EX-99.1 2 exhibit991oct.txt EXHIBIT 99,1, KEYSTONE 8-K 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 OCTOBER, 2004. I. FINANCIAL SUMMARY CASH RECEIPTS AND DISBURSEMENTS -------------------------------
FVSW KCI DEMI JLP SWC SWCI Total ---- --- ---- --- --- ---- ----- A. CASH ON HAND START OF MONTH $0 $9,799,794 $0 $0 ($956) $0 $9,798,838 ----------------------------------------------------------------------- B. RECEIPTS 0 77,474,387 0 0 6,157 1,250 77,481,794 C. DISBURSEMENTS 0 78,135,290 0 0 4,722 1,250 78,141,262 ----------------------------------------------------------------------- D. NET RECEIPTS (DISBURSEMENTS) 0 (660,903) 0 0 1,435 0 (659,468) ----------------------------------------------------------------------- E. CASH ON HAND END OF MONTH $0 $9,138,891 $0 $0 $479 $0 $9,139,370 =======================================================================
Note 1 - KCI Cash On Hand At End of Month includes $10,638,136 of cash held in escrow for PSC Metals, Inc. pending resolution of disputed ferrous scrap ownership. (See U.S. Bank - Portland, Oregon accounts # 15365681004 and # 436000100). Note 2 - KCI Receipts and Disbursement exclude transfers between KCI cash accounts of $56,321,366. PROFIT AND LOSS STATEMENT ------------------------- ACCRUAL BASIS -------------
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------ ----- A NET SALES $0 $36,955,317 $0 $0 $1,677,464 $0 $38,632,781 ($1,464,300) $37,168,481 B. COST OF SALES 0 28,842,733 0 0 1,248,285 0 30,091,018 (1,464,300) 28,626,718 --------------------------------------------------------------------------------------------- C. GROSS PROFIT 0 8,112,584 0 0 429,179 0 8,541,763 0 8,541,763 D. TOTAL OPERATING EXPENSES 4,410 5,583,103 0 60,050 424,990 14,345 6,086,898 (236,435) 5,850,463 --------------------------------------------------------------------------------------------- E. NET INCOME (LOSS) FROM OPERATION (4,410) 2,529,481 0 (60,050) 4,189 (14,345) 2,454,865 236,435 2,691,300 F. NON-OPERATING, NON-RECURRING REVENUEE(EXPENSES)) 7,713 (1,399,735) 60,000 0 102,404 0 (1,229,618) (236,435) (1,466,053) --------------------------------------------------------------------------------------------- H. NET INCOME (LOSS) $3,303 $1,129,746 $60,000 ($60,050) $106,593 ($14,345) $1,225,247 $0 $1,225,247 =============================================================================================
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) $36,955,317 $1,677,464 $38,632,781 ($1,464,300) $37,168,481 --------------------------------------------------------------------------------------------- Less: Cost of Goods Sold: Beginning Inventory at Cost 46,806,436 2,329,708 49,136,144 49,136,144 Add: Purchases 22,230,814 1,058,890 23,289,704 (1,464,300) 21,825,404 Less: Ending Inventory at Cost 40,194,517 2,140,313 42,334,830 42,334,830 --------------------------------------------------------------------------------------------- Cost of Good Sold 0 28,842,733 0 0 1,248,285 0 30,091,018 (1,464,300) 28,626,718 --------------------------------------------------------------------------------------------- Gross Profit 0 8,112,584 0 0 429,179 0 8,541,763 0 8,541,763 --------------------------------------------------------------------------------------------- Less: Operating Expenses: Officer Compensation 52,115 52,115 52,115 Salaries and Wages- Other Employees 1,490,909 100,892 1,591,801 1,591,801 Employee Benefits and Pensions 105 558,325 44,413 7,803 610,646 610,646 Payroll Taxes 126,032 16,720 142,752 142,752 Real Estate Taxes 15,289 13,695 (240) 28,744 28,744 Federal and State Income Taxes 0 0 0 Rent and Lease Expense 52,978 1,652 250 54,880 54,880 Interest Expense 467,423 60,000 527,423 (222,850) 304,573 Insurance 88,622 15,912 104,534 104,534 Automobile Expense 0 0 0 0 Utilities 225,744 12,290 238,034 238,034 Depreciation and Amortization 4,305 1,241,418 111,572 4,923 1,362,218 1,362,218 Repairs and Maintenance 217,969 8,238 0 226,207 226,207 Advertising 60,577 60,577 60,577 