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Synalloy Corp. Reports Operating Results (10-Q)

May 17, 2010 | About:

Synalloy Corp. (NASDAQ:SYNL) filed Quarterly Report for the period ended 2010-04-03.

Synalloy Corp. has a market cap of $67.1 million; its shares were traded at around $10.69 with a P/E ratio of 213.8 and P/S ratio of 0.65. The dividend yield of Synalloy Corp. stocks is 2.34%.SYNL is in the portfolios of Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Sale of Blackman Uhler Specialties & Discontinued Operations On October 2, 2009, the Company entered into an Asset Purchase Agreement with SantoLubes Manufacturing, LLC (“SM”) to sell the specialty chemical business of Blackman Uhler Specialties, LLC (“BU”) for a purchase price of $10,366,000, along with certain property, plant and equipment held by Synalloy Corporation for a purchase price of $1,130,000, all located at the Spartanburg, SC location. The purchase price of approximately $11,496,000, payable in cash, was equal to the approximate net book values of the assets sold as of October 3, 2009, the effective date of the sale, and the Company recorded a loss of approximately $250,000 in the third quarter of 2009 resulting primarily from transaction fees and other costs related to the transaction. Divesting BU s specialty chemicals business, which had annual sales of approximately $14,500,000, has freed up resources and working capital to allow further expansion into the Company s metals businesses. The Company has entered into a lease agreement with SM to lease office space in Spartanburg for corporate operations and has also entered into an outsourcing agreement with SM to provide SM with certain accounting and administration functions.

The Company is from time-to-time subject to various claims, other possible legal actions for product liability and other damages, and other matters arising out of the normal conduct of the Company s business. A Metals Segment customer alleged that the Segment delivered defective pipe in 2006 which the customer removed and replaced. Representatives from both Companies met in May 2010 and on May 12, 2010 agreed to settle this claim for a cash payment of $1,900,000. The Company had a $1,400,000 reserve for this claim at the end of 2009 and recorded an additional $500,000 of claims expense in the first quarter of 2010. Other than environmental contingencies, management is not currently aware of any other asserted or unasserted matters which could have a significant effect on the financial condition or results of operations of the Company.

Read the The complete Report

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Rating: 3.4/5 (5 votes)


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