A. M. CASTLE & CO. Announces Record First Quarter 2006 Results and Declares a Quarterly Cash Dividend

FRANKLIN PARK, Ill., May 5  /PRNewswire-FirstCall/ -- A. M. CASTLE & CO. (AMEX:CAS) a leading North American distributor of highly engineered metals and plastics, announced today record sales and earnings performance for the first quarter ended March 31, 2006.  Consolidated net sales increased 13.4% to $279.2 million, up $33.0 million from the first quarter of 2005.  Net income applicable to common stock was $15.8 million, or $0.86 per diluted share, compared to $11.5 million, or $0.65 per diluted share, in the first quarter of the prior year.

"Our growth reflects continued strong demand in the end markets we serve," stated Michael Goldberg, President and CEO of A. M. Castle & Co.  "Previously, we stated our expectation to increase consolidated revenues in the mid single digit range, exclusive of material price impact.  In the first quarter of 2006, we achieved 9% sales growth net of price and were able to drive incremental operating profits at a rate of 16 cents for every new dollar of sales," continued Goldberg.

The Company reported 10% sales growth in its Metals business, net of price on a year over year basis.  "Metals prices for our current product mix remain near the end of year 2005 levels and were 4% higher than the first quarter of last year, resulting in our reported 14% comparative sales growth," commented Stephen Hooks, President of Castle Metals.  "The aerospace, oil and gas, and mining and heavy industrial equipment sectors continue to show particular strength for our Metals business with no signs of slowing down for the balance of this year," Hooks said.

Plastics segment sales increased 9% versus the first quarter of 2005, including a favorable 8% material price impact and 1% volume growth.  "Our Plastics business remains a key growth segment for us," commented Goldberg. "We expect revenue growth in plastics to keep pace, at a minimum, with our metals growth rate over the course of the year."

Larry Boik, Vice President and CFO added, "We completed the purchase of our new Birmingham, Alabama facility in the first quarter and we expect this location to be fully operational this summer.  Additionally, our business systems replacement initiative continues as planned.  Both of these investments in the Company's future were reflected in our capital spending for the first quarter of 2006."  The Company reported a debt-to-capital ratio of 29.4%, down from 31.3% at the end of 2005 and a cash position of $32.7 million, as of March 31, 2006.

The Company's Board of Directors approved a quarterly cash dividend of 6 cents per share, payable May 26, 2006 to shareholders of record at the close of business on May 12th.

In closing, Mr. Goldberg invited interested parties to listen to its conference call scheduled for 11:00 a.m. (EDT) today, Friday, May 5, 2006. Connection is available at http://www.amcastle.com/ and will 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; and aluminum.   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.

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.

  CONSOLIDATED STATEMENTS OF INCOME                  For the Three
  (Dollars in thousands, except per                   Months Ended
  share data)                                           March 31,
  Unaudited
                                                  2006              2005

  Net sales                                     $279,193          $246,203
  Cost of material sold                          196,100           173,300
    Gross material margin                         83,093            72,903

  Plant and delivery expense                      29,625            26,368
  Sales, general, and administrative
   expense                                        24,885            23,487
  Depreciation and amortization expense            2,444             2,273
  Total operating expense                         56,954            52,128

  Operating income                                26,139            20,775

  Interest expense, net                           (1,087)           (2,083)
  Discount on sale of accounts
   receivable                                        -                (536)

  Income before income taxes and equity
   earnings of joint venture                      25,052            18,156

  Income taxes                                   (10,242)           (7,895)
  Income before equity in earnings of
   joint venture                                  14,810            10,261

  Equity in earnings of joint venture              1,239             1,509
  Net income                                      16,049            11,770

  Preferred dividends                               (242)             (240)
  Net income applicable to common stock          $15,807           $11,530

  Basic earnings per share                         $0.95             $0.73
  Diluted earnings per share                       $0.86             $0.65

  EBITDA *                                       $29,822           $24,557

  *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,
                                                  2006              2005

  Net income                                     $16,049           $11,770
  Depreciation and amortization                    2,444             2,273
  Interest, net                                    1,087             2,083
  Discount on accounts receivable sold               -                 536
  Provision from income taxes                     10,242             7,895
  EBITDA                                         $29,822           $24,557




