SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[ x ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2002
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[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to _______________
Commission File Number 1-5415
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A.M. CASTLE & CO. EMPLOYEES' PROFIT SHARING PLAN
(Employer Identification Number 36-0879160, Plan Number 002)
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(Full title of plan)
A. M. CASTLE & CO.
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(Name of issuer of securities held pursuant to the plan)
3400 North Wolf Road; Franklin Park, Illinois 60131
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(Address of principal executive offices of issuer of securities)
A. M. CASTLE & CO. EMPLOYEES' PROFIT SHARING PLAN
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits
as of December 31, 2002 and 2001 2
Statement of Changes in Net Assets Available for
Benefits for the Year Ended December 31, 2002 3
Notes to Financial Statements 4-8
SUPPLEMENTAL SCHEDULE:
Form 5500, Schedule H, Part IV, Line 4i--Schedule
of Assets (Held at End of Year) as of December 31, 2002 9
All other schedules required by Section 2520.103-10 of the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974 have been omitted because they are not applicable.
INDEPENDENT AUDITORS' REPORT
To the Participants in
A. M. Castle & Co. Employees' Profit Sharing Plan:
We have audited the accompanying statement of net assets available for benefits
of A. M. Castle & Co. Employees' Profit Sharing Plan (the "Plan") as of December
31, 2002, and the related statement of changes in net assets available for
benefits for the year then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit. Other auditors, who
have ceased operations, were engaged to audit the financial statements of the
Plan for the year ended December 31, 2001 and their report, dated May 31, 2002,
expressed an unqualified opinion on those statements.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the 2002 financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of A. M. Castle
& Co. Employees' Profit Sharing Plan as of December 31, 2002, and the changes in
net assets available for benefits for the year then ended, in conformity with
accounting principles generally accepted in the United States of America.
Our audit was performed for the purpose of forming an opinion on the basic 2002
financial statements taken as a whole. The accompanying supplemental schedule
listed in the table of contents is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This schedule is the responsibility of the Plan's
management. Such schedule has been subjected to the auditing procedures applied
in the audit of the basic 2002 financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic 2002 financial
statements taken as a whole.
/s/ DELOITTE & TOUCHE LLP
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DELOITTE & TOUCHE LLP
June 20, 2003
A. M. CASTLE & CO. EMPLOYEES' PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2002 AND 2001
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2002 2001
ASSETS:
Participant-directed investments $56,965,420 $63,710,323
Nonparticipant-directed investments (Note 4) 1,433,396 2,183,522
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Total investments 58,398,816 65,893,845
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Receivables:
Employer contribution 23,485
Participant contributions 126,101
Accrued investment income 202
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Total receivables 149,586 202
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Total assets 58,548,402 65,894,047
LIABILITIES:
Other payables 52,307 46,735
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NET ASSETS AVAILABLE FOR BENEFITS $58,496,095 $65,847,312
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See notes to financial statements.
-2-
A. M. CASTLE & CO. EMPLOYEES' PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2002
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ADDITIONS:
Contributions:
Employer contributions $ 455,704
Participant contributions 2,233,391
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Total additions 2,689,095
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DEDUCTIONS:
Investment income (loss):
Net depreciation in fair value of investments (7,049,713)
Interest and dividend income 517,114
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Net investment loss (6,532,599)
Benefits paid to participants (5,733,015)
Administrative fees (12,475)
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Total deductions (12,278,089)
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NET DECREASE IN NET ASSETS BEFORE TRANSFERS (9,588,994)
TRANSFERS OF PLAN ASSETS FROM OLIVER STEEL
PLATE CORPORATION EMPLOYEES' PROFIT SHARING
PLAN (Note 1) 2,237,777
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NET DECREASE IN NET ASSETS (7,351,217)
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 65,847,312
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End of year $ 58,496,095
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See notes to the financial statements.
