The four facilities have a total of over one million square feet of
manufacturing and office space.  The facilities contain a total of 16 tube
mills and four steel coil slitters.  Leavitt's production capacity is in excess
of 1 billion pounds annually.  Leavitt's facilities are currently operating
between one and three shifts daily with utilization at approximately forty-five
percent of capacity.  All of Leavitt's facilities are owned except for the
Jackson facility which is leased.   The following table sets forth information
concerning size, location, use and nature of the principal manufacturing
facilities owned or leased by Leavitt.

<TABLE>
<CAPTION>
Location               Square Feet             No. of Mills         No. of Slitters         Owned/Leased
--------               -----------             ------------         ---------------         ------------
<S>                      <C>                   <C>                        <C>                    <C>
Chicago, IL                450,000             4 mechanical               2                      owned
North Plant                                    2 structural

Chicago, IL                240,000             1 structural               1                      owned
South Plant

Hammond, IN                 70,000             5 mechanical              --                      owned


Jackson, MS                256,000             4 mechanical               1                      leased
</TABLE>

         The Chicago South Plant also contains a 100,000 square foot production
tube finishing facility.  The Jackson leases expire in 2001.  Under the leases,
Leavitt may purchase the land and facility based on the appraised value of the
land at the time of purchase and a scheduled payout for the facility and the
improvements.  Upon expiration of the leases, the scheduled payout for the
facility and improvements (but not the land) is reduced to one dollar.





                                       10
<PAGE>   11
ITEM 3.  LEGAL PROCEEDINGS

         The Company is involved in certain claims and litigation arising in
the ordinary course of business which involve, in the aggregate, claims for
damages in amounts not in excess of 10% of the Company's current assets.
Management believes that the ultimate disposition of these matters will not
have a material effect on the Company's financial position, results of
operations or liquidity.

         CBCC and/or other entities named "Chase Brass & Copper Co." (which may
include Old Chase or divisions of Old Chase) have been named by governmental
agencies and/or private parties as a potentially responsible party ("PRP")
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 ("CERCLA") and/or analogous state laws with respect to two sites, and
may have been identified as a PRP at one additional site, as discussed in the
following paragraphs.

         CBCC has been named one of over 130 defendants in a CERCLA Section 107
action styled Ashland Oil, Inc. v. Acme Scrap Iron & Metal Corp., et. al. (Case
No. I:94 CV 1592), which seeks recovery of response costs previously spent and
proposed to be spent by the plaintiff Ashland Oil at the Huth Oil Services
Company site located in Cleveland, Ohio. A waste oil reclamation facility was
operated at the site from 1938 until 1990. Beginning in 1983, and at various
other times until 1990, both the U.S. EPA and the Ohio EPA conducted
inspections and sampling at this site. In October 1990, the U.S. EPA ordered
the plaintiffs, Ashland Chemical Company (a division of Ashland Oil, Inc.), The
Cleveland Electric Illuminating Company and Huth Oil Services Company, to
remediate the site. As a result thereof, the plaintiff has alleged that between
1990 and 1993 it and the other ordered parties have incurred response costs in
excess of $10 million. The complaint alleges that the defendants are each
strictly, as well as jointly and severally, liable. The Company believes,
however, that CBCC has had no contact with the site and has no knowledge as to
what, if any, share of response costs has been allocated to CBCC. BP has been
notified of the institution of this suit and has assumed the defense thereof
because alleged events giving rise to CERCLA liability occurred prior to the
CBCC Acquisition.

         CBCC has been notified by a group of private parties of its potential
identification as a PRP at a site in Tifton, Georgia, commonly known as the
"SoGreen" site. According to the notice, a flue dust and flyash recycling
facility was operated at the site from approximately 1976 until 1993.  Pursuant
to a consent order entered into between Atlantic Steel Industries, Inc.,
Florida Steel Corporation, Georgetown Steel Corporation, Owen Electric Steel
Company of South Carolina and U.S. Foundry & Manufacturing Corporation
(collectively, the "Steel Companies") and the Georgia Department of Natural
Resources -- Environmental Protection Division, the Steel Companies have been
engaged in removing a flue dust pile, and also have undertaken an assessment of
groundwater, at this site. In addition, pursuant to a U.S.  EPA unilateral
order, the Steel Companies apparently are engaged in a removal action to
remediate contaminated soils, and are undertaking the cleanup of non-metal
contaminants, at the site. The notice also indicates that the Steel Companies
settled, for approximately $3 million, a class action brought by residents of
the area near the site alleging





                                       11
<PAGE>   12
property damage due to the proximity of the residents' neighborhood to the
site. The notice alleges that CBCC may be liable for contribution with respect
to prior cleanup costs incurred by the Steel Companies and may be required to
participate in funding future cleanup costs at the site. According to the
notice, the Steel Companies currently have expended or are committed to expend
approximately $17 million (including settlement of the class action) on matters
related to the site. The Company believes that CBCC has had no contact with
this site and that this site received waste materials from an entity named
"Chase Brass & Copper Co.," which may have been a division of Old Chase (not
related to the brass rod division acquired by the Company), located in North
Carolina.  BP has been notified and has assumed defense of this matter.

         The Jack's Creek, or Sitkin Smelting & Refining, site located in
Mifflin County, Pennsylvania, was placed on the U.S. EPA's National Priorities
List in 1989.  While CBCC has not received any formal notification from the
U.S. EPA or any third party, the Company believes that Old Chase has been
identified by the U.S. EPA as a PRP.  To the Company's knowledge, however,
neither CBCC nor the brass rod division of Old Chase directly disposed of
hazardous wastes at this site.  Nevertheless, BP has been notified by the
Company of CBCC's (or Old Chase's) apparent identification as a PRP and BP's
responsibility for any liability associated with this site as it relates to
periods prior to the date of the CBCC Acquisition.  Based on information
available to the Company, it appears that if CBCC or Old Chase were determined
to be liable, liability would be allocated on the basis of 0.5828% of cleanup
costs (or approximately $376,000).

         The Company believes that it has no liability for the cleanup costs
related to the sites described above because (a) such liability is attributable
to an entity  that had the same or similar name to that of CBCC, such as a
division or subsidiary of BP (other than the brass rod division of Old Chase),
or (b) such liability arose from acts that occurred prior to the CBCC
Acquisition and, therefore, BP retained such liability under the CBCC Purchase
Agreement and is contractually obligated to indemnify the Company for such
liabilities.  To the extent CBCC incurs any cleanup costs with respect to these
sites, it intends to enforce its rights under the CBCC Purchase Agreement to
recover such amounts from BP.  In the event CBCC is entitled to recovery from
BP pursuant to the CBCC Purchase Agreement, or otherwise, but is unable to
collect such amounts from BP, the Company may elect to offset the amounts of
such recoveries against amounts payable under the $20 million promissory note
issued to BP in conjunction with the CBCC Acquisition to the extent it legally
is entitled to do so.

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

         There were no matters submitted to a vote of security holders, through
the solicitation of proxies or otherwise, during the fourth quarter of the
fiscal year ended December 31, 1996.





                                       12
<PAGE>   13
                                    PART II


ITEM 5.  MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED MATTERS

         The Company completed its initial public offering of Common Stock on
November 10, 1994 (the "Offering"), pursuant to which the Company sold
3,200,000 shares of Common Stock at a price to the public of $10.00 per share.
As of March 18, 1997, the Company had outstanding 5,982,521 shares of Common
Stock and 4,100,079 shares of Nonvoting Common Stock exchangeable on a
share-for-share basis into shares of Common Stock at the option of the holder
thereof.  There is no established public trading market for the Company's
Nonvoting Common Stock, all of which currently is held of record by CVC.

         The Company's Common Stock is listed and traded on the New York Stock
Exchange (the "NYSE") under the symbol "CSI."  The Common Stock began trading
on the NYSE on November 4, 1994.

         The following table sets forth, for the periods shown, the high and
low sales prices for the Common Stock as reported by the NYSE.  No cash
dividends were paid or declared with respect to such periods.
<TABLE>
<CAPTION>
                              1996                              1995
                              ----                              ----
                     High             Low              High             Low
                     ----             ---              ----             ---
<S>                 <C>              <C>              <C>              <C>
First quarter      $ 14 3/4        $ 10 3/4         $ 11 1/2         $  9 1/4
Second quarter     $ 20 3/8        $ 13 1/2         $ 12 3/8         $ 10 3/8
Third quarter      $ 18 7/8        $ 16 1/8         $ 15             $ 11 3/4
Fourth quarter     $ 19 7/8        $ 17 1/4         $ 14 1/2         $ 11 3/4
</TABLE>

         As of March 18, 1997, the last reported sales price of the Company's
Common Stock, as reported by the NYSE, was $21.50 per share.

         The Company's Common Stock was held of record by approximately 133
persons on March 18, 1997.

         The Company has not paid or declared any dividends on shares of its
Common Stock.  The Company does not anticipate paying cash dividends on its
Common Stock in the foreseeable future and anticipates that future earnings
will be retained to finance operations, expansion and acquisitions.  The
payment of future cash dividends will be at the sole discretion of the
Company's Board of Directors and will depend upon the Company's profitability,
financial condition, cash requirements, future earnings prospects and other
factors deemed relevant by the Company's Board of Directors.

         The Bank Credit Facility (as hereinafter defined) entered into by the
Company in conjunction with the Leavitt Acquisition also contains certain
restrictions on the Company's ability to pay





                                       13
<PAGE>   14
dividends.  See "Item 7.  Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources -- Bank
Credit Facility."

ITEM 6.  SELECTED FINANCIAL DATA

         The following table sets forth, for the periods and at the dates
indicated, selected consolidated financial data for the Company.  Financial
data for each of the years ended December 31, 1996 to 1992, and at December 31,
1996 to 1992, has been derived from the Company's audited financial statements.
The following selected financial data should be read in conjunction with "Item
7.  Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements and notes thereto included elsewhere
herein.


<TABLE>
<CAPTION>
                                                                       YEAR ENDED DECEMBER 31,
                                                 -----------------------------------------------------------
                                                   1996         1995         1994         1993        1992
                                                   ----         ----         ----         ----        ----
                                                        (IN THOUSANDS, EXCEPT PER SHARE INFORMATION)

<S>                                              <C>          <C>         <C>          <C>          <C>
INCOME STATEMENT DATA:
  Net sales   . . . . . . . . . . . . . . .      366,991      313,097     $260,096     $212,341     $222,512
  Cost of goods sold (exclusive of
    depreciation and amortization
    shown separately below) . . . . . . . .      311,345      270,022      224,532      189,144      200,336
                                                 -------      -------     --------     --------     --------
    Gross profit  . . . . . . . . . . . . .       55,646       43,075       35,564       23,197       22,176
  Selling, general and administrative
    expenses (a)  . . . . . . . . . . . . .       12,121        8,264        6,193        5,863        5,285
  Depreciation and amortization   . . . . .        6,710        5,537        5,795        5,555        6,170
                                                 -------      -------     --------     --------     --------
    Operating income  . . . . . . . . . . .       36,815       29,274       23,576       11,779       10,721
  Interest expense  . . . . . . . . . . . .        2,612        1,530        3,911        5,412        7,891
                                                 -------      -------     --------     --------     --------
    Income before income taxes and
      extraordinary items . . . . . . . . .       34,203       27,744       19,665        6,367        2,830
  Provision for income taxes  . . . . . . .       13,564       11,043        7,111        1,131          975
                                                  -------      -------     --------     --------    --------
    Income before extraordinary items   . .       20,639       16,701       12,554        5,236        1,855
  Extraordinary items (b)   . . . . . . . .          --           --           --           814          825
                                                 -------      -------     --------     --------     --------
    Net income  . . . . . . . . . . . . . .       20,639       16,701       12,554        6,050        2,680
  Preferred stock dividends and
    accretion (C)                                    --           --         2,244        1,293        1,121
                                                 -------      -------     --------     --------     --------
      Net income available for
       common stock . . . . . . . . . . . .      $20,639      $16,701     $ 10,310     $  4,757      $ 1,559
                                                 =======      =======     ========     ========     ========
  Per share information (d):
  Income before extraordinary items
    available for common stock  . . . . . .      $  2.05      $  1.66     $   1.40     $    .58     $    .11
  Extraordinary items   . . . . . . . . . .          --           --           --           .12          .12
                                                 -------      -------     --------     --------     --------
    Net income available for
     common stock . . . . . . . . . . . . .      $  2.05      $  1.66     $   1.40     $    .70     $    .23
                                                 =======      =======     ========     ========      =======

BALANCE SHEET DATA (AT YEAR END):
  Working capital   . . . . . . . . . . . .      $48,649      $36,798     $ 16,786     $ 7,858      $ 14,862
  Total assets  . . . . . . . . . . . . . .      204,751      103,003       81,542      78,845        87,230
  Cash and cash equivalents   . . . . . . .        9,763       16,973          173         920         1,019
  Total debt  . . . . . . . . . . . . . . .       70,762       18,784      17,018       53,402        66,525
  Redeemable Preferred Stock  . . . . . . .          --           --           --        7,111         5,818
  Stockholders' equity (deficit)  . . . . .       74,333       53,645       36,944      (2,179)      (6,936)

OTHER DATA:
  EBITDA (e)  . . . . . . . . . . . . . . .      $43,525      $34,811     $ 29,371     $17,334      $ 16,891
  Free cash flow (f)  . . . . . . . . . . .       23,257       17,773       12,714       8,140         5,362
  Capital expenditure (g)   . . . . . . . .        4,092        4,465        3,391       2,172         2,367
</TABLE>

______

(a) Selling, general and administrative expenses for 1995, 1994 and 1993
    included due diligence expenses related to proposed acquisitions that were
    not consummated.  See note (e) below.





                                       14
<PAGE>   15
(b) Extraordinary items include an $814,000 net gain on repurchase of
    subordinated debt in 1993 and a $825,000 tax benefit of net operating loss
    carryforward in 1992.

(c) Includes accretion to redemption value for the Company's 15% Exchangeable
    Preferred Stock of $1,043,000 in 1994 (including $912,000 in accretion in
    excess of historical levels in connection with the November 1994 $5.0
    million redemption), $152,000 in 1993 and $126,000 in 1992.

(d) Based on 10,063,252 average shares of Common Stock outstanding for the year
    ended December 31, 1996, 10,060,800 average shares of Common Stock
    outstanding for the year ended December 31, 1995, 7,369,363 average shares
    of Common Stock outstanding for the year ended December 31, 1994, and
    6,777,806 average shares of Common Stock outstanding for all other periods
    reported.

(e) Earnings before interest, taxes, depreciation and amortization ("EBITDA")
    is presented as a measure of the Company's ability to meet its cash
    requirements.  EBITDA should not be considered in isolation from, or as a
    substitute for, net income or cash flow data prepared in accordance with
    generally accepted accounting principles or as a measure of the Company's
    profitability or liquidity.

(f) Free cash flow is calculated as net income plus depreciation and
    amortization less capital expenditures.

(g) Capital expenditures exclude expenditures made by the Company since August
    1990 totaling $1.2 million, which the Company believes are recoverable from
    BP and, therefore, are recorded in the receivable from BP.  In addition to
    the capital expenditures reported for 1993, a waste water treatment plant,
    constructed and fully funded by BP under the terms of a Remediation
    Agreement entered into in connection with the CBCC Acquisition, began
    operating in 1993 and, in connection therewith, $1,790,000 was transferred
    from the receivable from BP to property, plant and equipment.





