##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For Quarterly Period Ended September 30, 2010
 or,
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission File Number 1-5415
 A. M. Castle & Co.
 (Exact name of registrant as specified in its charter)
 Maryland
    
    36-0879160(State or Other Jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation of organization)
 3400 North Wolf Road, Franklin Park, Illinois
    
    60131(Address of Principal Executive Offices)
    
    (Zip Code)
 847/455-7111
 (Former name, former address and former fiscal year, if changed since last report)
 þ o
 Yes o
No o
  Large Accelerated Filer o
    
    Accelerated Filer þ
    
    Non-Accelerated Filer o
    
    Smaller Reporting Company o
 Yes o No þ
  Class
    
    Outstanding at October 29, 2010Common Stock, $0.01 Par Value
    
    22,954,459 shares




---



##### 



PagePart I. Financial InformationItem 1. Financial Statements (unaudited):Condensed Consolidated Balance Sheets
    
    
    3Condensed Consolidated Statements of Operations
    
    
    4Condensed Consolidated Statements of Cash Flows
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6-17Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18-25Item 3. Quantitative and Qualitative Disclosure About Market Risk
    
    
    26Item 4. Controls and Procedures
    
    
    26Part II. Other InformationItem 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 6. Exhibits
    
    
    27Signatures
    
    
    27Exhibit Index
    
    
    28Exhibit 3.2Exhibit 31.1Exhibit 31.2Exhibit 32.1
   2




---



##### Table of Contents



Part I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements (unaudited)
 Amounts in thousands, except par value and per share data
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 As ofSeptember 30,
    
    
    December 31,2010
    
    
    2009ASSETSCurrent assetsCash and cash equivalents
    
    $
    28,175
    
    
    $
    28,311Accounts receivable, less allowances of $4,500 and $4,195
    
    
    139,771
    
    
    
    105,832Inventories, principally on last-in, first-out basis (replacement cost higher by $122,144 and $116,816)
    
    
    161,780
    
    
    
    170,960Other current assets
    
    
    8,060
    
    
    
    5,241Income tax receivable
    
    
    9,980
    
    
    
    18,970Total current assets
    
    
    347,766
    
    
    
    329,314Investment in joint venture
    
    
    26,724
    
    
    
    23,468Goodwill
    
    
    50,084
    
    
    
    50,072Intangible assets
    
    
    43,214
    
    
    
    48,575Prepaid pension cost
    
    
    21,050
    
    
    
    19,913Other assets
    
    
    3,436
    
    
    
    3,906Property, plant and equipment, at costLand
    
    
    5,193
    
    
    
    5,192Building
    
    
    52,047
    
    
    
    51,945Machinery and equipment
    
    
    182,742
    
    
    
    178,545239,982
    
    
    
    235,682Less  accumulated depreciation
    
    
    (162,366
    )
    
    
    (152,929
    )77,616
    
    
    
    82,753Total assets
    
    $
    569,890
    
    
    $
    558,001LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable
    
    $
    89,256
    
    
    $
    71,295Accrued liabilities
    
    
    30,332
    
    
    
    22,419Income taxes payable
    
    
    1,221
    
    
    
    1,848Deferred income taxes
    
    
    4,409
    
    
    
    9,706Current portion of long-term debt
    
    
    7,647
    
    
    
    7,778Short-term debt
    
    
    11,500
    
    
    
    13,720Total current liabilities
    
    
    144,365
    
    
    
    126,766Long-term debt, less current portion
    
    
    68,437
    
    
    
    67,686Deferred income taxes
    
    
    29,362
    
    
    
    32,032Other non-current liabilities
    
    
    3,200
    
    
    
    5,281Pension and post retirement benefit obligations
    
    
    8,366
    
    
    
    8,028Commitments and contingenciesStockholders equityPreferred stock, $0.01 par value - 10,000 shares authorized; no shares
issued and outstanding at September 30, 2010 and December 31, 2009
    
    
    
    
    
    
    Common stock, $0.01 par value - 30,000 shares authorized;
23,124 shares issued and 22,954 outstanding at September 30, 2010 and 23,115 shares
issued and 22,906 outstanding at December 31, 2009
    
    
    231
    
    
    
    230Additional paid-in capital
    
    
    179,569
    
    
    
    178,129Retained earnings
    
    
    152,245
    
    
    
    156,387Accumulated other comprehensive loss
    
    
    (13,577
    )
    
    
    (13,528
    )Treasury stock, at cost  170 shares at September 30, 2010 and 209 shares at
December 31, 2009
    
