GENTEK INC - 10-Q Quarterly Report

Back to GetFilings.com

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2003

OR

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

For the transition period from ________ to ________

Commission File Number 001-14789

GENTEK INC.
(Exact name of Registrant as specified in its charter)

Delaware 02-0505547
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

Liberty Lane
Hampton, New Hampshire 03842
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (603) 929-2264

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 whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [_] No [X]

Applicable to issuers involved in bankruptcy proceedings during the preceding
five years:

Indicate by checkmark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court. Yes [X] No [_]

The number of outstanding shares of the Registrant's Common Stock as of November
10, 2003 was 10,000,000.

================================================================================

GENTEK INC.

FORM 10-Q

QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003

INDEX
-----

Page No.
--------

PART I. FINANCIAL INFORMATION:

Item 1. Financial Statements

Consolidated Statements of Operations - Three Months and Nine Months
Ended September 30, 2003 and 2002...................................... 1

Consolidated Balance Sheets - September 30, 2003 and
December 31, 2002...................................................... 2

Consolidated Statements of Cash Flows - Nine Months
Ended September 30, 2003 and 2002...................................... 3

Notes to the Consolidated Financial Statements............................ 4-22

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................. 23-31

Item 3. Quantitative and Qualitative Disclosures about Market Risk......... 31

Item 4. Controls and Procedures............................................ 31

PART II. OTHER INFORMATION:

Item 1. Legal Proceedings.................................................. 32

Item 2. Changes in Securities and Use of Proceeds.......................... 32

Item 3. Defaults upon Senior Securities.................................... 32-33

Item 4. Submission of Matters to a Vote of Security Holders................ 33

Item 5. Other Information.................................................. 33

Item 6. Exhibits and Reports on Form 8-K................................... 33-35

SIGNATURES .................................................................. 36

PART I. FINANCIAL INFORMATION
-----------------------------

Item 1. Financial Statements.

GENTEK INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)

Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------

Net revenues................................................... $ 276,141 $ 279,458 $ 822,013 $ 859,124
Cost of sales.................................................. 213,749 220,948 656,618 681,891
Selling, general and administrative expense.................... 41,217 46,732 123,410 137,761
Restructuring and impairment charges........................... 3,109 49,722 27,770 73,340
------------ ------------ ------------ ------------
Operating profit (loss)..................................... 18,066 (37,944) 14,215 (33,868)
Interest expense (contractual interest for the three and
nine month periods ended September 30, 2003 was
$17,030 and $51,870, respectively).......................... 464 20,752 1,419 57,337
Interest income................................................ 265 568 811 1,779
Reorganization items........................................... 20,652 -- 54,442 --
Other (income) expense, net.................................... 998 495 (2,117) (494)
------------ ------------ ------------ ------------
Loss before income taxes and cumulative effect of a
change in accounting principle........................... (3,783) (58,623) (38,718) (88,932)
Income tax provision (benefit)................................. 998 (791) 4,766 118,261
------------ ------------ ------------ ------------
Loss before cumulative effect of a change in
accounting principle..................................... (4,781) (57,832) (43,484) (207,193)
Cumulative effect of a change in accounting principle
(net of tax benefit of $39,760)............................. -- -- -- (161,125)
------------ ------------ ------------ ------------
Net loss.................................................... $ (4,781) $ (57,832) $ (43,484) $ (368,318)
============ ============ ============ ============
Loss per common share - basic:
Loss before cumulative effect of a change in accounting
principle................................................... $ (.19) $ (2.26) $ (1.70) $ (8.12)
Cumulative effect of a change in accounting principle.......... -- -- -- (6.32)
------------ ------------ ------------ ------------
Net loss.................................................... $ (.19) $ (2.26) $ (1.70) $ (14.44)
============ ============ ============ ============
Loss per common share - assuming dilution:
Loss before cumulative effect of a change in accounting
principle................................................... $ (.19) $ (2.26) $ (1.70) $ (8.12)
Cumulative effect of a change in accounting principle.......... -- -- -- (6.32)
------------ ------------ ------------ ------------
Net loss.................................................... $ (.19) $ (2.26) $ (1.70) $ (14.44)
============ ============ ============ ============

See the accompanying notes to the consolidated financial statements.

-1-

GENTEK INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

September 30, December 31,
2003 2002
--------------- ---------------
(unaudited)

ASSETS
Current assets:
Cash and cash equivalents............................................... $ 116,441 $ 133,030
Receivables, net........................................................ 179,419 185,825
Inventories............................................................. 102,637 104,718
Deferred income taxes................................................... 3,525 3,328
Other current assets.................................................... 22,057 24,027
--------------- ---------------
Total current assets................................................. 424,079 450,928
Property, plant and equipment, net......................................... 281,789 308,825
Goodwill................................................................... 127,912 127,724
Deferred income taxes...................................................... 48,924 42,789
Other assets............................................................... 30,210 26,719
--------------- ---------------
Total assets......................................................... $ 912,914 $ 956,985
=============== ===============
LIABILITIES AND DEFICIT
Current liabilities:
Accounts payable........................................................ $ 45,863 $ 50,852
Accrued liabilities..................................................... 147,460 128,714
Current portion of long-term debt....................................... 14,295 15,091
--------------- ---------------
Total current liabilities............................................ 207,618 194,657
Long-term debt............................................................. 957 2,452
Liabilities subject to compromise.......................................... 982,956 1,143,765
Other liabilities.......................................................... 269,328 126,432
--------------- ---------------
Total liabilities.................................................... 1,460,859 1,467,306
--------------- ---------------
Deficit:
Preferred Stock, $.01 par value; authorized 10,000,000 shares;
none issued or outstanding........................................... -- --
Common Stock, $.01 par value; authorized 100,000,000 shares;
issued: 22,981,146 and 21,589,623 shares at September 30,
2003 and December 31, 2002, respectively............................. 230 216
Class B Common Stock, $.01 par value; authorized 40,000,000
shares; issued and outstanding: 2,505,337 and 3,896,860 shares
at September 30, 2003 and December 31, 2002, respectively............ 25 39
Paid in capital......................................................... 3,308 3,305
Accumulated other comprehensive loss.................................... (25,254) (31,111)
Accumulated deficit..................................................... (525,009) (481,525)
Treasury stock, at cost: 150,313 shares at September 30, 2003
and December 31, 2002................................................ (1,245) (1,245)
--------------- ---------------
Total deficit........................................................ (547,945) (510,321)
--------------- ---------------
Total liabilities and deficit........................................ $ 912,914 $ 956,985
=============== ===============

See the accompanying notes to the consolidated financial statements.

-2-

GENTEK INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)

Nine Months Ended
September 30,
---------------------------------
2003 2002
--------------- ---------------

Cash flows from operating activities:
Net loss............................................................... $ (43,484) $ (368,318)
Adjustments to reconcile net loss to net cash provided by (used
for) operating activities:
Cumulative effect of a change in accounting principle............... -- 161,125
Depreciation and amortization....................................... 34,112 36,188
Asset impairment charges............................................ 24,862 64,819
Reorganization items................................................ 54,442 --
Net loss (gain) on disposition of long-term assets.................. 152 (596)
Long-term incentive plan costs, net................................. 3 (542)
Decrease in receivables............................................. 14,203 2,325
Decrease in inventories............................................. 3,540 7,730
(Increase) decrease in deferred tax assets.......................... (1,357) 126,400
Decrease in accounts payable........................................ (8,744) (33,722)
Increase (decrease) in accrued liabilities.......................... (3,666) 6,130
Decrease in other liabilities and assets, net....................... (7,155) (3,759)
--------------- ---------------
Net cash provided by (used for) operations....................... 66,908 (2,220)
--------------- ---------------
Net cash used for reorganization items.................................... (17,170) --
--------------- ---------------
Cash flows from investing activities:
Capital expenditures................................................... (26,254) (36,026)
Proceeds from sales or disposals of long-term assets................... 167 13,449
Acquisition of businesses net of cash acquired*........................ -- (464)
--------------- ---------------
Net cash used for investing activities........................... (26,087) (23,041)
--------------- ---------------
Cash flows from financing activities:
Proceeds from long-term debt........................................... 2,537 167,778
Repayment of long-term debt............................................ (44,790) (24,601)
Payment to acquire treasury stock...................................... -- (1)
Debt issuance costs - reorganization................................... (938) --
--------------- ---------------
Net cash provided by (used for) financing activities............. (43,191) 143,176
--------------- ---------------
Effect of exchange rate changes on cash................................... 2,951 981
--------------- ---------------
Increase (decrease) in cash and cash equivalents.......................... (16,589) 118,896
Cash and cash equivalents at beginning of period.......................... 133,030 9,205
--------------- ---------------
Cash and cash equivalents at end of period................................ $ 116,441 $ 128,101
=============== ===============
Supplemental information:
Cash paid (refunded) for income taxes.................................. $ (295) $ (6,853)
=============== ===============
Cash paid for interest................................................. $ 1,409 $ 48,465
=============== ===============
*Acquisition of businesses net of cash acquired:
Working capital, other than cash....................................... $ -- $ 59
Property, plant and equipment.......................................... -- (364)
Other assets........................................................... -- (159)
--------------- ---------------
Cash used to acquire businesses........................................ $ -- $ (464)
=============== ===============

See the accompanying notes to the consolidated financial statements.

-3-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

Note 1 - Basis of Presentation

The accompanying unaudited consolidated financial statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation have been included. Operating results for the nine months ended
September 30, 2003 are not indicative of the results that may be expected for
the year ending December 31, 2003. These statements should be read in
conjunction with the financial statements and the notes thereto included in the
Company's Annual Report on Form 10-K/A for the year ended December 31, 2002.

On October 11, 2002, GenTek and 31 of its direct and indirect
subsidiaries, including its Noma Company subsidiary (collectively, the
"Debtors"), filed voluntary petitions for reorganization relief (the "Filing")
under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in
the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"). The Debtors' cases have been jointly administered as Case No. 02-12986
(MFW). As a result of the Filing, an automatic stay was imposed against efforts
by claimants to collect amounts due or to proceed against property of the
Debtors. As of September 30, 2003, the Debtors were operating their respective
businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the Bankruptcy Code
and orders of the Bankruptcy Court. As such, they were permitted to engage in
ordinary course of business transactions without prior approval of the
Bankruptcy Court. Transactions outside of the ordinary course of business,
including certain sales of assets and certain requests for additional
financings, were subject to approval by the Bankruptcy Court.

On December 10, 2002, Noma Company sought and obtained from the Ontario
Superior Court of Justice, Canada (the "Ontario Court"), an initial order
pursuant to section 18.6 of the Companies' Creditors Arrangement Act, R.S.C.
1985, c. C-36, as amended ("CCAA"), recognizing the Filing and granting Noma
Company, among other things, a stay against claims, proceedings and the exercise
of any contractual rights against it or its property in Canada, and recognizing
various orders granted by the Bankruptcy Court.

The Debtors filed for relief under Chapter 11 as a result of the
Company's inability to obtain an amendment to its senior credit facility. The
protection afforded by Chapter 11 allowed the Debtors to continue to serve their
customers and preserve the value of their businesses, while they reorganized and
worked to develop and implement a strategic plan to deleverage the Company's
balance sheet and create an improved long-term capital structure.

