CAS Simplify China A Shares Plus Income ETF

A.M. Castle & Co. Reports Second Quarter Results; Record Earnings Levels Continue, 2005 Outlook Remains Strong FRANKLIN PARK, Ill., Aug. 2 /PRNewswire-FirstCall/ -- A.M. Castle & Co. (AMEX:CAS), one of North America's leading metals and plastics distributors, today reported results for the quarter and year-to-date ended June 30, 2005. Sales for the second quarter of 2005 were $251.0 million, 33% higher than the prior year. Earnings per share (basic) for the quarter were $0.80, up $0.44 from the second quarter of 2004. Year-to-date 2005 sales were $497.2 million, an increase of 37% versus the prior year. Earnings for the year-to-date period in 2005 were $1.55 per share (basic), compared to $0.50 in 2004. "We are very pleased with our results for both the quarter and the year to date," stated G. Thomas McKane, A.M. Castle's Chairman and CEO. "The hard work of many people over the last several years to restructure this Company is paying off handsomely. In particular, we have reduced our sales breakeven point, improved productivity and positioned the Company well to capitalize on a recovery in the durable goods manufacturing sector." Sales in the Company's metals segment grew 34% for the second quarter while sales in the plastics segment grew 31%. Excluding the impact of material price increases, sales for the quarter grew 8% in the metals segment, 14% in the plastics segment and 9% on a consolidated basis. For the trailing 12-months ended June 30, 2005, the Company reported the following financial metrics: -- Net sales of $894.4 million, up 42% versus the prior 12-month period -- Earnings per share (basic) of $2.05, compared to a loss of $0.02 in the prior 12 months -- Return on average shareholders' equity of 23% "Our solid performance during the past year has improved the Company's financial strength," noted Larry Boik, the Company's CFO. "We have reduced total debt as reported by over $11 million, lowering our ratio of debt-to-total capital to 36.5%. Including amounts outstanding under our accounts receivable purchase facility, our June 30, 2005 debt-to-total capital ratio was 41.6% versus 47.7% one year ago." Market Outlook "Demand in our primary metal markets remains firm, with activity in the construction and mining equipment, aerospace, and oil and gas markets continuing particularly strong," reported Steve Hooks, COO of the Company's Castle Metals business. "We currently see nothing, beyond the normal seasonal slowdowns, that would change the underlying demand levels during the third and fourth quarter," continued Hooks. "While there has been some erosion of price levels in selected carbon products, price levels in aluminum, stainless and nickel steels increased during the quarter. Overall metal price levels at the end of June 2005 were slightly ahead of prices at the end of 2004 for our mix of products." Credit Facility On July 29, 2005 the Company obtained an $82 million secured revolving line of credit from a syndicate of banks led by Bank of America. This new facility replaces the receivable purchase facility which had been used to fund working capital since late 2002. The initial interest rate under the new revolving facility is LIBOR plus 1.375%. "The size of this revolver clearly gives us great flexibility to grow the Company going forward, and the interest rate associated with this line is a clear indication of our balance sheet strength," commented McKane. Webcast Information In closing, Mr. McKane invited interested parties to listen to its conference call scheduled for 11:00 a.m. (EDT) today, Tuesday, August 2, 2005. Connection is available at http://www.amcastle.com/ and will 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 (Dollars in thousands, except per For the Three For the Six share data) Months Ended Months Ended Unaudited June 30 June 30 2005 2004 2005 2004 Net sales $250,967 $188,221 $497,170 $363,854 Cost of material sold (175,449) (131,865) (348,749) (256,346) Gross material margin 75,518 56,356 148,421 107,508 Plant and delivery expense (27,347) (23,405) (53,715) (47,001) Sales, general, and administrative expense (23,717) (19,315) (46,672) (38,771) Depreciation and amortization expense (2,274) (2,244) (4,547) (4,491) Total operating expense (53,338) (44,964) (104,934) (90,263) Operating income 22,180 11,392 43,487 17,245 Interest expense, net (2,027) (2,218) (4,110) (4,532) Discount on sale of accounts receivable (464) (234) (1,000) (517) Income before income tax and equity in joint venture 19,689 8,940 38,377 12,196 Income taxes Federal (5,776) (2,231) (11,224) (2,836) State (789) (552) (2,076) (729) Foreign (759) (828) (1,509) (1,382) (7,324) (3,611) (14,809) (4,947) Net income before equity in joint venture 12,365 5,329 23,568 7,249 Equity earnings of joint ventures 1,016 1,104 2,525 1,739 Income taxes - joint venture (399) (435) (993) (685) Net income 12,982 5,998 25,100 