Keystone reports Q2 earnings

Dallas, Texas-based wire product manufacturer and distributor Keystone Consolidated Industries, Inc. reported increased earnings in the second quarter of 2006, in part due to a very high credit for defined pension benefits. Keystone's net earnings for the second quarter of 2006 were $13.0 million, up from a net loss of $3.7 million in the second quarter of 2005. The company's defined pension credit for Q2 2006 was $12.2 million compared to $3.2 million in the same quarter of 2005 and resulted from an increase in assets of the company's defined benefit pension plan, as well as reduced post-retirement expenses after reaching an agreement with the retirees during the reorganization of the company. In the three months prior to June 30, 2006, overall sales volume for various products increased, as wire rod sales more than doubled from 45,000 net tons (49,500 mt) in the second quarter 2005 to 103,000 net tons (113,300 mt) in the second quarter 2006. However, selling prices for all products were lower in Q2 2006 than in the same period of 2005. In addition, Keystone's average selling price of $490 /nt ($539 /mt) for wire rod during second quarter 2006 is considered by some analysts below par the industry's standard price. The company speculates that their earnings increase is also in part due to increased demand, problems with competitors' production, paired with less concern about the company's financial stability as opposed to high concern in 2005 when Keystone was under Chapter 11 protection. The company emerged from Chapter 11 protection August 31, 2005.