UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



ý	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For Quarterly Period Ended ~~September 30, 2016~~March 31, 2017



¨	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 1-5415

A. M. Castle & Co.

(Exact name of registrant as specified in its charter)



Maryland	36-0879160
(State or other jurisdiction of incorporation of organization)	(I.R.S. Employer Identification No.)

1420 Kensington Road, Suite 220, Oak Brook, Illinois	60523
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone, including area code (847) 455-7111

(Former name, former address and former fiscal year, if changed since last report) None

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 ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, ~~or a~~ smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer” and~~filer,” “smaller reporting ~~company”~~company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	¨		Accelerated filer	ý ¨
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	ý
			Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No ý

The number of shares outstanding of the registrant’s common stock as of ~~November 4, 2016~~May 1, 2017 was ~~32,549,823~~32,486,039 shares.

A. M. Castle & Co.

Table of Contents

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

Amounts in thousands, except par value and per share data


A.M. Castle & Co. Condensed Consolidated Balance Sheets	A.M. Castle & Co. Condensed Consolidated Balance Sheets						A.M. Castle & Co. Condensed Consolidated Balance Sheets
	As of						As of
	September 30, 2016			December 31, 2015			March 31, 2017			December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	10,005		$	11,100		$	16,245		$	35,624
Accounts receivable, less allowances of $2,141 and $2,380, respectively	76,899			73,191
Accounts receivable, less allowances of $1,797 and $1,945, respectively							80,704			64,385
Inventories	179,396			216,090			158,637			146,603
Prepaid expenses and other current assets	11,609			10,424			14,027			10,141
Income tax receivable	1,583			346			152			433
Current assets of discontinued operations	—			37,140
Total current assets	279,492			348,291			269,765			257,186
Investment in joint venture	—			35,690
Intangible assets, net	5,637			10,250			2,571			4,101
Prepaid pension cost	10,372			8,422			9,219			8,501
Deferred income taxes	416			378			410			381
Other noncurrent assets	6,624			6,109			8,299			9,449
Property, plant and equipment:
Land	2,071			2,519			2,071			2,070
Buildings	37,402			39,778			37,368			37,341
Machinery and equipment	127,690			153,955			127,960			125,836
Property, plant and equipment, at cost	167,163			196,252			167,399			165,247
Accumulated depreciation	(115,279		)	(131,691		)	(118,513		)	(115,537		)
Property, plant and equipment, net	51,884			64,561			48,886			49,710
Noncurrent assets of discontinued operations	—			19,805
Total assets	$	354,425		$	493,506		$	339,150		$	329,328
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	51,856		$	45,606		$	52,604		$	33,083
Accrued and other current liabilities	37,401			28,078			23,790			19,854
Income tax payable	1,512			33			95			209
Current portion of long-term debt	142			7,012			75			137
Current liabilities of discontinued operations	—			11,158
Total current liabilities	90,911			91,887			76,564			53,283
Long-term debt, less current portion	235,454			310,614			287,101			286,459
Deferred income taxes	—			4,169			139			—
Build-to-suit liability	13,229			13,237			12,528			12,305
Other noncurrent liabilities	9,044			7,935			5,677			5,978
Pension and postretirement benefit obligations	18,513			18,676			6,336			6,430
Commitments and contingencies (Note 14)
Stockholders’ equity (deficit):
Preferred stock, $0.01 par value—9,988 shares authorized (including 400 Series B Junior Preferred, $0.00 par value); no shares issued and outstanding at September 30, 2016 and December 31, 2015	—			—
Common stock, $0.01 par value—60,000 shares authorized; 32,768 shares issued and 32,639 outstanding at September 30, 2016 and 23,888 shares issued and 23,794 outstanding at December 31, 2015	327			238
Commitments and contingencies (Note 13)
Stockholders’ deficit:
Preferred stock, $0.01 par value—9,988 shares authorized (including 400 Series B Junior Preferred, $0.00 par value); no shares issued and outstanding at March 31, 2017 and December 31, 2016							—			—
Common stock, $0.01 par value—60,000 shares authorized; 32,768 shares issued and 32,482 outstanding at March 31, 2017 and 32,768 shares issued and 32,566 outstanding at December 31, 2016							327			327
Additional paid-in capital	244,344			226,844			245,065			244,825
Accumulated deficit	(223,435		)	(145,309		)	(266,783		)	(253,291		)
Accumulated other comprehensive loss	(32,950		)	(33,821		)	(26,725		)	(25,939		)
Treasury stock, at cost—129 shares at September 30, 2016 and 94 shares at December 31, 2015	(1,012		)	(964		)
Total stockholders’ equity (deficit)	(12,726		)	46,988
Total liabilities and stockholders’ equity (deficit)	$	354,425		$	493,506
Treasury stock, at cost—286 shares at March 31, 2017 and 202 shares at December 31, 2016							(1,079		)	(1,049		)
Total stockholders’ deficit							(49,195		)	(35,127		)
Total liabilities and stockholders’ deficit							$	339,150		$	329,328

The accompanying notes are an integral part of these financial statements.


A.M. Castle & Co. Condensed Consolidated Statements of Operations and Comprehensive Loss	A.M. Castle & Co. Condensed Consolidated Statements of Operations and Comprehensive Loss												A.M. Castle & Co. Condensed Consolidated Statements of Operations and Comprehensive Loss
	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2016			2015			2016			2015			2017			2016
Net sales	$	124,893		$	150,571		$	419,433		$	505,439		$	135,926		$	163,848
Costs and expenses:
Cost of materials (exclusive of depreciation and amortization)	92,406			115,300			323,808			411,834			101,037			133,758
Warehouse, processing and delivery expense	19,561			25,893			63,772			76,826			18,719			23,403
Sales, general and administrative expense	16,820			18,023			51,486			60,338			14,486			17,437
Restructuring expense	912			1,204			14,674			17,653			128			11,718
Depreciation and amortization expense	3,845			5,666			12,498			17,447			3,864			4,393
Total costs and expenses	133,544			166,086			466,238			584,098			138,234			190,709
Operating loss	(8,651		)	(15,515		)	(46,805		)	(78,659		)	(2,308		)	(26,861		)
Interest expense, net	8,743			10,156			28,711			30,345			10,736			10,369
Unrealized gain on embedded debt conversion option	(6,285		)	—			(7,569		)	—
Financial restructuring expense													877			—
Unrealized loss on embedded debt conversion option													146			—
Debt restructuring loss, net	—			—			6,562			—			—			7,075
Other expense, net	6,250			2,270			4,587			4,532
Loss from continuing operations before income taxes and equity in losses of joint venture	(17,359		)	(27,941		)	(79,096		)	(113,536		)
Income tax expense (benefit)	903			(629		)	1,099			(22,141		)
Loss from continuing operations before equity in losses of joint venture	(18,262		)	(27,312		)	(80,195		)	(91,395		)
Equity in losses of joint venture	(36		)	(1,460		)	(4,177		)	(134		)
Other (income) expense, net													(512		)	1,145
Loss from continuing operations before income taxes and equity in earnings of joint venture													(13,555		)	(45,450		)
Income tax benefit													(63		)	(335		)
Loss from continuing operations before equity in earnings of joint venture													(13,492		)	(45,115		)
Equity in earnings of joint venture													—			311
Loss from continuing operations	(18,298		)	(28,772		)	(84,372		)	(91,529		)	(13,492		)	(44,804		)
Income (loss) from discontinued operations, net of income taxes	(1,688		)	955			6,246			2,333
Income from discontinued operations, net of income taxes													—			7,934
Net loss	$	(19,986	)	$	(27,817	)	$	(78,126	)	$	(89,196	)	$	(13,492	)	$	(36,870	)

Basic earnings (loss) per common share:
Basic and diluted earnings (loss) per common share:
Continuing operations	$	(0.57	)	$	(1.22	)	$	(3.02	)	$	(3.89	)	$	(0.42	)	$	(1.90	)
Discontinued operations	(0.05		)	0.04			0.22			0.10			—			0.34
Net basic loss per common share	$	(0.62	)	$	(1.18	)	$	(2.80	)	$	(3.79	)

Diluted earnings (loss) per common share:
Continuing operations	$	(0.57	)	$	(1.22	)	$	(3.02	)	$	(3.89	)
Discontinued operations	(0.05		)	0.04			0.22			0.10
Net diluted loss per common share	$	(0.62	)	$	(1.18	)	$	(2.80	)	$	(3.79	)
Net basic and diluted loss per common share													$	(0.42	)	$	(1.56	)

Comprehensive loss:
Net loss	$	(19,986	)	$	(27,817	)	$	(78,126	)	$	(89,196	)	$	(13,492	)	$	(36,870	)
Change in unrecognized pension and postretirement benefit costs, net of tax	456			670			1,368			3,529			214			456
Foreign currency translation adjustments	2,967			(2,941		)	(497		)	(7,633		)
Foreign currency translation adjustments, net of tax													(1,000		)	611
Comprehensive loss	$	(16,563	)	$	(30,088	)	$	(77,255	)	$	(93,300	)	$	(14,278	)	$	(35,803	)

The accompanying notes are an integral part of these financial statements.


A.M. Castle & Co. Condensed Consolidated Statements of Cash Flows	A.M. Castle & Co. Condensed Consolidated Statements of Cash Flows						A.M. Castle & Co. Condensed Consolidated Statements of Cash Flows
	Nine Months Ended						Three Months Ended
	September 30,						March 31,
	2016			2015			2017			2016
Operating activities:
Net loss	$	(78,126	)	$	(89,196	)	$	(13,492	)	$	(36,870	)
Less: Income from discontinued operations, net of income taxes	6,246			2,333			—			7,934
Loss from continuing operations	(84,372		)	(91,529		)	(13,492		)	(44,804		)
Adjustments to reconcile loss from continuing operations to net cash used in operating activities of continuing operations:
Depreciation and amortization	12,498			17,447			3,864			4,393
Amortization of deferred gain	(92		)	—			(16		)	(56		)
Amortization of deferred financing costs and debt discount	4,258			6,241			1,410			2,439
Debt restructuring loss	6,562			—			—			7,075
Loss from lease termination	4,452			—			—			4,539
Unrealized gain on embedded debt conversion option	(7,569		)	—
Loss (gain) on sale of property, plant and equipment	1,720			(5,741		)
Unrealized loss on embedded debt conversion option							146			—
(Gain) loss on sale of property, plant and equipment							(2		)	1,774
Unrealized gain on commodity hedges	(813		)	(313		)	—			(263		)
Unrealized foreign currency transaction loss	2,484			4,142
Equity in losses of joint venture	4,141			134
Dividends from joint venture	—			315
Unrealized foreign currency transaction gain							(527		)	(61		)
Equity in earnings of joint venture							—			(311		)
Share-based compensation expense	916			424			154			202
Pension curtailment	—			3,080
Deferred income taxes	113			(23,310		)	(734		)	—
Other, net	679			(12		)	223			—
Changes in assets and liabilities:
Accounts receivable	(5,128		)	18,326			(15,164		)	(9,979		)
Inventories	34,780			43,838			(10,285		)	26,563
Prepaid expenses and other current assets	(301		)	(8,258		)	(3,938		)	(2,129		)
Other noncurrent assets	(302		)	(2,789		)	2,635			(173		)
Prepaid pension costs	(406		)	1,272			(718		)	(122		)
Accounts payable	6,026			4,059			15,281			4,073
Income tax payable and receivable	198			1,188			144			504
Accrued and other current liabilities	8,604			18,802			3,652			8,902
Pension and postretirement benefit obligations and other noncurrent liabilities	865			(400		)	(171		)	968
Net cash used in operating activities of continuing operations	(10,687		)	(13,084		)
Net cash (used in) from operating activities of discontinued operations	(6,907		)	6,673
Net cash (used in) from operating activities of continuing operations							(17,538		)	3,534
Net cash used in operating activities of discontinued operations							—			(5,219		)
Net cash used in operating activities	(17,594		)	(6,411		)	(17,538		)	(1,685		)
Investing activities:
Proceeds from sale of investment in joint venture	31,550			—
Capital expenditures	(2,431		)	(4,526		)	(1,096		)	(1,238		)
Proceeds from sale of property, plant and equipment	2,829			7,742			2			467
Net cash from investing activities of continuing operations	31,948			3,216
Net cash from (used in) investing activities of discontinued operations	53,570			(867		)
Net cash from investing activities	85,518			2,349
Change in cash collateralization of letters of credit							45			—
Net cash used in investing activities of continuing operations							(1,049		)	(771		)
Net cash from investing activities of discontinued operations							—			53,570
Net cash (used in) from investing activities							(1,049		)	52,799
Financing activities:
Proceeds from long-term debt	581,052			707,200			—			287,113
Repayments of long-term debt	(640,415		)	(698,696		)	(78		)	(331,196		)
Payment of debt restructuring costs	(8,677		)	—
Payments of debt restructuring costs							—			(7,075		)
Payments of debt issue costs							(911		)	—
Payments of build-to-suit liability	(687		)	(500		)	—			(462		)
Net cash (used in) from financing activities	(68,727		)	8,004
Net cash used in financing activities							(989		)	(51,620		)
Effect of exchange rate changes on cash and cash equivalents	(292		)	(424		)	197			124
Net change in cash and cash equivalents							(19,379		)	(382		)


A.M. Castle & Co. Condensed Consolidated Statements of Cash Flows	A.M. Castle & Co. Condensed Consolidated Statements of Cash Flows					A.M. Castle & Co. Condensed Consolidated Statements of Cash Flows
	Nine Months Ended					Three Months Ended
	September 30,					March 31,
	2016			2015		2017		2016
Net change in cash and cash equivalents	(1,095		)	3,518
Cash and cash equivalents - beginning of year	11,100			8,454		35,624		11,100
Cash and cash equivalents - end of period	$	10,005		$	11,972	$	16,245	$	10,718

The accompanying notes are an integral part of these financial statements.

A. M. Castle & Co.

Notes to Condensed Consolidated Financial Statements

Unaudited - Amounts in thousands except per share data and percentages

(1) Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by A. M. Castle & Co. and subsidiaries (the “Company”), without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), and accounting principles generally accepted in the United States of America (“GAAP”). The Condensed Consolidated Balance Sheet at December 31, ~~2015~~2016 is derived from the audited financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of management, the unaudited statements included herein contain all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of financial results for the interim period. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (as amended) and the Current Report on Form 8-K filed May 26, 2016, which revised the Company financial statement presentation and disclosures to reflect discontinued operations related to the sale of substantially all the assets of the Company's wholly-owned subsidiary, Total Plastics, Inc. ("TPI").2016. The ~~2016~~2017 interim results reported herein may not necessarily be indicative of the results of the Company’s operations for the full year.

~~In March 2016, the Company completed the sale of substantially all the assets of TPI. TPI is reflected in the~~The accompanying ~~condensed~~ consolidated financial statements have been prepared on the basis of the Company continuing as a ~~discontinued operation, and all the data in this filing has been recast~~going concern for a reasonable period of time. The Company's principal source of liquidity is cash flows from operations. The Company's plan indicates that it will have sufficient cash flows from its operations to ~~present TPI~~continue as a ~~discontinued operation for all periods presented.~~going concern. The Company's ability to have sufficient cash flows to continue as a going concern is based on plans that rely on certain underlying assumptions and estimates that may differ from actual results. On April 6, 2017, the Company and certain of its subsidiaries entered into a restructuring support agreement with certain of their creditors. The agreement contemplates the financial restructuring of the debt and equity of the Company and the subsidiaries. Refer to Note 14 -Subsequent Events.

(2) New Accounting Standards

Standards Updates ~~Issued Not Yet Effective~~Adopted

~~In August 2016,~~Effective January 1, 2017, the Company adopted Financial Accounting Standards Board ("FASB") ~~issued~~ Accounting Standards Update ("ASU") No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," to reduce the existing diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230. The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under Topic 230. For public companies, the amendments in ASU 2016-15 are effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of ASU No. 2016-15 to have a material impact on its consolidated financial statements.

~~In March 2016, the FASB issued ASU~~ No. 2016-09, "Improvements to Employee Share-Based Payment Accounting," which simplifies several aspects of the accounting for employee share-based payment transactions. Under ASU No. 2016-09, a ~~Company~~company recognizes all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement, eliminating the notion of the additional paid-in capital pool and significantly reducing the complexity and cost of accounting for excess tax benefits and tax deficiencies. For interim reporting purposes, excess tax benefits and tax deficiencies are considered discrete items in the reporting period in which they occur and are not included in the estimate of an entity’s annual effective tax rate. ASU No. 2016-09 further eliminates the requirement to defer recognition of an excess tax benefit until the benefit is realized through a reduction to taxes payable. The adoption of ASU No. 2016-09 did not have a material impact on the Company's consolidated financial statements.

