Exhibit 99.1
This Financial Report (the "Financial Report") is limited in scope, covers a
limited time period and has been prepared solely 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 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.
A-1
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 MARCH, 2004.
I. FINANCIAL SUMMARY
CASH RECEIPTS AND DISBURSEMENTS
FVSW KCI DEMI JLP SWC SWCI Total
---- --- ---- --- --- ---- -----
A. CASH ON HAND START OF MONTH $0 $342,038 $0 $0 $660 $0 $342,698
--------------------------------------------------------------------------
B. RECEIPTS 0 61,213,335 0 0 8,449 0 61,221,784
C. DISBURSEMENTS 0 57,558,038 0 0 9,559 0 57,567,597
--------------------------------------------------------------------------
D. NET RECEIPTS (DISBURSEMENTS) 0 3,655,297 0 0 (1,110) 0 3,654,187
--------------------------------------------------------------------------
--------------------------------------------------------------------------
E. CASH ON HAND END OF MONTH $0 $3,997,335 $0 $0 ($450) $0 $3,996,885
==========================================================================
Note 1 - KCI Cash On Hand At End of Month includes $4,437,996 of cash held in
escrow for PSC Metals, Inc. pending resolution of disputed ferrous
scrap ownership.
Note 2 - KCI Receipts include $23,003,540 of advances on its Revolving Line of
Credit (RLC).
Note 3 - KCI Disbursements include $22,011,530 of payments on its RLC.
Note 4 - KCI Receipts and Disbursements include transfers from and to,
respectively KCI accounts of $10,446,114
Note 5 - SWC Receipts and KCI Disbursements include transfers from KCI to SWC
of $8,449.
CASH DISBURSEMENT RECONCILIATION
FVSW KCI DEMI JLP SWC SWCI Total
---- --- ---- --- --- ---- -----
Per Schedule of Receipts
and Disbursement 0 57,558,038 0 0 9,559 0 57,567,597
Less:
Payments on Revolving
Credit Facility (22,011,530) (22,011,530)
Transfers to other cash accounts (10,454,563) (10,454,563)
--------------------------------------------------------------------------
Net Cash Disbursements $0 $25,091,945 $0 $0 $9,559 $0 $25,101,504
==========================================================================
PROFIT AND LOSS STATEMENT
ACCRUAL BASIS
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
A NET SALES $0 $23,880,692 $0 $0 $896,203 $771 $24,777,666 ($1,266,025) $23,511,641
B. COST OF SALES 0 19,753,083 0 0 924,849 13,848 20,691,780 (1,266,025) 19,425,755
-------------------------------------------------------------------------------------------------
C. GROSS PROFIT 0 4,127,609 0 0 (28,646) (13,077) 4,085,886 0 4,085,886
D. TOTAL OPERATING EXPENSES 3,549 4,789,488 0 60,000 95,204 2,222 4,950,463 (200,239) 4,750,224
-------------------------------------------------------------------------------------------------
E. NET INCOME (LOSS) FROM
OPERATION(3,549) (661,879) (3,549) (661,879) 0 (60,000) (123,850) (15,299) (864,577) 200,239 (664,338)
F. NON-OPERATING, NON-RECURRING
REVENUEE(EXPENSES)) 8,049 (651,122) 60,000 0 129,370 0 (453,703) (200,239) (653,942)
-------------------------------------------------------------------------------------------------
H. NET INCOME (LOSS) $4,500 ($1,313,001) $60,000 ($60,000) $5,520 ($15,299) ($1,318,280) $0 ($1,318,280)
=================================================================================================
A-2
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) $23,880,692 $896,203 $771 $24,777,666 ($1,266,025) $23,511,641
------------------------------------------------------------------------------------------------
Less: Cost of Goods Sold:
Beginning Inventory at Cost 20,711,733 1,313,953 22,025,686 22,025,686
Add: Purchases 25,776,642 1,131,462 13,848 26,921,952 (1,266,025) 25,655,927
Less: Ending Inventory
at Cost 26,735,292 1,520,566 28,255,858 28,255,858
------------------------------------------------------------------------------------------------
Cost of Goods Sold 0 19,753,083 0 0 924,849 13,848 20,691,780 (1,266,025) 19,425,755
------------------------------------------------------------------------------------------------
