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                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

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                          COMMISSION FILE NO. 1-13394

                             CHASE INDUSTRIES INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                            <C>
                   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)
</TABLE>

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

          Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>
                                                           NAME OF EACH EXCHANGE
             TITLE OF EACH CLASS                            ON WHICH REGISTERED
             -------------------                           ---------------------
<S>                                            <C>
    Common Stock, par value $.01 per share                New York Stock Exchange
      Rights to Purchase Series A Junior
    Participating Preferred Stock, par value
                 $.01 per share                           New York Stock Exchange
</TABLE>

          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 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 Parts I, II, III, and IV of this Form 10-K or any
amendment to this Form 10-K.  [ ]

<TABLE>
<S>                                                            <C>
Aggregate market value of outstanding Common Stock held by
  non-affiliates of the Registrant, as of March 22, 2001....   $73,927,049
Number of shares of Common Stock outstanding as of March 22,
  2001......................................................     9,145,177
Number of shares of Nonvoting Common Stock outstanding as of
  March 22, 2001............................................     6,150,118*
</TABLE>

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

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

                      DOCUMENTS INCORPORATED BY REFERENCE

     Part III -- Registrant's definitive proxy statement to be filed pursuant to
Regulation 14A for the Annual Meeting of Shareholders to be held May 2, 2001.

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                             CHASE INDUSTRIES INC.

                          2000 FORM 10-K ANNUAL REPORT

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                PAGE
                                                                                ----
<S>              <C>                                                            <C>
PART I
  Item 1.        Business....................................................     1
  Item 2.        Properties..................................................     5
  Item 3.        Legal Proceedings...........................................     5
  Item 4.        Submission of Matters to a Vote of Security Holders.........     8

PART II
  Item 5.        Market for Registrant's Common Equity and Related Matters...     8
  Item 6.        Selected Financial Data.....................................     9
  Item 7.        Management's Discussion and Analysis of Financial Condition     10
                 and Results of Operations...................................
  Item 7A.       Quantitative and Qualitative Disclosures About Market           19
                 Risk........................................................
  Item 8.        Financial Statements and Supplementary Data.................    19
  Item 9.        Changes in and Disagreements with Accountants on Accounting     40
                 and Financial Disclosure....................................

PART III
  Item 10.       Directors and Executive Officers of the Registrant..........    40
  Item 11.       Executive Compensation......................................    40
  Item 12.       Security Ownership of Certain Beneficial Owners and             40
                 Management..................................................
  Item 13.       Certain Relationships and Related Transactions..............    40
PART IV
  Item 14.       Exhibits, Financial Statements, Schedules and Reports on        40
                 Form 8-K....................................................
</TABLE>

Note: The responses to Items 10 through 13 are included in the Company's
      definitive proxy statement to be filed pursuant to Regulation 14A for the
      Annual Meeting of Stockholders to be held May 2, 2001. The required
      information is incorporated into this Form 10-K by reference to those
      documents and is not repeated herein.

                                        i
<PAGE>   3

                                     PART I

ITEM 1. BUSINESS

GENERAL

     Chase Industries Inc. (the "Company"), through its wholly owned subsidiary
Chase Brass & Copper Company, Inc. ("CBCC"), is a leading manufacturer of
free-machining and forging brass rod. 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.

     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 85% and 10%,
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 99% of CBCC's
total shipments and net sales in 2000 and 1999. CBCC's diverse customer base of
more than 250 companies uses its "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.

DISCONTINUED OPERATIONS

     On August 30, 1996, the Company acquired, through its wholly owned
subsidiary Leavitt Tube Company, Inc. ("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 structural pipe and is a leading producer and supplier in the
United States. Structural steel tubing is used in farm equipment,
non-residential construction and other commercial applications. 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. Structural pipe is used for handrails, scaffolding
and communications towers.

     The competitive environment in the welded steel tube industry became
increasingly difficult as a result of the Asian crisis in June 1997 and its
aftermath combined with new production capacity being introduced. Consequently,
tubing shipments and margins came under severe pressure and Leavitt's returns on
invested capital consistently fell short of expectations. In 1999 and 2000, with
the help of outside consultants, the Company conducted an analysis of methods to
increase profitability by restructuring Leavitt and reducing its costs. While
cost reductions and improvements were implemented, the Company concluded that
Leavitt could not achieve acceptable rates of return on invested capital for the
foreseeable future. Consequently, in fourth quarter 2000, the Company decided to
pursue the sale of Leavitt, a manufacturer of structural and mechanical steel
tubing and structural pipe. On March 15, 2001, the Company signed a definitive
agreement to sell Leavitt to privately-held Pinkert Industrial Group, LLC,
headquartered in Chicago, for approximately $32 million, subject to closing
adjustments. The sale is scheduled to close on March 30, 2001. Including the tax
benefit, the Company expects to realize cash proceeds of approximately $40
million from this sale and recorded a $36.0 million, net of taxes, estimated
loss on disposal of discontinued operations in fourth quarter 2000.
Consequently, the financial statements reflect Leavitt as a discontinued
operation. For discontinued operations information see Note 13 of Notes to
Consolidated Financial Statements included in Item 8.

                                        1
<PAGE>   4

PRODUCTS

     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 in an impression
die and then machined.

CAPITAL INVESTMENT AND CONTINUING PRODUCTIVITY IMPROVEMENT PROGRAMS

     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 completed capital
improvements which have improved the reliability and enhanced the production
capacity and productivity of CBCC's manufacturing facility.

     In 1996, CBCC launched the "Project 400" capital expansion project. The
project is designed to increase foundry, extrusion and finishing capabilities
with an ultimate goal of increasing finished brass rod production capability by
one-third to approximately 400 million pounds annually. The first phase of the
project was completed in early 1998 with the installation of three new billet
heaters that increased finished brass rod capacity by about 17 percent. The new
billet heaters will also increase productivity and improve quality. The total
cost of the first phase of the project was approximately $12 million.

     In second quarter 1998, the Company announced Phase II of Project 400,
which was a $30 million multi-year investment to construct an additional brass
foundry enabling CBCC to increase casting capacity and to provide customers with
multiple alloys. New casting equipment has been installed and a new building is
completed. The new brass foundry began producing billets on a trial basis in
February 2000, and is now producing billets at expected production rates.

     In fourth quarter 1999, a follow-on expansion of CBCC's extrusion and
finishing capacity was approved by the Company's Board of Directors. Phase III
of Project 400 includes the purchase of a second extrusion press and associated
finishing equipment with a capital investment totaling $50 million. This
investment, in addition to those in the earlier initiative, as discussed above,
comprise a $92 million expansion through Project 400. The building housing the
finishing lines has been completed and construction of the extrusion press
building has begun. Contracts have been signed for the long lead-time equipment.
Phase III is on schedule and expected to come on line in first quarter 2002.
When completed in first quarter 2002, production capacity will increase by about
one-third to in excess of 400 million pounds annually. The Company anticipates
that capital projects will be paid for with cash flows provided by operating
activities and its existing bank credit facility, as necessary.

     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 a quality system's adherence to the internationally recognized ISO
standards.

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 250 companies in the United States and Canada. The
Company's customers include original equipment manufacturers, independent
fabricators and distributors. CBCC's original equipment manufacturing customers
primarily are in the construction and remodeling, industrial machinery and
equipment,

                                        2
<PAGE>   5

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 CBCC's warehouse in Los Angeles. See "Item 2.
Properties."

COMPETITION

     The industries in which the Company operates are highly competitive. Based
on available industry data, the Company estimates that it supplied approximately
32% of copper alloy rod shipped by U.S. mills in 2000. In addition to CBCC,
there currently are five U.S. companies operating a total of six 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 and Ansonia Copper &
Brass, Inc. 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 ceramics, plastics and steel. 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 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 -- General Economic and Industry Conditions."

RAW MATERIALS AND SUPPLIES

     The principal raw material used by the Company is brass scrap. The Company
believes adequate supplies of this raw material 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

     CBCC does not depend on any single customer or group of customers. The loss
of any one customer would not have a material adverse effect on CBCC. Also,
during 2000, 1999 and 1998, 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 2001.

BACKLOG ORDERS

     As of March 22, 2001 and 2000, CBCC had backlog orders totaling $12.5
million and $21.5 million, respectively. The decrease from 2000 is mainly
attributed to the downturn in the economy that began in third quarter 2000. This
negatively impacted incoming orders as customers found it necessary to reduce
their inventories in response to reduced demand. 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 2001, but is
unable to estimate the amount of backlog that will exist as of year end 2001.

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
                                        3
<PAGE>   6

trademarks CHASE BRASS & COPPER CO. and a centaur design in Mexico. Because of
the recognition of these trademarks in the industries in which CBCC operates,
the Company considers these intellectual property rights important to its
business.

EMPLOYEES

     At December 31, 2000, CBCC had approximately 315 full-time employees, of
whom approximately 100 were salaried and approximately 215 were hourly. The
Company believes that its relations with its employees are good and currently
does not anticipate any work stoppages.

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 $2.0 million in 2001. Estimates of capital
expenditures for pollution control purposes beyond 2001 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 during
the period of 2002-2005 will aggregate approximately $2.0 million. These
estimates are exclusive of expenditures associated with on-site remediation
activities as more fully discussed below. 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.

     Preliminary studies conducted immediately prior to the CBCC Acquisition
indicated that certain areas of the site upon which CBCC's manufacturing
facility is located have been contaminated by certain volatile organic compounds
("VOCs") as well as total petroleum hydrocarbons and certain metals associated
with historical operating practices. As described in Note 11 of Notes to
Consolidated Financial Statements included in Item 8, under the terms of a
Remediation Agreement entered into in 1990 in connection with the CBCC
Acquisition between the Company and certain affiliates of BP America, Inc., as
the owners of the brass rod division of Old Chase prior to the CBCC Acquisition
(collectively, "BP"), BP was responsible for certain remediation activities
attributable to contamination resulting from operations prior to the CBCC
Acquisition. BP also is obligated under the Asset Purchase Agreement pursuant to
which the Company acquired the assets and operations of CBCC from BP (the "CBCC
Purchase Agreement") to indemnify the Company for certain liabilities arising
out of certain environmental conditions that existed as of the CBCC Acquisition
date.

     CBCC completed remediation activities for a portion of its site in 1998 and
completed additional remedial actions for other portions of its site in fourth
quarter 2000. CBCC also is in the process of developing a remediation plan for
two additional areas of its site, and expects to initiate in situ remediation
activities at those areas in 2001. Based on preliminary cost estimates provided
by CBCC's independent environmental consultant, and subject to the development
by the consultant of a remediation plan for these areas of the site and the
receipt of bids for the remediation activities required under such plan, the
Company estimates that the costs for this project will be approximately $3
million, based upon capital and operating costs for a period of
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five years. However, subject to pilot testing and operating experience, costs
may increase if a longer operating period is necessary. As described in Note 11
of Notes to Consolidated Financial Statements included in Item 8, claims
asserted by the Company against BP under the Remediation Agreement and the CBCC
Purchase Agreement for, among other things, costs incurred and anticipated to be
incurred by the Company for these environmental remediation activities were
settled pursuant to a Settlement Agreement and Mutual Release entered into in
February 2001.

     Based on currently available data, the Company believes that upon
completion of the remediation activities described above CBCC will have
substantially completed the remediation activities that the Company believes are
necessary to address contamination at its site. However, until the completion of
these remedial and associated investigatory activities and receipt of approval
from the Ohio EPA of CBCC's activities to remediate this contamination, as well
as remediation activities previously conducted, the Company cannot be certain
that further remediation activities will not be required at its site. To the
extent regulatory agencies require additional remediation at those areas of
CBCC's site where CBCC previously has undertaken remediation activities, or
requires excavation of soil at the two remaining areas for which CBCC currently
is developing a remediation plan for in situ remediation, as a part of the
settlement of the litigation with BP referred to above, BP has retained
financial responsibility for such remediation activities.

     The Company is involved in certain environmental legal proceedings as
described in "Item 3. Legal Proceedings" and Note 11 of Notes to Consolidated
Financial Statements included in Item 8.

     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 11 of Notes to Consolidated
Financial Statements included in Item 8.

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's manufacturing facility and the Company's executive and general
offices are located on a 75-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 185,000 square feet. The plant
was originally 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.

     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 2006. The Los Angeles warehouse lease contains a five-year
renewal provision.

     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's "Project 400" capital expansion program
is designed to further increase finished brass rod capacity by one-third to
about 400 million pounds annually. See "Item 1. Business -- Capital Investment
and Continuing Productivity Improvement Programs."

ITEM 3. LEGAL PROCEEDINGS

     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 four sites, and may have been
identified as PRP at one additional site, as described in the following
paragraphs.

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<PAGE>   8

     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 assumed the defense of this
suit 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 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 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 waste 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).

     In March 1998, CBCC received a notice from the U.S. EPA of its potential
identification as a PRP at two sites, one in Kansas City, Kansas, and one in
Kansas City, Missouri. According to the notice, the sites were operated by waste
disposal companies from 1982 until 1987, during which time over 1500 parties
sent materials containing polychlorinated biphenyls ("PCBs") to the site. Based
on information provided by the notice, it appears that a third party firm
employed by Old Chase to dispose of PCB-containing materials delivered
PCB-containing materials to these sites for treatment and/or disposal, and
certain of such materials came from Old Chase. Pursuant to an Administrative
Order on Consent with the U.S. EPA, a group of PRPs at the sites are performing
an Engineering Evaluation/Cost Analysis ("EE/CA") to evaluate and compare
different cleanup alternatives at these sites. In addition to the EE/CA, the
notice indicates that the U.S. EPA is planning to conduct removal activities at
both facilities, which activities may include a range of possibilities

                                        6
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from cleaning up the contamination inside the buildings and in the surrounding
soils to demolition of the buildings, and to perform follow-through activities
to monitor, operate and maintain the completed removal action. As noted above,
the alleged activities with respect to these sites occurred between 1982 and
1987 and, therefore, CBCC has had no contact with these sites. Based on
information provided with the notice, the Company believes that the brass rod
division of Old Chase may have generated waste materials that were treated
and/or disposed of at these sites, and BP has assumed the defense of this
matter.

     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.

     The Company also is a party to other litigation incidental to its business
involving claims for damages not in excess of 10% of its current assets, and
other matters, none of which claims or the liability resulting therefrom the
Company believes to be material.

