x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 29, 2012 |
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Large accelerated Filer
¨
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Accelerated filer
x
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Non-accelerated filer
¨
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Smaller reporting company
¨
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Page #
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Location
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Principal Operations
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Building Square Feet
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Land Acres
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Bristol, TN
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Manufacturing stainless steel pipe and stainless steel piping systems
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275,000
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73.1
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Crossett, AR
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Manufacturing carbon and chrome alloy piping systems
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133,000
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19.8
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Cleveland, TN
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Chemical manufacturing and warehousing facilities
|
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118,000
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10.5
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Andrews, TX
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Manufacturing liquid storage solutions an separation equipment
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109,432
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19.6
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Dalton, GA
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Warehouse facilities
(1)
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32,000
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2.0
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Spartanburg, SC
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Corporate headquarters
(1)
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6,840
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—
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Glen Allen, VA
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Office space for Corporate employees
(1)
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2,869
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—
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Augusta, GA
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Chemical manufacturing
(2)
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—
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46.0
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(1)
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Leased facility.
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(2)
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Plant was closed in 2001 and all structures and manufacturing equipment have been removed.
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2012
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2011
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||||||||||||
Quarter
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High
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Low
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High
|
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Low
|
||||||||
1st
|
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$
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13.78
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$
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10.21
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$
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15.50
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$
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11.29
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2nd
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13.45
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10.39
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15.49
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|
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11.49
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3rd
|
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14.00
|
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10.45
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13.80
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9.19
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4th
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14.97
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12.26
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12.92
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9.15
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Source: Russell Investment Group
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12/07
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12/08
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12/09
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12/10
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12/11
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12/12
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||||||||||||
Synalloy Corporation
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$
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100.00
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$
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28.45
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$
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57.01
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$
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77.67
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$
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67.45
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$
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95.71
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Russell 2000
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100.00
|
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66.21
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84.20
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106.82
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102.36
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119.09
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||||||
NASDAQ Non-Financial
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100.00
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60.05
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89.89
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105.83
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107.21
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125.86
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Date Issued
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Class of Purchasers
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Number of Shares Issued
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Aggregate Exercise Price
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|||
10/22/2012
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Officers and Employees
|
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7,800
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$
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77,688
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12/20/2012
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Officers and Employees
|
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4,000
|
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46,200
|
|
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11,800
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$
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123,888
|
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Selected Financial Data and Other Financial Information
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|||||||||||||||||||
(Dollar amounts in thousands except for per share data)
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|||||||||||||||||||
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2012
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2011
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2010
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2009
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2008
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Operations
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Net sales
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$
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197,659
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$
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170,575
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$
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151,121
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$
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103,640
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$
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167,269
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Gross profit
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21,928
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21,090
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15,916
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9,489
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18,552
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|||||
Selling, general & administrative expense
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14,140
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12,284
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9,724
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8,787
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9,729
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|||||
Operating income
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7,788
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8,805
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6,192
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702
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8,823
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|||||
Net income continuing operations
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4,235
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5,797
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4,034
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219
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5,631
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|||||
Net (loss) income discontinued operations
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—
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—
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—
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(4
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)
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352
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|||||
Net income
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4,235
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5,797
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4,034
|
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215
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5,983
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Financial Position
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Total assets
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148,507
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98,916
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81,375
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78,252
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94,666
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Working capital
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65,919
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56,344
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43,232
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44,123
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49,433
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Long-term debt, less current portion
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37,593
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8,650
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219
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—
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9,959
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|||||
Shareholders' equity
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71,774
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68,619
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63,875
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62,721
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62,867
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Financial Ratios
|
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Current ratio
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3.6:1
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4.1:1
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4.0:1
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4.5:1
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3.7:1
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Gross profit to net sales
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11
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%
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12
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%
|
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11
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%
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9
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%
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|
11
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%
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|||||
Long-term debt to capital
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34
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%
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11
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%
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0
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%
|
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0
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%
|
|
14
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%
|
|||||
Return on average assets
|
3
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%
|
|
6
|
%
|
|
5
|
%
|
|
0
|
%
|
|
6
|
%
|
|||||
Return on average equity
|
6
|
%
|
|
9
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%
|
|
6
|
%
|
|
0
|
%
|
|
9
|
%
|
|||||
Per Share Data (income/(loss) – diluted)
|
|
|
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|
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||||||
Net income continuing operations
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$
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0.66
|
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$
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0.91
|
|
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$
|
0.64
|
|
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$
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0.03
|
|
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$
|
0.90
|
|
Net income (loss) discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
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(0.00
|
)
|
|
0.05
|
|
|||||
Net income
|
0.66
|
|
|
0.91
|
|
|
0.64
|
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0.03
|
|
|
0.95
|
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|||||
Dividends declared and paid
|
0.25
|
|
|
0.25
|
|
|
0.50
|
|
|
0.10
|
|
|
0.25
|
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|||||
Book value
|
11.29
|
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|
10.85
|
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10.16
|
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10.01
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10.06
|
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|||||
Other Data
|
|
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||||||
Depreciation and amortization
|
$
|
3,399
|
|
|
$
|
2,659
|
|
|
$
|
2,642
|
|
|
$
|
2,402
|
|
|
$
|
2,082
|
|
Capital expenditures
|
$
|
4,740
|
|
|
$
|
3,185
|
|
|
$
|
5,095
|
|
|
$
|
1,892
|
|
|
$
|
3,059
|
|
Employees at year end
|
597
|
|
|
441
|
|
|
441
|
|
|
466
|
|
|
459
|
|
|||||
Shareholders of record at year end
|
669
|
|
|
687
|
|
|
704
|
|
|
790
|
|
|
826
|
|
|||||
Average shares outstanding - diluted
|
6,394
|
|
|
6,362
|
|
|
6,309
|
|
|
6,269
|
|
|
6,281
|
|
|||||
Stock Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Price range of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
High
|
$
|
14.97
|
|
|
$
|
15.50
|
|
|
$
|
12.25
|
|
|
$
|
10.49
|
|
|
$
|
17.96
|
|
Low
|
10.21
|
|
|
9.15
|
|
|
7.47
|
|
|
3.85
|
|
|
3.52
|
|
|||||
Close
|
13.49
|
|
|
10.27
|
|
|
12.12
|
|
|
9.42
|
|
|
5.00
|
|
|
2012
|
|
2011
|
|
2010
|
|||||||||||||||
(in thousands)
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||
Net sales
|
$
|
146,285
|
|
|
100.0
|
%
|
|
$
|
127,727
|
|
|
100.0
|
%
|
|
$
|
108,544
|
|
|
100.0
|
%
|
Cost of goods sold
|
132,596
|
|
|
90.6
|
%
|
|
112,445
|
|
|
88.0
|
%
|
|
99,367
|
|
|
91.5
|
%
|
|||
Gross profit
|
13,689
|
|
|
9.4
|
%
|
|
15,282
|
|
|
12.0
|
%
|
|
9,177
|
|
|
8.5
|
%
|
|||
Selling, general and administrative expense
|
7,551
|
|
|
5.2
|
%
|
|
6,029
|
|
|
4.7
|
%
|
|
5,403
|
|
|
5.0
|
%
|
|||
Operating income
|
$
|
6,138
|
|
|
4.2
|
%
|
|
$
|
9,253
|
|
|
7.3
|
%
|
|
$
|
3,774
|
|
|
3.5
|
%
|
Year-end backlogs - Piping systems
|
$
|
19,254
|
|
|
|
|
$
|
22,743
|
|
|
|
|
|
$
|
25,300
|
|
|
|
|
a)
|
Palmer was acquired August 21, 2012 and accordingly, 19 weeks and 13 weeks of their operations were included in the year and fourth quarter of 2012, respectively.
