CAS Simplify China A Shares Plus Income ETF

FRANKLIN PARK, Ill., March 8 /PRNewswire-FirstCall/ -- A. M. Castle & Co. (AMEX:CAS), a global distributor of specialty metal and plastic products, value-added services and supply chain solutions, today reported record financial results for the fourth quarter and full year ended December 31, 2006. For the fourth quarter, consolidated net sales including the acquisition of Transtar Metals, which was completed on September 5, 2006, were $322.0 million, an increase of $94.7 million or 41.7% from the fourth quarter of 2005. Net earnings for the quarter were $9.0 million, or $0.47 per diluted share, as compared to $3.1 million or $0.18 per diluted share in the prior year. For the year, consolidated net sales including Transtar were $1,177.6 million, an increase of $218.6 million or 22.8% over 2005. Net earnings were $54.2 million, or $2.89 per diluted share, as compared to $37.9 million or $2.11 per diluted share in 2005. Both fourth quarter and full year 2005 earnings include a $3.0 million (after-tax), or $0.16 per diluted share, debt refinancing charge. "2006 marked several major milestones in the company's 116-year history, which have positioned us for the next stage of development - growing A. M. Castle into a global specialty metals brand," stated Michael Goldberg, President and CEO of A. M. Castle. "Our revenues surpassed the $1 billion threshold for the first time, while earnings grew 30% to a record $54.2 million." "Our long-term strategy is to increase our focus on higher-margin specialty products and complementary value-added services and expand our presence in targeted growth markets on a global basis. We took the first step in our new strategy with the acquisition of Transtar Metals, a leading global aluminum distributor to the aerospace and defense industry. Transtar significantly broadened our global participation in the aerospace industry, which now accounts for approximately 30% of our total revenue," stated Goldberg. Goldberg further commented, "Contributing to our 2006 revenue performance were the strong sales of nickel alloy products. Nickel alloy tonnage for the fourth quarter was up nearly 21% over the fourth quarter of 2005 and was 26% higher on a full year comparative basis. The greatest demand for our specialty metals products, including nickel alloys, aluminum, stainless steels and thick carbon plate, were largely into higher growth industries such as aerospace, oil and gas and heavy equipment." Metal segment sales were $295.1 million in the fourth quarter, an increase of $94.5 million or 47.1% versus the fourth quarter of 2005. Of this increase, 4.5% was attributable to volume, 12.5% to price increases and the balance to the acquisition of Transtar. Plastic segment sales were $26.9 million in the quarter, an increase of $0.2 million or 0.8% versus the fourth quarter of last year. For the full year, Metal segment sales were $1,062.6 million, an increase of $211.3 million or 24.8% versus 2005. Of this increase, 6.5% was attributable to volume, 8.6% to price increases and the balance to the Transtar acquisition. Plastic segment sales for fiscal year 2006 were $115.0 million, an increase of $7.3 million or 6.8% versus last year. Volume accounted for 3.8% of this increase and the remainder was due to price increases. "In addition to our 2006 sales growth, we focused on our operations which resulted in improved inventory turnover and operating margin of 7.9% of sales. We were able to successfully manage the intricacies of our customers' supply- chain networks in an environment of relatively high demand, tight supply and volatile material prices," commented Mike Goldberg. "The Transtar acquisition, which was the largest in our company's history, affords us opportunities to further enhance our operating leverage in 2007 through both top-line sales growth and material procurement initiatives. We have already integrated key members of our Castle Metals team with the Transtar team to manage the cross-selling effort of our combined product offerings and enhance our supplier partnerships on a global scale. Through these efforts and a realignment of leadership and certain operations within the company, we have formed the nucleus of an aerospace and defense group within our Metals segment that is focused on servicing the supply chain needs of that industry. This is a cornerstone of our long-term strategy to become the foremost provider of specialty products and services and specialized supply chain solutions for targeted industries," Goldberg ended. The company reported continued improvement in inventory turnover. Days sales in inventory (DSI) were 116.7 days in 2006 versus 119.3 days in 2005. "Looking to 2007, we believe most of the markets we serve will remain strong, supporting further sales growth, but they may exhibit a slower rate of growth than what we enjoyed in recent years. We have targeted further improvements in our inventory turnover for 2007 and remain steadfast in reducing our debt-to-capital ratio from 51.2% at December 31, 2006 to the low 40's range by year end 2007. In summary, 2007 is already showing signs of being another promising year for our company, and I am excited about the opportunities that lie ahead," Goldberg concluded. Also on February 22, 2007, the Company announced a cash dividend of $0.06 per share to be paid on March 16, 2007 to shareholders of record at close of business on March 2, 2007. The Company will be holding its annual shareholders' meeting at 10:00 am (CDT) on April 26, 2007 at its corporate headquarters in Franklin Park, IL. Webcast Information Management will hold a conference call at 11:00 a.m. ET today to review the Company's results for the three month and twelve month periods ended December 31, 2006. The call can be accessed via the Internet live or as a replay. Those who would like to listen to the call may access the webcast through http://www.amcastle.com/ . An archived version of the conference call webcast