| For the quarter ended March 31, 2010 | Commission file number 1-3919 |
|--------------------------------------|-------------------------------|

| 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 |
|-----------------------------------------------------------|----------------|
|                                                      |           |

----

INDEX

| Part I.                                                                               | FINANCIAL INFORMATION                                                                                                                   | Page  |
|---------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------|------------|
|                                                                                  |                                                                                                                                    |       |
| Item 1.                                                                               | Financial Statements                                                                                                                    |       |
|                                                                                  |                                                                                                                                    |       |
|                                                                                  | Condensed Consolidated Balance Sheets – December 31, 2009; March 31, 2010 (unaudited)                                             | 3          |
|                                                                                  |                                                                                                                                    |       |
|                                                                                  | Condensed Consolidated Statements of Operations (unaudited) – Three months ended March 31, 2009 and 2010                          | 5          |
|                                                                                  |                                                                                                                                    |       |
|                                                                                  | Condensed Consolidated Statements of Cash Flows (unaudited) –  Three months ended March 31, 2009 and 2010               | 6          |
|                                                                                  |                                                                                                                                    |       |
|                                                                                  | Condensed Consolidated Statement of Stockholders' Equity and Comprehensive Income (unaudited) – Three months ended March 31, 2010 | 7          |
|                                                                                  |                                                                                                                                    |       |
|                                                                                  | Notes to Condensed Consolidated Financial Statements (unaudited)                                                                        | 8          |
|                                                                                  |                                                                                                                                    |       |
| Item 2.                                                                               | Management's Discussion and Analysis of Financial Condition and Results of Operations                                              | 15         |
|                                                                                  |                                                                                                                                    |       |
| Item 3.                                                                               | Quantitative and Qualitative Disclosures About Market Risk                                                                              | 24         |
|                                                                                  |                                                                                                                                    |       |
| Item 4.                                                                               | Controls and Procedures                                                                                                                 | 25         |
|                                                                                  |                                                                                                                                    |       |
| PART II.                                                                              | OTHER INFORMATION                                                                                                                       |       |
|                                                                                  |                                                                                                                                    |       |
| Item 1.                                                                               | Legal Proceedings                                                                                                                       | 26         |
|                                                                                  |                                                                                                                                    |       |
| Item 1A.                                                                              | Risk Factors                                                                                                                            | 26         |
|                                                                                  |                                                                                                                                    |       |
| Item 6.                                                                               | Exhibits                                                                                                                                | 26         |
|                                                                                  |                                                                                                                                    |       |
| Items 2, 3, 4 and 5 of Part II are omitted because there is no information to report. |                                                                                                                                    |

----

CONDENSED

|                                                      |   | December 31, |    |   | March 31,   |   |
|-----------------------------------------------------------|--------|--------------|---------|--------|-------------|--------|
| ASSETS                                                    |   |  2009   |    |   | 2010        |   |
|                                                      |   |         |    |   | (unaudited) |   |
|                                                      |   |         |    |   |        |   |
| Current assets:                                           |   |         |    |   |        |   |
|   Accounts receivable, net                      |   | $            | 41,231  |   |        | $      | 57,072 |   |
|   Inventories                                   |   |         | 41,225  |   |        |   | 59,205 |   |
|   Deferred income taxes                         |   |         | 4,434   |   |        |   | 4,434 |   |
|   Income taxes receivable                       |   |         | 4,206   |   |        |   | 3,118 |   |
|   Prepaid expenses and other                    |   |         | 2,626   |   |        |   | 2,107 |   |
|                                                      |   |         |    |   |        |   |   |   |
|     Total current assets              |   |         | 93,722  |   |        |   | 125,936 |   |
|                                                      |   |         |    |   |        |   |   |   |
| Property, plant and equipment:                            |   |         |    |   |        |   |   |   |
|   Land                                          |   |         | 1,468   |   |        |   | 1,468 |   |
|   Buildings and improvements                    |   |         | 61,207  |   |        |   | 61,790 |   |
|   Machinery and equipment                       |   |         | 328,497 |   |        |   | 328,190 |   |
|   Construction in progress                      |   |         | 2,583   |   |        |   | 3,192 |   |
|                                                      |   |         | 393,755 |   |        |   | 394,640 |   |
|   Less accumulated depreciation                 |   |         | 308,586 |   |        |   | 311,151 |   |
|                                                      |   |         |    |   |        |   |   |   |
|     Net property, plant and equipment |   |         | 85,169  |   |        |   | 83,489 |   |
|                                                      |   |         |    |   |        |   |   |   |
| Other assets:                                             |   |         |    |   |        |   |   |   |
|   Pension asset                                 |   |         | 84,806  |   |        |   | 89,990 |   |
|   Other, net                                    |   |         | 1,387   |   |        |   | 1,320 |   |
|                                                      |   |         |    |   |        |   |   |   |
|     Total other assets                |   |         | 86,193  |   |        |   | 91,310 |   |
|                                                      |   |         |    |   |        |   |   |   |
|                                                      |   |         |    |   |        |   |   |   |
|     Total assets                      |   | $            | 265,084 |   |        | $      | 300,735 |   |
|                                                      |   |         |    |   |        |   |   |   |

