| For      the quarter ended March 31,      2009 |                                                                                           Commission file number 1-3919 |
|------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

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

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

----

| Part      I.       FINANCIAL      INFORMATION                                                                                                                                                                                       |  Page  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|
|                                                                                                                                                                                                                                                                   |             |
| Item      1.       Financial      Statements                                                                                                                                                                                        |             |
|                                                                                                                                                                                                                                                                   |             |
| Condensed      Consolidated Balance Sheets –                           December      31, 2008; March 31, 2009 (unaudited) | 3                |
|                                                                                                                                                                                                                                                                   |             |
| Condensed      Consolidated Statements of Operations (unaudited) -  Three      months ended March 31, 2008 and 2009                                                                                                                                          | 5                |
|                                                                                                                                                                                                                                                                   |             |
| Condensed      Consolidated Statements of Cash Flows (unaudited) –  Three      months ended March 31, 2008 and 2009                                                                                                                                    | 6                |
|                                                                                                                                                                                                                                                                   |             |
| Condensed      Consolidated Statement of Stockholders' Equity  and      Comprehensive Loss (unaudited) -    Three      months ended March 31, 2009                                                                                       | 7                |
|                                                                                                                                                                                                                                                                   |             |
|   Notes      to Condensed Consolidated Financial Statements (unaudited)                                                                                                                                                                                      | 8                |
|                                                                                                                                                                                                                                                                   |             |
| Item      2.       Management's Discussion and      Analysis of Financial  Condition 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                                                                                                                                                                                     | 29               |
|                                                                                                                                                                                                                                                                   |             |
| Item      1A.     Risk Factors                                                                                                                                                                                                                | 29               |
|                                                                                                                                                                                                                                                                   |             |
| Item      6.         Exhibits                                                                                                                                                                                             | 29               |
|                                                                                                                                                                                                                                                                   |             |
| Items      2, 3, 4 and 5 of Part II are omitted because there is no information to      report.                                                                                                                                                                        |             |

----

|                                                           |   | December      31, |    |   | March      31, |   |
|----------------------------------------------------------------|--------|-------------------|---------|--------|----------------|--------|
| ASSETS                                                         |   | 2008              |    |   | 2009           |   |
|                                                           |   |              |    |   | (unaudited)    |   |
|                                                           |   |              |    |   |           |   |
| Current      assets:                                           |   |              |    |   |           |   |
|   Accounts      receivable, net                      |   | $                 | 26,612  |   |           | $      | 32,112 |   |
|   Inventories                                        |   |              | 70,858  |   |           |   | 49,038 |   |
|   Deferred      income taxes                         |   |              | 14,373  |   |           |   | 14,373 |   |
|   Income      taxes receivable                       |   |              | -       |   |           |   | 3,504 |   |
|   Prepaid      expenses and other                    |   |              | 2,724   |   |           |   | 2,118 |   |
|                                                           |   |              |    |   |           |   |   |   |
|     Total      current assets              |   |              | 114,567 |   |           |   | 101,145 |   |
|                                                           |   |              |    |   |           |   |   |   |
| Property,      plant and equipment:                            |   |              |    |   |           |   |   |   |
|   Land                                               |   |              | 1,468   |   |           |   | 1,468 |   |
|   Buildings      and improvements                    |   |              | 59,598  |   |           |   | 59,735 |   |
|   Machinery      and equipment                       |   |              | 317,573 |   |           |   | 322,260 |   |
|   Construction      in progress                      |   |              | 9,421   |   |           |   | 6,632 |   |
|                                                           |   |              | 388,060 |   |           |   | 390,095 |   |
|   Less      accumulated depreciation                 |   |              | 298,073 |   |           |   | 301,627 |   |
|                                                           |   |              |    |   |           |   |   |   |
|     Net      property, plant and equipment |   |              | 89,987  |   |           |   | 88,468 |   |
|                                                           |   |              |    |   |           |   |   |   |
| Other      assets:                                             |   |              |    |   |           |   |   |   |
|   Restricted      investments                        |   |              | 2,277   |   |           |   | 2,277 |   |
|   Pension      asset                                 |   |              | 41,651  |   |           |   | 45,030 |   |
|   Other,      net                                    |   |              | 1,251   |   |           |   | 1,182 |   |
|                                                           |   |              |    |   |           |   |   |   |
|     Total      other assets                |   |              | 45,179  |   |           |   | 48,489 |   |
|                                                           |   |              |    |   |           |   |   |   |
|                                                           |   |              |    |   |           |   |   |   |
|     Total      assets                      |   | $                 | 249,733 |   |           | $      | 238,102 |   |
|                                                           |   |              |    |   |           |   |   |   |