Between the Filing through September 30, 2003, the Company's available
cash and continued cash flow from operations were adequate to fund ongoing
operations and meet anticipated obligations to customers, vendors and employees
in the ordinary course of business during the Chapter 11 process. Further, in
order to augment its financial flexibility during the Chapter 11 process, the
Company negotiated with certain members of its pre-petition bank syndicate, and
received approval from the Bankruptcy Court on March 6, 2003, and approval from
the Ontario Court on March 13, 2003, to enter into a debtor-in-possession credit
facility. This facility enabled the Company to issue up to $50,000 of

-4-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

letters of credit, including approximately $30,000 of letters of credit issued
under the pre-petition credit facility, to support the Company and its
subsidiaries' undertakings (other than ordinary trade credit) and provided the
Company's Noma Company subsidiary with a $10,000 revolving credit facility for
working capital and other general corporate purposes of Noma Company. The
facility's original maturity date of September 30, 2003, was extended to
December 31, 2003 (subject to expiration on effectiveness of a plan of
reorganization) by the holders of a majority of the commitments. To support the
payment obligations under this facility, the Bankruptcy Court awarded
super-priority administrative expense status to such obligations and granted the
lenders senior priming liens (with certain exceptions) on the Debtors' assets.

At hearings held on October 17, 2002 and November 7, 2002, the
Bankruptcy Court granted the Debtors' "first day" motions for various relief
designed to stabilize their operations and business relationships with their
customers, vendors, employees and other entities, and entered orders granting
authority to the Debtors to, among other things: (1) pay certain pre-petition
and post-petition employee wages, benefits and other employee obligations; (2)
honor customer programs; (3) pay certain pre-petition taxes and fees; (4) pay
certain pre-petition obligations to foreign vendors; (5) pay certain
pre-petition shipping charges; and (6) pay certain pre-petition claims of
critical vendors. The Bankruptcy Court also entered orders authorizing the
Debtors to use cash collateral of their senior lenders, and Noma Company to use
GenTek's cash collateral, on terms specified in such orders. All such orders
were also recognized by the Ontario Court.

As a result of the Filing, pending pre-petition litigation and claims
against the Debtors were stayed automatically in accordance with Section 362 of
the Bankruptcy Code and no party was able to take any action to seek payment on
its pre-petition claims or to proceed against property of the Debtors' estates
except pursuant to further order of the Bankruptcy Court. The Filing resulted in
an immediate acceleration of the Company's senior credit facility and 11% Senior
Subordinated Notes, subject to the automatic stay.

As a general rule, all of the Debtors' contracts and leases have
continued in effect in accordance with their terms notwithstanding the Filing,
unless otherwise ordered by the Bankruptcy Court. The Bankruptcy Code has
provided the Debtors with the opportunity to reject any contracts or leases that
are burdensome or assume any contracts or leases that are favorable or otherwise
necessary to their business operations. In the event of a rejection of a
contract or lease by the Debtors, the affected parties have been provided a
period of time within which to file rejection damage claims, which are
considered to be pre-petition claims. As a condition to assumption of a contract
or lease, the Debtors were required to cure breaches under such agreements,
including, without limitation, payment of any amounts due and owing.

GenTek and the other Debtors have incurred significant administrative
and reorganization expenses resulting from the Filing and the continuation of
the Chapter 11 proceedings. The amount of these expenses, which have been
expensed as incurred and reported as reorganization items, have had, and will
continue to have, a material effect on the Company's results of operations. See
Note 3.

The adverse publicity associated with the Filing and the Chapter 11
proceedings, and the resulting uncertainty regarding the Company's future
prospects may have hindered, and may continue to hinder, the Company's ongoing
business activities and its ability to operate, fund and execute its business
plan by: impairing relations with existing and potential customers; limiting the
Company's ability to obtain

-5-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

trade credit; impairing present and future relationships with vendors; and
negatively impacting the ability of the Company to attract, retain and
compensate key employees and to retain employees generally.

As of September 30, 2003, the Debtors had proposed and were awaiting
the hearing to consider the confirmation of their joint plan of reorganization
dated August 28, 2003. The disclosure statement with respect to such plan was
approved by order of the Bankruptcy Court dated August 27, 2003, and the Debtors
were authorized to solicit acceptances and rejections of the plan. The
confirmation hearing was subsequently held on October 7, 2003, and the
Bankruptcy Court on that date entered an order confirming the plan, as modified
on October 3, 2003 (the plan as so modified, the "Confirmed Plan"). The
Confirmed Plan became effective in accordance with its terms on November 10,
2003 (the "Effective Date").

The Confirmed Plan provides that, in full satisfaction of their
allowable claims: (i) the holders of existing secured claims under the Company's
existing credit facility (excluding the tranche in which Noma Company is a
borrower) initially receive approximately 81 percent of the common stock of the
reorganized Company (the "Reorganized Company"), $60,000 in cash (reduced by
certain payments) and $216,500 principal amount of senior term notes issued by
the Reorganized Company; (ii) holders of existing secured claims under the term
loan facility to Noma Company under the Company's existing credit facility will
receive approximately 13 percent of the common stock of the Reorganized Company
and $33,500 principal amount of senior term notes issued by the Reorganized
Company; (iii) holders of general unsecured claims and trade vendor claims who
elect to receive equity in the Reorganized Company on account of their claims
will receive a pro rata distribution of up to approximately 2 percent, in the
aggregate, of the common stock of the Reorganized Company and warrants to
purchase additional shares of the common stock of the Reorganized Company; (iv)
holders of general unsecured claims and trade vendor claims that elect not to
receive equity of the Reorganized Company will receive an amount in cash equal
to the lesser of (A) 6 percent of each such holder's allowed claim or (B) each
such holder's pro rata share of $5,000; (v) holders of unsecured claims relating
to the Company's existing bonds will receive approximately 4 percent of the
common stock of the Reorganized Company and warrants to purchase additional
shares of the common stock of the Reorganized Company; (vi) upon the liquidation
of their disputed claims, holders of California Tort Claims (to the extent they
are determined to hold allowable claims) will receive the same treatment of any
uninsured portion of their claims (excluding any portion of such claims
attributable to noncompensatory damages) as they would have received had such
claims been classified as general unsecured claims (except that such holders
will not be entitled to elect cash instead of equity); (vii) upon the
ratification and consummation of a proposed settlement, holders of Pennsylvania
Tort Claims will receive, through their class representative, an aggregate
distribution of $120 in cash, a note in the principal amount of $675, and a
payment from the Debtors' insurer; and (viii) holders of claims described in
subsections (i), (iii), (iv), (v) and (vi) above will be entitled to receive a
portion of any amounts recovered by a preference claim litigation trust created
pursuant to the Confirmed Plan. In addition to the foregoing, the Confirmed Plan
provides that administrative expense claims, priority claims, convenience
claims, a secured claim of the Company against Noma Company in the amount of
approximately $5,700 and certain other secured claims, will all be paid in full.
Furthermore, the Confirmed Plan provides for the cancellation of all then
outstanding shares of common stock of the Company without any distribution to be
made to the holders of such shares.

-6-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

The consolidated financial statements have been prepared in accordance
with Statement of Position 90-7 ("SOP 90-7"), "Financial Reporting by Entities
in Reorganization Under the Bankruptcy Code," and on a going concern basis,
which contemplates continuity of operations, realization of assets and
liquidation of liabilities in the ordinary course of business. However, as of
September 30, 2003 and continuing through the Effective Date, as a result of the
Filing, such realization of assets and liquidation of liabilities was subject to
uncertainty. While operating as debtors-in-possession under the protection of
Chapter 11 of the Bankruptcy Code and subject to Bankruptcy Court approval or
otherwise as permitted in the normal course of business, the Debtors might have
sold or otherwise disposed of assets and liquidated or settled liabilities for
amounts other than those reflected in the consolidated financial statements.
Further, the consolidated financial statements do not give effect to any
adjustments to the carrying value of assets or amount of liabilities that might
be necessary as a consequence of the Confirmed Plan. Liabilities and obligations
whose treatment and satisfaction were dependent on the outcome of the Chapter 11
cases have been segregated and classified as liabilities subject to compromise
in the consolidated balance sheets. In connection with its emergence from
bankruptcy on November 10, 2003, the Company will be adopting fresh-start
reporting in accordance with SOP 90-7. Accordingly, the Company's post-emergence
financial statements will not be comparable with its pre-emergence financial
statements.

Pursuant to the Bankruptcy Code, schedules were filed by the Debtors
with the Bankruptcy Court setting forth the assets and liabilities of the
Debtors as of the date of Filing. A bar date of April 14, 2003 was set for the
filing of proofs of claim against the Debtors. Differences between amounts
recorded by the Debtors and claims filed by creditors are being investigated and
will be resolved as part of the proceedings in the Chapter 11 cases. That
process is continuing after the Effective Date. Accordingly, the ultimate number
and allowed amount of such claims are not presently known but the settlement
terms of each such allowed claim is set forth in the Confirmed Plan.

Note 2 - Summary of Significant Accounting Policies

Compensation cost for stock-based employee compensation plans is
recognized using the intrinsic value method. The following table illustrates the
effect on net loss and loss per share if the Company had applied the fair value
based method to recognize stock-based employee compensation.

Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- ---------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------

Net loss as reported..................................... $ (4,781) $ (57,832) $ (43,484) $ (368,318)
Deduct: Total stock-based employee
compensation income (expense) determined under fair
value based method for all awards, net of related tax
effects............................................... 492 (571) 1,486 (1,885)
----------- ------------ ------------ ------------
Pro forma net loss....................................... $ (4,289) $ (58,403) $ (41,998) $ (370,203)
=========== ============ ============ ============
Loss per share:
Basic - as reported................................... $ (.19) $ (2.26) $ (1.70) $ (14.44)
=========== ============ ============ ============
Basic - pro forma..................................... $ (.17) $ (2.28) $ (1.64) $ (14.51)
=========== ============ ============ ============
Diluted - as reported................................. $ (.19) $ (2.26) $ (1.70) $ (14.44)
=========== ============ ============ ============
Diluted - pro forma................................... $ (.17) $ (2.28) $ (1.64) $ (14.51)
=========== ============ ============ ============

-7-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

For purposes of this calculation, the fair value of each option grant
was estimated on the grant date using the Black-Scholes option-pricing model.
There were no grants made in 2002 or 2003.

In July 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 141 "Business Combinations" and SFAS No. 142 "Goodwill and Other
Intangible Assets." SFAS No. 141 requires business combinations initiated after
June 30, 2001 to be accounted for using the purchase method of accounting, and
broadens the criteria for recording intangible assets separate from goodwill.
SFAS No. 142 requires the use of a nonamortization approach to account for
purchased goodwill and certain intangibles. Under a nonamortization approach,
goodwill and certain intangibles will not be amortized into results of
operations, but instead would be reviewed for impairment and written down and
charged to results of operations only in the periods in which the recorded value
of goodwill and certain intangibles is more than its fair value. The provisions
of each statement which apply to goodwill and intangible assets acquired prior
to June 30, 2001 were adopted by the Company on January 1, 2002, and
accordingly, the Company ceased amortizing goodwill. Upon adoption of SFAS No.
142, the Company recorded a charge of $161,125 (net of a tax benefit of $39,760)
as a cumulative effect of a change in accounting principle.

