CAS Simplify China A Shares Plus Income ETF

Declares a Quarterly Cash Dividend FRANKLIN PARK, Ill., Oct. 31 /PRNewswire-FirstCall/ -- A. M. Castle & Co. (AMEX:CAS), a global distributor of specialty metal and plastic products and services announced today continued strong customer demand and record sales and earnings performance for the quarter ended September 30, 2006. Consolidated net sales for the third quarter ended September 30, 2006 were $300.8 million, an increase of $66.3 million, or 28.2% from the third quarter of 2005. Year-to-date consolidated net sales were $855.6 million, an increase of $123.9 million, or 16.9% from the same period of 2005. "We continue to experience strong demand for our products and services," stated Michael Goldberg, President and CEO of A. M. Castle. "Of the 28% increase in our third quarter revenues, 8% was attributable to volume, 12% to price increases and 8% to our acquisition of Transtar. Sales of nickel alloy products were particularly robust, with tonnage in that product family growing 60% compared to the third quarter of last year, reflecting the strong oil and gas market. Year-to-date revenues were 17% ahead of last year, of which 7% was attributable to volume, 7% to price and 3% to Transtar," Goldberg continued. On September 5, 2006 the Company announced its acquisition of Transtar Metals, a leading distributor of high-performance alloys to the aerospace and defense industries world-wide. Under the terms of the agreement signed August 12, 2006, the closing purchase price was $173.3 million subject to final adjustments, including the assumption of $1.0 million of foreign debt and $0.6 million of capital leases. The purchase was funded with approximately $30.0 million of available cash and $142.0 million of debt financing. Transtar Metals has eight operations strategically located in aerospace hubs in the U.S., the United Kingdom and France. Additionally, Transtar maintains a sales presence throughout Europe and the Far East. International sales are over one-third of Transtar's total revenue stream. "We are very pleased with our acquisition of Transtar and our people are working together extremely well. The aerospace business continues to be strong," commented Goldberg. Net income applicable to common stock for the third quarter was $15.3 million, or $0.82 per diluted share, compared to $10.1 million, or $0.56 per diluted share in the third quarter of 2005. Year-to-date net income applicable to common stock was $45.2 million, or $2.45 per diluted share, compared to $34.9 million, or $1.93 per diluted share for the same period of 2005. In its Metals segment the Company reported 30% sales growth for the third quarter and 18% on a year-to-date basis. The Transtar acquisition contributed 8% of that growth for the third quarter and 3% year-to-date. Increased volume was 9% and 8% for the third quarter and year-to-date, respectively. Material price increases accounted for the remainder of the sales growth. Plastic segment sales increased 11% compared to the third quarter of 2005, and 9% on a year-to-date basis. Sales growth, excluding material price increases in this segment was 9% and 3% for the third quarter and year-to-date comparable periods, respectively. "We will continue to look to invest in certain markets which we believe have higher growth potential and where we can leverage our expertise in specialty products," stated Goldberg. "Our acquisition of Transtar Metals is the cornerstone of our long-term strategic growth initiative in this regard. Including Transtar, we have about 30% of our total Company revenues aligned with the global aerospace and defense industry. It is our intent to invest in other industries that are in line with our strategic goals over the next few years, but we are very mindful of our balance sheet," concluded Goldberg. Larry Boik, Vice President and CFO of the Company commented, "Our balance sheet and cash position allowed us to move forward with the strategic acquisition of Transtar. The future cash earnings of the business will be used to reduce our debt and to provide similar flexibility to fund future