----

| LIABILITIES      AND STOCKHOLDERS' EQUITY                                         |   | December      31, |     |   | March      31, |   |
|-----------------------------------------------------------------------------------|--------|-------------------|----------|--------|----------------|--------|
|                                                                              |   | 2008              |     |   | 2009      |   |
|                                                                              |   |              |     |   | (unaudited)    |   |
|                                                                              |   |              |     |   |           |   |
| Current      liabilities:                                                         |   |              |     |   |           |   |
|   Notes      payable and current maturities of long-term      debt |   | $                 | 18,848   |   |           | $      | 22,549 |   |
|   Accounts      payable                                                 |   |              | 7,776    |   |           |   | 6,094 |   |
|   Accrued      OPEB cost                                                |   |              | 1,372    |   |           |   | 1,372 |   |
|   Income      taxes payable                                             |   |              | 1,116    |   |           |   | - |   |
|   Other      accrued liabilities                                        |   |              | 29,569   |   |           |   | 18,083 |   |
|                                                                              |   |              |     |   |           |   |   |   |
|     Total      current liabilities                            |   |              | 58,681   |   |           |   | 48,098 |   |
|                                                                              |   |              |     |   |           |   |   |   |
| Noncurrent      liabilities:                                                      |   |              |     |   |           |   |   |   |
|   Long-term      debt                                                   |   |              | 12,782   |   |           |   | 11,457 |   |
|   Accrued      pension cost                                             |   |              | 1,319    |   |           |   | 1,202 |   |
|   Accrued      OPEB cost                                                |   |              | 42,560   |   |           |   | 42,920 |   |
|   Deferred      income taxes                                            |   |              | 8,284    |   |           |   | 10,460 |   |
|   Other      accrued liabilities                                        |   |              | 6,463    |   |           |   | 6,790 |   |
|                                                                              |   |              |     |   |           |   |   |   |
|     Total      noncurrent liabilities                         |   |              | 71,408   |   |           |   | 72,829 |   |
|                                                                              |   |              |     |   |           |   |   |   |
|                                                                              |   |              |     |   |           |   |   |   |
| Stockholders'      equity:                                                        |   |              |     |   |           |   |   |   |
|   Common      stock                                                     |   |              | 125      |   |           |   | 125 |   |
|   Additional      paid-in capital                                       |   |              | 100,111  |   |           |   | 100,111 |   |
|   Accumulated      other comprehensive loss                             |   |              | (160,415 | )      |           |   | (158,510 | ) |
|   Retained      earnings                                                |   |              | 180,619  |   |           |   | 176,245 |   |
|   Treasury      stock                                                   |   |              | (796     | )      |           |   | (796 | ) |
|                                                                              |   |              |     |   |           |   |   |   |
|     Total      stockholders' equity                           |   |              | 119,644  |   |           |   | 117,175 |   |
|                                                                              |   |              |     |   |           |   |   |   |
|     Total      liabilities and stockholders’ equity     |   | $                 | 249,733  |   |           | $      | 238,102 |   |
|                                                                              |   |              |     |   |           |   |   |   |

----

|                                                                            |   | Three      months ended  March 31, |         |
|---------------------------------------------------------------------------------|--------|----------------------------------------------|--------------|
|                                                                            |   | 2008                                         |         |   | 2009 |   |
|                                                                            |   | (unaudited)                                  |         |
|                                                                            |   |                                         |         |   |   |   |
| Net      sales                                                                  |   | $                                            | 134,139      |   |   | $ | 60,475 |   |
| Cost      of goods sold                                                         |   |                                         | (127,013     | ) |   |   | (62,274 | ) |
|                                                                            |   |                                         |         |   |   |   |   |   |
|   Gross      margin (loss)                                            |   |                                         | 7,126        |   |   |   | (1,799 | ) |
|                                                                            |   |                                         |         |   |   |   |   |   |
| Other      operating income (expense):                                          |   |                                         |         |   |   |   |   |   |
|   Selling      expense                                                |   |                                         | (1,871       | ) |   |   | (1,606 | ) |
|   General      and administrative expense                             |   |                                         | (3,673       | ) |   |   | (3,058 | ) |
|   Defined      benefit pension credit (expense)                       |   |                                         | 18,996       |   |   |   | (1,515 | ) |
|   Other      postretirement benefit credit                            |   |                                         | 2,198        |   |   |   | 1,260 |   |
|                                                                            |   |                                         |         |   |   |   |   |   |
|       Total      other operating income (expense) |   |                                         | 15,650       |   |   |   | (4,919 | ) |
|                                                                            |   |                                         |         |   |   |   |   |   |
| Operating      income (loss)                                                    |   |                                         | 22,776       |   |   |   | (6,718 | ) |
|                                                                            |   |                                         |         |   |   |   |   |   |
| Nonoperating      income (expense):                                             |   |                                         |         |   |   |   |   |   |
|   Interest      expense                                               |   |                                         | (1,313       | ) |   |   | (332 | ) |
|   Other      income (expense), net                                    |   |                                         | 390          |   |   |   | (2 | ) |
|                                                                            |   |                                         |         |   |   |   |   |   |
|       Total      nonoperating expense             |   |                                         | (923         | ) |   |   | (334 | ) |
|                                                                            |   |                                         |         |   |   |   |   |   |
|   Income      (loss) before income taxes                              |   |                                         | 21,853       |   |   |   | (7,052 | ) |
|                                                                            |   |                                         |         |   |   |   |   |   |
| Income      tax benefit (expense)                                               |   |                                         |  (8,243 | ) |   |   | 2,678 |   |
|                                                                            |   |                                         |         |   |   |   |   |   |
|   Net      income (loss)                                              |   | $                                            | 13,610       |   |   | $ | (4,374 | ) |
|                                                                            |   |                                         |         |   |   |   |   |   |
| Basic      and diluted income (loss) per share                                  |   | $                                            | 1.39         |   |   | $ | (0.36 | ) |
|                                                                            |   |                                         |         |   |   |   |   |   |
| Basic      and diluted weighted average shares outstanding                 |   |                                         |   9,794 |   |   |   | 12,102 |   |
|                                                                            |   |                                         |         |   |   |   |   |   |

