This Monthly Financial Report (the "Financial Report") is limited in scope,
covers a limited time period and has been prepared soley for purposes of
complying with the monthly reporting requirements of the United States
Bankruptcy Court for the Eastern District of Wisconsin in Milwaukee. Keystone
Consolidated Industries, Inc's ("Keystone") wholly-owned subsidiary, Engineered
Wire Products, Inc. ("EWP") has not filed for protection under Chapter 11 of
Title 11 of the United States Bankruptcy Code, and financial information for EWP
has been omitted from the Financial Report. The Financial Report is unaudited
and does not purport to show the financial statements of Keystone or any of its
subsidiaries in accordance with accounting principles generally accepted in the
United States ("GAAP"), and therefore excludes items required by GAAP, such as
certain reclassifications, eliminations, accruals and disclosure items. Undue
reliance should not be placed upon the Financial Report. There can be no
assurance that such information is complete.
MONTHLY FINANCIAL REPORT
OFFICE OF THE U.S. TRUSTEE
EASTERN DISTRICT OF WISCONSIN
Case Name: FV Steel & Wire Company ("FVSW") Case No: 04-22421-SVK
Keystone Consolidated Industries, Inc. ("KCI") 04-22422-SVK
DeSoto Environmental Management, Inc. ("DEMI") 04-22423-SVK
J.L. Prescott Company ("JLP") 04-22424-SVK
Sherman Wire Company ("SWC") 04-22425-SVK
Sherman Wire of Caldwell, Inc.("SWCI") 04-22426-SVK
FOR MONTH OF APRIL, 2004.
I. FINANCIAL SUMMARY
CASH RECEIPTS AND DISBURSEMENTS
-------------------------------
FVSW KCI DEMI JLP SWC SWCI Total
---- --- ---- --- --- ---- -----
A. CASH ON HAND START OF MONTH $0 $3,997,335 $0 $0 ($450) $0 $3,996,885
---------------------------------------------------------------------
B. RECEIPTS 0 93,747,435 0 0 6,696 2,100 93,756,231
---------------------------------------------------------------------
C. DISBURSEMENTS 0 93,303,951 0 0 9,459 4,364 93,317,774
---------------------------------------------------------------------
D. NET RECEIPTS (DISBURSEMENTS) 0 443,484 0 0 (2,763) (2,264) 438,457
---------------------------------------------------------------------
E. CASH ON HAND END OF MONTH $0 $4,440,819 $0 $0 ($3,213) ($2,264) $4,435,342
=====================================================================
Note 1 - KCI Cash On Hand At End of Month includes $5,435,049 of cash held in
escrow for PSC Metals, Inc. pending resolution of disputed ferrous scrap
ownership.
Note 2 - KCI Receipts include $36,358,000 of advances on its Revolving Line of
Credit (RLC).
Note 3 - KCI Disbursements include $29,630,170 of payments on its RLC.
Note 4 - KCI Receipts and Disbursements include transfers from and to,
respectively KCI accounts of $27,794,600.
Note 5 - SWC Receipts and KCI Disbursements include transfers from KCI to SWC of
$8,796.
CASH DISBURSEMENT RECONCILIATION
--------------------------------
FVSW KCI DEMI JLP SWC SWCI Total
----- --- ---- --- --- ---- -----
Per Schedule of Receipts and Disbursements 0 93,303,951 0 0 9,459 4,364 93,317,774
Less:
Payments on Revolving Credit Facility (29,630,170) (29,630,170)
Transfers to other cash accounts (27,803,396) (27,803,396)
-------------------------------------------------------------------------
Net Cash Disbursements $0 $35,870,385 $0 $0 $9,459 $4,364 $35,884,208
=========================================================================
Page 1 of 9
PROFIT AND LOSS STATEMENT
-------------------------
ACCRUAL BASIS
-------------
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
A NET SALES $0 $42,918,441 $0 $0 $1,414,317 $17,766 $44,350,524 ($1,727,180) $42,623,344
B. COST OF SALES 0 31,829,183 0 0 1,376,194 10,171 33,215,548 (1,727,180) 31,488,368
---------------------------------------------------------------------------------------------
C. GROSS PROFIT 0 11,089,258 0 0 38,123 7,595 11,134,976 0 11,134,976
D. TOTAL OPERATING EXPENSES 4,660 6,585,135 530 60,500 125,072 1,605 6,777,502 (236,636) 6,540,866
---------------------------------------------------------------------------------------------
E. NET INCOME (LOSS) FROM OPERATIONS (4,660) 4,504,123 (530) (60,500) (86,949) 5,990 4,357,474 236,636 4,594,110
