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A. M. Castle & Co. (NYSE:CAS)

Q2 2010 Earnings Call Transcript

July 27, 2010 11:00 am ET

Executives

Katie Pyra – IR, FD Ashton Partners

Mike Goldberg – President and CEO

Scott Stephens – VP Finance, CFO and Treasurer

Analysts

Edward Marshall – Sidoti & Company

Phil Gibbs – Keybanc Capital Markets

Dan Whalen – Capstone Investments

Tim Hayes – Davenport & Company

Operator

Thank you for standing by, and welcome to the A.M. Castle & Company's second quarter 2010 earnings conference call. At this time, all participants are in a listen-only mode. Following today's presentation, instructions will be given for the question-and-answer session. As a reminder, this conference call is being recorded today, Tuesday, July 27, 2010. I would now like to turn the conference over to Katie Pyra with FD. Please go ahead.

Katie Pyra

Thank you. Good morning. Thank you everyone for joining us for A.M. Castle's 2010 second quarter conference call. By now, you should have all received a copy of this morning's press release. If anyone still needs one, please call my office at 312-553-6717 and we'll send you a copy immediately following the conference call.

With us from the management of Castle this morning are Mike Goldberg, President and CEO; and, Scott Stephens, Vice President of Finance and CFO. As a reminder, this call is being recorded.

Certain information relating to projections of the company's results that will be discussed during today's call may be characterized as forward-looking under the Private Securities Litigation Reform Act of 1995. Those statements are based on current expectations and assumptions that are subject to a number of factors that could cause actual results to differ materially.

Additional information concerning these factors is contained in the risk factors section of the company's most recent Form 10-K and other reports and filings with the SEC, and also in the cautionary statement contained in today's release. The company does not undertake any duty to update any forward-looking statements.

This presentation also includes certain non-GAAP financial measures in an effort to provide additional information to investors. All non-GAAP measures have been reconciled to their related GAAP measures in accordance with SEC rules. You will find the reconciliation in the financial information attached to today's release, which is available on the company's website at www.amcastle.com under the Investors tab and in the Form 8-K submitted to the SEC.

And now, I'll turn the call over to Mike Goldberg. Go ahead, Mike.

Mike Goldberg

Thanks, Katie. Good morning, everyone. On today's call, Scott and I will review our second quarter results and comment on the current business environment and our outlook for the remainder of 2010. And also give you a longer-term view to some of their markets.

First, a quick recap of our financial results, second quarter consolidated net sales was $240.1 million, which is at $45 million or 23% higher than in the second quarter of last year. Year-to-date sales were $463.1 million, a 3.5% increase compared to the first half of 2009. Company reported net income for the quarter of $0.4 million or $0.02 per diluted share as compared to a net loss of $5.5 million or $0.24 per diluted share in the prior year period.

The first half of 2010, the company reported a net loss of $4.2 million or $0.18 per diluted share versus a net loss of $5 million or $0.22 per diluted share in the first half of 2009.

Second quarter net sales in our metals segment rose 22.5 % to $213.3 million, compared to $174.1 million for the same period last year. The sales increase reflected stronger volumes as tons sold to date were up 20.6% from the comparable period in 2009.

Larger sales increase were in our alloy and carbon bar products, primarily reflecting continued pick-up in our general industrial and oil and gas markets. Sequentially, second quarter metals tons sold to date were up 3.5% from quarter one of 2010 and metals net sales were 6.8% higher than Q1 of 2010.

Sales for our plastics segment were $26.8 million, an increase of $5.8 million or 27.6% over the second quarter of 2009. Year-to-date, plastic sales were $50.1 million thru June of 2010, 19% higher than the first half of 2009. Sequentially, plastic sales were 15% higher in Q2 versus Q1 of this year.

So now, for a few market observations, in the second half of last year, we saw signs that the overall market was slowly beginning to come out of its deep recession. We saw productivity and inquiries begin picking up in all our markets, albeit very slowly. And in the first quarter we saw a year-over-year increase in metals volumes for the first time since mid-2008. And sequentially, tons sold per day were 22% higher in the first quarter of '10 than the fourth quarter of '09. In the second quarter, we saw a further increase in tons sold per day of 3.5% over the first quarter of 2010.

