| For      the quarter ended September 30,      2008 | Commission      file number 1-39199 |
|----------------------------------------------------|-------------------------------------|

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

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

----

| Part      I.    FINANCIAL      INFORMATION                                                                                                                                                 |  Page  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|
|                                                                                                                                                                                                           |             |
| Item      1.    Financial      Statements                                                                                                                                                  |             |
|                                                                                                                                                                                                           |             |
| Condensed      Consolidated Balance Sheets –                 December 31, 2007;      September 30, 2008 (unaudited) | 3                |
|                                                                                                                                                                                                           |             |
| Condensed      Consolidated Statements of Operations (unaudited) -          Three months and nine months ended September 30, 2007 and    2008                                              | 5                |
|                                                                                                                                                                                                           |             |
| Condensed      Consolidated Statements of Cash Flows (unaudited) –          Nine months ended September 30, 2007 and 2008                                                            | 6                |
|                                                                                                                                                                                                           |             |
| Condensed      Consolidated Statement of Stockholders' Equity         and Comprehensive Income -  Nine months ended         September 30, 2008 (unaudited)             | 7                |
|                                                                                                                                                                                                           |             |
| Notes      to Condensed Consolidated Financial Statements (unaudited)                                                                                                                                          | 8                |
|                                                                                                                                                                                                           |             |
| Item      2.    Management's      Discussion and Analysis of Financial          Condition and Results of Operations                                                    | 17               |
|                                                                                                                                                                                                           |             |
| Item      3.    Quantitative      and Qualitative Disclosures About Market Risk                                                                                                            | 31               |
|                                                                                                                                                                                                           |             |
| Item      4.    Controls and      Procedures                                                                                                                                               | 31               |
|                                                                                                                                                                                                           |             |
| PART      II.   OTHER      INFORMATION                                                                                                                                                          |             |
|                                                                                                                                                                                                           |             |
| Item      1.    Legal      Proceedings                                                                                                                                                     | 32               |
|                                                                                                                                                                                                           |             |
| Item      1A.     Risk      Factors                                                                                                                                                        | 32               |
|                                                                                                                                                                                                           |             |
| Item      6.    Exhibits                                                                                                                                                                   | 32               |
|                                                                                                                                                                                                           |             |
| Items      2, 3, 4 and 5 of Part II are omitted because there is no information to      report.                                                                                                                |             |

----

|                                                           |   | December      31, |    |   | September      30, |   |
|----------------------------------------------------------------|--------|-------------------|---------|--------|--------------------|--------|
| ASSETS                                                         |   | 2007              |    |   | 2008               |   |
|                                                           |   |              |    |   | (unaudited)        |   |
|                                                           |   |              |    |   |               |   |
| Current      assets:                                           |   |              |    |   |               |   |
|   Accounts      receivable, net                      |   | $                 | 54,891  |   |               | $      | 82,797 |   |
|   Inventories                                        |   |              | 53,551  |   |               |   | 74,187 |   |
|   Deferred      income taxes                         |   |              | 10,055  |   |               |   | 10,055 |   |
|   Prepaid      expenses and other                    |   |              | 2,465   |   |               |   | 2,978 |   |
|                                                           |   |              |    |   |               |   |   |   |
|     Total      current assets              |   |              | 120,962 |   |               |   | 170,017 |   |
|                                                           |   |              |    |   |               |   |   |   |
| Property,      plant and equipment:                            |   |              |    |   |               |   |   |   |
|   Land                                               |   |              | 1,272   |   |               |   | 1,236 |   |
|   Buildings      and improvements                    |   |              | 58,946  |   |               |   | 58,955 |   |
|   Machinery      and equipment                       |   |              | 315,874 |   |               |   | 314,780 |   |
|   Construction      in progress                      |   |              | 3,675   |   |               |   | 7,772 |   |
|                                                           |   |              | 379,767 |   |               |   | 382,743 |   |
|   Less      accumulated depreciation                 |   |              | 287,298 |   |               |   | 294,513 |   |
|                                                           |   |              |    |   |               |   |   |   |
|     Net      property, plant and equipment |   |              | 92,469  |   |               |   | 88,230 |   |
|                                                           |   |              |    |   |               |   |   |   |
| Other      assets:                                             |   |              |    |   |               |   |   |   |
|   Restricted      investments                        |   |              | 2,245   |   |               |   | 2,266 |   |
|   Pension      asset                                 |   |              | 545,656 |   |               |   | 591,520 |   |
|   Other,      net                                    |   |              | 1,691   |   |               |   | 1,868 |   |
|                                                           |   |              |    |   |               |   |   |   |
|     Total      other assets                |   |              | 549,592 |   |               |   | 595,654 |   |
|                                                           |   |              |    |   |               |   |   |   |
|                                                           |   |              |    |   |               |   |   |   |
|     Total      assets                      |   | $                 | 763,023 |   |               | $      | 853,901 |   |
|                                                           |   |              |    |   |               |   |   |   |

----

| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                                                                                                                               |   | December      31, |    |   | September      30, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|--------------------|--------|
|                                                                                                                                                                                                                    |   | 2007              |    |   | 2008               |   |
|                                                                                                                                                                                                                    |   |              |    |   | (unaudited)        |   |
|                                                                                                                                                                                                                    |   |              |    |   |               |   |
| Current      liabilities:                                                                                                                                                                                               |   |              |    |   |               |   |
|   Notes      payable and current maturities of long-term      debt                                                                                                                                       |   | $                 | 62,175  |   |               | $      | 51,631 |   |
|   Accounts      payable                                                                                                                                                                                       |   |              | 14,078  |   |               |   | 16,697 |   |
|   Accrued      OPEB cost                                                                                                                                                                                      |   |              | 4,482   |   |               |   | 4,482 |   |
|   Other      accrued liabilities                                                                                                                                                                              |   |              | 19,597  |   |               |   | 34,189 |   |
|                                                                                                                                                                                                                    |   |              |    |   |               |   |   |   |
|     Total      current liabilities                                                                                                                                                                  |   |              | 100,332 |   |               |   | 106,999 |   |
|                                                                                                                                                                                                                    |   |              |    |   |               |   |   |   |
| Noncurrent      liabilities:                                                                                                                                                                                            |   |              |    |   |               |   |   |   |
|   Long-term      debt                                                                                                                                                                                         |   |              | 29,402  |   |               |   | 14,687 |   |
|   Accrued      OPEB cost                                                                                                                                                                                      |   |              | 27,167  |   |               |   | 41,008 |   |
|   Deferred      income taxes                                                                                                                                                                                  |   |              | 194,728 |   |               |   | 215,956 |   |
|   Other      accrued liabilities                                                                                                                                                                              |   |              | 6,700   |   |               |   | 6,271 |   |
|                                                                                                                                                                                                                    |   |              |    |   |               |   |   |   |
|     Total      noncurrent liabilities                                                                                                                                                               |   |              | 257,997 |   |               |   | 277,922 |   |
|                                                                                                                                                                                                                    |   |              |    |   |               |   |   |   |
|                                                                                                                                                                                                                    |   |              |    |   |               |   |   |   |
| Stockholders'      equity:                                                                                                                                                                                              |   |              |    |   |               |   |   |   |
|   Common      stock $.01 par value; 11,000,000 shares authorized and 10,000,000 shares      issued at December 31, 2007; 20,000,000 shares authorized and 12,500,000      shares issued at September 30, 2008 |   |              | 100     |   |               |   | 125 |   |
|   Additional      paid-in capital                                                                                                                                                                             |   |              | 75,423  |   |               |   | 100,111 |   |
|   Accumulated      other comprehensive income                                                                                                                                                                 |   |              | 215,462 |   |               |   | 195,531 |   |
|   Retained      earnings                                                                                                                                                                                      |   |              | 114,505 |   |               |   | 174,009 |   |
|   Treasury      stock                                                                                                                                                                                         |   |              | (796    | )      |               |   | (796 | ) |
|                                                                                                                                                                                                                    |   |              |    |   |               |   |   |   |
|     Total      stockholders' equity                                                                                                                                                                 |   |              | 404,694 |   |               |   | 468,980 |   |
|                                                                                                                                                                                                                    |   |              |    |   |               |   |   |   |
|     Total      liabilities and stockholders’ equity                                                                                                                                           |   | $                 | 763,023 |   |               | $      | 853,901 |   |
|                                                                                                                                                                                                                    |   |              |    |   |               |   |   |   |