  CONSOLIDATED BALANCE SHEETS
  (Dollars in thousands)                                    As of
  Unaudited                                      March 31,          Dec. 31,
                                                   2006               2005
  ASSETS
  Current assets
    Cash and cash equivalents                    $32,704            $37,392
    Accounts receivable, less
     allowances of $1,897 at March 31,
     2006 and $1,763 at December 31, 2005        133,614            107,064
    Inventories (principally on last-
     in, first-out basis) (latest cost
     higher by $103,870 at March 31, 2006
     and $104,036 at December 31, 2005)          121,020            119,306
    Other current assets                           7,124              6,351
         Total current assets                    294,462            270,113
  Investment in joint venture                     11,740             10,850
  Goodwill                                        32,219             32,222
  Prepaid pension cost                            40,889             41,946
  Other assets                                     4,186              4,182
  Property, plant and equipment, at
   cost
    Land                                           5,200              4,772
    Building                                      48,106             45,890
    Machinery and equipment                      129,426            127,048
                                                 182,732            177,710
    Less - accumulated depreciation             (115,793)          (113,288)
                                                  66,939             64,422
  Total assets                                  $450,435           $423,735

  LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities
    Accounts payable                            $113,176           $103,246
    Accrued liabilities                           19,007             21,535
    Current and deferred income taxes             10,746              7,052
    Current portion of long-term debt              6,233              6,233
         Total current liabilities               149,162            138,066
  Long-term debt, less current portion            73,698             73,827
  Deferred income taxes                           21,418             21,903
  Deferred gain on sale of assets                  5,754              5,967
  Pension and postretirement benefit
   obligations                                     8,719              8,467
  Commitments and contingencies
  Stockholders' equity
      Preferred stock, $0.01 par value
       - 10,000,000 shares
        authorized; 12,000 shares
        issued and outstanding                    11,239             11,239
      Common stock, $0.01 par value -
       authorized 30,000,000
       shares; issued and outstanding
       16,659,525 at March 31, 2006
       and 16,605,714 at December 31, 2005           166                166
      Additional paid-in capital                  62,582             60,916
      Retained earnings                          125,333            110,530
      Accumulated other comprehensive
       income                                      2,119              2,370
      Treasury stock, at cost -
       547,685 shares at March 31,
       2006 and 546,055 shares at December 31,
       2005                                       (9,755)            (9,716)
         Total stockholders' equity              191,684            175,505
  Total liabilities and stockholders'
   equity                                       $450,435           $423,735




  CONSOLIDATED STATEMENTS OF CASH FLOWS
  (Dollars in thousands)                           For the Three Months
  Unaudited                                           Ended March 31,
                                                  2006              2005

  Cash flows from operating activities:
    Net income                                   $16,049           $11,770
  Adjustments to reconcile net income
   to net cash from operating activities:
    Depreciation and amortization                  2,444             2,273
    Amortization of deferred gain                   (213)             (214)
    Equity in earnings from joint
     venture                                      (1,239)           (1,509)
    Stock compensation expense                       974               348
    Deferred tax provision (benefit)              (1,117)              716
    Excess tax benefits from stock-
     based payment arrangements                     (168)              -
   Increase (decrease) from changes in:
    Accounts receivable                          (26,712)          (14,929)
    Inventories                                   (1,846)           (3,718)
    Prepaid pension costs                          1,058               329
    Other current assets                            (813)             (300)
    Accounts payable                              10,100             3,389
    Accrued liabilities                           (2,514)             (314)
    Income tax payable                             4,395             5,976
    Postretirement benefit obligations
     and other liabilities                           220               616
  Net cash from operating activities                 618             4,433

  Cash flows from investing activities:
    Dividends from joint venture                     354               767
    Capital expenditures                          (4,999)             (989)
  Net cash from investing activities              (4,645)             (222)

  Cash flows from financing activities:
    Repayments of long-term debt                    (129)           (2,217)
    Preferred stock dividend                        (242)             (240)
    Common stock dividend                         (1,004)              -
    Exercise of stock options                        479                68
    Excess tax benefits from stock-
     based payment arrangements                      168               -
  Net cash from financing activities                (728)           (2,389)

    Effect of exchange rate changes on
     cash and cash equivalents                        67                17

  Net increase (decrease) in cash and
   cash equivalents                               (4,688)            1,839

    Cash and cash equivalents -
     beginning of year                           $37,392            $3,106
    Cash and cash equivalents - end of
     period                                      $32,704            $4,945


DATASOURCE: A. M. CASTLE & CO.



CONTACT: Larry A. Boik, Vice President-Finance & CFO of A. M. CASTLE &

CO., [phone],  ; or, Katie Pyra of Ashton Partners,

[phone],  



Web site: http://www.amcastle.com/ 

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