Page 1 of 10

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended

June September 30, 2001

Commission File Number 1-5415

A. M. Castle & Co

(Exact name of registrant as specified in its charter)

Maryland

 

36-0879160

(State or Other Jurisdiction of

 

(I.R.S. Employer Identification No.)

incorporation of organization)

  

3400 North Wolf Road, Franklin Park, Illinois

60131

(Address of Principal Executive Offices)

(Zip Code)

Registrant's telephone, including area code

847/455-7111

None

(Former name, former address and former fiscal year, if changed since last year)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

X

No

___

Yes X No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class

Outstanding at JuneSeptember 30, 2001

Common Stock, No Par Value

14,160,56414,110,564 shares

 

 

Page 2 of 10

 

A. M. CASTLE & CO.

 

 

 

Part I. FINANCIAL INFORMATION

 

  

Page

  

Number

Part I.

Financial Information

 
 

Item 1.

Financial StatementsStatements:

3-6

  

Condensed Balance Sheets

3

  

Comparative Statements of Cash Flows

3

  

Comparative Statements of Income

4

  

Notes to Condensed Financial Statements

5-65-7

 

Item 2.

Management's Discussion and Analysis of Financial

 
  

Conditions and Results of Operations

6-77-8

Part II.

Other Information

 
 

Item 1.

Legal Proceedings

89

 

Item 4.

Submission of Matters to a Vote of Security Holders

8-9

Item 6.6

Exhibits and Reports on Form 8-K

9

 

Page 3 of 10

CONDENSED BALANCE SHEETS

(Dollars in thousands except per share data)

(Unaudited)

June 30,

December 31,

June 30,

ASSETS

 

2001

2000

2000

Cash

$ 2,603

$ 2,079

$ 4,017

Accounts receivable, net

85,224

91,636

99,290

Inventories (principally on last-in, first-out basis)

158,451

163,206

184,497

Income tax receivable

2,889

4,116

-

Other current assets

1,843

1,426

1,958

Total current assets

$251,010

$262,463

$289,762

Investment in joint ventures

9,591

9,714

11,812

Prepaid expenses and other assets

56,630

55,566

55,510

Fixed assets, net

90,966

91,108

100,319

Total assets

$408,197

$418,851

$457,403

LIABILITIES AND STOCKHOLDERS' EQUITY

   

Accounts payable

$ 72,678

$ 84,734

$118,628

Accrued liabilities

16,299

17,854

16,368

Income taxes payable

2,383

1,130

5,786

Current portion of long-term debt

3,425

3,425

3,914

 

Total current liabilities

$ 94,785

$107,143

$144,696

Long-term debt, less current portion

165,799

161,135

150,884

Deferred income taxes

18,574

18,096

16,257

Minority interest

1,187

971

736

Post retirement benefit obligations.

2,130

2,265

2,217

Stockholders' equity

125,722

129,241

142,613

 

Total liabilities and stockholders' equity

$408,197

$418,851

$457,403

    

SHARES OUTSTANDING

14,111

14,061

14,048

BOOK VALUE PER SHARE

$ 8.91

$ 9.19

$ 10.15

WORKING CAPITAL

$156,225

$155,320

$145,066

WORKING CAPITAL PER SHARE

$ 11.07

$ 11.05

$ 10.33

    

DEBT TO CAPITAL

57.4%

56.0%

52.0%

    

CONDENSED STATEMENTS OF CASH FLOWS

 

(Unaudited)

(Dollars in thousands)

 

For the Six Months

  

Ended June 30,

Cash flows from operating activities:

 

2001

2000

Net income

$ 930

$ 6,602

Depreciation

4,732

4,924

Other

(521)

(6,886)

Cash provided from operating activities before

  

working capital changes

5,141

4,640

(Increase) decrease in working capital

(743)

(15,720)

Net cash provided from (used by) operating activities

4,398

(11,080)

Cash flows from investing activities:

  

Investments and acquisitions

-

(4,050)

Capital expenditures, net of sales proceeds

(4,089)

