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BASIS OF PRESENTATION: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States 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 footnotes required by generally accepted accounting principles 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. Operating results for the nine-month period ended September 28, 2002, are not necessarily indicative of the results that may be expected for the year ending December 28, 2002. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the period ended December 29, 2001.

CHANGE IN ACCOUNTING PRINCIPLE: In June 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets ("Statements") effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over their useful lives. The Company applied the new standards on accounting for goodwill and other intangible assets during the first nine months of 2002, which resulted in a one-time charge of $235,000, or $.04 per share, representing the cumulative effect of a change in accounting principle, recorded as a restatement in the first quarter and included in the year-to-date numbers. If the application of the non-amortization provisions of the Statements had been adopted as of the first quarter of 2001, net income and earnings per share would have increased by $28,000, or less than $.01 per share, and $83,000, or $.01 per share, for the three and nine months ended September 29, 2001, respectively.

Inventories are stated at the lower of cost (first-in, first-out method) or market. An inventory charge of $2,471,000 was recorded in the second quarter of 2002, $1,800,000 for the Colors Group and $671,000 for the Metals Segment. The Company has historically sold off excess inventory slowly to avoid distressed pricing that would be required to dispose of the excess inventory more quickly. With the price erosion that occurred over the first six months of the year and weak business conditions that currently exist, excess inventories were not reduced as much as planned. Therefore, excess inventories were written down to reflect management's estimate of the values that can be realized under a plan to dispose of excess inventories as quickly as feasible.

The Company is from time to time subject to various claims, other possible legal actions for product liability and other damages, and other matters arising out of the normal conduct of the Company's business. Management believes that based on present information, it is unlikely that liability, if any, exists that would have a materially adverse effect on the consolidated operating results or financial position of the Company.

Comprehensive (loss) and income was ($3,744,000) and ($4,950,000) for the three and nine months ended September 28, 2002, respectively, and ($273,000) and $142,000 for the three and nine months ended September 29, 2001, respectively. Comprehensive income consists of net income less unrealized gains and (losses) on the Company's foreign equity investment, of $0 and ($48,000), net of deferred taxes of $0 and tax benefit of $26,000, for the three and nine months ended September 28, 2002, respectively, and $20,000 and $3,000, net of deferred income taxes of $7,000 and $1,000 for the three and nine months ended September 29, 2001, respectively, and is recorded in Shareholders' Equity.

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On July 26, 2002, the Company entered into a new Credit Agreement with a new bank to provide a $19,000,000 line of credit expiring on July 25, 2004, and refinanced the Company's notes payable and long term debt replacing the existing bank indebtedness. Although the line of credit does not expire until 2004, the Company anticipates reducing the amount owed under the line of credit to approximately $10,000,000 over the next twelve months and has therefore classified $2,827,000 as a current liability. Current interest rates are prime plus .25 percent or LIBOR plus 2.75 percent, and can vary based on EBITDA performance from prime to prime plus .75 percent and LIBOR plus 2.50 percent to LIBOR plus 3.25 percent. Borrowings under the Agreement are limited to a borrowing base calculation including eligible accounts receivable, inventories, and cash surrender value of the Company's life insurance as defined in the Agreement. As of September 28, 2002, the amount available for borrowing was $16,500,000 of which $12,827,000 was borrowed leaving $3,673,000 of availability. Covenants include, among others, maintaining certain EBITDA and tangible net worth amounts, and restrictions on the payment of dividends.

In August 2001, the FASB issued Statements of Financial Accounting Standards No. 144, Accounting for the Impairment or disposal of Long-Lived Assets, effective for fiscal years beginning after December 15, 2001. The Company completed an impairment assessment on the plant and equipment located at Spartanburg, S.C., and at the end of the second quarter of 2002, recorded a $2,267,000 impairment loss on the plant and equipment, $1,786,000 related to the Colors Group and $481,000 to the Specialty Chemicals Group. The impairment loss was calculated based on the excess of the carrying amount of the long-lived assets over their fair value. Management utilized its best estimate to determine fair values including market conditions, experience in acquiring and disposing of similar plant and equipment, and estimates of future cash flows, to test for recoverability of the long-lived assets. After completing an analysis of the business at the site and exploring other options that were available, it became apparent that the facility could not adequately recover the fixed costs related to the facility under current business conditions. Accordingly, a write-down of the plant and equipment was recorded.

