##### 



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, 2007
    
    Commission File Number: 1-5415
 A. M. CASTLE & CO.
  Maryland
    
    36-0879160(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)3400 North Wolf Road, Franklin Park, Illinois
    
    60131(Address of principal executive offices)
    
    (Zip Code)
 (847) 455-7111
 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 o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  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
    
    Part III




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##### 



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
         2




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##### 



Business Segments
   2007
    
    2006
    
    2005Metals
    
    
    92
    %
    
    
    90
    %
    
    
    89
    %Plastics
    
    
    8
    %
    
    
    10
    %
    
    
    11
    %100
    %
    
    
    100
    %
    
    
    100
    %
 Metals Segment
    Plastics Segment
   3




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##### 



Joint Venture
  Access to SEC Filings
  ITEM 1A   Risk Factors
  Our future operating results depend on a number of factors beyond our control, such as the
prices for metals and plastics, which could cause our results to be adversely affected.
  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;
 4




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##### 




    
    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; and
 
    
    the loss of the acquired businesses customers.
   A substantial portion of our sales are concentrated in the aerospace and oil and gas
industries, and thus our financial performance is highly dependent on the conditions of those
industries.
  We are vulnerable to interest rate fluctuations on our indebtedness, which could hurt our
operating results.
  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.
  5




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##### 



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.
  A disruption in our information technology systems could impact our ability to 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.
  6




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##### 



Antidumping and other duties could be imposed on us, our suppliers and our products.
  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 outside the U.S.
  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.
  7




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##### 



ITEM 1B   Unresolved SEC Staff Comments
 None
 ITEM 2   Properties
  ApproximateFloor Area inLocations
    
    Square FeetMetals SegmentBedford Heights, Ohio
    
    
    374,400Birmingham, Alabama
    
    
    76,000Charlotte, North Carolina
    
    
    116,500Dallas, Texas
    
    
    78,000Edmonton, Alberta
    
    
    38,300
    (1)Fairfield, Ohio
    
    
    166,000
    (1)Franklin Park, Illinois
    
    
    522,600Hammond, Indiana (H-A Industries)
    
    
    243,000
    (1)Houston, Texas
    
    
    109,100Kansas City, Missouri
    
    
    118,000
    (1)Kent, Washington
    
    
    31,100
    (1)Minneapolis, Minnesota
    
    
    65,200Mississauga, Ontario
    
    
    60,000
    (1)Monterrey, Mexico
    
    
    55,000
    (1)Montreal, Quebec
    
    
    38,760
    (1)Paramount, California
    
    
    155,500
    (1)Philadelphia, Pennsylvania
    
    
    71,600Riverdale, Illinois
    
    
    115,000
    (1)Saskatoon, Saskatchewan
    
    
    15,000
    (1)Stockton, California
    
    
    60,000
    (1)Twinsburg, Ohio
    
    
    120,000
    (1)Wichita, Kansas
    
    
    58,800
    (1)Winnipeg, Manitoba
    
    
    50,000Worcester, Massachusetts
    
    
    56,000Kennesaw, Georgia
    
    
    87,500
    (1)Orange, Connecticut
    
    
    32,144
    (1)Orange, Connecticut
    
    
    25,245
    (1)Dallas, Texas
    
    
    74,880
    (1)Torrance, California
    
    
    12,171
    (1)Gardena, California
    
    
    33,435
    (1)Gardena, California
    
    
    117,000
    (1)Wichita, Kansas
    
    
    42,000
    (1)Wichita, Kansas
    
    
    48,000
    (1)Kent, Washington
    
    
    65,000
    (1)
 8




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##### 



ApproximateFloor Area inLocations
    
    Square FeetEuropeMontoir de Bretagne, France
    
    
    25,600
    (1)Letchworth, England
    
    
    40,000
    (1)ChinaShanghai, China
    
    
    45,700
    (1)Sales Offices (1)Cincinnati, OhioMilwaukee, WisconsinPhoenix, ArizonaTulsa, OklahomaTotal Metals Segment
    
    
    3,442,535Plastics SegmentBaltimore, Maryland
    
    
    24,000
    (1)Cleveland, Ohio
    
    
    8,600
    (1)Cranston, Rhode Island
    
    
    14,990
    (1)Detroit, Michigan
    
    
    22,000
    (1)Elk Grove Village, Illinois
    
    
    22,500
    (1)Fort Wayne, Indiana
    
    
    9,600
    (1)Grand Rapids, Michigan
    
    
    42,500Harrisburg, Pennsylvania
    
    
    13,900
    (1)Indianapolis, Indiana
    
    
    13,500
    (1)Kalamazoo, Michigan
    
    
    81,000
    (1)Knoxville, Tennessee
    
    
    16,530
    (1)Mt. Vernon, New York
    
    
    30,000
    (1)New Philadelphia, Ohio
    
    
    15,700
    (1)Pittsburgh, Pennsylvania
    
    
    8,500
    (1)Rockford, Michigan
    
    
    53,600
    (1)Tampa, Florida
    
    
    17,700
    (1)Trenton, New Jersey
    
    
    6,000
    (1)Worcester, Massachusetts
    
    
    11,000Total Plastics Segment
    
    
    411,620GRAND TOTAL
    
    
    3,854,155
 
 (1)
    
    Leased: See Note 4 to the Companys accompanying consolidated financial
statements for information regarding lease agreements. 9




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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
      2007
    
    2006Low
    
    High
    
    Low
    
    HighFirst Quarter
    
    $
    22.72
    
    
    $
    30.85
    
    
    $
    22.16
    
    
    $
    31.31Second Quarter
    
    $
    28.64
    
    
    $
    38.10
    
    
    $
    23.61
    
    
    $
    44.25Third Quarter
    
    $
    26.23
    
    
    $
    37.22
    
    
    $
    25.34
    
    
    $
    34.86Fourth Quarter
    
    $
    23.66
    
    
    $
    37.18
    
    
    $
    24.15
    
    
    $
    34.20
 ITEM 6   Selected Financial Data
 (dollars in millions, except per share data)
    
    2007
    
    2006
    
    2005
    
    2004
    
    2003For the year ended December 31,:Net sales
    
    $
    1,420.4
    
    
    $
    1,177.6
    
    
    $
    959.0
    
    
    $
    761.0
    
    
    $
    543.0Net income (loss) (continuing operations)
    
    
    51.8
    
    
    
    55.1
    
    
    
    38.9
    
    
    
    15.4
    
    
    
    (19.9
    )Earnings (loss) per diluted share (continuing operations)
    
    
    2.41
    
    
    
    2.89
    
    
    
    2.11
    
    
    
    0.82
    
    
    
    (1.32
    )Cash dividends paid per common share
    
    
    0.24
    
    
    
    0.24
    
    
    
    
    
    
    
    
    
    
    
    As of December 31:Total assets
    
    
    677.0
    
    
    
    655.1
    
    
    
    423.7
    
    
    
    383.0
    
    
    
    338.9Long-term debt, less current portion
    
    
    60.7
    
    
    
    90.1
    
    
    
    73.8
    
    
    
    89.8
    
    
    
    100.0Total debt
    
    
    86.5
    
    
    
    226.1
    
    
    
    80.1
    
    
    
    101.4
    
    
    
    108.3Stockholders equity
    
    
    385.1
    
    
    
    215.9
    
    
    
    175.5
    
    
    
    130.4
    
    
    
    113.7
 10




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##### 



ITEM 7   Managements Discussion and Analysis of Financial Condition and Results of Operations
  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.
 This section may contain statements that constitute forward-looking statements pursuant to
the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These
statements are identified by words such as anticipate, believe, estimate, expect,
intend, predict, or project and similar expressions. Although the Company believes
that the expectations reflected in such forward-looking statements are based on reasonable
assumptions, such statements are subject to risks and uncertainties that could cause actual
results to differ materially from those presented. In addition, certain risk factors
identified in ITEM 1A of this document may affect the Companys businesses. As a result,
past financial results may not be a reliable indicator of future performance.
 The following discussion should be read in conjunction with 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
      11