                                       15
<PAGE>   16
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

GENERAL

Leavitt Acquisition

         On August 30, 1996, the Company acquired, through Leavitt, the assets
and operations of the steel tube division of UNR Industries, Inc. ("UNR"), (the
"Leavitt Acquisition").  Upon consummation of the Leavitt Acquisition, Leavitt
continued operations in the manufacture and sale of structural and mechanical
steel tubing and is a leading producer and supplier in the United States.  See
"Item 1. Business - General" and Note 2 of Notes to Consolidated Financial
Statements.

The Offering

         On November 10, 1994, the Company completed its initial public
offering (the "Offering") by selling 3,200,000 shares of Common Stock for
$10.00 per share to the public.  Net proceeds to the Company after deducting
commissions, fees and expenses totaled $28.8 million.  The net proceeds were
used to repay $21.0 million of bank debt and redeem all 5,000 shares of the
Company's outstanding 15% Exchangeable Preferred Stock (the "Redeemable
Preferred Stock") at an aggregate redemption price of $7.8 million
(representing the $5.0 million face value plus $2.8 million of unpaid accrued
dividends).  See Notes 3, 11 and 12 of Notes to Consolidated Financial
Statements.

         As a result of the Offering, the capital structure of the Company, its
interest and tax expense, and Redeemable Preferred Stock dividends and
accretion to liquidation value are not comparable to that of the Company as a
private company.  Therefore, the Company's net income prior to the Offering is
not comparable to net income following the Offering.

Operations

         The Company, through its wholly owned subsidiaries CBCC and Leavitt,
is a leading manufacturer of free-machining and forging brass rod and
structural and mechanical steel tubing.

         CBCC.  CBCC's net sales represent gross sales of brass rod less sales
discounts and freight charges.  The gross sales price of brass rod consists of
a metal price charged to customers and a fabrication price as separate
components.  Cost of goods sold includes the cost of brass scrap, which is the
principal raw material used in the manufacturing process and the primary
component of cost of goods sold, as well as the costs of labor, energy and
other materials and supplies used in fabricating the brass scrap into finished
rod.  Therefore, CBCC's profit levels depend primarily on the amount of
finished rod shipped, fabrication prices, and the difference between the metal
price charged to customers and CBCC's cost of brass scrap.





                                       16
<PAGE>   17
           CBCC obtains approximately 80% of the brass scrap used in its
operations from its customers through purchase and tolling arrangements.  The
metal price charged to customers (the "Metal Selling Price") has been four cents
per pound higher than the price at which brass scrap is purchased from customers
(the "Metal Buying Price") since December 1994.  CBCC also purchases
approximately 20% of its brass scrap from scrap dealers at prevailing
free-market prices. Free-market prices of brass scrap fluctuate based on the
supply of and demand for brass scrap and the prices for copper and zinc (the
major components of brass), and generally are less than the Metal Buying Price.
Since 1990, free-market prices, as compared to Metal Buying Prices, have been
favorable to CBCC by historical standards and the supply of brass scrap in the
United States has increased in excess of demand as a result of increased imports
of brass rod.  Although the increased supply of brass scrap has resulted in
continued favorable free-market scrap prices during first quarter 1997, there
can be no assurance that such discounts will continue.  Decreasing imports of
brass rod and increasing demand for brass scrap could cause free-market brass
scrap prices to increase, and increased pressure from customers to purchase
brass scrap directly from them at the Metal Buying Price could reduce CBCC's
ability to take advantage of free-market discounts.

         As noted above, CBCC's pricing structure consists of the Metal Selling
Price and the fabrication price as separate components.  The Metal Selling
Price is determined at the time of shipment based on the then-current Metal
Buying Price and is not directly affected by fluctuations in free-market brass
scrap prices.  As a result of this pricing structure, increases and decreases
in the Metal Selling Price will affect net sales levels and gross profit as a
percentage of sales, even in the absence of an increase or decrease in
shipments or the fabrication prices charged to customers, but will have little
impact on gross profit levels.  However, the quantity of free-market brass
scrap purchased by CBCC and changes in the difference between the free-market
prices paid for brass scrap and the Metal Buying Price will affect gross
profit, even in the absence of an increase or a decrease in shipments or net
sales levels.

         In addition to sales made under the pricing structure described above,
some sales are made on a tolling basis, where the customer consigns brass scrap
to CBCC and is charged a fabrication price for processing the brass scrap into
finished rod.  Tolling transactions affect net sales by the Metal Selling Price
that otherwise would be charged to the customer in a sale of finished brass
rod.  To a lesser extent, tolling transactions also affect gross profit to the
extent CBCC is unable to take advantage of the pricing differential on brass
scrap purchased and sold.  To partially offset the effect of tolling
transactions on gross profit, CBCC requires tolling customers to deliver 1.04
pounds of brass scrap in exchange for each pound of finished rod shipped.

         Leavitt.  Leavitt's financial performance may be impacted by changes
in the price it pays for flat-rolled steel, the primary cost component of
Leavitt's finished product, based on the market conditions in the domestic and
international flat-rolled steel industry.  Based on the then-current market
conditions in the steel tubing industry, the level of capacity utilization and
the pricing policies of Leavitt's competitors, Leavitt may or may not be able
to pass the economic impact of steel price changes on to its customers through
changes in the selling price.  The steel tubing





                                       17
<PAGE>   18
industry is highly fragmented and suppliers may reduce prices or fail to
increase prices as a result of steel coil price increases, depending on their
individual financial and operational motivation.

General Economic and Industry Conditions

         The demand for the Company's products in the United States and Canada
generally is dependent upon business conditions in the industries which use
products made from copper alloy rod and structural and mechanical steel tubing.
Manufacturers of products used in building and construction and manufacturers
of industrial machinery and equipment are the primary users of copper alloy
rod.  Primary users of steel tubing are non-residential construction, farm
equipment and steel tube commercial products manufacturers.

         Therefore, the Company's operating results during any given period
depend significantly on business conditions in its industry.  These activities,
in turn, are sensitive to fluctuations in overall economic activity, movement
in interest rates and availability of short- and long-term financing.  The
Company's operating results also depend on its manufacturing capacity, as well
as industry production levels and other market factors.

         CBCC.  During 1996, United States and Canadian apparent consumption of
copper alloy rod was approximately 978 million pounds, which included industry
shipments of approximately 893 million pounds plus net imports of approximately
85 million pounds.  Industry shipments increased 4% over 1995, effectively
displacing a 32% decline in net imports.  Although industry shipments,
excluding CBCC's shipments, remained flat, CBCC increased shipments 10% to
record levels in 1996.  Over the past ten years, apparent consumption has
fluctuated based on demand, while over the same period CBCC's shipments have
increased both in total pounds and as a percentage of apparent consumption.
Although net imports have declined in 1996, foreign suppliers continue to
aggressively attack the domestic copper alloy rod industry by offering lower
prices than the domestic mills, resulting in CBCC expecting net import levels
to continue to exceed historical levels.

         The strong 1996 industry demand was predominantly in the industry's
largest end use market, building and construction.  CBCC targeted specific
plumbing customers for growth in this segment, which now represents over 50% of
CBCC's shipments and is expected to remain strong through 2000.  The building
and construction segment continues to be impacted by the high level of new
homes built, a higher use of brass plumbing fixtures per home and a high level
of home remodeling, which has increased plumbing fixture demand.

         Leavitt.  The structural steel tubing has substantially more capacity
than demand in a highly competitive environment.  Leavitt believes its share of
this industry is approximately 9%.  Use of structural steel tubing in
construction is increasing and Leavitt is working to increase its share of
industry shipments.  Leavitt has taken a leading role in the North American
Steel Tube Institute's hollow-structural sections committee, whose objective is
to grow the usage of structural steel tubing in the United States.  The goal of
the Institute is to educate construction companies, architects and industry
executives on the benefits of the use of structural steel in lieu of other
products.





                                       18
<PAGE>   19
         1997 Outlook.  As a result of the above factors, the Company believes
that its shipments will increase in 1997.  Management believes that its ability
to increase shipments despite fluctuations in demand results from our quality
products and emphasis on customer service.  However, forecasts of future
industry consumption, future levels of imports and future shipments by the
Company are forward-looking and are subject to risks and uncertainties,
including without limitation those identified below, which could cause actual
results to differ materially from historical results or those anticipated.
There can be no assurance that 1997 industry consumption will be similar to
1996 levels or the Company's 1997 shipments will increase as anticipated.
Actual results and developments in these areas will be affected by the general
economic and industry conditions discussed above.  Foreign economic activity
and the relationship of the U.S. dollar to other currencies also affects import
levels and exports of U.S. manufactured products containing parts made from
brass rod and steel tube.  The Company's 1997 shipments also will be affected
by its ability to maintain manufacturing operations at its current levels
without significant interruption.

Inventories

         At the time of the CBCC and Leavitt Acquisitions, assets purchased,
including inventory, were valued at net realizable value in accordance with
purchase accounting rules and the Company elected the last-in, first-out
("LIFO") method of inventory accounting for financial reporting purposes.  If
the first-in, first-out ("FIFO") method for determining cost had been used, at
December 31, 1996, inventories would have been approximately $2.0 million
higher.  Inventories have been written down to lower of cost-or-market and such
reduced amounts are considered cost for subsequent periods.

RESULTS OF OPERATIONS

         The following table is derived from the Company's Consolidated
Statement of Income for the periods indicated and presents the results of
operations as a percentage of net sales:
<TABLE>
<CAPTION>
                                                                     YEAR ENDED DECEMBER 31,
                                                           1996       1995        1994      1993       1992
                                                           ----       ----        ----      ----       ----
<S>                                                      <C>        <C>        <C>          <C>       <C>
Net sales . . . . . . . . . . . . . . . . . . . . .       100.0%     100.0%      100.0%     100.0%    100.0%
Cost of goods sold  . . . . . . . . . . . . . . . .        84.8       86.2        86.3       89.1      90.0
                                                          -----      -----       -----      -----     -----
     Gross profit . . . . . . . . . . . . . . . . .        15.2       13.8        13.7       10.9      10.0
Selling, general and administrative expenses* . . .         3.3        2.6         2.4        2.7       2.4
Depreciation and amortization . . . . . . . . . . .         1.8        1.8         2.2        2.6       2.8
                                                          -----      -----       -----      -----     -----
     Operating income . . . . . . . . . . . . . . .        10.1        9.4         9.1        5.6       4.8
Interest expense  . . . . . . . . . . . . . . . . .          .7         .5         1.5        2.6       3.5
                                                          -----      -----       -----      -----     -----
     Income before income taxes and
       extraordinary item . . . . . . . . . . . . .         9.4        8.9         7.6        3.0       1.3
Provision for income taxes  . . . . . . . . . . . .         3.7        3.6         2.7        0.5       0.5
                                                          -----      -----       -----      -----     -----
     Income before extraordinary item . . . . . . .         5.7%       5.3%        4.9%       2.5%       .8%
                                                          =====      =====       =====      =====     =====

</TABLE>
------------
*See "Item 6.  Selected Financial Data."




                                       19
<PAGE>   20
         The following graphs illustrate trends in profitability since 1992
(dollars in millions for years ended December 31):

                                                         [Net Income Available
[Gross Profit Chart]       [Operating Income Chart]      for Common Stock Chart]

FYE  12/31/92  22.2          FYE  12/31/92  10.7           FYE  12/31/92   1.6
FYE  12/31/93  23.2          FYE  12/31/93  11.8           FYE  12/31/93   4.8
FYE  12/31/94  35.6          FYE  12/31/94  23.6           FYE  12/31/94  10.3
FYE  12/31/95  43.1          FYE  12/31/95  29.3           FYE  12/31/95  16.7
FYE  12/31/96  55.6          FYE  12/31/96  36.8           FYE  12/31/96  20.6

1996 Compared with 1995

         Net sales increased $53.9 million, or 17%, to $367 million in 1996.
Gross profit increased $12.6 million, or 29%, to $55.6 million, principally due
to record brass rod shipments and the impact of the Leavitt Acquisition.
Record brass rod shipments were attained despite a flat copper alloy rod
industry, which, excluding CBCC, increased only 1% in 1996 compared with 1995,
as discussed above in this Item 7 under "General Economic and Industry
Conditions."

         Selling, general and administrative ("SG&A") expenses increased $3.9
million, or 47%, to $12.1 million, due primarily to $2.6 million of SG&A
expenses at Leavitt.  Depreciation and amortization increased $1.2 million, or
21%, due to the Leavitt Acquisition and increased depreciation on CBCC capital
additions, partially offset by elimination of CBCC amortization as intangibles
became fully amortized in 1995.

         As a result of the above factors, operating income increased $7.5
million, or 26%, to $36.8 million in 1996.

         Net interest expense increased $1.1 million, or 71%, to $2.6 million
due to interest expense incurred on the Leavitt Acquisition debt, partially
offset by lower average levels of bank debt in 1996 prior to the Leavitt
Acquisition compared with 1995.  Additionally, the Company earned interest
income in 1996 totaling $720,000 compared with $390,000 in 1995.

         Income tax expense increased $2.5 million, or 23%, to $13.6 million in
1996 as a result of a $6.5 million, or 23%, increase in pretax income.





                                       20
<PAGE>   21
         As a result of the above factors, net income available for common
stock increased $3.9 million, or 24%, to $20.6 million in 1996.  Earnings per
share increased to $2.05 from $1.66 in 1995.

1995 Compared with 1994

         Net sales increased $53.0 million, or 20%, to $313.1 million in 1995,
principally due to a 16% increase in Metal Selling Prices and record brass rod
shipments.  The shipment increase was attained despite a decline in industry
shipments, excluding CBCC, of 44 million pounds, or 7%.

         Gross profit increased $7.5 million, or 21%, to $43.1 million in 1995,
principally due to higher fabrication charges.

         SG&A expenses increased $2.1 million, or 33%, to $8.3 million, due
primarily to a $770,000 increase in public company expenses, a $430,000
increase in accrued incentive compensation, and a $240,000 increase in rental
expense principally due to the lease of a new computer system.  Depreciation
and amortization decreased $258,000, or 4%, due to reduced amortization as
intangible assets became fully amortized in 1995, partially offset by increased
depreciation on capital additions.

         As a result of the above factors, operating income increased $5.7
million, or 24%, to $29.3 million in 1995.

         Net interest expense decreased $2.4 million, or 61%, to $1.5 million
due to lower levels of bank debt in 1995 compared with 1994 as a result of the
repayment of all outstanding bank debt in conjunction with the Offering and no
borrowings on the bank credit facility after first quarter 1995.  Additionally,
the Company earned interest income in 1995 totaling $390,000.

         Income tax expense increased $3.9 million, or 55%, to $11.0 million in
1995 as a result of an $8.1 million, or 41%, increase in pretax income and an
increase in the Company's effective tax rate to 40% from 36% in 1994.  In 1994,
the lower tax rate was due primarily to the utilization of federal income tax
net operating loss ("NOL") carryforwards and current recognition of deferred
income tax assets which had not been realized in prior years.  The Company's
1994 current federal income tax provision was calculated using the Alternative
Minimum Tax ("AMT") provisions as required by the Internal Revenue Code.  The
Company completed utilization of its federal income tax NOL in second quarter
1994 and, accordingly, recognized income tax expense in second half 1994 and
1995 at a higher effective tax rate based primarily upon the federal statutory
rate of 35%.

