| For the quarter ended September 30, 2010 | Commission file number 1-3919 |
|------------------------------------------|-------------------------------|

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

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

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

| Registrant’s telephone number, including area code: | (972) 458-0028 |
|-----------------------------------------------------------|----------------|
|                                                      |           |

|   | * | The registrant has not yet been phased into the interactive data requirements. |
|--------|---|--------------------------------------------------------------------------------|

----

| Part I.                                                                               | FINANCIAL INFORMATION                                                                                                                                                                                 |  Page  |
|---------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|
|                                                                                  |                                                                                                                                                                                                  |             |
| Item 1.                                                                               | Financial Statements                                                                                                                                                                                  |             |
|                                                                                  |                                                                                                                                                                                                  |             |
|                                                                                  | Condensed Consolidated Balance Sheets –December 31, 2009; September 30, 2010 (unaudited)                                                                                                        | 3                |
|                                                                                  |                                                                                                                                                                                                  |             |
|                                                                                  | Condensed Consolidated Statements of Operations (unaudited) -Three months and nine months ended September 30, 2009 and 2010                                                                           | 5                |
|                                                                                  |                                                                                                                                                                                                  |             |
|                                                                                  | Condensed Consolidated Statements of Cash Flows (unaudited) -Nine months ended September 30, 2009 and 2010                                                                                            | 6                |
|                                                                                  |                                                                                                                                                                                                  |             |
|                                                                                  | Condensed Consolidated Statement of Stockholders' Equity          and Comprehensive Income (unaudited) -  Nine months ended September 30, 2010 | 7                |
|                                                                                  |                                                                                                                                                                                                  |             |
|                                                                                  | Notes to Condensed Consolidated Financial Statements (unaudited)                                                                                                                                      | 8                |
|                                                                                  |                                                                                                                                                                                                  |             |
| Item 2.                                                                               | Management's Discussion and Analysis of FinancialCondition and Results of Operations                                                                                                                  | 16               |
|                                                                                  |                                                                                                                                                                                                  |             |
| Item 3.                                                                               | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                                            | 28               |
|                                                                                  |                                                                                                                                                                                                  |             |
| Item 4.                                                                               | Controls and Procedures                                                                                                                                                                               | 28               |
|                                                                                  |                                                                                                                                                                                                  |             |
| PART II.                                                                              | OTHER INFORMATION                                                                                                                                                                                     |             |
|                                                                                  |                                                                                                                                                                                                  |             |
| Item 1.                                                                               | Legal Proceedings                                                                                                                                                                                     | 30               |
|                                                                                  |                                                                                                                                                                                                  |             |
| Item 1A.                                                                              | Risk Factors                                                                                                                                                                                          | 30               |
|                                                                                  |                                                                                                                                                                                                  |             |
| Item 6.                                                                               | Exhibits                                                                                                                                                                                              | 30               |
|                                                                                  |                                                                                                                                                                                                  |             |
| Items 2, 3, 4 and 5 of Part II are omitted because there is no information to report. |

----

|                                                      |   | December 31, |    |   | September 30, |   |
|-----------------------------------------------------------|--------|--------------|---------|--------|---------------|--------|
| ASSETS                                                    |   |  2009   |    |   | 2010          |   |
|                                                      |   |         |    |   | (unaudited)   |   |
|                                                      |   |         |    |   |          |   |
| Current assets:                                           |   |         |    |   |          |   |
|   Accounts receivable, net                      |   | $            | 41,231  |   |          | $      | 52,584 |   |
|   Inventories                                   |   |         | 41,225  |   |          |   | 67,657 |   |
|   Deferred income taxes                         |   |         | 4,434   |   |          |   | 4,434 |   |
|   Income taxes receivable                       |   |         | 4,206   |   |          |   | 765 |   |
|   Prepaid expenses and other                    |   |         | 2,626   |   |          |   | 2,884 |   |
|                                                      |   |         |    |   |          |   |   |   |
|     Total current assets              |   |         | 93,722  |   |          |   | 128,324 |   |
|                                                      |   |         |    |   |          |   |   |   |
| Property, plant and equipment:                            |   |         |    |   |          |   |   |   |
|   Land                                          |   |         | 1,468   |   |          |   | 1,468 |   |
|   Buildings and improvements                    |   |         | 61,207  |   |          |   | 62,224 |   |
|   Machinery and equipment                       |   |         | 328,497 |   |          |   | 330,665 |   |
|   Construction in progress                      |   |         | 2,583   |   |          |   | 4,852 |   |
|                                                      |   |         | 393,755 |   |          |   | 399,209 |   |
|   Less accumulated depreciation                 |   |         | 308,586 |   |          |   | 316,682 |   |
|                                                      |   |         |    |   |          |   |   |   |
|     Net property, plant and equipment |   |         | 85,169  |   |          |   | 82,527 |   |
|                                                      |   |         |    |   |          |   |   |   |
| Other assets:                                             |   |         |    |   |          |   |   |   |
|   Pension asset                                 |   |         | 84,806  |   |          |   | 100,354 |   |
|   Other, net                                    |   |         | 1,387   |   |          |   | 1,551 |   |
|                                                      |   |         |    |   |          |   |   |   |
|     Total other assets                |   |         | 86,193  |   |          |   | 101,905 |   |
|                                                      |   |         |    |   |          |   |   |   |
|                                                      |   |         |    |   |          |   |   |   |
|     Total assets                      |   | $            | 265,084 |   |          | $      | 312,756 |   |
|                                                      |   |         |    |   |          |   |   |   |

----

| LIABILITIES AND STOCKHOLDERS' EQUITY                                     |   | December 31, |     |   | September 30, |   |
|--------------------------------------------------------------------------|--------|--------------|----------|--------|---------------|--------|
|                                                                     |   | 2009    |     |   | 2010     |   |
|                                                                     |   |         |     |   | (unaudited)   |   |
|                                                                     |   |         |     |   |          |   |
| Current liabilities:                                                     |   |         |     |   |          |   |
|   Notes payable and current maturities of long-term debt  |   | $            | 19,396   |   |          | $      | 36,270 |   |
|   Accounts payable                                             |   |         | 5,577    |   |          |   | 8,426 |   |
|   Accrued OPEB cost                                            |   |         | 1,357    |   |          |   | 1,357 |   |
|   Other accrued liabilities                                    |   |         | 18,329   |   |          |   | 22,573 |   |
|                                                                     |   |         |     |   |          |   |   |   |
|     Total current liabilities                        |   |         | 44,659   |   |          |   | 68,626 |   |
|                                                                     |   |         |     |   |          |   |   |   |
| Noncurrent liabilities:                                                  |   |         |     |   |          |   |   |   |
|   Long-term debt                                               |   |         | 5,974    |   |          |   | 5,356 |   |
|   Accrued OPEB cost                                            |   |         | 44,244   |   |          |   | 45,180 |   |
|   Deferred income taxes                                        |   |         | 19,569   |   |          |   | 26,910 |   |
|   Other accrued liabilities                                    |   |         | 2,868    |   |          |   | 1,782 |   |
|                                                                     |   |         |     |   |          |   |   |   |
|     Total noncurrent liabilities                     |   |         | 72,655   |   |          |   | 79,228 |   |
|                                                                     |   |         |     |   |          |   |   |   |
|                                                                     |   |         |     |   |          |   |   |   |
| Stockholders' equity:                                                    |   |         |     |   |          |   |   |   |
|   Common stock                                                 |   |         | 125      |   |          |   | 125 |   |
|   Additional paid-in capital                                   |   |         | 100,111  |   |          |   | 100,111 |   |
|   Accumulated other comprehensive loss                         |   |         | (132,530 | )      |          |   | (128,841 | ) |
|   Retained earnings                                            |   |         | 180,860  |   |          |   | 194,303 |   |
|   Treasury stock                                               |   |         | (796     | )      |          |   | (796 | ) |
|                                                                     |   |         |     |   |          |   |   |   |
|     Total stockholders' equity                       |   |         | 147,770  |   |          |   | 164,902 |   |
|                                                                     |   |         |     |   |          |   |   |   |
|     Total liabilities and stockholders’ equity |   | $            | 265,084  |   |          | $      | 312,756 |   |
|                                                                     |   |         |     |   |          |   |   |   |