(5,889)

Net cash provided from (used by) investing activities

(4,089)

(9,939)

Cash flows from financing activities:

  

Long-term borrowings, net

4,664

28,258

Dividends paid

(4,461)

(5,484)

Other

12

(316)

Net cash provided from (used by) financing activities

215

22,458

Net increase (decrease) in cash

$ 524

$ 1,439

Cash - beginning of year

2,079

2,578

Cash - end of period

$ 2,603

$ 4,017

Supplemental cash disclosure - cash paid during the period:

  

Interest

$ 5,303

$ 4,751

Income taxes

$ (2,127)

$ 2,910

CONDENSED BALANCE SHEETS

   

(Dollars in thousands except per share data)(unaudited)

Sept. 30,

Dec. 31,

Sept. 30,

ASSETS

2001

2000

2000

Cash

$ 3,404

$ 2,079

$ 2,458

Accounts receivable, net

29,631

91,636

103,153

Inventories (principally on last-in, first-out basis)

145,417

163,206

188,751

Income tax receivable

6,435

4,116

---

Other current assets

3,847

1,426

2,383

 

Total current assets

$188,734

$262,463

$296,745

Investment in joint ventures

9,764

9,714

12,392

Prepaid expenses and other assets

59,020

55,566

55,524

Fixed assets, net

88,273

91,108

97,338

 

Total assets

$345,791

$418,851

$461,999

LIABILITIES AND STOCKHOLDERS' EQUITY

   

Accounts payable

$ 59,636

$ 84,734

$105,253

Accrued liabilities

15,947

17,854

15,980

Income taxes payable

4,024

1,130

4,300

Current portion of long-term debt

2,697

3,425

3,021

 

Total current liabilities

$ 82,304

$107,143

$128,554

Long-term debt, less current portion

118,940

161,135

171,920

Deferred income taxes

19,275

18,096

17,236

Minority interest

1,225

971

842

Other Liabilities

2,178

2,265

2,254

Stockholders' equity

121,869

129,241

141,193

 

Total liabilities and stockholders' equity

$345,791

$418,851

$461,999

SHARES OUTSTANDING

14,111

14,061

14,061

BOOK VALUE PER SHARE

$ 8.64

$ 9.19

$ 10.04

WORKING CAPITAL

$106,430

$155,320

$168,191

WORKING CAPITAL PER SHARE

$ 7.54

$ 11.05

$ 11.96

DEBT TO CAPITAL

50.0%

56.0%

55.3%

    
    

CONDENSED STATEMENTS OF CASH FLOWS

 

(Unaudited)

(Dollars in thousands)

 

For the Nine Months

  

Ended Sept. 30,

Cash flows from operating activities:

 

2001

2000

 

Net income

 

$ (1,223)

$ 7,981

 

Depreciation

 

7,079

7,102

 

Other

 

(2,460)

(6,844)

 

Cash provided from operating activities before

   
 

working capital changes

 

3,396

8,239

 

Sale of accounts receivable

 

53,700

--

 

(Increase) in other working capital

 

(3,209)

(39,237)

Net cash provided from (used by) operating activities

 

53,887

(30,998)

Cash flows from investing activities:

   
 

Investments and acquisitions

 

--

(4,050)

 

Capital expenditures, net of sales proceeds

 

(3,490)

(4,876)

Net cash provided (used by) from investing activities

 

(3,490)

(8,926)

Cash flows from financing activities:

   
 

Long-term borrowings, net

 

(42,923)

48,401

Dividends paid

 

(6,160)

(8,245)

 

Other

 

11

(352)

Net cash provided (used by) from financing activities

 

(49,072)

39,804

Net increase (decrease) in cash

 

$ 1,325

$ (120)

 

Cash - beginning of year

 

2,079

2,578

 

Cash - end of period

 

$ 3,404

$ 2,458

Supplemental cash disclosure - cash paid during the period

   
 

Interest

 

$ 7,575

$ 7,406

 

Income taxes

 

$ (2,169)

