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Synalloy's Third Quarter Earnings Per Share Increase By 122% Excluding Palmer Acquisition Costs

Stocks in this article: SYNL

SPARTANBURG, S.C., Oct. 24, 2012 (GLOBE NEWSWIRE) -- Synalloy Corporation (Nasdaq:SYNL), a producer of stainless steel pipe, fiberglass (FRP) and steel storage tanks and specialty chemicals and a fabricator of stainless and carbon steel piping systems announces that the third quarter of 2012 produced net sales of $50,271,000, up 9% compared to net sales of $46,193,000 for the third quarter of 2011. Net earnings for the third quarter of 2012 were $843,000 or $0.13 per share. This compares to net earnings of $571,000, or $0.09 per share for 2011's third quarter. For the first nine months, net sales for 2012 were $144,521,000, up 11% compared to net sales of $130,334,000 for the first nine months of 2011. Net earnings were $3,270,000 or $0.51 per share for the first nine months of 2012 compared to $4,780,000 or $0.75 per share for the same period of 2011. Inventory losses in our Metals Segment had a larger negative impact on the Company's reported earnings in this year's third quarter and first nine months compared to the same periods of the prior year. The approximate effect of inventory losses on this year's third quarter and first nine months results was a reduction of reported earnings by $0.15 and $0.37 per share, respectively, while reducing reported earnings per share for the same periods of the prior year by $0.13 and $0.08 per share, respectively. In addition, the Company recorded $600,000 of acquisition costs associated with our acquisition of Palmer of Texas ("Palmer") in the third quarter of 2012. The acquisition costs reduced earnings per share for the third quarter and first nine months of 2012 by $0.07.

Metals Segment

Sales in the third quarter of 2012 totaled $35,580,000, a decrease of 1% from the same quarter last year. Operating income was $1,282,000 and $912,000 for the third quarters of 2012 and 2011, respectively. Excluding Palmer results, sales for the third quarter 2012 would have been 13% lower than the prior year. The sales decrease resulted from a 15% decrease in average selling prices partially offset by a 2% increase in unit volumes. In the third quarter, the Segment experienced non-commodity unit volumes increasing 9% while commodity unit volume decreased 2%. Selling prices for both commodity and non-commodity prices decreased approximately 16% from the prior year. Average raw material surcharges, which result from fluctuating nickel prices, were $0.37 per pound lower for the third quarter of 2012 as compared to 2011. As surcharges decrease, selling prices decrease and customers delay their purchases as long as possible. The Segment is focusing on international sales efforts, which continue to show year-over-year sales growth. Operating income increased due to the addition of Palmer plus selling an increased percentage of higher-priced, higher margin special alloys in the third quarter of 2012 as compared to 2011.

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