8,303 Preferred dividends (240) (240) (480) (480) Net income applicable to common stock $12,742 $5,758 $24,620 $7,823 Basic earnings per share $0.80 $0.36 $1.55 $0.50 Diluted earnings per share $0.73 $0.35 $1.41 $0.47 EBITDA * $25,470 $14,740 $50,559 $23,475 *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 2005 2004 2005 2004 Net income from operations $12,982 $5,998 $25,100 $8,303 Depreciation and amortization 2,274 2,244 4,547 4,491 Interest, net 2,027 2,218 4,110 4,532 Discount on accounts receivable sold 464 234 1,000 517 Provision from income taxes 7,324 3,611 14,809 4,947 Provision from income taxes - joint venture 399 435 993 685 EBITDA $25,470 $14,740 $50,559 $23,475 CONSOLIDATED BALANCE SHEETS (Dollars in thousands) As of Unaudited* June 30 Dec. 31 June 30 2005* 2004 2004* ASSETS Current assets Cash and equivalents $5,265 $3,106 $4,503 Accounts receivable, less allowances of $2,023 in June 2005, $1,760 in December 2004, and $449 in June 2004 102,268 80,323 91,714 Inventories (principally on last-in first-out basis) (latest cost higher by approximately $94,300 in June 2005, $92,500 in December 2004, and $65,100 in June 2004) 129,645 135,588 105,224 Income tax receivable 289 169 408 Assets held for sale 995 995 1,059 Advances to joint venture and other current assets 7,419 7,325 8,658 Total current assets 245,881 227,506 211,566 Investment in joint venture 9,671 8,463 5,973 Goodwill 32,188 32,201 31,925 Pension assets 41,604 42,262 42,169 Advances to joint venture and other assets 7,026 7,586 7,464 Property, plant and equipment, at cost Land 4,770 4,771 4,766 Building 45,587 45,514 47,131 Machinery and equipment 126,346 124,641 119,883 176,703 174,926 171,780 Less - accumulated depreciation (114,147) (109,928) (105,133) 62,556 64,998 66,647 Total assets $398,926 $383,016 $365,744 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $86,740 $93,342 $87,299 Accrued liabilities and deferred gains 25,183 23,016 21,652 Current and deferred income taxes 9,114 4,349 2,377 Current portion of long-term debt 16,390 11,607 13,057 Total current liabilities 137,427 132,314 124,385 Long-term debt, less current portion 73,491 89,771 89,187 Deferred income taxes 20,809 19,668 20,147 Deferred gain on sale of assets 6,038 6,465 6,902 Minority interest 1,655 1,644 1,262 Postretirement benefits obligations 2,992 2,905 2,758 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 15,926,769 at June 2005, 15,806,366 at December 2004, and 15,793,937 at June 2004 159 159 159 Additional paid in capital 36,911 35,082 35,009 Earnings reinvested in the business 107,020 82,400 74,300 Accumulated other comprehensive income 1,430 1,616 663 Other - deferred compensation - (2) (22) Treasury stock, at cost - 202,524 shares at June 2005, 62,065 shares at December 2004, and 59,260 shares at June 2004 (245) (245) (245) Total stockholders' equity 156,514 130,249 121,103 Total liabilities and stockholders' equity $398,926 $383,016 $365,744 CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands) For the Six Months Unaudited Ended June 30 2005 2004 Cash flows from operating activities: Net income $25,100 $8,303 Adjustments to reconcile net income to net cash from operating activities Depreciation and amortization 4,547 4,491 Amortization of deferred gain (427) (402) Equity in earnings from joint venture (2,525) (1,739) Income tax provision 15,802 5,632 Non-cash pension loss and postretirement benefits 1,124 210 Deferred stock compensation 1,652 - Other 148 698 Cash from operating activities before working capital changes 45,421 17,193 Increase (decrease) from changes in: Accounts receivable sold (purchased) 5,000 (5,000) Accounts receivable (27,121) (31,373) Inventory 5,711 13,650 Accounts payable and accrued liabilities (4,276) 21,217 Other current assets (96) (1,763) Income taxes payable, receivable and deferred (10,003) (1,596) Net cash from operating activities 14,636 12,327 Cash flows from investing activities: Investments and acquisitions - (1,744) Dividends from joint venture 1,334 207 Capital expenditures (2,204) (2,372) Net cash from investing activities (870) (3,909) Cash flows from financing activities: Repayment of long-term debt (11,346) (5,826) Preferred stock dividend (480) (480) Other 177 (94) Net cash from financing activities (11,649) (6,400) Effect of exchange rate changes on cash 42 30 Net increase in cash 2,159 2,048 Cash - beginning of year $3,106 $2,455 Cash - end of period $5,265 $4,503 Supplemental cash disclosure - cash paid during the period: Interest $(4,558) $(4,569) Income taxes $(9,417) $(1,448) DATASOURCE: A.M. Castle & Co. CONTACT: G. Thomas McKane, Chairman & CEO of A.M. Castle & Co., +1-847-349-2502, or ; or Analyst Contacts, John McNamara, +1-212-827-3771, or , or General Information, George Zagoudis, +1-312-640-6663, or , both of Financial Relations Board Web site: http://www.amcastle.com/

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