| Keystone Consolidated Industries, Inc.                 |
|--------------------------------------------------------|
| (Exact name of Registrant as specified in its charter) |

| Delaware                                                      |   | 37-0364250                       |
|---------------------------------------------------------------|--------|----------------------------------|
| (State or other jurisdiction ofIncorporation or organization) |   | (IRS EmployerIdentification No.) |

| 5430 LBJ Freeway, Suite 1740,Three Lincoln Centre, Dallas, Texas |   | 75240-2697 |
|------------------------------------------------------------------|--------|------------|
| (Address of principal executive offices)                         |   | (Zip Code) |

| Registrant’s telephone number, including area code:   | (972) 458-0028               |
|-------------------------------------------------------------|------------------------------|
|                                                        |                         |
| Securities registered pursuant to Section 12(b) of the Act: | None.                        |
|                                                        |                         |
| Securities registered pursuant to Section 12(g) of the Act: | Title of each class          |
|                                                        | Common Stock, $.01 par value |

----

----

| ·   | Future supply and demand for our products (including cyclicality thereof), |
|--------------------|----------------------------------------------------------------------------|

| ·   | Customer inventory levels, |
|--------------------|----------------------------|

| ·   | Changes in raw material and other operating costs (such as ferrous scrap and energy), |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | The possibility of labor disruptions, |
|--------------------|---------------------------------------|

| ·   | General global economic and political conditions, |
|--------------------|---------------------------------------------------|

| ·   | Competitive products (including low-priced imports) and substitute products, |
|--------------------|------------------------------------------------------------------------------|

| ·   | Customer and competitor strategies, |
|--------------------|-------------------------------------|

| ·   | The impact of pricing and production decisions, |
|--------------------|-------------------------------------------------|

| ·   | Environmental matters (such as those requiring emission and discharge limits for existing and new facilities), |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | Government regulations and possible changes thereof, |
|--------------------|------------------------------------------------------|

| ·   | Significant increases in the cost of providing medical coverage to employees, |
|--------------------|-------------------------------------------------------------------------------|

| ·   | The ultimate resolution of pending litigation, U.S. Environmental Protection Agency (“U.S. EPA”) investigations and audits conducted by the Internal Revenue Service, |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | International trade policies of the United States and certain foreign countries, |
|--------------------|----------------------------------------------------------------------------------|

| ·   | Operating interruptions (including, but not limited to, labor disputes, fires, explosions, unscheduled or unplanned downtime, supply disruptions and transportation interruptions), |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our ability to renew or refinance credit facilities, |
|--------------------|------------------------------------------------------|

| ·   | The ability of our customers to obtain adequate credit, and |
|--------------------|-------------------------------------------------------------|

| ·   | Any possible future litigation. |
|--------------------|---------------------------------|

----

| ITEM 1. | BUSINESS. |
|---------|-----------|

| ·   | Keystone Steel & Wire (“KSW”), located in Peoria, Illinois, operates an electric arc furnace mini-mill, rod mill, industrial wire mill and wire product fabrication facilities and manufactures and sells wire rod, coiled rebar, industrial wire, fabricated wire and other products to agricultural, industrial, construction, commercial, original equipment manufacturers and retail consumer markets; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Engineered Wire Products, Inc. (“EWP”), located in Upper Sandusky, Ohio, manufactures and sells wire mesh in both roll and sheet form that is utilized as reinforcement in concrete construction products including pipe, pre-cast boxes and applications for use in roadways, buildings and bridges; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Keystone-Calumet, Inc. (“Calumet”), located in Chicago Heights, Illinois, manufactures and sells merchant and special bar quality products and special sections in carbon and alloy steel grades for use in agricultural, cold drawn, construction, industrial chain, service centers and transportation applications as well as in the production of a wide variety of products by original equipment manufacturers. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

| ·   | 6 at our corporate office; |
|--------------------|----------------------------|

| ·   | 820 at KSW, of which 672 are represented by the Independent Steel Workers’ Alliance (the “ISWA”) under an agreement expiring in May 2012; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 76 at EWP, of which 62 are represented by Local Union #40, an Affiliate to the International Brotherhood of Teamsters' Chauffeurs Warehousemen and Helpers of America (the “AFL-CIO”), under an agreement expiring in November 2011; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 72 at Calumet. |
|--------------------|----------------|

|                     |   | Years Ended December 31, |   |
|--------------------------|--------|--------------------------|--------|
|                     |   | 2008                     |   |   | 2009 |   |   | 2010 |   |
|   Product      |   | Percentof TonsShipped    |   |   | PercentofSales |   |   | Percentof TonsShipped |   |   | PercentofSales |   |   | Percentof TonsShipped |   |   | PercentofSales |   |
|                     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Wire rod                 |   |                     | 58.5   | % |   |   | 48.8 | % |   |   | 60.8 | % |   |   | 46.0 | % |   |   | 63.8 | % |   |   | 52.6 | % |
| Fabricated wire products |   |                     | 14.7   |   |   |   | 21.3 |   |   |   | 15.6 |   |   |   | 28.2 |   |   |   | 12.2 |   |   |   | 20.8 |   |
| Industrial wire          |   |                     | 10.4   |   |   |   | 12.1 |   |   |   | 8.2 |   |   |   | 9.6 |   |   |   | 8.8 |   |   |   | 10.7 |   |
| Wire mesh                |   |                     | 9.2    |   |   |   | 11.3 |   |   |   | 9.7 |   |   |   | 11.7 |   |   |   | 7.9 |   |   |   | 9.3 |   |
| Bar                      |   |                     | 3.1    |   |   |   | 3.0 |   |   |   | 3.2 |   |   |   | 3.3 |   |   |   | 4.0 |   |   |   | 4.8 |   |
| Coiled rebar             |   |                     | 2.6    |   |   |   | 2.3 |   |   |   | 1.2 |   |   |   | 0.8 |   |   |   | 1.2 |   |   |   | 1.0 |   |
| Other                    |   |                     | 1.5    |   |   |   | 1.2 |   |   |   | 1.3 |   |   |   | 0.4 |   |   |   | 2.1 |   |   |   | 0.8 |   |
|                     |   |                     | 100.0  | % |   |   | 100.0 | % |   |   | 100.0 | % |   |   | 100.0 | % |   |   | 100.0 | % |   |   | 100.0 | % |
|                     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                                   |   | KSW    |   |   | EWP    |   |   | Calumet |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
|                                   |   |   |   |   |   |   |   |    |   |
| Ten largest customers:                 |   |   |   |   |   |   |   |    |   |
|   % of segments’ sales |   |   | 62     | %      |   |   | 51     | %       |   |   | 50 | % |
|   % of consolidated sales    |   |   | 53     | %      |   |   | 5      | %       |   |   | 3 | % |
|                                   |   |   |   |   |   |   |   |    |   |   |   |   |
| Customers > 10%:                    |   |   |   |   |   |   |   |    |   |   |   |   |
|   % of segments’ sales |   |   | 12     | %      |   |   | 24     | %       |   |   | - |   |
|   % of consolidated sales    |   |   | 10     | %      |   |   | 2      | %       |   |   | - |   |

----

| ·   | the breadth of our fabricated wire products, wire mesh, industrial wire and bar offerings; |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | our ability to service diverse geographic and product markets; |
|--------------------|----------------------------------------------------------------|

| ·   | the relatively low cost of our internal supply of billet and wire rod; and |
|--------------------|----------------------------------------------------------------------------|

| ·   | our reputation for superior product quality. |
|--------------------|----------------------------------------------|

----

----

| ITEM 1A. | RISK FACTORS. |
|----------|---------------|

----

| ·   | making it more difficult for us to satisfy our obligations with respect to our liabilities; |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | increasing our vulnerability to adverse general economic and industry conditions; |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | requiring a portion of our cash flow from operations be used for the payment of interest on our debt, therefore reducing our ability to use our cash flow to fund working capital, capital expenditures, acquisitions and general corporate requirements; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions and general corporate requirements; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | limiting our flexibility in planning for, or reacting to, changes in our business, regulatory requirements and the industry in which we operate; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | placing us at a competitive disadvantage relative to other less-leveraged competitors. |
|--------------------|----------------------------------------------------------------------------------------|

----

----

| ITEM 1B. | UNRESOLVED STAFF COMMENTS. |
|----------|----------------------------|

| ITEM 2. | PROPERTIES. |
|---------|-------------|

|  Facility Name       |   | Location                |   | ApproximateSize(Square Feet) |      |  Primary Products Produced for External Sales |
|---------------------------|--------|-------------------------|--------|------------------------------|-----------|----------------------------------------------------|
|                      |   |                    |   |                         |      |                                               |
| Keystone Steel & Wire |   | Peoria, IL              |   |                         | 1,951,000 |                                               |  Fabricated wire products, industrial wire and wire      rod |
| Engineered Wire Products  |   | Upper Sandusky, OH |   |                         | 126,000   |                                               |  Wire mesh |
| Keystone-Calumet          |   | Chicago Heights, IL     |   |                         | 216,000   |                                               |  Steel bar |
|                      |   |                    |   |                         |      |                                               |   |
|                      |   |                    |   |                         | 2,293,000 |                                               |   |

| ITEM 3. | LEGAL PROCEEDINGS. |
|---------|--------------------|

| ITEM 4. | RESERVED. |
|---------|-----------|

----

| ITEM 5. | MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. |
|---------|------------------------------------------------------------------------|

|                                      |   | High   |   |   | Low    |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                      |   |   |   |   |   |   |
| Year ended December 31, 2009              |   |   |   |   |   |   |
|                                      |   |   |   |   |   |   |
|   First quarter                 |   | $      | 6.25   |   |   | $      | 2.80 |   |
|   Second quarter                |   | $      | 3.32   |   |   | $      | 2.25 |   |
|   Third quarter                 |   | $      | 4.11   |   |   | $      | 2.70 |   |
|   Fourth quarter                |   | $      | 5.05   |   |   | $      | 3.50 |   |
|                                      |   |   |   |   |   |   |   |   |
| Year ended December 31, 2010              |   |   |   |   |   |   |   |   |
|                                      |   |   |   |   |   |   |   |   |
|   First quarter                 |   | $      | 5.50   |   |   | $      | 4.00 |   |
|   Second quarter                |   | $      | 5.97   |   |   | $      | 4.65 |   |
|   Third quarter                 |   | $      | 6.05   |   |   | $      | 4.55 |   |
|   Fourth quarter                |   | $      | 5.75   |   |   | $      | 4.55 |   |
|                                      |   |   |   |   |   |   |   |   |
| First quarter 2011 through March 10, 2011 |   | $      | 6.55   |   |   | $      | 4.70 |   |

----

|                    |   | June 23, |   |   | December 31, |   |
|-------------------------|--------|----------|--------|--------|--------------|--------|
|                    |   | 2006     |   |   | 2006         |   |   | 2007 |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |
|                    |   |     |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Keystone common stock   |   | $        | 100    |   |         | $      | 750 |   |   | $ | 725 |   |   | $ | 300 |   |   | $ | 200 |   |   | $ | 228 |   |
| S&P 500 Index       |   |     | 100    |   |         |   | 115 |   |   |   | 121 |   |   |   | 76 |   |   |   | 97 |   |   |   | 111 |   |
| S&P 500 Steel Index |   |     | 100    |   |         |   | 117 |   |   |   | 142 |   |   |   | 69 |   |   |   | 88 |   |   |   | 101 |   |

