SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

 X       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD SEPTEMBER 30, 1999

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 of                          I.R.S. Employer

 incorporation or organization)                         Identification No.

  5430 LBJ FREEWAY,  SUITE 1740,  THREE LINCOLN  CENTRE,  DALLAS,  TX 75240-2697
(Address of principal executive offices) (Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:    (972) 458-0028

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  13 or 15(d)  of the  Securities  Exchange  Act of 1934
during  the  preceding  12  months,  and (2) has  been  subject  to such  filing
requirements for the past 90 days.

                           YES   X                            No _____

Number of shares of common stock outstanding at November 5, 1999: 9,926,531


<PAGE>


                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.

                                AND SUBSIDIARIES

                                      INDEX

                                                                         Page
                                                                         NUMBER

PART I.  FINANCIAL INFORMATION

  Item 1.         Financial Statements

                  Consolidated Balance Sheets - December 31, 1998
                   and September 30, 1999                                  3-4

                  Consolidated Statements of Operations - Three months
                   and nine months ended September 30, 1998 and 1999         5

                  Consolidated Statements of Cash Flows - Nine months
                   ended September 30, 1998 and 1999                         6

                  Consolidated Statement of Stockholders' Equity - Nine
                   months ended September 30, 1999                           7

                  Notes to Consolidated Financial Statements              8-12

  Item 2.         Management's Discussion and Analysis of Financial
                   Condition and Results of Operations                   13-20

PART II. OTHER INFORMATION

  Item 1.         Legal Proceedings                                         21

  Item 6.         Exhibits and Reports on Form 8-K                          21


<PAGE>


                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.

                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                 (In thousands)

<TABLE>
<CAPTION>
                                                      DECEMBER 31, SEPTEMBER 30,
                 ASSETS                                  1998          1999
                                                      -----------  -------------

Current assets:

<S>                                                      <C>            <C>
  Accounts and notes receivable ..................       $ 36,786       $ 38,625
  Inventories ....................................         52,239         62,279
  Deferred income taxes ..........................         18,985         16,293
  Prepaid expenses and other .....................          3,916          1,698
                                                         --------       --------

     Total current assets ........................        111,926        118,895
                                                         --------       --------

Property, plant and equipment ....................        354,682        355,372
Less accumulated depreciation ....................        198,582        204,841
                                                         --------       --------

     Net property, plant and equipment ...........        156,100        150,531
                                                         --------       --------

Other assets:

  Restricted investments .........................          8,624          9,037
  Prepaid pension cost ...........................        120,516        124,331
  Deferred financing costs .......................          3,493          3,149
  Goodwill .......................................          1,115          1,030
  Other ..........................................          4,083          4,169
                                                         --------       --------

     Total other assets ..........................        137,831        141,716
                                                         --------       --------

                                                         $405,857       $411,142
                                                         ========       ========

</TABLE>


<PAGE>



                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.

                                AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                                 (In thousands)

<TABLE>
<CAPTION>
       LIABILITIES AND STOCKHOLDERS' EQUITY

                                                    DECEMBER 31,   SEPTEMBER 30,
                                                       1998           1999
                                                    ------------   -------------
Current liabilities:
Notes payable and current maturities of
<S>                                                    <C>            <C>
    long-term debt ...............................     $  29,912      $  52,489
  Accounts payable ...............................        34,002         23,377
  Accrued OPEB cost ..............................        10,000         10,000
  Other accrued liabilities ......................        37,457         38,178
                                                       ---------      ---------

      Total current liabilities ..................       111,371        124,044
                                                       ---------      ---------

Noncurrent liabilities:

  Long-term debt .................................       101,852        100,899
  Accrued OPEB cost ..............................        99,047         98,306
  Deferred income taxes ..........................         6,162          3,124
  Negative goodwill ..............................        24,065         23,048
  Other ..........................................        10,283          9,882
                                                       ---------      ---------

      Total noncurrent liabilities ...............       241,409        235,259
                                                       ---------      ---------

Minority interest ................................          --               27
                                                       ---------      ---------

Stockholders' equity:

  Common stock ...................................        10,569         10,656
  Additional paid-in capital .....................        51,763         52,398
  Accumulated deficit ............................        (9,243)       (11,230)
  Treasury stock, at cost ........................           (12)           (12)
                                                       ---------      ---------

      Total stockholders' equity .................        53,077         51,812
                                                       ---------      ---------

                                                       $ 405,857      $ 411,142
                                                       =========      =========

</TABLE>





<PAGE>


                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.

                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                      (In thousands, except per share data)

<TABLE>
<CAPTION>
                                         Three months ended        Nine months ended
                                             September 30,             September 30,
                                       --------------------      ----------------------
                                          1998          1999       1998          1999
                                          ----          ----       ----          ----

Revenues and other income:

<S>                                    <C>          <C>          <C>          <C>
  Net sales ........................   $  87,125    $  79,738    $ 289,148    $ 277,379
  Interest .........................         119          138          440          327
  Other, net .......................          11         --            439          313
                                       ---------    ---------    ---------    ---------
                                          87,255       79,876      290,027      278,019
                                       ---------    ---------    ---------    ---------

Costs and expenses:

  Cost of goods sold ...............      81,207       76,226      265,217      253,373
  Selling ..........................       1,357        1,630        4,432        5,540
  General and administrative .......       5,829        4,423       12,587       15,608
  Pension expense(credit) ..........      (2,467)         185       (7,083)      (3,815)
  Interest .........................       2,483        3,507        7,362       10,552
                                       ---------    ---------    ---------    ---------
                                          88,409       85,971      282,515      281,258
                                       ---------    ---------    ---------    ---------

                                          (1,154)      (6,095)       7,512       (3,239)

Equity in losses of Alter
 Recycling Company L.L.C ...........        --             (9)        --             (9)
                                       ---------    ---------    ---------    ---------