F. NON-OPERATING, NON-RECURRING
REVENUE(EXPENSES) 7,829 (934,412) 60,000 0 163,051 25,000 (678,532) (236,636) (915,168)
---------------------------------------------------------------------------------------------
H. NET INCOME (LOSS) $3,169 $3,569,711 $59,470 ($60,500) $76,102 $30,990 $3,678,942 $0 $3,678,942
=============================================================================================
Page 2 of 9
II. PROFIT AND LOSS STATEMENT (ACCRUAL BASIS)
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
A. Related to Business Operations:
-------------------------------
Total Revenue (Sales) $42,918,441 $1,414,317 $17,766 $44,350,524 ($1,727,180) $42,623,344
---------------------------------------------------------------------------------------------
Less: Cost of Goods Sold:
Beginning Inventory at Cost 26,783,092 1,520,566 28,303,658 28,303,658
Add: Purchases 44,617,712 1,598,280 10,171 46,226,163 (1,727,180) 44,498,983
Less: Ending Inventory at Cost 39,571,621 1,742,652 41,314,273 41,314,273
---------------------------------------------------------------------------------------------
Cost of Goods Sold 0 31,829,183 0 0 1,376,194 10,171 33,215,548 (1,727,180) 31,488,368
---------------------------------------------------------------------------------------------
Gross Profit 0 11,089,258 0 0 38,123 7,595 11,134,976 0 11,134,976
---------------------------------------------------------------------------------------------
Less: Operating Expenses:
Officer Compensation 52,115 52,115 52,115
Salaries and Wages-
Other Employees 1,356,424 39,969 1,396,393 1,396,393
Employee Benefits and Pensions 105 1,673,243 23,148 1,696,496 1,696,496
Payroll Taxes 118,253 4,969 123,222 123,222
Real Estate Taxes 15,288 0 15,288 15,288
Federal and State Income Taxes 0 0 0 0
Rent and Lease Expense 5,083 1,400 6,483 6,483
Interest Expense 583,653 60,000 0 643,653 (223,051) 420,602
Insurance 145,057 0 145,057 145,057
Automobile Expense 0 214 214 214
Utilities 348,740 6,313 115 355,168 355,168
Depreciation and Amortization 4,305 1,131,397 0 1,135,702 1,135,702
Repairs and Maintenance 190,034 1,166 191,200 191,200
Advertising 32,174 0 32,174 32,174
Supplies, Office Expense
and Photocopies 116,758 2,033 118,791 118,791
Bad Debts 0 0 0 0
Miscellaneous 250 816,916 530 500 45,860 1,490 865,546 (13,585) 851,961
---------------------------------------------------------------------------------------------
Total Operating Expenses 4,660 6,585,135 530 60,500 125,072 1,605 6,777,502 (236,636) 6,540,866
---------------------------------------------------------------------------------------------
Net Income (Loss) From Operations (4,660) 4,504,123 (530) (60,500) (86,949) 5,990 4,357,474 236,636 4,594,110
---------------------------------------------------------------------------------------------
B. Not Related to Business Operations:
-----------------------------------
Revenue:
Interest Income 829 10,161 60,000 163,051 234,041 (223,051) 10,990
Net Gain (Loss) on Sale of Assets 25,000 25,000 25,000
Other 7,000 55,427 0 0 0 0 62,427 (13,585) 48,842
---------------------------------------------------------------------------------------------
Total Non-Operating Revenue 7,829 65,588 60,000 0 163,051 25,000 321,468 (236,636) 84,832
---------------------------------------------------------------------------------------------
Expenses:
Legal and Professional Fees 0 1,000,000 0 0 0 0 1,000,000 0 1,000,000
Other 0 0 0 0 0 0 0 0 0
---------------------------------------------------------------------------------------------
Total Non-Operating Expenses 0 1,000,000 0 0 0 0 1,000,000 0 1,000,000
---------------------------------------------------------------------------------------------
Net Income (Loss) For Period $3,169 $3,569,711 $59,470 ($60,500) $76,102 $30,990 $3,678,942 $0 $3,678,942
=============================================================================================
Note 1 - Beginning and ending inventory balances shown above do not include
reserves related to LIFO and obsolescence that are reflected in the inventory
balances shown on the Balance Sheet.
Note 2 - Interest income at DEMI and SWC is based on the balance of intercompany
receivables.