-3-
A. M. CASTLE & CO. EMPLOYEES' PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 2002 AND 2001, AND
FOR THE YEAR ENDED DECEMBER 31, 2002
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1. DESCRIPTION OF THE PLAN
The following description of A. M. Castle & Co. Employee's Profit Sharing
Plan (the "Plan") is provided for general information purposes only.
Participants should refer to the Plan document for more complete
information
General--The Plan was established on January 1, 1957. The Plan was amended
and restated from time to time to provide a means for eligible (salaried
and nonsalaried) employees to participate in the earnings of A. M. Castle &
Co. in order to build a supplemental retirement fund and to provide
additional disability and death benefits. Participants should refer to the
Plan document for more complete information.
The Plan is a defined contribution profit-sharing and 401(k) plan available
to salaried and other eligible employees of A. M. Castle & Co. and certain
of its subsidiaries (collectively referred to as the "Company"). Employees
of the Company are eligible to become participants in the Plan upon
completion of 30 days of service for the 401(k) portion of the Plan and 1
year of service for the profit-sharing portion of the Plan. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of
1974 ("ERISA").
Trustee--ABN AMRO is the trustee of the Plan. The Plan's trust fund is
administered under the terms of certain trust agreements between the
Company and ABN AMRO. The trust agreements provide, among other things,
that the trustee shall account for all investments, receipts and
disbursements and other transactions and shall provide annually a report
setting forth such transactions and the status of the fund at the close of
the period.
Transfers from Other Plans--Effective January 2, 2002, all the assets and
liabilities of the plan participants of the Oliver Steel Plate Corporation
Employees' Profit Sharing Plan were transferred into and merged with A. M.
Castle & Co. Employees' Profit Sharing Plan.
Participant Accounts--Each participant may contribute up to 17% of the
participant's pretax compensation if an employee of A. M. Castle & Co. and
16% if an employee of Oliver Steel Plate Corporation, as defined by the
Plan, subject to Internal Revenue Code ("IRC") limitations. Contributions
up to 5% of the participants after-tax compensation, as defined by the
Plan, can also be made, but no more than 17% if an employee of A. M. Castle
& Co. and 16% if an employee of Oliver Steel Plate Corporation. Similar to
pretax contributions, the earnings on these contributions accumulate on a
tax-deferred basis. Participants direct the investment of their participant
contributions among various investment options offered by the Plan,
including the common stock of the Company.
Employer Contributions--The employer's matching contribution is 25% of each
dollar the employee contributes to the Plan up to the first 6% of the
participant's pretax compensation. The employer's matching contribution for
employees of Oliver Steel Plate Corporation is 50% of each dollar the
employee contributes to the plan up to the first 6% of the participant's
pretax compensation. Additionally, the Company may also make profit-sharing
contributions. The employer's profit-sharing contribution to the Plan is
-4-
determined at Company management's discretion as defined by the Plan. There
was no Company profit-sharing contribution for the year ended December 31,
2002. Company contributions are invested directly into A. M. Castle & Co.
common stock.
Company profit-sharing contributions are allocated to participants'
accounts in the ratio of their yearly covered compensation to the total of
all participants' yearly covered compensation.
Vesting--Participant contributions and earnings thereon are at all times
100% vested. For employer matching and profit-sharing contributions to the
Plan and any earnings thereon, participants, after completing one calendar
year of service, will be one-third vested. Upon completion of three years
of service, participants will become two-thirds vested in the matching
401(k) portion of the Plan until completion of five years of service, at
which time they will become fully vested in both the 401(k) and
profit-sharing portions of the Plan. In addition, the Plan contains
provisions under which the entire amount credited to a participant's
account is distributable upon a participant's disability or death.
Forfeitures--Employer contributions may be reduced by the amount of
employee forfeitures. The amount of forfeitures, which reduced employer
contributions for the year ended December 31, 2002 was $41,319. At December
31, 2002, there were unallocated forfeitures of $92,138.