Carrying amount of goodwill by segment is as follows:

Performance
Products Manufacturing Consolidated
----------------- ----------------- -----------------

Balance at December 31, 2002........................ $ 21,738 $ 105,986 $ 127,724
Foreign currency translation........................ -- 188 188
----------------- ----------------- -----------------
Balance at September 30, 2003....................... $ 21,738 $ 106,174 $ 127,912
================= ================== =================

In July 2001, the FASB issued SFAS No. 143 "Accounting for Asset
Retirement Obligations," which requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is
incurred and the associated asset retirement costs are capitalized as part of
the carrying amount of the long-lived asset. The Company adopted this standard
on January 1, 2003. There was no effect upon adoption on the Company's
consolidated financial statements.

In July 2002, the FASB issued SFAS No. 146 "Accounting for Costs
Associated with Exit or Disposal Activities," which requires that a liability
for costs associated with an exit or disposal activity be recognized when the
liability is incurred. This differs from prior guidance, which required the
liability to be recognized when a commitment plan was put into place. SFAS No.
146 also establishes that fair value is the objective for initial measurement of
the liability. This statement is effective for exit or disposal activities that
are initiated after December 31, 2002. The Company adopted this standard on
January 1, 2003. There was no effect upon adoption on the Company's consolidated
financial statements.

-8-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

Note 3 - Debtor Financial Information

The condensed combined financial statements of the Debtors are
presented below. These statements reflect the financial position, results of
operations and cash flows of the Debtors on a combined basis, including certain
amounts and transactions between Debtors and non-debtor subsidiaries of the
Company which are eliminated in the consolidated financial statements.

Condensed Combined Statements of Operations

Three Months Nine Months
Ended Ended
September 30, 2003 September 30, 2003
------------------- -------------------

Net revenues......................................................... $ 198,028 $ 611,368
Cost of sales........................................................ 159,827 511,007
Selling, general and administrative expense.......................... 24,056 73,160
Restructuring and impairment charges................................. -- 24,661
------------------- -------------------
Operating income ................................................. 14,145 2,540
Interest expense (contractual interest for the three and nine
month periods ended September 30, 2003 was $16,739
and $50,856, respectively)........................................ 173 405
Reorganization items................................................. 20,652 54,442
Other expense (income), net.......................................... 738 (4,415)
------------------- -------------------
Loss before income taxes.......................................... (7,418) (47,892)
Income tax provision................................................. 779 4,246
Equity in income from subsidiaries................................... 3,416 8,654
------------------- -------------------
Net loss.......................................................... $ (4,781) $ (43,484)
=================== ===================

-9-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

Condensed Combined Balance Sheets

September 30, December 31,
2003 2002
--------------- ---------------

Current assets:
Cash and cash equivalents.............................................. $ 68,154 $ 94,708
Receivables, net....................................................... 124,239 132,089
Inventories............................................................ 65,283 66,395
Other current assets................................................... 18,731 21,754
--------------- ---------------
Total current assets................................................ 276,407 314,946
Property, plant and equipment, net........................................ 204,712 231,505
Goodwill.................................................................. 126,563 126,563
Intercompany receivable (payable)......................................... 16,146 12,653
Investment in subsidiaries................................................ 102,289 96,481
Other assets.............................................................. 24,312 21,848
--------------- ---------------
Total assets........................................................ $ 750,429 $ 803,996
=============== ===============
Current liabilities:
Accounts payable....................................................... $ 28,846 $ 31,978
Accrued liabilities.................................................... 109,192 98,147
Current portion of long-term debt...................................... 101 101
--------------- ---------------
Total current liabilities........................................... 138,139 130,226
Long-term debt............................................................ 519 596
Liabilities subject to compromise......................................... 982,956 1,143,765
Other liabilities......................................................... 176,760 39,730
--------------- ---------------
Total liabilities................................................... 1,298,374 1,314,317
Deficit................................................................... (547,945) (510,321)
--------------- ---------------
Total liabilities and deficit....................................... $ 750,429 $ 803,996
=============== ===============

-10-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

Condensed Combined Statement of Cash Flows

Nine Months
Ended
September 30,
2003
---------------

Net cash provided by operating activities.................................. $ 52,085
Net cash used for reorganization items..................................... (17,170)
Net cash used for investing activities..................................... (21,684)
Net cash used for financing activities..................................... (39,785)
---------------
Decrease in cash and cash equivalents...................................... (26,554)
Cash and cash equivalents at beginning of period........................... 94,708
---------------
Cash and cash equivalents at end of period................................. $ 68,154
===============

Liabilities subject to compromise in the Consolidated and
Debtor-in-Possession balance sheets consist of the following items:

September 30, December 31,
2003 2002
--------------- ----------------

Accounts payable........................................................... $ 42,433 $ 44,331
Accrued interest payable................................................... 17,795 17,795
Accrued liabilities........................................................ 5,569 12,644
Long-term debt............................................................. 893,704 921,986
Long-term liabilities...................................................... 23,455 147,009
--------------- ----------------
$ 982,956 $ 1,143,765
=============== ================

Reorganization items in the Consolidated and Debtor-in-Possession
statement of operations consist of the following:

Three Months Nine Months
Ended Ended
September 30, September 30,
2003 2003
--------------- ---------------

Professional fees.......................................................... $ 6,302 $ 18,398
Employee costs............................................................. 13,072 20,104
Interest income............................................................ (115) (564)
Settlement of pre-petition liabilities..................................... (24) (1,527)
Write off of unamortized debt issuance costs............................... -- 11,730
Other...................................................................... 1,417 6,301
--------------- ---------------
$ 20,652 $ 54,442
=============== ===============

-11-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

Note 4 - Comprehensive Loss

Total comprehensive loss is comprised of net loss, foreign currency
translation adjustments and the change in unrealized gains and losses on
marketable securities and derivative financial instruments. Total comprehensive
loss for the three months ended September 30, 2003 and 2002 was $(7,628) and
$(59,159), respectively. Total comprehensive loss for the nine months ended
September 30, 2003 and 2002 was $(37,627) and $(362,873), respectively.

Note 5 - Earnings Per Share

The computation of basic earnings per share is based on the weighted
average number of common shares outstanding during the period. The computation
of diluted earnings per share assumes the foregoing and, in addition, the
exercise of all stock options and restricted units, using the treasury stock
method.

The shares outstanding used for basic and diluted earnings per common
share are reconciled as follows:

Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------

Basic earnings per common share:
Weighted average common shares
outstanding...................................... 25,564,310 25,563,185 25,564,310 25,515,445
========== ========== ========== ==========
Diluted earnings per common share:
Weighted average common shares
outstanding...................................... 25,564,310 25,563,185 25,564,310 25,515,445
Options and restricted units........................ -- -- -- --
---------- ---------- ---------- ----------
Total............................................... 25,564,310 25,563,185 25,564,310 25,515,445
========== ========== ========== ==========

For the nine months ended September 30, 2003 and 2002, 2,685,500 and
2,950,083 options and restricted units, respectively, were not included in the
computation of diluted earnings per common share due to their antidilutive
effect.

Note 6 - Inventories

September 30, December 31,
2003 2002
---------------- ----------------

Raw materials............................................................. $ 38,687 $ 41,003
Work in process........................................................... 19,865 16,363
Finished products......................................................... 40,383 42,077
Supplies and containers................................................... 3,702 5,275
---------------- ----------------
$ 102,637 $ 104,718
================ ================

-12-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

Note 7 - Long-Term Debt

September 30, December 31,
Maturities 2003 2002
---------- ---------------- -----------------

Bank term loans - floating rates...................... 2003-2007 $ 441,453 $ 463,401
Revolving credit facility - floating rate............. 2005 252,251 264,718
Senior Subordinated Notes - 11%....................... 2009 200,000 193,867
Other debt - floating rates........................... 2003-2018 15,252 17,543
---------------- ----------------
Total debt......................................... 908,956 939,529
Less: Current portion.............................. 14,295 15,091
Liabilities subject to compromise............ 893,704 921,986
---------------- ----------------
Net long-term debt................................. $ 957 $ 2,452
================ ================

On October 11, 2002, the Company and 31 of its direct and indirect
subsidiaries filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code. The filing of a bankruptcy petition resulted in an immediate
acceleration of the principal amount and accrued and unpaid interest on the
Company's senior credit facility and 11% Senior Subordinated Notes. Outstanding
balances for the senior credit facility and the 11% Senior Subordinated Notes
have been reclassified to liabilities subject to compromise. In connection with
its use of cash collateral under the credit facility, the Company has made
adequate protection payments to its senior creditors, based upon interest rates
ranging from 5.8 to 6.5 percent for its credit facility, which are being
recorded as reductions in principal for accounting purposes. See Note 1 for
further discussion of the Company's bankruptcy.

The Company entered into a debtor-in-possession credit facility with
certain members of its pre-petition bank syndicate, and received approval of
such facility from the Bankruptcy Court on March 6, 2003, and approval from the
Ontario Court on March 13, 2003. This facility provides for up to $50,000 of
letters of credit, including approximately $30,000 of letters of credit issued
under the pre-petition credit facility, to support the Company and its
subsidiaries' undertakings (other then ordinary trade credit) and provides the
Company's Noma Company subsidiary with a $10,000 revolving credit facility for
working capital and other general corporate purposes of Noma Company. Borrowings
under the revolving credit facility bear interest at variable rates based on
prime plus 2.3 percent or LIBOR plus 3.5 percent. The facility's original
maturity date of September 30, 2003, was extended to December 31, 2003 (subject
to expiration upon the effectiveness of a plan of reorganization) by the holders
of a majority of the commitments. To support the payment obligations under the
new facility, the Bankruptcy Court awarded super-priority administrative expense
status to such obligations and granted the lenders senior priming liens (with
certain exceptions) on the Debtors' assets. At September 30, 2003, the unused
letter of credit balance was $16,491 and there were no borrowings outstanding
under the revolving credit facility.

On November 10, 2003, GenTek, substantially all of GenTek's domestic
subsidiaries, and Noma Company (collectively, "the Borrowers") entered into a
$125,000 revolving credit facility which matures on November 10, 2008. The
facility includes a letter of credit sub-limit of $60,000. The facility is
secured by a first priority lien on substantially all of the assets of the
Borrowers and 65 percent of the stock of first-tier foreign subsidiaries. The
facility bears interest at variable rates based on a base rate or LIBOR plus an
applicable margin. The initial margins will be 1.5 percent for base rate
borrowings and

-13-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

2.5 percent for LIBOR borrowings. The margins are subject to periodic adjustment
based upon the financial performance of the Company.

In addition, on November 10, 2003, the Company issued $250,000 of
senior term notes which mature on November 10, 2008. The notes are guaranteed by
substantially all of the Company's direct and indirect domestic subsidiaries,
and are secured by second-priority liens on substantially all of the assets of
the Company and its direct and indirect domestic subsidiaries and 65 percent of
the stock of first-tier foreign subsidiaries. The notes bear interest at
variable rates based on LIBOR plus 4.5 percent, subject to a LIBOR floor of 1.5
percent.