Page 3 of 9
IV. BALANCE SHEET
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
ASSETS
------
Current
- -------
Cash $4,440,819 ($3,213) ($2,264) $4,435,342 $4,435,342
Inventory 53,582 22,551,040 1,937,841 24,542,463 24,542,463
Accounts Receivable 28,331,094 583,040 28,914,134 (43,373) 28,870,761
Prepaid Expenses 823,434 88,976 1,264 913,674 913,674
Other - Exhibit E 75,994 3,856,214 14,729,793 0 299,430 0 18,961,431 (15,070,041) 3,891,390
---------------------------------------------------------------------------------------------------------------
Total Current
Assets 129,576 60,002,601 14,729,793 0 2,906,074 (1,000) 77,767,044 (15,113,414) 62,653,630
---------------------------------------------------------------------------------------------------------------
Fixed
- -----
Property and
Equipment 1,175,330 323,170,127 21,589,653 2,829,738 348,764,848 348,764,848
Accumulated
Depreciation (707,488)(235,933,619) (16,356,181)(2,316,890) (255,314,178) (255,314,178)
---------------------------------------------------------------------------------------------------------------
Total Fixed
Assets 467,842 87,236,508 0 0 5,233,472 512,848 93,450,670 0 93,450,670
---------------------------------------------------------------------------------------------------------------
Other
- -----
Restricted
Investments 5,556,917 401,599 5,958,516 5,958,516
Prepaid Pension
Asset 130,010,914 0 130,010,914 130,010,914
Deferred Financing
Costs 1,537,159 0 1,537,159 1,537,159
Goodwill 751,508 0 751,508 751,508
Other - Exhibit F 115,000 39,636,719 0 0 2,246,871 0 41,998,590 (41,173,674) 824,916
---------------------------------------------------------------------------------------------------------------
Total Other
Assets 115,000 177,493,217 0 0 2,648,470 0 180,256,687 (41,173,674) 139,083,013
---------------------------------------------------------------------------------------------------------------
Total Assets $712,418 $324,732,326 $14,729,793 $0 $10,788,016 $511,848 $351,474,401 ($56,287,088)$295,187,313
===============================================================================================================
Page 4 of 9
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
LIABILITIES
-----------
Current
- -------
Pre-Petition
Accounts Payable 19,289,216 883,007 53,018 20,225,241 20,225,241
Post-Petition
Accounts Payable 6,541,896 33,662 69 6,575,627 6,575,627
Pre-Petition
Accounts Payable -
Affiliates (2,649,073) 90,549,820 5,774,107 15,552,291 (89,758,156)(1,459,080) 18,009,909 (14,904,350) 3,105,559
Post-Petition
Accounts Payable -
Affilliates (91,523) 317,699 530 120,500 147,881 (182,173) 312,914 (209,064) 103,850
Pre-Petition
Accrued Expenses -
Exhibit G 3,183 19,210,670 35,632 (36,000) 6,668,380 62,661 25,944,526 0 25,944,526
Post-Petition
Accrued Expenses -
Exhibit H 0 12,517,326 0 0 173,486 2,115 12,692,927 0 12,692,927
Pre-Petition Notes
Payable and
Current Maturities
of Long Term Debt 28,157,157 20,290 0 28,177,447 28,177,447
Post-Petition
Notes Payable and
Current Maturities
of Long Term Debt 38,331,859 (4,817) 38,327,042 38,327,042
Accrued OPEB Cost 11,441,001 155,000 297,662 0 11,893,663 11,893,663
Income Taxes
Payable 0 0 0 0 0 5,436 5,436 5,436
Pre-petition
accrued pref.
Stock dividends 11,651,342 11,651,342 11,651,342
Post petition
accrued pref.
