Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 06, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 0-19687 | |
Entity Registrant Name | Synalloy Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 57-0426694 | |
Entity Address, Address Line One | 4510 Cox Road, | |
Entity Address, Address Line Two | Suite 201, | |
Entity Address, City or Town | Richmond, | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 23060 | |
City Area Code | (804) | |
Local Phone Number | 822-3260 | |
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | SYNL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Smaller Reporting Company | true | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 9,108,691 | |
Entity Central Index Key | 0000095953 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 163 | $ 626 |
Accounts receivable, net of allowance for credit losses of $237 and $70, respectively | 33,132 | 35,074 |
Inventories, net | 89,007 | 98,186 |
Prepaid expenses and other current assets | 13,453 | 13,229 |
Total current assets | 135,755 | 147,115 |
Property, plant and equipment, net | 36,331 | 40,690 |
Operating Lease, Right-of-Use Asset | 32,090 | 35,772 |
Goodwill | 6,810 | 17,558 |
Intangible assets, net | 12,131 | 15,714 |
Deferred income taxes | 1,327 | 0 |
Deferred charges, net | 271 | 348 |
Total assets | 224,715 | 257,197 |
Current liabilities | ||
Accounts payable | 19,514 | 21,150 |
Accrued expenses and other current liabilities | 6,718 | 6,037 |
Current portion of long-term debt | 4,000 | 4,000 |
Current portion of earn-out liability | 3,959 | 5,576 |
Current portion of operating lease liabilities | 835 | 3,562 |
Current portion of finance lease liabilities | 26 | 253 |
Total current liabilities | 35,052 | 40,578 |
Long-term debt | 67,343 | 71,554 |
Long-term portion of earn-out liability | 994 | 3,578 |
Deferred income taxes | 0 | 790 |
Long-term portion of operating lease liabilities | 33,000 | 33,723 |
Long-term portion of finance lease liabilities | 41 | 336 |
Other long-term liabilities | 92 | 127 |
Total non-current liabilities | 101,470 | 110,108 |
Commitments and contingencies – See Note 11 | ||
Shareholders' equity | ||
Common stock, par value $1 per share; authorized 24,000,000 shares; issued 10,300,000 shares | 10,300 | 10,300 |
Capital in excess of par value | 37,664 | 37,407 |
Retained earnings | 51,428 | 70,552 |
Shareholders' equity before treasury stock | 99,392 | 118,259 |
Less cost of common stock in treasury - 1,191,309 and 1,257,784 shares, respectively | 11,199 | 11,748 |
Total shareholders' equity | 88,193 | 106,511 |
Total liabilities and shareholders' equity | $ 224,715 | $ 257,197 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets [Abstract] | ||
Allowance for credit loss | $ 237 | $ 70 |
Stockholders' Equity Attributable to Parent [Abstract] | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 24,000,000 | 24,000,000 |
Common stock, shares issued (in shares) | 10,300,000 | 10,300,000 |
Common stock in treasury, at cost (in shares) | 1,191,309 | 1,257,784 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 59,266 | $ 73,640 | $ 200,099 | $ 237,222 |
Cost of sales | 54,271 | 66,352 | 183,592 | 213,412 |
Gross profit | 4,995 | 7,288 | 16,507 | 23,810 |
Selling, general and administrative expense | 6,275 | 8,361 | 21,088 | 24,920 |
Acquisition costs and other | 656 | 90 | 803 | 438 |
Proxy contest costs | 207 | 0 | 3,105 | 0 |
Earn-out adjustments | (146) | (1,242) | (969) | (1,643) |
Asset impairments | 0 | 0 | 6,079 | 0 |
Goodwill impairment | 10,748 | 0 | 10,748 | 0 |
Gain on lease modification | (171) | 0 | (171) | 0 |
Operating (loss) income | (12,574) | 79 | (24,176) | 95 |
Other expense (income) | ||||
Interest expense | 452 | 944 | 1,703 | 2,977 |
Change in fair value of interest rate swaps | (16) | 21 | 65 | 145 |
Other, net | 59 | 180 | (1,244) | (224) |
Loss before income taxes | (13,069) | (1,066) | (24,700) | (2,803) |
Income tax benefit | (2,530) | (112) | (6,026) | (660) |
Net loss | $ (10,539) | $ (954) | $ (18,674) | $ (2,143) |
Net loss per common share: | ||||
Basic (in dollars per share) | $ (1.16) | $ (0.11) | $ (2.06) | $ (0.24) |
Diluted (in dollars per share) | $ (1.16) | $ (0.11) | $ (2.06) | $ (0.24) |
Weighted average shares outstanding: | ||||
Basic (in shares) | 9,105 | 8,995 | 9,079 | 8,969 |
Dilutive effect from stock options and grants (in shares) | 0 | 0 | 0 | 0 |
Diluted (in shares) | 9,105 | 8,995 | 9,079 | 8,969 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities | ||
Net loss | $ (18,674) | $ (2,143) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation expense | 5,752 | 5,806 |
Amortization expense | 2,324 | 2,614 |
Asset impairments | 6,079 | 0 |
Goodwill impairment | 10,748 | 0 |
Amortization of debt issuance costs | 129 | 120 |
Unrealized (gain) loss on equity securities | (208) | 282 |
Deferred income taxes | (2,116) | (561) |
Proceeds from business interruption insurance | 1,040 | 0 |
Loss (gain) on sale of equity securities | 38 | (474) |
Earn-out adjustments | (969) | (1,643) |
Payments on earn-out liabilities in excess of acquisition date fair value | (292) | (448) |
Provision for losses on accounts receivable | 53 | (92) |
Provision for losses on inventories | 874 | 1,392 |
Loss on sale of property, plant and equipment | 237 | (50) |
Non-cash lease expense | 385 | 432 |
Non-cash lease termination loss | 24 | 0 |
Gain on lease modification | (171) | 0 |
Change in fair value of interest rate swap | 65 | 145 |
Issuance of treasury stock for director fees | 405 | 304 |
Stock-based compensation expense | 1,036 | 1,760 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,438 | 2,779 |
Inventories | 4,593 | 12,169 |
Other assets and liabilities | (1,902) | (1,035) |
Accounts payable | (1,636) | (909) |
Accrued expenses | 681 | (1,258) |
Accrued income taxes | (3,963) | (1,263) |
Net cash provided by operating activities | 5,970 | 17,927 |
Investing activities | ||
Purchases of property, plant and equipment | (2,824) | (2,841) |
Proceeds from sale of property, plant and equipment | 102 | 189 |
Proceeds from sale of equity securities | 4,430 | 1,091 |
Purchase of equity securities | 0 | (543) |
Acquisition of ASTI | 0 | (21,895) |
Net cash provided by (used in) investing activities | 1,708 | (23,999) |
Financing activities | ||
Borrowings (repayments) from line of credit | (1,210) | (10,630) |
Borrowings from term loan | 0 | 20,000 |
Payments on long-term debt | (3,000) | (2,667) |
Principal payments on finance lease obligations | (101) | (101) |
Payments for finance lease terminations | (204) | 0 |
Payments on earn-out liabilities | (2,939) | (2,497) |
Repurchase of common stock | (635) | 0 |
Payments for deferred financing costs | (52) | 0 |
Net cash (used in) provided by financing activities | (8,141) | 4,105 |
Decrease in cash and cash equivalents | (463) | (1,967) |
Cash and cash equivalents at beginning of period | 626 | 2,220 |
Cash and cash equivalents at end of period | 163 | 253 |
Supplemental disclosure | ||
Interest | 1,573 | 2,780 |
Income taxes | $ 16 | $ 1,174 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Capital in Excess of Par Value | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Cost of Common Stock in Treasury |
Beginning balance at Dec. 31, 2018 | $ 102,484 | $ 4,623 | $ 10,300 | $ 36,521 | $ 68,965 | $ 4,623 | $ (13,302) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (2,143) | (2,143) | |||||
Issuance of shares of common stock from the treasury | 304 | (808) | 1,112 | ||||
Stock-based compensation | 1,760 | 1,760 | |||||
Ending balance at Sep. 30, 2019 | $ 107,028 | 10,300 | 37,473 | 71,445 | (12,190) | ||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||||
Beginning balance at Dec. 31, 2018 | $ 102,484 | 4,623 | 10,300 | 36,521 | 68,965 | 4,623 | (13,302) |
Ending balance at Dec. 31, 2019 | 106,511 | (450) | 10,300 | 37,407 | 70,552 | (450) | (11,748) |
Beginning balance at Jun. 30, 2019 | 107,074 | 10,300 | 36,565 | 72,399 | (12,190) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (954) | (954) | |||||
Stock-based compensation | 908 | 908 | |||||
Ending balance at Sep. 30, 2019 | 107,028 | 10,300 | 37,473 | 71,445 | (12,190) | ||
Beginning balance at Dec. 31, 2019 | 106,511 | $ (450) | 10,300 | 37,407 | 70,552 | $ (450) | (11,748) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (18,674) | (18,674) | |||||
Issuance of shares of common stock from the treasury | 405 | (779) | 1,184 | ||||
Stock-based compensation | 1,036 | 1,036 | |||||
Purchase of common stock | (635) | (635) | |||||
Ending balance at Sep. 30, 2020 | 88,193 | 10,300 | 37,664 | 51,428 | (11,199) | ||
Beginning balance at Jun. 30, 2020 | 98,057 | 10,300 | 37,465 | 61,967 | (11,675) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (10,539) | (10,539) | |||||
Issuance of shares of common stock from the treasury | 405 | (71) | 476 | ||||
Stock-based compensation | 270 | 270 | |||||
Ending balance at Sep. 30, 2020 | $ 88,193 | $ 10,300 | $ 37,664 | $ 51,428 | $ (11,199) |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (Parenthetical) - shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | |||
Issuance of common stock from the treasury (in shares) | 50,652 | 126,092 | 118,430 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Financial Statement Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included as required by Regulation S-X, Rule 10-01. These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto in the Synalloy Corporation (the Company) Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the Annual Report). The financial results for the interim periods may not be indicative of the financial results for the entire fiscal year. Reclassifications Certain prior period amounts have been reclassified to conform to current period presentation. Recently Issued Accounting Standards - Adopted On January 1, 2020, the Company adopted ASU No. 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The updated guidance removes disclosure requirements pertaining to the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. In addition, the amendment clarifies that the measurement uncertainty disclosure is to communicate information about uncertainty in measurement as of the reporting date. The guidance also adds disclosure requirements for changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 measurements held at the end of the reporting period as well as the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The adoption of this standard by the Company did not have a material impact on the unaudited condensed consolidated financial statements or footnote disclosures. See Note 2 for further discussion on the Company's fair value measurements. On January 1, 2020, the Company adopted ASU No. 2017-04 Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. The updated guidance eliminated step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. Additionally, the amount of goodwill allocated to a reporting unit with a zero or negative carrying amount of net assets should be disclosed. The adoption of this standard by the Company did not have a material impact on the unaudited condensed consolidated financial statements. On January 1, 2020, the Company adopted ASU No. 