Standards Updates Issued Not Yet Effective

In March 2017, the FASB issued ASU 2017-07, "Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." Under the new guidance, employers must present the service cost component of the net periodic benefit cost in the same income statement line item(s) as other employee compensation costs arising from services rendered during the period. In addition, only the service cost component will be eligible for capitalization in assets. The other components of net periodic benefit cost must be reported separately from the line item(s) that includes the service cost component and outside of any subtotal of operating income, if one is presented. Employers will have to disclose the line(s) used to present the other components of net periodic benefit cost, if the components are not presented separately in the income statement. The guidance on the income statement presentation of the components of net periodic benefit cost must be applied retrospectively, while the guidance limiting the capitalization of net periodic benefit cost in assets to the service cost component must be applied prospectively. For public ~~companies,~~business entities, the ~~ASU~~guidance is effective for ~~annual reporting periods~~fiscal years beginning after December 15, ~~2016, including~~2017, and interim periods within those ~~annual reporting periods.~~years. Early adoption ~~will be~~is permitted ~~in any interim or~~as of the beginning of an annual period for which interim financial statements have not ~~yet~~ been ~~issued or have not been made available for issuance.~~issued. The Company is currently evaluating the impact the adoption of ASU No. ~~2016-09~~2017-07 will have on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," to reduce the existing diversity in practice related to how certain cash receipts

and cash payments are presented and classified in the statement of cash flows under Topic 230. The amendments in ASU No. 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under Topic 230. The provisions of ASU No. 2016-15 must be applied retrospectively to all periods presented with limited exceptions. For public companies, the amendments in ASU No. 2016-15 are effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of ASU No. 2016-15 to have a material impact on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)," which requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position. ASU No. 2016-02 also requires ~~improved~~additional disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The ~~update is~~provisions of ASU No. 2016-02 are to be applied using a modified retrospective approach, and are effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU No. 2016-02 will have on its consolidated financial ~~statements.~~

~~In August 2014,~~statements, but the ~~FASB issued ASU No. 2014-15, "Disclosure of Uncertainties about an Entity’s Ability to Continue~~Company expects that most existing operating lease commitments will be recognized as operating lease obligations and right-of-use assets as a ~~Going Concern," providing additional guidance surrounding the disclosure~~result of going concern uncertainties in the financial statements and implementing requirements for management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. The

ASU is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2016. The Company will begin performing the periodic assessments required by the ASU on its effective date and is currently assessing whether the adoption of the ASU will result in additional disclosures.adoption.

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," related to revenue recognition. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in prior accounting guidance. The ASU ~~provides alternative methods~~permits the use of ~~initial~~either the retrospective or modified retrospective (cumulative-effect) transition method of adoption. ASU No. 2015-14, "Deferral of the Effective Date," was issued in August 2015 to defer the effective date of ASU No. 2014-09 for public companies until annual reporting periods beginning after December 15, 2017. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. In 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing,” ~~and~~ ASU No. 2016-12, "Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients," and ASU No. 2016-20, "Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers," which provide supplemental adoption guidance and clarification to ~~ASC~~ASU No. 2014-09. ASU No. 2016-08, ASU No. 2016-10, ASU No. 2016-12 and ASU No. ~~2016-12~~2016-20 must be adopted concurrently with the adoption of ASU No. 2014-09. The Company ~~is currently reviewing~~continues to evaluate the ~~guidance and assessing the potential~~ impact of these ASU's on its consolidated financial ~~statements.~~statements and disclosures, and plans to adopt these ASU's in the first quarter of 2018 using the modified retrospective transition method.

(3) Discontinued Operation

On March 15, 2016, the Company completed the sale of ~~TPI~~substantially all the assets of its wholly-owned subsidiary, Total Plastics, Inc. ("TPI") for $55,070 in cash, subject to customary working capital adjustments. Under the terms of the sale, $1,500 of the purchase price was placed into escrow pending adjustment based upon the final calculation of the working capital at closing. The sale resulted in preliminary pre-tax and after-tax gains of $4,217 and $2,994, respectively, for the three months ended March 31, 2016. The Company and the buyer agreed to the final working capital adjustment during the third quarter of 2016, which resulted in the full escrowed amount being returned to the ~~buyer and the Company reducing its pre-tax gain on the~~buyer. The sale ~~of TPI by $2,214. The sale~~ultimately resulted in pre-tax and after-tax gains of $2,003 and $1,306, respectively, for the ~~nine months~~year ended ~~September 30,~~December 31, 2016.

Prior to the sale of TPI, the Company had two reportable segments consisting of its Plastics segment and its Metals segment. Subsequent to the sale of TPI, which represented the Company's Plastics segment in its entirety, the Company has only one reportable segment.

Summarized results of the discontinued operation for the three months ended March 31, 2016 were as follows:


	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2016			2015		2016			2015		Three Months Ended March 31, 2016
Net sales	$	—		$	34,105	$	29,680		$	101,168	$	29,680
Cost of materials	—			23,970		21,027			71,251		21,027
Operating costs and expenses	—			8,201		7,288			25,005		7,288
Interest expense^(a)	—			350		333			1,081		333
Income from discontinued operations before income taxes	$	—		$	1,584	$	1,032		$	3,831	$	1,032
Income tax expense (benefit) ^(b)	—			629		(3,908		)	1,498
Gain (loss) on sale of discontinued operations, net of income taxes	(1,688		)	—		1,306			—
Income (loss) from discontinued operations, net of income taxes	$	(1,688	)	$	955	$	6,246		$	2,333
Income tax expense benefit ^(b)											(3,908		)
Gain on sale of discontinued operations, net of income taxes											2,994
Income from discontinued operations, net of income taxes											$	7,934

^(a)Interest expense was allocated to the discontinued operation based on the debt that was required to be paid as a result of the sale of TPI.

^(b) Income tax benefit for the ~~nine~~three months ended ~~September 30,~~March 31, 2016 includes $4,207 reversal of valuation allowance resulting from the sale of TPI.

~~Major classes of assets and liabilities of the discontinued operation at December 31, 2015 were as follows:~~

December 31,
2015
Current assets of discontinued operations:
Accounts receivable $ 16,688
Inventories 19,353
Prepaid expenses and other current assets 1,099
Current assets of discontinued operations $ 37,140
Noncurrent assets of discontinued operations:
Goodwill $ 12,973
Property, plant and equipment, at cost 26,979
Less: accumulated depreciation (20,147 )
Noncurrent assets of discontinued operations $ 19,805
Current liabilities of discontinued operations:
Accounts payable $ 10,666
Accrued and other current liabilities 492
Current liabilities of discontinued operations $ 11,158

(4) Earnings (Loss) Per Share

Diluted earnings (loss) per common share is computed by dividing income (loss) by the weighted average number of shares of common stock outstanding plus outstanding common stock equivalents. Common stock equivalents consist of employee and director stock options, restricted stock awards, other share-based payment awards, and contingently issuable shares related to the Company’s 7.0% Convertible Senior Notes due December 15, 2017 (the "Convertible Notes") and the Company's 5.25% Convertible Senior Secured Notes due December 30, 2019 (the "New Convertible Notes"), which are included in the calculation of weighted average shares outstanding using the treasury stock method, if dilutive. Refer to Note 7 - Debt for further description of the Convertible Notes and New Convertible Notes.

The following table is a reconciliation of the basic and diluted earnings (loss) per common share calculations:


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2016			2015			2016			2015			2017			2016
Numerator:
Loss from continuing operations	$	(18,298	)	$	(28,772	)	$	(84,372	)	$	(91,529	)	$	(13,492	)	$	(44,804	)
Income (loss) from discontinued operations, net of income taxes	(1,688		)	955			6,246			2,333
Income from discontinued operations, net of income taxes													—			7,934
Net loss	$	(19,986	)	$	(27,817	)	$	(78,126	)	$	(89,196	)	$	(13,492	)	$	(36,870	)
Denominator:
Weighted average common shares outstanding	32,260			23,580			27,909			23,535			32,303			23,625
Effect of dilutive securities:
Outstanding common stock equivalents	—			—			—			—			—			—
Denominator for diluted earnings (loss) per common share	32,260			23,580			27,909			23,535			32,303			23,625

Basic earnings (loss) per common share:
Continuing operations	$	(0.57	)	$	(1.22	)	$	(3.02	)	$	(3.89	)	$	(0.42	)	$	(1.90	)
Discontinued operations	(0.05		)	0.04			0.22			0.10			—			0.34
Net basic loss per common share	$	(0.62	)	$	(1.18	)	$	(2.80	)	$	(3.79	)	$	(0.42	)	$	(1.56	)

Diluted earnings (loss) per common share:
Continuing operations	$	(0.57	)	$	(1.22	)	$	(3.02	)	$	(3.89	)	$	(0.42	)	$	(1.90	)
Discontinued operations	(0.05		)	0.04			0.22			0.10			—			0.34
Net diluted loss per common share	$	(0.62	)	$	(1.18	)	$	(2.80	)	$	(3.79	)	$	(0.42	)	$	(1.56	)
Excluded outstanding share-based awards having an anti-dilutive effect	2,326			1,049			2,326			1,049			2,468			954
Excluded "in the money" portion of New Convertible Notes having an anti-dilutive effect	—			—			—			—			—			—

The New Convertible Notes are dilutive to the extent the Company generates net income and the average stock price during the period is greater than $2.25 per share, which is the conversion price of the New Convertible ~~Notes.The~~Notes. The New Convertible Notes are only dilutive for the “in the money” portion of the New Convertible Notes that could be settled with the Company’s common stock. In future periods, absent a fundamental change (as defined in the New Convertible Notes indenture), the outstanding New Convertible Notes could increase diluted average shares outstanding by a maximum of approximately 9,900 shares. The Convertible Notes would have an insignificant impact on the diluted average shares outstanding if settled with the Company's stock.

(5) Joint Venture

Kreher Steel Company, LLC ("Kreher"), a national distributor and processor of carbon and alloy steel bar products headquartered in Melrose Park, Illinois, was a 50% owned joint venture of the Company. In August 2016, the Company completed the sale of its ownership share in Kreher to its joint venture partner for aggregate cash proceeds of $31,550, which resulted in a loss on disposal of $5, including selling expenses. Because the sale of the Company's investment in Kreher is not considered to be a strategic shift that will have a major effect on the Company's operations and financial results, the results of Kreher are reflected within continuing operations in the Condensed Consolidated Financial Statements.

In June 2016, the Company received an offer from its joint venture partner to purchase its ownership share in Kreher for an amount that was less than the current carrying value of the Company's investment in Kreher. The Company determined that the offer to purchase its ownership share in Kreher at a purchase price lower than the carrying value indicated that it may not be able to recover the full carrying amount of its investment, and therefore recognized a $4,636 other-than-temporary impairment charge in the second quarter of 2016 to reduce the carrying amount of the investment to the negotiated purchase price. Prior to receiving the purchase offer, the Company had no previous indicators that its investment in Kreher had incurred a loss in value that was other-than-temporary.

In August 2016, the Company completed the sale of its ownership share in Kreher to its joint venture partner for aggregate cash proceeds of $31,550, which resulted in a loss on disposal of $5, including selling expenses.

The following information summarizes financial data for ~~this joint venture (for~~Kreher for the ~~periods in 2016, the information is through the date the Company sold its investment in Kreher):~~three months ended March 31, 2016:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016		2015			Three Months Ended March 31, 2016
Net sales	$	17,737		$	36,885		$	79,007	$	130,505		$	31,518
Cost of materials	15,359			31,339			67,115		110,734			26,601
(Loss) income before taxes	(234		)	(3,117		)	267		(367		)
Net income (loss)	(62		)	(2,920		)	928		(268		)
Income before taxes												566
Net income												622

(6) Intangible Assets

Intangible assets consisted of customer relationships as follows:

September 30, 2016 December 31, 2015

Gross
Carrying
Amount

Accumulated
Amortization

Gross
Carrying
Amount

Accumulated
Amortization
Customer relationships $ 67,348
$ 61,711
$ 67,438
$ 57,188



	March 31, 2017				December 31, 2016
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Customer relationships	$	67,326	$	64,755	$	67,317	$	63,216

The Company recorded the following aggregate amortization expense associated with intangibles:

Three Months Ended Nine Months Ended
September 30, September 30,
2016 2015 2016 2015
Amortization expense $ 1,533
$ 2,655
$ 4,593
$ 8,001



	Three Months Ended
	March 31,
	2017		2016
Amortization expense	$	1,533	$	1,527

The following is a summary of the estimated annual amortization expense for the remainder of ~~2016~~2017 and each of the subsequent years:


2016	$	1,533
2017	$	4,104	$	2,571
2018	$	—	$	—
2019	$	—	$	—
2020	$	—	$	—
2021			$	—

(7) Debt

Long-term debt consisted of the following:


	September 30, 2016			December 31, 2015			March 31, 2017			December 31, 2016
LONG-TERM DEBT
12.75% Senior Secured Notes due December 15, 2016	$	—		$	6,681
7.0% Convertible Notes due December 15, 2017	41			57,500			$	25		$	41
11.0% Senior Secured Term Loan Credit Facilities due September 14, 2018							99,500			99,500
12.75% Senior Secured Notes due December 15, 2018	204,519			203,319			177,019			177,019
Revolving Credit Facility due December 10, 2019	12,500			66,100
5.25% Convertible Notes due December 30, 2019	22,323			—			22,323			22,323
Other, primarily capital leases	143			428			50			96
Plus: derivative liability for embedded conversion feature	3,284			—			549			403
Less: unamortized discount	(4,502		)	(12,255		)	(6,852		)	(7,587		)
Less: unamortized debt issuance costs	(2,712		)	(4,147		)	(5,438		)	(5,199		)
Total long-term debt	$	235,596		$	317,626		$	287,176		$	286,596
Less: current portion	142			7,012			75			137
Total long-term portion	$	235,454		$	310,614		$	287,101		$	286,459

Secured Notes

In ~~February~~ 2016, the Company completed a private exchange offer and consent solicitation (the “Exchange Offer”) to certain eligible holders to exchange new 12.75% Senior Secured Notes due 2018 (the “New Secured Notes”) for the Company’s outstanding 12.75% Senior Secured Notes due ~~2016 (the "Secured Notes"). In connection with~~2016. The Company determined that the Exchange Offer was considered to be a troubled debt restructuring within the scope of Accounting Standards Codification ("ASC") No. 470-60, "Debt - Troubled Debt Restructurings by Debtors", as the Company ~~issued $203,319 aggregate principal amount of New Secured Notes. In~~was determined to be experiencing financial difficulties and was granted a concession by the eligible holders. Accordingly, the Company expensed the eligible holder consent fees and related legal and other direct costs incurred in conjunction with the Exchange Offer the Company solicited consents to certain proposed amendments to the Secured Notes and the related indenture (the “Existing Indenture”) providing for, among other things, elimination of substantially all restrictive covenants and certain events of defaultin debt restructuring loss, net in the ~~Existing Indenture~~Condensed Consolidated Statements of Operations and releasing all of the collateral securing the Secured Notes and related guarantees. In May 2016, the Company entered into an agreement providing for the exchange of $1,200 aggregate principal amount of Secured Notes for $1,200 aggregate principal amount of New Secured Notes. On August 1, 2016, the Company issued a notice of redemption with respect to the remaining outstanding Secured Notes and deposited $5,629 with the trustee (representing the aggregate principal amount plus accrued and unpaid interest to the August 31, 2016 redemption date) to effect a satisfaction and discharge of the indenture governing the Secured Notes. There is no principal amount of Secured Notes outstanding at September 30, 2016.

The New Secured Notes have substantially the same terms as the Secured Notes except for the following principal differences: (i) the New Secured Notes were offered pursuant to an exemption from the registration requirements of the Securities Act, and do not have the benefit of any exchange offer or other registration rights, (ii) the New Secured Notes effectively extend the maturity date of the Secured Notes to December 15, 2018, unless the Company is unable to both (a) complete the exchange of a portion of its Convertible Notes on or prior to June 30, 2016, and (b) redeem, on one or more occasions (each, a “Special Redemption”), an aggregate of not less than $27,500 of aggregate principal amount of the New Secured Notes on or prior to October 31, 2016, using cash available to the Company and/or net proceeds from sales of assets of the Company or a Restricted Subsidiary outside the ordinary course of business (other than net proceeds derived from the sale of accounts receivable and inventory (the “Designated Asset Sale Proceeds”)), subject to a penalty equal to 4.00% of the outstanding principal, payable in cash and/or stock, in the Company’s sole discretion (the “Special Redemption Condition”), in which case the maturity date of the New Secured Notes will be September 14, 2017, (iii) the New Secured Notes provide that, whether or not the Special Redemption Condition is satisfied, the Company will have an obligation to effect Special Redemptions using Designated Asset Sale Proceeds or other permissible funds until such time as the aggregate amount of Special Redemptions equals $40,000, (iv) the New Secured Notes contain modifications to the asset sale covenant providing that the Company shall not use any net proceeds from asset sales outside the ordinary course of business to redeem, repay or prepay the Convertible Notes, and (v) the granting of a third-priority lien on the collateral securing the New Secured Notes for the benefit of the new Convertible Notes is a permitted lien under the indenture. The Company completed the exchange of a portion

of its Convertible Notes prior to June 30, 2016, and satisfied the Special Redemption Condition by issuing an irrevocable notice of redemption for $27,500 of aggregate principal amount of New Secured Notes on October 31, 2016.Comprehensive Loss.

