CAS Simplify China A Shares Plus Income ETF

A. M. Castle & Co. Announces First Quarter 2004 Results FRANKLIN PARK, Ill., May 4 /PRNewswire-FirstCall/ -- A.M. Castle & Co. , a North American distributor of highly engineered metals and plastics, announced today net income applicable to common stock of $2.1 million, or 13 cents per share, for the first quarter of 2004. This compares with a loss of $1.6 million, or 10 cents per share, for the comparable period last year. In making the announcement, G. Thomas McKane, Chairman and CEO, noted that actual results were at the high end of the range indicated by the Company in its April 6, 2004 update on the outlook for the quarter. McKane noted that results for the quarter reflect substantially improved market dynamics in both the metals and plastics segments of the Company's business. "Continuing the recovery we began to see in November," said McKane, "shipments in the metals segment, as measured by tons sold, grew 17% on a year-over-year basis. Higher price levels, fueled by worldwide increases in demand for steel scrap, nickel and coke, contributed to a 9% increase in revenue per ton that was offset by a 3% decline due to changes in sales mix towards the Company's lower priced carbon and carbon alloy product lines. These factors combined to produce a 23% increase in sales within the metals segment. In plastics, sales rose 30% with little or no change in material price levels." For the first quarter of 2004, the Company reported sales of $175.6 million, up $34.0 million, or 24%, from year-ago levels. Net income applicable to common stock totalled $2.1 million, or 13 cents per share (fully diluted), compared with a loss of $1.6 million, or 10 cents per share, in the first quarter of 2003. Commenting on these results, McKane pointed out that earnings before interest, taxes, depreciation and amortization (EBITDA) totalled $8.7 million in the first three months of 2004 versus $2.8 million in the same period a year ago. "This clearly indicates," he said, "the positive operating leverage that has been created over the last three years by our efforts to reduce our structural cost base, improve productivity and close or sell off non-performing and non-strategic business units. In aggregate, we generated an additional $6.0 million of EBITDA on a $34.0 million increase in revenues, or a 17.5% return on incremental sales. It is significant to note," he added, "that since the Company is on LIFO there are no inventory inflation profits included in our reported results." In discussing the near-term outlook for the Company, McKane stated that the economic recovery experienced in the first quarter, although broad based across most durable goods manufacturing industries and almost all geographic sectors, does not reflect any significant improvements in either oil and gas or aerospace which are important markets to Castle. "We believe," he said, "that both of these markets will begin to show some recovery as the year unfolds and that the improvements seen during the first quarter in the rest of the Company's markets will be sustained into the second quarter of the year. In this environment," he continued, "material shortages are becoming an increasing reality. As an important customer to our suppliers, we believe we are competitively well positioned to deal with these issues until such time as supply and demand come into better balance." In closing, Mr. McKane invited interested parties to listen to its conference call scheduled for 11:00 a.m. (EDT) today, Tuesday, May 4, 2004. Connection is available at http://www.amcastle.com/ and will be available for 14 days following the call. Founded in 1890, A. M. Castle & Co. provides highly engineered materials and value added services to a wide range of companies within 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 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 60 locations throughout North America. Its common stock is traded on the American and Chicago Stock Exchange under the ticker symbol "CAS". This release contains 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 to provide the reader with additional information in analyzing the Company's operating results. A reconciliation of EBITDA to net income is provided per SEC requirements. 