##### 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 EndedSeptember 30, 2008
 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
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
  Class
    
    Outstanding at October 24, 2008Common Stock, $0.01 Par Value
    
    22,645,807 shares




---



##### 



PagePart I. Financial InformationItem 1.
    
    Condensed Consolidated Financial Statements (unaudited):Condensed Consolidated Balance Sheets
    
    3Condensed Consolidated Statements of Operations
    
    4Condensed Consolidated Statements of Cash Flows
    
    5Notes to Condensed Consolidated Financial Statements
    
    6-19Item 2.
    
    Managements
Discussion and Analysis of Financial Condition and Results of Operations
    
    19-26Item 3.
    
    Quantitative and Qualitative Disclosure About Market Risk
    
    26Item 4.
    
    Controls and Procedures
    
    26-27Part II. Other InformationItem 6.
    
    Exhibits
    
    28EX-31.1EX-31.2EX-32.1




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##### Table of Contents



CONDENSED CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands, except share and par value data)
Unaudited
 As ofSeptember 30,
    
    
    December 31,2008
    
    
    2007ASSETSCurrent assetsCash and cash equivalents
    
    $
    17,696
    
    
    $
    22,970Accounts receivable, less allowances of $3,146 at September 30, 2008
and $3,220 at December 31, 2007
    
    
    204,148
    
    
    
    146,675Inventories, principally on last-in, first-out basis (replacement cost
higher by $180,953 at September 30, 2008 and $142,118 at December 31, 2007)
    
    
    272,457
    
    
    
    207,284Other current assets
    
    
    11,856
    
    
    
    13,462Total current assets
    
    
    506,157
    
    
    
    390,391Investment in joint venture
    
    
    23,437
    
    
    
    17,419Goodwill
    
    
    112,308
    
    
    
    101,540Intangible assets
    
    
    58,384
    
    
    
    59,602Prepaid pension cost
    
    
    28,987
    
    
    
    25,426Other assets
    
    
    6,229
    
    
    
    7,516Property, plant and equipment, at costLand
    
    
    5,192
    
    
    
    5,196Building
    
    
    50,186
    
    
    
    48,727Machinery and equipment (includes construction in progress)
    
    
    170,450
    
    
    
    155,950225,828
    
    
    
    209,873Less  accumulated depreciation
    
    
    (139,483
    )
    
    
    (134,763
    )86,345
    
    
    
    75,110Total assets
    
    $
    821,847
    
    
    $
    677,004LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable
    
    $
    155,791
    
    
    $
    109,055Accrued liabilities
    
    
    34,796
    
    
    
    33,143Income taxes payable
    
    
    4,563
    
    
    
    2,497Deferred income taxes  current
    
    
    5,015
    
    
    
    7,298Current portion of long-term debt
    
    
    7,196
    
    
    
    7,037Short-term debt
    
    
    53,197
    
    
    
    18,739Total current liabilities
    
    
    260,558
    
    
    
    177,769Long-term debt, less current portion
    
    
    90,100
    
    
    
    60,712Deferred income taxes
    
    
    39,759
    
    
    
    37,760Other non-current liabilities
    
    
    17,043
    
    
    
    15,688Commitments and contingenciesStockholders equityCommon stock, $0.01 par value - 30,000,000 shares authorized;
22,850,106 shares issued and 22,645,807 outstanding at September 30, 2008 and
22,330,946 shares issued and 22,097,869 outstanding at December 31, 2007
    
    
    228
    
    
    
    223Additional paid-in capital
    
    
    178,774
    
    
    
    179,707Retained earnings
    
    
    239,635
    
    
    
    207,134Accumulated other comprehensive (loss) income
    
    
    (1,330
    )
    
    
    1,498Treasury stock, at cost - 204,299 shares at September 30, 2008
and 233,077 shares at December 31, 2007
    
    
    (2,920
    )
    
    
    (3,487
    )Total stockholders equity
    
    
    414,387
    
    
    
    385,075Total liabilities and stockholders equity
    
    $
    821,847
    
    
    $
    677,004
 The accompanying notes are an integral part of these statements.




