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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
(FEE REQUIRED)
For the fiscal year Ended December 31, 1993 Commission File Number: 1-5415
A. M. CASTLE & CO.
(Exact name of registrant as specified in its charter)
DELAWARE 36-0879160
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
3400 NORTH WOLF ROAD, FRANKLIN PARK, ILLINOIS 60131
(Address of principal executive offices), (Zip Code)
Registrant's telephone number, including area code (708) 455-7111
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE ON
TITLE OF EACH WHICH REGISTERED
CLASS
Common Stock -- no par value American and Chicago Stock Exchanges
Securities registered pursuant to Section 12(g) of the Act: 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 X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K X .
The approximate aggregate market value of the registrant's common stock held by
non-affiliates of the registrant on March 4, 1994 was $130,551,000.
The number of shares outstanding of the registrant's common stock on March 4,
1994 was 7,303,150 shares.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENTS INCORPORATED BY REFERENCE APPLICABLE PART OF FORM 10-K
Annual Report to Stockholders for the Parts I, II and IV
year ended December 31, 1993
Proxy Statement dated March 11, 1994 Part III
furnished to Stockholders in connection with
registrant's Annual Meeting of Stockholders
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PART I
ITEM 1. BUSINESS.
A. M. Castle & Co. is one of North America's largest, independent metals
service center companies. The registrant (Company) provides a complete range of
inventories as well as preprocessing services to a wide variety of customers.
In the last three years, sales mix was approximately as follows:
1993 1992 1991
---- ---- ----
Carbon and Stainless........................................ 77 % 73 % 70 %
Non-Ferrous Metals.......................................... 23 % 27 % 30 %
---- ---- ----
100 % 100 % 100 %
These metals are inventoried in many forms including round, hexagon, square
and flat bars; plates; tubing; shapes; and sheet and coil.
Depending on the size of the facility and the nature of the markets it
serves, each of the Company's service centers is equipped as needed with Bar
Saws, Tubing Cut-off Lathes, Close Tolerance Plate Saws, Oxygen and Plasma Arc
Flame Cutting Machinery, Stress Relieving and Annealing Furnaces, Surface
Grinding Equipment, Edge Conditioning Equipment, Sheet Shears and Coil
Processing Equipment. The Company also does specialized fabrications for
customers through pre-qualified subcontractors.
Emphasis on the more highly engineered grades and alloys of metals,
supported by strong service commitments, has earned the Company a leadership
role in filling the needs of users of those metals.
The Company has its main office, and largest distribution center, in
Franklin Park, Illinois. This center serves metropolitan Chicago and,
approximately, a nine state area. In addition, there are distribution centers in
various other cities (see Item 2). The Chicago, Los Angeles and Cleveland
distribution centers together account for approximately one-half of all sales.
The customer base in the Eastern part of the county includes heavy and
light machine tool industries, construction equipment, mining, textile
manufacturing machinery and plastic extrusion machinery. The aerospace market is
also served both directly and through subcontractors.
The Midwest Region serves manufacturers of hydrocarbon processing
equipment, farm implement and construction equipment, food processing equipment
and machine tools. The automotive, marine and aerospace markets are also
included in the Midwest Region customer base.
In the Western area of the country, the Company serves the metal needs of a
wide variety of industries as well as the subcontractors and manufacturers who
serve those industries. The major markets include aircraft and aerospace, both
military and commercial, oil and gas, chemical, petrochemical, farm equipment,
electronics, lumber, and mining.
In Canada, the Company serves a wide range of businesses including
aerospace, pulp and paper, and machinery equipment manufacturing. These markets
are serviced by the Company's Canadian subsidiary A. M. Castle & Co. (Canada)
Inc.
The Company's specialized operating unit is the Hy-Alloy Steels Co.,
located in Bedford Park, Illinois, a Chicago suburb. Hy-Alloy is a distributor
of alloy bars stocked as rounds, squares, hexes, and flats; and of alloy tubing.
It serves a nationwide market, which includes aircraft and aerospace, oil field
equipment, gears and power train components, machine tools, screw machine
products, bearings, construction equipment and agricultural equipment. In 1993 a
value-added bar processing center, H-A Industries, was added. From this
facility, the Company ships quench and tempered alloy bar products to its
customers throughout the United States and Canada.