The last time we told you we expected to return to profitability in the second half of the year, provided the economy continued its recovery. Since then, business conditions have continued to improve. And as you saw with today's release, we returned to profitability somewhat earlier than anticipated. However, our figures indicate that the momentum of the first quarter has slowed and we do not anticipate business conditions to slip back nor do we expect a significant further growth for the balance of the year.

Our customers are still quite optimistic and most did not have any expanded shut downs during the early July holiday period. But as with most others in the economy, they remain cautious. De-stocking, with the exception of aerospace, appears to have ended. But customers are not looking to restock or build inventories. Instead, most continue to make purchases only to fill their most immediate needs.

After incremental increases in the first quarter, our pricing continued to be higher in the second quarter. We saw some increases in carbon and alloy bar prices. Some were offset by the clients in scrap. Scrap surcharges rose early in the year and have fallen back a little. We expect them to remain relatively stable for the balance of 2010. Commodities spiked early followed by a pull back and then a recovery. And we're relatively stable through most of the second quarter. Supplier lead-times pushed out a little for carbon and alloy bar but contracted for plate. The carbon and alloy plate markets remain relatively weak.

Many economists point to today's mixed data as evidence that the recovery maybe taking a pause after several quarters of growth. Our own business maybe doing a bit of the same. For the balance of the year, we anticipate that the margin at least be similar to second quarter levels.

Now, I'll make a few specific end market comments. In the general industrial area, it appears that customer inventories are now back in line. The increased demand for mining equipment continued strong, driven by foreign consumption of coal and raw materials. The defense market continues to be relatively strong especially for our programs with the Navy. Many of our large OEM customers were quite busy in the second quarter, and we saw signs of a pick-up in demand across many sectors of the heavy industrial equipment industry, compressors, heat exchangers, industrial gears, and fluid power. On the other hand, the demand for aerial and mobile cranes remains low as that continues to carry a heavy finished goods inventory.

Next, I'll move on to oil and gas, a market where customer's sentiment continuous to be largely positive. In the second quarter, we opened a new facility in Lafayette, Louisiana, and better positions us to provide enhanced services and value-added solutions to customers in the Gulf region. This bigger market is critically important in this region. And we can now offer daily product deliveries into the Lafayette market.

The Gulf oil spill has not impacted our business directly in any significant way. The spill impacted their sales activity by estimated $200,000 to $300,000 for the second quarter caused by our customers' concerns over the potential long term effect on the Gulf region while the world remained uncapped as well as the uncertainty caused by the government's deep water drilling ban. Now that the world closure appears to be complete and customers have been able to redeploy rigs throughout the various sales in July, the Gulf region appeared to be returning to pre-spill levels.

Our international oil and gas business continue to grow, with June representing our highest sales month yet in 2010. International expansion will continue to be a critical part of the growth story for oil and gas.

Now, a few words about aerospace, lead time for heat-treated aluminum plate remains short and capacity continuous to exceed demand. Prices have remained flat during the second quarter. And we would expect them to continue this levels until this excess supply dries up. In the commercial aircraft business, optimism is spreading. Air traffic is improving as is cargo. (inaudible) confirmed recent recovery that we've seen in the air traffic. And the new order that it showed exceeded expectations.

For business in general, the aviation sector is improving, but still remains slow and severely over-stocked. At the phase rate, the aerospace business remains relatively strong. In April, we announced the signing of the memorandum of agreement with Lockheed Martin. It went into a six-year contract extension for the F-35 Joint Strike Fighter program. Our projections still call for a slow ramp-up in the next three years, escalating to full production in 2016. So we expect annual revenue from the JSF program to be in between $15 million and $ 20 million range for both 2010 and 2011.

And finally, I want to discuss what's seen in our plastics business. Activity has been relatively good, and with the particular strength in the retail point of purchase display and lifestyles market. The machine plastics business we do for the automotive sector has also continued to be strong.

Now, just a few comments on progress and some of our key priorities in 2010, our metals business continues to enjoy the benefits of operation on a common Oracle platform across virtually all locations in the US and Canada. We are working to improve the new system and our proficiency at using it. And next year, we plan to complete the final stage of our ERP implementation converting our international operations to Oracle.

We also continue to make group progress on inventory efficiency. At the end of December 2009, our average day sales in inventory, our DSI, were 193 days on trailing three-month basis. We were able to reduce DSI to 150 days at the end of the first quarter, and 142 days at the end of the second quarter. Our coal plate – plastics businesses returned to normal DSI levels during the quarter, and its somewhat offset by continued overhang in aerospace and oil and gas. Having said that, both aerospace and oil and gas achieved DSI improvements in the second quarter and are continuing to progress.