    
    (2,308
    )
    
    
    (3,010
    )Total stockholders equity
    
    
    316,160
    
    
    
    318,208Total liabilities and stockholders equity
    
    $
    569,890
    
    
    $
    558,001
 The accompanying notes are an integral part of these statements.
  3




---



##### Table of Contents



CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Three
    
    
    For the NineMonths Ended
    
    
    Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales
    
    $
    244,938
    
    
    $
    183,960
    
    
    $
    708,066
    
    
    $
    631,307Costs and expenses:Cost of materials (exclusive of depreciation and amortization)
    
    
    181,911
    
    
    
    137,671
    
    
    
    529,469
    
    
    
    464,917Warehouse, processing and delivery expense
    
    
    30,923
    
    
    
    26,160
    
    
    
    90,003
    
    
    
    83,305Sales, general, and administrative expense
    
    
    27,276
    
    
    
    23,625
    
    
    
    80,026
    
    
    
    81,474Depreciation and amortization expense
    
    
    4,993
    
    
    
    5,149
    
    
    
    15,494
    
    
    
    16,107Operating loss
    
    
    (165
    )
    
    
    (8,645
    )
    
    
    (6,926
    )
    
    
    (14,496
    )Interest expense, net
    
    
    (1,379
    )
    
    
    (1,539
    )
    
    
    (3,924
    )
    
    
    (4,797
    )Loss before income taxes and equity in earnings of joint venture
    
    
    (1,544
    )
    
    
    (10,184
    )
    
    
    (10,850
    )
    
    
    (19,293
    )Income taxes
    
    
    (43
    )
    
    
    3,607
    
    
    
    2,735
    
    
    
    7,834Loss before equity in earnings of joint venture
    
    
    (1,587
    )
    
    
    (6,577
    )
    
    
    (8,115
    )
    
    
    (11,459
    )Equity in earnings of joint venture
    
    
    1,659
    
    
    
    240
    
    
    
    3,973
    
    
    
    81Net income (loss)
    
    $
    72
    
    
    $
    (6,337
    )
    
    $
    (4,142
    )
    
    $
    (11,378
    )Basic earnings (loss) per share
    
    $
    
    
    
    $
    (0.28
    )
    
    $
    (0.18
    )
    
    $
    (0.50
    )Diluted earnings (loss) per share
    
    $
    
    
    
    $
    (0.28
    )
    
    $
    (0.18
    )
    
    $
    (0.50
    )Dividends per common share
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    0.06
 The accompanying notes are an integral part of these statements.
  4




---



##### Table of Contents



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Nine MonthsEnded September 30,2010
    
    
    2009Operating activities:Net loss
    
    $
    (4,142
    )
    
    $
    (11,378
    )Adjustments to reconcile net loss to net cash
from operating activities:Depreciation and amortization
    
    
    15,494
    
    
    
    16,107Amortization of deferred gain
    
    
    (664
    )
    
    
    (670
    )Loss on sale of fixed assets
    
    
    108
    
    
    
    Equity in earnings of joint venture
    
    
    (3,973
    )
    
    
    (81
    )Dividends from joint venture
    
    
    804
    
    
    
    485Deferred tax (benefit) provision
    
    
    (7,963
    )
    
    
    9,248Share-based compensation expense
    
    
    1,714
    
    
    
    1,079Excess tax (benefits) deficiencies from share-based payment arrangements
    
    
    (172
    )
    
    
    95Increase (decrease) from changes, net of acquisitions, in:Accounts receivable
    
    
    (34,021
    )
    
    
    52,552Inventories
    
    
    8,806
    
    
    
    49,624Other current assets
    
    
    (2,603
    )
    
    
    180Other assets
    
    
    2,428
    
    
    
    (2,440
    )Prepaid pension costs
    
    
    (786
    )
    
    
    (562
    )Accounts payable
    
    
    15,290
    
    
    
    (47,917
    )Accrued liabilities
    
    
    6,432
    
    
    
    (4,772
    )Income taxes payable and receivable
    
    
    8,475
    
    
    
    (29,576
    )Postretirement benefit obligations and other liabilities
    
    
    376
    
    
    
    (865
    )Net cash from operating activities
    
    
    5,603
    
    
    
    31,109Investing activities:Capital expenditures
    
    
    (5,061
    )
    
    
    (6,202
    )Proceeds from sale of fixed assets
    
    
    
    
    
    
    19Insurance proceeds
    
    
    
    
    
    
    1,093Net cash used in investing activities
    
    
    (5,061
    )
    
