Keystone Highlights Reorganization Status

Keystone Consolidated Industries has entered into an agreement with Contran Corp., Keystone's largest pre-petition shareholder; EWP Financial, LLC, an affiliate of Contran and one of Keystone's Debtor-In-Possession lenders; certain retiree groups, the Independent Steel Workers Alliance, Keystone's largest labor union; the Official Committee of Unsecured Creditors of the company and certain individual members of the Committee with respect to terms and conditions of a proposed consensual plan of reorganization for Keystone and its direct and indirect Debtor operating subsidiaries.

The agreement provides that Keystone will, among other things, finalize the Consensual Plan with the input of the other parties to incorporate terms and conditions in the agreement and file such Consensual Plan with the Bankruptcy Court for its approval for solicitation of a vote to consummate the Consensual Plan. The negotiated Consensual Plan will, among other things, incorporate the following provisions:

Certain provisions of the previously negotiated and Bankruptcy Court approved amendment to the collective bargaining agreement with the ISWA;

Specific provisions of the previously negotiated agreement regarding healthcare related payments to certain retiree groups

Payments to unsecured creditors of Keystone and its subsidiaries;

            Conversion of certain pre-petition secured and unsecured claims to equity in reorganized Keystone;

Administrative services to continue to be provided by Contran to the reorganized Keystone under a new Intercorporate Services Agreement;

Formation of a Creditor Trust; and

Issuance of new common stock of Keystone to holders of certain secured claims and to all holders of unsecured claims of Keystone and its Debtor subsidiaries.

The Agreement also provides for a process to evaluate an alternative plan of reorganization for the Debtors. The Agreement remains subject to approval of the Bankruptcy Court. The execution of this Agreement is another important milestone in Keystone's efforts to complete a successful restructuring.

David Cheek, Keystone's president and CEO, said, "The Company experienced a significant performance turnaround during 2004 and as such, our financial results continue to exceed the results from the same period a year ago. The combined effects of favorable market conditions, customer loyalty, ongoing cost control initiatives and cost reductions resulting from the previously granted interim relief, have all contributed to the improved financial results. Keystone appreciates the continued support of its customers, vendors, employees and retirees in its efforts to reorganize and restructure the company and improve its long-term competitive position and financial prospects."