$ 5,079

Page 4 of 10

COMPARATIVE STATEMENTS OF INCOME

    

(Dollars in thousands, except per share data)

    

For the Three and Nine Months Ended September 30,

For The Three

For The Nine

(Unaudited)

Months Ended

Months Ended

 

Sept. 30,

Sept. 30,

 

2001

2000

2001

2000

Net sales

$143,601

$184,958

$485,816

$572,475

Cost of material sold

101,574

130,354

340,373

400,195

 

Gross profit on sales

42,027

54,604

145,443

172,280

      

Operating expenses

39,734

47,452

131,529

144,405

Depreciation and amortization expense

2,347

2,178

7,079

7,102

Interest expense, net

2,435

2,669

7,563

7,409

Sale of accounts receivable

910

--

910

--

     

(Loss) income before taxes

(3,399)

2,305

(1,638)

13,364

     

Income Taxes:

    
 

Federal

(1,025)

747

(385)

4,351

 

State

(221)

179

(30)

1,032

 

(1,246)

926

(415)

5,383

     

Net (loss) income

$ (2,153)

$ 1,379

$ (1,223)

$ 7,981

Net (loss) income per share (basic and diluted)

$ (0.15)

$ 0.10

$ (0.09)

$ 0.57

     

Financial Ratios:

    
 

Return on sales

(1.50)%

.75%

(0.25)%

1.39%

 

Asset turnover

1.66

1.60

1.87

1.66

 

Return on assets

(2.49)%

1.19%

(0.47)%

2.31%

 

Leverage factor

2.68

3.26

2.68

3.25

 

Return on opening stockholders' equity

(6.66)%

3.89%

(1.26)%

7.50%

      

Other Data:

    
 

Cash dividends paid

$ 1,699

$ 2,761

$ 6,160

$ 8,245

 

Dividends per share

$ 0.120

$ 0.195

$ 0.435

$ 0.585

 

Average number of shares outstanding

14,111

14,061

14,088

14,052

 

COMPARATIVE STATEMENTS OF INCOME

(Dollars in thousands, except per share data)

 

For the Three Months

For The Six Months

 

Ended June 30,

Ended June 30,

(Unaudited)

2001

2000

2001

2000

Net sales

$158,569

$192,278

$342,215

$387,517

Cost of material sold

110,693

133,896

238,799

269,841

Gross profit on sales

47,876

58,382

103,416

117,676

     

Operating expenses

42,728

48,729

91,795

96,953

Depreciation and amortization expense

2,335

2,486

4,732

4,924

Interest expense, net

2,525

2,436

5,128

4,740

     

Income before taxes

288

4,731

1,761

11,059

     

Income Taxes:

    

Federal

115

1,552

640

3,604

State

46

343

191

853

161

1,895

831

4,457

     

Net income

$ 127

$ 2,836

$ 930

$ 6,602

     

Net income per share

$ 0.01

$ 0.20

$ 0.07

$ 0.47

Diluted income per share

$ 0.01

$ 0.20

$ 0.07

$ 0.47

     
     

Financial Ratios:

    

Return on sales

0.08%

1.47%

0.27%

1.70%

Asset turnover

1.55

1.68

1.68

1.69

Return on assets

0.12%

2.48%

0.46%

2.89%

Leverage factor

3.16

3.23

3.16

3.23

Return on opening stockholders' equity

0.39%

8.00%

1.44%

9.31%

     

Other Data:

    

Cash dividends paid

$1,700

$2,742

$4,461

$5,484

Dividends per share

$0.120

$0.195

$0.315

$0.390

Average number of shares outstanding

14,094

14,048

14,077

14,048

Inventory determination under the LIFO method can only be made at the end of each fiscal year based on the inventory levels and costs at that time. Accordingly, interim LIFO determinations, including those at JuneSeptember 30, 2001, December 31, 2000 and JuneSeptember 30, 2000, must necessarily be based on management's estimates of expected year-endyear end inventory levels and costs. Since future estimates of inventory levels and costs are subject to certain forces beyond the control of management, interim financial results are subject to fiscal year endyear-end LIFO inventory valuations. It is estimated that if September 30, 2001 inventory levels and prices hold constant through the end of the year, an additional charge of $1.0 to $2.0 million would be made to cost of sales.