The New Secured Notes are fully and unconditionally guaranteed, jointly and severally, by certain 100% owned domestic subsidiaries of the Company (the “Guarantors”). The New Secured Notes and the related guarantees are secured by a lien on substantially all of the Company's and the Guarantors' assets, subject to certain exceptions and permitted liens pursuant to a pledge and security agreement. The terms of the New Secured Notes contain numerous covenants imposing financial and operating restrictions on the Company's business. These covenants place restrictions on the Company's ability and the ability of its subsidiaries to, among other things, pay dividends, redeem stock or make other distributions or restricted payments; incur indebtedness or issue common stock; make certain investments; create liens; agree to payment restrictions affecting certain subsidiaries; consolidate or merge; sell or otherwise transfer or dispose of assets, including equity interests of certain subsidiaries; enter into transactions with affiliates; enter into sale and leaseback transactions; and use the proceeds of permitted sales of the Company's assets.

The Company may redeem some or all of the New Secured Notes at a redemption price of 100% of the principal amount, plus accrued and unpaid interest. The New Secured Notes also contain a provision that allows holders of the New Secured Notes to require the Company to repurchase all or any part of the New Secured Notes if a change of control triggering event occurs. Under this provision, the repurchase of the New Secured Notes will occur at a purchase price of 101% of the outstanding principal amount, plus accrued and unpaid interest, if any, on such New Secured Notes to the date of repurchase. In addition, upon certain asset sales, the Company may be required to offer to use the net proceeds thereof to purchase some of the New Secured Notes at 100% of the principal amount thereof, plus accrued and unpaid interest.

The New Secured Notes require that the Company make, subject to certain conditions and within 95 days of the end of each fiscal year beginning with the fiscal year ending December 31, 2016, an offer to purchase the New Secured Notes with (i) 75% of excess cash flow (as defined in the New Secured Notes indenture) until the Company has offered to purchase up to $50,000 in aggregate principal amount of the notes, (ii) 50% of excess cash flow until the Company has offered to purchase up to $75,000 in aggregate principal amount of the notes, (iii) 25% of the excess cash flow until the Company has offered to purchase up to $100,000 in aggregate principal amount of the notes and (iv) 0% thereafter, in each case, at 103% of the principal amount, thereof, plus accrued and unpaid interest.

The Company determined that the Exchange Offer was considered to be a troubled debt restructuring within the scope of ASC No. 470-60, "Debt-Troubled Debt Restructurings", as the Company was determined to be experiencing financial difficulties and was granted a concession by the eligible holders. Accordingly, for the nine months ended September 30, 2016, the Company has expensed the eligible holder consent fees and related legal and other direct costs of $7,075 incurred in conjunction with the Exchange Offer in debt restructuring costs in the Condensed Consolidated Statements of Operations and Comprehensive Loss. There were no consent fees or related legal and other direct costs incurred in conjunction with the Exchange Offer for the three months ended September 30, 2016.

The Company pays interest on the New Secured Notes at a rate of 12.75% per annum in cash semi-annually.

Senior Secured Term Loan Credit Facilities

On December 8, 2016, the Company entered into new secured credit facilities (the “Credit Facilities”) with certain financial institutions (the "Financial Institutions") in order to replace and repay outstanding borrowings and support the continuance of letters of credit under the Company's senior secured asset-based revolving credit facility (the “Revolving Credit Facility”). The Credit Facilities are in the form of senior secured first-lien term loan facilities in an aggregate principal amount of up to $112,000. In connection with the closing of the Credit Facilities, commitments pursuant to the Revolving Credit Facility were terminated, liens granted to the collateral agent pursuant thereto were released in full, and Revolving Credit Facility borrowings outstanding were repaid by the Company using proceeds from the Credit Facilities. Letters of credit previously issued under the Revolving Credit Facility were cash collateralized, resulting in $7,923 and $7,968 of restricted cash that is reflected in other noncurrent assets in the Condensed Consolidated Balance Sheet at March 31, 2017 and December 31, 2016, respectively.

The Credit Facilities consist of a $75,000 initial term loan facility funded at closing and a $37,000 delayed-draw term loan facility (the “Delayed Draw Facility”). Under the Delayed Draw Facility, $24,500 was drawn in December 2016 and $12,500 was expected to be available in June 2017 or thereafter. On May 4, 2017, the Company entered into an amendment to the agreement governing the Credit Facilities (the "Credit Facilities Agreement"). Under this amendment, the Financial Institutions agreed to accelerate the Company's access to the Delayed Draw Facility that was expected to be available in June 2017 or thereafter.

The funding of the Credit Facilities was subject to original issue discount in an amount equal to 3.0% of the full principal amount of the Credit Facilities. The Credit Facilities bear interest at a rate per annum equal to 11.0%, payable monthly in arrears. The outstanding principal amount of the Credit Facilities and all accrued and unpaid interest thereon will be due and be payable on September 14, 2018.

In connection with the closing of the Credit Facilities, the Financial Institutions were issued warrants (the “Warrants”) to purchase an aggregate of 5,000 shares of the Company's common stock, pro rata based on the principal amount of each Financial Institution’s commitment in the Credit Facilities. Warrants to purchase 2,500 shares have an exercise price of $0.50 per share, and Warrants to purchase 2,500 shares have an exercise price of $0.65 per share. The Warrants were exercisable upon issuance and expire on June 8, 2018.

All obligations of the Company under the Credit Facilities are guaranteed on a senior-secured basis by each direct and indirect, existing and future, domestic or Canadian subsidiary of the Company (the “Subsidiary Guarantors” and together with the Company, the “Credit Parties”). All obligations under the Credit Facilities are secured on a first-priority basis by a perfected security interest in substantially all assets of the Credit Parties (subject to certain exceptions for permitted liens). The Company agreed to add its foreign subsidiaries as guarantors and to direct such subsidiaries to grant a security interest in substantially all of their respective assets, subject to certain exceptions, as soon as possible after closing.

The Credit Facilities Agreement contains numerous covenants that, if breached, could result in a default under the agreement. These covenants include a financial covenant that requires the Company to maintain a minimum amount of consolidated adjusted EBITDA (as defined in the Credit Facilities Agreement) during various applicable fiscal periods beginning with the fiscal quarter ended March 31, 2017. The Company is also required to maintain specified minimum amounts of net working capital (as defined in the Credit Facilities Agreement) and consolidated liquidity (as defined in the Credit Facilities Agreement) of at least $20,000. The Credit Facilities Agreement also provides that a default could result from the occurrence of any condition, act, event or development that results or could be reasonably expected to result in a material adverse effect (as defined in the Credit Facilities Agreement). In the event of a default, the Financial Institutions could elect to declare all amounts borrowed due and payable, including accrued interest and any other obligations under the Credit Facilities. Any such acceleration would also result in a default under the indentures governing the New Secured Notes and the New Convertible Notes.

On April 6, 2017, the Company entered into an amendment to the Credit Facilities Agreement. Under this amendment, the Financial Institutions agreed that the financial covenants related to consolidated adjusted EBITDA and specified minimum amounts of net working capital and consolidated liquidity, all as described in the preceding paragraph, would cease to apply for the period from March 31, 2017 through and including May 31, 2018.

Convertible Notes

In ~~the first half of~~ 2016, the Company entered into Transaction Support Agreements (as amended, supplemented or modified, the “Support Agreements”) with certain holders (the “Supporting Holders”) of the Convertible Notes. The Support

Agreements provided for the terms of exchanges in which the Company agreed to issue ~~new 5.25% Senior Secured~~New Convertible Notes ~~due 2019 (the “New Convertible Notes”)~~ in exchange for outstanding Convertible Notes (the “Convertible Note Exchange”). ~~For each $1 principal amount of~~The Convertible ~~Notes validly exchanged~~Note Exchange was considered to be a troubled debt restructuring, as the Company was experiencing financial difficulties and was granted a concession by the Supporting Holders. As a result, the Company expensed legal and other direct costs incurred in conjunction with the Convertible Note Exchange, an exchanging holder of Convertible Notes was entitled to receive $0.7 principal amount of New Convertible Notes, plus accrued and unpaid interest. On March 22, 2016, the Company filed a registration statement on Form S-3, as later amended, to register the resale of the common stock underlying the New Convertible Notes. On May 6, 2016, the Company held a special meeting of stockholders to consider a proposal to approve, as required pursuant to Rule 312 of the NYSE Listed Company Manual, the issuance of the Company’s common stock upon conversion of the New Convertible Notes. The proposal was approved by the Company’s stockholders with the affirmative vote of approximately 73% of the outstanding shares of common stock entitled to vote thereon, which represented approximately 99% of the total votes cast.

In May 2016, the Company entered into amendments to the Support Agreements that, among other things, permitted the Supporting Holders to elect to exchange some or all of the Convertible Notes directly into shares of the Company’s common stock on the same economic terms as would be applicable had they exchanged their Convertible Notes for New Convertible Notes and then converted those New Convertible Notes into common stock.

Supporting Holders holding $23,443 in aggregate principal amount of Convertible Notes exchanged their Convertible Notes for an aggregate of 7,863 shares of the Company’s common stock, which had a fair value of $15,332 at the time of the Convertible Note Exchange. Supporting Holders holding $34,016 in aggregate principal amount of Convertible Notes exchanged their Convertible Notes for $23,806 in aggregate principal amount of New Convertible Notes, which included (i) $20,866 in aggregate principal amount of New Convertible Notes issued pursuant to exchange agreements between the Company and certain non-affiliate noteholders and (ii) $2,940 in aggregate principal amount of New Convertible Notes issued pursuant to an exchange agreement with an affiliate of the Company.

As further described below, the New Convertible Notes are convertible into common stock at the option of the holder. The Company determined that the conversion option is not clearly and closely related to the economic characteristics of the New Convertible Notes, nor does it meet the criteria to be considered indexed to the Company’s common stock. As a result, the Company concluded that the embedded conversion option must be bifurcated from the New Convertible Notes, separately valued, and accounted for as a derivative liability that partially settled the Convertible Notes. The initial value allocated to the derivative liability was $11,574, with a corresponding discount recorded to the New Convertible Notes. During each reporting period, the derivative liability, which is classified in long-term debt, will be marked to fair value through earnings.

The Convertible Note Exchange was considered to be a troubled debt restructuring, as the Company was experiencing financial difficulties and was granted a concession by the Supporting Holders. As a result, the Company recognized a loss of $76 from the Convertible Note Exchange. The loss has been included in debt restructuring loss, net in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2016.

Subsequent to the Convertible Note Exchange, $1,483 in aggregate principal amount of New Convertible Notes was converted to 713 shares of the Company’s common stock. This resulted in a $589 extinguishment gain from the conversion of the New Convertible Notes and the settlement of a related portion of the derivative liability. The gain has been included in debt restructuring gain (loss), net in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2016. As of September 30, 2016, the Company had $22,323 aggregate principal amount of New Convertible Notes outstanding, and the derivative liability had a fair value of ~~$3,284.~~$549 as of March 31, 2017.

The New Convertible Notes mature on December 30, 2019, and bear interest at a rate of 5.25% per annum, payable semi-annually in cash. The New Convertible Notes are initially convertible into shares of the Company's common stock at any time at a conversion price per share equal to $2.25 and are subject to adjustment in accordance with the New Convertible Notes indenture. All current and future guarantors of the New Secured Notes, the ~~Revolving~~ Credit ~~Facility,~~Facilities, and any other material indebtedness of the Company guarantee the New Convertible Notes, subject to certain exceptions. The New Convertible Notes are secured on a “silent” third-priority basis by the same collateral that secures the New Secured Notes. Upon conversion, the Company will pay and/or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at the Company’s election, together with cash in lieu of fractional shares. The value of shares of the Company's common stock for purposes of the settlement of the conversion right will be calculated as provided in the indenture, using a 20 trading day observation period. Upon such conversion, the holder shall be entitled to receive an amount equal to the "make-whole" premium, payable in the form of cash, shares of the Company's common stock, or a combination of both, at the Company's sole discretion. The value of shares of Company common stock for purposes of calculating the "make-whole" premium will be based on the greater of (i) 130% of the conversion price then in effect and (ii) the volume weighted average price ("VWAP") of such shares for the 20 trading day observation period as provided in the indenture.

If the VWAP of the Company's common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which such notice of redemption is provided, the Company shall have the right to redeem any or all of the New Convertible Notes at a price equal to (i) 100.0% of the aggregate principal amount thereof plus (ii) the "make-whole" premium. The redemption price can be paid in the form of cash, shares of the Company's common stock or a combination of both, at the Company's sole discretion. The value of shares of the Company's common stock will be based on the VWAP of such shares for the 20 trading days immediately preceding the date of redemption. Prior to the third trading day prior to the date of any such redemption, any New Convertible Notes called for redemption may be converted by the holder into shares of the Company's common stock at the conversion price then in effect.

~~Following the Convertible Note Exchange, the Company had $41 aggregate principal amount of Convertible Notes outstanding at September 30, 2016.~~

~~Revolving Credit Facility~~

In June 2016, the Company entered into an amendment (the “Amendment”) to the Loan and Security Agreement governing the senior secured asset-based revolving credit facility (the “Revolving Credit Facility”), by and among the Company and certain domestic subsidiaries, the financial institutions from time to time party to the Loan and Security Agreement as lenders, and Wells Fargo Bank, National Association, in its capacity as agent. The Amendment reduced the aggregate commitments under the Revolving Credit Facility from $125,000 to $100,000, and also decreased aggregate commitments under (i) the Canadian portion of the Revolving Credit Facility from $20,000 to $16,000 and (ii) the letter of credit facility portion of the Revolving Credit Facility from $20,000 to $16,000.

The Amendment imposed an availability block that decreased availability under the Revolving Credit Facility by $17,500 initially. The availability block is subject to adjustment, and is reduced to $8,750 if the Company’s ratio (as defined in the Revolving Credit Facility Loan and Security Agreement) of EBITDA to fixed charges (the “Fixed Charge Coverage Ratio”) is at least 1.0 to 1.0 for each of the preceding six months. It is reduced to zero if the Fixed Charge Coverage Ratio is at least 1.0 to 1.0 for any trailing twelve-month period. The availability block was $17,500 as of September 30, 2016.

Previously, the Revolving Credit Facility restricted the Company’s ability to repay the New Secured Notes and the Secured Notes unless the Company is able to satisfy certain financial testing conditions. Pursuant to the terms of the Amendment, the Company is permitted to repay up to $27,500 of the New Secured Notes and up to $6,000 of the Secured Notes, subject to satisfaction of revised financial testing conditions.

The Amendment also increased the interest rate charged in connection with loans advanced under the Revolving Credit Facility. At the Company’s election, borrowings under the Revolving Credit Facility will bear interest at variable rates based on (a) a customary base rate plus an applicable margin of 1.75% or (b) an adjusted LIBOR rate plus an applicable margin of 2.75%, with such applicable margins subject to adjustment if the Fixed Charge Coverage Ratio is at least 1.0 to 1.0~~. The weighted average interest rate for borrowings under the Revolving Credit Facility for the three and nine months ended September 30, 2016 was 4.00%and 3.40%, respectively. The Company pays certain customary recurring fees with respect to the Revolving Credit Facility.~~

The Revolving Credit Facility matures on December 10, 2019 (or 91 days prior to the maturity date of the Company's Secured Notes or Convertible Notes if they have not been refinanced at that time). If certain incurrence tests are met, subject to approval by the Revolving Credit Facility lending group, the Company may have the ability under its Revolving Credit Facility to increase the aggregate commitments by $25,000 in the future. Currently, the Company is not able to increase the aggregate commitments as it has not met the incurrence tests.

