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 (the
"Trustee"). 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. In addition, in
order to comply with the 15-day filing requirements of the Trustee, certain
year-end adjustments have been excluded from this report. The debtors anticipate
filing an amended report when information relative to these adjustments becomes
available.
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 JUNE, 2005.
I. FINANCIAL SUMMARY
CASH RECEIPTS AND DISBURSEMENTS
-------------------------------
FVSW KCI DEMI JLP SWC SWCI Total
---- --- ---- --- --- ---- -----
A. CASH ON HAND START OF MONTH $0 $4,743,605 $0 $0 $78 $0 $4,743,683
-----------------------------------------------------------------------------
B. RECEIPTS 0 54,103,684 0 0 4,340 1,675 54,109,699
C. DISBURSEMENTS 0 54,257,444 0 0 4,679 1,675 54,263,798
-----------------------------------------------------------------------------
D. NET RECEIPTS (DISBURSEMENTS) 0 (153,760) 0 0 (339) 0 (154,099)
-----------------------------------------------------------------------------
E. CASH ON HAND END OF MONTH $0 $4,589,845 $0 $0 ($261) $0 $4,589,584
=============================================================================
Note 1 - KCI Cash On Hand At End of Month includes $5,407,584 of cash held in
escrow for anticipated payment to Unsecured Creditors' Committee upon
emergence from Chapter 11. (See U.S. Bank - Portland, Oregon accounts #
15365681004 and # 436000100).
Note 2 - KCI Receipts and Disbursement exclude transfers between KCI cash
accounts of $11,824,108.
PROFIT AND LOSS STATEMENT
ACCRUAL BASIS
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
A NET SALES $0 $23,157,487 $0 $0 $917,175 $0 $24,074,662 ($1,008,132) $23,066,530
B. COST OF SALES 0 20,835,741 0 0 889,966 0 21,725,707 (1,008,132) 20,717,575
---------------------------------------------------------------------------------------------------
C. GROSS PROFIT 0 2,321,746 0 0 27,209 0 2,348,955 0 2,348,955
D. TOTAL OPERATING EXPENSES 3,549 5,815,843 0 60,000 341,187 6,200 6,226,779 (202,660) 6,024,119
---------------------------------------------------------------------------------------------------
E. NET INCOME (LOSS) FROM
OPERATIONS (3,549) (3,494,097) 0 (60,000) (313,978) (6,200) (3,877,824) 202,660 (3,675,164)
F. NON-OPERATING,
NON-RECURRING
REVENUE (EXPENSES) 7,520 (991,014) 60,000 0 83,124 0 (840,370) (202,660) (1,043,030)
---------------------------------------------------------------------------------------------------
H. NET INCOME (LOSS) $3,971 ($4,485,111) $60,000 ($60,000) ($230,854) ($6,200) ($4,718,194) $0 ($4,718,194)
===================================================================================================
Page 1 of 6
II. PROFIT & LOSS STATEMENT (ACCRUAL BASIS)
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------- -----
A. Related to Business
Operations:
- --------------------------
Total Revenue (Sales) $23,157,487 $917,175 $24,074,662 ($1,008,132) $23,066,530
-------------------------------------------------------------------------------------------------
Less: Cost of Goods Sold:
Beginning Inventory
at Cost 62,376,248 3,741,342 66,117,590 66,117,590
Add: Purchases 18,825,273 709,980 19,535,253 (1,008,132) 18,527,121
Less: Ending Inventory
at Cost 60,365,780 3,561,356 63,927,136 63,927,136
-------------------------------------------------------------------------------------------------
Cost of Good Sold 0 20,835,741 0 0 889,966 0 21,725,707 (1,008,132) 20,717,575
-------------------------------------------------------------------------------------------------
Gross Profit 0 2,321,746 0 0 27,209 0 2,348,955 0 2,348,955
-------------------------------------------------------------------------------------------------
Less: Operating Expenses:
Officer Compensation 43,750 43,750 43,750
Salaries and Wages --
Other Employees 1,120,236 72,173 1,192,409 1,192,409
Employee Benefits
and Pensions 105 1,467,729 24,232 1,492,066 1,492,066
Payroll Taxes 93,341 10,967 104,308 104,308
Real Estate Taxes 26,389 12,057 633 39,079 39,079
Federal and State Income
Taxes 0 0 0
Rent and Lease Expense 69,146 953 70,099 70,099
Interest Expense 395,512 60,000 455,512 (191,791) 263,721
Insurance 147,873 12,730 160,603 160,603
Automobile Expense 0 0 0 0
Utilities 230,225 8,939 236 239,400 239,400
Depreciation and