Note 8 - Segment Information

Industry segment information is summarized as follows:

Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------

Net Revenues:
Performance products.................................. $ 87,895 $ 94,034 $ 259,149 $ 272,511
Manufacturing......................................... 98,628 113,016 317,454 367,976
Communications........................................ 89,618 72,408 245,410 218,637
------------ ------------ ------------ ------------
Total segments..................................... $ 276,141 $ 279,458 $ 822,013 $ 859,124
============ ============ ============ ============

Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------

Operating Profit (Loss):
Performance products.................................. $ 11,989 $ 10,620 $ (6,842) $ 23,423
Manufacturing......................................... 5,584 9,066 23,121 34,436
Communications........................................ 2,353 (53,610) 3,687 (82,250)
------------ ------------ ------------ ------------
Total segments..................................... 19,926 (33,924) 19,966 (24,391)
Eliminations and other corporate expenses............. (1,860) (4,020) (5,751) (9,477)
------------ ------------ ------------ ------------
Consolidated.......................................... 18,066 (37,944) 14,215 (33,868)
Interest expense...................................... 464 20,752 1,419 57,337
Other (income) expense, net........................... 21,385 (73) 51,514 (2,273)
------------ ------------ ------------ ------------
Consolidated loss before income taxes
and cumulative effect of a change in
accounting principle................................. $ (3,783) $ (58,623) $ (38,718) $ (88,932)
============ ============ ============ ============

-14-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

Identifiable Assets
----------------------------
September 30, December 31,
2003 2002
------------- ------------

Performance products........... $ 226,272 $ 249,326
Manufacturing(1)............... 363,887 369,415
Communications................. 270,898 258,595
Corporate...................... 51,857 79,649
------------- ------------
Consolidated................... $ 912,914 $ 956,985
============= ============

(1) Includes equity method investments of $18,890 and $18,274, respectively.

Note 9 - Restructuring and Impairment Charges

The Company's restructuring actions during 2003 consist of exiting a
facility and a workforce reduction in its communications segment and two plant
closures in its performance products segment. The Company expects to
substantially complete implementation of these restructuring actions by the
second quarter of 2004. The following tables summarize the Company's expected
costs and accruals for these restructuring actions:

Performance
Products Communications Consolidated
------------- ---------------- ------------

Employee Termination Costs
Total costs expected to be incurred..... $ 7,900 $ 4,100 $ 12,000
============= ============== ============

Provisions--Restructuring............... 304 2,499 2,803
Provisions--Reorganization items........ 6,000 -- 6,000
Amounts paid............................ (248) (14) (262)
------------- -------------- ------------
Balance at September 30, 2003........... $ 6,056 $ 2,485 $ 8,541
============= ============== ============
Facility Exit Costs
Total costs expected to be incurred..... $ 6,300 $ 6,300
============= ============

Provisions--Restructuring............... 105 105
Provisions--Reorganization items........ 405 405
Amounts paid............................ (420) (420)
------------- ------------
Balance at September 30, 2003........... $ 90 $ 90
============= ============

In addition, the Company may incur additional environmental
investigation and remediation costs as a result of the closing of a facility.
These costs cannot be reasonably estimated until the scope of any investigation
and any remedial activity required as a result is determined. See Note 10.

-15-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

The Company's restructuring programs initiated in prior years have been
substantially completed. However, certain costs have payment terms extending
beyond 2003. The following tables summarize the Company's liabilities for
restructuring programs initiated in prior years:

Employee
Termination Facility
Costs Exit Costs
-------------- ------------

Balance at December 31, 2001.............................. $ 11,621 $ 4,628
Provisions................................................ 13,152 267
Reclassified to liabilities subject to compromise......... (1,338) (2,196)
Amounts paid.............................................. (9,542) (1,547)
-------------- ------------
Balance at December 31, 2002.............................. 13,893 1,152
Amounts paid.............................................. (8,922) (288)
-------------- ------------
Balance at September 30, 2003............................. $ 4,971 $ 864
============== ============

During the third quarter of 2003, the Company announced a plan to close
a facility in Santiago, Chile, which is included in the communications segment.
Accordingly, the Company assessed the long-lived assets at this facility for
impairment. Based on the results of this assessment, the Company recorded a
non-cash impairment charge of $201 to reduce the carrying value of the fixed
assets at this facility to fair value, which was determined based on an
independent appraisal.

On February 28, 2003, the Company announced a plan to wind down and
close operations at its facility in Claymont, Delaware, which is included in the
performance products segment. Accordingly, the Company assessed the long-lived
assets at this facility for impairment. Based on the results of this assessment,
the Company recorded a non-cash impairment charge of $24,661 to reduce the
carrying value of the fixed assets at this facility to fair value, which was
determined based upon an independent appraisal.

Note 10 - Commitments and Contingencies

On February 28, 2003, the Company announced a plan to wind down and
close operations in Claymont, Delaware at the South Plant of the Delaware Valley
Works complex, an industrial facility owned and operated by the Company. The
plan was approved by the Bankruptcy Court on July 24, 2003. During the fourth
quarter of 2003, commercial operations at the South Plant ceased. The Company
intends to comply fully with all of its environmental obligations in connection
with the decommissioning of the facility including, without limitation, those
relating to any investigation and remediation of the facility required by law.
Depending on the scope of any investigation and any remedial activity required
as a result, additional costs above those currently estimated could be incurred
over a period of the next

-16-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

several years. The Company is currently unable to estimate the nature and extent
of these additional costs. As such, it is possible that the final outcome could
have a material adverse effect on the Company's results of operations, cash
flows and financial condition. Operations at the Delaware Valley Works' other
manufacturing areas located in the North Plant of the facility, including the
production of sulfur, fluorine, potassium and ammonia-based compounds and
warehousing, distribution and transportation operations, will continue.

Note 11 - Summarized Financial Information

The Company's 11% Senior Subordinated Notes due 2009 are fully and
unconditionally guaranteed, on a joint and several basis, by substantially all
of the Company's wholly owned, domestic subsidiaries ("Subsidiary Guarantors").
The non-guarantor subsidiaries are the Company's foreign subsidiaries.

The following condensed consolidating financial information illustrates
the composition of the combined Subsidiary Guarantors. The Company believes that
the separate, complete financial statements of the respective guarantors would
not provide additional material information which would be useful in assessing
the financial composition of the Subsidiary Guarantors.

Condensed Consolidating Statement of Operations
Three Months Ended September 30, 2003

Non-
Subsidiary Guarantor
Parent Guarantors Subsidiaries Eliminations Consolidated
------------- ------------ ------------- ------------ -------------

Net revenues................................ $ -- $ 164,170 $ 120,317 $ (8,346) $ 276,141
Cost of sales............................... -- 129,963 92,132 (8,346) 213,749
Selling, general and administrative
expense................................... 1,839 19,437 19,941 -- 41,217
Restructuring and impairment charges........ -- -- 3,109 -- 3,109
------------- ------------ ------------- ------------ -------------
Operating profit (loss).................. (1,839) 14,770 5,135 -- 18,066
Interest expense............................ 265 53 419 (273) 464
Other expense, net.......................... 10 20,055 1,047 273 21,385
------------- ------------ ------------- ------------ -------------
Income (loss) before income taxes........ (2,114) (5,338) 3,669 -- (3,783)
Income tax provision (benefit).............. 2,624 (2,018) 392 -- 998
Equity in income (loss) from
subsidiaries.............................. (43) 3,277 -- (3,234) --
------------- ------------ ------------- ------------ -------------
Net income (loss)........................ $ (4,781) $ (43) $ 3,277 $ (3,234) $ (4,781)
============= ============ ============= ============ =============

-17-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

Condensed Consolidating Statement of Operations
Three Months Ended September 30, 2002

Non-
Subsidiary Guarantor
Parent Guarantors Subsidiaries Eliminations Consolidated
------------- ------------ ------------- ------------ -------------

Net revenues................................ $ -- $ 181,454 $ 107,239 $ (9,235) $ 279,458
Cost of sales............................... -- 145,789 84,394 (9,235) 220,948
Selling, general and administrative
expense................................... 119 27,782 18,831 -- 46,732
Restructuring and impairment charges........ -- 102 49,620 -- 49,722
------------- ------------ ------------- ------------ -------------
Operating profit (loss).................. (119) 7,781 (45,606) -- (37,944)
Interest expense............................ 16,593 16,076 3,079 (14,996) 20,752
Other (income) expense, net................. (15,084) (746) 761 14,996 (73)
------------- ------------ ------------- ------------ -------------
Loss before income taxes................. (1,628) (7,549) (49,446) -- (58,623)
Income tax provision (benefit).............. 388 (150) (1,029) -- (791)
Equity in loss from subsidiaries............ (55,816) (48,417) -- 104,233 --
------------- ------------ ------------- ------------ -------------
Net loss................................. $ (57,832) $ (55,816) $ (48,417) $ 104,233 $ (57,832)
============= ============ ============= ============ =============

Condensed Consolidating Statement of Operations
Nine Months Ended September 30, 2003

Non-
Subsidiary Guarantor
Parent Guarantors Subsidiaries Eliminations Consolidated
------------- ------------ ------------- ------------ -------------

Net revenues................................ $ -- $ 502,704 $ 345,338 $ (26,029) $ 822,013
Cost of sales............................... -- 414,161 268,486 (26,029) 656,618
Selling, general and administrative
expense................................... 5,567 60,616 57,227 -- 123,410
Restructuring and impairment charges........ -- 24,661 3,109 -- 27,770
------------- ------------ ------------- ------------ -------------
Operating profit (loss).................. (5,567) 3,266 16,516 -- 14,215
Interest expense............................ 551 151 1,512 (795) 1,419
Other (income) expense, net................. (859) 51,756 (178) 795 51,514
------------- ------------ ------------- ------------ -------------
Income (loss) before income taxes........ (5,259) (48,641) 15,182 -- (38,718)
Income tax provision (benefit).............. 22,075 (18,881) 1,572 -- 4,766
Equity in income (loss) from
subsidiaries.............................. (16,150) 13,610 -- 2,540 --
------------- ------------ ------------- ------------ -------------
Net income (loss)........................ $ (43,484) $ (16,150) $ 13,610 $ 2,540 $ (43,484)
============= ============ ============= ============ =============

-18-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

Condensed Consolidating Statement of Operations
Nine Months Ended September 30, 2002

Non-
Subsidiary Guarantor
Parent Guarantors Subsidiaries Eliminations Consolidated
------------- ------------ ------------- ------------ -------------

Net revenues................................ $ -- $ 559,121 $ 329,784 $ (29,781) $ 859,124
Cost of sales............................... -- 454,351 257,321 (29,781) 681,891
Selling, general and administrative
expense................................... 1,401 81,540 54,820 -- 137,761
Restructuring and impairment charges........ -- 23,285 50,055 -- 73,340
------------- ------------ ------------- ------------ -------------
Operating loss........................... (1,401) (55) (32,412) -- (33,868)
Interest expense............................ 46,190 44,548 7,877 (41,278) 57,337
Other income, net........................... (41,258) (1,893) (400) 41,278 (2,273)
------------- ------------ ------------- ------------ -------------
Loss before income taxes and cumulative
effect of a change in accounting
principle............................. (6,333) (42,710) (39,889) -- (88,932)
Income tax provision........................ 4,940 69,685 43,636 -- 118,261
Cumulative effect of a change in
accounting principle...................... -- (65,359) (95,766) -- (161,125)
Equity in loss from subsidiaries............ (357,045) (179,291) -- 536,336 --
------------- ------------ ------------- ------------ -------------
Net loss................................ $ (368,318) $ (357,045) $ (179,291) $ 536,336 $ (368,318)
============= ============ ============= ============ =============

-19-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

Condensed Consolidating Balance Sheet
September 30, 2003

Non-
Subsidiary Guarantor
Parent Guarantors Subsidiaries Eliminations Consolidated
------------- ------------ ------------- ------------ -------------