----

|                                                                                    |   | Three      months ended March 31, |    |
|-----------------------------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                                                    |   | 2008                                   |    |   | 2009 |   |
|                                                                                    |   | (unaudited)                            |    |
|                                                                                    |   |                                   |    |   |   |   |
| Cash      flows from operating activities:                                              |   |                                   |    |   |   |   |
|   Net      income (loss)                                                      |   | $                                      | 13,610  |   |   | $ | (4,374 | ) |
|   Depreciation      and amortization                                          |   |                                   | 3,949   |   |   |   | 3,597 |   |
|   Deferred      income taxes                                                  |   |                                   | 8,182   |   |   |   | 1,027 |   |
|   Defined      benefit pension expense (credit)                               |   |                                   | (18,996 | ) |   |   | 1,515 |   |
|   OPEB      credit                                                            |   |                                   | (2,198  | ) |   |   | (1,260 | ) |
|   OPEB      payments                                                          |   |                                   | (966    | ) |   |   | (337 | ) |
|   Bad      debt expense (credit)                                              |   |                                   | (7      | ) |   |   | 949 |   |
|   Inventory      impairment                                                   |   |                                   | -       |   |   |   | 1,495 |   |
|   Other,      net                                                             |   |                                   | 285     |   |   |   | 153 |   |
|   Change      in assets and liabilities:                                      |   |                                   |    |   |   |   |   |   |
|     Accounts      receivable                                        |   |                                   | (13,336 | ) |   |   | (6,449 | ) |
|     Inventories                                                     |   |                                   | 3,530   |   |   |   | 20,325 |   |
|     Accounts      payable                                           |   |                                   | (1,917  | ) |   |   | (1,682 | ) |
|     Accrued      liabilities                                        |   |                                   | 434     |   |   |   | (11,159 | ) |
|     Income      taxes                                               |   |                                   | (16     | ) |   |   | (4,620 | ) |
|     Other,      net                                                 |   |                                   | 556     |   |   |   | 623 |   |
|                                                                                    |   |                                   |    |   |   |   |   |   |
|       Net      cash used in operating activities          |   |                                   | (6,890  | ) |   |   | (197 | ) |
|                                                                                    |   |                                   |    |   |   |   |   |   |
| Cash      flows from investing activities:                                              |   |                                   |    |   |   |   |   |   |
|   Capital      expenditures                                                   |   |                                   | (1,882  | ) |   |   | (2,162 | ) |
|   Restricted      investments, net                                            |   |                                   | (15     | ) |   |   | - |   |
|   Other,      net                                                             |   |                                   | 360     |   |   |   | - |   |
|                                                                                    |   |                                   |    |   |   |   |   |   |
|       Net      cash used in investing activities          |   |                                   | (1,537  | ) |   |   | (2,162 | ) |
|                                                                                    |   |                                   |    |   |   |   |   |   |
| Cash      flows from financing activities:                                              |   |                                   |    |   |   |   |   |   |
|   Issuance      of common stock                                               |   |                                   | 24,713  |   |   |   | - |   |
|   Revolving      credit facility, net                                         |   |                                   | (6,524  | ) |   |   | 12,809 |   |
|   Principal      payments on other notes payable and long-term      debt |   |                                   | (9,625  | ) |   |   | (10,443 | ) |
|   Deferred      financing costs paid                                          |   |                                   | (137    | ) |   |   | (7 | ) |
|                                                                                    |   |                                   |    |   |   |   |   |   |
|       Net      cash provided by financing activities      |   |                                   | 8,427   |   |   |   | 2,359 |   |
|                                                                                    |   |                                   |    |   |   |   |   |   |
| 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                        |   | $                                      | 1,104   |   |   | $ | 126 |   |
|     Income      taxes, net                                          |   |                                   | 78      |   |   |   | 915 |   |

----

|                                                               |   | Common      |   |   | Additionalpaid-in |   |    | Accumulated      othercomprehensive income (loss) |   |   | Retained |   |   | Treasury |   |   |   |   |    | Comprehensive |   |
|--------------------------------------------------------------------|--------|-------------|--------|--------|-------------------|--------|---------|---------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|--------|--------|--------|---------|---------------|--------|
|                                                               |   | stock       |   |   | capital           |   |    | Pensions                                          |   |   | OPEB     |   |   | earnings |   |   | stock  |   |    | Total         |   |   | income (loss) |   |
|                                                               |   | (unaudited) |   |
|                                                               |   |        |   |   |              |   |    |                                              |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |
| Balance      – December 31, 2008                             |   | $           | 125    |   |              | $      | 100,111 |                                              |   | $      | (193,258 | )      |   | $        | 32,843 |   |   | $      | 180,619 |          |   | $ | (796 | ) |   | $ | 119,644 |   |   |   |   |
|                                                               |   |        |   |   |              |   |    |                                              |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss                                                      |   |        | -      |   |              |   | -       |                                              |   |   | -        |   |   |     | -      |   |   |   | (4,374  | )             |   |   | - |   |   |   | (4,374 | ) |   | $ | (4,374 | ) |
|                                                               |   |        |   |   |              |   |    |                                              |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of actuarial losses,      net of tax        |   |        | -      |   |              |   | -       |                                              |   |   | 2,934    |   |   |     | 1,302  |   |   |   | -       |          |   |   | - |   |   |   | 4,236 |   |   |   | 4,236 |   |
|                                                               |   |        |   |   |              |   |    |                                              |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of prior service  cost (credit), net of tax |   |        | -      |   |              |   | -       |                                              |   |   | 192      |   |   |     | (2,523 | )      |   |   | -       |          |   |   | - |   |   |   | (2,331 | ) |   |   | (2,331 | ) |
|                                                               |   |        |   |   |              |   |    |                                              |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      – March 31, 2009                                |   | $           | 125    |   |              | $      | 100,111 |                                              |   | $      | (190,132 | )      |   | $        | 31,622 |   |   | $      | 176,245 |          |   | $ | (796 | ) |   | $ | 117,175 |   |   |   |   |   |
|                                                               |   |        |   |   |              |   |    |                                              |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
|   Comprehensive      loss                                |   |        |   |   |              |   |    |                                              |   |   |     |   |   |     |   |   |   |   |    |          |   |   |   |   |   |   |   |   |   | $ | (2,469 | ) |