Amortization 3,444 1,141,937 87,300 4,081 1,236,762 1,236,762
Repairs and Maintenance 167,510 8,681 176,191 176,191
Advertising 120,908 120,908 120,908
Supplies, Office Expense
and Photocopies 83,561 15,591 99,152 99,152
Bad Debts 0 0 0
Miscellaneous 0 707,726 0 0 87,564 1,250 796,540 (10,869) 785,671
-------------------------------------------------------------------------------------------------
Total Operating Expenses 3,549 5,815,843 0 60,000 341,187 6,200 6,226,779 (202,660) 6,024,119
-------------------------------------------------------------------------------------------------
Net Income (Loss)
From Operations (3,549) (3,494,097) 0 (60,000) (313,978) (6,200) (3,877,824) 202,660 (3,675,164)
-------------------------------------------------------------------------------------------------
B. Not Related to Business
Operations:
- --------------------------
Revenue:
Interest Income 520 0 60,000 131,791 192,311 (191,791) 520
Net Gain (Loss) on Sale
of Assets 0 (12,804) (12,804) (12,804)
Other 7,000 53,602 0 0 0 0 60,602 (10,869) 49,733
-------------------------------------------------------------------------------------------------
Total Non-Operating
Revenue 7,520 53,602 60,000 0 118,987 0 240,109 (202,660) 37,449
-------------------------------------------------------------------------------------------------
Expenses:
Legal and Professional
Fees 0 1,044,616 0 0 35,863 0 1,080,479 0 1,080,479
Other 0 0 0 0 0 0 0 0 0
-------------------------------------------------------------------------------------------------
Total Non-Operating
Expenses 0 1,044,616 0 0 35,863 0 1,080,479 0 1,080,479
-------------------------------------------------------------------------------------------------
Net Income (Loss)
For Period $3,971 ($4,485,111) $60,000 ($60,000) ($230,854) ($6,200) ($4,718,194) $0 ($4,718,194)
=================================================================================================
Page 2 of 6
IV. BALANCE SHEET
FVSW KCI DEMI JLP SWC SWCI
---- --- ---- --- --- ----
ASSETS
------
Current
- -------
Cash $4,589,845 ($261)
Inventory 53,582 27,649,465 3,135,692
Accounts Receivable 27,163,000 425,198 6,000
Prepaid Expenses 2,016,161 62,240 1,264
Other - Exhibit E 83,653 1,945,652 15,569,793 0 315,332 0
---------------------------------------------------------------------------------
Total Current Assets 137,235 63,364,123 15,569,793 0 3,938,201 7,264
---------------------------------------------------------------------------------
Fixed
- -----
Property and Equipment 1,175,330 328,831,242 20,724,187 2,285,279
Accumulated Depreciation (759,149) (249,091,806) (16,716,484) (1,854,186)
---------------------------------------------------------------------------------
Total Fixed Assets 416,181 79,739,436 0 0 4,007,703 431,093
---------------------------------------------------------------------------------
Other
- -----
Restricted Investments 5,976,474 250,722
Prepaid Pension Asset 141,688,002
Deferred Financing Costs 894,567
Goodwill 751,508
Other - Exhibit F 40,000 39,500,966 0 0 2,246,871 0
---------------------------------------------------------------------------------
Total Other Assets 40,000 188,811,517 0 0 2,497,593 0
---------------------------------------------------------------------------------
Total Assets $593,416 $331,915,076 $15,569,793 $0 $10,443,497 $438,357
=================================================================================
LIABILITIES
-----------
Current
- -------
Pre-Petition Accounts Payable 18,726,293 1,012,833 54,503
Post-Petition Accounts Payable 1,215,917 66,873 1,250
Pre-Petition Accounts Payable
- Affiliates (2,649,073) 88,419,300 5,774,107 15,552,291 (89,758,156) (1,459,080)
Post-Petition Accounts Payable
- Affiliates (244,136) 3,533,052 433,128 730,515 (326,241) (128,733)
Pre-Petition Accrued Expenses
- Exhibit G 3,183 13,302,829 35,632 (36,000) 6,668,380 64,082
Post-Petition Accrued Expenses
- Exhibit H 0 14,480,310 0 0 68,205 (3,709)
Post-Petition Accrued
Professional Fees 3,688,011 2,939
Post-Petition Accrued Other
Taxes - Exhibit M 0 (27,850) 0 0 35,170 (2,213)
Pre-Petition Notes Payable
and Current Maturities of
Long Term Debt 28,116,000 20,290
Post-Petition Notes Payable
and Current Maturities of
Long Term Debt 31,298,247 (20,290)
Accrued OPEB Cost 11,441,001 155,000 297,662
Income Taxes Payable
Pre-petition accrued pref.
