Unassociated Document


________________________________________________________________


UNITED STATES


SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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) May 4, 2004


A. M. Castle & Co.
(Exact name of registrant as specified in its chapter)


        ____Maryland_________    _______1-5415_______    ______36-0879160______
        (State of jurisdiction        (Commission           (IRS Employer
        of incorporation)          File Number)           Identification No.)


        3400 North Wolf Road, Franklin Park, IL   _______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)



________________________________________________________________





     



Item 12. Results of Operations and Financial Condition


On Tuesday May 4, 2004 the Company disseminated a press release, Attached as Exhibit A, announcing the Company’s operational results for the First Quarter ending March 31, 2004

As part of the press release there is a discussion of non-GAAP financial term EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). That term is also shown on the Comparative Statements of Operations. It is below the disclosure of the GAAP figures for Operating income, Net income and Diluted earnings per share. 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 provide a proper understanding of the changes in the Company’s earnings.

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: 5/04/04





     



3400 North Wolf Road
Franklin Park, Illinois 60131
(847) 455-7111
(847) 455-6930 (Fax)



A. M. CASTLE & CO.

For Further Information:

----------AT THE COMPANY-----------
---------------AT FINANCIAL RELATIONS BOARD-----------
Edward Culliton
Analyst Contacts:
General Information:
VP, Finance & Chief Financial Officer
Peter Seltzberg
George Zagoudis (312) 640-6663
(847) 349-2508
(212) 445-8457
 
Email: eculliton@amcastle.com
Email:gzagoudis@financialrelationsboard.com
 
Email: pseltzberg@financialrelationsboard.com

 
Traded: AMEX, CSE (CAS)
Member: S&P SmallCap 600 Index   


FOR IMMEDIATE RELEASE
TUESDAY, MAY 4, 2004


A. M. Castle & Co. Announces First Quarter 2004 Results

Franklin Park, Illinois, May 4, 2004 — A.M. Castle & Co. (Amex: CAS), a North American distributor of highly engineered metals and plastics, announced today net income applicable to common stock of $2.1 million, or 13 cents per share, for the first quarter of 2004. This compares with a loss of $1.6 million, or 10 cents per share, for the comparable period last year. In making the announcement, G. Thomas McKane, Chairman and CEO, noted that actual results were at the high end of the range indicated by the Company in its April 6, 2004 update on the outlook for the quarter.

    McKane noted that results for the quarter reflect substantially improved market dynamics in both the metals and plastics segments of the Company’s business. “Continuing the recovery we began to see in November,” said McKane, “shipments in the metals segment, as measured by tons sold, grew 17% on a year-over-year basis. Higher price levels, fueled by worldwide increases in demand for steel scrap, nickel and coke, contributed to a 9% increase in revenue per ton that was offset by a 3% decline due to changes in sales mix towards the Company’s lower priced carbon and carbon alloy product lines. These factors

M o r e . . .
     
 
A. M. Castle & Co.
Add One

combined to produce a 23% increase in sales within the metals segment. In plastics, sales rose 30% with little or no change in material price levels.”

    For the first quarter of 2004, the Company reported sales of $175.6 million, up $34.0 million, or 24%, from year-ago levels. Net income applicable to common stock totalled $2.1 million, or 13 cents per share (fully diluted), compared with a loss of $1.6 million, or 10 cents per share, in the first quarter of 2003. Commenting on these results, McKane pointed out that earnings before interest, taxes, depreciation and amortization (EBITDA) totalled $8.7 million in the first three months of 2004 versus $2.8 million in the same period a year ago. “This clearly indicates,” he said, “the positive operating leverage that has been created over the last three years by our efforts to reduce our structural cost base, improve productivity and close or sell off non-performing and non-strategic business units. In aggregate, we generated an additional $6.0 million of EBITDA on a $34.0 million increase in revenues, or a 17.5% return on incremental sales. It is significant to note,” he added, “that since the Company is on LIFO there are no inventory inflation profits included in our reported results.”

    In discussing the near-term outlook for the Company, McKane stated that the economic recovery experienced in the first quarter, although broad based across most durable goods manufacturing industries and almost all geographic sectors, does not reflect any significant improvements in either oil and gas or aerospace which are important markets to Castle. “We believe,” he said, “that both of these markets will begin to show some recovery as the year unfolds and that the improvements seen during the first quarter in the rest of the Company’s markets will be sustained into the second quarter of the year. In this environment,” he continued, “material shortages are becoming an increasing reality. As an important customer to our suppliers, we believe we are competitively well positioned to deal with these issues until such time as supply and demand come into better balance.”

M o r e . . .
     
 
A. M. Castle & Co.
Add Two


In closing, Mr. McKane invited interested parties to listen to its conference call scheduled for 11:00 a.m. (EST) today, Tuesday, May 4, 2004. Connection is available at www.amcastle.com and will be available for 14 days following the call.