----

|                                                                  |   | Three      months ended September 30, |         |   | Nine      months ended September 30, |   |
|-----------------------------------------------------------------------|--------|--------------------------------------------|--------------|--------|-------------------------------------------|--------|
|                                                                  |   | 2007                                       |         |   | 2008                                      |   |   | 2007 |   |   | 2008 |   |
|                                                                  |   | (unaudited)                                |         |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |
| Net      sales                                                        |   | $                                          | 103,358      |   |                                      | $      | 183,209 |   |   | $ | 339,121 |   |   | $ | 495,375 |   |
| Cost      of goods sold                                               |   |                                       | (96,923      | )      |                                      |   | (156,867 | ) |   |   | (319,651 | ) |   |   | (440,170 | ) |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
|   Gross      margin                                         |   |                                       | 6,435        |   |                                      |   | 26,342 |   |   |   | 19,470 |   |   |   | 55,205 |   |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Other      operating income (expense):                                |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
|   Selling      expense                                      |   |                                       | (1,601       | )      |                                      |   | (2,575 | ) |   |   | (5,032 | ) |   |   | (6,338 | ) |
|   General      and administrative expense                   |   |                                       | (3,532       | )      |                                      |   | (5,187 | ) |   |   | (10,253 | ) |   |   | (12,850 | ) |
|   Defined      benefit pension credit                       |   |                                       | 20,379       |   |                                      |   | 18,467 |   |   |   | 61,136 |   |   |   | 55,401 |   |
|   Other      postretirement benefit credit                  |   |                                       | 2,201        |   |                                      |   | 2,006 |   |   |   | 6,602 |   |   |   | 6,542 |   |
|   Gain      on legal settlement                             |   |                                       | -            |   |                                      |   | - |   |   |   | 5,400 |   |   |   | - |   |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
|       Total      other operating income |   |                                       | 17,447       |   |                                      |   | 12,711 |   |   |   | 57,853 |   |   |   | 42,755 |   |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income                                                 |   |                                       | 23,882       |   |                                      |   | 39,053 |   |   |   | 77,323 |   |   |   | 97,960 |   |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Non      operating income (expense):                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
|   Interest      expense                                     |   |                                       | (1,630       | )      |                                      |   | (879 | ) |   |   | (4,619 | ) |   |   | (3,124 | ) |
|   Other      income, net                                    |   |                                       | 447          |   |                                      |   | 435 |   |   |   | 999 |   |   |   | 835 |   |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
|       Total      non operating expense  |   |                                       | (1,183       | )      |                                      |   | (444 | ) |   |   | (3,620 | ) |   |   | (2,289 | ) |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Income      before income taxes and reorganization items         |   |                                       |  22,699 |   |                                      |   |  38,609 |   |   |   |  73,703 |   |   |   |  95,671 |   |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Reorganization      items:                                            |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
|   Reorganization      costs                                 |   |                                       | (3           | )      |                                      |   | (129 | ) |   |   | (115 | ) |   |   | (231 | ) |
|   Gain      on cancellation of debt                         |   |                                       | 9,031        |   |                                      |   | - |   |   |   | 9,031 |   |   |   | - |   |
|       Total      reorganization items   |   |                                       | 9,028        |   |                                      |   | (129 | ) |   |   | 8,916 |   |   |   | (231 | ) |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
|   Income      before income taxes                           |   |                                       | 31,727       |   |                                      |   | 38,480 |   |   |   | 82,619 |   |   |   | 95,440 |   |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for income taxes                                       |   |                                       | (11,921      | )      |                                      |   | (14,505 | ) |   |   | (31,108 | ) |   |   | (35,936 | ) |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
|   Net      income                                           |   | $                                          | 19,806       |   |                                      | $      | 23,975 |   |   | $ | 51,511 |   |   | $ | 59,504 |   |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted income per share                               |   | $                                          | 1.98         |   |                                      | $      | 1.98 |   |   | $ | 5.15 |   |   | $ | 5.25 |   |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Basic      and diluted weighted average shares outstanding       |   |                                       |  10,000 |   |                                      |   | 12,102 |   |   |   |  10,000 |   |   |   | 11,336 |   |
|                                                                  |   |                                       |         |   |                                      |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                             |   | Nine      months ended September 30, |       |
|--------------------------------------------------------------------------------------------------|--------|-------------------------------------------|------------|
|                                                                                             |   | 2007                                      |       |   | 2008 |   |
|                                                                                             |   | (unaudited)                               |       |
|                                                                                             |   |                                      |       |   |   |   |
| Cash      flows from operating activities:                                                       |   |                                      |       |   |   |   |
|   Net      income                                                                      |   | $                                         | 51,511     |   |   | $ | 59,504 |   |
|   Depreciation      and amortization                                                   |   |                                      | 11,591     |   |   |   | 11,432 |   |
|   Deferred      income taxes                                                           |   |                                      | 30,990     |   |   |   | 33,242 |   |
|   Defined      benefit pension credit                                                  |   |                                      | (61,136    | ) |   |   | (55,401 | ) |
|   OPEB      credit                                                                     |   |                                      | (6,602     | ) |   |   | (6,542 | ) |
|   OPEB      payments                                                                   |   |                                      | (2,799     | ) |   |   | (2,024 | ) |
|   Gain      on cancellation of debt                                                    |   |                                      | (9,031     | ) |   |   | - |   |
|   Payment      to pre-petition creditors                                               |   |                                      | (3,680     | ) |   |   | - |   |
|   Other,      net                                                                      |   |                                      | 808        |   |   |   | 695 |   |
|   Change      in assets and liabilities (net of acquisition):                          |   |                                      |       |   |   |   |   |   |
|     Accounts      receivable                                                 |   |                                      | (14,124    | ) |   |   | (27,962 | ) |
|     Inventories                                                              |   |                                      | 3,727      |   |   |   | (20,636 | ) |
|     Accounts      payable and accrued liabilities                            |   |                                      | (1,855     | ) |   |   | 16,766 |   |
|     Other,      net                                                          |   |                                      | (282       | ) |   |   | (1,013 | ) |
|                                                                                             |   |                                      |       |   |   |   |   |   |
|       Net      cash provided by (used in) operating activities     |   |                                      | (882       | ) |   |   | 8,061 |   |
|                                                                                             |   |                                      |       |   |   |   |   |   |
| Cash      flows from investing activities:                                                       |   |                                      |       |   |   |   |   |   |
|   Capital      expenditures                                                            |   |                                      | (13,204    | ) |   |   | (7,776 | ) |
|   Acquisition      of CaluMetals’ assets                                         |   |                                      | (6,240     | ) |   |   | - |   |
|   Restricted      investments, net                                                     |   |                                      | 3,809      |   |   |   | (21 | ) |
|   Other,      net                                                                      |   |                                      |  781  |   |   |   | 436 |   |
|                                                                                             |   |                                      |       |   |   |   |   |   |
|       Net      cash used in investing activities                   |   |                                      | (14,854    | ) |   |   | (7,361 | ) |
|                                                                                             |   |                                      |       |   |   |   |   |   |
| Cash      flows from financing activities:                                                       |   |                                      |       |   |   |   |   |   |
|   Issuance      of common stock                                                        |   |                                      | -          |   |   |   | 24,713 |   |
|   Revolving      credit facilities, net                                                |   |                                      | 28,066     |   |   |   | (10,172 | ) |
|   Other      notes payable and long-term debt:                                         |   |                                      |       |   |   |   |   |   |
|     Additions                                                                |   |                                      | 4,065      |   |   |   | - |   |
|     Principal      payments                                                  |   |                                      | (16,173    | ) |   |   | (15,089 | ) |
|   Deferred      financing costs paid                                                   |   |                                      |  (222 | ) |   |   | (152 | ) |
|                                                                                             |   |                                      |       |   |   |   |   |   |
|       Net      cash provided by (used in) financing activities     |   |                                      | 15,736     |   |   |   | (700 | ) |
|                                                                                             |   |                                      |       |   |   |   |   |   |
| 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                                 |   | $                                         | 4,221      |   |   | $ | 2,825 |   |
|     Income      taxes, net                                                   |   |                                      | 332        |   |   |   | 2,891 |   |
|   Non-cash      issuance of debt for acquisition of      CaluMetals’ assets |   |                                      | 781        |   |   |   |  - |   |

