UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
    
    Commission File Number: 1-5415
 A. M. CASTLE & CO.
 
 Maryland
    
    36-0879160(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)3400 North Wolf Road, Franklin Park, Illinois
    
    60131(Address of principal executive offices)
    
    (Zip Code)
 (847) 455-7111
 Title of each class
    
    Name of each exchange on which registeredCommon Stock  $0.01 par value
    
    New York Stock Exchange
 None
  o þ
  o þ
  þ o
 o
  Large accelerated filer oAccelerated filer þNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o  o þ
    Documents Incorporated by Reference
    
    Applicable Part of Form 10-KProxy Statement furnished to Stockholders in connection 
with registrants Annual Meeting of Stockholders to be held April 23, 2009.
    
    Part III




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##### 



Disclosure Regarding Forward-Looking Statements
 Information provided and statements contained in this report that are not purely historical are
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (Securities Act), Section 21E of the Securities Exchange Act of 1934, as amended
(Exchange Act), and the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements only speak as of the date of this report and the Company assumes no obligation to update
the information included in this report. Such forward-looking statements include information
concerning our possible or assumed future results of operations, including descriptions of our
business strategy. These statements often include words such as believe, expect, anticipate,
intend, predict, plan, or similar expressions. These statements are not guarantees of
performance or results, and they involve risks, uncertainties, and assumptions. Although we
believe that these forward-looking statements are based on reasonable assumptions, there are many
factors that could affect our actual financial results or results of operations and could cause
actual results to differ materially from those in the forward-looking statements, including those
risk factors identified in Item 1A Risk Factors of this report. 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.
 PART I
 ITEM 1  Business
 In this annual report on Form 10-K, the Company, we or our refer to A. M. Castle & Co., a
Maryland corporation, and its subsidiaries included in the consolidated financial statements,
except as otherwise indicated or as the context otherwise requires.
 Business and Markets
 Company
Overview
   2




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##### 



Industry
and Markets
      Recent
Acquisitions and Expansions
   Note 8
 3




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##### 



Procurement
    Employees
  Business
Segments
   2008
    
    2007
    
    2006Metals
    
    
    92
    %
    
    
    92
    %
    
    
    90
    %Plastics
    
    
    8
    %
    
    
    8
    %
    
    
    10
    %100
    %
    
    
    100
    %
    
    
    100
    %
 Metals Segment
  4




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##### 



Plastics Segment
   Joint
Venture
  Access
to SEC Filings
  Certifications
  ITEM 1A   Risk Factors
  Our future operating results depend on a number of factors beyond our control, such as the
prices of metals and plastics, which could cause our results to be adversely affected.
  5




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##### 



We service industries that are highly cyclical, and any downturn in our customers industries
could reduce our revenue and profitability.
  We may not be able to realize the benefits we anticipate from our acquisitions.
  
    
    difficulties in integrating and managing personnel, financial reporting and other systems
used by the acquired businesses;
    
    the failure of the acquired businesses to perform in accordance with our expectations;
    
    failure to achieve anticipated synergies between our business units and the acquired
businesses;
    
    the loss of the acquired businesses customers; and
    
    cyclicality of business.
   We are vulnerable to interest rate fluctuations on our indebtedness, which could hurt our
operating results.
  The current global economic crisis has had and may continue to have an adverse impact on our
business, results of operations and financial condition.
  6




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##### 



Disruptions in the supply of raw materials could adversely affect our ability to meet our
customer demands and our revenues and profitability.
  Our industry is highly competitive, which may force us to lower our prices and may have an
adverse effect on net income.
  Our business could be adversely affected by a disruption to our primary distribution hub.
  
    
    damage to or inoperability of our warehouse or related systems;
    
    a prolonged power or telecommunication failure;
    
    a natural disaster such as fire, tornado or flood;
    
    a work stoppage; or
    
    an airplane crash or act of war or terrorism on-site or nearby as the facility is located
within seven miles of OHare International Airport (a major U.S. airport) and lies below
certain take-off and landing flight patterns.
  7




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##### 



A disruption in our information technology systems could impact our ability to conduct business
and/or report our financial performance.
  We operate in international markets, which expose us to a number of risks.
  A portion of our workforce is represented by collective bargaining units, which may lead to
work stoppages.
  We could incur substantial costs in order to comply with, or to address any violations under,
environmental and employee health and safety laws, which could significantly increase our operating
expenses and reduce our operating income.
  Antidumping and other duties could be imposed on us, our suppliers and our products.
  8




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##### 



Increases in energy prices would increase our operating costs and we may be unable to pass
these increases on to our customers in the form of higher prices, which may reduce our
profitability.
  We may not be able to retain or expand our customer base if the United States manufacturing
industry continues to relocate production operations internationally.
  Any prolonged disruption of our processing centers could adversely affect our business.
  Our operating results are subject to the seasonal nature of our customers businesses.
  We may face product liability claims that are costly and create adverse publicity.
  ITEM 1B   Unresolved Staff Comments
 None.
 9




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##### 



ITEM 2   Properties
  ApproximateFloor Area inLocations
    
    Square FeetMetals SegmentArlington, Texas
    
    
    74,880Bedford Heights, Ohio
    
    
    374,400
    (1)Birmingham, Alabama
    
    
    76,000
    (1)Charlotte, North Carolina
    
    
    116,500
    (1)Dallas, Texas
    
    
    78,000
    (1)Edmonton, Alberta
    
    
    38,300Fairfield, Ohio
    
    
    166,000Franklin Park, Illinois
    
    
    522,600
    (1)Gardena, California
    
    
    150,435Hammond, Indiana (H-A Industries)
    
    
    243,000Houston, Texas
    
    
    109,100
    (1)Houston, Texas (Administrative location)
    
    
    1,961Kansas City, Missouri
    
    
    118,000Kennesaw, Georgia
    
    
    87,500Kent, Washington
    
    
    53,000Minneapolis, Minnesota
    
    
    65,200
    (1)Mississauga, Ontario
    
    
    60,000Monterrey, Mexico
    
    
    55,000Montreal, Quebec
    
    
    38,760Orange, Connecticut
    
    
    57,389Paramount, California
    
    
    155,500Philadelphia, Pennsylvania
    
    
    71,600
    (1)Saskatoon, Saskatchewan
    
    
    15,000Stockton, California
    
    
    60,000Torrance, California (Administrative location)
    
    
    15,028Twinsburg, Ohio
    
    
    120,000Wichita, Kansas
    
    
    148,800Winnipeg, Manitoba
    
    
    50,000
    (1)Worcester, Massachusetts
    
    
    56,000
    (1)Sales OfficesCincinnati, Ohio

    (Intentionally left blank)Milwaukee, WisconsinPhoenix, ArizonaTulsa, Oklahoma
 10




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##### 



ApproximateFloor Area inLocations
    
    Square FeetEuropeBlackburn, England
    
    
    62,139Hoddesdon, England
    
    
    9,472Bilbao, Spain
    
    
    10,000Due Pre Cadeau, France
    
    
    25,600Letchworth, England
    
    
    40,000ChinaShanghai, China
    
    
    45,700Total Metals Segment
    
    
    3,370,864Plastics SegmentBaltimore, Maryland
    
    
    24,000Cleveland, Ohio
    
    
    8,600Cranston, Rhode Island
    
    
    14,990Detroit, Michigan
    
    
    22,000Elk Grove Village, Illinois
    
    
    22,500Fort Wayne, Indiana
    
    
    17,600Grand Rapids, Michigan
    
    
    42,500
    (1)Harrisburg, Pennsylvania
    
    
    13,900Indianapolis, Indiana
    
    
    13,500Kalamazoo, Michigan
    
    
    81,000Knoxville, Tennessee
    
    
    16,530Maple Shade, New Jersey
    
    
    12,480Mt. Vernon, New York
    
    
    30,000New Philadelphia, Ohio
    
    
    15,700Pittsburgh, Pennsylvania
    
    
    12,800Rockford, Michigan
    
    
    53,600Tampa, Florida
    
    
    17,700Worcester, Massachusetts
    
    
    11,000
    (1)Total Plastics Segment
    
    
    430,400GRAND TOTAL
    
    
    3,801,264
 
 (1)
    
    Represents owned facility. 11




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##### 



ITEM 3   Legal Proceedings
  ITEM 4   Submission of Matters to a Vote of Security Holders
  PART II
 ITEM 5 
    
    Market for the Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
       2008
    
    2007Low
    
    High
    
    Low
    
    HighFirst Quarter
    
    $
    16.70
    
    
    $
    29.65
    
    
    $
    22.72
    
    
    $
    30.85Second Quarter
    
    $
    26.08
    
    
    $
    34.20
    
    
    $
    28.64
    
    
    $
    38.10Third Quarter
    
    $
    16.16
    
    
    $
    28.46
    
    
    $
    26.23
    
    
    $
    37.22Fourth Quarter
    
    $
    6.12
    
    
    $
    17.41
    
    
    $
    23.66
    
    
    $
    37.18
 12




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##### 



ITEM 6   Selected Financial Data
  (dollars in millions, except per share data)
    
    2008
    
    2007
    
    2006
    
    2005
    
    2004For the year ended December 31:Net sales
    
    $
    1,501.0
    
    
    $
    1,420.4
    
    
    $
    1,177.6
    
    
    $
    959.0
    
    
    $
    761.0Net (loss) income from continuing operations
    
    
    (17.1
    )
    
    
    51.8
    
    
    
    55.1
    
    
    
    38.9
    
    
    
    15.4Basic earnings (loss) per common share from continuing
operations
    
    
    (0.76
    )
    
    
    2.49
    
    
    
    2.95
    
    
    
    2.37
    
    
    
    0.92Diluted earnings (loss) per common share from continuing
operations
    
    
    (0.76
    )
    
    
    2.41
    
    
    
    2.89
    
    
    
    2.11
    
    
    
    0.82Cash dividends declared per common share
    
    
    0.24
    
    
    
    0.24
    
    
    
    0.24
    
    
    
    
    
    
    
    As of December 31:Total assets
    
    
    679.0
    
    
    
    677.0
    
    
    
    655.1
    
    
    
    423.7
    
    
    
    383.0Long-term debt, less current portion
    
    
    75.0
    
    
    
    60.7
    
    
    
    90.1
    
    
    
    73.8
    
    
    
    89.8Total debt
    
    
    117.1
    
    
    
    86.5
    
    
    
    226.1
    
    
    
    80.1
    
    
    
    101.4Total stockholders equity
    
    
    347.3
    
    
    
    385.1
    
    
    
    215.9
    
    
    
    175.5
    
    
    
    130.4
 13




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##### 



ITEM 7   Managements Discussion and Analysis of Financial Condition and Results of Operations
 Amounts in millions except per share data
  Information
regarding the business and markets of A. M. Castle & Co. and its subsidiaries
(the Company), including its reportable segments, is included in Item 1 Business of this
annual report on Form 10-K .
 The following discussion should be read in conjunction with Item 6 Selected Financial Data
and the Companys consolidated financial statements and related notes thereto in Item 8
Financial Statements and Supplementary Data.
 EXECUTIVE OVERVIEW
   
    
    Record sales of $1,501.0 million and third highest operating income in the Companys
history of $63.0 million (before non-cash goodwill impairment charge of $58.9 million in
the fourth quarter of 2008);
    
    Non-cash goodwill impairment charge of $58.9 million in the fourth quarter of 2008;
    
    Acquisition of Metals U.K. in the first quarter of 2008;
    
    Amendment to the Companys Amended Senior Credit Facility during the first quarter 2008;
and
    
    Completion of the first scheduled phase of the Metals segment ERP implementation during
the second quarter of 2008 and completion of implementation of a stand alone ERP system in
the Plastics segment during the third quarter of 2008.
    14




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##### 



Recent Market and Pricing Trends
   
    
    Changes in volume typically result in corresponding changes to the Companys variable
costs. However, as pricing changes occur, variable expenses are not impacted.
    
