##### 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, 2009
 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 
incorporation of organization)
    
    (I.R.S. Employer Identification No.)
 3400 North Wolf Road, Franklin Park, Illinois
    
    60131(Address of Principal Executive Offices)
    
    (Zip Code)
 847/455-7111
  
  þ o
 o 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 October 23, 2009Common Stock, $0.01 Par Value
    
    22,908,070 shares




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##### 



Page 2 of 31    
 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
    
    
    6-17Item 2.
    
    Managements
Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17-25Item 3.
    
    Quantitative and Qualitative Disclosure About Market Risk
    
    
    25Item 4.
    
    Controls and Procedures
    
    
    25-26Part II. Other InformationItem 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 6.
    
    Exhibits
    
    
    27-28EX-31.1EX-31.2EX-32.1




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Page 3 of 31 
 Item 1. Condensed Consolidated Financial Statements (unaudited)  Amounts in thousands, except par value and per share data
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 As ofSeptember 30,
    
    
    December 31,2009
    
    
    2008ASSETSCurrent assetsCash and cash equivalents
    
    $
    20,110
    
    
    $
    15,277Accounts
receivable, less allowances of $3,864 at September 30, 2009 and $3,318 at December 31, 2008
    
    
    109,515
    
    
    
    159,613Inventories,
principally on last-in, first-out basis (replacement cost higher by $108,080 at September 30, 2009 and $133,748 at December 31, 2008)
    
    
    194,380
    
    
    
    240,673Other current assets
    
    
    5,753
    
    
    
    6,976Income taxes receivable
    
    
    24,657
    
    
    
    640Deferred income taxes
    
    
    
    
    
    
    5,244Total current assets
    
    
    354,415
    
    
    
    428,423Investment in joint venture
    
    
    22,943
    
    
    
    23,340Goodwill
    
    
    51,411
    
    
    
    51,321Intangible assets
    
    
    50,330
    
    
    
    55,742Prepaid pension cost
    
    
    27,471
    
    
    
    26,615Other assets
    
    
    4,549
    
    
    
    5,303Property, plant and equipment, at costLand
    
    
    5,191
    
    
    
    5,184Building
    
    
    51,810
    
    
    
    50,069Machinery and equipment (includes construction in progress)
    
    
    178,249
    
    
    
    172,500235,250
    
    
    
    227,753Less  accumulated depreciation
    
    
    (150,173
    )
    
    
    (139,463
    )85,077
    
    
    
    88,290Total assets
    
    $
    596,196
    
    
    $
    679,034LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable
    
    $
    77,079
    
    
    $
    126,490Accrued liabilities
    
    
    24,157
    
    
    
    27,929Income taxes payable
    
    
    908
    
    
    
    6,451Deferred income taxes  current
    
    
    6,050
    
    
    
    Current portion of long-term debt
    
    
    10,876
    
    
    
    10,838Short-term debt
    
    
    11,925
    
    
    
    31,197Total current liabilities
    
    
    130,995
    
    
    
    202,905Long-term debt, less current portion
    
    
    75,540
    
    
    
    75,018Deferred income taxes
    
    
    36,812
    
    
    
    38,743Other non-current liabilities
    
    
    13,724
    
    
    
    15,068Commitments and contingenciesStockholders equityPreferred
stock, $0.01 par value  10,000 shares authorized; 12,000 shares
issued and no shares outstanding at September 30, 2009 and December 31, 2008
    
    
    
    
    
    
    Common
stock, $0.01 par value  30,000 shares authorized; 23,115 shares
issued and 22,908 outstanding at September 30, 2009 and 22,850 shares issued and 22,654 outstanding at December 31, 2008
    
    
    230
    
    
    
    228Additional paid-in capital
    
    
    177,819
    
    
    
    176,653Retained earnings
    
    
    171,912
    
    
    
    184,651Accumulated other comprehensive loss
    
    
    (7,882
    )
    
    
    (11,462
    )Treasury
stock, at cost  207 shares at September 30, 2009
and 197 shares at December 31, 2008
    
    
    (2,954
    )
    
    
    (2,770
    )Total stockholders equity
    
    
    339,125
    
    
    
    347,300Total liabilities and stockholders equity
    
    $
    596,196
    
    
    $
    679,034
 The accompanying notes are an integral part of these statements.