    
    (5,090
    )Financing activities:Short-term (repayments) borrowings, net
    
    
    (2,220
    )
    
    
    (19,276
    )Net borrowings on long-term revolving lines of credit
    
    
    1,746
    
    
    
    Repayments of long-term debt
    
    
    (607
    )
    
    
    (1,755
    )Common stock dividends
    
    
    
    
    
    
    (1,361
    )Excess tax benefits (deficiencies) from share-based payment arrangements
    
    
    172
    
    
    
    (95
    )Exercise of stock options and other
    
    
    279
    
    
    
    Net cash used in financing activities
    
    
    (630
    )
    
    
    (22,487
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (48
    )
    
    
    1,301Net (decrease) increase in cash and cash equivalents
    
    
    (136
    )
    
    
    4,833Cash and cash equivalents  beginning of year
    
    
    28,311
    
    
    
    15,277Cash and cash equivalents  end of period
    
    $
    28,175
    
    
    $
    20,110
 The accompanying notes are an integral part of these statements
  5




---



##### Table of Contents



(Unaudited  Amounts in thousands except per share data)
 (1) Condensed Consolidated Financial Statements
   (2) New Accounting Standards
 Standards Adopted
   6




---



##### Table of Contents



(3) Earnings Per Share
  For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Numerator:Net income (loss)
    
    $
    72
    
    
    $
    (6,337
    )
    
    $
    (4,142
    )
    
    $
    (11,378
    )Denominator:Denominator for basic income (loss) per
share:Weighted average common shares outstanding
    
    
    22,731
    
    
    
    22,908
    
    
    
    22,707
    
    
    
    22,846Effect of dilutive securities:Outstanding common stock equivalents
    
    
    405
    
    
    
    
    
    
    
    
    
    
    
    Denominator for diluted earnings per share
    
    
    23,136
    
    
    
    22,908
    
    
    
    22,707
    
    
    
    22,846Basic earnings (loss) per share
    
    $
    
    
    
    $
    (0.28
    )
    
    $
    (0.18
    )
    
    $
    (0.50
    )Diluted earnings (loss) per share
    
    $
    
    
    
    $
    (0.28
    )
    
    $
    (0.18
    )
    
    $
    (0.50
    )Excluded outstanding shared-based awards
having an anti-dilutive effect
    
    
    70
    
    
    
    239
    
    
    
    499
    
    
    
    239
  (4) Debt
  September 30, 2010
    
    
    December 31, 2009SHORT-TERM DEBTU.S. Revolver A (a)
    
    $
    4,000
    
    
    $
    5,000Trade acceptances (b)
    
    
    7,500
    
    
    
    8,720Total short-term debt
    
    
    11,500
    
    
    
    13,720LONG-TERM DEBT6.76% insurance company loan due
in scheduled installments from
2007 through 2015
    
    
    50,026
    
    
    
    50,026U.S. Revolver B (a)
    
    
    25,291
    
    
    
    24,246Other, primarily capital leases
    
    
    767
    
    
    
    1,192Total long-term debt
    
    
    76,084
    
    
    
    75,464Less current portion
    
    
    (7,647
    )
    
    
    (7,778
    )Total long-term portion
    
    
    68,437
    
    
    
    67,686TOTAL SHORT-TERM AND LONG-TERM DEBT
    
    $
    87,584
    
    
    $
    89,184
 (a)
    
    The Companys amended and Restated Credit Agreement (the 2008 Senior Credit Facility)
provides a $230,000 five-year secured revolver consisting of (i) a $170,000 revolving A loan (the
U.S. Revolver A), (ii) a $50,000 multicurrency revolving B loan (the U.S. Revolver B), and
(iii) a Canadian dollar $9,784 revolving loan (corresponding to $10,000 in U.S. dollars as of the
amendment closing date; availability expressed in U.S. dollars changes based on movement in the
exchange rate between the Canadian dollar and U.S. dollar). The maturity date of the 2008 Senior
Credit Facility is January 2, 2013.  7




---



##### Table of Contents



The Company has classified U.S. Revolver A as short-term based on its ability and intent to repay
amounts outstanding under this instrument within the next 12 months. U.S. Revolver B is classified
as long-term as the Companys cash projections indicate that amounts outstanding (which are
denominated in British pounds) under this instrument are not expected to be repaid within the next
12 months. The Company had availability of $80,247 under its U.S. Revolver A and $24,709 under its
U.S. Revolver B as of September 30, 2010. The Companys Canadian subsidiary had availability of
approximately $9,499 in U.S dollars. The weighted average interest rate for borrowings under
the U.S. Revolver A and U.S. Revolver B for the nine months ended September 30, 2010 was 2.70% and
1.57%, respectively. The weighted average interest rate under the Canadian Revolver for the nine
months ended September 30, 2010 was 0.22% and primarily represents unused credit line fees.(b)
    
    The trade acceptance purchase agreement which was a 364-day facility expired by its terms on
August 27, 2010. At September 30, 2010, the Company had $7,500 in outstanding trade acceptances
with varying maturity dates ranging up to 120 days. The outstanding trade acceptances will be paid
on their respective maturity dates. The weighted average interest rate was 1.14% for the nine
months ended September 30, 2010.






