A. M. Castle & Co. finalizes $8 million loan

OAK BROOK - While reporting its third quarter financial results Tuesday, A. M. Castle & Co. said it has reached an agreement in principle with certain of its stockholders to provide a new $8 million loan.

As part of the agreement, the company and its first lien lender, PNC Bank, agreed to extend the maturity of A. M. Castle's existing loan to Feb. 28, 2023, and to amend certain aspects of the loan to provide expanded access to approximately $3.8 million of capital generated by the company's recent cash flow improvements.

A. M. Castle & Co. is a distributor of specialty metal and supply chain solutions.

"From an operational perspective, we believe the third quarter was the bottom of the pandemic impacts in our volume and revenue performance. In fact, in both our industrial and aerospace end-markets we have begun to see recovery in billings and, more promisingly, in forward bookings for the coming months," said President and CEO Marec Edgar.

The company generated cash flow from operations of $3.9 million during the quarter. It also incurred $700,000 in severance costs due to layoffs.

"Throughout this year we have made strategic decisions to reduce operating expenses. We expect these cost reductions, which we estimate to be at least $15 million on an annualized basis, to generate increased profitability leverage as markets recover," said Pat Anderson, executive vice president of finance and administration.