   Income (loss) before income taxes      (1,154)      (6,104)       7,512       (3,248)

Provision (benefit) for income taxes        (447)      (1,911)       1,949       (1,288)

Minority interest in after tax
  earnings (losses) ................        --            (75)        --             27
                                       ---------    ---------    ---------    ---------

   Net income (loss) ...............        (707)      (4,118)       5,563       (1,987)

Dividends on preferred stock .......          17         --            157         --
                                       ---------    ---------    ---------    ---------

    Net income (loss) available for
      common shares ................   $    (724)   $  (4,118)   $   5,406    $  (1,987)
                                       =========    =========    =========    =========

Net income (loss) per share available for common shares:

  Basic ............................   $    (.07)   $    (.41)   $     .58    $    (.20)
                                       =========    =========    =========    =========
  Diluted ..........................   $    (.07)   $    (.41)   $     .57    $    (.20)
                                       =========    =========    =========    =========

Weighted average common and common equivalent shares outstanding:

  Basic ............................       9,661        9,927        9,446        9,897
                                       =========    =========    =========    =========
  Diluted ..........................       9,661        9,927        9,613        9,897
                                       =========    =========    =========    =========
</TABLE>




<PAGE>


                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.

                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                  Nine months ended September 30, 1998 and 1999

                                 (In thousands)

<TABLE>
<CAPTION>
                                                              1998        1999
                                                              ----        ----

Cash flows from operating activities:

<S>                                                        <C>         <C>
  Net income (loss) ....................................   $  5,563    $ (1,987)
  Depreciation and amortization ........................     14,535      16,439
  Amortization of deferred financing costs .............        378         389
  Deferred income taxes ................................      1,735        (346)
  Other, net ...........................................        859      (3,687)
  Change in assets and liabilities:

    Accounts receivable ................................     (6,658)       (209)
    Inventories ........................................      4,820     (10,881)
    Prepaid pension cost ...............................     (7,083)     (3,815)
    Accounts payable ...................................      3,385      (9,305)
    Other, net .........................................     (6,435)      3,450
                                                           --------    --------

      Net cash provided (used) by operating activities .     11,099      (9,952)
                                                           --------    --------

Cash flows from investing activities:

  Capital expenditures .................................    (46,526)    (12,438)
  Other, net ...........................................       (715)        766
                                                           --------    --------

      Net cash used by investing activities ............    (47,241)    (11,672)
                                                           --------    --------

Cash flows from financing activities:

  Revolving credit facilities, net .....................     13,738      22,220
  Other notes payable and long-term debt:
    Additions ..........................................         95         659
    Principal payments .................................     (1,096)     (1,255)
  Preferred stock dividend payments ....................       (157)       --
  Exercise of warrants and redemption of preferred
    stock, net .........................................        701        --
  Common stock issued - other ..........................        239        --
                                                           --------    --------

      Net cash provided by financing activities ........     13,520      21,624
                                                           --------    --------

Net change in cash and cash equivalents ................    (22,622)       --

Cash and cash equivalents, beginning of period .........     22,622        --
                                                           --------    --------

Cash and cash equivalents, end of period ...............   $   --      $   --
                                                           ========    ========

Supplemental disclosures:
  cash paid for:
    Interest, net of amount capitalized ................   $ 10,351    $ 12,644
    Income taxes (refund received) .....................        139      (3,533)
  Common stock contributed to employee benefit plan ....   $    616    $    722

</TABLE>


<PAGE>


                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.

                                AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                      Nine months ended September 30, 1999

                                 (In thousands)

<TABLE>
<CAPTION>
                                         Additional
                                 Common    paid-in  Accumulated   Treasury
                                 stock     capital    deficit      stock      Total
                               --------   --------   --------    ---------   --------

<S>                            <C>        <C>        <C>         <C>         <C>
Balance - December 31, 1998    $ 10,569   $ 51,763   $ (9,243)   $    (12)   $ 53,077

Net loss ...................       --         --       (1,987)       --        (1,987)

Issuance of common stock ...         87        635       --          --           722
                               --------   --------   --------    --------    --------

Balance - September 30, 1999   $ 10,656   $ 52,398   $(11,230)   $    (12)   $ 51,812
                               ========   ========   ========    ========    ========

</TABLE>





<PAGE>



                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.

                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Organization and basis of presentation:

         The consolidated  balance sheet at December 31, 1998 has been condensed
from the audited  consolidated  financial  statements  of Keystone  Consolidated
Industries,  Inc.  ("Keystone" or the "Company") at that date. The  consolidated
balance  sheet  at  September  30,  1999  and  the  consolidated  statements  of
operations and cash flows for the interim  periods ended  September 30, 1998 and
1999, and the  consolidated  statement of  stockholders'  equity for the interim
period ended September 30, 1999, have each been prepared by the Company, without
audit. In the opinion of management, all adjustments,  consisting only of normal
recurring  adjustments,  necessary to present fairly the consolidated  financial
position,  results of  operations  and cash flows  have been made.  However,  it
should be understood that  accounting  measurements at interim dates may be less
precise than at year end. The results of operations for the interim  periods are
not necessarily indicative of the operating results for a full year or of future
operations.

         Certain information  normally included in financial statements prepared
in accordance with generally accepted  accounting  principles has been condensed
or omitted. The accompanying consolidated financial statements should be read in
conjunction with the consolidated financial statements included in the Company's
Annual  Report on Form 10-K for the year ended  December  31, 1998 (the  "Annual
Report").

         At  September  30,  1999,  Contran  Corporation  ("Contran")  and other
entities related to Mr. Harold C. Simmons own  approximately 49% of the Company.
Substantially all of Contran's outstanding voting stock is held either by trusts
established  for the  benefit  of  certain  children  and  grandchildren  of Mr.
Simmons, of which Mr. Simmons is sole trustee,  or by Mr. Simmons directly.  The
Company may be deemed to be controlled by Contran and Mr. Simmons.

