EX-99.1 2 exhibit991june.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 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, 2004. I. FINANCIAL SUMMARY CASH RECEIPTS AND DISBURSEMENTS -------------------------------
FVSW KCI DEMI JLP SWC SWCI Total ---- --- ---- --- --- ---- ----- A. CASH ON HAND START OF MONTH $0 $5,930,120 $0 $0 ($2,392) $0 $5,927,728 ------------------------------------------------------------------- B. RECEIPTS 0 94,489,224 0 0 3,072 0 94,492,296 C. DISBURSEMENTS 0 93,241,605 0 0 15,464 4,000 93,261,069 ------------------------------------------------------------------- D. NET RECEIPTS (DISBURSEMENTS) 0 1,247,619 0 0 (12,392) (4,000) 1,231,227 ------------------------------------------------------------------- E. CASH ON HAND END OF MONTH $0 $7,177,739 $0 $0 ($14,784) ($4,000) $7,158,955 ===================================================================
Note 1 - KCI Cash On Hand At End of Month includes $7,892,490 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 include $24,123,000 of advances on its Revolving Line of Credit (RLC). Note 3 - KCI Disbursements include $30,443,293 of payments on its RLC. Note 4 - KCI Receipts and Disbursements include transfers from and to, respectively KCI accounts of $39,887,792. Note 5 - SWC Receipts and KCI Disbursements include transfers from KCI to SWC of $3,072. CASH DISBURSEMENT RECONCILIATION --------------------------------
FVSW KCI DEMI JLP SWC SWCI Total ---- --- ---- --- --- ---- ----- Per Schedule of Receipts and Disbursements 0 93,241,605 0 0 15,464 4,000 93,261,069 Less: Payments on Revolving Credit Facility (30,443,293) (30,443,293) Transfers to other cash accounts (39,890,864) (39,890,864) ---------------------------------------------------------------------------- Net Cash Disbursements $0 $22,907,448 $0 $0 $15,464 $4,000 $22,926,912 ============================================================================
Page 1 of 9 PROFIT AND LOSS STATEMENT ------------------------- ACCRUAL BASIS -------------
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------ ----- A NET SALES $0 $30,613,303 $0 $0 $1,595,321 $0 $32,208,624 ($1,681,386) $30,527,238 B. COST OF SALES 0 22,666,306 0 0 1,198,619 0 23,864,925 (1,681,386) 22,183,539 --------------------------------------------------------------------------------------------- C. GROSS PROFIT 0 7,946,997 0 0 396,702 0 8,343,699 0 8,343,699 D. TOTAL OPERATING EXPENSES 3,549 5,296,208 0 60,500 461,403 27,293 5,848,953 (199,007) 5,649,946 --------------------------------------------------------------------------------------------- E. NET INCOME (LOSS) FROM OPERATIONS (3,549) 2,650,789 0 (60,500) (64,701) (27,293) 2,494,746 199,007 2,693,753 F. NON-OPERATING, NON-RECURRING REVENUE (EXPENSES) 7,994 (820,601) 60,000 0 123,246 0 (629,361) (199,007) (828,368) --------------------------------------------------------------------------------------------- H. NET INCOME (LOSS) $4,445 $1,830,188 $60,000 ($60,500) $58,545 ($27,293) $1,865,385 $0 $1,865,385 =============================================================================================
Page 2 of 9 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) $30,613,303 $1,595,321 $32,208,624 ($1,681,386) $30,527,238 --------------------------------------------------------------------------------------------- Less: Cost of Goods Sold: Beginning Inventory at Cost 43,714,789 2,275,607 45,990,396 45,990,396 Add: Purchases 20,768,347 1,222,548 21,990,895 (1,681,386) 20,309,509 Less: Ending Inventory at Cost 41,816,830 2,299,536 44,116,366 44,116,366 --------------------------------------------------------------------------------------------- Cost of Goods Sold 0 22,666,306 0 0 1,198,619 0 23,864,925 (1,681,386) 22,183,539 --------------------------------------------------------------------------------------------- Gross Profit 0 7,946,997 0 0 396,702 0 8,343,699 0 8,343,699 --------------------------------------------------------------------------------------------- Less: Operating Expenses: Officer