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##### 



Recent Market and Pricing Trends
    Current Business Outlook
  12




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##### 



Table 1
 YEAR
    
    Qtr 1
    
    Qtr 2
    
    Qtr 3
    
    Qtr 42005
    
    
    55.3
    
    
    
    52.1
    
    
    
    54.3
    
    
    
    56.02006
    
    
    54.7
    
    
    
    54.1
    
    
    
    52.9
    
    
    
    50.82007
    
    
    50.5
    
    
    
    53.0
    
    
    
    51.3
    
    
    
    49.6
    RESULTS OF OPERATIONS: YEAR-TO-YEAR COMPARISONS AND COMMENTARY
  Net Sales 
 Cost of Materials
 Other Operating Costs and Expenses 
 13




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##### 



2007 Results Compared to 2006
  Operating Results by Segment (dollars in millions)
 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
    )%Other 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 Other 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:
    14




---



##### 



Cost of Materials:
  Other Operating Expenses and Operating Income:
   Other Income and Expense, Income Taxes and Net Income:
     15




---



##### 



2006 Results Compared to 2005
  Operating Results by Segment (dollars in millions)
 Year Ended December 31,
    
    Fav / (Unfav)2006
    
    2005
    
    $ Change
    
    % ChangeNet SalesMetals
    
    $
    1,062.6
    
    
    $
    851.3
    
    
    $
    211.3
    
    
    
    24.8
    %Plastics
    
    
    115.0
    
    
    
    107.7
    
    
    
    7.3
    
    
    
    6.8Total Net Sales
    
    $
    1,177.6
    
    
    $
    959.0
    
    
    $
    218.6
    
    
    
    22.8
    %Cost of MaterialsMetals
    
    $
    762.3
    
    
    $
    603.9
    
    
    $
    (158.4
    )
    
    
    (26.2
    )%% of Metals Sales
    
    
    71.7
    %
    
    
    70.9
    %
    
    
    
    
    
    
    (0.8
    )%Plastics
    
    
    76.9
    
    
    
    73.3
    
    
    
    (3.6
    )
    
    
    (4.9
    )%% of Plastics Sales
    
    
    66.9
    %
    
    
    68.1
    %
    
    
    
    
    
    
    1.2
    %Total Cost of Materials
    
    $
    839.2
    
    
    $
    677.2
    
    
    $
    (162.0
    )
    
    
    (23.9
    )%% of Total Sales
    
    
    71.3
    %
    
    
    70.6
    %
    
    
    
    
    
    
    (0.7
    )%Other Operating Costs and ExpensesMetals
    
    $
    205.3
    
    
    $
    172.0
    
    
    $
    (33.3
    )
    
    
    (19.4
    )%Plastics
    
    
    30.8
    
    
    
    28.9
    
    
    
    (1.9
    )
    
    
    (6.5
    )Other
    
    
    9.8
    
    
    
    9.7
    
    
    
    (0.1
    )
    
    
    Total Other Operating Costs & Expenses
    
    $
    245.9
    
    
    $
    210.6
    
    
    $
    (35.3
    )
    
    
    (16.8
    )%% of Total Sales
    
    
    20.9
    %
    
    
    22.0
    %
    
    
    
    
    
    
    1.1
    %Operating IncomeMetals
    
    $
    95.0
    
    
    $
    75.3
    
    
    $
    19.7
    
    
    
    26.2
    %% of Metals Sales
    
    
    8.9
    %
    
    
    8.8
    %
    
    
    
    
    
    
    0.1
    %Plastics
    
    
    7.3
    
    
    
    5.6
    
    
    
    1.7
    
    
    
    30.4
    %% of Plastics Sales
    
    
    6.3
    %
    
    
    5.2
    %
    
    
    
    
    
    
    1.1
    %Other
    
    
    (9.8
    )
    
    
    (9.7
    )
    
    
    (0.1
    )
    
    
    (1.0
    )%Total Operating Income
    
    $
    92.5
    
    
    $
    71.2
    
    
    $
    21.3
    
    
    
    29.9
    %% of Total Sales
    
    
    7.9
    %
    
    
    7.4
    %
    
    
    
    
    
    
    0.5
    %
 Other includes costs of executive, legal and finance departments which are shared by both segments of the Company.
 Net Sales:
    Cost of Materials:
  16




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##### 



Other Operating Expenses and Operating Income:
   Other Income and Expense, Income Taxes and Net Income:
     Liquidity and Capital Resources
          17




---



##### 



Capital Expenditures
  Contractual Obligations and Other Commitments:
  (dollars in thousands)
 Less
    
    One to
    
    
    
    
    
    MoreThan One
    
    Three
    
    Three to
    
    Than FivePayments Due In
    
    Total
    
    Year
    
    Years
    
    Five Years
    
    YearsLong-Term Debt Obligations
(excluding capital lease
obligations)
    
    $
    66,828
    
    
    $
    6,412
    
    
    $
    17,580
    
    
    $
    15,678
    
    
    $
    27,158Interest Payments on Debt
Obligations (a)
    
    
    21,115
    
    
    
    4,627
    
    
    
    7,462
    
    
    
    5,284
    
    
    
    3,742Capital Lease Obligations
    
    
    921
    
    
    
    625
    
    
    
    188
    
    
    
    108
    
    
    
    Operating Lease Obligations
    
    
    57,101
    
    
    
    14,193
    
    
    
    20,588
    
    
    
    15,311
    
    
    
    7,009Purchase Obligations (b)
    
    
    335,867
    
    
    
    253,528
    
    
    
    52,339
    
    
    
    30,000
    
    
    
    Other (c)
    
    
    5,521
    
    
    
    5,029
    
    
    
    492
    
    
    
    
    
    
    
    Total
    
    $
    487,353
    
    
    $
    284,414
    
    
    $
    98,649
    
    
    $
    66,381
    
    
    $
    37,909
 
 (a)
    
    Interest payments on debt obligations represent interest on all Company debt outstanding
as of December 31, 2007. 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, 2007. 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 a number of long-term contracts to purchase certain quantities of
material with certain suppliers. In each case of such a long-term obligation, the Company
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 and 2) obligations which are to be disclosed according to FASB Interpretation No.
(FIN) 48, Accounting for Uncertainty in Income Taxes (FIN 48). The FIN 48 obligations
in the table above represent uncertain tax positions related to temporary differences. 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 $1.3 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 18




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##### 



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
  Off-Balance Sheet Arrangements
    Critical Accounting Policies
  Revenue Recognition and Accounts Receivable
  Inventory
 19




---



##### 



Income Taxes
   Retirement Plans
   Goodwill and Other Intangible Assets Impairment 
 20




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##### 



Long-Lived Assets 
 Stock-Based Compensation 
 Recent Accounting Pronouncements:
  ITEM 7a  Quantitative and Qualitative Disclosures about Market Risk
     21




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##### 



ITEM 8   Financial Statements and Supplementary Data
 
 Consolidated Statements of Operations
 Year Ended December 31,(Dollars in thousands, except per share data)
    
    2007
    
    2006
    
    2005Net sales
    
    $
    1,420,353
    
    
    $
    1,177,600
    
    
    $
    958,978Costs and expenses:Cost of materials (exclusive of depreciation and
amortization)
    
    
    1,032,355
    
    
    
    839,234
    
    
    
    677,186Warehouse, processing and delivery expense
    
    
    139,993
    
    
    
    123,204
    
    
    
    108,427Sales, general and administrative expense
    
    
    137,153
    
    
    
    109,407
    
    
    
    92,848Depreciation and amortization expense
    
    
    20,177
    
    
    
    13,290
    
    
    
    9,340Operating income
    
    
    90,675
    
    
    
    92,465
    
    
    
    71,177Interest expense, net
    
    
    (12,899
    )
    
    
    (8,302
    )
    
    
    (7,348
    )Discount on sale of accounts receivable
    
    
    
    
    
    
    
    
    
    
    (1,127
    )Loss on extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    (4,904
    )Income before income taxes and equity in earnings of
joint venture
    
    
    77,776
    
    
    
    84,163
    
    
    
    57,798Income taxes
    
    
    (31,294
    )
    
    
    (33,330
    )
    
    
    (23,191
    )Income before equity in earnings of joint venture
    
    
    46,482
    
    
    