The Revolving Credit Facility contains a springing financial maintenance covenant requiring the Company to maintain a Fixed Charge Coverage Ratio of 1.1 to 1.0 when excess availability is less than the greater of 10% of the calculated borrowing base (as defined in the Revolving Credit Facility Loan and Security Agreement) or $10,000. In addition, if excess availability is less than the greater of 12.5% of the calculated borrowing base (as defined in the Revolving Credit Facility Loan and Security Agreement) or $12,500, the lender has the right to take full dominion of the Company’s cash collections and apply these proceeds to outstanding loans under the Revolving Credit Facility. The Company's Fixed Charge Coverage Ratio was negative for the twelve months ended September 30, 2016. At this ratio, the Company's current maximum borrowing capacity would be $54,471 before triggering full dominion of the Company's cash collections. As of September 30, 2016, the Company had $41,971 of additional unrestricted borrowing capacity under the Revolving Credit Facility. As noted above, the Company issued an irrevocable notice of redemption for $27,500 of aggregate principal amount of New Secured Notes on October 31, 2016. The Company will use proceeds from the Revolving Credit Facility to make the redemption payment.

(8) Fair Value Measurements

The three-tier value hierarchy the Company utilizes, which prioritizes the inputs used in the valuation methodologies, is:

Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants.

The fair value of cash, accounts receivable, cash collateralized letters of credit and accounts payable approximate their carrying values. The fair value of cash equivalents are determined using the fair value hierarchy described above. Cash equivalents consisting of money market funds are valued based on quoted prices in active markets and as a result are classified as Level 1.

The Company’s pension plan asset portfolio as of ~~September 30, 2016~~March 31, 2017 and December 31, ~~2015~~2016 is primarily invested in fixed income securities, which generally fall within Level 2 of the fair value hierarchy. Fixed income securities are valued based on evaluated prices provided to the trustee by independent pricing services. Such prices may be determined by various factors which include, but are not limited to, market quotations, yields, maturities, call features, ratings, institutional size trading in similar groups of securities and developments related to specific securities.

Fair Value Measurements of Debt

The fair value of the Company's New Secured Notes as of ~~September 30, 2016~~March 31, 2017 was estimated to be ~~$153,901~~$115,947 compared to a carrying value of ~~$204,519.~~$177,019. The fair value of the ~~Company's~~New Secured Notes as of December 31, ~~2015~~2016 was estimated to be ~~$160,662~~$116,833 compared to a carrying value of ~~$210,000.~~$177,019. The fair ~~values~~value for ~~both~~ the ~~Secured Notes and~~ New Secured Notes ~~were~~was determined based on recent trades of the bonds and fall within Level 2 of the fair value hierarchy.

~~The~~Because it entered into the new Credit Facilities in December 2016, the Company determined that the fair value of borrowings outstanding under the ~~Company's Convertible Notes as of September 30, 2016 was estimated to be $25 compared to a~~Credit Facilities approximated carrying value ~~of $41. The fair value of the Convertible Notes as of~~at March 31, 2017 and December 31, ~~2015 was approximately $21,966 compared to a carrying value of $57,500. The~~2016.

Including the bifurcated embedded conversion option, the fair value of the Company's New Convertible Notes ~~as of September 30, 2016, including the bifurcated embedded conversion option,~~ was estimated to be ~~$8,233~~$5,419 compared to a carrying value of ~~$22,323.~~$22,323 as of March 31, 2017. The fair ~~values for both~~value of the New Convertible Notes ~~and~~was approximately $5,369 compared a carrying value of $22,323 as of December 31, 2016. The fair value of the New Convertible Notes, which ~~fall~~falls within Level 3 of the fair value hierarchy, ~~were~~was determined based on similar debt instruments that do not contain a conversion feature, as well as other factors related to the callable nature of the ~~Convertible Notes and~~ New Convertible Notes.

The main inputs and assumptions into the fair value model for the New Convertible Notes at ~~September 30, 2016~~March 31, 2017 were as follows:

Company's stock price at the end of the period $ 0.80
Expected volatility 79.70 %
Credit spreads 65.75 %
Risk-free interest rate 0.91 %

~~Given the revolving nature and the variable interest rates, the Company has determined that the fair value of the Revolving Credit Facility approximates its carrying value.~~



Company's stock price at the end of the period	$	0.30
Expected volatility	110.60		%
Credit spreads	77.30		%
Risk-free interest rate	1.44		%

Fair Value Measurements of Embedded Conversion Feature

The fair value of the derivative liability for the embedded conversion feature of the New Convertible Notes was estimated to be ~~$3,284~~$549 as of ~~September 30, 2016.~~March 31, 2017. The estimated fair value of the derivative liability for the embedded conversion feature of the New Convertible Notes, which falls within Level 3 of the fair value hierarchy, is measured on a recurring basis using a binomial lattice model using the Company's historical volatility over the term corresponding to the remaining contractual term of the New Convertible Notes and observed spreads of similar debt instruments that do not include a conversion feature. The following reconciliation represents the change in fair value of the embedded conversion feature of the New Convertible Notes between December 31, ~~2015~~2016 and ~~September 30, 2016:~~March 31, 2017:

Derivative liability for embedded conversion feature
Fair value as of December 31, 2015 $ —
Fair value at issuance date 11,574
Settlement upon conversion into common stock (721 )
Mark-to-market adjustment on conversion feature^(a)
(7,569 )
Fair value as of September 30, 2016 $ 3,284



	Derivative liability for embedded conversion feature
Fair value as of December 31, 2016	$	403
Mark-to-market adjustment on conversion feature^(a)	146
Fair value as of March 31, 2017	$	549

^(a) Mark-to-market adjustment is recognized in unrealized ~~gain~~loss on embedded debt conversion option in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the ~~nine months ended September 30, 2016.~~

~~Fair Value Measurements of Commodity Hedges~~

~~The Company has a commodity hedging program to mitigate risks associated with certain commodity price fluctuations. At~~ ~~September 30, 2016, the Company had executed forward contracts that extend through 2016. The counterparty to these contracts is not considered a credit risk by the Company. At~~ ~~September 30, 2016~~ and December 31, 2015, the notional value associated with forward contracts was $770 and $3,080, respectively. The Company recorded, through cost of materials, realized and unrealized net losses of $3 for the three months ended September 30, 2016, realized and unrealized net gains of $31 for the nine months ended September 30, 2016, and realized and unrealized net losses of $252 and $706 for the three and nine months ended September 30, 2015, respectively. As of September 30, 2016 and DecemberMarch 31, ~~2015, all commodity hedge contracts were in a liability position. As of September 30, 2016, the Company had a letter of credit outstanding for $700 as collateral for the commodity hedge contracts.~~2017.

~~The Company uses information which is representative of readily observable market data when valuing derivative liabilities associated with commodity hedges.~~

~~The liabilities measured at fair value on a recurring basis were as follows:~~

Level 1 Level 2 Level 3
Total^(a)
As of September 30, 2016
Derivative liability for commodity hedges $ —
$ 202
$ —
$ 202
As of December 31, 2015
Derivative liability for commodity hedges $ —
$ 1,015
$ —
$ 1,015

^(a)As of September 30, 2016 and December 31, 2015 the entire derivative liability for commodity hedges of $202 and $1,015, respectively, are short-term and are included in accrued and other current liabilities in the Condensed Consolidated Balance Sheets.

(9) Stockholders’ ~~Equity (Deficit)~~

~~Convertible Note Exchange and Conversions of New Convertible Notes~~

The Company issued 7,863 shares of common stock in May 2016 in connection with the Convertible Note Exchange, and issued an additional 713 shares in June 2016 when New Convertible Notes were converted to common stock. The issuance of these shares was recorded using the fair value of the Company's common stock on the dates the shares were issued, and resulted in an increase in the par value of common stock and additional paid-in capital of $86 and $16,543, respectively. The Company received no cash proceeds from issuing these shares.Deficit

Accumulated Comprehensive Loss

The components of accumulated other comprehensive loss are as follows:



	March 31, 2017			December 31, 2016
Unrecognized pension and postretirement benefit costs, net of tax	$	(9,583	)	$	(9,797	)
Foreign currency translation losses, net of tax	(17,142		)	(16,142		)
Total accumulated other comprehensive loss	$	(26,725	)	$	(25,939	)

September 30,
2016 December 31,
2015
Unrecognized pension and postretirement benefit costs, net of tax $ (15,817 ) $ (17,185 )
Foreign currency translation losses (17,133 ) (16,636 )
Total accumulated other comprehensive loss $ (32,950 ) $ (33,821 )

~~Changes~~Changes in accumulated other comprehensive loss by component for the three months ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~ are as follows:

Defined Benefit Pension and Postretirement Items Foreign Currency Items Total
2016 2015 2016 2015 2016 2015
Balance as of July 1, $ (16,273 ) $ (24,263 ) $ (20,100 ) $ (14,686 ) $ (36,373 ) $ (38,949 )
Other comprehensive income (loss) before reclassifications —
—
2,967
(2,941 ) 2,967
(2,941 )
Amounts reclassified from accumulated other comprehensive loss, net of tax ^(a)
456
670
—
—
456
670
Net current period other comprehensive income (loss) 456
670
2,967
(2,941 ) 3,423
(2,271 )
Balance as of September 30, $ (15,817 ) $ (23,593 ) $ (17,133 ) $ (17,627 ) $ (32,950 ) $ (41,220 )



	Defined Benefit Pension and Postretirement Items						Foreign Currency Items						Total
	2017			2016			2017			2016			2017			2016
Balance as of January 1,	$	(9,797	)	$	(17,185	)	$	(16,142	)	$	(16,636	)	$	(25,939	)	$	(33,821	)
Other comprehensive income (loss) before reclassifications, net of tax	—			—			(1,000		)	611			(1,000		)	611
Amounts reclassified from accumulated other comprehensive loss, net of tax ^(a)	214			456			—			—			214			456
Net current period other comprehensive income (loss)	214			456			(1,000		)	611			(786		)	1,067
Balance as of March 31,	$	(9,583	)	$	(16,729	)	$	(17,142	)	$	(16,025	)	$	(26,725	)	$	(32,754	)

^(a)See reclassifications from accumulated other comprehensive loss table below for details of reclassification from accumulated other comprehensive loss for the three month periods ended ~~September 30, 2016~~March 31, 2017 and ~~2015.~~2016.

~~Changes in accumulated other comprehensive loss by component for the~~ ~~nine months ended September 30, 2016~~ ~~and~~ ~~2015~~ ~~are as follows:~~

Defined Benefit Pension and Postretirement Items Foreign Currency Items Total
2016 2015 2016 2015 2016 2015
Balance as of January 1, $ (17,185 ) $ (27,122 ) $ (16,636 ) $ (9,994 ) $ (33,821 ) $ (37,116 )
Other comprehensive loss before reclassifications —
—
(497 ) (7,633 ) (497 ) (7,633 )
Amounts reclassified from accumulated other comprehensive loss, net of tax ^(a)
1,368
3,529
—
—
1,368
3,529
Net current period other comprehensive income (loss) 1,368
3,529
(497 ) (7,633 ) 871
(4,104 )
Balance as of September 30, $ (15,817 ) $ (23,593 ) $ (17,133 ) $ (17,627 ) $ (32,950 ) $ (41,220 )

^(a)See reclassifications from accumulated other comprehensive loss table for details of reclassification from accumulated other comprehensive loss for the nine month periods ended September 30, 2016 and 2015.

Reclassifications from accumulated other comprehensive loss are as follows:


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2016			2015			2016			2015			2017			2016
Unrecognized pension and postretirement benefit items:
Prior service cost^(b)	$	(50	)	$	4		$	(150	)	$	(997	)	$	(50	)	$	(50	)
Actuarial loss ^(b)	(406		)	(674		)	(1,218		)	(2,532		)	(164		)	(406		)
Total before tax	(456		)	(670		)	(1,368		)	(3,529		)	(214		)	(456		)
Tax effect	—			—			—			—			—			—
Total reclassifications for the period, net of tax	$	(456	)	$	(670	)	$	(1,368	)	$	(3,529	)	$	(214	)	$	(456	)

^(b)These accumulated other comprehensive loss components are included in the computation of net periodic pension and postretirement benefit cost included in sales, general and administrative expense. Prior service cost of $813 for pension curtailment is shown as restructuring expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2015. There was no pension curtailment expense in the three and nine months ended September 30, 2016 or the three months ended September 30, 2015.

(10) ~~Share-based Compensation~~

The Company accounts for its share-based compensation arrangements by recognizing compensation expense for the fair value of the share awards granted ratably over their vesting period. All compensation expense related to share-based compensation arrangements is recorded in sales, general and administrative expense and warehouse, processing and delivery expense. The total share-based compensation expense recognized for the three and nine months ended September 30, 2016 was $350 and $916, respectively, and $428 and $424 for the three and nine months ended September 30, 2015, respectively. The unrecognized compensation cost as of September 30, 2016 associated with all share-based payment arrangements is $2,087 and the weighted average period over which it is to be expensed is 1.3 years.

During the third quarter of 2016, the Company granted 304 non-vested shares to its non-employee directors pursuant to the Company's Non-Employee Director Compensation Plan. The non-vested shares had a weighted average grant date fair value of $1.47 per share. The grant date fair value of the non-vested shares is established using the market price of the Company's stock on the date of grant. The non-vested shares vest in full on the first anniversary of the date of grant.

On February 25, 2016, the Board of Directors of the Company approved the grant of 1,203 non-qualified stock options ("stock options") for executive officers under the Company’s 2016 Long-Term Compensation Plan (“2016 LTC Plan”). All stock options awarded under the 2016 LTC Plan are subject to the terms of the 2008 A.M. Castle & Co. Omnibus Incentive Plan, amended and restated as of July 27, 2016.

The stock options vest in three equal installments over three years from the grant date and are exercisable immediately upon vesting. The strike price was equal to the closing price of the Company's stock on the date of grant. The term of the options is 10 years from the date of grant.

The weighted average grant date fair value of $1.12 per share for the options granted under the 2016 LTC Plan for executive officers was estimated using the Black-Scholes option-pricing model with the following assumptions:



	~~2016~~
~~Expected volatility~~	~~61.8~~	%
~~Risk-free interest rate~~	~~1.3~~	%
~~Expected life (in years)~~	~~6.0~~
~~Expected dividend yield~~	—	%

~~(11)~~ Employee Benefit Plans

Components of the net periodic pension and postretirement benefit cost are as follows:


	Three Months Ended						Nine Months Ended						Three Months Ended
	September 30,						September 30,						March 31,
	2016			2015			2016			2015			2017			2016
Service cost	$	112		$	250		$	336		$	724		$	106		$	112
Interest cost	1,312			1,722			3,936			5,312			1,210			1,312
Expected return on assets	(2,035		)	(2,494		)	(6,105		)	(7,128		)	(2,034		)	(2,035		)
Amortization of prior service cost	50			(4		)	150			184			50			50
Amortization of actuarial loss	406			674			1,218			2,532			164			406
Curtailment charge	—			—			—			3,080
Net periodic pension and postretirement benefit (credit) cost	$	(155	)	$	148		$	(465	)	$	4,704		$	(504	)	$	(155	)
Contributions paid	$	—		$	—		$	—		$	—		$	356		$	—

The Company anticipates making ~~no significant~~additional cash contributions of $213 to its pension plans in ~~2016.~~2017.

~~(12)~~(11) Restructuring Activity

In April 2015, the Company announced a restructuring plan consisting of workforce reductions and the consolidation of ~~more~~ facilities in locations deemed to have redundant operations. In the ~~nine~~three months ended ~~September 30,~~March 31, 2016, the Company incurred ~~additional~~ costs associated with the April 2015 restructuring plan which consisted of employee termination and related benefits, moving costs, professional fees and losses on the disposal of fixed assets. In addition, the Company recorded charges of $452 for inventory moved from consolidated plants that was subsequently identified to be scrapped. The inventory charge is reported in cost of materials in the Condensed Consolidated Statement of Operations and Comprehensive Loss for the ~~nine~~three months ended ~~September 30,~~March 31, 2016. ~~Substantially all of the previously announced restructuring activities are complete.~~

In the first quarter of 2016, the Company closed its Houston and Edmonton facilities and sold all the equipment at these facilities to an unrelated third party. Restructuring activities associated with the strategic decision to close these facilities included employee termination and related benefits, lease termination costs, moving costs associated with exit from the closed facilities, and professional fees at the closed facilities.