----

|                                                                                     |   | Common      |    |   | Additionalpaid-in |   |           | Accumulated      other comprehensive income |   |   | Retained  |   |   | Treasury |        |   |   |   |    | Comprehensive |   |
|------------------------------------------------------------------------------------------|--------|-------------|---------|--------|-------------------|--------|----------------|--------------------------------------------------|--------|--------|-----------|--------|--------|----------|-------------|--------|--------|--------|---------|---------------|--------|
|                                                                                     |   | stock       |    |   | capital           |   |           | Pensions                                         |   |   | OPEB      |   |   | earnings |        |   | stock  |   |    | Total         |   |   | income |   |
|                                                                                     |   | (unaudited) |    |
|                                                                                     |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |
| Balance      – December 31, 2007                                                   |   | $           | 100     |   |              | $      | 75,423         |                                             |   | $      | 164,763   |   |   | $        | 50,699      |   |   | $      | 114,505 |          |   | $ | (796 | ) |   | $ | 404,694 |   |   |   |   |
|                                                                                     |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                          |   |        | -       |   |              |   | -              |                                             |   |   | -         |   |   |     | -           |   |   |   | 59,504  |          |   |   | - |   |   |   | 59,504 |   |   | $ | 59,504 |   |
|                                                                                     |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock, net of issuance costs                                     |   |        | 25      |   |              |   | 24,688         |                                             |   |   | -         |   |   |     | -           |   |   |   | -       |          |   |   | - |   |   |   | 24,713 |   |   |   |  - |   |
|                                                                                     |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Actuarial      gain arising from interim remeasurement, net of tax                       |   |        | -       |   |              |   | -              |                                             |   |   | -         |   |   |     | 4,857       |   |   |   | -       |          |   |   | - |   |   |   | 4,857 |   |   |   | 4,857 |   |
|                                                                                     |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Plan      amendment, net of tax                                                          |   |        | -       |   |              |   | -              |                                             |   |   | -         |   |   |     | (15,205     | )      |   |   | -       |          |   |   | - |   |   |   | (15,205 | ) |   |   | (15,205 | ) |
|                                                                                     |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of actuarial        (gains) losses, net of tax               |   |        |  - |   |              |   |  -        |                                             |   |   | (5,046    | )      |   |     |  2,913 |   |   |   | -       |          |   |   | - |   |   |   | (2,133 | ) |   |   | (2,133 | ) |
|                                                                                     |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of prior service cost         (credit), net of tax |   |        |  - |   |              |   |    - |                                             |   |   |  575 |   |   |     | (8,025      | )      |   |   |  - |          |   |   |  - |   |   |   | (7,450 | ) |   |   | (7,450 | ) |
|                                                                                     |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      – September 30, 2008                                                  |   | $           | 125     |   |              | $      | 100,111        |                                             |   | $      | 160,292   |   |   | $        | 35,239      |   |   | $      | 174,009 |          |   | $ | (796 | ) |   | $ | 468,980 |   |   |   |   |   |
|                                                                                     |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
|   Comprehensive      income                                                    |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   | $ | 39,573 |   |

----

----

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

| ·   | Engineered      Wire Products (“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      (“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.  We acquired the assets of Calumet’s operations on      March 23, 2007. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                      |   | Three      months ended September 30, |    |   | Nine      months endedSeptember 30, |   |
|-----------------------------------------------------------|--------|--------------------------------------------|---------|--------|-------------------------------------|--------|
|                                                      |   | 2007                                       |    |   | 2008                                |   |   | 2007 |   |   | 2008 |   |
|                                                      |   | (In      thousands)                        |    |
|                                                      |   |                                       |    |   |                                |   |   |   |   |   |   |   |
| Net      sales:                                           |   |                                       |    |   |                                |   |   |   |   |   |   |   |
|   KSW                                           |   | $                                          | 96,592  |   |                                | $      | 179,591 |   |   | $ | 323,377 |   |   | $ | 483,760 |   |
|   EWP                                           |   |                                       | 14,806  |   |                                |   | 19,457 |   |   |   | 40,876 |   |   |   | 53,636 |   |
|   Calumet                                       |   |                                       | 1,646   |   |                                |   | 4,927 |   |   |   | 2,961 |   |   |   | 13,632 |   |
|   Elimination      of intersegment sales   |   |                                       | (9,686  | )      |                                |   | (20,766 | ) |   |   | (28,093 | ) |   |   | (55,653 | ) |
|                                                      |   |                                       |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
|      Total      net sales        |   | $                                          | 103,358 |   |                                | $      | 183,209 |   |   | $ | 339,121 |   |   | $ | 495,375 |   |
|                                                      |   |                                       |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income (loss):                             |   |                                       |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
|   KSW                                           |   | $                                          | 577     |   |                                | $      | 18,577 |   |   | $ | 3,578 |   |   | $ | 37,877 |   |
|   EWP                                           |   |                                       | 2,292   |   |                                |   | 3,372 |   |   |   | 5,787 |   |   |   | 8,038 |   |
|   Calumet                                       |   |                                       | (799    | )      |                                |   | (874 | ) |   |   | (1,348 | ) |   |   | (1,716 | ) |
|   Pension      credit                           |   |                                       | 20,379  |   |                                |   | 18,467 |   |   |   | 61,136 |   |   |   | 55,401 |   |
|   OPEB      credit                              |   |                                       | 2,201   |   |                                |   | 2,006 |   |   |   | 6,602 |   |   |   | 6,542 |   |
|   Gain      on legal settlement                 |   |                                       | -       |   |                                |   | - |   |   |   | 5,400 |   |   |   | - |   |
|   Other(1)                                      |   |                                       | (768    | )      |                                |   | (2,495 | ) |   |   | (3,832 | ) |   |   | (8,182 | ) |
|                                                      |   |                                       |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
|      Total      operating income |   |                                       | 23,882  |   |                                |   | 39,053 |   |   |   | 77,323 |   |   |   | 97,960 |   |
|                                                      |   |                                       |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
| Non      operating income (expense):                      |   |                                       |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
|   Interest      expense                         |   |                                       | (1,630  | )      |                                |   | (879 | ) |   |   | (4,619 | ) |   |   | (3,124 | ) |
|   Other      income (expense), net              |   |                                       | 447     |   |                                |   | 435 |   |   |   | 999 |   |   |   | 835 |   |
|   Reorganization      costs                     |   |                                       | (3      | )      |                                |   | (129 | ) |   |   | (115 | ) |   |   | (231 | ) |
|   Gain      on cancellation of debt             |   |                                       | 9,031   |   |                                |   | - |   |   |   | 9,031 |   |   |   | - |   |
|                                                      |   |                                       |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |   |                                       |    |   |                                |   |   |   |   |   |   |   |   |   |   |   |
|   Income      before income taxes               |   | $                                          | 31,727  |   |                                | $      | 38,480 |   |   | $ | 82,619 |   |   | $ | 95,440 |   |

