##### 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 June 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.
 
 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
  
 þ o
  Large Accelerated Filer
o
    
    Accelerated Filer
þ
    
    Non-Accelerated Filer   o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
 o þ
  Class
    
    
    Outstanding at July 28, 2008Common Stock, $0.01 Par Value
    
    
    22,645,807shares




---



##### 



Page 2 of 33   
  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 4. Submission of Matters to a Vote of Security Holders
    
    
    28Item 6. Exhibits
    
    
    29EX-10.1EX-10.2EX-31.1EX-31.2EX-32.1




---



##### Table of Contents



Page 3 of 33 
 CONDENSED CONSOLIDATED BALANCE SHEETS  (Dollars in thousands, except share and par value data)
Unaudited
 As ofJune 30,
    
    
    Dec 31,2008
    
    
    2007ASSETSCurrent assetsCash and cash equivalents
    
    $
    26,132
    
    
    $
    22,970Accounts receivable, less allowances of $3,434 at June 30, 2008
and $3,220 at December 31, 2007
    
    
    211,137
    
    
    
    146,675Inventories, principally on last-in, first-out basis (replacement cost higher by $174,912
at June 30, 2008 and $142,118 at December 31, 2007)
    
    
    248,007
    
    
    
    207,284Other current assets
    
    
    16,722
    
    
    
    13,462Total current assets
    
    
    501,998
    
    
    
    390,391Investment in joint venture
    
    
    21,050
    
    
    
    17,419Goodwill
    
    
    113,847
    
    
    
    101,540Intangible assets
    
    
    60,939
    
    
    
    59,602Prepaid pension cost
    
    
    28,373
    
    
    
    25,426Other assets
    
    
    8,389
    
    
    
    7,516Property, plant and equipment, at costLand
    
    
    5,194
    
    
    
    5,196Building
    
    
    49,591
    
    
    
    48,727Machinery and equipment (includes construction in progress)
    
    
    167,729
    
    
    
    155,950222,514
    
    
    
    209,873Less  accumulated depreciation
    
    
    (139,794
    )
    
    
    (134,763
    )82,720
    
    
    
    75,110Total assets
    
    $
    817,316
    
    
    $
    677,004LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable
    
    $
    173,836
    
    
    $
    109,055Accrued liabilities
    
    
    31,342
    
    
    
    33,143Income taxes payable
    
    
    3,190
    
    
    
    2,497Deferred income taxes  current
    
    
    6,563
    
    
    
    7,298Current portion of long-term debt
    
    
    7,416
    
    
    
    7,037Short-term debt
    
    
    36,378
    
    
    
    18,739Total current liabilities
    
    
    258,725
    
    
    
    177,769Long-term debt, less current portion
    
    
    94,721
    
    
    
    60,712Deferred income taxes
    
    
    39,992
    
    
    
    37,760Other non-current liabilities
    
    
    17,144
    
    
    
    15,688Commitments and contingenciesStockholders equityCommon stock, $0.01 par value  30,000,000 shares authorized;22,850,106 shares issued and 22,638,707 outstanding at June 30, 2008 and
22,330,946 shares issued and 22,097,869 outstanding at December 31, 2007
    
    
    228
    
    
    
    223Additional paid-in capital
    
    
    178,195
    
    
    
    179,707Retained earnings
    
    
    229,515
    
    
    
    207,134Accumulated other comprehensive income
    
    
    1,860
    
    
    
    1,498Treasury stock, at cost - 211,399 shares at June 30, 2008
and 233,077 shares at December 31, 2007
    
    
    (3,064
    )
    
    
    (3,487
    )Total stockholders equity
    
    
    406,734
    
    
    
    385,075Total liabilities and stockholders equity
    
    $
    817,316
    
    
    $
    677,004
 The accompanying notes are an integral part of these statements.