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The updated guidance amends the current accounting guidance and requires the measurement of all expected losses based on historical experience, current conditions, and reasonable and supportable forecasts rather than the incurred loss model which reflects losses that are probable. Entities are required to apply these changes through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company evaluated its financial instruments and determined that its trade accounts receivable are subject to the new current expected credit loss model. Based upon the application of the new current expected credit loss model, on January 1, 2020, we recorded a cumulative effect adjustment of $0.4 million to Retained Earnings. The adoption of this standard by the Company did not have a material impact on the unaudited condensed consolidated statement of operations or cash flows. On September 30, 2020, the Company early adopted ASU No. 2019-12 "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This ASU removes certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences as well as adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group. The most significant impact to the Company is the removal of a limit on the tax benefit recognized on pre-tax losses in interim periods. The adoption of this standard by the Company did not have a material effect on the unaudited condensed consolidated financial statements or footnote disclosures. Recently Issued Accounting Standards - Not Yet Adopted Recent accounting pronouncements pending adoption, other than those stated above, are not expected to have a material impact on the Company. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, we use a three-tier valuation hierarchy based upon observable and non-observable inputs: Level 1 - Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date. Level 2 - Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including: • Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in non-active markets; • Inputs other than quoted prices that are observable for the asset or liability; and • Inputs that are derived principally from or corroborated by other observable market data. Level 3 - Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using model-based techniques, including option pricing models, discounted cash flow models, probability weighted models, and Monte Carlo simulations. The Company's financial instruments include cash and cash equivalents, accounts receivable, derivative instruments, accounts payable, earn-out liabilities, a revolving line of credit, a term loan, and equity securities investments. Assets and Liabilities Measured at Fair Value on a Recurring Basis The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. Level 1: Equity securities During the three and nine months ended September 30, 2020, the Company sold 494,074 and 1.2 million shares, respectively, of its equity securities investments, resulting in a realized loss of $69,375 and $37,954, respectively. For the three months ended September 30, 2020, the Company recorded no net unrealized gains or losses on investments in equity securities. For the nine months ended September 30, 2020, the Company recorded net unrealized gains of $0.2 million on the investments in equity securities held, which is included in "Other expense (income)" on the accompanying unaudited condensed consolidated statements of operations. The Company held no equity securities as of September 30, 2020. The fair value of equity securities held by the Company as of December 31, 2019 was $4.3 million and is included in “Prepaid expenses and other current assets” on the accompanying condensed consolidated balance sheets. Level 2: Derivative Instruments The Company has one interest rate swap contract, which is classified as a Level 2 financial instrument as it is not actively traded and is valued using pricing models that use observable market inputs. The fair value of the contract was a liability of $0.1 million at September 30, 2020 and an asset of $6,088 at December 31, 2019, respectively. The interest rate swap was priced using discounted cash flow techniques. Changes in its fair value were recorded to other expense (income) with corresponding offsetting entries to "Prepaid expenses and other current assets" or "Accrued Expenses", as appropriate. Significant inputs to the discounted cash flow model include projected future cash flows based on projected one-month LIBOR and the average margin for companies with similar credit ratings and similar maturities. Level 3: Contingent consideration (earn-out) liabilities The fair value of contingent consideration ("earn-out") liabilities resulting from the 2017 MUSA-Stainless acquisition, 2018 MUSA-Galvanized acquisition, and 2019 American Stainless acquisition are classified as Level 3. Each quarter-end, the Company re-evaluates its assumptions for all earn-out liabilities and adjusts to reflect the updated fair values. Changes in the estimated fair value of the earn-out liabilities are reflected in operating income in the periods in which they are identified. Changes in the fair value of the earn-out liabilities may materially impact and cause volatility in the Company's operating results. The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration (earn-out) liabilities are the discount rate, timing of the estimated payouts, and future revenue projections. Significant increases (decreases) in any of those inputs would not have resulted in a material difference in the fair value measurement of the earn-out liabilities for the three and nine months ended September 30, 2020. The following table presents a summary of changes in fair value of the Company's Level 3 earn-out liabilities measured on a recurring basis for the nine months ended September 30, 2020: (in thousands) MUSA-Stainless MUSA-Galvanized American Stainless Total Balance at December 31, 2019 $ 2,403 $ 1,782 $ 4,969 $ 9,154 Earn-out payments during the period (1,263) (488) (1,480) (3,231) Changes in fair value during the period (415) (38) (516) (969) Balance at September 30, 2020 $ 725 $ 1,256 $ 2,973 $ 4,954 For the three and nine months ended September 30, 2020, the Company had no unrealized gains or losses included in other comprehensive income for recurring Level 3 fair value instruments. Quantitative Information about Significant Unobservable Inputs Used in Level 3 Fair Value Measurements The following table summarizes the significant unobservable inputs in the fair value measurement of our contingent consideration (earn-out) liabilities as of September 30, 2020: Instrument Fair Value Principal Valuation Technique Significant Unobservable Inputs Range Weighted Contingent consideration (earn-out) liabilities $4,954 Probability Weighted Expected Return Discount rate - 5% Timing of estimated payouts 2020 - 2022 - Future revenue projections $5.5M - 12.3M $9.5M The weighted average discount rate was calculated by applying an equal weighting to each contingent consideration's (earn-out liabilities) discount rate. The weighted average future revenue projection was calculated by applying an equal weighting of probabilities to each forecasted scenario within the valuation models to determine the probability weighted sales applicable to the contingent consideration (earn-out liabilities). Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis During the three and nine months ended September 30, 2020, the Company's only significant assets or liabilities measured at fair value on a non-recurring basis subsequent to their initial recognition were certain long-lived assets and goodwill. The Company reviews the carrying amounts of long-lived assets whenever certain events or changes in circumstances indicate that the carrying amounts may not be recoverable. With input from executive management, the Company's accounting and finance personnel that organizationally report to the chief financial officer, assess performance quarterly against historical patterns, projections of future profitability, and whether it is more likely than not that the assets will be disposed of significantly prior to the end of their estimated useful life for evidence of possible impairment. An impairment loss is recognized when the carrying amount of the asset (disposal) group is not recoverable and exceeds fair value. The Company estimates the fair values of assets subject to long-lived asset impairment based on the Company's own judgments about the assumptions market participants would use in pricing the assets and observable market data, when available. The Company classifies these fair value measurements as Level 3. During the quarter ended June 30, 2020, due to the continued curtailment of operations related to the COVID-19 pandemic, inventory of Palmer was written down to its net realizable value of $2.1 million and certain long-lived assets of Palmer, including tangible and intangible assets, were written down to their estimated fair value of $1.7 million, resulting in asset impairment charges of $6.1 million. The Company evaluates goodwill for impairment annually and earlier if an event or other circumstances indicates that we may not recover the carrying value of the asset. During the third quarter of 2020, the Company determined potential indicators of impairment within the Welded Pipe & Tube reporting unit included in the Metals Segment existed. As a result of the goodwill impairment evaluation, it was concluded that the estimated fair value of the Welded Pipe and Tube reporting unit was below its carrying value by 9.7% resulting in a goodwill impairment charge of $10.7 million for the quarter ended September 30, 2020. See Note 5 - Goodwill and Intangible Assets for additional details. The Company classifies these fair value measurements as Level 3. Fair Value of Financial Instruments For short-term instruments, other than those required to be reported at fair value on a recurring and non-recurring basis and for which additional disclosures are included above, management concluded the historical carrying value is a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization. Therefore, as of September 30, 2020 and December 31, 2019, the carrying amounts for cash and cash equivalents, accounts receivable, accounts payable, the Company's revolving line of credit, which is based on a variable interest rate, and term loan approximate their fair value. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined by either specific identification or weighted average methods. The components of inventories are as follows: (in thousands) September 30, 2020 December 31, 2019 Raw materials $ 39,843 $ 42,896 Work-in-process 20,780 17,616 Finished goods 29,964 38,422 $ 90,587 $ 98,934 Less inventory reserves $ 1,580 $ 748 Inventories, net $ 89,007 $ 98,186 |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consist of the following: (in thousands) September 30, 2020 December 31, 2019 Land 63 63 Leasehold improvements 2,866 1,921 Buildings 84 214 Machinery, fixtures and equipment 100,097 100,300 Construction-in-progress 2,456 2,999 105,566 105,497 Less accumulated depreciation and amortization 69,235 64,807 Property, plant and equipment, net 36,331 40,690 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets During the second quarter of 2020, the Company determined potential indicators of impairment within the Welded Pipe & Tube reporting unit included in the Metals Segment, with an associated goodwill balance of $16.2 million, existed. Continued deterioration in macroeconomic conditions, continued risks within the stainless steel industrial business, reporting unit operating losses and a decline in the reporting unit's net sales compared to forecast, collectively, indicated that the reporting unit had experienced a triggering event. As a result, the Company quantitatively evaluated the Welded Pipe & Tube reporting unit for impairment. Fair value of the reporting unit was determined using an income approach. Determining the fair value of the reporting unit and allocation of that fair value to individual assets and liabilities within the reporting unit to determine the implied fair value of the goodwill is judgmental in nature and requires the use of significant management estimates and assumptions. These estimates and assumptions include the discount rate, terminal growth rate, tax rate, projected capital expenditures, and overall operational forecasts, including sales growth, gross margins, and operating margins. Any changes in the