UNITEDSTATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of
1934
|
Date
of Report (Date of earliest event reported)
|
November
1, 2005
|
|
A.
M. Castle & Co.
|
|
(Exact
name of registrant as specified in its
charter)
|
|
Maryland
|
1-5415
|
36-0879160
|
|
(State
or other jurisdiction
of
incorporation)
|
(Commission
File
Number)
|
(IRS
Employer
Identification
No.
|
|
3400
N. Wolf Road, Franklin Park, Illinois
|
60131
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
Registrant's
telephone number including area code
|
847/455-7111
|
|
(Former
name or former address if changed since last
report.)
|
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[
]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[
]
Pre-commencement communications pursuant to Rule 13 e-4(c) under the Exchange
Act (17 CFR 240.13 e-4(c))
A. M. Castle &
Co.
Item
2.02 Results of Operation and Financial Condition
On
Tuesday, November 1, 2005 the Company disseminated a press release, attached
as
Exhibit A, announcing the Company’s operational results for the Third Quarter
ending September 30, 2005.
As
part
of the press release there is a bridge of non-GAAP financial measurement of
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) to
reported net income. It is shown below the disclosure of the GAAP figures for
Operating income, Net income and Diluted earnings per share. This reconciliation
of EBITDA to Net income is for the Nine Months Ended September 30, 2005 and
September 30, 2004.
The
Company believes, however, that EBITDA is an important term and concept because
of its use by the professional investment community, including the Company’s
primary lenders. The Company believes the use of this Term is necessary to
a
proper understanding of the changes in the Company’s earnings.
Exhibits:
Correspondence
- Press Release
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
A. M. Castle & Co.
|
||
|
/s/ Lawrence A. Boik
|
||
|
Lawrence A. Boik
|
||
|
Vice President, Controller/Treasurer
|
||
Date: November 1, 2005
A.
M.
CASTLE & CO.
3400
North Wolf Road
Franklin
Park, Illinois 60131
(847)
455-7111
(847) 455-6930 (Fax)
For
Further Information:
|
———AT
THE COMPANY———
|
——AT
ASHTON PARTNERS——
|
|
G.
Thomas McKane
|
Investors:
|
|
Chairman
& C.E.O.
|
Katie
Pyra
|
|
(847)
349-2502
|
(312)
553-6717
|
|
Email:
tmkane@amcastle.com
|
Email:
kpyra@ashtonpartners.com
|
Traded:
AMEX, CSE (CAS)
Member:
S&P SmallCap 600 Index
FOR
IMMEDIATE RELEASE
TUESDAY,
NOVEMBER 1, 2005
A.
M. Castle & Co.
Reports
Third Quarter Results Earnings Increase 72% Over Prior
Year;
Announces
2006 Expansion Plans
FRANKLIN
PARK, IL, November 1st - A. M. Castle & Co. (AMEX:
CAS), one of North America’s leading metals and
plastics distributors, today reported for the quarter ended September 30, 2005,
net earnings after tax of $10.0 million, a 72% increase over the prior year.
Basic earnings per share for the same period were $0.63 ($0.56 diluted) as
compared to $0.37 per share ($0.36 diluted) during the same quarter of the
prior
year. Sales for the third quarter 2005 increased 17.7% over the prior period
to
$234.6 million.
Year-to-date,
net earnings were $34.7
million, a 154% increase over the prior year’s results. Sales for the
nine-months ended September 30, 2005 were $731.7 million, an increase of 29.9%
over the prior year.
"We
are
pleased with the results of the quarter as the Company continues its strong
sales and earnings levels," said G. Thomas McKane, A. M. Castle’s Chairman and
CEO. "Demand for our products from the durable goods manufacturing industry,
our
principle customer base, continues at a high level."
"Our
debt, net of cash, position improved by $34 million during the quarter. As
a
result our debt-to-total capital is down to 33.1%," reported Larry Boik, A.
M.