Gross Profit 0 4,127,609 0 0 (28,646) (13,077) 4,085,886 0 4,085,886
------------------------------------------------------------------------------------------------
Less: Operating Expenses:
Officer Compensation 29,038 29,038 29,038
Salaries and Wages --
Other Employees 1,013,710 31,975 1,045,685 1,045,685
Employee Benefits
and Pensions 105 769,221 17,294 786,620 786,620
Payroll Taxes 89,611 3,817 93,428 93,428
Real Estate Taxes 12,231 0 12,231 12,231
Federal and State
Income Taxes 0 0
Rent and Lease Expense 1,889 955 2,844 2,844
Interest Expense 560,728 60,000 620,728 (189,370) 431,358
Insurance 47,911 0 47,911 47,911
Automobile Expense 53 53 53
Utilities 383,132 5,086 30 388,248 388,248
Depreciation and
Amortization 3,444 1,128,724 0 1,132,168 1,132,168
Repairs and Maintenance 141,991 1,069 143,060 143,060
Advertising 39,706 0 39,706 39,706
Supplies, Office Expense
and Photocopies 51,647 65 51,712 51,712
Bad Debts 0 0 0
Miscellaneous 0 519,949 0 0 34,890 2,192 557,031 (10,869) 546,162
------------------------------------------------------------------------------------------------
Total Operating Expenses 3,549 4,789,488 0 60,000 95,204 2,222 4,950,463 (200,239) 4,750,224
------------------------------------------------------------------------------------------------
Net Income (Loss)
From Operation (3,549) (661,879) 0 (60,000) (123,850) (15,299) (864,577) 200,239 (664,338)
------------------------------------------------------------------------------------------------
B. Not Related to Business Operations:
Revenue:
Interest Income 1,049 60,000 129,370 190,419 (189,370) 1,049
Net Gain (Loss) on
Sale of Assets 0 0
Other 7,000 48,878 0 0 0 0 55,878 (10,869) 45,009
------------------------------------------------------------------------------------------------
Total Non-Operating Revenue 8,049 48,878 60,000 0 129,370 0 246,297 (200,239) 46,058
------------------------------------------------------------------------------------------------
Expenses:
Legal and Professional Fees 0 700,000 0 0 0 0 700,000 0 700,000
Other 0 0 0 0 0 0 0 0 0
------------------------------------------------------------------------------------------------
Total Non-Operating Expenses 0 700,000 0 0 0 0 700,000 0 700,000
------------------------------------------------------------------------------------------------
Net Income (Loss) For Period $4,500 ($1,313,001) $60,000 ($60,000) $5,520 ($15,299) ($1,318,280) $0 ($1,318,280)
================================================================================================
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.
A-3
IV. BALANCE SHEET
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
ASSETS
------
Current
Cash $3,997,336 ($451) $3,996,885 $3,996,885
Inventory 53,582 21,954,159 1,715,758 23,723,499 23,723,499
Accounts Receivable 17,311,837 506,688 17,818,525 17,818,525
Prepaid Expenses 1,071,906 25,068 1,096,974 1,096,974
Other - Exhibit H 78,147 30,999 14,669,793 0 299,430 0 15,078,369 (14,964,350) 114,019
--------------------------------------------------------------------------------------------------------------
Total Current
Assets 131,729 44,366,237 14,669,793 0 2,546,493 0 61,714,252 (14,964,350) 46,749,902
--------------------------------------------------------------------------------------------------------------
Fixed
Property and
Equipment 1,175,330 323,119,224 21,201,404 3,659,087 349,155,045 349,155,045
Accumulated
Depreciation (703,183)(234,802,221) (16,004,527) (2,989,169)(254,499,100) (254,499,100)
--------------------------------------------------------------------------------------------------------------
Total Fixed Assets 472,147 88,317,003 0 0 5,196,877 669,918 94,655,945 0 94,655,945
--------------------------------------------------------------------------------------------------------------
Other
- -----
Restricted
Investments 5,549,168 401,599 5,950,767 5,950,767
Prepaid Pension
Asset 129,088,715 129,088,715 129,088,715
Deferred Financing
Costs 1,619,992 1,619,992 1,619,992
Goodwill 751,508 751,508 751,508
Investment in J.L.