    If surcharges are passed through to the customer without a mark-up, gross material
margins will decrease.
    
    The ability to pass surcharges on to customers immediately is limited due to
contractual provisions with certain customers. Therefore, a lag exists between when the
surcharge impacts net sales and cost-of-sales.
 Current Business Outlook
  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
    
    
    
    36.1
 15




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##### 



RESULTS OF OPERATIONS: YEAR-TO-YEAR COMPARISONS AND COMMENTARY
  Net Sales 
 Cost of Materials
 Operating Costs and Expenses 
 
    
    Warehouse, processing and delivery expenses, including occupancy costs, compensation and
employee benefits for warehouse personnel, processing, shipping and handling costs;
    
    Sales expenses, including compensation and employee benefits for sales personnel;
    
    General and administrative expenses, including compensation for executive officers and
general management, expenses for professional services primarily related to accounting and
legal advisory services, data communication and computer hardware and maintenance; and
    
    Depreciation and amortization expenses, including depreciation for all owned property
and equipment, and amortization of various intangible assets.
 16




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##### 



2008 Results Compared to 2007
  Operating Results by Segment
 Year Ended December 31,
    
    Fav / (Unfav)2008
    
    2007
    
    $ Change
    
    % ChangeNet SalesMetals
    
    $
    1,384.8
    
    
    $
    1,304.8
    
    
    $
    80.0
    
    
    
    6.1
    %Plastics
    
    
    116.2
    
    
    
    115.6
    
    
    
    0.6
    
    
    
    0.5
    %Total Net Sales
    
    $
    1,501.0
    
    
    $
    1,420.4
    
    
    $
    80.6
    
    
    
    5.7
    %Cost of MaterialsMetals
    
    $
    1,044.4
    
    
    $
    954.4
    
    
    $
    (90.0
    )
    
    
    (9.4
    )%% of Metals Sales
    
    
    75.4
    %
    
    
    73.1
    %
    
    
    
    
    
    
    (2.3
    )%Plastics
    
    
    79.6
    
    
    
    78.0
    
    
    
    (1.6
    )
    
    
    (2.1
    )%% of Plastics Sales
    
    
    68.5
    %
    
    
    67.5
    %
    
    
    
    
    
    
    (1.0
    )%Total Cost of Materials
    
    $
    1,124.0
    
    
    $
    1,032.4
    
    
    $
    (91.6
    )
    
    
    (8.9
    )%% of Total Sales
    
    
    74.9
    %
    
    
    72.7
    %
    
    
    
    
    
    
    (2.2
    )%Operating Costs and ExpensesMetals
    
    $
    328.9
    
    
    $
    256.0
    
    
    $
    (72.9
    )
    
    
    (28.5
    )%Plastics
    
    
    33.4
    
    
    
    32.7
    
    
    
    (0.7
    )
    
    
    (2.1
    )%Other
    
    
    10.6
    
    
    
    8.6
    
    
    
    (2.0
    )
    
    
    (23.3
    )%Total Operating Costs & Expenses
    
    $
    372.9
    
    
    $
    297.3
    
    
    $
    (75.6
    )
    
    
    (25.4
    )%% of Total Sales
    
    
    24.8
    %
    
    
    20.9
    %
    
    
    
    
    
    
    (3.9
    )%Operating IncomeMetals
    
    $
    11.5
    
    
    $
    94.4
    
    
    $
    (82.9
    )
    
    
    (87.8
    )%% of Metals Sales
    
    
    0.8
    %
    
    
    7.2
    %
    
    
    
    
    
    
    (6.4
    )%Plastics
    
    
    3.2
    
    
    
    4.9
    
    
    
    (1.7
    )
    
    
    (34.7
    )%% of Plastics Sales
    
    
    2.8
    %
    
    
    4.2
    %
    
    
    
    
    
    
    (1.4
    )%Other
    
    
    (10.6
    )
    
    
    (8.6
    )
    
    
    (2.0
    )
    
    
    (23.3
    )%Total Operating Income
    
    $
    4.1
    
    
    $
    90.7
    
    
    $
    (86.6
    )
    
    
    (95.5
    )%% of Total Sales
    
    
    0.3
    %
    
    
    6.4
    %
    
    
    
    
    
    
    (6.1
    )%
 Other includes costs of executive, legal and finance departments which are shared by both segments of the
Company.
 Net Sales:
    Cost of Materials:
   17




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##### 



Operating Expenses and Operating Income:
  Critical Accounting Policies Note 8
  Other Income and Expense, Income Taxes and Net Income:
     18




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##### 



2007 Results Compared to 2006
  Operating Results by Segment
 Year Ended December 31,
    
    Fav / (Unfav)2007
    
    2006
    
    $ Change
    
    % ChangeNet SalesMetals
    
    $
    1,304.8
    
    
    $
    1,062.6
    
    
    $
    242.2
    
    
    
    22.8
    %Plastics
    
    
    115.6
    
    
    
    115.0
    
    
    
    0.6
    
    
    
    0.5
    %Total Net Sales
    
    $
    1,420.4
    
    
    $
    1,177.6
    
    
    $
    242.8
    
    
    
    20.6
    %Cost of MaterialsMetals
    
    $
    954.4
    
    
    $
    762.3
    
    
    $
    (192.1
    )
    
    
    (25.2
    )%% of Metals Sales
    
    
    73.1
    %
    
    
    71.7
    %
    
    
    
    
    
    
    (1.4
    )%Plastics
    
    
    78.0
    
    
    
    76.9
    
    
    
    (1.1
    )
    
    
    (1.4
    )%% of Plastics Sales
    
    
    67.5
    %
    
    
    66.9
    %
    
    
    
    
    
    
    (0.6
    )%Total Cost of Materials
    
    $
    1,032.4
    
    
    $
    839.2
    
    
    $
    (193.2
    )
    
    
    (23.0
    )%% of Total Sales
    
    
    72.7
    %
    
    
    71.3
    %
    
    
    
    
    
    
    (1.4
    )%Operating Costs and ExpensesMetals
    
    $
    256.0
    
    
    $
    205.3
    
    
    $
    (50.7
    )
    
    
    (24.7
    )%Plastics
    
    
    32.7
    
    
    
    30.8
    
    
    
    (1.9
    )
    
    
    (6.2
    )%Other
    
    
    8.6
    
    
    
    9.8
    
    
    
    1.2
    
    
    
    12.2
    %Total Operating Costs & Expenses
    
    $
    297.3
    
    
    $
    245.9
    
    
    $
    (51.4
    )
    
    
    (20.9
    )%% of Total Sales
    
    
    20.9
    %
    
    
    20.9
    %
    
    
    
    
    
    
    0.0
    %Operating IncomeMetals
    
    $
    94.4
    
    
    $
    95.0
    
    
    $
    (0.6
    )
    
    
    (0.6
    )%% of Metals Sales
    
    
    7.2
    %
    
    
    8.9
    %
    
    
    
    
    
    
    (1.7
    )%Plastics
    
    
    4.9
    
    
    
    7.3
    
    
    
    (2.4
    )
    
    
    (32.9
    )%% of Plastics Sales
    
    
    4.2
    %
    
    
    6.3
    %
    
    
    
    
    
    
    (2.1
    )%Other
    
    
    (8.6
    )
    
    
    (9.8
    )
    
    
    1.2
    
    
    
    12.2
    %Total Operating Income
    
    $
    90.7
    
    
    $
    92.5
    
    
    $
    (1.8
    )
    
    
    (1.9
    )%% of Total Sales
    
    
    6.4
    %
    
    
    7.9
    %
    
    
    
    
    
    
    (1.5
    )%
 Other includes costs of executive, legal and finance departments which are shared by both segments of the
Company.
 Net Sales:
   19




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##### 



Cost of Materials:
  Operating Expenses and Operating Income:
   Other Income and Expense, Income Taxes and Net Income:
     Liquidity and Capital Resources
    20




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##### 



Outstanding
    
    
    
    
    
    Weighted AverageDebt type
    
    Borrowings
    
    Availability
    
    Interest RateU.S. Revolver A
    
    $
    18.0
    
    
    $
    143.4
    
    
    
    4.33
    %U.S. Revolver B
    
    
    24.0
    
    
    
    26.0
    
    
    
    6.41
    %Canadian facility
    
    
    
    
    
    
    10.0
    
    
    
    Trade acceptances (a)
    
    
    10.0
    
    
    
    n/a
    
    
    
    4.41
    %
 
 (a)
    
    A trade acceptance is a form of debt instrument having a definite maturity and obligation to
pay and which has been accepted by an acknowledgement by the company upon whom it is drawn.     Capital Expenditures
  Contractual Obligations and Other Commitments
  21




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##### 



Payments Due In
    
    Total
    
    Less Than One Year
    
    One to Three Years
    
    Three to Five Years
    
    More Than Five YearsLong-Term Debt Obligations
(excluding capital lease
obligations)
    
    $
    84.3
    
    
 $
    10.3
    
    
 $
    14.8
    
    
 $
    40.6
    
    
 $
    18.6Interest Payments on Debt
Obligations (a)
    
    
    26.6
    
    
    
    6.1
    
    
    
    10.4
    
    
    
    8.2
    
    
    
    1.9Capital Lease Obligations
    
    
    1.5
    
    
    
    0.5
    
    
    
    0.8
    
    
    
    0.2
    
    
    
    Operating Lease Obligations
    
    
    56.4
    
    
    
    12.3
    
    
    
    20.4
    
    
    
    17.1
    
    
    
    6.6Purchase Obligations (b)
    
    
    384.5
    
    
    
    265.2
    
    
    
    87.3
    
    
    
    32.0
    
    
    
    Other (c)
    
    
    5.9
    
    
    
    4.4
    
    
    
    1.5
    
    
    
    
    
    
    
    Total
    
 $
    559.2
    
    
 $
    298.8
    
    
 $
    135.2
    
    
 $
    98.1
    
    
 $
    27.1
 
 a)
    
    Interest payments on debt obligations represent interest on all Company debt outstanding as of
December 31, 2008. The interest payment amounts related to the variable rate component of the
Companys debt assume that interest will be paid at the rates prevailing at December 31, 2008.
Future interest rates may change, and therefore, actual interest payments could differ from those
disclosed in the table above.b)
    
