Company Quick10K Filing
Castle AM
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 4 $7
10-Q 2019-11-12 Quarter: 2019-09-30
10-Q 2019-08-14 Quarter: 2019-06-30
10-Q 2019-05-09 Quarter: 2019-03-31
10-K 2019-03-15 Annual: 2018-12-31
10-Q 2018-11-14 Quarter: 2018-09-30
10-Q 2018-08-09 Quarter: 2018-06-30
10-Q 2018-05-14 Quarter: 2018-03-31
10-K 2018-03-15 Annual: 2017-12-31
10-Q 2017-11-14 Quarter: 2017-09-30
10-Q 2017-08-09 Quarter: 2017-06-30
10-Q 2017-05-15 Quarter: 2017-03-31
10-K 2017-04-07 Annual: 2016-12-31
10-Q 2016-11-09 Quarter: 2016-09-30
10-Q 2016-08-09 Quarter: 2016-06-30
10-Q 2016-05-10 Quarter: 2016-03-31
10-K 2016-03-15 Annual: 2015-12-31
10-Q 2015-11-09 Quarter: 2015-09-30
10-Q 2015-08-06 Quarter: 2015-06-30
10-Q 2015-04-30 Quarter: 2015-03-31
10-K 2015-03-09 Annual: 2014-12-31
10-Q 2014-10-29 Quarter: 2014-09-30
10-Q 2014-08-11 Quarter: 2014-06-30
10-Q 2014-05-01 Quarter: 2014-03-31
10-K 2014-03-07 Annual: 2013-12-31
10-Q 2013-11-01 Quarter: 2013-09-30
10-Q 2013-07-31 Quarter: 2013-06-30
10-Q 2013-05-02 Quarter: 2013-03-31
10-K 2013-03-11 Annual: 2012-12-31
10-Q 2012-11-02 Quarter: 2012-09-30
10-Q 2012-08-07 Quarter: 2012-06-30
10-Q 2012-05-03 Quarter: 2012-03-31
10-K 2012-03-14 Annual: 2011-12-31
10-Q 2011-11-03 Quarter: 2011-09-30
10-Q 2011-08-03 Quarter: 2011-06-30
10-Q 2011-05-06 Quarter: 2011-03-31
10-K 2011-03-14 Annual: 2010-12-31
10-Q 2010-11-05 Quarter: 2010-09-30
10-Q 2010-07-29 Quarter: 2010-06-30
10-Q 2010-04-29 Quarter: 2010-03-31
10-K 2010-03-12 Annual: 2009-12-31
8-K 2020-01-07 Officers, Other Events, Exhibits
8-K 2019-11-12 Earnings, Exhibits
8-K 2019-08-14 Earnings, Exhibits
8-K 2019-05-07 Earnings, Exhibits
8-K 2019-05-01 Shareholder Vote
8-K 2019-03-14 Earnings, Exhibits
8-K 2018-12-21 Officers, Exhibits
8-K 2018-11-13 Earnings, Exhibits
8-K 2018-11-05 Officers, Other Events, Exhibits
8-K 2018-08-07 Earnings, Exhibits
8-K 2018-06-01 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2018-05-14 Earnings, Exhibits
8-K 2018-04-25 Shareholder Vote
8-K 2018-03-13 Earnings, Regulation FD, Exhibits
8-K 2018-02-06 Other Events
CTAM 2019-09-30
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 ctam-ex311x093019.htm
EX-31.2 ctam-ex312x093019.htm
EX-32..1 ctam-ex321x093019.htm

Castle AM Earnings 2019-09-30

CTAM 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
VLTC 8 22 28 2 0 -2 -0 30 0% -148.2 -10%
MNTR 8 6 2 5 2 -3 -3 7 30% -2.2 -53%
VSTR 8 1 2 1 1 1 1 8 98% 11.8 80%
CAPC 8 7 1 13 3 -1 -1 6 22% -8.2 -12%
RSLS 7 44 30 358 8 -55 -56 3 2% -0.1 -126%
FVRG 7 3 12 12 9 -2 0 8 77% 43.6 -50%
CTAM 7 365 389 583 0 -40 3 261 0% 93.6 -11%
SOFO 7 15 21 34 25 -13 -11 10 74% -0.9 -89%
GRST 7 24 34 1 0 -10 -9 7 0% -0.8 -42%
FSSN 7 2 5 1 0 -6 -6 8 83% -1.3 -281%