     On January 7, 1998, a lawsuit entitled Ken-Chas Reserve Company and BP
Exploration (Alaska) Inc. and The Standard Oil Company v. Chase Industries Inc.
and Chase Brass & Copper Company, Inc. was filed in the Court of Common Pleas in
Cuyahoga County, Ohio. In this complaint (as amended, the "Complaint"),
plaintiffs sought declaratory judgment regarding the calculation of interest
payable under the $20 million promissory note issued to BP as part of the
consideration for the CBCC Acquisition (the "BP Note"). Under the BP Note, a
contingent interest payment was payable August 24, 1996, calculated pursuant to
a formula based on the Company's "EBDIT" (defined in the BP Note as earnings
before depreciation, interest and taxes, as determined in accordance with GAAP)
for years 1990 through 1995. In calculating the interest payable on August 24,
1996, the Company followed the express terms of the BP Note and, accordingly,
deducted amortization from earnings for the purposes of the interest
calculation. In calculating the interest payable on August 24, 1996, in
accordance with the express terms of the BP Note, the interest payable was
$254,746, which the Company offset against the receivable from BP. Plaintiffs
alleged that, notwithstanding the express terms of the BP Note, the term "EBDIT"
should be interpreted to refer to earnings before depreciation, interest, taxes
and amortization and, based on such interpretation, alleged that the contingent
interest payable under the BP Note in August 1996 should have been approximately
$5.8 million.

     In addition, under the BP Note interest was payable on August 24 of each
year from and after August 24, 1996, until the BP Note matured on August 24,
1999. The interest due and payable on each of August 24, 1998 and 1997, was
$1,856,000, which amount the Company also offset against the receivable from BP.
As of the August 24, 1999, due date of the BP Note, the Company also offset
accrued and unpaid interest of $1,856,000 due August 24, 1999, and the full
principal balance of the BP Note against the receivable from BP and other
amounts claimed by the Company to be owed by BP to the Company as a result of
BP's breach of the CBCC Purchase Agreement and the Remediation Agreement. In the
Complaint, plaintiffs also sought recovery of the $20 million principal amount
of the BP Note plus interest allegedly owing on the BP Note.

     On April 6, 1998, the Company filed an Answer and Counterclaim (as amended
in July 1999, the "Answer and Counterclaim") disputing the allegations set forth
in the Complaint and asserting a counterclaim seeking recovery from BP of an
unspecified amount of damages resulting from BP's breach of representations,
warranties and covenants contained in the CBCC Purchase Agreement and amounts
owed under the Remediation Agreement. The Answer and Counterclaim also sought to
enforce a prior settlement agreement between the Company and BP regarding
certain disputes under the CBCC Purchase Agreement and the Remediation Agreement
and sought a declaratory judgment confirming the Company's entitlement to offset
and/or recoup amounts owed by BP and Old Chase against amounts payable under the
BP Note and that no default had occurred under the BP Note. On June 8, 1998,
plaintiffs filed a Reply to Counterclaim in response to the Answer and
Counterclaim. In plaintiffs' Reply to Counterclaim, as amended, plaintiffs
denied any breach by BP of any representations, warranties or covenants
contained in the CBCC Purchase

                                        7
<PAGE>   10

Agreement or the Remediation Agreement and denied the existence of any prior
settlement agreement reached between the Company and BP regarding certain
disputes under the CBCC Purchase Agreement and the Remediation Agreement.

     This case originally was scheduled for trial in September 2000. In December
1999, plaintiffs filed a motion to compel arbitration of the Company's claims
raised in the Answer and Counterclaim and to stay the litigation with respect to
the Company's counterclaims pending arbitration. In August 2000, the trial court
partially granted BP's motion to compel arbitration, but limited the arbitration
to environmental matters. The trial court's order also stayed proceedings in the
litigation pending arbitration of the environmental issues. In September 2000
the Company appealed the trial court's order, requesting the appellate court to
reverse the trial court's order and remand the case for trial as to all issues
or, in the alternative, to reverse and remand for trial all issues other than
BP's suggested modifications to the remedial procedures for the area of CBCC's
site that were currently being conducted. In October 2000 BP filed a motion to
dismiss the Company's appeal. The appellate court had not ruled on BP's motion,
and this appeal remained pending, as of December 31, 2000. As described in Note
11 of Notes to Consolidated Financial Statements included in Item 8, which
discussion is incorporated herein by reference, in February 2001 the Company
settled this lawsuit.

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 year
ended December 31, 2000.

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED MATTERS

     As of March 22, 2001 the Company had outstanding 9,145,177 shares of Common
Stock and 6,150,118 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 Court Square
Capital Limited, a subsidiary of Citigroup Inc.

     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 during such periods.

<TABLE>
<CAPTION>
                                                                      2000                          1999
                                                           --------------------------    --------------------------
                                                              HIGH            LOW           HIGH            LOW
                                                           -----------    -----------    -----------    -----------
<S>                                                        <C>            <C>            <C>            <C>
First quarter..........................................        $10 5/16       $7 3/4         $11 1/16       $7 5/8
Second quarter.........................................        $ 9 3/4        $8 1/4         $ 9 9/16       $7 3/8
Third quarter..........................................        $10 13/16      $8 1/8         $ 9 1/4        $8
Fourth quarter.........................................        $10 1/2        $6 3/8         $ 9 1/8        $7 7/8
</TABLE>

     As of March 22, 2001, the last reported sales price of the Company's Common
Stock, as reported by the NYSE, was $10.70 per share, and the Common Stock was
held of record by approximately 129 holders.

     The Company has not paid or declared any cash 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.

                                        8
<PAGE>   11

     The Bank Credit Facility (as hereinafter defined) also contains certain
restrictions on the Company's ability to pay 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 (UNAUDITED; IN THOUSANDS, EXCEPT PER SHARE DATA)

     In addition to reclassifying Leavitt Tube as a discontinued operation,
shipping and handling costs have been reclassified to cost of goods sold from
net sales for all periods presented.

<TABLE>
<CAPTION>
                                                        YEAR ENDED DECEMBER 31,
                                          ----------------------------------------------------
                                            2000       1999       1998       1997       1996
                                          --------   --------   --------   --------   --------
<S>                                       <C>        <C>        <C>        <C>        <C>
Income Statement Data:
  Net sales.............................  $289,918   $272,920   $292,738   $337,158   $322,415
  Cost of goods sold (exclusive of
     depreciation shown separately
     below).............................   244,476    225,724    247,705    288,876    273,286
  Lower of cost-or-market inventory
     writedowns.........................        --         --      3,174         --         --
                                          --------   --------   --------   --------   --------
     Gross profit.......................    45,442     47,196     41,859     48,282     49,129
  Selling, general and administrative
     expenses...........................     7,540     10,625      8,398      8,139      9,501
  Depreciation..........................     6,544      6,219      5,759      4,995      5,128
                                          --------   --------   --------   --------   --------
     Operating income...................    31,358     30,352     27,702     35,148     34,500
  Interest expense......................     1,409      1,136      3,111      4,602      2,593
                                          --------   --------   --------   --------   --------
     Income before income taxes.........    29,949     29,216     24,591     30,546     31,907
  Provision for income taxes............    10,872     11,103      9,345     11,608     12,654
                                          --------   --------   --------   --------   --------
  Income from continuing operations.....    19,077     18,113     15,246     18,938     19,253
  Discontinued Operations:
     Income (loss), net of taxes........       (10)       502        514      4,884      1,386
     Estimated (loss) on disposal, net
       of taxes.........................   (36,000)        --         --         --         --
                                          --------   --------   --------   --------   --------
  Net income (loss).....................  $(16,933)  $ 18,615   $ 15,760   $ 23,822   $ 20,639
                                          ========   ========   ========   ========   ========
Basic Per Share Information:*
  Average shares outstanding............    15,263     15,234     15,216     15,141     15,095
  Income from continuing operations.....  $   1.25   $   1.19   $   1.01   $   1.25   $   1.28
  Income from discontinued operations...        --       0.03       0.03       0.32       0.09
  Estimated (loss) on disposal of
     discontinued operations............     (2.36)        --         --         --         --
                                          --------   --------   --------   --------   --------
  Net income (loss).....................  $  (1.11)  $   1.22   $   1.04   $   1.57   $   1.37
                                          ========   ========   ========   ========   ========
Diluted Per Share Information:*
  Average shares outstanding............    15,377     15,336     15,561     15,483     15,292
  Income from continuing operations.....  $   1.24   $   1.18   $   0.98   $   1.22   $   1.26
  Income from discontinued operations...        --       0.03       0.03       0.32       0.09
  Estimated (loss) on disposal of
     discontinued operations............     (2.34)        --         --         --         --
                                          --------   --------   --------   --------   --------
  Net income (loss).....................  $  (1.10)  $   1.21   $   1.01   $   1.54   $   1.35
                                          ========   ========   ========   ========   ========
</TABLE>

                                        9
<PAGE>   12

<TABLE>
<CAPTION>
                                                        YEAR ENDED DECEMBER 31,
                                          ----------------------------------------------------
                                            2000       1999       1998       1997       1996
                                          --------   --------   --------   --------   --------
<S>                                       <C>        <C>        <C>        <C>        <C>
Balance Sheet Data (at year end):
  Working capital.......................  $ 18,028   $ 18,353   $ 29,741   $ 23,687   $ 24,852
  Total assets..........................   197,203    214,771    182,250    192,554    185,150
  Total debt............................    20,000     27,000     27,000     47,578     70,000
  Stockholders' equity..................   117,494    134,046    115,420     98,713     74,333
Other Data:
  Operating cash flow...................  $ 21,547   $ 31,009   $ 37,423   $ 14,637   $ 39,047
  Capital expenditures..................    20,066     31,078     11,516     11,611      3,586
</TABLE>

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

* Adjusted for the three-for-two stock split effective June 6, 1998

ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
       OF OPERATIONS

GENERAL

  Sale of Leavitt Tube

     In fourth quarter 2000, the Company decided to pursue the sale of Leavitt.
On March 15, 2001, the Company signed a definitive agreement to sell Leavitt to
privately-held Pinkert Industrial Group, LLC, headquartered in Chicago, for
approximately $32 million, subject to closing adjustments. The sale is scheduled
to close on March 30, 2001. Including the tax benefit, the Company expects to
realize cash proceeds of approximately $40 million from this sale and recorded a
$36.0 million, net of taxes, estimated loss on disposal of discontinued
operations in fourth quarter 2000. Consequently, the financial statements
reflect Leavitt as a discontinued operation.

  Operations

     The Company has a brass products segment operated by CBCC and a steel
products segment operated by Leavitt, which has been classified as a
discontinued operation. The Company is a leading manufacturer of free-machining
and forging brass rod.

     CBCC.  CBCC is an ISO 9002 certified manufacturer and supplier of
free-machining and forging brass rod in the United States and Canada. CBCC's net
sales represent gross sales of brass rod less sales discounts. 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 freight
delivery costs, 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.

     CBCC obtains approximately 75% 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") was four cents per pound higher
than the price at which brass scrap is purchased from customers (the "Metal
Buying Price") from December 1994 until December 1997. In December 1997, the
difference was increased to five cents per pound, and in January 1999 the
difference was increased to seven cents per pound. The difference between the
Metal Selling Price and the Metal Buying Price was increased to eight cents per
pound in September 1999. CBCC also purchases approximately 25% 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 through
December 2000, there can be no

                                        10
<PAGE>   13

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,
approximately 11% of pounds sold 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 degree, 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 additional pounds of brass scrap in exchange for each pound of finished
rod shipped.

     Leavitt.  Leavitt is a leading producer of structural and mechanical
electric resistance welded steel tubing in square, rectangular and round shapes
in sizes ranging from 1/2 inch to 10 inch squares and equivalent rectangles and
3/8 inch to 12 3/4 inches in outer diameter for round sizes. 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 the international flat-rolled steel
industry. Based on the then-current market conditions in the steel tubing
industry and the level of capacity utilization, 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 industry is highly fragmented and
suppliers may reduce prices or fail to increase prices as a result of
flat-rolled steel 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. Manufacturers of products used in building
and construction and manufacturers of industrial machinery and equipment are the
primary users of copper alloy rod.

     Therefore, the Company's operating results during any given period depend
significantly on business conditions in these industries. These industries, 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.

     During 2000, United States and Canadian apparent consumption of brass rod
was approximately 1.1 billion pounds, which included industry shipments of 984
million pounds plus net imports of approximately 134 million pounds, which was
basically flat with 1999 apparent consumption. Industry shipments decreased
approximately 17 million pounds, or 2%, from 1 billion pounds in 1999, while net
imports increased approximately 24 million pounds, or 22%. Fueled by strong
demand for brass rod, apparent consumption increased during the period from
second half 1999 through first half 2000. Demand and the strong U.S. dollar have
increased imports of brass rod. However, the increasing interest rates through
mid-2000 and the economic slowdown that began in third quarter 2000 have
adversely impacted customers in building and
                                        11
<PAGE>   14

construction, transportation, industrial machinery and equipment and
distribution industries. All market segments saw softening in fourth quarter
2000 as industry shipments were down 11% and net imports were off 13% as
compared to fourth quarter 1999. The industry's largest end use market, building
and construction, has been impacted by the slowing of new home construction and
flattening demand in home remodeling.

     Since 1990, apparent consumption has fluctuated based on demand, while over
the same period, CBCC's shipments have increased, with shipments plateauing over
the last three years due to production constraints.

     2001 Outlook.  Consistent with the slowing economy, the Company is
projecting softening of apparent consumption of brass rod in first half 2001
compared with the prior year. With the forecasted recovery in the overall
economy in second half 2001, demand for brass rod should strengthen and by
fourth quarter 2001 apparent consumption of brass rod should show year over year
increases in usage. 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 the Company's projection of
apparent consumption will occur. 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 affect import levels and exports of U.S. manufactured
products containing parts made from brass rod. The Company's 2001 shipments also
will be affected by its ability to maintain manufacturing operations at its
current levels without significant interruption and successfully implement its
capacity expansion program.

  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 amounts are considered cost for subsequent
years. If the first-in, first-out (FIFO) method for determining cost had been
used, inventories would have been approximately $0.4 million higher at December
31, 2000, and $0.4 million lower at December 31, 1999.

RESULTS OF OPERATIONS (UNAUDITED; IN MILLIONS)

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              ------------------------
                                                               2000     1999     1998
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Net sales...................................................  $289.9   $272.9   $292.7
Cost of goods sold..........................................   244.5    225.7    247.7
Lower of cost-or-market inventory writedowns................      --       --      3.2
                                                              ------   ------   ------
  Gross profit..............................................    45.4     47.2     41.8
Selling, general and administrative expenses................     7.5     10.7      8.4
Depreciation................................................     6.5      6.2      5.7
                                                              ------   ------   ------
  Operating income..........................................    31.4     30.3     27.7
Interest expense, net.......................................     1.4      1.1      3.1
                                                              ------   ------   ------
  Income before income taxes................................    30.0     29.2     24.6
Provision for income taxes..................................    10.9     11.1      9.3
                                                              ------   ------   ------
  Income from continuing operations.........................    19.1     18.1     15.3
Discontinued operations:
  Income from discontinued operation, net of tax............      --      0.5      0.5
  Estimated loss on disposal, net of tax....................   (36.0)      --       --
                                                              ------   ------   ------
Net income (loss)...........................................  $(16.9)  $ 18.6   $ 15.8
                                                              ======   ======   ======
</TABLE>

                                        12
<PAGE>   15

  2000 Compared With 1999

     Net sales increased $17.0 million, or 6.2%, to $289.9 million in 2000. Net
sales increased mainly as a result of a 9% increase in the brass rod Metal
Selling Price. Partially offsetting this increase was a 1% decline in brass rod
shipment pounds. The shipment gains earlier in the year were offset by a fourth
quarter decline. In the fourth quarter 2000, an economic slowdown adversely
impacted incoming order rates from customers across all market segments.
Additional discussion on demand was previously discussed above under "General
Economic and Industry Conditions."