----

|                                                       |   | Three months ended September 30, |    |   | Nine months ended September 30, |   |
|------------------------------------------------------------|--------|---------------------------------------|---------|--------|--------------------------------------|--------|
|                                                       |   | 2009                                  |    |   | 2010                                 |   |   | 2009  |   |   | 2010 |   |
|                                                       |   | (unaudited)                           |    |
|                                                       |   |                                  |    |   |                                 |   |   |   |   |   |   |   |
| Net sales                                                  |   | $                                     | 100,363 |   |                                 | $      | 113,608 |   |   | $ | 231,349 |   |   | $ | 348,321 |   |
| Cost of goods sold                                         |   |                                  | (85,452 | )      |                                 |   | (108,100 | ) |   |   | (212,998 | ) |   |   | (317,584 | ) |
|                                                       |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|   Gross margin                                   |   |                                  | 14,911  |   |                                 |   | 5,508 |   |   |   | 18,351 |   |   |   | 30,737 |   |
|                                                       |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Other operating income (expense):                          |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|   Selling expense                                |   |                                  | (1,498  | )      |                                 |   | (1,448 | ) |   |   | (4,776 | ) |   |   | (4,949 | ) |
|   General and administrative expense             |   |                                  | (3,678  | )      |                                 |   | (2,434 | ) |   |   | (7,539 | ) |   |   | (10,315 | ) |
|   Defined benefit pension credit (expense)       |   |                                  | (1,515  | )      |                                 |   | 1,211 |   |   |   | (4,543 | ) |   |   | 3,632 |   |
|   Other postretirement benefit credit            |   |                                  | 1,042   |   |                                 |   | 1,342 |   |   |   | 3,562 |   |   |   | 4,029 |   |
|                                                       |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|     Total other operating expense      |   |                                  | (5,649  | )      |                                 |   | (1,329 | ) |   |   | (13,296 | ) |   |   | (7,603 | ) |
|                                                       |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Operating income                                           |   |                                  | 9,262   |   |                                 |   | 4,179 |   |   |   |  5,055 |   |   |   | 23,134 |   |
|                                                       |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Nonoperating income (expense):                             |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|   Interest expense                               |   |                                  | (474    | )      |                                 |   | (502 | ) |   |   | (1,214 | ) |   |   | (1,567 | ) |
|   Other income, net                              |   |                                  | 42      |   |                                 |   | 125 |   |   |   |  144 |   |   |   | 272 |   |
|                                                       |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|     Total nonoperating expense         |   |                                  | (432    | )      |                                 |   | (377 | ) |   |   | (1,070 | ) |   |   | (1,295 | ) |
|                                                       |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|   Income before income taxes                     |   |                                  | 8,830   |   |                                 |   | 3,802 |   |   |   | 3,985 |   |   |   | 21,839 |   |
|                                                       |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense                                         |   |                                  | (2,962  | )      |                                 |   | (1,483 | ) |   |   | (1,491 | ) |   |   | (8,396 | ) |
|                                                       |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|   Net income                                     |   | $                                     | 5,868   |   |                                 | $      | 2,319 |   |   | $ | 2,494 |   |   | $ | 13,443 |   |
|                                                       |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted income per share                         |   | $                                     | 0.48    |   |                                 | $      | 0.19 |   |   | $ | 0.21 |   |   | $ | 1.11 |   |
|                                                       |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted weighted average shares outstanding |   |                                  | 12,102  |   |                                 |   | 12,102 |   |   |   | 12,102 |   |   |   |  12,102 |   |
|                                                       |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                          |   | Nine months ended  September 30,  |    |
|-------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|
|                                                                          |   | 2009                                             |    |   | 2010 |   |
|                                                                          |   | (unaudited)                                      |    |
|                                                                          |   |                                             |    |   |   |   |
| Cash flows from operating activities:                                         |   |                                             |    |   |   |   |
|   Net income                                                        |   | $                                                | 2,494   |   |   | $ | 13,443 |   |
|   Depreciation and amortization                                     |   |                                             | 10,399  |   |   |   | 9,119 |   |
|   Deferred income taxes                                             |   |                                             | 3,794   |   |   |   | 5,058 |   |
|   Defined benefit pension expense (credit)                          |   |                                             | 4,543   |   |   |   | (3,632 | ) |
|   OPEB credit                                                       |   |                                             | (3,562  | ) |   |   | (4,029 | ) |
|   OPEB payments                                                     |   |                                             | (1,005  | ) |   |   | (978 | ) |
|   Bad debt expense                                                  |   |                                             | 3,258   |   |   |   | 52 |   |
|   Inventory impairment                                              |   |                                             | 2,702   |   |   |   | 172 |   |
|   Other, net                                                        |   |                                             | 346     |   |   |   | (142 | ) |
|   Change in assets and liabilities:                                 |   |                                             |    |   |   |   |   |   |
|     Accounts receivable                                   |   |                                             | (27,327 | ) |   |   | (11,356 | ) |
|     Inventories                                           |   |                                             | 10,088  |   |   |   | (26,343 | ) |
|     Accounts payable                                      |   |                                             | 3,540   |   |   |   | 2,849 |   |
|     Accrued environmental costs                           |   |                                             | (4,285  | ) |   |   | (113 | ) |
|     Accrued liabilities                                   |   |                                             | (11,639 | ) |   |   | 3,271 |   |
|     Income taxes                                          |   |                                             | (3,168  | ) |   |   | 3,441 |   |
|     Other, net                                            |   |                                             | (108    | ) |   |   | (258 | ) |
|                                                                          |   |                                             |    |   |   |   |   |   |
|       Net cash used in operating activities     |   |                                             | (9,930  | ) |   |   | (9,446 | ) |
|                                                                          |   |                                             |    |   |   |   |   |   |
| Cash flows from investing activities:                                         |   |                                             |    |   |   |   |   |   |
|   Capital expenditures                                              |   |                                             | (6,799  | ) |   |   | (6,512 | ) |
|   Restricted investments, net                                       |   |                                             | 2,027   |   |   |   | (2 | ) |
|   Other, net                                                        |   |                                             | 72      |   |   |   | 108 |   |
|                                                                          |   |                                             |    |   |   |   |   |   |
|       Net cash used in investing activities     |   |                                             | (4,700  | ) |   |   | (6,406 | ) |
|                                                                          |   |                                             |    |   |   |   |   |   |
| Cash flows from financing activities:                                         |   |                                             |    |   |   |   |   |   |
|   Revolving credit facility, net                                    |   |                                             | 28,323  |   |   |   | 22,448 |   |
|   Principal payments on other notes payable and long-term debt |   |                                             | (13,670 | ) |   |   | (6,225 | ) |
|   Deferred financing costs paid                                     |   |                                             | (23     | ) |   |   | (371 | ) |
|                                                                          |   |                                             |    |   |   |   |   |   |
|       Net cash provided by financing activities |   |                                             | 14,630  |   |   |   | 15,852 |   |
|                                                                          |   |                                             |    |   |   |   |   |   |
| 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                   |   | $                                                | 903     |   |   | $ | 1,224 |   |
|     Income taxes paid (refunded), net                     |   |                                             | 865     |   |   |   | (103 | ) |
|                                                                          |   |                                             |    |   |   |   |   |   |