---



##### Table of Contents



Page 4 of 33 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Dollars in thousands, except per share data)
Unaudited
 For the Three
    
    
    For the SixMonths Ended
    
    
    Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    397,115
    
    
    $
    372,608
    
    
    $
    790,594
    
    
    $
    747,959Costs and expenses:Cost of materials (exclusive of depreciation and amortization)
    
    
    297,196
    
    
    
    270,263
    
    
    
    588,540
    
    
    
    539,713Warehouse, processing and delivery expense
    
    
    40,091
    
    
    
    34,293
    
    
    
    78,616
    
    
    
    69,863Sales, general and administrative expense
    
    
    36,168
    
    
    
    33,947
    
    
    
    71,650
    
    
    
    70,341Depreciation and amortization expense
    
    
    6,067
    
    
    
    4,977
    
    
    
    11,878
    
    
    
    9,873Operating income
    
    
    17,593
    
    
    
    29,128
    
    
    
    39,910
    
    
    
    58,169Interest expense, net
    
    
    (2,213
    )
    
    
    (4,163
    )
    
    
    (4,259
    )
    
    
    (8,424
    )Income before income taxes and equity in earnings of joint venture
    
    
    15,380
    
    
    
    24,965
    
    
    
    35,651
    
    
    
    49,745Income taxes
    
    
    (6,949
    )
    
    
    (9,994
    )
    
    
    (15,299
    )
    
    
    (19,871
    )Income before equity in earnings of joint venture
    
    
    8,431
    
    
    
    14,971
    
    
    
    20,352
    
    
    
    29,874Equity in earnings of joint venture
    
    
    2,820
    
    
    
    1,391
    
    
    
    4,713
    
    
    
    2,323Net income
    
    
    11,251
    
    
    
    16,362
    
    
    
    25,065
    
    
    
    32,197Preferred stock dividends
    
    
    
    
    
    
    (350
    )
    
    
    
    
    
    
    (593
    )Net income applicable to common stock
    
    $
    11,251
    
    
    $
    16,012
    
    
    $
    25,065
    
    
    $
    31,604Basic earnings per share
    
    $
    0.50
    
    
    $
    0.81
    
    
    $
    1.12
    
    
    $
    1.65Diluted earnings per share
    
    $
    0.49
    
    
    $
    0.78
    
    
    $
    1.11
    
    
    $
    1.59Dividends per common share paid
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.12
    
    
    $
    0.12
 The accompanying notes are an integral part of these statements.




---



##### Table of Contents



Page 5 of 33 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (Dollars in thousands)
Unaudited
 For the SixMonths EndedJune 30,2008
    
    
    2007Operating activities:Net income
    
    $
    25,065
    
    
    $
    32,197Adjustments to reconcile net income to net cash
used in operating activities:Depreciation and amortization
    
    
    11,878
    
    
    
    9,873Amortization of deferred gain
    
    
    (638
    )
    
    
    (447
    )Loss on disposal of fixed assets
    
    
    15
    
    
    
    1,327Impairment of long-lived asset
    
    
    
    
    
    
    589Equity in earnings of joint venture
    
    
    (4,713
    )
    
    
    (2,323
    )Dividends from joint venture
    
    
    1,112
    
    
    
    715Deferred tax provision
    
    
    750
    
    
    
    1,498Share-based compensation expense
    
    
    1,757
    
    
    
    2,515Excess tax benefits from share-based payment arrangements
    
    
    (2,752
    )
    
    
    (148
    )Increase (decrease) from changes, net of acquisitions, in:Accounts receivable
    
    
    (49,633
    )
    
    
    (25,153
    )Inventories
    
    
    (29,441
    )
    
    
    (43,611
    )Other current assets
    
    
    2,328
    
    
    
    2,762Other assets
    
    
    1,386
    
    
    
    2,035Prepaid pension costs
    
    
    (1,036
    )
    
    
    49Accounts payable
    
    
    53,916
    
    
    
    5,741Accrued liabilities
    
    
    (4,695
    )
    
    
    2,454Income taxes payable
    
    
    (5,192
    )
    
    
    (1,861
    )Postretirement benefit obligations and other liabilities
    
    
    (1,622
    )
    
    
    626Net cash used in operating activities
    
    
    (1,515
    )
    
    
    (11,162
    )Investing activities:Cash paid for acquisition, net of cash acquired
    
    
    (26,812
    )
    
    
    Capital expenditures
    
    
    (11,262
    )
    
    
    (8,371
    )Proceeds from sale of fixed assets
    
    
    29
    
    
    
    23Net cash used in investing activities
    
    
    (38,045
    )
    
    
    (8,348
    )Financing activities:Short-term borrowings (repayments), net
    
    
    17,344
    
    
    
    (39,560
    )Proceeds from issuance of long-term debt
    
    
    32,288
    
    
    
    Repayments of long-term debt
    
    
    (279
    )
    
    
    (28,899
    )Payment of debt issuance fees
    
    
    (424
    )
    