     Gross profit decreased $1.8 million, or 3.8%, to $45.4 million in 2000 due
to slightly lower unit profit margins and lower brass rod shipments. Increased
costs for electricity, natural gas and fuel were partially offset by improved
profitability of brass purchased on the open market.

     Selling, general and administrative ("SG&A") expenses decreased $3.2
million, or 29.9%, to $7.5 million for 2000. The decrease was due to reduced
professional and consulting expenses, lower management incentives and decreased
franchise taxes, partially offset by higher legal fees in 2000 which were mainly
due to the BP litigation.

     Depreciation expense increased by $0.3 million, or 4.8%, to $6.5 million
due to the new brass foundry.

     As a result of the above factors, operating income increased $1.1 million,
or 3.6%, to $31.4 million in 2000.

     Net interest expense increased by $0.3 million, or 27.3%, to $1.4 million
for 2000. The increase was primarily the result of $0.4 million less capitalized
interest expense on the brass rod extrusion and finishing expansion in 2000 than
on the new brass rod foundry in 1999 due to the stage of completion of each
project.

     As a result of the above factors, income before income taxes increased by
$0.8 million, or 2.7%, to $30.0 million in 2000 from $29.2 million in 1999.

     Income tax expense decreased by $0.2 million, or 1.8%, to $10.9 million as
a result of a reduction in the effective tax rate from 38% in 1999 to 36.3%
partially offset by the tax on an increase of $0.8 million in income before
taxes. The lower effective tax rate in 2000 was primarily the result of state
tax planning initiatives including tax incentives related to CBCC's Project 400
capital investment. In first quarter 2000, the Internal Revenue Service (the
"IRS") completed an examination of the federal income tax return filed by the
Company for year ended December 31, 1996. In July 2000, the Company received a
refund in the amount of $1.1 million from the IRS resulting from the treatment
of settled issues for that year.

     As a result of the above factors, income from continuing operations
increased by $1.0 million, or 5.5%, to $19.1 million or $1.24 per diluted share,
in 2000 from $18.1 million, or $1.18 per diluted share in 1999.

     Income from discontinued operations, net of taxes, decreased to basically
break-even in 2000 from $0.5 million of income, net of taxes, in 1999. Leavitt's
results decreased in 2000 due to lower steel tubing shipments and lower unit
margins. Despite higher selling prices, flat-rolled steel prices increased more
than Leavitt was able to pass along to its customers due to competitive
pressures, thereby resulting in lower unit margins. Leavitt's 1999 results also
included a $0.9 million lower of cost-or-market inventory writedown.

     Loss on disposal of discontinued operations, net of taxes, was $36.0
million. In March 2001, the Company signed a definitive sale agreement for the
assets and certain liabilities of Leavitt Tube. Additional discussion on the
sale of Leavitt was previously discussed above under "General -- Sale of Leavitt
Tube."

     Net loss for 2000 was $16.9 million, or $1.10 per diluted share, compared
with net income for 1999 of $18.6 million, or $1.21 per diluted share.

  1999 Compared With 1998

     Net sales decreased $19.8 million, or 6.8%, to $272.9 million in 1999. Net
sales increased mainly as a result of an 8% decrease in the average brass rod
Metal Selling Price in 1999 compared to 1998. CBCC's brass

                                        13
<PAGE>   16

rod shipments were slightly down from the record 1998 level. Strong 1999
industry demand was predominantly in the industry's largest end use market,
plumbing and construction.

     Gross profit increased $5.4 million, or 12.9%, to $47.2 million in 1999 due
to improved unit profit margins and $3.2 million lower of cost-or-market
inventory writedown in 1998 due to reductions in the brass metal price. Unit
margins improved because of the January 1999 and September 1999 increase in the
difference between the Metal Selling Price and the Metal Buying Price.

     SG&A expenses increased $2.3 million, or 27.4%, to $10.7 million for 1999.
The increase was due to higher professional and consulting expenses and
increased management incentives.

     Depreciation expense increased by $0.5 million, or 8.8%, to $6.2 million
due to the new brass foundry.

     As a result of the above factors, operating income increased $2.6 million,
or 9.4%, to $30.3 million in 1999.

     Net interest expense decreased by $2.0 million, or 64.5%, to $1.1 million
for 1999, primarily as a result of the repayment of long-term debt and
capitalizing approximately $800,000 of interest expense on the construction of
the new CBCC brass foundry.

     As a result of the above factors, income before income taxes increased by
$4.6 million, 18.7%, to $29.2 million in 1999 from $24.6 million in 1998.

     Income tax expense increased by $1.8 million, or 19.4%, to $11.1 million as
a result of the taxes on an increase of $4.6 million in income before income
taxes. The effective tax rates for 1999 and 1998 were 38%.

     As a result of the above factors, income from continuing operations,
increased by $2.8 million, or 18.3%, to $18.1 million, or $1.18 per diluted
share, in 1999 from $15.3 million in 1998 or $0.98 per diluted share.

     Income from discontinued operations, net of taxes, was flat in 1999 at $0.5
million of income, net of taxes, with 1998. Leavitt's 1999 results included a
$0.9 million lower of cost-or-market inventory writedown compared to a $3.6
million lower of cost-or-market inventory writedown in 1998. The inventory
writedowns resulted from declining flat-rolled steel prices and lower steel
tubing prices. Leavitt's results, excluding the lower of cost-or-market
inventory writedowns, decreased $1.7 million, or 60.7%, to $1.1 million, net of
tax, for 1999 due to lower steel tubing shipments and lower unit margins.

     As a result of the above factors, net income increased by $2.8 million, or
17.7%, for 1999 to $18.6 million, or $1.21 per diluted share, compared with net
income for 1998 of $15.8 million, or $1.01 per diluted share.

LIQUIDITY AND CAPITAL RESOURCES

  General

     At December 31, 2000, long-term debt, including current portion, totaled
$20.0 million, a $7.0 million, or 25.9% decrease from year end 1999. Cash and
cash equivalents were $4.0 million at year end, resulting in net debt as of
December 31, 2000, of $16.0 million.

     The Company currently is meeting its operational and liquidity needs with
cash on hand, internally generated funds and amounts available under the
Revolving Credit Facility.

  Working Capital

     At December 31, 2000, working capital was $18.0 million, a $0.4 million, or
2.2%, decrease from $18.4 million at December 31, 1999. Working capital at
December 31, 2000, included $21.6 million receivable from BP and the BP Note
payable of $20.0 million and interest accrued on the BP Note aggregating $8.3
million. These amounts were long-term assets and liabilities at December 31,
1999, and were settled in February 2001 with a CBCC payment of $2 million to BP.
See further discussion of the BP settlement at Note 11 of Notes to Consolidated
Financial Statements included in Item 8.  Excluding the BP related amounts,
working capital at December 31, 2000, was $24.8 million, a $6.4 million increase
from 1999.

                                        14
<PAGE>   17

Decreases in cash and cash equivalents of $5.1 million and prepaid expenses of
$3.2 million were offset by an increase in inventory of $10.6 million and a
decrease in current liabilities of $3.4 million.

     Accounts receivable remained flat with the prior year despite a 3.5%
reduction in net sales in fourth quarter 2000 compared with 1999. Offsetting
this reduction was an increase in the Company's accounts receivable days
outstanding from the prior year, partially due to certain customers electing not
to take advantage of prompt payment discounts in 2000 and the slowing of the
economy. The increase in inventory was partially due to an increase in brass rod
accumulated in advance of maintenance outages in fourth quarter 2000 which was
not needed as shipments slowed in fourth quarter 2000. Additionally, inventory
increased due to the timing of brass scrap purchases. The decrease in current
liabilities was the result of the timing of metal purchases and payment of
accrued environmental costs.

     The Company's current ratio follows:

<TABLE>
<CAPTION>
                                                              DECEMBER 31,
                                                              -------------
                                                              2000    1999
                                                              -----   -----
<S>                                                           <C>     <C>
Current ratio...............................................  1.28    1.45
Current ratio excluding cash................................  1.21    1.23
</TABLE>

  Cash Flow Provided by Operating Activities

     In 2000, net cash provided by operating activities was $21.5 million
compared to $31.0 million in 1999. The primary sources of cash from operating
activities in 2000 were net income from continuing operations of $19.1 million,
depreciation of $6.5 million, and a deferred tax expense of $6.9 million
partially offset by an increase in assets and liabilities, excluding cash, debt
and deferred taxes of $14.6 million. The change in working capital for 2000 was
explained above in "Working Capital." In addition to cash provided by continuing
operations of $17.9 million, cash provided by discontinued operations totaled
$3.6 million.

     In 1999, net cash provided by operating activities was $31.0 million
compared to $37.4 million in 1998. The primary sources of cash from operating
activities in 1999 were net income from continuing operations of $18.1 million,
depreciation and amortization of $6.2 million, a deferred tax expense of $1.1
million and a reduction in assets and liabilities, excluding cash, debt and
deferred taxes of $2.2 million. In addition to cash provided by continuing
operations of $27.6 million, cash provided by discontinued operations totaled
$3.4 million.

     At December 31, 1999, working capital was $18.4 million which decreased
$11.3 million from $29.7 million at December 31, 1998. A decrease in inventory
of $5.1 million, and an increase in accounts payable and accrued liabilities of
$11.5 million were partially offset by an increase in accounts receivable of
$2.1 million and an increase in prepaid expenses of $3.8 million. The decline in
inventory was due to timing of metal receipts and management's efforts to reduce
inventory levels. The increase in accounts payable and accrued liabilities was
mainly due to timing of metal purchases, increased capital expenditures payable
due to the status of the foundry project in 1999 compared to the billet heater
project in 1998, and the accrued environmental costs of $6.6 million at December
31, 1999. Accounts receivable increased primarily due to an increase in net
sales in December 1999 compared to December 1998.

     In 1998, net cash provided by operating activities increased $22.8 million
to $37.4 million compared with 1997. The primary sources of cash from operating
activities in 1998 were net income from continuing operations of $15.2 million
and depreciation and amortization of $5.8 million, partially offset by an
increase in assets and liabilities, excluding cash, debt and deferred taxes of
$3.6 million. In addition to cash provided by continuing operations of $22.5
million, cash provided by discontinued operations totaled $14.9 million.

     At December 31, 1998, working capital was $29.7 million which increased by
$6.1 million from $23.6 million at December 31, 1997. An increase in cash and
cash equivalents of $8.3 million and a decrease of $8.1 million in accounts
payable and accrued liabilities were partially offset by a decrease in accounts
receivable of $8.2 million and a decrease in inventory of $4.0 million. The
primary reason for the decrease in accounts receivable, inventory and accounts
payable was the decrease in the brass metal price in 1998.

                                        15
<PAGE>   18

  Cash Flow (Used in) Investing Activities

     Capital expenditures were $20.1 million, $31.1 million, and $11.5 million
in 2000, 1999 and 1998, respectively. Capital expenditures included equipment
and construction costs for a second extrusion press and additional finishing
lines in 2000, equipment and construction costs for the new CBCC foundry in
1999, and initial costs for the new foundry and installation costs for the three
new billet heaters in 1998.

  Cash Flow (Used in) Provided by Financing Activities

     During 2000, the Company prepaid the remaining $7.0 million on the Term
Loan (as hereinafter defined). The Term Loan was paid off in June 2000, three
years ahead of schedule. In addition, the Company received $0.4 million for the
exercise of stock options. Cash provided by financing activities of $0.1 million
during 1999 resulted from stock option exercises.

     During 1998, the Company prepaid $13.0 million on the Term Loan. Net
repayments on the Revolving Credit Facility totaled $7.6 million. The Company
also received proceeds of $2 million in conjunction with a lease of new billet
heating equipment. See Notes 5 and 10 of Notes to Consolidated Financial
Statements included in Item 8.

  Capital Resources

     In 1996, CBCC launched a capital project referred to as "Project 400." The
project is designed to increase foundry, extrusion and finishing capabilities
with an ultimate goal of increasing finished brass rod production capability by
one-third to approximately 400 million pounds annually. The first phase of the
project was completed in early 1998 with the installation of three new billet
heaters that increased finished brass rod capacity by about 17 percent. The new
billet heaters have increased productivity and improved quality. The total cost
of the first phase of the project was approximately $12 million and was financed
through a six-year operating lease.

     In second quarter 1998, the Company announced Phase II of Project 400,
which was a $30 million multi-year investment to construct an additional brass
foundry enabling CBCC to increase casting capacity and to provide customers with
multiple alloys. The new brass foundry began producing billets on a trial basis
in February 2000 and is now producing billets at expected production rates. The
new foundry has reduced metal costs and increased production capacity. The new
foundry produced approximately 18% of CBCC's billet requirements in 2000.

     In fourth quarter 1999, the Company announced Phase III of Project 400,
which was a $50 million multi-year investment to purchase a second extrusion
press and additional finishing equipment. When Phase III comes on line, which is
expected to occur in 2002, CBCC's production capacity will increase by about
one-third to more than 400 million pounds annually. The building housing the
finishing lines has been completed and construction of the extrusion press
building has begun. All long-lead time equipment has been ordered. The Company
anticipates that capital projects will be paid for with cash flows provided by
operating activities and the Bank Credit Facility, as necessary.

  Bank Credit Facility

     In connection with the Leavitt Acquisition, the Company entered into a
credit facility (the "Bank Credit Facility") of $100 million agented by PNC
Bank, National Association ("PNC Bank"). The Bank Credit Facility originally
included a $60 million term loan ("Term Loan") and a $40 million revolving
credit facility ("Revolving Credit Facility"). Prior to second quarter 2000, the
Company had prepaid all amounts on the Term Loan originally due through April
2001. The remaining balance of $7 million on the Term Loan was prepaid in second
quarter 2000. Effective September 8, 1999, the Company and PNC Bank agreed on an
amendment to the Bank Credit Facility which increased the Revolving Credit
Facility by $10 million, to $50 million. On September 1, 2000, the Company and
PNC Bank agreed on an extension to August 30, 2002, on the Revolving Credit
Facility.

     Advances under the Bank Credit Facility bear interest at alternative
variable rates based on certain percentages, as provided in the agreement, in
excess of the lending bank's prime rate, the Federal funds rate or LIBOR, with
interest payable quarterly or as of the end of each LIBOR borrowing period,
whichever is

                                        16
<PAGE>   19

shorter. There were no borrowings outstanding on the Bank Credit Facility at
December 31, 2000. The weighted average interest rate on the Bank Credit
Facility was 6.5% at December 31, 1999.