By year-end, we expect our DSI in total to approximate historical levels. Our average day sales outstanding also continue to come in nicely at 49.3 days, compared to 54.1 days year-end. We expect to at least maintain this improved level throughout the balance of the year. We believe that the short term outlook for the balance of the year seems to be set. No surge in business is expected, but double debt either.

I would like to share some general industry research on the longer term outlook for our end user markets. While this information is from sources outside of the company, we believe they're reliable. And hence, I'm very optimistic about the longer term.

Our oil and gas business is steadily correlated with rig count. And in over the next few years, rig count is anticipated to increase from the trough last year 2,200 to 4,000 by 2013. Spending in this sector is expected to continue at a very healthy rate for the foreseeable future.

In aerospace, the long term prospects remain good. Over the next 20 years, it's forecasted that commercial airlines will require about 30,900 new plants. But more importantly, over the next five years, we expect solid growth and with additional builds of wide body plants. We believe supply could tighten up over this period.

In the general industrial segment our recovery machine tools, construction equipment, mining equipment, power generation, and alternative energy is expected in the next three to five years to levels similar to 2007 and 2008.

Four of our markets are forecast to return to health in the longer term. And we expect to see that ramp up beginning in 2011, especially as there is always – or expect there to be little inventory on the supply chain. We believe we'll be well-positioned to take advantage of this next market recovery.

I'd just take a moment to recognize our employees for their efforts and sacrifices over the past year, contributed to the company's return to profitability in the second quarter. Our customers recently have also recognized our employees' dedication and efforts, resulting in three customer recognition awards received during this quarter. Our oil and gas business was recognized as Supplier of the Quarter by Halliburton completion tools at our Carlton, Texas facility, choosing Castle for this honor out of more than 800 suppliers.

In aerospace, our Los Angeles branch recently received a 2009 Preferred Platinum Supply award from (inaudible), one of only 69 suppliers out of the total 1,684 to receive this honor.

And in our plastics business, our Grand Rapids branch was recently named Innovative Supplier of the Year at Haworth, Inc 2010 Supplier Expectations and Appreciation Day, one of only13 suppliers recognized out of more than 500. The team may have received a special recognition for product diversity and a strong service focus.

So I know good things happening in the business. So at this time, I'll turn things over to Scott to give you some more detailed review of the numbers.

Scott Stephens

Thanks Mike. Good morning, everyone. I'll start with a summary of our second quarter and year-to-date financial comparisons, and then provide some commentary on our balance sheet and cash results through June.

Consolidated second quarter sales were $240.1 million, which was $45 million or 23% higher than the second quarter of last year. In the metals segment, we reported second quarter sales of $213.3 million, which was 39.2% or 22.5% higher than last year. Overall tons sold per day were up 20.6% versus the second quarter of 2009.

Sequentially, second quarter of 2010 tons sold per day were 3.5% above first quarter 2010 levels demonstrating the improving trend of the demand environment and our various end markets that Mike spoke about earlier. On the plastics side, Q2 2010 net sales were $26.8 million, which was 27.6% higher than the second quarter of 2009.

The consolidated gross margin rate for the second quarter of 2010 was 25.7% of sales, and as compared to the prior year period at 25.6%. Gross profit increased sequentially 150 basis points from 24.2% in the first quarter of this year.

We said after Q1 that we expected our margins to improve sequentially throughout the balance of 2010. And we're pleased with our ability to effectively leverage the improved demand environment and our improved inventory position into stronger margin performance compared to the first quarter of this year. If the demand environment remains firm, we expect margins to continue to improve in the second half of 2010 from the 25.7% level achieved in Q1.

The company recorded $3 million of LIFO expense in the second quarter, compared to $2 million in the first quarter of this year, and compared to $15 million of LIFO income in Q2 of the prior year. We expect our LIFO charges for the balance of the year to be comparable to our second quarter levels based on our market outlook today.

Second quarter consolidated operating expenses or $61.3 million, which was $3.7 million or 6.4% higher than last year, and comparable to $61 million in Q1 of this year. As we had expected, certain elements of our compensation and benefit cuts from 2009 were restored during the second quarter.