----

| ITEM 6. | SELECTED FINANCIAL DATA. |
|---------|--------------------------|

|                                                                                              |   |  Years ended December 31,                       |    |
|---------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|---------|
|                                                                                              |   | 2006                                                 |    |   | 2007 |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |
|                                                                                              |   | (In thousands, except per share and per ton amounts) |    |
| Statement of Operations Data:                                                                     |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |
|   Net sales                                                                             |   | $                                                    | 440,540 |   |   | $ | 451,178 |   |   | $ | 562,693 |   |   | $ | 322,347 |   |   | $ | 450,745 |   |
|   Operating income                                                                      |   |                                                 | 79,750  |   |   |   | 97,972 |   |   |   | 110,493 |   |   |   | 3,209 |   |   |   | 16,462 |   |
|                                                                                              |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Defined benefit pension credit (expense)                                              |   |                                                 | 55,978  |   |   |   | 80,443 |   |   |   | 73,923 |   |   |   | (5,887 | ) |   |   | 4,654 |   |
|   OPEB credit                                                                           |   |                                                 | 8,297   |   |   |   | 8,526 |   |   |   | 8,474 |   |   |   | 4,748 |   |   |   | 5,258 |   |
|       Operating income before pension and OPEB (1)                       |   |                                                 | 15,475  |   |   |   | 9,003 |   |   |   | 28,096 |   |   |   | 4,348 |   |   |   | 6,550 |   |
|   Gain on cancellation of debt                                                          |   |                                                 | -       |   |   |   | 10,074 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|   Gain on legal settlement                                                              |   |                                                 | -       |   |   |   | 5,400 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|   Provision for income taxes                                                            |   |                                                 | (17,055 | ) |   |   | (37,619 | ) |   |   | (40,014 | ) |   |   | (2,292 | ) |   |   | (6,493 | ) |
|                                                                                              |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Net income                                                                            |   | $                                                    | 57,732  |   |   | $ | 64,765 |   |   | $ | 66,114 |   |   | $ | 241 |   |   | $ | 8,743 |   |
|                                                                                              |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Basic and diluted income per share                                       |   | $                                                    | 5.77    |   |   | $ | 6.48 |   |   | $ | 5.73 |   |   | $ | 0.02 |   |   | $ | 0.72 |   |
|  Basic and diluted weighted average shares outstanding (2)                                   |   |                                                 | 10,000  |   |   |   | 10,000 |   |   |   | 11,533 |   |   |   | 12,102 |   |   |   | 12,102 |   |
|                                                                                              |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Other Operating Data:                                                                       |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Shipments (000 tons):                                                                 |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Wire rod                                                                  |   |                                                 | 349     |   |   |   | 395 |   |   |   | 343 |   |   |   | 257 |   |   |   | 381 |   |
|     Fabricated wire products                                                  |   |                                                 | 112     |   |   |   | 103 |   |   |   | 86 |   |   |   | 66 |   |   |   | 73 |   |
|     Industrial wire                                                           |   |                                                 | 75      |   |   |   | 66 |   |   |   | 61 |   |   |   | 34 |   |   |   | 52 |   |
|     Wire mesh                                                                 |   |                                                 | 67      |   |   |   | 58 |   |   |   | 54 |   |   |   | 41 |   |   |   | 47 |   |
|     Bar                                                                       |   |                                                 | -       |   |   |   | 9 |   |   |   | 18 |   |   |   | 13 |   |   |   | 24 |   |
|     Coiled rebar                                                              |   |                                                 | 1       |   |   |   | 15 |   |   |   | 15 |   |   |   | 5 |   |   |   | 7 |   |
|     Other                                                                     |   |                                                 | 71      |   |   |   | 2 |   |   |   | 9 |   |   |   |  6 |   |   |   | 12 |   |
|       Total                                                         |   |                                                 | 675     |   |   |   | 648 |   |   |   | 586 |   |   |   |  422 |   |   |   | 596 |   |
|    Per-ton selling prices:                                                         |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Wire rod                                                                  |   | $                                                    | 500     |   |   | $ | 548 |   |   | $ | 797 |   |   | $ | 575 |   |   | $ | 618 |   |
|     Fabricated wire products                                                  |   |                                                 | 1,037   |   |   |   | 1,089 |   |   |   | 1,380 |   |   |   | 1,373 |   |   |   | 1,277 |   |
|     Industrial wire                                                           |   |                                                 | 726     |   |   |   | 763 |   |   |   | 1,103 |   |   |   | 897 |   |   |   | 915 |   |
|     Wire mesh                                                                 |   |                                                 | 870     |   |   |   | 896 |   |   |   | 1,168 |   |   |   | 916 |   |   |   | 878 |   |
|     Bar                                                                       |   |                                                 | -       |   |   |   | 663 |   |   |   | 946 |   |   |   | 782 |   |   |   | 888 |   |
|     Coiled rebar                                                              |   |                                                 | 529     |   |   |   | 563 |   |   |   | 841 |   |   |   | 540 |   |   |   | 622 |   |
|       All products in total                                         |   |                                                 | 645     |   |   |   | 690 |   |   |   | 955 |   |   |   | 760 |   |   |   | 749 |   |
|                                                                                              |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Average per-ton ferrous scrap cost of goods sold                                      |   | $                                                    | 210     |   |   | $ | 235 |   |   | $ | 368 |   |   | $ | 262 |   |   | $ | 294 |   |
|                                                                                              |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Increase (decrease) in LIFO reserve and cost of    goods sold (3) |   | $                                                    | 3,367   |   |   | $ | 5,713 |   |   | $ | 10,142 |   |   | $ | (15,200 | ) |   | $ | 5,423 |   |
|                                                                                              |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Financial Data:                                                                             |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Capital expenditures                                                                  |   | $                                                    | 18,739  |   |   | $ | 16,602 |   |   | $ | 13,298 |   |   | $ | 9,000 |   |   | $ | 14,937 |   |
|   Depreciation and amortization                                                         |   |                                                 | 15,222  |   |   |   | 15,434 |   |   |   | 15,164 |   |   |   | 13,584 |   |   |   | 12,062 |   |
|                                                                                              |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                |   | As of December 31,  |    |
|-----------------------------------------------------|--------|--------------------------|---------|
|                                                |   | 2006                     |    |   | 2007 |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |
|                                                |   | (In thousands)           |    |
| Balance Sheet Data:                                 |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |
|   Working capital                         |   | $                        | 31,776  |   |   | $ | 20,630 |   |   | $ | 55,886 |   |   | $ | 49,063 |   |   | $ | 55,095 |   |
|   Property, plant and equipment, net |   |                     | 88,695  |   |   |   | 92,469 |   |   |   | 89,987 |   |   |   | 85,169 |   |   |   | 88,009 |   |
|   Total assets                            |   |                     | 763,936 |   |   |   | 763,023 |   |   |   | 249,733 |   |   |   | 265,084 |   |   |   | 357,217 |   |
|   Total debt                              |   |                     | 76,448  |   |   |   | 91,577 |   |   |   | 31,630 |   |   |   | 25,370 |   |   |   | 28,681 |   |
|   Stockholders’ equity (2)          |   |                     | 403,662 |   |   |   | 404,694 |   |   |   | 119,644 |   |   |   | 147,770 |   |   |   | 191,736 |   |

| (1)   | Because pension and other postretirement benefit (“OPEB”) expense or credits are unrelated to the operating activities of our businesses, we measure and evaluate the performance of our businesses using operating income before pension and OPEB credit or expense.  As such, we believe the presentation of operating income before pension and OPEB credit or expense provides more useful information to investors.  Operating income before pension and OPEB credit or expense is a non-GAAP measure of profitability that is not in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and it should not be considered in isolation or as a substitute for a measure prepared in accordance with GAAP.  A reconciliation of operating income as reported to operating income adjusted for pension and OPEB expense or credit is set forth in the following table. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                 |   | Years ended December 31,  |    |
|------------------------------------------------------|--------|--------------------------------|---------|
|                                                 |   | 2006                           |    |   | 2007 |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |
|                                                 |   | (In thousands)                 |    |
|                                                 |   |                           |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income as reported                         |   | $                              | 79,750  |   |   | $ | 97,972 |   |   | $ | 110,493 |   |   | $ | 3,209 |   |   | $ | 16,462 |   |
|   Defined benefit pension expense (credit) |   |                           | (55,978 | ) |   |   | (80,443 | ) |   |   | (73,923 | ) |   |   | 5,887 |   |   |   | (4,654 | ) |
|   OPEB credit                              |   |                           | (8,297  | ) |   |   | (8,526 | ) |   |   | (8,474 | ) |   |   | (4,748 | ) |   |   | (5,258 | ) |
| Operating income before pension/OPEB                 |   | $                              | 15,475  |   |   | $ | 9,003 |   |   | $ | 28,096 |   |   | $ | 4,348 |   |   | $ | 6,550 |   |

| (2)   | On March 24, 2008 we issued 2.5 million shares of our common stock and received net proceeds of $24.7 million pursuant to a subscription rights offering. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | We use the last-in-first-out (“LIFO”) method to determine the cost of the majority of our productive inventories.  Changes in LIFO reserves are reflected in cost of goods sold. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
|---------|----------------------------------------------------------------------------------------------|

| ·   | increased selling prices for wire rod, industrial wire, bar and coiled rebar; |
|--------------------|-------------------------------------------------------------------------------|

| ·   | lower selling prices for fabricated wire products and mesh as competitive conditions in those markets resulted in an inability to raise selling prices; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased sales volume during 2010 as economic conditions during the first half of 2009 resulted in a sharp reduction of customer orders; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher production levels during the first half of 2010 as we operated our facilities on substantially reduced production schedules during the first half of 2009 given the sharp reduction in demand, which resulted in a much higher percentage of fixed costs being included in cost of goods sold during 2009 as these costs could not be capitalized into inventory (fixed costs as a percentage of sales were 6.1% during 2010 as compared to 8.2% during 2009); |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased electricity costs at our largest manufacturing facility during 2010; |
|--------------------|--------------------------------------------------------------------------------|

| ·   | increased maintenance costs during 2010 due to increased production; |
|--------------------|----------------------------------------------------------------------|

| ·   | decreases in our LIFO reserve and cost of goods sold during 2009 of $15.2 million as compared to a $5.4 million increase in our LIFO reserve and cost of goods sold during 2010 as discussed in Note 3 to our Consolidated Financial Statements; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | impairment charges of $2.8 million to reduce certain inventories to net realizable value during 2009 compared to nominal similar charges during 2010; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | bad debt expense of $2.9 million during 2009 primarily due to the Chapter 11 proceedings of one of our customers compared to nominal similar amounts during 2010; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher incentive compensation expense during 2010 due to increased profitability; and |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | a $4.2 million credit to general and administrative expense during 2009 related to the release of accrued environmental costs for certain inactive waste management units. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | lower shipment volumes due to the economic conditions of 2009; |
|--------------------|----------------------------------------------------------------|

| ·   | lower selling prices during 2009; |
|--------------------|-----------------------------------|

| ·   | reduced production volumes during 2009 as discussed above, which resulted in a higher percentage of fixed costs included in cost of goods sold (fixed costs as a percentage of sales were 8.2% during 2009 as compared to 5.8% during 2008); |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased variable costs of production during 2009 due to frequent mill changes as customers began to manage their inventory by ordering much smaller quantities of our many different products; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased variable costs of production as idle production facilities were difficult to re-start given cold winter temperatures during the first quarter of 2009; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | decreased cost of ferrous scrap during 2009; |
|--------------------|----------------------------------------------|

| ·   | decreased cost of electricity and natural gas during 2009; |
|--------------------|------------------------------------------------------------|

| ·   | decreases in our LIFO reserve and cost of goods sold during 2009 of $15.2 million as compared to a $10.1 million increase in our LIFO reserve and cost of goods sold during 2008 as discussed in Note 3 to our Consolidated Financial Statements; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | decreased workers compensation expense during 2009; |
|--------------------|-----------------------------------------------------|

| ·   | a $2.8 million impairment charge to reduce certain inventories to net realizable value during 2009 as compared to a $1.2 million impairment charge during 2008; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | bad debt expense during 2009 of $2.9 million primarily due to the Chapter 11 proceedings of one of our customers compared to nominal similar amounts during 2008; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | decreased employee incentive compensation accruals during 2009 resulting from lower profitability; and |
|--------------------|--------------------------------------------------------------------------------------------------------|

| ·   | a $4.2 million credit to general and administrative expense during 2009 related to the release of accrued environmental costs as discussed above. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | KSW, located in Peoria, Illinois, operates an electric arc furnace mini-mill, rod mill, industrial wire mill and wire product fabrication facilities and manufactures and sells wire rod, industrial wire, coiled rebar, fabricated wire and other products to agricultural, industrial, construction, commercial, original equipment manufacturers and retail consumer markets; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | EWP, located in Upper Sandusky, Ohio, manufactures and sells wire mesh in both roll and sheet form that is utilized as reinforcement in concrete construction products including pipe, pre-cast boxes and applications for use in roadways, buildings and bridges; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Calumet, located in Chicago Heights, Illinois, manufactures and sells merchant and special bar quality products and special sections in carbon and alloy steel grades for use in agricultural, cold drawn, construction, industrial chain, service centers and transportation applications as well as in the production of a wide variety of products by original equipment manufacturers. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                   |   |  KSW      |     |   |  EWP |   |    |  Calumet |   |   |  Other(1) |   |   |  Total |    |
|--------------------------------------------------------|--------|----------------|----------|--------|-----------|--------|---------|---------------|--------|--------|----------------|--------|--------|-------------|---------|
|                                                   |   | (In thousands) |     |
|                                                   |   |           |     |   |      |   |    |          |   |   |           |   |   |        |    |
|                                                   |   |           |     |   |      |   |    |          |   |   |           |   |   |        |    |
| For the year ended December 31, 2008:                  |   |           |     |   |      |   |    |          |   |   |
|                                                   |   |           |     |   |      |   |    |          |   |   |           |   |   |        |    |
|  Net sales                                        |   | $              | 542,106  |   |      | $      | 63,433  |          |   | $      | 17,165         |   |   | $           | (60,011 | ) |   | $ | 562,693 |   |
|  Cost of goods sold                               |   |           | (494,776 | )      |      |   | (54,676 | )             |   |   | (18,981        | )      |   |        | 57,236  |   |   |   | (511,197 | ) |
|    Gross margin (loss)                  |   |           | 47,330   |   |      |   | 8,757   |          |   |   | (1,816         | )      |   |        | (2,775  | ) |   |   | 51,496 |   |
|                                                   |   |           |     |   |      |   |    |          |   |   |           |   |   |        |    |   |   |   |   |   |
|  Selling and administrative expense          |   |           | (15,156  | )      |      |   | (3,419  | )             |   |   | (1,113         | )      |   |        | (3,712  | ) |   |   | (23,400 | ) |
|  Operating income (loss) before pension/OPEB      |   | $              | 32,174   |   |      | $      | 5,338   |          |   | $      | (2,929         | )      |   | $           | (6,487  | ) |   | $ | 28,096 |   |
|                                                   |   |           |     |   |      |   |    |          |   |   |           |   |   |
| For the year ended December 31, 2009:                  |   |           |     |   |      |   |    |          |   |   |           |   |   |
|                                                   |   |           |     |   |      |   |    |          |   |   |           |   |   |        |    |   |   |   |   |   |
|  Net sales                                        |   | $              | 298,219  |   |      | $      | 37,575  |          |   | $      | 11,127         |   |   | $           | (24,574 | ) |   | $ | 322,347 |   |
|  Cost of goods sold                               |   |           | (279,380 | )      |      |   | (33,572 | )             |   |   | (14,350        | )      |   |        | 27,515  |   |   |   | (299,787 | ) |
|    Gross margin (loss)                  |   |           | 18,839   |   |      |   | 4,003   |          |   |   | (3,223         | )      |   |        | 2,941   |   |   |   | 22,560 |   |
|                                                   |   |           |     |   |      |   |    |          |   |   |           |   |   |        |    |   |   |   |   |   |
|  Selling and administrative expense               |   |           | (12,863  | )      |      |   | (2,598  | )             |   |   | (480           | )      |   |        | (2,271  | ) |   |   | (18,212 | ) |
|  Operating income (loss) before pension/OPEB |   | $              | 5,976    |   |      | $      | 1,405   |          |   | $      | (3,703         | )      |   | $           | 670     |   |   | $ | 4,348 |   |
|                                                   |   |           |     |   |      |   |    |          |   |   |           |   |   |
| For the year ended December 31, 2010:                  |   |           |     |   |      |   |    |          |   |   |           |   |   |
|                                                   |   |           |     |   |      |   |    |          |   |   |           |   |   |        |    |   |   |   |   |   |
|  Net sales                                        |   | $              | 433,729  |   |      | $      | 41,310  |          |   | $      | 22,987         |   |   | $           | (47,281 | ) |   | $ | 450,745 |   |
|  Cost of goods sold                               |   |           | (408,971 | )      |      |   | (40,170 | )             |   |   | (22,028        | )      |   |        | 47,828  |   |   |   | (423,341 | ) |
|    Gross margin                         |   |           | 24,758   |   |      |   | 1,140   |          |   |   | 959            |   |   |        | 547     |   |   |   | 27,404 |   |
|                                                   |   |           |     |   |      |   |    |          |   |   |           |   |   |        |    |   |   |   |   |   |
|  Selling and administrative expense          |   |           | (14,154  | )      |      |   | (2,418  | )             |   |   | (862           | )      |   |        | (3,420  | ) |   |   | (20,854 | ) |
|  Operating income (loss) before pension/OPEB |   | $              | 10,604   |   |      | $      | (1,278  | )             |   | $      | 97             |   |   | $           | (2,873  | ) |   | $ | 6,550 |   |
|                                                   |   |           |     |   |      |   |    |          |   |   |           |   |   |        |    |   |   |   |   |   |