Document
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For Quarterly Period Ended September 30, 2019
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from             to            
Commission File Number: 1-5415
A. M. Castle & Co.
(Exact name of registrant as specified in its charter) 
 

Maryland36-0879160
(State or other jurisdiction of incorporation of organization)(I.R.S. Employer Identification No.)
1420 Kensington Road, Suite 220,Oak Brook,Illinois60523
(Address of principal executive offices)(Zip Code)
Registrant’s telephone, including area code (847) 455-7111

(Former name, former address and former fiscal year, if changed since last report) None
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, Par Value $0.01 Per ShareCTAMOCTQX Best Market
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   No    
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    
Yes   No   
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


Table of Contents
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    
Yes   No    
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    
Yes   No    
The number of shares outstanding of the registrant’s common stock as of November 5, 2019 was 3,649,658 shares.


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A. M. Castle & Co.
Table of Contents
 
  Page



Table of Contents
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Amounts in thousands, except par value and per share data
A.M. Castle & Co.
Condensed Consolidated Balance Sheets
 As of
 September 30, 2019December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents$7,499  $8,668  
Accounts receivable, less allowances of $1,847 and $1,364, respectively
87,859  79,757  
Inventories150,126  160,686  
Prepaid expenses and other current assets7,726  14,344  
Income tax receivable2,139  1,268  
Total current assets255,349  264,723  
Goodwill and intangible assets8,176  8,176  
Prepaid pension cost2,320  1,754  
Deferred income taxes1,260  1,261  
Operating right-of-use assets30,054  —  
Other noncurrent assets401  1,278  
Property, plant and equipment:
Land5,578  5,577  
Buildings20,911  21,218  
Machinery and equipment40,356  38,394  
Property, plant and equipment, at cost66,845  65,189  
Accumulated depreciation(17,420) (11,989) 
Property, plant and equipment, net49,425  53,200  
Total assets$346,985  $330,392  
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable$47,758  $42,719  
Accrued and other current liabilities13,203  16,631  
Operating lease liabilities6,422  —  
Income tax payable670  1,589  
Short-term borrowings4,028  5,498  
Current portion of finance leases614  119  
Total current liabilities72,695  66,556  
Long-term debt, less current portion262,077  245,966  
Deferred income taxes6,564  7,540  
Finance leases, less current portion8,347  61  
Build-to-suit liability  9,975  
Other noncurrent liabilities2,929  3,334  
Pension and postretirement benefit obligations6,290  6,321  
Noncurrent operating lease liabilities23,464  —  
Commitments and contingencies (see Note 13)
Stockholders’ deficit:
Common stock, $0.01 par value—200,000 Class A shares authorized with 3,818 shares issued and 3,650 shares outstanding at September 30, 2019, and 3,803 shares issued and outstanding at December 31, 2018
38  38  
Additional paid-in capital59,854  55,421  
Accumulated deficit(78,729) (50,472) 
Accumulated other comprehensive loss(16,090) (14,348) 
Treasury stock, at cost — 168 shares at September 30, 2019 and no shares at December 31, 2018
(454)   
Total stockholders’ deficit(35,381) (9,361) 
$346,985  $330,392  

The accompanying notes are an integral part of these financial statements.

3

Table of Contents
A.M. Castle & Co.
Condensed Consolidated Statements of Operations
and Comprehensive Loss
Three Months EndedNine Months Ended
 September 30,September 30,
2019201820192018
Net sales$136,113  $148,109  $433,570  $444,396  
Costs and expenses:
Cost of materials (exclusive of depreciation)103,019  110,896  323,918  331,861  
Warehouse, processing and delivery expense18,759  21,092  59,577  62,612  
Sales, general and administrative expense16,048  16,871  49,027  50,393  
Depreciation expense2,055  2,227  6,306  6,965  
Total costs and expenses139,881  151,086  438,828  451,831  
Operating loss(3,768) (2,977) (5,258) (7,435) 
Interest expense, net10,204  8,746  29,503  24,001  
Other income, net(697) (3,000) (4,779) (7,101) 
Loss before income taxes(13,275) (8,723) (29,982) (24,335) 
Income tax benefit(1,079) (2,068) (1,479) (4,026) 
Net loss$(12,196) $(6,655) $(28,503) $(20,309) 
Basic and diluted loss per common share$(5.49) $(3.33) $(13.11) $(10.15) 
Comprehensive loss:
Net loss$(12,196) $(6,655) $(28,503) $(20,309) 
Change in unrecognized pension and postretirement benefit costs, net of tax23    69    
Foreign currency translation adjustments, net of tax(1,068) (1,014) (1,811) (3,013) 
Comprehensive loss$(13,241) $(7,669) $(30,245) $(23,322) 
The accompanying notes are an integral part of these financial statements.



