CAS Simplify China A Shares Plus Income ETF

FRANKLIN PARK, Ill., Aug. 1 /PRNewswire-FirstCall/ -- A. M. CASTLE & CO. (AMEX:CAS), a leading North American distributor of highly engineered metals and plastics, announced today continued strong demand and record sales and earnings performance for the second quarter and first-half of 2006. Consolidated net sales for the second quarter ended June 30, 2006 were $275.6 million, an increase of $25.6 million or 9.8% from the second quarter of 2005. For the first half of 2006, net sales totaled $554.8 million, a $57.6 million or 11.6% increase from the same period of 2005. "Excluding material price increases, we achieved 5% sales growth in the second quarter and 7% sales growth for the first half of the year," stated Michael Goldberg, President and CEO of A. M. Castle & Co. Net income applicable to common stock for the second quarter was $14.1 million, or $0.76 per diluted share, compared to $13.2 million, or $0.73 per diluted share, in the second quarter of 2005. For the first half of 2006, net income applicable to common stock, was $29.9 million, or $1.62 per diluted share, compared to $24.8 million, or $1.37 per diluted share for the first half of 2005. "We continue to experience strong demand in the markets we serve, particularly aerospace, oil and gas, and mining and heavy industrial equipment sectors. Also contributing to our record results was a moderate increase in metals prices during the second quarter," added Goldberg. "We remain optimistic about customer demand requirements for the second half of 2006. However, we want to remind our shareholders that typical seasonal patterns would suggest that second half sales will generally fall below those of the first half, assuming no further movement in material prices," Goldberg concluded. The Company reported 10% sales growth in its Metals business for the second quarter and 12% sales growth on a year-to-date basis. Metals prices for the Company's current product mix were 5% higher than both the second quarter of 2005 and the comparative six-months. Plastics sales increased 7% compared to the second quarter of last year and increased 8% year-to-date. Plastics prices were 5% higher than the second quarter of 2005 and 7% higher than the first half of last year. "We continue to explore various growth opportunities in both our Metals and Plastics segments," stated Goldberg. "Our excellent balance sheet has us well-positioned for both organic growth and potential strategic acquisitions that complement and enhance our existing product offerings, as well as expand our geographic reach," added Goldberg. The Company's debt to capital ratio at quarter end was 27.3%. Larry Boik, Vice President and CFO of the Company, commented, "Our new Alabama facility shipped its first customer orders in early July." The Birmingham facility was announced previously as part of the Company's planned expansion of its Metals business into the Southern U.S. manufacturing region. "Our business systems replacement initiative is also progressing well. We completed the conversion of our financial systems during the second quarter and have started work on our core business applications. The project remains on track to be completed in late 2007 to early 2008 at a total cost of $4.0 million to $6.0 million," added Boik. "Our capital expenditures through June reflect the purchase of the Alabama facility and our investment in new technology as we expand our business market reach and capabilities for the future," Boik concluded. On July 27, 2006, the Company's Board of Directors approved a quarterly cash dividend of 6 cents per share, payable on August 28, 2006 to shareholders of record at the close of business on August 11th. In closing, Mr. Goldberg invites interested parties to listen to its conference call scheduled for 11:00 a.m. (EDT) today, Tuesday, August 1, 2006. A rebroadcast of the call will be available for 14 days following the call on the Company's web site at http://www.amcastle.com/ . 