Current replacement cost of inventories exceeds book value by $42.9 million, $42.9 million and $47.4$44.6 million at JuneSeptember 30, 2001, December 31, 2000 and JuneSeptember 30, 2000, respectively. Taxes on income would become payable on any realization of this excess from reductions in the level of inventories.

Page 5 of 10

 

A. M. CASTLE & CO.

Notes to Condensed Financial Statements

1.

Condensed Financial Statements

Condensed Financial Statements

The condensed financial statements included herein are unaudited, except for the balance sheet at December 31, 2000, which is condensed from the audited financial statements at that date. The Company believes that the disclosures are adequate to make the information not misleading; however, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited statements, included herein, contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position, the cash flows, and the results of operations for the periods then ended. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. The 2001 interim results reported herein may not necessarily be indicative of the results of operations for the full year 2001.

 

The condensed financial statements included herein are unaudited, except for the balance sheet at December 31, 2000, which is condensed from the audited financial statements at that date. The Company believes that the disclosures are adequate to make the information not misleading; however, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited statements, included herein, contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position, the cash flows, and the results of operations for the periods then ended. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. The 2001 interim results reported herein may not necessarily be indicative of the results of operations for the full year 2001.

2.

Earnings Per Share

Earnings Per Share

In accordance with SFAS No. 128 "Earnings per Share" below is a reconciliation of the basic and diluted earnings per share calculations for the periods reported (dollars and shares in thousands):

In accordance with SFAS No. 128 "Earnings per Share" below is a reconciliation of the basic and diluted earnings per share calculations for the periods reported (dollars and shares in thousands):

 

For The Three

For The Six

For The Three

For The Nine

 

Months Ended

Months Ended

Months Ended

Months Ended

 

June 30,

June 30,

Sept. 30,

Sept. 30,

2001

2000

2001

2000

2001

2000

2001

2000

Net (Loss) Income

$(2,153)

$1,379

$(1,223)

$7,981

Net Income

$ 127

$2,836

$ 930

$6,602

Weighted average common shares outstanding

14,111

14,061

14,088

14,052

Dilutive effect of outstanding employee and

    

Weighted average common shares outstanding

14,094

14,048

14,077

14,048

directors' common stock options

--

--

--

--

Dilutive effect of outstanding employees and

Diluted common shares outstanding

14,111

14,061

14,088

14,052

directors' common stock option

38

-

10

-

     

Basic earnings per share

$ (.15)

$ .10

$ (.09)

$ .57

Diluted common shares outstanding

14,132

14,048

14,087

14,048

     

Diluted earnings per share

$ (.15)

$ .10

$ (.09)

$ .57

Basic earnings per share

$ .01

$ .20

$ 0.07

$ 0.47

     

Diluted earnings per share

$ .01

$ .20

$ 0.07

$ 0.47

Outstanding employee and directors'

    

common stock options having no

    

Outstanding employee and directors'

dilutive effect

1,668

820

1,668

820

common stock options having no

dilutive effect

939

809

939

809

3.

Segments

The Company has reviewed the business activities of its divisions and subsidiaries in accordance with the requirements of SFAS No. 131. The Company has concluded that its business activities fall into one identifiable business segment as approximately 91% of all revenues are derived from the distribution of its specialty metals products. These products are purchased, warehoused, processed and sold using essentially the same systems, facilities, sales force and distribution network.

 

Page

Page 6 of 10

3.

Accounts Receivable Securitization

On September 27, 2001, the Company and certain of its subsidiaries completed arrangements for a $65 million 364-day trade receivables securitization facility with a financial institution. The Company is utilizing a special purpose, non-owned, bankruptcy remote company (Castle Funding Corp.) for the sole purpose of buying receivables from the Company and those selected subsidiaries and selling an undivided interest in all eligible trade accounts receivable to a commercial paper conduit. Castle Funding Corp. retains an undivided percentage interest in the pool of accounts receivable and bad debt losses are allocated first to this retained interest. Funding under the facility is limited to the lesser of a funding base comprised of eligible receivables or $65 million.