         The Company  will adopt  Statement of  Financial  Accounting  Standards
("SFAS") No. 133, Accounting for Derivative  Instruments and Hedging Activities,
as amended,  no later than the first  quarter of 2001.  Under SFAS No. 133,  all
derivatives  will be recognized as either assets or liabilities  and measured at
fair value.  The accounting for changes in fair value of derivatives will depend
upon the intended use of the  derivative.  The impact on the Company of adopting
SFAS No. 133, if any, has not yet been determined but will be dependent upon the
extent  to which the  Company  is a party to  derivative  contracts  or  hedging
activities covered by SFAS No. 133 at the time of adoption.


<PAGE>


Note 2 - Joint ventures:

         In January 1999,  Keystone and two unrelated parties formed Garden Zone
LLC ("Garden  Zone"),  a joint venture to supply wire, wood and plastic products
to the consumer lawn and garden markets.  Keystone owns 51% of the joint venture
and, as such, Keystone's consolidated financial statements at September 30, 1999
include the  accounts of Garden  Zone.  Neither  Keystone  nor the other  owners
contributed  any capital or other assets to the Garden Zone joint  venture,  but
Keystone did guarantee Garden Zone's new $4 million  revolving credit agreement.
See Note 5.  Garden  Zone  commenced  operations  in  February  1999 and through
September  30, 1999 earned  $55,000,  of which  $28,000  accrued to Keystone for
financial reporting purposes.


         In July 1999, Keystone formed Alter Recycling Company,  L.L.C. ("ARC"),
a joint venture with Alter Peoria,  Inc., to operate a Scrap recycling operation
at Keystone's  facility in Peoria,  Illinois.  ARC sells scrap steel to Keystone
and others. Upon formation,  Keystone  contributed the property and equipment of
its current Peoria scrap facility (net book value of approximately  $335,000) to
the joint venture. Keystone does not currently anticipate it will be required to
make any other contributions to fund or operate this joint venture.  The Company
recognized no gain or loss upon formation of ARC and the Company's investment in
ARC is accounted for by the equity method.  At September 30, 1999, the Company's
investment in ARC amounted to $326,000 and is included in other assets.  ARC
commenced  operations in August 1999 and through September 30, 1999, the Company
had  purchased  approximately  $1.5  million  of scrap from ARC.  There were no
payables to ARC at September 30, 1999.


Note 3 - Disposition:

         In January  1999,  Keystone's  wholly-owned  subsidiary,  DeSoto,  Inc.
("DeSoto") sold its household cleaning products division.  DeSoto did not record
any  gain or loss as a result  of this  sale.  Subsequent  to the  sale,  DeSoto
changed its name to Sherman Wire Company.

Note 4 - Inventories:

         Inventories are stated at the lower of cost or market.  At December 31,
1998 and September 30, 1999, the last-in,  first-out ("LIFO") method was used to
determine the cost of approximately  three-fourths of total  inventories and the
first-in,  first-out or average cost methods were used to determine  the cost of
other inventories.


<PAGE>



<TABLE>
<CAPTION>
                                                        DECEMBER 31,  SEPTEMBER 30,
                                                           1998           1999
                                                        ------------  -------------
                                                              (In thousands)

Raw materials:

<S>                                                        <C>           <C>
  Steel and wire products ..........................       $17,400       $17,093
  Household cleaning products ......................           650          --
                                                           -------       -------
                                                            18,050       $17,093
                                                           -------       -------

Work in process -

  Steel and wire products ..........................         8,642         9,093
                                                           -------       -------

Finished products:

  Steel and wire products ..........................        12,797        20,195
  Lawn and garden products .........................          --           5,252
  Household cleaning products ......................           249          --
                                                           -------       -------
                                                            13,046        25,447
                                                           -------       -------
Supplies:

  Steel and wire products ..........................        16,894        14,980
                                                           -------       -------
                                                            56,632        66,613
                                                           -------       -------

Less LIFO reserve:

  Steel and wire products ..........................         4,334         4,334
  Household cleaning products ......................            59          --
                                                           -------       -------
                                                             4,393         4,334
                                                           -------       -------
                                                           $52,239       $62,279
                                                           =======       =======
</TABLE>

Note 5 - Notes payable and long-term debt:

<TABLE>
<CAPTION>
                                                         DECEMBER 31,   SEPTEMBER 30,
                                                            1998            1999
                                                         ------------   -------------
                                                               (In thousands)

<S>                                                        <C>          <C>
9 5/8% Senior Secured Notes, due August 2007 .........     $100,000     $100,000
Commercial credit agreements:
  Revolving credit facilities:
    Keystone .........................................       24,580       41,500
    EWP ..............................................        4,000        5,300
    Garden zone ......................................         --          4,000
  Term loan - EWP ....................................        1,020          583
Other ................................................        2,164        2,005
                                                           --------     --------
                                                            131,764      153,388
  Less current maturities ............................       29,912       52,489
                                                           --------     --------

                                                           $101,852     $100,899
                                                           ========     ========

</TABLE>


<PAGE>


Note 6 - Income taxes:

         Summarized  below are the differences  between the provision  (benefit)
for income taxes and the amounts that would be expected  using the U.S.  federal
statutory income tax rate of 35%.