         As a result of the above factors, net income increased $4.1 million,
or 33%, to $16.7 million in 1995.

         Dividends and accretion to liquidation value on the Company's
Redeemable Preferred Stock, which was redeemed in November 1994 in conjunction
with the Offering, totaled $2.2 million in 1994.





                                       21
<PAGE>   22
         As a result of the above factors, net income available for common
stock increased $6.4 million, or 62%, to $16.7 million in 1995.  Earnings per
share increased to $1.66 from $1.40 in 1994.

LIQUIDITY AND CAPITAL RESOURCES

General

         At December 31, 1996, increases in assets and liabilities compared
with year end 1995 were due predominately to the Leavitt Acquisition.  The most
significant impact was on long-term debt, which increased to $70.8 million from
$18 million at year end 1995.  The long-term debt balance at December 31, 1996,
is after prepaying $12 million of Leavitt Acquisition debt in fourth quarter
1996.  Cash and cash equivalents of $17.0 million at year end 1995 declined to
$9.8 million as a result of funding a portion of the Leavitt purchase price
with cash on hand.

         Free cash flow (net income plus depreciation and amortization less
capital expenditures) increased 31% to $23.3 million in 1996 compared with
1995.  Free cash flow will be applied to reduce bank debt and also will be
available to fund future acquisitions and capital expenditures.  Net interest
expense increased to $2.6 million from $1.5 million in 1995, reflecting the
Leavitt Acquisition debt.  The Company currently is meeting its operational and
liquidity needs with cash on hand, internally generated funds and amounts
available under the Bank Credit Facility (as hereinafter defined).

Working Capital

         Increases in assets and liabilities in 1996 compared with year end
1995 were predominately due to the Leavitt Acquisition, which increased working
capital $22.5 million.  At December 31, 1996, working capital was $48.6
million, $11.8 million, or 32%, over 1995.  The decrease in cash and cash
equivalents of $7.2 million, or 42%, was the result of funding a portion of the
Leavitt purchase price with cash on hand.  There was no significant change in
working capital from the Leavitt Acquisition date through December 31, 1996.

         The Company's current ratio follows:
<TABLE>
<CAPTION>
                                                    December 31,
                                                    1996   1995
                                                    ----   ----
                 <S>                                <C>    <C>
                 Current ratio                      1.94   2.43
                 Current ratio excluding cash       1.75   1.77
</TABLE>





                                       22
<PAGE>   23
Cash Flow Provided by Operating Activities

         For the years ended December 31, 1992 through 1996, the following
graphs illustrate trends in net cash provided by operating activities and free
cash flow (dollars in millions).   See "Item 6. Selected Financial Data".

  [Net Cash Provided by
Operating Activities Chart]               [Free Cash Flow Chart]

   FYE  12/31/92  14.1                      FYE  12/31/92   5.4
   FYE  12/31/93  15.2                      FYE  12/31/93   8.1
   FYE  12/31/94  21.2                      FYE  12/31/94  12.7
   FYE  12/31/95  21.3                      FYE  12/31/95  17.8
   FYE  12/31/96  39.5                      FYE  12/31/96  23.3

         In 1996, net cash provided by operating activities increased $18.2
million to $39.5 million compared with 1995.  The primary sources of cash from
operating activities in 1996 were net income of $20.6 million, depreciation and
amortization of $6.7 million, accretion of discount on the BP Note (as
hereinafter defined) of $1.2 million, and a decrease in working capital,
excluding cash, of $11 million.

         In 1995, net cash provided by operating activities of $21.3 million
was flat compared with 1994.  The primary sources of cash from operating
activities in 1995 were net income of $16.7 million, depreciation and
amortization of $5.5 million and accretion of discount on the BP Note of $1.8
million, partially offset by an increase in working capital, excluding cash, of
$3.2 million.

         In 1994, net cash provided by operating activities increased $6.0
million to $21.2 million compared with 1993.  The primary sources of cash from
operating activities in 1994 were net income of $12.6 million, depreciation and
amortization of $5.8 million and deferred income taxes of $2.3 million.

Cash Flow Used in Investing Activities

         Cash used in investing activities in 1996 includes $91.7 million for
the acquisition of Leavitt.  Capital expenditures were $4.1 million, $4.5
million and $3.4 million in 1996, 1995 and 1994,





                                       23
<PAGE>   24
respectively.  Capital additions included improvements to the extrusion press
system and finishing lines in 1996 and the $2.7 million foundry expansion in
1995.

Cash Flow Provided by Financing Activities

         The Company received proceeds from issuance of the Term Loan (as
hereinafter defined) totaling $60 million during 1996 to fund the Leavitt
Acquisition, of which $10 million was prepaid prior to year end.

         Other than revolving credit borrowings under the bank credit facility
in first quarter 1995, the Company had no financing activities in 1995.

         The Company used $47.3 million in cash to repay debt and Redeemable
Preferred Stock (including dividends) in 1994.  Debt repaid in 1994 included
$15.0 million of revolving credit facility borrowings, $21.7 million on bank
term loans and $1.25 million of loans to certain stockholders who had provided
financing for the Company's repurchase of certain outstanding indebtedness in
1992.  Additionally, the Company redeemed the Redeemable Preferred Stock at an
aggregate redemption price of $7.8 million, representing the $5.0 million
redemption value plus $2.8 million in unpaid accrued dividends.  Redeemable
Preferred Stock dividends of $1.6 million also were paid in 1994.  The debt was
repaid through a combination of cash generated from operations and $28.8
million in Offering proceeds, net of fees.  See Note 3 of Notes to Consolidated
Financial Statements.

Capital Resources

         The Company is launching a proposed capital project referred to as
"Project 400".  The project includes potential expansion of CBCC's foundry,
extrusion system and finishing capability with an ultimate goal of increasing
finished brass rod shipments to approximately 400 million pounds annually, a
one-third increase over current production levels.  The first phase of the
project, which is expected to be completed near the end of 1997, has a total
cost of approximately $12 million.  It is anticipated that capital projects
will be paid for with cash flow provided by operating activities.

Bank Credit Facility

         In connection with the Leavitt Acquisition, the Company entered into a
new credit facility (the "Bank Credit Facility") of $100 million agented by PNC
Bank, National Association.  The Bank Credit Facility replaced the Company's
existing $33 million bank credit facility, which was terminated August 30,
1996.  The Bank Credit Facility includes a $60 million term loan ("Term Loan")
and a $40 million revolving credit facility ("Revolving Credit Facility").  In
December 1996, the Company prepaid $10 million on the Term Loan, including all
amounts originally due in 1997.  The remaining balance on the Term Loan is
payable in quarterly installments in amounts ranging from $775,000 in April
1998 to $3,025,000 due July 2003.  The total borrowing capacity





                                       24
<PAGE>   25
under the Revolving Credit Facility is determined monthly by a formula based on
levels of inventory and accounts receivable, up to a maximum of $40 million.
The Revolving Credit Facility commitment expires August 30, 2001, and the
Company can request a one-year extension of the expiration date at any time
after December 31, 1997.

         Advances under the Bank Credit Facility will bear interest, at the
Company's option, at a rate per annum equal to (i) the higher of (a) PNC Bank's
prime rate or (b) the Federal funds rate plus  1/2%, or (ii) LIBOR for the
applicable borrowing period plus  1/2%, 5/8%, 3/4%, 7/8%, 1 1/8%, or 1 3/8%
depending on the Company's ratio of total debt to earnings before interest,
taxes, depreciation and amortization, with interest payable quarterly or as of
the end of each LIBOR borrowing period, whichever is shorter.

         The Bank Credit Facility contains certain covenants that, among other
things, limit the Company's ability to incur additional debt, make capital
expenditures or pay dividends. The covenants also require the Company to
maintain a minimum interest coverage ratio and level of net worth and restrict
the Company from exceeding a maximum ratio of debt to cash flow from
operations.  The Bank Credit Facility also requires the Company to maintain
CBCC and Leavitt as wholly-owned subsidiaries.

         As of December 31, 1996, $50 million was outstanding under the Term
Loan and there were no borrowings outstanding under the Revolving Credit
Facility and the amount of total availability under the Revolving Credit
Facility was $40 million.

Average Revolving Credit Facility Borrowings

         The average outstanding balance under the Revolving Credit Facility in
1996 was $684,000.  However, the only borrowings under the Revolving Credit
Facility were during the three-month period immediately following the Leavitt
Acquisition, during which time the average outstanding balance was $2.7
million.  The average outstanding balance under the prior revolving credit
facility in 1995 was $391,000.  The Company's only 1995 borrowings were in the
first quarter, and in that quarter the outstanding balance averaged $1.9
million.  As of March 18, 1997, the Company had available $25 million under the
Revolving Credit Facility.  In March 1997, the Company converted $15 million of
Term Loan debt to Revolving Credit Facility borrowings.  For a discussion of
long-term borrowings under the Bank Credit Facility, see Note 7 of Notes to
Consolidated Financial Statements.

CONTINGENCIES

         In connection with the CBCC Acquisition, the Company issued a
promissory note to BP in the original principal amount of $20.0 million (the
"BP Note").  The BP Note was recorded at the CBCC Acquisition date at a
discount using a 10.4% effective interest rate.  The BP Note initially matured
in August 1996, and the Company, at its option, extended the maturity date for
three additional years to August 1999 with interest payable annually at 9.29%.
The BP Note contained





                                       25
<PAGE>   26
a contingent interest payment based upon average Company earnings (as defined
in the BP Note) for the years ended December 31, 1990 through 1995.  The
contingent interest, totalling $254,000 and due August 1996, was offset against
the receivable from BP.  See Note 14 of Notes to Consolidated Financial
Statements.

ENVIRONMENTAL MATTERS

         CBCC.  Preliminary studies conducted immediately prior to the CBCC
Acquisition indicated that the site upon which CBCC's manufacturing facility is
located has been contaminated by certain volatile organic compounds, including
trichloroethylene, as well as total petroleum hydrocarbons and certain metals
from historical operating practices.  In connection with the CBCC Acquisition,
BP agreed to retain liability for certain on-site contamination.  BP has
conducted initial site investigation activities to determine the extent of
contamination and appropriate cleanup methods.  The results of the initial site
investigation activities were provided to CBCC in second quarter 1996, which
results identified the presence and location of certain contaminants.  BP also
provided to CBCC a draft remediation plan with respect to certain areas of the
facility based on the results of the initial sampling.  CBCC has reviewed the
initial sampling results and draft remediation plan provided to it and has
determined that additional sampling is necessary to fully delineate the extent
and magnitude of contamination and to determine appropriate cleanup standards.
CBCC and BP are working together, with their respective consultants, to
identify additional sampling that is required.  Upon completion of a plan for
such additional sampling, CBCC intends to meet with BP and the Ohio EPA to
identify available remedial methods and potential regulatory constraints
related to specific remedial methodologies.  The results of the initial
sampling, the additional sampling to be conducted, and input from the Ohio EPA
will be used to develop a comprehensive remediation plan for the site.  The
investigation is being conducted on a voluntary basis with the concurrence of
the Ohio EPA.  Until the completion of additional investigatory activities that
are necessary and the development of a remediation plan for the site, the
Company will be unable to estimate with any degree of certainty the extent of
contamination or the amount of cleanup costs associated therewith.

         The cleanup costs associated with the environmental conditions
described above may be material and, in the event CBCC were determined to be
solely responsible or liable for site cleanup activities (due to the inability
or unwillingness of other responsible parties to perform or pay for such
activities), such expenditures could have a material adverse effect on the
Company's earnings and financial condition.  Notwithstanding this potential
(although uncertain) material liability, because of BP's contractual
obligations to fund investigatory and cleanup costs of this site under the
Remediation Agreement, the Company does not believe that the cleanup costs or
other liabilities associated with such conditions will have a material adverse
effect on the Company's financial position, results of operations or liquidity
and the Company has not made any related accrual of all or any part of such
costs.  To the extent CBCC or the Company incurs any liability with respect to
the environmental conditions discussed above, the Company intends to enforce
its rights under the Remediation Agreement and the CBCC Purchase Agreement to
recover such amounts from BP.





                                       26
<PAGE>   27
         CBCC and/or other entities named "Chase Brass & Copper Co." (which may
include Old Chase or divisions of Old Chase) have been named by governmental
agencies and/or private parties as a PRP under CERCLA and/or state laws with
respect to two sites, and may have been identified as a PRP at one additional
site.  The Company believes that it has no liability for the cleanup costs
related to these sites because (a) such liability is attributable to an entity
that had the same or similar name to that of CBCC, such as a division or
subsidiary of BP (other than the brass rod division of Old Chase), or (b) such
liability arose from acts that occurred prior to the CBCC Acquisition and,
therefore, BP retained such liability under the CBCC Purchase Agreement and is
contractually obligated to indemnify the Company for such liabilities.

         Leavitt.  Prior to the Leavitt Acquisition, five underground storage
tanks ("UST's") were removed from Leavitt's facility in Hammond, Indiana.  It
is the Company's understanding that these UST's were used to contain waste oil,
waste oil residue and sludge, phenol and metals when the property was utilized
by prior owners as a bus barn.  Prior to removal, one or more of the UST's
released petroleum and other chemical constituents into the environment.  Some
contamination of groundwater and soil at the Hammond facility remains in place.
Prior to the Leavitt Acquisition, Old Leavitt had conducted sampling and had
requested the Indiana Department of Environment Management ("IDEM") to "close"
the UST removal project.  The IDEM has not yet issued a "closed" letter, and,
in February 1997, notified Leavitt that additional groundwater sampling will be
required prior to the IDEM considering closure.  Leavitt intends to begin
additional groundwater sampling in second quarter 1997.  Until such sampling is
conducted, and the results thereof provided to Leavitt, the Company is unable
to determine the current extent of contamination or what, if any, remedial
activities may be required.

         The cleanup costs associated with the environmental conditions
described above may be material and, in the event Leavitt were determined to be
solely responsible or liable for site cleanup activities (due to the inability
or unwillingness of other responsible parties to perform or pay for such
activities), such expenditures could have a material adverse effect on the
Company's earnings and financial condition.  Notwithstanding this potential
(although uncertain) material liability, UNR is obligated under the Leavitt
Acquisition Agreement to indemnify Leavitt for 90% of losses related to certain
environmental conditions, including costs incurred with respect to contaminants
released at Leavitt's properties prior to the Leavitt Acquisition, to the
extent such losses exceed $400,000 in the aggregate.  In addition, to the
extent the contamination at the Hammond facility is attributed to actions of
prior owners, the Company may be entitled to recover from the prior owners
costs incurred by Leavitt at the Hammond site.  Therefore, the Company does not
believe that costs that may be incurred by Leavitt in connection with the
investigation and cleanup associated with the groundwater and soil
contamination at the Hammond facility will have a material adverse effect on
the Company's financial position, results of operations or liquidity and the
Company has not made any accrual of all or part of such costs.

         For additional discussion of the environmental matters discussed
above, see "Item 1.  Business - Regulation  - Environmental Regulation,"
"Item 3.  Legal Proceedings" and Note 14 of Notes to Consolidated Financial
Statements.