----

|                                           |   | December      31,   |   |   | September      30, |   |
|------------------------------------------------|--------|---------------------|--------|--------|--------------------|--------|
|                                           |   | 2007                |   |   | 2008               |   |
|                                           |   | (In      thousands) |   |
|                                           |   |                |   |   |               |   |
|   Raw      materials                 |   | $                   | 6,954  |   |               | $      | 7,139 |   |
|   Billets                            |   |                | 8,158  |   |               |   | 9,743 |   |
|   Wire      rod                      |   |                | 12,897 |   |               |   | 22,635 |   |
|   Work      in process               |   |                | 5,079  |   |               |   | 7,461 |   |
|   Finished      products             |   |                | 24,855 |   |               |   | 33,183 |   |
|   Supplies                           |   |                | 19,900 |   |               |   | 22,824 |   |
|                                           |   |                |   |   |               |   |   |   |
|     Inventory      at FIFO |   |                | 77,843 |   |               |   | 102,985 |   |
|     Less      LIFO reserve |   |                | 24,292 |   |               |   | 28,798 |   |
|                                           |   |                |   |   |               |   |   |   |
|       Total      |   | $                   | 53,551 |   |               | $      | 74,187 |   |
|                                           |   |                |   |   |               |   |   |   |

|                                                 |   | December      31,   |   |   | September      30, |   |
|------------------------------------------------------|--------|---------------------|--------|--------|--------------------|--------|
|                                                 |   | 2007                |   |   | 2008               |   |
|                                                 |   | (In      thousands) |   |
|                                                 |   |                |   |   |               |   |
| Wachovia      revolving credit facility              |   | $                   | 46,261 |   |               | $      | 36,089 |   |
| 8%      Notes                                        |   |                | 17,160 |   |               |   | 9,108 |   |
| UC      Note                                         |   |                | 2,501  |   |               |   | - |   |
| Term      loans:                                     |   |                |   |   |               |   |   |   |
|   Wachovia                                 |   |                | 16,286 |   |               |   | 12,286 |   |
|   County                                   |   |                | 8,499  |   |               |   | 7,980 |   |
| Other                                                |   |                | 870    |   |               |   | 855 |   |
|                                                 |   |                |   |   |               |   |   |   |
|     Total      debt              |   |                | 91,577 |   |               |   | 66,318 |   |
|     Less      current maturities |   |                | 62,175 |   |               |   | 51,631 |   |
|                                                 |   |                |   |   |               |   |   |   |
|     Total      long-term debt    |   | $                   | 29,402 |   |               | $      | 14,687 |   |

----

|                               |   | Nine      months endedSeptember 30, 2008 |   |
|------------------------------------|--------|------------------------------------------|--------|
|                               |   | (In      thousands)                      |   |
|                               |   |                                     |   |
| Balance      at December 31, 2007  |   | $                                        | 5,282  |   |
| Payments                           |   |                                     | (505   | ) |
|                               |   |                                     |   |   |
| Balance      at September 30, 2008 |   | $                                        | 4,777  |   |

----

----

|                                           |   | December      31,   |   |   | September      30, |   |
|------------------------------------------------|--------|---------------------|--------|--------|--------------------|--------|
|                                           |   | 2007                |   |   | 2008               |   |
|                                           |   | (In      thousands) |   |
| Current:                                       |   |                |   |   |               |   |
|   Employee      benefits             |   | $                   | 10,881 |   |               | $      | 24,518 |   |
|   Self      insurance                |   |                | 3,755  |   |               |   | 5,718 |   |
|   Environmental                      |   |                | 217    |   |               |   | 212 |   |
|   Other                              |   |                | 4,744  |   |               |   | 3,741 |   |
|                                           |   |                |   |   |               |   |   |   |
| Total                                          |   | $                   | 19,597 |   |               | $      | 34,189 |   |
|                                           |   |                |   |   |               |   |   |   |
| Noncurrent:                                    |   |                |   |   |               |   |   |   |
|   Environmental                      |   | $                   | 5,065  |   |               | $      | 4,565 |   |
|   Workers      compensation payments |   |                | 1,494  |   |               |   | 1,557 |   |
|   Other                              |   |                | 141    |   |               |   | 149 |   |
|                                           |   |                |   |   |               |   |   |   |
| Total                                          |   | $                   | 6,700  |   |               | $      | 6,271 |   |

----

|                                                                      |   | Nine      months endedSeptember 30, 2008 |   |
|---------------------------------------------------------------------------|--------|------------------------------------------|--------|
|                                                                      |   | (In      thousands)                      |   |
|                                                                      |   |                                     |   |
| Balance      at December 31, 2007                                         |   | $                                        | 31,649 |   |
|   Service      cost                                             |   |                                     | 74     |   |
|   Interest      cost                                            |   |                                     | 1,193  |   |
|   Actuarial      gain arising from interim remeasurement        |   |                                     | (7,784 | ) |
|   Plan      amendment                                           |   |                                     | 24,755 |   |
|   Benefits      paid                                            |   |                                     | (2,024 | ) |
|   2008      benefits extinguished by increased pension benefits |   |                                     | (2,373 | ) |
|                                                                      |   |                                     |   |   |
| Balance      at September 30, 2008                                        |   | $                                        | 45,490 |   |

