Date of Report (Date of earliest event reported) ______May 6, 2003__________
__________________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 9. Regulation FD Disclosure
On Tuesday, May 6, 2003, the Company will issue a press release, a copy of which is attached as Exhibit A, which contains Non-GAAP financial information. The Non-GAAP financial information consists of EBITDA (Earnings Before Interest, Discounts on Sale of Accounts Receivable, Taxes, Depreciation and Amortization). This measure may not be comparable to similarly titled measures reported by other companies. The Company believes that EBITDA is a measure that should be reported because of its importance to the professional investment community including the Company's primary lenders. Further the Company discusses trailing quarter-to-quarter comparative results which do not include the net inventory charges made in the fourth quarter of 2002. The Company believes this information is necessary to a proper understanding of the impact of volume changes on the Company's earnings between the first quarter and fourth quarter, on a comparable basis, without the effect of a net inventory adjustment which only occurs in the fourth quarter.
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/ Edward F. Culliton
EdwardF. Culliton
Vice
President & CFO
Date: May 5, 2003
FOR
IMMEDIATE RELEASETUESDAY,
MAY 6, 2003
FRANKLIN PARK, ILLINOIS, MAY 6, 2003 -- A. M. CASTLE & CO. (AMEX: CAS), A North American distributor of highly engineered metals and plastics, today announced its operating results for the quarter ended March 31, 2003.
For the quarter, sales totalled $141.6 million, an increase of 4.1 percent over sales of $136.0 million for the first three months of 2002. Current quarter sales include $3.3 million of revenues of its small order business, Metal Express, which was consolidated following the Company's purchase of its partner's remaining joint venture interest effective May 1, 2002. Metal revenues were relatively flat year-over-year while sales of its Total Plastics, Inc. subsidiary rose $1.9 million, or 13.2 percent. Gross material margins rose $1.9 million due primarily to the inclusion of Metal Express and the increased volume of Total Plastics. As a percent of sales, total gross material margins at 30.5 percent were comparable to the 30.4 percent reported in the prior quarter.
Other operating expenses rose $3.1 million to $42.7 million from $39.6 million in the first quarter of 2002. The consolidation of Metal Express accounted for $1.7 million of the increase while expenses at Total Plastics rose $0.7 million in support of higher activity levels. Of the remaining $0.7 million of increased expenses, $0.4 million was due to lower non-cash pension income primarily due to a reduction in the expected long-term rate of return on pension assets from 10 percent to 9 percent. Financing expense increased to $2.8 million from $2.1 million a year-ago reflecting the impact of higher rates negotiated as part of the capital restructuring put in place in the later part of 2002 offset by reductions of $14.8 million in the aggregate amount of debt and advances under the Company's accounts receivable purchase facility. After-tax losses for the quarter totalled $1.4 million as compared with $0.2 million in 2002. Including dividends payable on preferred stock, the net loss applicable to common stock totalled $1.6 million, or 10 cents per share, compared with $0.2 million, or 1-cent per share, a year ago.
Exhibit A.2
In making the announcement, G. Thomas McKane, President and CEO noted that "On a trailing quarter basis, sales were up $17.4 million, or 14.0 percent. Gross material margins increased $6.4 million from the fourth quarter of 2002. The Company's fourth quarter cost of sales included a $1.3 million net inventory adjustment. Exclusive of this charge, gross material margins increased by $5.1 million. Plant, delivery, selling and administrative expenses increased by $2.3 million, or 13.5 percent on the incremental sales volume. As a result of the increased volume, we produced a $2.8 million increase in EBITDA. This $2.8 million represents a 16.1 percent return on incremental sales, indicative of the leverage the Company will realize when demand in our markets begins to recover."
Speaking to current market conditions, Mr. McKane noted that the Company was seeing single digit growth in the upper Midwest but that aerospace markets continue to decline as both commercial and private aircraft orders remain depressed.
In closing, Mr. McKane invited interested parties to listen to the Company's conference call scheduled for 11:00 (EST) today, Tuesday, May 6, 2003. 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 industrial companies. The company is
widely recognized as one of the leading industrial distributors of specialty
metals such as carbon, alloy and stainless steels; aluminum; nickel alloy;
titanium; and copper and brass. Through its subsidiary, Total Plastics, Inc.,
the company also distributes a broad range of value-added industrial plastics.
Together, Castle and its affiliated companies operate over 50 locations
throughout North America. Its common stock is traded on the American and Chicago
Stock Exchanges under the ticker symbol "CAS."
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. Exhibit A.3
CONDENSED STATEMENTS OF OPERATIONS Prior year
amounts have been reclassified to conform with current year presentation related
primarily to discontinued operations. Exhibit A.4
(Amounts in thousands)
CONDENSED STATEMENTS OF
CASH FLOWS Financial tables to follow...