----

|                                             |   |             |     |
|--------------------------------------------------|--------|------------------|----------|
|                                             |   | 2008             |     |   | % ofsales |   |   | 2009 |   |   | % ofsales |   |   | 2010 |   |   | % ofsales |   |
|                                             |   | ($ in thousands) |     |
|                                             |   |             |     |
| Net sales                                        |   | $                | 542,106  |   |   |   | 100.0 | % |   | $ | 298,219 |   |   |   | 100.0 | % |   | $ | 433,729 |   |   |   | 100.0 | % |
| Cost of goods sold                               |   |             | (494,776 | ) |   |   | (91.3 | ) |   |   | (279,380 | ) |   |   | (93.7 | ) |   |   | (408,971 | ) |   |   | (94.3 | ) |
|   Gross margin                         |   |             | 47,330   |   |   |   | 8.7 |   |   |   | 18,839 |   |   |   | 6.3 |   |   |   | 24,758 |   |   |   | 5.7 |   |
|                                             |   |             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling and administrative                       |   |             | (15,156  | ) |   |   | (2.8 | ) |   |   | (12,863 | ) |   |   | (4.3 | ) |   |   | (14,154 | ) |   |   | (3.3 | ) |
|   Operating income before pension/OPEB |   | $                | 32,174   |   |   |   | 5.9 | % |   | $ | 5,976 |   |   |   | 2.0 | % |   | $ | 10,604 |   |   |   | 2.4 | % |
|                                             |   |             |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                       |   | 2008   |    |   | 2009   |   |    | 2010   |   |
|------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Sales volume (000 tons):                                   |   |   |    |   |   |   |    |   |   |
|   Wire rod                                       |   |   | 398     |   |   |   | 291     |   |   |   | 429 |   |
|   Fabricated wire products                       |   |   | 86      |   |   |   | 66      |   |   |   | 73 |   |
|   Industrial wire                                |   |   | 61      |   |   |   | 34      |   |   |   | 52 |   |
|   Billet                                         |   |   | 35      |   |   |   | 16      |   |   |   | 45 |   |
|   Coiled rebar                                   |   |   | 15      |   |   |   | 5       |   |   |   | 7 |   |
|     Total                              |   |   | 595     |   |   |   | 412     |   |   |   | 606 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Per-ton selling prices:                                    |   |   |    |   |   |   |    |   |   |   |   |   |
|   Wire rod                                       |   | $      | 797     |   |   | $      | 575     |   |   | $ | 620 |   |
|   Fabricated wire products                       |   |   | 1,380   |   |   |   | 1,373   |   |   |   | 1,277 |   |
|   Industrial wire                                |   |   | 1,103   |   |   |   | 897     |   |   |   | 915 |   |
|   Billet                                         |   |   | 657     |   |   |   | 366     |   |   |   | 452 |   |
|   Coiled rebar                                   |   |   | 841     |   |   |   | 540     |   |   |   | 622 |   |
|     All products                       |   |   | 906     |   |   |   | 720     |   |   |   | 712 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Average per-ton ferrous scrap cost of goods sold           |   | $      | 368     |   |   | $      | 262     |   |   | $ | 294 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Increase (decrease) in LIFO reserve and cost of goods sold |   | $      | 6,588   |   |   | $      | (9,125  | )      |   | $ | 4,506 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Average electricity cost per kilowatt hour            |   | $      | 0.05    |   |   | $      | 0.03    |   |   | $ | 0.04 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Kilowatt hours consumed (000 hours)                        |   |   | 485,446 |   |   |   | 341,392 |   |   |   | 478,641 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Average natural gas cost per therm                         |   | $      | 0.95    |   |   | $      | 0.50    |   |   | $ | 0.50 |   |
|                                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Natural gas therms consumed (000 therms)                   |   |   | 19,380  |   |   |   | 14,115  |   |   |   | 18,134 |   |

----

| ·   | higher production levels during the first half of 2010 as KSW operated on substantially reduced production schedules during the first half of 2009 given the sharp reduction in demand caused by economic conditions, which resulted in a higher percentage of fixed costs being included in cost of goods sold during 2009 as these costs could not be capitalized into inventory (fixed costs as a percentage of sales were 6.3% during 2010 compared to 8.7% during 2009); |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased maintenance costs during 2010 due to increased production; |
|--------------------|----------------------------------------------------------------------|

| ·   | bad debt expense of $2.9 million during 2009 primarily due to the Chapter 11 proceedings of one of KSW’s customers compared to nominal similar amounts during 2010; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher incentive compensation expense during 2010 due to increased profitability; and |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | a $4.2 million credit during 2009 related to the release of accrued environmental costs as discussed above. |
|--------------------|-------------------------------------------------------------------------------------------------------------|

| ·   | substantially reduced production volumes during the first half of 2009 as discussed above which resulted in a higher percentage of fixed costs included in cost of goods sold (fixed costs as a percentage of sales were 8.7% during 2009 as compared to 6.2% during 2008); |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased variable costs of production during 2009 due to frequent mill changes as customers began managing their inventory by ordering much smaller quantities of KSW’s many different product lines; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased variable costs of production as idle production facilities were difficult to re-start given cold winter temperatures during the first quarter of 2009; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | decreased workers compensation expense during 2009; |
|--------------------|-----------------------------------------------------|

| ·   | bad debt expense of $2.9 million during 2009 primarily due to the Chapter 11 proceedings of one of KSW’s customers as compared to nominal similar amounts during 2008; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | decreased employee incentive compensation accruals during 2009 due to lower profitability; and |
|--------------------|------------------------------------------------------------------------------------------------|

| ·   | the $4.2 million credit related to the release of accrued environmental costs during 2009 as discussed above. |
|--------------------|---------------------------------------------------------------------------------------------------------------|

----

|                                                    |   | 2008             |    |   | % ofsales |   |   | 2009   |   |   | % ofsales |   |   | 2010   |   |   | % ofsales |   |
|---------------------------------------------------------|--------|------------------|---------|--------|-----------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|-----------|--------|
|                                                    |   | ($ in thousands) |    |
|                                                    |   |             |    |   |      |   |   |   |   |   |      |   |   |   |   |   |      |   |
| Net sales                                               |   | $                | 63,433  |   |      |   | 100.0  | %      |   | $      | 37,575    |   |   |   | 100.0  | %      |      | $      | 41,310 |   |   |   | 100.0 | % |
| Cost of goods sold                                      |   |             | (54,676 | )      |      |   | (86.2  | )      |   |   | (33,572   | )      |   |   | (89.4  | )      |      |   | (40,170 | ) |   |   | (97.2 | ) |
|   Gross margin                                |   |             | 8,757   |   |      |   | 13.8   |   |   |   | 4,003     |   |   |   | 10.6   |   |      |   | 1,140 |   |   |   | 2.8 |   |
|                                                    |   |             |    |   |      |   |   |   |   |   |      |   |   |   |   |   |      |   |   |   |   |   |   |   |
| Selling and administrative                              |   |             | (3,419  | )      |      |   | (5.4   | )      |   |   | (2,598    | )      |   |   | (6.9   | )      |      |   | (2,418 | ) |   |   | (5.9 | ) |
|   Operating income (loss) before pension/OPEB |   | $                | 5,338   |   |      |   | 8.4    | %      |   | $      | 1,405     |   |   |   | 3.7    | %      |      | $      | (1,278 | ) |   |   | (3.1 | )% |
|                                                    |   |             |    |   |      |   |   |   |   |   |      |   |   |   |   |   |      |   |   |   |   |   |   |   |

|                                                       |   | 2008   |   |   | 2009   |   |   | 2010   |   |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                       |   |   |   |   |   |   |   |   |   |
| Sales volume (000 tons) - Wire mesh                        |   |   | 54     |   |   |   | 41     |   |   |   | 47 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Per-ton selling prices - Wire mesh                         |   | $      | 1,168  |   |   | $      | 916    |   |   | $ | 878 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Average per-ton wire rod cost of goods sold                |   | $      | 713    |   |   | $      | 710    |   |   | $ | 634 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in LIFO reserve and cost of goods sold |   | $      | 3,554  |   |   | $      | (6,075 | )      |   | $ | 917 |   |

| ·   | significantly higher percentage of fixed costs included in cost of goods sold during the first quarter of 2009 due to substantially reduced production volumes as discussed above (fixed costs as a percentage of sales were 4.9% during 2009 as compared to 3.1% during 2008); |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased variable costs of production during 2009 due to frequent mill changes as customers began managing their inventory by ordering much smaller quantities of EWP’s different products; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | decreased employee incentive compensation accruals during 2009 as discussed above. |
|--------------------|------------------------------------------------------------------------------------|

----

|                                                    |   | 2008             |    |   | % ofsales |   |       | 2009   |   |   | % ofsales |   |   | 2010   |   |   | % ofsales |   |
|---------------------------------------------------------|--------|------------------|---------|--------|-----------|--------|------------|--------|--------|--------|-----------|--------|--------|--------|--------|--------|-----------|--------|
|                                                    |   | ($ in thousands) |    |
|                                                    |   |             |    |   |      |   |       |   |   |   |      |   |   |   |   |   |      |   |
| Net sales                                               |   | $                | 17,165  |   |      |   | 100.0      | %      |   | $      | 11,127    |   |   |   | 100.0  | %      |      | $      | 22,987 |   |   |   | 100.0 | % |
| Cost of goods sold                                      |   |             | (18,981 | )      |      |   | (110.6     | )      |   |   | (14,350   | )      |   |   | (129.0 | )      |      |   | (22,028 | ) |   |   | (95.8 | ) |
|   Gross margin (loss)                         |   |             | (1,816  | )      |      |   | (10.6      | )      |   |   | (3,223    | )      |   |   | (29.0  | )      |      |   | 959 |   |   |   | 4.2 |   |
|                                                    |   |             |    |   |      |   |       |   |   |   |      |   |   |   |   |   |      |   |   |   |   |   |   |   |
| Selling and administrative                              |   |             | (1,113  | )      |      |   |  (6.5 | )      |   |   | (480      | )      |   |   | (4.3   | )      |      |   | (862 | ) |   |   | (3.8 | ) |
|   Operating income (loss) before pension/OPEB |   | $                | (2,929  | )      |      |   | (17.1      | )%     |   | $      | (3,703    | )      |   |   | (33.3  | )%     |      | $      | 97 |   |   |   | 0.4 | % |

|                                      |   | 2008   |   |   | 2009   |   |   | 2010   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                      |   |   |   |   |   |   |   |   |   |
| Sales volume (000 tons) - Bar             |   |   | 18     |   |   |   | 13     |   |   |   | 24 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Per-ton selling prices - Bar              |   | $      | 946    |   |   | $      | 782    |   |   | $ | 888 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Average per-ton billet cost of goods sold |   | $      | 549    |   |   | $      | 447    |   |   | $ | 507 |   |

----

| ·   | increased variable costs of production due to frequent mill changes as customers began managing their inventory by ordering much smaller quantities of Calumet’s many different product lines; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased variable costs of production as idle production facilities were difficult to re-start given cold winter temperatures during the first quarter of 2009; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | decreased cost of electricity and natural gas. |
|--------------------|------------------------------------------------|

|                                    |   | 2008             |   |   | 2009   |   |   | 2010   |   |
|-----------------------------------------|--------|------------------|--------|--------|--------|--------|--------|--------|--------|
|                                    |   | ($ in thousands) |   |
|                                    |   |             |   |   |   |   |   |   |   |
| Interest expense                        |   | $                | 3,798  |   |   | $      | 1,725  |   |   | $ | 1,863 |   |
|                                    |   |             |   |   |   |   |   |   |   |   |   |   |
| Average balance of total debt           |   | $                | 68,169 |   |   | $      | 35,129 |   |   | $ | 36,983 |   |
|   Average balance of revolver |   |             | 35,030 |   |   |   | 17,889 |   |   |   | 28,662 |   |
|                                    |   |             |   |   |   |   |   |   |   |   |   |   |
| Weighted average interest rate          |   |             | 5.0    | %      |   |   | 4.1    | %      |   |   | 4.0 | % |

----

|                              | Margins on prime | Margins on LIBOR |
|-----------------------------------|------------------|------------------|
|                              |             |             |
| January 2008 – October 2009 | 0% to 0.5%       | 2% to 2.75%      |
|                              |             |             |
| October 2009 – August 2010  | 1% or 1.25%      | 2.75% or 3%      |
|                              |             |             |
| August 2010 – December 2010 | 0.25% to 0.5%    | 2% to 2.25%      |

| ·   | higher operating income before pension/OPEB during 2010 of $2.2 million; |
|--------------------|--------------------------------------------------------------------------|

| ·   | lower net cash used as a result of relative changes in our accounts receivable in 2010 of $11.9 million primarily due to an abnormally low accounts receivable balance at December 31, 2008 as a result of customers limiting orders during the fourth quarter of 2008; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher net cash used by relative changes in our inventory of $31.4 million in 2010 primarily due to increased scrap costs and substantially higher production levels during the first half of 2010 to meet increased demand as compared to extremely low production levels during the first half of 2009 as a result of a rapid decline in product demand (production levels were relatively consistent between the last half of 2010 and last half of 2009); |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher net cash provided by relative changes in our accounts payable of $3.3 million in 2010 primarily due to increased costs associated with the annual fourth quarter maintenance shutdown at our largest facility; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher net cash provided by relative changes in our accrued liabilities of $14.0 million in 2010 primarily as a result of the payment of 2008 employee incentive compensation during the first quarter of 2009 which was significantly higher than 2009 employee incentive compensation paid during the first quarter of 2010; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the release of $1.0 million of utility deposits as a result of entering into new energy service agreements during 2010; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| ·   | income tax refunds of $.1 million during 2010 compared to income tax payments of $1.1 million during 2009. |
|--------------------|------------------------------------------------------------------------------------------------------------|