    
    (21
    )Preferred stock dividends
    
    
    
    
    
    
    (345
    )Common stock dividends
    
    
    (2,684
    )
    
    
    (2,056
    )Excess tax benefits from share-based payment arrangements
    
    
    2,752
    
    
    
    148Net proceeds from issuance of common stock
    
    
    
    
    
    
    93,196Payment of withholding taxes from share-based incentive issuance
    
    
    (6,000
    )
    
    
    Exercise of stock options and other
    
    
    523
    
    
    
    210Net cash from financing activities
    
    
    43,520
    
    
    
    22,673Effect of exchange rate changes on cash and cash equivalents
    
    
    (798
    )
    
    
    375Net increase in cash and cash equivalents
    
    
    3,162
    
    
    
    3,538Cash and cash equivalents  beginning of year
    
    
    22,970
    
    
    
    9,526Cash and cash equivalents  end of period
    
    $
    26,132
    
    
    $
    13,064
 The accompanying notes are an integral part of these statements.




---



##### Table of Contents



Page 6 of 33  
  (Unaudited  Amounts in thousands except share and per share data)
 (1) Condensed Consolidated Financial Statements
   (2) New Accounting Standards
 Standards Adopted
    Standards Issued Not Yet Adopted




---



##### Table of Contents



Page 7 of 33




---



##### Table of Contents



Page 8 of 33 (3) Acquisitions
 Acquisition of Metals U.K. Group
      Preliminary Purchase Price Allocation
 Current assets
    
    $
    25,903Property, plant and equipment, net
    
    
    3,876Trade name
    
    
    516Customer relationships  contractual
    
    
    893Customer relationships  non-contractual
    
    
    2,421Non-compete agreements
    
    
    1,705Goodwill
    
    
    12,359Total assets
    
    
    47,673Current liabilities
    
    
    13,726Long-term liabilities
    
    
    4,299Total liabilities
    
    
    18,025Net assets
    
    $
    29,648




---



##### Table of Contents



Page 9 of 33    Acquisition of Transtar Intermediate Holdings #2, Inc. (Transtar)
  (4) Earnings Per Share




---



##### Table of Contents



Page 10 of 33 For the Three Months
    
    For the Six MonthsEnded June 30,
    
    Ended June 30,2008
    
    2007
    
    2008
    
    2007Numerator:Net income
    
    $
    11,251
    
    
    $
    16,362
    
    
    $
    25,065
    
    
    $
    32,197Preferred dividends distributed
    
    
    
    
    
    
    (350
    )
    
    
    
    
    
    
    (593
    )Undistributed earnings
    
    $
    11,251
    
    
    $
    16,012
    
    
    $
    25,065
    
    
    $
    31,604Undistributed earnings attributable to:Common stockholders
    
    $
    11,251
    
    
    $
    15,392
    
    
    $
    25,065
    
    
    $
    29,730Preferred stockholders, as if converted
    
    
    
    
    
    
    620
    
    
    
    
    
    
    
    1,874Total undistributed earnings
    
    $
    11,251
    
    
    $
    16,012
    
    
    $
    25,065
    
    
    $
    31,604Denominator:Denominator for basic earnings per share:Weighted average common shares outstanding
    
    
    22,621
    
    
    
    18,985
    
    
    
    22,408
    
    
    
    18,016Effect of dilutive securities:Outstanding employee and directors
common stock options, restricted stock
and share-based awards
    
    
    155
    
    
    
    780
    
    
    
    82
    
    
    
    786Convertible preferred stock
    
    
    
    
    
    
    1,196
    
    
    
    
    
    
    
    1,495Denominator for diluted earnings per share
    
    
    22,776
    
    
    
    20,961
    
    
    
    22,490
    
    
    
    20,277Basic earnings per share
    
    $
    0.50
    
    
    $
    0.81
    
    
    $
    1.12
    
    
    $
    1.65Diluted earnings per share
    
    $
    0.49
    
    
    $
    0.78
    
    
    $
    1.11
    
    
    $
    1.59Outstanding common stock options and
convertible preferred stock shares having
an anti-dilutive effect
    
    
    20
    
    
    
    
    
    
    
    20
    
    
    
    




---



##### Table of Contents



Page 11 of 33 (5) Debt
  June 30, 2008
    
    December 31, 2007SHORT-TERM DEBTU.S. Revolver A
    
    $
    17,500
    
    
    $
    4,300Mexico
    
    
    3,000
    
    
    