Supplies, Office Expense and Photocopies 202,812 7,541 210,353 210,353 Bad Debts 0 0 0 Miscellaneous 0 782,890 0 50 92,065 1,609 876,614 (13,585) 863,029 --------------------------------------------------------------------------------------------- Total Operating Expenses 4,410 5,583,103 0 60,050 424,990 14,345 6,086,898 (236,435) 5,850,463 --------------------------------------------------------------------------------------------- Net Income (Loss) From Operations (4,410) 2,529,481 0 (60,050) 4,189 (14,345) 2,454,865 236,435 2,691,300 --------------------------------------------------------------------------------------------- B. Not Related to Business Operations: ---------------------------------- Revenue: Interest Income 713 23,858 60,000 162,850 247,421 (222,850) 24,571 Net Gain (Loss) on Sale of Assets (102,451) (102,451) (102,451) Other 7,000 55,556 0 0 0 0 62,556 (13,585) 48,971 --------------------------------------------------------------------------------------------- Total Non-Operating Revenue 7,713 (23,037) 60,000 0 162,850 0 207,526 (236,435) (28,909) --------------------------------------------------------------------------------------------- Expenses: Legal and Professional Fees 0 1,376,698 0 0 60,446 0 1,437,144 0 1,437,144 Other 0 0 0 0 0 0 0 0 0 --------------------------------------------------------------------------------------------- Total Non-Operating Expenses 0 1,376,698 0 0 60,446 0 1,437,144 0 1,437,144 --------------------------------------------------------------------------------------------- Net Income (Loss) For Period $3,303 $1,129,746 $60,000 ($60,050) $106,593 ($14,345) $1,225,247 $0 $1,225,247 =============================================================================================
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 2 IV. BALANCE SHEET
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------ ----- ASSETS ------ Current ------- Cash $9,138,891 $479 $9,139,370 $9,139,370 Inventory 53,582 34,209,343 2,335,503 36,598,428 36,598,428 Accounts Receivable 33,471,616 740,314 6,000 34,217,930 34,217,930 Prepaid Expenses 1,460,005 196,154 1,264 1,657,423 1,657,423 Other - Exhibit E 75,712 1,395,492 15,089,793 0 360,264 0 16,921,261 (15,455,838) 1,465,423 --------------------------------------------------------------------------------------------------------------- Total Current Assets 129,294 79,675,347 15,089,793 0 3,632,714 7,264 98,534,412 (15,455,838) 3,078,574 --------------------------------------------------------------------------------------------------------------- Fixed ----- Property and Equipment 1,175,330 323,959,453 21,679,004 2,291,278 349,105,065 349,105,065 Accumulated Depreciation (729,874)(241,570,800) (16,967,004) (1,823,024) (261,090,702) (261,090,702) --------------------------------------------------------------------------------------------------------------- Total Fixed Assets 445,456 82,388,653 0 0 4,712,000 468,254 88,014,363 0 88,014,363 --------------------------------------------------------------------------------------------------------------- Other ----- Restricted Investments 5,716,907 248,296 5,965,203 5,965,203 Prepaid Pension Asset 134,806,352 134,806,352 134,806,352 Deferred Financing Costs 1,420,313 1,420,313 1,420,313 Goodwill 751,508 751,508 751,508 Other - Exhibit F 115,000 39,610,719 0 0 2,246,871 0 41,972,590 (41,173,674) 798,916 --------------------------------------------------------------------------------------------------------------- Total Other Assets 115,000 182,305,799 0 0 2,495,167 0 184,915,966 (41,173,674) 143,742,292 --------------------------------------------------------------------------------------------------------------- Total Assets $689,750 $344,369,799 $15,089,793 $0 $10,839,881 $475,518 $371,464,741 ($56,629,512) $314,835,229 ===============================================================================================================
Page 3 IV. BALANCE SHEET (con't)