----

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

| ·   | 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  March 31, |    |
|------------------------------------------------------------------|--------|----------------------------------------------|---------|
|                                                             |   | 2008                                         |    |   | 2009 |   |
|                                                             |   | (In      thousands)                          |    |
| Net      sales:                                                  |   |                                         |    |   |   |   |
|   KSW                                                  |   | $                                            | 131,040 |   |   | $ | 53,993 |   |
|   EWP                                                  |   |                                         | 13,052  |   |   |   | 7,161 |   |
|   Calumet                                              |   |                                         | 3,303   |   |   |   | 1,918 |   |
|   Elimination      of intersegment sales          |   |                                         | (13,256 | ) |   |   | (2,597 | ) |
|                                                             |   |                                         |    |   |   |   |   |   |
|      Total      net sales               |   | $                                            | 134,139 |   |   | $ | 60,475 |   |
|                                                             |   |                                         |    |   |   |   |   |   |
| Operating      income (loss):                                    |   |                                         |    |   |   |   |   |   |
|   KSW                                                  |   | $                                            | 2,410   |   |   | $ | (4,450 | ) |
|   EWP                                                  |   |                                         | 1,478   |   |   |   | (326 | ) |
|   Calumet                                              |   |                                         | (692    | ) |   |   | (2,471 | ) |
|   Pension      credit (expense)                        |   |                                         | 18,996  |   |   |   | (1,515 | ) |
|   OPEB      credit                                     |   |                                         | 2,198   |   |   |   | 1,260 |   |
|   Other(1)                                             |   |                                         | (1,614  | ) |   |   | 784 |   |
|                                                             |   |                                         |    |   |   |   |   |   |
|      Total      operating income (loss) |   |                                         | 22,776  |   |   |   | (6,718 | ) |
|                                                             |   |                                         |    |   |   |   |   |   |
| Nonoperating      income (expense):                              |   |                                         |    |   |   |   |   |   |
|   Interest      expense                                |   |                                         | (1,313  | ) |   |   | (332 | ) |
|   Other      income (expense), net                     |   |                                         | 390     |   |   |   | (2 | ) |
|                                                             |   |                                         |    |   |   |   |   |   |
|                                                             |   |                                         |    |   |   |   |   |   |
|   Income      (loss) before income taxes               |   | $                                            | 21,853  |   |   | $ | (7,052 | ) |

----

|                                           |   | December      31,   |    |   | March      31, |   |
|------------------------------------------------|--------|---------------------|---------|--------|----------------|--------|
|                                           |   | 2008                |    |   | 2009           |   |
|                                           |   | (In      thousands) |    |
|                                           |   |                |    |   |           |   |
|   Raw      materials                 |   | $                   | 9,635   |   |           | $      | 10,341 |   |
|   Billets                            |   |                | 10,191  |   |           |   | 5,689 |   |
|   Wire      rod                      |   |                | 24,225  |   |           |   | 7,978 |   |
|   Work      in process               |   |                | 6,657   |   |           |   | 6,967 |   |
|   Finished      products             |   |                | 33,646  |   |           |   | 26,323 |   |
|   Supplies                           |   |                | 20,938  |   |           |   | 21,687 |   |
|                                           |   |                |    |   |           |   |   |   |
|     Inventory      at FIFO |   |                | 105,292 |   |           |   | 78,985 |   |
|     Less      LIFO reserve |   |                | 34,434  |   |           |   | 29,947 |   |
|                                           |   |                |    |   |           |   |   |   |
|       Total      |   | $                   | 70,858  |   |           | $      | 49,038 |   |
|                                           |   |                |    |   |           |   |   |   |

|                                                 |   | December      31,   |   |   | March      31, |   |
|------------------------------------------------------|--------|---------------------|--------|--------|----------------|--------|
|                                                 |   | 2008                |   |   | 2009           |   |
|                                                 |   | (In      thousands) |   |
|                                                 |   |                |   |   |           |   |
| Wachovia      revolving credit facility              |   | $                   | 3,264  |   |           | $      | 16,073 |   |
| 8%      Notes                                        |   |                | 9,108  |   |           |   | - |   |
| Term      loans:                                     |   |                |   |   |           |   |   |   |
|   Wachovia                                 |   |                | 10,953 |   |           |   | 9,619 |   |
|   County                                   |   |                | 7,441  |   |           |   | 7,441 |   |
| Other                                                |   |                | 864    |   |           |   | 873 |   |
|                                                 |   |                |   |   |           |   |   |   |
|     Total      debt              |   |                | 31,630 |   |           |   | 34,006 |   |
|     Less      current maturities |   |                | 18,848 |   |           |   | 22,549 |   |
|                                                 |   |                |   |   |           |   |   |   |
|     Total      long-term debt    |   | $                   | 12,782 |   |           | $      | 11,457 |   |

----

|                              |   | Three      months endedMarch 31, 2009 |   |
|-----------------------------------|--------|---------------------------------------|--------|
|                              |   | (In      thousands)                   |   |
|                              |   |                                  |   |
| Balance      at December 31, 2008 |   | $                                     | 5,125  |   |
| Payments                          |   |                                  | (130   | ) |
|                              |   |                                  |   |   |
| Balance      at March 31, 2009    |   | $                                     | 4,995  |   |