----

|                                                                     |   | Common      |   |   | Additionalpaid-in |   |    | Accumulated othercomprehensive income (loss) |   |   | Retained |   |   | Treasury |   |   |   |   |    | Comprehensive |   |
|--------------------------------------------------------------------------|--------|-------------|--------|--------|-------------------|--------|---------|----------------------------------------------|--------|--------|----------|--------|--------|----------|--------|--------|--------|--------|---------|---------------|--------|
|                                                                     |   | stock       |   |   | capital           |   |    | Pensions                                     |   |   | OPEB     |   |   | earnings |   |   | stock  |   |    | Total         |   |   | income (loss) |   |
|                                                                     |   | (unaudited) |   |
|                                                                     |   |        |   |   |              |   |    |                                         |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |
| Balance – December 31, 2009                                        |   | $           | 125    |   |              | $      | 100,111 |                                         |   | $      | (158,401 | )      |   | $        | 25,871 |   |   | $      | 180,860 |          |   | $ | (796 | ) |   | $ | 147,770 |   |   |   |   |
|                                                                     |   |        |   |   |              |   |    |                                         |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                               |   |        | -      |   |              |   | -       |                                         |   |   | -        |   |   |     | -      |   |   |   | 13,443  |          |   |   | - |   |   |   | 13,443 |   |   | $ | 13,443 |   |
|                                                                     |   |        |   |   |              |   |    |                                         |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization of prior service cost     (credit) |   |        | -      |   |              |   | -       |                                         |   |   | 560      |   |   |     | (7,351 | )      |   |   | -       |          |   |   | - |   |   |   | (6,791 | ) |   |   | (6,791 | ) |
|                                                                     |   |        |   |   |              |   |    |                                         |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization of actuarial losses                                    |   |        | -      |   |              |   | -       |                                         |   |   | 6,801    |   |   |     | 3,679  |   |   |   | -       |          |   |   | - |   |   |   | 10,480 |   |   |   | 10,480 |   |
|                                                                     |   |        |   |   |              |   |    |                                         |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance – September 30, 2010                                       |   | $           | 125    |   |              | $      | 100,111 |                                         |   | $      | (151,040 | )      |   | $        | 22,199 |   |   | $      | 194,303 |          |   | $ | (796 | ) |   | $ | 164,902 |   |   |   |   |   |
|                                                                     |   |        |   |   |              |   |    |                                         |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
|   Comprehensive income                                         |   |        |   |   |              |   |    |                                         |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   | $ | 17,132 |   |

----

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

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

----

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

|                                                 |   | Three months ended September 30, |    |   | Nine months ended September 30, |   |
|------------------------------------------------------|--------|---------------------------------------|---------|--------|--------------------------------------|--------|
|                                                 |   | 2009                                  |    |   | 2010                                 |   |   | 2009 |   |   | 2010 |   |
|                                                 |   | (In thousands)                        |    |
|                                                 |   |                                  |    |   |                                 |   |   |   |   |   |   |   |
| Net sales:                                           |   |                                  |    |   |                                 |   |   |   |   |   |   |   |
|   KSW                                      |   | $                                     | 92,746  |   |                                 | $      | 104,664 |   |   | $ | 213,829 |   |   | $ | 338,046 |   |
|   EWP                                      |   |                                  | 12,782  |   |                                 |   | 12,085 |   |   |   | 31,506 |   |   |   | 32,452 |   |
|   Calumet                                  |   |                                  | 2,841   |   |                                 |   | 6,329 |   |   |   | 7,197 |   |   |   | 16,315 |   |
|   Elimination of intersegment sales   |   |                                  | (8,006  | )      |                                 |   | (9,470 | ) |   |   | (21,183 | ) |   |   | (38,492 | ) |
|                                                 |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|      Total net sales        |   | $                                     | 100,363 |   |                                 | $      | 113,608 |   |   | $ | 231,349 |   |   | $ | 348,321 |   |
|                                                 |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Operating income (loss):                             |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|   KSW                                      |   | $                                     | 8,629   |   |                                 | $      | 2,654 |   |   | $ | 7,944 |   |   | $ | 18,172 |   |
|   EWP                                      |   |                                  | 887     |   |                                 |   | (412 | ) |   |   | 801 |   |   |   | 98 |   |
|   Calumet                                  |   |                                  | (187    | )      |                                 |   | (196 | ) |   |   | (3,378 | ) |   |   | 450 |   |
|   Pension credit (expense)                 |   |                                  | (1,515  | )      |                                 |   | 1,211 |   |   |   | (4,543 | ) |   |   | 3,632 |   |
|   OPEB credit                              |   |                                  | 1,042   |   |                                 |   | 1,342 |   |   |   | 3,562 |   |   |   | 4,029 |   |
|   Other(1)                                 |   |                                  | 406     |   |                                 |   | (420 | ) |   |   | 669 |   |   |   | (3,247 | ) |
|                                                 |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|      Total operating income |   |                                  | 9,262   |   |                                 |   | 4,179 |   |   |   | 5,055 |   |   |   | 23,134 |   |
|                                                 |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Nonoperating income (expense):                       |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|   Interest expense                         |   |                                  | (474    | )      |                                 |   | (502 | ) |   |   | (1,214 | ) |   |   | (1,567 | ) |
|   Other income, net                        |   |                                  | 42      |   |                                 |   | 125 |   |   |   | 144 |   |   |   | 272 |   |
|                                                 |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|   Income before income taxes               |   | $                                     | 8,830   |   |                                 | $      | 3,802 |   |   | $ | 3,985 |   |   | $ | 21,839 |   |