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 and Exchange Commission. COMPARATIVE STATEMENTS OF OPERATIONS (Amounts in thousands, except per share data) Unaudited For The Three Months Ended March 31, 2004 2003 Net sales $175,634 $141,646 Cost of material sold (124,481) (98,444) Gross material margin 51,153 43,202 Plant and delivery expense (23,599) (22,350) Sales, general, and administrative expense (19,454) (18,036) Depreciation and amortization expense (2,247) (2,304) Total other operating expense (45,300) 42,690) Operating income 5,853 512 Equity earnings (loss) of joint ventures 632 (37) Interest expense, net (2,314) (2,443) Discount on sale of accounts receivable (283) (329) Income/(loss) before income taxes 3,888 (2,297) Income taxes Federal (1,232) 763 State (354) 127 (1,586) 890 Net income (loss) from operations 2,302 (1,407) Preferred dividends (240) (238) Net income (loss) applicable to common stock $2,062 $(1,645) Basic earnings (loss) per share $0.13 $(0.10) Diluted earnings (loss) per share $0.13 $(0.10) EBITDA (1) $8,732 $2,779 (1) Earnings before interest, discount on sale of accounts receivable, taxes, depreciation and amortization Reconciliation of EBITDA to net income: For The Three Months Ended March 31, 2004 2003 Net income (loss) from operations $2,302 $(1,407) Depreciation and amortization 2,247 2,304 Interest, net 2,314 2,443 Discount on accounts receivable sold 283 329 Provision (benefit) from income taxes 1,586 (890) EBITDA $8,732 $2,779 COMPARATIVE BALANCE SHEETS (Amounts in thousands except per share data) (Unaudited) Mar. 31, Dec. 31, Mar. 31, 2004 2003 2003 ASSETS Current assets Cash and equivalents $4,434 $2,455 $1,306 Accounts receivable, net 77,348 54,232 42,714 Inventories (principally on last-in first-out basis) 104,040 117,270 128,092 Income tax receivable 652 660 12,929 Assets held for sale 1,117 1,067 - Advances to joint ventures and other current assets 6,599 7,184 7,492 Total current assets 194,190 182,868 192,533 Investment in joint ventures 5,060 5,492 7,404 Goodwill 31,935 31,643 31,978 Pension assets 42,122 42,075 40,719 Advances to joint ventures and other assets 8,265 8,688 6,534 Property, plant and equipment, at cost Land 4,767 4,767 6,027 Building 46,975 45,346 53,440 Machinery and equipment 119,253 118,447 126,311 170,995 168,560 185,778 Less - accumulated depreciation (103,079) (100,386) (105,534) 67,916 68,174 80,244 Total assets $349,488 $338,940 $359,412 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $77,056 $67,601 $68,256 Accrued liabilities and deferred gains 18,665 19,145 16,834 Current and deferred income taxes 4,656 4,852 4,386 Current portion of long-term debt 8,308 8,248 9,622 Total current liabilities 108,685 99,846 99,098 Long-term debt, less current portion 98,409 100,034 103,814 Deferred income taxes 15,670 13,963 23,011 Deferred gain on sale of assets 7,095 7,304 - Minority interest 1,261 1,456 1,376 Post retirement benefits obligations 2,765 2,683 2,222 Stockholders' equity Preferred stock 11,239 11,239 11,239 Common stock 159 159 158 Additional paid in capital 35,009 35,009 35,017 Earnings reinvested in the business 68,542 66,480 83,851 Accumulated other comprehensive income (loss) 928 1,042 (35) Other - deferred compensation (29) (30) (109) Treasury stock, at cost (245) (245) (230) Total stockholders' equity 115,603 113,654 129,891 Total liabilities and stockholders' equity $349,488 $338,940 $359,412 CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) For The Three Months Ended March 31, 2004 2003 Cash flows from operating activities: Net income/(loss) $2,302 $(1,407) Depreciation and amortization 2,247 2,304 Amortization of deferred gain (209) - Equity (earnings) loss from joint ventures (632) 37 Deferred taxes and income tax receivable 1,666 (1,361) Non-cash pension income and post-retirement benefits 105 (240) Other 93 12 Cash from operating activities before working capital changes 5,572 (655) Net change in accounts receivable sold 5,000 4,300 Other increases in working capital (3,613) (2,922) Net cash from operating activities 6,959 723 Cash flows from investing activities: Investments and acquisitions (1,744) - Advances to joint ventures - (114) Capital expenditures (1,430) (736) Net cash from investing activities (3,174) (850) Cash flows from financing activities: Long-term borrowings, net (1,479) 697 Preferred dividends paid (240) (238) Other 17 - Net cash from financing activities (1,702) 459 Effect of exchange rate changes on cash (104) 56 Net increase in cash 1,979 388 Cash - beginning of year 2,455 918 Cash - end of period $4,434 $1,306 Supplemental cash disclosure - cash (paid) received during the period: Interest $(2,319) $(2,227) Income taxes $20 $(197) DATASOURCE: A.M. Castle & Co. CONTACT: Edward Culliton, VP, Finance & Chief Financial Officer of A.M. Castle & Co., +1-847-349-2508, ; or Analyst, Peter Seltzberg, +1-212-445-8457, , or General Information, George Zagoudis, +1-312-640-6663, , both of Financial Relations Board Web site: http://www.amcastle.com/

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