----

|                                                                   |   | Three      months ended September 30, |    |   | Nine      months ended September 30, |   |
|------------------------------------------------------------------------|--------|--------------------------------------------|---------|--------|-------------------------------------------|--------|
|                                                                   |   | 2007                                       |    |   | 2008                                      |   |   | 2007 |   |   | 2008 |   |
|                                                                   |   | (In      thousands)                        |    |
| Service      cost                                                      |   | $                                          | 60      |   |                                      | $      | (31 | ) |   | $ | 181 |   |   | $ | 74 |   |
| Interest      cost                                                     |   |                                       | 480     |   |                                      |   | 267 |   |   |   | 1,440 |   |   |   | 1,193 |   |
| Amortization      of accumulated other comprehensive      income: |
|      Prior      service credit                |   |                                       | (4,411  | )      |                                      |   | (4,039 | ) |   |   | (13,233 | ) |   |   | (12,862 | ) |
|      Actuarial      losses                    |   |                                       | 1,670   |   |                                      |   | 1,413 |   |   |   | 5,010 |   |   |   | 4,669 |   |
| Settlement      of 2006 1114 Agreement benefits                   |   |                                       |  - |   |                                      |   |  384 |   |   |   |  - |   |   |   |  384 |   |
| Total                                                                  |   | $                                          | (2,201  | )      |                                      | $      | (2,006 | ) |   | $ | (6,602 | ) |   | $ | (6,542 | ) |

|                                                              |   | Three      months ended September 30, |    |   | Nine      months ended September 30, |   |
|-------------------------------------------------------------------|--------|--------------------------------------------|---------|--------|-------------------------------------------|--------|
|                                                              |   | 2007                                       |    |   | 2008                                      |   |   | 2007 |   |   | 2008 |   |
|                                                              |   | (In      thousands)                        |    |
| Service      cost                                                 |   | $                                          | 969     |   |                                      | $      | 860 |   |   | $ | 2,907 |   |   | $ | 2,582 |   |
| Interest      cost                                                |   |                                       | 5,267   |   |                                      |   | 5,578 |   |   |   | 15,801 |   |   |   | 16,735 |   |
| Expected      return on plan assets                               |   |                                       | (23,013 | )      |                                      |   | (22,518 | ) |   |   | (69,038 | ) |   |   | (67,553 | ) |
| Amortization      of accumulated other comprehensive income: |
|      Prior      service cost             |   |                                       | 306     |   |                                      |   | 308 |   |   |   | 918 |   |   |   | 922 |   |
|      Actuarial      gains                |   |                                       | (3,908  | )      |                                      |   | (2,695 | ) |   |   | (11,724 | ) |   |   | (8,087 | ) |
|                                                              |   |                                       |    |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                             |   | $                                          | (20,379 | )      |                                      | $      | (18,467 | ) |   | $ | (61,136 | ) |   | $ | (55,401 | ) |

----

|                                           |   | Nine      months ended |   |
|------------------------------------------------|--------|------------------------|--------|
|                                           |   | September 30,          |   |
|                                           |   | 2007                   |   |   | 2008 |   |
|                                           |   | (In      thousands)    |   |
|                                           |   |                   |   |   |   |   |
| Expected      tax provision, at statutory rate |   | $                      | 28,917 |   |   | $ | 33,405 |   |
| U.S.      state income taxes, net              |   |                   | 2,174  |   |   |   | 2,441 |   |
| Other,      net                                |   |                   | 17     |   |   |   | 90 |   |
|                                           |   |                   |   |   |   |   |   |   |
| Provision      for income taxes                |   | $                      | 31,108 |   |   | $ | 35,936 |   |

----

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

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

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

| ·   | The      impact of pricing and productiondecisions, |
|--------------------|-----------------------------------------------------|

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

| ·   | Government      regulations and possible changestherein, |
|--------------------|----------------------------------------------------------|

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

| ·   | The      ultimate resolution of pendinglitigation, |
|--------------------|----------------------------------------------------|

| ·   | 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 and transportation      interruptions), |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our      ability to renew or refinance creditfacilities, |
|--------------------|----------------------------------------------------------|

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

| ·   | Other      risks and uncertainties as discussed in this Quarterly Report and the 2007      Annual Report, including, without limitation, the section referenced      above. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                            |   | Three      months ended September 30, |    |   | Nine      months ended September 30, |   |
|-------------------------------------------------|--------|--------------------------------------------|---------|--------|-------------------------------------------|--------|
|                                            |   | 2007                                       |    |   | 2008                                      |   |   | 2007 |   |   | 2008 |   |
|                                            |   | (In      thousands)                        |    |
| Operating      income as reported               |   | $                                          | 23,882  |   |                                      | $      | 39,053 |   |   | $ | 77,323 |   |   | $ | 97,960 |   |
|   Defined      benefit pension credit |   |                                       | (20,379 | )      |                                      |   | (18,467 | ) |   |   | (61,136 | ) |   |   | (55,401 | ) |
|   OPEB      credit                    |   |                                       | (2,201  | )      |                                      |   | (2,006 | ) |   |   | (6,602 | ) |   |   | (6,542 | ) |
| Operating      income before pension and OPEB   |   | $                                          | 1,302   |   |                                      | $      | 18,580 |   |   | $ | 9,585 |   |   | $ | 36,017 |   |

| ·   | higher      per-ton product selling prices resulting from price increases we      implemented to offset our increased costs for ferrous scrap, as well as      increased demand for domestic wire rod and industrial wire as discussed      below; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      shipment volumes primarily due to lower quantities of import product      available for sale and higher prices for import products as well as the      weak U.S. dollar; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | decreased      costs for zinc during 2008; |
|--------------------|--------------------------------------------|

| ·   | cost      savings resulting from a reduction-in-force during the first quarter of      2008; |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | increased      costs for ferrous scrap and energy during2008; |
|--------------------|---------------------------------------------------------------|

| ·   | higher      costs in 2008 for certain excise taxes as a result of the expiration of      certain exemptions for which we previously  qualified; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased      employee incentive compensation accruals as a result of increased      profitability; |
|--------------------|------------------------------------------------------------------------------------------------------|

| ·   | increased      costs for workers compensation and personal injury claims under our      general liability insurance in 2008;and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | a      legal settlement with a former insurance carrier of $5.4 million recorded      during the second quarter of 2007. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------|

----

|                                      |   | Three      months ended September 30, |   |   | Nine      months ended September 30, |   |
|-------------------------------------------|--------|--------------------------------------------|--------|--------|-------------------------------------------|--------|
|                                      |   | 2007                                       |   |   | 2008                                      |   |   | 2007 |   |   | 2008 |   |
| Sales      volume (000 tons):             |   |                                       |   |   |                                      |   |   |   |   |   |   |   |
|   Fabricated      wire products |   |                                       | 20     |   |                                      |   | 20 |   |   |   | 85 |   |   |   | 76 |   |
|   Wire      mesh                |   |                                       | 16     |   |                                      |   | 14 |   |   |   | 45 |   |   |   | 47 |   |
|   Industrial      wire          |   |                                       | 14     |   |                                      |   | 17 |   |   |   | 52 |   |   |   | 53 |   |
|   Coiled      rebar             |   |                                       | 3      |   |                                      |   | 7 |   |   |   | 11 |   |   |   | 14 |   |
|   Bar                           |   |                                       | 3      |   |                                      |   | 4 |   |   |   | 4 |   |   |   | 14 |   |
|   Wire      rod                 |   |                                       | 91     |   |                                      |   | 95 |   |   |   | 282 |   |   |   | 310 |   |
|   Billets                       |   |                                       | -      |   |                                      |   | 8 |   |   |   |  1 |   |   |   | 9 |   |
|     Total             |   |                                       | 147    |   |                                      |   | 165 |   |   |   | 480 |   |   |   | 523 |   |
|                                      |   |                                       |   |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   |                                       |   |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Average      per-ton selling prices:      |   |                                       |   |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
|   Fabricated      wire products |   | $                                          | 1,109  |   |                                      | $      | 1,578 |   |   | $ | 1,082 |   |   | $ | 1,356 |   |
|   Wire      mesh                |   |                                       | 912    |   |                                      |   | 1,348 |   |   |   | 901 |   |   |   | 1,151 |   |
|   Industrial      wire          |   |                                       | 785    |   |                                      |   | 1,302 |   |   |   | 758 |   |   |   | 1,083 |   |
|   Coiled      rebar             |   |                                       | 584    |   |                                      |   | 921 |   |   |   | 561 |   |   |   | 844 |   |
|   Bar                           |   |                                       | 621    |   |                                      |   | 1,147 |   |   |   | 664 |   |   |   | 933 |   |
|   Wire      rod                 |   |                                       | 555    |   |                                      |   | 965 |   |   |   | 546 |   |   |   | 795 |   |
|   Billets                       |   |                                       | -      |   |                                      |   | 852 |   |   |   | 132 |   |   |   | 793 |   |
|   All      products             |   |                                       | 695    |   |                                      |   | 1,106 |   |   |   | 699 |   |   |   | 943 |   |