Compensation 40,577 40,577 40,577 Salaries and Wages - Other Employees 1,099,307 87,764 1,187,071 1,187,071 Employee Benefits and Pensions 105 1,581,932 32,735 17,669 1,632,441 1,632,441 Payroll Taxes 93,909 15,174 109,083 109,083 Real Estate Taxes 12,231 10,024 (193) 22,062 22,062 Federal and State Income Taxes 0 0 0 Rent and Lease Expense 28,823 2,361 31,184 31,184 Interest Expense 423,416 60,000 483,416 (188,138) 295,278 Insurance (314,466) 121,473 (192,993) (192,993) Automobile Expense 0 0 0 Utilities 216,290 7,925 709 224,924 224,924 Depreciation and Amortization 3,444 1,136,270 89,586 5,915 1,235,215 1,235,215 Repairs and Maintenance 132,307 6,245 138,552 138,552 Advertising 41,287 41,287 41,287 Supplies, Office Expense and Photocopies 103,659 4,757 108,416 108,416 Bad Debts 0 0 0 Miscellaneous 0 700,666 0 500 83,359 3,193 787,718 (10,869) 776,849 --------------------------------------------------------------------------------------------- Total Operating Expenses 3,549 5,296,208 0 60,500 461,403 27,293 5,848,953 (199,007) 5,649,946 --------------------------------------------------------------------------------------------- Net Income (Loss) From Operations (3,549) 2,650,789 0 (60,500) (64,701) (27,293) 2,494,746 199,007 2,693,753 --------------------------------------------------------------------------------------------- B. Not Related to Business Operations: ---------------------------------- Revenue: Interest Income 994 5,264 60,000 128,138 194,396 (188,138) 6,258 Net Gain (Loss) on Sale of Assets 0 0 Other 7,000 45,174 0 0 0 0 52,174 (10,869) 41,305 --------------------------------------------------------------------------------------------- Total Non-Operating Revenue 7,994 50,438 60,000 0 128,138 0 246,570 (199,007) 47,563 --------------------------------------------------------------------------------------------- Expenses: Legal and Professional Fees 0 871,039 0 0 4,892 0 875,931 0 875,931 Other 0 0 0 0 0 0 0 0 0 --------------------------------------------------------------------------------------------- Total Non-Operating Expenses 0 871,039 0 0 4,892 0 875,931 0 875,931 --------------------------------------------------------------------------------------------- Net Income (Loss) For Period $4,445 $1,830,188 $60,000 ($60,500) $58,545 ($27,293) $1,865,385 $0 $1,865,385 =============================================================================================
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 3 of 9 IV. BALANCE SHEET
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------ ----- ASSETS ------ Current ------- Cash $7,177,739 ($14,784) ($4,000) $7,158,955 $7,158,955 Inventory 53,582 24,796,250 2,494,725 27,344,557 27,344,557 Accounts Receivable 28,314,710 892,563 29,207,273 29,207,273 Prepaid Expenses 1,028,511 177,271 1,264 1,207,046 1,207,046 Other - Exhibit E 77,982 3,983,619 14,849,793 0 364,429 0 19,275,823 (15,217,819) 4,058,004 --------------------------------------------------------------------------------------------------------------- Total Current Assets 131,564 65,300,829 14,849,793 0 3,914,204 (2,736) 84,193,654 (15,217,819) 68,975,835 --------------------------------------------------------------------------------------------------------------- Fixed ----- Property and Equipment 1,175,330 323,349,737 21,589,653 2,829,738 348,944,458 348,944,458 Accumulated Depreciation (714,376)(238,036,911) (16,536,153)(2,328,721) (257,616,161) (257,616,161) --------------------------------------------------------------------------------------------------------------- Total Fixed Assets 460,954 85,312,826 0 0 5,053,500 501,017 91,328,297 0 91,328,297 --------------------------------------------------------------------------------------------------------------- Other ----- Restricted Investments 5,556,917 401,599 5,958,516 5,958,516 Prepaid Pension Asset 131,486,435 131,486,435 131,486,435 Deferred Financing Costs 1,565,042 1,565,042 1,565,042 Goodwill 751,508 751,508 751,508 Other - Exhibit F 115,000 39,628,719 0 0 2,246,871 0 41,990,590 (41,173,674) 816,916 --------------------------------------------------------------------------------------------------------------- Total Other Assets 115,000 178,988,621 0 0 2,648,470 0 181,752,091 (41,173,674) 140,578,417 --------------------------------------------------------------------------------------------------------------- Total Assets $707,518 $329,602,276 $14,849,793 $0 $11,616,174 $498,281 $357,274,042 ($56,391,493)$300,882,549 ===============================================================================================================