Index

----

| LIABILITIES AND STOCKHOLDERS' EQUITY                                     |   | December 31, |     |   | March 31,   |   |
|--------------------------------------------------------------------------|--------|--------------|----------|--------|-------------|--------|
|                                                                     |   | 2009    |     |   | 2010   |   |
|                                                                     |   |         |     |   | (unaudited) |   |
|                                                                     |   |         |     |   |        |   |
| Current liabilities:                                                     |   |         |     |   |        |   |
|   Notes payable and current maturities of long-term debt  |   | $            | 19,396   |   |        | $      | 37,886 |   |
|   Accounts payable                                             |   |         | 5,577    |   |        |   | 12,487 |   |
|   Accrued OPEB cost                                            |   |         | 1,357    |   |        |   | 1,357 |   |
|   Other accrued liabilities                                    |   |         | 18,329   |   |        |   | 20,901 |   |
|                                                                     |   |         |     |   |        |   |   |   |
|     Total current liabilities                        |   |         | 44,659   |   |        |   | 72,631 |   |
|                                                                     |   |         |     |   |        |   |   |   |
| Noncurrent liabilities:                                                  |   |         |     |   |        |   |   |   |
|   Long-term debt                                               |   |         | 5,974    |   |        |   | 5,984 |   |
|   Accrued OPEB cost                                            |   |         | 44,244   |   |        |   | 44,640 |   |
|   Deferred income taxes                                        |   |         | 19,569   |   |        |   | 21,953 |   |
|   Other accrued liabilities                                    |   |         | 2,868    |   |        |   | 2,154 |   |
|                                                                     |   |         |     |   |        |   |   |   |
|     Total noncurrent liabilities                     |   |         | 72,655   |   |        |   | 74,731 |   |
|                                                                     |   |         |     |   |        |   |   |   |
|                                                                     |   |         |     |   |        |   |   |   |
| Stockholders' equity:                                                    |   |         |     |   |        |   |   |   |
|   Common stock                                                 |   |         | 125      |   |        |   | 125 |   |
|   Additional paid-in capital                                   |   |         | 100,111  |   |        |   | 100,111 |   |
|   Accumulated other comprehensive loss                         |   |         | (132,530 | )      |        |   | (131,302 | ) |
|   Retained earnings                                            |   |         | 180,860  |   |        |   | 185,235 |   |
|   Treasury stock                                               |   |         | (796     | )      |        |   | (796 | ) |
|                                                                     |   |         |     |   |        |   |   |   |
|     Total stockholders' equity                       |   |         | 147,770  |   |        |   | 153,373 |   |
|                                                                     |   |         |     |   |        |   |   |   |
|     Total liabilities and stockholders’ equity |   | $            | 265,084  |   |        | $      | 300,735 |   |
|                                                                     |   |         |     |   |        |   |   |   |

Index

----

CONDENSED

|                                                              |   | Three months ended  March 31, |    |
|-------------------------------------------------------------------|--------|-----------------------------------------|---------|
|                                                              |   | 2009                                    |    |   | 2010 |   |
|                                                              |   | (unaudited)                             |    |
|                                                              |   |                                    |    |   |   |   |
| Net sales                                                         |   | $                                       | 60,475  |   |   | $ | 99,743 |   |
| Cost of goods sold                                                |   |                                    | (62,274 | ) |   |   | (89,238 | ) |
|                                                              |   |                                    |    |   |   |   |   |   |
|   Gross margin (loss)                                   |   |                                    | (1,799  | ) |   |   | 10,505 |   |
|                                                              |   |                                    |    |   |   |   |   |   |
| Other operating income (expense):                                 |   |                                    |    |   |   |   |   |   |
|   Selling expense                                       |   |                                    | (1,606  | ) |   |   | (1,709 | ) |
|   General and administrative expense                    |   |                                    | (3,058  | ) |   |   | (3,875 | ) |
|   Defined benefit pension credit (expense)              |   |                                    | (1,515  | ) |   |   | 1,212 |   |
|   Other postretirement benefit credit                   |   |                                    | 1,260   |   |   |   | 1,342 |   |
|                                                              |   |                                    |    |   |   |   |   |   |
|       Total other operating expense |   |                                    | (4,919  | ) |   |   | (3,030 | ) |
|                                                              |   |                                    |    |   |   |   |   |   |
| Operating income (loss)                                           |   |                                    | (6,718  | ) |   |   | 7,475 |   |
|                                                              |   |                                    |    |   |   |   |   |   |
| Non operating income (expense):                                   |   |                                    |    |   |   |   |   |   |
|   Interest expense                                      |   |                                    | (332    | ) |   |   | (443 | ) |
|   Other income (expense), net                           |   |                                    | (2      | ) |   |   | 64 |   |
|                                                              |   |                                    |    |   |   |   |   |   |
|       Total non operating expense   |   |                                    | (334    | ) |   |   | (379 | ) |
|                                                              |   |                                    |    |   |   |   |   |   |
|   Income (loss) before income taxes                     |   |                                    | (7,052  | ) |   |   | 7,096 |   |
|                                                              |   |                                    |    |   |   |   |   |   |
| Income tax (expense) benefit                                      |   |                                    | 2,678   |   |   |   | (2,721 | ) |
|                                                              |   |                                    |    |   |   |   |   |   |
|   Net income (loss)                                     |   | $                                       | (4,374  | ) |   | $ | 4,375 |   |
|                                                              |   |                                    |    |   |   |   |   |   |
| Basic and diluted income (loss) per share                         |   | $                                       | (0.36   | ) |   | $ | 0.36 |   |
|                                                              |   |                                    |    |   |   |   |   |   |
| Basic and diluted weighted average shares outstanding        |   |                                    | 12,102  |   |   |   | 12,102 |   |
|                                                              |   |                                    |    |   |   |   |   |   |