Stock dividends 11,845,805
Post petition accrued pref.
Stock dividends 9,635,564
---------------------------------------------------------------------------------
Total Current Liabilities (2,890,026) 235,674,479 6,242,867 16,401,806 (81,932,335) (1,473,900)
---------------------------------------------------------------------------------
Long Term
Pre-Petition Long Term Debt 32,180,761
Post-Petition Long Term Debt 147,506
Accrued OPEB Cost 34,849 122,296,313 1,446,589 9,435,096
Accrued Pension Cost 1,638,828
Pre-Petition Accrued Expenses
- Exhibit I 0 11,104,689 3,573,908 0 0 0
Post-Petition Accrued Expenses
- Exhibit J 0 121,955 (198,554) 0 0 0
---------------------------------------------------------------------------------
Total Long Term Liabilities 34,849 167,490,052 3,375,354 1,446,589 9,435,096 0
---------------------------------------------------------------------------------
Preferred Stock 2,112,000
- --------------- ---------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock 10,000 10,798,251 6 2,246,866 5,619,274 1,000
Additional Paid-In Capital 31,589,932 27,579,007
Accumulated Deficit 3,438,593 (115,737,513) 5,951,566 (20,095,261) 83,299,908 1,911,257
Treasury Stock (12,125) (33,557,453)
---------------------------------------------------------------------------------
Total Stockholders'
Equity (Deficit) 3,448,593 (73,361,455) 5,951,572 (17,848,395) 82,940,736 1,912,257
---------------------------------------------------------------------------------
Total Liabilities &
Stockholders' Equity
(Deficit) $593,416 $331,915,076 $15,569,793 $0 $10,443,497 $438,357
=================================================================================
Page 3 of 6
IV. BALANCE SHEET (Continued)
Sub Elimin-
Total ations Total
----- ------- -----
ASSETS
------
Current
- -------
Cash $4,589,584 $4,589,584
Inventory 30,838,739 30,838,739
Accounts Receivable 27,594,198 27,594,198
Prepaid Expenses 2,079,665 2,079,665
Other - Exhibit E 17,914,430 (15,885,125) 2,029,305
------------------------------------------
Total Current Assets 83,016,616 (15,885,125) 67,131,491
------------------------------------------
Fixed
- -----
Property and Equipment 353,016,038 353,016,038
Accumulated Depreciation (268,421,625) (268,421,625)
------------------------------------------
Total Fixed Assets 84,594,413 0 84,594,413
------------------------------------------
Other
- -----
Restricted Investments 6,227,196 6,227,196
Prepaid Pension Asset 141,688,002 141,688,002
Deferred Financing Costs 894,567 894,567
Goodwill 751,508 751,508
Other - Exhibit F 41,787,837 (41,173,674) 614,163
------------------------------------------
Total Other Assets 191,349,110 (41,173,674) 150,175,436
------------------------------------------
Total Assets $358,960,139 ($57,058,799) $301,901,340
==========================================
LIABILITIES
-----------
Current
- -------
Pre-Petition Accounts Payable 19,793,629 19,793,629
Post-Petition Accounts Payable 1,284,040 1,284,040
Pre-Petition Accounts Payable
- Affiliates 15,879,389 (14,904,350) 975,039
Post-Petition Accounts Payable
- Affiliates 3,997,585 (980,775) 3,016,810
Pre-Petition Accrued Expenses
- Exhibit G 20,038,106 0 20,038,106
Post-Petition Accrued Expenses
- Exhibit H 14,544,806 0 14,544,806
Post-Petition Accrued
Professional Fees 3,690,950 3,690,950
Post-Petition Accrued Other
Taxes - Exhibit M 5,107 0 5,107
Pre-Petition Notes Payable
and Current Maturities of
Long Term Debt 28,136,290 28,136,290
Post-Petition Notes Payable
and Current Maturities of
Long Term Debt 31,277,957 31,277,957
Accrued OPEB Cost 11,893,663 11,893,663
Income Taxes Payable 0 0
Pre-petition accrued pref.