    Purchase obligations consist of raw material purchases made in the normal course of business.
The Company has long-term contracts to purchase minimum quantities of material with certain
suppliers. For each long-term contractual purchase obligation, the Company generally has an
irrevocable purchase agreement from its customer for the same amount of material over the same time
period.c)
    
    Other is comprised of 1) deferred revenues that represent commitments to deliver products, 2)
obligations which are to be disclosed according to FASB Interpretation No. (FIN) 48, Accounting
for Uncertainty in Income Taxes (FIN 48) and 3) earnout related to Metals U.K. acquisition to be
paid based on the achievement of performance targets related to fiscal years 2008, 2009 and 2010.
The FIN 48 obligations in the table above represent uncertain tax positions related to temporary
differences and uncertain tax positions where the Company anticipates a high probability of
settlement within a given timeframe. The years for which the temporary differences related to the
uncertain tax positions will reverse have been estimated in scheduling the obligations within the
table. In addition to the FIN 48 obligations in the table above, approximately $1.5 million of
unrecognized tax benefits have been recorded as liabilities in accordance with FIN 48, and we are
uncertain as to if or when such amounts may be settled. Related to the unrecognized tax benefits
not included in the table above, the Company has also recorded a liability for interest of $0.1
million.  Pension Funding
   22




---



##### 



Retirement Plans within
Critical Accounting Policies Note 5
 Off-Balance Sheet Arrangements
   Critical Accounting Policies
  Revenue Recognition and Accounts Receivable
  Inventories
 Income Taxes
 23




---



##### 



Retirement Plans
   Goodwill and Other Intangible Assets Impairment
 24




---



##### 



Note 8
 Long-Lived Assets 
 25




---



##### 



Share-Based Compensation 
 2006Risk free interest rate
    
    
    4.72
    %Expected dividend yield
    
    
    0.85
    %Expected option term
    
    10 YrsExpected volatility
    
    
    50
    %The estimated weighted average fair value on the date
granted based on the above assumptions
    
    $
    16.93
   Fair Value of Financial Instruments
 Level 1
 Level 2
 Level 3
 Note 5 Note 9
  26




---



##### 



ITEM 7a  Quantitative and Qualitative Disclosures about Market Risk
     27




---



##### 



ITEM 8   Financial Statements and Supplementary Data
 Amounts in thousands, except par value and per share data
 
 Consolidated Statements of Operations
 Year Ended December 31,2008
    
    2007
    
    2006Net sales
    
    $
    1,501,036
    
    
    $
    1,420,353
    
    
    $
    1,177,600Costs and expenses:Cost of materials (exclusive of depreciation and
amortization)
    
    
    1,123,977
    
    
    
    1,032,355
    
    
    
    839,234Warehouse, processing and delivery expense
    
    
    154,189
    
    
    
    139,993
    
    
    
    123,204Sales, general and administrative expense
    
    
    136,551
    
    
    
    137,153
    
    
    
    109,407Depreciation and amortization expense
    
    
    23,327
    
    
    
    20,177
    
    
    
    13,290Impairment of goodwill
    
    
    58,860
    
    
    
    
    
    
    
    Operating income
    
    
    4,132
    
    
    
    90,675
    
    
    
    92,465Interest expense, net
    
    
    (9,373
    )
    
    
    (12,899
    )
    
    
    (8,302
    )(Loss) income before income taxes and equity in
earnings of joint venture
    
    
    (5,241
    )
    
    
    77,776
    
    
    
    84,163Income taxes
    
    
    (20,690
    )
    
    
    (31,294
    )
    
    
    (33,330
    )(Loss) income before equity in earnings of joint venture
    
    
    (25,931
    )
    
    
    46,482
    
    
    
    50,833Equity in earnings of joint venture
    
    
    8,849
    
    
    
    5,324
    
    
    
    4,286Net (loss) income
    
    
    (17,082
    )
    
    
    51,806
    
    
    
    55,119Preferred stock dividends
    
    
    
    
    
    
    (593
    )
    
    
    (963
    )Net (loss) income applicable to common stock
    
    $
    (17,082
    )
    
    $
    51,213
    
    
    $
    54,156Basic (loss) earnings per share
    
    $
    (0.76
    )
    
    $
    2.49
    
    
    $
    2.95Diluted
(loss) earnings per share
    
    $
    (0.76
    )
    
    $
    2.41
    
    
    $
    2.89Dividends paid per common share
    
    $
    0.24
    
    
    $
    0.24
    
    
    $
    0.24
 The accompanying notes to consolidated financial statements are an integral part of these
statements.
 28




---



##### 



Consolidated Balance Sheets
 As ofDecember 31,2008
    
    2007AssetsCurrent assetsCash and cash equivalents
    
    $
    15,277
    
    
    $
    22,970Accounts receivable, less allowances of $3,318 in 2008 and $3,220 in 2007
    
    
    159,613
    
    
    
    146,675Inventories, principally on last-in, first-out basis (replacement cost higher
by $133,748 in 2008 and $142,118 in 2007)
    
    
    240,673
    
    
    
    207,284Other current assets
    
    
    12,860
    
    
    
    13,462Total current assets
    
    
    428,423
    
    
    
    390,391Investment in joint venture
    
    
    23,340
    
    
    
    17,419Goodwill
    
    
    51,321
    
    
    
    101,540Intangible assets
    
    
    55,742
    
    
    
    59,602Prepaid pension cost
    
    
    26,615
    
    
    
    25,426Other assets
    
    
    5,303
    
    
    
    7,516Property, plant and equipment, at costLand
    
    
    5,184
    
    
    
    5,196Building
    
    
    50,069
    
    
    
    48,727Machinery and equipment
    
    
    172,500
    
    
    
    155,950227,753
    
    
    
    209,873Less  accumulated depreciation
    
    
    (139,463
    )
    
    
    (134,763
    )88,290
    
    
    
    75,110Total assets
    
    $
    679,034
    
    
    $
    677,004Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    126,490
    
    
    $
    109,055Accrued payroll and employee benefits
    
    
    16,622
    
    
    
    14,757Accrued liabilities
    
    
    11,307
    
    
    
    18,386Income taxes payable
    
    
    6,451
    
    
    
    2,497Deferred income taxes  current
    
    
    
    
    
    
    7,298Current portion of long-term debt
    
    
    10,838
    
    
    
    7,037Short-term debt
    
    
    31,197
    
    
    
    18,739Total current liabilities
    
    
    202,905
    
    
    
    177,769Long-term debt, less current portion
    
    
    75,018
    
    
    
    60,712Deferred income taxes
    
    
    38,743
    
    
    
    37,760Other non-current liabilities
    
    
    7,535
    
    
    
    6,585Pension and postretirement benefit obligations
    
    
    7,533
    
    
    
    9,103Commitments and contingencies
Stockholders equityCommon stock, $0.01 par value  30,000 shares authorized; 22,850 shares
issued and 22,654 outstanding at December 31, 2008 and 22,331 shares issued
and 22,098 outstanding at December 31, 2007
    
    
    228
    
    
    
    223Additional paid-in capital
    
    
    176,653
    
    
    
    179,707Retained earnings
    
    
    184,651
    
    
    
    207,134Accumulated other comprehensive (loss) income
    
    
    (11,462
    )
    
    
    1,498Treasury stock, at cost  197 shares in 2008 and 233 shares in 2007
    
    
    (2,770
    )
    
    
    (3,487
    )Total stockholders equity
    
    
    347,300
    
    
    
    385,075Total liabilities and stockholders equity
    
    $
    679,034
    
    
    $
    677,004
 The accompanying notes to consolidated financial statements are an integral part of these
statements.
 29




---



##### 



Consolidated Statements of Cash Flow
 Years Ended December 31,2008
    
    2007
    
    2006Operating activities:Net (loss) income
    
    $
    (17,082
    )
    
    $
    51,806
    
    
    $
    55,119Adjustments to reconcile net income to net cash from operating activities:Depreciation and amortization
    
    
    23,327
    
    
    
    20,177
    
    
    
    13,290Amortization of deferred gain
    
    
    (1,128
    )
    
    
    (907
    )
    
    
    (760
    )Loss on sale of fixed assets
    
    
    363
    
    
    
    1,293
    
    
    
    94Loss on sale of subsidiary
    
    
    
    
    
    
    425
    
    
    
    Impairment of goodwill and long-lived asset
    
    
    58,860
    
    
    
    589
    
    
    
    Equity in earnings of joint venture
    
    
    (8,849
    )
    
    
    (5,324
    )
    
    
    (4,286
    )Dividends from joint venture
    
    
    2,955
    
    
    
    1,545
    
    
    
    1,623Deferred tax
(benefit) provision
    
    
    (13,578
    )
    
    
    (13,148
    )
    
    
    4,537Share-based compensation expense
    
    
    454
    
    
    
    5,018
    
    
    
    4,485Pension curtailment
    
    
    (472
    )
    
    
    284
    
    
    
    Excess tax benefits from share-based payment arrangements
    
    
    (2,881
    )
    
    
    (993
    )
    
    
    (1,186
    )Increase (decrease) from changes, net of acquisitions, in:Accounts receivable
    
    
    (7,736
    )
    
    
    14,700
    
    
    
    (19,678
    )Inventories
    
    
    (32,418
    )
    
    
    (6,275
    )
    
    
    (22,521
    )Other current assets
    
    
    4,182
    
    
    
    1,639
    
    
    
    (2,570
    )Other assets
    
    
    3,364
    
    
    
    879
    
    
    
    722Prepaid pension costs
    
    
    (92
    )
    
    
    6,074
    
    
    
    1,920Accounts payable
    
    
    13,844
    
    
    
    (11,008
    )
    
    
    7,882Accrued payroll and employee benefits
    
    
    1,889
    
    
    
    3,085
    
    
    
    (1,350
    )Income taxes payable
    
    
    6,985
    
    
    
    7,007
    
    
    
    (10,090
    )Accrued liabilities
    
    
    (7,900
    )
    
    
    1,507
    
    
    
    2,044Postretirement benefit obligations and other liabilities
    
    
    (2,340
    )
    
    
    293
    
    
    
    2,165Net cash from operating activities
    
    
    21,747
    
    
    
    78,666
    
    
    
    31,440Investing activities:Investments and acquisitions, net of cash acquired
    
    
    (26,857
    )
    
    
    (280
    )
    
    
    (175,583
    )Capital expenditures
    
    
    (26,302
    )
    
    
    (20,183
    )
    
    
    (12,935
    )Proceeds from sale of fixed assets
    
    
    358
    
    
    
    823
    
    
    
    124Proceeds from sale of subsidiary
    
    
    645
    
    
    
    5,707
    
    
    
    Net cash used in investing activities
    
    
    (52,156
    )
    
    
    (13,933
    )
    
    
    (188,394
    )Financing activities:Short-term borrowings (repayments), net
    
    
    12,636
    
    
    
    (104,690
    )
    