    Other foreign
    
    
    1,407
    
    
    
    2,312Trade acceptances
    
    
    14,471
    
    
    
    12,127Total short-term debt
    
    
    36,378
    
    
    
    18,739LONG-TERM DEBT6.76% insurance company loan due
in scheduled installments from
2008 through 2015
    
    
    63,228
    
    
    
    63,228U.S. Revolver B
    
    
    32,712
    
    
    
    Industrial development revenue
bonds at a 3.91% weighted average
rate, due in varying amounts
through 2009
    
    
    3,600
    
    
    
    3,600Other, primarily capital leases
    
    
    2,597
    
    
    
    921Total long-term debt
    
    
    102,137
    
    
    
    67,749Less current portion
    
    
    (7,416
    )
    
    
    (7,037
    )Total long-term portion
    
    
    94,721
    
    
    
    60,712TOTAL SHORT-TERM AND LONG-TERM DEBT
    
    $
    138,515
    
    
    $
    86,488




---



##### Table of Contents



Page 12 of 33   (6) Segment Reporting




---



##### Table of Contents



Page 13 of 33  Net
    
    Operating
    
    Capital
    
    Depreciation &Sales
    
    Income
    
    Expenditures
    
    Amortization2008Metals segment
    
    $
    365,400
    
    
    $
    19,570
    
    
    $
    5,380
    
    
    $
    5,749Plastics segment
    
    
    31,715
    
    
    
    1,096
    
    
    
    505
    
    
    
    318Other
    
    
    
    
    
    
    (3,073
    )
    
    
    
    
    
    
    Consolidated
    
    $
    397,115
    
    
    $
    17,593
    
    
    $
    5,885
    
    
    $
    6,0672007Metals segment
    
    $
    343,324
    
    
    $
    29,395
    
    
    $
    5,579
    
    
    $
    4,682Plastics segment
    
    
    29,284
    
    
    
    1,706
    
    
    
    613
    
    
    
    295Other
    
    
    
    
    
    
    (1,973
    )
    
    
    
    
    
    
    Consolidated
    
    $
    372,608
    
    
    $
    29,128
    
    
    $
    6,192
    
    
    $
    4,977Other  Operating loss includes the costs of executive, legal and finance departments, which are
shared by both the Metals and Plastics segments.Segment information for the six
months ended June 30, 2008 and 2007 is as follows:Net
    
    Operating
    
    Capital
    
    Depreciation &Sales
    
    Income
    
    Expenditures
    
    Amortization2008Metals segment
    
    $
    727,666
    
    
    $
    42,872
    
    
    $
    10,246
    
    
    $
    11,257Plastics segment
    
    
    62,928
    
    
    
    2,714
    
    
    
    1,016
    
    
    
    621Other
    
    
    
    
    
    
    (5,676
    )
    
    
    
    
    
    
    Consolidated
    
    $
    790,594
    
    
    $
    39,910
    
    
    $
    11,262
    
    
    $
    11,8782007Metals segment
    
    $
    689,916
    
    
    $
    59,725
    
    
    $
    7,324
    
    
    $
    9,272Plastics segment
    
    
    58,043
    
    
    
    3,211
    
    
    
    1,047
    
    
    
    601Other
    
    
    
    
    
    
    (4,767
    )
    
    
    
    
    
    
    Consolidated
    
    $
    747,959
    
    
    $
    58,169
    
    
    $
    8,371
    
    
    $
    9,873
   June 30,
    
    December 31,2008
    
    2007Metals segment
    
    $
    740,779
    
    
    $
    607,993Plastics segment
    
    
    55,487
    
    
    
    51,592Other
    
    
    21,050
    
    
    
    17,419Consolidated
    
    $
    817,316
    
    
    $
    677,004




---



##### Table of Contents



Page 14 of 33 (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
    
    
    12,359
    
    
    
    
    
    
    
    12,359Currency valuation
    
    
    (52
    )
    
    
    
    
    
    
    (52
    )Balance as of June 30, 2008
    
    $
    100,874
    
    
    $
    12,973
    
    
    $
    113,847
   June 30, 2008
    
    December 31, 2007GrossCarrying
    
    Accumulated
    
    Gross Carrying
    
    AccumulatedAmount
    
    Amortization
    
    Amount
    
    AmortizationCustomer relationships
    
    $
    70,181
    
    
    $
    11,527
    
    
    $
    66,867
    
    
    $
    8,131Non-compete agreements
    
    
    3,262
    
    
    