Allocations of Income--Earnings of the Plan, as defined, are allocated to
participants' accounts based on the proportion of each participant's
account balance within each fund to the total account balance.
Participant Loans--Participants may borrow a minimum of $1,000 and a
maximum or the lesser of $50,000 or 50% of their vested account balances
from the amount in their accounts for a specified time period, as defined
in the Plan document. Interest is charged on outstanding loans at two
percentage points above the prime rate in effect at the time of the loan.
Loan rates are established at the beginning of each quarter. Loans are
secured by the balance in the participant's account. Upon termination of
employment, participant loans (if in default) are first deducted from
participant equity, with the remaining equity balance distributed to the
participant.
Payment of Benefits--Distributions from the Plan will not be made until a
participant retires, dies or otherwise terminates employment with the
Company. Distributions are made in cash in a lump sum or an installment
basis or can be rolled over to another plan or an individual's IRA account.
Distributions are recorded when paid.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting--The accompanying financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America.
Use of Estimates-- The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires the use of estimates and assumptions that affect the
reported amounts of net assets available for benefits and changes therein.
Actual results could differ from those estimates. The Plan utilizes various
investment instruments, including mutual funds, and common stock.
Investment securities, in general, are exposed to various risks, such as
interest rate, credit and overall market volatility. Due to the level of
risk associated with certain investment securities, it is reasonably
possible that changes in the values of investment securities will occur in
the near term and that such changes could materially affect the amounts
reported in the financial statements.
-5-
Investment Valuation and Income Recognition--Net appreciation
(depreciation) in fair value of investments is calculated as the difference
between market value at January 1 or date of purchase, if subsequent to
January 1, and market value at year-end.
Investments are stated at fair value, based on quoted market prices as of
the last day of the year. Interest and dividends earned on investments, but
not yet received, are included in the statements of net assets available
for benefits. Participant loans are valued at the outstanding loan
balances.
Contributions--Participant contributions are recorded in the period in
which the Company makes payroll deductions from the Plan's participants.
Benefit Payments--Benefit payments to participants are recorded upon
distribution. There are no amounts allocated to accounts of persons who
have elected to withdraw from the Plan but have not yet been paid at
December 31, 2002 and 2001.
Administrative Expenses--Administrative and trustee expenses are paid by
the Company, with the exception of loan issuance and maintainance fees,
which are paid by the Plan.
3. INVESTMENTS
The Plan's investments that represent five percent or more of the Plan's
net assets available for benefits as of December 31 are as follows:
2002 2001
Stated Principal Value Fund $ -- $18,764,717
Mutual funds:
ABN AMRO Income Plus Fund 22,175,084
A. M. Castle & Co. Equity Fund 21,242,777 31,418,388
Vanguard Wellesley Balanced Fund 6,659,568 6,003,356
During 2002, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
(depreciated) as follows:
Common stock $(1,022,267)
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Mutual funds:
A.M. Castle & Co. Equity Fund (5,196,104)
Vanguard Institutional Index Fund (668,848)
RS Emerging Growth Fund (518,388)
Black Rock Aggressive Growth Fund (468,810)
American Europacific Growth Fund (106,288)
PIMCO Equity Income Fund (85,512)
M&C Growth Fund (60,772)
Vanguard Wellesley Balanced Fund (27,566)
ABN AMRO Income Plus Fund 251,050
Stated Principal Value Fund 853,792
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Total mutual funds (6,027,446)
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Net depreciation of investments $(7,049,713)
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-6-
4. NONPARTICIPANT-DIRECTED INVESTMENTS
The A. M. Castle & Co. common stock fund is an investment option that
contains both participant-directed and nonparticipant-directed activity.
