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A. M. Castle & Co. POSITIONED FOR Growth.     March 2011. Forward Looking Statement & Non-GAAP Measures.

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march 2011

A. M. Castle & Co.

POSITIONED FOR Growth

 March 2011

forward looking statement non gaap measures
Forward Looking Statement & Non-GAAP Measures

This presentation 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, debt extinguishment expense, and interest expense (including discount on accounts receivable sold and loss on extinguishment of debt), 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.

overview
Overview
  • 120 year history in the metal service center industry
  • One of the largest metal service center companies in the U.S., $944 million 2010 revenue
  • Supplying over 5,000 products to 25,000 customers
  • Foremost global distributor of specialty grade, high performance metals
  • Diversified Plastics business with a wide variety of products and large customer base
  • Solutions provider of specialty processing services and supply chain management solutions
  • Strong exposure to high-growth end markets including Oil & Gas, Mining and Heavy Equipment and Aerospace
  • Expanding global footprint
end markets
End Markets

Markets Served

Global Demand Recovery Driving Growth in Key End Markets

product portfolio
Product Portfolio

Products Provided

Diversified Product Offering with Focus on Specialty Materials

service solutions serving vital link in global metal supply chain

Sub

Sub

GlobalOEMs

Mills

A. M.

Castle

Sub

Sub

Sub

Global

Sub

Service SolutionsServing Vital Link in Global Metal Supply Chain
  • A. M. Castle is a Vital Link in the Metal Supply Chain
  • Purchase metal at mill minimum order quantities
  • Leverage diverse mill relationships to achieve procurement advantages (price and product availability)
  • Deliver products to a large and diverse customer base of OEMs and sub-contractors
  • Provide value-added services including semi-finished products
  • Castle Metals Plus™ - collaborative supply chain management
    • Manage the gap between supplier lead-times and customer demand
    • Manage sub-contractor networks for global OEM customers
    • Ensure supply of constrained specialty metals
recent transformation
Recent Transformation

Recent Transformation Positions Company for Greater Upside

well positioned to capture growth opportunities
Well-Positioned to Capture Growth Opportunities
  • The late-cycle nature of our business classically lags the general economic cycle by twelve months
    • Trough ran from the second quarter of 2009 through the first quarter of 2010
  • Expected improvement across most of our end-markets in 2011, including heavy industrial and mining equipment, power generation, commercial aerospace and defense aerospace

Source: Monthly PMI number from January 2007-January 2011 and quarterly CAS revenues for each interim period from 2007-2010

go to market strategy pursuing profitable and high growth end markets
Go-To-Market StrategyPursuing Profitable and High-Growth End-Markets

Unmatched Experience and Expertise in Key End-Markets

9.

go to market strategy providing solutions to optimize supply chain performance
Go-To-Market StrategyProviding Solutions to Optimize Supply Chain Performance
  • Providing unrivaled industry expertise and forecasting capacity to create true strategic partnerships with customers
  • Customer collaborations result in verifiable improvements that impact total cost, delivery, quality, and exposure to metal supply
  • Focus on material management and improved forecasting supported by our investment in technological enhancements

10.

go to market strategy case study f 35 joint strike fighter jsf program
Go-To-Market StrategyCase Study: F-35 Joint Strike Fighter (JSF) Program
  • Recently signed six-year contract extension with Lockheed Martin for the F-35 Joint Strike Fighter (JSF) Program through 2016
  • Supplier to the platform since inception
  • Supplying aluminum plate and cut-to-size aluminum plate products
  • Global account with various value-added processing and collaborative supply chain management services
  • Value estimated to be in the $200-$230 million range over a six-year term
blue chip customer base serving a broad range of diverse customers
Blue Chip Customer BaseServing a Broad Range of Diverse Customers

Serving Global OEMs and Thousands of Medium & Smaller-Sized Firms

positioned for profitable growth
Positioned For Profitable Growth

Revenue

$ in millions

  • Increased activity seen in early-cycle businesses
  • Improving trend of customers buying materials for production
positioned for profitable growth1
Positioned For Profitable Growth

EBITDA*

$ in millions

  • Consolidated gross profit margin was 25.7% in 2010 compared to 24.8% in 2009 reflecting an improved inventory position and improved market conditions

* 2008 Excludes non-cash charge of $58.9 million for goodwill impairment

positioned for profitable growth2
Positioned For Profitable Growth

Annual Operating Cash Flows*

$ in millions

  • Company generated substantial cash flows during brutal economic environment in 2009

* 2008 Excludes non-cash charge of $58.9 million for goodwill impairment

slide18

Solid Working Capital Measurements

Inventory Turns – DSI*

Receivables – DSO*

Days

Days

  • On track to return DSI to historical 120 day level
  • Continued focus on conservative approach to receivables management

* Annual ratios are full year averages

strong financial position
Strong Financial Position

Debt to Total Capital Ratios*

  • Reduced total debt from $89.2M year-end 2009 to $69.1M year-end 2010
  • $230M credit facility in place through January 2013

* 2008 increase primarily reflects the January 2008 acquisition of Metals UK

investment highlights
Investment Highlights
  • Specialty Product Focus with Value-Added Processing Emphasis
  • Strong Alignment with Growing End Markets, Positioned for Profitable Growth
  • Increased Global Presence and Capabilities
  • Extensive Supplier Relationships
  • Increased Customer Penetration Through Collaborative Supply Chain Solutions
  • Experienced Industry Management Team
  • Proven Track Record of Performance
  • Strong Financial Position
management team
Management Team

Michael H. Goldberg

  • President and Chief Executive Officer
  • Prior experience includes Executive Vice President of Integris Metals and Executive Vice President of the North American Metals Distribution Group, a division of Rio Algom Ltd

Scott F. Stephens

  • VP, CFO and Treasurer
  • Prior experience includes Chief Financial Officer of Lawson Products, Inc.

Stephen V. Hooks

  • EVP and President Castle Metals
  • Held various positions at the Company including Executive Vice President of A. M. Castle and Chief Operating Officer of Castle Metals
management team1
Management Team
  • G. Nicholas Jones
  • President Castle Metals Oil & Gas
  • Blain Tiffany
  • President Castle Metals Aerospace
  • Formerly President, Castle Metals Plate
  • Thomas Garrett
  • President Total Plastics Inc.
  • Held various positions at TPI since 1988 including Controller and Vice President
  • Ian Griffiths
  • Managing Director Metals UK Group
suppliers
Suppliers

Stable supply base values A. M. Castle as a key customer and provides access to specialty metals

Product Category Supplier

Aluminum Kaiser Aluminum and Alcoa

Alloy Timken and Republic

Nickel & Stainless Allegheny and Special Metals

Carbon Mittal-Arcelor, Ipsco & Gerdau

Titanium RTI

Plastics Cyro Industries/Degussa, Sheffield Plastics/Division of Bayer, and Quadrant Engineered Plastics

blue chip platform support
Blue Chip Platform Support

Airbus A380

Stryker

Gulfstream V

JSF

aerospace structural material usage
Aerospace Structural Material Usage
  • Heat-treated aluminum is the dominant structural material in aircraft fabrication
  • Composite usage will increase in certain applications but will not displace Castle Metals Aerospace business

A.M. Castle Products  MinimalComposite Substitutions

A.M. Castle Products  Engine Components