    50,833
    
    
    
    34,607Equity in earnings of joint venture
    
    
    5,324
    
    
    
    4,286
    
    
    
    4,302Net income
    
    
    51,806
    
    
    
    55,119
    
    
    
    38,909Preferred stock dividends
    
    
    (593
    )
    
    
    (963
    )
    
    
    (961
    )Net income applicable to common stock
    
    $
    51,213
    
    
    $
    54,156
    
    
    $
    37,948Basic earnings per share
    
    $
    2.49
    
    
    $
    2.95
    
    
    $
    2.37Diluted earnings per share
    
    $
    2.41
    
    
    $
    2.89
    
    
    $
    2.11Dividends paid per common share
    
    $
    0.24
    
    
    $
    0.24
    
    
    
    
 The accompanying notes to consolidated financial statements are an integral part of these
statements.
 22




---



##### 



Consolidated Balance Sheets
 As ofDecember 31,(Dollars in thousands, except share and par value data)
    
    2007
    
    2006AssetsCurrent assetsCash and cash equivalents
    
    $
    22,970
    
    
    $
    9,526Accounts receivable, less allowances of $3,220 in 2007 and $3,112 in 2006
    
    
    146,675
    
    
    
    160,999Inventories, principally on last-in, first-out basis
(replacement cost higher by $142,118 in 2007 and $128,404 in 2006)
    
    
    207,284
    
    
    
    202,394Other current assets
    
    
    13,462
    
    
    
    18,743Total current assets
    
    
    390,391
    
    
    
    391,662Investment in joint venture
    
    
    17,419
    
    
    
    13,577Goodwill
    
    
    101,540
    
    
    
    101,783Intangible assets
    
    
    59,602
    
    
    
    66,169Prepaid pension cost
    
    
    25,426
    
    
    
    5,681Other assets
    
    
    7,516
    
    
    
    5,850Property, plant and equipment, at costLand
    
    
    5,196
    
    
    
    5,221Building
    
    
    48,727
    
    
    
    49,017Machinery and equipment
    
    
    155,950
    
    
    
    141,090209,873
    
    
    
    195,328Less  accumulated depreciation
    
    
    (134,763
    )
    
    
    (124,930
    )75,110
    
    
    
    70,398Total assets
    
    $
    677,004
    
    
    $
    655,120Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    109,055
    
    
    $
    117,561Accrued payroll and employee benefits
    
    
    14,757
    
    
    
    15,168Accrued liabilities
    
    
    18,386
    
    
    
    14,984Income taxes payable
    
    
    2,497
    
    
    
    931Deferred income taxes  current
    
    
    7,298
    
    
    
    16,339Current portion of long-term debt
    
    
    7,037
    
    
    
    12,834Short-term debt
    
    
    18,739
    
    
    
    123,261Total current liabilities
    
    
    177,769
    
    
    
    301,078Long-term debt, less current portion
    
    
    60,712
    
    
    
    90,051Deferred income taxes
    
    
    37,760
    
    
    
    31,782Other non-current liabilities
    
    
    6,585
    
    
    
    5,666Pension and postretirement benefit obligations
    
    
    9,103
    
    
    
    10,636Commitments and contingenciesStockholders equityPreferred stock, $0.01 par value  10,000,000 shares authorized; no
shares issued at December 31, 2007 and 12,000 shares issued and
outstanding at December 31, 2006
    
    
    
    
    
    
    11,239Common stock, $0.01 par value  30,000,000 shares authorized;
22,330,946 shares issued and 22,097,869 outstanding at December 31,
2007; and 17,085,091 shares issued and 16,722,977 shares outstanding
at December 31, 2006
    
    
    223
    
    
    
    170Additional paid-in capital
    
    
    179,707
    
    
    
    69,775Retained earnings
    
    
    207,134
    
    
    
    160,625Accumulated other comprehensive income (loss)
    
    
    1,498
    
    
    
    (18,504
    )Deferred unearned compensation
    
    
    
    
    
    
    (1,392
    )Treasury stock, at cost  233,077 shares in 2007 and 362,114 shares
in 2006
    
    
    (3,487
    )
    
    
    (6,006
    )Total stockholders equity
    
    
    385,075
    
    
    
    215,907Total liabilities and stockholders equity
    
    $
    677,004
    
    
    $
    655,120
 The accompanying notes to consolidated financial statements are an integral part of these
statements.
 23




---



##### 



Consolidated Statements of Cash Flows
 For theYear Ended December 31,(Dollars in thousands)
    
    2007
    
    2006
    
    2005Cash flows from operating activities:Net income
    
    $
    51,806
    
    
    $
    55,119
    
    
    $
    38,909Adjustments to reconcile net income to net cash from
operating activities:Depreciation and amortization
    
    
    20,177
    
    
    
    13,290
    
    
    
    9,340Amortization of deferred gain
    
    
    (907
    )
    
    
    (760
    )
    
    
    (498
    )Loss on sale of fixed assets
    
    
    1,293
    
    
    
    94
    
    
    
    73Loss on sale of subsidiary
    
    
    425
    
    
    
    
    
    
    
    Impairment of long-lived asset
    
    
    589
    
    
    
    
    
    
    
    Equity in earnings of joint venture
    
    
    (5,324
    )
    
    
    (4,286
    )
    
    
    (4,302
    )Dividends from joint venture
    
    
    1,545
    
    
    
    1,623
    
    
    
    1,915Deferred tax provision (benefit)
    
    
    (13,148
    )
    
    
    4,537
    
    
    
    (2,046
    )Share-based compensation expense
    
    
    5,018
    
    
    
    4,485
    
    
    
    4,174Loss on pension curtailment
    
    
    284
    
    
    
    
    
    
    
    Excess tax benefits from share-based payment arrangements
    
    
    (993
    )
    
    
    (1,186
    )
    
    
    (793
    )Increase (decrease) from changes, net of acquisitions, in:Accounts receivable
    
    
    14,700
    
    
    
    (19,678
    )
    
    
    (26,217
    )Inventories
    
    
    (6,275
    )
    
    
    (22,521
    )
    
    
    16,742Other current assets
    
    
    1,639
    
    
    
    (2,570
    )
    
    
    2,186Other assets
    
    
    879
    
    
    
    722
    
    
    
    (398
    )Prepaid pension costs
    
    
    6,074
    
    
    
    1,920
    
    
    
    316Accounts payable
    
    
    (11,008
    )
    
    
    7,882
    
    
    
    9,702Accrued payroll and employee benefits
    
    
    3,085
    
    
    
    (1,350
    )
    
    
    2,319Income taxes payable
    
    
    7,007
    
    
    
    (10,090
    )
    
    
    7,594Accrued liabilities
    
    
    1,507
    
    
    
    2,044
    
    
    
    506Postretirement benefit obligations and other liabilities
    
    
    293
    
    
    
    2,165
    
    
    
    271Net cash from operating activities
    
    
    78,666
    
    
    
    31,440
    
    
    
    59,793Investing activities:Investments and acquisitions, net of cash acquired
    
    
    (280
    )
    
    
    (175,583
    )
    
    
    (236
    )Capital expenditures
    
    
    (20,183
    )
    
    
    (12,935
    )
    
    
    (8,685
    )Proceeds from sale of fixed assets
    
    
    823
    
    
    
    124
    
    
    
    33Proceeds from sale of subsidiary
    
    
    5,707
    
    
    
    
    
    
    
    Collection of note receivable
    
    
    
    
    
    
    
    
    
    
    2,465Net cash from (used in) investing activities
    
    
    (13,933
    )
    
    
    (188,394
    )
    
    
    (6,423
    )Financing activities:Short-term borrowings (repayments), net
    
    
    (104,690
    )
    
    
    110,919
    
    
    
    Proceeds from issuance of long-term debt
    
    
    
    
    
    
    30,000
    
    
    
    75,000Repayments of long-term debt
    
    
    (35,337
    )
    
    
    (7,832
    )
    
    
    (96,271
    )Payment of debt issuance fees
    
    
    (173
    )
    
    
    (3,156
    )
    
    
    Preferred stock dividends
    
    
    (345
    )
    
    
    (963
    )
    