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##### Table of Contents



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Dollars in thousands, except per share data)
Unaudited
 For the Three
    
    
    For the NineMonths Ended
    
    
    Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    388,898
    
    
    $
    350,319
    
    
    $
    1,179,492
    
    
    $
    1,098,278Costs and expenses:Cost of materials (exclusive of depreciation and amortization)
    
    
    287,773
    
    
    
    253,121
    
    
    
    876,313
    
    
    
    792,834Warehouse, processing and delivery expense
    
    
    40,547
    
    
    
    35,136
    
    
    
    119,163
    
    
    
    104,999Sales, general, and administrative expense
    
    
    38,372
    
    
    
    34,852
    
    
    
    110,022
    
    
    
    105,193Depreciation and amortization expense
    
    
    5,574
    
    
    
    4,903
    
    
    
    17,452
    
    
    
    14,776Operating income
    
    
    16,632
    
    
    
    22,307
    
    
    
    56,542
    
    
    
    80,476Interest expense, net
    
    
    (2,781
    )
    
    
    (2,746
    )
    
    
    (7,040
    )
    
    
    (11,170
    )Income before income taxes and equity in earnings of joint venture
    
    
    13,851
    
    
    
    19,561
    
    
    
    49,502
    
    
    
    69,306Income taxes
    
    
    (5,720
    )
    
    
    (8,073
    )
    
    
    (21,019
    )
    
    
    (27,944
    )Income before equity in earnings of joint venture
    
    
    8,131
    
    
    
    11,488
    
    
    
    28,483
    
    
    
    41,362Equity in earnings of joint venture
    
    
    3,347
    
    
    
    1,422
    
    
    
    8,060
    
    
    
    3,745Net income
    
    
    11,478
    
    
    
    12,910
    
    
    
    36,543
    
    
    
    45,107Preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (593
    )Net income applicable to common stock
    
    $
    11,478
    
    
    $
    12,910
    
    
    $
    36,543
    
    
    $
    44,514Basic earnings per share
    
    $
    0.51
    
    
    $
    0.58
    
    
    $
    1.63
    
    
    $
    2.22Diluted earnings per share
    
    $
    0.50
    
    
    $
    0.57
    
    
    $
    1.62
    
    
    $
    2.14Dividends per common share paid
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.18
    
    
    $
    0.18
 The accompanying notes are an integral part of these statements.




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##### Table of Contents



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands)Unaudited
 For the NineMonths EndedSeptember 30,2008
    
    
    2007Operating activities:Net income
    
    $
    36,543
    
    
    $
    45,107Adjustments to reconcile net income to net cash
used in operating activities:Depreciation and amortization
    
    
    17,452
    
    
    
    14,776Amortization of deferred gain
    
    
    (890
    )
    
    
    (670
    )Loss on disposal of fixed assets
    
    
    65
    
    
    
    1,325Impairment of long-lived asset
    
    
    
    
    
    
    589Equity in earnings of joint venture
    
    
    (8,060
    )
    
    
    (3,745
    )Dividends from joint venture
    
    
    2,086
    
    
    
    1,103Deferred tax provision
    
    
    (1,065
    )
    
    
    (5,154
    )Share-based compensation expense
    
    
    2,555
    
    
    
    3,798Excess tax benefits from share-based payment arrangements
    
    
    (2,752
    )
    
    
    (420
    )Increase (decrease) from changes, net of acquisitions, in:Accounts receivable
    
    
    (46,037
    )
    
    
    (20,830
    )Inventories
    
    
    (57,765
    )
    
    
    (23,248
    )Other current assets
    
    
    4,947
    
    
    
    3,357Other assets
    
    
    1,371
    
    
    
    2,937Prepaid pension costs
    
    
    (1,554
    )
    
    
    74Accounts payable
    
    
    40,711
    
    
    
    (6,874
    )Accrued liabilities
    
    
    (858
    )
    
    
    8,252Income taxes payable
    
    
    (1,082
    )
    
    
    2,096Postretirement benefit obligations and other liabilities
    
    
    (1,297
    )
    
    
    2,140Net cash from (used in) operating activities
    
    
    (15,630
    )
    
    
    24,613Investing activities:Cash paid for acquisitions, net of cash acquired
    
    
    (26,857
    )
    
    
    (280
    )Capital expenditures
    
    
    (18,814
    )
    
    
    (13,150
    )Proceeds from sale of fixed assets
    
    
    75
    
    
    
    23Net cash used in investing activities
    
    
    (45,596
    )
    
    
    (13,407
    )Financing activities:Short-term borrowings (repayments), net
    
    
    34,269
    
    
    