judgments, estimates, or assumptions could produce significantly different results. As a result of the goodwill impairment evaluation, it was concluded that the estimated fair value of the Welded Pipe and Tube reporting unit was greater than its carrying value by 1.7% and, as such, no goodwill impairment was necessary in the quarter ended June 30, 2020. During the third quarter of 2020, the Company determined potential indicators of impairment within the Welded Pipe & Tube reporting unit included in the Metals Segment, with an associated goodwill balance of $16.2 million, existed. Continued declines in the Company's stock price, reporting unit operating losses, and continued declines in the reporting unit's net sales compared to forecast, collectively, indicated that the reporting unit had experienced a triggering event and the need to perform another quantitative interim evaluation of goodwill. As a result, the Company quantitatively evaluated the Welded Pipe & Tube reporting unit for impairment. Fair value of the reporting unit was determined using a combination of an income approach and a market-based approach with equal weighting applied to each approach. The income approach utilized the estimated discounted cash flows expected to be generated by the reporting unit's assets while the market-based approach utilized comparable company information. Determining the fair value of the reporting unit and allocation of that fair value to individual assets and liabilities within the reporting unit to determine the implied fair value of the goodwill is judgmental in nature and requires the use of significant management estimates and assumptions. These estimates and assumptions include the discount rate, terminal growth rate, tax rate, projected capital expenditures, and overall operational forecasts, including sales growth, gross margins, and operating margins. Any changes in the judgments, estimates, or assumptions could produce significantly different results. As a result of the goodwill impairment evaluation, it was concluded that the estimated fair value of the Welded Pipe and Tube reporting unit was below its carrying value by 9.7% resulting in a goodwill impairment charge of $10.7 million for the quarter ended September 30, 2020. The carrying amounts of goodwill are as follows: (in thousands) Metals Segment Chemicals Segment Balance at December 31, 2019 $ 16,203 $ 1,355 Impairment charges (10,748) — Balance at September 30, 2020 $ 5,455 $ 1,355 During the second quarter of 2020, due to the continued curtailment of operations related to the COVID-19 pandemic and managements decision to pursue a sale and exit of the Palmer business, the intangible customer list related to Palmer was written down to its estimated fair market value of zero, resulting in an impairment charge of $1.3 million, which is included in "Asset impairments" on the accompanying unaudited condensed consolidated statements of operations. The balance of intangible assets subject to amortization are as follows: (in thousands) September 30, 2020 December 31, 2019 Intangible assets, gross $ 30,866 $ 32,126 Accumulated amortization of intangible assets (18,735) (16,412) Intangible assets, net $ 12,131 $ 15,714 Estimated amortization expense related to intangible assets for the next five years are as follows (in thousands): Remainder of 2020 $ 705 2021 2,721 2022 2,501 2023 1,050 2024 952 2025 855 Thereafter 3,347 |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Long-term debt consists of the following: (in thousands) September 30, 2020 December 31, 2019 $100 million Revolving line of credit, due December 20, 2021 $ 58,010 $ 59,221 $20 million Term loan, due February 1, 2024 $ 13,333 $ 16,333 $ 71,343 $ 75,554 On December 20, 2018, the Company amended its Credit Agreement with its bank to refinance and increase its Line of Credit (the "Line") from $80,000,000 to $100,000,000 and to create a new 5-year term loan in the principal amount of $20,000,000 (the “Term Loan”). The Term Loan was used to finance the purchase of substantially all of the assets of American Stainless (see Note 13). The Term Loan’s maturity date is February 1, 2024 and shall be repaid in 60 consecutive monthly installments. Interest on the Term Loan is calculated using the One Month LIBOR Rate (as defined in the Credit Agreement), plus 1.90 percent. The Line will be used for working capital needs and as a source for funding future acquisitions. The maturity date of the Line has been extended to December 20, 2021. Interest on the Line remains unchanged and is calculated using the One Month LIBOR Rate, plus 1.65%. Borrowings under the Line are limited to an amount equal to a Borrowing Base calculation that includes eligible accounts receivable and inventory. As of September 30, 2020, the Company had $7.5 million of remaining available capacity under the Line. Pursuant to the Credit Agreement, the Company is subject to certain covenants including maintaining a minimum fixed charge coverage ratio of not less than 1.25, maintaining a minimum tangible net worth of not less than $60.0 million, and a limitation on the Company’s maximum amount of capital expenditures per year, which is in line with currently projected needs. The Company notified its bank of a technical default of the fixed charge coverage ratio in its Credit Agreement at the quarter ended June 30, 2020. To address the technical default, the Company entered into two amendments to its Credit Agreement with its bank subsequent to the end of the second quarter. On July 31, 2020, the Company entered into the Third Amendment to the Third Amended and Restated Loan Agreement (the "Third Amendment") with its bank. The Third Amendment amended the definition of the fixed charge coverage ratio to include the proxy contest costs in the numerator of the ratio calculation. Additionally, on August 13, 2020, the Company entered into the Fourth Amendment to the Third Amended and Restated Loan Agreement (the "Fourth Amendment") with its bank. The Fourth Amendment amended the definition of the fixed charge coverage ratio to include the lesser of the actual non-cash asset impairment charge related to Palmer, or $6.0 million in the numerator of the ratio calculation. Th e amendments are effective for the quarter ended June 30, 2020 and the directly following three quarters after June 30, 2020 . The Company notified its bank of a technical default of the fixed charge coverage ratio in its Credit Agreement at the quarter ended September 30, 2020. To address the technical default, the Company entered into an amendment to its Credit Agreement with its bank subsequent to the end of the third quarter. On October 23, 2020, the Company entered into the Fifth Amendment to the Third Amended and Restated Loan Agreement (the "Fifth Amendment") with its bank. The Fifth Amendment amended the definition of the fixed charge coverage ratio to include in the numerator (i) the calculation of losses from the suspended operations of Palmer in the amount of $1,560,000, which is effective for the quarter ended June 30, 2020 and for the directly following three quarters after June 30, 2020, (ii) the calculation of losses from the suspended operations of Palmer in the amount of $740,000, which is effective for the quarter ended September 30, 2020 and for the directly following three quarters after September 30, 2020, and (iii) the extraordinary expenses related to the investigation of a whistleblower complaint in the amount of $636,000, which is effective for the quarter ended September 30, 2020 and for the directly following three quarters after September 30, 2020. At September 30, 2020, the Company had a minimum fixed charge coverage ratio of 1.47 and a minimum tangible net worth of $67.7 million. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense for the three and nine months ended September 30, 2020 was $0.3 million and $1.0 million, respectively. Stock-based compensation expense for the three and nine months ended September 30, 2019 was $0.9 million and $1.8 million, respectively. Stock Options During the three and nine months ended September 30, 2020 and September 30, 2019, no stock options were exercised by officers or employees of the Company. 2011 Long-Term Incentive Stock Option Plan On February 5, 2020 the Compensation & Long-Term Incentive Committee of the Company's Board of Directors ("Compensation Committee") approved stock option grants under the 2011 Long-Term Incentive Stock Option Plan ("the 2011 Plan"). Options for a total of 123,500 shares, with an exercise price of $12.995 per share, were granted under the 2011 Plan to certain management employees of the Company. The stock options will vest in 33 percent increments annually on a cumulative basis, beginning one year after the date of grant. In order for the options to vest, the employee must be in the continuous employment of the Company since the date of the grant. Except for death, disability, or qualifying retirement, any portion of the grant that has not vested will be forfeited upon termination of employment. The Company may terminate any portion of the grant that has not vested upon an employee's failure to comply with all conditions of the award or the 2011 Plan. Shares representing grants that have not yet vested will be held in escrow by the Company. An employee will not be entitled to any voting rights with respect to any shares not yet vested, and the shares are not transferable. The per share weighted-average fair value of this stock option grant was $4.53. The Black-Scholes model for this grant was based on a risk-free interest rate of 1.66 percent, an expected life of ten years, an expected volatility of 35.1 percent and a dividend yield of 1.79 percent. On June 30, 2020 the Compensation Committee approved stock option grants under the 2011 Plan. Options for a total of 20,000 shares, with an exercise price of $7.329 per share, were granted under the 2011 Plan to certain management employees of the Company. The stock options will vest in 33 percent increments annually on a cumulative basis, beginning one year after the date of grant. In order for the options to vest, the employee must be in the continuous employment of the Company since the date of the grant. Except for death, disability, or qualifying retirement, any portion of the grant that has not vested will be forfeited upon termination of employment. The Company may terminate any portion of the grant that has not vested upon an employee's failure to comply with all conditions of the award or the 2011 Plan. Shares representing grants that have not yet vested will be held in escrow by the Company. An employee will not be entitled to any voting rights with respect to any shares not yet vested, and the shares are not transferable. The per share weighted-average fair value of this stock option grant was $2.59. The Black-Scholes model for this grant was based on a risk-free interest rate of 0.64 percent, an expected life of ten years, an expected volatility of 38.7 percent and a dividend yield of 1.89 percent. Restricted Stock Awards 2015 Stock Awards Plan On February 5, 2020, the Compensation Committee approved stock grants under the Company's 2015 Stock Awards Plan (the "Plan") to certain management employees of the Company where 45,418 shares with a market price of $12.995 per share were granted under the Plan. The stock awards vest in either 20 percent or 33 percent increments annually on a cumulative basis, beginning one year after the date of grant. In order for the awards to vest, the employee must be in the continuous employment of the Company since the date of the award. Except for death, disability, or qualifying retirement, any portion of an award that has not vested is forfeited upon termination of employment. The Company may terminate any portion of the award that has not vested upon an employee's failure to comply with