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b)
|
Associated with the acquisition of Palmer, an intangible asset of $9,000,000 was recognized, which represents the fair value of the customer base that was acquired by the Company. This intangible asset will be amortized over a 15-year period using an accelerated amortization method. As a result of this transaction, the year and fourth quarter of 2012 includes $540,000 of amortization expense.
|
c)
|
Declining nickel prices resulted in inventory losses in the year and fourth quarter of 2012 of approximately $4,645,000 and $1,150,000, respectively. For the same periods last year, fluctuating nickel prices produced inventory losses of $1,637,000 and $870,000, respectively. As nickel prices decrease, selling prices are reduced accordingly while material costs reflect the higher priced inventory.
|
d)
|
In the year and fourth quarter of 2011, operating income for the fabrication unit of our Metals Segment was favorably affected by higher unit selling prices associated with the completion of several large scale lump-sum jobs. The unit realized $4,659,000 and $135,000 of additional billings during the year and fourth quarter of 2011, respectively, from these completed jobs.
|
|
2012
|
|
2011
|
|
2010
|
|||||||||||||||
(Amounts in thousands)
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||
Net sales
|
$
|
51,374
|
|
|
100.0
|
%
|
|
$
|
42,848
|
|
|
100.0
|
%
|
|
$
|
42,577
|
|
|
100.0
|
%
|
Cost of goods sold
|
43,134
|
|
|
84.0
|
%
|
|
37,040
|
|
|
86.4
|
%
|
|
35,838
|
|
|
84.2
|
%
|
|||
Gross profit
|
8,240
|
|
|
16.0
|
%
|
|
5,808
|
|
|
13.6
|
%
|
|
6,739
|
|
|
15.8
|
%
|
|||
Selling, general and administrative expense
|
3,397
|
|
|
6.6
|
%
|
|
3,587
|
|
|
8.4
|
%
|
|
2,779
|
|
|
6.5
|
%
|
|||
Operating income
|
$
|
4,843
|
|
|
9.4
|
%
|
|
$
|
2,221
|
|
|
5.2
|
%
|
|
$
|
3,960
|
|
|
9.3
|
%
|
(Amounts in thousands)
|
|
|
Payment Obligations for the Year Ended
|
||||||||||||||||||||||||
|
Total
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
Thereafter
|
||||||||||||||
Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Line of credit
|
$
|
18,061
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,061
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term loan
|
21,750
|
|
|
2,250
|
|
|
2,250
|
|
|
2,250
|
|
|
2,250
|
|
|
2,250
|
|
|
10,500
|
|
|||||||
Vehicle loan
|
56
|
|
|
24
|
|
|
24
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Interest payments
|
4,940
|
|
|
1,171
|
|
|
1,087
|
|
|
803
|
|
|
519
|
|
|
435
|
|
|
925
|
|
|||||||
Contingent consideration
|
8,500
|
|
|
2,500
|
|
|
2,500
|
|
|
3,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Operating leases
|
1,011
|
|
|
370
|
|
|
301
|
|
|
193
|
|
|
98
|
|
|
49
|
|
|
—
|
|
|||||||
Purchase obligations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Deferred compensation
(1)
|
456
|
|
|
71
|
|
|
71
|
|
|
71
|
|
|
21
|
|
|
21
|
|
|
201
|
|
|||||||
Total
|
$
|
54,774
|
|
|
$
|
6,386
|
|
|
$
|
6,233
|
|
|
$
|
24,886
|
|
|
$
|
2,888
|
|
|
$
|
2,755
|
|
|
$
|
11,626
|
|
(1)
|
For a description of the deferred compensation obligation, see Note 6 to the Consolidated Financial Statements included in Item 8 of this Form 10-K.
|
|
2012
|
|
2011
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,085,261
|
|
|
$
|
110,138
|
|
Accounts receivable, less allowance for doubtful accounts of $1,312,715 and $1,203,000 respectively
|
31,177,526
|
|
|
26,582,279
|
|
||
Inventories, net
|
|
|
|
||||
Raw materials
|
13,975,628
|
|
|
10,120,408
|
|
||
Work-in-process
|
13,773,037
|
|
|
12,632,301
|
|
||
Finished goods
|
22,414,727
|
|
|
20,310,029
|
|
||
Total inventories
|
50,163,392
|
|
|
43,062,738
|
|
||
Deferred income taxes
|
2,981,439
|
|
|
2,632,145
|
|
||
Prepaid expenses and other current assets
|
5,514,530
|
|
|
2,250,735
|
|
||
Total current assets
|
90,922,148
|
|
|
74,638,035
|
|
||
|
|
|
|
||||
Cash value of life insurance
|
2,549,220
|
|
|
3,092,430
|
|
||
Property, plant and equipment, net
|
28,034,930
|
|
|
18,713,524
|
|
||
Goodwill
|
18,252,678
|
|
|
2,354,730
|
|
||
Deferred charges, net
|
287,564
|
|
|
117,645
|
|
||
Intangible asset, net
|
8,460,000
|
|
|
—
|
|
||
|
|
|
|
||||
Total assets
|
$
|
148,506,540
|
|
|
$
|
98,916,364
|
|
|
|
|
|
||||
Liabilities and Shareholders' Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Current portion of long-term debt
|
$
|
2,274,054
|
|
|
$
|
—
|
|
Accounts payable
|
10,523,788
|
|
|
13,043,153
|
|
||
Accrued expenses
|
12,083,499
|
|
|
5,112,662
|
|
||
Current portion of environmental reserves
|
122,000
|
|
|
138,000
|
|
||
Total current liabilities
|
25,003,341
|
|
|
18,293,815
|
|
||
|
|
|
|
||||
Long-term debt
|
37,593,309
|
|
|
8,650,431
|
|
||
Long-term environmental reserves
|
518,000
|
|
|
502,000
|
|
||
Long-term deferred compensation
|
263,872
|
|
|
293,555
|
|
||
Long-term contingent consideration
|
5,708,831
|
|
|
—
|
|
||
Deferred income taxes
|
7,645,119
|
|
|
2,557,662
|
|
||
|
|
|
|
||||
Shareholders' equity
|
|
|
|
||||
Common stock, par value $1 per share - authorized 12,000,000 shares; issued 8,000,000 shares
|
8,000,000
|
|
|
8,000,000
|
|
||
Capital in excess of par value
|
1,398,612
|
|
|
1,153,889
|
|
||
Retained earnings
|
76,836,761
|
|
|
74,198,151
|
|
||
|
86,235,373
|
|
|
83,352,040
|
|
||
Less cost of common stock in treasury: 1,643,267 and 1,674,156 shares, respectively
|
14,461,305
|
|
|
14,733,139
|
|
||
Total shareholders' equity
|
71,774,068
|
|
|
68,618,901
|
|
||
Commitments and contingencies – See Note 11
|
|
|
|
||||
|
|
|
|
||||
Total liabilities and shareholders' equity
|
$
|
148,506,540
|
|
|
$
|
98,916,364
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net sales
|
$
|
197,658,874
|
|
|
$
|
170,575,298
|
|
|
$
|
151,120,668
|
|
|
|
|
|
|
|
||||||
Cost of sales
|
175,730,511
|
|
|
149,485,455
|
|
|
135,204,721
|
|
|||
|
|
|
|
|
|
||||||
Gross profit
|
21,928,363
|
|
|
21,089,843
|
|
|
15,915,947
|
|
|||
|
|
|
|
|
|
||||||
Selling, general and administrative expense
|
14,140,355
|
|
|
12,284,478
|
|
|
9,723,590
|
|
|||