(5) Segment Reporting








8



---



##### Table of Contents



Note 1
  Net
    
    
    Operating
    
    
    Capital
    
    
    Depreciation &Sales
    
    
    Income (Loss)
    
    
    Expenditures
    
    
    Amortization2010Metals segment
    
    $
    218,057
    
    
    $
    1,119
    
    
    $
    1,528
    
    
    $
    4,702Plastics segment
    
    
    26,881
    
    
    
    1,097
    
    
    
    279
    
    
    
    291Other
    
    
    
    
    
    
    (2,381
    )
    
    
    
    
    
    
    Consolidated
    
    $
    244,938
    
    
    $
    (165
    )
    
    $
    1,807
    
    
    $
    4,9932009Metals segment
    
    $
    161,772
    
    
    $
    (7,963
    )
    
    $
    1,190
    
    
    $
    4,818Plastics segment
    
    
    22,188
    
    
    
    710
    
    
    
    90
    
    
    
    331Other
    
    
    
    
    
    
    (1,392
    )
    
    
    
    
    
    
    Consolidated
    
    $
    183,960
    
    
    $
    (8,645
    )
    
    $
    1,280
    
    
    $
    5,149
   9




---



##### Table of Contents



Net
    
    
    Operating
    
    
    Capital
    
    
    Depreciation &Sales
    
    
    (Loss) Income
    
    
    Expenditures
    
    
    Amortization2010Metals segment
    
    $
    631,020
    
    
    $
    (4,239
    )
    
    $
    4,553
    
    
    $
    14,540Plastics segment
    
    
    77,046
    
    
    
    2,700
    
    
    
    508
    
    
    
    954Other
    
    
    
    
    
    
    (5,387
    )
    
    
    
    
    
    
    Consolidated
    
    $
    708,066
    
    
    $
    (6,926
    )
    
    $
    5,061
    
    
    $
    15,4942009Metals segment
    
    $
    566,930
    
    
    $
    (11,008
    )
    
    $
    5,974
    
    
    $
    15,089Plastics segment
    
    
    64,377
    
    
    
    84
    
    
    
    228
    
    
    
    1,018Other
    
    
    
    
    
    
    (3,572
    )
    
    
    
    
    
    
    Consolidated
    
    $
    631,307
    
    
    $
    (14,496
    )
    
    $
    6,202
    
    
    $
    16,107
   September 30,
    
    
    December 31,2010
    
    
    2009Metals segment
    
    $
    493,424
    
    
    $
    488,090Plastics segment
    
    
    49,742
    
    
    
    46,443Other
    
    
    26,724
    
    
    
    23,468Consolidated
    
    $
    569,890
    
    
    $
    558,001
  (6) Goodwill and Intangible Assets
  Metals
    
    
    PlasticsSegment
    
    
    Segment
    
    
    TotalBalance as of January 1, 2010Goodwill
    
    $
    97,316
    
    
    $
    12,973
    
    
    $
    110,289Accumulated impairment losses
    
    
    (60,217
    )
    
    
    
    
    
    
    (60,217
    )Balance as of January 1, 2010
    
    
    37,099
    
    
    
    12,973
    
    
    
    50,072Currency valuation
    
    
    12
    
    
    
    
    
    
    
    12Balance as of September 30, 2010Goodwill
    
    
    97,328
    
    
    
    12,973
    
    
    
    110,301Accumulated impairment losses
    
    
    (60,217
    )
    
    
    
    
    
    
    (60,217
    )Balance as of September 30, 2010
    
    $
    37,111
    
    
    $
    12,973
    
    
    $
    50,084
  10




---



##### Table of Contents



Note 8, st
  September 30, 2010
    
    
    December 31, 2009Gross
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationCustomer relationships
    
    $
    69,490
    
    
    $
    26,388
    
    
    $
    69,549
    
    
    $
    21,435Non-compete agreements
    
    
    2,907
    
    
    