     The Bank Credit Facility contains certain covenants that, among other
things, limit the Company's ability to incur additional debt 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, 2000, no amount was outstanding under the Revolving
Credit Facility. Total availability under the Revolving Credit Facility was
$45.4 million as of December 31, 2000.

  Average Revolving Credit Facility Borrowings

     The average outstanding balance under the Revolving Credit Facility in 2000
and 1999 was $0.7 million. As of March 22, 2001, the Company had available $35.4
million under the Revolving Credit Facility. For a discussion of long-term
borrowings under the Bank Credit Facility, see Note 5 of Notes to Consolidated
Financial Statements.

CONTINGENCIES -- ENVIRONMENTAL MATTERS

     As discussed in "Item 1. Business -- Environmental Regulation" and Note 11
of Notes to Consolidated Financial Statements included in Item 8, CBCC is
subject to certain contingent liabilities relating to environmental conditions
at its manufacturing facility.

     CBCC completed remediation activities for a portion of its Montpelier, Ohio
manufacturing facility in 1998 at a cost of approximately $1 million, and
initiated additional interim remedial actions for other portions of the site in
second quarter 1999. Costs for the remedial actions initiated in 1999 originally
were estimated at $3.1 million and were recorded in second quarter 1999. Based
on BP's obligations under the Remediation Agreement and the CBCC Purchase
Agreement, the Company recorded a receivable from BP of $1 million in third
quarter 1998 for costs related to 1998 remediation activities and a $3.1 million
receivable from BP in second quarter 1999 for costs related to the 1999
remediation activities.

     The results of sampling conducted as part of the interim remedial actions
initiated in 1999 identified the presence of VOCs that were not covered by the
initial scope of these interim actions. As a result, CBCC conducted additional
sampling of certain areas of the site to further delineate the contamination in
those areas. Based on the aggregate sampling results, CBCC modified its 1999
remediation plan. CBCC began implementing the modified plan in first quarter
2000 and completed the remediation in fourth quarter 2000 at a cost of $10
million (including $2.5 million spent in 1999 for this project). CBCC also is in
the process of developing a remediation plan for in situ remediation at two
additional areas of its site, and expects to initiate in situ remediation
activities at those areas in 2001. Based on preliminary cost estimates provided
by CBCC's independent environmental consultant, and subject to the development
by the consultant of a remediation plan for these areas of the site and the
receipt of bids for the remediation activities required under such plan, the
Company estimates that the costs for this project will be approximately $3
million, based upon capital and operating costs for a period of five years.
However, subject to pilot testing and operating experience, costs may increase
if a longer operating period is necessary. Based on cost estimates of the
remediation activities conducted in 1999 and 2000, the Company recorded $13.5
million of environmental reserves of which $4.4 million was accrued in 2000.
Based on BP's obligations under the Remediation Agreement, the Company recorded
a corresponding $13.5 million receivable from BP. Remediation spending of $2.5
million in 1999 and $7.0 million in 2000 resulted in a reserve of $4.0 million
at December 31, 2000. The reserve included $3.0 million for the in situ
remediation plan, $0.6 million for environmental consulting, and $0.4 million
for final payments on the 2000 remediation activities.

     As described in Note 11 of Notes to Consolidated Financial Statements
included in Item 8, claims asserted by the Company against BP under the
Remediation Agreement and the CBCC Purchase Agreement for, among other things,
costs incurred and anticipated to be incurred by the Company for these
environmental

                                        17
<PAGE>   20

remediation activities were settled pursuant to a Settlement Agreement and
Mutual Release entered into in February 2001.

     Based on currently available data, the Company believes that, upon
completion of the remediation activities described above, CBCC will have
substantially completed the remediation activities at its site that are
necessary to address contamination of which CBCC currently is aware. However,
until completion of these remedial and associated investigatory activities and
receipt of approval from the Ohio EPA of CBCC's activities to remediate this
contamination, as well as remediation activities previously conducted, the
Company cannot be certain that further remediation activities will not be
required at CBCC's site. To the extent regulatory agencies require additional
remediation at those areas of CBCC's site where CBCC previously has undertaken
remediation activities, or requires excavation of soil at the two remaining
areas for which CBCC currently is developing a remediation plan for in situ
remediation, as a part of the settlement of the litigation with BP referred to
above, BP has retained financial responsibility for such remediation activities.

     The Company expects to fund cleanup costs related to the remaining
remediation activities at its manufacturing facility with cash on hand and
borrowings under its existing Bank Credit Facility. Therefore, the Company does
not believe that funding these remediation activities will have a material
adverse effect on the Company's financial condition, results of operations or
liquidity.

     The statements set forth herein regarding anticipated expenditures for
environmental matters are forward looking, are based on sampling results
currently available to the Company, remediation plans in the process of being
developed by independent consultants of CBCC (which plans are subject to
assumptions regarding applicable cleanup standards and methodologies)and
preliminary cost estimates for completion of the remediation activities. Actual
costs required to be expended by the Company with respect to such matters may
differ materially from current expectations depending on the final resolution of
known uncertainties, including finalization of remediation plans for the two
remaining areas of CBCC's site as discussed above, completion of proposed
remediation activities, acceptance by applicable governmental agencies of
cleanup standards relied upon in developing remediation plans and conducting
remediation activities, discovery of additional contaminants during remediation,
and any change in CBCC's proposed use of its property which affects any
applicable cleanup standard.

CONTINGENCIES -- LEGAL PROCEEDINGS

     As discussed in "Item 3. Legal Proceedings" and Note 11 of Notes To
Consolidated Financial Statements included in Item 8, in February 2001 the
Company and CBCC settled a lawsuit with BP, originally filed in January 1998,
regarding amounts payable under the BP Note.

INFLATION

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

SAFE HARBOR

     This document contains forward-looking statements regarding the operations
of the Company and the industries in which it operates. These statements are
identified by the use of words such as "believe," "expects," "anticipates,"
"will," "should" and other words referring to events to occur in the future.
Management uses estimates and assumptions in forming the basis for such
forward-looking statements. Such estimates and assumptions, including forecasts
regarding demand and pricing for the Company's products, are subject to risks
and uncertainties which could cause actual results to differ materially from
historical results or those anticipated, as described in forward-looking
statements. Actual results will be affected by general economic and industry
conditions in the end-use markets for the Company's products as well as the
impact of competitive products and pricing, including without limitation the
impact of imports. Foreign economic activity and the relationship of the U.S.
dollar to other currencies also affect import levels and exports of U.S.
manufactured products containing parts made from brass rod and steel tube. The
Company's shipments also will be affected by its ability to maintain
manufacturing operations at its current levels without significant interruption
and successfully implement its capacity expansion program.
                                        18
<PAGE>   21

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company has no financial instruments or agreements that require
disclosure pursuant to this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                             CHASE INDUSTRIES INC.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                       AND FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
                                                              PAGE
                                                              -----
<S>                                                           <C>
Consolidated Financial Statements:
  Report of Independent Accountants.........................     20
  Consolidated Balance Sheet as of December 31, 2000 and
     1999...................................................     21
  Consolidated Statement of Income for the Years Ended
     December 31, 2000, 1999 and 1998.......................     22
  Consolidated Statement of Changes in Stockholders' Equity
     for the Years Ended December 31, 2000, 1999 and 1998...     23
  Consolidated Statement of Cash Flows for the Years Ended
     December 31, 2000, 1999 and 1998.......................     24
  Notes to Consolidated Financial Statements................  25-39

Financial Statement Schedule:
  Valuation and Qualifying Accounts.........................    S-1
</TABLE>

                                        19
<PAGE>   22

                       REPORT OF INDEPENDENT ACCOUNTANTS

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

     In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of Chase Industries Inc. and its subsidiaries at December 31, 2000 and
1999, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America. In addition, in
our opinion, the financial statement schedule listed in the accompanying index
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
These financial statements and financial statement schedule are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements and financial statement schedule based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Detroit, Michigan
March 23, 2001

                                        20
<PAGE>   23

                             CHASE INDUSTRIES INC.

                           CONSOLIDATED BALANCE SHEET
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
                                     ASSETS

Current assets:
  Cash and cash equivalents.................................  $  3,993   $  9,131
  Receivables, net of allowance for doubtful accounts and
     claims of $990 in 2000 and 1999........................    24,214     24,196
  Inventories...............................................    29,072     18,423
  Prepaid expenses..........................................     1,253      4,434
  Deferred income taxes.....................................     3,251      2,597
  Other assets..............................................    21,600         --
                                                              --------   --------
          Total current assets..............................    83,383     58,781
Net assets of discontinued operations.......................    38,161     77,832
Property, plant and equipment, net..........................    75,659     62,137
Other assets................................................        --     16,021
                                                              --------   --------
          Total assets......................................  $197,203   $214,771
                                                              ========   ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable..........................................  $ 23,447   $ 24,179
  Accrued compensation and benefits.........................     4,170      4,731
  Accrued income taxes......................................     2,692      2,714
  Other accrued liabilities.................................     6,701      8,804
  Current portion of long-term debt.........................    20,000         --
  Interest payable -- Seller's note.........................     8,345         --
                                                              --------   --------
          Total current liabilities.........................    65,355     40,428
Long-term debt..............................................        --     27,000
Interest payable -- Seller's note...........................        --      6,484
Deferred income taxes.......................................    14,354      6,813
                                                              --------   --------
          Total liabilities.................................    79,709     80,725
                                                              --------   --------
Commitments and contingencies...............................        --         --
                                                              --------   --------
Stockholders' equity:
  Common stock, $.01 par value, 36,310,000 shares
     authorized; 9,135,802 and 9,084,877 shares issued and
     outstanding in 2000 and 1999, respectively.............        92         91
  Nonvoting common stock, $.01 par value, 12,300,000 shares
     authorized; 6,150,118 shares issued and outstanding in
     2000 and 1999..........................................        61         61
  Additional paid-in capital................................    31,884     31,504
  Retained earnings.........................................    85,457    102,390
                                                              --------   --------
          Total stockholders' equity........................   117,494    134,046
                                                              --------   --------
          Total liabilities and stockholders' equity........  $197,203   $214,771
                                                              ========   ========
</TABLE>

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

                                        21
<PAGE>   24

                             CHASE INDUSTRIES INC.

                        CONSOLIDATED STATEMENT OF INCOME
                  (IN THOUSANDS, EXCEPT PER SHARE INFORMATION)

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2000       1999       1998
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Net sales...................................................  $289,918   $272,920   $292,738
Cost of goods sold (exclusive of depreciation shown
  separately below).........................................   244,476    225,724    247,705
Lower of cost-or-market inventory writedowns................        --         --      3,174
                                                              --------   --------   --------
  Gross profit..............................................    45,442     47,196     41,859
Selling, general and administrative expenses................     7,540     10,625      8,398
Depreciation................................................     6,544      6,219      5,759
                                                              --------   --------   --------
  Operating income..........................................    31,358     30,352     27,702
Interest expense, net.......................................     1,409      1,136      3,111
                                                              --------   --------   --------
  Income before income taxes................................    29,949     29,216     24,591
Provision for income taxes..................................    10,872     11,103      9,345
                                                              --------   --------   --------
Income from continuing operations...........................    19,077     18,113     15,246
Discontinued operations (Note 13):
  Income (loss), net of income taxes........................       (10)       502        514
  Estimated (loss) on disposal, net of income taxes.........   (36,000)        --         --
                                                              --------   --------   --------
          Net income (loss).................................  $(16,933)  $ 18,615   $ 15,760
                                                              ========   ========   ========
Earnings per share -- Basic:
  Income from continuing operations.........................  $   1.25   $   1.19   $   1.01
  Income from discontinued operations.......................        --       0.03       0.03
  Estimated (loss) on disposal of discontinued operations...     (2.36)        --         --
                                                              --------   --------   --------
          Net income (loss).................................  $  (1.11)  $   1.22   $   1.04
                                                              ========   ========   ========
Earnings per share -- Diluted:
  Income from continuing operations.........................  $   1.24   $   1.18   $   0.98
  Income from discontinued operations.......................        --       0.03       0.03
  Estimated (loss) on disposal of discontinued operations...     (2.34)        --         --
                                                              --------   --------   --------
          Net income (loss).................................  $  (1.10)  $   1.21   $   1.01
                                                              ========   ========   ========
</TABLE>

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

                                        22
<PAGE>   25

                             CHASE INDUSTRIES INC.

           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                               ADDITIONAL
                                                      COMMON    PAID-IN     RETAINED
                                                      STOCK     CAPITAL     EARNINGS    TOTAL
                                                      ------   ----------   --------   --------
<S>                                                   <C>      <C>          <C>        <C>
Balances, January 1, 1998...........................   $101     $30,597     $ 68,015   $ 98,713
  Net income........................................     --          --       15,760     15,760
  Exercised stock options...........................     --         947           --        947
  Three-for-two stock split.........................     51         (51)          --         --
                                                       ----     -------     --------   --------
Balances, December 31, 1998.........................    152      31,493       83,775    115,420
  Net income........................................     --          --       18,615     18,615
  Exercised stock options...........................     --          11           --         11
                                                       ----     -------     --------   --------
Balances, December 31, 1999.........................    152      31,504      102,390    134,046
  Net income (loss).................................     --          --      (16,933)   (16,933)
  Exercised stock options...........................      1         380           --        381
                                                       ----     -------     --------   --------
Balances, December 31, 2000.........................   $153     $31,884     $ 85,457   $117,494
                                                       ====     =======     ========   ========
</TABLE>

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

                                        23
<PAGE>   26

                             CHASE INDUSTRIES INC.