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Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------ ----- LIABILITIES ----------- Current ------- Pre-Petition Accounts Payable 19,344,646 993,041 54,503 20,392,190 20,392,190 Post-Petition Accounts Payable 9,013,156 179,400 4,641 9,197,197 9,197,197 Pre-Petition Accounts Payable- Affiliates (2,649,073) 90,305,621 5,774,107 15,552,291 (89,758,156)(1,459,080) 17,765,710 (14,904,350) 2,861,360 Post-Petition Accounts Payable- Affiliates (105,314) 548,340 7,971 241,250 329,658 (155,466) 866,439 (313,469) 552,970 Pre-Petition Accrued Expenses- Exhibit G 3,183 19,957,329 35,632 (36,000) 6,668,380 64,082 26,692,606 0 26,692,606 Post-Petition Accrued Expenses - Exhibit H 0 13,226,463 0 0 267,705 442 13,494,610 0 13,494,610 Pre-Petition Notes Payable and Current 0 0 Maturities of Long Term Debt 28,151,777 20,290 28,172,067 28,172,067 Post-Petition Notes Payable and Current 0 0 Maturities of Long Term Debt 30,789,549 (9,364) 30,780,185 30,780,185 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 2,455,567 2,455,567 2,455,567 --------------------------------------------------------------------------------------------------------------- Total Current Liabilities (2,751,204) 237,079,254 5,817,710 15,912,541 (81,011,384)(1,490,878) 173,556,039 (15,217,819) 158,338,220 --------------------------------------------------------------------------------------------------------------- Long Term --------- Pre-Petition Long Term Debt 32,165,761 32,165,761 32,165,761 Post-Petition Long Term Debt 0 0 Accrued OPEB Cost 33,000 107,199,359 1,620,194 9,351,836 118,204,389 118,204,389 Accrued Pension Cost 1,638,828 1,638,828 1,638,828 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 0 780,025 (7,441) 0 0 0 772,584 0 772,584 --------------------------------------------------------------------------------------------------------------- Total Long Term Liabilities 33,000 152,880,110 3,566,467 1,620,194 9,351,836 0 167,451,607 0 167,451,607 ---------------------------------------------------------------------------------------------------------------
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Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------ ----- 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 38,769,929 27,579,007 66,348,936 (27,579,007) 38,769,929 Accumulated Deficit 3,415,722 (112,025,143) 5,465,610 (19,779,601) 83,634,894 1,988,159 (37,300,359) (39,274,975) (76,575,334) Treasury Stock (12,125) (33,557,453) (33,569,578) 33,557,453 (12,125) --------------------------------------------------------------------------------------------------------------- Total Stockholders' Equity (Deficit) 3,425,722 (62,469,088) 5,465,616 (17,532,735) 83,275,722 1,989,159 14,154,396 (41,173,674) (27,019,278) --------------------------------------------------------------------------------------------------------------- Total Liabilities & Stockholders' Equity (Deficit) $707,518 $329,602,276 $14,849,793 $0 $11,616,174 $498,281 $357,274,042 ($56,391,494)$300,882,549 ===============================================================================================================
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 6 of 9 EXHIBIT E OTHER CURRENT ASSETS
