A. M. Castle & Co. Reports 2005 Year End Results; Announces Record Sales and Earnings

FRANKLIN PARK, Ill., March 13  /PRNewswire-FirstCall/ -- A. M. Castle & Co. (AMEX:CAS), one of North America's leading metals and plastics distributors, today reported its financial results for the fourth quarter and full year ended December 31, 2005.

For the fourth quarter, net sales were $227.3 million, a level 15% higher than the prior year.  Net earnings for the quarter increased 273% to $7.1 million, or $0.39 per diluted share as compared to $0.12 per diluted share in the prior year.

For the year, net sales were $959.0 million, a 26% increase over 2004. Net earnings rose 190% to $41.9 million, or $2.33 per diluted share, as compared to $14.5 million, or $0.82 per diluted share in 2004.  Fourth quarter and full year 2005 earnings include a $3.0 million (after-tax), or $0.16 per diluted share, refinancing charge that was previously announced.

All previously reported quarters for 2004 and 2005 have been restated to reflect the Company's fourth quarter 2005 adoption of FAS 123R - "Accounting for Stock-Based Compensation".  Refer to Table "A" attached to this release for more detail.

"Throughout 2005, we experienced strong demand for our products across our metal end-user markets," stated G. Thomas McKane, Chairman of the Board. Metals sales of $851.3 million in 2005 rose 27% over last year on a nominal basis or, approximately 6% excluding the impact of material price increases. "We continue to see healthy demand for our metals products, especially those used in aerospace, oil and gas, and heavy construction and mining equipment," McKane added.

The Company's plastics business achieved record sales of $107.7 million, nearly a 20% increase over 2004.  Excluding the effect of material price increases, 2005 full year plastics sales rose 2%.  "We experienced some softness in our point-of-purchase display markets during the third quarter of 2005," stated McKane. "However, underlying demand is sound and we continue to view our plastics business as a growth engine for the future.  We have successfully grown this segment to $108 million in 2005 from a $55 million business in 2001, achieving a compound growth rate in excess of 18% per year," he noted.

Commenting further, Larry A. Boik, CFO, noted, "Not only are we pleased with our 2005 operating results, but also with our successful completion of the previously announced long-term debt refinancing.  Although we incurred a significant one-time charge to earnings in the fourth quarter of 2005, we reduced our annual interest expense by $1.9 million and extended maturities, substantially reducing our annual debt service cash outlays."  The Company's debt-to-capital ratio as of December 31, 2005 was 30.8%, a significant improvement from 43.7% at the end of 2004.  Return-on-stockholders' equity was 32.1%. "Our current cash position and revitalized balance sheet provide the financial flexibility needed to grow the business," Boik added.

As part of the year-end audit of the Company's financial statements, significant adjustments were recorded.  These audit adjustments, in management's opinion, indicate a material weakness as that term is defined in Section 404 of the Sarbanes-Oxley Act of 2002.

On January 30, 2006, the Company announced the hiring of Michael Goldberg as President and C.E.O. of A. M. Castle & Co.  Mr. McKane will continue to serve as Chairman.  "The entire Board of Directors is excited to have Mike leading the Company in its next phase of development," said McKane.

Also on January 30th, the Company announced a cash dividend of $0.06 per share that was paid on February 27, 2006 to shareholders of record on February 13, 2006.

Webcast Information

Shareholders and other interested parties are invited to listen to A. M. Castle's conference call hosted by McKane, Goldberg and Boik scheduled for 11:00 a.m. (EST) today, Monday, March 13, 2006. 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; 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, debt extinguishment expense, 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          For the
  (Dollars in thousands, except per     Months Ended         Year Ended
    share data)                            Dec 31              Dec 31
  Unaudited                            2005      2004      2005      2004


  Net sales                          $227,257  $197,803  $958,978  $760,997
  Cost of material sold              (157,968) (145,049) (670,674) (543,426)
    Gross margin                       69,289    52,754   288,304   217,571

  Plant and delivery expense          (26,792)  (24,561) (108,427)  (95,229)
  Sales, general, and administrative
   expense                            (23,340)  (21,422)  (92,848)  (82,142)
  Depreciation and amortization
   expense                             (2,588)   (2,015)   (9,340)   (8,751)
  Total operating expense             (52,720)  (47,998) (210,615) (186,122)

  Operating income                     16,569     4,756    77,689    31,449

  Interest expense, net                (1,473)   (2,261)   (7,348)   (8,968)
  Discount on sale of accounts
   receivable                              --      (285)   (1,127)     (969)
  Extinguishment of debt               (4,904)       --    (4,904)       --

  Income before income tax and
   equity earnings of
   joint venture                       10,192     2,210    64,310    21,512

