EX-99.1 2 exhibit991may.txt EXHIBIT 99.2 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 MAY, 2005. I. FINANCIAL SUMMARY CASH RECEIPTS AND DISBURSEMENTS -------------------------------
FVSW KCI DEMI JLP SWC SWCI Total ---- --- ---- --- --- ---- ----- A. CASH ON HAND START OF MONTH $0 $2,967,010 $0 $0 ($1,867) $0 $2,965,143 -------------------------------------------------------------------------- B. RECEIPTS 0 69,822,495 0 0 9,903 1,400 69,833,798 C. DISBURSEMENTS 0 68,045,900 0 0 7,958 1,400 68,055,258 -------------------------------------------------------------------------- D. NET RECEIPTS (DISBURSEMENTS) 0 1,776,595 0 0 1,945 0 1,778,540 -------------------------------------------------------------------------- E. CASH ON HAND END OF MONTH $0 $4,743,605 $0 $0 $78 $0 $4,743,683 ==========================================================================
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 $15,103,609. PROFIT AND LOSS STATEMENT ACCRUAL BASIS -------------------------
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------- ----- A NET SALES $0 $23,697,773 $0 $0 $1,427,365 $0 $25,125,138 ($1,788,458) $23,336,680 B. COST OF SALES 0 22,173,813 0 0 1,225,768 0 23,399,581 (1,788,458) 21,611,123 -------------------------------------------------------------------------------------------------- C. GROSS PROFIT 0 1,523,960 0 0 201,597 0 1,725,557 0 1,725,557 D. TOTAL OPERATING EXPENSES 3,549 5,971,802 0 60,000 371,791 8,295 6,415,437 (201,895) 6,213,542 -------------------------------------------------------------------------------------------------- E. NET INCOME (LOSS) FROM OPERATIONS (3,549) (4,447,842) 0 (60,000) (170,194) (8,295) (4,689,880) 201,895 (4,487,985) F. NON-OPERATING, NON-RECURRING REVENUE (EXPENSES) 7,567 (539,017) 60,000 0 46,420 0 (425,030) (201,895) (626,925) -------------------------------------------------------------------------------------------------- H. NET INCOME (LOSS) $4,018 ($4,986,859) $60,000 ($60,000) ($123,774) ($8,295) ($5,114,910) $0 ($5,114,910) ==================================================================================================
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) $23,697,773 $1,427,365 $25,125,138 ($1,788,458) $23,336,680 -------------------------------------------------------------------------------------------------- Less: Cost of Goods Sold: Beginning Inventory at Cost 74,640,455 3,792,279 78,432,734 78,432,734 Add: Purchases 9,909,606 1,174,831 11,084,437 (1,788,458) 9,295,979 Less: Ending Inventory at Cost 62,376,248 3,741,342 66,117,590 66,117,590 -------------------------------------------------------------------------------------------------- Cost of Good Sold 0 22,173,813 0 0 1,225,768 0 23,399,581 (1,788,458) 21,611,123 -------------------------------------------------------------------------------------------------- Gross Profit 0 1,523,960 0 0 201,597 0 1,725,557 0 1,725,557 -------------------------------------------------------------------------------------------------- Less: Operating Expenses: Officer Compensation 43,750 43,750 43,750 Salaries and Wages- - Other Employees 1,140,189 75,608 1,215,797 1,215,797 Employee Benefits and Pensions 105 1,110,923 23,921 1,639 1,136,588 1,136,588 Payroll Taxes 96,715 11,496 108,211 108,211 Real Estate Taxes 17,011 12,056 633 29,700 29,700 Federal and State Income Taxes 0 0 0 Rent and Lease Expense 74,244 1,305 75,549 75,549 Interest Expense 425,506 60,000 485,506 (191,026) 294,480 Insurance 73,236 12,730 85,966 85,966 Automobile Expense 0 0 0 0 Utilities 249,393 10,310 267 259,970 259,970 Depreciation and Amortization 3,444 1,127,811 87,300 4,081 1,222,636 1,222,636 Repairs and Maintenance 307,143 6,402 425 313,970 313,970 Advertising 39,340 39,340 39,340 Supplies, Office Expense and Photocopies 55,074 9,511 64,585 64,585 Bad Debts 0 0 0 Miscellaneous 0 1,211,467 0 0 121,152 1,250 1,333,869 (10,869) 1,323,000 -------------------------------------------------------------------------------------------------- Total Operating Expenses 3,549 