Index

----

CONDENSED 

|                                                                          |   | Three months ended   March 31,  |    |
|-------------------------------------------------------------------------------|--------|------------------------------------------------|---------|
|                                                                          |   | 2009                                           |    |   | 2010 |   |
|                                                                          |   | (unaudited)                                    |    |
|                                                                          |   |                                           |    |   |   |   |
| Cash flows from operating activities:                                         |   |                                           |    |   |   |   |
|   Net income (loss)                                                 |   | $                                              | (4,374  | ) |   | $ | 4,375 |   |
|   Depreciation and amortization                                     |   |                                           | 3,597   |   |   |   | 3,261 |   |
|   Deferred income taxes                                             |   |                                           | 1,027   |   |   |   | 1,623 |   |
|   Defined benefit pension expense (credit)                          |   |                                           | 1,515   |   |   |   | (1,212 | ) |
|   OPEB credit                                                       |   |                                           | (1,260  | ) |   |   | (1,342 | ) |
|   OPEB payments                                                     |   |                                           | (337    | ) |   |   | (243 | ) |
|   Bad debt expense                                                  |   |                                           | 949     |   |   |   | 44 |   |
|   Inventory impairment                                              |   |                                           | 1,495   |   |   |   | 92 |   |
|   Other, net                                                        |   |                                           | 153     |   |   |   | 65 |   |
|   Change in assets and liabilities:                                 |   |                                           |    |   |   |   |   |   |
|     Accounts receivable                                   |   |                                           | (6,449  | ) |   |   | (15,876 | ) |
|     Inventories                                           |   |                                           | 20,325  |   |   |   | (18,072 | ) |
|     Accounts payable                                      |   |                                           | (1,682  | ) |   |   | 6,910 |   |
|     Accrued liabilities                                   |   |                                           | (11,159 | ) |   |   | 1,858 |   |
|     Income taxes                                          |   |                                           | (4,620  | ) |   |   | 1,088 |   |
|     Other, net                                            |   |                                           | 623     |   |   |   | 519 |   |
|                                                                          |   |                                           |    |   |   |   |   |   |
|       Net cash used in operating activities     |   |                                           | (197    | ) |   |   | (16,910 | ) |
|                                                                          |   |                                           |    |   |   |   |   |   |
| Cash flows from investing activities:                                         |   |                                           |    |   |   |   |   |   |
|   Capital expenditures                                              |   |                                           | (2,162  | ) |   |   | (1,592 | ) |
|   Other, net                                                        |   |                                           | -       |   |   |   | 20 |   |
|                                                                          |   |                                           |    |   |   |   |   |   |
|       Net cash used in investing activities     |   |                                           | (2,162  | ) |   |   | (1,572 | ) |
|                                                                          |   |                                           |    |   |   |   |   |   |
| Cash flows from financing activities:                                         |   |                                           |    |   |   |   |   |   |
|   Revolving credit facility, net                                    |   |                                           | 12,809  |   |   |   | 19,823 |   |
|   Principal payments on other notes payable and long-term debt |   |                                           | (10,443 | ) |   |   | (1,334 | ) |
|   Deferred financing costs paid                                     |   |                                           | (7      | ) |   |   | (7 | ) |
|                                                                          |   |                                           |    |   |   |   |   |   |
|       Net cash provided by financing activities |   |                                           | 2,359   |   |   |   | 18,482 |   |
|                                                                          |   |                                           |    |   |   |   |   |   |
| Net change in cash and cash equivalents                                       |   |                                           | -       |   |   |   | - |   |
|                                                                          |   |                                           |    |   |   |   |   |   |
| Cash and cash equivalents, beginning of period                                |   |                                           | -       |   |   |   | - |   |
|                                                                          |   |                                           |    |   |   |   |   |   |
| Cash and cash equivalents, end of period                                      |   | $                                              | -       |   |   | $ | - |   |
|                                                                          |   |                                           |    |   |   |   |   |   |
| Supplemental disclosures:  Cash paid for:                           |   |                                           |    |   |   |   |   |   |
|     Interest, net of amount capitalized                   |   | $                                              | 126     |   |   | $ | 240 |   |
|     Income taxes, net                                     |   |                                           | 915     |   |   |   | 9 |   |

Index

----

CONDENSED 

|                                        |   | Common      |   |   | Additionalpaid-in |   |    | Accumulated othercomprehensive income (loss) |   |   | Retained |   |   | Treasury |   |   |   |   |    | Comprehensive |   |
|---------------------------------------------|--------|-------------|--------|--------|-------------------|--------|---------|----------------------------------------------|--------|--------|----------|--------|--------|----------|--------|--------|--------|--------|---------|---------------|--------|
|                                        |   | stock       |   |   | capital           |   |    | Pensions                                     |   |   | OPEB     |   |   | earnings |   |   | stock  |   |    | Total         |   |   | income (loss) |   |
|                                        |   | (unaudited) |   |
|                                        |   |        |   |   |              |   |    |                                         |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |
| Balance – December 31, 2009           |   | $           | 125    |   |              | $      | 100,111 |                                         |   | $      | (158,401 | )      |   | $        | 25,871 |   |   | $      | 180,860 |          |   | $ | (796 | ) |   | $ | 147,770 |   |   |   |   |
|                                        |   |        |   |   |              |   |    |                                         |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                  |   |        | -      |   |              |   | -       |                                         |   |   | -        |   |   |     | -      |   |   |   | 4,375   |          |   |   | - |   |   |   | 4,375 |   |   | $ | 4,375 |   |
|                                        |   |        |   |   |              |   |    |                                         |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization of actuarial losses       |   |        | -      |   |              |   | -       |                                         |   |   | 2,267    |   |   |     | 1,226  |   |   |   | -       |          |   |   | - |   |   |   | 3,493 |   |   |   | 3,493 |   |
|                                        |   |        |   |   |              |   |    |                                         |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization of prior service cost (credit) |   |        | -      |   |              |   | -       |                                         |   |   | 186      |   |   |     | (2,451 | )      |   |   | -       |          |   |   | - |   |   |   | (2,265 | ) |   |   | (2,265 | ) |
|                                        |   |        |   |   |              |   |    |                                         |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance – March 31, 2010              |   | $           | 125    |   |              | $      | 100,111 |                                         |   | $      | (155,948 | )      |   | $        | 24,646 |   |   | $      | 185,235 |          |   | $ | (796 | ) |   | $ | 153,373 |   |   |   |   |   |
|                                        |   |        |   |   |              |   |    |                                         |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
|   Comprehensive income            |   |        |   |   |              |   |    |                                         |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   | $ | 5,603 |   |