<TABLE>
<CAPTION>
                                                              Nine months ended
                                                                September 30,
                                                             1998          1999
                                                           -------      --------
                                                               (In thousands)

<S>                                                        <C>          <C>
Expected tax expense (benefit), at statutory rate ....     $ 2,629      $(1,137)
U.S. state income taxes, net .........................         217          155
Amortization of goodwill .............................        (326)        (326)
Other, net ...........................................        (571)          20
                                                           -------      -------

Provision (benefit) for income  taxes ................     $ 1,949      $(1,288)
                                                           =======      =======
</TABLE>


Note 7 - Other accrued liabilities:
<TABLE>
<CAPTION>
                                                    December 31,   September 30,
                                                       1998            1999
                                                    ------------   -------------
                                                          (In thousands)

Current:

<S>                                                      <C>            <C>
  Employee benefits ..............                       $11,560        $10,933
  Environmental ..................                         7,165          9,341
  Self insurance .................                         6,950          6,613
  Interest .......................                         4,054          1,601
  Disposition of former facilities                         1,452            633
  Legal and professional .........                           795            919
  Other ..........................                         5,481          8,138
                                                         -------        -------

                                                         $37,457        $38,178
                                                         =======        =======

Nnoncurrent:

  Environmental ..................                       $ 8,175        $ 8,290
  Other ..........................                         2,108          1,592
                                                         -------        -------

                                                         $10,283        $ 9,882
                                                         =======        =======
</TABLE>


Note 8 - Operations:

         During 1998, the Company's  operations  were comprised of two segments;
the  manufacture  and sale of  carbon  steel  rod,  wire and wire  products  for
agricultural,   industrial,   construction,   commercial,   original   equipment
manufacturers  and  retail  consumer  markets  and the  manufacture  and sale of
household cleaning products.

         In  January  1999,   Keystone  sold  its  household  cleaning  products
division. See Note 3. At December 31, 1998,  identifiable segment assets related
to the household  cleaning  products  division  amounted to  approximately  $2.3
million.

         Beginning   in  February   1999,   Keystone  is  also  engaged  in  the
distribution  of wire,  plastic and wood lawn and garden  products to  retailers
through Garden Zone. Garden Zone's identifiable  segment assets at September 30,
1999 were approximately $6.0 million.

<PAGE>

     Beginning  in August 1999,  Keystone is also  engaged in a scrap  recycling
joint  venture  through  its 50%  interest  in  ARC,  an  unconsolidated  equity
affiliate.

<TABLE>
<CAPTION>
                                                             Three months ended               Nine months ended
                                                                September 30,                    September 30,
                                                          ------------------------         ------------------------
                                                           1998            1999            1998             1999
                                                         -------          -------         --------        --------
                                                               (In thousands)

Revenues:

<S>                                                       <C>              <C>             <C>             <C>
  Steel and wire products                                 $85,444          $77,677         $280,944        $267,508
  Lawn and garden products                                      -            2,434                -          12,753
  Household cleaning products                               1,681             -               8,204            -
                                                          -------          -------         --------        --------
                                                           87,125           80,111          289,148         280,261
  Elimination of intersegment
    revenues                                                 -                (373)            -             (2,882)
                                                          -------          -------         --------        --------

                                                          $87,125          $79,738         $289,148        $277,379
                                                          =======          =======         ========        ========

Income (loss) before income taxes:
  Operating profit (loss):
    Steel and wire products                               $ 1,885          $(2,392)         $13,708        $  7,771
    Lawn and garden products                                    -              (73)               -             223
    Household cleaning products                              (379)            -                (335)           -
                                                          -------          -------         --------       ---------
                                                            1,506           (2,465)          13,373           7,994
  General corporate items:
    Interest income                                           119              138              440             327
    General income (expense), net                            (296)            (261)           1,061          (1,008)
  Interest expense                                         (2,483)          (3,507)          (7,362)        (10,552)
  Equity in losses of ARC                                    -                  (9)            -                 (9)
                                                          -------          -------         --------        --------

    Income (loss) before income
      taxes                                               $(1,154)         $(6,104)        $  7,512        $ (3,248)
                                                          =======          =======         ========        ========
</TABLE>


Note 9 - Contingencies:

         At September 30, 1999,  the Company's  financial  statements  reflected
accrued  liabilities of $17.6 million for estimated  remedial costs arising from
environmental  issues.  There is no assurance  regarding  the  ultimate  cost of
remedial measures that might eventually be required by environmental authorities
or  that  additional   environmental   hazards,   requiring   further   remedial
expenditures,  might not be asserted  by such  authorities  or private  parties.
Accordingly,  the  ultimate  costs of remedial  measures  may exceed the amounts
currently accrued.

         For additional  information  related to commitments and  contingencies,
see "Management's  Discussion and Analysis of Financial Condition and Results of
Operations" and the Annual Report.


<PAGE>


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS:

         Keystone Consolidated Industries, Inc. ("Keystone" or the "Company") is
a leading  manufacturer of fabricated wire products,  industrial wire and carbon
steel rod for the agricultural,  industrial,  construction,  original  equipment
manufacturer  and  retail  consumer  markets.   Historically,  the  Company  has
experienced  greater sales and profits  during the first half of the year due to
the  seasonality  of sales in principal  wire  products  markets,  including the
agricultural and construction markets.

         Beginning in January 1999, Keystone is also engaged in the distribution
of wire,  plastic  and wood lawn and garden  products to  retailers  through its
51%-owned  subsidiary  Garden Zone LLC ("Garden  Zone"), a joint venture between
Keystone and two unrelated  parties.  See Note 2 to the  Consolidated  Financial
Statements.

     Beginning  in August  1999,  Keystone  is also  engaged in scrap  recycling
through its  unconsolidated  50%  interest in Alter  Recycling  Company,  L.L.C.
("ARC"). See Note 2 to the Consolidated  Financial Statements.

     Prior to January  1999,  Keystone was also engaged in the  manufacture  and
distribution of household cleaning products through its wholly-owned  subsidiary
DeSoto,  Inc.  ("DeSoto").  In January 1999, DeSoto sold its household  cleaning
products  division and changed its name to Sherman Wire  Company.  See Note 3 to
the Consolidated Financial Statements.