----

| ·   | lower operating income before pension/OPEB during 2009 of $23.7 million; |
|--------------------|--------------------------------------------------------------------------|

| ·   | lower OPEB payments during 2009 of $1.1 million as a result of amendments to one of our OPEB plans and one of our pension plans to create supplemental pension benefits in lieu of us paying certain OPEB benefits throughout 2009; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher net cash used as a result of relative changes in our accounts receivable in 2009 of $46.0 million primarily due to an abnormally low accounts receivable balance at December 31, 2008 as a result of customers limiting orders during the fourth quarter of 2008; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher net cash provided by relative changes in our inventory in 2009 of $45.4 million due to lower scrap and utility costs as well as a significant reduction in inventory levels during 2009 as we adjusted production and inventory strategies based on changes in customer order patterns; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lower net cash used due to relative changes in our accounts payable of $4.1 million in 2009 as a result of increased cost management efforts during 2009; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher net cash used as a result of relative changes in our accrued liabilities of $20.3 million in 2009 as 2008 employee incentive compensation paid in the first quarter of 2009 was significantly higher than 2007 employee incentive compensation paid in the first quarter of 2008; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lower interest payments during 2009 of $2.1 million; and |
|--------------------|----------------------------------------------------------|

| ·   | lower tax payments during 2009 of $1.9 million due to decreased profitability. |
|--------------------|--------------------------------------------------------------------------------|

----

|                                           |   | Payment due date  |   |
|------------------------------------------------|--------|------------------------|--------|
|   Contractual commitment   |   | 2011                   |   |   |   | 2012/2013 |   |   |   | 2014/2015 |   |   | 2016and after |   |   | Total |   |
|                                           |   | (In thousands)         |   |
|                                           |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Principal payments on debt obligations    |   | $                      | 27,744 |   |   | $ | 1 |   |   | $ | 1,100 |   |   | $ | - |   |   | $ | 28,845 |   |
|                                           |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating leases                               |   |                   | 727    |   |   |   | 733 |   |   |   | 300 |   |   |   | 225 |   |   |   | 1,985 |   |
|                                           |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Product supply agreements                      |   |                   | 2,360  |   |   |   | 2,470 |   |   |   | 1,720 |   |   |   | 643 |   |   |   | 7,193 |   |
|                                           |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                          |   | $                      | 30,831 |   |   | $ | 3,204 |   |   | $ | 3,120 |   |   | $ | 868 |   |   | $ | 38,023 |   |

----

|                                                |   | December 31,   |   |
|-----------------------------------------------------|--------|----------------|--------|
|                                                |   | 2009           |   |   | 2010 |   |
|                                                |   | (In thousands) |   |
|                                                |   |           |   |   |   |   |
| Working capital                                     |   | $              | 49,063 |   |   | $ | 55,095 |   |
| Outstanding balance under revolving credit facility |   |           | 12,546 |   |   |   | 27,740 |   |
|                                                |   |           |   |   |   |   |   |   |
| Additional borrowing availability                   |   |           | 38,637 |   |   |   | 38,779 |   |

----

----

|                          Discount rates used for:                         |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Obligations atDecember 31, 2008 and    expense in 2009                                                                                                                                                                                                                                      | Obligations atDecember 31, 2009 and    expense in 2010    | Obligations atDecember 31, 2010 and    expense in 2011    |
|                                                                                                                                                                                                                                                                                                                           |   |   |
| 6.2%                                                                                                                                                                                                                                                                                                                           | 5.6% | 5.0% |

----

|                                       |   | December 31,  |   |
|--------------------------------------------|--------|--------------------|--------|
|                                       |   | 2009               |   |   | 2010 |   |
|                                       |   |               |   |   |   |   |
| Equity securities and limited partnerships |   |               | 78     | % |   |   | 83 | % |
| Fixed income securities                    |   |               | 21     |   |   |   | 16 |   |
| Real estate                                |   |               | 1      |   |   |   | 1 |   |
| Cash, cash equivalents and other           |   |               | -      |   |   |   | - |   |
|                                       |   |               |   |   |   |   |   |   |
|     Total              |   |               | 100    | % |   |   | 100 | % |

----

----

| ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
|----------|-------------------------------------------------------------|

|              |   | Amount              |   |   |            |   |   |               |   |
|-------------------|--------|---------------------|--------|--------|-----------------|--------|--------|--------------------|--------|
|              |   | Carrying value |   |   | Fair value |   |   | Interest rate |   |   | Maturity date |   |
|              |   | (In thousands)      |   |   |            |   |   |               |   |
|              |   |                |   |   |            |   |   |               |   |   |   |   |
| December 31, 2010 |   | $                   | 27,740 |   |            | $      | 27,740 |               |   |   | 2.6 | % |   |   | 2015 |   |
|              |   |                |   |   |            |   |   |               |   |   |   |   |   |   |   |   |
| December 31, 2009 |   | $                   | 18,166 |   |            | $      | 18,166 |               |   |   | 4.0 | % |   |   | 2010 |   |

----

| ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
|---------|----------------------------------------------|

| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. |
|---------|---------------------------------------------------------------------------------------|

| ITEM 9A. | CONTROLS AND PROCEDURES. |
|----------|--------------------------|

----

|   | · | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets, |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | provide reasonable assurance transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are made only in accordance with authorizations of our management and directors, and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our Consolidated Financial Statements. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ITEM 9B. | OTHER INFORMATION. |
|----------|--------------------|

----

| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. |
|----------|---------------------------------------------------------|

| ITEM 11. | EXECUTIVE COMPENSATION. |
|----------|-------------------------|

| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. |
|----------|-------------------------------------------------------------------------------------------------|

| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE. |
|----------|---------------------------------------------------------------------------|

| ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES. |
|----------|-----------------------------------------|

| ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. |
|----------|---------------------------------------------|

| (a) and (c) | Financial Statements and Schedules |
|-------------|------------------------------------|

| (b) | Exhibits |
|-----|----------|

----

|      Exhibit No. | Exhibit Item                                                                                                                                                                                                                                                                                                                                                                     |
|--------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                 |                                                                                                                                                                                                                                                                                                                                                                             |
| 3.1                                  | Amended and Restated Certificate of Incorporation of the Registrant dated January 18, 2008, as filed with the Secretary of State of Delaware.  (Incorporated by reference to Exhibit 99.1 to the Registrant's Report on Form 8-K dated January 18, 2008).                                                                                                         |
| 3.2                                  | Amended and Restated Bylaws of the Registrant dated August 31, 2005.  (Incorporated by reference to Exhibit 3.6 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2003).                                                                                                                                                             |
| 4.1                                  | Loan and Security Agreement dated August 31, 2005 by and between the Registrant and Wachovia Capital Finance Corporation (Central).  (Incorporated by reference to Exhibit 4.51 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2003).                                                                                       |
| 4.2                                  | First Amendment to Loan and Security Agreement dated as of June 30, 2006 by and between the Registrant and Wachovia Capital Finance Corporation (Central). (Incorporated by reference to Exhibit 4.7 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2006).                                                                            |
| 4.3                                  | Amendment No. 2 to Loan and Security Agreement dated as of March 23, 2007 by and between the Registrant and Wachovia Capital Finance Corporation (Central). (Incorporated by reference to Exhibit 4.8 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2006).                                                                           |
| 4.4                                  | Amendment No. 3 to Loan and Security Agreement dated as of October 2, 2009 by and between the Registrant and Wachovia Capital Finance Corporation (Central). (Incorporated by reference to Exhibit 4.1 to the Registrant’s Report on Form 8-K dated October 2, 2009).                                                                                                 |
| 4.5                                  | Amendment No. 4 to Loan and Security Agreement dated as of August 17, 2010 by and between the Registrant and Wells Fargo Capital Finance, LLC. (Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated August 17, 2010).                                                                                                       |
| 10.1                                 | Agreement Regarding Shared Insurance between Registrant, CompX International Inc., Contran Corporation, Kronos Worldwide, Inc., NL Industries, Inc., Titanium Metals Corp. and Valhi, Inc. dated as of October 30, 2003.  (Incorporated by reference to Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2003).  |
| 10.2                                 | The Combined Master Retirement Trust between Contran Corporation and Harold C. Simmons as amended and restated effective September 30, 2005. (Incorporated by reference to Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2006).                                                                                         |
| 10.3                                 | Keystone Consolidated Industries, Inc. Master Retirement Trust I between the Registrant and U.S. Bank National Association as amended and restated effective January 1, 2006. (Incorporated by reference to Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2006).                                                        |

----

|     Exhibit No. | Exhibit Item                                                                                                                                                                                                                                                                                                                |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |                                                                                                                                                                                                                                                                                                                        |
| 10.4                           | Keystone Consolidated Industries, Inc. Master Retirement Trust II between the Registrant and U.S. Bank National Association as amended and restated effective January 1, 2006. (Incorporated by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2006).  |
| 10.5*                          | Form of Deferred Compensation Agreement between the Registrant and certain executive officers.  (Incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q (File No. 1-3919) for the quarter ended March 31, 1999).                                                        |
| 10.6                           | Intercorporate Services Agreement dated as of January 1, 2007 by and between Registrant and Contran Corporation.  (Incorporated by reference to Exhibit 10.6 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007).                                                     |
| 14.1                           | Amended Code of Business Conduct and Ethics dated August 14, 2007 (Incorporated by reference to Exhibit 14.1 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2007).                                                                                                               |
| 21.1**                         | Subsidiaries of the Company                                                                                                                                                                                                                                                                                            |
| 31.1**                         | Certification                                                                                                                                                                                                                                                                                                          |
| 31.2**                         | Certification                                                                                                                                                                                                                                                                                                          |
| 32.1**                         | Certification                                                                                                                                                                                                                                                                                                          |

|   | *Management contract, compensatory plan or agreement.**Filed herein. |
|--------|----------------------------------------------------------------------|

----

| KEYSTONE CONSOLIDATED INDUSTRIES, INC.(Registrant)  /s/ GLENN R. SIMMONS                                               Glenn R. SimmonsChairman of the Board |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  /s/ GLENN R. SIMMONS                                             Glenn R. SimmonsChairman of the Board                               |  /s/ STEVEN L. WATSON                                                    Steven L. WatsonDirector                                                                                                                                                                     |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  /s/ THOMAS E. BARRY                                         Thomas E. BarryDirector                                                                           |  /s/ DONALD P. ZIMA                                                         Donald P. ZimaDirector                                                                                                                                           |
|  /s/ DAVID L. CHEEK                                               David L. CheekPresident and Chief Executive  Officer |  /s/ BERT E. DOWNING, JR.                                                       Bert E. Downing, Jr.Vice President, Chief Financial Officer, Corporate Controller  and Treasurer (Principal Accounting and Financial Officer) |

----

|                                                                                                                                                                                           |                                         |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------|--------|
|                                                                                                                                                                                           |                                         | Page   |
|                                                                                                                                                                                           |                                         |   |
|                                                                                                                                                                                           |                                         |   |
|  Report of Independent Registered Public Accounting Firm                                                                                                                                  | F-2                                          |
|                                                                                                                                                                                           |                                         |
|  Consolidated Balance Sheets -                                                                                                                                                            |                                         |
|                                                                                                                                                                                           | December 31, 2009 and 2010                   | F-3    |
|                                                                                                                                                                                           |                                         |   |
|  Consolidated Statements of Operations -                                                                                                                                                  |                                         |
|                                                                                                                                                                                           | Years ended December 31, 2008, 2009 and 2010 | F-5    |
|                                                                                                                                                                                           |                                         |   |
|  Consolidated Statements of Comprehensive Income (Loss) -                                                                                                                                 |                                         |
|                                                                                                                                                                                           | Years ended December 31, 2008, 2009 and 2010 | F-6    |
|                                                                                                                                                                                           |                                         |   |
|  Consolidated Statements of Stockholders' Equity -                                                                                                                         |                                         |
|                                                                                                                                                                                           | Years ended December 31, 2008, 2009 and 2010 | F-7    |
|                                                                                                                                                                                           |                                         |   |
|  Consolidated Statements of Cash Flows –                                                                                                                                            |                                         |
|                                                                                                                                                                                           | Years ended December 31, 2008, 2009 and 2010 | F-8    |
|                                                                                                                                                                                           |                                         |   |
|      Notes to Consolidated Financial Statements                                                                                                                       | F-10                                         |
|                                                                                                                                                                                           |                                         |   |
|                                                                                                                                                                                           |                                         |   |
| We omitted Schedules I, II, III and IV because they are not applicable or the required amounts are either not material or are presented in the Notes to the Consolidated Financial Statements. |

----

----

|                                                                         |   |   December 31,  |        |
|------------------------------------------------------------------------------|--------|---------------------------|-------------|
| ASSETS                                                                       |   | 2009                      |        |   | 2010 |   |
|                                                                         |   |                      |        |   |   |   |
|                                                                         |   |                      |        |   |   |   |
| Current assets:                                                              |   |                      |        |   |   |   |
|   Accounts receivable, net of allowances of $2,897 and $2,938 |   | $                         | 41,231      |   |   | $ | 46,765 |   |
|   Inventories                                                      |   |                      | 41,225      |   |   |   | 45,944 |   |
|   Deferred income taxes                                            |   |                      | 4,434       |   |   |   | 17,501 |   |
|   Income taxes receivable                                          |   |                      | 4,206       |   |   |   | 2,029 |   |
|   Prepaid expenses and other                                       |   |                      | 2,626       |   |   |   | 1,474 |   |
|                                                                         |   |                      |        |   |   |   |   |   |
|     Total current assets                                 |   |                      | 93,722      |   |   |   | 113,713 |   |
|                                                                         |   |                      |        |   |   |   |   |   |
| Property, plant and equipment:                                               |   |                      |        |   |   |   |   |   |
|   Land                                                             |   |                      | 1,468       |   |   |   | 1,468 |   |
|   Buildings and improvements                                       |   |                      | 61,207      |   |   |   | 63,375 |   |
|   Machinery and equipment                                          |   |                      | 328,497     |   |   |   | 338,071 |   |
|   Construction in progress                                         |   |                      | 2,583       |   |   |   | 4,628 |   |
|                                                                         |   |                      | 393,755     |   |   |   | 407,542 |   |
|   Less accumulated depreciation                                    |   |                      | 308,586     |   |   |   | 319,533 |   |
|                                                                         |   |                      |        |   |   |   |   |   |
|     Net property, plant and equipment                    |   |                      | 85,169      |   |   |   | 88,009 |   |
|                                                                         |   |                      |        |   |   |   |   |   |
| Other assets:                                                                |   |                      |        |   |   |   |   |   |
|   Pension asset                                                    |   |                      | 84,806      |   |   |   | 153,962 |   |
|   Other, net                                                       |   |                      |  1,387 |   |   |   | 1,533 |   |
|                                                                         |   |                      |        |   |   |   |   |   |
|     Total other assets                                   |   |                      | 86,193      |   |   |   | 155,495 |   |
|                                                                         |   |                      |        |   |   |   |   |   |
|                                                                         |   |                      |        |   |   |   |   |   |
|     Total assets                                         |   | $                         | 265,084     |   |   | $ | 357,217 |   |
|                                                                         |   |                      |        |   |   |   |   |   |