INFLATION

         The Company does not believe that its operations have been
significantly affected by inflation.





                                       27
<PAGE>   28
QUARTERLY INFORMATION

         The table set forth below presents selected unaudited quarterly
financial data for the years ended December 31, 1996 and 1995.  The Company
believes that the financial information presented below reflects all
adjustments necessary, consisting only of normal recurring adjustments, for a
fair presentation of such financial information.  The Company's quarterly
results are not indicative of annual results or continuing trends.  The
financial data set forth below should be read in conjunction with "Item 6.
Selected Consolidated Financial Data" and the notes thereto.
<TABLE>
<CAPTION>
                                                                       1996
                                    --------------------------------------------------------------------
                                       FIRST             SECOND          THIRD         FOURTH
                                       QUARTER          QUARTER         QUARTER        QUARTER       TOTAL
                                       -------          -------         -------        -------       -----
FINANCIAL DATA:                                    (IN THOUSANDS, EXCEPT PER SHARE DATA)

<S>                                 <C>              <C>            <C>            <C>            <C>
  Net sales   . . . . . . . . .     $    89,917      $    82,095    $    88,253   $   106,726     $  366,991
  Gross profit  . . . . . . . .          12,634           11,797         14,349        16,866         55,646
  Operating income  . . . . . .           9,012            8,588          8,952        10,263         36,815
  Net income  . . . . . . . . .           5,240            5,040          5,034         5,325         20,639
  Average shares outstanding  .          10,061           10,063         10,064        10,065         10,063
  Earnings per share  . . . . .     $       .52      $       .50    $       .50    $      .53     $     2.05

  Cash and cash equivalents   .     $    21,461      $    27,243    $     1,516    $    9,763
  Accounts receivable   . . . .          40,177           31,760         44,571        34,514
  Inventories   . . . . . . . .          11,493           13,683         44,119        52,050
  Working capital   . . . . . .          43,237           49,341         52,212        48,649
  Total assets  . . . . . . . .         114,366          113,185        201,672       204,751
  Stockholders' equity  . . . .          58,864           63,949         68,995        74,333

OTHER DATA:
  Free cash flow  . . . . . . .     $     5,969      $     5,638    $     6,157    $    5,493     $   23,257
  Capital expenditures  . . . .             486              645            635         2,326          4,092
</TABLE>

<TABLE>
<CAPTION>
                                                                       1995
                                      ----------------------------------------------------------------------
                                        FIRST           SECOND           THIRD         FOURTH
                                       QUARTER          QUARTER         QUARTER        QUARTER       TOTAL
                                       -------          -------         -------        -------       -----
FINANCIAL DATA:                                    (IN THOUSANDS, EXCEPT PER SHARE DATA)

<S>                                 <C>              <C>            <C>            <C>            <C>
  Net sales   . . . . . . . . .     $    86,137      $    82,994    $    68,672    $   75,294     $  313,097
  Gross profit  . . . . . . . .          12,276           11,248          9,306        10,245         43,075
  Operating income  . . . . . .           8,386            7,765          6,053         7,070         29,274
  Net income  . . . . . . . . .           4,738            4,432          3,422         4,109         16,701
  Average shares outstanding  .          10,061           10,061         10,061        10,061         10,061
  Earnings per share  . . . . .     $       .47      $       .44    $       .34    $      .41     $     1.66

  Cash and cash equivalents   .     $       609      $     5,331    $    12,385    $   16,973
  Accounts receivable   . . . .          37,151           30,850         27,934        28,071
  Inventories   . . . . . . . .          10,097            9,604          9,978        15,975
  Working capital   . . . . . .          23,067           28,092         32,078        36,798
  Total assets  . . . . . . . .          89,754           87,179         91,493       103,003
  Stockholders' equity  . . . .          41,682           46,114         49,536        53,645

OTHER DATA:
  Free cash flow  . . . . . . .     $     5,816      $     4,584    $     3,517    $    3,856     $   17,773
  Capital expenditures  . . . .             385            1,389          1,289         1,402          4,465
</TABLE>





                                       28
<PAGE>   29
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


                          CHASE BRASS INDUSTRIES, INC.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                       AND FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
                                                                                                     Page(s)
                                                                                                     -------
<S>                                                                                                  <C>
CONSOLIDATED FINANCIAL STATEMENTS:

    Report of Independent Accountants   . . . . . . . . . . . . . . . . . . . . . . . . . .            30

    Consolidated Balance Sheet as of December 31, 1996 and 1995   . . . . . . . . . . . . .           31-32

    Consolidated Statement of Income for the Years Ended
           December 31, 1996, 1995 and 1994   . . . . . . . . . . . . . . . . . . . . . . .            33

    Consolidated Statement of Changes in Preferred Stock and
           Stockholders' Equity (Deficit) for the Years Ended
           December 31, 1996, 1995 and 1994   . . . . . . . . . . . . . . . . . . . . . . .            34

    Consolidated Statement of Cash Flows for the Years Ended
           December 31, 1996, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . . .            35

    Notes to Consolidated Financial Statements    . . . . . . . . . . . . . . . . . . . . .           36-53

    Unaudited Quarterly Financial Information   . . . . . . . . . . . . . . . . . . . . . .            54

FINANCIAL STATEMENT SCHEDULES:

    Schedule I - Condensed Financial Information of Parent Company  . . . . . . . . . . . .          S-1-S-2

    Schedule II - Valuation and Qualifying Accounts   . . . . . . . . . . . . . . . . . . .            S-3
</TABLE>





                                       29
<PAGE>   30
                       REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors and Stockholders
of Chase Brass Industries, Inc.:

         We have audited the consolidated financial statements and financial
statement schedules of Chase Brass Industries, Inc. listed in Item 8 of this
Form 10-K.  These financial statements and financial statement schedules are
the responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements and financial statements
schedules based on our audits.

         We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Chase
Brass Industries, Inc. as of December 31, 1996 and 1995, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1996, in conformity with generally accepted
accounting principles.  In addition, in our opinion, the financial statement
schedules taken as whole, present fairly, in all material respects, the
information required to be included therein.


 /s/ Coopers & Lybrand L.L.P.
-----------------------------
Detroit, Michigan
February 3, 1997





                                       30
<PAGE>   31
                          CHASE BRASS INDUSTRIES, INC.
                           CONSOLIDATED BALANCE SHEET
                                 (IN THOUSANDS)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                                    December 31,
                                                                   1996                 1995
                                                                   ----                 ----
<S>                                                              <C>                   <C>
Current assets:

  Cash and cash equivalents                                      $  9,763             $ 16,973

  Receivables, net of allowance for
    doubtful accounts and claims of
    $1,236 and $1,036 in 1996 and 1995, respectively               34,514               28,071

  Inventories                                                      52,050               15,975

  Prepaid expenses                                                  1,131                  733

  Deferred income taxes                                             2,897                  850
                                                                 --------             --------

   Total current assets                                           100,355               62,602

Property, plant and equipment, net                                 97,628               38,445

Other assets                                                        6,768                  --
                                                                 --------             --------

   Total assets                                                  $204,751             $103,003
                                                                 ========             ========
</TABLE>





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





                                       31
<PAGE>   32
                          CHASE BRASS INDUSTRIES, INC.
                           CONSOLIDATED BALANCE SHEET
                    (IN THOUSANDS, EXCEPT SHARE INFORMATION)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                    December 31,
                                                                             1996                 1995
                                                                             ----                 ----
<S>                                                                     <C>                   <C>
Current liabilities:

  Accounts payable                                                      $    36,134           $   18,900

  Accrued compensation and benefits                                           5,598                2,490

  Accrued income taxes                                                        3,685                3,310

  Other accrued liabilities                                                   6,158                1,104

  Current portion of long-term debt                                             131                  --
                                                                        -----------           ----------

    Total current liabilities                                                51,706               25,804

Long-term debt                                                               70,631               18,784

Deferred income taxes                                                         8,081                4,770
                                                                        -----------           ----------

    Total liabilities                                                       130,418               49,358
                                                                        -----------           ----------

Commitments and contingencies                                                   --                   --

Stockholders' equity:

  Common stock, $.01 par value, 25,000,000 shares
    authorized; 5,965,621 and 5,960,721 shares issued and
    outstanding in 1996 and 1995, respectively                                   60                   60

  Nonvoting common stock, $.01 par value, 5,000,000
    shares authorized; 4,100,079 shares issued and
    outstanding in 1996 and 1995                                                 41                   41

  Additional paid-in capital                                                 30,039               29,990

  Retained earnings                                                          44,193               23,554
                                                                        -----------           ----------

  Total stockholders' equity                                                 74,333               53,645
                                                                        -----------           ----------

    Total liabilities and stockholders' equity                          $   204,751           $   103,003
                                                                        ===========           ===========
</TABLE>

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





                                       32
<PAGE>   33
                          CHASE BRASS INDUSTRIES, INC.
                        CONSOLIDATED STATEMENT OF INCOME
                   (IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
                                                                      Year Ended December 31,
                                                               1996             1995             1994
                                                               ----             ----             ----
<S>                                                         <C>
Net sales                                                   $   366,991      $   313,097      $   260,096

Cost of goods sold (exclusive of depreciation
  and amortization shown separately below)                      311,345          270,022          224,532
                                                            -----------      -----------      -----------

     Gross profit                                                55,646           43,075           35,564

Selling, general and administrative expenses                     12,121            8,264            6,193

Depreciation and amortization                                     6,710            5,537            5,795
                                                            -----------      -----------      -----------

     Operating income                                            36,815           29,274           23,576

Interest expense                                                  2,612            1,530            3,911
                                                            -----------      -----------      -----------

     Income before income taxes                                  34,203           27,744           19,665

Provision for income taxes                                       13,564           11,043            7,111
                                                            -----------      -----------      -----------

     Net income                                                  20,639           16,701           12,554

Dividends on preferred stock and
  accretion to liquidation value                                    --               --             2,244
                                                            -----------      -----------      -----------

     Net income available for common stock                  $    20,639      $    16,701      $    10,310
                                                            ===========      ===========      ===========


Average shares outstanding                                   10,063,252       10,060,800        7,369,363
                                                            ===========      ===========      ===========

Net income available for common stock per share             $      2.05      $      1.66      $      1.40
                                                            ===========      ===========      ===========
</TABLE>


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





                                       33
<PAGE>   34
                          CHASE BRASS INDUSTRIES, INC.
              CONSOLIDATED STATEMENT OF CHANGES IN PREFERRED STOCK
                       AND STOCKHOLDERS' EQUITY (DEFICIT)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                             Stockholders' Equity (Deficit)
                                                     -----------------------------------------------------------
                                                                  Additional
                                       Preferred      Common        Paid-In    Treasury   Earnings
                                         Stock         Stock        Capital     Stock*    (Deficit)     Total
                                       ----------    ---------     --------   --------    ---------  -----------
<S>                                    <C>           <C>          <C>                   <C>           <C>
Balances, December 31, 1993            $   7,111     $       68   $   2,253              $   (4,500)   $  (2,179)

Net income                                                                                   12,554       12,554

Preferred stock dividends                  1,201                                             (1,201)      (1,201)

Preferred stock dividends paid            (4,355)

Accretion to redemption value              1,043                     (1,043)                              (1,043)

Preferred stock redemption                (5,000)

Exercised stock options                                       1          11                                   12

Proceeds from Offering,
  net of fees                                                32      28,769                               28,801
                                       ---------     ----------   ---------   --------   ----------    ---------

Balances, December 31, 1994                   --            101      29,990        --         6,853       36,994
                                       ---------     ----------   ---------   --------   ----------    ---------

Net income                                                                                   16,701       16,701
                                       ---------     ----------   ---------   --------   ----------    ---------

Balances, December 31, 1995                   --            101      29,990        --        23,554       53,645

Net income                                                                                   20,639       20,639

Exercised stock options                                                  49                                   49
                                       ---------     ----------   ---------   --------   ----------    ---------

Balances, December 31, 1996            $      --     $      101   $  30,039   $     --   $   44,193    $  74,333
                                       =========     ==========   =========   ========   ==========    =========
</TABLE>

________________
* Zero at December 31, 1996, 1995 and 1994.  Less than $1,000 at December 31,
1993.





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





                                      34
<PAGE>   35
                         CHASE BRASS INDUSTRIES, INC.
                     CONSOLIDATED STATEMENT OF CASH FLOWS
                                (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                Year Ended December 31,
                                                                           1996             1995            1994
                                                                           ----             ----            ----
<S>                                                                   <C>            <C>             <C>
Operating activities:
   Net income                                                          $  20,639         $  16,701       $  12,554
   Adjustments to reconcile net income to net cash
     provided by operating activities:
       Depreciation and amortization                                       6,710             5,537           5,795
       Accretion of discount on BP Note                                    1,216             1,766           1,601
       Deferred income tax expense (benefit)                                (142)              131           2,304
       Changes in assets and liabilities:
           (Increase) decrease in receivables                              7,034            (4,723)         (5,194)
           (Increase) in inventories                                      (6,874)           (1,919)         (1,634)
           (Increase) in prepaid expenses                                   (325)             (570)            (78)
           Decrease (increase) in receivable from BP                         362               168            (161)
           Increase (decrease) in accounts payable                         7,692              (407)          5,127
           Increase in accrued liabilities                                 3,219             3,096             857
           Decrease in deferred income taxes, net                            --              1,485             --
                                                                      ----------        ----------      ----------
               Net cash provided by operating activities                  39,531            21,265          21,171
                                                                      ----------        ----------      ----------
Investing activities:
   Purchase of Leavitt Tube Company, Inc.                                (91,665)              --              --
   Additions to property, plant and equipment                             (4,092)           (4,465)         (3,391)
   (Increase) in intangibles                                              (1,005)              --              --
   Decrease in deferred income taxes, net                                     --             1,485             --
                                                                      ----------        ----------      ----------
               Net cash (used in) investing activities                   (96,762)           (4,465)         (3,391)
                                                                      ----------        ----------      ----------
Financing activities:
   Revolving credit loan repayments, net                                     --                --          (15,000)
   Principal payments on bank term loans                                 (10,000)              --          (21,735)
   Proceeds from issuance of a bank term loan                             60,000               --              --
   Preferred stock dividends and redemption                                  --                --           (9,355)
   Proceeds from Offering, net of fees                                       --                --           28,801
   Other, net                                                                 21               --           (1,238)
                                                                      ----------        ----------      ----------
               Net cash (used in) financing activities                    50,021               --          (18,527)
                                                                      ----------        ----------      ----------
Net increase (decrease) in cash and cash equivalents                      (7,210)           16,800            (747)
Cash and cash equivalents, beginning of period                            16,973               173             920
                                                                      ----------        ----------      ----------
Cash and cash equivalents, end of period                              $    9,763        $   16,973      $      173
                                                                      ==========        ==========      ==========

Supplemental cash flow information:
   Cash flow data:
       Interest paid                                                  $    2,291        $      157      $    2,706
       Income taxes paid                                              $   13,088        $    7,037      $    4,105
   Non-cash investing activity:
       Liabilities assumed in connection
         with the acquisition of Leavitt                              $   20,190              --              --
</TABLE>


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





                                      35
<PAGE>   36
                         CHASE BRASS INDUSTRIES,  INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       SIGNIFICANT ACCOUNTING POLICIES:

         PRINCIPLES OF CONSOLIDATION AND ORGANIZATION

         The consolidated balance sheet as of December 31, 1996 and 1995, and
the consolidated statements of income, changes in preferred stock and
stockholders' equity (deficit), and cash flows for the years ended December 31,
1996, 1995 and 1994, include the accounts of Chase Brass Industries, Inc. (the
"Company"), a Delaware corporation, and its wholly-owned subsidiaries, Chase
Brass & Copper Company, Inc. ("CBCC"), a Delaware corporation, Leavitt Tube
Company, Inc. ("Leavitt"), a Delaware corporation, and Holco Corporation
("Holco"), an Illinois corporation and wholly-owned subsidiary of Leavitt.  See
Note 2 for a discussion of the Leavitt Acquisition.

