-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R/HfAktDKA/KCJOsxjpQHwrgYiQ47M3hhBvIOdCNkhgdCzk4dm37WXqlrhj1cyS3 4prIOMRxz71bYaKyw9XePw== 0000018172-97-000001.txt : 19970520 0000018172-97-000001.hdr.sgml : 19970520 ACCESSION NUMBER: 0000018172-97-000001 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19970516 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CASTLE A M & CO CENTRAL INDEX KEY: 0000018172 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-METALS SERVICE CENTERS & OFFICES [5051] IRS NUMBER: 360879160 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-05415 FILM NUMBER: 97610135 BUSINESS ADDRESS: STREET 1: 3400 N WOLF RD CITY: FRANKLIN PARK STATE: IL ZIP: 60131 BUSINESS PHONE: 7084557111 MAIL ADDRESS: STREET 1: 3400 N WOLF RD CITY: FRANKLIN PARK STATE: IL ZIP: 60131 10-Q/A 1 Page 1 of 8 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1997 Commission File Number 1-5415 A. M. Castle & Co. (Exact name of registrant as specified in its charter.) Delaware 36-0879160 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 3400 North Wolf Road, Franklin Park, Illinois 60131 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone, including area code: 847/455-7111 None (Former name, former address and former fiscal year, if changed since last year) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days Yes [X] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date: Common Stock No Par Value - 14,019,878 shares as of March 31, 1997. Page 2 of 8 A. M. CASTLE & CO. Part I. FINANCIAL INFORMATION Page Number Part I. Financial Information Item 1. Financial Statements . . . . . . . . . . . . 3 Part I. Financial Information Item 1. Financial Statements . . . . . . . . . . . . 3 Condensed Balance Sheets . . . . . . . . . . 3 Comparative Statements of Cash Flows . . . . 4 Comparative Statements of Income . . . . . . 4 Notes to Condensed Financial Statements. . . 5 Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations . . . .7 - 8 Part II. Other Information Item 1. Legal Proceedings . . . . . . . . . . . . . . 8 Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . 8 Item 6. Exhibits and Reports on Form 8-K. . . . . . . 8 Page 3 of 8 A. M. CASTLE & CO. CONDENSED BALANCE SHEETS (Dollars in thousands except per share data) (unaudited) March 31 Dec. 31 March 31 Assets 1997 1996 1996 Cash. . . . . . . . . . . . . . . . .$ 1,780 $ 1,805 $ 649 Accounts receivable, net. . . . . . . 80,158 68,791 77,371 Inventories (principally on last-in, first-out basis. . . . . . . . . . . 108,758 93,315 107,736 Total current assets . . . . . .$190,696 $163,911 $185,756 Prepaid expenses and other assets . . 33,580 34,742 23,263 Fixed assets, net . . . . . . . . . . 64,774 62,717 48,947 Total assets . . . . . . . . . .$289,050 $261,370 $257,966 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable. . . . . . . . . . .$ 88,776 $ 63,860 $ 72,744 Accrued liabilities . . . . . . . . . 13,124 15,105 11,498 Income taxes payable. . . . . . . . . 4,903 2,455 4,749 Current portion of long-term debt . . 2,095 2,482 3,174 Total current liabilities. . . . 108,898 83,902 92,165 Long-term debt, less current portion. 39,188 40,934 43,145 Deferred income taxes . . . . . . . . 11,743 11,427 10,190 Post retirement benefit obligations . 3,283 3,181 2,970 Stockholders' equity. . . . . . . . . 125,938 121,926 109,496 Total liabilities and stockholders' equity . . . . . . . . . . . . .$289,050 $261,370 $257,966 SHARES OUTSTANDING. . . . . . . . . . 14,020 14,009 13,986* BOOK VALUE PER SHARE. . . . . . . . .$ 8.98 $ 8.70 $ 7.83* WORKING CAPITAL . . . . . . . . . . .$ 81,798 $ 80,009 $ 93,591 WORKING CAPITAL PER SHARE . . . . . .$ 5.83 $ 5.71 $ 6.69* *Restated to reflect a 25% stock dividend. CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended March 31, Cash flows from operating activities: 1997 1996 Net income. . . . . . . . . . . . . . . . $ 6,182 $ 7,622 Depreciation. . . . . . . . . . . . . . . 1,383 1,235 Other . . . . . . . . . . . . . . . . . . 1,722 (669) Cash provided from operating activities before working capital changes. . . . . . . . . . . . 9,287 8,188 (Increase) decrease in working capital. . (1,108) (9,796) Net cash provided from (used by) operating activities . . . . . . . . . . . . . . . . 