In general, the Company purchases metals from many producers. In the case
of nickel alloys and titanium, each is single sourced. Satisfactory alternative
sources, however, are available for all metals that the
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Company buys and its business would not be materially adversely affected by the
loss of any one supplier. Purchases are made in large lots and held in the
distribution centers until sold, usually in smaller quantities. The Company's
ability to provide quick delivery, frequently overnight, of a wide variety of
metal products allows customers to reduce inventory investment because they do
not need to order the large quantities required by producing mills.
The major portion of 1993 net sales were from materials owned by the
Company. The materials required to fill the balance of such sales were obtained
from other sources, such as direct mill shipments to customers or purchases from
other metals distributors. Sales are primarily through the Company's own sales
organization and are made to many thousands of customers in a wide variety of
industries. No single customer is significant to the Company's sales volume.
Deliveries are made principally by leased trucks. Common carrier delivery is
used in areas not serviced directly by the Company's fleet.
The Company encounters strong competition both from other independent
metals distributors and from large distribution organizations, some of which
have substantially greater resources.
The Company has approximately 1200 full-time employees in its operations
throughout the United States and Canada. Approximately 300 of these are
represented by collective bargaining units, principally the United Steelworkers
of America.
ITEM 2. PROPERTIES.
The Company's principal executive offices are at its Franklin Park plant
near Chicago, Illinois. All properties and equipment are well maintained and in
good operating condition and sufficient for the current level of activities.
Metals distribution centers and sales offices are maintained at each of the
following locations, all of which are owned in fee, except as indicated:
APPROXIMATE
FLOOR AREA IN
LOCATION SQUARE FEET
------------------------------------------------------------------------ -------------
CASTLE METALS
Atlanta, Georgia........................................................ 35,100(1)
Charlotte, North Carolina............................................... 66,700(1)
Chicago area --
Franklin Park, Illinois............................................... 533,600
Cincinnati, Ohio........................................................ 9,300(1)
Cleveland area --
Bedford Heights, Ohio................................................. 381,400
Dallas, Texas........................................................... 78,000
Houston, Texas.......................................................... 109,100
Kansas City, Missouri................................................... 170,000
Los Angeles area --
Paramount, California................................................. 264,900
Milwaukee area --
Wauwatosa, Wisconsin.................................................. 98,000(1)
Philadelphia, Pennsylvania.............................................. 71,600
Salt Lake City, Utah.................................................... 22,500(1)
Stockton, California.................................................... 60,000(1)
Worcester, Massachusetts................................................ 60,000
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Total Castle Metals........................................... 1,960,200
HY-ALLOY STEELS CO.
Chicago area --
Bedford Park, Illinois................................................ 103,700
H-A INDUSTRIES
Hammond, Indiana........................................................ 123,000(1)
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APPROXIMATE
FLOOR AREA IN
LOCATION SQUARE FEET
------------------------------------------------------------------------ -------------
A. M. CASTLE & CO. (CANADA) INC.
Montreal, Quebec........................................................ 25,600(1)
Toronto area --
Mississauga, Ontario.................................................. 57,100(1)
Etobicoke, Ontario...................................................... 8,000(1)
Winnipeg, Manitoba...................................................... 20,700(1)
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2,298,300
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SALES OFFICES (LEASED)
Buffalo, New York
Detroit, Michigan
Pittsburgh, Pennsylvania
Phoenix, Arizona
San Diego, California
Tulsa, Oklahoma
Wichita, Kansas
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(1) Leased: See Note 5 in the 1993 Annual Report to Stockholders, incorporated
herein by this specific reference, for information regarding lease
agreements.
ITEM 3. LEGAL PROCEEDINGS.
There are no material legal proceedings other than the ordinary routine
litigation incidental to the business of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
ITEM 6. SELECTED FINANCIAL DATA.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information required to be filed in Part II (Items 5, 6, and 7) in Form
10-K has been included in the 1993 Annual Report to Stockholders, as required by
the Securities and Exchange Commission, and is included elsewhere in the filing.