Stock dividends 1,028,060 0 1,028,060 1,028,060
---------------------------------------------------------------------------------------------------------------
Total Current
Liabilities (2,737,413) 239,036,046 5,810,269 15,791,791 (81,538,605)(1,517,954) 174,844,134 (15,113,414) 159,730,720
---------------------------------------------------------------------------------------------------------------
Long Term
- ---------
Pre-Petition Long
Term Debt 32,180,761 32,180,761 32,180,761
Post-Petition Long
Term Debt 0 0 0
Accrued OPEB Cost 33,000 103,880,439 1,620,194 9,276,774 114,810,407 114,810,407
Accrued Pension
Cost 1,134,572 1,134,572 1,134,572
Pre-Petition
Accrued Expenses -
Exhibit I 0 11,096,137 3,573,908 0 0 0 14,670,045 0 14,670,045
Post-Petition
Accrued Expenses -
Exhibit J 0 140,542 0 0 0 0 140,542 0 140,542
---------------------------------------------------------------------------------------------------------------
Total Long Term
Liabilities 33,000 148,432,451 3,573,908 1,620,194 9,276,774 0 162,936,327 0 162,936,327
---------------------------------------------------------------------------------------------------------------
Page 5 of 9
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
Preferred Stock 2,112,000 2,112,000 2,112,000
- --------------- ---------------------------------------------------------------------------------------------------------------
STOCKHOLDERS'
EQUITY (DEFICIT)
Common Stock 10,000 10,798,251 6 2,246,866 5,619,274 1,000 18,675,397 (7,877,145) 10,798,252
Additional Paid-In
Capital 40,391,899 27,579,007 67,970,906 (27,579,007) 40,391,899
Accumulated Deficit 3,406,831 (116,026,196) 5,345,610 (19,658,851) 83,409,019 2,028,802 (41,494,785) (39,274,975) (80,769,760)
Treasury Stock (12,125) (33,557,453) (33,569,578) 33,557,453 (12,125)
---------------------------------------------------------------------------------------------------------------
Total
Stockholders'
Equity (Deficit) 3,416,831 (64,848,171) 5,345,616 (17,411,985) 83,049,847 2,029,802 11,581,940 (41,173,674) (29,591,734)
---------------------------------------------------------------------------------------------------------------
Total Liabilities
& Stockholders'
Equity (Deficit) $712,418 $324,732,326 $14,729,793 $0 $10,788,016 $511,848 $351,474,401 ($56,287,088)$295,187,313
===============================================================================================================
Note 1 - Inventory balances above reflect reserves related to LIFO and
obslescence that are not reflected in the inventory balances shown on the Profit
& Loss Statement.
Note 2 - Substantially all Current and Long Term Accrued OPEB (Future Retiree
Medical) Costs were incurred pre-petition.
Page 6 of 9
EXHIBIT E
OTHER CURRENT ASSETS
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
Interest Receivable $994 $994 $994
Note Receivable 75,000 75,000 75,000
Intercompany Receivable 3,824,574 14,729,793 294,557 18,848,924 (15,070,041) 3,778,883
Receivable from R. Missar 4,873 4,873 4,873
Short Term Investments 20,428 20,428 20,428
Receivable From EB Plans 2,282 2,282 2,282
Stop Loss Receivable 8,930 8,930 8,930
0 0
---------------------------------------------------------------------------------------------------
$75,994 $3,856,214 $14,729,793 $0 $299,430 $0 $18,961,431 ($15,070,041) $3,891,390
===================================================================================================
EXHIBIT F
OTHER LONG TERM ASSETS
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
Note Receivable $115,000 $115,000 $115,000
Rail Cars 381,866 381,866 381,866
Investment in Sherman
Wire Corp. 38,915,803 38,915,803 (38,915,803) 0
Investment in Fox Valley
Steel & Wire 10,000 10,000 (10,000) 0
Investment in Sherman Wire
of Caldwell Inc. 1,000 1,000 (1,000) 0
Investment in J.L.