(Amounts in thousands,
except per share data)
-------------------------------------------
(Unaudited)
For the Three Months Ended March 31,
2003 2002
Net sales
$ 141,646
$ 136,036
Cost of material sold
(98,444
)
(94,744
)
Gross material margin
43,202
41,292
Plant and delivery expense
(22,350
)
(22,134
)
Sales, general and administrative expense
(18,036
)
(15,472
)
Depreciation and amortization expense
(2,304
)
(2,034
)
Total other operating expense
(42,690
)
(39,640
)
Operating income
, 51
2
1,652
Equity in earnings (loss) of joint ventures
(37
)
166
Interest expense, net
(2,443
)
(1,768
)
Discount on sale of accounts receivable
(329
)
(298
)
Loss from continuing operations before taxes
(2,297
)
(248
)
Income Taxes:
Federal
763
75
State
127
14
890
89
Net loss from continuing operations
(1,407
)
(159
)
Discontinued operations:
Income from discontinued operations,
net of income tax $2
--
7
Net loss
(1,407
)
(152
)
Preferred dividends
(238
)
--
Net loss applicable to common stock
$ (1,645
)
$ (152
)
Basic and diluted loss per share from:
Continuing operations
$ (0.10
)
$ (0.01
)
Discontinued operations
--
--
Total
$ (0.10
)
$ (0.01
)
(Unaudited)
March 31, December 31, March 31,
2003 2002 2002 ---------------------------------------------- --
ASSETS
Cash
$ 1,306
$ 918
$ 1,248
Accounts receivable
42,714
34,273
31,966
Inventories (principally on last-in, first-out basis)
128,092
131,704
133,652
Income tax receivable
12,929
9,897
4,973
Other current assets
7,492
7,930
7,435
Current assets - discontinued subsidiary
--
--
8,705
Total current assets
192,533
184,722
187,979
Investment in joint ventures
7,404
7,278
9,373
Goodwill
31,978
31,947
31,197
Pension assets
40,719
40,359
29,783
Advances to joint ventures and other assets
6,534
6,754
4,384
Property, plant and equipment at cost:
Land
6,027
6,025
5,824
Buildings
53,440
53,322
51,328
Machinery and equipment
126,311
125,376
124,840
185,778
184,723
181,992
Less--accumulated depreciation
(105,534
)
(103,188
)
(97,656
)
80,244
81,535
84,336
Non-current assets - discontinued subsidiary
--
--
2,419
Total assets
$ 359,412
$ 352,595
$ 349,471
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable
$ 68,256
$ 64,192
$ 62,332
Accrued liabilities
16,834
16,092
14,523
Deferred and current taxes
4,386
4,351
3,674
Current portion of long-term debt
9,622
3,546
2,442
Current liabilities - discontinued subsidiary
--
--
6,584
Total current liabilities
99,098
88,181
89,555
Long-term debt, less current portion
103,814
108,801
113,146
Long-term debt - discontinued subsidiary
--
--
853
Deferred and current taxes
23,011
21,101
20,358
Minority interest
1,376
1,352
1,290
Post retirement benefit obligations
2,222
2,236
2,181
Stockholders' equity
Preferred stock
11,239
11,239
--
Common stock
158
158
147
Additional paid in capital
35,017
35,017
28,459
Earnings reinvested in the business
83,851
85,490
95,496
Accumulated other comprehensive loss
(35
)
(555
)
(1,555
)
Other-deferred compensation
(109
)
(195
)
(457
)
Treasury stock, at cost
(230
)
(230
)
(2
)
Total stockholders' equity
129,891
130,924
122,088
Total liabilities and stockholders'
equity
$ 359,412
$ 352,595
$ 349,471
(Dollars in thousands) For the Three Months
(Unaudited) Ended
March 31,
2003 2002__
----------------------------
Cash flows from operating activities:
Net loss
$(1,645
)
$ (152
)
Net income from discontinued operations
-
(7
)
Depreciation and amortization
2,304
2,034
Equity in (earnings) loss of joint ventures
37
(166
)
(Decrease) increase in deferred taxes
(1,361
)
1,592
Non-cash pension income
(240
)
(616
)
Other
12
(461
)
Cash from operating activities
before working capital changes
(893
)
2,224
Sale of accounts receivable
4,300
2,000
Other decrease (increase) in working capital
(2,922
)
(1,853
)
Net cash from operating activities - continuing
operations
485
2,371
Net cash from operating activities - discontinued
operations
-
2,936
Net cash from operating activities
485
5,307
Cash flows from investing activities:
Advances to joint ventures
(114
)
(1,605
)
Capital expenditures, net of sales
proceeds
(736
)
(851
)
Net cash from investing activities - continuing
operations
(850
)
(2,456
)
Net cash from investing activities - discontinued
operations
-
(16
)
Net cash from investing activities
(850
)
(2,472
)
Cash flows from financing activities:
Long-term borrowings, net
697
(4,105
)
Effect of exchange rate changes on cash
56
6
Other
-
83
Net cash from financing activities - continuing
operations
753
(4,016
)
Net cash from financing activities - discontinued
operations
-
628
Net cash from financing activities
753
(3,388
)
Net increase in cash
388
(553
)
Cash - beginning of year
918
1,801
Cash - end of period
$ 1,306
$ 1,248