Current assets:
Cash and cash equivalents................. $ 38,382 $ 14,504 $ 63,555 $ -- $ 116,441
Receivables, net.......................... 653 97,359 81,407 -- 179,419
Inventories............................... -- 50,185 52,452 -- 102,637
Other current assets...................... (30,392) 47,084 8,890 -- 25,582
------------- ------------ ------------- ------------ -------------
Total current assets................... 8,643 209,132 206,304 -- 424,079
Property, plant and equipment, net........... -- 185,096 96,693 -- 281,789
Goodwill..................................... -- 45,005 82,907 -- 127,912
Intercompany receivable (payable)............ 712,884 (676,273) (36,611) -- --
Investment in subsidiaries................... (344,685) 94,639 -- 250,046 --
Other assets................................. (80,641) 89,298 70,477 -- 79,134
------------- ------------ ------------- ------------ -------------
Total assets........................... $ 296,201 $ (53,103) $ 419,770 $ 250,046 $ 912,914
============= ============ ============= ============ =============
Current liabilities:
Accounts payable.......................... $ 1 $ 22,123 $ 23,739 $ -- $ 45,863
Accrued liabilities....................... 52,676 46,816 47,968 -- 147,460
Current portion of long-term debt......... -- 101 14,194 -- 14,295
------------- ------------ ------------- ------------ -------------
Total current liabilities.............. 52,677 69,040 85,901 -- 207,618
Long-term debt............................... -- 519 438 -- 957
Liabilities subject to compromise............ 789,405 49,710 143,841 -- 982,956
Other liabilities............................ 2,064 172,313 94,951 -- 269,328
------------- ------------ ------------- ------------ -------------
Total liabilities...................... 844,146 291,582 325,131 -- 1,460,859
Equity (deficit)............................. (547,945) (344,685) 94,639 250,046 (547,945)
------------- ------------ ------------- ------------ -------------
Total liabilities and equity (deficit). $ 296,201 $ (53,103) $ 419,770 $ 250,046 $ 912,914
============= ============ ============= ============ =============

-20-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

Condensed Consolidating Balance Sheet
December 31, 2002

Non-
Subsidiary Guarantor
Parent Guarantors Subsidiaries Eliminations Consolidated
------------- ------------ ------------- ------------ -------------

Current assets:
Cash and cash equivalents................. $ 64,046 $ 22,230 $ 46,754 $ -- $ 133,030
Receivables, net.......................... 8,674 95,978 81,173 -- 185,825
Inventories............................... -- 51,776 52,942 -- 104,718
Other current assets...................... (29,129) 46,215 10,269 -- 27,355
------------- ------------ ------------- ------------ -------------
Total current assets................... 43,591 216,199 191,138 -- 450,928
Property, plant and equipment, net........... -- 211,525 97,300 -- 308,825
Goodwill..................................... -- 45,005 82,719 -- 127,724
Intercompany receivable (payable)............ 714,357 (696,631) (17,726) -- --
Investment in subsidiaries................... (335,365) 83,305 -- 252,060 --
Other assets................................. (83,903) 90,104 63,307 -- 69,508
------------- ------------ ------------- ------------ -------------
Total assets........................... $ 338,680 $ (50,493) $ 416,738 $ 252,060 $ 956,985
============= ============ ============= ============ =============
Current liabilities:
Accounts payable.......................... $ 6 $ 24,445 $ 26,401 $ -- $ 50,852
Accrued liabilities....................... 25,036 53,071 50,607 -- 128,714
Current portion of long-term debt......... -- 101 14,990 -- 15,091
------------- ------------ ------------- ------------ -------------
Total current liabilities.............. 25,042 77,617 91,998 -- 194,657
Long-term debt............................... -- 596 1,856 -- 2,452
Liabilities subject to compromise............ 821,895 169,960 151,910 -- 1,143,765
Other liabilities............................ 2,064 36,699 87,669 -- 126,432
------------- ------------ ------------- ------------ -------------
Total liabilities...................... 849,001 284,872 333,433 -- 1,467,306
Equity (deficit)............................. (510,321) (335,365) 83,305 252,060 (510,321)
------------- ------------ ------------- ------------ -------------
Total liabilities and equity (deficit). $ 338,680 $ (50,493) $ 416,738 $ 252,060 $ 956,985
============= ============ ============= ============ =============

-21-

GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Concluded)
For the nine months ended September 30, 2003
(Dollars in thousands, except per share data)
(unaudited)

Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2003

Non-
Subsidiary Guarantor
Parent Guarantors Subsidiaries Consolidated
------------- ------------ ------------- ------------

Net cash provided by operating activities... $ 1,871 $ 17,168 $ 30,699 $ 49,738
------------- ------------ ------------- ------------
Net cash used for investing activities...... -- (19,679) (6,408) (26,087)
------------- ------------ ------------- ------------
Cash flows from financing activities:
Intercompany cash transfers.............. 5,139 (5,139) -- --
Other ................................... (32,674) (76) (10,441) (43,191)
------------- ------------ ------------- ------------
Net cash used for financing activities...... (27,535) (5,215) (10,441) (43,191)
------------- ------------ ------------- ------------
Effect of exchange rates on cash............ -- -- 2,951 2,951
------------- ------------ ------------- ------------
Increase (decrease) in cash and cash
equivalents............................... (25,664) (7,726) 16,801 (16,589)
Cash and cash equivalents at beginning of
period.................................... 64,046 22,230 46,754 133,030
------------- ------------ ------------- ------------
Cash and cash equivalents at end of period.. $ 38,382 $ 14,504 $ 63,555 $ 116,441
============= ============ ============= ============

Condensed Consolidating Statement of Cash Flows
Nine Months Ended September 30, 2002

Non-
Subsidiary Guarantor
Parent Guarantors Subsidiaries Consolidated
------------- ------------ ------------- ------------

Net cash provided by (used for) operating
activities................................ $ (2,294) $ (24,285) $ 24,359 $ (2,220)
------------- ------------ ------------- ------------
Net cash used for investing activities...... -- (16,224) (6,817) (23,041)
------------- ------------ ------------- ------------
Cash flows from financing activities:
Intercompany cash transfers............. (79,007) 58,961 20,046 --
Other................................... 143,453 (665) 388 143,176
------------- ------------ ------------- ------------
Net cash provided by financing activities... 64,446 58,296 20,434 143,176
------------- ------------ ------------- ------------
Effect of exchange rates on cash............ -- -- 981 981
------------- ------------ ------------- ------------
Increase in cash and cash equivalents....... 62,152 17,787 38,957 118,896
Cash and cash equivalents at beginning
of period.................................. -- 443 8,762 9,205
------------- ------------ ------------- ------------
Cash and cash equivalents at end of period.. $ 62,152 $ 18,230 $ 47,719 $ 128,101
============= ============ ============= ============

-22-

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

This Form 10-Q contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Company's actual results could differ materially from
those set forth in the forward-looking statements. Certain factors that might
cause such a difference include those discussed in the section entitled,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Forward-Looking Statements" contained in the Company's Annual
Report on Form 10-K/A for the year ended December 31, 2002.

On October 11, 2002, GenTek and 31 of its direct and indirect
subsidiaries, including its Noma Company subsidiary (collectively, the
"Debtors"), filed voluntary petitions for reorganization relief (the "Filing")
under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in
the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"). The Debtors' cases have been jointly administered as Case No. 02-12986
(MFW). As a result of the Filing, an automatic stay was imposed against efforts
by claimants to collect amounts due or to proceed against property of the
Debtors. As of September 30, 2003, the Debtors were operating their respective
businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the Bankruptcy Code
and orders of the Bankruptcy Court. As such, they were permitted to engage in
ordinary course of business transactions without prior approval of the
Bankruptcy Court. Transactions outside of the ordinary course of business,
including certain sales of assets and certain requests for additional
financings, were subject to approval by the Bankruptcy Court.

On December 10, 2002, Noma Company sought and obtained from the Ontario
Superior Court of Justice, Canada (the "Ontario Court"), an initial order
pursuant to section 18.6 of the Companies' Creditors Arrangement Act, R.S.C.
1985, c. C-36, as amended ("CCAA"), recognizing the Filing and granting Noma
Company, among other things, a stay against claims, proceedings and the exercise
of any contractual rights against it or its property in Canada, and recognizing
various orders granted by the Bankruptcy Court.

The Debtors filed for relief under Chapter 11 as a result of the
Company's inability to obtain an amendment to its senior credit facility. The
protection afforded by Chapter 11 allowed the Debtors to continue to serve their
customers and preserve the value of their businesses, while they reorganized and
worked to develop and implement a strategic plan to deleverage the Company's
balance sheet and create an improved long-term capital structure.

Between the Filing through September 30, 2003, the Company's available
cash and continued cash flow from operations were adequate to fund ongoing
operations and meet anticipated obligations to customers, vendors and employees
in the ordinary course of business during the Chapter 11 process. Further, in
order to augment its financial flexibility during the Chapter 11 process, the
Company negotiated with certain members of its pre-petition bank syndicate, and
received approval from the Bankruptcy Court on March 6, 2003, and approval from
the Ontario Court on March 13, 2003, to enter into a debtor-in-possession credit
facility. This facility enabled the Company to issue up to $50 million of
letters of credit, including approximately $30 million of letters of credit
issued under the pre-petition credit facility, to support the Company and its
subsidiaries' undertakings (other than ordinary trade credit) and provided the
Company's Noma Company subsidiary with a $10 million revolving credit facility
for working capital and other general corporate purposes of Noma Company. The
facility's original maturity date of September 30, 2003, was extended to
December 31, 2003 (subject to its expiration upon effectiveness of a plan of
reorganization) by the holders of a majority of the commitments. To support the
payment obligations under this facility, the Bankruptcy Court awarded
super-priority administrative

-23-

expense status to such obligations and granted the lenders senior priming liens
(with certain exceptions) on the Debtors' assets.

At hearings held on October 17, 2002 and November 7, 2002, the
Bankruptcy Court granted the Debtors' "first day" motions for various relief
designed to stabilize their operations and business relationships with their
customers, vendors, employees and other entities, and entered orders granting
authority to the Debtors to, among other things: (1) pay certain pre-petition
and post-petition employee wages, benefits and other employee obligations; (2)
honor customer programs; (3) pay certain pre-petition taxes and fees; (4) pay
certain pre-petition obligations to foreign vendors; (5) pay certain
pre-petition shipping charges; and (6) pay certain pre-petition claims of
critical vendors. The Bankruptcy Court also entered orders authorizing the
Debtors to use cash collateral of their senior lenders, and Noma Company to use
GenTek's cash collateral, on terms specified in such orders. All such orders
were also recognized by the Ontario Court.

As a result of the Filing, pending pre-petition litigation and claims
against the Debtors were stayed automatically in accordance with Section 362 of
the Bankruptcy Code and no party was able to take any action to seek payment on
its pre-petition claims or to proceed against property of the Debtors' estates
except pursuant to further order of the Bankruptcy Court. The Filing resulted in
an immediate acceleration of the Company's senior credit facility and 11% Senior
Subordinated Notes, subject to the automatic stay.