all conditions of the award or the Plan. An employee is not entitled to any voting rights with respect to any shares not yet vested, and the shares are not transferable. Performance-Based Restricted Stock Awards In 2017, the Compensation Committee granted performance restricted stock awards (“2017 Performance Based Incentive Award”) to officers and certain key management-level employees. The 2017 Performance Based Incentive Award vested three years from the grant date based on continuous service, with the number of shares earned (0 percent to 150 percent of the target award) depending on the extent to which the Company achieved certain financial performance targets measured over the period from January 1, 2017 to December 31, 2019. On February 5, 2020, the Compensation Committee approved the vesting of the 2017 Performance Based Incentive Award for a total of 28,481 restricted shares at a grant date market price of $12.30. On February 5, 2020, the Compensation Committee approved performance-based restricted stock awards to certain management employees of the Company where 36,647 shares with a market price of $12.995 per share were granted under the Plan. The Company's performance-based restricted stock awards are classified as equity and contain performance and service conditions that must be satisfied for an employee to earn the right to benefit from the award. The performance condition is based on the achievement of the Company's Adjusted EBITDA targets. The fair value of the performance-based restricted stock awards are determined based on the closing market price of our stock on the date of grant. In general, 0 percent to 150 percent of the Company's performance-based restricted stock awards vest at the end of a three year service period from the date of grant based upon achievement of the performance condition specified. Except for death, disability, or qualifying retirement, any portion of an award that has not vested is forfeited upon termination of employment. The Company may terminate any portion of the award that has not vested upon an employee's failure to comply with all conditions of the award. An employee is not entitled to any voting rights with respect to any shares not yet vested, and the shares are not transferable. |
Loss Per Share
Loss Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share The following table sets forth the computation of basic and diluted loss per share: Three Months Ended Nine Months Ended September 30, (in thousands, except per share data) 2020 2019 2020 2019 Numerator: Net loss (10,539) (954) (18,674) (2,143) Denominator: Denominator for basic earnings per share - weighted average shares 9,105 8,995 9,079 8,969 Effect of dilutive securities: Employee stock options and stock grants — — — — Denominator for diluted earnings per share - weighted average shares 9,105 8,995 9,079 8,969 Net loss per share: Basic $ (1.16) $ (0.11) $ (2.06) $ (0.24) Diluted $ (1.16) $ (0.11) $ (2.06) $ (0.24) |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. The Company is no longer subject to U.S. federal examinations for years before 2015 or state examinations for years before 2014. During the first nine months of 2020 and 2019, the Company did not identify nor reserve for any unrecognized tax benefits. Our income tax provision and overall effective tax rates for the periods presented are as follows: Three Months Ended Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Income tax benefit $ (2,530) $ (112) $ (6,026) $ (660) Effective income tax rate 19.4 % 10.6 % 24.4 % 23.6 % The effective tax rate was 19.4% and 10.6% for the three months ended September 30, 2020 and 2019, respectively. The September 30, 2020 effective tax rate was approximately equal to the U.S. statutory rate of 21.0%. The September 30, 2019 effective tax rate was lower than the statutory rate of 21.0% due to state taxes, net of the federal benefit, and discrete tax benefits on our stock compensation plan. The effective tax rate was 24.4% and 23.6% for the nine months ended September 30, 2020 and 2019, respectively. The September 30, 2020 effective tax rate was higher than the statutory rate of 21.0% due to discrete tax benefits over the costs associated with our public proxy contest, asset impairments at our Palmer facility, goodwill impairment over our Metals Segment and benefits from our stock compensation plan. Additionally, we recognized estimated tax benefits associated with the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") which was signed into law on March 27, 2020. The CARES Act includes various income and payroll tax provisions, notably enabling the Company to carry back net operating losses and recover taxes paid in prior years. The September 30, 2019 effective tax rate was approximately equal to the U.S. statutory tax rate of 21%. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases On September 10, 2020, Store Master Funding XII, LLC, a Delaware limited liability company (“Store”) and the Company's sale-leaseback partner, closed on a transaction pursuant to which Store sold to a third party approximately 12.5 acres of unimproved land and immaterial improvements located at Synalloy’s facility in Munhall, Pennsylvania. Synalloy subleases the Munhall facility to Bristol Metals, LLC. As a result of the sale, on September 10, 2020, Synalloy and Store entered into a Third Amended and Restated Master Lease Agreement (the “Master Lease”) to reduce Synalloy’s rent at the Munhall facility pursuant to the terms and conditions of the Second Amended and Restated Master Lease Agreement between the parties dated January 2, 2019. The Master Lease amendment was determined to be a lease modification that qualified for a change of accounting on the existing lease and not a separate contract. Upon modification of the Master Lease Agreement, the right-of-use asset and operating lease liability were remeasured using an incremental borrowing rate determined on the date of modification. As such, the Company recognized a reduction in the right-of-use asset and operating lease liability related to the Master Lease of $3.2 million and $3.4 million, respectively, and recognized a gain on the modification of $0.2 million, which is reported within operating expenses on the unaudited condensed consolidated statement of operations. Balance Sheet Presentation Operating and finance lease amounts included in the unaudited condensed consolidated balance sheet are as follows (in thousands): Classification Financial Statement Line Item September 30, 2020 Assets Right-of-use assets, operating leases $ 32,090 Assets Property, plant and equipment 65 Current liabilities Current portion of lease liabilities, operating leases 835 Current liabilities Current portion of lease liabilities, finance leases 26 Non-current liabilities Non-current portion of lease liabilities, operating leases 33,000 Non-current liabilities Non-current portion of lease liabilities, finance leases 41 Total Lease Cost Individual components of the total lease cost incurred by the Company are as follows: (in thousands) Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Operating lease cost $ 1,032 $ 3,101 Finance lease cost: Amortization of right-of-use assets 9 84 Interest on finance lease liabilities — 24 Total lease cost $ 1,041 $ 3,209 Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the unaudited condensed consolidated statement of operations. Maturity of Leases The amounts of undiscounted future minimum lease payments under leases as of September 30, 2020 are as follows: (in thousands) Operating Finance Remainder of 2020 $ 899 $ 9 2021 3,610 22 2022 3,665 15 2023 3,699 15 2024 3,549 8 Thereafter 47,159 — Total undiscounted minimum future lease payments 62,581 69 Imputed Interest 28,746 2 Present value of lease liabilities $ 33,835 $ 67 Lease Term and Discount Rate Weighted-average remaining lease term September 30, 2020 Operating Leases 15.70 years Finance Leases 2.91 years Weighted-average discount rate Operating Leases 8.33 % Finance Leases 2.56 % |
Leases | Leases On September 10, 2020, Store Master Funding XII, LLC, a Delaware limited liability company (“Store”) and the Company's sale-leaseback partner, closed on a transaction pursuant to which Store sold to a third party approximately 12.5 acres of unimproved land and immaterial improvements located at Synalloy’s facility in Munhall, Pennsylvania. Synalloy subleases the Munhall facility to Bristol Metals, LLC. As a result of the sale, on September 10, 2020, Synalloy and Store entered into a Third Amended and Restated Master Lease Agreement (the “Master Lease”) to reduce Synalloy’s rent at the Munhall facility pursuant to the terms and conditions of the Second Amended and Restated Master Lease Agreement between the parties dated January 2, 2019. The Master Lease amendment was determined to be a lease modification that qualified for a change of accounting on the existing lease and not a separate contract. Upon modification of the Master Lease Agreement, the right-of-use asset and operating lease liability were remeasured using an incremental borrowing rate determined on the date of modification. As such, the Company recognized a reduction in the right-of-use asset and operating lease liability related to the Master Lease of $3.2 million and $3.4 million, respectively, and recognized a gain on the modification of $0.2 million, which is reported within operating expenses on the unaudited condensed consolidated statement of operations. Balance Sheet Presentation Operating and finance lease amounts included in the unaudited condensed consolidated balance sheet are as follows (in thousands): Classification Financial Statement Line Item September 30, 2020 Assets Right-of-use assets, operating leases $ 32,090 Assets Property, plant and equipment 65 Current liabilities Current portion of lease liabilities, operating leases 835 Current liabilities Current portion of lease liabilities, finance leases 26 Non-current liabilities Non-current portion of lease liabilities, operating leases 33,000 Non-current liabilities Non-current portion of lease liabilities, finance leases 41 Total Lease Cost Individual components of the total lease cost incurred by the Company are as follows: (in thousands) Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Operating lease cost $ 1,032 $ 3,101 Finance lease cost: Amortization of right-of-use assets 9 84 Interest on finance lease liabilities — 24 Total lease cost $ 1,041 $ 3,209 Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the unaudited condensed consolidated statement of operations. Maturity of Leases The amounts of undiscounted future minimum lease payments under leases as of September 30, 2020 are as follows: (in thousands) Operating Finance Remainder of 2020 $ 899 $ 9 2021 3,610 22 2022 3,665 15 2023 3,699 15 2024 3,549 8 Thereafter 47,159 — Total undiscounted minimum future lease payments 62,581 69 Imputed Interest 28,746 2 Present value of lease liabilities $ 33,835 $ 67 Lease Term and Discount Rate Weighted-average remaining lease term September 30, 2020 Operating Leases 15.70 years Finance Leases 2.91 years Weighted-average discount rate Operating Leases 8.33 % Finance Leases 2.56 % |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is from time-to-time subject to various claims, possible legal actions for product liability and other damages, and other matters arising out of the normal conduct of the Company's business. Management is not currently aware of any asserted or unasserted matters which could have a material effect on the financial condition or results of operations of the Company. |
Industry Segments