    (62,904
    )Proceeds from issuance of long-term debt
    
    
    30,490
    
    
    
    Repayments of long-term debt
    
    
    (409
    )
    
    
    (29,089
    )Payment of debt issuance fees
    
    
    (424
    )
    
    
    (21
    )Preferred stock dividends
    
    
    
    
    
    
    (345
    )Common stock dividends
    
    
    (4,042
    )
    
    
    (3,378
    )Excess tax benefits from share-based payment arrangements
    
    
    2,752
    
    
    
    420Net proceeds from issuance of common stock
    
    
    
    
    
    
    92,883Payment of withholding taxes from share-based incentive issuance
    
    
    (6,000
    )
    
    
    Exercise of stock options and other
    
    
    450
    
    
    
    508Net cash from (used in) financing activities
    
    
    57,086
    
    
    
    (1,926
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (1,134
    )
    
    
    272Net increase in cash and cash equivalents
    
    
    (5,274
    )
    
    
    9,552Cash and cash equivalents  beginning of year
    
    
    22,970
    
    
    
    9,526Cash and cash equivalents  end of period
    
    $
    17,696
    
    
    $
    19,078
 The accompanying notes are an integral part of these statements.




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##### Table of Contents



(Unaudited  Amounts in thousands except per share data)
 (1) Condensed Consolidated Financial Statements
   (2) New Accounting Standards
 Standards Adopted
    Standards Issued Not Yet Adopted




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##### Table of Contents



(3) Acquisitions
 Acquisition of Metals U.K. Group




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##### Table of Contents



Preliminary Purchase Price AllocationCurrent assets
    
    $
    25,903Property, plant and equipment, net
    
    
    3,876Trade name
    
    
    516Customer relationships  contractual
    
    
    893Customer relationships  non-contractual
    
    
    2,421Non-compete agreements
    
    
    1,705Goodwill
    
    
    12,404Total assets
    
    
    47,718Current liabilities
    
    
    13,726Long-term liabilities
    
    
    4,299Total liabilities
    
    
    18,025Net assets
    
    $
    29,693




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##### Table of Contents



Acquisition of Transtar Intermediate Holdings #2, Inc. (Transtar)
   (4) Earnings Per Share




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##### Table of Contents



For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Numerator:Net income
    
    $
    11,478
    
    
    $
    12,910
    
    
    $
    36,543
    
    
    $
    45,107Preferred dividends distributed
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (593
    )Undistributed earnings
    
    $
    11,478
    
    
    $
    12,910
    
    
    $
    36,543
    
    
    $
    44,514Undistributed earnings attributable to:Common stockholders
    
    $
    11,478
    
    
    $
    12,910
    
    
    $
    36,543
    
    
    $
    42,936Preferred stockholders, as if converted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,578Total undistributed earnings
    
    $
    11,478
    
    
    $
    12,910
    
    
    $
    36,543
    
    
    $
    44,514Denominator:Denominator for basic earnings per share:Weighted average common shares outstanding
    
    
    22,644
    
    
    
    22,076
    
    
    
    22,487
    
    
    
    19,369Effect of dilutive securities:Outstanding employee and directors
common stock options, restricted stock
and share-based awards
    
    
    135
    
    
    
    771
    
    
    
    117
    
    
    
    744Convertible preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    979Denominator for diluted earnings per share
    
    
    22,779
    
    
    
    22,847
    
    
    
    22,604
    
    
    
    21,092Basic earnings per share
    
    $
    0.51
    
    
    $
    0.58
    
    
    $
    1.63
    
    
    $
    2.22Diluted earnings per share
    
    $
    0.50
    
    
    $
    0.57
    
    
    $
    1.62
    
    
    $
    2.14Outstanding common stock options and
convertible preferred stock shares having
an anti-dilutive effect
    
    
    20
    
    
    
    
    
    
    
    20
    
    
    
    




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##### Table of Contents



(5) Debt
  September 30,
    
    
    December 31,2008
    
    
    2007SHORT-TERM DEBTU.S. Revolver A
    
    $
    41,000
    
    
    $
    4,300Mexico
    
    
    2,200
    
    
    
    Other foreign
    
    
    
    
    
    
    2,312Trade acceptances
    
    
    9,997
    
    
    
    12,127Total short-term debt
    
    
    53,197
    
    
    
    18,739LONG-TERM DEBT6.76% insurance company loan due in
scheduled installments from 2008
through 2015
    