As a general rule, all of the Debtors' contracts and leases have
continued in effect in accordance with their terms notwithstanding the Filing,
unless otherwise ordered by the Bankruptcy Court. The Bankruptcy Code has
provided the Debtors with the opportunity to reject any contracts or leases that
are burdensome or assume any contracts or leases that are favorable or otherwise
necessary to their business operations. In the event of a rejection of a
contract or lease by the Debtors, the affected parties have been provided a
period of time within which to file rejection damage claims, which are
considered to be pre-petition claims. As a condition to assumption of a contract
or lease, the Debtors were required to cure breaches under such agreements,
including, without limitation, payment of any amounts due and owing.

GenTek and the other Debtors have incurred significant administrative
and reorganization expenses resulting from the Filing and the continuation of
the Chapter 11 proceedings. The amount of these expenses, which have been
expensed as incurred and reported as reorganization items, have had, and will
continue to have, a material effect on the Company's results of operations.

The adverse publicity associated with the Filing and the Chapter 11
proceedings, and the resulting uncertainty regarding the Company's future
prospects may have hindered, and may continue to hinder, the Company's ongoing
business activities and its ability to operate, fund and execute its business
plan by: impairing relations with existing and potential customers; limiting the
Company's ability to obtain trade credit; impairing present and future
relationships with vendors; and negatively impacting the ability of the Company
to attract, retain and compensate key employees and to retain employees
generally.

As of September 30, 2003, the Debtors had proposed and were awaiting
the hearing to consider the confirmation of their joint plan of reorganization
dated August 28, 2003. The disclosure statement with respect to such plan was
approved by order of the Bankruptcy Court dated August 27, 2003, and the Debtors
were authorized to solicit acceptances and rejections of the plan. The
confirmation hearing was subsequently held on October 7, 2003, and the
Bankruptcy Court on that date entered an order confirming the plan, as modified
on October 3, 2003 (the plan as so modified, the "Confirmed Plan"). The
Confirmed Plan became effective in accordance with its terms on November 10,
2003 (the "Effective Date").

-24-

The Confirmed Plan provides that, in full satisfaction of their
allowable claims: (i) the holders of existing secured claims under the Company's
existing credit facility (excluding the tranche in which Noma Company is a
borrower) initially receive approximately 81 percent of the common stock of the
reorganized Company (the "Reorganized Company"), $60 million in cash (reduced by
certain payments) and $216.5 million principal amount of senior term notes
issued by the Reorganized Company; (ii) holders of existing secured claims under
the term loan facility to Noma Company under the Company's existing credit
facility will receive approximately 13 percent of the common stock of the
Reorganized Company and $33.5 million principal amount of senior term notes
issued by the Reorganized Company; (iii) holders of general unsecured claims and
trade vendor claims who elect to receive equity in the Reorganized Company on
account of their claims will receive a pro rata distribution of up to
approximately 2 percent, in the aggregate, of the common stock of the
Reorganized Company and warrants to purchase additional shares of the common
stock of the Reorganized Company; (iv) holders of general unsecured claims and
trade vendor claims that elect not to receive equity of the Reorganized Company
will receive an amount in cash equal to the lesser of (A) 6 percent of each such
holder's allowed claim or (B) each such holder's pro rata share of $5 million;
(v) holders of unsecured claims relating to the Company's existing bonds will
receive approximately 4 percent of the common stock of the Reorganized Company
and warrants to purchase additional shares of the common stock of the
Reorganized Company; (vi) upon the liquidation of their disputed claims, holders
of California Tort Claims (to the extent they are determined to hold allowable
claims) will receive the same treatment of any uninsured portion of their claims
(excluding any portion of such claims attributable to noncompensatory damages)
as they would have received had such claims been classified as general unsecured
claims (except that such holders will not be entitled to elect cash instead of
equity); (vii) upon the ratification and consummation of a proposed settlement,
holders of Pennsylvania Tort Claims will receive, through their class
representative, an aggregate distribution of $0.1 million in cash, a note in the
principal amount of $0.7 million, and a payment from the Debtors' insurer; and
(viii) holders of claims described in subsections (i), (iii), (iv), (v) and (vi)
above will be entitled to receive a portion of any amounts recovered by a
preference claim litigation trust created pursuant to the Confirmed Plan. In
addition to the foregoing, the Confirmed Plan provides that administrative
expense claims, priority claims, convenience claims, a secured claim of the
Company against Noma Company in the amount of approximately $5.7 million and
certain other secured claims, will all be paid in full. Furthermore, the
Confirmed Plan provides for the cancellation of all then outstanding shares of
common stock of the Company without any distribution to be made to the holders
of such shares.

The consolidated financial statements have been prepared in accordance
with Statement of Position 90-7 ("SOP 90-7"), "Financial Reporting by Entities
in Reorganization Under the Bankruptcy Code," and on a going concern basis,
which contemplates continuity of operations, realization of assets and
liquidation of liabilities in the ordinary course of business. However, as of
September 30, 2003 and continuing through the Effective Date, as a result of the
Filing, such realization of assets and liquidation of liabilities was subject to
uncertainty. While operating as debtors-in-possession under the protection of
Chapter 11 of the Bankruptcy Code and subject to Bankruptcy Court approval or
otherwise as permitted in the normal course of business, the Debtors might have
sold or otherwise disposed of assets and liquidated or settled liabilities for
amounts other than those reflected in the consolidated financial statements.
Further, the consolidated financial statements do not give effect to any
adjustments to the carrying value of assets or amount of liabilities that might
be necessary as a consequence of the Confirmed Plan. Liabilities and obligations
whose treatment and satisfaction were dependent on the outcome of the Chapter 11
cases have been segregated and classified as liabilities subject to compromise
in the consolidated balance sheets. In connection with its emergence from
bankruptcy on November 10, 2003, the Company will be adopting fresh-start
reporting in accordance with SOP 90-7. Accordingly, the

-25-

Company's post-emergence financial statements will not be comparable with its
pre-emergence financial statements.

Pursuant to the Bankruptcy Code, schedules were filed by the Debtors
with the Bankruptcy Court setting forth the assets and liabilities of the
Debtors as of the date of Filing. A bar date of April 14, 2003 was set for the
filing of proofs of claim against the Debtors. Differences between amounts
recorded by the Debtors and claims filed by creditors are being investigated and
will be resolved as part of the proceedings in the Chapter 11 cases. That
process is continuing after the Effective Date. Accordingly, the ultimate number
and allowed amount of such claims are not presently known but the settlement
terms of each such allowed claim is set forth in the Confirmed Plan.

On February 28, 2003, the Company and Esseco S.p.A. announced plans to
form a joint venture, Esseco General Chemical LLC, to supply various sodium and
sulfur-based chemistries to the North American market. Initially, the joint
venture will focus on the supply and distribution of all grades of sodium
metabisulfite, sodium sulfite and sodium thiosulfate. The joint venture became
operational early in the second quarter of 2003. The implementation of the joint
venture was subject to certain conditions, including approval of the Bankruptcy
Court in Delaware, which was granted by order entered on April 4, 2003.

On February 28, 2003, the Company announced a plan to wind down and
close operations in Claymont, Delaware at the South Plant of the Delaware Valley
Works complex, an industrial facility owned and operated by the Company. The
plan was approved by the Bankruptcy Court on July 24, 2003. During the fourth
quarter of 2003, commercial operations at the South Plant ceased. The Company
intends to comply fully with all of its environmental obligations in connection
with the decommissioning of the facility including, without limitation, those
relating to any investigation and remediation of the facility required by law.
Depending on the scope of any investigation and any remedial activity required
as a result, additional costs above those currently estimated could be incurred
over a period of the next several years. The Company is currently unable to
estimate the nature and extent of these additional costs. As such, it is
possible that the final outcome could have a material adverse effect on the
Company's results of operations, cash flows and financial condition. Operations
at the Delaware Valley Works' other manufacturing areas located in the North
Plant of the facility, including the production of sulfur, fluorine, potassium
and ammonia-based compounds and warehousing, distribution and transportation
operations, will continue.

Results of Operations
- ---------------------

The following table sets forth the Company's net revenues and operating
profit (loss) by segment for the three and nine month periods ended September
30, 2003 and 2002 (in millions):

Three Months Ended Nine Months Ended
September 30, September 30,
------------- ------------ ------------- ------------
2003 2002 2003 2002
------------- ------------ ------------- ------------

Net Revenues:
- ------------
Performance products........................ $ 87.9 $ 94.1 $ 259.1 $ 272.5
Manufacturing............................... 98.6 113.0 317.5 368.0
Communications.............................. 89.6 72.4 245.4 218.6
------------- ------------ ------------- ------------
Total................................... $ 276.1 $ 279.5 $ 822.0 $ 859.1
============= ============ ============= ============

-26-

Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------- ------------------------------
2003 2002 2003 2002
------------- ------------ ------------ -----------

Operating Profit (Loss):
- ----------------------
Performance products.................... $ 12.0(1) $ 10.6 $ (6.8)(1) $ 23.4
Manufacturing........................... 5.6 9.1 23.1 34.4
Communications.......................... 2.4(2) (53.6)(3) 3.7(2) (82.2)(3)
Eliminations/other corporate............ (1.9) (4.0) (5.8) (9.5)
------------- ------------ ------------ -----------
Total................................ $ 18.1 $ (37.9) $ 14.2 $ (33.9)
============= ============ ============ ===========

(1) Includes restructuring and impairment charges of $0.4 and $25.1 million
for the three and nine month periods, respectively.
(2) Includes restructuring and impairment charges of $2.7 million.
(3) Includes restructuring and impairment charges of $49.7 and $73.3
million for the three and nine month periods, respectively.

Net revenues for the three and nine month periods ended September 30,
2003 decreased 1 percent and 4 percent from the comparable prior year periods to
$276 million and $822 million, respectively. The decrease for both periods
reflects lower sales in the manufacturing and performance products segments,
partially offset by higher sales in the communications segment. The decreases in
manufacturing segment revenues for both periods are due principally to certain
customers resourcing to competitors in the Far East or utilizing their own
in-house production capabilities and lower volumes with certain major customers
as a result of lower North American automotive build rates. The decreases in
revenues in the performance products segment for both periods are principally
the result of lower sales in the pharmaceutical and personal care markets, due
primarily to the sale of the Company's antacid product line in 2002 and
competitive pressures in antiperspirant actives, lower sales in the technology
market driven by the depressed semiconductor industry and reduced volumes in the
chemical processing market across several product lines. The increase in
revenues in the communications segment for the three months ended September 30,
2003 is principally due to higher volumes in the European and Americas regions
and the impact of exchange rate fluctuations on the reported results of the
Company's European subsidiaries. The increase in revenues in the Communications
segment for the nine months ended September 30, 2003 is principally due to the
impact of exchange rate fluctuations.

Gross profit for the three month period ended September 30, 2003
increased by $4 million from the prior year period. The increase for the third
quarter is principally due to higher gross profit in the communications segment,
partially offset by lower gross profit in the manufacturing segment. The
increase in gross profit in the communications segment is principally related to
the impact of exchange rate fluctuations on the reported results of the
Company's European subsidiaries, the favorable impact of the Company's
restructuring programs and higher volumes. The decrease in gross profit in the
manufacturing segment is due to the lower volumes discussed above and
manufacturing inefficiencies.