----

| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                               |   | December 31, |     |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|----------|
|                                                                                                                                                                               |   | 2009         |     |   | 2010 |   |
|                                                                                                                                                                               |   |         |     |   |   |   |
|                                                                                                                                                                               |   |         |     |   |   |   |
| Current liabilities:                                                                                                                                                               |   |         |     |   |   |   |
|   Notes payable and current maturities of long-term debt                                                                                                            |   | $            | 19,396   |   |   | $ | 27,744 |   |
|   Accounts payable                                                                                                                                                       |   |         | 5,577    |   |   |   | 6,694 |   |
|   Accrued OPEB cost                                                                                                                                                      |   |         | 1,357    |   |   |   | 1,279 |   |
|   Other accrued liabilities                                                                                                                                              |   |         | 18,329   |   |   |   | 22,901 |   |
|                                                                                                                                                                               |   |         |     |   |   |   |   |   |
|     Total current liabilities                                                                                                                                  |   |         | 44,659   |   |   |   | 58,618 |   |
|                                                                                                                                                                               |   |         |     |   |   |   |   |   |
| Noncurrent liabilities:                                                                                                                                                            |   |         |     |   |   |   |   |   |
|   Long-term debt                                                                                                                                                         |   |         | 5,974    |   |   |   | 937 |   |
|   Accrued OPEB cost                                                                                                                                                      |   |         | 44,244   |   |   |   | 45,247 |   |
|   Deferred income taxes                                                                                                                                                  |   |         | 19,569   |   |   |   | 58,830 |   |
|   Other                                                                                                                                                                  |   |         | 2,868    |   |   |   | 1,849 |   |
|                                                                                                                                                                               |   |         |     |   |   |   |   |   |
|     Total noncurrent liabilities                                                                                                                               |   |         | 72,655   |   |   |   | 106,863 |   |
|                                                                                                                                                                               |   |         |     |   |   |   |   |   |
|                                                                                                                                                                               |   |         |     |   |   |   |   |   |
| Stockholders' equity:                                                                                                                                                              |   |         |     |   |   |   |   |   |
|   Common stock $.01 par value; 20,000,000 shares authorized, 12,500,000 shares issued and 12,101,932 shares     outstanding at December 31, 2009 and 2010 |   |         | 125      |   |   |   | 125 |   |
|   Additional paid-in capital                                                                                                                                             |   |         | 100,111  |   |   |   | 100,111 |   |
|   Accumulated other comprehensive loss                                                                                                                                   |   |         | (132,530 | ) |   |   | (97,307 | ) |
|   Retained earnings                                                                                                                                                      |   |         | 180,860  |   |   |   | 189,603 |   |
|   Treasury stock, at cost – 398,068 shares                                                                                                                         |   |         | (796     | ) |   |   | (796 | ) |
|                                                                                                                                                                               |   |         |     |   |   |   |   |   |
|     Total stockholders' equity                                                                                                                                 |   |         | 147,770  |   |   |   | 191,736 |   |
|                                                                                                                                                                               |   |         |     |   |   |   |   |   |
|     Total liabilities and stockholders’ equity                                                                                                           |   | $            | 265,084  |   |   | $ | 357,217 |   |
|                                                                                                                                                                               |   |         |     |   |   |   |   |   |

----

|                                                           |   | Years Ended December 31, |     |
|----------------------------------------------------------------|--------|--------------------------|----------|
|                                                           |   |  2008          |     |   | 2009 |   |   | 2010  |   |
|                                                           |   |                     |     |   |   |   |   |   |   |
| Net sales                                                      |   | $                        | 562,693  |   |   | $ | 322,347 |   |   | $ | 450,745 |   |
| Cost of goods sold                                             |   |                     | (511,197 | ) |   |   | (299,787 | ) |   |   | (423,341 | ) |
|                                                           |   |                     |     |   |   |   |   |   |   |   |   |   |
|     Gross margin                           |   |                     | 51,496   |   |   |   | 22,560 |   |   |   | 27,404 |   |
|                                                           |   |                     |     |   |   |   |   |   |   |   |   |   |
| Other operating income (expense):                              |   |                     |     |   |   |   |   |   |   |   |   |   |
|   Selling expense                                    |   |                     | (7,227   | ) |   |   | (6,343 | ) |   |   | (6,758 | ) |
|   General and administrative expense                 |   |                     | (16,173  | ) |   |   | (11,869 | ) |   |   | (14,096 | ) |
|   Defined benefit pension credit (expense)           |   |                     | 73,923   |   |   |   | (5,887 | ) |   |   | 4,654 |   |
|   Other postretirement benefit credit                |   |                     | 8,474    |   |   |   | 4,748 |   |   |   | 5,258 |   |
|                                                           |   |                     |     |   |   |   |   |   |   |   |   |   |
|     Total other operating income (expense) |   |                     | 58,997   |   |   |   | (19,351 | ) |   |   | (10,942 | ) |
|                                                           |   |                     |     |   |   |   |   |   |   |   |   |   |
|                                                           |   |                     |     |   |   |   |   |   |   |   |   |   |
| Operating income                                               |   |                     | 110,493  |   |   |   | 3,209 |   |   |   | 16,462 |   |
|                                                           |   |                     |     |   |   |   |   |   |   |   |   |   |
| Nonoperating income (expense):                                 |   |                     |     |   |   |   |   |   |   |   |   |   |
|   Interest expense                                   |   |                     | (3,798   | ) |   |   | (1,725 | ) |   |   | (1,863 | ) |
|   Other, net                                         |   |                     | (567     | ) |   |   | 1,049 |   |   |   | 637 |   |
|                                                           |   |                     |     |   |   |   |   |   |   |   |   |   |
|     Total nonoperating expense             |   |                     | (4,365   | ) |   |   | (676 | ) |   |   | (1,226 | ) |
|                                                           |   |                     |     |   |   |   |   |   |   |   |   |   |
|   Income before income taxes                         |   |                     | 106,128  |   |   |   | 2,533 |   |   |   | 15,236 |   |
|                                                           |   |                     |     |   |   |   |   |   |   |   |   |   |
| Provision for income taxes                                     |   |                     | (40,014  | ) |   |   |  (2,292 | ) |   |   | (6,493 | ) |
|                                                           |   |                     |     |   |   |   |   |   |   |   |   |   |
| Net income                                                     |   | $                        | 66,114   |   |   | $ | 241 |   |   | $ | 8,743 |   |
|                                                           |   |                     |     |   |   |   |   |   |   |   |   |   |
| Basic and diluted income per share                             |   | $                        | 5.73     |   |   | $ | 0.02 |   |   | $ | 0.72 |   |
|                                                           |   |                     |     |   |   |   |   |   |   |   |   |   |
| Basic and diluted weighted average shares outstanding     |   |                     | 11,533   |   |   |   | 12,102 |   |   |   | 12,102 |   |

----

|                                                                                    |   |  Years ended December 31,  |     |
|-----------------------------------------------------------------------------------------|--------|--------------------------------------|----------|
|                                                                                    |   | 2008                                 |     |   | 2009 |   |   | 2010 |   |
|                                                                                    |   |                                 |     |   |   |   |   |   |   |
| Net income                                                                              |   | $                                    | 66,114   |   |   | $ | 241 |   |   | $ | 8,743 |   |
|                                                                                    |   |                                 |     |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss), net of tax:                                          |   |
|   Defined benefit pension plans                                               |   |                                 | (358,021 | ) |   |   | 34,857 |   |   |   | 41,656 |   |
|   Other postretirement benefit plans                                          |   |                                 | (17,856  | ) |   |   | (6,972 | ) |   |   | (6,433 | ) |
|                                                                                    |   |                                 |     |   |   |   |   |   |   |   |   |   |
|     Total other comprehensive income (loss), net                    |   |                                 | (375,877 | ) |   |   | 27,885 |   |   |   | 35,223 |   |
|                                                                                    |   |                                 |     |   |   |   |   |   |   |   |   |   |
|        Comprehensive income (loss)                   |   | $                                    | (309,763 | ) |   | $ | 28,126 |   |   | $ | 43,966 |   |
|                                                                                    |   |                                 |     |   |   |   |   |   |   |   |   |   |
| Accumulated other comprehensive income (loss), net of tax:                              |   |
|                                                                                    |   |
| Defined benefit pension plans:                                                          |   |
|     Balance at beginning of year                                         |   | $                                    | 164,763  |   |   | $ | (193,258 | ) |   | $ | (158,401 | ) |
|     Other comprehensive income (loss):                                   |   |
|        Plan amendment                                |   |                                 | (23      | ) |   |   | - |   |   |   | - |   |
|        Net actuarial gain (loss) arising during year |   |                                 | (352,019 | ) |   |   | 21,611 |   |   |   | 31,388 |   |
|        Amortization of prior service cost            |   |                                 | 767      |   |   |   | 805 |   |   |   | 761 |   |
|        Amortization of net actuarial losses (gains)  |   |                                 | (6,746   | ) |   |   | 12,441 |   |   |   | 9,507 |   |
|     Balance at end of year                                          |   | $                                    | (193,258 | ) |   | $ | (158,401 | ) |   | $ | (116,745 | ) |
|                                                                                    |   |
| Defined benefit OPEB plans:                                                             |   |
|     Balance at beginning of year                                    |   | $                                    | 50,699   |   |   | $ | 32,843 |   |   | $ | 25,871 |   |
|     Other comprehensive income (loss):                                   |   |                                 |     |   |   |   |   |   |   |   |   |   |
|        Plan amendment                                |   |                                 | (14,232  | ) |   |   | (49 | ) |   |   | - |   |
|        Net actuarial gain (loss) arising during year |   |                                 | 3,326    |   |   |   | (2,032 | ) |   |   | (1,581 | ) |
|        Amortization of prior service credit          |   |                                 | (10,802  | ) |   |   | (10,473 | ) |   |   | (9,990 | ) |
|        Amortization of net actuarial losses          |   |                                 | 3,852    |   |   |   | 5,582 |   |   |   | 5,138 |   |
|     Balance at end of year                                          |   | $                                    | 32,843   |   |   | $ | 25,871 |   |   | $ | 19,438 |   |
|                                                                                    |   |                                 |     |   |   |   |   |   |   |   |   |   |
| Total accumulated other comprehensive income (loss):                                    |   |
|     Balance at beginning of year                                    |   | $                                    | 215,462  |   |   | $ | (160,415 | ) |   | $ | (132,530 | ) |
|     Other comprehensive income (loss)                               |   |                                 | (375,877 | ) |   |   | 27,885 |   |   |   | 35,223 |   |
|     Balance at end of year                                          |   | $                                    | (160,415 | ) |   | $ | (132,530 | ) |   | $ | (97,307 | ) |

----

|                                                        |   | Common stock       |          |   | Additional |   |     | Accumulatedother comprehensiveincome (loss) |   |   |     |   |   |   |     |   |             |   |
|-------------------------------------------------------------|--------|--------------------|---------------|--------|------------|--------|----------|---------------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|------------------|--------|
|                                                        |   | Shares outstanding |          |   | Amount     |   |     | paid-incapital                              |   |   | Pensions |   |   | OPEB   |     |   | Retainedearnings |   |   | Treasurystock |   |   | Total |   |
|                                                        |   |               |          |   |       |   |     |                                        |   |   |     |   |   |   |     |   |             |   |   |   |   |   |   |   |
| Balance – December 31, 2007                           |   |               | 9,602         |   |       | $      | 100      |                                        |   | $      | 75,423   |   |   | $      | 164,763  |   |             | $      | 50,699 |   |   | $ | 114,505 |   |   | $ | (796 | ) |   | $ | 404,694 |   |
|                                                        |   |               |          |   |       |   |     |                                        |   |   |     |   |   |   |     |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                  |   |               | -             |   |       |   | -        |                                        |   |   | -        |   |   |   | -        |   |             |   | - |   |   |   | 66,114 |   |   |   | - |   |   |   | 66,114 |   |
|                                                        |   |               |          |   |       |   |     |                                        |   |   |     |   |   |   |     |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of common stock, net of   issuance costs |   |               |  2,500   |   |       |   |  25 |                                        |   |   | 24,688   |   |   |   | -        |   |             |   |  - |   |   |   | - |   |   |   |  - |   |   |   |  24,713 |   |
|                                                        |   |               |          |   |       |   |     |                                        |   |   |     |   |   |   |     |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive loss, net                               |   |               |   - |   |       |   |  -  |                                        |   |   | -        |   |   |   | (358,021 | )      |             |   | (17,856 | ) |   |   | - |   |   |   | - |   |   |   | (375,877 | ) |
|                                                        |   |               |          |   |       |   |     |                                        |   |   |     |   |   |   |     |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance – December 31, 2008                           |   |               | 12,102        |   |       |   | 125      |                                        |   |   | 100,111  |   |   |   | (193,258 | )      |             |   | 32,843 |   |   |   | 180,619 |   |   |   | (796 | ) |   |   | 119,644 |   |
|                                                        |   |               |          |   |       |   |     |                                        |   |   |     |   |   |   |     |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                  |   |               | -             |   |       |   | -        |                                        |   |   | -        |   |   |   | -        |   |             |   | - |   |   |   | 241 |   |   |   | - |   |   |   | 241 |   |
|                                                        |   |               |          |   |       |   |     |                                        |   |   |     |   |   |   |     |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss), net                      |   |               |  -       |   |       |   |  -  |                                        |   |   |  -  |   |   |   | 34,857   |   |             |   | (6,972 | ) |   |   | - |   |   |   | - |   |   |   | 27,885 |   |
|                                                        |   |               |          |   |       |   |     |                                        |   |   |     |   |   |   |     |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance – December 31, 2009                           |   |               | 12,102        |   |       |   | 125      |                                        |   |   | 100,111  |   |   |   | (158,401 | )      |             |   | 25,871 |   |   |   | 180,860 |   |   |   | (796 | ) |   |   | 147,770 |   |
|                                                        |   |               |          |   |       |   |     |                                        |   |   |     |   |   |   |     |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                  |   |               | -             |   |       |   | -        |                                        |   |   | -        |   |   |   | -        |   |             |   | - |   |   |   | 8,743 |   |   |   | - |   |   |   | 8,743 |   |
|                                                        |   |               |          |   |       |   |     |                                        |   |   |     |   |   |   |     |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss), net                      |   |               |  -       |   |       |   |  -  |                                        |   |   |  -  |   |   |   | 41,656   |   |             |   | (6,433 | ) |   |   | - |   |   |   | - |   |   |   | 35,223 |   |
|                                                        |   |               |          |   |       |   |     |                                        |   |   |     |   |   |   |     |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance – December 31, 2010                           |   |               | 12,102        |   |       | $      | 125      |                                        |   | $      | 100,111  |   |   | $      | (116,745 | )      |             |   | 19,438 |   |   | $ | 189,603 |   |   |   | (796 | ) |   | $ | 191,736 |   |