Operating income
|
7,788,008
|
|
|
8,805,365
|
|
|
6,192,357
|
|
|||
Other (income) and expense
|
|
|
|
|
|
|
|
|
|||
Interest expense
|
600,893
|
|
|
140,784
|
|
|
54,240
|
|
|||
Acquisition related costs
|
880,583
|
|
|
—
|
|
|
—
|
|
|||
Change in fair value of interest rate swap
|
113,648
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
(148,028
|
)
|
|
(85,579
|
)
|
|
(11,706
|
)
|
|||
Income before income taxes
|
6,340,912
|
|
|
8,750,160
|
|
|
6,149,823
|
|
|||
Provision for income taxes
|
2,106,000
|
|
|
2,953,000
|
|
|
2,116,000
|
|
|||
|
|
|
|
|
|
||||||
Net income
|
$
|
4,234,912
|
|
|
$
|
5,797,160
|
|
|
$
|
4,033,823
|
|
|
|
|
|
|
|
||||||
Net income per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.67
|
|
|
$
|
0.92
|
|
|
$
|
0.64
|
|
Diluted
|
$
|
0.66
|
|
|
$
|
0.91
|
|
|
$
|
0.64
|
|
|
Common Stock
|
|
Capital in Excess of
Par Value
|
|
Retained Earnings
|
|
Cost of Common Stock in Treasury
|
|
Total
|
||||||||||
Balance at January 2, 2010
|
$
|
8,000,000
|
|
|
$
|
856,021
|
|
|
$
|
69,113,403
|
|
|
$
|
(15,248,682
|
)
|
|
$
|
62,720,742
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
—
|
|
|
—
|
|
|
4,033,823
|
|
|
—
|
|
|
4,033,823
|
|
|||||
Payment of dividends, $0.50 per share
|
—
|
|
|
—
|
|
|
(3,165,831
|
)
|
|
—
|
|
|
(3,165,831
|
)
|
|||||
Issuance of 13,949 shares of common stock from the treasury
|
—
|
|
|
(55,220
|
)
|
|
—
|
|
|
122,707
|
|
|
67,487
|
|
|||||
Stock options exercised for 8,884 shares, net
|
—
|
|
|
(37,908
|
)
|
|
—
|
|
|
76,974
|
|
|
39,066
|
|
|||||
Employee stock option and grant compensation
|
—
|
|
|
179,814
|
|
|
—
|
|
|
—
|
|
|
179,814
|
|
|||||
Balance at January 1, 2011
|
8,000,000
|
|
|
942,707
|
|
|
69,981,395
|
|
|
(15,049,001
|
)
|
|
63,875,101
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
—
|
|
|
—
|
|
|
5,797,160
|
|
|
—
|
|
|
5,797,160
|
|
|||||
Payment of dividends, $0.25 per share
|
—
|
|
|
—
|
|
|
(1,580,404
|
)
|
|
—
|
|
|
(1,580,404
|
)
|
|||||
Issuance of 18,280 shares of common stock from the treasury
|
—
|
|
|
(72,247
|
)
|
|
—
|
|
|
160,835
|
|
|
88,588
|
|
|||||
Stock options exercised for 18,155 shares, net
|
—
|
|
|
6,876
|
|
|
—
|
|
|
155,027
|
|
|
161,903
|
|
|||||
Employee stock option and grant compensation
|
—
|
|
|
276,553
|
|
|
—
|
|
|
—
|
|
|
276,553
|
|
|||||
Balance at December 31, 2011
|
8,000,000
|
|
|
1,153,889
|
|
|
74,198,151
|
|
|
(14,733,139
|
)
|
|
68,618,901
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
—
|
|
|
—
|
|
|
4,234,912
|
|
|
—
|
|
|
4,234,912
|
|
|||||
Payment of dividends, $0.25 per share
|
—
|
|
|
—
|
|
|
(1,596,302
|
)
|
|
—
|
|
|
(1,596,302
|
)
|
|||||
Issuance of 19,089 shares of common stock from the treasury
|
—
|
|
|
(113,071
|
)
|
|
—
|
|
|
167,990
|
|
|
54,919
|
|
|||||
Stock options exercised for 11,800 shares, net
|
—
|
|
|
20,044
|
|
|
—
|
|
|
103,844
|
|
|
123,888
|
|
|||||
Employee stock option and grant compensation
|
—
|
|
|
337,750
|
|
|
—
|
|
|
—
|
|
|
337,750
|
|
|||||
Balance at December 29, 2012
|
$
|
8,000,000
|
|
|
$
|
1,398,612
|
|
|
$
|
76,836,761
|
|
|
$
|
(14,461,305
|
)
|
|
$
|
71,774,068
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
4,234,912
|
|
|
$
|
5,797,160
|
|
|
$
|
4,033,823
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation expense
|
2,831,718
|
|
|
2,631,864
|
|
|
2,631,785
|
|
|||
Amortization expense
|
567,693
|
|
|
26,958
|
|
|
10,680
|
|
|||
Deferred income taxes
|
53,697
|
|
|
121,192
|
|
|
(116,000
|
)
|
|||
Provision for losses on accounts receivable
|
106,883
|
|
|
792,719
|
|
|
62,617
|
|
|||
Provision for (reduction of) losses on inventories
|
484,070
|
|
|
(599,981
|
)
|
|
1,356,057
|
|
|||
(Gain) loss on sale of property, plant and equipment
|
(76,184
|
)
|
|
198
|
|
|
5,372
|
|
|||
Cash value of life insurance
|
(190,996
|
)
|
|
(62,864
|
)
|
|
(69,929
|
)
|
|||
Change in fair value of interest rate swap
|
113,648
|
|
|
—
|
|
|
—
|
|
|||
Environmental reserves
|
—
|
|
|
(296,456
|
)
|
|
(188,544
|
)
|
|||
Issuance of treasury stock for director fees
|
99,995
|
|
|
78,704
|
|
|
67,487
|
|
|||
Employee stock option and grant compensation
|
337,750
|
|
|
276,553
|
|
|
179,814
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
246,899
|
|
|
(7,402,098
|
)
|
|
(5,994,387
|
)
|
|||
Inventories
|
(1,906,355
|
)
|
|
(8,110,000
|
)
|
|
(10,204,490
|
)
|
|||
Other assets and liabilities, net
|
(1,668,773
|
)
|
|
(973,550
|
)
|
|
(17,103
|
)
|
|||
Accounts payable
|
(4,151,832
|
)
|
|
2,369,076
|
|
|
4,092,446
|
|
|||
Accrued expenses
|
1,195,374
|
|
|
1,806,371
|
|
|
(2,514,456
|
)
|
|||
Accrued income taxes
|
(643,636
|
)
|
|
(313,626
|
)
|
|
616,885
|
|
|||
Net cash provided by (used in) operating activities
|
1,634,863
|
|
|
(3,857,780
|
)
|
|
(6,047,943
|
)
|
|||
Investing activities
|
|
|
|
|
|
|
|
|
|||
Purchases of property, plant and equipment
|
(4,739,728
|
)
|
|
(3,185,129
|
)
|
|
(5,095,254
|
)
|
|||
Proceeds from sale of property, plant and equipment
|
153,850
|
|
|
31,490
|
|
|
63,032
|
|
|||
Acquisition of Palmer of Texas
|
(27,895,209
|
)
|
|
—
|
|
|
—
|
|
|||
Cash received from Palmer of Texas acquisition
|
1,389,054
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from life insurance settlement
|
734,206
|
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(30,357,827
|
)
|
|
(3,153,639
|
)
|
|
(5,032,222
|
)
|
|||
Financing activities
|
|
|
|
|
|
|
|
|
|||
Net borrowings from line of credit
|
9,410,463
|
|
|
8,431,156
|
|
|
219,275
|
|
|||
Borrowings from long-term debt
|
22,500,000
|
|
|
—
|
|
|
—
|
|
|||
Payments on long-term debt
|
(759,962
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from notes receivable
|
20,000
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from exercised stock options
|
123,888
|
|
|
161,903
|
|
|
39,066
|
|
|||
Dividends paid
|
(1,596,302
|
)
|
|
(1,580,404
|
)
|
|
(3,165,831
|
)
|
|||
Net cash provided by (used in) financing activities
|
29,698,087
|
|
|
7,012,655
|
|
|
(2,907,490
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
975,123
|
|
|
1,236
|
|
|
(13,987,655
|
)
|
|||
