CAS Simplify China A Shares Plus Income ETF

FRANKLIN PARK, Ill., March 31 /PRNewswire-FirstCall/ -- A. M. Castle & Co. (AMEX:CAS), one of North America's leading metals and plastics distributors, announced the final audited results for the year ended December 31, 2005. This release represents a change from the unaudited figures included in the Company's March 13, 2006 release. The final results include a LIFO (last-in, first-out) inventory valuation adjustment, which resulted in a non-cash $4.0 million after-tax charge as compared to the previously announced results. The impact of this adjustment reduces fourth quarter 2005 diluted earnings per share from $0.39 (as reported on March 13, 2006) to $0.18 as reported in the audited results. By comparison, earnings per share (diluted) for the fourth quarter of 2004 were $0.12. For the year 2005, diluted earnings per share were $2.11 as compared to $0.82 in the prior year. "Final determination of our LIFO year-end adjustment is a complex process which can only be calculated at year-end after all final inventory levels by SKU are known and all final invoices for material purchases are in hand," stated Larry A. Boik, Vice President and CFO. "The process takes on an added complexity during periods of frequent price changes as characterized in 2004 and 2005," he continued. During 2004 the total increase in the LIFO reserve was $49.7 million as compared to $11.5 million during 2005, reflecting the continued escalation in material costs (albeit at a slower rate of change during 2005). On an annual basis, the Company's sales increased 26% to a level of $959 million during 2005. Net income applicable to shareholders increased 162% to a level of $37.9 million on a year-over-year basis. EBITDA increased 87% to a level of $84.8 million in 2005. All figures for both the quarter and the year include the impact of the Company's adoption of FAS 123R-"Accounting for Stock Based Compensation" as reported in the March 13, 2006 press release. "Let us not lose sight of the fact that the fundamentals of the business at A. M. Castle remain very strong," said Michael Goldberg, President and CEO. "Sales, gross material margins and net income are all very strong and we remain optimistic about the outlook for 2006," he continued. The 10-K will be filed today, March 31, 2006. 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 (Dollars in thousands, except per share data) For the Three For the Months Ended Year Ended Dec 31 Dec 31 2005 2004 2005 2004 Net sales $227,257 $197,803 $958,978 $760,997 Cost of material sold (164,480) (145,049) (677,186) (543,426) Gross material margin 62,777 52,754 281,792 217,571 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 10,057 4,756 71,177 31,449 Interest expense, net (1,473) (2,261) (7,348) (8,968) Discount on sale of accounts receivable -- (285) (1,127) (969) Loss on extinguishment of debt (4,904) -- (4,904) -- Income before income tax and equity in earnings of joint venture 3,680 2,210 57,798 21,512 Income taxes (1,303) (2,084) (23,191) (11,294) Income before equity in earnings of joint ventures 2,377 126 34,607 10,218 Equity in earnings of joint venture 960 2,002 4,302 5,199 Net income 3,337 2,128 38,909 15,417 Preferred dividends (241) (239) (961) (957) Net income applicable to common stock $3,096 $1,889 $37,948 $14,460 Basic earnings per share $0.19 $0.12 $2.37 $0.92 Diluted earnings per share $0.18 $0.12 $2.11 $0.82 EBITDA * $13,605 $8,773 $84,819 $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 $3,337 $2,128 $38,909 $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 1,303 2,084 23,191 11,294 EBITDA $13,605 $8,773 $84,819 $45,399 CONSOLIDATED BALANCE SHEETS (Dollars in thousands) As of 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) (latest cost higher by $104,036 in 2005 and $92,500 in 2004) 119,306 135,588 Other current assets 6,351 8,489 Total current assets 270,113 227,506 Investment in joint venture 10,850 8,463 Goodwill and intangible assets 32,222 32,201 Prepaid pension cost 41,946 42,262 Other assets 4,182 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 $423,735 $383,016 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $103,246 $93,342 Accrued liabilities 21,535 19,591 Current and deferred income taxes 7,052 3,653 Current portion of long-term debt 6,233 11,607 Total current liabilities 138,066 128,193 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 Pension and postretirement benefit obligations 8,467 6,874 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 16,605,714 in 2005 and 15,806,366 in 2004 166 159 Additional paid in capital 60,916 45,052 Retained earnings 110,530 72,582 Accumulated other comprehensive income 2,370 1,616 Other - deferred compensation -- (2) Treasury stock, at cost - 546,065 shares at December 31, 2005 and 62,065 shares at December 31, 2004 (9,716) (245) Total stockholders' equity 175,505 130,401 Total liabilities and stockholders' equity $423,735 $383,016 Revised Consolidated Statement of Income (dollars in thousands, except earnings per share data) For the Three Months Ended Dec 31, 2005 Per 3/13/2006 Earnings LIFO As Release Adjustment Revised Net sales $227,257 $-- $227,257 Cost of material sold (157,968) (6,512) (164,480) Gross material margin 69,289 (6,512) 62,777 Operating income 16,569 (6,512) 10,057 Income before income taxes and equity earnings of joint venture 10,192 (6,512) 3,680 Income tax expense (3,857) 2,554 (1,303) Equity in earnings of joint venture 960 -- 960 Net Income $7,295 $(3,958) $3,337 Net income applicable to common stock $7,054 $(3,958) $3,096 Basic earnings per share $0.43 $(0.24) $0.19 Diluted earnings per share $0.39 $(0.21) $0.18 EBITDA $20,117 $(6,512) $13,605 Revised Consolidated Statement of Income (dollars in thousands, except earnings per share data) For the Year Ended Dec 31, 2005 Per 3/13/2006 Earnings LIFO As Release Adjustment Revised Net sales $958,978 $-- $958,978 Cost of material sold (670,674) (6,512) (677,186) Gross material margin 288,304 (6,512) 281,792 Operating income 77,689 (6,512) 71,177 Income before income taxes and equity earnings of joint venture 64,310 (6,512) 57,798 Income tax expense (25,745) 2,554 (23,191) Equity in earnings of joint venture 4,302 -- 4,302 Net Income $42,867 $(3,958) $38,909 Net income applicable to common stock $41,906 $(3,958) $37,948 Basic earnings per share $2.61 $(0.24) $2.37 Diluted earnings per share $2.33 $(0.22) $2.11 EBITDA $91,331 $(6,512) $84,819 Revised Consolidated Balance Sheet (dollars in thousands) For the Year Ended Dec 31, 2005 Per 3/13/2006 Earnings LIFO As Release Adjustment Revised ASSETS Cash and cash equivalents $37,392 $ -- $37,392 Accounts receivable, net 107,064 -- 107,064 Inventories (principally on last-in, first-out) 125,818 (6,512) 119,306 Other current assets 6,351 -- 6,351 Total current assets 276,625 (6,512) 270,113 Total assets $430,247 $(6,512) $423,735 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and accrued liabilities $130,074 $(5,293) $124,781 Current and deferred income taxes 9,606 (2,554) 7,052 Current portion of long-term debt 6,233 -- 6,233 Total current liabilities 145,913 (7,847) 138,066 Long-term debt, less current portion 73,827 -- 73,827 Deferred income taxes 21,903 -- 21,903 Other long-term liabilities 9,141 5,293 14,434 Stockholders' equity 179,463 (3,958) 175,505 Total liabilities and stockholders' equity $430,247 $(6,512) $423,735 DATASOURCE: A. M. Castle & Co. CONTACT: Larry A. Boik, Vice President-Finance & CFO of A. M. Castle & Co., +1-847-349-2576, or ; or Analysts, Katie Pyra for A. M. Castle & Co., +1-312-553-6717, or

Copyright