    
    (961
    )Common stock dividends
    
    
    (4,704
    )
    
    
    (4,061
    )
    
    
    Proceeds from issuance of common stock, net
    
    
    92,883
    
    
    
    
    
    
    
    Exercise of stock options and other
    
    
    552
    
    
    
    2,840
    
    
    
    2,227Excess tax benefits from share-based payment arrangements
    
    
    993
    
    
    
    1,186
    
    
    
    793Net cash from (used in) financing activities
    
    
    (50,821
    )
    
    
    128,933
    
    
    
    (19,212
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (468
    )
    
    
    155
    
    
    
    128Net increase (decrease) in cash and cash equivalents
    
    
    13,444
    
    
    
    (27,866
    )
    
    
    34,286Cash and cash equivalents  beginning of year
    
    
    9,526
    
    
    
    37,392
    
    
    
    3,106Cash and cash equivalents  end of year
    
    $
    22,970
    
    
    $
    9,526
    
    
    $
    37,392
 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.
 24




---



##### 



Consolidated Statement of Stockholders Equity
 Additional
    
    
    
    
    
    
    Deferred
    
    
    Accum. OtherCommon
    
    
    Treasury
    
    
    Preferred
    
    
    Common
    
    
    Treasury
    
    
    Paid-in
    
    
    Retained
    
    
    Unearned
    
    
    Comprehensive(Dollars and shares in thousands)
    
    Shares
    
    
    Shares
    
    
    Stock
    
    
    Stock
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    Compensation
    
    
    Income
    
    
    TotalBalance at January 1, 2005
    
    
    15,806
    
    
    
    (62
    )
    
    $
    11,239
    
    
    $
    159
    
    
    
    $(245
    )
    
    $
    45,052
    
    
    $
    72,582
    
    
    
    $(2
    )
    
    $
    1,616
    
    
    $
    130,401Comprehensive Income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,909
    
    
    
    
    
    
    
    
    
    
    
    38,909Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,151
    
    
    
    1,151Minimum pension liability, net of tax benefit of $254
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (397
    )
    
    
    (397
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,663Preferred stock dividend
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (961
    )
    
    
    
    
    
    
    
    
    
    
    (961
    )Long-term incentive plan expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,143
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,143Exercise of stock options and other
    
    
    800
    
    
    
    (484
    )
    
    
    
    
    
    
    7
    
    
    
    (9,471
    )
    
    
    13,721
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    4,259Balance at December 31, 2005
    
    
    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
    
    
    $
    385,075
 The accompanying notes to consolidated financial statements are an integral part of these
statements.
 25




---



##### 



A. M. Castle & Co.
Notes to Consolidated Financial Statements
December 31, 2007
 (1) Basis of Presentation and Significant Accounting Policies
 Nature of operations
 Basis of presentation
 Use of estimates
 Revenue recognition
 Cost of materials
 Other operating expenses 
 Cash and cash equivalents
 Statement of cash flows 
 26




---



##### 



Year Ended December 31,2007
    
    2006
    
    2005Cash paid during the year for:Interest
    
    $
    13.4
    
    
    $
    9.0
    
    
    $
    8.4Income taxes
    
    $
    36.7
    
    
    $
    38.9
    
    
    $
    16.9
   Inventories
 Insurance plans 
 Property, plant and equipment
 27




---



##### 



Long-lived assets
 Goodwill and intangible assets 
 Income taxes
    Foreign currency translation
 28




---



##### 



Earnings per share
 (dollars and shares in thousands,except per share data)
    
    2007
    
    2006
    
    2005Numerator:Net income
    
    $
    51,806
    
    
    $
    55,119
    
    
    $
    38,909Preferred dividends distributed
    
    
    (593
    )
    
    
    (963
    )
    
    
    (961
    )Undistributed earnings
    
    $
    51,213
    
    
    $
    54,156
    
    
    $
    37,948Undistributed earnings attributable to:Common stockholders
    
    $
    49,981
    
    
    $
    49,831
    
    
    $
    37,948Preferred stockholders, as if converted
    
    
    1,232
    
    
    
    4,325
    
    
    
    Total undistributed earnings
    
    $
    51,213
    
    
    $
    54,156
    
    
    $
    37,948Denominator:Denominator for basic earnings per share:Weighted average common shares outstanding
    
    
    20,060
    
    
    
    16,907
    
    
    
    16,033Effect of dilutive securities:Outstanding employee and directors
common stock options and restricted
stock
    
    
    756
    
    
    
    360
    
    
    
    593Convertible preferred stock
    
    
    732
    
    
    
    1,794
    
    
    
    1,794Denominator for diluted earnings per share
    
    
    21,548
    
    
    
    19,061
    
    
    
    18,420Basic earnings per share
    
    $
    2.49
    
    
    $
    2.95
    
    
    $
    2.37Diluted earnings per share
    
    $
    2.41
    
    
    $
    2.89
    
    
    $
    2.11Outstanding employees and directors
common stock options, restricted shares
and convertible preferred stock shares
having no dilutive effect
    
    
    
    
    
    
    20
    
    
    
    53
 Concentrations
 29




---



##### 



Share-based compensation 
 New Accounting Standards 
    (2) Acquisitions and Divestitures
  30




---



##### 



Current assets
    
    $
    99,746Property, plant & equipment, net
    
    
    4,274Intangible assets
    
    
    68,324Goodwill
    
    
    70,025Other long-term assets
    
    
    300Total assets
    
    
    242,669Current liabilities
    
    
    38,424Long-term liabilities
    
    
    25,950Total liabilities
    
    
    64,374Net assets
    
    $
    178,295
  (3) Segment Reporting
   31




---



##### 



2007
    
    2006
    
    2005Net salesUnited States
    
    $
    1,246.0
    
    
    $
    1,069.9
    
    
    $
    871.7All other countries
    
    
    174.4
    
    
    
    107.7
    
    
    
    87.3Total
    
    $
    1,420.4
    
    
    $
    1,177.6
    
    
    $
    959.0Long-lived assetsUnited States
    
    $
    68.6
    
    
    $
    65.3
    
    
    $
    59.5All other countries
    
    
    6.5
    
    
    
    5.1
    
    
    
    4.9Total
    
    $
    75.1
    
    
    $
    70.4
    
    
    $
    64.4
 dollars in millions
 Net
    
    Operating
    
    Total
    
    
    
    
    
    Depreciation &Sales
    
    Income (Loss)
    
    Assets
    
    Capital Expenditures
    
    Amortization2007Metals segment
    
    $
    1,304.8
    
    
    $
    94.4
    
    
    $
    608.0
    
    
    $
    17.6
    
    
    $
    19.0Plastics segment
    
    
    115.6
    
    
    
    4.9
    
    
    
    51.6
    
    
    
    2.6
    
    
    
    1.2Other
    
    
    
    
    
    
    (8.6
    )
    
    
    17.4
    
    
    
    
    
    
    
    Consolidated
    
    $
    1,420.4
    
    
    $
    90.7
    
    
    $
    677.0
    
    
    $
    20.2
    
    
    $
    20.22006Metals segment
    
    $
    1,062.6
    
    
    $
    95.0
    
    
    $
    593.7
    
    
    $
    11.8
    
    
    $
    12.2Plastics segment
    
    
    115.0
    
    
    
    7.3
    
    
    
    47.8
    
    
    
    1.1
    
    
    
    1.1Other
    
    
    
    
    
    
    (9.8
    )
    
    
    13.6
    
    
    
    
    
    
    
    Consolidated
    
    $
    1,177.6
    
    
    $
    92.5
    
    
    $
    655.1
    
    
    $
    12.9
    
    
    $
    13.32005Metals segment
    
    $
    851.3
    
    
    $
    75.3
    
    
    $
    362.8
    
    
    $
    7.1
    
    
    $
    8.3Plastics segment
    
    
    107.7
    
    
    
    5.6
    
    
    
    49.8
    
    
    
    1.6
    
    
    
    1.0Other
    
    
    
    
    
    
    (9.7
    )
    
    
    11.1
    
    
    
    
    
    
    