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Page 4 of 31 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Three
    
    
    For the NineMonths Ended
    
    
    Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    $
    183,960
    
    
    $
    388,898
    
    
    $
    631,307
    
    
    $
    1,179,492Costs and expenses:Cost of materials (exclusive of depreciation and amortization)
    
    
    137,671
    
    
    
    287,773
    
    
    
    464,917
    
    
    
    876,313Warehouse, processing and delivery expense
    
    
    26,160
    
    
    
    40,547
    
    
    
    83,305
    
    
    
    119,163Sales, general and administrative expense
    
    
    23,625
    
    
    
    38,372
    
    
    
    81,474
    
    
    
    110,022Depreciation and amortization expense
    
    
    5,149
    
    
    
    5,574
    
    
    
    16,107
    
    
    
    17,452Operating (loss) income
    
    
    (8,645
    )
    
    
    16,632
    
    
    
    (14,496
    )
    
    
    56,542Interest expense, net
    
    
    (1,539
    )
    
    
    (2,781
    )
    
    
    (4,797
    )
    
    
    (7,040
    )(Loss) income before income taxes and equity in earnings of
joint venture
    
    
    (10,184
    )
    
    
    13,851
    
    
    
    (19,293
    )
    
    
    49,502Income tax benefit (provision)
    
    
    3,607
    
    
    
    (5,720
    )
    
    
    7,834
    
    
    
    (21,019
    )(Loss) income before equity in earnings of joint venture
    
    
    (6,577
    )
    
    
    8,131
    
    
    
    (11,459
    )
    
    
    28,483Equity in earnings of joint venture
    
    
    240
    
    
    
    3,347
    
    
    
    81
    
    
    
    8,060Net (loss) income
    
    $
    (6,337
    )
    
    $
    11,478
    
    
    $
    (11,378
    )
    
    $
    36,543Basic (loss) earnings per share
    
    $
    (0.28
    )
    
    $
    0.51
    
    
    $
    (0.50
    )
    
    $
    1.63Diluted (loss) earnings per share
    
    $
    (0.28
    )
    
    $
    0.50
    
    
    $
    (0.50
    )
    
    $
    1.62Dividends per common share paid
    
    $
    
    
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.18
 The accompanying notes are an integral part of these statements.




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Page 5 of 31 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Nine MonthsEnded September 30,2009
    
    
    2008Operating activities:Net (loss) income
    
    $
    (11,378
    )
    
    $
    36,543Adjustments to reconcile net (loss) income to net cash
from (used in) operating activities:Depreciation and amortization
    
    
    16,107
    
    
    
    17,452Amortization of deferred gain
    
    
    (670
    )
    
    
    (890
    )Equity in earnings of joint venture
    
    
    (81
    )
    
    
    (8,060
    )Dividends from joint venture
    
    
    485
    
    
    
    2,086Deferred tax (benefit) provision
    
    
    9,248
    
    
    
    (1,065
    )Share-based compensation expense
    
    
    1,079
    
    
    
    2,555Excess tax deficiencies (benefits) from share-based payment
arrangements
    
    
    95
    
    
    
    (2,752
    )Increase (decrease) from changes, net of acquisitions, in:Accounts receivable
    
    
    52,552
    
    
    
    (46,037
    )Inventories
    
    
    49,624
    
    
    
    (57,765
    )Other current assets
    
    
    180
    
    
    
    4,947Other assets
    
    
    (2,440
    )
    
    
    1,436Prepaid pension costs
    
    
    (562
    )
    
    
    (1,554
    )Accounts payable
    
    
    (47,917
    )
    
    
    40,711Accrued liabilities
    
    
    (4,772
    )
    
    
    (858
    )Income taxes receivable and payable
    
    
    (29,576
    )
    
    
    (1,082
    )Postretirement benefit obligations and other liabilities
    
    
    (865
    )
    
    
    (1,297
    )Net cash from (used in) operating activities
    
    
    31,109
    
    
    
    (15,630
    )Investing activities:Cash paid for acquisitions, net of cash acquired
    
    
    
    
    