Index

----

NOTES 

| ·   | Keystone Steel & Wire (“KSW”), located in Peoria, Illinois, operates an electric arc furnace mini-mill 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 in concrete construction products including pipe, pre-cast boxes and applications for use in roadways, buildings and bridges; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Index

----

| ·   | 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. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                        |   | Three months ended  March 31, |   |
|-------------------------------------------------------------|--------|-----------------------------------------|--------|
|                                                        |   | 2009                                    |   |   | 2010 |   |
|                                                        |   | (In thousands)                          |   |
| Net sales:                                                  |   |                                    |   |   |   |   |
|   KSW                                             |   | $                                       | 53,993 |   |   | $ | 102,490 |   |
|   EWP                                             |   |                                    | 7,161  |   |   |   | 7,376 |   |
|   Calumet                                         |   |                                    | 1,918  |   |   |   | 4,251 |   |
|   Elimination of intersegment sales          |   |                                    | (2,597 | ) |   |   | (14,374 | ) |
|                                                        |   |                                    |   |   |   |   |   |   |
|      Total net sales               |   | $                                       | 60,475 |   |   | $ | 99,743 |   |
|                                                        |   |                                    |   |   |   |   |   |   |
| Operating income (loss):                                    |   |                                    |   |   |   |   |   |   |
|   KSW                                             |   | $                                       | (4,450 | ) |   | $ | 6,985 |   |
|   EWP                                             |   |                                    | (326   | ) |   |   | (363 | ) |
|   Calumet                                         |   |                                    | (2,471 | ) |   |   | 147 |   |
|   Pension credit (expense)                        |   |                                    | (1,515 | ) |   |   | 1,212 |   |
|   OPEB credit                                     |   |                                    | 1,260  |   |   |   | 1,342 |   |
|   Other(1)                                        |   |                                    | 784    |   |   |   | (1,848 | ) |
|                                                        |   |                                    |   |   |   |   |   |   |
|      Total operating income (loss) |   |                                    | (6,718 | ) |   |   | 7,475 |   |
|                                                        |   |                                    |   |   |   |   |   |   |
| Non operating income (expense):                             |   |                                    |   |   |   |   |   |   |
|   Interest expense                                |   |                                    | (332   | ) |   |   | (443 | ) |
|   Other income (expense), net                     |   |                                    | (2     | ) |   |   | 64 |   |
|                                                        |   |                                    |   |   |   |   |   |   |
|                                                        |   |                                    |   |   |   |   |   |   |
|   Income (loss) before income taxes               |   | $                                       | (7,052 | ) |   | $ | 7,096 |   |

Index

----

|                                      |   | December 31,   |   |   | March 31, |   |
|-------------------------------------------|--------|----------------|--------|--------|-----------|--------|
|                                      |   | 2009           |   |   | 2010      |   |
|                                      |   | (In thousands) |   |
|                                      |   |           |   |   |      |   |
|   Raw materials                 |   | $              | 3,222  |   |      | $      | 4,469 |   |
|   Billet                        |   |           | 4,917  |   |      |   | 7,322 |   |
|   Wire rod                      |   |           | 5,282  |   |      |   | 13,369 |   |
|   Work in process               |   |           | 4,645  |   |      |   | 5,896 |   |
|   Finished products             |   |           | 19,747 |   |      |   | 24,383 |   |
|   Supplies                      |   |           | 22,646 |   |      |   | 23,400 |   |
|                                      |   |           |   |   |      |   |   |   |
|     Inventory at FIFO |   |           | 60,459 |   |      |   | 78,839 |   |
|     Less LIFO reserve |   |           | 19,234 |   |      |   | 19,634 |   |
|                                      |   |           |   |   |      |   |   |   |
|       Total |   | $              | 41,225 |   |      | $      | 59,205 |   |
|                                      |   |           |   |   |      |   |   |   |

|                                            |   | December 31,   |   |   | March 31, |   |
|-------------------------------------------------|--------|----------------|--------|--------|-----------|--------|
|                                            |   | 2009           |   |   | 2010      |   |
|                                            |   | (In thousands) |   |
|                                            |   |           |   |   |      |   |
| Wachovia revolving credit facility              |   | $              | 12,546 |   |      | $      | 32,369 |   |
| Term loans:                                     |   |           |   |   |      |   |   |   |
|   Wachovia                            |   |           | 5,620  |   |      |   | 4,287 |   |
|   County                              |   |           | 6,302  |   |      |   | 6,302 |   |
| Other                                           |   |           | 902    |   |      |   | 912 |   |
|                                            |   |           |   |   |      |   |   |   |
|     Total debt              |   |           | 25,370 |   |      |   | 43,870 |   |
|     Less current maturities |   |           | 19,396 |   |      |   | 37,886 |   |
|                                            |   |           |   |   |      |   |   |   |
|     Total long-term debt    |   | $              | 5,974  |   |      | $      | 5,984 |   |