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A.M. Castle & Co.
Condensed Consolidated Statements of Cash Flows
Nine Months Ended
September 30,
 20192018
Operating activities:
Net loss$(28,503) $(20,309) 
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation6,306  6,965  
Amortization of deferred financing costs and debt discount8,511  5,762  
Loss (gain) on sale of property, plant and equipment210  (4) 
    Unrealized foreign currency gain(223) (784) 
Noncash interest paid in kind11,810  9,755  
Noncash rent expense544    
Noncash compensation expense1,715  2,063  
Deferred income taxes(2,016) (4,188) 
Other, net  463  
Changes in assets and liabilities:
Accounts receivable(8,356) (15,253) 
Inventories10,029  (14,324) 
Prepaid expenses and other current assets5,873  (3,614) 
Other noncurrent assets(134) 540  
Prepaid pension costs(566) (2,065) 
Accounts payable5,093  8,947  
Income tax payable and receivable(1,805) (83) 
Accrued and other current liabilities(3,451) 1,791  
Lease liabilities(340) —  
Pension and postretirement benefit obligations and other noncurrent liabilities(111) (287) 
Net cash from (used in) operating activities4,586  (24,625) 
Investing activities:
Capital expenditures(3,530) (4,909) 
Proceeds from sale of property, plant and equipment442  53  
Net cash used in investing activities(3,088) (4,856) 
Financing activities:
Proceeds from long-term debt including credit facilities3,500  45,454  
Repayments of long-term debt including credit facilities(4,488) (17,600) 
Repayments of short-term borrowings, net(1,238) (607) 
Principal paid on financing leases(454) —  
Payments of debt issue costs  (499) 
Payments of build-to-suit liability  (897) 
Net cash (used in) from financing activities(2,680) 25,851  
Effect of exchange rate changes on cash and cash equivalents13  (118) 
Net change in cash and cash equivalents(1,169) (3,748) 
Cash and cash equivalents - beginning of year8,668  11,104  
Cash and cash equivalents - end of period$7,499  $7,356  

The accompanying notes are an integral part of these financial statements.

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A.M. Castle & Co.
Consolidated Statements of Stockholders' Equity (Deficit)
Common
Shares
Treasury
Shares
Common
Stock
Treasury
Stock
Additional
Paid-in
Capital
(Accumulated Deficit) Retained
Earnings
Accumulated Other
Comprehensive
Loss
Total
Balance as of June 30, 20183,803    $38  $  $53,212  $(26,981) $(4,668) $21,601  
Net loss—  —  —  —  —  (6,655) —  (6,655) 
Foreign currency translation, net of tax—  —  —  —  —  —  (1,014) (1,014) 
Change in unrecognized pension and postretirement benefit costs, $0 tax effect
—  —  —  —  —  —  —    
Reclassification to equity of interest paid in kind attributable to conversion option, net of $0 tax effect
—  —  —  —  1,169  —  —  1,169  
Share-based compensation—  —  —  —  454  —  —  454  
Vesting of restricted shares and other—  —  —  —  37  —  —  37  
Balance as of September 30, 2018 3,803    $38  $  $54,872  $(33,636) $(5,682) $15,592  
Balance as of June 30, 20193,818  (168) $38  $(454) $58,556  $(66,533) $(15,045) $(23,438) 
Net loss—  —  —  —  —  (12,196) —  (12,196) 
Foreign currency translation, net of tax—  —  —  —  —  —  (1,068) (1,068) 
Change in unrecognized pension and postretirement benefit costs, net of $0 tax effect
—  —  —  —  —  —  23  23  
Reclassification to equity of interest paid in kind attributable to conversion option, net of $326 tax effect
—  —  —  —  927  —  —  927  
Share-based compensation—  —  —  —  371  —  —  371  
Vesting of restricted shares and other—  —  —  —  —  —  —    
Balance as of September 30, 20193,818  (168) $38  $(454) $59,854  $(78,729) $(16,090) $(35,381) 