Cash and cash equivalents at beginning of year
|
110,138
|
|
|
108,902
|
|
|
14,096,557
|
|
|||
Cash and cash equivalents at end of year
|
$
|
1,085,261
|
|
|
$
|
110,138
|
|
|
$
|
108,902
|
|
|
|
Level 3 Inputs
|
||
Balance at December 31, 2011
|
|
$
|
—
|
|
Present value contingent consideration liability associated with the Palmer acquisition
|
|
8,152,031
|
|
|
Interest expense charged during the year
|
|
56,800
|
|
|
Change in fair value of contingent consideration liability
|
|
—
|
|
|
Balance at December 29, 2012
|
|
$
|
8,208,831
|
|
|
2012
|
|
2011
|
||||
Land
|
$
|
732,213
|
|
|
$
|
515,105
|
|
Land improvements
|
707,286
|
|
|
681,278
|
|
||
Buildings
|
16,225,324
|
|
|
12,224,712
|
|
||
Machinery, fixtures and equipment
|
47,588,233
|
|
|
42,747,487
|
|
||
Construction-in-progress
|
3,748,831
|
|
|
2,378,018
|
|
||
|
69,001,887
|
|
|
58,546,600
|
|
||
Less accumulated depreciation
|
40,966,957
|
|
|
39,833,076
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
$
|
28,034,930
|
|
|
$
|
18,713,524
|
|
|
2012
|
|
2011
|
||||
$ 30,000,000 Revolving line of credit, due August 21, 2015
|
$
|
18,060,894
|
|
|
$
|
8,650,431
|
|
$ 22,500,000 Term loan, due August 21, 2022
|
21,750,000
|
|
|
—
|
|
||
Vehicle loan
|
56,469
|
|
|
—
|
|
||
|
39,867,363
|
|
|
8,650,431
|
|
||
Less current installments
|
2,274,054
|
|
|
—
|
|
||
Total long-term debt
|
$
|
37,593,309
|
|
|
$
|
8,650,431
|
|
|
2012
|
|
2011
|
||||
Salaries, wages and commissions
|
$
|
3,275,685
|
|
|
$
|
2,176,495
|
|
Current portion of contingent consideration
|
2,500,000
|
|
|
—
|
|
||
Advances from customers
|
2,015,246
|
|
|
1,146,559
|
|
||
Insurance
|
1,008,434
|
|
|
958,615
|
|
||
Taxes, other than income taxes
|
1,600,762
|
|
|
68,377
|
|
||
Benefit plans
|
260,810
|
|
|
175,943
|
|
||
Interest
|
482,503
|
|
|
4,928
|
|
||
Professional fees
|
259,933
|
|
|
225,000
|
|
||
Other accrued items
|
680,126
|
|
|
356,745
|
|
||
Total accrued expenses
|
$
|
12,083,499
|
|
|
$
|
5,112,662
|
|
|
Weighted
Average
Exercise
Price
|
|
Options
Outstanding
|
|
Weighted
Average
Contractual
Term
(in years)
|
|
Intrinsic
Value of
Options
|
|
Options
Available
|
||||||
At January 2, 2010
|
$
|
8.92
|
|
|
82,993
|
|
|
4.5
|
|
$
|
76,923
|
|
|
—
|
|
Exercised
|
$
|
4.97
|
|
|
(9,900
|
)
|
|
|
|
|
|
|
|||
Canceled / Expired
|
$
|
9.96
|
|
|
(29,093
|
)
|
|
|
|
|
|
|
—
|
|
|
At January 1, 2011
|
$
|
9.13
|
|
|
44,000
|
|
|
3.6
|
|
$
|
131,670
|
|
|
—
|
|
2011 option plan
|
|
|
|
|
|
|
|
|
|
|
|
350,000
|
|
||
Granted January 24, 2011
|
$
|
11.55
|
|
|
100,000
|
|
|
|
|
|
|
(100,000
|
)
|
||
Exercised
|
$
|
9.15
|
|
|
(19,200
|
)
|
|
|
|
|
|
|
|
|
|
Canceled / Expired
|
$
|
9.96
|
|
|
(4,000
|
)
|
|
|
|
|
|
|
—
|
|
|
At December 31, 2011
|
$
|
11.28
|
|
|
120,800
|
|
|
8.0
|
|
$
|
6,448
|
|
|
250,000
|
|
Granted February 9, 2012
|
$
|
11.35
|
|
|
36,740
|
|
|
|
|
|
|
|
(36,740
|
)
|
|
Granted August 21, 2012
|
$
|
12.73
|
|
|
75,000
|
|
|
|
|
|
|
(75,000
|
)
|
||
Exercised
|
$
|
10.50
|
|
|
(11,800
|
)
|
|
|
|
|
|
|
|
|
|
Canceled / Expired
|
$
|
—
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
At December 29, 2012
|
$
|
11.82
|
|
|
220,740
|
|
|
8.4
|
|
$
|
367,937
|
|
|
138,260
|
|
Exercisable options
|
$
|
10.84
|
|
|
29,000
|
|
|
5.4
|
|
$
|
76,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Options expected to vest:
|
|
|
|
|
|
|
|
|
Grant Date Fair Value
|
|
|
|
|||
At January 1, 2011
|
$
|
—
|
|
|
—
|
|
|
—
|
|
$
|
—
|
|
|
|
|
Granted January 24, 2011
|
$
|
11.55
|
|
|
100,000
|
|
|
|
|
$
|
7.93
|
|
|
|
|
Vested
|
$
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2011
|
$
|
11.55
|
|
|
100,000
|
|
|
9.1
|
|
$
|
7.93
|
|
|
|
|
Granted February 9, 2012
|
$
|
11.35
|
|
|
36,740
|
|
|
|
|
$
|
5.03
|
|
|
|
|
Granted August 21, 2012
|
$
|
12.73
|
|
|
75,000
|
|
|
|
|
$
|
5.44
|
|
|
|
|
Vested
|
$
|
11.55
|
|
|
(20,000
|
)
|
|
|
|
|
|
|
|
||
At December 29, 2012
|
$
|
11.97
|
|
|
191,740
|
|
|
8.9
|
|
$
|
6.40
|
|
|
|
|
Range of Exercise Prices
|
|
Outstanding Stock Options
|
|
Exercisable Stock Options
|
||||||||||||||
|
Shares
|
|
Weighted Average
|
|
Shares
|
|
Weighted Average Exercise Price
|
|||||||||||
|
|
Exercise Price
|
|
Remaining Contractual Life in Years
|
|
|
||||||||||||
$
|
9.96
|
|
|
13,000
|
|
|
$
|
9.96
|
|
|
2.09
|
|
13,000
|
|
|
$
|
9.96
|
|
$
|
11.35
|
|
|
36,740
|
|
|
$
|
11.35
|
|
|
9.11
|
|
—
|
|
|
|
||
$
|
11.55
|
|
|
96,000
|
|
|
$
|
11.55
|
|
|
8.07
|
|
16,000
|
|
|
$
|
11.55
|
|
$
|
12.73
|
|
|
75,000
|
|
|
$
|
12.73
|
|
|
9.64
|
|
—
|
|
|
|
||
|
|
|
220,740
|
|
|
|
|
|
|
|
29,000
|
|
|
|
|
|
Shares
|
|
Weighted Average
Grant Date Fair Value
|
|||
Outstanding at January 2, 2010
|
23,134
|
|
|
$
|
17.62
|
|
Granted February 24, 2010
|
51,500
|
|
|
$
|
7.88
|
|
Vested
|
(7,059
|
)
|
|
$
|
19.30
|
|
Forfeited
|
(19,235
|
)
|
|
$
|
8.89
|
|
Outstanding at January 1, 2011
|
48,340
|
|
|
$
|
10.47
|
|
Granted January 24, 2011
|
13,420
|
|
|
$
|
11.55
|
|
Granted February 9, 2011
|
13,300
|
|
|
$
|
13.34
|
|
Vested
|
(12,290
|
)
|
|
$
|
12.81
|
|
Forfeited
|
(19,198
|
)
|
|
$
|
9.62
|
|
Outstanding at December 31, 2011
|
43,572
|
|
|
$
|
11.39
|
|
Vested
|
(11,099
|
)
|
|
$
|
12.60
|
|
Forfeited
|
—
|
|
|
|
|
|
Outstanding at December 29, 2012
|
32,473
|
|
|
$
|
10.98
|
|
(Amounts in thousands)
|
2012
|
|
2011
|
||||
Deferred tax assets:
|
|
|
|
||||
Inventory valuation reserves
|
$
|
853
|
|
|
$
|
966
|
|
Allowance for doubtful accounts
|
162
|
|
|
382
|
|
||
Inventory capitalization
|
2,239
|
|
|
1,601
|
|
||
Environmental reserves
|
229
|
|
|
229
|
|
||
Interest rate swap
|
116
|
|
|
—
|
|
||
Deferred compensation
|
120
|
|
|
135
|
|
||
State net operating loss
|
66
|
|
|
—
|
|
||
Other
|
350
|
|
|
295
|
|
||
Total deferred tax assets
|
4,135
|
|
|
3,608
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
||
Tax over book depreciation and amortization
|
8,046
|
|
|
2,908
|
|
||
Prepaid expenses
|
663
|
|
|
582
|
|
||
Other
|
90
|
|
|
44
|
|
||
Total deferred tax liabilities
|
8,799
|
|
|
3,534
|
|
||
Net deferred tax (liabilities) assets
|
$
|
(4,664
|
)
|
|
$
|
74
|
|