8,179 (1,608) Cash flows from investing activities: Investments and acquisitions. . . . . . . (766) (8,181) Capital expenditures, net of sale proceeds. . . . . . . . . . . . . . . . . (3,135) (4,214) Net cash provided from (used by) investing activities. . . . . . . . . . . . . . . . (3,901)(12,395) Page 4 of 8 Cash flows from financing activities: Long-term borrowings, net . . . . . . . . (2,133) 15,474 Dividends paid. . . . . . . . . . . . . . (2,103) ( 1,674) Other . . . . . . . . . . . . . . . . . . (67) 185 Net cash provided from (used by) financing activities. . . . . . . . . . . . . . . . (4,303)) 13,985 Net increase (decrease) in cash . . . . . . (25) (18) Cash - beginning of year. . . . . . . . . 1,805 667 Cash - end of period. . . . . . . . . . . $ 1,780 $ 649 Cash paid (received) during the period: Interest . . . . . . . . . . . . . . . $ 692 $ 915 Income taxes . . . . . . . . . . . . . $ 1,405 $ 2,056 A. M. CASTLE & CO. COMPARATIVE STATEMENTS OF INCOME (Dollars in thousands, except tonnage and per share data) For the Three Months Ended (Unaudited) March 31, 1997 1996 Net sales . . . . . . . . $177,326 $175,047 Cost of material sold . . 126,395 126,042 Gross profit on sales . 50,931 49,005 Operating expenses. . . . 38,559 34,231 Depreciation expense. . . 1,383 1,235 Interest expense, net . . 638 773 Total . . . . . . . . . . 40,580 36,239 Income before taxes . . . 10,351 12,766 Income Taxes: Federal . . . . . . . . 3,345 4,104 State . . . . . . . . . 824 1,040 4,169 5,144 Net income. . . . . . . . 6,182 7,622 Net income per share. . . $ 0.44 $ 0.54* Financial Ratios: Return on sales . . . . 3.49% 4.35% Asset turnover. . . . . 2.45 2.71 Return on assets. . . . 8.55% 11.82% Leverage factor . . . . 2.37 2.50 Return on opening stockholders' equity . 20.28% 29.50% Other Data: Cash dividends paid . . $ 2,103 $ 1,674 Dividends per share . . $ 0.15 $ 0.12* Average number of shares outstanding. . . . . . 14,012 13,966* Tons sold . . . . . . . 92,509 88,163 Page 5 of 8 Inventory determination under the LIFO method can only be made at the end of each fiscal year based on the inventory levels and costs at that time. Accordingly, interim LIFO determinations, including those at March 31, 1997, and March 31, 1996, must necessarily be based on management's estimates of expected year end inventory levels and costs. Since future estimates of inventory levels and costs are subject to certain forces beyond the control of management, interim financial results are subject to fiscal year end LIFO inventory valuations. Current replacement cost of inventories exceeds book value by $57.1 million, $58.8 million, and $64.2 million at March 31, 1997, December 31, 1996 and March 31, 1996 respectively. Taxes on income would become payable on any realization of this excess from reductions in the level of inventories. A. M. CASTLE & CO. Notes to Condensed Financial Statements 1. Condensed Financial Statements The condensed financial statements included herein are unaudited, except for the balance sheet at December 31, 1996, which is condensed from the audited financial statements at that date. The Company believes that the disclosures are adequate to make the information not misleading; however, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited statements, included herein, contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position, the cash flows, and the results of operations for the periods then ended. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. The 1997 interim results reported herein may not necessarily be indicative of the results of operations for the full year 1996. 2. Common Stock and Per Share Information Net income per share computations are based on the weighted average number of shares of common stock outstanding during the respective periods. On April 25th, 1996, the Company declared a 25% dividend, which was effected as a 5 for 4 split. The additional shares were distributed May 24, 1996 to shareholders of record May 10, 1996. All per share amounts presented have been restated to reflect the effect of the 25% stock dividend. Page 6 of 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Operating results for the first quarter of 1997 were off 19% as compared to the first quarter of 1996. The Company earned $6.2 million ($0.44 per share) on slightly higher sales as compared to the $7.6 million ($0.54 per share) earned in the year earlier quarter. The higher sales and gross profit levels were offset by expense increases resulting from a higher level of transactional