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

| ·   | Engineered      Wire Products (“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. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                             |   | KSW                 |     |   | EWP    |   |    | Calumet |   |   | Other(1)   |   |   | Total  |        |
|------------------------------------------------------------------|--------|---------------------|----------|--------|--------|--------|---------|---------|--------|--------|------------|--------|--------|--------|-------------|
|                                                             |   | (In      thousands) |     |
| Three      months ended September 30, 2007:                      |   |
|                                                             |   |                |     |   |   |   |    |    |   |   |       |   |   |   |        |
|  Net      sales                                             |   | $                   | 96,592   |   |   | $      | 14,806  |    |   | $      | 1,646      |   |   | $      | (9,686      | ) |   | $ | 103,358 |   |
|  Cost      of goods sold                                    |   |                | (92,560  | )      |   |   | (11,551 | )       |   |   | (2,330     | )      |   |   |  9,518 |   |   |   | (96,923 | ) |
|    Gross      margin (loss)                       |   |                | 4,032    |   |   |   | 3,255   |    |   |   | (684       | )      |   |   | (168        | ) |   |   | 6,435 |   |
|                                                             |   |                |     |   |   |   |    |    |   |   |       |   |   |   |        |   |   |   |   |   |
|  Selling      and administrative expense               |   |                | (3,455   | )      |   |   | (963    | )       |   |   | (115       | )      |   |   |  (600  | ) |   |   | (5,133 | ) |
|  Operating      income (loss) before      pension/OPEB |   | $                   | 577      |   |   | $      | 2,292   |    |   | $      | (799       | )      |   | $      | (768        | ) |   | $ | 1,302 |   |
|                                                             |   |                |     |   |   |   |    |    |   |   |       |   |   |   |        |   |   |   |   |   |
| Three      months ended September 30, 2008:                      |   |
|                                                             |   |
|  Net      sales                                             |   | $                   | 179,591  |   |   | $      | 19,457  |    |   | $      | 4,927      |   |   | $      | (20,766     | ) |   | $ | 183,209 |   |
|  Cost      of goods sold                                    |   |                | (155,877 | )      |   |   | (14,902 | )       |   |   | (5,363     | )      |   |   | 19,275      |   |   |   | (156,867 | ) |
|    Gross      margin                              |   |                | 23,714   |   |   |   | 4,555   |    |   |   | (436       | )      |   |   | (1,491      | ) |   |   | 26,342 |   |
|                                                             |   |                |     |   |   |   |    |    |   |   |       |   |   |   |        |   |   |   |   |   |
|  Selling      and administrative      expense          |   |                | (5,137   | )      |   |   | (1,183  | )       |   |   |  (438 | )      |   |   | (1,004      | ) |   |   | (7,762 | ) |
|  Operating      income (loss) before      pension/OPEB |   | $                   | 18,577   |   |   | $      | 3,372   |    |   | $      | (874       | )      |   | $      | (2,495      | ) |   | $ | 18,580 |   |

| Nine      months ended September 30, 2007:                        |   |
|-------------------------------------------------------------------|--------|
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net      sales                                              |   | $ | 323,377 |   |   | $ | 40,876 |   |   | $ | 2,961 |   |   | $ | (28,093 | ) |   | $ | 339,121 |   |
|  Cost      of goods sold                                     |   |   | (309,093 | ) |   |   | (32,319 | ) |   |   | (4,007 | ) |   |   | 25,768 |   |   |   | (319,651 | ) |
|    Gross      margin (loss)                        |   |   | 14,284 |   |   |   | 8,557 |   |   |   | (1,046 | ) |   |   | (2,325 | ) |   |   | 19,470 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Selling      and administrative expense                |   |   | (10,706 | ) |   |   | (2,770 | ) |   |   | (302 | ) |   |   | (1,507 | ) |   |   | (15,285 | ) |
|  Gain      on legal settlement                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,400 |   |   |   |  5,400 |   |
|  Operating      income (loss) before      pension/OPEB  |   | $ | 3,578 |   |   | $ | 5,787 |   |   | $ | (1,348 | ) |   | $ | 1,568 |   |   | $ | 9,585 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nine      months ended September 30, 2008:                        |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net      sales                                              |   | $ | 483,760 |   |   | $ | 53,636 |   |   | $ | 13,632 |   |   | $ | (55,653 | ) |   | $ | 495,375 |   |
|  Cost      of goods sold                                     |   |   | (433,400 | ) |   |   | (42,433 | ) |   |   | (14,477 | ) |   |   | 50,140 |   |   |   | (440,170 | ) |
|    Gross      margin (loss)                        |   |   | 50,360 |   |   |   | 11,203 |   |   |   | (845 | ) |   |   | (5,513 | ) |   |   | 55,205 |   |
|                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Selling      and administrative      expense           |   |   | (12,483 | ) |   |   | (3,165 | ) |   |   | (871 | ) |   |   | (2,669 | ) |   |   | (19,188 | ) |
|  Operating      income (loss)  before      pension/OPEB |   | $ | 37,877 |   |   | $ | 8,038 |   |   | $ | (1,716 | ) |   | $ | (8,182 | ) |   | $ | 36,017 |   |

----

|                                               |   |  Three months ended September      30, |    |
|----------------------------------------------------|--------|---------------------------------------------|---------|
|                                               |   | 2007                                        |    |   | %      ofsales |   |   | 2008 |   |   | %      ofsales |   |
|                                               |   | ($      in thousands)                       |    |
|                                               |   |                                        |    |   |   |   |   |   |   |   |   |   |
| Net      sales                                     |   | $                                           | 96,592  |   |   |   | 100.0 | % |   | $ | 179,591 |   |   |   | 100.0 | % |
| Cost      of goods sold                            |   |                                        | (92,560 | ) |   |   | (95.8 | ) |   |   | (155,877 | ) |   |   | (86.8 | ) |
|    Gross      margin                |   |                                        | 4,032   |   |   |   | 4.2 |   |   |   | 23,714 |   |   |   | 13.2 |   |
|                                               |   |                                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and administrative expense            |   |                                        | (3,455  | ) |   |   | (3.6 | ) |   |   | (5,137 | ) |   |   | (2.9 | ) |
| Operating      income before pension and OPEB |   | $                                           | 577     |   |   |   | 0.6 | % |   | $ | 18,577 |   |   |   | 10.3 | % |

|                                               |   |  Nine months ended September      30, |     |
|----------------------------------------------------|--------|--------------------------------------------|----------|
|                                               |   | 2007                                       |     |   | %      ofsales |   |   | 2008 |   |   | %      ofsales |   |
|                                               |   | ($      in thousands)                      |     |
|                                               |   |                                       |     |   |   |   |   |   |   |   |   |   |
| Net      sales                                     |   | $                                          | 323,377  |   |   |   | 100.0 | % |   | $ | 483,760 |   |   |   | 100.0 | % |
| Cost      of goods sold                            |   |                                       | (309,093 | ) |   |   | (95.6 | ) |   |   | (433,400 | ) |   |   | (89.6 | ) |
|    Gross      margin                |   |                                       | 14,284   |   |   |   | 4.4 |   |   |   | 50,360 |   |   |   | 10.4 |   |
|                                               |   |                                       |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and administrative expense            |   |                                       | (10,706  | ) |   |   | (3.3 | ) |   |   | (12,483 | ) |   |   | (2.6 | ) |
| Operating      income before pension and OPEB |   | $                                          | 3,578    |   |   |   | 1.1 | % |   | $ | 37,877 |   |   |   | 7.8 | % |