    2,795
    
    
    
    2,938
    
    
    
    2,477Trade name
    
    
    378
    
    
    
    378
    
    
    
    378
    
    
    
    378Total
    
    $
    72,775
    
    
    $
    29,561
    
    
    $
    72,865
    
    
    $
    24,290
   2010
    
    $
    7,0922011
    
    
    6,6222012
    
    
    6,1432013
    
    
    6,1432014
    
    
    6,143
 (7) Inventories
    11




---



##### Table of Contents



(8) Share-based Compensation
  Long-Term Compensation and Incentive Plans
    Restricted Share Units and Non-Vested Shares
    12




---



##### Table of Contents



Shares
    
    
    UnitsWeighted-
    
    
    
    
    
    
    Weighted-Average Grant
    
    
    
    
    
    
    Average GrantShares
    
    
    Date Fair Value
    
    
    Units
    
    
    Date Fair ValueOutstanding at January 1, 2010
    
    
    262
    
    
    $
    10.76
    
    
    
    
    
    
    
    Granted
    
    
    39
    
    
    $
    18.06
    
    
    
    150
    
    
    $
    12.07Forfeited
    
    
    (20
    )
    
    $
    6.37
    
    
    
    (7
    )
    
    $
    12.07Vested
    
    
    (54
    )
    
    $
    11.19
    
    
    
    Outstanding at September 30, 2010
    
    
    227
    
    
    $
    13.24
    
    
    
    143
    
    
    $
    12.07Expected to vest at September 30, 2010
    
    
    215
    
    
    $
    13.49
    
    
    
    126
    
    
    $
    12.07
  Performance Shares
   2010Expected volatility
    
    
    61.6
    %Risk-free interest rate
    
    
    1.45
    %Expected life (in years)
    
    
    2.80Expected dividend yield
    
    
    
  13




---



##### Table of Contents



Estimated Number of
    
    
    Maximum Number ofGrant Date Fair
    
    
    Performance Shares to
    
    
    Performance Shares thatPlan Year
    
    Value
    
    
    be Issued
    
    
    could Potentially be Issued2010 LTC Plan
    

    $12.26
    
    
    
    149
    
    
    
    2862009 LTI Plan
    

    $5.66
    
    
    
    
    
    
    
    6272008 LTI Plan
    

    $22.90 - $28.17
    
    
    
    
    
    
    
    320
   Stock Options
   2010Expected volatility
    
    
    58.5
    %Risk-free interest rate
    
    
    2.3
    %Expected life (in years)
    
    
    5.5Expected dividend yield
    
    
    1.2
    %
  14




---



##### Table of Contents



Weighted AverageShares
    
    
    Exercise PriceStock options outstanding at January 1, 2010
    
    
    239
    
    
    $
    11.37Granted
    
    
    303
    
    
    $
    12.79Exercised
    
    
    (27
    )
    
    $
    10.52Forfeited
    
    
    (14
    )
    
    $
    12.79Expired
    
    
    (2
    )
    
    $
    10.00Stock options outstanding at September 30, 2010
    
    
    499
    
    
    $
    12.24Stock options vested or expected to vest as of
September 30, 2010
    
    
    465
    
    
    $
    12.20
  Deferred Compensation Plan
  (9) Comprehensive Income (Loss)
  September 30,2010
    
    
    2009Net income (loss)
    
    $
    72
    
    
    $
    (6,337
    )Foreign currency translation gain
    
    
    1,176
    
    
    
    1,200Pension cost amortization, net of tax
    
    
    72
    
    
    
    60Total comprehensive income (loss)
    
    $
    1,320
    
    
    $
    (5,077
    )
  September 30,2010
    
    
    2009Net loss
    
    $
    (4,142
    )
    
    $
    (11,378
    )Foreign currency translation (loss) gain
    
    
    (263
    )
    
    
    3,401Pension cost amortization, net of tax
    
    
    214
    
    
    
    179Total comprehensive loss
    
    $
    (4,191
    )
    
    $
    (7,798
    )
  15




---



##### Table of Contents



September 30,
    
    
    December 31,2010
    
    
    2009Foreign currency translation losses
    
    $
    (3,477
    )
    
    $
    (3,214
    )Unrecognized pension and postretirement benefit costs,
net of tax
    
    
    (10,100
    )
    
    
    (10,314
    )Total accumulated other comprehensive loss
    
    $
    (13,577
    )
    
    $
    (13,528
    )
 (10) Employee Benefit Plans
  For the Three Months EndedSeptember 30,2010
    