(Amounts in thousands)
|
2012
|
|
2011
|
|
2010
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
1,771
|
|
|
$
|
2,670
|
|
|
$
|
2,039
|
|
State
|
281
|
|
|
162
|
|
|
193
|
|
|||
Total current
|
2,052
|
|
|
2,832
|
|
|
2,232
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
Federal
|
114
|
|
|
108
|
|
|
(148
|
)
|
|||
State
|
(60
|
)
|
|
13
|
|
|
32
|
|
|||
Total deferred
|
54
|
|
|
121
|
|
|
(116
|
)
|
|||
Total
|
$
|
2,106
|
|
|
$
|
2,953
|
|
|
$
|
2,116
|
|
|
2012
|
|
2011
|
|
2010
|
|||||||||||||||
(Amounts in thousands)
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||
Tax at U.S. statutory rates
|
$
|
2,156
|
|
|
34.0
|
%
|
|
$
|
2,975
|
|
|
34.0
|
%
|
|
$
|
2,091
|
|
|
34.0
|
%
|
State income taxes, net of federal tax benefit
|
118
|
|
|
1.9
|
%
|
|
133
|
|
|
1.5
|
%
|
|
148
|
|
|
2.4
|
%
|
|||
Manufacturing exemption
|
(180
|
)
|
|
(2.8
|
)%
|
|
(162
|
)
|
|
(1.9
|
)%
|
|
(160
|
)
|
|
(2.6
|
)%
|
|||
Other, net
|
12
|
|
|
0.1
|
%
|
|
7
|
|
|
0.1
|
%
|
|
37
|
|
|
0.6
|
%
|
|||
Total
|
$
|
2,106
|
|
|
33.2
|
%
|
|
$
|
2,953
|
|
|
33.7
|
%
|
|
$
|
2,116
|
|
|
34.4
|
%
|
|
2012
|
|
2011
|
|
2010
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
4,234,912
|
|
|
$
|
5,797,160
|
|
|
$
|
4,033,823
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|||
Denominator for basic earnings per share - weighted average shares
|
6,341,856
|
|
|
6,313,418
|
|
|
6,282,497
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|||
Employee stock options and stock grants
|
52,488
|
|
|
48,670
|
|
|
26,701
|
|
|||
Denominator for diluted earnings per share - weighted average shares
|
6,394,344
|
|
|
6,362,088
|
|
|
6,309,198
|
|
|||
|
|
|
|
|
|
||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
0.67
|
|
|
$
|
0.92
|
|
|
$
|
0.64
|
|
Diluted
|
$
|
0.66
|
|
|
$
|
0.91
|
|
|
$
|
0.64
|
|
(Amounts in thousands)
|
2012
|
|
2011
|
|
2010
|
||||||
Net sales
|
|
|
|
|
|
||||||
Metals Segment
|
$
|
146,285
|
|
|
$
|
127,727
|
|
|
$
|
108,544
|
|
Specialty Chemicals Segment
|
51,374
|
|
|
42,848
|
|
|
42,577
|
|
|||
|
$
|
197,659
|
|
|
$
|
170,575
|
|
|
$
|
151,121
|
|
Operating income
|
|
|
|
|
|
|
|
|
|||
Metals Segment
|
$
|
6,138
|
|
|
$
|
9,253
|
|
|
$
|
3,774
|
|
Specialty Chemicals Segment
|
4,843
|
|
|
2,221
|
|
|
3,960
|
|
|||
|
10,981
|
|
|
11,474
|
|
|
7,734
|
|
|||
Less unallocated corporate expenses
|
3,193
|
|
|
2,668
|
|
|
1,541
|
|
|||
Operating income
|
7,788
|
|
|
8,806
|
|
|
6,193
|
|
|||
Acquisition related costs
|
881
|
|
|
—
|
|
|
—
|
|
|||
Other expense, net
|
566
|
|
|
56
|
|
|
43
|
|
|||
Pretax income
|
$
|
6,341
|
|
|
$
|
8,750
|
|
|
$
|
6,150
|
|
|
|
|
|
|
|
||||||
Identifiable assets
|
|
|
|
|
|
|
|
|
|||
Metals Segment
|
$
|
117,340
|
|
|
$
|
72,722
|
|
|
|
||
Specialty Chemicals Segment
|
21,949
|
|
|
18,465
|
|
|
|
||||
Corporate
|
9,218
|
|
|
7,729
|
|
|
|
||||
|
$
|
148,507
|
|
|
$
|
98,916
|
|
|
|
||
Depreciation and amortization
|
|
|
|
|
|
|
|
|
|||
Metals Segment
|
$
|
2,776
|
|
|
$
|
2,073
|
|
|
$
|
2,067
|
|
Specialty Chemicals Segment
|
435
|
|
|
419
|
|
|
416
|
|
|||
Corporate
|
188
|
|
|
167
|
|
|
159
|
|
|||
|
$
|
3,399
|
|
|
$
|
2,659
|
|
|
$
|
2,642
|
|
Capital expenditures
|
|
|
|
|
|
|
|
|
|||
Metals Segment
|
$
|
3,551
|
|
|
$
|
2,097
|
|
|
$
|
3,995
|
|
Specialty Chemicals Segment
|
1,066
|
|
|
930
|
|
|
1,035
|
|
|||
Corporate
|
123
|
|
|
158
|
|
|
65
|
|
|||
|
$
|
4,740
|
|
|
$
|
3,185
|
|
|
$
|
5,095
|
|
Geographic sales
|
|
|
|
|
|
|
|
|
|||
United States
|
$
|
188,292
|
|
|
$
|
159,820
|
|
|
$
|
144,340
|
|
Elsewhere
|
9,367
|
|
|
10,755
|
|
|
6,781
|
|
|||
|
$
|
197,659
|
|
|
$
|
170,575
|
|
|
$
|
151,121
|
|
(Amounts in thousands except for per share data)
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
2012
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
47,372
|
|
|
$
|
46,878
|
|
|
$
|
50,271
|
|
|
$
|
53,138
|
|
Gross profit
|
5,091
|
|
|
5,261
|
|
|
5,683
|
|
|
5,893
|
|
||||
Net income
|
1,337
|
|
|
1,090
|
|
|
843
|
|
|
965
|
|
||||
Per common share
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
0.21
|
|
|
0.17
|
|
|
0.13
|
|
|
0.15
|
|
||||
Diluted
|
0.21
|
|
|
0.17
|
|
|
0.13
|
|
|
0.15
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2011
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales
|
$
|
42,742
|
|
|
$
|
41,399
|
|
|
$
|
46,193
|
|
|
$
|
40,241
|
|
Gross profit
|
7,098
|
|
|
5,579
|
|
|
3,630
|
|
|
4,783
|
|
||||
Net income
|
2,500
|
|
|
1,709
|
|
|
571
|
|
|
1,017
|
|
||||
Per common share
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
0.40
|
|
|
0.27
|
|
|
0.09
|
|
|
0.16
|
|
||||
Diluted
|
0.39
|
|
|
0.27
|
|
|
0.09
|
|
|
0.16
|
|
|
|
|
Purchase
|
|
|
||||||
|
|
|
accounting and
|
|
|
||||||
|
As recorded
|
|
fair value
|
|
As recorded
|
||||||
|
by Palmer
|
|
adjustments
|
|
by Synalloy
|
||||||
Cash and cash equivalents
|
$
|
1,389,054
|
|
|
$
|
—
|
|
|
$
|
1,389,054
|
|
Accounts receivable, net
|
4,969,030
|
|
|
—
|
|
|
4,969,030
|
|
|||
Inventories, net
|
5,678,368
|
|
|
—
|
|
|
5,678,368
|
|
|||
Prepaid expenses
|
75,804
|
|
|
1,536,000
|
|
|
1,611,804
|
|
|||
Net fixed assets
|
4,799,692
|
|
|
2,691,370
|
|
|
7,491,062
|
|
|||
Goodwill
|
—
|
|
|
15,897,948
|
|
|
15,897,948
|
|
|||
Intangible asset - customer base
|
—
|
|
|
9,000,000
|
|
|
9,000,000
|
|
|||
Contingent consideration
|
—
|
|
|
(8,152,031
|
)
|
|
(8,152,031
|
)
|
|||
Other liabilities assumed
|
(6,833,315
|
)
|
|
(3,156,711
|
)
|
|
(9,990,026
|
)
|
|||
|
$
|
10,078,633
|
|
|
$
|
17,816,576
|
|
|
$
|
27,895,209
|
|
Charlotte, North Carolina
|
March 12, 2013
|
Plan Category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
(a)
|
|
Weighted average exercise price of outstanding options, warrants and rights (b)
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(1)
(c)
|
||||
Equity compensation plans approved by security holders
|
|
220,740
|
|
|
$
|
11.82
|
|
|
364,521
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
220,740
|
|
|
$
|
11.82
|
|
|
364,521
|
|
(1)
|
Represents shares remaining available for issuance under the 2005 Stock Awards Plan and the 2011 Plan.