Index

----

Index

----

|                                      |   | December 31,   |   |   | March 31, |   |
|-------------------------------------------|--------|----------------|--------|--------|-----------|--------|
|                                      |   | 2009           |   |   | 2010      |   |
|                                      |   | (In thousands) |   |
| Current:                                  |   |           |   |   |      |   |
|   Employee benefits             |   | $              | 10,456 |   |      | $      | 11,577 |   |
|   Self insurance                |   |           | 4,431  |   |      |   | 4,434 |   |
|   Environmental                 |   |           | 430    |   |      |   | 429 |   |
|   Other                         |   |           | 3,012  |   |      |   | 4,461 |   |
|                                      |   |           |   |   |      |   |   |   |
| Total                                     |   | $              | 18,329 |   |      | $      | 20,901 |   |
|                                      |   |           |   |   |      |   |   |   |
| Noncurrent:                               |   |           |   |   |      |   |   |   |
|   Workers compensation payments |   | $              | 2,315  |   |      | $      | 1,594 |   |
|   Environmental                 |   |           | 300    |   |      |   | 300 |   |
|   Other                         |   |           | 253    |   |      |   | 260 |   |
|                                      |   |           |   |   |      |   |   |   |
| Total                                     |   | $              | 2,868  |   |      | $      | 2,154 |   |

|                                                         |   | Three months ended March 31, |   |
|--------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                         |   | 2009                              |   |   | 2010 |   |
|                                                         |   | (In thousands)                    |   |
|                                                         |   |                              |   |   |   |   |
| Service cost                                                 |   | $                                 | 814    |   |   | $ | 832 |   |
| Interest cost                                                |   |                              | 5,410  |   |   |   | 4,936 |   |
| Expected return on plan assets                               |   |                              | (9,720 | ) |   |   | (10,951 | ) |
| Amortization of accumulated other comprehensive income: |   |                              |   |   |   |   |   |   |
|      Prior service cost             |   |                              | 308    |   |   |   | 302 |   |
|      Actuarial losses               |   |                              | 4,703  |   |   |   | 3,669 |   |
|                                                         |   |                              |   |   |   |   |   |   |
| Total pension expense (credit)                               |   | $                                 | 1,515  |   |   | $ | (1,212 | ) |

Index

----

|                                                         |   | Three months ended   March 31,  |   |
|--------------------------------------------------------------|--------|------------------------------------------------|--------|
|                                                         |   | 2009                                           |   |   | 2010 |   |
|                                                         |   | (In thousands)                                 |   |
|                                                         |   |                                           |   |   |   |   |
| Service cost                                                 |   | $                                              | 24     |   |   | $ | 28 |   |
| Interest cost                                                |   |                                           | 672    |   |   |   | 611 |   |
| Amortization of accumulated other comprehensive income: |   |                                           |   |   |   |   |   |   |
|      Prior service credit           |   |                                           | (4,044 | ) |   |   | (3,966 | ) |
|      Actuarial losses               |   |                                           | 2,088  |   |   |   | 1,985 |   |
|                                                         |   |                                           |   |   |   |   |   |   |
| Total OPEB credit                                            |   | $                                              | (1,260 | ) |   | $ | (1,342 | ) |

|                                                          |   | Three months ended |   |
|---------------------------------------------------------------|--------|--------------------|--------|
|                                                          |   | March 31,          |   |
|                                                          |   | 2009               |   |   | 2010 |   |
|                                                          |   | (In thousands)     |   |
|                                                          |   |               |   |
|                                                          |   |               |   |   |   |   |
| Expected income tax expense (benefit), at statutory rate |   | $                  | (2,468 | ) |   | $ | 2,484 |   |
| U.S. state income tax expense (benefit), net                  |   |               | (219   | ) |   |   | 226 |   |
| Other, net                                                    |   |               | 9      |   |   |   | 11 |   |
|                                                          |   |               |   |   |   |   |   |   |
| Income tax expense (benefit)                                  |   | $                  | (2,678 | ) |   | $ | 2,721 |   |

|                           |   | December 31,2009  |   |   | March 31,2010  |   |
|--------------------------------|--------|------------------------|--------|--------|---------------------|--------|
|                           |   | Carrying amount   |   |   | Fairvalue           |   |   | Carrying amount |   |   | Fairvalue |   |
|                           |   | (In thousands)         |   |
|                           |   |                   |   |   |                |   |   |   |   |   |   |   |
| Restricted cash equivalents    |   | $                      | 249    |   |                | $      | 249 |   |   | $ | 249 |   |   | $ | 249 |   |
| Accounts receivable, net       |   |                   | 41,231 |   |                |   | 41,231 |   |   |   | 57,072 |   |   |   | 57,072 |   |
| Accounts payable               |   |                   | 5,577  |   |                |   | 5,577 |   |   |   | 12,487 |   |   |   | 12,487 |   |
|                           |   |                   |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
| Long-term debt:                |   |                   |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
|   Variable-rate debt |   |                   | 18,166 |   |                |   | 18,166 |   |   |   | 36,656 |   |   |   | 36,656 |   |
|   Fixed-rate debt    |   |                   | 7,204  |   |                |   | 6,680 |   |   |   | 7,214 |   |   |   | 6,709 |   |
|                           |   |                   |   |   |                |   |   |   |   |   |   |   |   |   |   |   |

Index

----

Index

----

MANAGEMENT'S 

| ·   | 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, |
|--------------------|------------------------------------------------|

| ·   | 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, |
|--------------------|---------------------------------------------------------|

| ·   | Any possible future litigation, and |
|--------------------|-------------------------------------|

| ·   | Other risks and uncertainties as discussed in this Quarterly Report and the 2009 Annual Report, including, without limitation, the section referenced above. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

