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, +1-847-349-2576, ; or Analyst Contacts, Katie Pyra of Ashton Partners, +1-312-553-6717, Web site: http://www.amcastle.com/

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