----

|                                                                             |   |  Years ended December 31,  |       |
|----------------------------------------------------------------------------------|--------|--------------------------------------|------------|
|                                                                             |   | 2008                                 |       |   | 2009 |   |   | 2010 |   |
|                                                                             |   |                                 |       |   |   |   |   |   |   |
| Cash flows from operating activities:                                            |   |                                 |       |   |   |   |   |   |   |
|   Net income                                                           |   | $                                    | 66,114     |   |   | $ | 241 |   |   | $ | 8,743 |   |
|   Depreciation and amortization                                        |   |                                 | 15,164     |   |   |   | 13,584 |   |   |   | 12,062 |   |
|   Deferred income taxes                                                |   |                                 | 35,821     |   |   |   | 6,512 |   |   |   | 4,401 |   |
|   Defined benefit pension expense (credit)                             |   |                                 | (73,923    | ) |   |   | 5,887 |   |   |   | (4,654 | ) |
|   OPEB credit                                                          |   |                                 | (8,474     | ) |   |   | (4,748 | ) |   |   | (5,258 | ) |
|   OPEB payments                                                        |   |                                 | (2,458     | ) |   |   | (1,347 | ) |   |   | (1,303 | ) |
|   Bad debt expense                                                     |   |                                 | 16         |   |   |   | 2,935 |   |   |   | 78 |   |
|   Impairment of inventory                                              |   |                                 | 1,165      |   |   |   | 2,821 |   |   |   | 303 |   |
|   Other, net                                                           |   |                                 | 503        |   |   |   | 384 |   |   |   | (233 | ) |
|   Change in assets and liabilities:                                    |   |                                 |       |   |   |   |   |   |   |   |   |   |
|     Accounts receivable                                      |   |                                 | 28,449     |   |   |   | (17,516 | ) |   |   | (5,575 | ) |
|     Inventories                                              |   |                                 | (18,472    | ) |   |   | 26,812 |   |   |   | (4,628 | ) |
|     Accounts payable                                         |   |                                 | (6,302     | ) |   |   | (2,199 | ) |   |   | 1,117 |   |
|     Accrued environmental costs                              |   |                                 | (157       | ) |   |   | (4,395 | ) |   |   | 7 |   |
|     Accrued liabilities                                      |   |                                 | 9,871      |   |   |   | (10,440 | ) |   |   | 3,546 |   |
|     Income taxes                                             |   |                                 | 1,178      |   |   |   | (5,322 | ) |   |   | 2,177 |   |
|     Other, net                                               |   |                                 |  (197 | ) |   |   |  114 |   |   |   | 1,152 |   |
|                                                                             |   |                                 |       |   |   |   |   |   |   |   |   |   |
|     Net cash provided by operating activities                |   |                                 | 48,298     |   |   |   | 13,323 |   |   |   | 11,935 |   |
|                                                                             |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                            |   |                                 |       |   |   |   |   |   |   |   |   |   |
|   Capital expenditures                                                 |   |                                 | (13,298    | ) |   |   | (9,000 | ) |   |   | (14,937 | ) |
|   Restricted investments, net                                          |   |                                 | (32        | ) |   |   | 2,028 |   |   |   | (1 | ) |
|   Other, net                                                           |   |                                 |  437  |   |   |   |  81 |   |   |   | 110 |   |
|                                                                             |   |                                 |       |   |   |   |   |   |   |   |   |   |
|     Net cash used in investing activities                    |   |                                 | (12,893    | ) |   |   | (6,891 | ) |   |   | (14,828 | ) |
|                                                                             |   |                                 |       |   |   |   |   |   |   |   |   |   |
| Cash flows from financing activities:                                            |   |                                 |       |   |   |   |   |   |   |   |   |   |
|   Revolving credit facility, net                                       |   |                                 | (42,997    | ) |   |   | 9,282 |   |   |   | 15,194 |   |
|   Principal payments on other notes payable and long-term debt         |   |                                 | (16,962    | ) |   |   | (15,584 | ) |   |   | (11,927 | ) |
|   Deferred financing costs paid                                        |   |                                 |  (159 | ) |   |   | (130 | ) |   |   | (374 | ) |
|   Issuance of common stock                                             |   |                                 | 24,713     |   |   |   | - |   |   |   | - |   |
|                                                                             |   |                                 |       |   |   |   |   |   |   |   |   |   |
|     Net cash provided by (used in) financing activities |   |                                 | (35,405    | ) |   |   | (6,432 | ) |   |   |  2,893 |   |
|                                                                             |   |                                 |       |   |   |   |   |   |   |   |   |   |

----

|                                                                            |   |    Years ended December 31,  |   |
|---------------------------------------------------------------------------------|--------|---------------------------------------------|--------|
|                                                                            |   | 2008                                        |   |   | 2009 |   |   | 2010 |   |
|                                                                            |   |                                        |   |   |   |   |   |   |   |
| Cash and cash equivalents:                                                      |   |                                        |   |   |   |   |   |   |   |
|   Net change from operations, investing and financing activities |   |                                        | -      |   |   |   | - |   |   |   | - |   |
|                                                                            |   |                                        |   |   |   |   |   |   |   |   |   |   |
|   Balance at beginning of year                                        |   |                                        | -      |   |   |   | - |   |   |   | - |   |
|                                                                            |   |                                        |   |   |   |   |   |   |   |   |   |   |
|   Balance at end of year                                              |   | $                                           | -      |   |   | $ | - |   |   | $ | - |   |
|                                                                            |   |                                        |   |   |   |   |   |   |   |   |   |   |
|                                                                            |   |                                        |   |   |   |   |   |   |   |   |   |   |
| Supplemental disclosures:                                                       |   |                                        |   |   |   |   |   |   |   |   |   |   |
|   Cash paid for:                                                      |   |                                        |   |   |   |   |   |   |   |   |   |   |
|     Interest, net of amounts capitalized                    |   | $                                           | 3,581  |   |   | $ | 1,462 |   |   | $ | 1,631 |   |
|     Income taxes paid (refunded), net                       |   |                                        | 3,015  |   |   |   | 1,106 |   |   |   | (85 | ) |

----

----

----

| ·   | Keystone Steel & Wire (“KSW”), located in Peoria, Illinois, operates an electric arc furnace mini-mill, rod mill, industrial wire mill and wire fabrication facilities and manufactures and sells wire rod, coiled rebar, industrial wire, fabricated wire and other products to agricultural, industrial, construction, commercial, original equipment manufacturers and retail consumer markets; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Engineered Wire Products, Inc. (“EWP”), located in Upper Sandusky, Ohio, manufactures and sells wire mesh in both roll and sheet form that is utilized as reinforcement in concrete construction products including pipe, pre-cast boxes and applications for use in roadways, buildings and bridges; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Keystone-Calumet, Inc. (“Calumet”), located in Chicago Heights, Illinois, manufactures and sells merchant and special bar quality products and special sections in carbon and alloy steel grades for use in agricultural, cold drawn, construction, industrial chain, service centers and transportation applications as well as in the production of a wide variety of products by original equipment manufacturers. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                      |   | Years ended December 31,  |    |
|-----------------------------------------------------------|--------|--------------------------------|---------|
|                                                      |   | 2008                           |    |   | 2009 |   |   | 2010 |   |
|                                                      |   | (In thousands)                 |    |
|                                                      |   |                           |    |   |   |   |   |   |   |
| Net sales:                                                |   |                           |    |   |   |   |   |   |   |
|   KSW                                           |   | $                              | 542,106 |   |   | $ | 298,219 |   |   | $ | 433,729 |   |
|   EWP                                           |   |                           | 63,433  |   |   |   | 37,575 |   |   |   | 41,310 |   |
|   Calumet                                       |   |                           | 17,165  |   |   |   | 11,127 |   |   |   | 22,987 |   |
|   Elimination of intersegment sales             |   |                           | (60,011 | ) |   |   | (24,574 | ) |   |   | (47,281 | ) |
|                                                      |   |                           |    |   |   |   |   |   |   |   |   |   |
|     Total net sales                   |   | $                              | 562,693 |   |   | $ | 322,347 |   |   | $ | 450,745 |   |
|                                                      |   |                           |    |   |   |   |   |   |   |   |   |   |
| Operating income (loss):                                  |   |                           |    |   |   |   |   |   |   |   |   |   |
|   KSW                                           |   | $                              | 32,174  |   |   | $ | 5,976 |   |   | $ | 10,604 |   |
|   EWP                                           |   |                           | 5,338   |   |   |   | 1,405 |   |   |   | (1,278 | ) |
|   Calumet                                       |   |                           | (2,929  | ) |   |   | (3,703 | ) |   |   | 97 |   |
|   Defined benefit pension credit (expense) |   |                           | 73,923  |   |   |   | (5,887 | ) |   |   | 4,654 |   |
|   OPEB credit                                   |   |                           | 8,474   |   |   |   | 4,748 |   |   |   | 5,258 |   |
|   Other(1)                                      |   |                           | (6,487  | ) |   |   | 670 |   |   |   | (2,873 | ) |
|                                                      |   |                           |    |   |   |   |   |   |   |   |   |   |
|     Total operating income            |   |                           | 110,493 |   |   |   | 3,209 |   |   |   | 16,462 |   |
|                                                      |   |                           |    |   |   |   |   |   |   |   |   |   |
| Nonoperating income (expense):                            |   |                           |    |   |   |   |   |   |   |   |   |   |
|   Interest expense                              |   |                           | (3,798  | ) |   |   | (1,725 | ) |   |   | (1,863 | ) |
|   Other, net                                    |   |                           | (567    | ) |   |   | 1,049 |   |   |   | 637 |   |
|                                                      |   |                           |    |   |   |   |   |   |   |   |   |   |
| Income before income taxes                                |   | $                              | 106,128 |   |   | $ | 2,533 |   |   | $ | 15,236 |   |

----

|   |   | Increase (decrease) in LIFO reserve |   |
|--------|--------|-------------------------------------|--------|
|   |   | 2008                                |   |   | 2009 |   |   | 2010 |   |
|   |   | (In thousands)                      |   |
|   |   |                                |   |   |   |   |
|   |   |                                |   |   |   |   |   |   |   |
| KSW    |   | $                                   | 6,588  |   |   | $ | (9,125 | ) |   | $ | 4,506 |   |
|   |   |                                |   |   |   |   |   |   |   |   |   |   |
| EWP    |   |                                | 3,554  |   |   |   | (6,075 | ) |   |   | 917 |   |
|   |   |                                |   |   |   |   |   |   |   |   |   |   |
| Total  |   | $                                   | 10,142 |   |   | $ | (15,200 | ) |   | $ | 5,423 |   |
|   |   |                                |   |   |   |   |   |   |   |   |   |   |

|                          |   |  December 31, |    |
|-------------------------------|--------|--------------------|---------|
|                          |   | 2008               |    |   | 2009 |   |   | 2010 |   |
|                          |   | (In thousands)     |    |
| Total assets:                 |   |               |    |   |   |   |   |   |   |
|   KSW               |   | $                  | 150,021 |   |   | $ | 136,634 |   |   | $ | 145,416 |   |
|   EWP               |   |               | 24,758  |   |   |   | 19,495 |   |   |   | 19,034 |   |
|   Calumet           |   |               | 15,793  |   |   |   | 11,940 |   |   |   | 14,820 |   |
|   Corporate         |   |               | 59,161  |   |   |   | 97,015 |   |   |   | 177,947 |   |
|                          |   |               |    |   |   |   |   |   |   |   |   |   |
|     Total |   | $                  | 249,733 |   |   | $ | 265,084 |   |   | $ | 357,217 |   |
|                          |   |               |    |   |   |   |   |   |   |   |   |   |

----

|                           |   | Years ended December 31,  |   |
|--------------------------------|--------|--------------------------------|--------|
|                           |   | 2008                           |   |   | 2009 |   |   | 2010 |   |
|                           |   | (In thousands)                 |   |
| Depreciation and amortization: |   |                           |   |   |   |   |   |   |   |
|   KSW                |   | $                              | 12,754 |   |   | $ | 11,362 |   |   | $ | 9,874 |   |
|   EWP                |   |                           | 1,913  |   |   |   | 1,674 |   |   |   | 1,593 |   |
|   Calumet            |   |                           | 375    |   |   |   | 435 |   |   |   | 481 |   |
|   Corporate          |   |                           | 122    |   |   |   | 113 |   |   |   | 114 |   |
|                           |   |                           |   |   |   |   |   |   |   |   |   |   |
|     Total  |   | $                              | 15,164 |   |   | $ | 13,584 |   |   | $ | 12,062 |   |
|                           |   |                           |   |   |   |   |   |   |   |   |   |   |
| Capital expenditures:          |   |                           |   |   |   |   |   |   |   |   |   |   |
|   KSW                |   | $                              | 11,516 |   |   | $ | 8,094 |   |   | $ | 13,456 |   |
|   EWP                |   |                           | 845    |   |   |   | 375 |   |   |   | 528 |   |
|   Calumet            |   |                           | 915    |   |   |   | 531 |   |   |   | 953 |   |
|   Corporate          |   |                           | 22     |   |   |   | - |   |   |   | - |   |
|                           |   |                           |   |   |   |   |   |   |   |   |   |   |
|     Total  |   | $                              | 13,298 |   |   | $ | 9,000 |   |   | $ | 14,937 |   |
|                           |   |                           |   |   |   |   |   |   |   |   |   |   |

|                          |   | Years ended December 31,  |    |
|-------------------------------|--------|--------------------------------|---------|
|                          |   | 2008                           |    |   | 2009 |   |   | 2010 |   |
|                          |   | (In thousands)                 |    |
|                          |   |                           |    |   |   |   |   |   |   |
| United States                 |   | $                              | 550,928 |   |   | $ | 319,390 |   |   | $ | 446,972 |   |
| Canada                        |   |                           | 7,992   |   |   |   | 2,169 |   |   |   | 2,982 |   |
| Mexico                        |   |                           | 2,338   |   |   |   | - |   |   |   | - |   |
| Other                         |   |                           | 1,435   |   |   |   | 788 |   |   |   | 791 |   |
|                          |   |                           |    |   |   |   |   |   |   |   |   |   |
|     Total |   | $                              | 562,693 |   |   | $ | 322,347 |   |   | $ | 450,745 |   |

|                                      |   | December 31,   |   |
|-------------------------------------------|--------|----------------|--------|
|                                      |   | 2009           |   |   | 2010 |   |
|                                      |   | (In thousands) |   |
|                                      |   |           |   |   |   |   |
|   Raw materials                 |   | $              | 3,222  |   |   | $ | 3,957 |   |
|   Billet                        |   |           | 4,917  |   |   |   | 5,832 |   |
|   Wire rod                      |   |           | 5,282  |   |   |   | 7,042 |   |
|   Work in process               |   |           | 4,645  |   |   |   | 5,030 |   |
|   Finished product              |   |           | 19,747 |   |   |   | 22,821 |   |
|   Supplies                      |   |           | 22,646 |   |   |   | 25,919 |   |
|                                      |   |           |   |   |   |   |   |   |
|     Inventory at FIFO |   |           | 60,459 |   |   |   | 70,601 |   |
|     Less LIFO reserve |   |           | 19,234 |   |   |   | 24,657 |   |
|                                      |   |           |   |   |   |   |   |   |
|       Total |   | $              | 41,225 |   |   | $ | 45,944 |   |
|                                      |   |           |   |   |   |   |   |   |