Industry Segments | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Industry Segments | Industry Segments The following table summarizes certain information regarding segments of the Company's operations: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Net sales Metals Segment $ 47,079 $ 60,121 $ 159,761 $ 195,728 Specialty Chemicals Segment 12,187 13,519 40,338 41,494 $ 59,266 $ 73,640 $ 200,099 $ 237,222 Operating (loss) income Metals Segment $ (11,563) $ 450 $ (19,784) $ 3,125 Specialty Chemicals Segment 1,061 846 3,508 2,387 Unallocated corporate expenses 1,526 2,369 5,132 6,622 Acquisition related costs and other 656 90 803 438 Proxy contest costs 207 — 3,105 — Earn-out adjustments (146) (1,242) (969) (1,643) Gain on lease modification (171) — (171) — Operating (loss) income (12,574) 79 (24,176) 95 Interest expense 452 944 1,703 2,977 Change in fair value of interest rate swap (16) 21 65 145 Other (income) expense, net 59 180 (1,244) (224) Loss before income taxes $ (13,069) $ (1,066) $ (24,700) $ (2,803) As of (in thousands) September 30, 2020 December 31, 2019 Identifiable assets Metals Segment $ 157,974 $ 186,758 Specialty Chemicals Segment 25,004 25,428 Corporate 41,737 45,011 $ 224,715 $ 257,197 |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Acquisition of the Assets and Operations of American Stainless Tubing, Inc. On January 1, 2019, the Company's wholly-owned subsidiary, ASTI Acquisition, LLC (now American Stainless Tubing, LLC) ("ASTI"), completed the acquisition of substantially all of the assets of American Stainless Tubing, Inc. ("American Stainless"). The purchase price for the all-cash acquisition was $21.9 million, subject to a post-closing working capital adjustment. The Company funded the acquisition with a new five-year $20 million term note and a draw against its asset-based line of credit (see Note 6). The transaction is accounted for using the acquisition method of accounting for business combinations. Under this method, the total consideration transferred to consummate the acquisition is allocated to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values as of the closing date of the acquisition. The acquisition method of accounting requires extensive use of estimates and judgments to allocate the consideration transferred to the identifiable tangible and intangible assets acquired and liabilities assumed. During the third quarter of 2019, the Company finalized the purchase price allocation for the American Stainless acquisition. The excess of the consideration transferred over the fair value of the net tangible and identifiable intangible assets is reflected as goodwill. Goodwill consists of manufacturing cost synergies expected from combining American Stainless' production capabilities with the Metals Segment current operations. All of the goodwill recognized was assigned to the Company's Metals Segment and is expected to be deductible for income tax purposes. American Stainless will receive quarterly earn-out payments for a period of three years following closing. Pursuant to the asset purchase agreement between ASTI and American Stainless, earn-out payments will equate to six and one-half percent (6.5 percent) of ASTI’s revenue over the three-year earn-out period. In determining the appropriate discount rate to apply to the contingent payments, the risk associated with the functional form of the earn-out, and the credit risk associated with the payment of the earn-out were all considered. The fair value of the contingent consideration was estimated by applying the probability weighted expected return method using management's estimates of pounds to be shipped and future price per unit. During the second quarter of 2019, management identified circumstances that existed on the date of acquisition and as a result, revised the purchase price allocation of certain acquired assets and liabilities as allowable during the measurement period. The following table shows the initial estimate of value and revisions made during 2019: (in thousands) Initial estimate Revisions Final Inventories $ 5,564 $ — $ 5,564 Accounts receivable 3,534 — 3,534 Other current assets - production and maintenance supplies 605 — 605 Property, plant and equipment 2,793 — 2,793 Customer list intangible 10,000 (496) 9,504 Goodwill 7,044 714 7,758 Contingent consideration (earn-out liability) (6,148) (218) (6,366) Accounts payable (1,400) — (1,400) Other liabilities (97) — (97) $ 21,895 $ — $ 21,895 ASTI's results of operations are reflected in the Company's Condensed Consolidated Statements of Operations as follows: Three Months Ended Nine Months Ended (in thousands) 2020 2019 2020 2019 Net sales $ 8,020 $ 8,469 $ 22,920 $ 26,539 Income before taxes $ (4,233) $ 902 $ (2,515) $ 2,001 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Shareholders' Equity Stock Repurchase Program On February 21, 2019, the Board of Directors authorized a stock repurchase program for up to 850,000 shares of its outstanding common stock over 24 months. The shares will be purchased from time to time at prevailing market prices, through open market or privately negotiated transactions, depending on market conditions. Under the program, the purchases will be funded from available working capital, and the repurchased shares will be returned to the status of authorized, but unissued shares of common stock or held in treasury. There is no guarantee as to the exact number of shares that will be repurchased by the Company, and the Company may discontinue purchases at any time that management determines additional purchases are not warranted. During the three months ended September 30, 2020, the Company purchased no shares under the stock repurchase program. During the nine months ended September 30, 2020, the Company purchased 59,617 shares under the stock repurchase program at an average price of approximately $10.65 per share for an aggregate amount of $0.6 million. During the three and nine months ended September 30, 2019, the Company purchased no shares under the stock repurchase program. As of September 30, 2020, the Company has 790,383 shares of its share repurchase authorization remaining. Shareholder Rights Plan On March 31, 2020, the Board of Directors unanimously authorized the adoption of a limited duration shareholder rights plan expiring on March 31, 2021 and an ownership trigger threshold of 15%. In connection with the shareholder rights plan, the Board of Directors authorized and declared a dividend of one right (each, a "Right") for each outstanding share of the Company's common stock, par value $1.00 per share ("Common Stock") to stockholders of record at the close of business on April 10, 2020 (the "Record Date"). The complete terms of the Rights are set forth in a Rights Agreement dated March 31, 2020 (the "Rights Agreement"), by and between the Company and American Stock Transfer & Trust Company, LLC, as rights agent. The Rights will become exercisable only if a person or group acquires beneficial ownership of 15% or more of the Company's outstanding Common Stock or announces a tender or exchange offer that would result in beneficial ownership of 15% or more of the Company's Common Stock. Each Right would entitle the holder to purchase from the Company one half of one share of Common Stock at a purchase price of $22.50 per right, subject to adjustments (equivalent to $45.00 for each whole share of Common Stock). On June 27, 2020, the Company entered into Amendment 1 to the Rights Agreement (the "Amendment"). The Amendment terminated the Rights Agreement by accelerating the expiration of the Rights to June 28, 2020. At the time of the termination of the Rights Agreement, all of the Rights, which were distributed to holders of the Company's common stock, par value, $1.00, pursuant to the Rights Agreement, expired. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Revenues are recognized when control of the promised goods is transferred to our customers or when a service is rendered, in an amount that reflects the consideration we are to receive in exchange for those goods or services. The following table presents the Company's revenues, disaggregated by product group. Substantially all of the Company's revenues are derived from contracts with customers where performance obligations are satisfied at a point-in-time. Three Months Ended Nine Months Ended (in thousands) 2020 2019 2020 2019 Fiberglass and steel liquid storage tanks and separation equipment 538 5,552 4,994 25,628 Heavy wall seamless carbon steel pipe and tube 5,436 7,963 18,408 23,252 Stainless steel pipe and tube 37,231 40,993 120,265 128,299 Galvanized pipe and tube 3,875 5,613 16,094 18,549 Specialty chemicals 12,186 13,519 40,338 41,494 Net sales $ 59,266 $ 73,640 $ 200,099 $ 237,222 Arrangements with Multiple Performance Obligations Our contracts with customers may include multiple performance obligations. For such arrangements, revenue for each performance obligation is based on its stand-alone selling price and revenue is recognized as each performance obligation is satisfied. The Company generally determines stand-alone selling prices based on the prices charged to customers using the adjusted market assessment approach or expected cost plus margin. |
Proxy Contest and Related Costs
Proxy Contest and Related Costs | 9 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Proxy Contest and Related Costs | Proxy Contest and Related Costs During the six months ended June 30, 2020, the Company engaged in a proxy contest with Privet Fund Management, LLC ("Privet") and UPG Enterprises, LLC ("UPG"), which parties acted as a group during the proxy contest. At the Company’s Annual Meeting of Shareholders held on June 30, 2020 (the “Annual Meeting”), the Company’s independent shareholders voted the Company’s proxy card, resulting in five (of eight) incumbent Board members being re-elected to the Board of Directors. Due to cumulative voting, a unique voting method permitted by the Company’s Certificate of Incorporation, Privet and UPG were able to cumulate their group-owned shares to elect three (of eight) new directors at the Annual Meeting. During the three and nine months ended September 30, 2020, total costs incurred by the Company relating to the proxy contest were $0.2 million and $3.1 million, respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company notified its bank of a technical default of the fixed charge coverage ratio in its Credit Agreement at the quarter ended September 30, 2020. To address the technical default, the Company entered into an amendment to its Credit Agreement with its bank subsequent to the end of the third quarter. On October 23, 2020, the Company entered into the Fifth Amendment to the Third Amended and Restated Loan Agreement (the "Fifth Amendment") with its bank. The Fifth Amendment amended the definition of the fixed charge coverage ratio to include in the numerator (i) the calculation of losses from the suspended operations of Palmer in the amount of $1,560,000, which is effective for the quarter ended June 30, 2020 and for the directly following three quarters after June 30, 2020, (ii) the calculation of losses from the suspended operations of Palmer in the amount of $740,000, which is effective for the quarter ended September 30, 2020 and for the directly following three quarters after September 30, 2020, and (iii) the extraordinary expenses related to the investigation of a whistleblower complaint in the amount of $636,000, which is effective for the quarter ended September 30, 2020 and for the directly following three quarters after September 30, 2020. On October 27, 2020, the Company announced the retirement of Craig C. Bram, the Company's President and Chief Executive Officer and member of the Company's Board of Directors, effective November 9, 2020. On October 27, 2020, the Company announced the appointment of Christopher G. Hutter, a member of the Company's Board of Directors, as interim President and Chief Executive Officer, effective November 9, 2020. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Financial Statement Presentation | The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included as required by Regulation S-X, Rule 10-01. These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto in the Synalloy Corporation (the Company) Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (the Annual Report). The financial results for the interim periods may not be indicative of the financial results for the entire fiscal year. |