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 YEAR ENDED DECEMBER 31,
                                                              ------------------------------
                                                                2000       1999       1998
                                                              --------   --------   --------
<S>                                                           <C>        <C>        <C>
Operating activities:
  Income from continuing operations.........................  $ 19,077   $ 18,113   $ 15,246
  Adjustments to reconcile income from continuing operations
     to net cash provided by operating activities:
     Depreciation...........................................     6,544      6,219      5,758
     Deferred income tax expense (benefit)..................     6,887      1,078     (2,077)
     Lower of cost-or-market inventory writedowns...........        --         --      3,174
     Changes in assets and liabilities:
       (Increase) decrease in receivables...................       (18)    (2,083)     8,188
       (Increase) decrease in inventories...................   (10,649)     5,144        851
       Decrease (increase) in prepaid expenses..............     3,181     (3,792)        53
       (Increase) decrease in other assets..................    (3,718)    (8,627)      (522)
       (Decrease) increase in accounts payable..............      (732)     4,415    (10,666)
       (Decrease) increase in accrued liabilities...........    (2,686)     7,096      2,538
                                                              --------   --------   --------
       Net cash provided by operating activities of
          continuing operations.............................    17,886     27,563     22,543
                                                              --------   --------   --------
  Discontinued operations:
     Estimated (loss) on disposal of discontinued
       operations...........................................   (36,000)        --         --
     Non-cash items from discontinued operations............    36,000         --         --
     Cash provided by discontinued operations...............     3,661      3,446     14,880
                                                              --------   --------   --------
       Net cash provided by discontinued operations.........     3,661      3,446     14,880
                                                              --------   --------   --------
          Net cash provided by operating activities.........    21,547     31,009     37,423
                                                              --------   --------   --------
Investing activities:
  Expenditures for property, plant and equipment............   (20,066)   (31,078)   (11,516)
                                                              --------   --------   --------
          Net cash (used in) investing activities...........   (20,066)   (31,078)   (11,516)
                                                              --------   --------   --------
Financing activities:
  Revolving credit facility repayments, net.................        --         --     (7,578)
  Principal payments on bank term loan......................    (7,000)        --    (13,000)
  Equipment financing.......................................        --         --      2,000
  Other, net................................................       381         11        947
                                                              --------   --------   --------
          Net cash (used in) provided by financing
            activities......................................    (6,619)        11    (17,631)
                                                              --------   --------   --------
Net (decrease) increase in cash and cash equivalents........    (5,138)       (58)     8,276
Cash and cash equivalents, beginning of year................     9,131      9,189        913
                                                              --------   --------   --------
Cash and cash equivalents, end of year......................  $  3,993   $  9,131   $  9,189
                                                              ========   ========   ========
Supplemental disclosures:
  Interest paid.............................................  $    475   $    647   $  1,582
                                                              ========   ========   ========
  Income taxes paid.........................................  $    519   $ 11,703   $  7,955
                                                              ========   ========   ========
</TABLE>

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

                                        24
<PAGE>   27

                             CHASE INDUSTRIES INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES:

  Principles of Consolidation and Organization

     The consolidated balance sheet as of December 31, 2000 and 1999, and the
consolidated statements of income, changes in stockholders' equity, and cash
flows for the years ended December 31, 2000, 1999 and 1998, include the accounts
of Chase 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. All significant intercompany transactions
have been eliminated in consolidation.

     In fourth quarter 2000, the Company decided to divest Leavitt. On March 15,
2001, the Company signed a definitive agreement to sell Leavitt to
privately-held Pinkert Industrial Group, LLC, headquartered in Chicago, for
approximately $32 million, subject to closing adjustments. The sale is scheduled
to close on March 30, 2001. Leavitt has been reflected in the financial
statements as a discontinued operation. For additional discussion on the
discontinued operation, see Note 13, Discontinued Operations.

     On August 24, 1990, the Company acquired, through CBCC, the assets and
operations 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 the stock of Old Chase. The CBCC Acquisition was
accounted for as a purchase.

     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 and structural pipe. The Leavitt
Acquisition was accounted for as a purchase.

  Revenue Recognition

     Net sales represent gross sales of brass rod and are recorded at the time
of shipment. The gross sales price of brass rod consists of a metal price
charged to the customers and a fabrication price as separate components. In
addition, approximately 10% of pounds sold by CBCC are made on a "Tolling"
basis, where the customer consigns brass scrap to CBCC and is only charged a
fabrication price for processing the brass scrap into finished rod. For tolling
sales, the brass metal value is not included in net sales or cost of goods sold.

  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 and structural pipe.

  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.

                                        25
<PAGE>   28
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  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 years. During 1998, the Company recorded non-cash inventory
writedowns totaling $3.2 million due to reductions in the brass metal price.

     If the first-in, first-out (FIFO) method for determining cost had been
used, inventories would have been approximately $0.4 million higher and $0.4
million lower at December 31, 2000 and 1999, respectively.

  Property, Plant and Equipment

     Property, plant and equipment are 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. Long-lived assets are reviewed for
impairment whenever events or changes in circumstances indicate that their
carrying amounts may not be recoverable.

  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.

  Concentration of Credit Risk

     Accounts receivable is the principal financial instrument, which subjects
the Company to concentration of credit risk. 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.

  Recently Issued Accounting Pronouncements

     In June 1998, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"), which was originally effective
for years beginning after June 15, 1999. In June 1999, the FASB issued Statement
of Accounting Standards No. 137 delaying the effective date of SFAS 133 by one
year. SFAS 133 was amended by Statement of Financial Accounting Standards No.
138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities," which was issued in June 2000. The new standards require companies
to record derivatives on the balance sheet as assets or liabilities, measured at
fair value. Management of the Company believes SFAS 133, as amended, will not
have a material effect on its financial position or results of operations.

     In September 2000, the FASB issued Statement of Financial Accounting
Standards No. 140, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities" ("SFAS 140"). SFAS 140 replaces Statement of
Financial Accounting Standards No. 125, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishment of Liabilities" ("SFAS 125"), and is
effective for transfers and servicing of financial assets and extinguishments of
liabilities occurring after March 31, 2001. Management of the Company believes
SFAS 140 will not have a material effect on its financial position or results of
operations.

                                        26
<PAGE>   29
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
("SAB 101"). SAB 101 provides guidance on applying generally accepted accounting
principles to revenue recognition issues in financial statements. In June 2000,
the SEC issued Staff Accounting Bulletin No. 101B, "Second Amendment: Revenue
Recognition in Financial Statements" ("SAB 101B"). SAB 101B delayed the
implementation date of SAB 101 until no later than the fourth fiscal quarter of
2000. The Company adopted SAB 101 pursuant to SAB 101B (including the recent
Frequently Asked Questions and Answers document issued by the SEC in October
2000) as required in fourth quarter 2000. There was no effect on the Company's
results of operation from the adoption of SAB 101.

     At the September 2000 meeting, the Emerging Issues Task Force reached final
consensus on Issue 00-10, "Accounting for Shipping and Handling Revenues and
Costs" ("EITF 00-10"), which is effective in fourth quarter 2000 for the
Company. EITF 00-10 requires shipping and handling billed to customers to be
classified as revenue and requires shipping and handling costs to be classified
as cost of goods sold or disclosed separately in the income statement. In fourth
quarter 2000, in order to comply with EITF 00-10, the Company classified
shipping and handling costs as cost of goods sold in the consolidated Statement
of Income. For comparative purposes, shipping and handling costs in all prior
year periods have been reclassified to cost of goods sold from net sales to
conform to current year presentations.

2. INVENTORIES:

     Inventories consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                                              -----------------
                                                               2000      1999
                                                              -------   -------
<S>                                                           <C>       <C>
Raw materials...............................................  $ 5,703   $ 3,585
Work in progress............................................   11,224     8,405
Finished goods..............................................   13,699     7,308
                                                              -------   -------
                                                               30,626    19,298
Tolling metal due customers.................................   (1,554)     (875)
                                                              -------   -------
                                                              $29,072   $18,423
                                                              =======   =======
</TABLE>

3. PROPERTY, PLANT AND EQUIPMENT:

     Property, plant and equipment and the related depreciable lives consisted
of the following (in thousands):

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
Land and land improvements (15-20 years)....................  $    635   $    507
Buildings and improvements (10-39 years)....................    19,319     18,800
Machinery and equipment (3-20 years)........................    78,763     67,171
Construction in progress....................................    14,011      9,091
                                                              --------   --------
                                                               112,728     95,569
Accumulated depreciation....................................   (37,069)   (33,432)
                                                              --------   --------
                                                              $ 75,659   $ 62,137
                                                              ========   ========
</TABLE>

                                        27
<PAGE>   30
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. OTHER ASSETS:

     Receivable from BP.  The receivable from BP represents the amounts arising
from claims by the Company against BP under the CBCC Purchase Agreement and a
Remediation Agreement (as hereinafter defined). See Note 11, Commitments and
Contingencies, for further discussion of the Receivable from BP. The receivable
from BP consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                                              -----------------
                                                               2000      1999
                                                              -------   -------
<S>                                                           <C>       <C>
Certain environmental remediation costs.....................  $16,430   $11,975
Post-closing adjustments per CBCC Purchase Agreement........    1,292     1,292
Environmental-related capital expenditures..................    1,518     1,394
Other costs and claims......................................    2,360     1,360
                                                              -------   -------
Receivable from BP -- current asset.........................  $21,600
                                                              =======
Receivable from BP -- long-term asset.......................            $16,021
                                                                        =======
</TABLE>

5. FINANCING ARRANGEMENTS:

     Debt consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                                                DECEMBER 31,
                                                              -----------------
                                                               2000      1999
                                                              -------   -------
<S>                                                           <C>       <C>
BP Note.....................................................  $20,000   $20,000
Term Loan...................................................       --     7,000
                                                              -------   -------
Total debt..................................................   20,000    27,000
Current portion of long-term debt...........................   20,000        --
                                                              -------   -------
Long-term debt..............................................       --   $27,000
                                                              =======   =======
Interest payable -- Seller's Note:
  Contingent interest.......................................      254       254
  Interest on BP Note.......................................    7,429     5,568
  Accrued interest on BP Note...............................      662       662
                                                              -------   -------
Current interest payable -- Seller's Note...................  $ 8,345
                                                              =======
Long-term interest payable -- Seller's Note.................            $ 6,484
                                                                        =======
</TABLE>

     In connection with the CBCC Acquisition, the Company issued to BP a
promissory note in the original principal amount of $20.0 million as partial
consideration for the CBCC Acquisition (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 9.28%. 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, and the annual interest of $1,856,000 due
August 1997 and 1998, were offset against the receivable from BP. As of the
August 24, 1999, due date of the BP Note, the Company also offset the $1,856,000
in accrued and unpaid interest due August 24, 1999, and the full principal
balance of the BP Note against the receivable from BP and other amounts claimed
by the Company to be owed by BP to the Company as a result of BP's breach of the
CBCC Purchase Agreement and the Remediation Agreement. However, for financial
statement reporting purposes, pursuant to Statement of Financial Accounting
Standards No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishment of Liabilities" ("SFAS 125"), at December 31, 2000, the

                                        28
<PAGE>   31
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company continued to record the full principal balance of the BP Note as a
liability. SFAS 125 requires that in order to extinguish a liability, the debtor
must be legally released from the obligation by either the creditor or
judicially. The Company maintained the debt on its books and continued to accrue
interest at 9.28% until February 2001, when the matter was settled. See Note 11,
Commitments and Contingencies, for further discussion of the BP Note.

     In connection with the Leavitt Acquisition, the Company entered into a
credit facility (the "Bank Credit Facility") of $100 million agented by PNC
Bank, National Association ("PNC Bank"). The Bank Credit Facility originally
included a $60 million term loan ("Term Loan") and a $40 million revolving
credit facility ("Revolving Credit Facility"). In June 2000, the Company prepaid
the remaining $7 million outstanding under the Term Loan. The Term Loan was
repaid three years ahead of schedule. Effective September 8, 1999, the Company
and PNC Bank agreed on an amendment to the Bank Credit Facility which increased
the Revolving Credit Facility by $10 million, to $50 million. On September 1,
2000, the Company and PNC Bank agreed on an extension to August 30, 2002, on the
Revolving Credit Facility.

     Advances under the Bank Credit Facility bear interest at alternative
variable rates based on certain percentages, as provided in the agreement, in
excess of the lending bank's prime rate, the Federal funds rate or LIBOR, with
interest payable quarterly or as of the end of each LIBOR borrowing period,
whichever is shorter. No borrowings were outstanding on the Bank Credit Facility
at December 31, 2000. The weighted average interest rate on the Bank Credit
Facility was 6.5% at December 31, 1999.

     The Bank Credit Facility contains certain covenants that, among other
things, limit the Company's ability to incur additional debt 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.

     The Company capitalized interest expense on major capital projects totaling
$384,000 and $803,000 for the years ended December 31, 2000 and 1999,
respectively.

6. 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, 2000, 1999, and
1998, were $459,000, $454,000 and $366,000 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.

                                        29
<PAGE>   32
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following tables provide a reconciliation, for the years ended December
31, 2000 and 1999, of the changes in the defined benefit retirement plans'
benefit obligations and fair value of assets (in thousands):

     Change in plan assets:

<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                              ---------------
                                                               2000     1999
                                                              ------   ------
<S>                                                           <C>      <C>
Fair value at beginning of year.............................  $3,696   $3,344
Actual return (loss) on plan assets.........................     (51)     323
Employer contributions......................................     323       62
Benefit payments............................................     (42)     (33)
                                                              ------   ------
Fair value at end of year...................................  $3,926   $3,696
                                                              ======   ======
</TABLE>

     Change in benefit obligation:

<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                              ---------------
                                                               2000     1999
                                                              ------   ------
<S>                                                           <C>      <C>
Obligation at beginning of year.............................  $3,717   $3,993
Service cost................................................     163      178
Interest cost...............................................     297      268
Actuarial loss (gain).......................................     389     (689)
Benefit payments............................................     (42)     (33)
                                                              ------   ------
Obligation at end of year...................................  $4,524   $3,717
                                                              ======   ======
</TABLE>

     Funded Status:

<TABLE>
<CAPTION>
                                                              DECEMBER 31,
                                                              -------------
                                                              2000    1999
                                                              -----   -----
<S>                                                           <C>     <C>
Balance at end of year......................................  $(598)  $ (21)
Unrecognized net actuarial (gain) loss......................    415    (319)
Unrecognized prior service cost.............................    729     791
                                                              -----   -----
Pension prepaid expense.....................................  $ 546   $ 451
                                                              =====   =====
</TABLE>

     For the year ended December 31, 2000, the discount rate used in determining
the projected benefit obligation was 7.38% and the expected long-term rate of
return on assets was 8.0%. For the year ended December 31, 1999, the discount
rate used in determining the projected benefit obligation was 7.75% 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,
                                                              ------------------------
                                                               2000     1999     1998
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Service cost................................................  $ 163    $ 178    $ 115
Interest cost (loss)........................................    297      268      197
Actual loss (return) on plan assets.........................     51     (323)    (435)
Net amortization and deferral...............................   (284)     119      225
                                                              -----    -----    -----
Net periodic pension expense................................  $ 227    $ 242    $ 102
                                                              =====    =====    =====
</TABLE>

                                        30
<PAGE>   33
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. INCOME TAXES:

     The consolidated provision for income taxes consisted of the following (in
thousands):

<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31,
                                                          ---------------------------
                                                           2000      1999      1998
                                                          -------   -------   -------
<S>                                                       <C>       <C>       <C>
Current taxes:
  Federal...............................................  $ 3,793   $ 8,823   $ 9,555
  State.................................................      192     1,502     1,425
                                                          -------   -------   -------
Total current taxes.....................................    3,985    10,325    10,980
Deferred tax expense (benefit)..........................    6,887       778    (1,635)
                                                          -------   -------   -------
Provision for income taxes..............................  $10,872   $11,103   $ 9,345
                                                          =======   =======   =======
</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,
                                                              ----------------
                                                               2000      1999
                                                              -------   ------
<S>                                                           <C>       <C>
Net current deferred tax asset:
  Inventory reserves........................................  $   958   $  857
  Accrued employee benefits.................................      510      365
  Allowance for doubtful accounts and claims................      248      105
  Estimated capital loss on disposal of discontinued
     operation..............................................    5,434       --
  Valuation allowance.......................................   (5,434)      --
  Other, net................................................    1,535    1,270
                                                              -------   ------
                                                              $ 3,251   $2,597
                                                              =======   ======
Net long-term deferred tax liability:
  Depreciation and basis differences........................  $ 8,847   $6,346
  Other, net................................................    5,507      467
                                                              -------   ------
                                                              $14,354   $6,813
                                                              =======   ======
</TABLE>

     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,
                                                           --------------------------
                                                            2000      1999      1998
                                                           -------   -------   ------
<S>                                                        <C>       <C>       <C>
Tax provision at statutory rate of 35%...................  $10,482   $10,226   $8,607
State taxes..............................................      116       854      874
Other, net...............................................      274        23     (136)
                                                           -------   -------   ------
Provision for income taxes...............................  $10,872   $11,103   $9,345
                                                           =======   =======   ======
Effective tax rate.......................................     36.3%     38.0%    38.0%
</TABLE>

                                        31
<PAGE>   34
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. STOCK OPTIONS:

     In November 1994, the Company implemented its 1994 Long-Term Incentive Plan
(the "1994 Plan"). Under the 1994 Plan, as amended, 2,250,000 shares of Common
Stock are reserved for options granted or available for grant. Stock options
granted on or before December 31, 2000, become exercisable over five years from
the grant date (subject to acceleration under certain circumstances), expire
after ten years and have an exercise price equal to the closing market price on
the grant date.