----

|   |   | Increase (decrease) in LIFO reserve   |   |
|--------|--------|---------------------------------------|--------|
|   |   | Three months ended September 30, |   |   | Nine months ended September 30, |   |
|   |   | 2009                                  |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |
|   |   | (In thousands)                        |   |
|   |   |                                  |   |   |   |   |
| KSW    |   | $                                     | (2,318 | ) |   | $ | 1,910 |   |   | $ | (9,055 | ) |   | $ | 1,888 |   |
|   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| EWP    |   |                                  | (1,217 | ) |   |   | 313 |   |   |   | (4,434 | ) |   |   | 470 |   |
|   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total  |   | $                                     | (3,535 | ) |   | $ | 2,223 |   |   | $ | (13,489 | ) |   | $ | 2,358 |   |

|              |   | December 31,     |   |   | September 30,    |   |
|-------------------|--------|------------------|--------|--------|------------------|--------|
|              |   |  2009  |   |   |  2010  |   |
|              |   | (In thousands)   |   |
|              |   |             |   |   |             |   |
| Raw materials     |   | $                | 3,222  |   |             | $      | 4,449 |   |
| Billet            |   |             | 4,917  |   |             |   | 8,400 |   |
| Wire rod          |   |             | 5,282  |   |             |   | 19,427 |   |
| Work in process   |   |             | 4,645  |   |             |   | 6,566 |   |
| Finished product  |   |             | 19,747 |   |             |   | 25,096 |   |
| Supplies          |   |             | 22,646 |   |             |   | 25,311 |   |
|              |   |             |   |   |             |   |   |   |
| Inventory at FIFO |   |             | 60,459 |   |             |   | 89,249 |   |
| Less LIFO reserve |   |             | 19,234 |   |             |   | 21,592 |   |
|              |   |             |   |   |             |   |   |   |
| Total             |   | $                | 41,225 |   |             | $      | 67,657 |   |
|              |   |             |   |   |             |   |   |   |

----

|                                            |   | December 31,     |   |   | September 30, |   |
|-------------------------------------------------|--------|------------------|--------|--------|---------------|--------|
|                                            |   |  2009  |   |   | 2010          |   |
|                                            |   | (In thousands)   |   |
|                                            |   |             |   |   |          |   |
| Wells Fargo revolving credit facility           |   | $                | 12,546 |   |          | $      | 34,994 |   |
| Term loans:                                     |   |             |   |   |          |   |   |   |
|   Wells Fargo                         |   |             | 5,620  |   |          |   | - |   |
|   County                              |   |             | 6,302  |   |          |   | 5,701 |   |
| Other                                           |   |             | 902    |   |          |   | 931 |   |
|                                            |   |             |   |   |          |   |   |   |
|     Total debt              |   |             | 25,370 |   |          |   | 41,626 |   |
|     Less current maturities |   |             | 19,396 |   |          |   | 36,270 |   |
|                                            |   |             |   |   |          |   |   |   |
|     Total long-term debt    |   | $                | 5,974  |   |          | $      | 5,356 |   |

| ·   | lowered the maximum credit under the facility from $100 million to $70 million (which we believe will be sufficient to finance our existing operations), |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lowered the facility’s interest rate to prime plus a margin ranging from 0.25% to 0.5% (for prime-based borrowings) or LIBOR plus a margin ranging from 2.00% to 2.25% (for Eurodollar-based borrowings), |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | removed performance covenants unless excess availability is less than $10 million, at which point, we are required only to maintain a fixed charge coverage ratio of 1.0, |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | allows for unrestricted distribution of dividends and repurchases of company stock if excess availability is greater than $10 million, |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | extended the term of the facility to August 17, 2015, and |
|--------------------|-----------------------------------------------------------|

| ·   | substantially reduced monthly service, line of credit and unused line fees. |
|--------------------|-----------------------------------------------------------------------------|

----

----

|                                      |   | December 31,     |   |   | September 30, |   |
|-------------------------------------------|--------|------------------|--------|--------|---------------|--------|
|                                      |   |  2009  |   |   | 2010          |   |
|                                      |   | (In thousands)   |   |
| Current:                                  |   |             |   |   |          |   |
|   Employee benefits             |   | $                | 10,456 |   |          | $      | 14,208 |   |
|   Self insurance                |   |             | 4,431  |   |          |   | 4,882 |   |
|   Environmental                 |   |             | 430    |   |          |   | 417 |   |
|   Other                         |   |             | 3,012  |   |          |   | 3,066 |   |
|                                      |   |             |   |   |          |   |   |   |
| Total                                     |   | $                | 18,329 |   |          | $      | 22,573 |   |
|                                      |   |             |   |   |          |   |   |   |
| Noncurrent:                               |   |             |   |   |          |   |   |   |
|   Workers compensation payments |   | $                | 2,315  |   |          | $      | 1,297 |   |
|   Environmental                 |   |             | 300    |   |          |   | 225 |   |
|   Other                         |   |             | 253    |   |          |   | 260 |   |
|                                      |   |             |   |   |          |   |   |   |
| Total                                     |   | $                | 2,868  |   |          | $      | 1,782 |   |

|                                                         |   | Three months ended September 30, |   |   | Nine months ended September 30, |   |
|--------------------------------------------------------------|--------|---------------------------------------|--------|--------|--------------------------------------|--------|
|                                                         |   | 2009                                  |   |   | 2010                                 |   |   | 2009 |   |   | 2010 |   |
|                                                         |   | (In thousands)                        |   |
|                                                         |   |                                  |   |   |                                 |   |   |   |   |   |   |   |
| Service cost                                                 |   | $                                     | 814    |   |                                 | $      | 832 |   |   | $ | 2,441 |   |   | $ | 2,496 |   |
| Interest cost                                                |   |                                  | 5,411  |   |                                 |   | 4,936 |   |   |   | 16,231 |   |   |   | 14,809 |   |
| Expected return on plan assets                               |   |                                  | (9,721 | )      |                                 |   | (10,951 | ) |   |   | (29,161 | ) |   |   | (32,853 | ) |
| Amortization of accumulated other comprehensive income: |   |                                  |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|     Prior service cost                   |   |                                  | 308    |   |                                 |   | 302 |   |   |   | 924 |   |   |   | 907 |   |
|     Actuarial losses                     |   |                                  | 4,703  |   |                                 |   | 3,670 |   |   |   | 14,108 |   |   |   | 11,009 |   |
|                                                         |   |                                  |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Total expense (credit)                                       |   | $                                     | 1,515  |   |                                 | $      | (1,211 | ) |   | $ | 4,543 |   |   | $ | (3,632 | ) |