    
    2009Service cost
    
    $
    200
    
    
    $
    197Interest cost
    
    
    1,919
    
    
    
    1,934Expected return on assets
    
    
    (2,335
    )
    
    
    (2,253
    )Amortization of prior service cost
    
    
    65
    
    
    
    72Amortization of actuarial loss
    
    
    55
    
    
    
    34Net periodic pension and postretirement benefit
    
    $
    (96
    )
    
    $
    (16
    )
  For the Nine Months EndedSeptember 30,2010
    
    
    2009Service cost
    
    $
    600
    
    
    $
    590Interest cost
    
    
    5,757
    
    
    
    5,801Expected return on assets
    
    
    (7,005
    )
    
    
    (6,758
    )Amortization of prior service cost
    
    
    195
    
    
    
    215Amortization of actuarial loss
    
    
    165
    
    
    
    102Net periodic pension and postretirement benefit
    
    $
    (288
    )
    
    $
    (50
    )
   (11) Joint Venture
   16




---



##### Table of Contents



:
 For the Three Months EndedSeptember 30,2010
    
    
    2009Net sales
    
    $
    50,233
    
    
    $
    25,310Cost of materials
    
    
    41,605
    
    
    
    21,909Income before taxes
    
    
    3,901
    
    
    
    110Net income
    
    
    3,318
    
    
    
    480
 :
 For the Nine Months EndedSeptember 30,2010
    
    
    2009Net sales
    
    $
    135,840
    
    
    $
    78,871Cost of materials
    
    
    112,891
    
    
    
    68,483Income (loss) before taxes
    
    
    9,249
    
    
    
    (288
    )Net income
    
    
    7,946
    
    
    
    162
 (12) Commitments and Contingent Liabilities
   (13) Income Taxes
     17




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Amounts in millions except per share data
 Disclosure Regarding Forward-Looking Statements
 Information provided and statements contained in this report that are not purely historical are
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (Securities Act), Section 21E of the Securities Exchange Act of 1934, as amended
(Exchange Act), and the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements only speak as of the date of this report and the Company assumes no obligation to update
the information included in this report. Such forward-looking statements include information
concerning our possible or assumed future results of operations, including descriptions of our
business strategy. These statements often include words such as believe, expect, anticipate,
intend, predict, plan, or similar expressions. These statements are not guarantees of
performance or results, and they involve risks, uncertainties, and assumptions. Although we
believe that these forward-looking statements are based on reasonable assumptions, there are many
factors that could affect our actual financial results or results of operations and could cause
actual results to differ materially from those in the forward-looking statements, including those
risk factors identified in Item 1A Risk Factors in the Companys Annual Report on Form 10-K for
the year ended December 31, 2009. All future written and oral forward-looking statements by us or
persons acting on our behalf are expressly qualified in their entirety by the cautionary statements
contained or referred to above. Except for our ongoing obligations to disclose material
information as required by the federal securities laws, we do not have any obligations or intention
to release publicly any revisions to any forward-looking statements to reflect events or
circumstances in the future or to reflect the occurrence of unanticipated events.
 The following discussion should be read in conjunction with the Companys condensed consolidated
financial statements and related notes thereto in ITEM 1 Condensed Consolidated Financial
Statements (unaudited).
 Executive Overview
 Economic Trends and Current Business Conditions
      18




---



##### Table of Contents



YEAR
    
    Qtr 1
    
    
    Qtr 2
    
    
    Qtr 3
    
    
    Qtr 42008
    
    
    49.2
    
    
    
    49.5
    
    
    
    47.8
    
    
    
    36.12009
    
    
    35.9
    
    
    
    42.6
    
    
    
    51.5
    
    
    
    54.62010
    
    
    58.2
    
    
    
    58.8
    
    
    
    55.4
  Results of Operations: Third Quarter 2010 Comparisons to Third Quarter 2009
  Fav/(Unfav)2010
    
    
    2009
    
    
    $ Change
    
    
    % ChangeNet SalesMetals
    
    $
    218.0
    
    
    $
    161.8
    
    
    $
    56.2
    
    
    
    34.7
    %Plastics
    
    
    26.9
    
    
    
    22.2
    
    
    
    4.7
    
    
    
    21.2
    %Total Net Sales
    
    $
    244.9
    
    
    $
    184.0
    
    
    $
    60.9
    
    
    
    33.1
    %Cost of MaterialsMetals
    
    $
    163.6
    
    
    $
    122.5
    
    
    $
    (41.1
    )
    
    
    (33.6
    )%% of Metals Sales
    
    
    75.0
    %
    
    
    75.7
    %Plastics
    
    
    18.3
    
    
    