    
    63,228
    
    
    
    63,228U.S. Revolver B
    
    
    28,366
    
    
    
    Industrial development revenue bonds at
a 2.943% weighted average rate, due in
varying amounts through 2009
    
    
    3,600
    
    
    
    3,600Other, primarily capital leases
    
    
    2,102
    
    
    
    921Total long-term debt
    
    
    97,296
    
    
    
    67,749Less current portion
    
    
    (7,196
    )
    
    
    (7,037
    )Total long-term portion
    
    
    90,100
    
    
    
    60,712TOTAL SHORT-TERM AND LONG-TERM DEBT
    
    $
    150,493
    
    
    $
    86,488




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##### Table of Contents



(6) Segment Reporting




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##### Table of Contents



Net
    
    
    Operating
    
    
    Capital
    
    
    Depreciation &Sales
    
    
    Income
    
    
    Expenditures
    
    
    Amortization2008Metals segment
    
    $
    360,073
    
    
    $
    19,239
    
    
    $
    6,924
    
    
    $
    5,245Plastics segment
    
    
    28,825
    
    
    
    508
    
    
    
    628
    
    
    
    329Other
    
    
    
    
    
    
    (3,115
    )
    
    
    
    
    
    
    Consolidated
    
    $
    388,898
    
    
    $
    16,632
    
    
    $
    7,552
    
    
    $
    5,5742007Metals segment
    
    $
    320,836
    
    
    $
    24,084
    
    
    $
    3,794
    
    
    $
    4,627Plastics segment
    
    
    29,483
    
    
    
    1,023
    
    
    
    985
    
    
    
    276Other
    
    
    
    
    
    
    (2,800
    )
    
    
    
    
    
    
    Consolidated
    
    $
    350,319
    
    
    $
    22,307
    
    
    $
    4,779
    
    
    $
    4,903
   Net
    
    
    Operating
    
    
    Capital
    
    
    Depreciation &Sales
    
    
    Income
    
    
    Expenditures
    
    
    Amortization2008Metals segment
    
    $
    1,087,739
    
    
    $
    62,111
    
    
    $
    17,170
    
    
    $
    16,502Plastics segment
    
    
    91,753
    
    
    
    3,222
    
    
    
    1,644
    
    
    
    950Other
    
    
    
    
    
    
    (8,791
    )
    
    
    
    
    
    
    Consolidated
    
    $
    1,179,492
    
    
    $
    56,542
    
    
    $
    18,814
    
    
    $
    17,4522007Metals segment
    
    $
    1,010,752
    
    
    $
    83,808
    
    
    $
    11,118
    
    
    $
    13,899Plastics segment
    
    
    87,526
    
    
    
    4,234
    
    
    
    2,032
    
    
    
    877Other
    
    
    
    
    
    
    (7,566
    )
    
    
    
    
    
    
    Consolidated
    
    $
    1,098,278
    
    
    $
    80,476
    
    
    $
    13,150
    
    
    $
    14,776
   September 30,
    
    
    December 31,2008
    
    
    2007Metals segment
    
    $
    742,730
    
    
    $
    607,993Plastics segment
    
    
    55,680
    
    
    
    51,592Other
    
    
    23,437
    
    
    
    17,419Consolidated
    
    $
    821,847
    
    
    $
    677,004




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##### Table of Contents



(7) Goodwill and Intangible Assets
 Acquisition of Metals U.K.
   Metals
    
    PlasticsSegment

    
    Segment
    
    TotalBalance as of December 31, 2007
    
    $
    88,567
    
    
    $
    12,973
    
    

    $
    101,540Acquisition of Metals U.K
    
    
    12,404
    
    
    
    
    
    
    
    12,404Transtar Adjustment
    
    
    (244
    )
    
    
    
    
    
    
    (244
    )Currency valuation
    
    
    (1,392
    )
    
    
    
    
    
    
    (1,392
    )Balance as of September 30, 2008
    
    $
    99,335
    
    
    $
    12,973
    
    
    $
    112,308
  September 30, 2008
    
    
    December 31, 2007GrossCarrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationCustomer relationships
    
    $
    69,902
    
    
    $
    13,218
    
    
    $
    66,867
    
    
    $
    8,131Non-compete agreements
    
    
    3,119
    
    
    
    1,506
    
    
    
    1,557
    
    
    