Reclassifications | Certain prior period amounts have been reclassified to conform to current period presentation. |
Recently Issued Accounting Standards - Adopted and Not Yet Adopted | Recently Issued Accounting Standards - Adopted On January 1, 2020, the Company adopted ASU No. 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The updated guidance removes disclosure requirements pertaining to the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. In addition, the amendment clarifies that the measurement uncertainty disclosure is to communicate information about uncertainty in measurement as of the reporting date. The guidance also adds disclosure requirements for changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 measurements held at the end of the reporting period as well as the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The adoption of this standard by the Company did not have a material impact on the unaudited condensed consolidated financial statements or footnote disclosures. See Note 2 for further discussion on the Company's fair value measurements. On January 1, 2020, the Company adopted ASU No. 2017-04 Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment. The updated guidance eliminated step two of the goodwill impairment test and specifies that goodwill impairment should be measured by comparing the fair value of a reporting unit with its carrying amount. Additionally, the amount of goodwill allocated to a reporting unit with a zero or negative carrying amount of net assets should be disclosed. The adoption of this standard by the Company did not have a material impact on the unaudited condensed consolidated financial statements. On January 1, 2020, the Company adopted ASU No. 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The updated guidance amends the current accounting guidance and requires the measurement of all expected losses based on historical experience, current conditions, and reasonable and supportable forecasts rather than the incurred loss model which reflects losses that are probable. Entities are required to apply these changes through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company evaluated its financial instruments and determined that its trade accounts receivable are subject to the new current expected credit loss model. Based upon the application of the new current expected credit loss model, on January 1, 2020, we recorded a cumulative effect adjustment of $0.4 million to Retained Earnings. The adoption of this standard by the Company did not have a material impact on the unaudited condensed consolidated statement of operations or cash flows. On September 30, 2020, the Company early adopted ASU No. 2019-12 "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This ASU removes certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences as well as adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for goodwill and allocating taxes to members of a consolidated group. The most significant impact to the Company is the removal of a limit on the tax benefit recognized on pre-tax losses in interim periods. The adoption of this standard by the Company did not have a material effect on the unaudited condensed consolidated financial statements or footnote disclosures. Recently Issued Accounting Standards - Not Yet Adopted Recent accounting pronouncements pending adoption, other than those stated above, are not expected to have a material impact on the Company. |
Revenues | Revenues are recognized when control of the promised goods is transferred to our customers or when a service is rendered, in an amount that reflects the consideration we are to receive in exchange for those goods or services. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of Changes in Fair Value of Company's Earn-Out Liability | The following table presents a summary of changes in fair value of the Company's Level 3 earn-out liabilities measured on a recurring basis for the nine months ended September 30, 2020: (in thousands) MUSA-Stainless MUSA-Galvanized American Stainless Total Balance at December 31, 2019 $ 2,403 $ 1,782 $ 4,969 $ 9,154 Earn-out payments during the period (1,263) (488) (1,480) (3,231) Changes in fair value during the period (415) (38) (516) (969) Balance at September 30, 2020 $ 725 $ 1,256 $ 2,973 $ 4,954 |
Summary of Level 3 Assets and the Valuation Techniques Used to Measure Fair Value | The following table summarizes the significant unobservable inputs in the fair value measurement of our contingent consideration (earn-out) liabilities as of September 30, 2020: Instrument Fair Value Principal Valuation Technique Significant Unobservable Inputs Range Weighted Contingent consideration (earn-out) liabilities $4,954 Probability Weighted Expected Return Discount rate - 5% Timing of estimated payouts 2020 - 2022 - Future revenue projections $5.5M - 12.3M $9.5M |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventories | The components of inventories are as follows: (in thousands) September 30, 2020 December 31, 2019 Raw materials $ 39,843 $ 42,896 Work-in-process 20,780 17,616 Finished goods 29,964 38,422 $ 90,587 $ 98,934 Less inventory reserves $ 1,580 $ 748 Inventories, net $ 89,007 $ 98,186 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment consist of the following: (in thousands) September 30, 2020 December 31, 2019 Land 63 63 Leasehold improvements 2,866 1,921 Buildings 84 214 Machinery, fixtures and equipment 100,097 100,300 Construction-in-progress 2,456 2,999 105,566 105,497 Less accumulated depreciation and amortization 69,235 64,807 Property, plant and equipment, net 36,331 40,690 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The carrying amounts of goodwill are as follows: (in thousands) Metals Segment Chemicals Segment Balance at December 31, 2019 $ 16,203 $ 1,355 Impairment charges (10,748) — Balance at September 30, 2020 $ 5,455 $ 1,355 |
Schedule of Intangible Assets Subject to Amortization | The balance of intangible assets subject to amortization are as follows: (in thousands) September 30, 2020 December 31, 2019 Intangible assets, gross $ 30,866 $ 32,126 Accumulated amortization of intangible assets (18,735) (16,412) Intangible assets, net $ 12,131 $ 15,714 |
Schedule of Estimated Amortization Expense | Estimated amortization expense related to intangible assets for the next five years are as follows (in thousands): Remainder of 2020 $ 705 2021 2,721 2022 2,501 2023 1,050 2024 952 2025 855 Thereafter 3,347 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consists of the following: (in thousands) September 30, 2020 December 31, 2019 $100 million Revolving line of credit, due December 20, 2021 $ 58,010 $ 59,221 $20 million Term loan, due February 1, 2024 $ 13,333 $ 16,333 $ 71,343 $ 75,554 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Summary of the Computation of Basic and Diluted Loss Per Share | The following table sets forth the computation of basic and diluted loss per share: Three Months Ended Nine Months Ended September 30, (in thousands, except per share data) 2020 2019 2020 2019 Numerator: Net loss (10,539) (954) (18,674) (2,143) Denominator: Denominator for basic earnings per share - weighted average shares 9,105 8,995 9,079 8,969 Effect of dilutive securities: Employee stock options and stock grants — — — — Denominator for diluted earnings per share - weighted average shares 9,105 8,995 9,079 8,969 Net loss per share: Basic $ (1.16) $ (0.11) $ (2.06) $ (0.24) Diluted $ (1.16) $ (0.11) $ (2.06) $ (0.24) |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Provision for Income Taxes and Effective Tax Rates | Our income tax provision and overall effective tax rates for the periods presented are as follows: Three Months Ended Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Income tax benefit $ (2,530) $ (112) $ (6,026) $ (660) Effective income tax rate 19.4 % 10.6 % 24.4 % 23.6 % |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Operating and Finance Leases Recorded in Consolidated Balance Sheet | Operating and finance lease amounts included in the unaudited condensed consolidated balance sheet are as follows (in thousands): Classification Financial Statement Line Item September 30, 2020 Assets Right-of-use assets, operating leases $ 32,090 Assets Property, plant and equipment 65 Current liabilities Current portion of lease liabilities, operating leases 835 Current liabilities Current portion of lease liabilities, finance leases 26 Non-current liabilities Non-current portion of lease liabilities, operating leases 33,000 Non-current liabilities Non-current portion of lease liabilities, finance leases 41 |
Schedule of Operating and Finance Leases Discount Rates, Total Lease Cost and Weighted Average Remaining Lease Terms | Individual components of the total lease cost incurred by the Company are as follows: (in thousands) Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Operating lease cost $ 1,032 $ 3,101 Finance lease cost: Amortization of right-of-use assets 9 84 Interest on finance lease liabilities — 24 Total lease cost $ 1,041 $ 3,209 Weighted-average remaining lease term September 30, 2020 Operating Leases 15.70 years Finance Leases 2.91 years Weighted-average discount rate Operating Leases 8.33 % Finance Leases 2.56 % |
Schedule of Maturities For Operating Leases After Adoption of 842 | The amounts of undiscounted future minimum lease payments under leases as of September 30, 2020 are as follows: (in thousands) Operating Finance Remainder of 2020 $ 899 $ 9 2021 3,610 22 2022 3,665 15 2023 3,699 15 2024 3,549 8 Thereafter 47,159 — Total undiscounted minimum future lease payments 62,581 69 Imputed Interest 28,746 2 Present value of lease liabilities $ 33,835 $ 67 |
Schedule of Maturities For Finance Leases After Adoption of 842 | The amounts of undiscounted future minimum lease payments under leases as of September 30, 2020 are as follows: (in thousands) Operating Finance Remainder of 2020 $ 899 $ 9 2021 3,610 22 2022 3,665 15 2023 3,699 15 2024 3,549 8 Thereafter 47,159 — Total undiscounted minimum future lease payments 62,581 69 Imputed Interest 28,746 2 Present value of lease liabilities $ 33,835 $ 67 |
Industry Segments (Tables)
Industry Segments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following table summarizes certain information regarding segments of the Company's operations: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Net sales Metals Segment $ 47,079 $ 60,121 $ 159,761 $ 195,728 Specialty Chemicals Segment 12,187 13,519 40,338 41,494 $ 59,266 $ 73,640 $ 200,099 $ 237,222 Operating (loss) income Metals Segment $ (11,563) $ 450 $ (19,784) $ 3,125 Specialty Chemicals Segment 1,061 846 3,508 2,387 Unallocated corporate expenses 1,526 2,369 5,132 6,622 Acquisition related costs and other 656 90 803 438 Proxy contest costs 207 — 3,105 — Earn-out adjustments (146) (1,242) (969) (1,643) Gain on lease modification (171) — (171) — Operating (loss) income (12,574) 79 (24,176) 95 Interest expense 452 944 1,703 2,977 Change in fair value of interest rate swap (16) 21 65 145 Other (income) expense, net 59 180 (1,244) (224) Loss before income taxes $ (13,069) $ (1,066) $ (24,700) $ (2,803) As of (in thousands) September 30, 2020 December 31, 2019 Identifiable assets Metals Segment $ 157,974 $ 186,758 Specialty Chemicals Segment 25,004 25,428 Corporate 41,737 45,011 $ 224,715 $ 257,197 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Preliminary Allocation of Total Consideration of Assets Acquired and Liabilities Assumed | The following table shows the initial estimate of value and revisions made during 2019: (in thousands) Initial estimate Revisions Final Inventories $ 5,564 $ — $ 5,564 Accounts receivable 3,534 — 3,534 Other current assets - production and maintenance supplies 605 — 605 Property, plant and equipment 2,793 — 2,793 Customer list intangible 10,000 (496) 9,504 Goodwill 7,044 714 7,758 Contingent consideration (earn-out liability) (6,148) (218) (6,366) Accounts payable (1,400) — (1,400) Other liabilities (97) — (97) $ 21,895 $ — $ 21,895 |