Stock dividends 11,845,805 11,845,805
Post petition accrued pref.
Stock dividends 9,635,564 9,635,564
------------------------------------------
Total Current Liabilities 172,022,891 (15,885,125) 156,137,766
------------------------------------------
Long Term
Pre-Petition Long Term Debt 32,180,761 32,180,761
Post-Petition Long Term Debt 147,506 147,506
Accrued OPEB Cost 133,212,847 133,212,847
Accrued Pension Cost 1,638,828 1,638,828
Pre-Petition Accrued Expenses
- Exhibit I 14,678,597 0 14,678,597
Post-Petition Accrued Expenses
- Exhibit J (76,599) 0 (76,599)
------------------------------------------
Total Long Term Liabilities 181,781,940 0 181,781,940
------------------------------------------
Preferred Stock 2,112,000 2,112,000
- --------------- ------------------------------------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock 18,675,397 (7,877,145) 10,798,252
Additional Paid-In Capital 59,168,939 (27,579,007) 31,589,932
Accumulated Deficit (41,231,450) (39,274,975) (80,506,425)
Treasury Stock (33,569,578) 33,557,453 (12,125)
------------------------------------------
Total Stockholders'
Equity (Deficit) 3,043,308 (41,173,674) (38,130,366)
------------------------------------------
Total Liabilities &
Stockholders' Equity
(Deficit) $358,960,139 ($57,058,799) $301,901,340
==========================================
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 incrred pre-petition.
Page 4 of 6
EXHIBIT E
OTHER CURRENT ASSETS
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------- -----
Interest Receivable $1,653 $1,653 $1,653
Note Receivable 75,000 75,000 75,000
Intercompany Receivable 1,864,254 15,569,793 315,332 17,749,379 (15,885,125) 1,864,254
Short Term Investments 20,428 20,428 20,428
Receivable From EB
Plans 58,543 58,543 58,543
Stop Loss Receivable 1,927 1,927 1,927
Rent Receivable 7,000 7,000 7,000
Security Deposit 500 500 500
---------------------------------------------------------------------------------------------------------
Total Other
Current Assets $83,653 $1,945,652 $15,569,793 $0 $315,332 $0 $17,914,430 ($15,885,125) $2,029,305
=========================================================================================================
EXHIBIT F
OTHER LONG TERM ASSETS
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------- -----
Note Receivable $40,000 $40,000 $40,000
Rail Cars 246,113 246,113 246,113
Investment in
Sherman Wire Company 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
0 0
---------------------------------------------------------------------------------------------------------
Total Other Long
Term Assets $40,000 $39,500,966 $0 $0 $2,246,871 $0 $41,787,837 ($41,173,674) $614,163
=========================================================================================================
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) ($67,276) ($67,276)
Worker Comp Exp 2,059,343 (168) 2,059,175 2,059,175
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 142,856 487,932 630,788 630,788
Self-Insurance
Liability 2,403,446 5,050,166 7,453,612 7,453,612
Pensions 0 15,704 15,704 15,704
Salaries/Wages 71,558 47,300 118,858 118,858
Holiday Pay/Vacations 0 127,854 127,854 127,854
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 0 28,615 28,615 28,615
Medical Insurance 86,560 88,737 16,419 191,716 191,716
Utilities 0 5,049 (110) 4,939 4,939
Volume Incentive Plan 0 72,000 72,000 72,000
Property Tax 0 32,865 5,973 38,838 38,838
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 0 0 0
Sales Rebates/Discounts 41,275 41,275 41,275
Manufacturing Misc 0 0 0
EPA 7,833,624 7,833,624 7,833,624
Medical Insurance 0 0 0