At the end of June, our headcount levels are relatively unchanged from the year ago. And as we mentioned our Q2 volume, was up over 20% from last year. At current levels, our annualized operating costs are approximately $245 million. This represents the 3.4% increase from the actual annual operating costs for the full year 2009, and in an environment with substantially higher shipping volumes than last year. We expect to take a conservative approach to managing our cost levels in conjunction with the ongoing market recovery. At this point, we don't anticipate any significant changes in our operating cost environment for the balance of 2010.

Consolidated operating income for the quarter was $0.3 million, compared to a $7.6 million operating loss in the prior year quarter. Joint venture equity income was $1.4 million for the quarter, compared to $0.2 million loss in the same period last year. Interest expense was $1.3 million for the quarter or $0.3 million lower than the prior year due to lower borrowings.

Our second quarter tax benefit – tax rate was 7.2%, compared to a full year rate – benefit rate of 37.3% in 2009. Fluctuations in our effective tax rate typically are due to changes in the geographic mix of income and losses. We expect the full year of 2010 effective tax rate to approximate 40%.

For the second quarter, the company reported net income of $0.4 million or $0.2 per diluted share. In the prior year quarter, the company reported a net loss of $0.24 per diluted share.

Now, I'll briefly go through the six-month comparative results. Consolidated sales for year-to-date June were $463.1 million, which is 15.8% or 3.5% higher than the first half of 2009. Consolidated gross margin rate for the first half of 2010 is 24.9% of sales as compared to 26.8% in the prior year period. As I mentioned earlier, we do expect gross margins to continue to improve throughout the remainder of 2010.

For the first half of 2010, consolidated operating expenses were $122.3 million, which is $3.6 million or 2.9% lower than last year. Consolidated operating loss for the first half of 2010 was $6.8 million versus a prior year operating loss of $5.9 million. Joint venture equity income was $2.3 million for the first half of 2010 versus a loss of $0.2 million for the first half of 2009. Interest expense of $2.5 million was $0.7 million lower than the prior year. Net loss reported for the first half of 2010 was $4.2 million or $0.18 per diluted share, compared to first half 2009 loss of $0.22 per diluted share.

Now, on to the balance sheet and working capital, during the second quarter inventory increased $4 million to support the increase in sales. However, our continued focus on working capital management in conjunction with the market demand recovery resulted in an eight-day reduction in DSI to 142 days at the end of Q2, compared to a 150 days at the end of Q1.

Inventory turn levels have returned to near normal in most of our businesses, except aerospace and oil and gas. Mike mentioned earlier that we expect the oversupply situation in heat-treated aluminum plate to moderate starting at the end of the year. Our oil and gas inventory turns have improved dramatically over the past two quarters and should be at normal levels in the second half of this year.

Average receivable DSO declined from 54.1 days in 2009 to 49.3 days at the end of Q2. We'd anticipate that our 2010 DSO rate will stay below 50 days.

Our bad debt write-offs remain at low levels, just a $190,000 for Q2, compared to $205,000 in the first quarter of the year. Debt increased during the quarter by $2.6 million in response to working capital needed to fund increased sales activity. And as of June 30, our debt-to-capital ratio was 21.5%, compared to 21.9% at year-end 2009. Total debt outstanding at June 30 was $85.9 million, compared to $89.2 million at the end of last year.

Earlier this year, we spoke about our plans to evaluate strategic acquisitions this year, most likely in the second half of 2010. We still plan to be active in the M&A area. And our strong balance sheet and low debt levels position as well to explore strategic acquisition opportunities.

Capital expenditures in the quarter were $1.3 million as compared to $1.1 million in the second quarter of last year. Year-to-date, June capital expenditures were $3.3 million. We anticipate 2010 capital spending to be similar to 2009 levels or approximately $8 million to $10 million.

In terms of our outlook for the second half of 2010, we do expect the economy overall and our key markets to continue to improve. However, we saw the sequential pace of improvement slow down during the second quarter. At this point, we expect demand levels for the second of 2010 to be consistent with Q2. Longer term, we're optimistic about our opportunities for growth in all of our key end markets.

And now, we'll open up the call for your questions.

Question-and-Answer Session

Operator

(Operator Instructions) And our first question comes from the line of Edward Marshall with Sidoti & Company. Please go ahead.

Edward Marshall – Sidoti & Company

Good morning, guys, and thanks for taking my call.

Mike Goldberg

Go Ahead.