    
    110,919Proceeds from issuance of long-term debt
    
    
    29,496
    
    
    
    
    
    
    
    30,000Repayments of long-term debt
    
    
    (6,967
    )
    
    
    (35,337
    )
    
    
    (7,832
    )Payment of debt issuance fees
    
    
    (524
    )
    
    
    (173
    )
    
    
    (3,156
    )Preferred stock dividends
    
    
    
    
    
    
    (345
    )
    
    
    (963
    )Common stock dividends
    
    
    (5,401
    )
    
    
    (4,704
    )
    
    
    (4,061
    )Proceeds from issuance of common stock, net
    
    
    
    
    
    
    92,883
    
    
    
    Exercise of stock options and other
    
    
    450
    
    
    
    552
    
    
    
    2,840Payment of withholding taxes from share-based incentive issuance
    
    
    (6,000
    )
    
    
    
    
    
    
    Excess tax benefits from share-based payment arrangements
    
    
    2,881
    
    
    
    993
    
    
    
    1,186Net cash from (used in) financing activities
    
    
    26,571
    
    
    
    (50,821
    )
    
    
    128,933Effect of exchange rate changes on cash and cash equivalents
    
    
    (3,855
    )
    
    
    (468
    )
    
    
    155Net
(decrease) increase in cash and cash equivalents
    
    
    (7,693
    )
    
    
    13,444
    
    
    
    (27,866
    )Cash and cash equivalents  beginning of year
    
    
    22,970
    
    
    
    9,526
    
    
    
    37,392Cash and cash equivalents  end of year
    
    $
    15,277
    
    
    $
    22,970
    
    
    $
    9,526
 See Note 1 to the consolidated financial statements for supplemental cash flow disclosures.
 The accompanying notes to consolidated financial statements are an integral part of these
statements.
 30




---



##### 



Consolidated Statement of Stockholders Equity
 Additional
    
    
    
    
    
    Deferred
    
    AccumulatedAccum. OtherCommon
    
    Treasury
    
    Preferred
    
    Common
    
    Treasury
    
    Paid-in
    
    Retained
    
    Unearned
    
    ComprehensiveShares
    
    Shares
    
    Stock
    
    Stock
    
    Stock
    
    Capital
    
    Earnings
    
    Compensation
    
    Income (Loss)
    
    TotalBalance at January 1, 2006
    
    
    16,606
    
    
    
    (546
    )
    
    $
    11,239
    
    
    $
    166
    
    
    $
    (9,716
    )
    
    $
    60,916
    
    
    $
    110,530
    
    
    $
    
    
    
    $
    2,370
    
    
    $
    175,505Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,119
    
    
    
    
    
    
    
    
    
    
    
    55,119Foreign currency
translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    66
    
    
    
    66Minimum pension
liability, net of tax
expense of $206
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    322
    
    
    
    322Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,507Adjustment to initially
apply SFAS No. 158,
net of tax benefit of $13,611
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,262
    )
    
    
    (21,262
    )Preferred stock dividend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (963
    )
    
    
    
    
    
    
    
    
    
    
    (963
    )Common stock dividend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,061
    )
    
    
    
    
    
    
    
    
    
    
    (4,061
    )Long-term incentive
plan expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,209
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,209Exercise of stock
options and other
    
    
    479
    
    
    
    184
    
    
    
    
    
    
    
    4
    
    
    
    3,710
    
    
    
    5,650
    
    
    
    
    
    
    
    (1,392
    )
    
    
    
    
    
    
    7,972Balance at December 31,
2006
    
    
    17,085
    
    
    
    (362
    )
    
    $
    11,239
    
    
    $
    170
    
    
    $
    (6,006
    )
    
    $
    69,775
    
    
    $
    160,625
    
    
    $
    (1,392
    )
    
    $
    (18,504
    )
    
    $
    215,907Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,806
    
    
    
    
    
    
    
    
    
    
    
    51,806Foreign currency
translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,268
    
    
    
    4,268Defined benefit pension
liability adjustments,
net of tax expense of $10,085
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,734
    
    
    
    15,734Total comprehensive
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71,808Preferred stock dividend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (593
    )
    
    
    
    
    
    
    
    
    
    
    (593
    )Common stock dividend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,704
    )
    
    
    
    
    
    
    
    
    
    
    (4,704
    )Long-term incentive
plan expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,016
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,016Conversion of preferred
stock and issuance
of common stock
    
    
    4,801
    
    
    
    
    
    
    
    (11,239
    )
    
    
    53
    
    
    
    
    
    
    
    104,069
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    92,883Exercise of stock
options and other
    
    
    445
    
    
    
    129
    
    
    
    
    
    
    
    
    
    
    
    2,519
    
    
    
    1,847
    
    
    
    
    
    
    
    1,392
    
    
    
    
    
    
    
    5,758Balance at December 31,
2007
    
    
    22,331
    
    
    
    (233
    )
    
    $
    
    
    
    $
    223
    
    
    $
    (3,487
    )
    
    $
    179,707
    
    
    $
    207,134
    
    
    $
    
    
    
    $
    1,498
    
    
    $
    385,075Comprehensive Loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,082
    )
    
    
    
    
    
    
    
    
    
    
    (17,082
    )Foreign currency
translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,630
    )
    
    
    (13,630
    )Defined benefit pension
liability adjustments,
net of tax expense of
$428
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    670
    
    
    
    670Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,042
    )Common stock dividend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,401
    )
    
    
    
    
    
    
    
    
    
    
    (5,401
    )Long-term incentive
plan income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (728
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (728
    )Exercise of stock
options and other
    
    
    519
    
    
    
    36
    
    
    
    
    
    
    
    5
    
    
    
    717
    
    
    
    (2,326
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,604
    )Balance at December 31,
2008
    
    
    22,850
    
    
    
    (197
    )
    
    $
    
    
    
    $
    228
    
    
    $
    (2,770
    )
    
    $
    176,653
    
    
    $
    184,651
    
    
    $
    
    
    
    $
    (11,462
    )
    
    $
    347,300
 The accompanying notes to consolidated financial statements are an integral part of these
statements.
 31




---



##### 



A. M. Castle & Co.
Notes to Consolidated Financial Statements
Amounts in thousands except per share data
 (1) Basis of Presentation and Significant Accounting Policies
 Nature of operations
   Basis of presentation
 Use of estimates
 Revenue recognition
  32




---



##### 



Cost of materials
 Operating expenses 
 
    
    Warehouse, processing and delivery expenses, including occupancy costs, compensation and
employee benefits for warehouse personnel, processing, shipping and handling costs;
    
    Sales expenses, including compensation and employee benefits for sales personnel;
    
    General and administrative expenses, including compensation for executive officers and
general management, expenses for professional services primarily attributable to accounting
and legal advisory services, data communication and computer hardware and maintenance; and
    
    Depreciation and amortization expenses, including depreciation for all owned property
and equipment, and amortization of various intangible assets.
 Cash and cash equivalents
 Statement of cash flows 
  Year Ended December 31,2008
    
    2007
    
    2006Non-cash investing activities:Capital expenditures financed by accounts payable
    
    $
    1,490
    
    
    $
    883
    
    
    
    Capital obligation for Metals U.K. Group acquisition
    
    
    
    
    
    $
    1,298
    
    
    
    Cash paid during the year for:Interest
    
    $
    7,544
    
    
    $
    13,423
    
    
    $
    9,041Income taxes
    
    $
    29,153
    
    
    $
    36,675
    
    
    $
    38,871
 Inventories
 Insurance plans 
 33




---



##### 



Property, plant and equipment
  Buildings and building improvements
    
    12 - 40 yearsPlant equipment
    
    3 - 25 yearsFurniture and fixtures
    
    3 - 10 yearsVehicles and office equipment
    
    3 - 7 years
  Long-lived assets
 Goodwill and intangible assets 
  34




---



##### 



Income taxes
     35




---



##### 



Foreign currency translation
 Earnings per share
 2008
    
    2007
    
    2006Numerator:Net (loss) income
    
    $
    (17,082
    )
    
    $
    51,806
    
    
    $
    55,119Preferred dividends distributed
    
    
    
    
    
    
    (593
    )
    
    
    (963
    )Undistributed (losses) earnings
    
    $
    (17,082
    )
    
    $
    51,213
    
    
    $
    54,156Undistributed (losses) earnings attributable to:Common stockholders
    
    $
    (17,082
    )
    
    $
    49,981
    
    
    $
    49,831Preferred stockholders, as if converted
    
    
    
    
    
    
    1,232
    
    
    
    4,325Total undistributed (losses) earnings
    
    $
    (17,082
    )
    
    $
    51,213
    
    
    $
    54,156Denominator:Denominator for basic earnings per share:Weighted average common shares outstanding
    
    
    22,528
    
    
    
    20,060
    
    
    
    16,907Effect of dilutive securities:Outstanding employee and directors common
stock options, restricted stock and share-based
awards
    
    
    
    
    
    
    756
    
    
    
    360Convertible preferred stock
    
    
    
    
    
    
    732
    
    
    
    1,794Denominator for diluted earnings per share
    
    
    22,528
    
    
    
    21,548
    
    
    
    19,061Basic earnings (loss) per share
    
    $
    (0.76
    )
    
    $
    2.49
    
    
    $
    2.95Diluted earnings (loss) per share
    
    $
    (0.76
    )
    
    $
    2.41
    
    
    $
    2.89Outstanding common stock options and
convertible preferred stock having an
anti-dilutive effect
    
    
    246
    
    
    
    
    
    
    
    20
 36




---



##### 



Concentrations
 Share-based compensation 
 New Accounting Standards
 Standards Adopted
  Level 1
 Level 2
 Level 3
 Note 5 Note 9
   37




---



##### 



Standards Issued Not Yet Adopted
    (2) Acquisitions and Divestitures
 Acquisitions
 Metals U.K. Group
    38




---



##### 



Note 9
  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
    
    
    12,404Total assets
    
    
    47,718Current liabilities
    
    
    13,726Long-term liabilities
    
    
    4,299Total liabilities
    
    
    18,025Total purchase price
    
    $
    29,693
 Note 8
 Transtar Intermediate Holdings #2, Inc.
    Divestiture
 Metal Mart LLC
   39




---



##### 



(3) Segment Reporting
      2008
    
    2007
    
    2006Net salesUnited States
    
    $
    1,236,355
    
    
    $
    1,245,943
    
    
    $
    1,069,888All other countries
    
    
    264,681
    
    
    
    174,410
    
    
    
    107,712Total
    
    $
    1,501,036
    
    
    $
    1,420,353
    
    
    $
    1,177,600Long-lived assetsUnited States
    
    $
    78,911
    
    
    $
    68,621All other countries
    
    
    9,379
    
    
    
    6,489Total
    
    $
    88,290
    
    
    $
    75,110
 40




---



##### 



Net
    
    Operating
    
    Total
    
    
    
    
    
    Depreciation &Sales
    
    Income (Loss)
    