Schedule of Unaudited Pro Forma Financial Information | ASTI's results of operations are reflected in the Company's Condensed Consolidated Statements of Operations as follows: Three Months Ended Nine Months Ended (in thousands) 2020 2019 2020 2019 Net sales $ 8,020 $ 8,469 $ 22,920 $ 26,539 Income before taxes $ (4,233) $ 902 $ (2,515) $ 2,001 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue by Product Group | The following table presents the Company's revenues, disaggregated by product group. Substantially all of the Company's revenues are derived from contracts with customers where performance obligations are satisfied at a point-in-time. Three Months Ended Nine Months Ended (in thousands) 2020 2019 2020 2019 Fiberglass and steel liquid storage tanks and separation equipment 538 5,552 4,994 25,628 Heavy wall seamless carbon steel pipe and tube 5,436 7,963 18,408 23,252 Stainless steel pipe and tube 37,231 40,993 120,265 128,299 Galvanized pipe and tube 3,875 5,613 16,094 18,549 Specialty chemicals 12,186 13,519 40,338 41,494 Net sales $ 59,266 $ 73,640 $ 200,099 $ 237,222 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ 51,428 | $ 70,552 | |
Cumulative Effect, Period of Adoption, Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Retained earnings | $ (400) |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($)financial_instrumentshares | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)financial_instrumentshares | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Realized gain (loss) on sale of equity securities | $ (38,000) | $ 474,000 | ||||
Unrealized gains on equity securities | 208,000 | (282,000) | ||||
Net realizable value | $ 89,007,000 | 89,007,000 | $ 98,186,000 | |||
Goodwill impairment | $ 10,748,000 | $ 0 | $ 10,748,000 | $ 0 | ||
Welded Pipe & Tube | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value less than carrying value | 9.70% | 9.70% | ||||
Goodwill impairment | $ 10,700,000 | $ 0 | ||||
Fair Value, Recurring | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Sale of shares equity securities investments (in shares) | shares | 494,074 | 1,200,000 | ||||
Realized gain (loss) on sale of equity securities | $ (69,375) | $ (37,954) | ||||
Unrealized gains on equity securities | 0 | 200,000 | ||||
Fair value of equity securities | $ 0 | $ 0 | 4,300,000 | |||
Derivative asset, number of instruments held | financial_instrument | 1 | 1 | ||||
$20 million Term loan, due February 1, 2024 | Interest Rate Swap | Level 2 Inputs | Fair Value, Recurring | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Derivative liability | $ 100,000 | $ 100,000 | ||||
Derivative asset | $ 6,088 | |||||
Palmer of Texas | Fair Value, Nonrecurring | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Net realizable value | 2,100,000 | |||||
Fair value | 1,700,000 | |||||
Asset impairments | $ 6,100,000 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Summary of Changes in Fair Value of Company's Earn-Out Liability (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Earn-out payments during the period | $ 2,939 | $ 2,497 |
Level 3 Inputs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 9,154 | |
Earn-out payments during the period | (3,231) | |
Changes in fair value during the period | (969) | |
Ending balance | 4,954 | |
MUSA-Stainless | Level 3 Inputs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 2,403 | |
Earn-out payments during the period | (1,263) | |
Changes in fair value during the period | (415) | |
Ending balance | 725 | |
MUSA-Galvanized | Level 3 Inputs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 1,782 | |
Earn-out payments during the period | (488) | |
Changes in fair value during the period | (38) | |
Ending balance | 1,256 | |
American Stainless | Level 3 Inputs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 4,969 | |
Earn-out payments during the period | (1,480) | |
Changes in fair value during the period | (516) | |
Ending balance | $ 2,973 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Summary of Fair Value Level 3 Assets and Valuation Technique (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Level 3 Inputs | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration, liability, measurement input, percent | 4,954 |
Weighted Average | Measurement Input, Discount Rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration, liability, measurement input, percent | 0.05 |
Weighted Average | Measurement Input, Future Revenue Projection | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Fair value measurement input | $ 9,500 |
Minimum | Measurement Input, Future Revenue Projection | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Fair value measurement input | 5,500 |
Maximum | Measurement Input, Future Revenue Projection | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Fair value measurement input | $ 12,300 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 39,843 | $ 42,896 |
Work-in-process | 20,780 | 17,616 |
Finished goods | 29,964 | 38,422 |
Inventory, gross | 90,587 | 98,934 |
Less inventory reserves | 1,580 | 748 |
Inventories, net | $ 89,007 | $ 98,186 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | $ 105,566 | $ 105,497 |
Less accumulated depreciation and amortization | 69,235 | 64,807 |
Property, plant and equipment, net | 36,331 | 40,690 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | 63 | 63 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | 2,866 | 1,921 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | 84 | 214 |
Machinery, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | 100,097 | 100,300 |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property, plant and equipment, gross | $ 2,456 | $ 2,999 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Goodwill [Line Items] | ||||||
Balance at September 30, 2020 | $ 6,810,000 | $ 6,810,000 | ||||
Goodwill impairment | 10,748,000 | $ 0 | 10,748,000 | $ 0 | ||
Estimated fair market value | 12,131,000 | $ 12,131,000 | $ 15,714,000 | |||
Palmer of Texas | Customer Lists | ||||||
Goodwill [Line Items] | ||||||
Estimated fair market value | $ 0 | |||||
Asset impairments | $ 1,300,000 | |||||
Welded Pipe & Tube | ||||||
Goodwill [Line Items] | ||||||
Fair value greater than carrying value | 1.70% | |||||
Goodwill impairment | $ 10,700,000 | $ 0 | ||||
Fair value less than carrying value | 9.70% | 9.70% | ||||
Metals Segment | ||||||
Goodwill [Line Items] | ||||||
Balance at September 30, 2020 | $ 5,455,000 | $ 5,455,000 | ||||
Goodwill impairment | 10,748,000 | |||||
Metals Segment | Welded Pipe & Tube | ||||||
Goodwill [Line Items] | ||||||
Balance at September 30, 2020 | $ 16,200,000 | $ 16,200,000 | $ 16,200,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill [Line Items] | ||||
Balance at December 31, 2019 | $ 17,558 | |||
Goodwill impairment | $ (10,748) | $ 0 | (10,748) | $ 0 |
Balance at September 30, 2020 | 6,810 | 6,810 | ||
Metals Segment | ||||
Goodwill [Line Items] | ||||
Balance at December 31, 2019 | 16,203 | |||
Goodwill impairment | (10,748) | |||
Balance at September 30, 2020 | 5,455 | 5,455 | ||
Specialty Chemicals Segment | ||||
Goodwill [Line Items] | ||||
Balance at December 31, 2019 | 1,355 | |||
Goodwill impairment | 0 | |||
Balance at September 30, 2020 | $ 1,355 | $ 1,355 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible assets, gross | $ 30,866 | $ 32,126 |
Accumulated amortization of intangible assets | (18,735) | (16,412) |
Intangible assets, net | $ 12,131 | $ 15,714 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Summary of Estimated Amortization Expense (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2020 | $ 705 |
2021 | 2,721 |
2022 | 2,501 |
2023 | 1,050 |
2024 | 952 |
2025 | 855 |
Thereafter | $ 3,347 |
Long-term Debt - Summary of Deb
Long-term Debt - Summary of Debt (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 20, 2018 |
Debt Instrument [Line Items] | ||||
Long-term Debt | $ 71,343,000 | $ 75,554,000 | ||
$100 million Revolving line of credit, due December 20, 2021 | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt | $ 100,000,000 | |||
$20 million Term loan, due February 1, 2024 | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt | $ 20,000,000 | $ 20,000,000 | ||
Revolving Credit Facility | $100 million Revolving line of credit, due December 20, 2021 | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | 58,010,000 | 59,221,000 | ||
Secured Debt | $20 million Term loan, due February 1, 2024 | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt | $ 13,333,000 | $ 16,333,000 |
Long-term Debt - Narrative (Det
Long-term Debt - Narrative (Details) | Jan. 01, 2019USD ($) | Dec. 20, 2018USD ($)debt_installment | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Dec. 19, 2018USD ($) |
Line of Credit Facility [Line Items] | ||||||
Repayments of debt, number of consecutive installments | debt_installment | 60 | |||||
Extraordinary expenses | $ 636,000 | |||||
Palmer of Texas | ||||||
Line of Credit Facility [Line Items] | ||||||
Asset impairments | $ 6,000,000 | |||||
Losses from suspended operations | 740,000 | $ 1,560,000 | ||||
$100 million Revolving line of credit, due December 20, 2021 | ||||||
Line of Credit Facility [Line Items] | ||||||
Principal amount of debt | $ 100,000,000 | |||||
$20 million Term loan, due February 1, 2024 | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt term | 5 years | 5 years | ||||
Principal amount of debt | $ 20,000,000 | $ 20,000,000 | ||||
$20 million Term loan, due February 1, 2024 | London Interbank Offered Rate (LIBOR) | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread | 1.90% | |||||
Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Minimum fixed charge coverage ratio | 1.25 | |||||
Covenants, minimum tangible net worth | 60,000,000 | $ 60,000,000 | ||||
Minimum fixed charge coverage ratio actual | 1.47 | |||||
Covenants, minimum tangible net worth actual | 67,700,000 | $ 67,700,000 | ||||
Revolving Credit Facility | $100 million Revolving line of credit, due December 20, 2021 | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | $ 100,000,000 | $ 80,000,000 | ||||
Remaining borrowing capacity | $ 7,500,000 | $ 7,500,000 | ||||
Revolving Credit Facility | $100 million Revolving line of credit, due December 20, 2021 | London Interbank Offered Rate (LIBOR) | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread | 1.65% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | ||||
Employee stock compensation | $ 0.3 | $ 0.9 | $ 1 | $ 1.8 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Options (Details) - $ / shares | Jun. 30, 2020 | Feb. 05, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options exercised (in shares) | 0 | 0 | 0 | 0 | ||
2011 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options granted in the period (in shares) | 20,000 | 123,500 | ||||
Options granted in the period, weighted average exercise price (in dollars per share) | $ 7.329 | $ 12.995 | ||||
Award vesting percentage | 33.00% | 33.00% | ||||
Grants in the period, weighted average grant date fair value (in dollars per share) | $ 2.59 | $ 4.53 | ||||
Risk free interest rate | 0.64% | 1.66% | ||||
Expected term | 10 years | 10 years | ||||
Expected volatility rate | 38.70% | 35.10% | ||||