Index

----

Index

----

|                                                 |   | Three months ended March 31, |   |
|------------------------------------------------------|--------|-----------------------------------|--------|
|                                                 |   | 2009                              |   |   | 2010 |   |
|                                                 |   | (In thousands)                    |   |
|                                                 |   |                              |   |   |   |   |
| Operating income (loss) as reported                  |   | $                                 | (6,718 | ) |   | $ | 7,475 |   |
|   Defined benefit pension expense (credit) |   |                              | 1,515  |   |   |   | (1,212 | ) |
|   OPEB credit                              |   |                              | (1,260 | ) |   |   | (1,342 | ) |
| Operating income (loss) before pension and OPEB      |   | $                                 | (6,463 | ) |   | $ | 4,921 |   |

| ·   | decreased cost of raw material included in cost of goods sold during 2010 as products sold during the first quarter of 2009 were produced with ferrous scrap purchased during the last half of 2008 when market prices were at unprecedented high levels; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a $1.5 million impairment charge during the first quarter of 2009 as compared to only a $92,000 impairment charge during the first quarter of 2010 to reduce certain inventories to net realizable value; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | bad debt expense of $949,000 during the first quarter of 2009 primarily due to the Chapter 11 proceedings of one of our customers while bad debt expense during the first quarter of 2010 was $44,000; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lower selling prices during 2010 as selling prices during the first quarter of 2009 were driven by the extremely high levels of ferrous scrap costs during the last half of 2008; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | a $4.5 million decrease in our LIFO reserve and cost of goods sold during the first quarter of 2009 as compared to a $399,000 increase in our LIFO reserve and cost of goods sold during the first quarter of 2010. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Index

----

|                                 |   | Three months ended  March 31,  |   |
|--------------------------------------|--------|------------------------------------------|--------|
|                                 |   | 2009                                     |   |   | 2010 |   |
| Sales volume (000 tons):             |   |                                     |   |   |   |   |
|   Wire rod                 |   |                                     | 22     |   |   |   | 81 |   |
|   Fabricated wire products |   |                                     | 20     |   |   |   | 22 |   |
|   Industrial wire          |   |                                     | 6      |   |   |   | 11 |   |
|   Wire mesh                |   |                                     | 7      |   |   |   | 9 |   |
|   Bar                      |   |                                     | 2      |   |   |   | 5 |   |
|   Coiled rebar             |   |                                     | 1      |   |   |   |   | (1) |
|   Other                    |   |                                     | -      |   |   |   | 3 |   |
|     Total        |   |                                     | 58     |   |   |   | 131 |   |
|                                 |   |                                     |   |   |   |   |   |   |
| (1) Less than 1,000 tons.            |   |                                     |   |   |   |   |   |   |
|                                 |   |                                     |   |   |   |   |   |   |
| Average per-ton selling prices:      |   |                                     |   |   |   |   |   |   |
|   Wire rod                 |   | $                                        | 667    |   |   | $ | 594 |   |
|   Fabricated wire products |   |                                     | 1,457  |   |   |   | 1,286 |   |
|   Industrial wire          |   |                                     | 1,071  |   |   |   | 881 |   |
|   Wire mesh                |   |                                     | 1,081  |   |   |   | 857 |   |
|   Bar                      |   |                                     | 902    |   |   |   | 859 |   |
|   Coiled rebar             |   |                                     | 594    |   |   |   | 597 |   |
|   All products             |   |                                     | 1,039  |   |   |   | 755 |   |

| ·   | Keystone Steel & Wire (“KSW”), located in Peoria, Illinois, operates an electric arc furnace mini-mill 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 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. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Index

----

|                                                   |   | KSW            |    |   | EWP    |   |   | Calumet |   |   | Other(1) |   |   | Total  |    |
|--------------------------------------------------------|--------|----------------|---------|--------|--------|--------|--------|---------|--------|--------|----------|--------|--------|--------|---------|
|                                                   |   | (In thousands) |    |
| Three months ended March 31, 2009:                     |   |
|                                                   |   |           |    |   |   |   |   |    |   |   |     |   |   |   |    |
|  Net sales                                        |   | $              | 53,993  |   |   | $      | 7,161  |    |   | $      | 1,918    |   |   | $      | (2,597  | ) |   | $ | 60,475 |   |
|  Cost of goods sold                               |   |           | (54,924 | )      |   |   | (6,834 | )       |   |   | (4,329   | )      |   |   | 3,813   |   |   |   | (62,274 | ) |
|    Gross margin (loss)                  |   |           | (931    | )      |   |   | 327    |    |   |   | (2,411   | )      |   |   | 1,216   |   |   |   | (1,799 | ) |
|                                                   |   |           |    |   |   |   |   |    |   |   |     |   |   |   |    |   |   |   |   |   |
|  Selling and administrative expense          |   |           | (3,519  | )      |   |   | (653   | )       |   |   | (60      | )      |   |   | (432    | ) |   |   | (4,664 | ) |
|  Operating income (loss) before pension/OPEB |   | $              | (4,450  | )      |   | $      | (326   | )       |   | $      | (2,471   | )      |   | $      | 784     |   |   | $ | (6,463 | ) |
|                                                   |   |           |    |   |   |   |   |    |   |   |     |   |   |   |    |   |   |   |   |   |
| Three months ended March 31, 2010:                     |   |
|                                                   |   |
|  Net sales                                        |   | $              | 102,490 |   |   | $      | 7,376  |    |   | $      | 4,251    |   |   | $      | (14,374 | ) |   | $ | 99,743 |   |
|  Cost of goods sold                               |   |           | (91,767 | )      |   |   | (7,172 | )       |   |   | (3,898   | )      |   |   | 13,599  |   |   |   | (89,238 | ) |
|    Gross margin (loss)                  |   |           | 10,723  |   |   |   | 204    |    |   |   | 353      |   |   |   | (775    | ) |   |   | 10,505 |   |
|                                                   |   |           |    |   |   |   |   |    |   |   |     |   |   |   |    |   |   |   |   |   |
|  Selling and administrative expense          |   |           | (3,738  | )      |   |   | (567   | )       |   |   | (206     | )      |   |   | (1,073  | ) |   |   | (5,584 | ) |
|  Operating income (loss) before pension/OPEB |   | $              | 6,985   |   |   | $      | (363   | )       |   | $      | 147      |   |   | $      | (1,848  | ) |   | $ | 4,921 |   |