    Assets
    
    Capital Expenditures
    
    Amortization2008Metals segment
    
    $
    1,384,859
    
    
    $
    11,554
    
    
    $
    602,897
    
    
    $
    24,218
    
    
    $
    22,040Plastics segment
    
    
    116,177
    
    
    
    3,182
    
    
    
    52,797
    
    
    
    2,084
    
    
    
    1,287Other
    
    
    
    
    
    
    (10,604
    )
    
    
    23,340
    
    
    
    
    
    
    
    Consolidated
    
    $
    1,501,036
    
    
    $
    4,132
    
    
    $
    679,034
    
    
    $
    26,302
    
    
    $
    23,3272007Metals segment
    
    $
    1,304,713
    
    
    $
    94,235
    
    
    $
    607,993
    
    
    $
    17,537
    
    
    $
    18,988Plastics segment
    
    
    115,640
    
    
    
    4,989
    
    
    
    51,592
    
    
    
    2,646
    
    
    
    1,189Other
    
    
    
    
    
    
    (8,549
    )
    
    
    17,419
    
    
    
    
    
    
    
    Consolidated
    
    $
    1,420,353
    
    
    $
    90,675
    
    
    $
    677,004
    
    
    $
    20,183
    
    
    $
    20,1772006Metals segment
    
    $
    1,062,620
    
    
    $
    94,915
    
    
    $
    593,730
    
    
    $
    11,941
    
    
    $
    12,170Plastics segment
    
    
    114,980
    
    
    
    7,301
    
    
    
    47,813
    
    
    
    994
    
    
    
    1,120Other
    
    
    
    
    
    
    (9,751
    )
    
    
    13,577
    
    
    
    
    
    
    
    Consolidated
    
    $
    1,177,600
    
    
    $
    92,465
    
    
    $
    655,120
    
    
    $
    12,935
    
    
    $
    13,290
  (4) Lease Agreements
   Capital
    
    Operating2009
    
    $
    548
    
    
    $
    12,2592010
    
    
    498
    
    
    
    10,5542011
    
    
    325
    
    
    
    9,8682012
    
    
    133
    
    
    
    9,4832013
    
    
    18
    
    
    
    7,653Later years
    
    
    
    
    
    
    6,576Total future minimum rental payments
    
    $
    1,522
    
    
    $
    56,393
    41




---



##### 



(5) Employee Benefit Plans
 Pension Plans
     :
 2008
    
    2007
    
    2006Service cost
    
    $
    2,057
    
    
    $
    3,562
    
    
    $
    3,485Interest cost
    
    
    7,216
    
    
    
    7,424
    
    
    
    7,011Expected return on assets
    
    
    (11,124
    )
    
    
    (10,080
    )
    
    
    (9,696
    )Amortization of prior service cost
    
    
    245
    
    
    
    58
    
    
    
    58Amortization of actuarial loss
    
    
    351
    
    
    
    3,153
    
    
    
    3,756Net periodic pension (credit) cost,
excluding impact of curtailment
    
    $
    (1,255
    )
    
    $
    4,117
    
    
    $
    4,614
  :
 2008
    
    2007Change in projected benefit obligation:Projected benefit obligation at beginning of year
    
    $
    117,949
    
    
    $
    132,025Service cost
    
    
    2,057
    
    
    
    3,562Interest cost
    
    
    7,216
    
    
    
    7,424Curtailments
    
    
    (1,962
    )
    
    
    (13,291
    )Plan change
    
    
    1,891
    
    
    
    Benefit payments
    
    
    (5,562
    )
    
    
    (5,709
    )
 42




---



##### 



2008
    
    2007Actuarial (gain) loss
    
    
    1,619
    
    
    
    (6,062
    )Projected benefit obligation at end of year
    
    $
    123,208
    
    
    $
    117,949Change in plan assets:Fair value of plan assets at beginning of year
    
    $
    137,314
    
    
    $
    130,377Actual return on assets
    
    
    13,655
    
    
    
    12,332Employer contributions
    
    
    165
    
    
    
    314Benefit payments
    
    
    (5,562
    )
    
    
    (5,709
    )Fair value of plan assets at end of year
    
    $
    145,572
    
    
    $
    137,314Funded status  net prepaid
    
    $
    22,364
    
    
    $
    19,365Amounts recognized in the consolidated balance sheets consist of:Prepaid pension cost
    
    $
    26,615
    
    
    $
    25,426Accrued liabilities
    
    
    (216
    )
    
    
    (164
    )Pension and postretirement benefit obligations
    
    
    (4,035
    )
    
    
    (5,897
    )Net amount recognized
    
    $
    22,364
    
    
    $
    19,365Pre-tax components of accumulated other comprehensive income
(loss):Unrecognized actuarial loss
    
    $
    (7,799
    )
    
    $
    (10,692
    )Unrecognized prior service cost
    
    
    (1,918
    )
    
    
    (133
    )Total
    
    $
    (9,717
    )
    
    $
    (10,825
    )Accumulated benefit obligation
    
    $
    123,085
    
    
    $
    115,764
   2008
    
    2007Discount rate
    
    
    6.25
    %
    
    
    6.25
    %Projected annual salary increases
    
    
    
    
    
    
    4.00
  2008
    
    2007
    
    2006Discount rate
    
    
    6.25
    %
    
    
    5.75
    %
    
    
    5.50
    %Expected long-term rate of return on plan assets
    
    
    8.75
    
    
    
    8.75
    
    
    
    8.75Projected annual salary increases
    
    
    4.00
    
    
    
    4.00
    
    
    
    4.00
  43




---



##### 



2008
    
    2007Equity securities
    
    
    
    
    
    
    73.4
    %Debt securities
    
    
    86.7
    %
    
    
    6.8
    %Real estate
    
    
    5.0
    %
    
    
    5.8
    %Other
    
    
    8.3
    %
    
    
    14.0
    %100.0
    %
    
    
    100.0
    %
   2009
    
    $
    6,2802010
    
    
    6,5442011
    
    
    6,7222012
    
    
    7,0242013
    
    
    7,4272014  2018
    
    
    43,256
 Postretirement Plan
  :
 2008
    
    2007
    
    2006Service cost
    
    $
    151
    
    
    $
    176
    
    
    $
    186Interest cost
    
    
    207
    
    
    
    220
    
    
    
    213Amortization of prior service cost
    
    
    47
    
    
    
    47
    
    
    
    47Amortization of actuarial loss (gain)
    
    
    (18
    )
    
    
    (5
    )
    
    
    27Net periodic postretirement benefit cost
    
    $
    387
    
    
    $
    438
    
    
    $
    473
  44




---



##### 



:
 2008
    
    
    2007Change in accumulated postretirement benefit obligations:Accumulated postretirement benefit obligation at beginning of year
    
    $
    3,416
    
    
    $
    3,867Service cost
    
    
    151
    
    
    
    175Interest cost
    
    
    207
    
    
    
    220Benefit payments
    
    
    (126
    )
    
    
    (170
    )Actuarial loss (gain)
    
    
    39
    
    
    
    (676
    )Accumulated postretirement benefit obligation at end of year
    
    $
    3,687
    
    
    $
    3,416Funded status  net liability
    
    $
    (3,687
    )
    
    $
    (3,416
    )Amounts recognized in the consolidated balance sheets consist of:Accrued liabilities
    
    $
    (189
    )
    
    $
    (210
    )Pension and postretirement benefit obligations
    
    
    (3,498
    )
    
    
    (3,206
    )Net amount recognized
    
    $
    (3,687
    )
    
    $
    (3,416
    )Pre-tax components of accumulated other comprehensive income (loss):Unrecognized actuarial gain
    
    $
    499
    
    
    $
    556Unrecognized prior service cost
    
    
    (76
    )
    
    
    (123
    )Total
    
    $
    423
    
    
    $
    433
  Retirement Savings Plan
    2008
    
    2007
    
    2006Supplemental contributions and 401(k) match
    
    $
    3,161
    
    
    $
    3,939
    
    
    $
    3,977
 45




---



##### 



(6) Joint Venture
   2008
    
    2007
    
    2006Equity in earnings of joint venture
    
    $
    8,849
    
    
    $
    5,324
    
    
    $
    4,286Investment in joint venture
    
    
    23,340
    
    
    
    17,419
    
    
    
    13,577Sales to joint venture
    
    
    568
    
    
    
    642
    
    
    
    626Purchases from joint venture
    
    
    1,040
    
    
    
    565
    
    
    
    133
 :
 2008
    
    2007
    
    2006Revenues
    
    $
    221,753
    
    
    $
    164,297
    
    
    $
    130,973Net income
    
    
    17,698
    
    
    
    10,647
    
    
    
    8,572Current assets
    
    
    64,550
    
    
    
    56,149
    
    
    
    41,420Non-current assets
    
    
    19,184
    
    
    
    18,137
    
    
    
    12,705Current liabilities
    
    
    34,864
    
    
    
    37,354
    
    
    
    22,894Non-current liabilities
    
    
    3,428
    
    
    
    3,275
    
    
    
    3,615Members equity
    
    
    45,442
    
    
    
    33,657
    
    
    
    27,616Capital expenditures (a)
    
    
    2,628
    
    
    
    7,999
    
    
    
    1,143Depreciation and amortization
    
    
    1,597
    
    
    
    1,236
    
    
    
    1,008
 
 (a)
    
    Includes purchase of Special Metals Inc. for $4,312 on April 2, 2007. (7) Income Taxes
  2008
    
    2007
    
    2006U.S.
    
    $
    (13,425
    )
    
    $
    65,516
    
    
    $
    74,226Non-U.S.
    