         On August 24, 1990, the Company acquired, through CBCC, the assets and
income of a Delaware corporation formerly named Chase Brass & Copper Company,
Incorporated ("Old Chase"), pursuant to the Asset Purchase Agreement ("CBCC
Purchase Agreement") dated May 10, 1990, by and between the Company, CBCC, Old
Chase, BP Exploration (Alaska) Inc.  ("BPE") and The Standard Oil Company (the
"CBCC Acquisition").  BPE and The Standard Oil Company (collectively referred
to as "BP") own all of the stock of Old Chase.  The CBCC Acquisition was
accounted for as a purchase.

         NATURE OF OPERATIONS

         The Company, through its wholly-owned subsidiaries CBCC and Leavitt,
is a leading manufacturer of free- machining and forging brass rod and
structural and mechanical steel tubing.

         CBCC, employing more than 300 people at its Montpelier, Ohio, plant,
is an ISO 9002 certified manufacturer and supplier of free-machining and
forging brass rod in the United States and Canada.  Its diverse customer base
of more than 250 companies uses CBCC's "Blue Dot" trademark rod to produce a
variety of products, such as plumbing fixtures, heating and air conditioning
components, industrial valves, automotive parts, and numerous hardware
components.

         Leavitt is a leading producer of structural and mechanical steel
tubing with plants in Chicago, IL, Hammond, IN, and Jackson, MS, employing more
than 400 people.  Leavitt's structural steel tubing is used in farm equipment,
non- residential construction and other structural applications.  The
mechanical steel tubing is used in a broad range of consumer and commercial
products, including furniture and fixtures, lawn-care products, storage racks,
exercise equipment, bicycles and machine tools.





                                       36
<PAGE>   37
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


         USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those estimates.

         INVENTORIES

         Inventories are stated at the lower of cost-or-market, with cost
determined on the last-in, first-out (LIFO) basis.  Inventories have been
written down to lower of cost-or-market and such reduced amounts are considered
cost for subsequent periods.

         If the first-in, first-out (FIFO) method for determining cost had been
used, inventories would have been approximately $2.0 million and $4.3 million
higher at December 31, 1996 and 1995, respectively.

         PROPERTY, PLANT AND EQUIPMENT

         Property, plant and equipment is stated at cost.  Depreciation is
computed by the straight-line method based on estimated useful lives of the
assets.  Upon retirement or disposal, the cost and accumulated depreciation are
removed from the accounts, and any gain or loss is included in income.
Maintenance and repair costs are charged to expense as incurred.

         INTANGIBLES

         Intangible assets are amortized on a straight-line basis over their
estimated economic lives.

         CASH FLOWS

         For purposes of the consolidated statement of cash flows, the Company
considers all highly liquid investments with a maturity of three months or less
when purchased to be cash equivalents.  The carrying value of all financial
instruments approximates market value.





                                       37
<PAGE>   38
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


         RISK CONCENTRATION

         Accounts receivable is the principal financial instrument which
subjects the Company to concentration of credit risk.  As of December 31, 1996
and 1995, receivables from customers represent substantially all of the
Company's net trade receivables.  Credit is extended based upon an evaluation
of the customer's financial condition and, generally, collateral is not
required.  Concentrations of credit risk with respect to receivables are
somewhat limited due to the Company's large number of customers, the diversity
of these customers' businesses and the dispersion of such customers throughout
the continental United States and parts of Canada.  The Company maintains an
allowance for doubtful accounts and claims based upon the expected
collectibility of all trade receivables.

         COMMON STOCK AND EARNINGS PER SHARE

         Common shares outstanding during the periods presented have been
adjusted to reflect a 691.6129-for-1 stock split (the "Stock Split"), and
historical common shares authorized have been adjusted to reflect an increase
in authorized shares, each of which occurred in conjunction with the Company's
initial public offering of Common Stock (the "Offering") in November 1994.
Earnings per share is computed based upon the average number of common shares
and common share equivalents outstanding during the periods presented, adjusted
to give effect to the Stock Split.  Net income available for common stock is
determined by deducting dividends on preferred stock and accretion to
liquidation value.

2.       LEAVITT ACQUISITION:

         On August 30, 1996, the Company acquired, through Leavitt, the assets
and operations of the steel tube division of UNR Industries, Inc., including
all the outstanding stock of Holco (the "Leavitt Acquisition").  Upon
consummation of the Leavitt Acquisition, Leavitt continued operations in the
manufacture and sale of structural and mechanical steel tubing.  The net
purchase price was approximately $91.7 million after post-closing adjustments,
of which $62 million was financed with the Bank Credit Facility (as hereinafter
defined) and the remainder with cash.  Leavitt's results of operations for the
period since the Leavitt Acquisition date are included in the Company's 1996
results of operations.  The Leavitt Acquisition was accounted for as a
purchase.





                                       38
<PAGE>   39
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


         As of the Leavitt Acquisition date, the value of Leavitt's property,
plant and equipment was increased $31.3 million over its then-current book
value to reflect the estimated fair value of the assets purchased.  Assets
totaling $4.4 million were recorded as of the Leavitt Acquisition date to
reflect a non-compete agreement, a supply agreement with an affiliate of UNR
Industries, Inc. and to reflect the actual purchase price in excess of the fair
value of the assets acquired.  The Company also incurred certain closing and
financing costs in connection with the Leavitt Acquisition approximating $1
million.

         The pro forma data outlined below reflects pro forma adjustments to
the statement of income for the years ended December 31, 1996 and 1995, as if
the Leavitt Acquisition occurred as of the beginning of each period presented.
The pro forma adjustments reflect the impact of additional depreciation and
amortization expenses.  The pro forma adjustments also reflect the impact of
additional interest expense resulting from the Leavitt Acquisition debt and the
elimination of the Company's interest income partially offset by the
elimination of interest expense on the portion of Leavitt debt not assumed by
the Company.  The income tax effect of the pro forma adjustments is based on an
effective income tax rate of 40%.  Pro forma results for the years ended
December 31 follow (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                         1996               1995
                                         ----               ----
         <S>                        <C>                <C>
         Net sales                  $    468,881       $   469,430
         Net income                 $     23,020       $    22,025
         Earnings per share         $       2.29       $      2.19
</TABLE>

3.       INITIAL PUBLIC OFFERING:

         On November 10, 1994, the Company sold 3,200,000 shares of Common
Stock, par value $.01 per share, for $10.00 per share to the public.  Net
proceeds to the Company totaled $28.8 million after deducting underwriting
discounts and commissions and offering expenses.  The net proceeds were used to
repay bank debt and redeem all 5,000 shares of outstanding 15% Exchangeable
Preferred Stock (the "Redeemable Preferred Stock") at an aggregate redemption
price of $7.8 million (representing the $5 million face value plus $2.8 of
unpaid accrued dividends).





                                       39
<PAGE>   40
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


4.       INVENTORIES:

         Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
                                                                                   December 31,
                                                                              1996                 1995
                                                                              ----                 ----
         <S>                                                              <C>                 <C>
         Raw materials                                                    $   14,547         $    6,641
         Work in progress                                                     21,124              4,903
         Finished goods                                                       18,613              7,952
                                                                          ----------         ----------
                                                                              54,284             19,496
         Tolling metal due customers                                          (2,234)            (3,521)
                                                                          ----------         ----------
                                                                          $   52,050         $   15,975
                                                                          ==========         ==========
</TABLE>

5.       PROPERTY, PLANT AND EQUIPMENT:

         Property, plant and equipment and the related depreciable lives
consisted of the following (in thousands):
<TABLE>
<CAPTION>
                                                                                     December 31,
                                                                               1996                1995
                                                                               ----                ----
         <S>                                                              <C>                 <C>
         Land and land improvements (15-20 years)                         $    3,331          $     246
         Buildings and improvements (10-39 years)                             21,834              7,279
         Machinery and equipment (2-15 years)                                 92,530             46,140
         Construction in progress                                              1,925              1,226
                                                                          ----------         ----------
                                                                             119,620             54,891
         Accumulated depreciation                                            (21,992)           (16,446)
                                                                          ----------         ----------
                                                                          $   97,628          $  38,445
                                                                          ==========          =========
</TABLE>





                                       40
<PAGE>   41
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


6.       OTHER ASSETS:

         Intangibles.  There were no intangible assets at December 31, 1995.
Intangible assets recorded in conjunction with the Leavitt Acquisition and the
related period of amortization consisted of the following (in thousands):
<TABLE>
<CAPTION>
                                                                       December 31, 1996
                                                                       -----------------
         <S>                                                                 <C>
         Covenant not-to-compete (5 years)                                   $     500
         Supply agreement (5 years)                                                560
         Deferred financing costs (5 years)                                        450
         Acquisition costs (5 years)                                               555
         Excess of cost over net assets acquired (15 years)                      3,321
                                                                             ---------
                                                                                 5,386
         Accumulated amortization                                                 (211)
                                                                             ---------
                                                                             $   5,175
                                                                             =========
</TABLE>

         Receivable from BP.  At December 31, 1996, the receivable from BP
totaled $1.6 million and included $1.3 million resulting from certain
post-closing adjustments under the CBCC Purchase Agreement and $1.2 million in
environmental-related capital expenditures for which the Company expects
reimbursement under the terms of the CBCC Purchase Agreement and a Remediation
Agreement (herein so called) dated August 24, 1990, entered into by and among
BPE, The Standard Oil Company, the Company and CBCC concerning the performance
of remedial and certain other environmental matters by the parties thereto.
Were the Company not to receive payment on the receivable balance due from BP,
the Company intends to offset any such amounts against amounts payable under
the $20 million Subordinated Promissory Note issued to BP as partial
consideration for the Acquisition (the "BP Note").

         At December 31, 1996, the receivable from BP reflects a reduction of
$254,000 of contingent interest which was payable August 1996 under the BP Note
as the Company offset the amount against certain post-closing adjustments.  At
December 31, 1996, the receivable from BP also reflects a reduction of $661,000
of interest payable August 1997 as it is the Company's intent to offset the
amount against certain post-closing adjustments.





                                       41
<PAGE>   42
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


7.       FINANCING ARRANGEMENTS:

         Debt consisted of the following at December 31, (in thousands):

<TABLE>
<CAPTION>
                                                        1996                 1995
                                                        ----                 ----
         <S>                                            <C>                <C>
         BP Note                                        $20,000            $18,784
         Term loan                                       50,000                 --
         Other                                              762                 --
                                                        -------            -------
                                                         70,762             18,784
         Current portion of long-term debt                  131                 --
                                                        -------            -------
         Long-term debt                                 $70,631            $18,784
                                                        =======            =======
</TABLE>

         In connection with the CBCC Acquisition, the Company issued the BP
Note in the original principal amount of $20.0 million.  The BP Note was
recorded at the CBCC Acquisition date at a discount using a 10.4% effective
interest rate.  The BP Note initially matured in August 1996, and the Company,
at its option, extended the maturity date for three additional years to August
1999 with interest payable annually at 9.29%.  The BP Note contained a
contingent interest payment based upon average Company earnings (defined in the
BP Note) for the years ended December 31, 1990 through 1995.  The contingent
interest, totaling $254,000 and due August 1996, was offset against the
receivable from BP.

         In connection with the Leavitt Acquisition, the Company entered into a
new credit facility (the "Bank Credit Facility") of $100 million.  The Bank
Credit Facility replaced the Company's existing $33 million bank credit
facility which was terminated August 30, 1996.  The Bank Credit Facility
includes a $60 million term loan ("Term Loan") and a $40 million revolving
credit facility ("Revolving Credit Facility").  Total borrowing capacity under
the Revolving Credit facility is determined monthly by a formula based on
levels of inventory and accounts receivable up to a maximum of $40 million.
The Revolving Credit Facility commitment expires August 30, 2001, and the
Company can request a one-year extension of the expiration date any time after
December 31, 1997.  The Term Loan is payable quarterly and matures October
2003.  The Company prepaid $10 million on the Term Loan in December 1996,
including all amounts originally due in 1997.





                                       42
<PAGE>   43
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


         Advances under the Bank Credit Facility will bear interest, at the
Company's option, at a rate per annum equal to (i) the higher of (a) the bank's
prime rate or (b) the Federal funds rate plus 1/2%, or (ii) LIBOR for the
applicable borrowing period plus 1/2%, 5/8%, 3/4%, 7/8%, 1 1/8%, or 1 3/8%
depending on the Company's ratio of total debt to earnings before interest,
taxes, depreciation and amortization, with interest payable quarterly or at of
the end of each LIBOR borrowing period, whichever is shorter.  At December 31,
1996, the weighted average interest rate on the Term Loan was 6.3%.

         The Bank Credit Facility contains certain covenants that, among other
things, limit the Company's ability to incur additional debt, make capital
expenditures or pay dividends.  The covenants also require the Company to
maintain a minimum interest coverage ratio and level of net worth and restrict
the Company from exceeding a maximum ratio of debt to cash flow from
operations.  The Bank Credit Facility also requires the Company to maintain
CBCC and Leavitt as wholly-owned subsidiaries.

         Aggregate maturities of long-term debt are as follows:  $131,000 in
1997, $3 million in 1998, $24.4 million in 1999, $8.6 million in 2000, $12.2
million in 2001, and $22.5 million thereafter.

8.       RETIREMENT PLANS:

         The Company provides various contributory and noncontributory benefit
plans covering substantially all of its employees, including profit sharing
plans, employee savings plans under Section 401(k) of the Internal Revenue
Code, and defined benefit pension plans.

         For plans to which the Company contributes, the contributions become
fully vested after five years of service.  The amount of Company contributions
to the employee savings plans are based on formulas outlined in the plans.
Company contributions under the noncontributory qualified profit sharing plans
are based on a percentage of eligible employees' compensation.  Contributions
to the trust fund of the profit sharing plans are discretionary, and the
Company has the right to amend, modify or terminate the plans, but in no event
will any portion of vested contributions revert to the Company.  Charges to
expense under the defined contribution plans, for the years ended December 31,
1996, 1995 and 1994, were $588,000, $353,000 and $299,000, respectively.

         The defined benefit retirement plans provide benefits based on a
participant's years of service and stated monthly benefit amounts based on the
date of retirement.  The Company's policy is to make periodic contributions as
required by contract or applicable regulations.  Increases in 1996 in the
funded status and net periodic pension expense of the defined benefit
retirement plans was primarily the result of the Leavitt Acquisition.