Castle’s CFO. "In addition, we reduced our interest rate on long-term debt by
150 basis points," continued Boik.
m
o r e . . . .
A.
M.
Castle & Co.
Add
1
Service
Center Expansion
The
Company also announced it will open a new service center in Northern Alabama
and
significantly expand its Montreal, Canada facility during the first half of
2006. "These investments increase our presence in two strong growth markets"
stated Stephen Hooks, President of the Company’s Castle Metals business unit.
"The new Alabama site along with our existing Charlotte, North Carolina
operation will allow us to better serve the durable goods manufacturing growth
occurring in the southeastern United States," stated Hooks. "Additionally,
our
Montreal facility will expand approximately 50%, in order to meet our Canadian
customers expectations and growing market needs," continued Hooks.
Webcast
Information
Shareholders
and other interested parties are invited to listen to A. M. Castle’s conference
call hosted by Mr. McKane and scheduled for 11:00 a.m. (EDT) today, Tuesday,
November 1, 2005. Those interested may access the call at the Company’s website,
http://www.amcastle.com, and it will also be available for 14 days following
the
call.
About
A. M. Castle & Co.
Founded
in 1890, A. M. Castle & Co. is a specialty metals and plastics distribution
company serving the North American market, principally within the producer
durable equipment sector. Its customer base includes many Fortune 500 companies
as well as thousands of medium and smaller-sized firms spread across a wide
spectrum of industries. Within its core metals business, it specializes in
the
distribution of carbon, alloy and stainless steels; nickel alloy; aluminum;
copper and brass. Through its subsidiary, Total Plastics, Inc., the Company
also
distributes a broad range of value-added industrial plastics. Together, Castle
operates over 50 locations throughout North America. Its common stock is traded
on the American and Chicago Stock Exchange under the ticker symbol "CAS".
Safe
Harbor Statement / Regulation G Disclosure
This
release may contain forward-looking statements relating to future financial
results. Actual results may differ materially as a result of factors over which
the Company has no control. These risk factors and additional information are
included in the Company's reports on file with the Securities Exchange
Commission.
more
. . . .
A. M. Castle & Co.
Add 2
The
financial statements included in
this release contain a non-GAAP disclosure, EBITDA, which consists of income
before provision for income taxes plus depreciation and amortization, and
interest expense (including discount on accounts receivable sold), less interest
income. EBITDA is presented as a supplemental disclosure because this measure
is
widely used by the investment community for evaluation purposes and provides
the
reader with additional information in analyzing the Company's operating results.
EBITDA should not be considered as an alternative to net income or any other
item calculated in accordance with U.S. GAAP, or as an indicator of operating
performance. Our definition of EBITDA used here may differ from that used by
other companies. A reconciliation of EBITDA to net income is provided per U.S.
Securities and Exchange Commission requirements.
m
o r e . . . .