  Income tax expense                   (3,857)   (2,084)  (25,745)  (11,294)
  Income before equity in
   unconsolidated subsidiaries          6,335       126    38,565    10,218

  Equity in earnings of joint
   venture                                960     2,002     4,302     5,199
  Net income                            7,295     2,128    42,867    15,417

  Preferred dividends                    (241)     (239)     (961)     (957)
  Net income applicable to common
   stock                               $7,054    $1,889   $41,906   $14,460

  Basic earnings per share              $0.43     $0.12     $2.61     $0.92
  Diluted earnings per share            $0.39     $0.12     $2.33     $0.82

  EBITDA *                            $20,117    $8,773   $91,331   $45,399


  * Earnings before interest, discount on sale of accounts receivable,
    taxes, depreciation and amortization, and debt extinguishment expense



  Reconciliation of EBITDA to net income:  For the Three    For the Twelve
                                           Months Ended      Months Ended
                                              Dec 31            Dec 31
                                           2005     2004    2005     2004

  Net income                               $7,295  $2,128  $42,867  $15,417
  Depreciation and amortization             2,588   2,015    9,340    8,751
  Interest, net                             1,473   2,261    7,348    8,968
  Discount on accounts receivable sold         --     285    1,127      969
  Debt extinguishment                       4,904      --    4,904       --
  Provision from income taxes               3,857   2,084   25,745   11,294
  EBITDA                                  $20,117  $8,773  $91,331  $45,399




The following table shows the quarterly earnings impact of the Company's early adoption of FAS 123R - "Accounting for Stock-Based Compensation".

  Table "A"
  (Dollars in thousands, except per share data)

                               Restated          As Previously Reported
                       Net Income                 Net Income
                       applicable                 applicable
                       to common                  to common
                         stock            EPS*     stock           EPS*

  2005
    Q1                  $11,530          $0.65     $11,878        $0.70
    Q2                   13,245           0.73      12,742         0.72
    Q3                   10,077           0.56      10,044         0.56

  2004
    Q1                    1,624           0.10       2,062         0.13
    Q2                    5,329           0.30       5,758         0.35
    Q3                    5,618           0.32       5,847         0.36
    Q4                    1,889           0.12       2,249         0.15

  * diluted


  CONSOLIDATED BALANCE SHEETS
  (Dollars in thousands)                                    As of
  Unaudited                                      Dec 31             Dec. 31
                                                  2005               2004
  ASSETS
  Current assets
    Cash and cash equivalents                    $37,392             $3,106
    Accounts receivable, less
     allowances of $1,763 in 2005
       and $1,760 in 2004                        107,064             80,323
    Inventories (principally on
     last-in, first-out basis)                   125,818            135,588
     (latest cost higher by approximately
     $97,524 in 2005 and $92,500 in 2004)
    Other current assets                           6,351              8,489
         Total current assets                    276,625            227,506
  Investment in joint venture                     10,850              8,463
  Goodwill                                        32,292             32,201
  Pension asset                                   41,946             42,262
  Other assets                                     4,112              7,586
  Property, plant and equipment, at cost
    Land                                           4,772              4,771
    Building                                      45,890             45,514
    Machinery and equipment                      127,048            124,641
                                                 177,710            174,926
    Less - accumulated depreciation             (113,288)          (109,928)
                                                  64,422             64,998
  Total assets                                  $430,247           $383,016

  LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities
    Accounts payable                            $103,246            $93,342
    Accrued liabilities                           26,828             23,560
    Current and deferred income taxes              9,606              3,653
    Current portion of long-term debt              6,233             11,607
         Total current liabilities               145,913            132,162
  Long-term debt, less current portion            73,827             89,771
  Deferred income taxes                           21,903             19,668
  Deferred gain on sale-leaseback assets           5,967              6,465
  Postretirement benefits obligation               3,174              2,905
  Minority interest                                   --              1,644
  Commitments and contingencies
  Stockholders' equity
      Preferred stock, no 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 16,583,456 in 2005
       and 15,806,366 in 2004                        164                159
      Additional paid in capital                  60,918             45,052
      Retained earnings                          114,488             72,582
      Accumulated other comprehensive income       2,370              1,616
      Other - deferred compensation                   --                 (2)
      Treasury stock, at cost -
       571,828 shares at December 31,
       2005 and 62,065 shares at
       December 31, 2004                          (9,716)              (245)
         Total stockholders' equity              179,463            130,401
  Total liabilities and stockholders'
   equity                                       $430,247           $383,016


DATASOURCE: A. M. Castle & Co.



CONTACT:  Larry A. Boik, Vice President-Finance & CFO, [phone],

; or Analyst Contacts, Katie Pyra of Ashton Partners,

[phone], 



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

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