5,971,802 0 60,000 371,791 8,295 6,415,437 (201,895) 6,213,542 -------------------------------------------------------------------------------------------------- Net Income (Loss) From Operations (3,549) (4,447,842) 0 (60,000) (170,194) (8,295) (4,689,880) 201,895 (4,487,985) -------------------------------------------------------------------------------------------------- B. Not Related to Business Operations: Revenue: Interest Income 567 7 60,000 131,026 191,600 (191,026) 574 Net Gain (Loss) on Sale of Assets 0 0 0 Other 7,000 46,817 0 0 0 0 53,817 (10,869) 42,948 -------------------------------------------------------------------------------------------------- Total Non-Operating Revenue 7,567 46,824 60,000 0 131,026 0 245,417 (201,895) 43,522 -------------------------------------------------------------------------------------------------- Expenses: Legal and Professional Fees 0 585,841 0 0 84,606 0 670,447 0 670,447 Other 0 0 0 0 0 0 0 0 0 -------------------------------------------------------------------------------------------------- Total Non-Operating Expenses 0 585,841 0 0 84,606 0 670,447 0 670,447 -------------------------------------------------------------------------------------------------- Net Income (Loss) For Period $4,018 ($4,986,859) $60,000 ($60,000) ($123,774) ($8,295) ($5,114,910) $0 ($5,114,910) ==================================================================================================
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 of 6 IV. BALANCE SHEET -----------------
FVSW KCI DEMI JLP SWC SWCI ---- --- ---- --- --- ---- ASSETS ------ Current ------- Cash $4,743,605 $78 Inventory 53,582 35,548,779 3,315,678 Accounts Receivable 27,584,987 524,009 6,000 Prepaid Expenses 2,082,154 102,513 1,264 Other - Exhibit E 76,133 1,968,122 15,509,793 0 344,741 0 ------------------------------------------------------------------------------- Total Current Assets 129,715 71,927,647 15,509,793 0 4,287,019 7,264 ------------------------------------------------------------------------------- Fixed ----- Property and Equipment 1,175,330 327,770,567 20,937,452 2,285,279 Accumulated Depreciation (755,705) (248,025,988) (16,846,683) (1,850,105) ------------------------------------------------------------------------------- Total Fixed Assets 419,625 79,744,579 0 0 4,090,769 435,174 ------------------------------------------------------------------------------- Other ----- Restricted Investments 5,976,474 250,722 Prepaid Pension Asset 140,419,473 Deferred Financing Costs 922,798 Goodwill 751,508 Other - Exhibit F 40,000 39,504,966 0 0 2,246,871 0 ------------------------------------------------------------------------------- Total Other Assets 40,000 187,575,219 0 0 2,497,593 0 ------------------------------------------------------------------------------- Total Assets $589,340 $339,247,445 $15,509,793 $0 $10,875,381 $442,438 =============================================================================== LIABILITIES ----------- Current ------- Pre-Petition Accounts Payable 18,726,293 1,012,833 54,503 Post-Petition Accounts Payable 548,403 90,828 1,675 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 (244,240) 3,355,489 433,128 670,515 (117,198) (130,676) Pre-Petition Accrued Expenses - Exhibit G 3,183 13,409,121 35,632 (36,000) 6,668,380 64,082 Post-Petition Accrued Expenses - Exhibit H 0 13,805,572 0 0 92,762 (3,677) Post-Petition Accrued Professional Fees 3,329,947 2,939 Post-Petition Accrued Other Taxes - Exhibit M 0 (153,421) 0 0 21,779 (2,846) 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 37,299,863 (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 9,044,613 ------------------------------------------------------------------------------- Total Current Liabilities (2,890,130) 239,187,986 6,242,867 16,341,806 (81,688,171) (1,476,019) ------------------------------------------------------------------------------- Long Term --------- Pre-Petition Long Term Debt 32,180,761 Post-Petition Long Term Debt 149,573 Accrued OPEB Cost 34,849 121,128,936 