A. M. Castle & Co.
Add 3
|
CONSOLIDATED
STATEMENTS OF INCOME
(Dollars
in thousands, except per share data)
|
For
the Three
|
For
the Nine
|
|||||||||||
|
Unaudited
|
Months
Ended
|
Months
Ended
|
|
||||||||||
|
|
|
|
Sep
30
|
|
|
Sep
30
|
|||||||
|
2005
|
|
|
2004
|
|
|
2005
|
|
|
2004
|
||||
|
Net
sales
|
$
|
234,551
|
$
|
199,341
|
$
|
731,721
|
$
|
563,195
|
|||||
|
Cost
of material sold
|
(163,956
|
)
|
(142,033
|
)
|
(512,706
|
)
|
(398,378
|
)
|
|||||
|
Gross margin
|
70,595
|
57,308
|
219,015
|
164,817
|
|||||||||
|
Plant
and delivery expense
|
(27,920
|
)
|
(23,665
|
)
|
(81,635
|
)
|
(70,667
|
)
|
|||||
|
Sales,
general, and administrative expense
|
(23,591
|
)
|
(20,345
|
)
|
(70,263
|
)
|
(59,117
|
)
|
|||||
|
Depreciation
and amortization expense
|
(2,205
|
)
|
(2,245
|
)
|
(6,752
|
)
|
(6,736
|
)
|
|||||
|
Total
operating expense
|
(53,716
|
)
|
(46,255
|
)
|
(158,650
|
)
|
(136,520
|
)
|
|||||
|
Operating
income
|
16,879
|
11,053
|
60,365
|
28,297
|
|||||||||
|
Interest
expense, net
|
(1,765
|
)
|
(2,175
|
)
|
(5,875
|
)
|
(6,706
|
)
|
|||||
|
Discount
on sale of accounts receivable
|
(127
|
)
|
(167
|
)
|
(1,127
|
)
|
(684
|
)
|
|||||
|
Income
before income tax and equity in joint venture
|
14,987
|
8,711
|
53,363
|
20,907
|
|||||||||
|
Income
tax expense
|
|||||||||||||
|
Federal
|
(4,393
|
)
|
(2,135
|
)
|
(15,617
|
)
|
(4,971
|
)
|
|||||
|
State
|
(938
|
)
|
(554
|
)
|
(3,014
|
)
|
(1,283
|
)
|
|||||
|
Foreign
|
132
|
(819
|
)
|
(1,377
|
)
|
(2,201
|
)
|
||||||
|
(5,199
|
)
|
(3,508
|
)
|
(20,008
|
)
|
(8,455
|
)
|
||||||
|
Net
income before equity in joint venture
|
9,788
|
5,203
|
33,355
|
12,452
|
|||||||||
|
Equity
earnings of joint venture
|
817
|
1,458
|
3,342
|
3,197
|
|||||||||
|
Income taxes - joint venture
|
(321
|
)
|
(574
|
)
|
(1,314
|
)
|
(1,259
|
)
|
|||||
|
Net
income
|
10,284
|
6,087
|
35,383
|
14,390
|
|||||||||
|
Preferred
dividends
|
(240
|
)
|
(240
|
)
|
(720
|
)
|
(720
|
)
|
|||||
|
Net
income applicable to common stock
|
$
|
10,044
|
$
|
5,847
|
$
|
34,663
|
$
|
13,670
|
|||||
|
Basic
earnings per share
|
$
|
0.63
|
$
|
0.37
|
$
|
2.18
|
$
|
0.87
|
|||||
|
Diluted
earnings per share
|
$
|
0.56
|
$
|
0.36
|
$
|
1.96
|
$
|
0.87
|
|||||
|
EBITDA
*
|
$
|
19,901
|
$
|
14,756
|
$
|
70,459
|
$
|
38,230
|
|||||
|
*Earnings
before interest, discount on sale of accounts receivable, taxes,
depreciation and amortization
|
|||||||||||||
|
Reconciliation
of EBITDA to net income:
|
For
the Three
|
For
the Nine
|
|||||||||||
|
|
Months
Ended
|
Months
Ended
|
|||||||||||
|
|
Sept
30
|
|
|
Sept
30
|
|
||||||||
|
|
|
|
2005
|
|
|
2004
|
2005
|
|
|
2004
|
|||
|
Net
income
|
$
|
10,284
|
$
|
6,087
|
$
|
35,383
|
$
|
14,390
|
|||||
|
Depreciation
and amortization
|
2,205
|
2,245
|
6,752
|
6,736
|
|||||||||
|
Interest,
net
|
1,765
|
2,175
|
5,875
|
6,706
|
|||||||||
|
Discount
on accounts receivable sold
|
127
|
167
|
1,127
|
684
|
|||||||||
|
Provision
from income taxes
|
5,199
|
3,508
|
20,008
|
8,455
|
|||||||||
|
Provision
from income taxes - joint venture
|
321
|
574
|
1,314
|
1,259
|
|||||||||
|
EBITDA
|
$
|
19,901
|
$
|
14,756
|
$
|
70,459
|
$
|
38,230
|
|||||
m
o r e . . . .