|                                             |   |  Three months ended March 31, |    |
|--------------------------------------------------|--------|------------------------------------|---------|
|                                             |   | 2009                               |    |   | % ofsales |   |   | 2010 |   |   | % ofsales |   |
|                                             |   | ($ in thousands)                   |    |
|                                             |   |                               |    |   |   |   |   |   |   |   |   |   |
| Net sales                                        |   | $                                  | 53,993  |   |   |   | 100.0 | % |   | $ | 102,490 |   |   |   | 100.0 | % |
| Cost of goods sold                               |   |                               | (54,924 | ) |   |   | (101.7 | ) |   |   | (91,767 | ) |   |   | (89.5 | ) |
|    Gross margin (loss)            |   |                               | (931    | ) |   |   | (1.7 | ) |   |   | 10,723 |   |   |   | 10.5 |   |
|                                             |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling and administrative expense               |   |                               | (3,519  | ) |   |   | (6.5 | ) |   |   | (3,738 | ) |   |   | (3.6 | ) |
| Operating income (loss) before pension/OPEB |   | $                                  | (4,450  | ) |   |   | (8.2 | )% |   | $ | 6,985 |   |   |   | 6.9 | % |

Index

----

|                                                       |   | Three months ended March 31, |   |
|------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                       |   | 2009                              |   |   | 2010 |   |
| Sales volume (000 tons):                                   |   |                              |   |   |   |   |
|   Wire rod                                       |   |                              | 25     |   |   |   | 98 |   |
|   Fabricated wire products                       |   |                              | 20     |   |   |   | 22 |   |
|   Billet                                         |   |                              | 1      |   |   |   | 12 |   |
|   Industrial wire                                |   |                              | 6      |   |   |   | 11 |   |
|   Coiled rebar                                   |   |                              | 1      |   |   |   |   | (1) |
|   Total sales                                    |   |                              | 53     |   |   |   | 143 |   |
|                                                       |   |                              |   |   |   |   |   |   |
| (1) Less than 1,000 tons.                                  |   |                              |   |   |   |   |   |   |
|                                                       |   |                              |   |   |   |   |   |   |
| Average per-ton selling prices:                            |   |                              |   |   |   |   |   |   |
|   Wire rod                                       |   | $                                 | 665    |   |   | $ | 593 |   |
|   Fabricated wire products                       |   |                              | 1,457  |   |   |   | 1,286 |   |
|   Billet                                         |   |                              | 551    |   |   |   | 428 |   |
|   Industrial wire                                |   |                              | 1,071  |   |   |   | 881 |   |
|   Coiled rebar                                   |   |                              | 594    |   |   |   | 597 |   |
|   All products                                   |   |                              | 1,006  |   |   |   | 709 |   |
|                                                       |   |                              |   |   |   |   |   |   |
| Average per-ton ferrous scrap cost of goods sold           |   | $                                 | 322    |   |   | $ | 250 |   |
|                                                       |   |                              |   |   |   |   |   |   |
| Increase (decrease) in LIFO reserve and cost of goods sold |   | $                                 | (3,417 | ) |   | $ | 306 |   |
|                                                       |   |                              |   |   |   |   |   |   |
| Average electricity cost per kilowatt hour                 |   | $                                 | 0.04   |   |   | $ | 0.04 |   |
|                                                       |   |                              |   |   |   |   |   |   |
| Kilowatt hours consumed (000 hours)                        |   |                              | 42,127 |   |   |   | 128,443 |   |
|                                                       |   |                              |   |   |   |   |   |   |
| Average natural gas cost per therm                         |   | $                                 | 0.81   |   |   | $ | 0.58 |   |
|                                                       |   |                              |   |   |   |   |   |   |
|  NNatural gas therms consumed (000 therms)            |   |                              | 3,398  |   |   |   | 5,924 |   |

| ·   | substantially reduced production volumes which resulted in a much higher percentage of fixed costs included in cost of goods sold; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | an increase in KSW’s allowance for bad debt of $906,000 primarily due to the Chapter 11 proceedings of one of KSW’s customers. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

Index

----

|                               |   | Three months ended March 31, |   |
|------------------------------------|--------|------------------------------|--------|
|                               |   | 2009                         |   |   | % of sales |   |   | 2010 |   |   | % ofsales |   |
|                               |   | ($ in thousands)             |   |
|                               |   |                         |   |   |   |   |   |   |   |   |   |   |
| Net sales                          |   | $                            | 7,161  |   |   |   | 100.0 | % |   | $ | 7,376 |   |   |   | 100.0 | % |
| Cost of goods sold                 |   |                         | (6,834 | ) |   |   | (95.4 | ) |   |   | (7,172 | ) |   |   | (97.2 | ) |
|    Gross margin          |   |                         | 327    |   |   |   | 4.6 |   |   |   | 204 |   |   |   | 2.8 |   |
|                               |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling and administrative expense |   |                         | (653   | ) |   |   | (9.1 | ) |   |   | (567 | ) |   |   | (7.7 | ) |
| Operating loss before pension/OPEB |   | $                            | (326   | ) |   |   | (4.5 | )% |   | $ | (363 | ) |   |   | (4.9 | ) |