    
    (26,857
    )Capital expenditures
    
    
    (6,202
    )
    
    
    (18,814
    )Proceeds from sale of fixed assets
    
    
    19
    
    
    
    75Insurance proceeds
    
    
    1,093
    
    
    
    Net cash used in investing activities
    
    
    (5,090
    )
    
    
    (45,596
    )Financing activities:Short-term (repayments) borrowings, net
    
    
    (19,276
    )
    
    
    34,269Proceeds from issuance of long-term debt
    
    
    
    
    
    
    30,490Repayments of long-term debt
    
    
    (1,755
    )
    
    
    (409
    )Payment of debt issuance fees
    
    
    
    
    
    
    (424
    )Common stock dividends
    
    
    (1,361
    )
    
    
    (4,042
    )Excess tax (deficiencies) benefits from share-based payment
arrangements
    
    
    (95
    )
    
    
    2,752Payment of withholding taxes from share-based incentive
issuance
    
    
    
    
    
    
    (6,000
    )Exercise of stock options and other
    
    
    
    
    
    
    450Net cash (used in) from financing activities
    
    
    (22,487
    )
    
    
    57,086Effect of exchange rate changes on cash and cash equivalents
    
    
    1,301
    
    
    
    (1,134
    )Net increase in cash and cash equivalents
    
    
    4,833
    
    
    
    (5,274
    )Cash and cash equivalents  beginning of year
    
    
    15,277
    
    
    
    22,970Cash and cash equivalents  end of period
    
    $
    20,110
    
    
    $
    17,696
 The accompanying notes are an integral part of these statements.




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Page 6 of 31 
 (Unaudited  Amounts in thousands except per share data)
 (1) Condensed Consolidated Financial Statements
   (2) New Accounting Standards
 Standards Adopted
  Note 14
 Note 4




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Page 7 of 31  Note 3
 Standards Issued Not Yet Adopted
  (3) Earnings Per Share
  For the Three Months
    
    For the Nine MonthsEnded September 30,
    
    Ended  September 30,2009
    
    2008
    
    2009
    
    2008Numerator:Net (loss) income
    
    $
    (6,337
    )
    
    $
    11,478
    
    
    $
    (11,378
    )
    
    $
    36,543Denominator:Denominator for basic earnings per share:Weighted average common shares outstanding
    
    
    22,908
    
    
    
    22,644
    
    
    
    22,846
    
    
    
    22,487Effect of dilutive securities:




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Page 8 of 31 For the Three Months
    
    For the Nine MonthsEnded September 30,
    
    Ended  September 30,2009
    
    2008
    
    2009
    
    2008Outstanding employee and directors
common stock options, restricted stock
and share-based awards
    
    
    
    
    
    
    135
    
    
    
    
    
    
    
    117Denominator for diluted earnings per share
    
    
    22,908
    
    
    
    22,779
    
    
    
    22,846
    
    
    
    22,604Basic (loss) earnings per share
    
    $
    (0.28
    )
    
    $
    0.51
    
    
    $
    (0.50
    )
    
    $
    1.63Diluted (loss) earnings per share
    
    $
    (0.28
    )
    
    $
    0.50
    
    
    $
    (0.50
    )
    
    $
    1.62Excluded outstanding common stock options
having an anti-dilutive effect
    
    
    239
    
    
    
    20
    
    
    
    239
    
    
    
    20
  (4) Debt
  September 30, 2009
    
    December 31, 2008SHORT-TERM DEBTU.S. Revolver A (a)
    
    $
    3,500
    
    
    $
    18,000Foreign
    
    
    
    
    
    
    3,200Trade acceptances (b)
    
    
    8,425
    
    
    
    9,997Total short-term debt
    
    
    11,925
    
    
    
    31,197LONG-TERM DEBT6.76% insurance company loan due
in scheduled installments through
2015
    
    
    56,816
    
    
    
    56,816U.S. Revolver B (a)
    
    
    24,803
    
    
    
    24,018Industrial development revenue
bonds at a 1.617% weighted average
interest rate, due in 2009
    
    
    3,500
    
    
    
    3,500Other, primarily capital leases
    
    
    1,297
    
    
    
    1,522Total long-term debt
    
    
    86,416
    
    
    