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A.M. Castle & Co.
Consolidated Statements of Stockholders' Equity (Deficit)
Common
Shares
Treasury
Shares
Common
Stock
Treasury
Stock
Additional
Paid-in
Capital
(Accumulated Deficit) Retained
Earnings
Accumulated Other
Comprehensive
Loss
Total
Balance as of December 31, 2017 3,734    $37  $  $49,944  $(13,327) $(2,669) $33,985  
Net loss—  —  —  —  —  (20,309) —  (20,309) 
Foreign currency translation, net of tax—  —  —  —  —  —  (3,013) (3,013) 
Change in unrecognized pension and postretirement benefit costs, $0 tax effect
—  —  —  —  —  —      
Reclassification to equity of interest paid in kind attributable to conversion option, net of $0 tax effect
—  —  —  —  3,447  —  —  3,447  
Share-based compensation69  —  —  —  1,362  —  —  1,362  
Vesting of restricted shares and other—  —  1  —  119  —  —  120  
Balance as of September 30, 2018 3,803    $38  $  $54,872  $(33,636) $(5,682) $15,592  
Balance as of December 31, 20183,803    $38  $  $55,421  $(50,472) $(14,348) $(9,361) 
Cumulative effect from adoption of the new lease standard (Leases: Topic 842) (Note 8)—  —  $—  —  —  246  —  246  
Net loss—  —  —  —  —  (28,503) —  (28,503) 
Foreign currency translation, net of tax—  —  —  —  —  —  (1,811) (1,811) 
Change in unrecognized pension and postretirement benefit costs, net of $0 tax effect
—  —  —  —  —  —  69  69  
Reclassification to equity of interest paid in kind attributable to conversion option, net of $961 tax effect
—  —  —  —  2,735  —  —  2,735  
Share-based compensation—  —  —  —  1,143  —  —  1,143  
Vesting of restricted shares and other15  (168) —  (454) 555  —  —  101  
Balance as of September 30, 20193,818  (168) $38  $(454) $59,854  $(78,729) $(16,090) $(35,381) 