    
    8,184
    
    
    
    12,260
    
    
    
    9,937
  2008
    
    2007
    
    2006Federal  current
    
    $
    25,943
    
    
    $
    34,082
    
    
    $
    21,701 deferred
    
    
    (11,025
    )
    
    
    (11,515
    )
    
    
    4,443State     current
    
    
    2,827
    
    
    
    5,194
    
    
    
    3,914 deferred
    
    
    (2,381
    )
    
    
    (527
    )
    
    
    (123
    )Foreign  current
    
    
    5,498
    
    
    
    5,166
    
    
    
    3,178 deferred
    
    
    (172
    )
    
    
    (1,106
    )
    
    
    217Total income
tax expense
    
    $
    20,690
    
    
    $
    31,294
    
    
    $
    33,330
 46




---



##### 



2008
    
    2007
    
    2006Federal income tax at statutory rates
    
    $
    (1,834
    )
    
    $
    27,220
    
    
    $
    29,456State income taxes, net of federal income tax benefits
    
    
    95
    
    
    
    3,050
    
    
    
    2,412Federal and state income tax on joint venture
    
    
    3,460
    
    
    
    2,071
    
    
    
    1,672Impairment of goodwill
    
    
    20,601
    
    
    
    
    
    
    
    Rate differential on foreign income
    
    
    (1,253
    )
    
    
    (231
    )
    
    
    (83
    )Other
    
    
    (379
    )
    
    
    (816
    )
    
    
    (127
    )Income tax expense
    
    $
    20,690
    
    
    $
    31,294
    
    
    $
    33,330Effective income tax expense rate
    
    
    (394.8
    %)
    
    
    40.2
    %
    
    
    39.6
    %
  2008
    
    2007Deferred tax liabilities:Depreciation
    
    $
    6,783
    
    
    $
    6,444Inventory
    
    
    
    
    
    
    12,639Pension
    
    
    10,259
    
    
    
    4,701Intangible assets and goodwill
    
    
    25,895
    
    
    
    28,069Postretirement benefits
    
    
    
    
    
    
    1,498Total deferred tax liabilities
    
    $
    42,937
    
    
    $
    53,351Deferred tax assets:Postretirement benefits
    
    $
    2,945
    
    
    $
    Inventory
    
    
    275
    
    
    
    Deferred compensation
    
    
    2,267
    
    
    
    1,468Deferred gain
    
    
    1,314
    
    
    
    2,280Impairments
    
    
    1,918
    
    
    
    1,283Other, net
    
    
    720
    
    
    
    3,262Total deferred tax assets
    
    $
    9,439
    
    
    $
    8,293Net deferred tax liabilities
    
    $
    33,498
    
    
    $
    45,058
  2008
    
    
    2007Balance as of January 1, 2008
    
    $
    1,754
    
    
    $
    931Increases (decreases) in unrecognized tax benefits:Due to tax positions taken in prior years
    
    
    169
    
    
    
    563Due to tax positions taken during the current year
    
    
    350
    
    
    
    260Balance as of December 31, 2008
    
    $
    2,273
    
    
    $
    1,754
    47




---



##### 



(8) Goodwill and Intangible Assets
 Acquisition of Metals U.K.
   Metals
    
    PlasticsSegment
    
    Segment
    
    TotalBalance as of January 1, 2007
    
    $
    88,810
    
    
    $
    12,973
    
    
    $
    101,783Transtar purchase price adjustments
    
    
    462
    
    
    
    
    
    
    
    462Sale of Metal Express
    
    
    (825
    )
    
    
    
    
    
    
    (825
    )Currency valuation
    
    
    120
    
    
    
    
    
    
    
    120Balance as of December 31, 2007
    
    $
    88,567
    
    
    $
    12,973
    
    
    $
    101,540Acquisition of Metals U.K.
    
    
    12,404
    
    
    
    
    
    
    
    12,404Transtar purchase price adjustment
    
    
    (244
    )
    
    
    
    
    
    
    (244
    )Impairment charge
    
    
    (58,860
    )
    
    
    
    
    
    
    (58,860
    )Currency valuation
    
    
    (3,519
    )
    
    
    
    
    
    
    (3,519
    )Balance as of December 31, 2008
    
    $
    38,348
    
    
    $
    12,973
    
    
    $
    51,321
    48




---



##### 



2008
    

2007Gross Carrying
    
    Accumulated
    
    Gross Carrying
    
    AccumulatedAmount
    
    Amortization
    
    Amount
    
    AmortizationCustomer relationships
    
    $
    69,292
    
    
    $
    14,729
    
    
    $
    66,867
    
    
    $
    8,131Non-compete agreements
    
    
    2,805
    
    
    
    1,626
    
    
    
    1,557
    
    
    
    691Trade name
    
    
    378
    
    
    
    378
    
    
    
    
    
    
    
    Total
    
    $
    72,475
    
    
    $
    16,733
    
    
    $
    68,424
    
    
    $
    8,822
    2009
    
    $
    7,3612010
    
    
    7,0152011
    
    
    6,5782012
    
    
    6,1352013
    
    
    6,135
 9) Debt
 :
 2008
    
    2007SHORT-TERM DEBTU.S. Revolver A (a)
    
    $
    18,000
    
    
    $
    4,300Mexico
    
    
    1,700
    
    
    
    Other foreign
    
    
    1,500
    
    
    
    2,312Trade acceptances (c)
    
    
    9,997
    
    
    
    12,127Total short-term debt
    
    
    31,197
    
    
    
    18,739LONG-TERM DEBT6.76% insurance company loan due in scheduled
installments from 2007 through 2015 (b)
    
    
    56,816
    
    
    
    63,228U.S. Revolver B (a)
    
    
    24,018
    
    
    
    Industrial development revenue bonds at a 3.22%
weighted average rate, due in varying amounts through 2009 (d)
    
    
    3,500
    
    
    
    3,600Other, primarily capital leases
    
    
    1,522
    
    
    
    921Total long-term debt
    
    
    85,856
    
    
    
    67,749Less current portion
    
    
    (10,838
    )
    
    
    (7,037
    )Total long-term portion
    
    
    75,018
    
    
    
    60,712TOTAL SHORT-TERM AND LONG-TERM DEBT
    
    $
    117,053
    
    
    $
    86,488
 
 (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 First Amendment to
the Amended 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) to be drawn by the Company
from time to time, (ii) a $50,000 multicurrency 49




---



##### 



revolving B loan (the U.S. Revolver B and with the U.S. Revolver A, the U.S. Facility) to be
drawn by the Company or its U.K. subsidiary from time to time, and (iii) a Cdn. $9,800 revolving
loan (corresponding to $10,000 in U.S. dollars as of the amendment closing date) (the Canadian
Facility) to be drawn by the Canadian subsidiary from time to time. 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.K. Guarantee Agreement).
The U.S. Revolver A letter of credit sub-facility was increased from $15,000 to $20,000. The
Companys U.K. subsidiary drew £14,900 (or $29,600) of the amount available under the U.S. Revolver
B to finance the acquisition of Metals U.K. Group on January 3, 2008 (see Note 2).The U.S. Facility is guaranteed by the material domestic subsidiaries of the Company and is secured
by substantially all of the assets of the Company and its domestic subsidiaries. The obligations
of the Company rank pari passu in right of payment with the Companys long-term notes. The U.S.
Facility contains a letter of credit sub-facility providing for the issuance of letters of credit
up to $20,000. Depending on the type of borrowing selected by the Company, the applicable interest
rate for loans under the U.S. Facility is calculated as a per annum rate equal to (i) LIBOR plus a
variable margin or (ii) Base Rate, which is the greater of the U.S. prime rate or the federal
funds effective rate plus 0.5%, plus a variable margin. The margin on LIBOR or Base Rate loans may
fall or rise as set forth in the 2008 Senior Credit Facility depending on the Companys
debt-to-capital ratio as calculated on a quarterly basis.The Canadian Facility is guaranteed by the Company and is secured by substantially all of the
assets of the Canadian subsidiary. The Canadian Facility provides for a letter of credit
sub-facility providing for the issuance of letters of credit in an aggregate amount of up to Cdn.
$2,000. Depending on the type of borrowing selected by the Canadian subsidiary, the applicable
interest rate for loans under the Canadian Facility is calculated as a per annum rate equal to (i)
for loans drawn in U.S. dollars, the rate plus a variable margin is the same as the U.S. Facility
and (ii) for loans drawn in Canadian dollars, the applicable CDOR rate for bankers acceptances of
the applicable face value and tenor or the greater of (a) the Canadian prime rate or (b) the
one-month CDOR rate plus 0.5%. The margin on the loans drawn under the Canadian Facility may fall
or rise as set forth in the agreement depending on the Companys debt-to-total capital ratio as
calculated on a quarterly basis.The U.S. Facility and the Canadian Facility are each an asset-based loan with a borrowing base that
fluctuates primarily with the Companys and the Canadian subsidiarys receivable and inventory
levels. The covenants contained in the 2008 Senior Credit Facility, including financial covenants,
match those set forth in the Companys long-term note agreements. These covenants limit certain
matters, including the incurrence of liens, the sale of assets, and mergers and consolidations, and
include a maximum debt-to-working capital ratio, a maximum debt-to-total capital ratio and a
minimum net worth provision. There is also a provision to release liens on the assets of the
Company and all of its subsidiaries should the Company achieve an investment grade credit rating.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. As of December 31, 2008, the
Company had availability of $143,367 under its U.S. Revolver A and $25,982 under its U.S. Revolver
B. The Companys Canadian subsidiary had availability of $10,000. The weighted average interest
rate for borrowings under the U.S. Revolver A and U.S. Revolver B as of December 31, 2008 was 4.33%
and 6.41%, respectively.(b)
    
    On November 17, 2005, the Company entered into a ten year note agreement (the Note
Agreement) with an insurance company and its affiliate pursuant to which the Company issued and
sold $75,000 aggregate principal amount of the Companys 6.26% senior secured notes due in
scheduled installments through November 17, 2015 (the Notes). On January 2, 2008, the Company
and its material domestic subsidiaries entered into a Second Amendment with its insurance company
and affiliate to amend the covenants on the Notes so as to be substantially the same as the 2008
Senior Credit Facility. 50




---



##### 



Interest on the Notes accrues at the rate of 6.26% annually, payable semi-annually. Per the Note
Agreement, the interest rate on the Notes increased by 0.5% per annum to 6.76% on December 1, 2006.
This rate will remain in effect until the Company achieves an investment grade credit rating on
its senior indebtedness, at which time the interest rate on the Notes reverts back to 6.26%.The Companys annual debt service requirements under the Notes, including annual interest payments,
will equal approximately $10,223 to $10,631 per year. The Notes may not be prepaid without a
premium.The Notes are senior secured obligations of the Company and are pari passu in right of payment with
the Companys other senior secured obligations, including the 2008 Senior Credit Facility. The
Notes are secured, on an equal and ratable basis with the Companys obligations under the 2008
Senior Credit Facility, by first priority liens on all of the Companys and its U.S. subsidiaries
material assets and a pledge of all of the Companys equity interests in certain of its
subsidiaries. The Notes are guaranteed by all of the Companys material U.S. subsidiaries.The covenants and events of default contained in the Note Agreement, including the financial
covenants, are substantially the same as those contained in the 2008 Senior Credit Facility. The
events of default include the failure to pay principal or interest on the Notes when due, failure
to comply with covenants and other agreements contained in the Note Agreement, defaults under other
material debt instruments of the Company or its subsidiaries, certain judgments against the Company
or its subsidiaries or events of bankruptcy involving the Company or its subsidiaries, the failure
of the guarantees or security documents to be in full force and effect or a default under those
agreements, or the Companys entry into a receivables securitization facility. Upon the occurrence
of an event of default, the Companys obligations under the Notes may be accelerated.The Company used the proceeds of the Notes, together with cash on hand, to prepay in full all of
its obligations under its former long-term senior secured notes.c)
    
    At December 31, 2008, the Company had $9,997 in outstanding trade acceptances with varying
maturity dates ranging up to 120 days. The weighted average interest rate was 4.41% for 2008.d)
    
    The industrial revenue bonds are based on an adjustable rate bond structure and are backed by a
letter of credit.
  2009
    
    $
    10,8382010
    
    
    7,6882011
    
    
    7,9392012
    
    
    8,1972013
    
    
    32,5752014 and beyond
    
    
    18,619Total debt
    
    $
    85,856
    51




---



##### 



(10) Share-based Compensation
  Restricted Stock, Stock Option and Equity Compensation Plans
 Plan Description
    