Prescott/DEMI 2,246,871 2,246,871 (2,246,871) 0
Long Term Insurance
Receivable 323,250 323,250 323,250
Deposits 4,800 4,800 4,800
---------------------------------------------------------------------------------------------------
$115,000 $39,636,719 $0 $0 $2,246,871 $0 $41,998,590 ($41,173,674) $824,916
===================================================================================================
Page 7 of 9
EXHIBIT G
PRE-PETITION ACCRUED EXPENSES - CURRENT
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
Income Taxes $3,183 $35,632 ($36,000) ($70,091) ($1,838) ($69,114) ($69,114)
Worker Comp Exp 1,236,861 (168) 1,236,693 1,236,693
Missar Pension 0 19,935 19,935 19,935
Unclaimed Property 6,487 17,540 24,027 24,027
Abandoned Real Estate Exp 0 658,744 658,744 658,744
Legal and Professional Fees 311,879 487,932 799,811 799,811
Self-Insurance Liability 2,537,192 5,050,166 7,587,358 7,587,358
Pensions 0 15,704 15,704 15,704
Salaries/Wages 77,616 47,300 124,916 124,916
Holiday Pay/Vacations 1,985,751 127,854 2,113,605 2,113,605
FICA - Employer 0 3,257 3,257 3,257
Federal Unemployment Taxes 0 3,397 3,397 3,397
State Unemployment Taxes 0 20,577 20,577 20,577
Defined Contribution Plan 1,521,426 28,615 1,550,041 1,550,041
Medical Insurance 86,671 88,737 16,419 191,827 191,827
Utilities 0 5,049 307 5,356 5,356
Volume Incentive Plan 0 72,000 72,000 72,000
Property Tax 204,119 32,865 5,973 242,957 242,957
Sales/Use Tax 0 8,124 1,800 9,924 9,924
Customer Overpayments 0 50,843 50,843 50,843
Other - Plant Shut-Down 0 40,000 40,000 40,000
Goods received not invoiced 0 0 0
Unearned Revenue 10,768 10,768 10,768
Sales Rebates/Discounts 1,602,269 1,602,269 1,602,269
Manufacturing Misc 0 0 0
EPA 7,951,976 7,951,976 7,951,976
Medical Insurance 951,800 951,800 951,800
Accrued State Franchise Tax 206,742 206,742 206,742
Accrued Bank Service Charge (9,925) (9,925) (9,925)
Accrued Interest 454,639 454,639 454,639
Accrued travel 40,223 40,223 40,223
Accrued taxes - other 34,176 34,176 34,176
---------------------------------------------------------------------------------------------------
$3,183 $19,210,670 $35,632 ($36,000) $6,668,380 $62,661 $25,944,526 $0 $25,944,526
===================================================================================================
EXHIBIT H
POST PETITION ACCRUED EXPENSES - CURRENT
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
Abandoned Real Estate Exp 8,400 8,400 8,400
Pensions 17,274 17,274 17,274
Salaries/Wages 886,662 7,922 894,584 894,584
Holiday Pay/Vacations 1,971,491 7,525 1,979,016 1,979,016
FICA - Employer 307,688 2,761 310,449 310,449
Federal Unemployment Taxes (34,297) (2,933) (37,230) (37,230)
State Unemployment Taxes (525,613) (13,959) (539,572) (539,572)
Defined Contribution Plan 269,953 14,059 284,012 284,012
Medical Insurance 388,038 21,625 (1,214) 408,449 408,449
Utilities 224,846 72,481 (134) 297,193 297,193
Property Tax 27,519 37,149 3,463 68,131 68,131
Sales/Use Tax 73,560 413 73,973 73,973
Legal 314,462 769 315,231 315,231
Professional Fees 100,959 100,959 100,959
Goods Received Not Invoiced 1,627,698 1,627,698 1,627,698
Worker's Compensation 2,786,864 2,786,864 2,786,864
Unearned Revenue 0 0 0
Sales Rebates/Discounts 549,400 549,400 549,400
Abanondon Property 154 154 154
Miscellaneous 1,474,230 1,474,230 1,474,230
Accrued State Franchise Tax 31,963 31,963 31,963
Accrued Bank Service Charge 3,964 3,964 3,964
Accrued Self-Insurance Losses 172,982 172,982 172,982
Accrued Interest 162,728 162,728 162,728
Accrued Travel 1,520,344 1,520,344 1,520,344
Accrued Management Fees 181,731 181,731 181,731
-----------------------------------------------------------------------------------------------
$0 $12,517,326 $0 $0 $173,486 $2,115 $12,692,927 $0 $12,692,927
===============================================================================================
Page 8 of 9
EXHIBIT I
PRE-PETITION ACCRUED EXPENSES - LONG TERM
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
Environmental 3,127,000 3,573,908 6,700,908 6,700,908
Workmans Compensation 1,846,775 1,846,775 1,846,775
Accrued Deferred Interest Exp. 781,715 781,715 781,715
L/T Deferred Compensation 15,660 15,660 15,660
Long Term Disability 32,987 32,987 32,987
L/T Deferred Tax Liability 5,292,000 5,292,000 5,292,000
0 0
-----------------------------------------------------------------------------------------------
$0 $11,096,137 $3,573,908 $0 $0 $0 $14,670,045 $0 $14,670,045
===============================================================================================
EXHIBIT J
POST PETITION ACCRUED EXPENSES - LONG TERM
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
Workmans Compensation $140,699 $140,699 $140,699
Accrued Deferred Interest Exp. 0 0
Long Term Disability (157) (157) (157)
-----------------------------------------------------------------------------------------------
$0 $140,542 $0 $0 $0 $0 $140,542 $0 $140,542
===============================================================================================
Page 9 of 9