                                       43
<PAGE>   44
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


         The defined benefit retirement plans' funded status was as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                   December 31,
                                                           1996                  1995
                                                           ----                  ----
 <S>                                                    <C>                  <C>
 Vested benefits                                        $    8,374           $   1,828
 Nonvested benefits                                            219                 136
                                                        -----------          ----------
 Projected benefit obligation (which equals
   the accumulated benefit obligation)                       8,593               1,964
 Funded status at fair value                                (8,244)             (1,919)
                                                        -----------          ----------
 Assets less than the projected benefit obligation             349                  45
 Unrecognized prior service cost                              (251)               (224)
 Unrecognized net loss                                        (269)               (223)
                                                        -----------          ----------
 Prepaid pension expense                                $     (171)          $    (402)
                                                        ===========          ==========
</TABLE>

         For the year ended December 31, 1996, discount rates used in
determining the projected benefit obligation ranged from 7.25% to 7.5% and the
expected long-term rate of return on assets ranged from 7.5% to 8.5%.  For the
year ended December 31, 1995, the discount rate used in determining the
projected benefit obligation was 7.5% and the expected long-term rate of return
on assets was 8.0%.

         The defined benefit retirement plans' net periodic pension expense was
as follows (in thousands):
<TABLE>
<CAPTION>
                                                  Year Ended December 31,
                                           1996             1995           1994
                                           ----             ----           ----
  <S>                                 <C>             <C>             <C>
  Service cost                            $  156          $   87          $   82
  Interest cost                              308             131             117
  Return on plan assets                     (340)            (88)            (42)
  Net amortization and deferral               55             (26)            (43)
                                          ------          ------          ------
  Net periodic pension expense            $  179          $  104          $  114
                                          ======          ======          ======
</TABLE>





                                       44
<PAGE>   45
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


9.       INCOME TAXES:

         The consolidated provision for income taxes consisted of the following
(in thousands):
<TABLE>
<CAPTION>
                                                                       Year Ended December 31,
                                                                  1996           1995          1994
                                                                  ----           ----          ----
         <S>                                                  <C>           <C>
         Current taxes:
           Federal                                            $  11,327      $   8,885     $   3,823
           State                                                  2,379          2,027           984
                                                              ---------      ---------     ---------
             Total current taxes                                 13,706         10,912         4,807
                                                              ---------      ---------     ---------
         Deferred taxes:
           Federal and state                                       (142)           131         2,646
           Reversal of tax valuation allowance                       --            --           (342)
                                                              ---------      ---------     ---------
             Total deferred taxes                                  (142)           131         2,304
                                                              ---------      ---------     ---------
         Provision for income taxes                           $  13,564      $  11,043     $   7,111
                                                              =========      =========     =========
</TABLE>

         Deferred income taxes are recorded to reflect the tax consequences on
future years of differences between the financial statement and tax bases of
assets and liabilities and were composed of the following (in thousands):
<TABLE>
<CAPTION>
                                                                  December 31,
                                                               1996          1995
                                                               ----          ----
         <S>                                               <C>          <C>
         Net current deferred tax asset:
           Allowance for doubtful accounts and claims      $      519    $      363
           Accrued employee benefits                            1,254           422
           Other, net                                           1,124            65
                                                           ----------     ---------
                                                           $    2,897     $     850
                                                           ==========     =========
         Net long-term deferred tax liability:
           Depreciation and basis differences              $    7,893    $    4,414
           Other, net                                             188           356
                                                           ----------     ---------
                                                           $    8,081    $    4,770
                                                           ==========    ==========
</TABLE>





                                       45
<PAGE>   46
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


         A reconciliation of the provision for income taxes compared with the
amounts at the federal statutory tax rate follows (in thousands):
<TABLE>
<CAPTION>
                                                        Year Ended December 31,
                                                    1996            1995        1994
                                                    ----            ----        ----
     <S>                                        <C>            <C>            <C>
     Tax provision at statutory rate of 35%     $   11,971     $    9,711    $   6,883
     State taxes                                     1,547          1,318          640
     Change in tax valuation allowance                 --             --          (342)
     Other, net                                         46             14          (70)
                                                ---------------------------------------
     Provision for income taxes                 $   13,564     $   11,043    $   7,111
                                                ==========     ==========    ==========
     Effective tax rate                              39.7%          39.8%         36.2%
</TABLE>

10.      STOCK OPTIONS:

         In November 1994, the Company implemented its 1994 Long-Term Incentive
Plan (the "Plan") for key employees and non-employee directors.  In connection
with the Plan, 1,000,000 shares of Common Stock were reserved for option
grants.  Stock options granted become exercisable over five years from the date
of the grant and expire after 10 years.  The exercise price of options granted
approximates the fair market value at the grant date.





                                       46
<PAGE>   47
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


<TABLE>
<CAPTION>
                                                                        Year Ended December 31,
                                                         1996                  1995                   1994
                                                    -----------------     -----------------         --------
<S>                                                  <C>                   <C>                      <C>
Options outstanding at beginning of year                      544,000               490,000              --

Options granted                                               318,300                60,000          490,000
Exercise price per share                             $16.75 to $18.88      $11.25 to $11.73           $10.00
Weighted average exercise price                                $17.32                $11.33           $10.00

Options exercised                                               4,900                    --               --
Exercise price per share                                       $10.00                    --               --
Weighted average exercise price                                $10.00                    --               --

Options canceled/forfeited                                     62,300                 6,000               --
Exercise price per share                             $10.00 to $17.00                $10.00               --
Weighted average exercise price                                $11.03                $10.00               --

Options outstanding at end of year                            795,100               544,000          490,000
Exercise price per share                             $10.00 to $18.88      $10.00 to $11.73           $10.00
Weighted average exercise price                                $12.95                $10.37           $10.00
Weighted average remaining life (years)                          8.60                  8.89             9.86

Options exercisable at end of year                            196,300                96,800               --
Exercise price per share                             $10.00 to $11.23                $10.00               --
Weighted average exercise price                                $10.08                $10.00               --
</TABLE>

         Stock options outstanding at December 31, 1996, totaling 795,100
shares include 478,800 shares and 316,300 shares with weighted average exercise
prices of $10.06 and $17.32 per share, respectively, and remaining weighted
average contractual lives of 7.9 years and 9.7 years, respectively.

         Effective January 1, 1996, the Company adopted the disclosure
requirements of Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" (SFAS 123).  However, as permitted
under SFAS 123, the Company has elected to continue accounting for the Plan in
accordance with Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" (APB 25), which is an intrinsic value based method
of accounting.





                                       47
<PAGE>   48
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


         The fair value of each stock option grant was estimated as of the
grant date using the Black-Scholes option- pricing model with the following
assumptions used for stock options granted in:

<TABLE>
<CAPTION>
                                                                                  1996             1995
                                                                                  ----             ----
         <S>                                                                       <C>              <C>
         Estimated fair value per share of options
           granted during the year                                                 $8.43            $5.74

         Assumptions:

           Annualized dividend yield                                                 --               --
           Common stock price volatility (peer index)                              37.6%            39.6%
           Risk-free rate of return                                                 6.7%             7.1%
           Expected option term (in years)                                           6                6
</TABLE>

         The Company has elected to continue applying the provisions of APB 25
and, accordingly, no stock option compensation cost is included in the results
of operations.  Had stock option compensation for the Plan been determined
based on the fair value of the stock options on the respective grant dates
consistent with the methodology of SFAS 123, the impact on the Company's net
income and earnings per share would not have been material.

11.  PREFERRED STOCK:

         At December 31, 1996 and 1995, the Company had no preferred stock
issued or outstanding.  In conjunction with the Offering, the Company
authorized 1,000,000 shares of preferred stock, none of which has been issued.
The preferences and rights of such preferred stock may be determined by the
Board of Directors at any time prior to issuance.

         In conjunction with the Offering, the Company redeemed all 5,000
outstanding shares of its Redeemable Preferred Stock on November 10, 1994, at
the redemption price of $1,000 per share plus accumulated unpaid dividends.

         The difference between the fair value of the Redeemable Preferred
Stock at issuance and the mandatory redemption value was recorded through
periodic accretions, using the effective interest method with a related charge
to additional paid-in capital.  Additional accretion of $912,000 was recorded
in conjunction with the Offering to increase the redemption value to $5
million.





                                       48
<PAGE>   49
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


12.      COMMON STOCK:

         The Company's Common Stock consisted of the following:

<TABLE>
<CAPTION>
                                        Shares issued as of December 31,
                                   1996               1995              1994
                                   ----               ----              ----
    <S>                         <C>                <C>               <C>
    Common Stock                 5,965,621          5,960,721         5,960,721
    Nonvoting Common Stock       4,100,079          4,100,079         4,100,079
                               -----------        -----------       -----------
                                10,065,700         10,060,800        10,060,800
                                ==========         ==========        ==========
</TABLE>

         All shares of Common Stock and Nonvoting Common Stock are identical,
except that holders of Nonvoting Common Stock have no voting rights.  Shares of
Nonvoting Common Stock may be converted, at the option of the holder, into
Common Stock on a share-for-share basis, except to the extent that the holder
of Nonvoting Common Stock is restricted from obtaining certain ownership levels
in the Company pursuant to the Small Business Investment Act of 1958 and the
Bank Holding Company Act of 1956.

         On November 2, 1994, all outstanding common shares in all classes were
converted into 6,860,800 shares of Common Stock.  One stockholder then
exchanged 4,100,079 shares of Common Stock for Nonvoting Common Stock on a
share-for-share basis.  As part of the Offering, the Company issued 3,200,000
shares of Common Stock at a price to the public of $10.00 per share.

13.      OPERATING LEASE OBLIGATIONS:

         Rental expense under operating leases was $648,000, $658,000 and
$501,000 for the years ended December 31, 1996, 1995 and 1994, respectively.
As of December 31, 1996, the minimum rental commitments under long-term
operating leases were as follows:  $314,000 in 1997, $194,000 in 1998, $174,000
in 1999 and 2000, and $87,000 in 2001.





                                       49
<PAGE>   50
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


14.      COMMITMENTS AND CONTINGENCIES:

         CBCC.  In connection with the CBCC Acquisition, the Company and BP
entered into a remediation agreement (the "Remediation Agreement").  Under the
terms of the Remediation Agreement, BP is responsible for certain remediation
activities attributable to environmental releases which occurred prior to the
CBCC Acquisition at CBCC's manufacturing facility and the construction of a
waste water treatment plant to enable CBCC to comply with its waste water
discharge permit (the "Permit").  BP also is obligated under the CBCC Purchase
Agreement to indemnify the Company for liabilities arising out of certain
environmental conditions that existed as of the CBCC Acquisition date.  BP has
performed certain activities in this regard and has acknowledged liability for
certain releases of regulated substances into the environment which occurred
prior to the CBCC Acquisition.

         While CBCC's waste water treatment plant has been in operation since
May 1993, CBCC is still experiencing exceedances to certain limitations
contained in the Permit, resulting in violations of the Clean Water Act.  BP
and CBCC have identified several conditions contributing to the exceedances and
are actively working to correct the problems that have precluded CBCC's routine
compliance with the Permit.  The Ohio Environmental Protection Agency ("Ohio
EPA") is kept apprised as to the status of the parties' activities concerning
the elimination of exceedances and concurs with the proposals for corrective
measures, and the Ohio EPA has not initiated any enforcement action against
CBCC for prior exceedances, but has indicated that it may do so if violations
of the Permit limits continue after January 31, 1997.  In February 1997, CBCC
completed a control project designed to eliminate exceedances to the Permit
limits and currently is monitoring its waste water discharge to determine if
the exceedances have been eliminated.

         CBCC and/or other entities named "Chase Brass & Copper Co." (which may
include Old Chase or divisions of Old Chase) have been named by governmental
agencies and/or private parties as a potentially responsible party ("PRP")
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (CERCLA) and/or state laws with respect to two sites, and may have been
identified as a PRP at one additional site.

         In connection with one of the two sites, located in Cleveland, Ohio,
CBCC has been named as one of over 130 defendants in a CERCLA Section 107
action which seeks recovery of response costs previously spent and proposed to
be spent by the plaintiff.  The plaintiff has alleged that between 1990 and
1993 it and the other ordered parties have incurred response costs in excess of
$10 million.  The Company believes that CBCC has had no contact with the site
and has no knowledge





                                       50
<PAGE>   51
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


as to what, if any, share of response costs has been allocated to CBCC.  BP has
been notified of this suit and has assumed the defense thereof because alleged
events giving rise to the CERCLA liability occurred prior to the CBCC
Acquisition.

         With respect to the second site, located in Tifton, Georgia, CBCC has
been notified by a group of private parties of its potential identification as
a PRP.  The notice alleges that CBCC may be liable for contribution with
respect to prior cleanup costs incurred by third parties at this site and may
be required to participate in funding future cleanup costs at this site.  The
Company believes that CBCC has had no contact with the site and has no
knowledge as to what, if any, share of response costs would be allocated to
CBCC if it is determined that CBCC or Old Chase had any contact with this site.
BP has been notified and has assumed the defense of this matter.

         The additional site, located in Mifflin County, Pennsylvania, was
placed on the United States Environmental Protection Agency's (the "EPA")
National Priorities List in 1989.  While CBCC has not received any formal
notification from the EPA or any third party, the Company believes that Old
Chase has been identified by the EPA as a PRP.  To the Company's knowledge,
however, neither CBCC nor the brass rod division of Old Chase directly disposed
of hazardous wastes at this site.  Nevertheless, BP has been notified by the
Company of CBCC's (or Old Chase's) apparent identification as a PRP and BP's
responsibility for any liability associated with this site as it relates to
periods prior to the date of the CBCC Acquisition.  Based on information
available to the Company, it appears that if CBCC or Old Chase were determined
to be liable, liability would be allocated on the basis of 0.5828% of cleanup
costs (or approximately $376,000).

         The Company believes that CBCC has no liability for the cleanup costs
related to these sites because (a) such liability is attributable to an entity
that had the same or similar name to that of CBCC, such as a division or
subsidiary of BP (other than the brass rod division of Old Chase), or (b) such
liability arose from acts that occurred prior to the CBCC Acquisition and,
therefore, BP retained such liability under the CBCC Purchase Agreement and is
contractually obligated to indemnify the Company for such liabilities.  To the
extent CBCC incurs any cleanup costs with respect to these sites, it intends to
enforce its rights under the CBCC Purchase Agreement to recover such amounts
from BP.

         Preliminary studies conducted immediately prior to the CBCC
Acquisition indicated that the site upon which CBCC's manufacturing facility is
located has been contaminated with certain volatile organic compounds,
including trichlorethylene, as well as total petroleum hydrocarbons and certain
metals from historical operating practices.  BP has conducted initial site
investigation activities to determine the extent of contamination and
appropriate cleanup methods.  The results of the initial site investigation
activities were provided to CBCC in second quarter 1996, which results
identified the presence and location of certain contaminants.  BP also provided
to CBCC a draft remediation plan with respect to certain areas of the facility
based on the results of the initial sampling.  CBCC has reviewed the initial
sampling results and draft remediation plan provided to





                                       51
<PAGE>   52
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


it and has determined that additional sampling is necessary to fully delineate
the extent and magnitude of contamination and to identify appropriate cleanup
standards.  CBCC and BP are working together, with their respective
consultants, to identify additional sampling that is required.  Upon completion
of a plan for such additional sampling, CBCC intends to meet with BP and the
Ohio EPA to identify available remedial methods and potential regulatory
constraints related to specific remedial methodologies.  The results of the
initial sampling, the additional sampling to be conducted, and input from the
Ohio EPA will be used to develop a comprehensive remediation plan for the site.
The investigation is being conducted on a voluntary basis with the concurrence
of the Ohio EPA.