    Consolidated
    
    $
    959.0
    
    
    $
    71.2
    
    
    $
    423.7
    
    
    $
    8.7
    
    
    $
    9.3
 32




---



##### 



(4) Lease Agreements
  (dollars in thousands)
 Capital
    
    Operating2008
    
    $
    625
    
    
    $
    14,1932009
    
    
    121
    
    
    
    11,5102010
    
    
    67
    
    
    
    9,0782011
    
    
    62
    
    
    
    8,2402012
    
    
    46
    
    
    
    7,071Later years
    
    
    
    
    
    
    7,009Total future minimum rental payments
    
    $
    921
    
    
    $
    57,101
   (5) Pension and Postretirement Plans
   33




---



##### 



dollars in thousands):
 2007
    
    2006
    
    2005Service cost
    
    $
    3,562
    
    
    $
    3,485
    
    
    $
    2,744Interest cost
    
    
    7,424
    
    
    
    7,011
    
    
    
    6,193Expected return on assets
    
    
    (10,080
    )
    
    
    (9,696
    )
    
    
    (9,577
    )Amortization of prior service cost
    
    
    58
    
    
    
    58
    
    
    
    63Amortization of actuarial loss
    
    
    3,153
    
    
    
    3,756
    
    
    
    2,459Net periodic pension benefit cost
    
    $
    4,117
    
    
    $
    4,614
    
    
    $
    1,882
  (dollars in thousands):
 2007
    
    2006Change in projected benefit obligation:Projected benefit obligation at beginning of year
    
    $
    132,025
    
    
    $
    130,251Service cost
    
    
    3,562
    
    
    
    3,485Interest cost
    
    
    7,424
    
    
    
    7,011Curtailments
    
    
    (13,291
    )
    
    
    Benefit payments
    
    
    (5,709
    )
    
    
    (5,444
    )Actuarial (gain) loss
    
    
    (6,062
    )
    
    
    (3,278
    )Projected benefit obligation at end of year
    
    $
    117,949
    
    
    $
    132,025Change in plan assets:Fair value of plan assets at beginning of year
    
    $
    130,377
    
    
    $
    118,509Actual return on assets
    
    
    12,332
    
    
    
    16,940Employer contributions
    
    
    314
    
    
    
    372Benefit payments
    
    
    (5,709
    )
    
    
    (5,444
    )Fair value of plan assets at end of year
    
    $
    137,314
    
    
    $
    130,377Funded status  net prepaid (liability)
    
    $
    19,365
    
    
    $
    (1,648
    )Amounts recognized in the consolidated balance sheets consist of:Prepaid pension cost
    
    $
    25,426
    
    
    $
    5,681Accrued liabilities
    
    
    (164
    )
    
    
    (369
    )Pension and postretirement benefit obligations
    
    
    (5,897
    )
    
    
    (6,960
    )Net amount recognized
    
    $
    19,365
    
    
    $
    (1,648
    )Pre-tax components of accumulated other comprehensive income
(loss):Unrecognized actuarial loss
    
    $
    (10,692
    )
    
    $
    (35,449
    )Unrecognized prior service cost
    
    
    (133
    )
    
    
    (475
    )Total
    
    $
    (10,825
    )
    
    $
    (35,924
    )Accumulated benefit obligation
    
    $
    115,764
    
    
    $
    115,889
 34




---



##### 



2007
    
    2006Discount rate
    
    
    6.25
    %
    
    
    5.75
    %Projected annual salary increases
    
    
    4.00
    
    
    
    4.00Expected long-term rate of return on plan assets
    
    
    8.75
    
    
    
    8.75Measurement date
    
    
    12/31/07
    
    
    
    12/31/06
  2007
    
    2006
    
    2005Discount rate
    
    
    5.75
    %
    
    
    5.50
    %
    
    
    5.75
    %Expected long-term rate of return on plan assets
    
    
    8.75
    
    
    
    8.75
    
    
    
    9.00Projected annual salary increases
    
    
    4.00
    
    
    
    4.00
    
    
    
    4.00Measurement date
    
    
    12/31/06
    
    
    
    12/31/05
    
    
    
    12/31/04
   2007
    
    2006Equity securities
    
    
    73.4
    %
    
    
    69.8
    %Company stock
    
    
    
    
    
    
    6.0
    %Debt securities
    
    
    6.8
    %
    
    
    6.5
    %Real estate
    
    
    5.8
    %
    
    
    5.4
    %Other
    
    
    14.0
    %
    
    
    12.3
    %100.0
    %
    
    
    100.0
    %
  (dollars in thousands)
 35




---



##### 



2008
    
    $
    6,1142009
    
    
    6,1992010
    
    
    6,4692011
    
    
    6,6482012
    
    
    6,7752013  2017
    
    
    40,367
  (dollars in thousands):
 2007
    
    2006
    
    2005Service cost
    
    $
    176
    
    
    $
    186
    
    
    $
    138Interest cost
    
    
    220
    
    
    
    213
    
    
    
    179Amortization of prior service cost
    
    
    47
    
    
    
    47
    
    
    
    47Amortization of actuarial loss (gain)
    
    
    (5
    )
    
    
    27
    
    
    
    Net periodic postretirement benefit cost
    
    $
    438
    
    
    $
    473
    
    
    $
    364
  dollars in thousands):
 2007
    
    2006Change in accumulated postretirement benefit obligations:Accumulated postretirement benefit obligation at beginning of year
    
    $
    3,867
    
    
    $
    3,928Service cost
    
    
    175
    
    
    
    186Interest cost
    
    
    220
    
    
    
    213Benefit payments
    
    
    (170
    )
    
    
    (86
    )Actuarial loss (gains)
    
    
    (676
    )
    
    
    (374
    )Accumulated postretirement benefit obligation at end of year
    
    $
    3,416
    
    
    $
    3,867Funded status  net liability
    
    $
    (3,416
    )
    
    $
    (3,867
    )Amounts recognized in the consolidated balance sheets consist of:Accrued liabilities
    
    $
    (210
    )
    
    $
    (190
    )Pension and postretirement benefit obligations
    
    
    (3,206
    )
    
    
    (3,677
    )Net amount recognized
    
    $
    (3,416
    )
    
    $
    (3,867
    )Pre-tax components of accumulated other comprehensive income
(loss):Unrecognized actuarial gain (loss)
    
    $
    556
    
    
    $
    (115
    )Unrecognized prior service cost
    
    
    (123
    )
    
    
    (171
    )Total
    
    $
    433
    
    
    $
    (286
    )
  36




---



##### 



(dollars in thousands)
 2007
    
    2006
    
    2005Profit sharing and 401(k)
    
    $
    3,939
    
    
    $
    3,977
    
    
    $
    4,077Management incentive
    
    $
    3,423
    
    
    $
    4,226
    
    
    $
    4,261
 (6) Joint Venture
  dollars in millions):
 For the Years Ended December 31,
    
    2007
    
    2006
    
    2005Equity in earnings of joint venture
    
    $
    5.3
    
    
    $
    4.3
    
    
    $
    4.3Investment in joint venture
    
    
    17.4
    
    
    
    13.6
    
    
    
    10.8Sales to joint venture
    
    
    0.7
    
    
    
    0.6
    
    
    
    0.3Purchases from joint venture
    
    
    0.6
    
    
    
    0.1
    
    
    
    0.2
 dollars in millions):
 For the Years Ended December 31,
    
    2007
    
    2006
    
    2005Revenues
    
    $
    164.3
    
    
    $
    131.0
    
    
    $
    130.9Net income
    
    
    10.6
    
    
    
    8.6
    
    
    
    8.6Current assets
    
    
    56.1
    
    
    
    41.4
    
    
    
    40.0Non-current assets
    
    
    18.2
    
    
    
    12.7
    
    
    
    9.9Current liabilities
    
    
    37.4
    
    
    
    22.9
    
    
    
    25.9Non-current liabilities
    
    
    3.3
    
    
    
    3.6
    
    
    
    1.7Members equity
    
    
    33.7
    
    
    
    27.6
    
    
    
    22.3Capital expenditures (a)
    
    
    8.0
    
    
    
    1.1
    
    
    
    0.8Depreciation
    
    
    1.2
    
    
    
    1.0
    
    
    
    1.0
 
 (a)
    
    Includes purchase of Special Metals Inc. for $4.3 million on April 2, 2007 37




---



##### 



(7) Income Taxes
 (dollars in thousands)
 2007
    
    2006
    
    2005U.S.
    