|
(a)
|
The following documents are filed as a part of this report:
|
1.
|
Financial Statements: The following consolidated financial statements of Synalloy Corporation are included in Part II, Item 8:
|
2.
|
Financial Statements Schedules: The following consolidated financial statements schedule of Synalloy Corporation is included in Item 15:
|
3.
|
Listing of Exhibits:
|
Column A
|
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
||||||||
Description
|
|
Balance at Beginning of Period
|
|
Charged to Cost and Expenses
|
|
Deductions
|
|
Balance at End of Period
|
||||||||
Year ended December 29, 2012
|
|
|
|
|
|
|
|
|
||||||||
Deducted from asset account:
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
1,203,000
|
|
|
$
|
928,000
|
|
|
$
|
818,000
|
|
|
$
|
1,313,000
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended December 31, 2011
|
|
|
|
|
|
|
|
|
||||||||
Deducted from asset account:
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
435,000
|
|
|
$
|
793,000
|
|
|
$
|
25,000
|
|
|
$
|
1,203,000
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year ended January 1, 2011
|
|
|
|
|
|
|
|
|
||||||||
Deducted from asset account:
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
355,000
|
|
|
$
|
85,000
|
|
|
$
|
5,000
|
|
|
$
|
435,000
|
|
By
/s/ Craig C. Bram
Craig C. Bram
Chief Executive Officer
|
March 12, 2013
Date
|
|
|
By
/s/ Richard D. Sieradzki
Richard D. Sieradzki
Chief Financial Officer and
Principal Accounting Officer
|
March 12, 2013
Date
|
By
/s/ Carroll D. Vinson
Carroll D. Vinson
Chairman of the Board
|
March 12, 2013
Date
|
|
|
By
/s/ Anthony A. Callander
Anthony A. Callander
Director
|
March 12, 2013
Date
|
|
|
By
/s/ Murray H. Wright
Murray H. Wright
Director
|
March 12, 2013
Date
|
|
|
By
/s/ James W. Terry, Jr.
James W. Terry, Jr.
Director
|
March 12, 2013
Date
|
|
|
By
/s/ Henry L. Guy
Henry L. Guy
Director
|
March 12, 2013
Date
|
|
|
By
/s/ Craig C. Bram
Craig C. Bram
Chief Executive Officer and Director
|
March 12, 2013
Date
|
Exhibit No.
from
Item 601 of
Regulation S-K
|
|
Description
|
|
3.1
|
|
|
Restated Certificate of Incorporation of Registrant, as amended, incorporated by reference to Registrant's Form 10-Q for the period ended April 2, 2005
|
3.2
|
|
|
Bylaws of Registrant, as amended, incorporated by reference to Registrant's Form 10-Q for the period ended March 31, 2001 (the "first quarter 2001 Form 10-Q")
|
4.1
|
|
|
Form of Common Stock Certificate, incorporated by reference to the first quarter 2001 Form 10-Q
|
10.1
|
|
|
Synalloy Corporation 1998 Long-Term Incentive Stock Plan, incorporated by reference to the first quarter 2001 Form 10-Q
|
10.2
|
|
|
Synalloy Corporation 2005 Stock Awards Plan, incorporated by reference to the Proxy Statement for the 2005 Annual Meeting of Shareholders
|
10.3
|
|
|
Amendment 1 to the Synalloy Corporation 2005 Stock Awards Plan incorporated by reference to Registrant's Form 10-K for the year ended December 29, 2007
|
10.4
|
|
|
2011 Long-Term Incentive Stock Option Plan, incorporated by reference to Registrant's Proxy Statement for the 2011 Annual Meeting of Shareholders
|
10.5
|
|
|
2011 Short-Term Cash Incentive and Options Plan, incorporated by reference to Registrant's Form 10-K for the year ended December 31, 2011
|
10.6
|
|
|
2012 Short-Term Cash Incentive and Options Plan
|
10.7
|
|
|
Agreement between Registrant's Bristol Metals, LLC subsidiary and the United Steelworkers of America Local 4586, dated December 10, 2010, incorporated by reference to Registrant's Form 10-K for the year ended January 1, 2011
|
10.8
|
|
|
Agreement between Registrant's Bristol Metals, LLC subsidiary and the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada Local Union No. 538, dated February 16, 2009, incorporated by reference to Registrant's Form 10-K for the year ended January 1, 2011
|
10.9
|
|
|
Agreement between Registrant's Bristol Metals, LLC subsidiary and the Teamsters Local Union No. 549, dated March 5, 2010, incorporated by reference to Registrant's Form 10-K for the year ended January 1, 2011
|
10.10
|
|
|
Loan Agreement, dated as of June 30, 2010, between Registrant and Branch Banking and Trust (“BB&T”), incorporated by reference to Registrant's Form 10-K for the year ended January 1, 2011
|
10.11
|
|
|
First Amendment to First Amended and Restated Loan Agreement, dated August 21, 2012, between Registrant and Branch Banking and Trust (“BB&T”)
|
10.12
|
|
|
First Amendment to First Amended and Restated Loan Agreement, dated October 22, 2012, between Registrant and Branch Banking and Trust (“BB&T”)
|
10.13
|
|
|
Employment Agreement dated January 24, 2011, between Registrant and Craig C. Bram, incorporated by reference to Registrant's Form 10-K for the year ended January 1, 2011
|
10.14
|
|
|
Amended Employment Agreement dated January 24, 2012, between Registrant and Craig C. Bram, incorporated by reference to Registrant's Form 10-K for the year ended December 31, 2011
|
10.15
|
|
|
Amended Employment Agreement dated January 24, 2013, between Registrant and Craig C. Bram
|
10.16
|
|
|
Employment Agreement, dated August 21, 2012, between Registrant and Jimmie D. Lee, incorporated by reference to Registrant's Form 10-Q for the quarter ended September 29, 2012
|
10.17
|
|
|
Stock Purchase Agreement, dated as of August 10, 2012, among Jimmie Dean Lee, James Varner, Steven C. O'Brate and Synalloy Corporation, incorporated by reference to Registrant's Form 8-K filed on August 24, 2012
|
21
|
|
|
Subsidiaries of the Registrant
|
23
|
|
|
Consent of Dixon Hughes Goodman LLP, independent registered public accounting firm for Registrant
|
31.1
|
|
|
Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer
|
31.2
|
|
|
Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer
|
32
|
|
|
Certifications Pursuant to 18 U.S.C. Section 1350
|
1.