Accordingly, the following items required under Items 5, 6, and 7 are
incorporated herein by this specific reference to the 1993 Annual Report to
Stockholders: "Common Stock Information", page 20, "Eleven-Year Financial and
Operating Summary", pages 18 and 19, and "Financial Review", pages 7 and 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
See Part IV, Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
EXECUTIVE OFFICERS OF THE REGISTRANT
NAME AND TITLE AGE BUSINESS EXPERIENCE
- ------------------------------------------- --- -------------------------------------------
Michael Simpson............................ 55 Mr. Simpson began his employment with the
Chairman of the Board registrant in 1968. In 1974 Mr. Simpson was
elected President of Hy-Alloy Steels Co.
Mr. Simpson was elected Vice President --
Midwest Region in 1977. In 1979 Mr. Simpson
was elected Chairman of the Board.
Richard G. Mork............................ 58 Mr. Mork began his employment with the
President and Chief registrant in 1957. In 1977 Mr. Mork was
Executive Officer elected to the position of Vice
President -- Eastern Region and in 1988 to
the position of Senior Vice President and
Chief Operating Officer. In 1990 Mr. Mork
was made President and Chief Executive
Officer.
Edward F. Culliton......................... 52 Mr. Culliton began his employment with the
Vice President and registrant in 1965. Mr. Culliton was
Chief Financial Officer elected Corporate Secretary in 1972 and
Treasurer in 1975. In 1977 he was elected
Vice President of Finance. He is the Chief
Financial Officer.
Sven G. Ericsson........................... 45 Mr. Ericsson began his employment with the
Vice President -- registrant in 1989. Mr. Ericsson was
Plate and Carbon elected to the position of Vice
Products Group President -- Eastern Region in 1989, and
Vice President -- Plate and Carbon Products
Group in 1992.
M. Bruce Herron............................ 48 Mr. Herron began his employment with the
Vice President -- registrant in 1970. Mr. Herron was elected
Western Region to the position of Vice
President -- Western Region in 1989.
Stephen V. Hooks........................... 42 Mr. Hooks began his employment with the
Vice President -- registrant in 1972. Mr. Hooks was elected
Midwest Region to the position of Vice
President -- Midwest Region in 1993.
Richard G. Phifer.......................... 49 Mr. Phifer began his employment with the
Vice President -- registrant in 1990. Mr. Phifer was elected
Eastern Region to the position of Vice President -- Plate
and Carbon Products Group in 1991, and Vice
President -- Eastern Region in 1992.
Thomas D. Prendergast...................... 60 Mr. Prendergast began his employment with
Vice President -- Human the registrant in 1974. Mr. Prendergast was
Resources elected Vice President -- Human Resources
in 1991.
Alan D. Raney.............................. 42 Mr. Raney began his employment with the
Vice President -- registrant in 1986. Mr. Raney was elected
High Tech Products Vice President -- Midwest Region during
Group 1989, and Vice President -- High Tech
Products Group in 1990.
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NAME AND TITLE AGE BUSINESS EXPERIENCE
- ------------------------------------------- --- -------------------------------------------
Gise Van Baren............................. 62 Mr. Van Baren began his employment with the
Vice President -- Alloy registrant's Hy-Alloy Steels Co. (acquired
Products Group and in 1973) in 1954. He became Vice President
President -- Hy-Alloy Steels of Hy-Alloy in 1976 and President in 1979.
Division He was elected Vice President -- Alloy
Products Group in 1991.
James A. Podojil........................... 51 Mr. Podojil began his employment with the
Chief Accounting Officer registrant in 1968. In 1977 he was elected
and Treasurer/Controller to the position of Controller and in 1985
was elected to the additional post of
Treasurer.
Jerry M. Aufox............................. 51 Mr. Aufox began his employment with the
Secretary and Corporate registrant in 1977. In 1985 he was elected
Counsel to the position of Secretary and Corporate
Counsel. He is responsible for all legal
affairs of the registrant.
All additional information required to be filed in Part III, Item 10, Form
10-K, has been included in the Definitive Proxy Statement dated March 11, 1994
filed with the Securities and Exchange Commission, pursuant to Regulation 14A
entitled "Information Concerning Nominees for Directors" and is hereby
incorporated by this specific reference.