         The  statements  in this  Quarterly  Report  on Form 10-Q  relating  to
matters that are not historical facts including,  but not limited to, statements
found in this "Management's  Discussion And Analysis Of Financial  Condition And
Results  Of  Operations,"   are  forward   looking   statements  that  represent
management's  belief and assumptions based on currently  available  information.
Forward-looking  statements  can be  identified  by the  use of  words  such  as
"believes," "intends," "may," "should," "anticipates,"  "expected" or comparable
terminology,  or by  discussions  of strategies or trends.  Although the Company
believes the  expectations  reflected  in such  forward-looking  statements  are
reasonable,  it cannot  give  assurances  these  expectations  will  prove to be
correct.   Such  statements  by  their  nature  involve  substantial  risks  and
uncertainties  that could  significantly  impact  expected  results,  and actual
future   results  could  differ   materially   from  those   described  in  such
forward-looking  statements.  Among the factors that could cause  actual  future
results to differ materially are the risks and  uncertainties  discussed in this
Quarterly  Report and those  described from time to time in the Company's  other
filings with the Securities and Exchange Commission  including,  but not limited
to, cost of raw materials,  future supply and demand for the Company's  products
(including  cyclicality  thereof),  general  economic  conditions,   competitive
products and substitute products, customer and competitor strategies, the impact
of  pricing  and  production  decisions,   environmental   matters,   government
regulations and possible  changes  therein,  the ultimate  resolution of pending
litigation,  successful  implementation  of the Company's  capital  improvements
plan, possible disruptions of normal business activity from Year 2000 issues and
international trade policies of the United States and certain foreign countries.
Should one or more of these risks  materialize  (or the  consequences  of such a
development  worsen),  or should the  underlying  assumptions  prove  incorrect,
actual results could differ  materially from those  forecasted or expected.  The
Company   disclaims  any  intention  or  obligation  to  update  or  revise  any
forward-looking statement whether as a result of new information,  future events
or otherwise.

<PAGE>

         The following  table sets forth the  Company's  steel and wire products
production and sales volume data for the periods indicated.

<TABLE>
<CAPTION>
                                            Three months ended      Nine months ended
                                               September 30,           September 30,
                                            ------------------      -----------------
                                            1998         1999       1998         1999
                                            ----         ----       ----         ----
                                                         (In thousands of tons)

Production volume:
 billets:

<S>                                          <C>          <C>          <C>          <C>
  Produced .........................         163          174          524          503
  Purchased ........................        --             12         --             42
 Rod ...............................         167          173          518          519

Sales volume:

 Fabricated wire products ..........          80           70          252          251
 Industrial wire ...................          43           32          130          110
 Steel rod .........................          51           55          170          166
                                       ---------    ---------    ---------    ---------

                                             174          157          552          527
                                       =========    =========    =========    =========
</TABLE>

         The  following  table sets forth the  components  of the  Company's net
sales for the periods indicated.

<TABLE>
<CAPTION>
                                          Three months ended        Nine months ended
                                             September 30,            September 30,
                                        ---------------------    ----------------------
                                          1998        1999          1998         1999
                                        -------    ----------    ---------    ---------
                                                          (In millions)

Steel and wire products:

<S>                                    <C>          <C>          <C>          <C>
  Fabricated wire products .........   $    50.9    $    47.9    $   167.8    $   172.4
  Industrial wire ..................        20.3         15.0         62.1         51.0
  Rod ..............................        14.0         14.5         50.0         43.1
  Other ............................          .2           .2          1.0          1.0
                                       ---------    ---------    ---------    ---------
                                            85.4         77.6        280.9        267.5

Lawn and garden products ...........        --            2.1         --            9.9
Household cleaning products ........         1.7         --            8.2         --
                                       ---------    ---------    ---------    ---------

                                       $    87.1    $    79.7    $   289.1    $   277.4
                                       =========    =========    =========    =========

</TABLE>

<PAGE>
         The following  table sets forth selected  operating data of the Company
as a percentage of net sales for the periods indicated.

<TABLE>
<CAPTION>
                                            Three months ended          Nine months ended
                                               September 30,              September 30,
                                         --------------------    ------------------------
                                           1998          1999         1998        1999
                                        --------    ---------    ---------     -------
<S>                                        <C>          <C>          <C>          <C>
Net sales ..........................       100.0%       100.0%       100.0%       100.0%
Cost of goods sold .................        93.2         95.6         91.7         91.3
                                       ---------    ---------    ---------    ---------
Gross profit .......................         6.8          4.4          8.3          8.7
Selling expense ....................         1.6          2.0          1.5          2.0
General and administrative expense .         6.7          5.6          4.4          5.6
Overfunded defined benefit pension
 (credit) expense ..................        (2.8)          .2         (2.4)        (1.4)

Income (loss) before income taxes ..        (1.3)%       (7.7)         2.6%        (1.2)
Provision (benefit) for income
 taxes .............................         (.5)        (2.4)          .7          (.5)
Minority interest in after-tax
  earnings (losses) ................        --            (.1)        --           --
                                       ---------    ---------    ---------    ---------

Net income (loss) ..................         (.8)%       (5.4)%        1.9%         (.7)%
                                       =========    =========    =========    =========
</TABLE>


         Although  billet  production  increased in the third quarter of 1999 as
compared to the same period in 1998,  billet production in the first nine months
of 1999  declined as compared to billet  production  in the first nine months of
1998.  Purchased  billets  enabled the  Company's  rod  production  in the third
quarter  and the first nine  months of 1999 to  increase  over the levels in the
same periods during 1998.

         Net sales of $79.7 million in the 1999 third quarter declined from 1998
third  quarter  levels  due  primarily  to lower  shipments  of  steel  and wire
products.  Total  shipments  of steel and wire  products  declined 10% from 1998
third-quarter levels.  Fabricated wire products and industrial wire sales volume
decreased  12% and 26%,  respectively,  while  carbon  steel  rod  sales  volume
increased 8%. The overall  per-ton selling price of the Company's steel and wire
products increased 1% during the 1999 third quarter compared with the 1998 third
quarter.  Per-ton selling prices of fabricated wire products  increased 7% while
carbon  steel  rod  selling  prices  decreased  4%.  Per-ton  selling  prices of
industrial wire were relatively level.