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 (Dollars in thousands, except per For the Three For the Six share data) Months Ended Months Ended Unaudited June 30, June 30, 2006 2005 2006 2005 Net sales $275,607 $250,967 $554,800 $497,170 Cost of material sold 195,244 175,449 391,343 348,749 Gross material margin 80,363 75,518 163,457 148,421 Plant and delivery expense 28,981 27,347 58,605 53,715 Sales, general, and administrative expense 25,071 22,617 49,957 46,104 Depreciation and amortization expense 2,654 2,274 5,097 4,547 Total operating expense 56,706 52,238 113,659 104,366 Operating income 23,657 23,280 49,798 44,055 Interest expense, net (958) (2,027) (2,046) (4,110) Discount on sale of accounts receivable - (464) - (1,000) Income before income taxes and equity earnings of joint venture 22,699 20,789 47,752 38,945 Income taxes (9,397) (8,320) (19,639) (16,215) Income before equity in earnings of joint venture 13,302 12,469 28,113 22,730 Equity in earnings of joint venture 1,056 1,016 2,295 2,525 Net income 14,358 13,485 30,408 25,255 Preferred dividends (243) (240) (485) (480) Net income applicable to common stock $14,115 $13,245 $29,923 $24,775 Basic earnings per share $0.83 $0.83 $1.78 $1.56 Diluted earnings per share $0.76 $0.73 $1.62 $1.37 EBITDA * $27,367 $26,570 $57,190 $51,127 *Earnings before interest, discount on sale of accounts receivable, taxes, depreciation and amortization Reconciliation of EBITDA to net income: For the Three For the Six Months Ended Months Ended June 30, June 30, 2006 2005 2006 2005 Net income $14,358 $13,485 $30,408 $25,255 Depreciation and amortization 2,654 2,274 5,097 4,547 Interest, net 958 2,027 2,046 4,110 Discount on accounts receivable sold - 464 - 1,000 Provision from income taxes 9,397 8,320 19,639 16,215 EBITDA $27,367 $26,570 $57,190 $51,127 CONSOLIDATED BALANCE SHEETS (Dollars in thousands) As of Unaudited June 30, Dec 31, 2006 2005 ASSETS Current assets Cash and cash equivalents $42,982 $37,392 Accounts receivable, less allowances of $2,040 at June 30, 2006 and $1,763 at December 31, 2005 128,946 107,064 Inventories (principally on last-in, first-out basis) (latest cost higher by $114,014 at June 30, 2006 and $104,036 at December 31, 2005) 139,604 119,306 Other current assets 7,378 6,351 Total current assets 318,910 270,113 Investment in joint venture 12,358 10,850 Goodwill 32,250 32,222 Prepaid pension cost 40,037 41,946 Other assets 4,923 4,182 Property, plant and equipment, at cost Land 5,203 4,772 Building 48,468 45,890 Machinery and equipment 132,207 127,048 185,878 177,710 Less - accumulated depreciation (118,627) (113,288) 67,251 64,422 Total assets $475,729 $423,735 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $123,397 $103,246 Accrued liabilities 22,997 21,535 Current and deferred income taxes 1,497 7,052 Current portion of long-term debt 6,233 6,233 Total current liabilities 154,124 138,066 Long-term debt, less current portion 73,569 73,827 Deferred income taxes 20,784 21,903 Deferred gain on sale of assets 5,672 5,967 Pension and postretirement benefit obligations 8,949 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 16,980,004 at June 30, 2006 and 16,605,714 at December 31, 2005 170 166 Additional paid-in capital 66,000 60,916 Retained earnings 138,434 110,530 Accumulated other comprehensive income 3,473 2,370 Treasury stock, at cost - 411,235 shares at June 30, 2006 and 546,065 shares at December 31, 2005 (6,685) (9,716) Total stockholders' equity 212,631 175,505 Total liabilities and stockholders' equity $475,729 $423,735 CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) For the Six Months Unaudited Ended June 30, 2006 2005 Cash flows from operating activities: Net income $30,408 $25,255 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 5,097 4,547 Amortization of deferred gain (295) (427) Equity in earnings from joint venture (2,295) (2,525) Stock compensation expense 1,945 1,497 Deferred tax provision (benefit) (1) 1,586 Excess tax benefits from stock-based payment arrangements (811) - Increase (decrease) from changes in: Accounts receivable (21,644) (22,121) Inventories (20,089) 5,711 Prepaid pension costs 1,909 1,124 Other current assets (1,118) (96) Accounts payable 20,210 (6,456) Accrued liabilities 1,471 2,180 Income tax payable (6,588) 4,213 Postretirement benefit obligations and other liabilities (273) 148 Net cash from operating activities 7,926 14,636 Cash flows from investing activities: Dividends from joint venture 825 1,334 Capital expenditures (7,804) (2,204) Net cash from investing activities (6,979) (870) Cash flows from financing activities: Repayments of long-term debt (258) (11,346) Preferred stock dividend (485) (480) Dividends paid (2,018) - Exercise of stock options and other 6,174 177 Excess tax benefits from stock-based payment arrangements 811 - Net cash from financing activities 4,224 (11,649) Effect of exchange rate changes on cash and cash equivalents 419 42 Net increase in cash and cash equivalents 5,590 2,159 Cash and cash equivalents - beginning of year $37,392 $3,106 Cash and cash equivalents - end of period $42,982 $5,265 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 of Ashton Partners, +1-312-553-6717, or Web site: http://www.amcastle.com/

Copyright