    85,856Less current portion
    
    
    (10,876
    )
    
    
    (10,838
    )Total long-term portion
    
    
    75,540
    
    
    
    75,018TOTAL SHORT-TERM AND LONG-TERM DEBT
    
    $
    98,341
    
    
    $
    117,053
 
 (a)
    
    On January 2, 2008, the Company and its Canadian, U.K. and material domestic subsidiaries
entered into a First Amendment to its Amended and Restated Credit Agreement (the 2008 Senior
Credit Facility) dated as of September 5, 2006 with its lending syndicate. The 2008 Senior Credit
Facility provides a $230,000 five-year secured revolver. The facility consists 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 Cdn. $9,800 revolving loan (corresponding to $10,000 in U.S.




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##### Table of Contents



Page 9 of 31 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). In addition, the
maturity date of the 2008 Senior Credit Facility was extended to January 2, 2013. The obligations
of the U.K. subsidiary under the U.S. Revolver B are guaranteed by the Company and its material
domestic subsidiaries (the Guarantee Subsidiaries) pursuant to a U.K. Guarantee Agreement entered
into by the Company and the Guarantee Subsidiaries on January 2, 2008. The U.S. Revolver A letter
of credit sub-facility was increased from $15,000 to $20,000.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 under this
instrument are not expected to be repaid within the next 12 months. Taking into consideration the
most recent borrowing base calculation as of September 30, 2009, which reflects trade receivables,
inventory, letters of credit and other outstanding secured indebtedness, the Company had
availability of $62,942 under its U.S. Revolver A and $25,197 under its U.S. Revolver B. The
Companys Canadian subsidiary had availability of approximately $8,323. 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, 2009 was 1.92% and 1.92%, respectively.b)
    
    At September 30, 2009, the Company had $8,425 in outstanding trade acceptances with varying
maturity dates ranging up to 120 days. The weighted average interest rate was 2.53% for the nine
months ended September 30, 2009.The fair value of the Companys fixed rate debt as of September 30, 2009, including current
maturities, was estimated to be between $50,200 and $52,400 compared to a carrying value of
$56,816. The fair value of the fixed rate debt was determined using a market approach, which
estimates fair value based on companies with similar credit quality
and size of debt issuances. As of September 30, 2009, the estimated
fair value of the Companys debt outstanding under its revolving
credit facility is $24,630, assuming the current amount of debt
outstanding at the end of the period was outstanding until the
maturity of the Companys facility in January 2013. Although
borrowings could be materially greater or less than the current
amount of borrowings outstanding at the end of the period, it is not
practical to estimate the amounts that may be outstanding during
future periods since there is no predetermined borrowing or repayment
schedule.  The estimated fair value of the Companys debt outstanding
under its revolving credit facility is lower than the carrying value
of $28,303 since the terms of this facility are more favorable than
those that might be expected to be available in the current lending
environment.As of September 30, 2009, the Company remains in compliance with the covenants of its financing
agreements, which requires it to maintain certain funded debt-to-capital ratios, working
capital-to-debt ratios and a minimum adjusted consolidated net worth as defined within the
agreements. (5) Segment Reporting




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Page 10 of 31   Note 1
  Net
    
    Operating (Loss)
    
    Capital
    
    Depreciation &Sales
    
    Income
    
    Expenditures
    
    Amortization2009Metals segment
    
    $
    161,772
    
    
    $
    (7,963
    )
    
    $
    1,190
    
    
    $
    4,818Plastics segment
    
    
    22,188
    
    
    
    710
    
    
    
    90
    
    
    
    331Other
    
    
    
    
    
    
    (1,392
    )
    
    
    
    
    
    
    Consolidated
    
    $
    183,960
    
    
    $
    (8,645
    )
    
    $
    1,280
    
    
    $
    5,1492008Metals segment
    
    $
    360,073
    
    
    $
    19,239
    
    
    $
    6,924
    
    
    $
    5,245Plastics segment
    
    
    28,825
    
    
    
    508
    
    
    
    628
    
    
    
    329Other
    
    
    
    
    
    
    (3,115
    )
    
    
    
    
    