Since Castle Funding Corp.' s sole purpose is to purchase accounts receivable from the Company, it is required by the Financial Accounting Standards Board (FASB) that the special purpose company be consolidated with the Company even though it is non- owned. The sales of accounts receivable are reflected as a reduction of "accounts receivable, net" in the Condensed Balance Sheet and the proceeds received are included in net cash provided from operating activities in the Condensed Statement of Cash Flows. Sales proceeds from the receivables are less than the face amount of accounts receivable sold by an amount equal to a discount on sales that approximates the conduit's financing cost of issuing their own commercial paper, which is backed by their ownership interests in the accounts receivable sold by the special purpose company, plus an agreed upon margin. These costs are charged to "sale of accounts receivable" in the Comparative Statement of Income.

Generally, the facility provides that as payments are collected from the sold accounts receivable, the special purpose vehicle may elect to have the commercial paper conduit reinvest the proceeds in new accounts receivable. The commercial paper conduit, in addition to their rights to collect payments from that portion of the interests in the accounts receivable that is owned by them, also has the right to collect payments from that portion of the ownership interest in the accounts receivable that is owned by the special purpose company. In calculating the fair market value of the receivables, the book value of the receivables represent the best estimate of the fair value due to the current nature of these items. The facility, which expires on September 26, 2002, requires early amortization if the special purpose company does not maintain a minimum equity requirement or if certain ratios related to the collectibility of the receivables are not maintained.

As of September 30, 2001 $64.9 million of accounts receivable had been sold to Castle Funding Corp. and of this amount $53.7 million was sold to the commercial paper conduit which was the maximum amount which could be sold based on the September 30, 2001 eligible receivable balance. During the third quarter of 2001 and the first nine months of 2001, the Company incurred one-time costs of $0.9 million relating to the sales of accounts receivable.

Page 7 of 10

4.

New Accounting Standard

 

The Financial Accounting Standards Board (FASB) issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities", which is effective for fiscal years beginning after June 15, 2000. The Company was required to and has adopted SFAS No. 137 on January 1, 2001. The adoption did not have a significant effect on the Company's consolidated results of operations or financial position during 2001.

In July 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 141, "Business Combinations" and No. 142, "Goodwill and Other Intangible Assets". SFAS No. 141, requires that the purchase method of accounting be used for all business combinations completed after June 30, 2001, clarifies the criteria for recognition of intangible assets separately from goodwill and requires that unallocated negative goodwill be written-off immediately as an extraordinary gain. SFAS No. 142, effective for fiscal years beginning after December 15, 2001, requires that ratable amortization of goodwill be replaced with periodic tests of goodwill impairment and that intangible assets, other than goodwill, which have determinable useful lives, be amortized over their useful lives. The Company is required to and will adopt SFAS Nos. 141 and 142 beginning January 1, 2002. The Company is currently assessing the Statements and has not yet determined the impact of its adop tion on its financial statements.

Item 2.

Management's Discussion and Analysis of Financial Condition and Results Ofof Operations.

  
 

Results of Operations

 

Net profit for the second quarter of 2001 was down 95.5% compared to 2000's second quarter. The Company earned $0.1generated a net loss of $2.2 million ($.01 per share) as compared to $2.8 million ($.20.15 net loss per share) in the comparablethird quarter last year. Results were adversely affected by the general slowdown in the manufacturing sector of the economy. Earnings2001 as compared to 2000's third quarter earnings of $1.4 million ($.10 net income per share). The net loss for the first sixnine months of $0.9$1.2 million ($.07.09 net loss per share) were 85.5% belowreflects a decrease from the net income reported for the same period last year's earningsyear of $6.6$8.0 million ($.47.57 net income per share). The results for both the quarter and nine month period reflect the impact of a severe slowdown in activity in most of the industries the Company serves, along with a $.04 per share loss incurred in conjunction with an accounts receivable securitization financing agreement which closed in September.