A. M. Castle
Add 4
|
CONSOLIDATED
BALANCE SHEETS
|
||||||||||
|
(Dollars
in thousands)
|
As
of
|
|||||||||
|
Unaudited*
|
Sep
30
|
Dec.
31
|
Sep
30
|
|||||||
|
2005
|
2004
|
2004
|
||||||||
|
ASSETS
|
||||||||||
|
Current
assets
|
||||||||||
|
Cash
and equivalents
|
$
|
11,956
|
$
|
3,106
|
$
|
5,435
|
||||
|
Accounts
receivable, less
allowances of $1,937 in September 2005,
$1,760
in December 2004, and $423 in
September 2004
|
116,497
|
80,323
|
99,073
|
|||||||
|
Inventories
(principally on
last-in, first-out basis)
(latest
cost higher by approximately
$97,432 in September 2005,
$92,500
in December 2004, and $79,569 in
September 2004)
|
117,698
|
135,588
|
121,297
|
|||||||
|
Income
tax receivable
|
144
|
169
|
310
|
|||||||
|
Assets
held for sale
|
-
|
995
|
995
|
|||||||
|
Other
current assets
|
6,662
|
7,325
|
7,926
|
|||||||
|
Total
current assets
|
252,957
|
227,506
|
235,036
|
|||||||
|
Investment
in joint venture
|
10,149
|
8,463
|
7,024
|
|||||||
|
Goodwill
|
32,296
|
32,201
|
31,959
|
|||||||
|
Pension
assets
|
41,275
|
42,262
|
42,216
|
|||||||
|
Other
assets
|
4,748
|
7,586
|
7,517
|
|||||||
|
Assets
held for sale
|
995
|
-
|
-
|
|||||||
|
Property,
plant and equipment, at cost
|
||||||||||
|
Land
|
4,772
|
4,771
|
4,768
|
|||||||
|
Building
|
45,719
|
45,514
|
47,255
|
|||||||
|
Machinery
and equipment
|
127,513
|
124,641
|
121,092
|
|||||||
|
178,004
|
174,926
|
173,115
|
||||||||
|
Less
- accumulated depreciation
|
(114,848
|
)
|
(109,928
|
)
|
(107,528
|
)
|
||||
|
63,156
|
64,998
|
65,587
|
||||||||
|
Total
assets
|
$
|
405,576
|
$
|
383,016
|
$
|
389,339
|
||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||||
|
Current
liabilities
|
||||||||||
|
Accounts
payable
|
$
|
85,161
|
$
|
93,342
|
$
|
102,893
|
||||
|
Accrued
liabilities and deferred gains
|
27,441
|
23,016
|
23,990
|
|||||||
|
Current
and deferred income taxes
|
8,076
|
4,349
|
2,954
|
|||||||
|
Current
portion of long-term debt
|
16,390
|
11,607
|
11,676
|
|||||||
|
Total
current liabilities
|
137,068
|
132,314
|
141,513
|
|||||||
|
Long-term
debt, less current portion
|
67,374
|
89,771
|
89,450
|
|||||||
|
Deferred
income taxes
|
21,484
|
19,668
|
19,942
|
|||||||
|
Deferred
gain on sale of assets
|
5,826
|
6,465
|
6,673
|
|||||||
|
Minority
interest
|
1,419
|
1,644
|
1,268
|
|||||||
|
Postretirement
benefits obligations
|
3,083
|
2,905
|
2,834
|
|||||||
|
Stockholders'
equity
|
||||||||||
|
Preferred
stock, no par value -
10,000,000 shares
authorized;
12,000 shares issued and
outstanding
|
11,239
|
11,239
|
11,239
|
|||||||
|
Common
stock, $0.01 par value -
authorized 30,000,000
shares;
issued and outstanding 15,981,952
at September 2005,
15,806,366
at December 2004, and
15,796,437 at September 2005
|
160
|
159
|
159
|
|||||||
|
Additional
paid in capital
|
40,922
|
35,082
|
35,025
|
|||||||
|
Earnings
reinvested in the business
|
117,064
|
82,400
|
80,147
|
|||||||
|
Accumulated
other comprehensive income
|
2,631
|
1,616
|
1,350
|
|||||||
|
Other
- deferred compensation
|
-
|
(2
|
)
|
(16
|
)
|
|||||
|
Treasury
stock, at cost - 219,748
shares at September 2005, 62,065
shares
at December 2004, and 59,260
shares at September 2004
|
(2,694
|
)
|
(245
|
)
|
(245
|
)
|
||||
|
Total
stockholders' equity
|
169,322
|
130,249
|
127,659
|
|||||||
|
Total
liabilities and stockholders' equity
|
$
|
405,576
|
$
|
383,016
|
$
|
389,339
|
||||
more
. . .