         During the first nine months of 1999, net sales  decreased 4% to $277.4
million from $289.1  million in the first nine months of 1998 due primarily to a
4% decline in shipments and a 1% decline in per-ton  selling prices of steel and
wire products.  Industrial wire and carbon steel rod shipments  declined 15% and
2%,  respectively,  while  fabricated  wire products  shipments were  relatively
unchanged  compared with 1998 levels.  Per-ton selling prices of industrial wire
and carbon steel rod declined 3% and 12%,  respectively,  while  fabricated wire
products per-ton selling prices increased 3%.

         The 1999 third quarter  gross margin  percentage of 4.4% was lower than
the 6.8% recorded during the comparable  period in 1998 as lower costs for scrap
steel,  the Company's  primary raw material,  and slightly higher selling prices
were more than offset by the effect of the lower sales volume, higher production
costs  associated with the start-up of new equipment  installed at the Company's
steel  mini-mill  located in Peoria,  Illinois,  purchased  billet  costs and an
unexpected  $2.2  million   fuel-adjustment   charge  from  the  Peoria  plant's
electricity  provider.  The Company  believes  it has  identified  the  start-up
problems  and  expects  to  have  these  problems  resolved  and  the  equipment
performing  at the  desired  levels  during  the 2000  first  quarter.  However,
Keystone  believes  those  problems will continue to adversely  impact  earnings
throughout the remainder of 1999 and the first quarter of 2000. Keystone's scrap
costs decreased 14% during the 1999 third quarter as compared to the same period
a year ago. During the 1999 third quarter, the Company purchased 206,000 tons of
scrap at an  average  price of $95 per ton as  compared  to 1998  third  quarter
purchases of 201,000 tons at an average price of $111 per ton. In addition,  the
Company  recorded a $2.2  million  benefit  during  the 1999 third  quarter as a
result of favorable  legal  settlements  with two electrode  vendors  related to
alleged  price  fixing.  The Company  does not  anticipate  it will  receive any
further  electrode  settlements.  The Company  purchased  12,000 tons of billets
during the 1999 third quarter at an average price of $190 per ton as compared to
none in the 1998 third quarter.

         For the first nine months of 1999,  Keystone's gross margin  percentage
increased  to 8.7% from 8.3%  during  the 1998  period.  This  increase  was due
primarily to lower costs for scrap steel and $2.7 million of favorable electrode
vendor  settlements  partially  offset by the effect of lower  sales  volume and
selling  prices,  higher  production  costs  associated  with the new  equipment
start-up problems,  purchased billet costs and the $2.2 million  fuel-adjustment
charge. During the first nine months of 1999, the Company purchased 542,000 tons
of scrap at an average  price of $89 per ton as  compared to 1998  purchases  of
572,000  tons at an average  price of $119 per ton, a 25%  decline.  The Company
purchased  42,000  tons of billets  during  the first nine  months of 1999 at an
average  price of $196 per ton as  compared  to none in the first nine months of
1998.

         Selling expenses increased to $1.6 million in the third quarter of 1999
from $1.4 million in the 1998 third quarter and increased to $5.5 million in the
first nine  months of 1999 from $4.4  million in the first nine  months of 1998,
primarily  as a  result  of the  higher  selling  expenses  associated  with the
Company's lawn and garden products segment.

         General and  administrative  expenses  decreased to $4.4 million during
the third  quarter of 1999 as compared to $5.8 million  during the third quarter
of 1998 primarily due to a $1.1 million charge to bad debt expense  related to a
customers bankruptcy during the 1998 third quarter.  There was no such charge in
the 1999  third  quarter.  During  the first nine  months of 1999,  general  and
administrative  expenses  amounted to $15.6 million as compared to $12.6 million
during the first nine months of 1998 primarily due to higher  general  insurance
expense,  costs  associated  with the start-up of the Company's  lawn and garden
products  segment,   unfavorable  legal  settlements  and  higher  environmental
charges.  In  addition,  the  1998  first  nine  months  included  a  legal  fee
reimbursement of $380,000.


         Due to a  reduction  in the  estimated  pension  credit  for 1999,  the
Company  recorded  pension  expense  of  $185,000  in the third  quarter of 1999
compared with a pension credit of $2.5 million in the 1998 third  quarter.  This
change in estimate  was  primarily a result of the  increased  pension  benefits
included in the Company's new labor contract with the Peoria  facility's  union.
The Company anticipates the total pension credit in 1999 will approximate $5.1
million as compared to a total pension credit of $9.4 million in 1998.


         Interest expense in the third quarter of 1999 was higher than the third
quarter of 1998 due  principally to higher average  borrowing  levels  partially
offset by lower  interest  rates.  Average  borrowings  by the Company under its
revolving credit facilities, EWP term loan and Senior Secured Notes approximated
$144.2 million in the third quarter of 1999 as compared to $107.9 million in the
third quarter of 1998.  During the third quarter of 1999,  the average  interest
rate paid by the Company was 9.3% per annum as compared to 9.6% per annum in the
third quarter of 1998.

         Interest  expense in the first nine months of 1999 was also higher than
the first nine months of 1999 due  principally to higher  borrowing  levels also
partially  offset by lower  interest  rates.  Average  borrowings by the Company
under its revolving  credit  facilities,  EWP term loan and Senior Secured Notes
approximated  $143.3  million in the first nine  months of 1999 as  compared  to
$106.5 million in the first nine months of 1998. During the first nine months of
1999,  the  average  interest  rate  paid by the  Company  was 9.3% per annum as
compared to 9.6% per annum in the first nine months of 1998.