----

|                                            |   | December 31,  |   |
|-------------------------------------------------|--------|--------------------|--------|
|                                            |   | 2009               |   |   | 2010 |   |
|                                            |   | (In thousands)     |   |
|                                            |   |               |   |   |   |   |
| Wells Fargo revolving credit facility           |   | $                  | 12,546 |   |   | $ | 27,740 |   |
| Term loans:                                     |   |               |   |   |   |   |   |   |
|   Wells Fargo                         |   |               | 5,620  |   |   |   | - |   |
|   County                              |   |               | 6,302  |   |   |   | - |   |
| Other                                           |   |               | 902    |   |   |   | 941 |   |
|                                            |   |               |   |   |   |   |   |   |
|     Total debt              |   |               | 25,370 |   |   |   | 28,681 |   |
|     Less current maturities |   |               | 19,396 |   |   |   | 27,744 |   |
|                                            |   |               |   |   |   |   |   |   |
|     Total long-term debt    |   | $                  | 5,974  |   |   | $ | 937 |   |

----

| Year ending December 31,                                                                              |   | Amount         |    |
|-------------------------------------------------------------------------------------------------------|--------|----------------|---------|
|                                                                                                  |   | (In thousands) |    |
|                                                                                                  |   |           |    |
| 2011                                                                                                  |   | $              | 27,744  |   |
| 2012                                                                                                  |   |           | 1       |   |
| 2013                                                                                                  |   |           | -       |   |
| 2014                                                                                                  |   |           | 1,100   |   |
| 2015                                                                                                  |   |           |  - |   |
|                 Total |   | $              | 28,845  |   |

|                                                             |   | Years ended December 31, |      |
|------------------------------------------------------------------|--------|--------------------------|-----------|
|                                                             |   | 2008                     |      |   | 2009 |   |   | 2010 |   |
|                                                             |   | (In thousands)           |      |
|                                                             |   |                     |      |   |   |   |   |   |   |
| Expected tax provision, at statutory rate                        |   | $                        | 37,146    |   |   | $ | 888 |   |   | $ | 5,333 |   |
| U.S. state income taxes, net                                     |   |                     | 2,842     |   |   |   | 1,399 |   |   |   | 1,118 |   |
| Other, net                                                       |   |                     | 26        |   |   |   | 5 |   |   |   | 42 |   |
|                                                             |   |                     |      |   |   |   |   |   |   |   |   |   |
| Provision for income taxes                                       |   | $                        | 40,014    |   |   | $ | 2,292 |   |   | $ | 6,493 |   |
|                                                             |   |                     |      |   |   |   |   |   |   |   |   |   |
| Provision for income taxes:                                      |   |                     |      |   |   |   |   |   |   |   |   |   |
|   Currently payable (refundable):                      |   |                     |      |   |   |   |   |   |   |   |   |   |
|     U.S. federal                             |   | $                        | 3,453     |   |   | $ | (4,246 | ) |   |   | 1,984 |   |
|     U.S. state                               |   |                     |  740 |   |   |   | 26 |   |   |   | 107 |   |
|                                                             |   |                     |      |   |   |   |   |   |   |   |   |   |
|      Net currently payable (refundable) |   |                     | 4,193     |   |   |   | (4,220 | ) |   |   | 2,091 |   |
|   Deferred income taxes, net                           |   |                     | 35,821    |   |   |   | 6,512 |   |   |   |  4,402 |   |
|                                                             |   |                     |      |   |   |   |   |   |   |   |   |   |
| Provision for income taxes                                       |   | $                        | 40,014    |   |   | $ | 2,292 |   |   | $ | 6,493 |   |
|                                                             |   |                     |      |   |   |   |   |   |   |   |   |   |
| Comprehensive provision for income taxes allocable to:      |   |                     |      |   |   |   |   |   |   |   |   |   |
|    Net income                                     |   | $                        | 40,014    |   |   | $ | 2,292 |   |   | $ | 6,493 |   |
|    Other comprehensive income (loss):             |   |                     |      |   |   |   |   |   |   |   |   |   |
|       Pension plans                |   |                     | (215,824  | ) |   |   | 18,505 |   |   |   | 25,771 |   |
|       OPEB plans                   |   |                     | (10,761   | ) |   |   | (3,793 | ) |   |   | (3,980 | ) |
|                                                             |   |                     |      |   |   |   |   |   |   |   |   |   |
|                                                             |   | $                        | (186,571  | ) |   | $ | 17,004 |   |   | $ | 28,284 |   |

----

|                                                                                   |   | December 31,   |    |
|----------------------------------------------------------------------------------------|--------|----------------|---------|
|                                                                                   |   | 2009           |    |   | 2010 |   |
|                                                                                   |   | Assets         |    |   | Liabilities |   |   | Assets |   |   | Liabilities |   |
|                                                                                   |   | (In thousands) |    |
|                                                                                   |   |           |    |   |   |   |   |   |   |   |   |   |
| Tax effect of temporary differences relating to:                                       |   |           |    |   |   |   |   |   |   |   |   |   |
|   Inventories                                                                |   | $              | 1,361   |   |   | $ | - |   |   | $ | 7,032 |   |   | $ | - |   |
|   Property and equipment                                                     |   |           | -       |   |   |   | (13,842 | ) |   |   | - |   |   |   | (14,710 | ) |
|   Pension asset                                                              |   |           | -       |   |   |   | (32,413 | ) |   |   | - |   |   |   | (59,661 | ) |
|   Accrued OPEB cost                                                          |   |           | 17,415  |   |   |   | - |   |   |   | 18,013 |   |   |   | - |   |
|   Accrued liabilities                                                        |   |           | 5,266   |   |   |   | - |   |   |   | 6,276 |   |   |   | - |   |
|   Other deductible differences                                               |   |           | 1,415   |   |   |   | - |   |   |   | 1,355 |   |   |   | - |   |
|   Net operating loss and credit carryforwards                                |   |           | 5,663   |   |   |   | - |   |   |   | 366 |   |   |   | - |   |
|                                                                                   |   |           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Gross deferred tax assets / (liabilities)                 |   |           | 31,120  |   |   |   | (46,255 | ) |   |   | 33,042 |   |   |   | (74,371 | ) |
|     Reclassification, principally netting by tax jurisdiction |   |           | (26,686 | ) |   |   |  26,686 |   |   |   | (15,541 | ) |   |   |  15,541 |   |
|                                                                                   |   |           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Net deferred tax asset / (liability)                           |   |           | 4,434   |   |   |   | (19,569 | ) |   |   | 17,501 |   |   |   | (58,830 | ) |
|     Less current deferred tax asset                                |   |           | (4,434  | ) |   |   | - |   |   |   | (17,501 | ) |   |   | - |   |
|                                                                                   |   |           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Noncurrent deferred tax liability                              |   | $              | -       |   |   | $ | (19,569 | ) |   | $ | - |   |   | $ | (58,830 | ) |

----

|         |   | PensionBenefits |    |   | OtherBenefits |   |
|--------------|--------|-----------------|---------|--------|---------------|--------|
|         |   | (In thousands)  |    |
|         |   |            |    |   |          |   |
| 2011 (1)     |   | $               | 31,240  |   |          | $      | 1,279 |   |
| 2012         |   |            | 28,394  |   |          |   | 4,120 |   |
| 2013         |   |            | 28,414  |   |          |   | 4,023 |   |
| 2014         |   |            | 28,257  |   |          |   | 3,928 |   |
| 2015         |   |            | 28,142  |   |          |   | 3,838 |   |
| Next 5 years |   |            | 138,471 |   |          |   | 17,736 |   |

| (1)   | Pension benefits in 2011 include the supplemental pension benefits created in lieu of the payments that would have been due under one of our OPEB plans, which are excluded from the other benefit payments. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                      |   | Pension Benefits |         |   | Other Benefits |   |
|---------------------------------------------------------------------------|--------|------------------|--------------|--------|----------------|--------|
|                                                                      |   | 2009             |         |   | 2010           |   |   | 2009 |   |   | 2010 |   |
|                                                                      |   | (In thousands)   |         |
|                                                                      |   |             |         |   |           |   |   |   |   |   |   |   |
| Change in projected benefit obligations ("PBO"):                          |   |             |         |   |           |   |   |   |   |   |   |   |
|   Balance at beginning of the year                              |   | $                | 364,278      |   |           | $      | 377,337 |   |   | $ | 43,932 |   |   | $ | 45,601 |   |
|   Service cost                                                  |   |             | 3,080        |   |           |   | 3,218 |   |   |   | 91 |   |   |   | 106 |   |
|   Interest cost                                                 |   |             | 21,417       |   |           |   | 20,161 |   |   |   | 2,712 |   |   |   | 2,489 |   |
|   Plan amendment                                                |   |             | -            |   |           |   | - |   |   |   | 76 |   |   |   | - |   |
|   Actuarial losses                                              |   |             | 16,623       |   |           |   | 21,634 |   |   |   | 3,138 |   |   |   | 2,561 |   |
|   Benefits paid                                                 |   |             | (31,062      | )      |           |   | (30,720 | ) |   |   | (1,347 | ) |   |   | (1,305 | ) |
|   OPEB benefits extinguished by increased pension benefits |   |             |   3,001 |   |           |   |  2,926 |   |   |   | (3,001 | ) |   |   | (2,926 | ) |
|                                                                      |   |             |         |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Balance at end of the year                                                |   | $                | 377,337      |   |           | $      | 394,556 |   |   | $ | 45,601 |   |   | $ | 46,526 |   |
|                                                                      |   |             |         |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Change in plan assets:                                                    |   |             |         |   |           |   |   |   |   |   |   |   |   |   |   |   |
|   Fair value at beginning of the year                           |   | $                | 404,610      |   |           | $      | 462,143 |   |   | $ | - |   |   | $ | - |   |
|   Actual return on plan assets                                  |   |             | 88,595       |   |           |   | 117,095 |   |   |   | - |   |   |   | - |   |
|   Employer contributions                                        |   |             | -            |   |           |   | - |   |   |   | 1,347 |   |   |   | 1,305 |   |
|   Benefits paid                                                 |   |             | (31,062      | )      |           |   | (30,720 | ) |   |   | (1,347 | ) |   |   | (1,305 | ) |
|                                                                      |   |             |         |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Fair value at end of the year                                             |   | $                | 462,143      |   |           | $      | 548,518 |   |   | $ | - |   |   | $ | - |   |
|                                                                      |   |             |         |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Funded status                                                             |   | $                | 84,806       |   |           | $      | 153,962 |   |   | $ | (45,601 | ) |   | $ | (46,526 | ) |
|                                                                      |   |             |         |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Amounts recognized in the Consolidated Balance Sheets:                    |   |             |         |   |           |   |   |   |   |   |   |   |   |   |   |   |
|    Pension asset                                           |   | $                | 84,806       |   |           | $      | 153,962 |   |   | $ |  - |   |   | $ | - |   |
|    Accrued OPEB costs:                                     |   |             |         |   |           |   |   |   |   |   |   |   |   |   |   |   |
|      Current                                     |   |             | -            |   |           |   | - |   |   |   | (1,357 | ) |   |   | (1,279 | ) |
|      Noncurrent                                  |   |             | -            |   |           |   | - |   |   |   | (44,244 | ) |   |   | (45,247 | ) |
|                                                                      |   | $                | 84,806       |   |           | $      | 153,962 |   |   |   | (45,601 | ) |   |   | (46,526 | ) |
|                                                                      |   |             |         |   |           |   |   |   |   |   |   |   |   |   |   |   |
|    Accumulated other comprehensive loss (income):     |   |             |         |   |           |   |   |   |   |   |   |   |   |   |   |   |
|      Prior service cost (credit)                 |   |             | 10,129       |   |           |   | 8,897 |   |   |   | (132,674 | ) |   |   | (116,505 | ) |
|     Actuarial losses                                  |   |             | 246,270      |   |           |   | 180,073 |   |   |   | 90,797 |   |   |   | 85,041 |   |
|                                                                      |   |             | 256,399      |   |           |   | 188,970 |   |   |   | (41,877 | ) |   |   | (31,464 | ) |
|                                                                      |   |             |         |   |           |   |   |   |   |   |   |   |   |   |   |   |
|  Total                                                               |   | $                | 341,205      |   |           | $      | 342,932 |   |   | $ | (87,478 | ) |   | $ | (77,990 | ) |
|                                                                      |   |             |         |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Accumulated benefit obligations (“ABO”) of pension plans |   | $                | 372,610      |   |           | $      | 389,136 |   |   |   |   |   |   |   |   |   |
|                                                                      |   |             |         |   |           |   |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |             |         |   |           |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                     |   | Pension Benefits |     |   | Other Benefits |   |
|------------------------------------------------------------------------------------------|--------|------------------|----------|--------|----------------|--------|
|                                                                                     |   | 2008             |     |   | 2009           |   |   | 2010 |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |
|                                                                                     |   | (In thousands)   |     |
|                                                                                     |   |             |     |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in plan assets and benefit obligations recognized in other comprehensive income: |   |             |     |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Plan amendment                                                                           |   | $                | (37      | )      |           | $      | - |   |   | $ | - |   |   | $ | (22,812 | ) |   | $ | (76 | ) |   | $ |  - |   |
| Net actuarial gain (loss) arising during the year                                        |   |             | (564,224 | )      |           |   | 33,085 |   |   |   | 50,808 |   |   |   | 5,332 |   |   |   | (3,138 | ) |   |   | (2,561 | ) |
| Amortization of unrecognized:                                                            |   |             |     |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Prior service cost (credit)                            |   |             | 1,229    |   |           |   | 1,232 |   |   |   | 1,232 |   |   |   | (17,313 | ) |   |   | (16,170 | ) |   |   | (16,170 | ) |
|     Net actuarial losses (gains)                                     |   |             | (10,813  | )      |           |   | 19,045 |   |   |   | 15,389 |   |   |   | 6,176 |   |   |   | 8,619 |   |   |   |  8,317 |   |
|                                                                                     |   |             |     |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Total                                                            |   | $                | (573,845 | )      |           | $      | 53,362 |   |   | $ | 67,429 |   |   | $ | (28,617 | ) |   | $ | (10,765 | ) |   | $ | (10,413 | ) |

