Date of Report (Date of earliest event reported)

May 10, 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))

On Tuesday, May 10, 2005 the Company disseminated a press release, attached as Exhibit A, announcing the Company’s operational results for the First Quarter ending March 31, 2005.

As part of the press release there is a bridge of the 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 Three Months Ended March 31, 2005 and March 31, 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.

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.

Date	May 10, 2005

AT THE COMPANY	AT FINANCIAL RELATIONS BOARD
G. Thomas McKane	Analyst Contacts:	General Information:
Chairman & CEO	John McNamara	George Zagoudis (312) 640-6663
(847) 349-2502	(212) 827-3771	Email:gzagoudis@financialrelationsboard.com
Email: tmckane@amcastle.com	Email: jmcnamara@financialrelationsboard.com

Traded: AMEX, CSE (CAS)

Member: S&P SmallCap 600 Index

FRANKLIN PARK, ILLINOIS, MAY 10, 2005 — A.M. CASTLE & CO. (AMEX: CAS) announced today record sales and earnings performance for the first quarter ended March 31, 2005. Consolidated net sales increased 40% to $246.2 million, up $70.6 million from $175.6 million in the same period of 2004. Net income applicable to common stock totalled $11.9 million, or $0.75 per share (basic), compared to net income applicable to common stock of $2.1 million, or $0.13 per share (basic), in the prior year.

 

In making the announcement, G. Thomas McKane, Chairman and CEO, noted that the Company’s primary customer markets within the producer durable goods equipment manufacturing of North America, remain strong. "The aerospace, oil and gas, mining and construction equipment, along with heavy truck and railroad equipment sectors are showing particular strength."  McKane added, "Additionally, the average metal pricing for our primary products has risen modestly since the end of 2004, mostly in our nickel alloy, stainless steel and aluminum product lines.  The Company estimates real volume growth in its metal segment at approximately 5% with average metal prices up 37% versus the first quarter last year. Plastic segment net sales increased 25% versus the first quarter of 2004, comprised of an estimated favorable 16% material price impact and 9% real growth."

The Company’s incremental operating income of 22% on incremental sales growth during the quarter reflected continued strong operating expense leverage.  "One of our key objectives for 2005 is the replacement of our existing receivables purchase facility with a more traditional revolving credit line," McKane commented, "Our continued strong operating performance allows us greater flexibility in pursuing refinancing options that will reduce debt service expense over the long-term."

 

In closing, Mr. McKane invited interested parties to listen to its conference call scheduled for 11:00 a.m. (EST) today, Tuesday, May 10, 2005. Connection is available at www.amcastle.com and will be available for 14 days following the call.

 

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".

 

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. A reconciliation of EBITDA to net income is provided per Securities Exchange Commission 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 Exchange Commission.

CONSOLIDATED STATEMENTS OF INCOME		For the Three
(Dollars in thousands, except per share data)		Months Ended
Unaudited		Mar. 31
			2005			2004
Net sales		$	246,203		$	175,634
Cost of material sold			(173,300	)		(124,481	)
Gross material margin			72,903			51,153
Plant and delivery expense			(26,368	)		(23,599	)
Sales, general, and administrative expense			(22,955	)		(19,454	)
Depreciation and amortization expense			(2,273	)		(2,247	)
Total operating expense			(51,596	)		(45,300	)
Operating income			21,307			5,853
Interest expense, net			(2,083	)		(2,314	)
Discount on sale of accounts receivable			(536	)		(283	)
Income before income tax and equity in unconsolidated subsidiaries			18,688			3,256
Income taxes
Federal			(6,009	)		(1,025	)
State			(1,476	)		(312	)
			(7,485	)		(1,337	)
Net income before equity in unconsolidated subsidiaries			11,203			1,919
Equity earnings of joint ventures, net of tax			915			383
Net income			12,118			2,302
Preferred Dividends			(240	)		(240	)
Net income applicable to common stock		$	11,878		$	2,062
Basic earnings per share		$	0.75		$	0.13
Diluted earnings per share		$	0.70		$	0.13
EBITDA *		$	25,089		$	8,732
*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,
			2005			2004
Net income		$	12,118		$	2,302
Depreciation and amortization			2,273			2,247
Interest, net			2,083			2,314
Discount on sales of accounts receivable			536			283
Income taxes			7,485			1,337
Tax on equity in unconsolidated subsidiaries			594			249
EBITDA		$	25,089		$	8,732

