CAS Simplify China A Shares Plus Income ETF

FRANKLIN PARK, Ill., Nov. 1 /PRNewswire-FirstCall/ -- A. M. Castle & Co. (AMEX:CAS), one of North America's leading metals and plastics distributors, today reported for the quarter ended September 30, 2005, net earnings after tax of $10.0 million, a 72% increase over the prior year. Basic earnings per share for the same period were $0.63 ($0.56 diluted) as compared to $0.37 per share ($0.36 diluted) during the same quarter of the prior year. Sales for the third quarter 2005 increased 17.7% over the prior period to $234.6 million. Year-to-date, net earnings were $34.7 million, a 154% increase over the prior year's results. Sales for the nine-months ended September 30, 2005 were $731.7 million, an increase of 29.9% over the prior year. "We are pleased with the results of the quarter as the Company continues its strong sales and earnings levels," said G. Thomas McKane, A. M. Castle's Chairman and CEO. "Demand for our products from the durable goods manufacturing industry, our principle customer base, continues at a high level." "Our debt, net of cash, position improved by $34 million during the quarter. As a result our debt-to-total capital is down to 33.1%," reported Larry Boik, A. M. Castle's CFO. "In addition, we reduced our interest rate on long-term debt by 150 basis points," continued Boik. Service Center Expansion The Company also announced it will open a new service center in Northern Alabama and significantly expand its Montreal, Canada facility during the first half of 2006. "These investments increase our presence in two strong growth markets," stated Stephen Hooks, President of the Company's Castle Metals business unit. "The new Alabama site along with our existing Charlotte, North Carolina operation will allow us to better serve the durable goods manufacturing growth occurring in the southeastern United States," stated Hooks. "Additionally, our Montreal facility will expand approximately 50%, in order to meet our Canadian customers' expectations and growing market needs," continued Hooks. Webcast Information Shareholders and other interested parties are invited to listen to A. M. Castle's conference call hosted by Mr. McKane and scheduled for 11:00 a.m. (EST) today, Tuesday, November 1, 2005. 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; 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". 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 For the Nine (Dollars in thousands, except per Months Ended Months Ended share data) Sept. 30 Sept. 30 Unaudited 2005 2004 2005 2004 Net sales $234,551 $199,341 $731,721 $563,195 Cost of material sold (163,956) (142,033) (512,706) (398,378) Gross margin 70,595 57,308 219,015 164,817 Plant and delivery expense (27,920) (23,665) (81,635) (70,667) Sales, general, and administrative expense (23,591) (20,345) (70,263) (59,117) Depreciation and amortization expense (2,205) (2,245) (6,752) (6,736) Total operating expense (53,716) (46,255) (158,650) (136,520) Operating income 16,879 11,053 60,365 28,297 Interest expense, net (1,765) (2,175) (5,875) (6,706) Discount on sale of accounts receivable (127) (167) (1,127) (684) Income before income tax and equity in joint venture 14,987 8,711 53,363 20,907 Income tax expense Federal (4,393) (2,135) (15,617) (4,971) State (938) (554) (3,014) (1,283) Foreign 132 (819) (1,377) (2,201) (5,199) (3,508) (20,008) (8,455) Net income before equity in joint venture 9,788 5,203 33,355 12,452 Equity earnings of joint venture 817 1,458 3,342 3,197 Income taxes - joint venture (321) (574) (1,314) (1,259) Net income 10,284 6,087 35,383 14,390 Preferred dividends (240) (240) (720) (720) Net income applicable to common stock $10,044 $5,847 $34,663 $13,670 Basic earnings per share $0.63 $0.37 $2.18 $0.87 Diluted earnings per share $0.56 $0.36 $1.96 $0.87 EBITDA * $19,901 $14,756 $70,459 $38,230 *Earnings before interest, discount on sale of accounts receivable, taxes, depreciation and amortization Reconciliation of EBITDA to net income: For the Three For the Nine Months Ended Months Ended Sept. 30 Sept. 30 2005 2004 2005 2004 Net income $10,284 $6,087 $35,383 $14,390 Depreciation and amortization 2,205 2,245 6,752 6,736 Interest, net 1,765 2,175 5,875 6,706 Discount on accounts