Founded in 1890, A. M. Castle & Co. provides highly engineered materials and value added services to a wide range of companies within the producer durable equipment sector of the economy. 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 60 locations throughout North America. Its common stock is traded on the American and Chicago Stock Exchange under the ticker symbol "CAS".

This release contains 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 to provide the reader with additional information in analyzing the Company’s operating results. A reconciliation of EBITDA to net income is provided per SEC requirements.

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 and Exchange Commission.

M o r e . . .
     
 
A. M. Castle & Co.
Add Three


COMPARATIVE STATEMENTS OF OPERATIONS
  
 
 
(Amounts in thousands, except per share data)
    
For The Three Months Ended

 

Unaudited

 

 
March 31,

 

 

 

 
2004

 

 
2003
  
   
 
 
Net sales
  
$
175,634
 
$
141,646
 
Cost of material sold
    
(124,481
)
  
(98,444
)
   
 
 
Gross material margin
    
51,153
   
43,202
 
 
    
 
    
 
  
Plant and delivery expense
    
(23,599
)
  
(22,350
)
Sales, general, and administrative expense
    
(19,454
)
  
(18,036
)
Depreciation and amortization expense
    
(2,247
)
  
(2,304
)
   
 
 
Total other operating expense
    
(45,300
)
  
(42,690
)
 
    
 
    
 
  
Operating income
    
5,853
   
512
 
 
    
 
    
 
  
Equity earnings (loss) of joint ventures
    
632
   
(37
)
Interest expense, net
    
(2,314
)
  
(2,443
)
Discount on sale of accounts receivable
    
(283
)
  
(329
)
   
 
 
 
    
 
    
 
  
Income/(loss) before income taxes
    
3,888
   
(2,297
)
 
    
 
    
 
  
Income taxes
    
 
    
 
  
Federal
   
(1,232
)
  
763
 
State
    
(354
)
  
127
 
   
 
 
 
    
(1,586
)
  
890
 
Net income (loss) from operations
    
2,302
   
(1,407
)
 
    
 
    
 
  
Preferred dividends
    
(240
)
  
(238
)
   
 
 
Net income (loss) applicable to common stock
  
$
2,062
 
$
(1,645
)
   
 
 
Basic earnings (loss) per share
 
$
0.13
 
$
(0.10
)
Diluted earnings (loss) per share
  
$
0.13
 
$
(0.10
)
   
 
 
EBITDA(1)
  
$
8,732
 
$
2,779
 
 
    
 
    
 
  
  
 
 
(1) Earnings before interest, discount on sale of accounts receivable, taxes, depreciation and amortization
    
 
    
 
  
 
    
 
    
 
  
Reconciliation of EBITDA to net income:
    
For The Three Months Ended

 

 

 
March 31,  
   
 
    
2004
   
2003
 
   
 
 
 
    
 
    
 
  
Net income (loss) from operations
  
$
2,302
 
$
(1,407
)
Depreciation and amortization
    
2,247
   
2,304
 
Interest, net
    
2,314
   
2,443
 
Discount on accounts receivable sold
    
283
   
329
 
Provision (benefit) from income taxes
    
1,586
   
(890
)
   
 
 
EBITDA
  
$
8,732
  
$
2,779
 
   
 
 



M o r e . . .
     

A. M. Castle & Co.
Add Four

COMPARATIVE BALANCE SHEETS
    
 
    
 
    
 
  
(Amounts in thousands except per share data)
    
 
    
 
    
 
  
(Unaudited)
    
Mar. 31,

 

 
Dec. 31,

 

 
Mar. 31,
  
 
    
2004

 

 
2003

 

 
2003
  
   
 
 
 
ASSETS
    
 
    
 
    
 
  
                    
Current assets
   
 
    
 
    
 
  
Cash and equivalents
  
$
4,434
 
$
2,455
 
$
1,306
 
Accounts receivable, net
   
77,348
   
54,232
   
42,714
 
Inventories (principally on last-in first-out basis)
    
104,040
   
117,270
   
128,092
 
Income tax receivable
    
652
   
660
   
12,929
 
Assets held for sale
    
1,117
   
1,067
   
-
 
Advances to joint ventures and other current assets
   
6,599
   
7,184
   
7,492
 
   
 
 
 
Total current assets
    
194,190
   
182,868
   
192,533
 
 
    
 
    
 
    
 
  
Investment in joint ventures
    
5,060
   
5,492
   
7,404
 
Goodwill
    
31,935
   
31,643
   
31,978
 
Pension assets
    
42,122
   
42,075
   
40,719
 
Advances to joint ventures and other assets
    
8,265
   
8,688
   
6,534
 
Property, plant and equipment, at cost
   
 
    
 
    
 
  
