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 CEO 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:

• Assumption of the previously negotiated amendment to the collective bargaining agreement with the Independent Steel Workers Alliance (the ISWA), Keystone's largest labor union.
• Assumption of previously negotiated agreements with certain retiree groups that will provide relief by permanently reducing healthcare related payments to these retiree groups from pre-petition levels.
• Reinstatement of obligations due to pre-petition secured lenders other than its DIP lenders (against the reorganized Keystone).
• Cancellation of all shares of Keystone's common and preferred stock outstanding at the petition date (February 26, 2004).
• Disbursement to pre-petition unsecured creditors with allowed claims against Keystone, 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.
• Sale of certain operating assets and existing operations of Sherman Wire Co. (one of Keystone's pre-petition wholly owned subsidiaries) to Keystone. The Sherman Wire assets and operations will then be used to form and operate Keystone Wire Products Inc., a newly created wholly owned subsidiary of reorganized Keystone.
• Distribution of proceeds of the sale of the reorganized Sherman Wire operating assets and other funds, on a pro rata basis, to Sherman Wire's pre-petition unsecured creditors.
• Liquidation of Sherman Wire's pre-petition wholly owned non-operating subsidiaries — J.L. Prescott Co., and DeSoto Environmental Management, Inc. — as well as Sherman Wire of Caldwell, Inc., a wholly-owned subsidiary of Keystone. Pre-petition unsecured creditors with allowed claims against these entities will receive their pro-rata share of the respective entity's net liquidation proceeds.
• Pre-petition unsecured creditors with allowed claims against FV Steel & Wire Co., another one of Keystone's wholly owned subsidiaries, will receive cash in an amount equal to their allowed claims.
• One of Keystone's Debtor-In-Possession lenders, EWP Financial, LLC (an affiliate of Contran Corp., 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.

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.

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. The company says it is looking forward to serving its customers for the next 100 years and beyond.

Headquartered in Dallas, Texas, Keystone Consolidated Industries 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.