    $
    65,516
    
    
    $
    74,226
    
    
    $
    51,236Non-U.S.
    
    
    12,260
    
    
    
    9,937
    
    
    
    6,562
 dollars in thousands)
 2007
    
    2006
    
    2005Federal  current
    
    $
    34,082
    
    
    $
    21,701
    
    
    $
    23,652 deferred
    
    
    (11,515
    )
    
    
    4,443
    
    
    
    (4,639
    )State     current
    
    
    5,194
    
    
    
    3,914
    
    
    
    242 deferred
    
    
    (527
    )
    
    
    (123
    )
    
    
    2,144Foreign  current
    
    
    5,166
    
    
    
    3,178
    
    
    
    1,343 deferred
    
    
    (1,106
    )
    
    
    217
    
    
    
    449$
    31,294
    
    
    $
    33,330
    
    
    $
    23,191
 (dollars in thousands):
 2007
    
    2006
    
    2005Federal income tax at statutory rates
    
    $
    27,220
    
    
    $
    29,456
    
    
    $
    20,229State income taxes, net of federal income tax benefits
    
    
    2,825
    
    
    
    2,412
    
    
    
    1,551Federal and state income tax on joint ventures
    
    
    2,071
    
    
    
    1,672
    
    
    
    1,687Other
    
    
    (822
    )
    
    
    (210
    )
    
    
    (276
    )Income tax expense
    
    $
    31,294
    
    
    $
    33,330
    
    
    $
    23,191Effective income tax expense rate
    
    
    40.2
    %
    
    
    39.6
    %
    
    
    40.1
    %
 (dollars in thousands):
 2007
    
    2006Deferred tax liabilities:Depreciation
    
    $
    6,444
    
    
    $
    7,950Inventory
    
    
    12,639
    
    
    
    20,623Pension
    
    
    4,701
    
    
    
    Intangibles and goodwill
    
    
    28,069
    
    
    
    29,739Postretirement benefits
    
    
    1,498
    
    
    
    Total deferred tax liabilities
    
    $
    53,351
    
    
    $
    58,312Deferred tax assets:Postretirement benefits
    
    $
    
    
    
    $
    1,431Deferred compensation
    
    
    1,468
    
    
    
    2,320Deferred gain
    
    
    2,280
    
    
    
    3,108Impairments
    
    
    1,283
    
    
    
    1,218Pension
    
    
    
    
    
    
    755Other, net
    
    
    3,262
    
    
    
    1,359Total deferred tax assets
    
    $
    8,293
    
    
    $
    10,191Net deferred tax liabilities
    
    $
    45,058
    
    
    $
    48,121
 38




---



##### 



dollars in thousands
 Balance as of January 1, 2007
    
    $
    931Increases(decreases) in unrecognized tax benefits:Due to tax positions taken in prior years
    
    
    563Due to tax positions taken during the current year
    
    
    260Due to settlement with taxing authorities
    
    
    Due to lapsing of applicable statute of limitations
    
    
    Balance as of December 31, 2007
    
    $
    1,754
    (8) Goodwill and Intangible Assets
 Acquisition of Transtar
  dollars in thousands
 Metals
    
    PlasticsSegment
    
    Segment
    
    TotalBalance as of January 1, 2006
    
    $
    19,249
    
    
    $
    12,973
    
    
    $
    32,222Transtar acquisition (see Note 2)
    
    
    69,564
    
    
    
    
    
    
    
    69,564Currency valuation
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Balance as of December 31, 2006
    
    $
    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
    
    
    $
    101,540
  39




---



##### 



dollars in thousands
 2007
    
    2006Gross
    
    
    
    
    
    GrossCarrying
    
    Accumulated
    
    Carrying
    
    AccumulatedAmount
    
    Amortization
    
    Amount
    
    AmortizationCustomer relationships
    
    $
    66,867
    
    
    $
    8,131
    
    
    $
    66,851
    
    
    $
    2,061Non-Compete agreements
    
    
    1,557
    
    
    
    691
    
    
    
    1,557
    
    
    
    178Total
    
    $
    68,424
    
    
    $
    8,822
    
    
    $
    68,408
    
    
    $
    2,239
   dollars in thousands
 2008
    
    $
    6,6092009
    
    
    6,4362010
    
    
    6,0862011
    
    
    6,0752012
    
    
    6,072
 9) Debt
 (dollars
in thousands):
 2007
    
    
    2006SHORT-TERM DEBTU.S. Revolver (a)
    
    $
    4,300
    
    
    $
    108,000Mexico
    
    
    
    
    
    
    1,863Transtar
    
    
    2,312
    
    
    
    1,383Trade acceptances (c)
    
    
    12,127
    
    
    
    12,015Total short-term debt
    
    
    18,739
    
    
    
    123,261LONG-TERM DEBTU.S. Term Loan due in scheduled installments
from 2006 through 2011 at a 7.25% weighted
average rate (e)
    
    
    
    
    
    
    28,5006.76% insurance company loan due in scheduled
installments from 2007 through 2015 (b)
    
    
    63,228
    
    
    
    69,283Industrial development revenue bonds at a 3.91%
weighted average rate, due in varying
amounts through 2009 (d)
    
    
    3,600
    
    
    
    3,600Other, primarily capital leases
    
    
    921
    
    
    
    1,502Total long-term debt
    
    
    67,749
    
    
    
    102,885Less-current portion
    
    
    (7,037
    )
    
    
    (12,834
    )Total long-term portion
    
    
    60,712
    
    
    
    90,051TOTAL SHORT-TERM AND LONG-TERM DEBT
    
    $
    86,488
    
    
    $
    226,146
 40




---



##### 



(a)
    
    On September 5, 2006 the Company and its Canadian subsidiary entered into a $210.0 million
five-year secured Amended and Restated Credit Agreement (the Amended Senior Credit Facility)
with its lending syndicate. The Amended Senior Credit Facility amended the Companys and the
Canadian Subsidiarys outstanding senior credit facility that had originally been entered into
in July 2005 (the 2005 Revolver).The Amended Senior Credit Facility provides for (i) a $170.0 million revolving loan (the
U.S. Revolver) to be drawn on by the Company from time to time, (ii) a $30.0 million term loan
( the U.S. Term Loan and with the U.S. Revolver, the U.S. Facility), and (iii) a Cdn. $11.1
million revolving loan (approximately $9.9 million in U.S. dollars), (the Canadian Revolver)
to be drawn on by the Companys Canadian subsidiary from time to time. The Canadian Revolver can
be drawn in either U.S. dollars or Canadian dollars. The revolving loans and term loan will
mature in 2011. As of December 31, 2007, the Company had outstanding borrowings of $4.3 million
under its U.S. Revolver and had availability of $158.8 million. The Companys Canadian
subsidiary had no outstanding borrowings under the Canadian Facility and had availability of
$9.9 million.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 provides for a swing line sub-facility in an aggregate amount up to
$15.0 million and for a letter of credit sub-facility providing for the issuance of letters of
credit up to $15.0 million. 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 and Base Rate loans may fall or rise as set forth in the Amended Senior Credit Agreement
depending on the Companys debt-to-capital ratio as calculated on a quarterly basis. As of
December 31, 2007 the Companys weighted average interest rate was 7.16%.The Canadian Revolver is guaranteed by the Company and is secured by substantially all of
the assets of the Canadian subsidiary. The Canadian Revolver provides for a letter of credit
sub-facility providing for the issuance of letters of credit in an aggregate amount of up to
Cdn. $2.0 million. Depending on the type of borrowing selected by the Canadian subsidiary, the
applicable interest rate for loans under the Canadian Revolver 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 Revolver 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 Revolver 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 Amended 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 was in compliance with all debt
covenants at December 31, 2007.In 2006, the Company used the proceeds from the $30.0 million U.S. Term Loan and drew
$117.0 million of the amount available under the U.S. Revolver along with cash on hand to
finance the acquisition of Transtar. (b)
    