Gross profit for the nine month period ended September 30, 2003
decreased by $12 million as compared to the comparable prior year period. This
decrease is principally due to lower gross profit in the manufacturing and
performance products segments partially offset by higher gross profit in the
communications segment. The decrease in gross profit in the manufacturing
segment is due to the lower volumes discussed above and unfavorable product mix
and manufacturing inefficiencies in the industrial market. The decrease in gross
profit in the performance products segment is the result of the above mentioned
sales decreases and increases in energy and key raw materials such as molten
sulfur and sulfuric acid, partially offset by higher spending during the first
six months of 2002 related to the extensive repairs of two boilers at one of the
Company's facilities. The increase in gross profit in the communications segment
is primarily related to the impact of exchange rate fluctuations on the reported

-27-

gross profit of the Company's European subsidiaries and the favorable impact of
the Company's restructuring programs.

Selling, general and administrative expense decreased $6 million and
$14 million for the three and nine month periods ended September 30, 2003,
respectively, as compared to the prior year levels. The decrease in spending for
the nine month period reflects lower spending in all segments and a $2 million
bad debt recovery in the communications segment, partially offset by the above
mentioned impacts of exchange rate fluctuations.

Operating profit for the three month period ended September 30, 2003
was $18 million as compared to a $38 million loss for the comparable prior year
period. This increase is principally due to a restructuring and impairment
charge of $50 million recorded in the third quarter of 2002, the above mentioned
decrease in selling, general and administrative expense and higher gross profit.
Operating profit for the nine month period ended September 30, 2003 was $14
million as compared to a $34 million loss for the prior year. This increase is
principally due to restructuring and impairment charges of $73 million recorded
during the first nine months of 2002 and the above mentioned decreases in
selling, general and administrative expense, partially offset by the above
mentioned decreases in gross profit.

Interest expense for the three and nine month periods ended September
30, 2003 was $20 million and $56 million lower than the prior year levels. These
decreases are due to the fact that no interest expense has been recorded on the
Company's senior credit facility and 11% Senior Subordinated Notes subsequent to
the Company's Chapter 11 filing on October 11, 2002. Through September 30, 2003,
the Company made adequate protection payments to its senior creditors, which are
being treated for accounting purposes as reductions in principal.

Reorganization items for the three and nine month periods ended
September 30, 2003 were $21 million and $54 million, respectively.
Reorganization items include the write off of unamortized debt issuance costs,
professional fees, employee retention costs and other items associated with the
Company's reorganization under Chapter 11.

Income tax expense for the three and nine month periods ended September
30, 2003 was $1 million and $5 million, respectively, which represents a
decrease of $2 million and $113 million from the comparable prior year periods.
The decrease for the nine month period is principally due to a valuation
allowance of $141 million recorded in 2002, which reduced the carrying value of
the Company's domestic net deferred tax assets to zero. Accordingly, income tax
expense for the three and nine month periods ended September 30, 2003 does not
include a provision for federal income tax benefit on domestic losses. The
Company will continue to monitor the likelihood of realizing its net deferred
tax assets and future adjustments to the deferred tax asset valuation allowances
will be recorded as necessary.

Impairment Charges
- ------------------

During the third quarter of 2003, the Company announced a plan to close
a facility in Santiago, Chile, which is included in the communications segment.
Accordingly, the Company assessed the long-lived assets at this facility for
impairment. Based on the results of this assessment, the Company recorded a
non-cash impairment charge of $201 to reduce the carrying value of the fixed
assets at this facility to fair value, which was determined based on an
independent appraisal.

During the first quarter of 2003, the Company announced a plan to wind
down and close operations at its facility in Claymont, Delaware which is
included in the performance products segment. Accordingly, the Company assessed
the long-lived assets at this facility for impairment. Based on the

-28-

results of this assessment, the Company recorded a non-cash impairment charge of
$25 million to reduce the carrying value of the fixed assets at this facility to
fair value, which was determined based upon an independent appraisal. The
Company will continue to evaluate the recoverability of its assets, which may
result in additional charges.

Restructuring Charges
- ---------------------

The Company's restructuring actions during 2003 consist of exiting a
facility and a workforce reduction in its communications segment and two plant
closures in its performance products segment. During the three months ended
September 30, 2003, the Company recorded restructuring charges of $2.8 million
related to employee termination costs and $0.1 million for closure costs at one
facility that will no longer be used. The Company expects to substantially
complete implementation of its restructuring actions by the second quarter of
2004. The reduction in costs from the closure of the South Plant of the
Delaware Valley Works will be offset by the resulting reduction in revenues.
Over the past three years, sales of the affected products averaged approximately
$50 million annually. Management expects that the other restructuring actions
will result in an estimated annual reduction in employee and facility related
expense and cash flows of approximately $4 million. The Company will begin to
realize these reductions in the fourth quarter of fiscal 2003. The Company
will continue to review its operations, and may record additional restructuring
charges to tailor its cost structure to current economic conditions.

Financial Condition, Liquidity and Capital Resources
- ----------------------------------------------------

Cash and cash equivalents were $116 million at September 30, 2003
compared with $133 million at December 31, 2002. The decrease in cash is the
result of the repayment of $45 million of long-term debt, capital expenditures
of $26 million, reorganization expenditures of $17 million, offset by cash
provided by operations of $67 million.

The Company had working capital of $216 million at September 30, 2003
as compared with working capital of $256 million at December 31, 2002. This
decrease in working capital principally reflects lower cash, lower accounts
receivable balances and higher accrued liabilities partially offset by lower
accounts payable.

Cash payments for employee termination costs and facility exit costs
totaled $10 million in the nine months ended September 30, 2003. While
management expects that cash outlays related to the restructuring programs will
be substantially completed by the end of the 2004, certain severance and
facility exit costs, primarily lease obligations, have payment terms extending
beyond 2004. Management intends to fund these cash outlays from existing cash
balances and cash flow generated by operations.

The Filing resulted in an immediate acceleration of the principal
amount and accrued and unpaid interest on the Company's senior credit facility
and 11% Senior Subordinated Notes. Outstanding balances for the senior credit
facility and the 11% Senior Subordinated Notes have been reclassified to
liabilities subject to compromise. In connection with its use of cash collateral
under the credit facility, the Company made adequate protection payments to its
senior creditors, which were recorded as reductions in principal for accounting
purposes.

As of September 30, 2003, the Company had approximately $116 million in
cash on hand, which management believed will provide sufficient liquidity to
fund ongoing operations and meet anticipated obligations to customers, vendors
and employees in the ordinary course of business during the remainder of the
Chapter 11 process. At hearings held on October 17, 2002 and November 7, 2002,
the Bankruptcy Court entered orders authorizing the Debtors' to use cash
collateral of their senior lenders, and Noma Company to use GenTek's cash
collateral, on terms specified in such orders. In order to augment its financial
flexibility during the Chapter 11 process, the Company negotiated with certain
members of its

-29-

pre-petition bank syndicate, and received approval from the Bankruptcy Court on
March 6, 2003, and approval from the Ontario Court on March 13, 2003, to enter
into a debtor-in-possession credit facility. This facility enabled the Company
to issue up to $50 million of letters of credit, including approximately $30
million of letters of credit issued under the pre-petition credit facility, to
support the Company and its subsidiaries' undertakings (other than ordinary
trade credit) and provides the Company's Noma Company subsidiary with a $10
million revolving credit facility for working capital and other general
corporate purposes of Noma Company. The facility's original maturity date of
September 30, 2003 was extended to December 31, 2003 (subject to expiration on
effectiveness of a plan of reorganization) by the holders of a majority of the
commitments. To support the payment obligations under the new facility, the
Bankruptcy Court awarded super-priority administrative expense status to such
obligations and granted the lenders senior priming liens (with certain
exceptions) on the Debtors' assets.

On November 10, 2003, GenTek, substantially all of GenTek's domestic
subsidiaries, and Noma Company (collectively, "the Borrowers") entered into a
$125 million revolving credit facility which matures on November 10, 2008. The
facility includes a letter of credit sub-limit of $60 million. The facility is
secured by a first priority lien on substantially all of the assets of the
Borrowers and 65 percent of the stock of first-tier foreign subsidiaries. The
facility bears interest at variable rates based on a base rate or LIBOR plus an
applicable margin. The initial margins will be 1.5 percent for base rate
borrowings and 2.5 percent for LIBOR borrowings. The margins are subject to
periodic adjustment based upon the financial performance of the Company.

In addition, on November 10, 2003, the Company issued $250 million of
senior term notes which mature on November 10, 2008. The notes are guaranteed by
substantially all of the Company's direct and indirect domestic subsidiaries,
and are secured by second-priority liens on substantially all of the assets of
the Company and its direct and indirect domestic subsidiaries and 65 percent of
the stock of first-tier foreign subsidiaries. The notes bear interest at
variable rates based on LIBOR plus 4.5 percent, subject to a LIBOR floor of 1.5
percent.

Recent Accounting Pronouncements
- --------------------------------

In July 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 141 "Business Combinations" and SFAS No. 142 "Goodwill and Other
Intangible Assets." SFAS No. 141 requires business combinations initiated after
June 30, 2001 to be accounted for using the purchase method of accounting, and
broadens the criteria for recording intangible assets separate from goodwill.
SFAS No. 142 requires the use of a nonamortization approach to account for
purchased goodwill and certain intangibles. Under a nonamortization approach,
goodwill and certain intangibles will not be amortized into results of
operations, but instead would be reviewed for impairment and written down and
charged to results of operations only in the periods in which the recorded value
of goodwill and certain intangibles is more than its fair value. The provisions
of each statement which apply to goodwill and intangible assets acquired prior
to June 30, 2001 were adopted by the Company on January 1, 2002. Accordingly,
the Company ceased amortizing goodwill. Upon adoption of SFAS No. 142, the
Company recorded a charge of $161 million (net of a tax benefit of $40 million)
as a cumulative effect of a change in accounting principle.

In July 2001, the FASB issued SFAS No. 143 "Accounting for Asset
Retirement Obligations," which requires that the fair value of a liability for
an asset retirement obligation be recognized in the period in which it is
incurred and the associated asset retirement costs are capitalized as part of
the carrying amount of the long-lived asset. The Company adopted this standard
on January 1, 2003. There was no effect upon adoption on the Company's
consolidated financial statements.

-30-

In July 2002, the FASB issued SFAS No. 146 "Accounting for Costs
Associated with Exit or Disposal Activities," which requires that a liability
for costs associated with an exit or disposal activity be recognized when the
liability is incurred. This differs from prior guidance, which required the
liability to be recognized when a commitment plan was put into place. SFAS No.
146 also establishes that fair value is the objective for initial measurement of
the liability. This statement is effective for exit or disposal activities that
are initiated after December 31, 2002. The Company adopted this standard on
January 1, 2003. There was no effect upon adoption on the Company's consolidated
financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Company's cash flows and earnings are subject to fluctuations
resulting from changes in interest rates, foreign currency exchange rates and
commodity prices and the Company selectively uses financial instruments to
manage these risks. The Company's objective in managing its exposure to changes
in interest rates, foreign currency exchange rates and commodity prices is to
reduce volatility on earnings and cash flow associated with such changes. The
Company has not entered, and does not intend to enter, into financial
instruments for speculation or trading purposes.

The Company measures the market risk related to its holding of
financial instruments based on changes in interest rates, foreign currency rates
and commodity prices using a sensitivity analysis. The sensitivity analysis
measures the potential loss in fair values, cash flows and earnings based on a
hypothetical 10 percent change in interest rates, foreign currency exchange
rates and commodity prices. The Company used current market rates on its debt
and derivative portfolio to perform the sensitivity analysis. Such analysis
indicates that a hypothetical 10 percent change in interest rates, foreign
currency exchange rates or commodity prices would not have a material impact on
the fair values, cash flows or earnings of the Company.