|                                                        |   | Three months ended March 31, |   |
|-------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                        |   | 2009                              |   |   | 2010 |   |
|                                                        |   |                              |   |   |   |   |
| Sales volume (000 tons) –  Wire mesh        |   |                              | 7      |   |   |   | 9 |   |
|                                                        |   |                              |   |   |   |   |   |   |
| Average per-ton selling prices –  Wire mesh |   | $                                 | 1,081  |   |   | $ | 857 |   |
|                                                        |   |                              |   |   |   |   |   |   |
| Average per-ton wire rod cost of goods sold            |   | $                                 | 805    |   |   | $ | 587 |   |
|                                                        |   |                              |   |   |   |   |   |   |
| Increase (decrease) in LIFO reserve and cost of goods sold  |   | $                                 | (1,070 | ) |   | $ | 93 |   |

| ·   | significantly higher percentage of fixed costs included in cost of goods sold during the first quarter of 2009 due to reduced production volumes; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lower payroll and benefit expenses during the first quarter of 2010 as a result of a reduction in personnel. |
|--------------------|--------------------------------------------------------------------------------------------------------------|

Index

----

|                                                         |   | Three months ended March 31, |   |
|--------------------------------------------------------------|--------|------------------------------|--------|
|                                                         |   | 2009                         |   |   | % of sales |   |   | 2010 |   |   | % ofsales |   |
|                                                         |   | ($ in thousands)             |   |
|                                                         |   |                         |   |   |   |   |   |   |   |   |   |   |
| Net sales                                                    |   | $                            | 1,918  |   |   |   | 100.0 | % |   | $ | 4,251 |   |   |   | 100.0 | % |
| Cost of goods sold                                           |   |                         | (4,329 | ) |   |   | (225.7 | ) |   |   | (3,898 | ) |   |   | (91.7 | ) |
|   Gross margin (loss)                              |   |                         | (2,411 | ) |   |   | (125.7 | ) |   |   | 353 |   |   |   | 8.3 |   |
|                                                         |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling and administrative expense                           |   |                         | (60    | ) |   |   | (3.1 | ) |   |   | (206 | ) |   |   | (4.8 | ) |
|   Operating income (loss) before pension/OPEB |   | $                            | (2,471 | ) |   |   | (128.8 | )% |   | $ | 147 |   |   |   | 3.5 | % |

|                                      |   | Three months ended  March 31, |   |
|-------------------------------------------|--------|-----------------------------------------|--------|
|                                      |   | 2009                                    |   |   | 2010 |   |
|                                      |   |                                    |   |   |   |   |
| Sales volume (000 tons) -  Bar  |   |                                    | 2      |   |   |   | 5 |   |
|                                      |   |                                    |   |   |   |   |   |   |
| Average per-ton selling prices - Bar |   | $                                       | 902    |   |   | $ | 859 |   |
|                                      |   |                                    |   |   |   |   |   |   |
| Average per-ton billet cost of goods sold |   | $                                       | 519    |   |   | $ | 439 |   |

| ·   | impairment charges of $1.5 million during the first quarter of 2009 as compared to impairment charges of $92,000 during the first quarter of 2010, as Calumet determined it was probable they would not be able to recover the cost of certain inventory items in future selling prices (as of March 31, 2010, only a few of Calumet’s product lines remain unprofitable); |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | substantially reduced production volumes during the first quarter of 2009 which resulted in a much higher percentage of fixed costs included in cost of goods sold and increased variable costs of production as idle production facilities were difficult to re-start given cold winter temperatures; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lower employee incentive compensation expense during 2009 resulting from poor operating performance. |
|--------------------|------------------------------------------------------------------------------------------------------|

Index

----

| ·   | substantially higher production levels during the first quarter of 2010 to meet increased demand, which required increased working capital usage, as compared to extremely low production levels during the first quarter of 2009 as a result of a rapid decline in product demand (we pay for the majority of our production costs as incurred while we generally receive customer payments a couple of months after shipment); |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher net cash provided by relative changes in our accrued liabilities of $13.0 million in 2010 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; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lower income tax payments during the first quarter of 2010 of $0.9 million as we made additional tax payments related to 2008 during the first quarter of 2009. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

Index

----

|                                                |   | December 31,   |   |   | March 31, |   |
|-----------------------------------------------------|--------|----------------|--------|--------|-----------|--------|
|                                                |   | 2009           |   |   | 2010      |   |
|                                                |   | (In thousands) |   |
|                                                |   |           |   |   |      |   |
| Working capital                                     |   | $              | 49,063 |   |      | $      | 53,305 |   |
| Outstanding balance under revolving credit facility |   |           | 12,546 |   |      |   | 32,369 |   |
|                                                |   |           |   |   |      |   |   |   |
| Additional borrowing availability                   |   |           | 38,637 |   |      |   | 31,556 |   |

QUANTITATIVE 

Index

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CONTROLS 

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

|   | · | provide reasonable assurance that 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 Condensed Consolidated Financial Statements. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Index

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OTHER 

| (a) | We have retained a signed original of any exhibit listed below that contains signatures, and we will provide any such exhibit to the Commission or its staff upon request.  The following exhibit is included herein: |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.1 | Certification. |
|--------|------|----------------|

|   | 31.2 | Certification. |
|--------|------|----------------|

|   | 32.1 | Certification. |
|--------|------|----------------|

Index

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| Date:  May 7, 2010  | By/s/ Bert E. Downing, Jr.                                Bert E. Downing, Jr.Vice President, Chief Financial Officer,Corporate Controller and Treasurer  |
|------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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