 

 

 

 

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)		Period Ended
Unaudited*		Mar. 31			Dec. 31			Mar. 31
			2005*			2004			2004*
ASSETS
Current assets
Cash and equivalents		$	4,945		$	3,106		$	4,434
Accounts receivable, less allowances of $1,877 in March 2005,
$1,760 in December 2004 and $526 in March 2004			95,194			80,323			77,348
Inventories (principally on last-in first-out basis)
(latest cost higher by approximately $95,700 in March 2005,
$92,500 in December 2004 and $55,600 in March 2004)			139,219			135,588			104,040
Income tax receivable			162			169			652
Assets held for sale			995			995			1,117
Advances to joint ventures and other current assets			7,624			7,325			6,599
Total current assets			248,139			227,506			194,190
Investment in joint ventures			9,204			8,463			5,060
Goodwill			32,196			32,201			31,935
Pension assets			41,933			42,262			42,122
Advances to joint ventures and other assets			6,967			7,586			8,265
Property, plant and equipment, at cost
Land			4,770			4,771			4,767
Building			45,495			45,514			46,975
Machinery and equipment			125,339			124,641			119,253
			175,604			174,926			170,995
Less - accumulated depreciation			(111,931	)		(109,928	)		(103,079	)
			63,673			64,998			67,916
Total assets		$	402,112		$	383,016		$	349,488
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable		$	96,595		$	93,342		$	77,056
Accrued liabilities and deferred gains			22,695			23,016			18,665
Current and deferred income taxes			10,235			4,349			4,656
Current portion of long-term debt			16,390			11,607			8,308
Total current liabilities			145,915			132,314			108,685
Long-term debt, less current portion			82,706			89,771			98,409
Deferred income taxes			20,462			19,668			15,670
Deferred gain on sale of assets			6,251			6,465			7,095
Minority interest			1,653			1,644			1,261
Post retirement benefits obligations			2,901			2,905			2,765
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 15,823,079 at March 2005,
15,806,366 at December 2004 and 15,788,442 at March 2004			159			159			159
Additional paid in capital			35,150			35,082			35,009
Earnings reinvested in the business			94,278			82,400			68,542
Accumulated other comprehensive income			1,643			1,616			928
Other - deferred compensation			-			(2	)		(29	)
Treasury stock, at cost - 63,331 shares at March 2005, 62,065
shares at December 2004 and 57,019 shares at March 2004			(245	)		(245	)		(245	)
Total stockholders' equity			142,224			130,249			115,603
Total liabilities and stockholders' equity		$	402,112		$	383,016		$	349,488

CONDENSED STATEMENTS OF CASH FLOWS
	(Dollars in thousands)	For the Three Months
		Ended Mar. 31,
		2005	2004
Cash flows from operating activities:
	Net income	$12,118	$2,302
Adjustments to reconcile net income to net cash from operating activities:
	Depreciation	2,273	2,247
	Amortization of deferred gain	(214)	(209)
	Equity in (earnings) from joint ventures	(1,509)	(632)
	Deferred taxes and income tax receivable	807	1,666
	Non-cash pension loss and post-retirement benefits	562	105
	Other	383	93
	Cash from operating activities before working capital changes	14,420	5,572
Increase (decrease) from changes in:
	Accounts receivable sold	13,500	5,000
	Accounts receivable	(28,429)	(26,883)
	Inventory	(3,718)	14,962
	Accounts payable and accrued liabilities	3,075	8,212
	Other current assets	(300)	240
	Income tax payable	5,885	(143)
Net cash from operating activities		4,433	6,959
Cash flows from investing activities:
	Investments and acquisitions	-	(1,744)
	Cash from joint ventures	767	-
	Capital expenditures	(989)	(1,430)
Net cash from investing activities		(222)	(3,174)
Cash flows from financing activities:
	Repayment of long-term debt	(2,217)	(1,479)
	Preferred stock dividend	(240)	(240)
	Other	68	17
Net cash from financing activities		(2,389)	(1,702)
	Effect of exchange rate changes on cash	17	(104)
Net increase in cash		1,839	1,979
	Cash - beginning of year	3,106	2,455
	Cash - end of period	$4,945	$4,434