    On November 17, 2005, the Company entered into a ten year note agreement with an insurance
company and its affiliate pursuant to which the Company issued and sold $75 million aggregate
principal amount of the Companys 6.26% senior secured notes due in scheduled installments through
November 17, 2015 (the Notes). Interest on the Notes accrued at the rate of 6.26% annually,
payable semi- 41




---



##### 



annually beginning on May 15, 2006. Per the 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 $10.2 to $10.7 million 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 Amended Senior Credit Facility.
The notes are secured, on an equal and ratable basis with the Companys obligations under the
Amended 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 Amended 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, 2007, the Company had $12.1 million in outstanding trade acceptances with
varying maturity dates ranging up to 120 days. The weighted average interest rate was 6.35% for
2007.(d)
    
    The industrial revenue bonds are based on an adjustable rate bond structure and are backed by a
letter of credit.(e)
    
    The Company used proceeds from the secondary equity offering in May 2007 to repay the $27.0
million outstanding balance on the U.S. Term Loan. (dollars in thousands)
 Year ending December 31,2008
    
    $
    7,0372009
    
    
    10,5112010
    
    
    7,2572011
    
    
    7,6762012
    
    
    8,1102013 and beyond
    
    
    27,158Total debt
    
    $
    67,749
    42




---



##### 



(10) Share-based Compensation
  Restricted Stock and Stock Option Plans
 Plan Description
    
    Authorized Shares1995 Directors Stock Option Plan
    
    
    187,5001996 Restricted Stock and Stock Option Plan
    
    
    937,5002000 Restricted Stock and Stock Option Plan
    
    
    1,200,0002004 Restricted Stock, Stock Option and Equity Compensation Plan
    
    
    1,350,000
   Weighted AverageExerciseShares
    
    
    PriceOutstanding at January 1, 2007
    
    
    369,638
    
    
    $
    10.65Granted
    
    
    
    
    
    
    Forfeitures
    
    
    (3,000
    )
    
    $
    21.88Exercised
    
    
    (82,518
    )
    
    $
    6.69Outstanding at December 31, 2007
    
    
    284,120
    
    
    $
    11.68Vested or expected to vest as of December 31, 2007
    
    
    284,120
    
    
    $
    11.68
  43




---



##### 



2006
    
    2005Risk free interest rate
    
    
    4.72
    %
    
    
    4.064.20
    %Expected dividend yield
    
    
    0.85
    %
    
    
    N/AExpected option term
    
    10 Yrs
    
    10 YrsExpected volatility
    
    
    50
    %
    
    
    50
    %The estimated weighted average fair value on the
date granted based on the above assumptions
    
    $
    16.93
    
    
    $
    9.45
   Weighted-AverageGrant DateRestricted Stock
    
    Shares
    
    Fair ValueNon-vested at January 1, 2007
    
    
    61,684
    
    
    $
    26.82Granted
    
    
    13,014
    
    
    $
    34.58Less vested shares
    
    
    (21,984
    )
    
    $
    27.37Non-vested at December 31, 2007
    
    
    52,714
    
    
    $
    28.51
 Deferred
Compensation Plan
 Long-Term Incentive Performance Plans
 44




---



##### 



2005 Plan Performance Shares
    
    SharesAllocated at January 1, 2007
    
    
    371,525Allocated during 2007
    
    
    Issued
    
    
    Forfeitures/Cancellations
    
    
    (9,391
    )Allocated at December 31, 2007
    
    
    362,134
  2007 Plan Performance Shares
    
    SharesAllocated at January 1, 2007
    
    
    Allocated during 2007
    
    
    125,200Issued
    
    
    Forfeitures/Cancellations
    
    
    (3,367
    )Allocated at December 31, 2007
    
    
    121,833
  (11) Preferred Stock
   45




---



##### 



(12) Commitments and Contingent Liabilities
   (13) Accumulated Other Comprehensive Income (Loss)
 dollars in thousands
 2007
    
    
    2006Foreign currency translation gains
    
    $
    7,837
    
    
    $
    3,569Unrecognized pension and postretirement benefit
costs, net of tax
    
    
    (6,339
    )
    
    
    (22,073
    )Total accumulated other comprehensive income (loss)
    
    $
    1,498
    
    
    $
    (18,504
    )
  (14) Selected Quarterly Data (Unaudited) dollars in thousands, except per share data
 First
    
    Second
    
    Third
    
    FourthQuarter
    
    Quarter
    
    Quarter
    
    Quarter2007Net 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
    
    
    $
    0.062006Net sales
    
    $
    279,193
    
    
    $
    275,607
    
    
    $
    300,809
    
    
    $
    321,991Gross profit (a)
    
    
    51,024
    
    
    
    48,728
    
    
    
    52,675
    
    
    
    49,440Net income
    
    
    16,049
    
    
    
    14,357
    
    
    
    15,492
    
    
    
    9,221Preferred dividends
    
    
    242
    
    
    
    244
    
    
    
    235
    
    
    
    242Net income applicable to common stock
    
    
    15,807
    
    
    
    14,113
    
    
    
    15,257
    
    
    
    8,979Basic earnings per share
    
    $
    0.95
    
    
    $
    0.83
    
    
    $
    0.82
    
    
    $
    0.49Diluted earnings per share
    
    $
    0.86
    
    
    $
    0.76
    
    
    $
    0.82
    
    
    $
    0.47Common 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. 46




---



##### 



(15) Subsequent Events
   47




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Employers Accounting for Defined Benefit Pension and Other
Postretirement Plans.
 Internal ControlIntegrated Framework ,
 /s/     Deloitte & Touche LLPDELOITTE & TOUCHE LLP 
 48




---



##### 



MANAGEMENTS ASSESSMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
   Internal Control  Integrated Framework
 Internal Control  Integrated Framework,
    49




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Internal Control 
Integrated Framework
    Internal
Control  Integrated Framework
  /s/     Deloitte & Touche LLPDELOITTE & TOUCHE LLP 
 50




---



##### 



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
  51




---



##### 



Item 9B  Other Information
  PART III
 ITEM 10   Directors and Executive Officers of the Registrant as of March 10, 2008
 Officers of The Registrant
 Name and Title
    
    Age
    
    Business ExperienceMichael
H. Goldberg
President & Chief Executive
Officer
    
    
    54
    
    
    Mr. Goldberg was elected
President and Chief
Executive Officer on
January 26, 2006. Prior
to joining the Registrant,
he was Executive Vice
President of Integris
Metals (an aluminum and
metals service center)
from November 2001 to
January 2005. From August
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
    
    
    56
    
    
    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.Lawrence A. Boik

Vice President,
Chief Financial Officer and
Treasurer
    
    
    48
    
    
    Mr. Boik began his
employment with the
registrant in September
2003 and was appointed to
the position of Vice
President-Controller,
Treasurer as well as Chief
Accounting Officer. In
October 2004, he was
elected to the position of
Vice President-Finance,
Chief Financial Officer
and Treasurer. Formerly,
he served as the CFO of
Meridan Rail from January
2002 to September 2003.
Prior employment included
Vice President-Controller
of ABC-NACO since July
2000, and Assistant
Corporate Controller of US
Can Co. back to October
1997.Kevin Coughlin 
Vice President, 
Operations
    
    
    57
    
    
    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.Sherry L. Holland

Vice President General Counsel and
Secretary
    
    
    59
    
    
    Ms. Holland began her
employment with the
registrant in May 2007,
when she was elected Vice
President, General Counsel
and Secretary. Prior to
joining the registrant she
was Senior Finance, Real
Estate and Transaction
Counsel for Kimball Hill,
Inc. from 2004 to 2006.
Prior employment included
Senior Counsel and
Assistant Secretary of IMC
Global, Inc. from 1999 to
2004 and Senior Counsel,
Assistant Secretary and
Manager of Regulator
Training, Education and
Administration of Phelps
Dodge Corporation from
1994 to 1998.Paul
J. Winsauer,
Vice President,
Human Resources
    
    
    56
    
    
    Mr. Winsauer began his
employment with the
registrant in 1981. In
1996, he was elected to
the position of Vice
President, Human
Resources.
 52




---



##### 



Name and Title
    
    Age
    
    Business ExperiencePatrick
R. Anderson
Vice President, Corporate Controller
and Chief
Accounting Officer
    
    
    36
    
    
    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
    
    
    47
    
    
    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. from 2005
through 2007 and Vice
President, Commercial
Operations with UniPure
Corporation through 2001.Blain
A. Tiffany
Vice President and
President, Castle Metals Plate
    
    
    49
    
    
    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.Michael
Zundel
Vice President and
President, Castle Metals Aerospace
    
    
    60
    
    
    Mr. Zundel began his
employment with Transtar
in 1993 and was appointed
to the position of
Executive Vice,
Commercial. In 2007, Mr.
Zundel was appointed to
the position of President,
Transtar Metals and
subsequently was appointed
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.
    