         Because the site investigatory activities related to CBCC's facility
are not yet complete, the Company presently is unable to estimate with any
degree of certainty the extent of contamination or the amount of site cleanup
costs associated therewith, although such costs may be material.  However,
because BP has acknowledged its obligations with respect to site contamination
attributable to Old Chase's operations, the probability that CBCC would be
required to make material expenditures related to site cleanup appears to be
remote.  Accordingly, no reserves have been established regarding the
aforementioned matters.  Additionally, the Company expects no material impact
on its financial position, results of operations or liquidity as a result of
the existence of any other environmental conditions.

         To the extent CBCC incurs cleanup costs with respect to CBCC's site,
it intends to enforce its rights under the CBCC Purchase Agreement to recover
such amounts from BP.  However, to the extent CBCC is required to fund cleanup
costs related to the remediation of contamination at its manufacturing facility
as a result of BP's refusal to implement remediation activities acceptable to
CBCC, such costs could have a material adverse effect on the Company's
financial condition and results of operations pending the recovery of such
amounts from BP.  In the event the Company is entitled to recovery from BP
pursuant to the Remediation Agreement, the CBCC Purchase Agreement, or
otherwise, but is unable to collect such amounts from BP, the Company may elect
to offset the amounts of such recoveries against amounts payable under the $20
million BP Note to the extent it legally is entitled to do so.

         Leavitt.  Prior to the closing of the Leavitt Acquisition, five
underground storage tanks ("USTs") were removed from Leavitt's facility in
Hammond, Indiana.  It is the Company's understanding that these USTs were used
to contain waste oil, waste oil residue and sludge, phenol and metals when the
property was utilized by prior owners as a bus barn.  Prior to removal, one or
more of the USTs released petroleum and other chemical constituents into the
environment.  Some contamination of groundwater and soil at the Hammond
facility remains in place.  Prior to the Leavitt Acquisition, Old Leavitt had
conducted sampling and had requested the Indiana Department of Environmental
Management ("IDEM") to "close" the UST removal project.  The IDEM has not yet
issued a "closed" letter, and in February 1997, notified Leavitt that
additional groundwater





                                       52
<PAGE>   53
                          CHASE BRASS INDUSTRIES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



sampling will be required prior to the IDEM considering closure.  Leavitt
intends to begin additional groundwater sampling in second quarter 1997.  Until
such sampling is conducted, and the results thereof provided to Leavitt, the
Company is unable to determine the current extent of contamination or what, if
any, remedial activities may be required.  However, because UNR Industries,
Inc. is obligated with respect to site contamination attributable to Old
Leavitt's operations, the probability that Leavitt would be required to make
material expenditures relating to site cleanup appears to be remote.

         The cleanup costs associated with the environmental conditions
described above may be material and, in the event Leavitt were determined to be
solely responsible or liable for site cleanup activities (due to the inability
or unwillingness of other responsible parties to perform or pay for such
activities), such expenditures could have a material adverse effect on the
Company's earnings and financial condition.  Notwithstanding this potential
(although uncertain) material liability, UNR Industries, Inc. is obligated
under the Leavitt Acquisition Agreement to indemnify Leavitt for 90% of losses
related to certain environmental conditions, including costs incurred with
respect to contaminants released at Leavitt's properties prior to the Leavitt
Acquisition, to the extent such losses exceed $400,000 in the aggregate.  In
addition, to the extent the contamination at the Hammond facility is attributed
to actions of prior owners, the Company may be entitled to recover from prior
owners costs incurred by the Company at the Hammond site. Therefore, the
Company does not believe that costs that may be incurred by Leavitt in
connection with investigation and cleanup associated with the groundwater and
soil contamination at the Hammond facility will have a material adverse effect
on the Company's financial position, results of operations or liquidity and the
Company has not made any accrual of all or any part of such costs.





                                       53
<PAGE>   54
                          CHASE BRASS INDUSTRIES, INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


15.      QUARTERLY FINANCIAL INFORMATION (unaudited; in thousands, except share
         amounts):

<TABLE>
<CAPTION>
                                                                  1996
                                  ------------------------------------------------------------------
                                         FIRST           SECOND           THIRD            FOURTH
                                       QUARTER          QUARTER          QUARTER          QUARTER*
                                       -------          -------          -------          -------
<S>                                 <C>               <C>              <C>              <C>
Net sales                           $     89,917      $     82,095     $     88,253     $    106,726

Gross profit                        $     12,634      $     11,797     $     14,349     $     16,866

Net income available for
    common stock                    $      5,240      $      5,040     $      5,034     $      5,325

Average shares outstanding                10,061            10,063           10,064           10,065

Net income available for
    common stock per share          $        .52      $        .50     $        .50     $        .53
</TABLE>

____________
* Significant increase in the fourth quarter
   reflects the Leavitt Acquisition

<TABLE>
<CAPTION>
                                                                   1995
                                    ----------------------------------------------------------------
                                        FIRST            SECOND            THIRD           FOURTH
                                       QUARTER           QUARTER          QUARTER          QUARTER
                                       -------           -------          -------          -------
<S>                                 <C>               <C>              <C>              <C>
Net sales                           $     86,137      $     82,994     $     68,672     $     75,294

Gross profit                        $     12,276      $     11,248     $      9,306     $     10,245

Net income available for
    common stock                    $      4,738      $      4,432     $      3,422     $      4,109

Average shares outstanding                10,061            10,061           10,061           10,061

Net income available for
    common stock per share          $        .47      $        .44     $        .34     $        .41
</TABLE>





                                       54
<PAGE>   55
ITEM 9.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
             FINANCIAL DISCLOSURE.

             None.

                                    PART III

ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

             Incorporated by reference herein from the Registrant's Proxy
             Statement for its Annual Meeting of Stockholders to be held in
             1997.

ITEM 11.     EXECUTIVE COMPENSATION

             Incorporated by reference herein from the Registrant's Proxy
             Statement for its Annual Meeting of Stockholders to be held in
             1997.

ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

             Incorporated by reference herein from the Registrant's Proxy
             Statement for its Annual Meeting of Stockholders to be held in
             1997.

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

             Incorporated by reference herein from the Registrant's Proxy
             Statement for its Annual Meeting of Stockholders to be held in
             1997.


                                    PART IV

ITEM 14.     EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

         (a) 1.  For a list of Financial Statements filed as a part of this
                 Annual Report, see "Item 8. Financial Statements and
                 Supplementary Data."

             2.  For a list of Financial Statement Schedules filed as a part of
                 this Annual Report, see "Item 8.  Financial Statements and
                 Supplementary Data."

             3.  Exhibits.

                 Exhibits followed by an (*) constitute management contracts or
                 compensatory plans or arrangements.





                                       55
<PAGE>   56
EXHIBIT
NUMBER                                                 DESCRIPTION

    2.1      --  Sale and Purchase Agreement dated May 15, 1996, among Chase
                 Brass Industries, Inc. (the "Company"), Leavitt Structural
                 Tubing Co. and UNR Industries, Inc. (incorporated by reference
                 to Exhibit 2.1 to the Company's Quarterly Report on Form 10-Q
                 for the quarter ended June 30, 1996).

    2.2      --  Amendment No. 1 to Sale and Purchase Agreement dated July 1,
                 1996, by and among the Company, Leavitt Tube Company, Inc., a
                 Delaware corporation and a wholly owned subsidiary of the
                 Company, Leavitt Structural Tubing Co., and UNR Industries,
                 Inc. (incorporated by reference to Exhibit 2.2 to the
                 Company's Quarterly Report on Form 10-Q for the quarter ended
                 June 30, 1996).

    2.3      --  Amendment No. 2 to Sale and Purchase Agreement dated as of
                 August 29, 1996, among the Company, Leavitt Tube Company,
                 Inc., Leavitt Structural Tubing Co. and UNR Industries, Inc.
                 (incorporated by reference to Exhibit 2.4 to the Company's
                 Current Report on Form 8-K filed with the Securities and
                 Exchange Commission on September 13, 1996).

    2.4      --  Assignment and Assumption Agreement dated June 27, 1996, by
                 and between the Company and Leavitt Tube Company, Inc.
                 (incorporated by reference to Exhibit 2.3 to the Company's
                 Quarterly Report on Form 10-Q for the quarter ended June 30,
                 1996).

    3.1      --  Restated Certificate of Incorporation of Chase Brass
                 Industries, Inc., a Delaware corporation (incorporated by
                 reference to Exhibit 4.1 to the Company's Registration
                 Statement on Form S-8 dated December 9, 1994, Registration No.
                 33-87278).

    3.2      --  By-Laws of the Company (incorporated by reference to Exhibit
                 3.2 to the Company's Registration Statement on Form S-1 as
                 filed with the Securities and Exchange Commission on November
                 3, 1994, Registration No. 33-83178).

    4.1      --  Specimen Common Stock Certificate (incorporated by reference
                 to Exhibit 4.1 to the Company's Registration Statement on Form
                 S-1 as filed with the Securities and Exchange Commission on
                 November 3, 1994, Registration No. 33-83178).

    4.2      --  Exchange Agreement dated November 4, 1994, between the Company
                 and Citicorp Venture Capital Ltd.  ("CVC") (incorporated by
                 reference to Exhibit 4.4 to the Company's Registration
                 Statement on Form S-8 dated December 9, 1994, Registration No.
                 33-87278).





                                       56
<PAGE>   57
    4.3      --  Voting Agreement dated November 4, 1994, between the Company,
                 CVC and Martin V. Alonzo ("Mr. Alonzo") (incorporated by
                 reference to Exhibit 4.5 to the Company's Registration
                 Statement on Form S-8 dated December 9, 1994, Registration No.
                 33-87278).

   10.1      --  Credit Agreement by and among the Company, the banks referred
                 to therein and PNC Bank, National Association, as Agent, dated
                 as of August 30, 1996 (incorporated by reference to Exhibit
                 99.1 to the Company's Current Report on Form 8-K filed with
                 the Securities and Exchange Commission on September 13, 1996).

   10.2*     --  Employment Agreement dated November 10, 1994, between the
                 Company and Mr. Alonzo (incorporated by reference to Exhibit
                 10.3 to the Company's Annual Report on Form 10-K for the year
                 ended December 31, 1994).

  +10.3*     --  Employment Agreement dated October 28, 1996, between Chase
                 Brass & Copper Company, Inc., a wholly owned subsidiary of the
                 Company, and Duane R. Grossett.

  +10.4*     --  Chase Brass Industries, Inc., 1994 Long-Term Incentive Plan,
                 as amended effective as of October 21, 1996.

   10.5      --  Indemnification Agreement dated November 10, 1994, between the
                 Company and Mr. Alonzo (incorporated by reference to Exhibit
                 10.6 to the Company's Annual Report on Form 10-K for the year
                 ended December 31, 1994).

  +10.6      --  Schedule identifying additional documents substantially
                 identical to the Indemnification Agreement included as Exhibit
                 10.5 and setting forth the material details in which those
                 documents differ from that document.

   10.7      --  Registration Rights Agreement dated November 10, 1994, by and
                 among the Company, CVC and Mr. Alonzo (incorporated by
                 reference to Exhibit 10.7 to the Company's Annual Report on
                 Form 10-K for the year ended December 31, 1994).

   10.8      --  Asset Purchase Agreement dated May 10, 1990, as amended, by
                 and among the Company, CBC Acquisition Corporation (a
                 wholly-owned subsidiary of the Company now named Chase Brass &
                 Copper Company, Inc.  ("CBCC"), Chase Brass & Copper Company,
                 Incorporated, a Delaware corporation now named Ken-Chas
                 Reserve Co. ("Old Chase"), BP Exploration (Alaska), Inc.
                 ("BP") and The Standard Oil Company ("Standard") (incorporated
                 by reference to Exhibit 10.5 to the Company's Registration
                 Statement on Form S-1 as filed with the Securities and
                 Exchange Commission on November 3, 1994, Registration No.
                 33-83178).





                                       57
<PAGE>   58
   10.9      --  Subordinated Promissory Note dated August 24, 1990, between
                 the Company and CBCC (incorporated by reference to Exhibit
                 10.8 to the Company's Registration Statement on Form S-1 as
                 filed with the Securities and Exchange Commission on November
                 3, 1994, Registration No. 33-83178).

   10.10     --  Remediation Agreement dated August 24, 1990, by and among the
                 Company, CBCC, BP and Standard (incorporated by reference to
                 Exhibit 10.10 to the Company's Registration Statement on Form
                 S-1 as filed with the Securities and Exchange Commission on
                 November 3, 1994, Registration No. 33-83178).

   10.11     --  Tolling Agreement dated May 4, 1994, by and among the Company,
                 CBCC, Old Chase, BP and Standard (incorporated by reference to
                 Exhibit 10.13 to the Company's Registration Statement on Form
                 S-1 as filed with the Securities and Exchange Commission on
                 November 3, 1994, Registration No. 33-83178).

  +10.12     --  Lease Agreement dated October 14, 1985, between UNR
                 Industries, Inc., UNR-Leavitt Division, as lessee, and Madison
                 Country Economic Development Authority (formerly known as
                 Industrial Development Authority of Madison County), as
                 lessor, regarding certain real property and improvements
                 located in Madison County, Mississippi ("Madison Lease
                 (1985)").

  +10.13     --  Assignment and Consent Agreement dated August 28, 1996,
                 assigning the Madison Lease (1985) from UNR Industries, Inc.
                 to Leavitt Tube Company, Inc. ("Leavitt").

  +10.14     --  Lease Agreement dated October 14, 1988, between UNR
                 Industries, Inc., UNR-Leavitt Division, as lessee, and Madison
                 Country Economic Development Authority (formerly known as
                 Industrial Development Authority of Madison County), as
                 lessor, regarding certain real property and improvements
                 located in Madison County, Mississippi ("Madison Lease
                 (1988)").

 +10.15      --  Assignment and Consent Agreement dated August 28, 1996,
                 assigning the Madison Lease (1988) from UNR Industries, Inc.
                 to Leavitt.

 +10.16*     --  CBCC Benefit Restoration Plan

 +10.17*     --  Leavitt Supplemental Executive Retirement Plan.

   +21       --  List of Subsidiaries of the Company.

 +23.1       --  Consent of Coopers & Lybrand L.L.P.

   +27       --  Financial Data Schedule

_________________
+  Filed herewith





                                       58
<PAGE>   59

        (b)      REPORTS ON FORM 8-K

                 On November 13, 1996, the Company filed a Current Report on
                 Form 8-K/A, dated November 13, 1996, regarding the
                 consummation of the Acquisition of the UNR-Leavitt Division of
                 UNR Industries, Inc.  The items reported on such Current
                 Report were Item 2 (Acquisition or Disposition of Assets) and
                 Item 7 (Exhibits).

        (c)      EXHIBITS

                 The response to this portion of Item 14 is submitted as a
                 separate section of this report.