|                                                |   | Pension Benefits |    |   | Other Benefits |   |
|-----------------------------------------------------|--------|------------------|---------|--------|----------------|--------|
|                                                |   | 2008             |    |   | 2009           |   |   | 2010 |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |
|                                                |   | (In thousands)   |    |
|                                                |   |             |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                                        |   | $                | 3,130   |   |           | $      | 3,080 |   |   | $ | 3,218 |   |   | $ | 128 |   |   | $ | 91 |   |   | $ | 106 |   |
| Interest cost                                       |   |             | 22,568  |   |           |   | 21,417 |   |   |   | 20,161 |   |   |   | 2,119 |   |   |   | 2,712 |   |   |   | 2,489 |   |
| Expected return on plan assets                      |   |             | (90,037 | )      |           |   | (38,887 | ) |   |   | (44,654 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Amortization of:                                    |   |             |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Prior service cost (credit)             |   |             | 1,229   |   |           |   | 1,232 |   |   |   | 1,232 |   |   |   | (17,313 | ) |   |   | (16,170 | ) |   |   | (16,170 | ) |
|   Net actuarial losses (gains)            |   |             | (10,813 | )      |           |   | 19,045 |   |   |   | 15,389 |   |   |   | 6,176 |   |   |   | 8,619 |   |   |   | 8,317 |   |
| Settlement of 2006 1114 Agreement benefits (1) |   |             |  - |   |           |   |  - |   |   |   |  - |   |   |   |  416 |   |   |   | - |   |   |   | - |   |
| Total benefit cost (credit)                         |   | $                | (73,923 | )      |           | $      | 5,887 |   |   | $ | (4,654 | ) |   | $ | (8,474 | ) |   | $ | (4,748 | ) |   | $ | (5,258 | ) |

----

|                          |   | Pension Benefits |   |   | Other Benefits |   |
|-------------------------------|--------|------------------|--------|--------|----------------|--------|
|                          |   | 2009             |   |   | 2010           |   |   | 2009 |   |   | 2010 |   |
|                          |   |             |   |   |           |   |   |   |   |   |   |   |
| Discount rate                 |   |             | 5.6    | %      |           |   | 5.0 | % |   |   | 5.5 | % |   |   | 5.0 | % |
| Rate of compensation increase |   |             | 3.6    | %      |           |   | 3.6 | % |   |   | - |   |   |   | - |   |

|                           |   | Pension Benefits |   |   | Other Benefits |   |
|--------------------------------|--------|------------------|--------|--------|----------------|--------|
|                           |   | 2008             |   |   | 2009           |   |   | 2010 |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |
|                           |   |             |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount rate                  |   |             | 6.3    | %      |           |   | 6.2 | % |   |   | 5.6 | % |   |   | 6.5 | % |   |   | 6.2 | % |   |   | 5.5 | % |
| Expected return on plan assets |   |             | 10.0   | %      |           |   | 10.0 | % |   |   | 10.0 | % |   |   | - |   |   |   | - |   |   |   | - |   |
| Rate of compensation increase  |   |             | 3.0    | %      |           |   | 3.4 | % |   |   | 3.6 | % |   |   | - |   |   |   | - |   |   |   | - |   |

----

|                                             |   |  December 31,  |     |
|--------------------------------------------------|--------|--------------------------|----------|
|                                             |   | 2009                     |     |   | 2010 |   |
|                                             |   | ($ in millions)          |     |
|                                             |   |                     |     |   |   |   |
| CMRT asset value                                 |   | $                        | 601.6    |   |   | $ | 712.2 |   |
|                                             |   |                     |     |   |   |   |   |   |
| CMRT fair value input:                           |   |                     |     |   |   |   |   |   |
| Level 1                                          |   |                     | 83       | % |   |   | 83 | % |
| Level 2                                          |   |                     | 3        |   |   |   | 1 |   |
| Level 3                                          |   |                     | 14       |   |   |   | 16 |   |
|                                             |   |                     | 100      | % |   |   | 100 | % |
|                                             |   |                     |     |   |   |   |   |   |
| CMRT asset mix:                                  |   |                     |     |   |   |   |   |   |
| Domestic equities, principally publically traded |   |                     |  65 | % |   |   |  73 | % |
| International equities, publically traded        |   |                     | 5        |   |   |   | 2 |   |
| Fixed income securities, publically traded       |   |                     | 21       |   |   |   | 16 |   |
| Privately managed limited partnerships           |   |                     | 8        |   |   |   | 8 |   |
| Other                                            |   |                     |  1  |   |   |   |  1 |   |
|                                             |   |                     | 100      | % |   |   | 100 | % |

----

----

|        |   | Lease commitment |   |
|-------------|--------|------------------|--------|
|        |   | (In thousands)   |   |
|        |   |             |   |
| 2011        |   | $                | 727    |   |
| 2012        |   |             | 543    |   |
| 2013        |   |             | 190    |   |
| 2014        |   |             | 150    |   |
| 2015        |   |             | 150    |   |
| Thereafter  |   |             | 225    |   |
|  Total |   | $                | 1,985  |   |

----

|                                   |   | KSW    |   |   | EWP    |   |   | Calumet |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|--------|---------|--------|
|                                   |   |   |   |   |   |   |   |    |   |
| Ten largest customers:                 |   |   |   |   |   |   |   |    |   |
|   % of segments’ sales |   |   | 62     | %      |   |   | 51     | %       |   |   | 50 | % |
|   % of consolidated sales    |   |   | 53     | %      |   |   | 5      | %       |   |   | 3 | % |
|                                   |   |   |   |   |   |   |   |    |   |   |   |   |
| Customers > 10%:                    |   |   |   |   |   |   |   |    |   |   |   |   |
|   % of segments’ sales |   |   | 12     | %      |   |   | 24     | %       |   |   | - |   |
|   % of consolidated sales    |   |   | 10     | %      |   |   | 2      | %       |   |   | - |   |

|                                      |   |  December 31,  |   |
|-------------------------------------------|--------|--------------------------|--------|
|                                      |   | 2009                     |   |   | 2010 |   |
|                                      |   | (In thousands)           |   |
| Current:                                  |   |                     |   |   |   |   |
|   Employee benefits             |   | $                        | 10,456 |   |   | $ | 12,679 |   |
|   Self insurance                |   |                     | 4,431  |   |   |   | 4,935 |   |
|   Environmental                 |   |                     | 430    |   |   |   | 472 |   |
|   Other                         |   |                     | 3,012  |   |   |   | 4,815 |   |
|                                      |   |                     |   |   |   |   |   |   |
| Total                                     |   | $                        | 18,329 |   |   | $ | 22,901 |   |
|                                      |   |                     |   |   |   |   |   |   |
| Noncurrent:                               |   |                     |   |   |   |   |   |   |
|   Workers compensation payments |   | $                        | 2,315  |   |   | $ | 1,242 |   |
|   Environmental                 |   |                     | 300    |   |   |   | 265 |   |
|   Other                         |   |                     | 253    |   |   |   | 342 |   |
|                                      |   |                     |   |   |   |   |   |   |
| Total                                     |   | $                        | 2,868  |   |   | $ | 1,849 |   |

|                           |   |                         |   |   |                         |   |
|--------------------------------|--------|------------------------------|--------|--------|------------------------------|--------|
|                           |   | December 31, 2009  |   |   | December 31, 2010  |   |
|                           |   | Carrying amount         |   |   | Fairvalue                    |   |   | Carrying amount |   |   | Fairvalue |   |
|                           |   | (In thousands)               |   |
|                           |   |                         |   |   |                         |   |   |   |   |   |   |   |
| Restricted cash equivalents    |   | $                            | 249    |   |                         | $      | 249 |   |   | $ | 250 |   |   | $ | 250 |   |
| Accounts receivable, net       |   |                         | 41,231 |   |                         |   | 41,231 |   |   |   | 46,765 |   |   |   | 46,765 |   |
| Accounts payable               |   |                         | 5,577  |   |                         |   | 5,577 |   |   |   | 6,694 |   |   |   | 6,694 |   |
|                           |   |                         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Long-term debt:                |   |                         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |
|   Variable-rate debt |   |                         | 18,166 |   |                         |   | 18,166 |   |   |   | 27,740 |   |   |   | 27,740 |   |
|   Fixed-rate debt    |   |                         | 7,204  |   |                         |   | 6,680 |   |   |   | 941 |   |   |   | 1,019 |   |
|                           |   |                         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                                                      |   | 1st Quarter                           |   |   | 2nd Quarter |   |       | 3rd Quarter |   |   | 4th Quarter |   |
|-----------------------------------------------------------|--------|---------------------------------------|--------|--------|-------------|--------|------------|-------------|--------|--------|-------------|--------|
|                                                      |   | (In thousands, except per share data) |   |
|                                                      |   |                                  |   |   |        |   |       |        |   |   |        |   |
| Year ended December 31, 2009:                             |   |                                  |   |   |        |   |       |        |   |   |        |   |
|   Net sales                                     |   | $                                     | 60,475 |   |        | $      | 70,511     |        |   | $      | 100,363     |   |   | $ | 90,998 |   |
|   Gross profit (loss)                           |   |                                  | (1,799 | )      |        |   | 5,239      |        |   |   | 14,911      |   |   |   | 4,209 |   |
|                                                      |   |                                  |   |   |        |   |       |        |   |   |        |   |   |   |   |   |
|   Net income (loss)                             |   | $                                     | (4,374 | )      |        | $      | 1,000      |        |   | $      | 5,868       |   |   | $ | (2,253 | ) |
|                                                      |   |                                  |   |   |        |   |       |        |   |   |        |   |   |   |   |   |
|   Basic and diluted net income (loss) per share |   | $                                     | (0.36  | )      |        | $      |  0.08 |        |   | $      | 0.48        |   |   | $ | (0.18 | ) |
|                                                      |   |                                  |   |   |        |   |       |        |   |   |        |   |   |   |   |   |
| Year ended December 31, 2010:                             |   |                                  |   |   |        |   |       |        |   |   |        |   |   |   |   |   |
|   Net sales                                     |   | $                                     | 99,743 |   |        | $      | 134,970    |        |   | $      | 113,608     |   |   | $ | 102,424 |   |
|   Gross profit (loss)                           |   |                                  | 10,505 |   |        |   | 14,724     |        |   |   | 5,508       |   |   |   | (3,333 | ) |
|                                                      |   |                                  |   |   |        |   |       |        |   |   |        |   |   |   |   |   |
|   Net income (loss)                             |   | $                                     | 4,375  |   |        | $      | 6,749      |        |   | $      | 2,319       |   |   | $ | (4,700 | ) |
|                                                      |   |                                  |   |   |        |   |       |        |   |   |        |   |   |   |   |   |
|   Basic and diluted net income (loss) per share |   | $                                     | 0.36   |   |        | $      |  0.56 |        |   | $      | 0.19        |   |   | $ | (0.39 | ) |
|                                                      |   |                                  |   |   |        |   |       |        |   |   |        |   |   |   |   |   |

| ·   | a 2009 credit related to the release of accrued environmental costs for certain inactive waste management units as discussed in Note 8; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | impairment charges to reduce Calumet’s inventory to its net realizable value during 2009. |
|--------------------|-------------------------------------------------------------------------------------------------|

----

|                                                      |   | 1st Quarter    |   |   | 2nd Quarter |   |   | 3rd Quarter |   |   | 4th Quarter |   |
|-----------------------------------------------------------|--------|----------------|--------|--------|-------------|--------|--------|-------------|--------|--------|-------------|--------|
|                                                      |   | (In thousands) |   |
|                                                      |   |           |   |   |        |   |   |        |   |   |        |   |
| Year ended December 31, 2009:                             |   |           |   |   |        |   |   |        |   |   |        |   |
|   Decrease in LIFO reserve                      |   | $              | 2,799  |   |        | $      | 3,411  |        |   | $      | 2,205       |   |   | $ | 1,057 |   |
|   Impairment of Calumet’s inventory       |   |           | (933   | )      |        |   | (530   | )           |   |   | (223        | )      |   |   | (74 | ) |
|   Release of environmental accruals             |   |           | -      |   |        |   | 2,604  |        |   |   | -           |   |   |   | - |   |
|     Total impact on net income (loss) |   | $              | 1,866  |   |        | $      | 5,485  |        |   | $      | 1,982       |   |   | $ | 983 |   |
|                                                      |   |           |   |   |        |   |   |        |   |   |        |   |   |   |   |   |
|                                                      |   |           |   |   |        |   |   |        |   |   |        |   |   |   |   |   |
| Year ended December 31, 2010:                             |   |           |   |   |        |   |   |        |   |   |        |   |   |   |   |   |
|   Decrease (increase) in LIFO reserve           |   | $              | (248   | )      |        | $      | 164    |        |   | $      | (1,356      | )      |   | $ | (1,759 | ) |
|   Impairment of Calumet’s inventory       |   |           | (57    | )      |        |   | (34    | )           |   |   | (15         | )      |   |   | (75 | ) |
|     Total impact on net income (loss) |   | $              | (305   | )      |        | $      | 130    |        |   | $      | (1,371      | )      |   | $ | (1,834 | ) |

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