----

----

|                                           |   | December      31,   |   |   | March      31, |   |
|------------------------------------------------|--------|---------------------|--------|--------|----------------|--------|
|                                           |   | 2008                |   |   | 2009           |   |
|                                           |   | (In      thousands) |   |
| Current:                                       |   |                |   |   |           |   |
|   Employee      benefits             |   | $                   | 19,656 |   |           | $      | 9,945 |   |
|   Self      insurance                |   |                | 5,936  |   |           |   | 4,437 |   |
|   Environmental                      |   |                | 455    |   |           |   | 400 |   |
|   Other                              |   |                | 3,522  |   |           |   | 3,301 |   |
|                                           |   |                |   |   |           |   |   |   |
| Total                                          |   | $                   | 29,569 |   |           | $      | 18,083 |   |
|                                           |   |                |   |   |           |   |   |   |
| Noncurrent:                                    |   |                |   |   |           |   |   |   |
|   Environmental                      |   | $                   | 4,670  |   |           | $      | 4,595 |   |
|   Workers      compensation payments |   |                | 1,621  |   |           |   | 2,017 |   |
|   Other                              |   |                | 172    |   |           |   | 178 |   |
|                                           |   |                |   |   |           |   |   |   |
| Total                                          |   | $                   | 6,463  |   |           | $      | 6,790 |   |

----

|                                                                         |   | Three      months ended March 31, |    |
|------------------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                                         |   | 2008                                   |    |   | 2009 |   |
|                                                                         |   | (In      thousands)                    |    |
|                                                                         |   |                                   |    |   |   |   |
| Service      cost                                                            |   | $                                      | 861     |   |   | $ | 814 |   |
| Interest      cost                                                           |   |                                   | 5,578   |   |   |   | 5,410 |   |
| Expected      return on plan assets                                          |   |                                   | (23,046 | ) |   |   | (9,720 | ) |
| Amortization      of accumulated other  comprehensive      income: |   |                                   |    |   |   |   |   |   |
|      Prior      service cost                        |   |                                   | 307     |   |   |   | 308 |   |
|      Actuarial      losses (gains)                  |   |                                   | (2,696  | ) |   |   | 4,703 |   |
|                                                                         |   |                                   |    |   |   |   |   |   |
| Total      pension expense (credit)                                          |   | $                                      | (18,996 | ) |   | $ | 1,515 |   |

|                                                              |   | Three      months ended March      31, |   |
|-------------------------------------------------------------------|--------|---------------------------------------------|--------|
|                                                              |   | 2008                                        |   |   | 2009 |   |
|                                                              |   | (In      thousands)                         |   |
|                                                              |   |                                        |   |   |   |   |
| Service      cost                                                 |   | $                                           | 52     |   |   | $ | 24 |   |
| Interest      cost                                                |   |                                        | 533    |   |   |   | 672 |   |
| Amortization      of accumulated other comprehensive income: |   |                                        |   |   |   |   |   |   |
|      Prior      service credit           |   |                                        | (4,411 | ) |   |   | (4,044 | ) |
|      Actuarial      losses               |   |                                        | 1,628  |   |   |   | 2,088 |   |
|                                                              |   |                                        |   |   |   |   |   |   |
| Total      OPEB credit                                            |   | $                                           | (2,198 | ) |   | $ | (1,260 | ) |

----

|                                                               |   | Three      months ended |   |
|--------------------------------------------------------------------|--------|-------------------------|--------|
|                                                               |   | March 31,               |   |
|                                                               |   | 2008                    |   |   | 2009 |   |
|                                                               |   | (In      thousands)     |   |
|                                                               |   |                    |   |
|                                                               |   |                    |   |   |   |   |
| Expected      income tax expense (benefit), at statutory rate |   | $                       | 7,648  |   |   | $ | (2,468 | ) |
| U.S.      state income tax expense (benefit), net                  |   |                    | 585    |   |   |   | (219 | ) |
| Other,      net                                                    |   |                    | 10     |   |   |   | 9 |   |
|                                                               |   |                    |   |   |   |   |   |   |
| Income      tax expense (benefit)                                  |   | $                       | 8,243  |   |   | $ | (2,678 | ) |

----

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

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

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

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

| ·   | General      global economic and politicalconditions, |
|--------------------|-------------------------------------------------------|

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

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

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

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

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

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

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

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

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

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

| ·   | 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 2008      Annual Report, including, without limitation, the section referenced      above. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                      |   | Three      months ended March 31, |    |
|-----------------------------------------------------------|--------|----------------------------------------|---------|
|                                                      |   | 2008                                   |    |   | 2009 |   |
|                                                      |   | (In      thousands)                    |    |
|                                                      |   |                                   |    |   |   |   |
| Operating      income (loss) as reported                  |   | $                                      | 22,776  |   |   | $ | (6,718 | ) |
|   Defined      benefit pension expense (credit) |   |                                   | (18,996 | ) |   |   | 1,515 |   |
|   OPEB      credit                              |   |                                   | (2,198  | ) |   |   | (1,260 | ) |
| Operating      income (loss) before pension and OPEB |   | $                                      | 1,582   |   |   | $ | (6,463 | ) |