----

|                                                         |   | Three months ended September 30, |   |   | Nine months ended September 30, |   |
|--------------------------------------------------------------|--------|---------------------------------------|--------|--------|--------------------------------------|--------|
|                                                         |   | 2009                                  |   |   | 2010                                 |   |   | 2009 |   |   | 2010 |   |
|                                                         |   | (In thousands)                        |   |
|                                                         |   |                                  |   |   |                                 |   |   |   |   |   |   |   |
| Service cost                                                 |   | $                                     | 19     |   |                                 | $      | 27 |   |   | $ |  67 |   |   | $ | 82 |   |
| Interest cost                                                |   |                                  | 690    |   |                                 |   | 611 |   |   |   | 2,034 |   |   |   | 1,831 |   |
| Amortization of accumulated other comprehensive income: |   |                                  |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|     Prior service credit                 |   |                                  | (4,040 | )      |                                 |   | (3,966 | ) |   |   | (12,128 | ) |   |   | (11,898 | ) |
|     Actuarial losses                     |   |                                  | 2,289  |   |                                 |   | 1,986 |   |   |   | 6,465 |   |   |   | 5,956 |   |
|                                                         |   |                                  |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Total credit                                                 |   | $                                     | (1,042 | )      |                                 | $      | (1,342 | ) |   | $ | (3,562 | ) |   | $ | (4,029 | ) |

|                                           |   | Nine months ended   |   |
|------------------------------------------------|--------|---------------------|--------|
|                                           |   |  September 30, |   |
|                                           |   | 2009                |   |   | 2010 |   |
|                                           |   | (In thousands)      |   |
|                                           |   |                |   |
|                                           |   |                |   |   |   |   |
| Expected income tax expense, at statutory rate |   | $                   | 1,395  |   |   | $ | 7,645 |   |
| U.S. state income tax expense, net             |   |                | 74     |   |   |   | 715 |   |
| Other, net                                     |   |                | 22     |   |   |   | 36 |   |
|                                           |   |                |   |   |   |   |   |   |
| Income tax expense                             |   | $                   | 1,491  |   |   | $ | 8,396 |   |

----

|                                                              |   | December 31, 2009 |   |   | September 30, 2010 |   |
|-------------------------------------------------------------------|--------|------------------------|--------|--------|-------------------------|--------|
|                                                              |   | Carryingamount         |   |   | Fairvalue               |   |   | Carryingamount |   |   | Fairvalue |   |
|                                                              |   | (In thousands)         |   |
|                                                              |   |                   |   |   |                    |   |   |   |   |   |   |   |
| Restricted cash equivalents (included in other noncurrent assets) |   | $                      | 249    |   |                    | $      | 249 |   |   | $ | 251 |   |   | $ | 251 |   |
| Accounts receivable, net                                          |   |                   | 41,231 |   |                    |   | 41,231 |   |   |   | 52,584 |   |   |   | 52,584 |   |
| Accounts payable                                                  |   |                   | 5,577  |   |                    |   | 5,577 |   |   |   | 8,426 |   |   |   | 8,426 |   |
|                                                              |   |                   |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Debt (excluding capitalized leases):                              |   |                   |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
|   Variable-rate debt                                    |   |                   | 18,166 |   |                    |   | 18,166 |   |   |   | 34,994 |   |   |   | 34,994 |   |
|   Fixed-rate debt                                       |   |                   | 7,195  |   |                    |   | 6,680 |   |   |   | 6,626 |   |   |   | 6,329 |   |
|                                                              |   |                   |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |

----

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

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

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

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

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

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

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

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

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

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

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

| ·   | The ultimate resolution of pending litigation, U.S. EPA investigations and audits conducted by the Internal Revenue Service, |
|--------------------|------------------------------------------------------------------------------------------------------------------------------|

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

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

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

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

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

----

| ·   | lowered the maximum credit under the facility from $100 million to $70 million (which we believe will be sufficient to finance our existing operations), |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lowered the facility’s interest rate, |
|--------------------|---------------------------------------------|

| ·   | removed performance covenants unless excess availability is less than $10 million, at which point, we are required only to maintain a fixed charge coverage ratio of 1.0, |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | allows for unrestricted distribution of dividends and repurchases of company stock if excess availability is greater than $10 million, |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | extended the term of the facility to August 17, 2015, and |
|--------------------|-----------------------------------------------------------|

| ·   | substantially reduced monthly service, line of credit and unused line fees. |
|--------------------|-----------------------------------------------------------------------------|

----

|                                                 |   | Three months ended September 30, |   |   | Nine months ended September 30,  |   |
|------------------------------------------------------|--------|---------------------------------------|--------|--------|--------------------------------------------|--------|
|                                                 |   | 2009                                  |   |   | 2010                                       |   |   | 2009 |   |   | 2010 |   |
|                                                 |   | (In thousands)                        |   |
|                                                 |   |                                  |   |   |                                       |   |   |   |   |   |   |   |
| Operating income as reported                         |   | $                                     | 9,262  |   |                                       | $      | 4,179 |   |   | $ | 5,055 |   |   | $ | 23,134 |   |
|   Defined benefit pension expense (credit) |   |                                  | 1,515  |   |                                       |   | (1,211 | ) |   |   | 4,543 |   |   |   | (3,632 | ) |
|   OPEB credit                              |   |                                  | (1,042 | )      |                                       |   | (1,342 | ) |   |   | (3,562 | ) |   |   | (4,029 | ) |
| Operating income before pension and OPEB             |   | $                                     | 9,735  |   |                                       | $      | 1,626 |   |   | $ | 6,036 |   |   | $ | 15,473 |   |

----

|                                 |   | Three months ended   September 30,  |   |   | Nine months ended   September 30, |   |
|--------------------------------------|--------|----------------------------------------------------|--------|--------|---------------------------------------------|--------|
|                                 |   | 2009                                               |   |   | 2010                                        |   |   | 2009 |   |   | 2010 |   |
|                                 |   |                                               |   |   |                                        |   |   |   |   |   |   |   |
| Sales volume (000 tons):             |   |                                               |   |   |                                        |   |   |   |   |   |   |   |
|   Wire rod                 |   |                                               | 100    |   |                                        |   | 105 |   |   |   | 158 |   |   |   | 293 |   |
|   Fabricated wire products |   |                                               | 14     |   |                                        |   | 11 |   |   |   | 54 |   |   |   | 57 |   |
|   Industrial wire          |   |                                               | 9      |   |                                        |   | 13 |   |   |   | 25 |   |   |   | 40 |   |
|   Wire mesh                |   |                                               | 15     |   |                                        |   | 14 |   |   |   | 34 |   |   |   | 37 |   |
|   Bar                      |   |                                               | 4      |   |                                        |   | 6 |   |   |   | 9 |   |   |   | 17 |   |
|   Coiled rebar             |   |                                               | 2      |   |                                        |   | 3 |   |   |   | 4 |   |   |   | 6 |   |
|   Other                    |   |                                               | 2      |   |                                        |   | 4 |   |   |   | 4 |   |   |   | 10 |   |
|                                 |   |                                               |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
|     Total        |   |                                               | 146    |   |                                        |   | 156 |   |   |   | 288 |   |   |   | 460 |   |
|                                 |   |                                               |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
|                                 |   |                                               |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Average per-ton selling prices:      |   |                                               |   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
|   Wire rod                 |   | $                                                  | 564    |   |                                        | $      | 624 |   |   | $ | 574 |   |   | $ | 617 |   |
|   Fabricated wire products |   |                                               | 1,344  |   |                                        |   | 1,281 |   |   |   | 1,393 |   |   |   | 1,297 |   |
|   Industrial wire          |   |                                               | 827    |   |                                        |   | 931 |   |   |   | 914 |   |   |   | 915 |   |
|   Wire mesh                |   |                                               | 874    |   |                                        |   | 891 |   |   |   | 928 |   |   |   | 880 |   |
|   Bar                      |   |                                               | 772    |   |                                        |   | 903 |   |   |   | 796 |   |   |   | 892 |   |
|   Coiled rebar             |   |                                               | 541    |   |                                        |   | 606 |   |   |   | 543 |   |   |   | 621 |   |
|   All products             |   |                                               | 686    |   |                                        |   | 723 |   |   |   | 801 |   |   |   | 751 |   |