Quarterly sales totalled $158.6$143.6 million, representing a 17.5%22.4% decrease from the secondthird quarter of 2000 sales of $192.3$185.0 million. The lower volume was due to a 24%29% decrease in tons sold offset by a shift in mix towards higher priced products. For the first sixnine months of 2001 total revenues were $342.2$485.8 million as compared to $387.5$572.5 million in 2000, a decrease of 11.7%15.1%.

Gross profit for the quarter went down by $12.6 million (23.0%) to $42.0 million due mainly to sales volume reductions. Total gross margin percentage decreased slightly from 29.5% to 29.3%. For the first nine months of 2001 total gross profit was down $26.8 million (15.6%) while the gross margin percentage remained relatively constant on a year-to-date basis at 29.9% and 30.0%, respectively.

Page 8 of 10

  
 

Gross profit for the quarter went down by $10.5 million (18.0%) to $47.9 million due mainly to lower sales volumes. Total gross margin percentage decreased slightly from 30.4% to 30.2%. For the first six months of 2001 total gross profit was down $14.3 million (12.1%) with the gross margin percentage of 30.2%, below the 30.4% attained last year.

SecondThird quarter operating expenses were down $6.0$7.7 million (12.3%(16.3%) when compared to the secondthird quarter of last year. Approximately 60 percent of the reduction is transaction related while the balance of the decrease reflects the effect of cost reduction programs begun in the first quarter of 2001. The announced 9.5% reduction in workforce in the first quarter produced a $3.0 million reduction in payroll and payroll related expenses when compared to the second quarter of 2000 with the remainder of the savings being generated through cost controls and reduced transactional activity. In the second quarter of 2001 the Company took a write-down of $0.3 million related to its investment in MetalSpectrum, an e-business joint venture which ceased operations during the quarter. Year-to-date operating expenses were down $5.2$12.9 million (5.3%(8.9%). Much of the reduction is due to lower sales activity levels, but it is estimated that on an annualized basis, $10 million to $11 million reflects a sustainable reduction in the Company's operating expense structure.

Page 7 of 10

Net interest expense for the secondthird quarter was up approximately $0.1 million (3.7%) asand year-to-date remained relatively flat when compared to last year's expense for the secondcomparable periods.

Late in the third quarter of 2000.2001 the Company incurred costs of $0.9 million in order to implement an accounts receivable securitization financing facility. The increase reflectsexpense includes the additional debt neededdiscounted loss on the sale of the receivables along with one-time charges for legal and facility fees along with expenses related to finance equity reductions offset by decreases in interest rates over the past year. Year-to-date the expense was $0.4 million higher than the previous period last year.termination and payoff of previously existing debt.

Liquidity and Capital Resources

Accounts receivable decreased by $14.1$73.5 million from the secondthird quarter of last year mainlyyear.

$53.7 million of the decrease was due to the sale of the receivables under the new accounts receivable securitization agreement. The remainder of the decrease is attributable to the reduction in sales volume.

Net inventory went downwas reduced by $26.0$43.3 million compared to last year's values due to the lower sales activity, along with programmed reductions put in place in order to increase cash flow. The reduction of $46.0$45.6 million in accounts payable is reflective of the decreased inventory and a lower level of salespurchasing activity.

Total long-term debt increaseddecreased by $14.9$53.3 million as compared to JuneSeptember 30, 2000 due primarily as a resultto the use of the needfunds from the accounts receivable purchase agreement to fundpayoff the decrease in equity.outstanding balance on the previously existing debt. The Company's debt-to-capital ratio was 57.4%50.0% as of JuneSeptember 30, 2001 compared to 56.0% and 52.0%55.3% at December 31, 2000 and JuneSeptember 30, 2000 respectively.