Information about the net assets and the significant components of the
changes in net assets relating to the A. M. Castle & Co. common stock fund
is as follows:
2002 2001
Net assets:
A. M. Castle & Co. common stock fund $ 1,433,831 $ 2,183,522
Receivables 2,568 2,909
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Total net assets $ 1,436,399 $ 2,186,431
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Changes in net assets:
Net depreciation in fair value of investments $(1,022,267)
Participant contributions 45,961
Employer contributions 6,691
Benefits paid to participants (148,527)
Transfers to other funds 368,110
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Net change (750,032)
A. M. Castle & Co. common stock fundbeginning of year 2,186,431
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A. M. Castle & Co. common stock fundend of year $ 1,436,399
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5. FEDERAL INCOME TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated August 2, 2002, that the Plan and related trust were designed
in accordance with applicable sections of the Internal Revenue Code. The
Plan has been amended since receiving the determination letter; however,
the Plan management believes that the Plan is designed and is currently
being operated in compliance with the applicable requirements of the
Internal Revenue Code. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
6. PLAN TERMINATION
Although the Company has not expressed any intent to do so, it reserves the
right under the Plan to discontinue its contributions at any time and
terminate the Plan subject to the provisions set forth in ERISA. In the
event of termination of the Plan, no part of the trust fund shall revert to
the Company. The trust fund shall be distributed to the participants and
beneficiaries as of the date of termination in the ratio that the credit
balances in their accounts bear to the total credit balance of the accounts
of all participants.
-7-
7. RELATED-PARTY TRANSACTIONS
ABN AMRO acts as trustee for the Plan and manages its investments.
Additionally, certain Plan investments are shares of a mutual fund managed
by the trustee, ABN AMRO. Transactions in such investments, including loans
made to plan participants, qualify as party-in-interest transactions, which
are exempt from the prohibited transaction rules.
As described in Note 1, the Plan invests in the common stock of the plan
sponsor, A. M. Castle & Co.
******
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A. M. CASTLE & CO. EMPLOYEES' PROFIT SHARING PLAN
FORM 5500, SCHEDULE H, PART IV, LINE 4i--SCHEDULE OF ASSETS
(HELD AT END OF YEAR)
DECEMBER 31, 2002
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Current
Identity of Issue, Description of Investment, Value or
Borrower, Lessor or Including Maturity Date, Contract
Similar Party Rate of Interest Cost Value
* A.M. CASTLE & CO. AM Castle & Co. Common Stock Fund $ 3,585,392 $ 1,433,831
PIMCO Advisors,
Montag-Caldwell Growth, and
John Hancock Core Equity A.M. Castle & Co.Equity Fund ** 21,242,777
* ABN AMRO Income Plus Fund ** 22,175,084
Montag & Caldwell M&C Growth Fund ** 290,307
PIMCO Advisors Value Fund ** 397,331
American Funds Europacific Growth Fund ** 618,403
RS Investments Emerging Growth Fund ** 1,744,720
Vanguard Wellesley Balanced Fund ** 6,659,568
Vanguard Institutional Index Institutional Index Fund ** 1,986,434
* Loans to Participants Maturing 2003 through 2007, at
interest rates of 5.67% to 9.44% ** 1,850,361
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TOTAL INVESTMENTS $ 58,398,816
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* Represents a party-in-interest.
** Cost information is not required for participant-directed investments
and, therefore, is not included.
-9-
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
33-30545 and 33-37818 of A.M. Castle & Co. on Form S-8 of our report dated June
20, 2003, appearing in this Annual Report on Form 11-K of the A.M. Castle & Co.
Employee's Profit Sharing Plan for the year ended December 31, 2002.
/s/ DELOITTE & TOUCHE LLP
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DELOITTE & TOUCHE LLP
June 27, 2003
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this annual report on Form 11-K for the A.M. Castle & Co.
employees' Profit Sharing Plan into A.M. Castle & Co.'s filed Registration
Statement on Form S-8 to be filed for the Plan.
Arthur Andersen LLP
Chicago, Illinois
June 6, 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
A.M. CASTLE & CO.
EMPLOYEES' PROFIT SHARING PLAN
Date: June 27, 2003
By: /S/ Paul J. Winsauer
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Plan Administrator