The accompanying notes are an integral part of these financial statements.
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A. M. Castle & Co.
Notes to Condensed Consolidated Financial Statements
Unaudited - Amounts in thousands except per share data and percentages
(1) Basis of Presentation
The Condensed Consolidated Financial Statements of A.M. Castle & Co. and its consolidated subsidiaries (collectively, the "Company") included herein and the Notes thereto have been prepared by the Company, without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), and accounting principles generally accepted in the United States of America (“GAAP”). The Condensed Consolidated Balance Sheet at December 31, 2018 is derived from the audited financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. In the opinion of the Company's management, the unaudited statements included herein contain all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of financial results for the interim period. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The operating results for the three and nine months ended September 30, 2019, as reported herein, may not necessarily be indicative of the Company’s operating results for the full year.
(2) New Accounting Standards
Standards Updates Adopted
In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)", which requires that lessees recognize assets and liabilities for leases with lease terms greater than 12 months in the statement of financial position. ASU No. 2016-02 also requires additional disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The provisions of ASU No. 2016-02 are to be applied using a modified retrospective approach, and are effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period. Topic 842 was subsequently amended by ASU No. 2018-01, “Land Easement Practical Expedient for Transition to Topic 842”; ASU No. 2018-10, “Codification Improvements to Topic 842, Leases”; ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements” (“ASU 2018-11”); and ASU No. 2018-20, “Narrow-Scope Improvements for Lessors” (collectively, "ASC 842"). ASU 2018-11 provides clarity on separating components of a lease contract and includes an option to not restate comparative periods in transition and elect to use the effective date of Topic 842 as the date of initial application.
The Company adopted ASC 842 effective January 1, 2019 using the modified retrospective approach, as required. The Company elected the transition method that allows it to apply the new standard only to leases existing at the date of initial application, January 1, 2019, and recognized the cumulative effect of initially applying the standard as an adjustment to opening retained earnings for the fiscal year beginning January 1, 2019. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019.
The Company has also elected the package of practical expedients permitted under the transition guidance, which among other things, allows the Company to carryforward the historical lease classification. ASC 842 also provides practical expedients for an entity’s ongoing accounting. The Company has made an accounting policy election to keep leases with an initial term of 12 months or less off the balance sheet and recognize those lease payments in the Condensed Consolidated Statements of Operations and Comprehensive Loss on a straight-line basis over the lease term. The Company has also elected the practical expedient to not separate lease and non-lease components for all of its real estate leases.
The adoption of ASC 842 resulted in recognition of additional operating right of use assets and lease liabilities on the Company's Condensed Consolidated Balance Sheets as of January 1, 2019 of $35,508 and $35,470, respectively. Additionally, the Company’s build-to-suit financing obligation has been classified as a finance lease liability, resulting in a $246 adjustment to the Company’s beginning accumulated deficit. The adoption of Topic 842 did not have a material effect on the Company's consolidated net loss or liquidity. The Company has reclassified certain prior year presentations to conform to the current period presentation under ASC 842. Refer to Note 8 - Leases, for further information and disclosures related to the adoption of ASC 842.
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Standards Updates Issued Not Yet Effective
In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement.” ASU No. 2018-13 amends Fair Value Measurement (Topic 820) to add, remove, and modify fair value measurement disclosure requirements. The ASU’s changes to disclosures aim to improve the effectiveness of Topic 820's disclosure requirements under the aforementioned FASB disclosure framework project. ASU No. 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods within the year of adoption. Early adoption is permitted for any eliminated or modified disclosures prescribed by the ASU. The Company will adopt the disclosure requirements of ASU No. 2018-13 in fiscal year 2020.
Also in August 2018, the FASB issued ASU No. 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans - General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plan.” ASU No. 2018-14 amends Compensation - Retirement Benefits (Topic 715) to add or remove certain disclosure requirements related to defined benefit pension and other postretirement plans. The ASU’s changes to disclosures aim to improve the effectiveness of Topic 715's disclosure requirements under the FASB’s disclosure framework project. ASU No. 2018-14 is effective for public entities for fiscal years beginning after December 15, 2020. ASU No. 2018-14 does not impact the interim disclosure requirements of Topic 715. Early adoption is permitted. The Company will adopt the disclosure requirements of this new guidance in fiscal year 2021.
(3) Revenue
The Company recognizes revenue from the sale of products when the earnings process is complete and when the title and risk and rewards of ownership have passed to the customer, which is primarily at the time of shipment. Revenue recognized other than at the time of shipment represented less than 1% of the Company’s consolidated net sales in the three and nine months ended September 30, 2019 and September 30, 2018, respectively. Customer payment terms are established prior to the time of shipment. Provisions for allowances related to sales discounts and rebates are recorded based on terms of the sale in the period that the sale is recorded. The Company utilizes historical information and the current sales trends of the Company's business to estimate such provisions. The provisions related to discounts and rebates due to customers are recorded as a reduction within net sales in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss.
The Company records revenue from shipping and handling charges in net sales. Costs incurred in connection with shipping and handling the Company’s products, which are related to third-party carriers or performed by Company personnel, are included in warehouse, processing and delivery expenses. In the three months ended September 30, 2019 and September 30, 2018, shipping and handling costs included in warehouse, processing and delivery expenses were $5,869 and $6,662, respectively. In the nine months ended September 30, 2019 and September 30, 2018, shipping and handling costs included in warehouse, processing and delivery expenses were $18,165 and $20,267, respectively. As a practical expedient under Accounting Standards Codification No. 606, "Revenue from Contracts with Customers (Topic 606)" ("ASC 606"), the Company has elected to account for shipping and handling activities as fulfillment costs and not a promised good or service. As a result, there is no change to the Company's accounting for revenue from shipping and handling charges under ASC 606.
The Company maintains an allowance for doubtful accounts related to the potential inability of customers to make required payments. The allowance for doubtful accounts is maintained at a level considered appropriate based on historical experience and specific identification of customer receivable balances for which collection is unlikely. The provision for doubtful accounts is recorded in sales, general and administrative expense in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Loss. Estimates of doubtful accounts are based on historical write-off experience as a percentage of net sales and judgments about the probable effects of economic conditions on certain customers.
The Company also maintains an allowance for credit memos for estimated credit memos to be issued against current sales. Estimates of allowance for credit memos are based upon the application of a historical issuance lag period to the average credit memos issued each month.
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Accounts receivable allowance for doubtful accounts and credit memos activity is as follows:
 Three Months EndedNine Months Ended
September 30,September 30,
 2019201820192018
Balance, beginning of period$1,701  $1,678  $1,364  $1,586  
Add Provision charged to expense(a)
142  (139) 529  34  
Recoveries7  10  18  36  
Less Charges against allowance
(3) (449) (64) (556) 
Balance, end of period$1,847  $1,100  $1,847  $1,100  
(a) Includes the net amount of credit memos reserved and issued.
The Company operates primarily in North America. Net sales are attributed to countries based on the location of the Company’s subsidiary that is selling direct to the customer. Net sales exclude assessed taxes such as sales and excise tax. Company-wide geographic data is as follows:
Three Months EndedNine Months Ended
September 30,September 30,
2019201820192018
Net sales
United States$89,407  $97,679  $278,430  $289,178  
Canada9,916  11,402  33,464  35,677  
Mexico11,700  16,767  37,221  48,305  
France13,013  11,944  41,638  38,981  
China7,751  6,129  29,329  19,945  
All other countries4,326  4,188  13,488  12,310  
Total$136,113  $148,109  $433,570  $444,396  
The Company does not incur significant incremental costs when obtaining customer contracts and any costs that are incurred are generally not recoverable from its customers. Substantially all of the Company's customer contracts are for a duration of less than one year. As a practical expedient under ASC 606, the Company has elected to continue to recognize incremental costs of obtaining a contract, if any, as an expense when incurred if the amortization period of the asset would have been one year or less. The Company does not have any costs to obtain a contract that are capitalized under ASC 606.
(4) Loss Per Share
Diluted loss per common share is computed by dividing net loss by the weighted average number of shares of the common stock of A.M. Castle & Co. outstanding plus outstanding common stock equivalents. Common stock equivalents consist of restricted stock awards and other share-based payment awards, shares that may be issued upon conversion of the Company’s outstanding 5.00% / 7.00% Convertible Senior Secured Paid-in-Kind ("PIK") Toggle Notes due 2022 (the “Second Lien Notes”), which are included in the calculation of weighted average shares outstanding using the if-converted method. Refer to Note 6 - Debt, for further description of the Second Lien Notes.
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The following table is a reconciliation of the basic and diluted loss per common share calculations:
 