For the nine months ended September 30, 2001 cash provided from operating activities totalled $53.9. The positive cash flow was due almost entirely to the use of the accounts receivable securitization facility which is the primary source of short-term funds. The Company has unusedimmediately available committed and uncommitted lines of bank credit of $81.9$2.9 million as of JuneSeptember 30, 2001.

The Company projects positive cash flow from operations for the quarter and year ended December 31, 2001 compareddue primarily to $121.2 million at June 30, 2000.reduced working capital requirements and depreciation cash flow. Additionally, the Company is seeking lines of bank credit and actively pursuing the sales of certain processing facilities and joint ventures. Therefore, management believes that there are adequate sources of liquidity to meet the Company's short and long-term needs.

 

Page 8 of 10

Part II. OTHER INFORMATION

Item 1.

Legal Proceedings

  
 

There are no material legal proceedings other than ordinary routine litigation incidental to the business of the Registrant.

  

Item 4.

Submission of Matters to a Vote of Security Holders

  
 

(a)

The Annual Meeting of Stockholders was held on April 26, 2001.

   
 

(b)

At the Annual Meeting the full Board of Directors were elected. The following are the individual members and the voting results:

     
 

DIRECTOR

FOR

WITHHELD

ABSTAINING

     
 

Daniel T. Carroll

11,394,339

143,902

2

 

Edward F. Culliton

11,395,011

143,230

2

 

Robert W. Grubbs

11,395,011

143,230

2

 

William K. Hall

11,395,011

143,230

2

 

Robert S. Hamada

11,394,340

143,901

2

 

Patrick J. Herbert, III

11,394,340

143,901

2

 

John P. Keller

11,395,011

143,230

2

 

John W. McCarter, Jr.

11,395,011

143,230

2

 

John McCartney

11,395,011

143,230

2

 

G. Thomas McKane

11,394,340

143,901

2

 

John W. Puth

11,395,011

143,230

2

 

Michael Simpson

11,395,011

143,230

2

     
 

(c)(1)

At the Annual Meeting the Stockholders ratified and adopted the Company's Restricted Stock and Stock Option Plan authorizing 1,200,000 shares for use under the Plan. The results of the voting were - 8,942,892 shares voted for the proposal; 721,675 shares voted against; and 105,198 shares abstained.

   
 

(c)(2)

At the Annual Meeting the Stockholders ratified and approved the change of the Company's state of incorporation from a Delaware corporation to a Maryland corporation effectuated through a statutory merger of the Company into a newly formed Maryland corporation. The results of the voting were - 8,428,934 shares for the proposal; 1,290,812 shares against the proposal; and 50,025 shares abstained.

 

 

Page 9 of 10

  

Part II. OTHER INFORMATION

 

Item 1.

Legal Proceedings

  
 

(c)(3)

AtThere are no material legal proceedings other than ordinary routine litigation incidental to the Annual Meeting the Stockholders ratified and adopted Arthur Andersen, LLP as A. M. Castle's independent auditor for 2001. The resultsbusiness of the voting were - 11,494,857 for the motion; 16,271 shares against the motion; and 27,114 shares abstained.Registrant.

  

Castle incorporates by reference its proxy statement filed in connection with the Annual Meeting of Stockholders with the SEC pursuant to Rule 14A.

Item. 6Item 6.

Exhibits and Reports on Form 8-K

  
 

(a)

None

   
 

(b)

The Company filed aNo reports on Form 8-K dated June 19, 2001 on June 20, 2001 in connection withhave been filed during the Company changing its state of incorporation from Delaware to Maryland on June 5, 2001. The reincorporation was accomplished by merging the Company with and into its wholly owned subsidiary,quarter for which subsequently changed its name to A. M. Castle & Co. Castle incorporates by reference Form 8-Kthis report is filed with the SEC on June 20, 2001

 

 

Page 10 of 10

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

A. M. Castle & Co.

 

(Registrant)

  

Date: July 31,November 8, 2001

By: / ss/J.A. Podojil

 

J. A. Podojil - Treasurer/Controller

  
 

(Mr. Podojil is the Chief Accounting Officer and has been authorized to sign on behalf of the Registrant.)