ITEM 11. EXECUTIVE COMPENSATION.
All information required to be filed in Part III, Item 11, Form 10-K, has
been included in the Definitive Proxy Statement dated March 11, 1994, filed with
the Securities and Exchange Commission, pursuant to Regulation 14A entitled
"Management Remuneration" and is hereby incorporated by this specific reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required to be filed in Part I, Item 4, Form 10-K, has been
included in the Definitive Proxy Statement dated March 11, 1994, filed with the
Securities and Exchange Commission pursuant to Regulation 14A, entitled
"Information Concerning Nominees for Directors" and "Stock Ownership of Certain
Beneficial Owners and Management" is hereby incorporated by this specific
reference.
Other than the information provided above, Part III has been omitted
pursuant to General Instruction G for Form 10-K and Rule 12b-23 since the
Company will file a Definitive Proxy Statement not later than 120 days after the
end of the fiscal year covered by this Form 10-K pursuant to Regulation 14A,
which involves the election of Directors.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
Financial statements (incorporated by reference to the 1993 Annual Report
to Stockholders) and exhibits are set forth in the accompanying index to
Financial Statements and Schedules. No reports on Form 8-K were filed in the
fourth quarter of 1993.
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A. M. CASTLE & CO.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Report of Independent Public Accountants on Schedules.......................... Page
Consent of Independent Public Accountants with respect to Form S-8............. Page
Consolidated Financial Statement Schedules
Property, Plant and Equipment -- Schedule V.................................. Page
Accumulated Depreciation -- Schedule VI...................................... Page
Valuation and Qualifying Accounts -- Schedule VIII........................... Page
Data incorporated by reference from 1993 Annual Report to Stockholders of A. M.
Castle & Co., included herein --
Consolidated Statements of Income -- For the years ended December 31, 1993,
1992, and 1991............................................................ Page
Consolidated Statements of Reinvested Earnings -- For the years ended
December 31, 1993, 1992, and 1991......................................... Page
Consolidated Balance Sheets -- December 31, 1993, 1992, and 1991............. Page
Consolidated Statements of Cash Flows -- For the years ended December 31,
1993, 1992, and 1991...................................................... Page
Notes to Consolidated Financial Statements................................... Pages
Report of Independent Public Accountants..................................... Page
Exhibits:
20 -- Report furnished to security holders..................................... Exhibit A
3 -- Articles of Incorporation and amendments................................. Exhibit B
3 -- By laws of the Company................................................... Exhibit C
10 -- Long term incentive compensation plan.................................... Exhibit D
10 -- 1990 restricted stock and stock option plan.............................. Exhibit E
10 -- Description of management incentive plan................................. Exhibit F
All schedules and exhibits, other than those listed above are omitted as
the information is not required or is furnished elsewhere in the financial
statements or the notes thereto.
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES
To A. M. Castle & Co.:
We have audited in accordance with generally accepted auditing standards,
the financial statements included in the A. M. Castle & Co. 1993 Annual Report
to Stockholders incorporated by reference in this Form 10-K, and have issued our
report thereon dated February 4, 1994. Our audit was made for the purpose of
forming an opinion on those statements taken as a whole. The schedules listed in
the accompanying index are the responsibility of the company's management and
are presented for purposes of complying with the Securities and Exchange
Commission's rules and are not part of the basic financial statements. These
schedules have been subjected to the auditing procedures applied in the audit of
the basic financial statements and, in our opinion, fairly state in all material
respects the financial data required to be set forth therein in relation to the
basic financial statements taken as a whole.
Chicago, Illinois,
February 4, 1994.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
WITH RESPECT TO FORM S-8
As independent public accountants, we hereby consent to the incorporation
of our report, incorporated by reference in this Form 10-K, into the Company's
previously filed Registration Statement File No. 2-83884 on Form S-8.