    15.2
    
    
    
    (3.1
    )
    
    
    (20.4
    )%% of Plastics Sales
    
    
    68.0
    %
    
    
    68.5
    %Total Cost of Materials
    
    $
    181.9
    
    
    $
    137.7
    
    
    $
    (44.2
    )
    
    
    (32.1
    )%% of Total Sales
    
    
    74.3
    %
    
    
    74.8
    %Operating Costs and ExpensesMetals
    
    $
    53.3
    
    
    $
    47.3
    
    
    $
    (6.0
    )
    
    
    (12.7
    )%Plastics
    
    
    7.5
    
    
    
    6.3
    
    
    
    (1.2
    )
    
    
    (19.0
    )%Other
    
    
    2.4
    
    
    
    1.4
    
    
    
    (1.0
    )
    
    
    (71.4
    )%Total Operating Costs & Expenses
    
    $
    63.2
    
    
    $
    55.0
    
    
    $
    (8.2
    )
    
    
    (14.9
    )%% of Total Sales
    
    
    25.8
    %
    
    
    30.0
    %Operating Income (Loss)Metals
    
    $
    1.1
    
    
    $
    (8.0
    )
    
    $
    9.1
    
    
    
    113.8
    %% of Metals Sales
    
    
    0.5
    %
    
    
    (4.9
    )%Plastics
    
    
    1.1
    
    
    
    0.7
    
    
    
    0.4
    
    
    
    57.1
    %% of Plastics Sales
    
    
    4.1
    %
    
    
    3.2
    %Other
    
    
    (2.4
    )
    
    
    (1.4
    )
    
    
    (1.0
    )
    
    
    (71.4
    )%Total Operating Loss
    
    $
    (0.2
    )
    
    $
    (8.7
    )
    
    $
    8.5
    
    
    
    97.7
    %% of Total Sales
    
    
    (0.1
    )%
    
    
    (4.7
    )%
 Other includes the costs of executive, legal and finance departments which are
shared by both segments of the Company.
  19




---



##### Table of Contents



Net Sales:
   Cost of Materials:
  Operating Expenses and Operating Loss:
   20




---



##### Table of Contents



Other Income and Expense, Income Taxes and Net Income (Loss):
     Results of Operations: Nine Months 2010 Comparisons to Nine Months 2009
  Fav/(Unfav)2010
    
    
    2009
    
    
    $ Change
    
    
    % ChangeNet SalesMetals
    
    $
    631.0
    
    
    $
    566.9
    
    
    $
    64.1
    
    
    
    11.3
    %Plastics
    
    
    77.1
    
    
    
    64.4
    
    
    
    12.7
    
    
    
    19.7
    %Total Net Sales
    
    $
    708.1
    
    
    $
    631.3
    
    
    $
    76.8
    
    
    
    12.2
    %Cost of MaterialsMetals
    
    $
    477.0
    
    
    $
    420.8
    
    
    $
    (56.2
    )
    
    
    (13.4
    )%% of Metals Sales
    
    
    75.6
    %
    
    
    74.2
    %Plastics
    
    
    52.5
    
    
    
    44.1
    
    
    
    (8.4
    )
    
    
    (19.0
    )%% of Plastics Sales
    
    
    68.1
    %
    
    
    68.5
    %Total Cost of Materials
    
    $
    529.5
    
    
    $
    464.9
    
    
    $
    (64.6
    )
    
    
    (13.9
    )%% of Total Net Sales
    
    
    74.8
    %
    
    
    73.6
    %Operating Costs and ExpensesMetals
    
    $
    158.2
    
    
    $
    157.1
    
    
    $
    (1.1
    )
    
    
    (0.7
    )%Plastics
    
    
    21.9
    
    
    
    20.2
    
    
    
    (1.7
    )
    
    
    (8.4
    )%Other
    
    
    5.4
    
    
    
    3.6
    
    
    
    (1.8
    )
    
    
    (50.0
    )%Total Operating Costs & Expenses
    
    $
    185.5
    
    
    $
    180.9
    
    
    $
    (4.6
    )
    
    
    (2.5
    )%% of Total Net Sales
    
    
    26.2
    %
    
    
    28.7
    %Operating (Loss) IncomeMetals
    
    $
    (4.2
    )
    
    $
    (11.0
    )
    
    $
    6.8
    
    
    
    61.8
    %% of Metals Sales
    
    
    (0.7
    )%
    
    
    (1.9
    )%Plastics
    
    
    2.7
    
    
    