----

| ·   | substantially      lower shipment volumes as discussedabove; |
|--------------------|--------------------------------------------------------------|

| ·   | increased      cost of raw material included in cost of goods sold during 2009 as the      product sold during the first quarter of 2009 was produced when ferrous      scrap market prices were at unprecedented high  levels; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | a      $1.5 million impairment charge during the first quarter of 2009 to reduce      certain inventories to net realizablevalue; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------|

| ·   | substantially      reduced production volumes as discussed above 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; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an      increase in our allowance for bad debt of $949,000 due to the general      adverse impact of the current economic environment on the liquidity of our      customers; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      selling prices during 2009 as a result of price increases we implemented      throughout 2008 in response to unprecedented higher ferrous scrap      costs; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | decreased      employee incentive compensation accruals during 2009 resulting from poor      operating performance; |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | decreased      workers compensation accruals during 2009;and |
|--------------------|--------------------------------------------------------------|

| ·   | a      $4.5 million decrease in our LIFO reserve and cost of goods sold during      the first quarter of 2009 (primarily due to an estimated substantial      deflation of raw material costs and inventory levels from December 2008 to      December 2009 resulting in an estimated $18.0 million decrease in our LIFO      reserve throughout 2009) as compared to a $928,000 increase in our LIFO      reserve and cost of goods sold during the first quarter of      2008. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                      |   | Three      months ended March 31, |   |
|-------------------------------------------|--------|----------------------------------------|--------|
|                                      |   | 2008                                   |   |   | 2009 |   |
| Sales      volume (000 tons):             |   |                                   |   |   |   |   |
|   Fabricated      wire products |   |                                   | 30     |   |   |   | 20 |   |
|   Industrial      wire          |   |                                   | 17     |   |   |   | 6 |   |
|   Coiled      rebar             |   |                                   | 3      |   |   |   | 1 |   |
|   Wire      rod                 |   |                                   | 106    |   |   |   | 22 |   |
|   Billets                       |   |                                   | 1      |   |   |   | - |   |
|   Wire      mesh                |   |                                   | 13     |   |   |   | 7 |   |
|   Bar                           |   |                                   | 5      |   |   |   | 2 |   |
|     Total             |   |                                   | 175    |   |   |   | 58 |   |
|                                      |   |                                   |   |   |   |   |   |   |
|                                      |   |                                   |   |   |   |   |   |   |
| Average      per-ton selling prices:      |   |                                   |   |   |   |   |   |   |
|   Fabricated      wire products |   | $                                      | 1,180  |   |   | $ | 1,457 |   |
|   Industrial      wire          |   |                                   | 846    |   |   |   | 1,071 |   |
|   Coiled      rebar             |   |                                   | 624    |   |   |   | 594 |   |
|   Wire      rod                 |   |                                   | 621    |   |   |   | 667 |   |
|   Billets                       |   |                                   | 255    |   |   |   | - |   |
|   Wire      mesh                |   |                                   | 941    |   |   |   | 1,081 |   |
|   Bar                           |   |                                   | 710    |   |   |   | 902 |   |
|   All      products             |   |                                   | 764    |   |   |   | 1,039 |   |

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

| ·   | 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 March 31, 2008:                          |   |
|                                                             |   |                |     |   |   |   |    |    |   |   |     |   |   |   |    |
|  Net      sales                                             |   | $                   | 131,040  |   |   | $      | 13,052  |    |   | $      | 3,303    |   |   | $      | (13,256 | ) |   | $ | 134,139 |   |
|  Cost      of goods sold                                    |   |                | (124,992 | )      |   |   | (10,764 | )       |   |   | (3,832   | )      |   |   | 12,575  |   |   |   | (127,013 | ) |
|    Gross      margin (loss)                       |   |                | 6,048    |   |   |   | 2,288   |    |   |   | (529     | )      |   |   | (681    | ) |   |   | 7,126 |   |
|                                                             |   |                |     |   |   |   |    |    |   |   |     |   |   |   |    |   |   |   |   |   |
|  Selling      and administrative expense               |   |                | (3,638   | )      |   |   | (810    | )       |   |   | (163     | )      |   |   | (933    | ) |   |   | (5,544 | ) |
|  Operating      income (loss) before      pension/OPEB      |   | $                   | 2,410    |   |   | $      | 1,478   |    |   | $      | (692     | )      |   | $      | (1,614  | ) |   | $ | 1,582 |   |
|                                                             |   |                |     |   |   |   |    |    |   |   |     |   |   |   |    |   |   |   |   |   |
| Three      months ended March 31, 2009:                          |   |
|                                                             |   |
|  Net      sales                                             |   | $                   | 53,993   |   |   | $      | 7,161   |    |   | $      | 1,918    |   |   | $      | (2,597  | ) |   | $ | 60,475 |   |
|  Cost      of goods sold                                    |   |                | (54,924  | )      |   |   | (6,834  | )       |   |   | (4,329   | )      |   |   | 3,813   |   |   |   | (62,274 | ) |
|    Gross      margin (loss)                       |   |                | (931     | )      |   |   | 327     |    |   |   | (2,411   | )      |   |   | 1,216   |   |   |   | (1,799 | ) |
|                                                             |   |                |     |   |   |   |    |    |   |   |     |   |   |   |    |   |   |   |   |   |
|  Selling      and administrative      expense          |   |                | (3,519   | )      |   |   | (653    | )       |   |   | (60      | )      |   |   | (432    | ) |   |   | (4,664 | ) |
|  Operating      income (loss) before      pension/OPEB |   | $                   | (4,450   | )      |   | $      | (326    | )       |   | $      | (2,471   | )      |   | $      | 784     |   |   | $ | (6,463 | ) |

|                                                  |   |  Three months ended March      31, |     |
|-------------------------------------------------------|--------|-----------------------------------------|----------|
|                                                  |   | 2008                                    |     |   | %      ofsales |   |   | 2009 |   |   | %      ofsales |   |
|                                                  |   | ($      in thousands)                   |     |
|                                                  |   |                                    |     |   |   |   |   |   |   |   |   |   |
| Net      sales                                        |   | $                                       | 131,040  |   |   |   | 100.0 | % |   | $ | 53,993 |   |   |   | 100.0 | % |
| Cost      of goods sold                               |   |                                    | (124,992 | ) |   |   | (95.4 | ) |   |   | (54,924 | ) |   |   | (101.7 | ) |
|    Gross      margin (loss)            |   |                                    | 6,048    |   |   |   | 4.6 |   |   |   | (931 | ) |   |   | (1.7 | ) |
|                                                  |   |                                    |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and administrative expense               |   |                                    | (3,638   | ) |   |   | (2.8 | ) |   |   | (3,519 | ) |   |   | (6.5 | ) |
| Operating      income (loss) before pension/OPEB |   | $                                       | 2,410    |   |   |   | 1.8 | % |   | $ | (4,450 | ) |   |   | (8.2 | )% |