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

| ·   | impairment charges to reduce certain inventories to net realizable value of $357,000 and $2.7 million during the third quarter and first nine months of 2009, respectively, as compared to nominal impairment charges during the third quarter and first nine months of 2010; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | bad debt expense of $728,000 and $3.2 million during the third quarter and first nine months of 2009, respectively, primarily due to the Chapter 11 proceedings of one of our customers as compared to nominal amounts during both of the 2010 periods; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lower incentive compensation expense during the third quarter of 2010 due to decreased profitability but higher incentive compensation expense during the first nine months of 2010 due to increased profitability during the first half of 2010; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | significant decreases in our LIFO reserve and cost of goods sold during the third quarter and first nine months of 2009 as compared to increases in our LIFO reserve and cost of goods sold during the third quarter and first nine months of 2010 as discussed in Note 2 to our Condensed Consolidated Financial Statements; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

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

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

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

----

|                                                   |   | KSW            |    |   | EWP    |   |    | Calumet |   |   | Other(1)   |   |   | Total  |   |
|--------------------------------------------------------|--------|----------------|---------|--------|--------|--------|---------|---------|--------|--------|------------|--------|--------|--------|--------|
|                                                   |   | (In thousands) |    |
| Three months ended September 30, 2009:                 |   |
|                                                   |   |           |    |   |   |   |    |    |   |   |       |   |   |   |   |
|  Net sales                                        |   | $              | 92,746  |   |   | $      | 12,782  |    |   | $      | 2,841      |   |   | $      | (8,006 | ) |   | $ | 100,363 |   |
|  Cost of goods sold                               |   |           | (80,143 | )      |   |   | (11,287 | )       |   |   | (2,861     | )      |   |   | 8,839  |   |   |   | (85,452 | ) |
|    Gross margin (loss)                  |   |           | 12,603  |   |   |   | 1,495   |    |   |   | (20        | )      |   |   | 833    |   |   |   | 14,911 |   |
|                                                   |   |           |    |   |   |   |    |    |   |   |       |   |   |   |   |   |   |   |   |   |
|  Selling and administrative expense          |   |           | (3,974  | )      |   |   | (608    | )       |   |   |  (167 | )      |   |   | (427   | ) |   |   | (5,176 | ) |
|  Operating income (loss) before pension/OPEB |   | $              | 8,629   |   |   | $      | 887     |    |   | $      | (187       | )      |   | $      | 406    |   |   | $ | 9,735 |   |
|                                                   |   |           |    |   |   |   |    |    |   |   |       |   |   |   |   |   |   |   |   |   |
| Three months ended September 30, 2010:                 |   |
|                                                   |   |
|  Net sales                                        |   | $              | 104,664 |   |   | $      | 12,085  |    |   | $      | 6,329      |   |   | $      | (9,470 | ) |   | $ | 113,608 |   |
|  Cost of goods sold                               |   |           | (99,431 | )      |   |   | (11,956 | )       |   |   | (6,360     | )      |   |   | 9,647  |   |   |   | (108,100 | ) |
|    Gross margin (loss)                  |   |           | 5,233   |   |   |   | 129     |    |   |   | (31        | )      |   |   | 177    |   |   |   | 5,508 |   |
|                                                   |   |           |    |   |   |   |    |    |   |   |       |   |   |   |   |   |   |   |   |   |
|  Selling and administrative expense          |   |           | (2,579  | )      |   |   | (541    | )       |   |   |  (165 | )      |   |   | (597   | ) |   |   | (3,882 | ) |
|  Operating income (loss) before pension/OPEB |   | $              | 2,654   |   |   | $      | (412    | )       |   | $      | (196       | )      |   | $      | (420   | ) |   | $ | 1,626 |   |

| Nine months ended September 30, 2009:                  |   |
|--------------------------------------------------------|--------|
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Net sales                                        |   | $ | 213,829 |   |   | $ | 31,506 |   |   | $ | 7,197 |   |   | $ | (21,183 | ) |   | $ | 231,349 |   |
|  Cost of goods sold                               |   |   | (197,668 | ) |   |   | (28,696 | ) |   |   | (10,191 | ) |   |   | 23,557 |   |   |   | (212,998 | ) |
|    Gross margin (loss)                  |   |   | 16,161 |   |   |   | 2,810 |   |   |   | (2,994 | ) |   |   | 2,374 |   |   |   | 18,351 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Selling and administrative expense          |   |   | (8,217 | ) |   |   | (2,009 | ) |   |   | (384 | ) |   |   | (1,705 | ) |   |   | (12,315 | ) |
|  Operating income (loss) before pension/OPEB |   | $ | 7,944 |   |   | $ | 801 |   |   | $ | (3,378 | ) |   | $ | 669 |   |   | $ | 6,036 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nine months ended September 30, 2010:                  |   |
|                                                   |   |
|  Net sales                                        |   | $ | 338,046 |   |   | $ | 32,452 |   |   | $ | 16,315 |   |   | $ | (38,492 | ) |   | $ | 348,321 |   |
|  Cost of goods sold                               |   |   | (309,426 | ) |   |   | (30,713 | ) |   |   | (15,345 | ) |   |   | 37,900 |   |   |   | (317,584 | ) |
|    Gross margin                         |   |   | 28,620 |   |   |   | 1,739 |   |   |   | 970 |   |   |   | (592 | ) |   |   | 30,737 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Selling and administrative expense          |   |   | (10,448 | ) |   |   | (1,641 | ) |   |   | (520 | ) |   |   | (2,655 | ) |   |   | (15,264 | ) |
|  Operating income before pension/OPEB        |   | $ | 18,172 |   |   | $ | 98 |   |   | $ | 450 |   |   | $ | (3,247 | ) |   | $ | 15,473 |   |

----

|                                      |   |  Three months ended September 30, |    |
|-------------------------------------------|--------|----------------------------------------|---------|
|                                      |   | 2009                                   |    |   | % ofsales |   |   | 2010 |   |   | % ofsales |   |
|                                      |   | ($ in thousands)                       |    |
|                                      |   |                                   |    |   |   |   |   |   |   |   |   |   |
| Net sales                                 |   | $                                      | 92,746  |   |   |   | 100.0 | % |   | $ | 104,664 |   |   |   | 100.0 | % |
| Cost of goods sold                        |   |                                   | (80,143 | ) |   |   | (86.4 | ) |   |   | (99,431 | ) |   |   | (95.0 | ) |
|    Gross margin            |   |                                   | 12,603  |   |   |   | 13.6 |   |   |   | 5,233 |   |   |   | 5.0 |   |
|                                      |   |                                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling and administrative expense        |   |                                   | (3,974  | ) |   |   | (4.3 | ) |   |   | (2,579 | ) |   |   | (2.5 | ) |
| Operating income before pension/OPEB |   | $                                      | 8,629   |   |   |   | 9.3 | % |   | $ | 2,654 |   |   |   | 2.5 | % |