    
    Consolidated
    
    $
    388,898
    
    
    $
    16,632
    
    
    $
    7,552
    
    
    $
    5,574




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Page 11 of 31  Net
    
    Operating (Loss)
    
    Capital
    
    Depreciation &Sales
    
    Income
    
    Expenditures
    
    Amortization2009Metals 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
    
    
    $
    16,1072008Metals 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
    
    
    $
    17,452
   September 30,
    
    December 31,2009
    
    2008Metals segment
    
    $
    524,642
    
    
    $
    602,897Plastics segment
    
    
    48,611
    
    
    
    52,797Other
    
    
    22,943
    
    
    
    23,340Consolidated
    
    $
    596,196
    
    
    $
    679,034
  (6) Goodwill and Intangible Assets
  Metals
    
    PlasticsSegment
    
    Segment
    
    TotalBalance as of January 1, 2009
    
    $
    38,348
    
    
    $
    12,973
    
    
    $
    51,321Currency valuation
    
    
    90
    
    
    
    
    
    
    
    90Balance as of September 30, 2009
    
    $
    38,438
    
    
    $
    12,973
    
    
    $
    51,411
 Note 8,
 st




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Page 12 of 31   September 30, 2009
    
    December 31, 2008Gross Carrying
    
    Accumulated
    
    Gross Carrying
    
    AccumulatedAmount
    
    Amortization
    
    Amount
    
    AmortizationCustomer relationships
    
    $
    69,522
    
    
    $
    19,762
    
    
    $
    69,292
    
    
    $
    14,729Non-compete agreements
    
    
    2,924
    
    
    
    2,354
    
    
    
    2,805
    
    
    
    1,626Trade name
    
    
    378
    
    
    
    378
    
    
    
    378
    
    
    
    378Total
    
    $
    72,824
    
    
    $
    22,494
    
    
    $
    72,475
    
    
    $
    16,733
   2009
    
    $
    7,4152010
    
    
    7,1032011
    
    
    6,6262012
    
    
    6,1412013
    
    
    6,141
 (7) Inventories




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Page 13 of 31 (8) Share-based Compensation
  Stock Options
  Weighted AverageShares
    
    Exercise PriceStock options outstanding at January 1, 2009
    
    
    246
    
    
    $
    11.49Expired
    
    
    (7
    )
    
    
    15.22Stock options outstanding at September 30, 2009
    
    
    239
    
    
    
    11.37Stock options vested or expected to vest as of
September 30, 2009
    
    
    239
  Restricted Stock




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Page 14 of 31  Weighted-Average Grant DateRestricted Stock
    
    Shares
    
    Fair ValueNon-vested shares
outstanding at January 1, 2009
    
    
    68
    
    
    $
    26.23Granted
    
    
    267
    
    
    
    8.14Forfeited
    
    
    (13
    )
    
    
    18.67Vested
    
    
    (34
    )
    
    
    26.67Non-vested shares outstanding
at September 30, 2009
    
    
    288
    
    
    
    12.86Non-vested shares expected to
vest as of September 30, 2009
    
    
    252
  Deferred Compensation Plan
  Long-Term Incentive Plans




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##### Table of Contents



Page 15 of 31  Maximum Number ofPerformance SharesEstimated Number of
    
    that couldGrant Date Fair
    
    Performance Shares
    
    Potentially bePlan Year
    
    Value
    
    to be Issued
    
    Issued2007
    
    $
    25.45 - $34.33
    
    
    
    
    
    
    
    1752008
    
    $
    22.90 - $28.17
    
    
    
    
    
    
    
    3672009
    
    
    $5.66
    
    
    
    
    
    
    
    711
 (9) Comprehensive (Loss) Income
  September 30,2009
    
    2008Net (loss) income
    
    $
    (6,337
    )
    
    $
    11,478Foreign currency translation gain (loss)
    
    
    1,200
    
    
    
    (3,249
    )Pension cost amortization, net of tax
    
    
    60
    
    
    
    59Total comprehensive (loss) income
    
    $
    (5,077
    )
    
    $
    8,288
  September 30,2009
    
    2008Net (loss) income
    
    $
    (11,378
    )
    
    $
    36,543Foreign currency translation gain (loss)
    
    
    3,401
    
    
    