As a result of its restructuring activities, the Company incurred the following restructuring expenses:


	Three Months Ended					Nine Months Ended				Three Months Ended
	September 30,					September 30,				March 31,
	2016		2015			2016		2015		2017		2016
Employee termination and related benefits	$	267	$	(987	)	$	945	$	13,265	$	28	$	553
Lease termination costs	—		364			6,706		364		—		6,145
Moving costs associated with plant consolidations	52		1,733			4,447		2,334		70		3,135
Professional fees	593		94			1,323		1,690		30		678
Loss on disposal of fixed assets	—		—			1,253		—		—		1,207
Total	$	912	$	1,204		$	14,674	$	17,653	$	128	$	11,718

Restructuring reserve activity for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 is summarized below:


			Period Activity												Period Activity
	Balance January 1, 2016		Charges (gains)		Cash receipts (payments)			Non-cash activity			Balance September 30, 2016		Balance January 1, 2017		Charges (gains)		Cash receipts (payments)			Non-cash activity		Balance March 31, 2017
Employee termination and related benefits ^(a)	$	8,301	$	945	$	(3,646	)	$	—		$	5,600	$	3,627	$	28	$	(87	)	$	—	$	3,568
Lease termination costs^(c)(b)	232		6,706		(566		)	(4,539		)	1,833		823		—		(228		)	—		595
Moving costs associated with plant consolidations	—		4,447		(4,447		)	—			—		—		70		(70		)	—		—
Professional fees	—		1,323		(1,323		)	—			—		—		30		(30		)	—		—
Disposal of fixed assets	—		1,253		2,703			(3,956		)	—		—		—		—			—		—
Total	$	8,533	$	14,674	$	(7,279	)	$	(8,495	)	$	7,433	$	4,450	$	128	$	(415	)	$	—	$	4,163

^(a)As of ~~September 30, 2016,~~March 31, 2017, the short-term portion of employee termination and related benefits of ~~$100~~$340 is included in accrued and other current liabilities in the Condensed Consolidated Balance Sheet and the long-term ~~portion~~liability associated with the Company's withdrawal from a multi-employer pension plan of ~~$5,500~~$3,228 is included in other noncurrent liabilities in the Condensed Consolidated Balance Sheet.

^(b)Payments on certain of the lease obligations are scheduled to continue until 2020. Market conditions and the Company’s ability to sublease these properties could affect the ultimate charge related to the lease obligations. Any potential recoveries or additional charges could affect amounts reported in the consolidated financial statements of future periods. As of ~~September 30, 2016,~~March 31, 2017, the short-term portion of the lease termination costs of ~~$125~~$291 is included in accrued and other current liabilities and the long-term portion of the lease termination costs of ~~$1,708~~$304 is included in other noncurrent liabilities in the Condensed Consolidated Balance Sheet.

^(c)In connection with the closure of the Company's Houston and Edmonton facilities, the Company agreed to sell its fixed assets and to a reduction in future proceeds from the sale of inventory in exchange for the assignment of its remaining lease obligations at its Houston facility resulting in a non-cash charge of $4,539 during the nine months ended September 30, 2016.

~~(13)~~(12) Income Taxes

The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items. The Company’s effective tax rate is expressed as income tax expense (benefit) ~~expense,~~, which includes tax expense on the Company’s share of joint venture ~~losses,~~earnings in the three months ended March 31, 2016, as a percentage of loss from continuing operations before income taxes and equity in ~~losses~~earnings of joint venture.

For the three months ended ~~September 30,~~March 31, 2017, the Company recorded income tax benefit of $63 on pre-tax loss from continuing operations of $13,555, for an effective tax rate of 0.5%. For the three months ended March 31, 2016, the Company recorded income tax ~~expense~~benefit of ~~$903~~$335 on pre-tax loss from continuing operations before equity in ~~losses~~earnings of joint venture of ~~$17,359,~~$45,450, for an effective tax rate of (5.2)%. For the three months ended September 30, 2015, the Company recorded income tax benefit of $629 on pre-tax loss from continuing operations before equity in losses of joint venture of $27,941, for an effective tax rate of 2.3%.

For the nine months ended September 30, 2016, the Company recorded income tax expense of $1,099 on pre-tax loss from continuing operations before equity in losses of joint venture of $79,096, for an effective tax rate of (1.4)%. For the nine months ended September 30, 2015, the Company recorded income tax benefit of $22,141 on pre-tax loss from continuing operations before equity in losses of joint venture of $113,536, for an effective tax rate of 19.5%0.7%.

The Company's U.S. statutory rate is 35%. The most significant factors impacting the effective tax rate for the ~~nine~~three months ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~ were losses in jurisdictions that the Company is not able to benefit due to uncertainty as to the realization of those losses, release of valuation allowances in jurisdictions that have become profitable, and the impact of intraperiod allocations.

~~(14)~~(13) Commitments and Contingent Liabilities

As of September 30, 2016, the Company had $8,088 of irrevocable letters of credit outstanding which primarily consisted of $5,000 for its warehouse in Janesville, Wisconsin, $700 for collateral associated with commodity hedges and $1,288 for compliance with the insurance reserve requirements of its workers’ compensation insurance program.

The Company is party to a variety of legal proceedings, claims, and ~~other claims,~~inquiries, including proceedings or inquiries by ~~government~~governmental authorities, which arise from the operation of its business. These proceedings, claims, and inquiries are incidental to and occur in the normal course of the Company's business affairs. The majority of these proceedings, claims, and ~~proceedings~~inquiries relate to commercial disputes with customers, suppliers, and others; employment ~~including benefit matters;~~and employee benefits-related disputes; product ~~quality;~~quality disputes with vendors and/or customers; and environmental, health and safety claims. It is the opinion of management that the currently expected outcome of these proceedings, claims, and ~~claims,~~inquiries, after taking into account recorded accruals and the availability and limits of our insurance coverage, will

not have a material adverse effect on the consolidated results of operations, financial condition or cash flows of the Company.

~~(15)~~(14) Subsequent Events

~~Special Redemption of Senior Secured Notes~~

On ~~October 31, 2016,~~April 6, 2017, the Company ~~issued~~and certain of its subsidiaries entered into an ~~irrevocable notice~~amendment to the Credit Facilities Agreement. Under this amendment, the Financial Institutions and the Agent agreed that the financial covenants of ~~redemption~~the Company and its subsidiaries with respect to ~~$27,500 aggregate principal~~maintaining a minimum amount of consolidated adjusted EBITDA (as defined in the Credit Facilities Agreement) and maintaining specified minimum amounts of net working capital (as

defined in the Credit Facilities Agreement) and consolidated liquidity (as defined in the Credit Facilities Agreement) would cease to apply for the period from March 31, 2017 through and including May 31, 2018.

On April 6, 2017, the Company and certain of its ~~New Secured Notes. These~~subsidiaries entered into a restructuring support agreement (the “RSA”) with certain of their creditors (the "Consenting Creditors"), including certain holders of the Company’s (a) term loans under its Credit Facilities Agreement, as amended, (b) New Secured Notes, and (c) New Convertible Notes. The RSA contemplates the financial restructuring of the debt and equity of the Company and the subsidiaries (the “Restructuring”) pursuant to a Restructuring Term Sheet attached to the RSA as an exhibit (the “Term Sheet”). The Term Sheet sets forth the terms and conditions of the Restructuring and provides for the consummation thereof, and contains mutual covenants of the Company and the Consenting Creditors in furtherance of the Restructuring, either as part of out-of-court proceedings or by prepackaged chapter 11 plan of reorganization (a “Plan”) confirmed by the U.S. Bankruptcy Court for the District of Delaware. If the Restructuring were ~~redeemed on November 9, 2016, meeting~~consummated pursuant to a Plan, the ~~Special Redemption Condition set forth in~~Plan would be confirmed following a filing by the ~~indenture governing~~Company for voluntary relief under chapter 11 of the ~~New Secured Notes.~~

~~Commitment for Senior Secured Term Loan Facilities~~United States Bankruptcy Code.

On ~~November 1, 2016, and November 2, 2016,~~May 4, 2017, the Company entered into ~~commitment letters with certain financial institutions in order~~an additional amendment to ~~replace and repay any amounts outstanding under~~ the ~~Revolving~~ Credit ~~Facility, including cash collateralization of any undrawn letters of credit, and~~Facilities Agreement. Under this amendment, the Financial Institutions agreed to ~~provide~~accelerate the Company's access to ~~additional working capital.~~ the Delayed Draw Facility that was expected to be available in June 2017 or thereafter.

Pursuant to the ~~terms~~RSA and in furtherance of the commitment letters, the new credit facilities will take the form of senior secured term loan facilities in an aggregate principal amount of $100,000. In connection therewith, commitments pursuant the Revolving Credit Facility will be terminated and liens granted to the collateral agent pursuant thereto will be released in full. The funding of the term loan facilities is subject to original issue discount in an amount equal to 3.0% of the full principal amount of the facilities. The facilities will bear interest at a rate of 11.0% per annum, and will mature in September 2018. The Company will be subject to certain financial covenants, consisting of (a) a minimum cash EBITDA level, (b) a minimum liquidity amount, and (c) a minimum working capital covenant.

~~Upon initial funding of the term loan facilities, the financial institutions will be issued warrants to purchase an aggregate of 5,000 shares of common stock of~~Restructuring, on May 15, 2017, the Company ~~pro rata based~~commenced solicitation of votes on its Plan by distributing a Disclosure Statement for Debtors’ Prepackaged Joint Chapter 11 Plan of Reorganization (the “Disclosure Statement”) to holders of Prepetition First Lien Secured Claims, Prepetition Second Lien Secured Claims, and Prepetition Third Lien Secured Claims, as such terms are defined in the principal amount of each financial institution’s commitment. The warrants will have exercise prices as follows: (a) 50% of the warrants will have an exercise price of $0.50 per share and will expire 18 months from the date of grant and (ii) the remaining 50% of the warrants will have an exercise price of $0.65 per share and will expire 18 months from the date of the grant.Plan.

A definitive agreement with respect to the term loan facilities, as required by the commitment letters, has not been executed and there can be no assurances that such agreement will be executed or as to the terms of such facilities, or that certain other conditions required by the commitment letters will be satisfied.

~~Shareholder Sale and Purchase of Company Common Stock~~

~~On November 3, 2016, one of the Company's shareholders, W. B. & Co., purchased all 4,631 shares of the Company's common stock owned by Raging Capital Master Fund, Ltd.~~

The future utilization of the Company's federal and state net operating losses is expected to be limited by Internal Revenue Service Section 382 due to this ownership change and others that occurred since the last ownership change that occurred in 2015. The impact of this limitation has not been quantified at this time; however, the Company has a full valuation allowance against its federal and state net operating losses.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~Amounts in millions, except per share data~~

Disclosure Regarding Forward-Looking Statements

Information provided and statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements only speak as of the date of this report and the Company assumes no obligation to update the information included in this report. Such forward-looking statements include information concerning our possible or assumed future results of operations, including descriptions of our business strategy, and the cost savings and other benefits that we expect to achieve from our ~~facility closures and organizational changes.~~restructuring. These statements often include words such as “believe,” “expect,” “anticipate,” “intend,” “predict,” “plan,” "should," or similar expressions. These statements are not guarantees of performance or results, and they involve risks, uncertainties, and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, there are many factors that could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking ~~statements,~~statements. These factors include or relate to: our ability to obtain sufficient acceptances in connection with our solicitation of debt holder support; our ability to obtain the bankruptcy court’s approval with respect to motions or other requests made in any necessary chapter 11 case, including maintaining strategic control as debtor-in-possession; our ability to confirm and consummate a chapter 11 plan of reorganization in any necessary chapter 11 case; the effects of the filing of any necessary chapter 11 case on our business and the interests of various constituents; the bankruptcy court’s rulings in any necessary chapter 11 case, as well the outcome of any such case in general; the length of time that we may operate under any necessary chapter 11 protection and the continued availability of operating capital during the pendency of any necessary chapter 11 case; risks associated with third party motions or objections in any necessary chapter 11 case, which may interfere with our ability to confirm and consummate a chapter 11 plan of reorganization; the potential adverse effects of any necessary chapter 11 case on our liquidity or results of operations; our ability to execute the Company’s business and financial reorganization plan; and increased advisory costs to execute our restructuring. Other factors include our ability to effectively manage our operational initiatives and restructuring activities, the impact of volatility of metals prices, the cyclical and seasonal aspects of our business, our ability to effectively manage inventory levels, our ability to successfully complete the remaining steps in our strategic refinancing process, and the impact of our substantial level of indebtedness, as well as including those risk factors identified in ~~Item 1A “Risk Factors” of~~ our Annual Report on Form ~~10-K/A~~10-K for the fiscal year ended December 31, ~~2015 and our Quarterly Report on Form 10-Q for the quarter ended June 30,~~ 2016. All future written and oral forward-looking statements by us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Except as required by the federal securities laws, we do not have any obligations or intention to release publicly any revisions to any forward-looking statements to reflect events or circumstances in the future, to reflect the occurrence of unanticipated events or for any other reason.

The following discussion should be read in conjunction with the Company’s Condensed Consolidated Financial Statements and related notes thereto in Item 1 “Financial Statements (unaudited)”.

Executive Overview

A.M. Castle & Co., together with its subsidiaries, (the “Company”) is a specialty metals distribution company serving customers on a global basis. The Company has operations in the United States, Canada, Mexico, France, the United Kingdom, Spain, China and Singapore. The Company provides a broad range of product inventories as well as value-added processing and supply chain services to a wide array of customers, principally within the producer durable equipment, aerospace, heavy industrial equipment, industrial goods, construction equipment, oil and gas, and retail sectors of the global economy. Particular focus is placed on the aerospace and defense, power generation, mining, heavy industrial equipment, and general manufacturing industries, as well as general engineering applications.

~~In February~~Net sales in the three months ended March 31, 2017 were $135.9 million, a decrease of $27.9 million, or 17.0%, from the $163.8 million reported for same period last year. Net sales for the three months ended March 31, 2016 included the ~~Company sold~~Company's $27.1 million sale of all of its inventory at its Houston and Edmonton facilities, which ~~primarily serviced~~were closed in February 2016. The Company posted a 5.7% increase in tons sold per day to customers compared to the ~~energy market,~~three months ended March 31, 2016. The positive impact of the increase in sales volumes was offset by a 5.1% decrease in average selling prices and an unfavorable change in product mix. Operating loss in the three months ended March 31, 2017, including restructuring charges of $0.1 million, was $2.3 million compared to an ~~unrelated third party and recognized net sales and cost~~operating loss of ~~materials~~$26.9 million, including restructuring charges of ~~$27.1 million. Subsequently,~~$11.7 million, in the same period last year.

Although the Company ~~sold all~~remains confident that it will have adequate liquidity over the next twelve months to operate its business and meet its cash requirements, further reduction in the Company’s long-term debt and cash interest

obligations would strengthen its financial position and flexibility and therefore remains a key near-term financial objective. To achieve this objective, on April 6, 2017, the Company entered into a restructuring support agreement (the “RSA”) with certain of its equipment at its Houston and Edmonton facilities and agreed to a reduction in future proceeds from the inventory sale in exchange for the assignment of its remaining lease obligations at its Houston facility, resulting in a non-cash charge of $4.5 million. The Company ceased operations at the Houston and Edmonton facilities in February 2016 and recorded restructuring expense of $7.5 million related to the closure of these facilities (including the previously discussed $4.5 million non-cash loss) in the nine months ended September 30, 2016. The salecreditors (the "Consenting Creditors"), including certain holders of the ~~assets and subsequent closure of the Houston and Edmonton facilities did not qualify as a discontinued operation~~Company’s (a) term loans under the ~~authoritative accounting guidance.~~

~~On March 15,~~credit facilities agreement dated as of December 8, 2016, ~~the Company completed the sale of substantially all the assets of its wholly-owned subsidiary, Total Plastics, Inc. ("TPI"~~as amended (the "Credit Facilities Agreement"), for $53.6 million in cash. The Company used the proceeds of the sale to repay indebtedness, pursuant to its previously announced plan to improve its capital structure. The sale of TPI, which resulted in pre-tax and after-tax gains of $2.0 million and $1.3 million, respectively, allows the Company to focus solely on its core metals business going forward. TPI is reflected in the accompanying Condensed Consolidated Financial Statements as a discontinued operation, and all the financial data in this filing has been recast to present TPI as a discontinued operation retrospectively for all periods presented.

In June 2016, the Company received an offer from its joint venture partner to purchase its ownership share in Kreher Steel Company, LLC ("Kreher") for an amount that was less than the current carrying value of the Company's investment in Kreher. The Company determined that this offer indicated that the Company may not be able to recover the full carrying amount of its investment and therefore, the Company recognized a $4.6 million other-than-temporary impairment charge in the second quarter of 2016 to reduce the carrying amount of the investment to the negotiated purchase price. In August 2016, the Company completed the sale of its ownership share in Kreher to its joint venture partner for aggregate cash proceeds of $31.6 million, which resulted in an insignificant loss on disposal. Because the sale of the Company's investment in Kreher is not considered to be a strategic shift that will have a major effect on the Company's operations and financial results, the results of Kreher through the date of sale are reflected within continuing operations in the Condensed Consolidated Financial Statements.