    
    45
    
    
    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
  53




---



##### 



ITEM 12   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
   Equity Plan Disclosures:
  (c)Number ofsecuritiesremaining available(b)
    
    for future(a)
    
    Weighted-average
    
    issuances underNumber of securities to be
    
    exercise price of
    
    equity compensationissued upon exercise of
    
    outstanding
    
    plans [excludingoutstanding options, warrants
    
    options, warrants
    
    securitiesPlan category
    
    and rights
    
    and rights
    
    reflected in column (a)]Equity compensation
plans approved by security holders
    
    Options
    284,120
    
    
    $
    11.68
    
    
    
    36,653Performance
    846,101
    **
    
    $
    0.00
    *Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    1,130,221
    
    
    $
    2.94
    *
    
    
    36,653
 
 *
    
    Performance shares were, at the time target grants were established, valued at market price.
The weighted average market price of performance shares at date of grant is $14.17.**
    
    Represents total number of securities that may be issued under the Companys Long-Term Incentive Performance
Plans based on actual performance compared to target goals..
 54




---



##### 



*
    
    $100 invested on 12/31/02 in stock or index including reinvestment of dividends. Fiscal
year ending December 31.
  12/02
    
    12/03
    
    12/04
    
    12/05
    
    12/06
    
    12/07A. M. Castle & Co.
    
    
    100.00
    
    
    
    160.44
    
    
    
    262.42
    
    
    
    480.00
    
    
    
    563.64
    
    
    
    607.26S & P 500
    
    
    100.00
    
    
    
    128.68
    
    
    
    142.69
    
    
    
    149.70
    
    
    
    173.34
    
    
    
    182.87Peer Group*
    
    
    100.00
    
    
    
    165.53
    
    
    
    219.10
    
    
    
    322.21
    
    
    
    403.45
    
    
    
    560.19
 
 *
    
    Peer Group consists of 1) Olympic Steel, Inc., 2) Reliance Steel & Aluminum Co., and 3) Central Steel & Wire Company. Ryerson was dropped
from the peer group as they are no longer a publicly traded company.
 55




---



##### 



ITEM 13   Certain Relationships and Related Transactions
  ITEM 14   Principal Accountant Fees and Services
  56




---



##### 



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, 2007, 2006 and 2005
    
    
    22Consolidated Balance Sheets  December 31, 2007 and 2006
    
    
    23Consolidated Statements of Cash Flows  For the years ended December 31, 2007, 2006 and 2005
    
    
    24Consolidated Statements of Stockholders Equity  For the years ended December 31, 2007, 2006 and 2005
    
    
    25Notes to Consolidated Financial Statements
    
    
    26-47Report of Independent Registered Public Accounting Firm
    
    
    48Managements Assessment of Internal Controls Over Financial Reporting
    
    
    49Report of Independent Registered Public Accounting Firm
    
    
    50Valuation and Qualifying Accounts  Schedule II
    
    
    60
 57




---



##### 



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. (4)3.1
    
    Articles of Incorporation of the Company (1)3.2
    
    By-Laws of the Company4.1
    
    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. (3)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. (5)4.3
    
    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. (5)4.4
    
    Guarantee Agreement, dated September 5, 2006, by and between the Company and the
Guarantee Subsidiaries. (5)4.5
    
    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. (5)4.6
    
    Amended and Restated Security Agreement, dated September 5, 2006, among the Company
and the Guarantee Subsidiaries. (5)4.7
    
    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. (5)10.1
    
    A. M. Castle & Co. 2004 Restricted Stock, Stock Option and Equity Compensation Plan (1)10.2
    
    Employment Agreement with Companys President and CEO dated January 26, 2006 (6)10.3
    
    Change of Control Agreement with Senior Executives of the Company (2)10.4
    
    Management Incentive Plan* (2)10.5
    
    Description of Directors Deferred Compensation Plan (2)10.6
    
    Employment Agreement with Companys Chairman of the Board dated January 26, 2006 (6)10.7
    
    Executive Agreement with Companys Executive Vice President dated January 26, 2006 (6)10.8
    
    Executive Agreement with Companys Chief Financial Officer dated July 2, 2003 (6)14.1
    
    Code of Ethics for Officers and Directors of A.M. Castle & Co. (2)
 58




---



##### 



ExhibitNumber
    
    Description of Exhibit21.1
    
    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 Lawrence A. Boik, 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 Lawrence A. Boik, 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.(1)
    
    Incorporated by reference to the Companys Definitive Proxy Statement filed with the SEC on
March 12, 2004.(2)
    
    Incorporated by reference to the Companys Definitive Proxy Statement filed with the SEC on
March 20, 2008.(3)
    
    Incorporated by reference to the Form 8-K filed with the SEC on November 21, 2005.(4)
    
    Incorporated by reference to the Form 8-K filed with the SEC on August 17,
2006.(5)
    
    Incorporated by reference to the Form 8-K filed with the SEC on September 8,
2006.(6)
    
    Incorporated by reference to the Companys Annual Report for 2005 and Form 10-K
filed with the SEC dated March 31, 2006. 59




---



##### 



SCHEDULE II
 A. M. Castle & Co.
 
 Accounts Receivable  Allowance for Doubtful Accounts
Valuation and Qualifying Accounts  For The Years Ended December 31, 2007, 2006 and 2005
 Dollars in thousands)
 2007
    
    
    2006
    
    
    2005Balance, beginning of year
    
    $
    3,112
    
    
    $
    1,763
    
    
    $
    1,760Add  Provision charged to expense
    
    
    647
    
    
    
    1,095
    
    
    
    356 Transtar allowance at date of acquisition
    
    
    
    
    
    
    1,229
    
    
    
     Recoveries
    
    
    262
    
    
    
    567
    
    
    
    173Less  Uncollectible accounts charged
against allowance
    
    
    (801
    )
    
    
    (1,542
    )
    
    
    (526
    )Balance, end of year
    
    $
    3,220
    
    
    $
    3,112
    
    
    $
    1,763
 60




---



##### 



SIGNATURES
  A. M. Castle & Co.(Registrant)By:
    
    /s/ Patrick R. AndersonPatrick R. Anderson,
Vice President  Controller and Chief Accounting Officer(Principal Accounting Officer)Date: March 10, 2008
  /s/ Brian P. Anderson
    
    /s/ Thomas A. Donahoe
    
    /s/ Ann M. DrakeBrian P. Anderson, Director and
    
    Thomas A. Donahoe, Director and
    
    Ann M. DrakeChairman, Audit Committee
    
    Member, Audit Committee
    
    Director/s/ Michael H. Goldberg
    
    /s/ William K. Hall
    
    /s/ Robert S. HamadaMichael H. Goldberg, President,
    
    William K. Hall
    
    Robert S. HamadaChief Executive Officer and
    
    Director
    
    DirectorDirector(Principal Executive Officer)/s/ Patrick J. Herbert, III
    
    /s/ Terrence J. Keating
    
    /s/ Pamela Forbes LiebermanPatrick J. Herbert, III
    
    Terrence J. Keating
    
    Pamela Forbes LiebermanDirector
    
    Director and Member,
    
    Director and Member,Audit Committee
    
    Audit Committee/s/ John W. McCartney
    
    /s/ Michael Simpson
    
    /s/ Lawrence A. BoikJohn W. McCartney,
    
    Michael Simpson
    
    Lawrence A. BoikChairman of the Board
    
    Director
    
    Vice President andChief Financial Officer(Principal Financial Officer)
 61