----

|                                                    |   | Three      months ended March 31, |   |
|---------------------------------------------------------|--------|----------------------------------------|--------|
|                                                    |   | 2008                                   |   |   | 2009 |   |
| Sales      volume (000 tons):                           |   |                                   |   |   |   |   |
|   Fabricated      wire products               |   |                                   | 30     |   |   |   | 20 |   |
|   Industrial      wire                        |   |                                   | 17     |   |   |   | 6 |   |
|   Coiled      rebar                           |   |                                   | 3      |   |   |   | 1 |   |
|   Wire      rod                               |   |                                   | 124    |   |   |   | 25 |   |
|   Billets                                     |   |                                   | 6      |   |   |   | 1 |   |
|   Total      sales                            |   |                                   | 180    |   |   |   | 53 |   |
|                                                    |   |                                   |   |   |   |   |   |   |
| Average      per-ton selling prices:                    |   |                                   |   |   |   |   |   |   |
|   Fabricated      wire products               |   | $                                      | 1,180  |   |   | $ | 1,457 |   |
|   Industrial      wire                        |   |                                   | 846    |   |   |   | 1,071 |   |
|   Coiled      rebar                           |   |                                   | 624    |   |   |   | 594 |   |
|   Wire      rod                               |   |                                   | 619    |   |   |   | 665 |   |
|   Billets                                     |   |                                   | 461    |   |   |   | 551 |   |
|   All      products                           |   |                                   | 727    |   |   |   | 1,006 |   |
|                                                    |   |                                   |   |   |   |   |   |   |
| Average      per-ton ferrous scrap      cost       |   | $                                      | 272    |   |   | $ | 322 |   |
|                                                    |   |                                   |   |   |   |   |   |   |
| Average      electricity cost      per kilowatt hour(1) |   | $                                      | 0.06   |   |   | $ | 0.04 |   |
|                                                    |   |                                   |   |   |   |   |   |   |
| Average      natural gas cost      per therm(1)    |   | $                                      | 0.86   |   |   | $ | 0.81 |   |

| ·   | lower      shipment volumes during the first quarter of 2009 as discussed      above; |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | increased      cost of ferrous scrap included in cost of goods sold during      2009; |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | substantially      reduced production volumes as discussed above 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; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | an      increase in KSW’s allowance for bad debt of $906,000 due to the general      adverse impact of the current economic environment on the liquidity of      KSW’s customers; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      selling prices during the first quarter of 2009 as discussed      above; |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | decreased      employee incentive compensation and workers compensation accruals during      2009 as discussed above; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------|

| ·   | a      $3.4 million decrease in KSW’s LIFO reserve and cost of goods sold during      the first quarter of 2009 (primarily because estimated scrap costs and      inventory levels for December 2009 are substantially lower than scrap      costs and inventory levels at December 2008) as compared to a $688,000      increase in KSW’s LIFO reserve and cost of goods sold during the first      quarter of 2008. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                             |   | Three months ended March31, |    |
|--------------------------------------------------|--------|-----------------------------|---------|
|                                             |   | 2008                        |    |   | %      of sales |   |   | 2009 |   |   | %      ofsales |   |
|                                             |   | ($      in thousands)       |    |
|                                             |   |                        |    |   |   |   |   |   |   |   |   |   |
| Net      sales                                   |   | $                           | 13,052  |   |   |   | 100.0 | % |   | $ | 7,161 |   |   |   | 100.0 | % |
| Cost      of goods sold                          |   |                        | (10,764 | ) |   |   | (82.5 | )% |   |   | (6,834 | ) |   |   | (95.4 | ) |
|         Gross margin                   |   |                        | 2,288   |   |   |   | 17.5 |   |   |   | 327 |   |   |   | 4.6 |   |
|                                             |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and administrative expense          |   |                        | (810    | ) |   |   | (6.2 | ) |   |   | (653 | ) |   |   | (9.1 | ) |
| Operating      income (loss) before pension/OPEB |   | $                           | 1,478   |   |   |   | 11.3 | % |   | $ | (326 | ) |   |   | (4.5 | )% |

|                                                             |   | Three      months ended March 31, |   |
|------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                             |   | 2008                                   |   |   | 2009 |   |
|                                                             |   |                                   |   |   |   |   |
| Sales      volume (000 tons) – Wire      mesh         |   |                                   | 13     |   |   |   | 7 |   |
|                                                             |   |                                   |   |   |   |   |   |   |
| Average      per-ton selling prices –  Wire mesh |   | $                                      | 941    |   |   | $ | 1,081 |   |
|                                                             |   |                                   |   |   |   |   |   |   |
| Average      per-ton wire rod cost                               |   | $                                      | 550    |   |   | $ | 805 |   |

| ·   | lower      shipment volumes during the first quarter of 2009 as discussed      above; |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | increased      cost of wire rod, EWP’s primary raw material, included in cost of goods      sold during 2009; |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | significantly      higher percentage of fixed costs included in cost of goods sold due to      reduced production volumes as discussedabove; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      selling prices during the first quarter of 2009 as discussed      above; |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | decreased      employee incentive compensation accruals during 2009 resulting from poor      operating performance; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