    Authorized Shares1995 Directors Stock Option Plan
    
    
    1881996 Restricted Stock and Stock Option Plan
    
    
    9382000 Restricted Stock and Stock Option Plan
    
    
    1,2002004 Restricted Stock, Stock Option and Equity Compensation Plan
    
    
    1,3502008 Restricted Stock, Stock Option and Equity Compensation Plan
    
    
    2,000
  Stock Options
  Weighted AverageExerciseShares
    
    
    PriceOutstanding at January 1, 2008
    
    
    284
    
    
    $
    11.68Granted
    
    
    
    
    
    
    Expired
    
    
    (2
    )
    
    $
    20.25Exercised
    
    
    (36
    )
    
    $
    12.31Outstanding at December 31, 2008
    
    
    246
    
    
    $
    11.49Vested or expected to vest as of December 31, 2008
    
    
    246
  52




---



##### 



2006Risk free interest rate
    
    
    4.72
    %Expected dividend yield
    
    
    0.85
    %Expected option term
    
    10 YrsExpected volatility
    
    
    50
    %The estimated weighted average fair value on the date
granted based on the above assumptions
    
    $
    16.93
 Restricted Stock
   Weighted-AverageGrant DateRestricted Stock
    
    Shares
    
    Fair ValueNon-vested shares outstanding at January 1, 2008
    
    
    53
    
    
    $
    28.51Granted
    
    
    41
    
    
    $
    25.77Forfeited
    
    
    (5
    )
    
    $
    25.87Vested
    
    
    (21
    )
    
    $
    31.77Non-vested shares outstanding at December 31, 2008
    
    
    68
    
    
    $
    26.23
 Deferred Compensation Plan
  Long-Term Incentive Performance Plans
 Long-Term Incentive Performance Plans 
 53




---



##### 



2005 Plan
 2007 Plan
 2008 Plan
 (11) Common and Preferred Stock
    (12) Commitments and Contingent Liabilities
  54




---



##### 



(13) Accumulated Other Comprehensive Income (Loss)
  2008
    
    
    2007Foreign currency translation (losses) gains
    
    $
    (5,793
    )
    
    $
    7,837Unrecognized pension and postretirement benefit
costs, net of tax
    
    
    (5,669
    )
    
    
    (6,339
    )Total accumulated other comprehensive (loss) income
    
    $
    (11,462
    )
    
    $
    1,498
 (14) Selected Quarterly Data (Unaudited)
 First
    
    Second
    
    Third
    
    FourthQuarter
    
    Quarter
    
    Quarter
    
    Quarter2008Net sales
    
    $
    393,479
    
    
    $
    397,115
    
    
    $
    388,898
    
    
    $
    321,544Gross profit (a)
    
    
    57,799
    
    
    
    53,761
    
    
    
    55,004
    
    
    
    32,979Net income (loss)
    
    
    13,814
    
    
    
    11,251
    
    
    
    11,478
    
    
    
    (53,625
    )Basic earnings (loss) per share
    
    $
    0.62
    
    
    $
    0.50
    
    
    $
    0.51
    
    
    $
    (2.37
    )Diluted earnings (loss) per share
    
    $
    0.62
    
    
    $
    0.49
    
    
    $
    0.50
    
    
    $
    (2.37
    )Common stock dividends declared
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.062007Net sales
    
    $
    375,351
    
    
    $
    372,608
    
    
    $
    350,319
    
    
    $
    322,075Gross profit (a)
    
    
    65,435
    
    
    
    63,075
    
    
    
    57,159
    
    
    
    42,159Net income
    
    
    15,835
    
    
    
    16,362
    
    
    
    12,910
    
    
    
    6,699Preferred dividends
    
    
    243
    
    
    
    350
    
    
    
    
    
    
    
    Net income applicable to common stock
    
    
    15,592
    
    
    
    16,012
    
    
    
    12,910
    
    
    
    6,699Basic earnings per share
    
    $
    0.84
    
    
    $
    0.81
    
    
    $
    0.58
    
    
    $
    0.30Diluted earnings per share
    
    $
    0.81
    
    
    $
    0.78
    
    
    $
    0.57
    
    
    $
    0.29Common stock dividends declared
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.06
 
 (a)
    
    Gross profit equals net sales minus cost of materials, warehouse, processing, and
delivery costs and less depreciation and amortization expense. (15) Subsequent Event
  55




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Internal ControlIntegrated Framework
 DELOITTE & TOUCHE LLP
 
 56




---



##### 



MANAGEMENTS ASSESSMENT OF INTERNAL CONTROL OVER FINANCIAL REPORTING
   Internal Control  Integrated Framework
 Internal Control  Integrated Framework,
    57




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Internal Control 
Integrated Framework
    Internal Control
 Integrated Framework
  DELOITTE & TOUCHE LLP
 
 58




---



##### 



ITEM 9   Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
  ITEM 9A  Controls & Procedures
 Disclosure Controls and Procedures
  Managements Annual Report on Internal Control Over Financial Reporting
  Change in Internal Control Over Financial Reporting
  Item 9B  Other Information
  59




---



##### 



PART III
 ITEM 10   Directors, Executive Officers and Corporate Governance
 Executive Officers of The Registrant
  Name and Title
    
    Age
    
    Business ExperienceMichael H. Goldberg
President & Chief Executive
Officer
    
    
    55
    
    
    Mr. Goldberg was elected
President and Chief
Executive Officer in 2006.
Prior to joining the
Registrant, he was
Executive Vice President
of Integris Metals (an
aluminum and metals
service center) from 2001
to 2005. From 1998 to
November 2001, Mr.
Goldberg was Executive
Vice President of North
American Metals
Distribution Group, a
division of Rio Algom LTD.Stephen V. Hooks
Executive Vice President and
President, Castle Metals
    
    
    57
    
    
    Mr. Hooks began his
employment with the
registrant in 1972. He
was elected to the
position of Vice President
 Midwest Region in 1993,
Vice President -
Merchandising in 1998,
Senior Vice
PresidentSales &
Merchandising in 2002 and
Executive Vice President
of the registrant and
Chief Operating Officer of
Castle Metals in January
2004. In 2005, Mr. Hooks
was appointed President of
Castle Metals.Scott F. Stephens
Vice President,
Chief Financial Officer and
Treasurer
    
    
    39
    
    
    Mr. Stephens began his
employment with the
registrant in July 2008
and was elected to the
position of Vice
President, Chief Financial
Officer, and Treasurer.
Formerly, he served as the
CFO of Lawson Products,
Inc. (a distributor of
services, systems and
products to the MRO and
OEM marketplace) since
2004, and CFO of The
Wormser Company from 2001
to 2004.Kevin Coughlin
Vice President, Operations
    
    
    58
    
    
    Mr. Coughlin began his
employment with the
registrant in 2005 and was
appointed to the position
of Vice
President-Operations.
Prior to joining the
registrant he was Director
of Commercial Vehicle
Electronics and Automotive
Starter Motor Groups for
Robert Bosch-North America
from 2001 to 2004 and Vice
President of Logistics and
Services for the
Skill-Bosch Power Tool
Company from 1997 to 2000.Robert J. Perna
Vice President General Counsel and
Secretary
    
    
    45
    
    
    Mr. Perna began his
employment with the
registrant in November
2008 and was elected to
the position of Vice
President-General Counsel
and Secretary. Prior to
joining the registrant he
was General Counsel, North
America, CNH America, LLC
(a manufacturer of
agricultural and
construction equipment)
since 2007, and he also
served as Associate
General Counsel and
Corporate Secretary for
Navistar International
Corporation (a
manufacturer of commercial
trucks and diesel engines)
back to April 2001.Kevin P. Fitzpatrick
Vice President,
Human Resources
    
    
    44
    
    
    Mr. Fitzpatrick began his
employment with the
registrant in January 2009
and was elected to the
position of Vice
President-Human Resources.
Prior to joining the
registrant he was Vice
President-North American
Human Resources and
Administration for
UPM-Kymmene Corporation (a
forest industry company)
since 2001.
 60




---



##### 



Name and Title
    
    Age
    
    Business ExperiencePatrick R. Anderson
Vice President, Corporate Controller
and Chief
Accounting Officer
    
    
    37
    
    
    Mr. Anderson began his
employment with the
registrant in 2007 and was
appointed to the position
of Vice President,
Corporate Controller and
Chief Accounting Officer.
Prior to joining the
registrant, he was
employed as a Senior
Manager with Deloitte &
Touche LLP where he was
employed from 1994 to
2007.Curtis M. Samford
Vice President and
President, Castle Metals Oil
& Gas
    
    
    48
    
    
    Mr. Samford began his
employment in March 2008
as Vice President of the
registrant and President
of Castle Metals Oil &
Gas. Mr. Samford formerly
was a Vice President with
Alcoa, Inc. (an aluminum
producer) from 2005
through 2007 and Vice
President, Commercial
Operations with UniPure
Corporation (an energy
technology company)
through 2001.Blain A. Tiffany
Vice President and
President, Castle Metals Aerospace
    
    
    50
    
    
    Mr. Tiffany began his
employment with the
registrant in 2000 and was
appointed to the position
of District Manager. He
was appointed Eastern
Region Manager in 2003,
Vice President  Regional
Manager in 2005 and in
2006 was appointed to the
position of Vice President
 Sales. In 2007 Mr.
Tiffany was appointed to
the position of Vice
President of the
registrant and President
of Castle Metals Plate.
In January 2009 Mr.
Tiffany was elected to the
Position of Vice President
of the registrant and
President of Castle Metals
Aerospace.Thomas L. Garrett
Vice President and
President, Total Plastics, Inc.
    
    
    46
    
    
    Mr. Garrett began his
employment with Total
Plastics, Inc., a wholly
owned subsidiary of the
registrant, in 1988 and
was appointed to the
position of Controller.
In 1996, he was elected to
the position of Vice
President and in 2001 was
appointed to the position
of Vice President of the
registrant and President
of Total Plastics, Inc.
  ITEM 11   Executive Compensation
  ITEM 12   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
   61




---



##### 



*
    
    $100 invested on 12/31/03 in stock or index including reinvestment of dividends. Fiscal
year ending December 31.  12/04
    
    
    12/05
    
    
    12/06
    
    
    12/07
    
    
    12/08A. M. Castle & Co.
    