~~In the first half of 2016, the Company exchanged $204.5 million aggregate principal amount of~~(b) 12.75% Senior Secured Notes due December ~~2016 for $204.5 million aggregate principal amount of new 12.75%~~15, 2018 (the "New Secured Notes"), and (c) 5.25% Convertible Senior Secured Notes due December ~~2018.~~30, 2019 (the "New Convertible Notes"). The Company also exchanged $57.5 million aggregate principal amount of 7.0% Convertible Notes due December 2017 for a combination of $23.8 million aggregate principal amount of 5.25% Convertible Notes due December 2019 and 7.9 million sharesRSA contemplates the financial restructuring of the ~~Company's common stock. These actions extended the maturity of substantially all~~debt and equity of the ~~Company's Senior Secured Notes~~Company (the “Restructuring”) pursuant to a Restructuring Term Sheet attached to the RSA as an exhibit (the “Term Sheet”). The Term Sheet sets forth the terms and ~~Convertible Notes on terms that greatly improved~~conditions of the Restructuring and provides for the consummation thereof, and contains mutual covenants of the Company and the Consenting Creditors in furtherance of the Restructuring, either as part of out-of-court proceedings or by prepackaged chapter 11 plan of reorganization (a “Plan”) confirmed by the U.S. Bankruptcy Court for the District of Delaware. If the Restructuring were consummated pursuant to a Plan, the Plan would be confirmed following a filing by the Company for voluntary relief under chapter 11 of the United States Bankruptcy Code. For additional information concerning the RSA, please refer to the Company's ~~capital structure.~~Current Report on Form 8-K filed with the Securities and Exchange Commission on April 7, 2017.

Results of Operations: Three Months Ended ~~September 30, 2016~~March 31, 2017 Compared to Three Months Ended ~~September 30, 2015~~March 31, 2016

The following table sets forth certain statement of operations data for the three months ended ~~September 30, 2016~~March 31, 2017 and ~~2015. Included in the operating results below is the closure of the Company's Houston and Edmonton facilities which occurred in the first quarter of~~ 2016.

Three Months Ended September 30,
2016 2015 Favorable/(Unfavorable)
$ % of Net Sales $ % of Net Sales $ Change % Change

Net sales $ 124.9
100.0 % $ 150.6
100.0 % $ (25.7 ) (17.1 )%
Cost of materials (exclusive of depreciation and amortization) 92.4
74.0 % 115.3
76.6 % 22.9
19.9 %
Operating costs and expenses^(a)
41.1
32.9 % 50.8
33.7 % 9.7
19.1 %
Operating loss $ (8.6 ) (6.9 )% $ (15.5 ) (10.3 )% $ 6.9
44.5 %

^(a) ~~Operating costs and expenses include $0.9 million and $1.2 million of restructuring expenses for the three months ended September 30, 2016 and 2015, respectively.~~

~~Net Sales~~

Net sales in the three months ended September 30, 2016 were $124.9 million, a decrease of $25.7 million, or 17.1%, compared to the three months ended September 30, 2015. The decrease in net sales was mainly due to a 9.6% decrease in tons sold per day to customers compared to the same period in the prior year, coupled with a 4.4% decrease in average selling prices. Impacting the decrease in net tons sold per day were sales attributable to the Company's Houston and Edmonton operations which were closed in February 2016. Excluding the tons sold from the Houston and Edmonton operations in the three months ended September 30, 2015, tons sold per day decreased 3.6% in the three months ended September 30, 2016 compared to the three months ended September 30, 2015. The largest sales volume decreases in the three months ended September 30, 2016 compared to the three months ended September 30, 2015 were in alloy bar, SBQ bar, tubing products, and cold finished carbon, with sales volume increases in aluminum and carbon and alloy plate.

Downward pricing pressures resulting from historically high levels of foreign imports into the U.S. market, lower prices on products purchased from mills and inventory de-stocking practices by many competitors continue to have a negative impact on metals pricing. The Company posted a decrease in the price per ton sold of virtually all of its product categories as compared to the prior year quarter. An overall favorable product mix in the three months ended September 30, 2016 compared to the three months ended September 30, 2015 partly offset the impact of the decrease in selling prices.

~~Cost of Materials~~

Cost of materials (exclusive of depreciation and amortization) in the three months ended September 30, 2016 was $92.4 million compared to $115.3 million in the three months ended September 30, 2015. The $22.9 million, or 19.9%, decrease is largely due to the decrease in sales volume in the three months ended September 30, 2016.

Cost of materials (exclusive of depreciation and amortization) was 74.0% of net sales in the three months ended September 30, 2016 compared to 76.6% of net sales in the three months ended September 30, 2015.

~~Operating Costs and Expenses and Operating Loss~~

~~Operating costs and expenses for the three months ended September 30, 2016 and 2015 were as follows:~~

Three Months Ended September 30, Favorable/(Unfavorable)
2016 2015 $ Change % Change
Warehouse, processing and delivery expense $ 19.6
$ 25.9
$ 6.3
24.3 %
Sales, general and administrative expense 16.8
18.0
1.2
6.7 %
Restructuring expense 0.9
1.2
0.3
25.0 %
Depreciation and amortization expense 3.8
5.7
1.9
33.3 %
Total operating costs and expenses $ 41.1
$ 50.8
$ 9.7
19.1 %

~~Operating costs and expenses decreased by $9.7 million from $50.8 million in the three months ended September 30, 2015 to $41.1 million in the three months ended September 30, 2016.~~

Warehouse, processing and delivery expense decreased by $6.3 million mainly as a result of lower payroll and benefits costs, lower variable costs resulting from the decrease in sales activity as well as lower facility costs resulting from plant consolidations and the February 2016 closure of the Houston and Edmonton facilities;

Sales, general and administrative expense decreased by $1.2 million mainly as a result of lower payroll and benefits costs due to lower company-wide employee headcount, bad debt expense and outside consulting services, partly offset by higher incentive based compensation costs;

~~Restructuring expense of $0.9 million in the three months ended September 30, 2016 consisted mainly of professional fees and severance expense; and~~

Depreciation and amortization expense decreased by $1.9 million mainly as a result of the impairment of intangible assets recorded in the fourth quarter of 2015, as well as plant consolidations and closures, and equipment sales.

Operating loss in the three months ended September 30, 2016, including restructuring expense of $0.9 million, was $8.6 million compared to operating loss of $15.5 million, including $1.2 million of restructuring expense, in the same period last year.

~~Other Income and Expense, Income Taxes and Net Loss~~

Interest expense was $8.7 million in the three months ended September 30, 2016 compared to $10.2 million in the three months ended September 30, 2015. The decrease was primarily attributable to lower outstanding borrowings. Unrealized gain on the embedded conversion option associated with the 5.25% Convertible Notes due December 30, 2019 was $6.3 million for the three months ended September 30, 2016. There was no conversion option associated with the convertible debt requiring mark-to-market accounting in the three months ended September 30, 2015.

Other expense, comprised mostly of foreign currency transaction losses, was $6.3 million in the three months ended September 30, 2016 compared to $2.3 million in the same period last year. The unfavorable change in these transaction losses from the prior year period was partly related to unhedged intercompany financing arrangements.

The Company recorded an income tax expense of $0.9 million for the three months ended September 30, 2016 compared to an income tax benefit of $0.6 million for the same period last year. The Company’s effective tax rate is expressed as income tax (benefit) expense, which includes tax expense on the Company’s share of joint venture losses, as a percentage of loss from continuing operations beforeincome taxes and equity in losses of joint venture. The effective tax rate for the three months ended September 30, 2016 and 2015 was (5.2)% and 2.3%, respectively. The higher effective tax rate in the three months ended September 30, 2016 resulted from changes in the geographic mix and timing of income (losses), the inability to benefit from current year losses due to changes in valuation allowances positions in the U.S. and Canada, and the impact of intraperiod allocations.

In August 2016, the Company completed the sale of its interest in its joint venture for aggregate cash proceeds of $31.6 million. Equity in losses of joint venture in the three months ended September 30, 2016 was less than $0.1 million ~~(refer to~~ ~~Note 5 - Joint Ventureto the Condensed Consolidated Financial Statements~~). Equity in losses of the Company’s joint venture was $1.5 million in the three months ended September 30, 2015, which included a $1.8 million charge associated with the impairment of goodwill at the joint venture.

Loss from continuing operations for the three months ended September 30, 2016 was $18.3 million compared to a loss from continuing operations of $28.8 million for the three months ended September 30, 2015. Loss from discontinued operations, net of income taxes, was $1.7 million for the three months ended September 30, 2016, which resulted from the settlement of the final working capital of TPI. Income from discontinued operations, net of income taxes, was $1.0 million for the three months ended September 30, 2015.

Net loss for the three months ended September 30, 2016 was $20.0 million. Net loss for the same period in the prior year, which includes income from discontinued operations (net of income taxes) of $1.0 million, was $27.8 million.

~~Results of Operations: Nine Months Ended September 30, 2016 Compared to Nine Months Ended September 30, 2015~~

~~The following table sets forth certain statement of operations data for the nine months ended September 30, 2016 and 2015.~~ Included in the operating results below is the sale of all inventory and subsequent closure of the Company's Houston and Edmonton facilities which occurred in the first quarter of 2016.


	Nine Months Ended September 30,															Three Months Ended March 31,
	2016					2015					Favorable/(Unfavorable)					2017					2016					Favorable/(Unfavorable)
	$			% of Net Sales		$			% of Net Sales		$ Change			% Change

(Dollar amounts in millions)																$			% of Net Sales		$			% of Net Sales		$ Change			% Change
Net sales	$	419.4		100.0	%	$	505.4		100.0	%	$	(86.0	)	(17.0	)%	$	135.9		100.0	%	$	163.8		100.0	%	$	(27.9	)	(17.0	)%
Cost of materials (exclusive of depreciation and amortization)^(a)	323.8			77.2	%	411.8			81.5	%	88.0			21.4	%	101.0			74.3	%	133.7			81.6	%	32.7			24.5	%
Operating costs and expenses^(b)	142.4			34.0	%	172.3			34.1	%	29.9			17.4	%	37.2			27.4	%	57.0			34.8	%	19.8			34.7	%
Operating loss	$	(46.8	)	(11.2	)%	$	(78.7	)	(15.6	)%	$	31.9		40.5	%	$	(2.3	)	(1.7	)%	$	(26.9	)	(16.4	)%	$	24.6		91.4	%

^(a) Cost of materials includes $0.5 ~~million and $22.3~~ million of inventory scrapping expenses associated with restructuring activity for the ~~nine~~three months ended ~~September 30, 2016 and 2015, respectively.~~March 31, 2016.

^(b) Operating costs and expenses include ~~$14.7~~$0.1 million and ~~$17.7~~$11.7 million of restructuring expenses for the ~~nine~~three months ended ~~September 30,~~March 31, 2017 and 2016, ~~and 2015,~~ respectively. ~~Also included in the nine months ended September 30, 2015 was a $5.6 million gain from the sale of an operating facility.~~

Net Sales

Net sales in the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 were ~~$419.4~~$135.9 million, a decrease of ~~$86.0~~$27.9 million, or 17.0%, compared to the ~~nine~~same period last year. Net sales for the three months ended September 30, 2015. The decrease in net sales was mainly attributable to a 15.6% decrease in tons sold per day to customers compared to the same period in the prior year and a 6.8% decrease in average selling prices, offset by a favorable product mix and the impact ofMarch 31, 2016 included the Company's $27.1 million sale of all its inventory at its Houston and Edmonton facilities to an unrelated third ~~party in the first quarter of 2016.~~party. The sale of this inventory, which was sold at a zero gross ~~profit~~ margin (calculated as net sales, less cost of materials), was the result of a strategic decision to lower the Company's exposure to oil and gas market fluctuations.

~~Compared to~~ Including that sale of inventory, net sales from the nine months ended September 30, 2015, sales volumes in the nine months ended September 30, 2016 decreased on virtually all products, with tubing, SBQ bar and alloy bar products having the most significant declines in sales volumes in the period. The closure of the Company's Houston and Edmonton ~~facilities~~locations, which were closed in February 2016, ~~also led~~were $33.0 million. Despite the closure of these two locations, the Company posted a 5.7% increase in tons sold per day to ~~decreased sales volume as~~customers compared to the three months ended March 31, 2016. Excluding the tons sold from ~~these~~the Houston and Edmonton locations ~~which primarily~~in the three months ended March 31, 2016, tons sold per day increased 10.6%. Products with the most notable improvements in sales volumes were ~~sold to oil~~aluminum, alloy bar, and ~~gas customers, were not replaced by subsequent sales out of another~~carbon and alloy plate. Offsetting the positive impact of the ~~Company's service centers.~~

~~Downward pricing pressures~~increase in ~~the nine months ended September 30, 2016 resulted in lower average selling prices on all of the products the Company sells compared to the nine months ended September 30, 2015. Lower pricing on high~~sales volumes of foreign metal imports and de-stocking by many of the Company's competitors caused the Company to lower prices in order to remain competitive. The most significant average selling price decreases of 8% to 18% on many of the Company's highest selling products by volume drove the 6.8%was a 5.1% decrease in average selling prices and an unfavorable change in product mix.

Average selling prices for many of the Company's products were higher in the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to the ~~nine months ended September 30, 2015 with a partial offset from favorable product mix.~~

same period last year, but decreases in average selling prices of aluminum, nickel, and alloy bar resulted in the overall 5.1% decrease in average selling prices.

Cost of Materials

Cost of materials (exclusive of depreciation and amortization) during the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 was ~~$323.8~~$101.0 million compared to ~~$411.8~~$133.7 million during the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016. The ~~$88.0~~$32.7 million, or ~~21.4%~~24.5%, decrease is ~~largely~~mostly due to ~~the decrease in sales volume during the nine months ended September 30, 2016, partly offset by~~ the $27.1 million of cost of materials recognized on the sale of all inventory at the Company's Houston and Edmonton facilities in the ~~nine~~three months ended ~~September 30,~~March 31, 2016, as discussed above. Included in cost of materials in the nine months ended September 30, 2015 is a $22.3 million restructuring charge related to the write-down of aged and excess inventory compared to a restructuring charge of $0.5 million for the nine months ended September 30, 2016.

Cost of materials (exclusive of depreciation and amortization) was ~~77.2%~~74.3% as a percent of net sales in the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, compared to ~~81.5%~~81.6% as a percent of net sales for the comparative prior year period. While the percentage for the three months ended March 31, 2016 was impacted by the $27.1 million sale of the inventory at the Houston and Edmonton locations, the decrease in the percentage also reflects improved inventory management and better matching of sales prices with inventory replacement cost.

Operating Costs and Expenses and Operating Loss

Operating costs and expenses for the ~~nine~~three months ended ~~September 30,~~March 31, 2017 and 2016 ~~and 2015~~ were as follows:


	Nine Months Ended September 30,				Favorable/(Unfavorable)				Three Months Ended March 31,				Favorable/(Unfavorable)
	2016		2015		$ Change		% Change
(Dollar amounts in millions)									2017		2016		$ Change		% Change
Warehouse, processing and delivery expense	$	63.7	$	76.8	$	13.1	17.1	%	$	18.7	$	23.4	$	4.7	20.1	%
Sales, general and administrative expense	51.5		60.3		8.8		14.6	%	14.5		17.5		3.0		17.1	%
Restructuring expense	14.7		17.7		3.0		16.9	%	0.1		11.7		11.6		99.1	%
Depreciation and amortization expense	12.5		17.5		5.0		28.6	%	3.9		4.4		0.5		11.4	%
Total operating costs and expenses	$	142.4	$	172.3	$	29.9	17.4	%	$	37.2	$	57.0	$	19.8	34.7	%

Operating costs and expenses decreased by ~~$29.9~~$19.8 million from ~~$172.3~~$57.0 million during the ~~nine~~three months ended ~~September 30, 2015~~March 31, 2016 to ~~$142.4~~$37.2 million during the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2017.