     In May 1997, the Company implemented its 1997 Non-Employee Director Stock
Option Plan (the "Director Plan") which provides for the granting of stock
options to non-employee directors upon their election to the Board of Directors
and, at the election of each non-employee director, in lieu of all or a portion
of their annual retainer and meeting fees. Under the Director Plan, 150,000
shares of Common Stock are reserved for options granted or available for grant.
Stock options granted upon election to the Board become exercisable in 20%
increments on each of the first five anniversaries of the date of grant, have an
exercise price equal to the average closing market price of common stock for the
five trading days preceding the date of election to the Board, and expire after
ten years. Stock options granted in lieu of the annual retainer and meeting fees
are granted quarterly at the end of each quarter, become exercisable immediately
upon grant, have an exercise price equal to one-half of the average closing
market price of Common Stock for the last five trading days of the quarter to
which the grant relates, and expire after ten years.

     In May 1997, the Company implemented its 1997 Executive Deferred
Compensation Stock Option Plan (the "Executive Plan") which provides for the
granting of stock options to eligible executives of the Company and its
subsidiaries who elect to participate in the Executive Plan and receive stock
options in lieu of all or a portion of their annual cash bonus. Under the
Executive Plan, 450,000 shares of Common Stock are reserved for options granted
or available for grant. Stock options granted under the Executive Plan are
granted on the date of determination of a participant's annual cash bonus,
become exercisable immediately upon grant and expire after ten years. The stock
options related to each annual bonus amount deferred are granted in four series
of equal numbers of options, with each series attributed to a calendar quarter
in the calendar year to which the bonus relates. Stock options granted in each
series have an exercise price equal to one-half of the average closing market
price of Common Stock for the last five trading days of the calendar quarter to
which such series relates.

     The following summary includes stock options granted under the Plans as of
December 31:

<TABLE>
<CAPTION>
                                    2000                   1999                   1998
                            --------------------   --------------------   --------------------
                                        WEIGHTED               WEIGHTED               WEIGHTED
                                        AVERAGE                AVERAGE                AVERAGE
                             NUMBER     EXERCISE    NUMBER     EXERCISE    NUMBER     EXERCISE
                            OF SHARES    PRICES    OF SHARES    PRICES    OF SHARES    PRICES
                            ---------   --------   ---------   --------   ---------   --------
<S>                         <C>         <C>        <C>         <C>        <C>         <C>
Outstanding at beginning
  of year.................  1,666,516    $11.19    1,586,793    $11.42    1,189,621    $9.00
Granted...................    179,337      6.58      111,583      8.15      486,392    16.66
Exercised.................    (50,925)     6.67       (1,425)     6.67      (80,400)    7.28
Canceled/Forfeited........    (57,450)    15.35      (30,435)    11.75       (8,820)   13.11
                            ---------              ---------              ---------
Outstanding at end of
  year....................  1,737,478     10.71    1,666,516     11.19    1,586,793    11.42
                            =========              =========              =========
Exercisable at end of
  year....................  1,312,268      9.91    1,044,896      9.05      736,818     8.13
                            =========              =========              =========
</TABLE>

                                        32
<PAGE>   35
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following table summarizes information about employee stock options
outstanding at December 31, 2000:

<TABLE>
<CAPTION>
                                           OPTIONS OUTSTANDING            OPTIONS EXERCISABLE
                                    ----------------------------------   ----------------------
                                                  WEIGHTED   WEIGHTED                  WEIGHTED
                                                  AVERAGE     AVERAGE                  AVERAGE
                                      NUMBER      EXERCISE   REMAINING     NUMBER      EXERCISE
    RANGE OF EXERCISE PRICES        OUTSTANDING    PRICE       LIFE      EXERCISABLE    PRICE
    ------------------------        -----------   --------   ---------   -----------   --------
<S>                                 <C>           <C>        <C>         <C>           <C>
$ 4.00 to $ 8.67.................      793,410     $ 6.65       5.4         697,235     $ 6.40
  8.68 to  15.17.................      562,243      11.49       5.5         404,298      11.75
 17.34 to  21.67.................      381,825      18.02       5.8         210,735      18.00
                                     ---------     ------       ---       ---------     ------
  4.00 to  21.67.................    1,737,478      10.71       5.5       1,312,268       9.91
                                     =========     ======       ===       =========     ======
</TABLE>

     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.
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 pro forma reduction to the Company's net income and
basic earnings per share would have been $1,117,000, $853,000 and $904,000, and
$.07, $.06 and $.06 in 2000, 1999 and 1998, respectively.

     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>
                                                              YEAR ENDED DECEMBER 31,
                                                              ------------------------
                                                               2000     1999     1998
                                                              ------   ------   ------
<S>                                                           <C>      <C>      <C>
Estimated fair value per share of options granted during the
  year......................................................  $4.78    $4.26    $6.72
Assumptions:
  Annualized dividend yield.................................     --       --       --
  Common stock price volatility.............................   38.0%    32.6%    29.2%
  Risk-free rate of return..................................    6.6%     6.0%     5.6%
  Expected option term (in years)...........................      6        6        6
</TABLE>

9. COMMON STOCK AND EARNINGS PER SHARE:

     The Company's Board of Directors declared and the stockholders approved, a
three-for-two stock split for shareholders of record as of June 6, 1998. As a
result of the split, 5,075,996 additional shares were issued and Additional
Paid-in Capital was reduced by $51,000. Fractional shares resulting from the
stock split were paid in cash, without interest. All references in the
accompanying financial statements to the number of shares and per share amounts
have been restated to reflect the stock split. In conjunction with the stock
split, the Company's Restated Certificate of Incorporation was amended by
stockholder vote to increase the number of authorized shares from 25 million to
36,310,000 for Common Stock and 5 million to 12.3 million for Nonvoting Common
Stock.

                                        33
<PAGE>   36
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following is a reconciliation of the denominator used in the
computation of basic and diluted earnings per share. Average shares are as
follows:

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                                   ------------------------------------
                                                      2000         1999         1998
                                                   ----------   ----------   ----------
<S>                                                <C>          <C>          <C>
Basic............................................  15,263,403   15,234,413   15,215,658
Stock options....................................     114,054      101,883      345,211
                                                   ----------   ----------   ----------
Diluted..........................................  15,377,457   15,336,296   15,560,869
                                                   ==========   ==========   ==========
</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.

     At December 31, 2000 and 1999, the Company had no preferred stock issued or
outstanding. In conjunction with the initial public offering in November 1994,
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.

     On December 26, 2000, the Board of Directors declared a dividend
distribution of one preferred share purchase right (a "right") for each share of
the Company's common stock outstanding on January 5, 2001. Each right would
entitle shareholders to purchase from the Company one one-thousandth of a share
of Series A Junior Participating Preferred Stock, $.01 par value, of the Company
at a price of $30 per one one-thousandth of a Preferred Share, subject to
adjustment. The rights are not currently exercisable, but would become
exercisable if certain events occurred relating to a person or group acquiring
or attempting to acquire 20 percent or more of the outstanding shares of common
stock. The rights expire on December 26, 2010, unless the expiration date is
extended or the rights redeemed or exchanged by the Company earlier.

10. OPERATING LEASE OBLIGATIONS:

     Rental expense under operating leases was $1,710,000, $1,575,000 and
$1,598,000 for the years ended December 31, 2000, 1999 and 1998, respectively.
As of December 31, 2000, the minimum rental commitments under long-term
operating leases were as follows: $1,284,000 in 2001, $1,092,000 in 2002,
$1,034,000 in 2003 and $42,000 in 2004.

     In December 1997, CBCC entered into a six-year operating lease agreement
for certain manufacturing equipment. There are several options available to the
Company at the end of the lease term, which include renewal of the lease,
purchase of the equipment by CBCC or sale of the equipment.

11. COMMITMENTS AND CONTINGENCIES:

     CBCC is subject to certain contingent environmental liabilities with
respect to CBCC's facility. 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 was responsible for certain
remediation activities attributable to environmental releases which occurred
prior to the CBCC Acquisition at CBCC's manufacturing facility. BP also is
obligated under the CBCC Purchase Agreement to indemnify the Company for certain
liabilities arising out of certain environmental conditions that existed as of
the CBCC Acquisition date.

     Preliminary studies conducted immediately prior to the CBCC Acquisition
indicated that certain areas of the site upon which CBCC's manufacturing
facility is located have been contaminated with certain volatile

                                        34
<PAGE>   37
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

organic compounds (VOCs) as well as total petroleum hydrocarbons and certain
metals from historical operating practices. After the CBCC Acquisition, BP and
CBCC conducted sampling to attempt to identify and determine the extent of
contamination at CBCC's site. Based on the sampling conducted by BP, BP
conducted certain remediation activities in 1993.

     Based on the results of sampling conducted by BP and CBCC, CBCC completed
an interim remediation for a portion of the site in 1998 at a cost to CBCC of
approximately $1 million, which was recorded in third quarter 1998. Based on
BP's obligations under the Remediation Agreement, the Company recorded a
corresponding $1 million receivable from BP.

     CBCC also initiated additional interim remedial actions for other portions
of the site in second quarter 1999, with completion anticipated during first
quarter 2000. Costs for this project originally were estimated at $3.1 million
and were recorded in second quarter 1999. Based on BP's obligations under the
Remediation Agreement and the CBCC Purchase Agreement, the Company also recorded
a corresponding $3.1 million receivable from BP in second quarter 1999. However,
the results of sampling conducted as part of these interim remedial actions
initiated in 1999 identified the presence of VOCs that were not covered by the
initial scope of these interim actions. As a result, CBCC conducted additional
sampling at certain areas of the site to further delineate the contamination in
those areas. Based on the aggregate sampling results, CBCC modified its 1999
remediation plan. CBCC began implementing the modified plan in first quarter
2000 and completed those remediation activities in fourth quarter 2000 at a cost
of $10 million (including $2.5 million spent in 1999 for this project).

     CBCC also is in the process of developing a remediation plan for in situ
remediation at two additional areas of its site, and expects to initiate in situ
remediation activities at those areas in 2001. Based on preliminary cost
estimates provided by CBCC's independent environmental consultant, and subject
to the development by the consultant of a remediation plan for these areas of
the site and the receipt of bids for the remediation activities required under
such plan, the Company estimates the cost for this project to approximate $3
million, based upon capital and operating costs for a period of five years.
However, subject to pilot testing and operating experience, costs may increase
if a longer operating period is necessary.

     Based on cost estimates of the remediation activities conducted in 1999 and
2000, the Company recorded $13.5 million of environmental reserves of which $4.4
million was accrued in 2000. Based on BP's obligations under the Remediation
Agreement, the Company recorded a corresponding $13.5 million receivable from
BP. Remediation spending of $2.5 million in 1999 and $7.0 million in 2000
resulted in a reserve of $4.0 million at December 31, 2000. The reserve included
$3.0 million for the in situ remediation plan, $0.6 million for environmental
consulting, and $0.4 million for final payments on the 2000 remediation
activities.

     Based on currently available data, the Company believes that upon
completion of the remediation activities at the two remaining sites described
above CBCC will have substantially completed the remediation activities that the
Company believes are necessary to address contamination at its site. However,
until the completion of these remedial and associated investigatory activities
and receipt of approval from the Ohio Environmental Protection Agency of CBCC's
activities to remediate this contamination, as well as remediation activities
previously conducted, the Company cannot be certain that further remediation
activities will not be required at its site. To the extent regulatory agencies
require additional remediation at those areas of CBCC's site where CBCC
previously has undertaken remediation activities, or requires excavation of soil
at the two remaining areas for which CBCC currently is developing a remediation
plan for in situ remediation, as part of the settlement of the litigation with
BP discussed below BP has retained responsibility for such remediation
activities.

     The Company believes it will be able to fund cleanup costs related to
anticipated future remediation activities at its manufacturing facility with
cash on hand and borrowings under its existing Bank Credit

                                        35
<PAGE>   38
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Facility. Therefore, the Company does not believe that funding these remediation
activities will have a material effect on the Company's financial condition,
results of operations or liquidity.

     Based on the status of remediation activities, other than as described
above, 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 related to CBCC.

     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 four sites (and possibly a fifth
site). 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 a
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.

     On January 7, 1998, a lawsuit entitled Ken-Chas Reserve Company and BP
Exploration (Alaska) Inc. and The Standard Oil Company v. Chase Industries Inc.
and Chase Brass & Copper Company, Inc. was filed in the Court of Common Pleas in
Cuyahoga County, Ohio. The Company and BP entered into a Settlement Agreement
and Mutual Release dated February 22, 2001 (the "Settlement Agreement"),
pursuant to which the Company and BP resolved and settled the claims between
them that were the subject of the lawsuit. Pursuant to the Settlement Agreement,
(1) the Company paid to BP $2 million, (2) the BP Note was deemed paid in full,
(3) the Company retained responsibility and financial liability for completing
in situ remediation at the two remaining areas of CBCC's site where additional
remediation activities currently are contemplated to be required and (4) BP
retained financial liability for (A) excavation activities that may be required
by regulatory agencies at these two remaining sites and (B) additional
remediation activities that may be required by regulatory agencies at the
remaining areas of CBCC's site, including areas where remediation activities
previously have been conducted. BP also retained and reaffirmed its obligations
under the CBCC Purchase Agreement to indemnify the Company and CBCC for any
claim made against the Company or CBCC in respect of any liability or obligation
of BP which was not assumed by the Company or CBCC as part of the CBCC
Acquisition, including without limitation claims related to off-site
contamination and third party claims.