Land
    
4,767
   
4,767
   
6,027
 
Building
   
46,975
   
45,346
   
53,440
 
Machinery and equipment
    
119,253
   
118,447
   
126,311
 
   
 
 
 
 
    
170,995
   
168,560
   
185,778
 
Less - accumulated depreciation
    
(103,079
)
  
(100,386
)
  
(105,534
)
   
 
 
 
 
    
67,916
   
68,174
   
80,244
 
   
 
 
 
Total assets
  
$
349,488
 
$
338,940
 
$
359,412
 
   
 
 
 
 
    
 
    
 
    
 
  
LIABILITIES AND STOCKHOLDER'S EQUITY
    
 
    
 
    
 
  
                    
Current liabilities
    
 
    
 
    
 
  
Accounts payable
  
$
77,056
 
$
67,601
 
$
68,256
 
Accrued liabilities and deferred gains
    
18,665
   
19,145
   
16,834
 
Current and deferred income taxes
   
4,656
   
4,852
   
4,386
 
Current portion of long-term debt
   
8,308
   
8,248
   
9,622
 
   
 
 
 
Total current liabilities
    
108,685
   
99,846
   
99,098
 
 
    
 
    
 
    
 
  
Long-term debt, less current portion
   
98,409
   
100,034
   
103,814
 
Deferred income taxes
   
15,670
   
13,963
   
23,011
 
Deferred gain on sale of assets
   
7,095
   
7,304
   
-
 
Minority interest
    
1,261
   
1,456
   
1,376
 
Post retirement benefits obligations
    
2,765
   
2,683
   
2,222
 
Stockholders' equity
   
 
    
 
    
 
  
Preferred stock
   
11,239
   
11,239
   
11,239
 
Common stock
    
159
   
159
   
158
 
Additional paid in capital
    
35,009
   
35,009
   
35,017
 
Earnings reinvested in the business
    
68,542
   
66,480
   
83,851
 
Accumulated other comprehensive income (loss)
   
928
   
1,042
   
(35
)
Other - deferred compensation
   
(29
)
  
(30
)
  
(109
)
Treasury stock, at cost
   
(245
)
  
(245
)
  
(230
)
   
 
 
 
Total stockholders' equity
   
115,603
   
113,654
   
129,891
 
   
 
 
 
Total liabilities and stockholders' equity
  
$
349,488
 
$
338,940
 
$
359,412
 
   
 
 
 


M o r e . . .
     

A. M. Castle & Co.
Add Five


CONDENSED STATEMENTS OF CASH FLOWS
    
 
    
 
  
(Dollars in thousands)
    
For The Three Months Ended
  
(Unaudited)
  
March 31,
 
    
2004

 

 
2003
  
   
 
 
 
    
 
    
 
  
Cash flows from operating activities:
    
 
    
 
  
Net income/(loss)
 
$
2,302
 
$
(1,407
)
Depreciation and amortization
    
2,247
   
2,304
 
Amortization of deferred gain
    
(209
)
  
-
 
Equity (earnings) loss from joint ventures
    
(632
)
  
37
 
Deferred taxes and income tax receivable
    
1,666
   
(1,361
)
Non-cash pension income and post-retirement benefits
    
105
   
(240
)
Other
    
93
   
12
 
   
 
 
Cash from operating activities before working capital changes
    
5,572
   
(655
)
Net change in accounts receivable sold
    
5,000
   
4,300
 
Other increases in working capital
    
(3,613
)
  
(2,922
)
   
 
 
Net cash from operating activities
    
6,959
   
723
 
 
    
 
    
 
  
Cash flows from investing activities:
    
 
    
 
  
Investments and acquisitions
    
(1,744
)
  
-
 
Advances to joint ventures
    
-
   
(114
)
Capital expenditures
    
(1,430
)
  
(736
)
   
 
 
Net cash from investing activities
   
(3,174
)
  
(850
)
 
    
 
    
 
  
Cash flows from financing activities
    
 
    
 
  
Long-term borrowings, net
    
(1,479
)
  
697
 
Preferred dividends paid
    
(240
)
  
(238
)
Other
    
17
   
-
 
   
 
 
Net cash from financing activities
   
(1,702
)
  
459
 
 
    
 
    
 
  
Effect of exchange rate changes on cash
    
(104
)
  
56
 
   
 
 
 
    
 
    
 
  
Net increase in cash
    
1,979
   
388
 
 
    
 
    
 
  
Cash - beginning of year
    
2,455
   
918
 
   
 
 
Cash - end of period
  
$
4,434
 
$
1,306
 
   
 
 
 
    
 
    
 
  
Supplemental cash disclosure - cash (paid) received during the period:
    
 
    
 
  
Interest
  
$
(2,319
)
$
(2,227
)
   
 
 
Income taxes
 
$
20
 
$
(197
)
   
 
 





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