    691Trade name
    
    
    473
    
    
    
    386
    
    
    
    
    
    
    
    Total
    
    $
    73,494
    
    
    $
    15,110
    
    
    $
    68,424
    
    
    $
    8,822
   2008
    
    
    $8,3882009
    
    
    7,6992010
    
    
    7,3492011
    
    
    6,7702012
    
    
    6,161




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##### Table of Contents



(8) Inventories
  (9) Share-based Compensation
  Restricted Stock, Stock Option and Equity Compensation Plans
   WeightedAverageShares
    
    Exercise PriceOutstanding at January 1, 2008
    
    
    284
    
    
    $
    11.68Granted
    
    
    Expired
    
    
    (2
    )
    
    $
    20.25Exercised
    
    
    (36
    )
    
    $
    12.31Outstanding at September 30, 2008
    
    
    246
    
    
    $
    11.49Vested or expected to vest as of September 30, 2008
    
    
    246




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##### Table of Contents



Weighted-Average GrantRestricted Stock
    
    Shares
    
    Date Fair ValueNon-vested shares outstanding at January 1, 2008
    
    
    53
    
    
    $
    28.51Granted
    
    
    33
    
    
    $
    27.18Forfeited
    
    
    (5
    )
    
    $
    25.87Vested
    
    
    (21
    )
    
    $
    31.77Non-vested shares outstanding at September 30, 2008
    
    
    60
    
    
    $
    27.04
 Deferred Compensation Plan
 Long-Term Incentive Performance Plans
 2005 Plan
 2007 Plan




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##### Table of Contents



2008 Plan
 (10) Comprehensive Income
 :
 September 30,2008
    
    2007Net income
    
    $
    11,478
    
    
    $
    12,910Foreign currency translation (loss) gain
    
    
    (3,249
    )
    
    
    2,394Pension cost amortization, net of tax
    
    
    59
    
    
    
    489Total comprehensive income
    
    $
    8,288
    
    
    $
    15,793
  September 30,2008
    
    2007Net income
    
    $
    36,543
    
    
    $
    45,107Foreign currency translation (loss) gain
    
    
    (4,052
    )
    
    
    5,088Pension cost amortization, net of tax
    
    
    1,224
    
    
    
    1,454Total comprehensive income
    
    $
    33,715
    
    
    $
    51,649
  September 30,
    
    December 31,2008
    
    2007Foreign currency translation gains
    
    $
    3,785
    
    
    $
    7,837Unrecognized pension and postretirement benefit
costs, net of tax
    
    
    (5,115
    )
    
    
    (6,339
    )Total accumulated other comprehensive (loss) income
    
    $
    (1,330
    )
    
    $
    1,498
 (11) Pension and Postretirement Plans




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For the Three Months EndedSeptember 30,2008
    
    2007Service cost
    
    $
    529
    
    
    $
    935Interest cost
    
    
    1,826
    
    
    
    1,911Expected return on assets
    
    
    (2,781
    )
    
    
    (2,520
    )Amortization of prior service cost
    
    
    26
    
    
    
    26Amortization of actuarial loss
    
    
    83
    
    
    
    787Net periodic pension and postretirement (benefit) cost
    
    $
    (317
    )
    
    $
    1,139
 For the Nine Months EndedSeptember 30,2008
    
    
    2007Service cost
    
    $
    1,587
    
    
    $
    2,804Interest cost
    
    
    5,479
    
    
    
    5,733Expected return on assets
    
    
    (8,343
    )
    
    
    (7,560
    )Amortization of prior service cost
    
    
    78
    
    
    
    79Amortization of actuarial loss
    
    
    249
    
    
    
    2,361Net periodic pension and postretirement
(benefit) cost, excluding impact
of curtailment
    
    $
    (950
    )
    
    $
    3,417
  (12) Commitments and Contingencies




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##### Table of Contents



(13) Income Taxes
  Balance as of December 31, 2007
    
    $
    1,754Increases (decreases) in unrecognized tax benefits:Due to tax positions taken during prior years
    