    1,235
    
    
    
    1,557
    
    
    
    691Trade name
    
    
    516
    
    
    
    258
    
    
    
    
    
    
    
    Total
    
    $
    73,959
    
    
    $
    13,020
    
    
    $
    68,424
    
    
    $
    8,822
   2008
    
    $
    8,3882009
    
    
    7,6992010
    
    
    7,3492011
    
    
    6,7702012
    
    
    6,161




---



##### Table of Contents



Page 15 of 33 (8) Inventories
   (9) Share-based Compensation
  Restricted Stock, Stock Option and Equity Compensation Plans




---



##### Table of Contents



Page 16 of 33 WeightedAverageShares
    
    Exercise PriceOutstanding at January 1, 2008
    
    
    284,120
    
    
    $
    11.68Granted
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Exercised
    
    
    (35,666
    )
    
    $
    14.66Outstanding at June 30, 2008
    
    
    248,454
    
    
    $
    11.18Vested or expected to vest as of June 30, 2008
    
    
    248,454
   Weighted-Average GrantRestricted Stock
    
    Shares
    
    Date Fair ValueNon-vested shares outstanding at January 1, 2008
    
    
    52,714
    
    
    $
    28.51Granted
    
    
    26,178
    
    
    $
    26.34Forfeited
    
    
    (4,500
    )
    
    $
    25.87Vested
    
    
    (13,014
    )
    
    $
    34.58Non-vested shares outstanding at June 30, 2008
    
    
    61,378
    
    
    $
    26.49
 Deferred Compensation Plan
 Long-Term Incentive Performance Plans




---



##### Table of Contents



Page 17 of 33  2005 Plan
 2007 Plan
 2008 Plan
 (10) Comprehensive Income
 :
 June 30,2008
    
    2007Net income
    
    $
    11,251
    
    
    $
    16,362Foreign currency translation gain
    
    
    309
    
    
    
    2,574Pension cost amortization, net of tax
    
    
    58
    
    
    
    476Total comprehensive income
    
    $
    11,618
    
    
    $
    19,412
 :
 June 30,2008
    
    2007Net income
    
    $
    25,065
    
    
    $
    32,197Foreign currency translation gain (loss)
    
    
    (803
    )
    
    
    2,694Pension cost amortization, net of tax
    
    
    1,165
    
    
    
    965Total comprehensive income
    
    $
    25,427
    
    
    $
    35,856




---



##### Table of Contents



Page 18 of 33  June 30,
    
    December 31,2008
    
    2007Foreign currency translation gains
    
    $
    7,034
    
    
    $
    7,837Unrecognized pension and postretirement benefit
costs, net of tax
    
    
    (5,174
    )
    
    
    (6,339
    )Total accumulated other comprehensive income
    
    $
    1,860
    
    
    $
    1,498
 (11) Pension and Postretirement Plans
   For the Three Months EndedJune 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 Six Months EndedJune 30,2008
    
    2007Service cost
    
    $
    1,058
    
    
    $
    1,869Interest cost
    
    
    3,653
    
    
    
    3,822Expected return on assets
    
    
    (5,562
    )
    
    
    (5,040
    )Amortization of prior service cost
    
    
    52
    
    
    
    53Amortization of actuarial loss
    
    
    166
    
    
    
    1,574Net periodic pension and postretirement
(benefit) cost, excluding impact
of curtailment
    
    $
    (633
    )
    
    $
    2,278




---



##### Table of Contents



Page 19 of 33 (12) Commitments and Contingent Liabilities
   (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
    
    
    130Balance as of June 30, 2008
    
    $
    1,949
   
 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




---



##### Table of Contents



Page 20 of 33 Executive Overview
 Economic Trends and Current Business Conditions
     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
   Results of Operations: Second Quarter 2008 Comparisons to Second Quarter 2007




---



##### Table of Contents



Page 21 of 33 (Amounts in millions)
    
    Fav/(Unfav)2008
    
    2007
    
    $ Change
    
    % ChangeNet SalesMetals
    
    $
    365.4
    
    
    $
    343.3
    
    
    $
    22.1
    
    
    
    6.4
    %Plastics
    
    
    31.7
    
    
    
    29.3
    
    
    
    2.4
    
    
    