Warehouse, processing and delivery expense ~~excluding a gain on sale of facility of $5.6 million recorded during the nine months ended September 30, 2015,~~ decreased by ~~$18.7~~$4.7 million primarily as a result of lower payroll, benefit, and ~~benefits costs, lower variable costs resulting from the decrease in sales activity, and lower~~ facility costs resulting from plant consolidations and the ~~February 2016~~ closure of the Houston and Edmonton facilities;

Sales, general and administrative expense decreased by ~~$8.8~~$3.0 million mainly as a result of lower payroll, benefit, and ~~benefits costs and non-restructuring related executive severance costs incurred in the prior year period;~~outside services costs;

Restructuring expense ~~of $14.7~~was $0.1 million in the ~~nine~~three months ended ~~September 30,~~March 31, 2017, while restructuring expense was $11.7 million in the three months ended March 31, 2016, which consisted mainly of severance expense and lease termination charges associated with the closure of the Company's Houston and Edmonton facilities, as well as moving expenses associated with ~~the~~ plant ~~consolidations related to the April 2015 restructuring plan;~~consolidations; and

Depreciation and amortization expense decreased by ~~$5.0~~$0.5 million ~~mainly as a result of the impairment of intangible assets recorded in the fourth quarter of 2015, as well as~~due to lower depreciation expense resulting from plant ~~consolidations and~~ closures and equipment sales.

Operating loss in the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017, including restructuring charges of ~~$14.7 million and inventory scrapping expense associated with restructuring activities of $0.5~~$0.1 million, was ~~$46.8~~$2.3 million compared to an operating loss of ~~$78.7~~$26.9 million, including ~~restructuring-related inventory scrapping expense of $22.3 million,~~ restructuring charges of ~~$17.7~~$11.7 million, ~~and the $5.6 million gain on sale of facility,~~ in the same period in the prior year.

Other Income and Expense, Income Taxes and Net Loss

Interest expense was ~~$28.7~~$10.7 million in the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to ~~$30.3~~$10.4 million in the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016. Unrealized ~~gain~~loss on the embedded conversion option associated with the ~~5.25%~~New Convertible Notes ~~due December 30, 2019~~ was ~~$7.6~~$0.1 million for the ~~nine~~three months ended ~~September 30, 2016.~~March 31, 2017. There was no conversion option associated with the convertible debt requiring mark-to-market accounting in the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016.

~~Debt~~Financial restructuring ~~costs~~expense of ~~$6.6~~$0.9 million in the ~~nine~~three months ended ~~September 30, 2016 reflect~~March 31, 2017 was mostly comprised of legal and other professional fees in connection with the planned financial restructuring of the debt and equity of the Company (refer to Note 14 -Subsequent Events to the Condensed Consolidated Financial Statements).

The debt restructuring loss of $7.1 million ofin the three months ended March 31, 2016 represents eligible holder consent fees and related legal and other direct costs incurred in conjunction with the ~~Exchange Offer, partly offset by a~~ February 2016 private exchange offer and consent solicitation (the "Exchange Offer") to certain eligible holders to exchange N~~$0.5 million~~ ~~gain resulting from~~ew Secured Notes for the ~~Convertible Note Exchange and the subsequent conversion of~~ ~~New Convertible~~Company’s outstanding 12.75% Senior Secured Notes ~~to equity.~~due 2016.

Other ~~expense,~~income, comprised mostly of foreign currency transaction ~~losses,~~gains, was ~~$4.6~~$0.5 million in the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to ~~$4.5~~other expense of $1.1 million for the same period in the prior ~~year.~~year, which consisted mostly of foreign currency transaction losses. These gains and losses are primarily related to unhedged intercompany financing arrangements.

The Company recorded an income tax ~~expense~~benefit of ~~$1.1~~$0.1 million for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to an income tax benefit of ~~$22.1~~$0.3 million for the same period last year. The Company’s effective tax rate is expressed as income tax expense (benefit) ~~expense,~~, which includes tax expense on the Company’s share of joint venture ~~losses,~~earnings in the three months ended March 31, 2016, as a percentage of loss from continuing operations before income taxes and equity in ~~losses~~earnings of joint venture. The effective tax rate for the ~~nine~~three months ended ~~September 30,~~March 31, 2017 and 2016 was 0.5% and ~~2015 was (1.4)% and 19.5%~~0.7%, respectively. The lower effective tax rate for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 resulted from changes in the geographic mix and timing of income (losses), the inability to benefit from current year losses due to ~~changes in~~ valuation allowance positions in the U.S. and ~~Canada,~~U.K., and the impact of intraperiod allocations.

Equity in ~~losses~~earnings of ~~the Company’s~~ joint venture was ~~$4.2~~$0.3 million in the ~~nine~~three months ended ~~September 30, 2016, compared to equity in losses of joint venture of $0.1 million in the same period last year.~~March 31, 2016. In August 2016, the Company completed the sale of its joint venture for aggregate cash proceeds of $31.6 million. ~~Included in the equity in losses of the Company's joint venture in the nine months ended September 30, 2016 was an impairment charge of $4.6 million related to the write-down of the Company's investment in joint venture to fair value (refer to~~ ~~Note 5 - Joint Ventureto the Condensed Consolidated Financial Statements). Equity in losses of joint venture for the prior year period included~~ ~~a $1.8 million charge associated with the impairment of goodwill at the joint venture.~~

Loss from continuing operations for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 was ~~$84.4~~$13.5 million compared to a loss from continuing operations of ~~$91.5~~$44.8 million for the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016. Income from discontinued operations, net of income taxes, was ~~$6.2~~$7.9 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2016, compared to income from discontinued operations, net of income taxes, of $2.3 million for the nine months ended September 30, 2015. Income from discontinued operations, net of income taxes, for the nine months ended September 30, 2016which includes an after-tax gain on the sale of ~~TPI~~substantially all the assets of ~~$1.3~~the Company's wholly owned subsidiary, Total Plastic, Inc. ("TPI") of $3.0 million and an income tax benefit of $4.2 million from the reversal of an income tax valuation allowance.

Net loss for the ~~nine~~three months ended ~~September 30, 2016, which includes income from discontinued operations (net of income taxes) of $6.2 million,~~March 31, 2017 was ~~$78.1~~$13.5 million. Net loss for the same period in the prior year, which includes income from discontinued operations (net of income taxes) of ~~$2.3~~$7.9 million, was ~~$89.2~~$36.9 million.

Liquidity and Capital Resources

Cash and cash equivalents increased (decreased) as follows:


	Nine Months Ended September 30,						Three Months Ended March 31,
	2016			2015
(Dollar amounts in millions)							2017			2016
Net cash used in operating activities	$	(17.6	)	$	(6.4	)	$	(17.5	)	$	(1.7	)
Net cash from investing activities	85.5			2.3
Net cash (used in) from investing activities							(1.0		)	52.8
Net cash (used in) from financing activities	(68.7		)	8.0			(1.0		)	(51.6		)
Effect of exchange rate changes on cash and cash equivalents	(0.3		)	(0.4		)	0.2			0.1
Net change in cash and cash equivalents	$	(1.1	)	$	3.5		$	(19.4	)	$	(0.4	)

The Company’s principal ~~sources~~source of liquidity ~~are~~is cash provided by ~~operations and available revolver borrowing capacity to fund working capital needs and growth initiatives.~~operations. Specific components of the change in working capital are highlighted below:

During the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, higher accounts receivable compared to year-end ~~2015~~2016 resulted in ~~$5.1~~$15.2 million of cash flow use compared to ~~$18.3~~$10.0 million of cash flow ~~source~~use for the same period last year. Average receivable days outstanding was ~~53.8~~49.6 days for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to ~~53.4~~50.3 days for the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016.

During the ~~nine~~three months ended ~~September 30, 2016, lower~~March 31, 2017, higher inventory levels compared to year-end ~~2015 provided $34.8~~2016 used $10.3 million of cash, ~~flow source,~~ while lower inventory levels at ~~September 30, 2015~~March 31, 2016 compared to year-end ~~2014~~2015 were a ~~$43.8~~$26.6 million cash flow source for the ~~nine~~three months ended ~~September 30, 2015.~~March 31, 2016. The majority of the cash flow source from inventory in the ~~nine~~three months ended ~~September 30,~~March 31, 2016 was the result of the Houston and Edmonton inventory sale discussed above. Average days sales in inventory was ~~172.7~~137.6 days for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to ~~228.0~~171.7 days for the ~~nine~~three months ended ~~September 30, 2015,~~March 31, 2016, which resulted primarily from ~~the Houston and Edmonton inventory sale and~~ improved inventory management.

During the ~~nine~~three months ended ~~September 30, 2016,~~March 31, 2017, increases in accounts payable and accrued and other current liabilities were ~~a $14.6~~an $18.9 million cash flow source compared to a ~~$22.9~~$13.0 million cash flow source for the same period last year. Accounts payable days outstanding was ~~44.5~~43.2 days for the ~~nine~~three months ended ~~September 30, 2016~~March 31, 2017 compared to ~~43.7~~42.0 days for the same period last year.

Net cash used in investing activities of $1.0 million during the three months ended March 31, 2017 is mostly attributable to cash paid for capital expenditures of $1.1 million. Management expects capital expenditures to range from $6.0 million to $7.0 million for the full-year 2017. Net cash from investing activities of ~~$85.5~~$52.8 million during the ~~nine months ended September 30, 2016~~same period last year is ~~mainly~~mostly attributable to cash proceeds from the sale of ~~TPI and the sale of the Company's 50% ownership in Kreher.~~TPI. Cash paid for capital expenditures for the ~~nine~~three months ended ~~September 30,~~March 31, 2016 was ~~$2.4 million,~~$1.2 million.

Under the indenture governing the Company's 7.0% Convertible Notes due 2017 (the "Convertible Notes"), upon the occurrence of a ~~decrease~~Fundamental Change, which includes, among other things, the delisting of ~~$2.1 million~~the Company’s common stock from the ~~same period last year. Management expects capital expenditures~~New York Stock Exchange ("NYSE"), each holder has the right to ~~range~~require the Company to repurchase for cash all or a portion of such holder’s Convertible Notes. Effective January 17, 2017, the Company’s common stock was delisted from ~~$3.0 million~~the NYSE. Accordingly, the Company made an offer to ~~$4.0 million for~~purchase its Convertible Notes and, on February 22, 2017, the ~~full-year 2016.~~Company repurchased $16 thousand aggregate principal amount of its Convertible Notes.

~~All~~During the three months ended March 31, 2016, all available proceeds from the sale of TPI ~~and Kreher~~ were used to pay down the Company's long-term debt, which along with the ~~$8.7~~$7.1 million payment of debt restructuring costs, resulted in net cash used in financing activities of ~~$68.7 million during the nine months ended September 30, 2016.~~$51.6 million.

In ~~connection with the Exchange Offer completed in February~~December 2016, ~~and subsequent secured note exchanges,~~ the Company ~~issued $204.5 million~~entered into new secured credit facilities (the "Credit Facilities") with certain financial institutions (the "Financial Institutions") in order to replace and repay outstanding borrowings and support the continuance of letters of credit under the Company's senior secured asset-based revolving credit facility. The Credit Facilities are in the form of senior secured first-lien term loan facilities in an aggregate principal amount of ~~New Secured Notes.~~ up to $112.0 million. The Credit Facilities consist of a $75.0 million initial term loan facility funded at closing and a $37.0 million Delayed Draw Facility. Under the Delayed Draw Facility, $24.5 million was drawn in December 2016 and $12.5 million was expected to be available in June 2017 or thereafter.

On August 1, 2016, the Company issued a notice of redemption with respect to the remaining outstanding Secured Notes and deposited $5.6 million with the trustee (representing the aggregate principal amount plus accrued and unpaid interest to the August 31, 2016 redemption date) to effect a satisfaction and discharge of the indenture governing the Secured Notes.

The Company also completed the Convertible Note Exchange during the first half of 2016. Supporting Holders holding $57.5 million aggregate principal amount of Convertible Notes exchanged their Convertible Notes for an aggregate of 7.9 million shares of the Company's common stock and $23.8 million aggregate principal amount of New Convertible Notes.

~~In June 2016,~~May 4, 2017, the Company entered into an amendment to ~~its Revolving~~the Credit Facilities Agreement. Under this amendment, the Financial Institutions agreed to accelerate the Company's access to the Delayed Draw Facility that ~~reduced the aggregate commitments under the Revolving Credit Facility from $125,000~~was expected to $100,000. The amendment also imposed an availability block that decreased availability under the Revolving Credit Facility by $17,500 initially. The availability block is subject to reduction if the Company’s ratio (as definedbe available in the Revolving Credit Facility Loan and Security Agreement) of EBITDA to fixed charges (the “Fixed Charge Coverage Ratio”) is at least 1.0 to 1.0 for certain specified periods. As a result of these items, along with the sale of certain assets, the Company's current maximum borrowing capacity has decreased from $96.2 million at December 31, 2015 to $54.5 million at September 30, 2016.

Under the Revolving Credit Facility Loan and Security Agreement, the maximum borrowing capacity of the Revolving Credit Facility is based on the Company's borrowing base calculation. The weighted average advance rates used in the borrowing base calculation are 85.0% on eligible accounts receivable and 55.2% on eligible inventory.

The Company's Revolving Credit Facility contains a springing financial maintenance covenant requiring the Company to maintain a Fixed Charge Coverage Ratio of 1.1 to 1.0 when excess availability is less than the greater of ~~10%~~ ~~of the calculated borrowing base (as defined in the Revolving Credit Facility Loan and Security Agreement)~~June 2017 or ~~$10 million. In addition, if excess availability is less than the greater of~~ ~~12.5%~~ ~~of the calculated borrowing base (as defined in the Revolving Credit Facility Loan and Security Agreement) or~~ ~~$12.5 million, the lender has the right to take full~~

dominion of the Company’s cash collections and apply these proceeds to outstanding loans under the Revolving Credit Agreement (“Cash Dominion”). The Company's Fixed Charge Coverage Ratio was negative for the twelve months ended ~~September 30, 2016~~. At this ratio, the Company's current maximum borrowing capacity would be $54.5 million before triggering Cash Dominion. The Revolving Credit Facility matures on December 10, 2019 (or 91 days prior to the maturity date of the Company's Secured Notes or Convertible Notes if they have not been refinanced at that time).

~~Additional unrestricted borrowing capacity under the Revolving Credit Facility at~~ ~~September 30, 2016~~ ~~was as follows:~~

Maximum borrowing capacity $ 93.9
Minimum excess availability before triggering Cash Dominion (12.5 )
Letters of credit and other reserves (9.4 )
Availability reserve (17.5 )
Current maximum borrowing capacity 54.5
Current borrowings (12.5 )
Additional unrestricted borrowing capacity $ 42.0

~~As part of the Company's refinancing of its Secured Notes, it agreed to make Special Redemptions using Designated Asset Sales Proceeds~~thereafter (refer to Note 714 - ~~Debt~~Subsequent Events to the Condensed Consolidated Financial Statements). ~~Pursuant~~This will enable the Company to finance additional investments in inventory and service its customers' needs.

The Credit Facilities Agreement contains numerous covenants that, if breached, could result in a default under the ~~indenture~~agreement. These covenants include a financial covenant that requires the Company to maintain a minimum amount of consolidated adjusted EBITDA (as defined in the Credit Facilities Agreement) during various applicable fiscal periods beginning with the fiscal quarter ended March 31, 2017. The Company is also required to maintain specified minimum amounts of net working capital (as defined in the Credit Facilities Agreement) and consolidated liquidity (as defined in the Credit Facilities Agreement). The Credit Facilities Agreement also provides that a default could result from the occurrence of any condition, act, event or development that results or could be reasonably expected to result in a material adverse effect (as defined in the Credit Facilities Agreement). In the event of a default, the Financial Institutions could elect to declare all amounts borrowed due and payable, including accrued interest and any other obligations

under the Credit Facilities. Any such acceleration would also result in a default under the indentures governing the Company's New Secured Notes ~~Special Redemptions~~and its New Convertible Notes.

On April 6, 2017, the Company entered into an amendment to the Credit Facilities Agreement. Under this amendment, the Financial Institutions agreed that the financial covenants related to consolidated adjusted EBITDA and specified minimum amounts of ~~not less than $27.5 million of aggregate principal amount~~net working capital and consolidated liquidity, all as described in the preceding paragraph, would cease to apply for the period from March 31, 2017 through and including May 31, 2018 (refer to Note 14 -Subsequent Events to the Condensed Consolidated Financial Statements).

The Company's debt agreements impose significant operating and financial restrictions which may prevent the Company from executing certain business opportunities, such as making acquisitions or paying dividends, among other things.

For additional information regarding the terms of the New Secured Notes, ~~must be made on or prior to October 31, 2016, subject to a penalty equal to 4.0% of the outstanding principal, payable in cash and/or stock, in which case the maturity date of~~ the New ~~Secured~~Convertible Notes ~~will be September 14, 2017. On October 31, 2016,~~and the ~~Company issued an irrevocable notice of redemption for $27.5 million of aggregate principal amount of the New Secured Notes~~Credit Facilities, refer to satisfy the Special Redemption requirement. The Company will use proceeds from the Revolving Credit Facility to make the Special Redemption payment, which will have a corresponding decrease in the Company's unrestricted borrowing capacity.

