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A. M. Castle & Co. Reports Operating Results (10-Q)

August 07, 2012 | About:
10qk

10qk

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A. M. Castle & Co. (CAS) filed Quarterly Report for the period ended 2012-06-30.

A M Castle And Co has a market cap of $170.7 million; its shares were traded at around $7.91 with a P/E ratio of 11.6 and P/S ratio of 0.2.

Highlight of Business Operations:

Consolidated net sales were $329.4 million, an increase of $46.8 million, or 16.6%, compared to the second quarter of 2011. Metals segment sales during the second quarter of 2012 of $297.2 million were $44.9 million, or 17.8%, higher than the same period last year. Tube Supply had net sales of $45.3 million for the quarter ended June 30, 2012. The decline in sales in the Metals segment, excluding the activity of Tube Supply, was the result of a slight increase in demand, offset by lower average prices for the Companys products. Average tons sold per day, excluding Tube Supply, increased 1.1% compared to the prior year quarter, which was primarily driven by growth carbon and alloy plate and nickel products. Virtually all key end-use markets experienced weaker demand in the second quarter of 2012 compared to 2011 with the exception of the heavy equipment and oil and gas sectors.

Cost of materials (exclusive of depreciation and amortization) during the second quarter of 2012 was $240.7 million, an increase of $32.2 million, or 15.4%, compared to the second quarter of 2011. Material costs for the Metals segment for the second quarter of 2012 were $218.2 million or 73.4% as a percent of net sales compared to $187.5 million or 74.3% as a percent of sales for the second quarter of 2011. Tube Supply cost of materials was $29.6 million for the quarter ended June 30, 2012. Excluding Tube Supply, cost of materials increased $2.6 million compared to the second quarter of 2011. Second quarter 2012 results include a $1.4 million loss associated with commodity hedges compared to no charge in the prior year period. The Metals segment recorded LIFO expense of $1.5 million in the second quarter of 2012 compared to $3.9 million in the second quarter of 2011. Material costs for the Plastics segment of 69.9% as a percent of net sales for the second quarter of 2012 were higher than 69.3% for the same period last year due to higher costs experienced in the automotive sector of the business.

Consolidated net sales were $692.3 million, an increase of $136.9 million, or 24.6%, compared to the same period last year. Higher net sales were primarily the result of higher shipping volumes and increased pricing in the metals and plastics markets. Metals segment sales during the first six months of 2012 of $629.1 million were $132.2 million, or 26.6%, higher than the same period last year. Tube Supply had net sales of $105.1 million for the first half of 2012. Average tons sold per day increased 5.2% compared to the prior year period. The increase in sales volume was driven primarily by carbon and alloy plate, nickel, stainless and tubing products. Key end-use markets that experienced increased demand in the first six months of 2012 include oil and gas, heavy equipment and general industrial equipment.

Cost of materials (exclusive of depreciation and amortization) during the first six months of 2012 were $504.7 million, an increase of $94.8 million, or 23.1%, compared to the same period last year. Material costs for the Metals segment for the first six months of 2012 were $460.3 million or 73.2% as a percent of net sales compared to $369.4 million or 74.3% as a percent of net sales for the first six months of 2011. Tube Supply cost of materials was $69.4 million for the first half of 2012. Cost of materials increased primarily as a result of increased sales activity for the period. Year-to-date 2012 results include a $1.0 million loss associated with commodity hedges compared to no charge in the prior year period. The Metals segment recorded LIFO expense of $6.1 million in 2012 compared to $6.9 million during the prior year period. Material costs for the Plastics segment were 70.3% and 69.2% as a percent of net sales for the first six months of 2012 and 2011, respectively. Management believes that consolidated material costs as a percentage of net sales will be comparable to first six months of 2012 levels for the balance of 2012.

Working capital at June 30, 2012 was $365.5 million compared to $349.0 million at December 31, 2011. The increase in working capital is primarily due to higher inventory of $92.4 million to support higher sales volumes and higher prepaid expenses and other current assets of $10.6 million, partially offset by a decrease in cash and income tax receivable of $10.1 million and $4.5 million, respectively, and increases in accounts payable and accrued liabilities of $62.8 million and $6.0 million, respectively, from December 31, 2011 to June 30, 2012.

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