Exhibit No. 99.1
KEYSTONE CONSOLIDATED INDUSTRIES, INC. [LOGO OMITTED]
================================================================================
PRESS RELEASE
================================================================================
FOR IMMEDIATE RELEASE CONTACT:
Keystone Consolidated Industries, Inc. Bert E. Downing, Jr.
5430 LBJ Freeway, Suite 1740 Vice President - Chief
Dallas, Texas 75240-2697 Financial Officer
(972) 458-0028 (972) 458-0028
KEYSTONE EMERGES FROM CHAPTER 11 BANKRUPTCY PROCEEDINGS
DALLAS, TEXAS . . . September 1, 2005. . . Keystone Consolidated
Industries, Inc. announced that it emerged from Chapter 11 bankruptcy
proceedings on August 31, 2005. Keystone previously received confirmation of its
Third Amended Joint Plan of Reorganization from the U.S. Bankruptcy Court for
the Eastern District of Wisconsin in Milwaukee at a confirmation hearing held on
August 10, 2005.
Keystone believes it is one of the few steel companies that has been able
to successfully reorganize and remain an independent company. David L. Cheek,
President and Chief Executive Officer of Keystone said: "This restructuring has
been a success by any measure thanks to the cooperation and continued commitment
and support of our employees, retirees and creditors, as well as the support of
our loyal customer base. The success of our restructuring has allowed Keystone
to emerge with improved cost structure, liquidity, financial condition and
competitive position with other steel and wire product manufacturers - both
domestic and foreign. Our customers can be assured of the continued delivery of
quality and service that RED BRAND has exemplified".
Significant provisions of the Company's Plan of Reorganization include,
among other things:
o Assumption of the previously negotiated amendment to the collective
bargaining agreement with the Independent Steel Workers Alliance (the
"ISWA"), Keystone's largest labor union;
o Assumption of the previously negotiated agreements reached with certain
retiree groups that will provide relief by permanently reducing
healthcare related payments to these retiree groups from pre-petition
levels;
o The Company's obligations due to pre-petition secured lenders other than
its DIP lenders were reinstated in full against reorganized Keystone;
o All shares of Keystone's common and preferred stock outstanding at the
petition date (February 26, 2004) were cancelled;
o Pre-petition unsecured creditors with allowed claims against Keystone
will receive, on a pro rata basis, in the aggregate, $5.2 million in
cash, a $4.8 million secured promissory note and 49% of the new common
stock of reorganized Keystone;
o Certain operating assets and existing operations of Sherman Wire Company
("Sherman Wire"), one of Keystone's pre-petition wholly-owned
subsidiaries, will be sold at fair market value to Keystone, which will
then be used to form and operate a newly created wholly-owned subsidiary
of reorganized Keystone named Keystone Wire Products Inc.;
o Sherman Wire was also reorganized and the proceeds of the operating asset
sale to Keystone and other funds will be distributed, on a pro rata
basis, to Sherman Wire's pre-petition unsecured creditors;
o Sherman Wire's pre-petition wholly-owned non-operating subsidiaries, J.L.
Prescott Company, and DeSoto Environmental Management, Inc. as well as
Sherman Wire of Caldwell, Inc., a wholly-owned subsidiary of Keystone,
will ultimately be liquidated and the pre-petition unsecured creditors
with allowed claims against these entities will receive their pro-rata
share of the respective entity's net liquidation proceeds;
o Pre-petition unsecured creditors with allowed claims against FV Steel &
Wire Company, another one of Keystone's wholly-owned subsidiaries, will
receive cash in an amount equal to their allowed claims;
o One of Keystone's Debtor-In-Possession lenders, EWP Financial, LLC (an
affiliate of Contran Corporation ("Contran"), Keystone's largest
pre-petition shareholder) converted $5 million of its DIP credit
facility, certain of its pre-petition unsecured claims and all of its
administrative claims against Keystone into 51% of the new common stock
of reorganized Keystone; and
o The Board of Directors of reorganized Keystone now consists of seven
individuals, two each of which were designated by Contran and the
Official Committee of Unsecured Creditors (the "OCUC"), respectively. The
remaining three directors qualify as independent directors (two of the
independent directors were appointed by Contran with the OCUC's consent
and one was appointed by the OCUC with Contran's consent).
In addition, Keystone has obtained an $80 million secured credit facility
from Wachovia Capital Finance (Central). Proceeds from this credit facility will
be used to extinguish Keystone's existing debtor-in-possession credit facilities
and to provide working capital for reorganized Keystone.
As noted before, Keystone has been providing an uninterrupted supply of
quality steel and wire products to its customers for over 100 years, a
commitment the Company maintained throughout the bankruptcy process. Keystone's
successful restructuring and emergence from Chapter 11 means that its customers
can continue to count on Keystone for their current and expanding steel and wire
product needs. Keystone looks forward to serving its customers for the next 100
years and beyond.
As provided by the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, Keystone cautions that statements in this press
release relating to matters that are not historical facts are forward-looking
statements that represent management's beliefs and assumptions based on
currently available information. Forward-looking statements can be identified by
the use of words such as "believes," "intends," "may," "should," "could,"
"anticipates," "expected," or comparable terminology, or by discussions of
strategies or trends. Although Keystone believes the expectations reflected in
such forward-looking statements are reasonable, it cannot give any assurances
that these expectations will prove to be correct. Such statements by their
nature involve substantial risks and uncertainties that could significantly
impact expected results, and actual future results could differ materially from
those described in such forward-looking statements. While it is not possible to
identify all factors, Keystone continues to face many risks and uncertainties.
Among the factors that could cause actual future results to differ materially
are the risks and uncertainties discussed in this press release and those
described from time to time in the Keystone's other filings with the U.S.
Securities and Exchange Commission including, but not limited to:
o Future supply and demand for Keystone's products (including cyclicality
thereof),
o Customer inventory levels,
o Changes in raw material and other operating costs (such as ferrous scrap
and energy),
o General economic conditions,
o Competitive products and substitute products,
o Changes in customer and competitor strategies,
o The impact of pricing and production decisions,
o The possibility of labor disruptions,
o Environmental matters (such as those regulating emission and discharge
standards for existing and new facilities),
o Government regulations and possible changes therein,
o Significant increases in the cost of providing medical coverage to
employees and retirees,
o The ultimate resolution of pending litigation,
o International trade policies of the United States and certain foreign
countries,
o Any possible future litigation, and
o Other risks and uncertainties as discussed in this press release.
Should one or more of these risks materialize (or the consequences of such
a development worsen), or should the underlying assumptions prove incorrect,
actual results could differ materially from those forecasted or expected.
Keystone disclaims any intention or obligation to update or revise any
forward-looking statement whether as a result of new information, future events
or otherwise.
Keystone Consolidated Industries, Inc. is headquartered in Dallas, Texas.
The company is a leading manufacturer and distributor of fencing and wire
products, wire rod, industrial wire, nails and construction products for the
agricultural, industrial, construction, original equipment markets and the
retail consumer. Up to date information concerning the bankruptcy case, copies
of Bankruptcy Court filings and orders issued by the Bankruptcy Court may be
found at http://www.kccllc.com .
* * * * * * * * * *