| ·   | a      $1.1 million decline in EWP’s LIFO reserve and cost of goods sold during      the first quarter of 2009 (primarily because estimated wire rod costs for      December 2009 are substantially lower than wire rod costs at December      2008) as compared to a $239,000 increase in EWP’s LIFO reserve and cost of      goods sold during the first quarter of2008. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                     |   | Three months ended March31, |   |
|----------------------------------------------------------|--------|-----------------------------|--------|
|                                                     |   | 2008                        |   |   | %      of sales |   |   | 2009 |   |   | %      ofsales |   |
|                                                     |   | ($      in thousands)       |   |
|                                                     |   |                        |   |   |   |   |   |   |   |   |   |   |
| Net      sales                                           |   | $                           | 3,303  |   |   |   | 100.0 | % |   | $ | 1,918 |   |   |   | 100.0 | % |
| Cost      of goods sold                                  |   |                        | (3,832 | ) |   |   | (116.0 | ) |   |   | (4,329 | ) |   |   | (225.7 | ) |
|   Gross      margin (loss)                     |   |                        | (529   | ) |   |   | (16.0 | ) |   |   | (2,411 | ) |   |   | (125.7 | ) |
|                                                     |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and administrative expense                  |   |                        | (163   | ) |   |   | (4.9 | ) |   |   | (60 | ) |   |   | (3.1 | ) |
|   Operating      loss before pension/OPEB |   | $                           | (692   | ) |   |   | (20.9 | )% |   | $ | (2,471 | ) |   |   | (128.8 | )% |

|                                           |   | Three      months ended  March 31, |   |
|------------------------------------------------|--------|----------------------------------------------|--------|
|                                           |   | 2008                                         |   |   | 2009 |   |
|                                           |   |                                         |   |   |   |   |
| Sales      volume (000 tons) -  Bar  |   |                                         | 5      |   |   |   | 2 |   |
|                                           |   |                                         |   |   |   |   |   |   |
| Average      per-ton selling prices - Bar |   | $                                            | 710    |   |   | $ | 902 |   |
|                                           |   |                                         |   |   |   |   |   |   |
| Average      per-ton billet cost               |   | $                                            | 429    |   |   | $ | 519 |   |

| ·   | lower      shipment volumes during the first quarter of 2009 as discussed      above; |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | increased      cost of billets, Calumet’s primary raw material, included in cost of goods      sold during 2009; |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| ·   | a      $1.5 million impairment charge during the first quarter of 2009 as Calumet      determined it was probable they would not be able to recover the cost of      certain inventory items (those produced when scrap prices were      substantially higher) in future sellingprices; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | substantially      reduced production volumes as discussed above 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; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      selling prices during the first quarter of 2009 as discussed above;      and |
|--------------------|------------------------------------------------------------------------------------------|

| ·   | decreased      employee incentive compensation accruals during 2009 resulting from poor      operating performance. |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

----

|                                 |   | Three      months ended March 31, |   |
|--------------------------------------|--------|----------------------------------------|--------|
|                                 |   | 2008                                   |   |   | 2009 |   |
|                                 |   | ($      in thousands)                  |   |
|                                 |   |                                   |   |   |   |   |
| Average      debt balance            |   | $                                      | 92,987 |   |   | $ | 30,403 |   |
|                                 |   |                                   |   |   |   |   |   |   |
| Weighted      average interest rates |   |                                   | 5.5    | % |   |   | 3.5 | % |

| ·   | an      operating loss before pension/OPEB of $6.5 million during the first      quarter of 2009 as compared to operating income before pension/OPEB of      $1.6 million during the first quarter of2008; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | lower      net cash used as a result of relative changes in our accounts receivable      in 2009 of $6.9 million primarily due to low shipment volumes during the      first quarter of 2009; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      net cash provided by relative changes in our inventory in 2009 of $16.8      million due to lower levels of inventory as we substantially reduced      production levels during the first quarter of 2009 as a result of the      rapid decline in product demand; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      net cash used as a result of relative changes in our accrued liabilities      of $11.6 million in 2009 as a result of settlements of workers      compensation claims during the first quarter of 2009 and the payment of      2008 employee incentive compensation which was significantly higher than      2007 employee incentive compensation (we generally pay the previous year’s      employee incentive compensation during the first quarter of each year);      and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      net cash used as a result of relative changes in our income taxes of $4.6      million as we made our final income tax payment for 2008 and recorded an      income tax receivable for 2009. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                  |   | December      31,   |   |   | March      31, |   |
|-------------------------------------------------------|--------|---------------------|--------|--------|----------------|--------|
|                                                  |   | 2008                |   |   | 2009           |   |
|                                                  |   | (In      thousands) |   |
|                                                  |   |                |   |   |           |   |
| Working      capital                                  |   | $                   | 55,886 |   |           | $      | 53,047 |   |
| Outstanding      balance of revolving credit facility |   |                | 3,264  |   |           |   | 16,073 |   |
|                                                  |   |                |   |   |           |   |   |   |
| Additional      borrowing availability                |   |                | 46,500 |   |           |   | 35,738 |   |

----

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

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

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

----

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

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

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

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

----

|                |  Keystone Consolidated      Industries, Inc.                                                        (Registrant)         |
|-----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Date:  May      6, 2009  | By/s/Bert      E. Downing, Jr.                           Bert      E. Downing, Jr.Vice      President, Chief Financial Officer,Corporate      Controller andTreasurer                                                                                                                    |

----