    0.1
    
    
    
    2.6
    
    
    
    2600
    %% of Plastics Sales
    
    
    3.5
    %
    
    
    0.2
    %Other
    
    
    (5.4
    )
    
    
    (3.6
    )
    
    
    (1.8
    )
    
    
    (50.0
    )%Total Operating Loss
    
    $
    (6.9
    )
    
    $
    (14.5
    )
    
    $
    7.6
    
    
    
    52.4
    %% of Total Net Sales
    
    
    (1.0
    )%
    
    
    (2.3
    )%
 Other includes the costs of executive, legal and finance departments which are shared by
both segments of the Company.
  21




---



##### Table of Contents



Net Sales:
   Cost of Materials:
  Operating Expenses and Operating Loss:
   22




---



##### Table of Contents



Other Income and Expense, Income Taxes and Net Loss:
      23




---



##### Table of Contents



Accounting Policies:
  Note 2
 Liquidity and Capital Resources
        24




---



##### Table of Contents



Outstanding
    
    
    
    
    
    
    Weighted AverageBorrowings as of
    
    
    Availability as of
    
    
    Interest Rate for the nineSeptember 30,
    
    
    September 30,
    
    
    months ended September 30,Debt type
    
    2010
    
    
    2010
    
    
    2010U.S. Revolver A
    
    $
    4.0
    
    
    $
    80.2
    
    
    
    2.70
    %U.S. Revolver B
    
    
    25.3
    
    
    
    24.7
    
    
    
    1.57
    %Canadian facility
    
    
    
    
    
    
    9.5
    
    
    
    0.22
    %Trade acceptances (a)
    
    
    7.5
    
    
    
    n/a
    
    
    
    1.14
    %
 (a)
    
    The trade acceptance purchase agreement which was a 364-day facility expired by its
terms on August 27, 2010. The outstanding trade acceptances will be paid on their
respective maturity dates. Liquidity will not be materially impacted as the Company has
sufficient borrowing availability under its revolver as noted above.    :
 2010
    
    $
    7.62011
    
    
    7.72012
    
    
    8.22013
    
    
    33.92014
    
    
    9.12015 and beyond
    
    
    9.6Total debt
    
    $
    76.1
  Actual atRequirement per
    
    
    September 30,Covenant Description
    
    Credit Agreement
    
    
    2010Funded debt-to-capital ratio
    
    less than 0.55
    
    
    
    0.18Working capital-to-debt ratio
    
    greater than 1.0
    
    
    
    3.59Minimum adjusted consolidated net worth
    

    $261.6
    
    
    $
    326.3
   25




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
    Internal Control  Integrated Framework,
 Changes in Internal Control over Financial Reporting
   26




---



##### Table of Contents



Part II. OTHER INFORMATION
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 6. Exhibits
 Exhibit No.
    
    Description3.2
    
    
    By-Laws of the Company, as amended on October 28, 201010.24
    *
    
    Form of amended and restated Change in Control Agreement for executive
officers other than the CEO. Filed as Exhibit 10.24 to Form 8-K filed
September 21, 2010. Commission File No. 1-541531.1
    
    
    CEO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 200231.2
    
    
    CFO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 200232.1
    
    
    CEO and CFO Certification Pursuant to Section 906 of the Sarbanes Oxley
Act of 2002
 *
    
    This agreement is considered a compensatory plan or arrangement. 
 SIGNATURE
  A. M. Castle & Co.
(Registrant)Date: November 5, 2010
    By:
    /s/ Patrick R. AndersonPatrick R. AndersonVice President  Controller and Chief
Accounting Officer
(Mr. Anderson has been authorized to sign
on behalf of the Registrant.)  27




---



##### Table of Contents



Exhibit Index
  Exhibit No.
    
    Description
    
    Page3.2
    
    
    By-Laws of the Company, as amended on October 28, 2010
    
    E-110.24
    *
    
    Form of amended and restated Change in Control
Agreement for executive officers other than the CEO.
Filed as Exhibit 10.24 to Form 8-K filed September
21, 2010. Commission File No. 1-541531.1
    
    
    CEO Certification Pursuant to Section 302 of the
Sarbanes Oxley Act of 2002
    
    E-1631.2
    
    
    CFO Certification Pursuant to Section 302 of the
Sarbanes Oxley Act of 2002
    
    E-1732.1
    
    
    CEO and CFO Certification Pursuant to Section 906 of
the Sarbanes Oxley Act of 2002
    
    E-18
 *
    
    This agreement is considered a compensatory plan or arrangement.  28