----

|                                                         |   | Three      months ended September 30, |   |   | Nine      months ended September 30, |   |
|--------------------------------------------------------------|--------|--------------------------------------------|--------|--------|-------------------------------------------|--------|
|                                                         |   | 2007                                       |   |   | 2008                                      |   |   | 2007 |   |   | 2008 |   |
| Sales      volume (000 tons):                                |   |                                       |   |   |                                      |   |   |   |   |   |   |   |
|   Fabricated      wire products                    |   |                                       | 20     |   |                                      |   | 20 |   |   |   | 85 |   |   |   | 76 |   |
|   Industrial      wire                             |   |                                       | 14     |   |                                      |   | 17 |   |   |   | 52 |   |   |   | 53 |   |
|   Coiled      rebar                                |   |                                       | 3      |   |                                      |   | 7 |   |   |   | 11 |   |   |   | 14 |   |
|   Wire      rod                                    |   |                                       | 106    |   |                                      |   | 112 |   |   |   | 327 |   |   |   | 366 |   |
|   Billets                                          |   |                                       | 3      |   |                                      |   | 14 |   |   |   | 10 |   |   |   | 28 |   |
|   Total      sales                                 |   |                                       | 146    |   |                                      |   | 170 |   |   |   | 485 |   |   |   | 537 |   |
|                                                         |   |                                       |   |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Average      per-ton selling prices:                         |   |                                       |   |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
|   Fabricated      wire products                    |   | $                                          | 1,109  |   |                                      | $      | 1,578 |   |   | $ | 1,082 |   |   | $ | 1,356 |   |
|   Industrial      wire                             |   |                                       | 785    |   |                                      |   | 1,302 |   |   |   | 758 |   |   |   | 1,083 |   |
|   Coiled      rebar                                |   |                                       | 584    |   |                                      |   | 921 |   |   |   | 561 |   |   |   | 844 |   |
|   Wire      rod                                    |   |                                       | 551    |   |                                      |   | 963 |   |   |   | 542 |   |   |   | 796 |   |
|   Billets                                          |   |                                       | 430    |   |                                      |   | 778 |   |   |   | 452 |   |   |   | 674 |   |
|   All      products                                |   |                                       | 649    |   |                                      |   | 1,053 |   |   |   | 658 |   |   |   | 898 |   |
|                                                         |   |                                       |   |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Average      per-ton ferrous scrap      purchase cost   |   | $                                          | 233    |   |                                      | $      | 450 |   |   | $ | 237 |   |   | $ | 385 |   |
|                                                         |   |                                       |   |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Average      electricity cost      per kilowatt hour(1) |   | $                                          | 0.04   |   |                                      | $      | 0.06 |   |   | $ | 0.05 |   |   | $ | 0.06 |   |
|                                                         |   |                                       |   |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Average      natural gas cost      per therm(1)         |   | $                                          | 0.76   |   |                                      | $      | 1.04 |   |   | $ | 0.77 |   |   | $ | 1.00 |   |

| ·   | higher      shipment volumes of industrial wire due to increased domestic demand as a      result of higher prices for import products as well as the weak U.S.      dollar; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      shipment volumes of coiled rebar due to acceptance of our product in the      market with a larger number of customers than in  2007; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      shipment volumes of wire rod due to lower quantities of import product      available for sale and higher prices for import products as well as the      weak U.S. dollar; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      shipment volumes of billets primarily due to increased demand from Calumet      and a non-recurring 5,000 ton sale to a new customer during the third      quarter of 2008; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lower      shipment volumes of fabricated wire products year-to-date as a result of      customer resistance to our priceincreases. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | decreased      costs for zinc of 39% and 34% during the third quarter and first nine      months of 2008, respectively; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

| ·   | cost      savings of approximately $500,000 and $350,000 during the third quarter      and first nine months of 2008, respectively, resulting from KSW’s      reduction-in-force during the first quarter of 2008 (cost savings during      the first nine months of 2008 were partially offset by the related      $800,000 severance expense); |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      costs in 2008 for certain excise taxes as a result of the expiration of      certain exemptions for which we previously  qualified; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased      employee incentive compensation accruals as a result of increased      profitability; and |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | increased      costs for workers compensation and personal injury claims under our      general liability insurance in2008. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

|                                          |   | Three months ended September      30, |    |
|-----------------------------------------------|--------|---------------------------------------|---------|
|                                          |   | 2007                                  |    |   | %      of sales |   |   | 2008 |   |   | %      ofsales |   |
|                                          |   | ($      in thousands)                 |    |
|                                          |   |                                  |    |   |   |   |   |   |   |   |   |   |
| Net      sales                                |   | $                                     | 14,806  |   |   |   | 100.0 | % |   | $ | 19,457 |   |   |   | 100.0 | % |
| Cost      of goods sold                       |   |                                  | (11,551 | ) |   |   | (78.0 | ) |   |   | (14,902 | ) |   |   | (76.6 | ) |
|         Gross margin                |   |                                  | 3,255   |   |   |   | 22.0 |   |   |   | 4,555 |   |   |   | 23.4 |   |
|                                          |   |                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and administrative expense       |   |                                  | (963    | ) |   |   | (6.5 | ) |   |   | (1,183 | ) |   |   | (6.1 | ) |
| Operating      income before pension and OPEB |   | $                                     | 2,292   |   |   |   | 15.5 | % |   | $ | 3,372 |   |   |   | 17.3 | % |

|                                          |   | Nine months ended September    30, |    |
|-----------------------------------------------|--------|------------------------------------|---------|
|                                          |   | 2007                               |    |   | %      of sales |   |   | 2008 |   |   | %      ofsales |   |
|                                          |   | ($      in thousands)              |    |
|                                          |   |                               |    |   |   |   |   |   |   |   |   |   |
| Net      sales                                |   | $                                  | 40,876  |   |   |   | 100.0 | % |   | $ | 53,636 |   |   |   | 100.0 | % |
| Cost      of goods sold                       |   |                               | (32,319 | ) |   |   | (79.1 | ) |   |   | (42,433 | ) |   |   | (79.1 | ) |
|         Gross margin                |   |                               | 8,557   |   |   |   | 20.9 |   |   |   | 11,203 |   |   |   | 20.9 |   |
|                                          |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and administrative expense       |   |                               | (2,770  | ) |   |   | (6.7 | ) |   |   | (3,165 | ) |   |   | (5.9 | ) |
| Operating      income before pension and OPEB |   | $                                  | 5,787   |   |   |   | 14.2 | % |   | $ | 8,038 |   |   |   | 15.0 | % |