    (4,052
    )Pension cost amortization, net of tax
    
    
    179
    
    
    
    1,224Total comprehensive (loss) income
    
    $
    (7,798
    )
    
    $
    33,715
  September 30,
    
    December 31,2009
    
    2008Foreign currency translation losses
    
    $
    (2,392
    )
    
    $
    (5,793
    )Unrecognized pension and postretirement benefit costs,
net of tax
    
    
    (5,490
    )
    
    
    (5,669
    )Total accumulated other comprehensive loss
    
    $
    (7,882
    )
    
    $
    (11,462
    )
 (10) Pension and Postretirement Plans




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##### Table of Contents



Page 16 of 31   For the Three Months EndedSeptember 30,2009
    
    2008Service cost
    
    $
    197
    
    
    $
    529Interest cost
    
    
    1,934
    
    
    
    1,826Expected return on assets
    
    
    (2,253
    )
    
    
    (2,781
    )Amortization of prior service cost
    
    
    72
    
    
    
    26Amortization of actuarial loss
    
    
    34
    
    
    
    83Net periodic pension and
postretirement benefit, excluding
impact of curtailment
    
    $
    (16
    )
    
    $
    (317
    )
 For the Nine Months EndedSeptember 30,2009
    
    2008Service cost
    
    $
    590
    
    
    $
    1,587Interest cost
    
    
    5,801
    
    
    
    5,479Expected return on assets
    
    
    (6,758
    )
    
    
    (8,343
    )Amortization of prior service cost
    
    
    215
    
    
    
    78Amortization of actuarial loss
    
    
    102
    
    
    
    249Net periodic pension and
postretirement benefit, excluding
impact of curtailment
    
    $
    (50
    )
    
    $
    (950
    )
  (11) Joint Venture
  :
 For the Nine Months EndedSeptember 30,2009
    
    2008Net sales
    
    $
    78,871
    
    
    $
    174,818Cost of materials
    
    
    68,483
    
    
    
    139,916(Loss) income before taxes
    
    
    (288
    )
    
    
    17,621Net income
    
    
    162
    
    
    
    16,120




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##### Table of Contents



Page 17 of 31 (12)
    
    Commitments and Contingent Liabilities   (13) Income Taxes
    (14) Subsequent Events
  
 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




---



##### Table of Contents



Page 18 of 31 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, 2008. 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
      YEAR
    
    Qtr 1
    
    Qtr 2
    
    Qtr 3
    
    Qtr 42007
    
    
    50.5
    
    
    
    53.0
    
    
    
    51.3
    
    
    
    49.62008
    
    
    49.2
    
    
    
    49.5
    
    
    
    47.8
    
    
    
    36.12009
    
    
    35.9
    
    
    
    42.6
    
    
    
    51.5




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##### Table of Contents



Page 19 of 31  Results of Operations: Third Quarter 2009 Comparisons to Third Quarter 2008
 Fav/(Unfav)2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeNet SalesMetals
    
    $
    161.8
    
    
    $
    360.1
    
    
    $
    (198.3
    )
    
    
    (55.1
    )%Plastics
    
    
    22.2
    
    
    
    28.8
    
    
    
    (6.6
    )
    
    
    (22.9
    )%Total Net Sales
    
    $
    184.0
    
    
    $
    388.9
    
    
    $
    (204.9
    )
    
    
    (52.7
    )%Cost of MaterialsMetals
    
    $
    122.5
    
    
    $
    268.2
    
    
    $
    145.7
    
    
    
    54.3
    %% of Metals Sales
    
    
    75.7
    %
    
    
    74.5
    %Plastics
    
    
    15.2
    
    
    
    19.6
    
    
    
    4.4
    
    
    
    22.4
    %% of Plastics Sales
    
    
    68.5
    %
    
    
    68.1
    %Total Cost of Materials
    
    $
    137.7
    
    
    $
    287.8
    
    
    $
    150.1
    
    
    
    52.2
    %% of Total Sales
    
    
    74.8
    %
    
    
    74.0
    %Operating Costs and ExpensesMetals
    
    $
    47.3
    
    
    $
    72.7
    
    
    $
    25.4
    
    
    
    34.9
    %Plastics
    
    
    6.3
    
    
    