Edward Marshall – Sidoti & Company

I just wanted to quickly ask the trends that you saw through the second quarter, if you can, month-by-month. I'm assuming the strength was in April and it ebbed throughout the remainder of the quarter. Is that the right way to look at it?

Mike Goldberg

That's exactly the right way to look at it, yes. April was actually our strongest month and then we had a slight softening in May and June.

Edward Marshall – Sidoti & Company

Okay. And then, so if the second half volume relative to the first half volume that you spoke of in your outlook is that partly a conservative notice normal seasonal patterns occur? Or is that something more about early re-stocking is over, and gradual improvement on the economy is going forward similar to what economic activity is?

Mike Goldberg

I think a bit of both. We always see – there's always fewer shipping days in the second half, typically around the holiday period, especially in December. So that tends to moderate a second-half volume activity. But general markets – as we said, we think that, with the exception of aerospace, the de-stocking phenomenon is over. We don't see restocking going on, so we're looking at second quarter volumes being reflective of real demand and we're not seeing any indications that that should change substantially.

Edward Marshall – Sidoti & Company

Okay. Thank you very much.

Operator

Thank you. (Operator Instructions) And our next question comes from the line of Phil Gibbs with Keybanc Capital Markets. Please go ahead.

Phil Gibbs – Keybanc Capital Markets

Hi, guys.

Mike Goldberg

Hi, Phil. Good morning.

Phil Gibbs – Keybanc Capital Markets

Your comments on the oil and gas market and the strength that we've seen coming off the bottom of the second quarter of last year, do you expect – you said the overall business is expected to moderate. But would you point to some moderation in the oil and gas markets given the fact that – if pricing remains relativity stable, or recounts keep rising at this point. What's your view in the near term there?

Scott Stephens

Well, I think so. We would expect continued improvement there. There was a – Mike mentioned a modest impact, but impact nonetheless in Q2 from the spill and the fear factor that came with that. Yes, you're right. The expectations are the recounts continue to increase and therefore we would expect continued improvement there. Not dramatic enough to change our overall outlook for the company, that's roughly 10% to 15% of our total business. But nonetheless, yes. I think we would expect near term continued improvement out of the oil and gas business.

Phil Gibbs – Keybanc Capital Markets

How should we be viewing pricing on a sequential basis? I know you said surcharges have backed off a bit. We've seen that in the nickel arena and both the carbon markets as well. But I know you have a lot of program-based and contract-based business. If pricing probably holds up fairly well on flattish volume or pricing down a bit, volume somewhat flattish. Is that how we should look at it on a seasonally adjusted basis?

Mike Goldberg

Yes. I think that pricing should be – surcharge issues aside, should be fairly firm for us. There's obviously been a lot of discussion around current weaknesses in flat-rolled prices. That obviously – that would impact us directly. And certainly, the bar markets are pretty decent at the moment and so I don't anticipate that we should see price weakness in those markets, so subject to some – the vagrancies of surcharges. Also we're looking at confirmed sub-pricing for the balance of the year.

Phil Gibbs – Keybanc Capital Markets

Okay. My last question here is on the gross profit margin. Getting that to improve for the balance of the year with the stable LIFO expense, is that predominantly attributable to better inventories – better inventory management? In the back half of the year, as you dig through some of that oil and gas and aerospace inventory?

Mike Goldberg

I think we're both going to comment on this, see if we say the same thing. I think to some degree, yes. And then, to another degree, just the efforts put out from our people to try to improve that gross margin. It can't be underestimated on that. But certainly, the inventory situation is increasingly a factor that helps.

Scott Stephens

Yes, I would just add. We wouldn't expect it to be dramatic, maybe not as significant as the Q1 to Q2 improvement. But you said it in your question, Phil, the inventory situation should continue to improve. We talked about aerospace and oil and gas as our primary focal points for improvement. If the market – demand market allows us to continue to improve there on our inventory position, then margin performance should come with that. And that would probably be the most significant driver of improvement. And again, so long as the broad market demand stays firm as we expect it to.

Phil Gibbs – Keybanc Capital Markets

Okay. So its internal execution from your commercial sales team coupled with some reduction in inventories and some of those later cycle line of markets, which get you there. Am I looking at that correctly?

Mike Goldberg

It's a pretty good description. Yes.

Scott Stephens

Yes.

Phil Gibbs – Keybanc Capital Markets

Thanks, guys. Congratulations on getting back to profitability here.