Three Months EndedNine Months Ended
 September 30,September 30,
 2019201820192018
Numerator:
Net loss$(12,196) $(6,655) $(28,503) $(20,309) 
Denominator:
Weighted average common shares outstanding2,221  2,000  2,174  2,000  
Effect of dilutive securities:
Outstanding common stock equivalents        
Denominator for diluted loss per common share2,221  2,000  2,174  2,000  
Basic loss per common share$(5.49) $(3.33) $(13.11) $(10.15) 
Diluted loss per common share$(5.49) $(3.33) $(13.11) $(10.15) 
Excluded outstanding share-based awards having an anti-dilutive effect1,429  1,803  1,488  1,803  
The computation of diluted loss per common share does not include common shares issuable upon conversion of the Company’s Second Lien Notes, as they were anti-dilutive under the if-converted method.
The Second Lien Notes are convertible into shares of the Company’s common stock at any time at the initial conversion price of $3.77 per share. In future periods, absent a fundamental change (as defined in the Second Lien Notes Indenture, which is described in Note 6 - Debt), the outstanding Second Lien Notes could increase diluted average shares outstanding by a maximum of approximately 50,500 shares.
(5) Goodwill and Intangible Asset
As of both September 30, 2019 and December 31, 2018, the Company had goodwill with a carrying value of $