Prescott/DEMI 2,246,871 2,246,871 (2,246,871) 0
Other - Exhibit I 190,000 44,933,719 0 0 0 0 45,123,719 (38,926,803) 6,196,916
--------------------------------------------------------------------------------------------------------------
Total Other Assets 190,000 181,943,102 0 0 2,648,470 0 184,781,572 (41,173,674) 143,607,898
--------------------------------------------------------------------------------------------------------------
Total Assets $793,876 $314,626,342 $14,669,793 $0 $10,391,840 $669,918 $341,151,769 ($56,138,024) $285,013,745
==============================================================================================================
LIABILITIES
- --------------
Current
- -------
Pre-Petition
Accounts Payable 19,487,042 883,007 53,018 20,423,067 20,423,067
Post-Petition
Accounts Payable 5,253,075 25,253 2,119 5,280,447 5,280,447
Pre-Petition
Accounts Payable
- Affiliates (2,649,073) 90,549,820 5,774,107 15,552,291 (89,758,156) (1,475,294) 17,993,695 (14,904,350) 3,089,345
Post-Petition
Accounts Payable
- Affiliates (6,896) 463,557 60,000 (59,927) 21,426 478,160 (60,000) 418,160
Pre-Petition
Accrued Expenses
- Exhibit J 3,183 27,927,526 35,632 (36,000) 6,668,381 62,661 34,661,383 0 34,661,383
Post-Petition
Accrued Expenses
- Exhibit K 0 1,771,955 0 0 118,030 1,739 1,891,724 0 1,891,724
Pre-Petition Notes
Payable and Current 0 0
Maturities of
Long Term Debt 28,159,816 20,290 0 28,180,106 28,180,106
Post-Petition Notes
Payable and Current 0 0
Maturities of
Long Term Debt 31,393,488 0 31,393,488 31,393,488
Accrued OPEB Cost 11,441,001 155,000 297,662 0 11,893,663 11,893,663
Income Taxes Payable 0 0 0
Pre-petition
accrued pref.
Stock dividends 11,651,342 11,651,342 11,651,342
Post petition
accrued pref.
Stock dividends 456,915 0 456,915 456,915
-------------------------------------------------------------------------------------------------------------
Total Current
Liabilities (2,652,786) 228,555,537 5,809,739 15,731,291 (81,805,460) (1,334,331) 164,303,990 (14,964,350) 149,339,640
--------------------------------------------------------------------------------------------------------------
A-4
Long Term
- ---------
Pre-Petition
Long Term Debt 32,180,761 32,180,761 32,180,761
Post-Petition
Long Term Debt 0 0
Accrued OPEB Cost 33,000 101,993,060 1,620,194 9,223,555 112,869,809 112,869,809
Accrued Pension Cost 819,412 819,412 819,412
Pre-Petition
Accrued Expenses
- Exhibit L 0 11,096,137 3,573,908 0 0 0 14,670,045 0 14,670,045
Post-Petition
Accrued Expenses
- Exhibit M 0 150,577 0 0 0 0 150,577 0 150,577
--------------------------------------------------------------------------------------------------------------
Total Long Term
Liabilities 33,000 146,239,947 3,573,908 1,620,194 9,223,555 0 160,690,604 0 160,690,604
--------------------------------------------------------------------------------------------------------------
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 40,963,043 27,579,007 68,542,050 (27,579,007) 40,963,043
Accumulated
Deficit 3,403,662 (114,030,311) 5,286,140 (19,598,351) 83,332,917 2,003,249 (39,602,694) (39,274,975) (78,877,669)
Treasury Stock (12,125) (33,557,453) (33,569,578) 33,557,453 (12,125)
--------------------------------------------------------------------------------------------------------------
Total
Stockholders's
Equity (Deficit) 3,413,662 (62,281,142) 5,286,146 (17,351,485) 82,973,745 2,004,249 14,045,175 (41,173,674) (27,128,499)
--------------------------------------------------------------------------------------------------------------
Total Liabilities
& Stockholder's
Equity (Deficit) $793,876 $314,626,34 $14,669,793 $0 10,391,840 $669,918 $341,151,769 ($56,138,024) $285,013,745
==============================================================================================================
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.