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------ ----- Interest Receivable $2,982 $2,982 $2,982 Note Receivable 75,000 75,000 75,000 Intercompany Receivable 3,949,728 14,849,793 364,429 19,163,950 (15,217,819) 3,946,131 Short Term Investments 20,428 20,428 20,428 Receivable From EB Plans 4,033 4,033 4,033 Stop Loss Receivable 8,930 8,930 8,930 Security Deposit 500 500 500 --------------------------------------------------------------------------------------------------- $77,982 $3,983,619 $14,849,793 $0 $364,429 $0 $19,275,823 ($15,217,819) $4,058,004 ===================================================================================================
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 373,866 373,866 373,866 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 $39,628,719 $0 $0 $2,246,871 $0 $41,990,590 ($41,173,674) $816,916 ====================================================================================================
Page 7 of 9 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 3,786,307 (168) 3,786,139 3,786,139 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 311,879 487,932 799,811 799,811 Self-Insurance Liability 2,535,714 5,050,166 7,585,880 7,585,880 Pensions 0 15,704 15,704 15,704 Salaries/Wages 77,616 47,300 124,916 124,916 Holiday Pay/Vacations 1,009,942 127,854 1,137,796 1,137,796 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 1,321,074 28,615 1,349,689 1,349,689 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 1,206,812 1,206,812 1,206,812 Manufacturing Misc 0 0 0 EPA 7,937,283 7,937,283 7,937,283 Medical Insurance 951,800 951,800 951,800 Accrued State Franchise Tax 206,742 206,742 206,742 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 34,176 34,176 34,176 ------------------------------------------------------------------------------------------------------- $3,183 $19,957,329 $35,632 ($36,000) $6,668,380 $64,082 $26,692,606 $0 $26,692,606 =======================================================================================================
EXHIBIT H POST PETITION ACCRUED EXPENSES - CURRENT
Sub Elimin- FVSW KCI DEMI JLP SWC SWCI Total ations Total ---- --- ---- --- --- ---- ----- ------ ----- Abandoned Real Estate Exp 154 17,300 17,454 17,454 Pensions 0 31,930 31,930 31,930 Salaries/Wages 927,848 26 927,874 927,874 Holiday Pay/Vacations 2,829,927 20,135 2,850,062 2,850,062 FICA - Employer (80,052) 3,251 (76,801) (76,801) Federal Unemployment Taxes 0 (2,553) (2,553) (2,553) State Unemployment Taxes 0 (9,409) (9,409) (9,409) Defined Contribution Plan 693,845 24,033 717,878 717,878 Medical Insurance 211,045 25,658 (2,259) 234,444 234,444 Utilities 225,936 81,812 820 308,568 308,568 Property Tax 258,921 46,333 1,881 307,135 307,135 Sales/Use Tax 1,059 2,071 3,130 3,130 Legal 30,000 2,100 32,100 32,100 Professional Fees 159,295 159,295 159,295 Goods Received Not Invoiced 1,617,348 1,617,348 1,617,348 Worker's Compensation (120,346) (120,346) (120,346) Unearned Revenue 35,000 35,000 35,000 Sales Rebates/Discounts 761,798 761,798 761,798 Abanondon Property 0 0 0 Miscellaneous 1,514,652 25,018 1,539,670 1,539,670 Accrued State Franchise Tax (88,827) (88,827) (88,827) Accrued Bank Service Charge 11,143 11,143 11,143 Accrued Self-Insurance Losses 149,604 149,604 149,604 Accrued Interest 312,129 312,129 312,129 Accrued Travel 0 0 0 Accrued Restructuring Costs 3,089,220 3,089,220 3,089,220 Accrued Profit Sharing 594,745 594,745 594,745 Accrued Management Fees 92,019 92,019 92,019 ------------------------------------------------------------------------------------------------------- $0 $13,226,463 $0 $0 $267,705 $442 $13,494,610 $0 $13,494,610 =======================================================================================================
Page 8 of 9 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 $779,413 $779,413 $779,413 Long Term Disability 612 612 612 Environmental (7,441) (7,441) (7,441) ----------------------------------------------------------------------------------------------- $0 $780,025 ($7,441) $0 $0 $0 $772,584 $0 $772,584 ===============================================================================================
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