-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, mcuFEM88jmnuiOvM9Bac4PAZlz/T0ODzGdVBlbtAsLZA/GZTT3a/RnKgximiNsr5 Ge5DCqZ75o0T+dx5FV/flA== 0000018172-95-000004.txt : 19950627 0000018172-95-000004.hdr.sgml : 19950627 ACCESSION NUMBER: 0000018172-95-000004 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950626 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: 95549251 BUSINESS ADDRESS: STREET 1: 3400 N WOLF RD CITY: FRANKLIN PARK STATE: IL ZIP: 60131 BUSINESS PHONE: 7084557111 10-Q/A 1 Page 1 of 9 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, 19954 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: 708/455-7111 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 - 11,090,006 shares as of April 30, 1995. Page 2 of 9 A. M. CASTLE & CO. Part I. FINANCIAL INFORMATION Page Number Part I. Financial Information Item 1. Financial Statements . . . . . . . . . . . . 3 Condensed Balance Sheets . . . . . . . . . . 3 Comparative Statements of Cash Flows . . . . 3 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 . . . . 6 - 7 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 9 A. M. CASTLE & CO. CONDENSED BALANCE SHEETS (Dollars in thousands except per share data) (unaudited) Mar. 31 Dec. 31 Mar. 31 Assets 1995 1994 1994 Cash. . . . . . . . . . . . . . . . .$ 3,419 $ 976 $ 2,770 Accounts receivable, net. . . . . . . 74,282 58,892 55,510 Inventories (principally on last-in, first-out basis. . . . . . . . . . . 96,990 98,215 94,068 Total current assets . . . . . .$174,691 $158,083 $152,348 Prepaid expenses and other assets . . 12,957 13,854 10,919 Fixed assets, net . . . . . . . . . . 42,220 41,190 40,570 Total assets . . . . . . . . . .$229,868 $213,127 $203,837 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable. . . . . . . . . . .$ 73,403 $ 61,282 $48,054 Accrued liabilities . . . . . . . . . 11,983 14,704 9,598 Income taxes payable. . . . . . . . . 7,492 2,321 2,946 Current portion of long-term debt . . 3,768 3,831 5,010 Total current liabilities. . . . 96,646 82,138 65,608 Long-term debt, less current portion. 33,837 38,531 54,903 Deferred income taxes . . . . . . . . 7,696 7,772 8,034 Post retirement benefit obligations . 2,558 2,525 2,528 Stockholders' equity. . . . . . . . . 89,131 82,161 72,764 Total liabilities and stockholders' equity . . . . . . . . . . . . .$229,868 $213,127 $203,837 SHARES OUTSTANDING. . . . . . . . . . 11,081 11,079 10,964* BOOK VALUE PER SHARE. . . . . . . . .$ 8.04 $ 7.42 $ 6.62* WORKING CAPITAL . . . . . . . . . . .$ 78,045 $ 75,945 $86,740 WORKING CAPITAL PER SHARE . . . . . .$ 7.04 $ 6.85 $ 7.90* CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) For the Three Months Ended March 31, Cash flows from operating activities: 1995 1994 Net income. . . . . . . . . . . . . . . . $ 8,246 $ 3,642 Depreciation. . . . . . . . . . . . . . . 1,092 1,186 Other . . . . . . . . . . . . . . . . . . 1,005 556 Cash provided from operating activities before working capital changes. . . . . . . . . . . . 10,343 5,384 (Increase) decrease in working capital. . 256 (331) Net cash provided from (used by) operating activities . . . . . . . . . . . . . . . . 10,599 5,053 Cash flows from investing activities: Capital expenditures, net of sale proceeds. . . . . . . . . . . . . . . . . (2,122) 156 Net cash provided from (used by) investing activities. . . . . . . . . . . . . . . . (2,122) 156 Page 4 of 9 Cash flows from financing activities: Long-term borrowings, net . . . . . . . . (4,757) 3,546 Dividends paid. . . . . . . . . . . . . . (1,331) (876) Other . . . . . . . . . . . . . . . . . . 54 455 Net cash provided from (used by) financing activities. . . . . . . . . . . . . . . . (6,034) (3,967) Net increase (decrease) in cash . . . . . . 2,443 1,242 Cash - beginning of year. . . . . . . . . 976 1,528 Cash - end of period. . . . . . . . . . . $ 3,419 $ 2,770 Supplemental disclosure on cash flow information: Cash paid (received) during the period: Interest . . . . . . . . . . . . . . . $ 1,082 $ 1,372 Income taxes . . . . . . . . . . . . . $ 294 $ 560 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, 1995 1994 Net sales . . . . . . . . $169,056 $133,848 Cost of material sold . . 121,757 97,501 Gross profit on sales . 47,299 36,347 Operating expenses. . . . 31,825 28,371 Depreciation expense. . . 1,092 1,186 Interest expense, net . . 747 874 Total . . . . . . . . . . 33,664 30,431 Income before taxes . . . 13,635 5,916 Income Taxes: Federal . . . . . . . . 4,336 1,836 State . . . . . . . . . 1,053 438 5,389 2,274 Net income. . . . . . . . 8,246 3,642 Net income per share. . . $ .74 $ .33 Financial Ratios: Return on sales . . . . 4.88% 2.72% Asset turnover. . . . . 2.94 2.63 Return on assets. . . . 14.35% 7.15% Leverage factor . . . . 2.80 2.93 Return on opening stockholders' equity . 40.15% 20.95% Other Data: Cash dividends paid . . $ 1,331 $ 876 Dividends per share . . .12 .08* Page 5 of 9 Average number of shares outstanding. . . . . . 