     In addition to the above, the Company has outstanding purchase commitments
for capital equipment and building construction totaling approximately $20.3
million at December 31, 2000.

                                        36
<PAGE>   39
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. QUARTERLY FINANCIAL INFORMATION (UNAUDITED; IN THOUSANDS, EXCEPT PER SHARE
AMOUNTS)

     In addition to reclassifying Leavitt Tube as a discontinued operation,
shipping and handling costs have been reclassified to cost of goods sold from
net sales for all periods presented.

<TABLE>
<CAPTION>
                                                                 2000
                                                --------------------------------------
                                                 FIRST    SECOND     THIRD     FOURTH
                                                QUARTER   QUARTER   QUARTER   QUARTER
                                                -------   -------   -------   --------
<S>                                             <C>       <C>       <C>       <C>
Net sales.....................................  $81,635   $73,835   $70,010   $ 64,438
Gross profit..................................  $13,346   $12,673   $10,981   $  8,442
Income from continuing operations.............  $ 5,813   $ 5,359   $ 4,250   $  3,655
Discontinued operations:
  Income (loss), net of taxes.................     (136)     (428)      (89)       643
  Estimated loss on disposal, net of taxes....                                 (36,000)
                                                -------   -------   -------   --------
Net income (loss).............................  $ 5,677   $ 4,931   $ 4,161   $(31,702)
                                                =======   =======   =======   ========
Average shares outstanding:
  Basic.......................................   15,235    15,258    15,276     15,284
  Diluted.....................................   15,347    15,391    15,407     15,365
Basic earning per share:
  Continuing operations.......................     0.38      0.35      0.28       0.24
  Discontinued operations:
     Income (loss), net of taxes..............  $ (0.01)  $ (0.03)  $ (0.01)  $   0.04
     Estimated loss on disposal, net of
       taxes..................................  $    --   $    --   $    --   $  (2.35)
  Net income (loss)...........................  $  0.37   $  0.32   $  0.27   $  (2.07)
Diluted earnings per share:
  Continuing operations.......................  $  0.38   $  0.35   $  0.28   $   0.24
  Discontinued operations:
     Income (loss), net of taxes..............  $ (0.01)  $ (0.03)  $ (0.01)  $   0.04
     Estimated loss on disposal, net of
       taxes..................................  $    --   $    --   $    --   $  (2.34)
  Net income (loss)...........................  $  0.37   $  0.32   $  0.27   $  (2.06)
</TABLE>

                                        37
<PAGE>   40
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                                                 1999
                                                 -------------------------------------
                                                  FIRST    SECOND     THIRD    FOURTH
                                                 QUARTER   QUARTER   QUARTER   QUARTER
                                                 -------   -------   -------   -------
<S>                                              <C>       <C>       <C>       <C>
Net sales......................................  $72,744   $66,805   $66,624   $66,747
Gross profit...................................  $12,869   $11,772   $11,080   $11,475
Income from continuing operations..............  $ 5,238   $ 4,553   $ 4,066   $ 4,256
Income (loss) discontinued operations, net of
  taxes........................................     (826)      504       226       598
                                                 -------   -------   -------   -------
Net income.....................................  $ 4,412   $ 5,057   $ 4,292   $ 4,854
                                                 =======   =======   =======   =======
Average shares outstanding:
  Basic........................................   15,234    15,234    15,234    15,235
  Diluted......................................   15,357    15,326    15,324    15,335
Basic earning per share:
  Continuing operations........................  $  0.34   $  0.30   $  0.27   $  0.28
  Discontinued operations:
     Income (loss), net of taxes...............  $ (0.05)  $  0.03   $  0.01   $  0.04
Net income.....................................  $  0.29   $  0.33   $  0.28   $  0.32
Diluted earnings per share:
  Continuing operations........................  $  0.34   $  0.30   $  0.27   $  0.28
  Discontinued operations:
     Income (loss), net of taxes...............  $ (0.05)  $  0.03   $  0.01   $  0.04
  Net income...................................  $  0.29   $  0.33   $  0.28   $  0.32
</TABLE>

<TABLE>
<CAPTION>
                                                                 1998*
                                                 -------------------------------------
                                                  FIRST    SECOND     THIRD    FOURTH
                                                 QUARTER   QUARTER   QUARTER   QUARTER
                                                 -------   -------   -------   -------
<S>                                              <C>       <C>       <C>       <C>
Net sales......................................  $83,247   $75,856   $69,390   $64,246
Gross profit...................................  $12,717   $10,243   $ 9,288   $ 9,612
Income from continuing operations..............  $ 5,319   $ 3,866   $ 2,915   $ 3,145
Income (loss) discontinued operations, net of
  taxes........................................    1,660       855      (163)   (1,837)
                                                 -------   -------   -------   -------
Net income.....................................  $ 6,979   $ 4,721   $ 2,752   $ 1,308
                                                 =======   =======   =======   =======
Average shares outstanding:
  Basic........................................   15,172    15,223    15,233    15,233
  Diluted......................................   15,545    15,698    15,545    15,437
Basic earning per share:
  Continuing operations........................  $  0.35   $  0.25   $  0.19   $  0.21
  Discontinued operations:
     Income (loss), net of taxes...............  $  0.11   $  0.06   $ (0.01)  $ (0.12)
  Net income...................................  $  0.46   $  0.31   $  0.18   $  0.09
Diluted earnings per share:
  Continuing operations........................  $  0.34   $  0.25   $  0.19   $  0.20
  Discontinued operations:
     Income (loss), net of taxes...............  $  0.11   $  0.05   $ (0.01)  $ (0.12)
  Net income...................................  $  0.45   $  0.30   $  0.18   $  0.08
</TABLE>

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

 *  The second and fourth quarters of 1998 included lower of cost-or-market
    inventory writedowns of $2,424,000 and $750,000, respectively.

                                        38
<PAGE>   41
                             CHASE INDUSTRIES INC.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. DISCONTINUED OPERATIONS

     In fourth quarter 2000, the Company decided to divest Leavitt. On March 15,
2001, the Company signed a definitive agreement to sell Leavitt to
privately-held Pinkert Industrial Group, LLC, headquartered in Chicago, for
approximately $32 million, subject to closing adjustments. The sale is scheduled
to close on March 30, 2001. The Company recorded an estimated loss on the sale
of Leavitt of $36.0 million, including income tax benefit of $11.3 million, in
fourth quarter 2000. The disposal of Leavitt represented the disposal of a
business segment. Consequently, the consolidated financial statements reflect
Leavitt as a discontinued operation.

     The operating results of discontinued operations were as follows (in
thousands):

<TABLE>
<CAPTION>
                                                          YEAR ENDED DECEMBER 31,
                                                       ------------------------------
                                                         2000       1999       1998
                                                       --------   --------   --------
<S>                                                    <C>        <C>        <C>
Net sales............................................  $118,787   $127,792   $149,901
Income (loss) before taxes...........................       (16)       809        829
Estimated (loss) on disposal.........................   (47,300)        --         --
Provision for income (taxes) benefit.................    11,306       (307)      (315)
                                                       --------   --------   --------
Net income (loss)....................................  $(36,010)  $    502   $    514
                                                       ========   ========   ========
</TABLE>

     A portion of the Company's interest expense has been allocated to
discontinued operations based on the debt outstanding on Leavitt's balance
sheet. Income taxes on results of the discontinued operations have been
allocated using the same overall rate incurred by the Company in each year
presented.

     The assets and liabilities of the discontinued operations were as follows
(in thousands):

<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                              ------------------
                                                                2000      1999
                                                              --------   -------
<S>                                                           <C>        <C>
Assets:
  Receivables, net..........................................  $  7,521   $ 9,187
  Inventories, net..........................................    29,194    26,807
  Other current assets......................................       815       930
  Property, plant and equipment, net........................    56,040    58,922
  Valuation allowance.......................................   (36,000)       --
  Other assets..............................................     2,637     3,271
                                                              --------   -------
          Total assets......................................    60,207    99,117
                                                              --------   -------
Liabilities:
  Accounts payable..........................................     9,101     7,409
  Accrued liabilities.......................................     5,006     5,685
  Noncurrent liabilities....................................     7,939     8,191
                                                              --------   -------
          Total liabilities.................................    22,046    21,285
                                                              --------   -------
Net assets of discontinued operations.......................  $ 38,161   $77,832
                                                              ========   =======
</TABLE>

                                        39
<PAGE>   42

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

     The response to this item is included in the Company's Proxy Statement for
its Annual Meeting of Stockholders to be held in 2001 and is incorporated herein
by reference.

ITEM 11. EXECUTIVE COMPENSATION

     The response to this item is included in the Company's Proxy Statement for
its Annual Meeting of Stockholders to be held in 2001 and is incorporated herein
by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The response to this item is included in the Company's Proxy Statement for
its Annual Meeting of Stockholders to be held in 2001 and is incorporated herein
by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The response to this item is included in the Company's Proxy Statement for
its Annual Meeting of Stockholders to be held in 2001 and is incorporated herein
by reference.

                                    PART IV

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

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

     2. Financial Statement Schedules

          Schedule II -- Valuation and Qualifying Accounts (page S-1)

          All other schedules are omitted because they are not applicable or not
     required or because the required information is included in the financial
     statements or notes thereto.

     3. Exhibits

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

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                                  DESCRIPTION
        -------                                  -----------
<C>                      <S>
           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).
</TABLE>

                                        40
<PAGE>   43

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                                  DESCRIPTION
        -------                                  -----------
<C>                      <S>
           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 dated
                            August 30, 1996, 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 the Company
                            (incorporated by reference to Exhibit 3.1 to the
                            Company's Quarterly Report on Form 10-Q for the quarter
                            ended June 30, 1998), as amended by the Certificate of
                            First Amendment to the Company's Restated Certificate of
                            Incorporation (incorporated by reference to Exhibit 3.2
                            to the Company's Current Report on Form 8-K dated May 14,
                            1997, filed with the Securities and Exchange Commission
                            on May 28, 1997) and Certificate of Second Amendment to
                            the Company's Restated Certificate of Incorporation
                            (incorporated herein by reference to Exhibit 3.2 to the
                            Company's Current Report on form 8-K dated May 26, 1998,
                            filed with the Securities and Exchange Commission on June
                            1, 1998).
           3.2           -- Certificate of Designation of Series A Junior
                            Participating Preferred Stock (incorporated herein by
                            reference to Exhibit 4.2 to the Company's Form 8-A dated
                            January 5, 2001, filed with the Securities and Exchange
                            Commission on January 5, 2001).
           3.3           -- By-Laws of the Company (incorporated by reference to
                            Exhibit 99.5 to the Company's Current Report on Form 8-K
                            dated December 26, 2000, filed with the Securities and
                            Exchange Commission on January 4, 2001).
           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).
          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 dated August 30, 1996, filed with the
                            Securities and Exchange Commission on September 13,
                            1996).
          10.2           -- First Amendment to Credit Agreement by and among the
                            Company, the banks referred to therein and PNC Bank,
                            National Association, as Agent dated June 16, 1997
                            (incorporated by reference to Exhibit 10.2 to the
                            Company's Annual Report on Form 10-K for the year ended
                            December 31, 1998).
          10.3           -- Second Amendment to Credit Agreement by and among the
                            Company, the banks referred to therein and PNC Bank,
                            National Association, as Agent dated September 8, 1999
                            (incorporated by reference to Exhibit 10.3 to the
                            Company's Annual Report on Form 10-K for the year ended
                            December 31, 1999).
         +10.4           -- Third Amendment to Credit Agreement by and among the
                            Company, the banks referred to therein and PNC Bank,
                            National Association, as Agent dated September 1, 2000.
          10.5*          -- 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).
</TABLE>

                                        41
<PAGE>   44

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                                  DESCRIPTION
        -------                                  -----------
<C>                      <S>
          10.6*          -- Employment Agreement dated October 12, 1999, between
                            Chase Brass & Copper Company, Inc., a wholly owned
                            subsidiary of the Company, and John H. Steadman
                            (incorporated by reference to Exhibit 10.5 to the
                            Company's Annual Report on form 10-K for the year ended
                            December 31, 1999).
          10.7*          -- Chase Industries Inc. 1994 Long-Term Incentive Plan, as
                            amended as of May 14, 1997 (incorporated by reference to
                            Exhibit 10.5 to the Company's Annual Report on Form 10-K
                            for the year ended December 31, 1998).
          10.8*          -- First Amendment to Chase Industries Inc. 1994 Long-Term
                            Incentive Plan, as amended May 14, 1997, effective as of
                            November 19, 1999 (incorporated by reference to Exhibit
                            10.7 to the Company's Annual Report on Form 10-K for the
                            year ended December 31, 1999).
          10.9*          -- Chase Industries Inc. 1997 Non-Employee Director Stock
                            Option Plan, as amended May 26, 1998 (incorporated by
                            reference to Exhibit 10.6 to the Company's Annual Report
                            on Form 10-K for the year ended December 31, 1998).
          10.10*         -- First Amendment to Chase Industries Inc. 1997
                            Non-Employee Director Stock Option Plan as amended May
                            26, 1998, effective as of November 19, 1999 (incorporated
                            by reference to Exhibit 10.9 to the Company's Annual
                            Report on Form 10-K for the year ended December 31,
                            1999).
          10.11*         -- Chase Industries Inc. 1997 Executive Deferred
                            Compensation Stock Option Plan (incorporated by reference
                            to Exhibit 10.7 to the Company's Annual Report on Form
                            10-K for the year ended December 31, 1998).
          10.12*         -- First Amendment to Chase Industries Inc. 1997 Executive
                            Deferred Compensation Stock Option Plan, effective as of
                            November 19, 1999 (incorporated by reference to Exhibit
                            10.11 to the Company's Annual Report on Form 10-K for the
                            year ended December 31, 1999).
          10.13          -- 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).
          10.14          -- Schedule identifying additional documents substantially
                            identical to the Indemnification Agreement included as
                            Exhibit 10.12 and setting forth the material details in
                            which those documents differ from that document
                            (incorporated by reference to Exhibit 10.13 to the
                            Company's Annual Report on Form 10-K for the year ended
                            December 31, 1999).
          10.15          -- 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).
          10.16          -- 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).
          10.17*         -- CBCC Benefit Restoration Plan (incorporated by reference
                            to Exhibit 10.16 to the Company's Annual Report on Form
                            10-K for the year ended December 31, 1996).
          10.18          -- Participation Agreement dated as of December 23, 1997,
                            among CBCC, as Lessee, ABN Amro Bank N.V., as Lessor, ABN
                            Amro Bank N.V. and Credit Agricole IndoSuez, as
                            Participants, and ABN Amro Bank N.V., as Agent, regarding
                            lease of equipment at CBCC's Montpelier, Ohio, facility
                            (incorporated by reference to Exhibit 10.18 to the
                            Company's Annual Report on Form 10-K for the year ended
                            December 31, 1997).
</TABLE>