activity, along with a slight inflationary increase in costs, without any relief from mill pricing. First quarter sales totaled $177.3 million, a 1.3% increase over the first quarter of 1996 sales of $175.0 million. The sales increase was provided by the Company's prior year's acquisitions. Excluding the effect of these acquisitions, sales for the quarter were down by $7.0 million or 4%. The decrease in sales was due to a 4.1% drop in average sales prices, along with a shift in sales mix, from the relatively higher valued Advanced Materials products, to the relatively lower valued Carbon and Alloy products, which served to offset a 4.9% increase in tons sold. Gross profit rose 3.9% to a record $50.9 million. The increase was entirely attributable to gross profit contributions from the Company's prior year's acquisitions. Looking at the Company's core business, gross profit was down approximately $1.2 million (2.5%) as a result of lower pricing at the mill level, and sales mix changes, which were partially offset by the increase in physical volume sold. Total gross margin percentage for the quarter was 28.7% as compared to 28.0% for the first quarter of 1996. The Company's expansion of value added services and processing capabilities continue to have a positive effect on gross margin performance. Total operating expenses were up by $4.3 million (12.6%) over the comparable period last year. Excluding the expenses of the acquired companies, Castle's operating expenses increased by approximately $2.0 million (5.8%) over the first quarter of 1996. Cost increases were experienced primarily in the plant area due to increased transactional activity, along with a slight increase in wages. Also contributing to the increase in operating expenses were increased utility costs, due to higher natural gas prices and cold weather, and costs associated with the opening of two new facilities in Minneapolis and Charlotte. Depreciation expense increased by $0.15 million (12.0%) over the prior year's comparable period. Excluding depreciation expense associated with the acquired companies, this expense increased by $0.03 million (2.8%) over the first quarter of 1996. Page 7 of 8 Net interest expense decreased by approximately $0.14 million (17.5%) as compared to the first quarter of 1996. Lower average borrowing levels were primarily responsible for the expense decrease. Liquidity and Capital Resources Accounts receivable increased by $2.8 million, and net inventory has increased by $1.0 million as compared to March 31, 1996. The receivable increase is due to slightly higher sales and a slightly higher collection period over the previous year. Net inventory has remained relatively flat as compared to the prior year quarter and has increased since December 31, 1996 in support of sales activity and marketing initiatives. Total bank and long term borrowing as of March 31, 1997 decreased by $5.0 million as compared to the balance at March 31, 1996. Net worth has increased by $16.4 million (15%) over the prior year's quarter, reflecting the continued strong earnings performance. The Company has unused committed and uncommitted lines of bank credit of $165.3 million as of March 31, 1997 vs. $145.3 million at March 31, 1996. Part II. OTHER INFORMATION Item 1. Legal Proceedings There are no material legal proceedings other than ordinary routine litigation incidental to the business of the Registrant. Item 4. Submission of Matters to a Vote of Security Holders (a)None Item 6. Exhibits and Reports of Form 8-K (a)None (b) No reports on Form 8-K have been filed during the quarter for which this report is filed. Page 8 of 8 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. A. M. Castle & Co. (Registrant) Date: May 9, 1997 By: /ss/ J. A. Podojil J. A. Podojil Treasurer/Controller (Mr. Podojil is the Chief Accounting Officer and has been authorized to sign on behalf of the Registrant). EX-27 2 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 QTR-1 3-MOS DEC-31-1996 DEC-31-1996 JAN-01-1997 JAN-01-1997 MAR-31-1997 MAR-31-1997 1,653 0 127 0 80,968 0 (810) 0 108,758 0 190,696 0 132,231 0 (67,457) 0 289,050 0 108,898 0 39,188 0 26,799 0 0 0 0 0 99,139 0 289,050 0 177,326 177,326 177,326 177,326 (126,395) (126,395) (39,858) (39,942) 0 0 (84) 0 (638) (638) 10,351 10,351 (4,169) (4,169) 6,182 6,182 0 0 0 0 0 0 6,182 6,182 0.44 0.44 0.44 0.44
-----END PRIVACY-ENHANCED MESSAGE-----