Expected dividend rate | 1.89% | 1.79% |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards (Details) - Stock Awards - 2015 Stock Awards Plan | Feb. 05, 2020$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Equity instruments other options, grants in period (in shares) | shares | 45,418 |
Equity instruments other than options, grants in period, weighted average grant date fair value (in dollars per share) | $ / shares | $ 12.995 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting percentage | 20.00% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting percentage | 33.00% |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance-Based Restricted Stock Awards (Details) - $ / shares | Feb. 05, 2020 | Dec. 31, 2017 |
2017 Performance Stock Award Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Equity instruments other options, grants in period (in shares) | 28,481 | |
Equity instruments other than options, grants in period, weighted average grant date fair value (in dollars per share) | $ 12.30 | |
2017 Performance Stock Award Plan | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of target award | 0.00% | |
2017 Performance Stock Award Plan | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of target award | 150.00% | |
2020 Performance Stock Award Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
Equity instruments other options, grants in period (in shares) | 36,647 | |
2020 Performance Stock Award Plan | Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity instruments other than options, grants in period, weighted average grant date fair value (in dollars per share) | $ 12.995 | |
2020 Performance Stock Award Plan | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of target award | 0.00% | |
2020 Performance Stock Award Plan | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of target award | 150.00% |
Loss Per Share (Details)
Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||
Net loss | $ (10,539) | $ (954) | $ (18,674) | $ (2,143) |
Denominator: | ||||
Denominator for basic earnings per share - weighted average shares (in shares) | 9,105,000 | 8,995,000 | 9,079,000 | 8,969,000 |
Employee stock options and stock grants (in shares) | 0 | 0 | 0 | 0 |
Denominator for diluted earnings per share - weighted average shares (in shares) | 9,105,000 | 8,995,000 | 9,079,000 | 8,969,000 |
Net loss per share: | ||||
Basic (in dollars per share) | $ (1.16) | $ (0.11) | $ (2.06) | $ (0.24) |
Diluted (in dollars per share) | $ (1.16) | $ (0.11) | $ (2.06) | $ (0.24) |
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 300,000 | 0 | 200,000 | 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit | $ (2,530) | $ (112) | $ (6,026) | $ (660) |
Effective income tax rate | 19.40% | 10.60% | 24.40% | 23.60% |
Leases - Narrative (Details)
Leases - Narrative (Details) | Sep. 10, 2020USD ($)a | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) |
Lessee, Lease, Description [Line Items] | |||||
Area of land | a | 12.5 | ||||
Gain on lease modification | $ 171,000 | $ 0 | $ 171,000 | $ 0 | |
Right-of-use asset Obtained in exchange for operating lease liability | $ 0 | $ 0 | |||
Third Amended and Restated Master Lease Agreement | |||||
Lessee, Lease, Description [Line Items] | |||||
Reduction on right-of-use asset | $ 3,200,000 | ||||
Reduction on operating lease | 3,400,000 | ||||
Gain on lease modification | $ 200,000 |
Leases - Schedule of Operating
Leases - Schedule of Operating and Finance Leases Recorded in the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Right-of-use assets, operating leases | $ 32,090 | $ 35,772 |
Property, plant and equipment | 65 | |
Current portion of lease liabilities, operating leases | 835 | 3,562 |
Current portion of lease liabilities, finance leases | 26 | 253 |
Non-current portion of lease liabilities, operating leases | 33,000 | 33,723 |
Non-current portion of lease liabilities, finance leases | $ 41 | $ 336 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization |
Leases - Schedule of Total Leas
Leases - Schedule of Total Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 1,032 | $ 3,101 |
Finance lease cost: | ||
Amortization of right-of-use assets | 9 | 84 |
Interest on finance lease liabilities | 0 | 24 |
Total lease cost | $ 1,041 | $ 3,209 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Operating | |
Remainder of 2020 | $ 899 |
2021 | 3,610 |
2022 | 3,665 |
2023 | 3,699 |
2024 | 3,549 |
Thereafter | 47,159 |
Total undiscounted minimum future lease payments | 62,581 |
Imputed Interest | 28,746 |
Present value of lease liabilities | $ 33,835 |
Leases - Maturities of Finance
Leases - Maturities of Finance Lease Liabilities (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Finance | |
Remainder of 2020 | $ 9 |
2021 | 22 |
2022 | 15 |
2023 | 15 |
2024 | 8 |
Thereafter | 0 |
Total undiscounted minimum future lease payments | 69 |
Imputed Interest | 2 |
Present value of lease liabilities | $ 67 |
Leases - Schedule of Weighted A
Leases - Schedule of Weighted Average Remaining Lease Term (Details) | Sep. 30, 2020 |
Weighted-average remaining lease term | |
Operating Leases | 15 years 8 months 12 days |
Finance Leases | 2 years 10 months 28 days |
Weighted-average discount rate | |
Operating Leases | 8.33% |
Finance Leases | 2.56% |
Industry Segments (Details)
Industry Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||
Net sales | $ 59,266 | $ 73,640 | $ 200,099 | $ 237,222 | |
Operating (loss) income | (12,574) | 79 | (24,176) | 95 | |
Acquisition related costs and other | 656 | 90 | 803 | 438 | |
Proxy contest costs | 207 | 0 | 3,105 | 0 | |
Earn-out adjustments | (146) | (1,242) | (969) | (1,643) | |
Gain on lease modification | 171 | 0 | 171 | 0 | |
Interest expense | 452 | 944 | 1,703 | 2,977 | |
Change in fair value of interest rate swap | (16) | 21 | 65 | 145 | |
Other (income) expense, net | 59 | 180 | (1,244) | (224) | |
Loss before income taxes | (13,069) | (1,066) | (24,700) | (2,803) | |
Identifiable assets | 224,715 | 224,715 | $ 257,197 | ||
Metals Segment | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 47,079 | 60,121 | 159,761 | 195,728 | |
Specialty Chemicals Segment | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 12,187 | 13,519 | 40,338 | 41,494 | |
Operating segment | Metals Segment | |||||
Segment Reporting Information [Line Items] | |||||
Operating (loss) income | (11,563) | 450 | (19,784) | 3,125 | |
Identifiable assets | 157,974 | 157,974 | 186,758 | ||
Operating segment | Specialty Chemicals Segment | |||||
Segment Reporting Information [Line Items] | |||||
Operating (loss) income | 1,061 | 846 | 3,508 | 2,387 | |
Identifiable assets | 25,004 | 25,004 | 25,428 | ||
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Unallocated corporate expenses | 1,526 | 2,369 | 5,132 | 6,622 | |
Identifiable assets | 41,737 | 41,737 | $ 45,011 | ||
Segment Reconciling Items | |||||
Segment Reporting Information [Line Items] | |||||
Earn-out adjustments | (146) | (1,242) | (969) | (1,643) | |
Gain on lease modification | $ (171) | $ 0 | $ (171) | $ 0 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) | Jan. 01, 2019 | Dec. 20, 2018 |
$20 million Term loan, due February 1, 2024 | ||
Business Acquisition [Line Items] | ||
Debt term | 5 years | 5 years |
Principal amount of debt | $ 20,000,000 | $ 20,000,000 |
American Stainless Tubing, Inc. | ||
Business Acquisition [Line Items] | ||
Purchase price | $ 21,900,000 | |
American Stainless Tubing, Inc. | American Stainless | ||
Business Acquisition [Line Items] | ||
Period for which earn out payments will be received | 3 years | |
American Stainless Tubing, Inc. | American Stainless | Earn-Out Payment | ||
Business Acquisition [Line Items] | ||
Earn out payment, target percentage | 6.50% |
Acquisitions - Schedule of Prel
Acquisitions - Schedule of Preliminary Allocation of Total Consideration of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 6,810 | $ 17,558 | ||
American Stainless Tubing, Inc. | ||||
Business Acquisition [Line Items] | ||||
Inventories | $ 5,564 | $ 5,564 | ||
Accounts receivable | 3,534 | 3,534 | ||
Other current assets - production and maintenance supplies | 605 | 605 | ||
Property, plant and equipment | 2,793 | 2,793 | ||
Customer list intangible | 9,504 | 10,000 | ||
Goodwill | 7,758 | 7,044 | ||
Contingent consideration (earn-out liability) | (6,366) | (6,148) | ||
Accounts payable | (1,400) | (1,400) | ||
Other liabilities | (97) | (97) | ||
Total consideration | 21,895 | $ 21,895 | ||
Revisions | ||||
Inventories | 0 | |||
Accounts receivable | 0 | |||
Other current assets - production and maintenance supplies | 0 | |||
Property, plant and equipment | 0 | |||
Customer list intangible | (496) | |||
Goodwill | 714 | |||
Contingent consideration (earn-out liability) | (218) | |||
Accounts payable | 0 | |||
Other liabilities | 0 | |||
Total consideration | $ 0 |
Acquisitions - Results of Opera
Acquisitions - Results of Operations Since Acquisition (Details) - American Stainless Tubing, Inc. - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Business Acquisition [Line Items] | ||||
Net sales | $ 8,020 | $ 8,469 | $ 22,920 | $ 26,539 |
Income before taxes | $ (4,233) | $ 902 | $ (2,515) | $ 2,001 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 21, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Equity [Abstract] | |||||
Number of shares authorized to be repurchased (in shares) | 850,000 | ||||
Period for shares to be repurchased | 24 months | ||||
Number of shares repurchased (in shares) | 0 | 0 | 59,617 | 0 | |
Stock repurchase program average price (in dollars per share) | $ 10.65 | ||||
Share repurchase aggregate cost | $ 635 | ||||
Stock repurchase program, number of remaining shares authorized to be repurchased (in shares) | 790,383 | 790,383 |
Stockholders' Equity - Sharehol
Stockholders' Equity - Shareholder Rights Plan (Details) | Mar. 31, 2020$ / sharesshares | Sep. 30, 2020$ / shares | Jun. 27, 2020$ / shares | Dec. 31, 2019$ / shares |
Equity [Abstract] | ||||
Shareholder rights plan, ownership trigger threshold | 15.00% | |||
Right dividend declared, per share of common stock held | 1 | |||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 | $ 1 |
Number of securities called by each right (in shares) | shares | 0.5 | |||
Right, common stock purchase price (in dollars per share) | $ 22.50 | |||
Right, common stock purchase price, full right equivalent (in dollars per share) | $ 45 |
Revenues - Schedule of Disaggre
Revenues - Schedule of Disaggregated Revenues by Source (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 59,266 | $ 73,640 | $ 200,099 | $ 237,222 |
Fiberglass and steel liquid storage tanks and separation equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 538 | 5,552 | 4,994 | 25,628 |
Heavy wall seamless carbon steel pipe and tube | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 5,436 | 7,963 | 18,408 | 23,252 |
Stainless steel pipe and tube | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 37,231 | 40,993 | 120,265 | 128,299 |
Galvanized pipe and tube | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 3,875 | 5,613 | 16,094 | 18,549 |
Specialty chemicals | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 12,186 | $ 13,519 | $ 40,338 | $ 41,494 |
Proxy Contest and Related Cos_2
Proxy Contest and Related Costs (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2020board_memberdirector | |
Other Income and Expenses [Abstract] | |||||
Proxy contest costs | $ | $ 207 | $ 0 | $ 3,105 | $ 0 | |
Number of board members re-elected | board_member | 5 | ||||
Number of directors elected | director | 3 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2020 | Jun. 30, 2020 | |
Subsequent Event [Line Items] | ||
Extraordinary expenses | $ 636 | |
Palmer of Texas | ||
Subsequent Event [Line Items] | ||
Losses from suspended operations | $ 740 | $ 1,560 |
Uncategorized Items - synl-2020
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201602Member |