A. M. Castle
Add 5
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|||||||
|
(Dollars
in thousands)
|
For
the Nine Months
|
||||||
|
Unaudited
|
Ended
September 30
|
||||||
|
2005
|
2004
|
||||||
|
Cash
flows from operating activities:
|
|||||||
|
Net
income
|
$
|
35,383
|
$
|
4,390
|
|||
|
Adjustments
to reconcile net income to net cash
from
operating activities
|
|||||||
|
Depreciation
and amortization
|
6,752
|
6,736
|
|||||
|
Amortization
of deferred gain
|
(639
|
)
|
(631
|
)
|
|||
|
Equity
in earnings from joint venture
|
(3,342
|
)
|
(3,197
|
)
|
|||
|
Deferred
income taxes
|
241
|
1,367
|
|||||
|
Non-cash
pension and postretirement benefit expense
|
1,685
|
315
|
|||||
|
Deferred
stock compensation expense
|
2,796
|
-
|
|||||
|
Other
|
(390
|
)
|
643
|
||||
|
Increase
(decrease) from changes in:
|
|||||||
|
Accounts
receivable sold (purchased)
|
(16,500
|
)
|
(8,000
|
)
|
|||
|
Accounts
receivable
|
(19,276
|
)
|
(35,224
|
)
|
|||
|
Inventory
|
18,205
|
(1,905
|
)
|
||||
|
Accounts
payable and accrued liabilities
|
(3,781
|
)
|
38,875
|
||||
|
Other
current assets
|
316
|
(953
|
)
|
||||
|
Income
taxes payable
|
5,265
|
3,080
|
|||||
|
Net
cash from operating activities
|
26,715
|
15,495
|
|||||
|
Cash
flows from investing activities:
|
|||||||
|
Investments
and acquisitions, net of cash acquired
|
(236
|
)
|
(1,744
|
)
|
|||
|
Dividends
from joint venture
|
1,705
|
624
|
|||||
|
Capital
expenditures
|
(4,784
|
)
|
(3,419
|
)
|
|||
|
Collection
of note receivable
|
2,639
|
-
|
|||||
|
Net
cash from investing activities
|
(676
|
)
|
(4,539
|
)
|
|||
|
Cash
flows from financing activities:
|
|||||||
|
Proceeds
from issuance of long-term debt
|
4,000
|
-
|
|||||
|
Repayment
of long-term debt
|
(21,542
|
)
|
(7,337
|
)
|
|||
|
Preferred
stock dividend
|
(720
|
)
|
(720
|
)
|
|||
|
Other
|
597
|
(85
|
)
|
||||
|
Net
cash from financing activities
|
(17,665
|
)
|
(8,142
|
)
|
|||
|
Effect
of exchange rate changes on cash
|
476
|
166
|
|||||
|
Net
increase in cash
|
8,850
|
2,980
|
|||||
|
Cash
- beginning of year
|
$
|
3,106
|
$
|
2,455
|
|||
|
Cash
- end of period
|
$
|
11,956
|
$
|
5,435
|
|||
-
30
-