receivable sold 127 167 1,127 684 Provision from income taxes 5,199 3,508 20,008 8,455 Provision from income taxes - joint venture 321 574 1,314 1,259 EBITDA $19,901 $14,756 $70,459 $38,230 CONSOLIDATED BALANCE SHEETS (Dollars in thousands) As of Unaudited* Sept. 30 Dec. 31 Sept. 30 2005 2004 2004 ASSETS Current assets Cash and equivalents $11,956 $3,106 $5,435 Accounts receivable, less allowances of $1,937 in September 2005, $1,760 in December 2004, and $423 in September 2004 116,497 80,323 99,073 Inventories (principally on last- in, first-out basis) (latest cost higher by approximately $97,432 in September 2005, $92,500 in December 2004, and $79,569 in September 2004) 117,698 135,588 121,297 Income tax receivable 144 169 310 Assets held for sale - 995 995 Other current assets 6,662 7,325 7,926 Total current assets 252,957 227,506 235,036 Investment in joint venture 10,149 8,463 7,024 Goodwill 32,296 32,201 31,959 Pension assets 41,275 42,262 42,216 Other assets 4,748 7,586 7,517 Assets held for sale 995 - - Property, plant and equipment, at cost Land 4,772 4,771 4,768 Building 45,719 45,514 47,255 Machinery and equipment 127,513 124,641 121,092 178,004 174,926 173,115 Less - accumulated depreciation (114,848) (109,928) (107,528) 63,156 64,998 65,587 Total assets $405,576 $383,016 $389,339 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $85,161 $93,342 $102,893 Accrued liabilities and deferred gains 27,441 23,016 23,990 Current and deferred income taxes 8,076 4,349 2,954 Current portion of long-term debt 16,390 11,607 11,676 Total current liabilities 137,068 132,314 141,513 Long-term debt, less current portion 67,374 89,771 89,450 Deferred income taxes 21,484 19,668 19,942 Deferred gain on sale of assets 5,826 6,465 6,673 Minority interest 1,419 1,644 1,268 Postretirement benefits obligations 3,083 2,905 2,834 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 15,981,952 at September 2005, 15,806,366 at December 2004, and 15,796,437 at September 2005 160 159 159 Additional paid in capital 40,922 35,082 35,025 Earnings reinvested in the business 117,064 82,400 80,147 Accumulated other comprehensive income 2,631 1,616 1,350 Other - deferred compensation - (2) (16) Treasury stock, at cost - 219,748 shares at September 2005, 62,065 shares at December 2004, and 59,260 shares at September 2004 (2,694) (245) (245) Total stockholders' equity 169,322 130,249 127,659 Total liabilities and stockholders' equity $405,576 $383,016 $389,339 CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) For the Nine Months Unaudited Ended September 30 2005 2004 Cash flows from operating activities: Net income $35,383 $14,390 Adjustments to reconcile net income to net cash from operating activities Depreciation and amortization 6,752 6,736 Amortization of deferred gain (639) (631) Equity in earnings from joint venture (3,342) (3,197) Deferred income taxes 241 1,367 Non-cash pension and postretirement benefit expense 1,685 315 Deferred stock compensation expense 2,796 - Other (390) 643 Increase (decrease) from changes in: Accounts receivable sold (purchased) (16,500) (8,000) Accounts receivable (19,276) (35,224) Inventory 18,205 (1,905) Accounts payable and accrued liabilities (3,781) 38,875 Other current assets 316 (953) Income taxes payable 5,265 3,080 Net cash from operating activities 26,715 15,495 Cash flows from investing activities: Investments and acquisitions, net of cash acquired (236) (1,744) Dividends from joint venture 1,705 624 Capital expenditures (4,784) (3,419) Collection of note receivable 2,639 - Net cash from investing activities (676) (4,539) Cash flows from financing activities: Proceeds from issuance of long-term debt 4,000 - Repayment of long-term debt (21,542) (7,337) Preferred stock dividend (720) (720) Other 597 (85) Net cash from financing activities (17,665) (8,142) Effect of exchange rate changes on cash 476 166 Net increase in cash 8,850 2,980 Cash - beginning of year $3,106 $2,455 Cash - end of period $11,956 $5,435 DATASOURCE: A. M. Castle & Co. CONTACT: G. Thomas McKane, Chairman & C.E.O. of A. M. Castle & Co., +1-847-349-2502, ; or Investors, Katie Pyra of Ashton Partners, +1-312-553-6717, Web site: http://www.amcastle.com/

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