    8.7
    
    
    
    2.4
    
    
    
    27.6
    %Other
    
    
    1.4
    
    
    
    3.1
    
    
    
    1.7
    
    
    
    54.8
    %Total Operating Costs & Expenses
    
    $
    55.0
    
    
    $
    84.5
    
    
    $
    29.5
    
    
    
    34.9
    %% of Total Sales
    
    
    30.0
    %
    
    
    21.7
    %Operating (Loss) IncomeMetals
    
    $
    (8.0
    )
    
    $
    19.2
    
    
    $
    (27.2
    )
    
    
    (141.7
    )%% of Metals Sales
    
    
    (4.9
    )%
    
    
    5.3
    %Plastics
    
    
    0.7
    
    
    
    0.5
    
    
    
    0.2
    
    
    
    40.0
    %% of Plastics Sales
    
    
    3.2
    %
    
    
    1.7
    %Other
    
    
    (1.4
    )
    
    
    (3.1
    )
    
    
    1.7
    
    
    
    54.8
    %Total Operating (Loss) Income
    
    $
    (8.7
    )
    
    $
    16.6
    
    
    $
    (25.3
    )
    
    
    (152.4
    )%% of Total Sales
    
    
    (4.7
    )%
    
    
    4.3
    %
 Other includes the costs of executive, legal and finance departments which are shared by both segments of the Company.
 Net Sales:




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##### Table of Contents



Page 20 of 31 Cost of Materials:
  Operating Expenses and Operating (Loss) Income:
   
    
    Warehouse, processing and delivery costs decreased by $14.4 million of which $7.9
million is the result of lower sales volume and $6.5 million is due to decreased
payroll costs associated with workforce reductions, reduced workweeks and suspension
of the Company 401(k) contributions;
    
    Sales, general and administrative costs decreased by $14.7 million primarily due to
lower ERP implementation costs of $2.7 million and decreased payroll related costs of
$6.7 million associated with workforce reductions and reduced workweeks, incentive
compensation and suspension of Company 401(k) contributions; and
    
    Depreciation and amortization expense was $0.4 million lower due to a decrease in
capital expenditures across the Company and certain intangible assets of Metals U.K.
becoming fully amortized in 2008.
  Other Income and Expense, Income Taxes and Net Income:




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##### Table of Contents



Page 21 of 31    Results of Operations: Nine Months 2009 Comparisons to Nine Months 2008
  Fav/(Unfav)2009
    
    2008
    
    $ Change
    
    % ChangeNet SalesMetals
    
    $
    566.9
    
    
    $
    1,087.7
    
    
    $
    (520.8
    )
    
    
    (47.9
    )%Plastics
    
    
    64.4
    
    
    
    91.8
    
    
    
    (27.4
    )
    
    
    (29.8
    )%Total Net Sales
    
    $
    631.3
    
    
    $
    1,179.5
    
    
    $
    (548.2
    )
    
    
    (46.5
    )%Cost of MaterialsMetals
    
    $
    420.8
    
    
    $
    813.6
    
    
    $
    392.8
    
    
    
    48.3
    %% of Metals Sales
    
    
    74.2
    %
    
    
    74.8
    %Plastics
    
    
    44.1
    
    
    
    62.7
    
    
    
    18.6
    
    
    
    29.7
    %% of Plastics Sales
    
    
    68.5
    %
    
    
    68.3
    %Total Cost of Materials
    
    $
    464.9
    
    
    $
    876.3
    
    
    $
    411.4
    
    
    
    46.9
    %% of Total Net Sales
    
    
    73.6
    %
    
    
    74.3
    %Operating Costs and ExpensesMetals
    
    $
    157.1
    
    
    $
    212.0
    
    
    $
    54.9
    
    
    
    25.9
    %Plastics
    
    
    20.2
    
    
    
    25.9
    
    
    
    5.7
    
    
    
    22.0
    %Other
    
    
    3.6
    
    
    
    8.8
    
    
    
    5.2
    
    
    
    59.1
    %Total Operating Costs & Expenses
    
    $
    180.9
    
    
    $
    246.7
    
    
    $
    65.8
    
    
    