    
    65Due to tax positions taken during the current year
    
    
    299Balance as of September 30, 2008
    
    $
    2,118
   
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 This section may contain statements that constitute forward-looking statements
pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of
1995. These statements are identified by words such as anticipate, believe,
estimate, expect, intend, predict, or project and similar expressions.
Although the Company believes that the expectations reflected in such forward-looking
statements are based on reasonable assumptions, such statements are subject to risks and
uncertainties that could cause actual results to differ materially from those presented.
In addition, certain risk factors identified in ITEM 1A of the Companys Annual Report
on Form 10-K may affect the Companys businesses. As a result, past financial results
may not be a reliable indicator of future performance.
 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).
 Financial Review
  Executive Overview
 Economic Trends and Current Business Conditions




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##### Table of Contents



YEAR
    
    Qtr 1
    
    Qtr 2
    
    Qtr 3
    
    Qtr 42006
    
    
    54.7
    
    
    
    54.1
    
    
    
    52.9
    
    
    
    50.82007
    
    
    50.5
    
    
    
    53.0
    
    
    
    51.3
    
    
    
    49.62008
    
    
    49.2
    
    
    
    49.5
    
    
    
    47.8




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##### Table of Contents



Results
of Operations: Third Quarter 2008 Comparisons to Third Quarter
2007
  (Amounts in millions)
    
    Fav/(Unfav)2008
    
    2007
    
    $ Change
    
    % ChangeNet SalesMetals
    
    $
    360.1
    
    
    $
    320.8
    
    
    $
    39.3
    
    
    
    12.3
    %Plastics
    
    
    28.8
    
    
    
    29.5
    
    
    
    (0.7
    )
    
    
    (2.4
    )%Total Net Sales
    
    $
    388.9
    
    
    $
    350.3
    
    
    $
    38.6
    
    
    
    11.0
    %Cost of MaterialsMetals
    
    $
    268.2
    
    
    $
    232.8
    
    
    $
    (35.4
    )
    
    
    (15.2
    )%% of Metals Sales
    
    
    74.5
    %
    
    
    72.6
    %
    
    
    
    
    
    
    (1.9
    )%Plastics
    
    
    19.6
    
    
    
    20.3
    
    
    
    0.7
    
    
    
    3.4
    %% of Plastics Sales
    
    
    68.1
    %
    
    
    68.8
    %
    
    
    
    
    
    
    0.7
    %Total Cost of Materials
    
    $
    287.8
    
    
    $
    253.1
    
    
    $
    (34.7
    )
    
    
    (13.7
    )%% of Total Sales
    
    
    74.0
    %
    
    
    72.3
    %
    
    
    
    
    
    
    (1.7
    )%Other Operating Costs and ExpensesMetals
    
    $
    72.7
    
    
    $
    63.9
    
    
    $
    (8.8
    )
    
    
    (13.8
    )%Plastics
    
    
    8.7
    
    
    
    8.2
    
    
    
    (0.5
    )
    
    
    (6.1
    )%Other
    
    
    3.1
    
    
    
    2.8
    
    
    
    (0.3
    )
    
    
    (10.7
    )%Total Other Operating
Costs & Expenses
    
    $
    84.5
    
    
    $
    74.9
    
    
    $
    (9.6
    )
    
    
    (12.8
    )%% of Total Sales
    
    
    21.7
    %
    
    
    21.4
    %
    
    
    
    
    
    
    (0.3
    )%Operating IncomeMetals
    
    $
    19.2
    
    
    $
    24.1
    
    
    $
    (4.9
    )
    
    
    (20.3
    )%% of Metals Sales
    
    
    5.3
    %
    
    
    7.5
    %
    
    
    
    
    
    
    (2.2
    )%Plastics
    
    
    0.5
    
    
    
    1.0
    
    
    
    (0.5
    )
    
    
    (50.0
    )%% of Plastics Sales
    
    
    1.7
    %
    
    
    3.4
    %
    
    
    
    
    
    
    (1.7
    )%Other
    
    
    (3.1
    )
    
    
    (2.8
    )
    
    
    (0.3
    )
    
    
    (10.7
    )%Total Operating Income
    
    $
    16.6
    
    
    $
    22.3
    
    
    $
    (5.7
    )
    
    
    (25.6
    )%% of Total Sales
    
    
    4.3
    %
    
    
    6.4
    %
    
    
    
    
    
    
    (2.1
    )%
 
 Other includes the costs of executive, legal and finance departments which are shared by both segments of the Company. Acquisition of Metals U.K. Group:
  Net Sales:




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##### Table of Contents



Cost of Materials:
  Other Operating Expenses and Operating Income:
   Other Income and Expense, Income Taxes and Net Income:




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##### Table of Contents



Results of Operations: Nine Months 2008 Comparisons to Nine Months 2007
  (Amounts in millions)
    
    Fav/(Unfav)2008
    
    2007
    
    $ Change
    
    % ChangeNet SalesMetals
    
    $
    1,087.7
    
    
    $
    1,010.8
    
    
    $
    76.9
    
    
    
    7.6
    %Plastics
    
    
    91.8
    
    
    
    87.5
    
    
    
    4.3
    
    
    
    4.9
    %Total Net Sales
    
    $
    1,179.5
    
    
    $
    1,098.3
    
    
    $
    81.2
    
    
    
    7.4
    %Cost of MaterialsMetals
    
    $
    813.6
    
    
    $
    733.5
    
    
    $
    (80.1
    )
    
    
    (10.9
    )%% of Metals Sales
    
    
    74.8
    %
    
    
    72.6
    %
    
    
    
    
    
    
    (2.2
    )%Plastics
    
    
    62.7
    
    
    
    59.3
    
    
    
    (3.4
    )
    
    
    (5.7
    )%% of Plastics Sales
    
    
    68.3
    %
    
    
    67.8
    %
    
    
    
    
    
    
    (0.5
    )%Total Cost of Materials
    
    $
    876.3
    
    
    $
    792.8
    
    
    $
    (83.5
    )
    
    
    (10.5
    )%% of Total Net Sales
    
    
    74.3
    %
    
    
    72.2
    %
    
    
    
    
    
    
    (2.1
    )%Other Operating Costs
and ExpensesMetals
    
    $
    212.0
    
    
    $
    193.4
    
    
    $
    (18.6
    )
    
    
    (9.6
    )%Plastics
    
    
    25.9
    
    
    
    24.0
    
    
    
    (1.9
    )
    
    
    (7.9
    )%Other
    
    
    8.8
    
    
    
    7.6
    
    
    
    (1.2
    )
    
    
    (15.8
    )%Total Other Operating
Costs & Expense
    
    $
    246.7
    
    
    $
    225.0
    
    
    $
    (21.7
    )
    
    
    (9.6
    )%% of Total Net Sales
    
    
    20.9
    %
    
    
    20.5
    %
    
    
    
    
    
    
    (0.4
    )%Operating IncomeMetals
    
    $
    62.1
    
    
    $
    83.9
    
    
    $
    (21.8
    )
    
    
    (26.0
    )%% of Metals Sales
    
    
    5.7
    %
    
    
    8.3
    %
    
    
    
    
    
    
    (2.6
    )%Plastics
    
    
    3.2
    
    
    
    4.2
    
    
    
    (1.0
    )
    
    
    (23.8
    )%% of Plastics Sales
    
    
    3.5
    %
    
    
    4.8
    %
    
    
    
    
    
    
    (1.3
    )%Other
    
    
    (8.8
    )
    
    
    (7.6
    )
    
    
    (1.2
    )
    
    
    (15.8
    )%Total Operating Income
    
    $
    56.5
    
    
    $
    80.5
    
    
    $
    (24.0
    )
    
    
    (29.8
    )%% of Total Net Sales
    
    
    4.8
    %
    
    
    7.3
    %
    
    
    
    
    
    
    (2.5
    )%
 
 Other  Operating loss includes the costs of executive, finance and legal departments, and other corporate
activities which support both the metals and plastics segments of the Company. Net Sales:




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##### Table of Contents



Cost of Materials:
  Other Operating Expenses and Operating Income:
   Other Income and Expense, Income Taxes and Net Income:




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##### Table of Contents



Accounting Policies:
  Liquidity and Capital Resources
       :




---



##### Table of Contents



2008
    
    $
    6.72009
    
    
    11.02010
    
    
    7.92011
    
    
    8.02012
    
    
    8.12013 and beyond
    
    
    55.6Total debt
    
    $
    97.3
    
 Item 3. Quantitative and Qualitative Disclosure about Market Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures




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Changes in Internal Controls Over Financial Reporting




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Part II. OTHER INFORMATION
 
 Item 6. Exhibits




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##### Table of Contents



SIGNATURES  A. M. Castle & Co.(Registrant)Date: October 29, 2008
    
    By:
    
    /s/ Patrick R. Anderson

Patrick R. Anderson
Vice President  Controller and Chief Accounting Officer
(Mr. Anderson has been authorized to sign on behalf
of the Registrant.)