----

|                                                             |   | Three      months ended September 30, |   |   | Nine      months ended September 30, |   |
|------------------------------------------------------------------|--------|--------------------------------------------|--------|--------|-------------------------------------------|--------|
|                                                             |   | 2007                                       |   |   | 2008                                      |   |   | 2007 |   |   | 2008 |   |
|                                                             |   |                                       |   |   |                                      |   |   |   |   |   |   |   |
| Sales      volume (000 tons) –  Wire      mesh   |   |                                       | 16     |   |                                      |   | 14 |   |   |   | 45 |   |   |   | 47 |   |
|                                                             |   |                                       |   |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Average      per-ton selling prices –  Wire mesh |   | $                                          | 912    |   |                                      | $      | 1,348 |   |   | $ | 901 |   |   | $ | 1,151 |   |
|                                                             |   |                                       |   |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Average      per-ton wire rod purchase      cost            |   | $                                          | 560    |   |                                      | $      | 980 |   |   | $ | 543 |   |   | $ | 830 |   |

----

|                                                     |   | Three months ended September      30, |       |
|----------------------------------------------------------|--------|---------------------------------------|------------|
|                                                     |   | 2007                                  |       |   | %      of sales |   |   | 2008 |   |   | %      ofsales |   |
|                                                     |   | ($      in thousands)                 |       |
|                                                     |   |                                  |       |   |   |   |   |   |   |   |   |   |
| Net      sales                                           |   | $                                     | 1,646      |   |   |   | 100.0 | % |   | $ | 4,927 |   |   |   | 100.0 | % |
| Cost      of goods sold                                  |   |                                  | (2,330     | ) |   |   | (141.5 | ) |   |   | (5,363 | ) |   |   | (108.8 | ) |
|   Gross      margin (loss)                     |   |                                  | (684       | ) |   |   | (41.5 | ) |   |   | (436 | ) |   |   | (8.8 | ) |
|                                                     |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and administrative expense                  |   |                                  |  (115 | ) |   |   | (7.0 | ) |   |   |  (438 | ) |   |   | (8.9 | ) |
|   Operating      loss before pension/OPEB |   | $                                     | (799       | ) |   |   | (48.5 | )% |   | $ | (874 | ) |   |   | (17.7 | )% |

|                                                     |   | Nine months ended September    30, |   |
|----------------------------------------------------------|--------|------------------------------------|--------|
|                                                     |   | 2007                               |   |   | %      of sales |   |   | 2008 |   |   | %      ofsales |   |
|                                                     |   | ($      in thousands)              |   |
|                                                     |   |                               |   |   |   |   |   |   |   |   |   |   |
| Net      sales                                           |   | $                                  | 2,961  |   |   |   | 100.0 | % |   | $ | 13,632 |   |   |   | 100.0 | % |
| Cost      of goods sold                                  |   |                               | (4,007 | ) |   |   | (135.3 | ) |   |   | (14,477 | ) |   |   | (106.2 | ) |
|   Gross      margin (loss)                     |   |                               | (1,046 | ) |   |   | (35.3 | ) |   |   | (845 | ) |   |   | (6.2 | ) |
|                                                     |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and administrative expense                  |   |                               | (302   | ) |   |   | (10.2 | ) |   |   | (871 | ) |   |   | (6.4 | ) |
|   Operating      loss before pension/OPEB |   | $                                  | (1,348 | ) |   |   | (45.5 | )% |   | $ | (1,716 | ) |   |   | (12.6 | )% |

|                                           |   | Three      months ended September 30, |   |   | Nine      months ended September 30, |   |
|------------------------------------------------|--------|--------------------------------------------|--------|--------|-------------------------------------------|--------|
|                                           |   | 2007                                       |   |   | 2008                                      |   |   | 2007 |   |   | 2008 |   |
|                                           |   |                                       |   |   |                                      |   |   |   |   |   |   |   |
| Sales      volume (000 tons) -  Bar  |   |                                       | 3      |   |                                      |   | 4 |   |   |   | 4 |   |   |   | 14 |   |
|                                           |   |                                       |   |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Average      per-ton selling prices - Bar |   | $                                          | 621    |   |                                      | $      | 1,147 |   |   | $ | 664 |   |   | $ | 933 |   |
|                                           |   |                                       |   |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Average      per-ton billet purchase cost      |   | $                                          | 399    |   |                                      | $      | 521 |   |   | $ | 439 |   |   | $ | 544 |   |

----

|                                 |   | Three      months ended September 30, |   |   | Nine      months ended September 30, |   |
|--------------------------------------|--------|--------------------------------------------|--------|--------|-------------------------------------------|--------|
|                                 |   | 2007                                       |   |   | 2008                                      |   |   | 2007 |   |   | 2008 |   |
|                                 |   | ($      in thousands)                      |   |
|                                 |   |                                       |   |   |                                      |   |   |   |   |   |   |   |
| Average      debt balance            |   | $                                          | 98,405 |   |                                      | $      | 66,928 |   |   | $ | 98,601 |   |   | $ | 77,146 |   |
|                                 |   |                                       |   |   |                                      |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average interest rates |   |                                       | 6.9    | %      |                                      |   | 4.6 | % |   |   | 6.2 | % |   |   | 5.0 | % |

----

|                                                     |   | December      31,   |   |   | September      30, |   |
|----------------------------------------------------------|--------|---------------------|--------|--------|--------------------|--------|
|                                                     |   | 2007                |   |   | 2008               |   |
|                                                     |   | (In      thousands) |   |
|                                                     |   |                |   |   |               |   |
| Working      capital                                     |   | $                   | 20,630 |   |               | $      | 63,018 |   |
| Outstanding      balance under revolving credit facility |   |                | 46,261 |   |               |   | 36,089 |   |
|                                                     |   |                |   |   |               |   |   |   |
| Additional      borrowing availability                   |   |                | 22,836 |   |               |   | 42,309 |   |

| ·   | higher      operating income before pension/OPEB in 2008 of $26.4    million; |
|--------------------|-------------------------------------------------------------------------------|

| ·   | higher      net cash used due to relative changes in our accounts receivable in 2008      of $13.8 million primarily due to significant increases in our selling      prices; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      net cash used due to relative changes in our inventory in 2008 of $24.4      million primarily due to increased costs of ferrous scrap and energy as      well as higher levels of inventory at EWP as customers delayed orders in      anticipation of future pricereductions; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      net cash provided from relative changes in our accounts payable and      accrued liabilities of $18.6 million in 2008 due in part to higher      accruals for employee incentive compensation and workers compensation in      2008; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | final      payment of $3.7 million in 2007 to certain of our pre-petition creditors      from our 2004 bankruptcy. |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

----

| ·   | $8.1      million on our 8% Notes, |
|--------------------|------------------------------------|

| ·   | $4.0      million on our Wachovia Term Loans, |
|--------------------|-----------------------------------------------|

| ·   | $2.5      million on our UC Note, and |
|--------------------|---------------------------------------|

| ·   | $519,000      on our County Term Loan. |
|--------------------|----------------------------------------|

----

----

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

----

| (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. |
|--------|------|----------------|

----

| Date:  November      6, 2008  | By/s/ Bert E. Downing,      Jr.                                                                         Bert      E. Downing, Jr.Vice      President, Chief Financial Officer, Corporate      Controller and Treasurer |
|----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----