~~The Revolving Credit Facility matures on December 10, 2019 (or 91 days prior~~Note 7 -Debt to the ~~maturity date of the Company's Secured Notes or Convertible Notes if they have not been refinanced at that time).~~Condensed Consolidated Financial Statements.

The Company ~~currently expects~~remains confident that it will have ~~sufficient access~~adequate liquidity over the next twelve months to ~~cash flows to continue as a going concern, to fund~~operate its ~~ongoing capital expenditure programs~~business and meet its ~~debt obligations, including interest payments, for at least~~cash requirements, but further reduction in the next twelve months. However, these plans rely on certain underlying assumptions and estimates that may differ from actual results. Such assumptions include improvements in operating results and cash flows driven by ongoing refinancing efforts and the restructuring activities taken that streamlined the Company’s organizational structure, lowered operating costs and increased liquidity. These plans also rely on the Company securing additional financing, achieving its sales targets, continuing to reduce operating costs and managing its working capital to increase liquidity. If the Company’s efforts to manage working capital and improve operating results are not successful, the Company may not have sufficient cash flows to continue as a going concern.

With the completion of the Exchange Offer and Convertible Notes Exchange, the Company has extended the maturity of a substantial portion of its long-term debt for up to two years. The sale of TPI, the sale of the Company's ownership in Kreher, and the sale of the Company's Houston and Edmonton inventory provided liquidity which was used to pay down long-term debt and ~~resulted~~cash interest obligations would strengthen its financial position and flexibility and therefore remains a key near-term financial objective. To achieve this objective, on April 6, 2017, the Company entered into a restructuring support agreement (the “RSA”) with certain of its creditors (the "Consenting Creditors"), including certain holders of the Company’s (a) term loans under its Credit Facilities Agreement, (b) New Secured Notes, and (c) New Convertible Notes. The RSA contemplates the financial restructuring of the debt and equity of the Company (the “Restructuring”) pursuant to a Restructuring Term Sheet attached to the RSA as an exhibit (the “Term Sheet”). The Term Sheet sets forth the terms and conditions of the Restructuring and provides for the consummation thereof, and contains mutual covenants of the Company and the Consenting Creditors in furtherance of the Restructuring, either as part of out-of-court proceedings or by prepackaged chapter 11 plan of reorganization (a “Plan”) confirmed by the U.S. Bankruptcy Court for the District of Delaware. If the Restructuring were consummated pursuant to a ~~$53.6 million reduction~~Plan, the Plan would be confirmed following a filing by the Company for voluntary relief under chapter 11 of the United States Bankruptcy Code. While there is still uncertainty about whether or not this action will be consummated out-of-court or through the U.S. Bankruptcy Court, this action, or similar actions, would be dilutive to the holders or the Company’s outstanding equity securities and could adversely affect the trading prices and values of the Company’s current debt and equity securities. For additional information concerning the RSA, please refer to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission (the "SEC") on April 7, 2017.

Pursuant to the RSA and in furtherance of the Restructuring, on May 15, 2017, the Company commenced solicitation of votes on its Plan by distributing a Disclosure Statement for Debtors’ Prepackaged Joint Chapter 11 Plan of Reorganization (the “Disclosure Statement”) to holders of Prepetition First Lien Secured Claims, Prepetition Second Lien Secured Claims, and Prepetition Third Lien Secured Claims, as such terms are defined in the Plan. A copy of the Disclosure Statement, which includes the Plan, has been furnished with the Company's ~~revolver balance during~~Current Report on Form 8-K filed with the nine months ended September 30, 2016. The Company plans to further improve liquidity through continued reductions in inventory, ongoing refinancing efforts and possible future strategic sales of under-performing assets. Furthermore, the Company has available borrowing capacity under the asset-based Revolving Credit Facility, as described above.SEC on May 15, 2017.

Through its ~~ongoing~~ restructuring and refinancing efforts, the Company is committed to achieving a strong financial position while maintaining sufficient levels of available liquidity, managing working capital and monitoring the Company's overall capitalization. Cash and cash equivalents at ~~September 30, 2016~~March 31, 2017 were ~~$10.0~~$16.2 million, and the Company had $42.0 million of additional unrestricted borrowing capacity under its Revolving Credit Facility prior to the reduction for the Special Redemption payment of $27.5 million. Approximately $1.7with approximately $7.7 million of the Company’s consolidated cash and cash equivalents balance ~~resides~~residing in the United States. ~~As foreign earnings are permanently reinvested, availability under the Company’s Revolving Credit Facility would be used to fund operations in the United States as the need arises in the future.~~

Working capital, defined as current assets less current liabilities, and the balances of its significant components are as follows:

September 30, December 31, Working Capital
2016 2015 Increase (Decrease)
Working capital $ 188.6
$ 256.4
$ (67.8 )
Cash and cash equivalents 10.0
11.1
(1.1 )
Accounts receivable 76.9
73.2
3.7
Inventories 179.4
216.1
(36.7 )
Accounts payable 51.9
45.6
(6.3 )
Accrued and other current liabilities 37.4
28.1
(9.3 )

The Company monitors its overall capitalization by evaluating total debt to total capitalization. Total debt to total capitalization is defined as the sum of short-term and long-term debt, divided by the sum of total debt and stockholders’ equity. Total debt to total capitalization was 105.7% at ~~September 30, 2016~~ ~~and~~ ~~87.1%~~ at ~~December 31, 2015~~. Over the long-term, the Company plans to improve its total debt to total capitalization by improving operating results, managing working capital and using cash generated from operations as well as the strategic sale of under-performing assets to repay outstanding debt. As and when permitted by the terms of the agreements governing the Company's outstanding indebtedness, depending on market conditions, the Company may decide in the future to refinance, redeem or repurchase its debt and take other steps to reduce its debt or lease obligations or otherwise improve its overall financial position and balance sheet.



	March 31,		December 31,		Working Capital
(Dollar amounts in millions)	2017		2016		Increase (Decrease)
Working capital	$	193.2	$	203.9	$	(10.7	)
Cash and cash equivalents	16.2		35.6		(19.4		)
Accounts receivable	80.7		64.4		16.3
Inventories	158.6		146.6		12.0
Accounts payable	52.6		33.1		(19.5		)
Accrued and other current liabilities	23.8		19.9		(3.9		)

The Company’s principal payments on long-term debt, including the current portion of long-term debt, required during the next five years and thereafter are summarized ~~below:~~below (amounts in millions):

2016 (remaining three months)^(a)
$ 27.6
2017 0.1
2018 177.0
2019^(b)
34.8
2020 —
2020 and beyond —
Total debt $ 239.5

^(a)Amount includes Special Redemption payment of $27.5 million of aggregate principal amount of the New Secured Notes. The terms of the New Secured Notes require, among other things, a notice of redemption with respect to this Special Redemption to be issued on or prior to October 31, 2016, in order to extend the maturity date of the New Secured Notes to December 15, 2018. On October 31, 2016, the Company issued an irrevocable notice of redemption for $27.5 million of aggregate principal amount of the New Secured Notes to satisfy the Special Redemption Condition. Refer to ~~Note 7 - Debt~~ ~~to the Condensed Consolidated Financial Statements.~~

^(b)Amount includes outstanding balance of $12.5 million under the Company's Revolving Credit Facility as of September 30, 2016 which can fluctuate. The maturity date presented above is based on the December 15, 2019 maturity date of the Revolving Credit Facility. Amounts outstanding under the Revolving Credit Facility may become due sooner than the December 15, 2019 maturity date as described in ~~Note 7 - Debt~~ ~~to the Condensed Consolidated Financial Statements.~~

As of September 30, 2016, the Company had $8.1 million of irrevocable letters of credit outstanding, which primarily consisted of $5.0 million for its new warehouse in Janesville, Wisconsin, $0.7 million for collateral associated with commodity hedges and $1.3 million for compliance with the insurance reserve requirements of its workers’ compensation insurance program.

On November 1, 2016, and November 2, 2016, the Company entered into commitment letters with certain financial institutions in order to replace and repay any amounts outstanding under the Revolving Credit Facility, including cash collateralization of any undrawn letters of credit, and to provide access to additional working capital. Pursuant to the terms of the commitment letters, the new credit facilities will take the form of senior secured term loan facilities in an aggregate principal amount of $100.0 million. Commitments pursuant to the existing Revolving Credit Facility will be terminated, and liens granted to the collateral agent will be released in full. The funding of the term loan facilities is subject to original issue discount in an amount equal to 3.0% of the full principal amount of the facilities. The facilities will bear interest at a rate of 11.0% per annum, and will mature in September 2018. The commitment letters also allow the Company to secure up to $12.0 million of financing through its foreign subsidiaries, subject to certain conditions. The Company expects to close on the term loan facilities in the fourth quarter of 2016.

As noted above, the availability block and other restrictions significantly reduce the Company’s unrestricted borrowing capacity under the Revolving Credit Facility. The term loan facilities are expected to provide the Company with greater liquidity than the Revolving Credit Facility that they will replace. The Company will be subject to certain financial covenants, consisting of (a) a minimum cash EBITDA level, (b) a minimum liquidity amount, and (c) a minimum working capital covenant.

On October 19, 2016, the Company received written notice from the New York Stock Exchange (the “NYSE”) that it was not in compliance with the continued listing standards set forth in Section 802.01C of the NYSE Listed Company Manual. The Company was considered below criteria established by the NYSE for continued listing because the average closing price of its common stock was less than $1.00 per share over a consecutive 30 trading-day period.

In accordance with applicable NYSE procedures, the Company notified the NYSE of its intention to cure this noncompliance. In accordance with the NYSE rules, the Company has six months from the date of receipt of the notice to achieve compliance with the continued listing standards of Section 802.01C. The Company can regain compliance at any time during the six-month cure period if the Company’s common stock has a closing share price of at least $1.00 per share on the last trading day of any calendar month during the period and also has an average closing share price of at least $1.00 per share over the 30 trading-day period ending on the last trading day of that month.

As previously disclosed, the Company received written notice from the NYSE on January 21, 2016 that it was not in compliance with the continued listing standards related to the maintenance of a minimum level of stockholders' equity and average market capitalization as set forth in Section 802.01B of the NYSE Listed Company Manual. The Company is currently implementing its plan to return to conformity with the relevant standards required in Section 802.01B within the 18-month period allowed by the NYSE.

The Company is actively monitoring the price of its common stock and will consider available options to resolve the deficiency and achieve compliance with Rule 802.01C. The Company's common stock will continue to be listed and traded on the NYSE during the cure period, subject to compliance with the NYSE's other applicable continued listing standards.



2017 (remaining nine months)	$	0.1
2018	276.5
2019	22.3
2020	—
2021	—
2022 and beyond	—
Total debt	$	298.9


Item 3.	Quantitative and Qualitative Disclosures about Market Risk

The Company is exposed to interest rate, commodity price and foreign exchange rate risks that arise in the normal course of business. There have been no significant or material changes to such risks since December 31, ~~2015~~2016. Refer to Item 7a7A in the Company’s Annual Report on Form 10-K filed for the year ended December 31, ~~2015~~2016~~, as amended,~~ for further discussion of such risks.


Item 4.	Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

A review and evaluation was performed by the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934). Based upon that review and evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

(b) Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15 and 15d-15 under the Exchange Act that occurred during the three months ended ~~September 30, 2016~~March 31, 2017 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II. OTHER INFORMATION

~~Item 1A. Risk Factors~~

There have been no material changes from the risk factors previously disclosed in Part 1, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2015, as amended, which was filed with the Securities and Exchange Commission on March 16, 2016, and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016.


~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~

~~None.~~


Item 6.	Exhibits

Exhibits required to be filed as part of this Report on Form 10-Q are listed in the Exhibit Index, which is incorporated by reference herein.

SIGNATURE

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:	~~November 9, 2016~~May 15, 2017	By:	/s/ ~~Paul Schwind~~Patrick R. Anderson
			~~Paul Schwind~~Patrick R. Anderson, Executive Vice President, Chief Financial Officer & Treasurer
			~~Corporate Controller~~(Principal Financial Officer & ~~Chief~~Principal Accounting ~~Officer~~Officer)
			(Mr. ~~Schwind~~Anderson has been authorized to sign on behalf of the Registrant.)

Exhibit Index

The following exhibits are filed herewith or incorporated herein by reference:



Exhibit No.	Description	Page
3.1	Amended and Restated Bylaws of A.M. Castle & Co., as adopted on November 3, 2016. Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K/A filed with the SEC on February 3, 2017. Commission File No. 1-05415
3.2	Amended and Restated Bylaws of A.M. Castle & Co., as adopted on April 6, 2017. Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on ~~November 4, 2016.~~April 7, 2017. Commission File No. 1-05415
10.1	~~Unit Purchase~~Restructuring Support Agreement, dated ~~August 7, 2016,~~April 6, 2017 by and ~~between A.M. Castle & Co.~~among the Company, certain of its subsidiaries, and ~~Duferco Steel, Inc.~~certain beneficial holders or other parties signatory thereto. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on ~~August 9, 2016.~~April 7, 2017. Commission File No. 1-05415
10.2	~~Settlement~~Second Amendment to Credit and Guaranty Agreement, dated ~~November 3, 2016,~~as of April 6, 2017, by and among ~~A.M. Castle & Co., Raging Capital Management, LLC and~~the Company, certain of ~~their affiliates,~~its subsidiaries, the Lenders party thereto, and ~~Steven W. Scheinkman, Kenneth H. Traub, Allan J. Young,~~Cantor Fitzgerald Securities, as Administrative Agent and ~~Richard N. Burger.~~Collateral Agent. Incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the SEC on April 7, 2017. Commission File No. 1-05415
10.3	Third Amendment to Credit and Guaranty Agreement, dated as of May 4, 2017, by and among the Company, certain of its subsidiaries, the Lenders party thereto, and Cantor Fitzgerald Securities, as Administrative Agent and Collateral Agent. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on ~~November~~May 4, ~~2016.~~2017. Commission File No. 1-05415
31.1	CEO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 2002	E-1
31.2	CFO Certification Pursuant to Section 302 of the Sarbanes Oxley Act of 2002	E-2
32.1	CEO and CFO Certification Pursuant to Section 906 of the Sarbanes Oxley Act of 2002	E-3
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Label Linkbase Document
101.PRE	XBRL Taxonomy Presentation Linkbase Document

3629



		Page
Part I. Financial Information
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2320
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3326
Item 4.	Controls and Procedures	3326

Part II. Other Information
~~Item 1A.~~	~~Risk Factors~~	34
~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	34
Item 6.	Exhibits	3427

~~Signatures~~Signature		3528

Exhibit Index		3629



	September 30, 2016				December 31, 2015
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Customer relationships	$	67,348	$	61,711	$	67,438	$	57,188



Company's stock price at the end of the period	$	0.80
Expected volatility	79.70		%
Credit spreads	65.75		%
Risk-free interest rate	0.91		%



	Derivative liability for embedded conversion feature
Fair value as of December 31, 2015	$	—
Fair value at issuance date	11,574
Settlement upon conversion into common stock	(721		)
Mark-to-market adjustment on conversion feature^(a)	(7,569		)
Fair value as of September 30, 2016	$	3,284



	Level 1		Level 2		Level 3		Total^(a)
As of September 30, 2016
Derivative liability for commodity hedges	$	—	$	202	$	—	$	202
As of December 31, 2015
Derivative liability for commodity hedges	$	—	$	1,015	$	—	$	1,015



	Three Months Ended September 30,
	2016					2015					Favorable/(Unfavorable)
	$			% of Net Sales		$			% of Net Sales		$ Change			% Change

Net sales	$	124.9		100.0	%	$	150.6		100.0	%	$	(25.7	)	(17.1	)%
Cost of materials (exclusive of depreciation and amortization)	92.4			74.0	%	115.3			76.6	%	22.9			19.9	%
Operating costs and expenses^(a)	41.1			32.9	%	50.8			33.7	%	9.7			19.1	%
Operating loss	$	(8.6	)	(6.9	)%	$	(15.5	)	(10.3	)%	$	6.9		44.5	%



Maximum borrowing capacity	$	93.9
Minimum excess availability before triggering Cash Dominion	(12.5		)
Letters of credit and other reserves	(9.4		)
Availability reserve	(17.5		)
Current maximum borrowing capacity	54.5
Current borrowings	(12.5		)
Additional unrestricted borrowing capacity	$	42.0



2016 (remaining three months)^(a)	$	27.6
2017	0.1
2018	177.0
2019^(b)	34.8
2020	—
2020 and beyond	—
Total debt	$	239.5