Accrued State Franchise
Tax 172,743 172,743 172,743
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 0 0
---------------------------------------------------------------------------------------------------------
Total Pre-Petition
Accrued Expenses
-Current $3,183 $13,302,829 $35,632 ($36,000) $6,668,380 $64,082 $20,038,106 $0 $20,038,106
=========================================================================================================
Page 5 of 6
EXHIBIT H
POST PETITION ACCRUED EXPENSES - CURRENT
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------- -----
Abandoned Real
Estate Exp 318 11,055 11,373 11,373
Pensions 0 31,930 31,930 31,930
Salaries/Wages 893,568 (4,163) 889,405 889,405
Holiday Pay/Vacations 3,925,825 (1,734) 3,924,091 3,924,091
Defined Contribution
Plan 828,993 24,880 853,873 853,873
Medical Insurance 293,905 (41,603) (4,171) 248,131 248,131
Utilities 295,763 54,769 462 350,994 350,994
Legal 271,951 (79,269) 192,682 192,682
Professional Fees 400,511 400,511 400,511
Goods Received Not
Invoiced 843,297 843,297 843,297
Worker's Compensation 3,106,909 3,106,909 3,106,909
Unearned Revenue 0 0 0
Sales Rebates/Discounts 1,284,888 1,284,888 1,284,888
Abanondon Property 0 0 0
Miscellaneous 815,500 72,340 887,840 887,840
Accrued Bank Service
Charge 48,114 48,114 48,114
Accrued Self-Insurance
Losses 9,543 9,543 9,543
Accrued Interest 822,956 822,956 822,956
Accrued Travel 0 0 0
Accrued Profit Sharing 250,000 250,000 250,000
Accrued Management Fees 388,269 388,269 388,269
---------------------------------------------------------------------------------------------------------
Total Post Petition
Accrued Expenses
-Current $0 $14,480,310 $0 $0 $68,205 ($3,709) $14,544,806 $0 $14,544,806
=========================================================================================================
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 24,212 24,212 24,212
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
---------------------------------------------------------------------------------------------------------
Total Pre-Petition
Accrued Expenses
-Long Term $0 $11,104,689 $3,573,908 $0 $0 $0 $14,678,597 $0 $14,678,597
=========================================================================================================
EXHIBIT J
POST PETITION ACCRUED EXPENSES - LONG TERM
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------- -----
Workmans Compensation $115,888 $115,888 $115,888
Long Term Disability 6,067 6,067 6,067
Environmental (198,554) (198,554) (198,554)
0 0
0 0
0 0
0 0
---------------------------------------------------------------------------------------------------------
Total Post Petition
Accrued Expenses
-Long Term $0 $121,955 ($198,554) $0 $0 $0 ($76,599) $0 ($76,599)
=========================================================================================================
EXHIBIT M
POST PETITION ACCRUED OTHER TAXES
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------- -----
FICA - Employer ($98,779) 2,137 ($96,642) ($96,642)
Federal Unemployment
Taxes 0 (3,024) (3,024) (3,024)
State Unemployment
Taxes 0 (9,110) (9,110) (9,110)
Property Tax 254,978 42,033 (2,213) 294,798 294,798
Sales/Use Tax 1,712 3,134 4,846 4,846
Accrued State Franchise
Tax (144,555) (144,555) (144,555)
Miscellaneous (41,206) (41,206) (41,206)
---------------------------------------------------------------------------------------------------------
Total Post Petition
Accrued Other Taxes $0 ($27,850) $0 $0 $35,170 ($2,213) $5,107 $0 $5,107
=========================================================================================================