Scott Stephens

All right. Thanks, Phil.

Operator

Thank you. Our next question comes from the line of Dan Whalen with Capstone Investments. Please go ahead.

Dan Whalen – Capstone Investments

Great. Good morning, everyone. You mentioned acquisitions, can you give us a sense of how your pipeline for potential acquisition can and has changed in the past quarter? Is it steeper? Is pricing changing much?

Mike Goldberg

There has been pretty unusual activity in the acquisition market in the industry. So it's always tough to come talk about pricing when there're not many transactions going on. I think, as many people discuss that, certainly over the last six months, there's been a mismatch between what people are willing to pay and what people are willing to sell at. I think our expectation is that overtime, that gap will start to narrow as performance – general industry performance improves. And the outlooks get stronger that we would suspect to see the number of companies for sale improve and the number of transactions completed increasing.

So it's been pretty, pretty quiet for a period of time, we would just expect this now to heat up a little. But if I have to guess, I think it might be, in general terms of the market, more activity in '11 than perhaps in '10. Even though there are those tax issues at the end of the year that may give us a full spurt towards the end of the year as well.

Scott Stephens

Dan, I would just add to that that in terms of pipeline, we've sort of gone from not really having a pipeline to at least legitimately being able to say that you have one. In other words, during the deepest part of the trough in the market, the acquisition discussions were largely academic and theoretical and aspirational. So now, they've actually – at least, you can see them becoming more legitimate or more real discussions as sellers' activity starts to make more sense.

So from not having a pipeline to actually having one, that's the way I characterize the change in the pipeline at this point. And just in terms of the overall market, it's similar. We've gone from seeing virtually no activity in terms of auctions or traditional process to at least seeing some, still not much and nothing close to what you might call normal. But there is some activity going on as of late. And as Mike said, we would expect that to continue to increase.

Dan Whalen – Capstone Investments

Great. Are you looking for further exposure in any particular end market or product or–?

Mike Goldberg

We've said in the past, we'd certainly – our acquisitions are kind of going to be connected to our strategy. So we're very interested in expanding out our oil and gas presence, continue to look at aerospace opportunities. And then – and really the third leg would be in our industrial markets valve, carbon bar, and plates business. So we're very much focused on our strategy of being a specialized company. And the targets would need to fit that strategy and certainly the markets that I just mentioned.

Dan Whalen – Capstone Investments

Great. Thanks a lot.

Operator

Thank you. Our next question comes from the line of Tim Hayes with Davenport & Company. Please go ahead.

Tim Hayes – Davenport & Company

Hi, good morning.

Mike Goldberg

Good morning, Tim.

Scott Stephens

Good morning, Tim.

Tim Hayes – Davenport & Company

Just a question on the heat treat aluminum plate market, is there a – the overhanging inventories, do you still expect that to maybe back in balance maybe by the end of the year? That's generally how we're – what we're hearing from the industry or other participants in the industry.

Mike Goldberg

Yes. I wish I could – I wish I knew that exactly. I think it has to improve, right, has to improve on a day-by-day, month-by-month as the material gets absorbed. The increase in build rate at Boeing and Airbus, which I think are planned for next year. So can the material get pulled through late this year, early next year, should help solve. Tough to put a date and a time on it but it's – it should get better. Is it the end of this year or beginning of next, I think that's – who knows? But we won't go from night to day, it would be kind of a gradual improvement, I would imagine, in the market place. But it's really all around increased build rate to not to consume the product. And we're going to see that and we're going to see the additional white body builds, which will make a big difference as well.

Tim Hayes – Davenport & Company

Can you give a sense there? Are you getting any fresh orders for the A380?

Mike Goldberg

And again, we track the A380 build rate, yes, it kind of goes through our contracts, through the aerospace sub-contracting networks. Yes, whatever that was a – when those build rates change, we get a pull through.

Tim Hayes – Davenport & Company

Okay. Thank you.

Operator

Thank you. (Operator Instructions) One moment please. And I show no further questions at this time. I'd like to turn the conference back to Mr. Goldberg for closing remarks.

Mike Goldberg

Okay. Thank you. Thanks to everybody for their interest today and we look forward to speaking to you in three months if we don't see you beforehand. Thanks.

Operator

Ladies and gentlemen, this concludes the A.M. Castle & Company second quarter 2010 conference call. Thank you for your participation. You may now disconnect.

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