         The  principal  reasons for the  difference  between  the U.S.  federal
statutory  income  tax rate and the  Company's  effective  income  tax rates are
explained in Note 6 to the Consolidated Financial Statements.

         As a result of the items discussed  above,  the Company  incurred a net
loss of $4.1 million  during the 1999 third quarter as compared to a net loss in
the 1998 third  quarter of  $707,000,  and  incurred a net loss during the first
nine months of 1999 of $2.0 million as compared to net income of $5.5 million in
the first nine months of 1998.

LIQUIDITY AND CAPITAL RESOURCES:

         The Company's cash flows from operating  activities are affected by the
seasonality  of  its  business  as  sales  of  certain   products  used  in  the
agricultural and construction industries are typically highest during the second
quarter  and  lowest  during the fourth  quarter  of each year.  These  seasonal
fluctuations,  impact the timing of  production,  sales and  purchases  and have
typically  resulted  in a use of  cash  from  operations  and  increases  in the
outstanding  balance under the Company's  revolving  credit  facility during the
first quarter of each year.

         At September 30, 1999 the Company had negative  working capital of $5.1
million,  including  $1.7  million of notes  payable and current  maturities  of
long-term  debt  as well  as the  outstanding  borrowings  under  the  Company's
revolving credit facilities of $50.8 million. The amount of available borrowings
under these credit  facilities is based on  formula-determined  amounts of trade
receivables and inventories,  less the amount of outstanding  letters of credit.
Under the terms of the indenture  related to the Company's 9 5/8% Senior Secured
Notes,  Keystone's  ability to borrow  under its $55  million  revolving  credit
facility may be limited.  At September  30, 1999,  unused  credit  available for
borrowing under Keystone's $55 million revolving credit facility,  which expires
December 31, 1999, and EWP's $6 million revolving credit facility, which expires
June 30, 2000, were $7.3 million, and $700,000,  respectively.  The terms of the
indenture  will permit  Keystone to borrow all of the $7.3 million unused credit
available under Keystone's $55 million  revolving  credit  facility,  during the
fourth  quarter  of 1999.  Keystone's  $55  million  revolving  credit  facility
requires  daily cash receipts be used to reduce  outstanding  borrowings,  which
results in the Company  maintaining  zero cash  balances when there are balances
outstanding  under this  credit  facility.  Garden  Zone's $4 million  revolving
credit  facility,  which expires December 11, 1999, was fully drawn at September
30, 1999.  Keystone and Garden Zone are currently both  negotiating with lenders
to renew or replace their existing  revolving  credit  facilities that expire in
December 1999.

         During  the  first  nine  months  of  1999,  the  Company's   operating
activities  used  approximately  $10.0 million of cash compared to $11.1 million
provided in the first nine months of 1998  principally  due to lower earnings in
the 1999 period and an increase in inventory levels during 1999.

         During 1997, the Company  commenced a $75 million  capital  improvement
plan to upgrade  certain of its plant and  equipment  and  eliminate  production
capacity bottlenecks in order to reduce costs and improve production efficiency.
Keystone  substantially  completed the capital  improvement plan during 1998. As
such,  capital  expenditures in the first nine months of 1999 were  considerably
less than capital  expenditures during the first nine months of 1998. During the
first  nine  months  of  1999,   the  Company  made  capital   expenditures   of
approximately  $12.4  million  as  compared  to $46.5  million in the first nine
months of 1998.  Capital  expenditures  for 1999 are  currently  estimated to be
approximately   $18  million  and  are  related   primarily   to  upgrades   and
debottlenecking  of production  equipment.  These capital  expenditures  will be
funded  using  borrowing  availability  under  the  Company's  revolving  credit
facilities.

         At September 30, 1999,  the Company's  financial  statements  reflected
accrued  liabilities  of $17.6 million for estimated  remediation  costs arising
from environmental  issues. There is no assurance regarding the ultimate cost of
remedial measures that might eventually be required by environmental authorities
or  that  additional   environmental   hazards,   requiring   further   remedial
expenditures,  might not be asserted  by such  authorities  or private  parties.
Accordingly, the costs of remedial measures may exceed the amounts accrued.

         The Company  incurs  significant  ongoing costs for plant and equipment
and  substantial   employee  medical  benefits  for  both  current  and  retired
employees.  As such,  the  Company  is  vulnerable  to  business  downturns  and
increases  in  costs,   and  accordingly,   routinely   compares  its  liquidity
requirements  and capital  needs  against its estimated  future  operating  cash
flows. As a result of this process,  the Company has in the past, and may in the
future,  reduce  controllable  costs, modify product mix, acquire and dispose of
businesses,  restructure  certain  indebtedness,  and  raise  additional  equity
capital.  The Company will continue to evaluate the need for similar  actions or
other measures in the future in order to meet its obligations.  The Company also
routinely  evaluates   acquisitions  of  interests  in,  or  combinations  with,
companies  related to the Company's current  businesses.  The Company intends to
consider such acquisition  activities in the future and, in connection with this
activity,  may consider issuing  additional  equity securities or increasing the
indebtedness of the Company. However, the Company's ability to incur new debt in
the future may be  limited by the terms of the  indenture  related to the 9 5/8%
Senior Secured Notes.

         Management  believes the cash flows from  operations  together with the
funds available  under the Company's  revolving  credit  facilities will provide
sufficient  funds to fund the  anticipated  needs of its  operations and planned
capital  improvements for the remainder of 1999 and the year ending December 31,
2000. This belief is based upon management's assessment of various financial and
operational  factors,  including,  but not limited to,  assumptions  relating to
product  shipments,  product  mix  and  selling  prices,  production  schedules,
productivity  rates, raw materials,  electricity,  labor,  employee benefits and
other fixed and variable costs,  interest  rates,  repayments of long-term debt,
capital  expenditures  and available  borrowings  under the Company's  revolving
credit facilities. However, liabilities under environmental laws and regulations
with  respect  to the  clean-up  and  disposal  of  wastes,  or any  significant
increases  in the cost of  providing  medical  coverage  to active  and  retired
employees  could  have  a  material  adverse  effect  on the  future  liquidity,
financial  condition  and results of  operations  of the Company.  Additionally,
significant  declines in the  Company's  end user markets or market  share,  the
inability to maintain  satisfactory  billet and rod production  levels, or other
unanticipated  costs, if  significant,  could result in a need for funds greater
than the Company currently has available.