    26.7
    %% of Total Net Sales
    
    
    28.7
    %
    
    
    20.9
    %Operating (Loss) IncomeMetals
    
    $
    (11.0
    )
    
    $
    62.1
    
    
    $
    (73.1
    )
    
    
    (117.7
    )%% of Metals Sales
    
    
    (1.9
    )%
    
    
    5.7
    %Plastics
    
    
    0.1
    
    
    
    3.2
    
    
    
    (3.1
    )
    
    
    (96.9
    )%% of Plastics Sales
    
    
    0.2
    %
    
    
    3.5
    %Other
    
    
    (3.6
    )
    
    
    (8.8
    )
    
    
    5.2
    
    
    
    59.1
    %Total Operating (Loss) Income
    
    $
    (14.5
    )
    
    $
    56.5
    
    
    $
    (71.0
    )
    
    
    (125.7
    )%% of Total Net Sales
    
    
    (2.3
    )%
    
    
    4.8
    %
 Other includes the costs of executive, legal and finance departments which are shared by both segments of the Company.




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##### Table of Contents



Page 22 of 31 Net Sales:
   Cost of Materials:
  Operating Expenses and Operating Income:
   
    
    Warehouse, processing and delivery costs decreased by $35.9 million of which $19.7
million is the result of lower sales volume and $16.2 million is due to decreased
payroll costs associated with workforce reductions, reduced workweeks and suspension
of the Company 401(k) contributions;
    
    Sales, general and administrative costs decreased by $28.6 primarily due to lower
ERP implementation costs of $5.0 million, decreased payroll related costs of $12.5
million associated with workforce reductions and reduced workweeks, incentive
compensation and suspension of Company 401(k) contributions and included a gain of
$1.3 million related to an insurance settlement during the second quarter of 2009; and
    
    Depreciation and amortization expense was $1.3 million lower due to a decrease in
capital expenditures across the Company and certain intangible assets of Metals U.K.
becoming fully amortized in 2008.




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##### Table of Contents



Page 23 of 31 
  Other Income and Expense, Income Taxes and Net Income:
     Accounting Policies:
  
    
    business combinations; and
    
    determining whether instruments granted in share-based payment transactions are
participating securities.
  
    
    subsequent events; and
    
    interim disclosures about fair value of financial instruments.
  Note 2




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##### Table of Contents



Page 24 of 31 Liquidity and Capital Resources
    Weighted AverageOutstanding
    
    Availability as of
    
    Interest Rate for the NineBorrowings as of
    
    September 30,
    
    Months Ended SeptemberDebt type
    
    September 30, 2009
    
    2009
    
    30, 2009U.S. Revolver A
    
    $
    3.5
    
    
    $
    62.9
    
    
    
    1.92
    %U.S. Revolver B
    
    
    24.8
    
    
    
    25.2
    
    
    
    1.92
    %Canadian facility
    
    
    
    
    
    
    8.3
    
    
    
    Trade acceptances
    
    
    8.4
    
    
    
    n/a
    
    
    
    2.53
    %
  :
 2009
    
    $
    10.82010
    
    
    7.52011
    
    
    7.92012
    
    
    8.22013
    
    
    33.42014 and beyond
    
    
    18.6Total debt
    
    $
    86.4




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##### Table of Contents



Page 25 of 31     
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures




---



##### Table of Contents



Page 26 of 31   Internal Control  Integrated Framework,
 Changes in Internal Control over Financial Reporting




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##### Table of Contents



Page 27 of 31 
 Part II. OTHER INFORMATION
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 6. Exhibits
 Exhibit No.
    
    Description31.1
    
    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
 SIGNATURE
  A. M. Castle & Co.(Registrant)Date: November 2, 2009
    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.)




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##### Table of Contents



Page 28 of 31  Exhibit Index
  ExhibitNo.
    
    Description
    
    Page31.1
    
    CEO Certification Pursuant to Section 302 of the
Sarbanes Oxley Act of 2002
    
    E-131.2
    
    CFO Certification Pursuant to Section 302 of the
Sarbanes Oxley Act of 2002
    
    E-232.1
    
    CEO and CFO Certification Pursuant to Section 906 of
the Sarbanes Oxley Act of 2002
    
    E-3