        (d)      FINANCIAL STATEMENT SCHEDULES

                 The response to this portion of Item 14 is submitted as a
                 separate section of this report.





                                       59
<PAGE>   60
                                   SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) 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.

                                     CHASE BRASS INDUSTRIES, INC.

Date:  March 18, 1997                By:  /s/  MARTIN V. ALONZO
                                         --------------------------------------
                                         Martin V. Alonzo
                                         Chairman of the Board, President and
                                         Chief Executive Officer

        Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                 Signature             Title                                 Date
                 ---------             -----                                 ----
  <S>  <C>                           <C>                                 <C>
  /s/  MARTIN V. ALONZO            Chairman of the Board,                March 18, 1997
-----------------------            President, Chief Executive
       Martin V. Alonzo            Officer and Director (Principal
                                   Executive Officer, Principal
                                   Financial Officer and Principal
                                   Accounting Officer)



  /s/  RAYMOND E. CARTLEDGE        Director                              March 18, 1997
---------------------------
       Raymond E. Cartledge


  /s/  CHARLES E. CORPENING        Director                              March 18, 1997
---------------------------
       Charles E. Corpening


  /s/  DONALD J, DONAHUE           Director                              March 18, 1997
---------------------------
       Donald J. Donahue


  /s/  JOHN R. KENNEDY            Director                               March 18, 1997
---------------------------
       John R. Kennedy


  /s/  THOMAS F. MCWILLIAMS       Director                               March 18, 1997
---------------------------
       Thomas F. McWilliams


  /s/  WILLIAM R. TOLLER          Director                               March 18, 1997
---------------------------
       William R. Toller
</TABLE>





                                       60
<PAGE>   61
                          CHASE BRASS INDUSTRIES, INC.
                             (PARENT COMPANY ONLY)

        SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY

         The following condensed financial statements reflect the parent
company only, Chase Brass Industries, Inc., accounting for its wholly-owned
subsidiaries Chase Brass & Copper Company, Inc., and Leavitt Tube Company,
Inc., on the equity method of accounting.  All footnote disclosures have been
omitted since information has been included in the Chase Brass Industries, Inc.
consolidated financial statements included elsewhere in this Form 10-K.


                            CONDENSED BALANCE SHEET
                           DECEMBER 31, 1996 AND 1995
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
           ASSETS
                                                              1996              1995
                                                              ----              ----
 <S>                                                       <C>                  <C>
 Cash and cash equivalents                                  $  9,704            $    --

 Other current assets                                          3,381                 --
 Investment in subsidiary                                     82,166             39,995

 Intercompany receivable                                      70,834             32,499
                                                            --------            -------

       Total assets                                         $166,085            $72,494
                                                            ========            =======

                 LIABILITIES AND STOCKHOLDERS' EQUITY
 Accounts payable and accrued liabilities                   $ 13,671            $    --

 Long-term debt                                               70,000             18,784

 Deferred income tax liability                                 8,081                 65
                                                            --------            -------

   Total liabilities                                          91,752             18,849
                                                            --------            -------
 Commitments and contingencies                                    --                 --

 Stockholder's equity:

   Common stock                                                   60                 60

   Non-voting common stock                                        41                 41
   Additional paid-in capital                                 30,039             29,990

   Retained earnings                                          44,193             23,554
                                                            --------            -------

     Total stockholders' equity                               74,333             53,645
                                                            --------            -------

       Total liabilities and stockholders' equity           $166,085            $72,494
                                                            ========            =======


                                     S-1
</TABLE>
<PAGE>   62

                          CHASE BRASS INDUSTRIES, INC.
                             (PARENT COMPANY ONLY)

      SCHEDULE I--CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY--(Continued)

                       CONDENSED STATEMENT OF OPERATIONS
             FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                   1996              1995              1994
                                                                   ----              ----              ----
 <S>                                                             <C>              <C>                <C>
 Equity in earnings of wholly-owned subsidiaries                 $23,627          $17,795            $13,487

 Interest expense                                                  3,158            1,766              1,673
                                                                 -------          -------            -------
 Income before income taxes                                       20,469           16,029             11,814

 (Benefit) for income taxes                                         (170)            (672)              (740)
                                                                 --------         -------            -------

   Net income                                                    $20,639          $16,701            $12,554
                                                                 =======          =======            =======
</TABLE>





                                      S-2
<PAGE>   63
                       CONDENSED STATEMENT OF CASH FLOWS
             FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                   1996             1995               1994
                                                                   ----             ----               ----
 <S>                                                            <C>            <C>               <C>
 Operating activities:
   Net income                                                    $20,639           $16,701           $12,554
   Adjustment to reconcile net income to net cash
     provided by (used in) operating activities:

     Equity in earnings of wholly-owned subsidiaries             (23,627)          (17,795)          (13,487)

     Accretion of discount on subordinated
       promissory note due seller                                  1,216             1,766             1,601

     Deferred income tax expense (benefit)                         8,016               (96)            1,325
   Changes in assets and liabilities:

     (Increase) in intercompany receivable                       (38,335)             (576)          (20,148)

     Increase (decrease) in accounts payable and
       accrued liabilities                                        13,671                --               (53)

     (Increase) in current assets                                 (3,381)               --                --
                                                                --------           -------           -------
       Net cash (used in) operating activities                   (21,801)               --           (18,208)
                                                                 -------           -------           -------

 Investing activities:
   Purchase of Leavitt                                           (18,544)               --                --
                                                                 -------           -------           -------

       Net cash (used in) investing activities                   (18,544)               --                --
                                                                 -------           -------           -------

 Financing activities:
   Principal payments of bank term loans                         (10,000)               --                --

   Proceeds from issuance of bank term loan                       60,000                --                --

   Proceeds from Offering, net of fees                                --                --            28,801

   Preferred stock dividends and redemption                           --                --            (9,355)
   Other                                                              49                --            (1,238)
                                                                --------           -------           -------

       Net cash provided by financing activities                  50,049                --            18,208
                                                                --------           -------           -------

 Net increase in cash                                              9,704                --                --
 Cash and cash equivalents, beginning of period                       --                --                --
                                                                --------           -------           -------

 Cash and cash equivalents, end of period                       $  9,704           $    --           $    --
                                                                ========           =======           =======
</TABLE>





                                      S-3
<PAGE>   64
                          CHASE BRASS INDUSTRIES, INC.

                 SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                               ADDITIONS CHARGED TO
                                                 BALANCE AT    --------------------                BALANCE AT
                                                 BEGINNING     COST AND      OTHER                   END OF
                                                 OF PERIOD      EXPENSES   ACCOUNTS  DEDUCTIONS      PERIOD
                                                 ---------      --------   --------  ----------     -------
 <S>                                                <C>          <C>          <C>        <C>           <C>
 YEAR ENDED DECEMBER 31, 1996
   Allowance for doubtful accounts
     and claims                                     $1,036         $201       $--        $    1        $1,236
                                                    ======         ====       ===        ======        ======

 YEAR ENDED DECEMBER 31, 1995
   Allowance for doubtful accounts
     and claims                                     $1,036       $    2       $--        $    2        $1,036
                                                    ======       ======       ===        ======        ======

 YEAR ENDED DECEMBER 31, 1994
   Allowance for doubtful accounts
     and claims                                     $1,112        $  67       $--          $143        $1,036
                                                    ======        =====       ===          ====        ======
</TABLE>





                                     S-4
<PAGE>   65

                              INDEX TO EXHIBITS

         Exhibits followed by an (*) constitute management contracts or
compensatory plans or arrangements.


<TABLE>
<CAPTION>

EXHIBIT                                                                         SEQUENTIALLY
NUMBER                            DESCRIPTION                                  NUMBERED PAGE
-------                           -----------                                  -------------

   <S>           <C>                                                               <C?
    2.1      --  Sale and Purchase Agreement dated May 15, 1996, among Chase
                 Brass Industries, Inc. (the "Company"), Leavitt Structural
                 Tubing Co. and UNR Industries, Inc. (incorporated by reference
                 to Exhibit 2.1 to the Company's Quarterly Report on Form 10-Q
                 for the quarter ended June 30, 1996).

    2.2      --  Amendment No. 1 to Sale and Purchase Agreement dated July 1,
                 1996, by and among the Company, Leavitt Tube Company, Inc., a
                 Delaware corporation and a wholly owned subsidiary of the
                 Company, Leavitt Structural Tubing Co., and UNR Industries,
                 Inc. (incorporated by reference to Exhibit 2.2 to the
                 Company's Quarterly Report on Form 10-Q for the quarter ended
                 June 30, 1996).

    2.3      --  Amendment No. 2 to Sale and Purchase Agreement dated as of
                 August 29, 1996, among the Company, Leavitt Tube Company,
                 Inc., Leavitt Structural Tubing Co. and UNR Industries, Inc.
                 (incorporated by reference to Exhibit 2.4 to the Company's
                 Current Report on Form 8-K filed with the Securities and
                 Exchange Commission on September 13, 1996).

    2.4      --  Assignment and Assumption Agreement dated June 27, 1996, by
                 and between the Company and Leavitt Tube Company, Inc.
                 (incorporated by reference to Exhibit 2.3 to the Company's
                 Quarterly Report on Form 10-Q for the quarter ended June 30,
                 1996).

    3.1      --  Restated Certificate of Incorporation of Chase Brass
                 Industries, Inc., a Delaware corporation (incorporated by
                 reference to Exhibit 4.1 to the Company's Registration
                 Statement on Form S-8 dated December 9, 1994, Registration No.
                 33-87278).

    3.2      --  By-Laws of the Company (incorporated by reference to Exhibit
                 3.2 to the Company's Registration Statement on Form S-1 as
                 filed with the Securities and Exchange Commission on November
                 3, 1994, Registration No. 33-83178).

</TABLE>

<PAGE>   66
    4.1      --  Specimen Common Stock Certificate (incorporated by reference
                 to Exhibit 4.1 to the Company's Registration Statement on Form
                 S-1 as filed with the Securities and Exchange Commission on
                 November 3, 1994, Registration No. 33-83178).

    4.2      --  Exchange Agreement dated November 4, 1994, between the Company
                 and Citicorp Venture Capital Ltd.  ("CVC") (incorporated by
                 reference to Exhibit 4.4 to the Company's Registration
                 Statement on Form S-8 dated December 9, 1994, Registration No.
                 33-87278).

    4.3      --  Voting Agreement dated November 4, 1994, between the Company,
                 CVC and Martin V. Alonzo ("Mr. Alonzo") (incorporated by
                 reference to Exhibit 4.5 to the Company's Registration
                 Statement on Form S-8 dated December 9, 1994, Registration No.
                 33-87278).

   10.1      --  Credit Agreement by and among the Company, the banks referred
                 to therein and PNC Bank, National Association, as Agent, dated
                 as of August 30, 1996 (incorporated by reference to Exhibit
                 99.1 to the Company's Current Report on Form 8-K filed with
                 the Securities and Exchange Commission on September 13, 1996).

   10.2*     --  Employment Agreement dated November 10, 1994, between the
                 Company and Mr. Alonzo (incorporated by reference to Exhibit
                 10.3 to the Company's Annual Report on Form 10-K for the year
                 ended December 31, 1994).

  +10.3*     --  Employment Agreement dated October 28, 1996, between Chase
                 Brass & Copper Company, Inc., a wholly owned subsidiary of the
                 Company, and Duane R. Grossett.

  +10.4*     --  Chase Brass Industries, Inc., 1994 Long-Term Incentive Plan,
                 as amended effective as of October 21, 1996.

   10.5      --  Indemnification Agreement dated November 10, 1994, between the
                 Company and Mr. Alonzo (incorporated by reference to Exhibit
                 10.6 to the Company's Annual Report on Form 10-K for the year
                 ended December 31, 1994).

  +10.6     --   Schedule identifying additional documents substantially
                 identical to the Indemnification Agreement included as
                 Exhibit 10.5 and setting forth the material details in which
                 those documents differ from that document.
<PAGE>   67
   10.7      --  Registration Rights Agreement dated November 10, 1994, by and
                 among the Company, CVC and Mr. Alonzo (incorporated by
                 reference to Exhibit 10.7 to the Company's Annual Report on
                 Form 10-K for the year ended December 31, 1994).

   10.8      --  Asset Purchase Agreement dated May 10, 1990, as amended, by
                 and among the Company, CBC Acquisition Corporation (a
                 wholly-owned subsidiary of the Company now named Chase Brass &
                 Copper Company, Inc.  ("CBCC"), Chase Brass & Copper Company,
                 Incorporated, a Delaware corporation now named Ken-Chas
                 Reserve Co. ("Old Chase"), BP Exploration (Alaska), Inc.
                 ("BP") and The Standard Oil Company ("Standard") (incorporated
                 by reference to Exhibit 10.5 to the Company's Registration
                 Statement on Form S-1 as filed with the Securities and
                 Exchange Commission on November 3, 1994, Registration No.
                 33-83178).

   10.9      --  Subordinated Promissory Note dated August 24, 1990, between
                 the Company and CBCC (incorporated by reference to Exhibit
                 10.8 to the Company's Registration Statement on Form S-1 as
                 filed with the Securities and Exchange Commission on November
                 3, 1994, Registration No. 33-83178).

  10.10      --  Remediation Agreement dated August 24, 1990, by and among the
                 Company, CBCC, BP and Standard (incorporated by reference to
                 Exhibit 10.10 to the Company's Registration Statement on Form
                 S-1 as filed with the Securities and Exchange Commission on
                 November 3, 1994, Registration No. 33-83178).

  10.11      --  Tolling Agreement dated May 4, 1994, by and among the Company,
                 CBCC, Old Chase, BP and Standard (incorporated by reference to
                 Exhibit 10.13 to the Company's Registration Statement on Form
                 S-1 as filed with the Securities and Exchange Commission on
                 November 3, 1994, Registration No. 33-83178).

 +10.12      --  Lease Agreement dated October 14, 1985, between UNR
                 Industries, Inc., UNR-Leavitt Division, as lessee, and Madison
                 Country Economic Development Authority (formerly known as
                 Industrial Development Authority of Madison County), as
                 lessor, regarding certain real property and improvements
                 located in Madison County, Mississippi ("Madison Lease
                 (1985)").
<PAGE>   68
 +10.13      --  Assignment and Consent Agreement dated August
                 28, 1996, assigning the Madison Lease (1985)
                 from UNR Industries, Inc. to Leavitt Tube
                 Company, Inc. ("Leavitt").

 +10.14      --  Lease Agreement dated October 14, 1988, between UNR
                 Industries, Inc., UNR-Leavitt Division, as lessee, and Madison
                 Country Economic Development Authority (formerly known as
                 Industrial Development Authority of Madison County), as
                 lessor, regarding certain real property and improvements
                 located in Madison County, Mississippi ("Madison Lease
                 (1988)").

+10.15       --  Assignment and Consent Agreement dated August 28, 1996,
                 assigning the Madison Lease (1988) from UNR Industries, Inc.
                 to Leavitt.

+10.16*      --  CBCC Benefit Restoration Plan

+10.17*      --  Leavitt Supplemental Executive Retirement Plan.

   +21       --  List of Subsidiaries of the Company.

  +23.1      --  Consent of Coopers & Lybrand L.L.P.

   +27       --  Financial Data Schedule

---------
+  Filed herewith