|                                      |   |  Nine months ended September 30, |     |
|-------------------------------------------|--------|---------------------------------------|----------|
|                                      |   | 2009                                  |     |   | % ofsales |   |   | 2010 |   |   | % ofsales |   |
|                                      |   | ($ in thousands)                      |     |
|                                      |   |                                  |     |   |   |   |   |   |   |   |   |   |
| Net sales                                 |   | $                                     | 213,829  |   |   |   | 100.0 | % |   | $ | 338,046 |   |   |   | 100.0 | % |
| Cost of goods sold                        |   |                                  | (197,668 | ) |   |   | (92.4 | ) |   |   | (309,426 | ) |   |   | (91.5 | ) |
|    Gross margin            |   |                                  | 16,161   |   |   |   | 7.6 |   |   |   | 28,620 |   |   |   | 8.5 |   |
|                                      |   |                                  |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling and administrative expense        |   |                                  | (8,217   | ) |   |   | (3.9 | ) |   |   | (10,448 | ) |   |   | (3.1 | ) |
| Operating income before pension/OPEB |   | $                                     | 7,944    |   |   |   | 3.7 | % |   | $ | 18,172 |   |   |   | 5.4 | % |

----

|                                                       |   | Three months ended   September 30,  |    |   | Nine months ended September 30, |   |
|------------------------------------------------------------|--------|----------------------------------------------------|---------|--------|--------------------------------------|--------|
|                                                       |   | 2009                                               |    |   | 2010                                 |   |   | 2009 |   |   | 2010 |   |
|                                                       |   |                                               |    |   |                                 |   |   |   |   |   |   |   |
| Sales volume (000 tons):                                   |   |                                               |    |   |                                 |   |   |   |   |   |   |   |
|   Wire rod                                       |   |                                               | 113     |   |                                 |   | 113 |   |   |   | 190 |   |   |   | 335 |   |
|   Fabricated wire products                       |   |                                               | 14      |   |                                 |   | 11 |   |   |   | 54 |   |   |   | 57 |   |
|   Industrial wire                                |   |                                               | 9       |   |                                 |   | 13 |   |   |   | 25 |   |   |   | 40 |   |
|   Billet                                         |   |                                               | 5       |   |                                 |   | 11 |   |   |   | 8 |   |   |   | 34 |   |
|   Coiled rebar                                   |   |                                               | 2       |   |                                 |   | 3 |   |   |   | 4 |   |   |   | 6 |   |
|   Total                                          |   |                                               | 143     |   |                                 |   | 151 |   |   |   | 281 |   |   |   | 472 |   |
|                                                       |   |                                               |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Average per-ton selling prices:                            |   |                                               |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|   Wire rod                                       |   | $                                                  | 561     |   |                                 | $      | 628 |   |   | $ | 575 |   |   | $ | 619 |   |
|   Fabricated wire products                       |   |                                               | 1,344   |   |                                 |   | 1,281 |   |   |   | 1,393 |   |   |   | 1,297 |   |
|   Industrial wire                                |   |                                               | 827     |   |                                 |   | 931 |   |   |   | 914 |   |   |   | 915 |   |
|   Billet                                         |   |                                               | 328     |   |                                 |   | 440 |   |   |   | 368 |   |   |   | 442 |   |
|   Coiled rebar                                   |   |                                               | 541     |   |                                 |   | 606 |   |   |   | 543 |   |   |   | 621 |   |
|   All products                                   |   |                                               | 647     |   |                                 |   | 689 |   |   |   | 756 |   |   |   | 712 |   |
|                                                       |   |                                               |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Average per-ton ferrous scrap cost of goods sold           |   | $                                                  | 230     |   |                                 | $      | 307 |   |   | $ | 267 |   |   | $ | 290 |   |
|                                                       |   |                                               |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in LIFO reserve and cost of goods sold |   | $                                                  | (2,318  | )      |                                 | $      | 1,910 |   |   | $ | (9,055 | ) |   | $ | 1,888 |   |
|                                                       |   |                                               |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Average electricity cost per kilowatt hour            |   | $                                                  | 0.03    |   |                                 | $      | 0.04 |   |   | $ | 0.03 |   |   | $ | 0.04 |   |
|                                                       |   |                                               |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Kilowatt hours consumed (000 hrs)                          |   |                                               | 122,148 |   |                                 |   | 120,698 |   |   |   | 253,896 |   |   |   | 388,053 |   |
|                                                       |   |                                               |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Average natural gas cost per therm                    |   | $                                                  | 0.38    |   |                                 | $      | 0.49 |   |   | $ | 0.52 |   |   | $ | 0.52 |   |
|                                                       |   |                                               |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Natural gas therms consumed (000 therms)              |   |                                               | 3,766   |   |                                 |   | 3,664 |   |   |   | 10,431 |   |   |   | 14,226 |   |

| ·   | substantially reduced production volumes which resulted in a higher percentage of fixed costs included in cost of goods sold (fixed costs as a percentage of sales were 12.8% during the first nine months of 2009 as compared to 8.5% during the first nine months of 2010); |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| ·   | an increase in KSW’s allowance for bad debt of $728,000 and $3.2 million, respectively, primarily due to the Chapter 11 proceedings of one of KSW’s customers; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lower employee incentive compensation accruals during the first nine months of 2009 due to decreased profitability; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

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

----

|                                        |   | Three months ended September 30, |    |
|---------------------------------------------|--------|----------------------------------|---------|
|                                        |   | 2009                             |    |   | % ofsales |   |   | 2010 |   |   | % ofsales |   |
|                                        |   | ($ in thousands)                 |    |
|                                        |   |                             |    |   |   |   |   |   |   |   |   |   |
| Net sales                                   |   | $                                | 12,782  |   |   |   | 100.0 | % |   | $ | 12,085 |   |   |   | 100.0 | % |
| Cost of goods sold                          |   |                             | (11,287 | ) |   |   | (88.3 | ) |   |   | (11,956 | ) |   |   | (98.9 | ) |
|    Gross margin                   |   |                             | 1,495   |   |   |   | 11.7 |   |   |   | 129 |   |   |   | 1.1 |   |
|                                        |   |                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling and administrative expense          |   |                             | (608    | ) |   |   | (4.8 | ) |   |   | (541 | ) |   |   | (4.5 | ) |
| Operating income (loss) before pension/OPEB |   | $                                | 887     |   |   |   | 6.9 | % |   | $ | (412 | ) |   |   | (3.4 | )% |

|                                 |   | Nine months ended September 30, |    |
|--------------------------------------|--------|---------------------------------|---------|
|                                 |   | 2009                            |    |   | % ofsales |   |   | 2010 |   |   | % ofsales |   |
|                                 |   | ($ in thousands)                |    |
|                                 |   |                            |    |   |   |   |   |   |   |   |   |   |
| Net sales                            |   | $                               | 31,506  |   |   |   | 100.0 | % |   | $ | 32,452 |   |   |   | 100.0 | % |
| Cost of goods sold                   |   |                            | (28,696 | ) |   |   | (91.1 | ) |   |   | (30,713 | ) |   |   | (94.6 | ) |
|    Gross margin            |   |                            | 2,810   |   |   |   | 8.9 |   |   |   | 1,739 |   |   |   | 5.4 |   |
|                                 |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling and administrative expense   |   |                            | (2,009  | ) |   |   | (6.4 | ) |   |   | (1,641 | ) |   |   | (5.1 | ) |
| Operating income before pension/OPEB |   | $                               | 801     |   |   |   | 2.5 | % |   | $ | 98 |   |   |   | 0.3 | % |