    8.2
    %Total Net Sales
    
    $
    397.1
    
    
    $
    372.6
    
    
    $
    24.5
    
    
    
    6.6
    %Cost of MaterialsMetals
    
    $
    275.2
    
    
    $
    250.7
    
    
    $
    24.5
    
    
    
    (9.8
    )%% of Metals Sales
    
    
    75.3
    %
    
    
    73.0
    %
    
    
    
    
    
    
    (2.3
    )%Plastics
    
    
    22.0
    
    
    
    19.6
    
    
    
    2.4
    
    
    
    (12.2
    )%% of Plastics Sales
    
    
    69.4
    %
    
    
    66.9
    %
    
    
    
    
    
    
    (2.5
    )%Total Cost of Materials
    
    $
    297.2
    
    
    $
    270.3
    
    
    $
    26.9
    
    
    
    (10.0
    )%% of Total Sales
    
    
    74.8
    %
    
    
    72.5
    %
    
    
    
    
    
    
    (2.3
    )%Other Operating Costs and ExpensesMetals
    
    $
    70.6
    
    
    $
    63.2
    
    
    $
    7.4
    
    
    
    (11.7
    )%Plastics
    
    
    8.6
    
    
    
    8.0
    
    
    
    0.6
    
    
    
    (7.5
    )%Other
    
    
    3.1
    
    
    
    2.0
    
    
    
    1.1
    
    
    
    (55.0
    )%Total Other Operating
Costs & Expenses
    
    $
    82.3
    
    
    $
    73.2
    
    
    $
    9.1
    
    
    
    (12.4
    )%% of Total Sales
    
    
    20.7
    %
    
    
    19.6
    %
    
    
    
    
    
    
    (1.1
    )%Operating IncomeMetals
    
    $
    19.6
    
    
    $
    29.4
    
    
    $
    (9.8
    )
    
    
    (33.3
    )%% of Metals Sales
    
    
    5.4
    %
    
    
    8.6
    %
    
    
    
    
    
    
    (3.2
    )%Plastics
    
    
    1.1
    
    
    
    1.7
    
    
    
    (0.6
    )
    
    
    (35.3
    )%% of Plastics Sales
    
    
    3.5
    %
    
    
    5.8
    %
    
    
    
    
    
    
    (2.3
    )%Other
    
    
    (3.1
    )
    
    
    (2.0
    )
    
    
    (1.1
    )
    
    
    (55.0
    )%Total Operating Income
    
    $
    17.6
    
    
    $
    29.1
    
    
    $
    (11.5
    )
    
    
    (39.5
    )%% of Total Sales
    
    
    4.4
    %
    
    
    7.8
    %
    
    
    
    
    
    
    (3.4
    )%
 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:




---



##### Table of Contents



Page 22 of 33   Cost of Materials:
  Other Operating Expenses and Operating Income:
    Other Income and Expense, Income Taxes and Net Income:




---



##### Table of Contents



Page 23 of 33 including
    Results of Operations: Six Months 2008 Comparisons to Six Months 2007
  (Amounts in millions)
    
    Fav/(Unfav)2008
    
    2007
    
    $ Change
    
    % ChangeNet SalesMetals
    
    $
    727.7
    
    
    $
    690.0
    
    
    $
    37.7
    
    
    
    5.5
    %Plastics
    
    
    62.9
    
    
    
    58.0
    
    
    
    4.9
    
    
    
    8.4
    %Total Net Sales
    
    $
    790.6
    
    
    $
    748.0
    
    
    $
    42.6
    
    
    
    5.7
    %Cost of MaterialsMetals
    
    $
    545.5
    
    
    $
    500.7
    
    
    $
    44.8
    
    
    
    (8.9
    )%% of Metals Sales
    
    
    75.0
    %
    
    
    72.6
    %
    
    
    
    
    
    
    (2.4
    )%Plastics
    
    
    43.1
    
    
    
    39.0
    
    
    
    4.1
    
    
    
    (10.5
    )%% of Plastics Sales
    
    
    68.5
    %
    
    
    67.2
    %
    
    
    
    
    
    
    (1.3
    )%Total Cost of Materials
    
    $
    588.6
    
    
    $
    539.7
    
    
    $
    48.9
    
    
    
    (9.1
    )%% of Total Net Sales
    
    
    74.4
    %
    
    
    72.2
    %
    
    
    
    
    