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The following is management's discussion of certain significant factors that affected the Company during the quarter ended September 28, 2002.

Consolidated sales for the quarter and year to date were down, decreasing five and nine percent, respectively, compared to the same periods one year ago. However, the Company reported $42,000 of consolidated net income for the quarter, or $.01 per share compared to a $293,000 net loss, or $.05 per share for the same period one year ago. The Company experienced a $4,860,000 net loss, or $.81 per share, year to date compared to net income of $139,000, or $.02 per share for the same period last year. Excluding charges discussed below, the net loss year to date for 2002 was $ $1,492,000, or $.25 per share.

Sales in the Colors Group declined 17 percent and 18 percent for the quarter and year to date, respectively, from the same periods last year because of lower sales prices for dyes. After experiencing four consecutive quarters of operating losses, the Group had $77,000 of operating income for the quarter. The operating income reflects improved market conditions and the Group's efforts to lower operating expenses and material costs in its dye business over the past six months. Pigment colors continued to generate a small operating profit for the quarter consistent with the first six months. The year-to-date operating loss, before write-downs discussed below, occurred partly from the reduction of excess inventories and unabsorbed operating costs incurred in the first two quarters of 2002. Demand for textile dyes has returned to more normal levels than the extremely low levels experienced in the fourth quarter of 2001 and first two quarters of 2002. Pounds sold have increased by more than 20 percent over the preceding quarter for the second and third quarters reflecting increases in overall demand and market share. The combination of the cost savings and volume increases has resulted in increased profitability incrementally over the first three quarters of 2002. At the end of the second quarter, the Company recorded inventory and plant and equipment writedowns as discussed below. At the beginning of September, the Group implemented additional cost reductions including reductions of personnel and non-critical operating expense items. Management believes that the writedowns and cost reductions have lowered operating costs to levels that should allow the Group to operate at break even or better under current levels of sales and material costs, although there is no assurance that this will occur.

Specialty Chemicals Group sales were up 17 percent for the third quarter and 10 percent for the first nine months compared to the same periods last year. The improved operating performance for the quarter resulted from a significant increase in toll and other contract business compared to the third quarter of last year. The significant loss incurred in the third quarter of last year resulted from the absence of hydrogenated product sales resulting from the Augusta plant closing and moving of related equipment during the quarter, and limited toll production from weak demand. Business conditions have shown improvement through the first three quarters of 2002 for this Group causing the favorable comparisons of year-to-date sales and operating income to the same periods last year. Management believes this trend should continue through the end of 2002, although there is no assurance that this will occur.

In the Metals Segment, dollar sales declined 8 percent for the quarter and 13 percent for the first nine months from the same periods a year earlier as a result of 14 percent and 24 percent lower average selling prices partially offset by 7 percent and 15 percent higher unit volumes for the quarter and year to date, respectively. Market conditions experienced in the first six months of 2002 continued through the third quarter as commodity prices remained weak and sales of higher-priced piping systems stayed at a very low level. Despite the poor market conditions, the Segment returned to profitability after two consecutive quarters of operating losses. However, the decline in prices resulting from extremely competitive market conditions, together with a product mix composed of a lower percentage of higher-margin large diameter pipe and piping systems, continued to negatively impact profitability. As a result of the poor conditions, pip-

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ing systems sustained a modest operating loss for the quarter and is responsible for almost all of the year-to-date operating loss. Beginning in September, cost reductions, including reductions of personnel and non-critical operating expense items, were implemented and market conditions began to improve slightly. These two factors resulted in the Segment achieving the operating income for the quarter.

Over the last month of the third quarter and early into the fourth quarter, sales demand for commodity pipe has improved and pricing appears to have stabilized somewhat. In addition, piping systems backlog continues to increase from the extremely low levels that existed at the end of the first quarter. If these favorable trends continue, they provide the opportunity for profitability to improve for the fourth quarter over the third quarter and first six months of 2002, although there is no assurance that this will occur.