Item 4. Controls and Procedures.

(a) Disclosure Controls and Procedures. The Company's management, with
the participation of the Company's Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of the Company's disclosure controls
and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the
end of the period covered by this report. Based on such evaluation, the
Company's Chief Executive Officer and Chief Financial Officer have concluded
that, as of the end of such period, the Company's disclosure controls and
procedures are effective at the reasonable assurance level in recording,
processing, summarizing and reporting, on a timely basis, information required
to be disclosed by the Company in the reports that it files or submits under the
Exchange Act.

(b) Internal Control Over Financial Reporting. There have not been any
changes in the Company's internal control over financial reporting (as such term
is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fiscal quarter to which this report relates that have materially affected, or
are reasonably likely to materially affect, the Company's internal control over
financial reporting.

-31-

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

Item 1. Legal Proceedings.

On October 11, 2002, GenTek Inc. and 31 of its direct and indirect
subsidiaries, including Noma Company, a Canadian subsidiary, (collectively,
including the Company, the "Debtors") filed voluntary petitions for
reorganization relief (the "Filing") under Chapter 11 of the United States
Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court
for the District of Delaware (the "Bankruptcy Court"). The Debtors' cases (the
"Chapter 11 cases") have been jointly administered as Case No. 02-12986 (MFW).
As of September 30, 2003, GenTek and the other Debtors were operating their
respective businesses as "debtors-in-possession" under the jurisdiction of the
Bankruptcy Court and in accordance with the applicable provisions of the
Bankruptcy Code and orders of the Bankruptcy Court.

The prosecution against the Debtors of claims and efforts to recover
from the Debtors payments related to litigation existing on October 11, 2002,
the date of filing for protection under Chapter 11 of the Bankruptcy Code, were
automatically stayed in accordance with section 362 of the Bankruptcy Code and
no party may take action to realize its pre-petition claims, except pursuant to
an order of the Bankruptcy Court.

Item 2. Changes in Securities and Use of Proceeds.

On November 10, 2003 the Confirmed Plan became effective. See Note 1 to
the Company's consolidated financial statements. The information contained in
Item 1 of the Company's Form 8-A to amend its Form 10, filed with the Securities
and Exchange Commission dated November 10, 2003, is incorporated herein by
reference.

Item 3. Defaults Upon Senior Securities.

On October 11, 2002, the Company and 31 of its direct and indirect
subsidiaries filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code. The filing of a bankruptcy petition resulted in an immediate
acceleration of the principal amount and accrued and unpaid interest on the
Company's senior credit facility and 11% Senior Subordinated Notes, which
totaled $961 million as of October 11, 2002. In addition, the Company received
termination payment demands from counterparties to the Company's interest rate
swap agreements totaling $13 million, which have not been paid. In connection
with its use of cash collateral under the senior credit facility, the Company
made adequate protection payments to its senior creditors which were recorded as
reductions in principle for accounting purposes.

As of September 30, 2003, the Debtors had proposed and were awaiting
the hearing to consider the confirmation of their joint plan of reorganization
dated August 28, 2003. The disclosure statement with respect to such plan was
approved by order of the Bankruptcy Court dated August 27, 2003, and the Debtors
were authorized to solicit acceptances and rejections of the plan. The
confirmation hearing was subsequently held on October 7, 2003, and the
Bankruptcy Court on that date entered an order confirming the plan, as modified
on October 3, 2003 (the plan as so modified, the "Confirmed Plan"). The
Confirmed Plan became effective in accordance with its terms on November 10,
2003 (the "Effective Date").

The Confirmed Plan provides that, in full satisfaction of their
allowable claims: (i) the holders of existing secured claims under the Company's
existing credit facility (excluding the tranche in which Noma Company is a
borrower) initially receive approximately 81 percent of the common stock of the
reorganized Company (the "Reorganized Company"), $60 million in cash (reduced by
certain payments)

-32-

and $216.5 million principal amount of senior term notes issued by the
Reorganized Company; (ii) holders of existing secured claims under the term loan
facility to Noma Company under the Company's existing credit facility will
receive approximately 13 percent of the common stock of the Reorganized Company
and $33.5 million principal amount of senior term notes issued by the
Reorganized Company; (iii) holders of general unsecured claims and trade vendor
claims who elect to receive equity in the Reorganized Company on account of
their claims will receive a pro rata distribution of up to approximately 2
percent, in the aggregate, of the common stock of the Reorganized Company and
warrants to purchase additional shares of the common stock of the Reorganized
Company; (iv) holders of general unsecured claims and trade vendor claims that
elect not to receive equity of the Reorganized Company will receive an amount in
cash equal to the lesser of (A) 6 percent of each such holder's allowed claim or
(B) each such holder's pro rata share of $5 million; (v) holders of unsecured
claims relating to the Company's existing bonds will receive approximately 4
percent of the common stock of the Reorganized Company and warrants to purchase
additional shares of the common stock of the Reorganized Company; (vi) upon the
liquidation of their disputed claims, holders of California Tort Claims (to the
extent they are determined to hold allowable claims) will receive the same
treatment of any uninsured portion of their claims (excluding any portion of
such claims attributable to noncompensatory damages) as they would have received
had such claims been classified as general unsecured claims (except that such
holders will not be entitled to elect cash instead of equity); (vii) upon the
ratification and consummation of a proposed settlement, holders of Pennsylvania
Tort Claims will receive, through their class representative, an aggregate
distribution of $120,000 in cash, a note in the principal amount of $675,000,
and a payment from the Debtors' insurer; and (viii) holders of claims described
in subsections (i), (iii), (iv), (v) and (vi) above will be entitled to receive
a portion of any amounts recovered by a preference claim litigation trust
created pursuant to the Confirmed Plan. In addition to the foregoing, the
Confirmed Plan provides that administrative expense claims, priority claims,
convenience claims, a secured claim of the Company against Noma Company in the
amount of approximately $5.7 million and certain other secured claims, will all
be paid in full. Furthermore, the Confirmed Plan provides for the cancellation
of all then outstanding shares of common stock of the Company without any
distribution to be made to the holders of such shares.

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

NONE

Item 5. Other Information.

NONE

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

(a) Exhibits;

3.1 Second Amended and Restated Certificate of
Incorporation of GenTek Inc., effective as of
November 7, 2003 (incorporated by reference to the
Registrant's Form 8-A to amend its Form 10, dated
November 10, 2003, as filed with the Securities and
Exchange Commission).

3.2 Amended and Restated By-Laws of GenTek Inc.,
effective as of November 10, 2003 (incorporated by
reference to the Registrant's Form 8-A to amend its
Form 10, dated November 10, 2003, as filed with the
Securities and Exchange Commission).

-33-

4.1 GenTek Inc. Tranche A Warrant Agreement, dated as of
November 10, 2003 (incorporated by reference to the
Registrant's Form 8-A to amend its Form 10, dated
November 10, 2003, as filed with the Securities and
Exchange Commission).

4.2 GenTek Inc. Tranche B Warrant Agreement, dated as of
November 10, 2003 (incorporated by reference to the
Registrant's Form 8-A to amend its Form 10, dated
November 10, 2003, as filed with the Securities and
Exchange Commission).

4.3 GenTek Inc. Tranche C Warrant Agreement, dated as of
November 10, 2003 (incorporated by reference to the
Registrant's Form 8-A to amend its Form 10, dated
November 10, 2003, as filed with the Securities and
Exchange Commission).

10.1 Form of Registration Rights Agreement by and among
the Company and the holders named therein dated as of
November 10, 2003 (incorporated by reference to the
Registrant's Form 8-A to amend its Form 10, dated
November 10, 2003, as filed with the Securities and
Exchange Commission).

10.2 Credit Agreement among GenTek Inc., Noma Company and
the domestic subsidiaries of GenTek Inc. from time to
time party hereto and Bank of America, N.A. as the
Agent, and Banc of America Securities LLC as sole
Syndication Agent, Book Runner and Lead Arranger,
dated as of November 10, 2003.

10.3 Security Agreement among GenTek Inc. and certain of
its subsidiaries and Bank of America, N.A. in its
capacity as agent for the financial institutions from
time to time party to the Credit Agreement, dated as
of November 10, 2003.

10.4 Pledge Agreement among GenTek Inc. and certain of its
subsidiaries and Bank of America, N.A. in its
capacity as agent for the financial institutions from
time to time party to the Credit Agreement, dated as
of November 10, 2003.

10.5 Intercreditor Agreement among Bank of America, N.A.,
as Senior Agent, BNY Asset Solutions LLC, as Junior
Agent, GenTek Inc. and each subsidiary of GenTek
party hereto, dated as of November 10, 2003.

10.6 Senior Term Loan and Guarantee Agreement among GenTek
Inc., as Borrower, The Subsidiaries of GenTek Inc.
Parties Hereto, as Guarantors, The Several Lenders
from Time to Time Parties Hereto, and BNY Asset
Solutions LLC, as Administrative Agent, dated as of
November 10, 2003.

10.7 Security Agreement among GenTek Inc. and certain of
its subsidiaries and BNY Asset Solutions LLC in its
capacity as administrative agent for the financial
institutions from time to time party to the Loan
Agreement, dated as of November 10, 2003.

10.8 Pledge Agreement among GenTek Inc. and certain of its
subsidiaries and BNY Asset Solutions LLC in its
capacity as administrative agent for the financial
institutions from time to time party to the Loan
Agreement, dated as of November 10, 2003.

10.9 GenTek Inc. 2003 Management and Directors Incentive
Plan.

31.1 GenTek Certification of Chief Executive Officer
pursuant to Rule 13a-14(a)/15d-14(a) as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.

-34-

31.2 Certification of Chief Financial Officer pursuant to
Rule 13a-14(a)/15d-14(a) as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.

32 Certification of Chief Executive Officer and Chief
Financial Officer pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K;

Form 8-K filed with the Securities and Exchange Commission
dated July 1, 2003, with respect to the Registrant filing its
Plan of Reorganization and Disclosure Statement with the
United States Bankruptcy Court in the District of Delaware.

Form 8-K filed with the Securities and Exchange Commission
dated August 21, 2003, with respect to the Registrant filing
its second proposed Plan of Reorganization and second proposed
Disclosure Statement with the United States Bankruptcy Court
in the District of Delaware.

Form 8-K filed with the Securities and Exchange Commission
dated August 27, 2003, with respect to the approval of the
Registrant's Disclosure Statement by the United States
Bankruptcy Court in the District of Delaware.

Form 8-K filed with the Securities and Exchange Commission
dated October 7, 2003, with respect to the entry of an order
by the United States Bankruptcy Court in the District of
Delaware confirming the Registrant's Final Plan of
Reorganization.

Form 8-K filed with the Securities and Exchange Commission
dated November 10, 2003, with respect to the Company's
announcement of its emergence from bankruptcy and closing on a
$125 million revolving credit facility.

-35-

SIGNATURES
----------

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

GENTEK INC.
-----------------------------------------
Registrant

Date November 14, 2003 /s/ Richard R. Russell
--------------------- --------------------------------------------
Richard R. Russell
President and Chief Executive Officer
(Principal Executive Officer) and Director

Date November 14, 2003 /s/ Matthew R. Friel
--------------------- --------------------------------------------
Matthew R. Friel
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

-36-

STATEMENT OF DIFFERENCES
------------------------
The section symbol shall be expressed as................................ 'SS'