    
    (2.2
    )%Other Operating Costs and ExpensesMetals
    
    $
    139.3
    
    
    $
    129.5
    
    
    $
    9.8
    
    
    
    (7.6
    )%Plastics
    
    
    17.1
    
    
    
    15.8
    
    
    
    1.3
    
    
    
    (8.2
    )%Other
    
    
    5.7
    
    
    
    4.8
    
    
    
    0.9
    
    
    
    (18.8
    )%Total Other Operating
Costs & Expense
    
    $
    162.1
    
    
    $
    150.1
    
    
    $
    12.0
    
    
    
    (8.0
    )%% of Total Net Sales
    
    
    20.5
    %
    
    
    20.1
    %
    
    
    
    
    
    
    (0.4
    )%Operating IncomeMetals
    
    $
    42.9
    
    
    $
    59.8
    
    
    $
    (16.9
    )
    
    
    (28.3
    )%% of Metals Sales
    
    
    5.9
    %
    
    
    8.7
    %
    
    
    
    
    
    
    (2.8
    )%Plastics
    
    
    2.7
    
    
    
    3.2
    
    
    
    (0.5
    )
    
    
    (15.6
    )%% of Plastics Sales
    
    
    4.3
    %
    
    
    5.5
    %
    
    
    
    
    
    
    (1.2
    )%Other
    
    
    (5.7
    )
    
    
    (4.8
    )
    
    
    (0.9
    )
    
    
    (18.8
    )%Total Operating Income
    
    $
    39.9
    
    
    $
    58.2
    
    
    $
    (18.3
    )
    
    
    (31.4
    )%% of Total Net Sales
    
    
    5.0
    %
    
    
    7.8
    %
    
    
    
    
    
    
    (2.8
    )%




---



##### Table of Contents



Page 24 of 33 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:
    Cost of Materials:
  Other Operating Expenses and Operating Income:
   Other Income and Expense, Income Taxes and Net Income:
  including




---



##### Table of Contents



Page 25 of 33    Accounting Policies:
  Liquidity and Capital Resources




---



##### Table of Contents



Page 26 of 33   2008
    
    $
    7.02009
    
    
    11.22010
    
    
    7.92011
    
    
    8.02012
    
    
    8.22013 and beyond
    
    
    59.9Total debt
    
    $
    102.1
    
 Item 3. Quantitative and Qualitative Disclosure about Market Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures




---



##### Table of Contents



Page 27 of 33  Changes in Internal Controls Over Financial Reporting




---



##### Table of Contents



Page 28 of 33 
 Part II. OTHER INFORMATION
 
 Item 4. Submission of Matters to a Vote of Security Holders
    Number of
    
    Number ofNumber of

    
    Votes
    
    BrokerName of Nominee
    
    Votes For
    
    Withheld
    
    Non-VotesBrian P. Anderson
    
    
    20,507,533
    
    
    
    464,757
    
    
    
    Thomas A. Donahoe
    
    
    20,666,810
    
    
    
    305,480
    
    
    
    Ann M. Drake
    
    
    20,796,206
    
    
    
    176,084
    
    
    
    Goldberg, Michael H.
    
    
    20,681,690
    
    
    
    290,600
    
    
    
    William K. Hall
    
    
    19,108,499
    
    
    
    1,863,791
    
    
    
    Robert S. Hamada
    
    
    20,644,077
    
    
    
    328,213
    
    
    
    Patrick J. Herbert III
    
    
    20,033,144
    
    
    
    939,146
    
    
    
    Terrence J. Keating
    
    
    20,674,860
    
    
    
    297,430
    
    
    
    Pamela Forbes Lieberman
    
    
    20,622,193
    
    
    
    350,097
    
    
    
    John McCartney
    
    
    20,879,134
    
    
    
    93,156
    
    
    
    Michael Simpson
    
    
    20,644,273
    
    
    
    328,017
    
    
    
    
  Number of
    
    Number of Votes
    
    Number of Votes
    
    Number of BrokerVotes For
    
    Against
    
    Abstained
    
    Non-Votes15,090,507
    
    
    3,667,932
    
    
    
    1,000,904
    
    
    
    1,213,447




---



##### Table of Contents



Page 29 of 33 
 Item 6. Exhibits




---



##### Table of Contents



Page 30 of 33 SIGNATURES
  A. M. Castle & Co.(Registrant) Date: July 30, 2008
    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.)