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------ ----- LIABILITIES ----------- Current Pre-Petition Accounts Payable 19,620,309 1,012,833 54,503 20,687,645 20,687,645 Post-Petition Accounts Payable 11,271,157 148,575 1,750 11,421,482 11,421,482 Pre-Petition Accounts Payable- Affiliates (2,649,073) 88,168,050 5,774,107 15,552,291 (89,758,156) (1,459,080) 15,628,139 (14,904,350) 723,789 Post-Petition Accounts Payable- Affiliates (126,110) 2,618,132 310,882 358,530 (767,684) (149,206) 2,244,544 (551,488) 1,693,056 Pre-Petition Accrued Expenses- Exhibit G 3,183 17,237,045 35,632 (36,000) 6,668,380 64,082 23,972,322 0 23,972,322 Post-Petition Accrued Expenses- Exhibit H 0 13,809,146 0 0 246,708 (2,457) 14,053,397 0 14,053,397 Post-Petition Accrued Professional Fees 4,281,075 2,939 4,284,014 4,284,014 Post-Petition Accrued Other Taxes-Exhibit M 0 352,800 0 0 81,914 1,881 436,595 0 436,595 Pre-Petition Notes Payable and Current 0 0 Maturities of Long Term Debt 28,116,000 20,290 28,136,290 28,136,290 Post-Petition Notes Payable and Current 0 0 Maturities of Long Term Debt 20,575,770 (15,743) 20,560,027 20,560,027 Accrued OPEB Cost 11,441,001 155,000 297,662 11,893,663 11,893,663 Income Taxes Payable 0 0 Pre-petition accrued pref. Stock dividends 11,845,805 11,845,805 11,845,805 Post petition accrued pref. Stock dividends 4,871,845 4,871,845 4,871,845 --------------------------------------------------------------------------------------------------------------- Total Current Liabilities (2,772,000) 234,208,135 6,120,621 16,029,821 (82,062,282) (1,488,527) 170,035,768 (15,455,838) 154,579,930 ---------------------------------------------------------------------------------------------------------------
Page 4 IV. BALANCE SHEET (con't)
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------ ----- 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 Cos 34,849 114,237,875 1,446,589 9,074,914 124,794,227 124,794,227 Accrued Pension Cost 2,773,400 2,773,400 2,773,400 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 0 679,445 (184,511) 0 0 0 494,934 0 494,934 --------------------------------------------------------------------------------------------------------------- Total Long Term Liabilities 34,849 160,967,618 3,389,397 1,446,589 9,074,914 0 174,913,367 0 174,913,367 --------------------------------------------------------------------------------------------------------------- Preferred Stock 2,112,000 2,112,000 2,112,000 -------------- ---------------------------------------------------------------------------------------------------------------
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------ ----- 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 36,353,651 27,579,007 63,932,658 (27,579,007) 36,353,651 Accumulated Deficit 3,416,901 (100,057,731) 5,579,769 (19,723,276) 84,186,421 1,963,045 (24,634,871) (39,274,975) (63,909,846) Treasury Stock (12,125) (33,557,453) (33,569,578) 33,557,453 (12,125) --------------------------------------------------------------------------------------------------------------- Total Stockholders' Equity (Deficit) 3,426,901 (52,917,954) 5,579,775 (17,476,410) 83,827,249 1,964,045 24,403,606 (41,173,674) (16,770,068) --------------------------------------------------------------------------------------------------------------- Total Liabilities & Stockholders' Equity (Deficit) $689,750 $344,369,799 $15,089,793 $0 $10,839,881 $475,518 $371,464,741 ($56,629,512) $314,835,229 ===============================================================================================================
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 5 EXHIBIT E OTHER CURRENT ASSETS
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------ ----- Interest Receivable $712 $712 $712 Note Receivable 75,000 75,000 75,000 Intercompany Receivable 1,266,119 15,089,793 360,264 16,716,176 (15,455,838) 1,260,338 Short Term Investments 20,428 20,428 20,428 Receivable From EB Plans 49,894 49,894 49,894 Stop Loss Receivable 58,551 58,551 58,551 Security Deposit 500 500 500 ---------------------------------------------------------------------------------------------------- $75,712 $1,395,492 $15,089,793 $0 $360,264 $0 $16,921,261 ($15,455,838) $1,465,423 ====================================================================================================