YEAR 2000 ISSUE

         As a result of certain computer programs being written using two digits
rather than four to define the applicable  year,  any of the Company's  computer
programs  that have date  sensitive  software may recognize a date using "00" as
the year 1900  rather  than the year 2000 (the  "Year 2000  Issue").  This could
result in a system failure or miscalculations causing disruptions of operations,
including,  among other things, a temporary  inability to process  transactions,
send  invoices or engage in normal  business  activities.  Such  failures  could
materially and adversely affect the Company's  results of operations,  liquidity
and financial condition.

         The Company has  substantially  completed  taking an  inventory  of its
information  systems to determine the modifications to existing software and new
software  required to mitigate any Year 2000 Issues.  The  Company's  evaluation
includes  information  systems  infrastructure,   financial  and  administrative
systems,  process  control  and  manufacturing  operating  systems  as  well  as
significant   vendors  and   customers.   Because  the  majority  of  Keystone's
significant information systems have recently been installed or updated, many of
the Company's systems and related software are already year 2000 compliant.

         Keystone is utilizing  both internal and external  sources to reprogram
or replace and test its software  and/or  hardware with  imbedded  chips and the
Company  expects to have its  evaluation  and required  modifications  completed
prior to December 31, 1999.

         Although the Company  expects its  critical  systems to be compliant by
December  31,  1999,  there is no  assurance  these  results  will be  achieved.
However,  the impact of a failure of any of the  Company's  information  systems
would be  mitigated  to the extent  that other  alternate  processes,  including
manual processes, were able to meet processing requirements. Presently, Keystone
expects  alternate  procedures  would be able to meet the  Company's  processing
needs.  In addition,  excluding  recent  equipment  additions that are year 2000
compliant,  a significant  portion of Keystone's plant and equipment is aged and
doesn't include imbedded chip technology susceptible to Year 2000 Issues.

         Keystone  relies  on  third  parties  for  raw  materials,   utilities,
transportation  and other key  services.  In addition,  the Company is dependent
upon its customers for cash flow. The Company has formally communicated with its
suppliers  and  customers  to  determine  the  extent  to which the  Company  is
vulnerable  to those third  parties'  failure to  eliminate  their own Year 2000
Issues.  Keystone  has  completed  these  third  party  communications  and  has
developed contingency plans for potential non-compliance by these third parties.
Confirmations  received by the Company  indicate  such  customers  and suppliers
generally  are in the process of becoming  Year 2000  compliant  by December 31,
1999.  Notwithstanding  the  Company's  efforts,  the  ability of the Company to
affect the Year 2000 Issues  preparedness  of such  customers  and  suppliers is
limited.  Year 2000 Issues that adversely  impact these third parties could also
affect the  operations of the Company.  There can be no assurance the systems of
other companies on which the Company's systems rely will be timely converted, or
that  a  failure  to  convert  by  another  company,  or a  conversion  that  is
incompatible  with the  Company's  systems,  would not have a  material  adverse
effect on the Company.

         The Company has substantially completed the evaluation of its Year 2000
Issue. Total costs incurred to date relative to the remediation of the Company's
Year 2000 Issues have been expensed as incurred and have not been material.  The
Company does not anticipate any remaining costs to be incurred  relative to Year
2000 Issues will be material.

        Although not anticipated, the most reasonably likely worst-case scenario
of failure by the Company or its key  suppliers or customers to become year 2000
compliant  would  be  a  short-term   slowdown  or  cessation  of  manufacturing
operations at one or more  facilities and a short-term  inability on the part of
the Company to process  orders and billings in a timely  manner,  and to deliver
product to customers.

         The costs of the  project  and the date on which the  Company  plans to
complete its year 2000  assessment  and  remediation  are based on  management's
estimates,  which were derived utilizing  numerous  assumptions of future events
including  the  continued   availability  of  certain  resources,   third  party
modification  plans and other factors.  However,  there can be no assurance that
these  estimates will be achieved and actual results could differ  significantly
from  those  plans.   Specific   factors  that  might  cause   differences  from
management's  estimates  include,  but are not limited to, the  availability and
cost of  personnel  trained in this  area,  the  ability  to locate and  correct
relevant  computer codes,  and similar  uncertainties.  Management  believes the
Company is devoting the necessary  resources to identify and resolve significant
Year 2000 Issues in a timely manner.


<PAGE>


PART II.  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        Reference  is made to  disclosure  provided  under the caption  "Current
litigation" in Note 15 to the Consolidated  Financial Statements included in the
Annual Report.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)     The following exhibit is included herein:

     27.1 Financial Data Schedule for the nine month period ended  September 30,
1999.

(b) Reports on Form 8-K filed during the quarter ended September 30, 1999:

        None.


<PAGE>



                               S I G N A T U R E S

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                          KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                                                        (Registrant)

DATE:  NOVEMBER 8, 1999                    BY /S/HAROLD M. CURDY
                                           -------------------------------------
                                              Harold M. Curdy
                                              Vice President - Finance/Treasurer
                                                (Principal Financial Officer)

DATE:  NOVEMBER 8, 1999                    BY /S/BERT E. DOWNING, JR.
                                           -------------------------------------
                                              Bert E. Downing, Jr.
                                              Corporate Controller
                                                (Principal Accounting Officer)