A-5
EXHIBIT H
OTHER CURRENT ASSETS
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
Interest Receivable $3,147 $3,147 $3,147
Note Receivable 75,000 75,000 75,000
Intercompany Receivable 14,669,793 294,557 14,964,350 (14,964,350) 0
Receivable from R. Missar 4,873 4,873 4,873
Short Term Investments 20,428 20,428 20,428
Receivable From EB Plans 1,641 1,641 1,641
Stop Loss Receivable 8,930 8,930 8,930
0 0
0 0
------------------------------------------------------------------------------------------------
$78,147 $30,999 $14,669,793 $0 $299,430 $0 $15,078,369 ($14,964,350) $114,019
================================================================================================
EXHIBIT I
OTHER LONG TERM ASSETS
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
Note Receivable $190,000 $190,000 $190,000
Rail Cars 386,866 386,866 386,866
Long Term Deferred Tax Asset 5,292,000 5,292,000 5,292,000
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
Long Term Insurance Receivable 323,250 323,250 323,250
Deposits 4,800 4,800 4,800
0 0
------------------------------------------------------------------------------------------------
$190,000 $44,933,719 $0 $0 $0 $0 $45,123,719 ($38,926,80) $6,196,916
================================================================================================
A-6
EXHIBIT J
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 4,028,477 (168) 4,028,309 4,028,309
Missar Pension 19,935 19,935 19,935
Unclaimed Property 17,540 17,540 17,540
Abandoned Real Estate Exp 6,487 658,744 665,231 665,231
Legal Fees 311,357 487,932 799,289 799,289
Self-Insurance Liability 2,537,192 5,050,166 7,587,358 7,587,358
Pensions 15,704 15,704 15,704
Salaries/Wages 717,383 47,301 764,684 764,684
Holiday Pay/Vacations 3,680,051 127,854 3,807,905 3,807,905
FICA - Employer 281,257 3,257 284,514 284,514
Federal Unemployment Taxes 3,397 3,397 3,397
State Unemployment Taxes 20,577 20,577 20,577
Defined Contribution Plan 1,521,426 28,615 1,550,041 1,550,041
Medical Insurance 206,559 88,737 16,419 311,715 311,715
Utilities 105,646 5,049 307 111,002 111,002
Volume Incentive Plan 72,000 72,000 72,000
Property Tax 204,119 32,865 5,973 242,957 242,957
Sales/Use Tax 375 8,124 1,800 10,299 10,299
Customer Overpayments 50,843 50,843 50,843
Other - Plant Shut-Down 40,000 40,000 40,000
Goods received not invoiced 295,647 295,647 295,647
Unearned Revenue 2,416,171 2,416,171 2,416,171
Sales 1,685,748 1,685,748 1,685,748
Manufacturing Misc 300,000 300,000 300,000
Environmental 7,951,976 7,951,976 7,951,976
Medical Insurance 951,800 951,800 951,800
Accrued State Franchise Tax 215,742 215,742 215,742
Accrued Bank Service Charge (9,925) (9,925) (9,925)
Accrued Interest 454,639 454,639 454,639
Accrued aircraft fees 40,223 40,223 40,223
Accrued taxes - other 25,176 25,176 25,176
------------------------------------------------------------------------------------------------
$3,183 $27,927,526 $35,632 ($36,000) $6,668,381 $62,661 $34,661,383 $0 $34,661,383
================================================================================================
A-7
EXHIBIT K
POST PETITION ACCRUED EXPENSES - CURRENT
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
Abandoned Real Estate Exp 4,200 4,200 4,200
Pensions 8,113 8,113 8,113
Salaries/Wages 453,423 11,439 464,862 464,862
Holiday Pay/Vacations 33,217 6,431 39,648 39,648
FICA - Employer 152,974 (218) 152,756 152,756
Federal Unemployment Taxes 1,065 1,065 1,065
State Unemployment Taxes 8,130 8,130 8,130
Defined Contribution Plan 122,807 7,332 130,139 130,139
Medical Insurance (66,861) (1,669) (606) (69,136) (69,136)
Utilities 335,977 54,911 30 390,918 390,918
Property Tax 12,231 18,003 2,315 32,549 32,549
Sales/Use Tax 1,871 (321) 1,550 1,550
Legal 46,286 614 46,900 46,900
Professional Fees 700,000 700,000 700,000
Goods Received Not Invoiced 1,828,507 1,828,507 1,828,507
Worker's Compensation (147,738) (147,738) (147,738)
Unearned Revenue (2,170,566) (2,170,566) (2,170,566)
Sales 219,646 219,646 219,646
Abanondon Property 154 154 154
Miscellaneous 340 340 340
Accrued State Franchise Tax 21,619 21,619 21,619
Accrued Bank Service Charge 2,726 2,726 2,726
Accrued Self-Insurance Losses 79,260 79,260 79,260
Accrued Interest 62,236 62,236 62,236
Accrued travel 3,077 3,077 3,077
Accrued Management Fees 80,769 80,769 80,769
------------------------------------------------------------------------------------------------
$0 $1,771,955 $0 $0 $118,030 $1,739 $1,891,724 $0 $1,891,724
================================================================================================
A-8
EXHIBIT L
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 $11,096,13 $3,573,908 $0 $0 $0 $14,670,045 $0 $14,670,045
================================================================================================
EXHIBIT M
POST PETITION ACCRUED EXPENSES - LONG TERM
Sub Elimin-
FVSW KCI DEMI JLP SWC SWCI Total ations Total
---- --- ---- --- --- ---- ----- ------ -----
Workmans compensation $118,448 $118,448 $118,448
Accrued Deferred Interest Exp. 32,199 32,199 32,199
Long Term Disability (70) (70) (70)
0 0
0 0
0 0
0 0
0 0
------------------------------------------------------------------------------------------------
$0 $150,577 $0 $0 $0 $0 $150,577 $0 $150,577
================================================================================================