Chicago, Illinois,
March 4, 1994
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SCHEDULE V
A. M. CASTLE & CO.
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(DOLLARS IN THOUSANDS)
BALANCE AT BALANCE AT
BEGINNING ADDITIONS RETIREMENTS END OF
CLASSIFICATION OF PERIOD AT COST AND SALES PERIOD
- ------------------------------------------------------ ---------- --------- ----------- ----------
1993
Land................................................ $ 4,117 $ -- $ 2 $ 4,115
Buildings........................................... 34,734 141 -- 34,875
Machinery and Equipment............................. 54,833 4,480 2,285 57,028
---------- --------- ----------- ----------
$ 93,684 $ 4,621 $ 2,287 $ 96,018
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---------- --------- ----------- ----------
1992
Land................................................ $ 4,115 $ 2 $ -- $ 4,117
Buildings........................................... 34,688 46 -- 34,734
Machinery and Equipment............................. 54,653 1,746 1,566 54,833
---------- --------- ----------- ----------
$ 93,456 $ 1,794 $ 1,566 $ 93,684
---------- --------- ----------- ----------
---------- --------- ----------- ----------
1991
Land................................................ $ 4,115 $ -- $ -- $ 4,115
Buildings........................................... 33,893 830 35 34,688
Machinery and Equipment............................. 59,340 2,475 7,162 54,653
---------- --------- ----------- ----------
$ 97,348 $ 3,305 $ 7,197 $ 93,456
---------- --------- ----------- ----------
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SCHEDULE VI
A. M. CASTLE & CO.
ACCUMULATED DEPRECIATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(DOLLARS IN THOUSANDS)
BALANCE AT PROVISION BALANCE AT
BEGINNING CHARGED RETIREMENTS END OF
CLASSIFICATION OF PERIOD TO INCOME AND SALES PERIOD
- ------------------------------------------------------ ---------- --------- ----------- ----------
1993
Buildings........................................... $ 14,443 $ 1,082 $ -- $ 15,525
Machinery and Equipment............................. 36,039 3,702 222 39,519
---------- --------- ----------- ----------
$ 50,482 $ 4,784 $ 222 $ 55,044
---------- --------- ----------- ----------
---------- --------- ----------- ----------
1992
Buildings........................................... $ 13,365 $ 1,078 $ -- $ 14,443
Machinery and Equipment............................. 32,676 3,787 424 36,039
---------- --------- ----------- ----------
$ 46,041 $ 4,865 $ 424 $ 50,482
---------- --------- ----------- ----------
---------- --------- ----------- ----------
1991
Buildings........................................... $ 12,166 $ 1,214 $ 15 $ 13,365
Machinery and Equipment............................. 30,417 4,059 1,800 32,676
---------- --------- ----------- ----------
$ 42,583 $ 5,273 $ 1,815 $ 46,041
---------- --------- ----------- ----------
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SCHEDULE VIII
A. M. CASTLE & CO.
ACCOUNTS RECEIVABLE -- ALLOWANCE FOR DOUBTFUL ACCOUNTS
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992, AND 1991
(DOLLARS IN THOUSANDS)
1993 1992 1991
----- ----- -----
Balance, beginning of year..................................... $ 600 $ 600 $ 600
Add -- Provision charged to income............................. 437 776 418
-- Recoveries............................................. 242 214 373
Less -- Uncollectible accounts charged against allowance....... (679) (990) (791)
----- ----- -----
Balance, end of year........................................... $ 600 $ 600 $ 600
----- ----- -----
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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)
By: /s/ James A. Podojil
-------------------------------
James A. Podojil, Treasurer and
Controller
(Mr. Podojil is the Chief
Accounting Officer and has been
authorized to sign on behalf of
the registrant.)
Date: March 4, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Michael Simpson
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Michael Simpson,
Chairman of the Board
March 4, 1994
/s/ Richard G. Mork
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Richard G. Mork, President--
Chief Executive Officer, and Director
March 4, 1994
/s/ Edward F. Culliton
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Edward F. Culliton, Vice President--
Chief Financial Officer, and Director
March 4, 1994
/s/ William K. Hall
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William K. Hall, Director
March 4, 1993
/s/ Robert S. Hamada
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Robert S. Hamada, Director
Chairman, Audit Committee
March 4, 1994
/s/ John W. McCarter, Jr.
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John W. McCarter, Jr., Director
March 4, 1994
/s/ William J. McDermott
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William J. McDermott, Director
March 4, 1994
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