1,446,589 9,391,962 Accrued Pension Cost 1,386,700 Pre-Petition Accrued Expenses - Exhibit I 0 11,104,689 3,573,908 0 0 0 Post-Petition Accrued Expenses - Exhibit J 0 201,270 (198,554) 0 0 0 ------------------------------------------------------------------------------- Total Long Term Liabilities 34,849 166,151,929 3,375,354 1,446,589 9,391,962 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 32,180,883 27,579,007 Accumulated Deficit 3,434,621 (111,171,479) 5,891,566 (20,035,261) 83,530,762 1,917,457 Treasury Stock (12,125) (33,557,453) ------------------------------------------------------------------------------- Total Stockholders' Equity (Deficit) 3,444,621 (68,204,470) 5,891,572 (17,788,395) 83,171,590 1,918,457 ------------------------------------------------------------------------------- Total Liabilities & Stockholders' Equity (Deficit) $589,340 $339,247,445 $15,509,793 $0 $10,875,381 $442,438 ===============================================================================
Page 3 of 6 IV. BALANCE SHEET (CONTINUED) -----------------------------
Sub Elimin- Total ations Total ----- ------- ----- ASSETS ------ Current ------- Cash $4,743,683 $4,743,683 Inventory 38,918,039 38,918,039 Accounts Receivable 28,114,996 28,114,996 Prepaid Expenses 2,185,931 2,185,931 Other - Exhibit E 17,898,789 (15,854,534) 2,044,255 ----------------------------------------- Total Current Assets 91,861,438 (15,854,534) 76,006,904 ----------------------------------------- Fixed ----- Property and Equipment 352,168,628 352,168,628 Accumulated Depreciation (267,478,481) (267,478,481) ----------------------------------------- Total Fixed Assets 84,690,147 0 84,690,147 ----------------------------------------- Other ----- Restricted Investments 6,227,196 6,227,196 Prepaid Pension Asset 140,419,473 140,419,473 Deferred Financing Costs 922,798 922,798 Goodwill 751,508 751,508 Other - Exhibit F 41,791,837 (41,173,674) 618,163 ----------------------------------------- Total Other Assets 190,112,812 (41,173,674) 148,939,138 ----------------------------------------- Total Assets $366,664,397 ($57,028,208) $309,636,189 ========================================= LIABILITIES ----------- Current ------- Pre-Petition Accounts Payable 19,793,629 19,793,629 Post-Petition Accounts Payable 640,906 640,906 Pre-Petition Accounts Payable-Affiliates 15,879,389 (14,904,350) 975,039 Post-Petition Accounts Payable-Affiliates 3,967,018 (950,184) 3,016,834 Pre-Petition Accrued Expenses - Exhibit G 20,144,398 0 20,144,398 Post-Petition Accrued Expenses - Exhibit H 13,894,657 0 13,894,657 Post-Petition Accrued Professional Fees 3,332,886 3,332,886 Post-Petition Accrued Other Taxes - Exhibit M (134,488) 0 (134,488) 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 37,279,573 37,279,573 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 9,044,613 9,044,613 ----------------------------------------- Total Current Liabilities 175,718,339 (15,854,534) 159,863,805 ----------------------------------------- Long Term --------- Pre-Petition Long Term Debt 32,180,761 32,180,761 Post-Petition Long Term Debt 149,573 149,573 Accrued OPEB Cost 132,002,336 132,002,336 Accrued Pension Cost 1,386,700 1,386,700 Pre-Petition Accrued Expenses - Exhibit I 14,678,597 0 14,678,597 Post-Petition Accrued Expenses - Exhibit J 2,716 0 2,716 ----------------------------------------- Total Long Term Liabilities 180,400,683 0 180,400,683 ----------------------------------------- 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 59,759,890 (27,579,007) 32,180,883 Accumulated Deficit (36,432,334) (39,274,975) (75,707,309) Treasury Stock (33,569,578) 33,557,453 (12,125) ----------------------------------------- Total Stockholders' Equity (Deficit) 8,433,375 (41,173,674) (32,740,299) ----------------------------------------- Total Liabilities & Stockholders' Equity (Deficit) $366,664,397 ($57,028,208) $309,636,189 =========================================
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 4 of 6 EXHIBIT E ---------