will be accessible for replay on the above website until the next earnings conference call. A replay of the conference call will also be available for seven days by calling 303-590-3000 (international) or 800-405-2236 and citing code 11084285. About A. M. Castle & Co. Founded in 1890, A. M. Castle & Co. is a specialty metal and plastic products and services distributor, principally serving the producer durable equipment sector of the economy. Its customer base includes many Fortune 500 companies as well as thousands of medium and smaller-sized firms spread across a variety of industries. Within its core metals business, it specializes in the distribution of alloy and stainless steels; nickel alloys; aluminum and carbon. Through its subsidiary, Total Plastics, Inc., the Company also distributes a broad range of value-added industrial plastics. Together, Castle operates over 65 locations throughout North America and Europe. 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 and loss on extinguishment of debt), 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 For the Three For the Year per share data) Months Ended Ended Unaudited Dec 31, Dec 31, 2006 2005 2006 2005 Net sales $321,991 $227,257 $1,177,600 $958,978 Costs and expenses: Cost of materials (exclusive of depreciation) 233,099 164,480 839,235 677,186 Warehouse, processing and delivery expense 34,484 26,792 123,204 108,427 Sales, general, and administrative expense 32,601 23,340 109,406 92,848 Depreciation and amortization expense 4,968 2,588 13,290 9,340 Total operating expense 305,152 217,200 1,085,135 887,801 Operating income 16,839 10,057 92,465 71,177 Interest expense, net (4,353) (1,473) (8,302) (7,348) Discount on sale of accounts receivable (1,127) Loss on extinguishment of debt - (4,904) - (4,904) Income before income taxes and equity earnings of joint venture 12,486 3,680 84,163 57,798 Income taxes (4,219) (1,303) (33,330) (23,191) Net income before equity in earnings of joint venture 8,267 2,377 50,833 34,607 Equity in earnings of joint venture 954 960 4,286 4,302 Net income 9,221 3,337 55,119 38,909 Preferred dividends (242) (241) (963) (961) Net income applicable to common stock $8,979 $3,096 $54,156 $37,948 Diluted earnings per share $0.47 $0.18 $2.89 $2.11 EBITDA * $22,761 $13,605 $110,041 $84,819 *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 Year Months Ended Ended Dec 31, Dec 31, 2006 2005 2006 2005 Net income $9,221 $3,337 $55,119 $38,909 Depreciation and amortization expense 4,968 2,588 13,290 9,340 Interest expense, net 4,353 1,473 8,302 7,348 Loss on extinguishment of debt - 4,904 - 4,904 Discount on sale of accounts receivable - - - 1,127 Provision for income taxes 4,219 1,303 33,330 23,191 EBITDA $22,761 $13,605 $110,041 $84,819 CONSOLIDATED BALANCE SHEETS (Dollars in thousands) Unaudited December 31, 2006 2005 ASSETS Current assets Cash and cash equivalents $9,526 $37,392 Accounts receivable, less allowances of $3,112 at December 31, 2006 and $1,763 at December 31, 2005 160,999 107,064 Inventories (principally on last- in, first-out basis) (latest cost higher by $128,104 at December 31, 2006 and $104,036 at December 31, 2005) 202,394 119,306 Other current assets 18,743 6,351 Total current assets 391,662 270,113 Investment in joint venture 13,577 10,850 Goodwill 101,783 32,222 Intangible assets 66,169 70 Prepaid pension cost 5,681 41,946 Other assets 5,850 4,112 Property, plant and equipment, at cost Land 5,221 4,772 Building 49,017 45,890 Machinery and equipment 141,090 127,048 195,328 177,710 Less - accumulated depreciation (124,930) (113,288) 70,398 64,422 Total assets $655,120 $423,735 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $117,561 $103,246 Accrued liabilities 30,152 21,535 Current and deferred income taxes 17,270 7,052 Short-term debt 123,261 - Current portion of long-term debt 12,834 6,233 Total current liabilities 301,078 138,066 Long-term debt, less current portion 90,051 73,827 Deferred income taxes 31,782 21,903 Deferred gain on sale of assets 5,666 5,967 Pension and postretirement benefit obligations 10,636 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 17,047,591 at December 31, 2006 and 16,605,714 at December 31, 2005 170 166 Additional paid-in capital 69,775 60,916 Retained earnings 160,625 110,530 Accumulated other comprehensive (loss) income (18,504) 2,370 Other - deferred compensation (1,392) - Treasury stock, at cost - 399,614 shares at December 31, 2006 and 546,065 shares at December 31, 2005 (6,006) (9,716) Total stockholders' equity 215,907 175,505 Total liabilities and stockholders' equity $655,120 $423,735 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) For the Year Unaudited Ended Dec 31, 2006 2005 Cash flows from operating activities: Net income $55,119 $38,909 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 13,290 9,340 Other non-cash items 2,925 (3,392) Increase (decrease) from changes, net of acquisitions, in: Working capital (60,353) 12,832 Other assets and liabilities 15,680 189 Net cash from operating activities 26,661 57,878 Cash flows from investing activities: Investments and acquisitions, net of cash acquired (175,583) (236) Capital expenditures (12,935) (8,685) Other 1,747 4,413 Net cash from investing activities (186,771) (4,508) Cash flows from financing activities: Increased (decreased) borrowings 133,087 (21,271) Dividends paid on common shares (4,061) - Preferred stock dividends (963) (961) Exercise of stock options and other 4,026 3,020 Net cash from financing activities 132,089 (19,212) Effect of exchange rate changes on cash and cash equivalents 155 128 Net (decrease) increase in cash and cash equivalents (27,866) 34,286 Cash and cash equivalents - beginning of year $37,392 $3,106 Cash and cash equivalents - end of year $9,526 $37,392 DATASOURCE: A. M. Castle & Co. CONTACT: Larry A. Boik, Vice President-Finance & CFO of A. M. Castle & Co., +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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