|                                                       |   | Three months ended September 30, |     |   | Nine months ended September 30, |   |
|------------------------------------------------------------|--------|---------------------------------------|----------|--------|--------------------------------------|--------|
|                                                       |   | 2009                                  |     |   | 2010                                 |   |   | 2009 |   |   | 2010 |   |
|                                                       |   |                                  |     |   |                                 |   |   |   |   |   |   |   |
| Sales volume (000 tons) – Wire mesh             |   |                                  |  15 |   |                                 |   | 14 |   |   |   |  34 |   |   |   | 37 |   |
|                                                       |   |                                  |     |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Average per-ton selling prices – Wire mesh      |   | $                                     | 874      |   |                                 | $      | 891 |   |   | $ | 928 |   |   | $ | 880 |   |
|                                                       |   |                                  |     |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Average per-ton wire rod cost of goods sold           |   | $                                     | 660      |   |                                 | $      | 647 |   |   | $ | 748 |   |   | $ | 629 |   |
|                                                       |   |                                  |     |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in LIFO reserve and cost of goods sold |   | $                                     | (1,217   | )      |                                 | $      | 313 |   |   | $ | (4,434 | ) |   | $ | 470 |   |

----

|                                                |   | Three months ended September 30, |   |
|-----------------------------------------------------|--------|----------------------------------|--------|
|                                                |   | 2009                             |   |   | % ofsales |   |   | 2010 |   |   | % ofSales |   |
|                                                |   | ($ in thousands)                 |   |
|                                                |   |                             |   |   |   |   |   |   |   |   |   |   |
| Net sales                                           |   | $                                | 2,841  |   |   |   | 100.0 | % |   | $ | 6,329 |   |   |   | 100.0 | % |
| Cost of goods sold                                  |   |                             | (2,861 | ) |   |   | (100.7 | ) |   |   | (6,360 | ) |   |   | (100.5 | ) |
|   Gross margin (loss)                     |   |                             | (20    | ) |   |   | (0.7 | ) |   |   | (31 | ) |   |   | (0.5 | ) |
|                                                |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling and administrative expense                  |   |                             | (167   | ) |   |   | (5.9 | ) |   |   | (165 | ) |   |   | (2.6 | ) |
|                                                |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Operating loss before pension/OPEB |   | $                                | (187   | ) |   |   | (6.6 | ) |   | $ | (196 | ) |   |   | (3.1 | )% |

|                                                         |   | Nine months ended September 30, |    |
|--------------------------------------------------------------|--------|---------------------------------|---------|
|                                                         |   | 2009                            |    |   | % ofsales |   |   | 2010 |   |   | % ofSales |   |
|                                                         |   | ($ in thousands)                |    |
|                                                         |   |                            |    |   |   |   |   |   |   |   |   |   |
| Net sales                                                    |   | $                               | 7,197   |   |   |   | 100.0 | % |   | $ | 16,315 |   |   |   | 100.0 | % |
| Cost of goods sold                                           |   |                            | (10,191 | ) |   |   | (141.6 | ) |   |   | (15,345 | ) |   |   | (94.1 | ) |
|   Gross margin (loss)                              |   |                            | (2,994  | ) |   |   | (41.6 | ) |   |   | 970 |   |   |   | 5.9 |   |
|                                                         |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling and administrative expense                           |   |                            | (384    | ) |   |   | (5.3 | ) |   |   | (520 | ) |   |   | (3.2 | ) |
|   Operating income (loss) before pension/OPEB |   | $                               | (3,378  | ) |   |   | (46.9 | ) |   | $ | 450 |   |   |   | 2.7 | % |

|                                                 |   | Three months ended September 30, |   |   | Nine months ended September 30, |   |
|------------------------------------------------------|--------|---------------------------------------|--------|--------|--------------------------------------|--------|
|                                                 |   | 2009                                  |   |   | 2010                                 |   |   | 2009 |   |   | 2010 |   |
|                                                 |   |                                  |   |   |                                 |   |   |   |   |   |   |   |
| Sales volume (000 tons) – Bar             |   |                                  | 4      |   |                                 |   | 6 |   |   |   | 9 |   |   |   | 17 |   |
|                                                 |   |                                  |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Average per-ton selling prices – Bar |   | $                                     | 772    |   |                                 | $      | 903 |   |   | $ | 796 |   |   | $ | 892 |   |
|                                                 |   |                                  |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Average per-ton billet cost of goods sold            |   | $                                     | 403    |   |                                 | $      | 551 |   |   | $ | 454 |   |   | $ | 494 |   |

| ·   | impairment charges of $357,000 and $2.7 million during the third quarter and first nine months of 2009, respectively, as Calumet determined it was probable they would not be able to recover the cost of certain inventory items in future selling prices, as compared to nominal impairment charges during the third quarter and first nine months of 2010; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

| ·   | $9.4 million increase in operating income before pension and OPEB during 2010; |
|--------------------|--------------------------------------------------------------------------------|

| ·   | lower net cash used by relative changes in our accounts receivable of $16.0 million in 2010 primarily due to an abnormally low accounts receivable balance at December 31, 2008 as a result of customers limiting orders during the fourth quarter of 2008; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher net cash used by relative changes in our inventory of $36.0 million in 2010 primarily due to substantially higher production levels during the first half of 2010 to meet increased demand as compared to extremely low production levels during the first half of 2009 as a result of a rapid decline in product demand (third quarter 2010 production levels were relatively consistent with those of the third quarter of 2009); |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher net cash provided by relative changes in our accrued liabilities of $14.9 million in 2010 as a result of the payment of 2008 employee incentive compensation during the first quarter of 2009 which was significantly higher than 2009 employee incentive compensation paid during the first quarter of 2010; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | income tax refund of $.1 million during the first nine months of 2010 compared to income tax payments of $.9 million during the first nine months of 2009. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                             |   | December 31,   |   |   | September 30, |   |
|--------------------------------------------------|--------|----------------|--------|--------|---------------|--------|
|                                             |   | 2009           |   |   | 2010          |   |
|                                             |   | (In thousands) |   |
|                                             |   |           |   |   |          |   |
| Working capital                                  |   | $              | 49,063 |   |          | $      | 59,698 |   |
| Outstanding balance of revolving credit facility |   |           | 12,546 |   |          |   | 34,994 |   |
| Additional borrowing availability                |   |           | 38,637 |   |          |   | 28,727 |   |

----

----

|   | · | 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: |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4.1 | Amendment No. 4 to Loan and Security Agreement dated as of August 17, 2010 by and between the Registrant and Wells Fargo Capital Finance, LLC. (Incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated August 17, 2010). |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

----

| Date:  November 3, 2010  | By/s/ Bert E. Downing, Jr.                                                                                             Bert E. Downing, Jr.Vice President, Chief Financial Officer, Corporate Controller and Treasurer |
|-----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----