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- -------- ----- Interest Receivable $1,133 $1,133 $1,133 Note Receivable 75,000 75,000 75,000 Intercompany Receivable 1,749,724 15,509,793 344,741 17,604,258 (15,854,534) 1,749,724 Short Term Investments 20,428 20,428 20,428 Receivable From EB Plans 195,543 195,543 195,543 Stop Loss Receivable 1,927 1,927 1,927 Security Deposit 500 500 500 ------------------------------------------------------------------------------------------ Total Other Current Assets $76,133 $1,968,122 $15,509,793 $0 $344,741 $0 $17,898,789 ($15,854,534) $2,044,255 ==========================================================================================
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 250,113 250,113 250,113 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 $39,504,966 $0 $0 $2,246,871 $0 $41,791,837 ($41,173,674) $618,163 ====================================================================================================
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 2,153,224 (168) 2,153,056 2,153,056 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 152,856 487,932 640,788 640,788 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 7,836,035 7,836,035 7,836,035 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 $13,409,121 $35,632 ($36,000) $6,668,380 $64,082 $20,144,398 $0 $20,144,398 ====================================================================================================
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 10,555 10,873 10,873 Pensions 0 24,602 24,602 24,602 Salaries/Wages 702,827 (6,220) 696,607 696,607 Holiday Pay/Vacations 4,350,606 4,859 4,355,465 4,355,465 Defined Contribution Plan 725,170 21,058 746,228 746,228 Medical Insurance 293,905 (37,518) (4,171) 252,216 252,216 Utilities 213,096 69,387 494 282,977 282,977 Legal 274,124 (24,202) 249,922 249,922 Professional Fees 415,558 415,558 415,558 Goods Received Not Invoiced 903,662 903,662 903,662 Worker's Compensation 2,912,758 2,912,758 2,912,758 Unearned Revenue 769 769 769 Sales Rebates/Discounts 1,026,388 1,026,388 1,026,388 Abanondon Property 0 0 0 Miscellaneous 698,500 30,241 728,741 728,741 Accrued Bank Service Charge 43,658 43,658 43,658 Accrued Self-Insurance Losses (90,901) (90,901) (90,901) Accrued Interest 777,634 777,634 777,634 Accrued Travel 0 0 0 Accrued Profit Sharing 250,000 250,000 250,000 Accrued Management Fees 307,500 307,500 307,500 -------------------------------------------------------------------------------------------- Total Post Petition Accrued Expenses- Current $0 $13,805,572 $0 $0 $92,762 ($3,677) $13,894,657 $0 $13,894,657 ============================================================================================
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 Expense 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 $195,588 $195,588 $195,588 Long Term Disability 5,682 5,682 5,682 Environmental (198,554) (198,554) (198,554) 0 0 0 0 0 0 0 0 -------------------------------------------------------------------------------------------- Total Post Petition Accrued Expenses- Long Term $0 $201,270 ($198,554) $0 $0 $0 $2,716 $0 $2,716 ============================================================================================
EXHIBIT M POST PETITION ACCRUED OTHER TAXES ---------------------------------
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------- ----- FICA - Employer ($170,379) 2,438 ($167,941) ($167,941) Federal Unemployment Taxes 0 (3,024) (3,024) (3,024) State Unemployment Taxes 0 (10,094) (10,094) (10,094) Property Tax 228,589 29,430 (2,846) 255,173 255,173 Sales/Use Tax 930 3,029 3,959 3,959 Accrued State Franchise Tax (171,355) (171,355) (171,355) Miscellaneous (41,206) (41,206) (41,206) -------------------------------------------------------------------------------------------- Total Post Petition Accrued Other Taxes $0 ($153,421) $0 $0 $21,779 ($2,846) ($134,488) $0 ($134,488) ============================================================================================