strategic growth opportunities as they arise. We will remain diligent in managing the balance sheet through the business cycles as we execute our growth strategy." On October 26, 2006 the Company's Board of Directors approved a quarterly cash dividend of 6 cents per share, payable on November 27, 2006 to shareholders of record at the close of business on November 10, 2006. About A. M. Castle & Co. Founded in 1890, A. M. Castle & Co. is a specialty metal and plastic products and services distributor, principally serving the producer durable equipment sector of the economy. Its customer base includes many Fortune 500 companies as well as thousands of medium and smaller-sized firms spread across a variety of industries. Within its core metals business, it specializes in the distribution of alloy and stainless steels; nickel alloys; aluminum and carbon. Through its subsidiary, Total Plastics, Inc., the Company also distributes a broad range of value-added industrial plastics. Together, Castle operates over 65 locations throughout North America and Europe. Its common stock is traded on the American and Chicago Stock Exchange under the ticker symbol "CAS." Safe Harbor Statement / Regulation G Disclosure This release may contain forward-looking statements relating to future financial results. Actual results may differ materially as a result of factors over which the Company has no control. These risk factors and additional information are included in the Company's reports on file with the Securities Exchange Commission. The financial statements included in this release contain a non-GAAP disclosure, EBITDA, which consists of income before provision for income taxes plus depreciation and amortization, and interest expense (including discount on accounts receivable sold), less interest income. EBITDA is presented as a supplemental disclosure because this measure is widely used by the investment community for evaluation purposes and provides the reader with additional information in analyzing the Company's operating results. EBITDA should not be considered as an alternative to net income or any other item calculated in accordance with U.S. GAAP, or as an indicator of operating performance. Our definition of EBITDA used here may differ from that used by other companies. A reconciliation of EBITDA to net income is provided per U.S. Securities and Exchange Commission requirements. CONSOLIDATED STATEMENTS OF INCOME For the Three For the Nine (Dollars in thousands, except per Months Ended Months Ended share data) Sept 30, Sept 30, Unaudited 2006 2005 2006 2005 Net sales $300,809 $234,551 $855,610 $731,721 Cost of material sold 214,792 163,956 606,136 512,705 Gross material margin 86,017 70,595 249,474 219,016 Plant and delivery expense 30,117 27,920 88,720 81,635 Sales, general, and administrative expense 26,847 23,405 76,805 69,509 Depreciation and amortization expense 3,225 2,205 8,323 6,752 Total operating expense 60,189 53,530 173,848 157,896 Operating income 25,828 17,065 75,626 61,120 Interest expense, net (1,903) (1,765) (3,949) (5,875) Discount on sale of accounts receivable - (127) - (1,127) Income before income taxes and equity earnings of joint venture 23,925 15,173 71,677 54,118 Income taxes (9,470) (5,673) (29,110) (21,888) Income before equity in earnings of joint venture 14,455 9,500 42,567 32,230 Equity in earnings of joint venture 1,037 817 3,332 3,342 Net income 15,492 10,317 45,899 35,572 Preferred dividends (235) (240) (720) (720) Net income applicable to common stock $15,257 $10,077 $45,179 $34,852 Diluted earnings per share $0.82 $0.56 $2.45 $1.93 EBITDA * $30,090 $20,087 $87,281 $71,214 *Earnings before interest, discount on sale of accounts receivable, taxes, depreciation and amortization Reconciliation of EBITDA to net For the Three For the Nine income: Months Ended Months Ended Sept 30, Sept 30, 2006 2005 2006 2005 Net income $15,492 $10,317 $45,899 $35,572 Depreciation and amortization 3,225 2,205 8,323 6,752 Interest, net 1,903 1,765 3,949 5,875 Discount on accounts receivable s - 127 - 1,127 Provision from income taxes 9,470 5,673 29,110 21,888 EBITDA $30,090 $20,087 $87,281 $71,214 CONSOLIDATED BALANCE SHEETS (Dollars in thousands) As of Unaudited Sept 30, Dec 31, 2006 2005 ASSETS Current assets Cash and cash equivalents $9,756 $37,392 Accounts receivable, less allowances of $3,263 at September 30, 2006 and $1,763 at December 31, 2005 182,023 107,064 Inventories (principally on last-in, first-out basis) 216,216 119,306 (latest cost higher by $121,865 at September 30, 2006 and $104,036 at December 31, 2005) Other current assets 13,996 6,351 Total current assets 421,991 270,113 Investment in joint venture 13,000 10,850 Goodwill 99,208 32,222 Intangible assets 68,520 70 Prepaid pension cost 39,082 41,946 Other assets 6,462 4,112 Property, plant and equipment, at cost Land 5,224 4,772 Buildings 48,641 45,890 Machinery and equipment 138,458 127,048 192,323 177,710 Less - accumulated depreciation (121,080) (113,288) 71,243 64,422 Total assets $719,506 $423,735 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $144,298 $103,246 Accrued liabilities 32,972 21,535 Current and deferred income taxes 10,863 7,052 Short-term debt 129,223 - Current portion of long-term debt 12,527 6,233 Total current liabilities 329,883 138,066 Long-term debt, less current portion 97,718 73,827 Deferred income taxes 48,618 21,903 Deferred gain on sale of assets 5,907 5,967 Pension and postretirement benefit obligations 9,181 8,467 Commitments and contingencies Stockholders' equity Preferred stock, $0.01 par value - 10,000,000 shares authorized; 12,000 shares issued and outstanding 11,239 11,239 Common stock, $0.01 par value - authorized 30,000,000 shares; issued and outstanding 17,013,371 at September 30, 2006 and 16,605,714 at December 31, 2005 170 166 Additional paid-in capital 67,772 60,916 Retained earnings 152,670 110,530 Accumulated other comprehensive income 3,281 2,370 Treasury stock, at cost - 411,235 shares at September 30, 2006 and 546,065 shares at December 31, 2005 (6,933) (9,716) Total stockholders' equity 228,199 175,505 Total liabilities and stockholders' equity $719,506 $423,735 CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) For the Nine Months Unaudited Ended Sept 30, 2006 2005 Cash flows from operating activities: Net income $45,899 $35,572 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 8,323 6,752 Amortization of deferred gain (559) (639) Equity in earnings from joint venture (3,332) (3,342) Stock compensation expense 2,911 2,607 Deferred tax provision 4,730 241 Excess tax benefits from stock-based payment arrangements (1,210) - Increase (decrease) from changes, net of acquisitions, in: Accounts receivable (40,380) (35,776) Inventories (36,020) 18,205 Prepaid pension costs 2,865 987 Other current assets (2,115) 316 Accounts payable 20,423 (8,182) Accrued liabilities 3,849 4,401 Income tax payable (9,946) 5,265 Postretirement benefit obligations and other liabilities (1,585) 308 Net cash (used in) from operating activities (6,147) 26,715 Cash flows from investing activities: Investments and acquisitions, net of cash acquired (175,795) (236) Dividends from joint venture 1,231 1,705 Capital expenditures (10,170) (4,784) Collection of note receivable - 2,639 Net cash used in investing activities (184,734) (676) Cash flows from financing activities: Proceeds from issuance of short-term debt 128,943 - Proceeds from issuance of long-term debt 30,574 4,000 Repayments of long-term debt (680) (21,542) Preferred stock dividend (720) (720) Dividends paid (3,039) - Exercise of stock options and other 6,525 597 Excess tax benefits from stock-based payment arrangements 1,210 - Net cash from (used in) financing activities 162,813 (17,665) Effect of exchange rate changes on cash and cash equivalents 432 476 Net (decrease) increase in cash and cash equivalents (27,636) 8,850 Cash and cash equivalents - beginning of year $37,392 $3,106 Cash and cash equivalents - end of period $9,756 $11,956 DATASOURCE: A. M. Castle & Co. CONTACT: Larry A. Boik, Vice President-Finance & CFO, of A. M. Castle & Co., +1-847-349-2576, or , or Analysts, Katie Pyra of Ashton Partners, +1-312-553-6717, or

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