                                        42
<PAGE>   45

<TABLE>
<CAPTION>
        EXHIBIT
         NUMBER                                  DESCRIPTION
        -------                                  -----------
<C>                      <S>
          10.19          -- Master Lease dated as of December 23, 1997, between ABN
                            Amro Bank N.V., as Lessor, and CBCC, as Lessee, regarding
                            lease of equipment at CBCC's Montpelier, Ohio, facility
                            (incorporated by reference to Exhibit 10.19 to the
                            Company's Annual Report on Form 10-K for the year ended
                            December 31, 1997).
          10.20          -- Lease Supplement No. 1 dated as of December 23, 1997,
                            between ABN Amro Bank N.V., as Lessor, and CBCC, as
                            Lessee, supplementing the Master Lease filed herewith as
                            Exhibit 10.19 (incorporated by reference to Exhibit 10.20
                            to the Company's Annual Report on Form 10-K for the year
                            ended December 31, 1997).
          10.21          -- Lease Supplement No. 2 dated as of February 2, 1998,
                            between ABN Amro Bank N.V., as Lessor, and CBCC, as
                            Lessee, supplementing the Master Lease filed herewith as
                            Exhibit 10.19 (incorporated by reference to Exhibit 10.21
                            to the Company's Annual Report on Form 10-K for the year
                            ended December 31, 1997).
          10.22          -- Appendix 1 (Definitions) to Participation Agreement filed
                            herewith as Exhibit 10.24 and Master Lease filed herewith
                            as Exhibit 10.25 (incorporated by reference to Exhibit
                            10.22 to the Company's Annual Report on Form 10-K for the
                            year ended December 31, 1997).
          10.23          -- Guarantee dated as of December 23, 1997, from the
                            Company, as Obligor, to ABN Amro Bank N.V., as Agent,
                            guaranteeing obligations of CBCC under Participation
                            Agreement filed herewith as Exhibit 10.24 and Master
                            Lease filed herewith as Exhibit 10.25 (incorporated by
                            reference to Exhibit 10.23 to the Company's Annual Report
                            on Form 10-K for the year ended December 31, 1997).
         +10.24          -- Change of Control Agreement dated as of March 31, 1997,
                            by and between the Company and Michael T. Segraves.
         +10.25          -- Amendment No. 1 to Change of Control Agreement dated as
                            of March 31, 1998, by and between the Company and Michael
                            T. Segraves.
         +10.26          -- Amendment No. 2 to Change of Control Agreement dated as
                            of February 15, 2001, by and between the Company and
                            Michael T. Segraves.
          21             -- List of Subsidiaries of the Company. (incorporated by
                            reference to Exhibit 21 to the Company's Annual Report on
                            Form 10-K for the year ended December 31, 1996).
         +23             -- Consent of PricewaterhouseCoopers LLP.
</TABLE>

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

+ Filed herewith

     (b) Reports on Form 8-K

     No Current Report on Form 8-K was filed by the Company during the fourth
quarter of 2000.

                                        43
<PAGE>   46

                                   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 INDUSTRIES INC.

<TABLE>
<S>                                              <C>
Date: March 29, 2001                                           By: /s/ MARTIN V. ALONZO
                                                   -------------------------------------------------
                                                                   Martin V. Alonzo
                                                         Chairman of the Board, President and
                                                                Chief Executive Officer
</TABLE>

     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
                      ---------                        ----------------------------------  ------------------
<C>                                                    <S>                                 <C>
                /s/ MARTIN V. ALONZO                   Chairman of the Board, President,     March 29, 2001
-----------------------------------------------------    Chief Executive Officer and
                  Martin V. Alonzo                       Director (Principal Executive
                                                         Officer)

               /s/ MICHAEL T. SEGRAVES                 Chief Financial Officer (Principal    March 29, 2001
-----------------------------------------------------    Financial Officer and Principal
                 Michael T. Segraves                     Accounting Officer)

              /s/ RAYMOND E. CARTLEDGE                 Director                              March 29, 2001
-----------------------------------------------------
                Raymond E. Cartledge

              /s/ CHARLES E. CORPENING                 Director                              March 29, 2001
-----------------------------------------------------
                Charles E. Corpening

                 /s/ JOHN R. KENNEDY                   Director                              March 29, 2001
-----------------------------------------------------
                   John R. Kennedy

                /s/ ROBERT D. KENNEDY                  Director                              March 29, 2001
-----------------------------------------------------
                  Robert D. Kennedy

              /s/ THOMAS F. MCWILLIAMS                 Director                              March 29, 2001
-----------------------------------------------------
                Thomas F. McWilliams

                /s/ WILLIAM R. TOLLER                  Director                              March 29, 2001
-----------------------------------------------------
                  William R. Toller
</TABLE>

                                        44
<PAGE>   47

                             CHASE INDUSTRIES INC.

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

<TABLE>
<CAPTION>
                                            BALANCE AT   ADDITIONS   CHARGED TO                BALANCE AT
                                            BEGINNING    COST AND      OTHER                     END OF
                                            OF PERIOD    EXPENSES     ACCOUNTS    DEDUCTIONS     PERIOD
                                            ----------   ---------   ----------   ----------   ----------
<S>                                         <C>          <C>         <C>          <C>          <C>
Year Ended December 31, 2000
  Allowance for doubtful accounts and
     claims...............................    $  990        $--         $--          $--          $990
                                              ======        ===         ===          ===          ====
Year Ended December 31, 1999
  Allowance for doubtful accounts and
     claims...............................    $  965        $60         $--          $35          $990
                                              ======        ===         ===          ===          ====
Year Ended December 31, 1998
  Allowance for doubtful accounts and
     claims...............................    $1,036        $--         $--          $71          $965
                                              ======        ===         ===          ===          ====
</TABLE>

                                       S-1
<PAGE>   48

                               INDEX TO EXHIBITS

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

<TABLE>
<CAPTION>
                                                                          SEQUENTIALLY
  EXHIBIT                                                                   NUMBERED
   NUMBER                            DESCRIPTION                              PAGE
  -------                            -----------                          ------------
<C>          <S>                                                          <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 dated
                August 30, 1996, 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 the Company
                (incorporated by reference to Exhibit 3.1 to the
                Company's Quarterly Report on Form 10-Q for the quarter
                ended June 30, 1998), as amended by the Certificate of
                First Amendment to the Company's Restated Certificate of
                Incorporation (incorporated by reference to Exhibit 3.2
                to the Company's Current Report on Form 8-K dated May 14,
                1997, filed with the Securities and Exchange Commission
                on May 28, 1997) and Certificate of Second Amendment to
                the Company's Restated Certificate of Incorporation
                (incorporated herein by reference to Exhibit 3.2 to the
                Company's Current Report on form 8-K dated May 26, 1998,
                filed with the Securities and Exchange Commission on June
                1, 1998).
     3.2     -- Certificate of Designation of Series A Junior
                Participating Preferred Stock (incorporated herein by
                reference to Exhibit 4.2 to the Company's Form 8-A dated
                January 5, 2001, filed with the Securities and Exchange
                Commission on January 5, 2001).
     3.3     -- By-Laws of the Company (incorporated by reference to
                Exhibit 99.5 to the Company's Current Report on Form 8-K
                dated December 26, 2000, filed with the Securities and
                Exchange Commission on January 4, 2001).
     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).
</TABLE>
<PAGE>   49

<TABLE>
<CAPTION>
                                                                          SEQUENTIALLY
  EXHIBIT                                                                   NUMBERED
   NUMBER                            DESCRIPTION                              PAGE
  -------                            -----------                          ------------
<C>          <S>                                                          <C>
    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 dated August 30, 1996, filed with the
                Securities and Exchange Commission on September 13,
                1996).
    10.2     -- First Amendment to Credit Agreement by and among the
                Company, the banks referred to therein and PNC Bank,
                National Association, as Agent dated June 16, 1997
                (incorporated by reference to Exhibit 10.2 to the
                Company's Annual Report on Form 10-K for the year ended
                December 31, 1998).
    10.3     -- Second Amendment to Credit Agreement by and among the
                Company, the banks referred to therein and PNC Bank,
                National Association, as Agent dated September 8, 1999
                (incorporated by reference to Exhibit 10.3 to the
                Company's Annual Report on Form 10-K for the year ended
                December 31, 1999).
   +10.4     -- Third Amendment to Credit Agreement by and among the
                Company, the banks referred to therein and PNC Bank,
                National Association, as Agent dated September 1, 2000.
    10.5*    -- 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).
    10.6*    -- Employment Agreement dated October 12, 1999, between
                Chase Brass & Copper Company, Inc., a wholly owned
                subsidiary of the Company, and John H. Steadman
                (incorporated by reference to Exhibit 10.5 to the
                Company's Annual Report on form 10-K for the year ended
                December 31, 1999).
    10.7*    -- Chase Industries Inc. 1994 Long-Term Incentive Plan, as
                amended as of May 14, 1997 (incorporated by reference to
                Exhibit 10.5 to the Company's Annual Report on Form 10-K
                for the year ended December 31, 1998).
    10.8*    -- First Amendment to Chase Industries Inc. 1994 Long-Term
                Incentive Plan, as amended May 14, 1997, effective as of
                November 19, 1999 (incorporated by reference to Exhibit
                10.7 to the Company's Annual Report on Form 10-K for the
                year ended December 31, 1999).
    10.9*    -- Chase Industries Inc. 1997 Non-Employee Director Stock
                Option Plan, as amended May 26, 1998 (incorporated by
                reference to Exhibit 10.6 to the Company's Annual Report
                on Form 10-K for the year ended December 31, 1998).
    10.10*   -- First Amendment to Chase Industries Inc. 1997
                Non-Employee Director Stock Option Plan as amended May
                26, 1998, effective as of November 19, 1999 (incorporated
                by reference to Exhibit 10.9 to the Company's Annual
                Report on Form 10-K for the year ended December 31,
                1999).
    10.11*   -- Chase Industries Inc. 1997 Executive Deferred
                Compensation Stock Option Plan (incorporated by reference
                to Exhibit 10.7 to the Company's Annual Report on Form
                10-K for the year ended December 31, 1998).
    10.12*   -- First Amendment to Chase Industries Inc. 1997 Executive
                Deferred Compensation Stock Option Plan, effective as of
                November 19, 1999 (incorporated by reference to Exhibit
                10.11 to the Company's Annual Report on Form 10-K for the
                year ended December 31, 1999).
    10.13    -- 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).
</TABLE>
<PAGE>   50

<TABLE>
<CAPTION>
                                                                          SEQUENTIALLY
  EXHIBIT                                                                   NUMBERED
   NUMBER                            DESCRIPTION                              PAGE
  -------                            -----------                          ------------
<C>          <S>                                                          <C>
    10.14    -- Schedule identifying additional documents substantially
                identical to the Indemnification Agreement included as
                Exhibit 10.12 and setting forth the material details in
                which those documents differ from that document
                (incorporated by reference to Exhibit 10.13 to the
                Company's Annual Report on Form 10-K for the year ended
                December 31, 1999).
    10.15    -- 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).
    10.16    -- 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).
    10.17*   -- CBCC Benefit Restoration Plan (incorporated by reference
                to Exhibit 10.16 to the Company's Annual Report on Form
                10-K for the year ended December 31, 1996).
    10.18    -- Participation Agreement dated as of December 23, 1997,
                among CBCC, as Lessee, ABN Amro Bank N.V., as Lessor, ABN
                Amro Bank N.V. and Credit Agricole IndoSuez, as
                Participants, and ABN Amro Bank N.V., as Agent, regarding
                lease of equipment at CBCC's Montpelier, Ohio, facility
                (incorporated by reference to Exhibit 10.18 to the
                Company's Annual Report on Form 10-K for the year ended
                December 31, 1997).
    10.19    -- Master Lease dated as of December 23, 1997, between ABN
                Amro Bank N.V., as Lessor, and CBCC, as Lessee, regarding
                lease of equipment at CBCC's Montpelier, Ohio, facility
                (incorporated by reference to Exhibit 10.19 to the
                Company's Annual Report on Form 10-K for the year ended
                December 31, 1997).
    10.20    -- Lease Supplement No. 1 dated as of December 23, 1997,
                between ABN Amro Bank N.V., as Lessor, and CBCC, as
                Lessee, supplementing the Master Lease filed herewith as
                Exhibit 10.19 (incorporated by reference to Exhibit 10.20
                to the Company's Annual Report on Form 10-K for the year
                ended December 31, 1997).
    10.21    -- Lease Supplement No. 2 dated as of February 2, 1998,
                between ABN Amro Bank N.V., as Lessor, and CBCC, as
                Lessee, supplementing the Master Lease filed herewith as
                Exhibit 10.19 (incorporated by reference to Exhibit 10.21
                to the Company's Annual Report on Form 10-K for the year
                ended December 31, 1997).
    10.22    -- Appendix 1 (Definitions) to Participation Agreement filed
                herewith as Exhibit 10.24 and Master Lease filed herewith
                as Exhibit 10.25 (incorporated by reference to Exhibit
                10.22 to the Company's Annual Report on Form 10-K for the
                year ended December 31, 1997).
    10.23    -- Guarantee dated as of December 23, 1997, from the
                Company, as Obligor, to ABN Amro Bank N.V., as Agent,
                guaranteeing obligations of CBCC under Participation
                Agreement filed herewith as Exhibit 10.24 and Master
                Lease filed herewith as Exhibit 10.25 (incorporated by
                reference to Exhibit 10.23 to the Company's Annual Report
                on Form 10-K for the year ended December 31, 1997).
   +10.24    -- Change of Control Agreement dated as of March 31, 1997,
                by and between the Company and Michael T. Segraves.
</TABLE>
<PAGE>   51

<TABLE>
<CAPTION>
                                                                          SEQUENTIALLY
  EXHIBIT                                                                   NUMBERED
   NUMBER                            DESCRIPTION                              PAGE
  -------                            -----------                          ------------
<C>          <S>                                                          <C>
   +10.25    -- Amendment No. 1 to Change of Control Agreement dated as
                of March 31, 1998, by and between the Company and Michael
                T. Segraves.
   +10.26    -- Amendment No. 2 to Change of Control Agreement dated as
                of February 15, 2001, by and between the Company and
                Michael T. Segraves.
    21       -- List of Subsidiaries of the Company. (incorporated by
                reference to Exhibit 21 to the Company's Annual Report on
                Form 10-K for the year ended December 31, 1996).
   +23       -- Consent of PricewaterhouseCoopers LLP.
</TABLE>

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

+ Filed herewith