    
    163.56
    
    
    
    299.18
    
    
    
    351.31
    
    
    
    378.50
    
    
    
    152.61S & P 500
    
    
    110.88
    
    
    
    116.33
    
    
    
    134.70
    
    
    
    142.10
    
    
    
    89.53Peer Group*
    
    
    132.36
    
    
    
    194.65
    
    
    
    243.73
    
    
    
    338.42
    
    
    
    133.39
 
 *
    
    Peer Group consists of Olympic Steel, Inc. and Reliance Steel & Aluminum Co. ITEM 13   Certain Relationships and Related Transactions, and Director Independence
  62




---



##### 



ITEM 14   Principal Accountant Fees and Services
  63




---



##### 



PART IV
 ITEM 15   Exhibits and Financial Statement Schedules
  
 A. M. Castle & Co.
Index To Financial Statements and Schedules
 PageConsolidated Statements of Operations  For the years ended December 31,
2008, 2007 and 2006
    
    
    28Consolidated Balance Sheets  December 31, 2008 and 2007
    
    
    29Consolidated Statements of Cash Flows  For the years ended December 31,
2008, 2007 and 2006
    
    
    30Consolidated Statements of Stockholders Equity  For the years ended December 31,
2008, 2007 and 2006
    
    
    31Notes to Consolidated Financial Statements
    
    
    32-55Report of Independent Registered Public Accounting Firm
    
    
    56Managements Assessment of Internal Control Over Financial Reporting
    
    
    57Report of Independent Registered Public Accounting Firm
    
    
    58Valuation and Qualifying Accounts  Schedule II
    
    
    68
  64




---



##### 



ExhibitNumber
    
    Description of Exhibit2.1
    
    Stock Purchase Agreement dated as of August 12, 2006 by and among A. M. Castle &
Co. and Transtar Holdings #2, LLC. Filed as Exhibit2.1 to Form 8-K filed August
17, 2006. Commission File No. 1-5415.3.1
    
    Articles of Incorporation of the Company. Filed as Appendix D to Proxy Statement
filed March 23, 2001. Commission File No. 1-5415.3.2
    
    By-Laws of the Company. Filed as Exhibit 3.2 to Annual Report on Form 10-K for the
period ended December 31, 2007, which was filed on March 10, 2008. Commission File
No. 1-5415.4.1
    
    Note Agreement dated November 17, 2005 for 6.26% Senior Secured Note Due November
17, 2005 between the Company as issuer and the Prudential Insurance Company of
American and Prudential Retirement Insurance and Annuity Company as Purchasers.
Filed as Exhibit 10 to Form 8-K filed November 21, 2005. Commission File No.
1-5415.4.2
    
    Amendment No. 1 to Note Agreement, dated September 5, 2006, between the Company and
The Prudential Insurance Company of America and Prudential Retirement Insurance and
Annuity Company Amendment. Filed as Exhibit 10.16 to Form 8-K filed September 8,
2006. Commission File No. 1-5415.4.3
    
    Amendment No. 2 to Note Agreement, dated January 2, 2008, between the Company and
The Prudential Insurance Company of America and Prudential Retirement Insurance and
Annuity Company Amendment. Filed as Exhibit 10.14 to Form 8-K filed January 4,
2008. Commission File No. 1-5415.4.4
    
    Amended and Restated Credit Agreement, dated September 5, 2006, by and between A.
M. Castle & Co. and Bank of America, N.A., as U.S. Agent, Bank of America, N.A.,
Canada Branch, as Canadian Agent, JPMorgan Chase Bank, N.A. as Syndication Agent
and LaSalle Business Credit, LLC as Documentation Agent. Filed as Exhibit 10.11 to
Form 8-K filed September 8, 2006. Commission File No. 1-5415.4.5
    
    First Amendment to Credit Agreement, dated January 2, 2008, by and between A. M.
Castle & Co., A.M. Castle & Co. (Canada) Inc., A.M. Castle Metals UK, Limited,
certain subsidiaries of the Company, the lenders party thereto, Bank of America,
N.A.. as U.S. Agent and Bank of America, N.A., Canada Branch, as Canadian Agent.
Filed as Exhibit 10.11 to Form 8-K filed January 4, 2008. Commission File No.
1-5415.4.6
    
    Guarantee Agreement, dated September 5, 2006, by and between the Company and the
Guarantee Subsidiaries. Filed as Exhibit 10.12 to Form 8-K filed September 8, 2006.
Commission File No. 1-5415.4.7
    
    U.K. Guarantee Agreement, dated January 2, 2008, by the Company and the Guarantee
Subsidiaries. Filed as Exhibit 10.12 to Form 8-K filed January 4, 2008. Commission
File No. 1-5415.4.8
    
    Amended and Restated Collateral Agency and Intercreditor Agreement, dated September
5, 2006 by and among A.M. Castle & Co., Bank of America, N.A., as Collateral Agent,
The Prudential Insurance Company of America and Prudential Retirement Insurance and
Annuity Company and The Northern Trust Company. Filed as Exhibit 10.13 to Form 8-K
filed September 8, 2006. Commission File No. 1-5415.
 65




---



##### 



ExhibitNumber
    
    Description of Exhibit4.9
    
    First Amendment to Amended and Restated Collateral Agency and Intercreditor
Agreement, dated January 2, 2008 by and among A.M. Castle & Co., Bank of America,
N.A., as Collateral Agent, The Prudential Insurance Company of America and
Prudential Retirement Insurance and Annuity Company and The Northern Trust Company.
Filed as Exhibit 10.13 to Form 8-K filed January 4, 2008. Commission File No.
1-5415.4.10
    
    Amended and Restated Security Agreement, dated September 5, 2006, among the Company
and the Guarantee Subsidiaries. Filed as Exhibit 10.14 to Form 8-K filed September
8, 2006. Commission File No. 1-5415.4.11
    
    Guarantee Agreement, dated September 5, 2006, by and between the Company and
Canadian Lenders and Bank of America, N.A. Canadian Branch, as Canadian Agent.
Filed as Exhibit 10.15 to Form 8-K filed September 8, 2006. Commission File No.
1-5415.Instruments defining the rights of holders of other unregistered long-term debt of
A.M. Castle & Co. and its subsidiaries have been omitted from this exhibit index
because the amount of debt authorized under any such instrument does not exceed 10%
of the total assets of the Registrant and its consolidated subsidiaries. The
Registrant agrees to furnish a copy of any such instrument to the Commission upon
request.10.1*
    
    A. M. Castle & Co. 2004 Restricted Stock, Stock Option and Equity Compensation
Plan. Filed as Appendix D to Proxy Statement filed March 12, 2004. Commission File
No. 1-5415.10.2*
    
    Employment/Non-Competition Agreement with Companys President and CEO dated January
26, 2006. Filed as Exhibit 10.4 to Annual Report on Form 10-K for the period ended
December 31, 2005, which was filed on March 31, 2006. Commission File No. 1-5415.10.3*
    
    Change in Control Agreement with Companys President and CEO dated January 26, 2006.10.4*
    
    Form of Severance Agreement which is executed with all executive officers, except
the CEO.10.5*
    
    Form of Change of Control Agreement which is executed with all executive officers.10.6*
    
    A. M. Castle & Co. 1995 Director Stock Option Plan. Filed as Exhibit A to Proxy
Statement filed March 7, 1995. Commission File No. 1-5415.10.7*
    
    A. M. Castle & Co. 1996 Restricted Stock and Stock Option Plan. Filed as Exhibit A
to Proxy Statement filed March 8, 2006. Commission File No. 1-5415.10.8*
    
    A. M. Castle & Co. 2000 Restricted Stock and Stock Option Plan. Filed as Appendix
B to Proxy Statement filed March 23, 2001. Commission File No. 1-5415.10.9*
    
    A. M. Castle & Co. 2004 Restricted Stock, Stock Option Plan and Equity Compensation
Plan. Filed as Exhibit D to Proxy Statement filed March 12, 2004. Commission File
No. 1-5415.10.10*
    
    A. M. Castle & Co. 2008 Restricted Stock, Stock Option Plan and Equity Compensation
Plan as amended and restated as of March 5, 2009.
 66




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##### 



ExhibitNumber
    
    Description of Exhibit10.11*
    
    Form of Restricted Stock Award Agreement under A. M. Castle & Co. 2008 Restricted
Stock, Stock Option Plan and Equity Compensation Plan.10.12*
    
    Form of Performance Share Award Agreement under A. M. Castle & Co. 2008 Restricted
Stock, Stock Option Plan and Equity Compensation Plan.10.13*
    
    A. M. Castle & Co. Directors Deferred Compensation Plan, as amended and restated as
of October 22, 2008.10.14*
    
    A. M. Castle & Co. Supplemental 401(k) Savings and Retirement Plan, as amended and
restated, effective as of January 1, 2009.10.15*
    
    A. M. Castle & Co. Supplemental Pension Plan, as amended and restated, effective as
of January 1, 2009.21.1
    
    Subsidiaries of Registrant23.1
    
    Consent of Independent Registered Public Accounting Firm31.1
    
    Certification by Michael H. Goldberg, President and Chief Executive Officer,
required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 193431.2
    
    Certification by Scott F. Stephens, Vice President and Chief Financial Officer,
required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 193432.1
    
    Certification by Michael H. Goldberg, President and Chief Executive Officer,
pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code32.2
    
    Certification by Scott F. Stephens, Vice President and Chief Financial Officer,
pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code
 
 *
    
    These agreements are considered a compensatory plan or arrangement. 67




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##### 



SCHEDULE II
 A. M. Castle & Co.
 
 Accounts Receivable  Allowance for Doubtful Accounts
Valuation and Qualifying Accounts  For The Years Ended December 31, 2008, 2007 and 2006
 Dollars in thousands)
 2008
    
    2007
    
    2006Balance, beginning of year
    
    $
    3,220
    
    
    $
    3,112
    
    
    $
    1,763Add
    
    Provision charged to expense
    
    
    1,600
    
    
    
    647
    
    
    
    1,095
    Transtar allowance at date of acquisition
    
    
    
    
    
    
    
    
    
    
    1,229
    Metals U.K. allowance at date of acquisition
    
    
    523
    
    
    
    
    
    
    
    
    Recoveries
    
    
    132
    
    
    
    262
    
    
    
    567Less
    
    Uncollectible accounts charged
against allowance
    
    
    (2,157
    )
    
    
    (801
    )
    
    
    (1,542
    )Balance, end of year
    
    $
    3,318
    
    
    $
    3,220
    
    
    $
    3,112
 68




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##### 



SIGNATURES
  A. M. Castle & Co.(Registrant)By:
    /s/ Patrick R. AndersonPatrick R. Anderson, Vice President
Controller and Chief Accounting
Officer
(Principal Accounting Officer)   /s/ Brian P. Anderson
    
    /s/ Thomas A. Donahoe
    
    /s/ Ann M. DrakeBrian P. Anderson, Director
    
    Thomas A. Donahoe, Director
    
    Ann M. Drake, Director/s/ Michael H. Goldberg
    
    /s/ William K. Hall
    
    /s/ Robert S. HamadaMichael H. Goldberg, President,
Chief Executive Officer and
Director
(Principal Executive Officer)
    
    William K. Hall, Director
    
    Robert S. Hamada, Director/s/ Patrick J. Herbert, III
    
    /s/ Terrence J. Keating
    
    /s/ Pamela Forbes LiebermanPatrick
J. Herbert, III, Director
    
    Terrence J. Keating, Director
    
    Pamela Forbes Lieberman, Director/s/ John McCartney
    
    /s/ Michael Simpson
    
    /s/ Scott F. StephensJohn
McCartney, Chairman of the
Board
    
    Michael Simpson, Director
    
    Scott F. Stephens, Vice President
and Chief Financial Officer
(Principal Financial Officer)
 69