|
Purpose
. This Short-Term Cash Incentive and Options Plan (the “Incentive Plan”) is intended to provide key executive employees of Synalloy Corporation (the “Company”, which term shall include Synalloy Corporation and any of its affiliates or subsidiaries) the opportunity to participate in the Company's profitability, future prosperity and growth. The purpose of the Incentive Plan is to provide short and long-term incentive for gain through outstanding service to the Company and its shareholders, and to assist in attracting and retaining executives of ability and initiative.
|
2.
|
Administration
. The Incentive Plan shall be administered by the Company's Compensation & Long Term Incentive Committee (the “Committee”). The same restrictions set forth in the Company's 2011 Long-Term Incentive Stock Option Plan (the “Stock Option Plan”), previously approved by the Company's Board of Directors and shareholders, applicable to Committee members shall also apply under this Incentive Plan. To the extent this Incentive Plan differs from or is inconsistent with the Stock Option Plan, the terms and provisions of the Stock Option Plan shall govern. The Committee shall have complete authority and discretion to interpret all provisions of this Incentive Plan consistent with law and the Stock Option Plan, to prescribe the form of instruments evidencing the stock options that may be granted under this Incentive Plan and pursuant to the Stock Option Plan, to adopt, amend, and rescind general and special rules and regulations for its administration, and to make all other determinations necessary or advisable for the administration of the Incentive Plan. No member of the Committee shall be liable for any action or determination in respect thereto, if made in good faith, and shall be entitled to indemnification by the Company with respect to all matters arising from his service on the Committee to the fullest extent allowable under the Company's charter documents and applicable law.
|
3.
|
Eligibility
. Any salaried employee of the Company who in the judgment of the Committee occupies a management position in which his or her efforts contribute to the profit and growth of the Company may be eligible to participate in the Incentive Plan. The named participants to this Incentive Plan shall be recommended by the division Presidents and the CEO, and approved by the Committee. The key metric used to measure management performance in a particular division or the Company as a whole, as the case may be, is net income before income taxes or “NIBIT” as more fully described in the Company's Proxy Statement. The NIBIT target ranges described herein are derived from the Company's annual budget approved by the Company's Board of Directors and are exclusive of and calculated prior to allocation of the cash and stock option incentives payable to all executives participating in the Incentive Plan.
Exhibit A
to this Incentive Plan, as may be amended from time to time by the Committee, sets forth the annual NIBIT target range and named participants' assigned percentage of the cash and stock option incentives. The Committee, upon recommendation from the Company's CEO, shall have the discretion to determine to what extent, if any, persons employed on a part-time or consulting basis will be eligible to participate in the Incentive Plan.
|
4.
|
Cash Incentive Pool
. At the beginning of the year, for each division, including Corporate, the division Presidents will identify the executives who they recommend to participate in each division's cash incentive pool with input from the CEO, and the CEO will recommend the executives who will participate in the Corporate division's cash incentive pool. Additionally, each recommended participant will be allocated a percentage of the division's cash incentive pool. The recommended allocations will be completed at the beginning of each year by the division Presidents, with input and review from the CEO. The CEO will prepare the recommended allocation for the Corporate division. These recommendations will be submitted to the Committee no later than two weeks prior to the February Board of Director's meeting. The Committee will review and approve, amend or reject the recommendations of the division Presidents and the CEO. The CEO's incentive calculation will be handled separately from the Corporate division and will be approved by the Committee.
|
A.
|
NIBIT Allocations
. At the beginning of each year, the Company's Board of Directors will approve the upcoming year's budget that shall include the NIBIT target range for each division and for the Company as a whole (each, a “Target Range”). The applicable Target Range for each division, as approved by the Board of Directors, is set forth on
Exhibit A
attached hereto. Each division cash incentive pool shall equal a designated percentage of NIBIT achieved by that division, or in the case of the Corporate division, achieved by the Company as a whole. Upon the division Presidents and CEO's recommendation, the Committee will establish the percentage of NIBIT that will comprise the cash incentive pool for each division and the Company as a whole (each, an “Incentive Pool Percentage”). The applicable Incentive Pool Percentages for each division are set forth below. Each Target Range will include three levels with corresponding Incentive Pool Percentages: (i) Below Target; (ii) On Target; and, (iii) Above Target. Wherever NIBIT falls (Below Target, On Target, or Above Target), the Incentive Pool Percentage for that applicable Target Range will apply to all dollars of profit beginning with the first dollar, computed using the applicable Incentive Pool Percentage.
|
B.
|
Cash Incentive Pool Percentages (excluding inventory adjustments)
*
:
|
C.
|
Downward Adjustments to the Cash Incentive Pool
. Each division President, upon approval by the CEO, has the authority to reduce an individual executive's cash incentive bonus for material underperformance against personal goals. Additionally, at the operating division level, the Corporate division level and for the CEO and other Company executives that may be identified individually, each cash incentive pool may be reduced for poor performance in two areas as detailed below: Safety and Inventory Turns.
|
i.
|
For every lost time accident during the year, the cash incentive pool for that division will be reduced by 5%. The cash incentive pool for the Corporate division and the CEO will be reduced as well by taking the division with the largest number of lost time accidents and multiplying the number of lost time accidents times 5. For example, if BRISMET has the largest number of accidents at 3, then the Corporate division and the CEO's cash incentive pool will be reduced by 15%.
|
ii.
|
An inventory turn target will be established for each division, where applicable, and will be set forth on
Exhibit A
. These inventory turn targets will be established by the CEO and division Presidents and approved by the Committee. If the inventory turns come in less than the target, the applicable division's cash incentive pool shall be reduced by 10%. If the inventory turns for the entire company are less than the targeted inventory turns, then the cash incentive pool for the Corporate division and the CEO will be reduced by 10% as well.
|
D.
|
Inventory Profits or Losses
. The NIBIT calculations shall exclude any inventory profits or losses applicable to the BRISMET division as set forth in this section. NIBIT calculations for the BRISMET division will be reduced on a dollar for dollar basis by the amount of inventory profits in that division, and the appropriate Target Range will be selected based on such reduced NIBIT calculation. Likewise, NIBIT calculations for the BRISMET division will be increased on a dollar for dollar basis by the amount of inventory losses in that division, and the appropriate Target Range will be selected based on such increased NIBIT calculation.
|
5.
|
Stock Options (Long-Term Incentives)
. To the extent stock options are available under the Stock Option Plan previously approved by the shareholders, stock options of Company stock will be issued as provided herein. All terms, conditions and restrictions set forth in the Stock Option Plan shall apply to any and all stock options issued pursuant to this Incentive Plan. Those executives eligible to receive bonus payments from the cash incentive pool under this Incentive Plan Stock options are eligible to receive stock options. Stock options will be issued in only those years where On Target or Above Target NIBIT is achieved in a particular division, or Company as a whole, depending upon the position of a particular executive. No stock options will be issued when NIBIT is Below Target.
|
6.
|
Stock Options Schedule
. Stock options shall be granted based on the schedule below. The percentages set forth below represent a percentage of each particular executive's base salary (i.e., base salary exclusive of bonuses) for the year under consideration.
|
7.
|
Mid-Year Acquisition Adjustments
. The Company, from time to time, may acquire another business or operating division mid-year, which acquisition will not be budgeted or accounted for in the Target Ranges that are established at the beginning of the fiscal year. Upon consultation with the CEO and division Presidents, the Committee shall amend the applicable Target Ranges to account for any and all mid-year acquisitions. Specifically, the Committee will update the applicable Target Ranges to account for the pro-forma NIBIT expected from each acquisition for the remainder of the current calendar year. The Company's practice is to allocate unbudgeted one-time expenses associated with a mid-year acquisition to the Corporate division only. In determining the actual year-end NIBIT calculation for the Corporate division and the CEO, the Committee will add back the one-time costs associated with each acquisition incurred during the year in question but not previously budgeted. The amount of one-time expenses to be added back will be approved by the Committee and will include only those expenses that were incurred as a direct result of completing the acquisition. In the event these one-time expenses extend from one calendar year to the next, the accrued one-time expenses associated with the acquisition from each year will be added back to the applicable year's NIBIT calculations for the Corporate division and the CEO.
