EXHIBIT 99.1
METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES
INTRODUCTION TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial statements of
Metallurg, Inc. ("Metallurg") adjust the historical financial statements of
Metallurg to give pro forma effect of the sale by Metallurg, and its wholly
owned subsidiary, Metallurg Europe Limited, of all of its interests in Metallurg
(South Africa) (Pty) Limited and its subsidiaries ("MeSA"), a South African
sales operation.
The unaudited pro forma consolidated statements of income have been
prepared as if the transaction occurred on February 1, 2000, the first day of
Metallurg's fiscal year ended December 31, 2000, which was a transition period.
The unaudited pro forma consolidated balance sheet has been prepared as if the
transaction occurred on September 30, 2003 and includes the disposal proceeds.
Earnings per share is not presented since Metallurg is a wholly owned subsidiary
of Metallurg Holdings, Inc.
The unaudited pro forma statements for the periods presented do not purport
to represent what Metallurg's results of operations or financial position would
actually have been had the transaction occurred on the dates noted above, or to
project Metallurg's results of operations for any future periods. The pro forma
adjustments are based upon available information and are directly attributable
to the transaction. The unaudited pro forma consolidated financial statements
should be read in conjunction with the historical financial statements and
related notes thereto of Metallurg included in the Annual Report filed on Form
10-K for the year ended December 31, 2002. Historical information for the
interim periods presented was restated in Metallurg's Quarterly Report on Form
10-Q for the quarter ended September 30, 2003; historical information for the
years ended December 31, 2002, 2001 and 2000 was restated in Metallurg's Current
Report on Form 8-K dated September 30, 2003.
METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES
PRO FORMA CONDENSED STATEMENT OF CONSOLIDATED OPERATIONS
THREE QUARTERS ENDED SEPTEMBER 30, 2003
(UNAUDITED)
(In thousands)
Pro Forma
Historical Adjustments (a) Pro Forma
---------- --------------- ---------
Total revenue.............................................. $250,719 $(40,973)(b) $209,746
-------- -------- --------
Operating costs and expenses:
Cost of sales........................................... 227,438 (35,968)(c) 191,470
Selling, general and administrative expenses............ 25,696 (2,855) 22,841
Restructuring charges and asset impairment.............. 2,659 -- 2,659
-------- -------- --------
Total operating costs and expenses ..................... 255,793 (38,823) 216,970
-------- -------- --------
Operating loss ......................................... (5,074) (2,150) (7,224)
Other income (expense):
Other (expense) income, net............................. (7) 74 67
Interest expense, net................................... (10,050) 246 (9,804)
------- -------- --------
Loss before income tax benefit and minority interest.... (15,131) (1,830) (16,961)
Income tax benefit ........................................ (322) (641) (963)
------- -------- --------
Loss before minority interest .......................... (14,809) (1,189) (15,998)
Minority interest ......................................... (57) 14 (43)
------- -------- --------
Net loss ............................................... $(14,866) $ (1,175) $(16,041)
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(a) Reflects the activity of MeSA.
(b) Reflects the following:
Total revenue of MeSA................................ $(41,954)
Adjustment of intergroup activity between MeSA
and the companies retained by Metallurg........... 981
--------
$(40,973)
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(c) Reflects the following:
Total cost of sales of MeSA.......................... $(36,949)
Adjustment of intergroup activity between MeSA
and the companies retained by Metallurg........... 981
--------
$(35,968)
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