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 355,866 355,866 355,866 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 0 0 ------------------------------------------------------------------------------------------------ $115,000 $39,610,719 $0 $0 $2,246,871 $0 $41,972,590 ($41,173,674) $798,916 ================================================================================================
Page 6 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 3,317,767 (168) 3,317,599 3,317,599 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 245,464 487,932 733,396 733,396 Self-Insurance Liability 2,605,387 5,050,166 7,655,553 7,655,553 Pensions 0 15,704 15,704 15,704 Salaries/Wages 77,616 47,300 124,916 124,916 Holiday Pay/Vacations 248,986 127,854 376,840 376,840 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 1,151,726 1,151,726 1,151,726 Manufacturing Misc 0 0 0 EPA 7,887,572 7,887,572 7,887,572 Medical Insurance 951,800 951,800 951,800 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 -------------------------------------------------------------------------------------------- $3,183 $17,237,045 $35,632 ($36,000) $6,668,380 $64,082 $23,972,322 $0 $23,972,322 ============================================================================================
EXHIBIT H POST PETITION ACCRUED EXPENSES - CURRENT
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------ ----- Abandoned Real Estate Exp 154 36,100 36,254 36,254 Pensions 0 64,908 64,908 64,908 Salaries/Wages 1,156,975 (4,548) 1,152,427 1,152,427 Holiday Pay/Vacations 4,343,184 18,615 4,361,799 4,361,799 Defined Contribution Plan 1,140,700 48,017 1,188,717 1,188,717 Medical Insurance 103,930 (15,399) (3,065) 85,466 85,466 Utilities 159,705 73,997 608 234,310 234,310 Legal 173,997 173,997 173,997 Professional Fees 378,543 378,543 378,543 Goods Received Not Invoiced 1,779,471 1,779,471 1,779,471 Worker's Compensation 711,226 711,226 711,226 Unearned Revenue 6,538 6,538 6,538 Sales Rebates/Discounts 910,966 910,966 910,966 Abanondon Property 0 0 0 Miscellaneous 1,377,684 25,018 1,402,702 1,402,702 Accrued Bank Service Charge 19,003 19,003 19,003 Accrued Self-Insurance Losses 390,461 390,461 390,461 Accrued Interest 430,182 430,182 430,182 Accrued Travel 0 0 0 Accrued Profit Sharing 773,446 773,446 773,446 Accrued Management Fees (47,019) (47,019) (47,019) -------------------------------------------------------------------------------------------- $0 $13,809,146 $0 $0 $246,708 ($2,457) $14,053,397 $0 $14,053,397 ============================================================================================
Page 7 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 $677,102 $677,102 $677,102 Long Term Disability 2,343 2,343 2,343 Environmental (184,511) (184,511) (184,511) -------------------------------------------------------------------------------------------- $0 $679,445 ($184,511) $0 $0 $0 $494,934 $0 $494,934 ============================================================================================
EXHIBIT M POST PETITION ACCRUED OTHER TAXES
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------ ----- FICA - Employer $252,722 2392 $255,114 $255,114 Federal Unemployment Taxes 0 (3,337) (3,337) (3,337) State Unemployment Taxes 0 (20,137) (20,137) (20,137) Property Tax 237,786 99,784 1,881 339,451 339,451 Sales/Use Tax 547 3,212 3,759 3,759 Accrued State Franchise Tax (98,992) (98,992) (98,992) Miscellaneous (39,263) (39,263) (39,263) -------------------------------------------------------------------------------------------- $0 $352,800 $0 $0 $81,914 $1,881 $436,595 $0 $436,595 ============================================================================================