11,080 10,950* Tons sold . . . . . . . 94,901 86,734 *Restated to reflect a 50% stock dividend. 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, 1995, and March 31, 1994, 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 $58.1 million, $51.7 million, and $46.0 million at March 31, 1995, December 31, 1994 and March 31, 1994 respectively. Taxes on income would become payable on any realization of this excess from reductions in the level of inventories. Page 6 of 9 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, 1994, 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 1995 interim results reported herein may not necessarily be indicative of the results of operations for the full year 1995. 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 July 28, 1994, the Company declared a 50% stock dividend, which was effected as a 3 for 2 stock split. The additional shares were distributed August 28, 1994 to shareholders of record August 12, 1994. All per share amounts presented have been restated to reflect the effect of the 50% stock dividend. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations _____________________ The first quarter of 1995 was a record quarter for A. M. Castle & Co. Net income of $8.2 million exceeded the Company's "previous best" of $4.6 million generated in the second quarter of 1988. A strong economy provided a positive environment for a significant upturn in prices and an increased level of sales activity. Other factors which had a major impact on earnings were an increase in gross margin percentage and continued aggressive management of all expenses. First quarter 1995 sales totaled a record $169.1 million, a 26.3% increase over the first quarter of 1994's sales of $133.8 million. Sales unit volume, expressed in tons sold, increased by 9.4% over Page 7 of 9 the same period. Favorable pricing and sales mix caused the sales increase in dollars to outpace the increase in tons sold. Gross margin percentage increased to 28.0% as compared to 27.2% for the first quarter of last year. The Company's margin improvement program has continued to produce favorable results. In terms of dollars, total gross profit increased by almost $11.0 million over the first quarter of last year. Of this amount, approximately $5.7 million was due to higher prices, $3.8 million due to increased physical volume and the balance due to changes in sales mix and cost savings from sourcing arrangements. Operating expenses were up by approximately $3.4 million (12.0%) over the comparable period last year. As a percentage of sales, however, first quarter 1995 operating expenses decreased to 18.8% from 21.1% for the first quarter of 1994. The expense increases experienced during the quarter were in volume driven and profit related expense categories. Expenses that increased due to the 9.4% rise in physical volume were warehouse wages, overtime, trucking expenses, commercial freight, and repairs and maintenance. Accruals for incentive and profit sharing expense were up significantly due to our record profits. Depreciation expense decreased to $0.1 million (7.9%) as compared to the first quarter of 1994 primarily due to the sale and leaseback of equipment purchased in 1994 and 1993, which had the effect of reducing depreciation expense and increasing rental expense. Rental expense is included in operating expenses, which were discussed above. Interest expense was down by approximately $0.1 million due to lower debt levels. Total funded borrowing decreased by $22.3 million since the first quarter of 1994. The debt reduction served to keep interest expense down even though interest rates have increased due to Federal Reserve rate hikes. Liquidity and Capital Resources _______________________________ The Company has managed to control working capital needs despite the upward pressure generated from the continued increase in business activity. Accounts receivable rose by $18.8 million due to the sharply increased sales volume. Net inventory, however, was only up by $2.9 million as the Company continued its efforts to hold inventory levels down despite the increased sales volume. Trade payables were up by approximately $25.3 million as a result of deferred terms negotiated with several vendors. Total bank and long term borrowing decreased by $22.3 million as compared to the balance at March 31, 1994. The Company has unused committed and uncommitted lines of bank credit of $137.0 million as of March 31, 1995 as compared to $104.2 million as March 31, 1994. Page 8 of 9 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 9 of 9 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 5, 1995 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 DEC-31-1995 MAR-31-1995 3,313 106 75,032 (750) 96,990 174,691 100,195 (57,975) 229,868 96,646 33,837 0 0 24,169 64,962 229,868 169,056 169,056 (121,757) (32,763) 0 (154) (747) 13,635 (5,389) 8,246 0 0 0 8,246 0.74 0.74
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