|
8.
|
General Provisions
. Neither the adoption of this Incentive Plan nor its operation, nor any document describing or referring to this Incentive Plan, or any part thereof, shall confer upon any employee any right to continue in the employ of the Company or any subsidiary, or shall in any way affect the right and power of the Company to terminate the employment of any employee at any time with or without assigning a reason therefor to the same extent as the Company might have done if this Incentive Plan had not been adopted.
|
9.
|
Duration and Amendment of the Incentive Plan
. Unless previously terminated by the Committee, the Incentive Plan shall be effective for the fiscal year specified in the Incentive Plan. The Committee may alter, amend, or terminate this Incentive Plan, including any exhibits attached hereto, at any time. Any stock options granted prior to the termination of this Incentive Plan shall remain valid thereafter in accordance with their terms and the Stock Option Plan.
|
|
9520406872
|
|
|
Account Number
|
|
.
|
|
(a)
|
Debt to the Bank;
|
(b)
|
Debt outstanding on the date hereof and shown on the most recent financial statements submitted to the Bank;
|
(c)
|
Accounts payable to trade creditors incurred in the ordinary course of business;
|
(d)
|
Debt secured by purchase money security interests as outlined above in Section 6.01 (e);
|
(e)
|
Intercompany debt extended by any Borrower to any other Borrower, on commercially reasonable purposes and terms, and appropriately reflected on the books and financial statements and information of the Borrowers.
|
(f)
|
Additional debt not to exceed $500,000 in the aggregate at any time.
|
Witness (as to the co-Borrowers):
______________________________
|
SYNALLOY CORPORATION
METCHEM, INC.
SYNALLOY METALS, INC.
MANUFACTURERS SOAP & CHEMICAL COMPANY
RAM-FAB, LLC
MANUFACTURERS CHEMICALS, LLC
BRISTOL METALS, LLC
SYNALLOY FABRICATION, LLC
By:
(SEAL)
Richard D. Sieradzki
Vice President, Finance
of and on behalf of each of
the above-named entities
|
Witness (as to BB&T):
______________________________
|
BRANCH BANKING AND TRUST COMPANY
By: ________________________________
Stan W. Parker
Senior Vice President
|
|
9520406872
|
|
|
Account Number
|
|
(a)
|
(i) from the period extending from August 21, 2012 to October ____, 2012, the principal amount of
$25,000,000
; (ii) from the period extending from October ____, 2012 to October ___, 2013, the principal amount of
$30,000,000
;
and
(iii) from the period extending from October ___, 2013 to the maturity date of the Line of Credit Note, the principal amount of
$25,000,000
and
|
(b)
|
the Availability (as defined in
Section 10.01
below).
|
(a)
|
Certain Provisions Incorporated by Reference.
Without limiting the continued general applicability of Section 10 (or any other provisions) of the Loan Agreement, the provisions of Sections 10.02 through Section 10.18 of the Loan Agreement are incorporated into this Amendment, mutatis mutandis, as if set forth herein in full.
|
(b)
|
Matters as to Amendment
. This Amendment constitutes an amendment to the Loan Agreement (and, to the extent applicable, all other Loan Documents) and except for the effect of any matters expressly set forth in this Amendment, this Amendment and each of the Loan Documents is, and shall continue to be following the effectiveness of this Amendment, in full force and effect in accordance with the terms thereof, and nothing in this Amendment shall otherwise be deemed to amend or modify any provision of the Loan Documents, each of which shall remain in full force and effect except as otherwise expressly provided herein or therein. This Amendment is not intended to be, nor shall it be construed to create, a novation or accord and satisfaction. This Amendment does not effect the release of any collateral, does not disturb the perfection or priority of any existing liens, and does not effect the release of any obligor, guarantor or other party from its obligations.
|
(c)
|
References to Line of Credit Note.
From and after the date of this Amendment, all references to the “Line of Credit Note” or similar references shall henceforth mean the same as, from and after the date of this Amendment, restated by the Restated Line of Credit Note.
|
(d)
|
Loan Documents.
For the avoidance of doubt, the term “Loan Documents” as used in the Loan Agreement and all the other Loan Documents as heretofore defined therein, includes among the other items set forth in such term, this Amendment and the Restated Line of Credit Note.
|
(e)
|
References to Documents.
Each reference in the Loan Agreement, this Amendment and any other Loan Documents shall be the same as may be amended, restated, increased, decreased, extended, reduced or otherwise modified and effect from time to time.
|
(f)
|
WAIVER OF JURY TRIAL. UNLESS EXPRESSLY PROHIBITED BY APPLICABLE LAW, THE UNDERSIGNED HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS OR CLAIMS ARISING OUT OF THIS AMENDMENT OR ANY OF THE LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH OR OUT OF THE CONDUCT OF THE RELATIONSHIP BETWEEN THE UNDERSIGNED AND BANK. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK TO MAKE THE LOAN AND ENTER INTO THIS AMENDMENT. FURTHER, THE UNDERSIGNED HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT SEEK TO ENFORCE THIS WAIVER OR RIGHT TO JURY TRIAL PROVISION. NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK'S COUNSEL, HAS THE AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION.
|
•
|
First Amended and Restated Loan Agreement (the “Loan Agreement”) among Branch Banking and Trust Company (“BB&T”) and the multiple Borrowers referenced above (collectively, the “Borrowers”).
|
•
|
Joinder Agreement among the Borrowers and the Bank.
|
•
|
All Swap Agreements (as defined in the Loan Agreement)
|
•
|
Security Agreement among the Borrowers and BB&T.
|
•
|
Mortgage of Real Estate with respect to one or more parcels of real property located in the State of Arkansas, from one or more of the applicable Borrowers for the benefit of BB&T.
|
•
|
Deed of Trust for Real Estate with respect to one or more parcels of real property located in the State of Tennessee, from one or more of the applicable Borrowers for the benefit of BB&T.
|
•
|
Deed of Trust for Real Estate with respect to one or more parcels of real property located in the State of Texas, from one or more of the applicable Borrowers for the benefit of BB&T.
|
•
|
Negative Pledge Agreements, each dated on or about July 9, 2010, from the applicable Borrower(s) named therein for the benefit of BB&T and relating to real properties in Spartanburg County, SC; Bradley County, TN; Sullivan County, TN. Also, any other negative pledge agreements or similar documents executed and delivered by one or more Borrowers, including without limitation in connection with the Palmer Acquisition.
|
•
|
Stock and LLC Interests Pledge Agreement the Borrowers and the Bank.
|
•
|
Assignments of Life Insurance Policies, each dated June 30, 2010, for policies executed by Synalloy Corporation for policies numbered 1820005, 1820003, 1820007, 1820001, 1820009.
|
•
|
Any and all other Loan Documents (as defined in the Loan Agreement)
|
WITNESSES
|
SYNALLOY CORPORATION
|
|
|
|
|
As to Synalloy Corporation
|
By
Its:
|
Carroll D. Vinson
Chairman of the Board of Directors
Dated_________________
|
|
|
|
|
|
EMPLOYEE
|
|
|
|
______________________
As to Employee
|
|
Craig C. Bram
Dated__________________
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
March 12, 2013
|
/s/ Craig C. Bram
|
|
|
Craig C. Bram
|
|
|
Chief Executive Officer
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
March 12, 2013
|
/s/ Richard D. Sieradzki
|
|
|
Richard D. Sieradzki
|
|
|
Chief Financial Officer and Principal Accounting Officer
|
Date:
|
March 12, 2013
|
/s/ Craig C. Bram
|
|
|
Craig C. Bram
|
|
|
Chief Executive Officer
|
|
|
|
|
|
/s/ Richard D. Sieradzki
|
|
|
Richard D. Sieradzki
|
|
|
Chief Financial Officer and Principal Accounting Officer
|