In accordance with the requirements of FAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," and FAS 142, "Goodwill and Other Intangible Assets," impairment assessments were performed in the second quarter of 2002 on the plant and equipment located at Spartanburg, S.C. and goodwill. The assessment resulted in the recording at the end of the second quarter of a $2,267,000 impairment loss on the plant and equipment, $1,786,000 related to the Colors Group and $481,000 to the Specialty Chemicals Group. The devastating effect of cheap imports on the domestic textile industry led to a huge decrease in demand for textile dyes over the past several years. Primarily because of this, our Spartanburg plant has been substantially underutilized. After completing an analysis of the business at the site and exploring other options that were available, it became apparent that the facility could not adequately recover the fixed costs related to the facility under current business conditions. Accordingly, a write-down of the plant and equipment was recorded. The assessments also resulted in the write-off of $362,000 of goodwill, $201,000 in the Metals Segment and $161,000 in the Colors Group, which was recorded as a restatement in the first quarter reflecting the cumulative effect of a change in accounting principle, and is included in the year-to-date numbers above in accordance with FAS 142. An inventory charge of $2,471,000 was also recorded in the second quarter, $1,800,000 for the Colors Group and $671,000 for the Metals Segment. The Company has historically sold off excess inventory slowly to avoid distressed pricing that would be required to dispose of the excess inventory more quickly. With the price erosion that occurred over the first six months of the year and weak business conditions that existed, excess inventories were not reduced as much as planned. Most of the inventory write-down in the Metals Segment was the result of excess inventories of fittings, flanges and special alloy pipe related to the piping systems business. The unexpectedly low level of new orders impacted piping systems' products to the extent that use of some of this inventory became uncertain. Therefore, excess inventories were written down to reflect management's estimate of the values that could be realized under a plan to scrap, sell or return the excess inventory as quickly as feasible. Finally, a $97,000 environmental charge was accrued in the second quarter for the Colors Group to provide for a proposed settlement of a claim related to shipment of waste to an outside waste disposal site during the 1980s.

Selling and administrative expense for the quarter decreased $425,000, or 15 percent, and increased $189,000, or two percent year to date, compared to the same periods last year. The cost reductions discussed above coupled with increased selling expenses from the acquisition of the Dalton, Georgia business in the third quarter of last year by the Specialty Chemicals Group caused the decline for the quarter. Year to date, increased selling expenses from the Dalton acquisition and the $97,000 waste disposal claim recorded in the second quarter as detailed above, accounted for the year to date increase.

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Cash flows from operations totaled $4,599,000 during the first nine months of 2002 compared to $5,397,000 generated during the same period one year ago. The decline came primarily from the net operating loss and a decrease in cash used from the increase in accounts receivable of $1,144,000 from the same period last year, offset by an increase in cash generated from reductions in inventory of $1,068,000 and an increase in accounts payable of $1,846,000 from the same period last year. The Company expects that available cash and existing lines of credit will be sufficient to meet normal operating requirements, including capital expenditures over the near term.

The statements contained in this management discussion and analysis that is not historical facts may be forward looking statements. The forward looking statements are subject to certain risks and uncertainties, including without limitation those identified below, which could cause actual results to differ materially from historical results or those anticipated. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The following factors could cause actual results to differ materially from historical results or those anticipated: adverse economic conditions, the impact of competitive products and pricing, product demand and acceptance risks, raw material and other increased costs, customer delays or difficulties in the production of products, and other risks detailed from time to time in Synalloy's Securities and Exchange Commission filings. Synalloy Corporation assumes no obligation to update the information included herein.

(a)  Based on their evaluation of the issuer's disclosure controls and procedures (as defined in 17 C.F.R. Sections 240.13a-14(c) and 240.15d-14(c)) as of a date within 90 days prior to the filing of this quarterly report, the issuer's chief executive officer and chief financial officer concluded that the effectiveness of such controls and procedures was adequate.

(b)  There were no significant changes in the issuer's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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Item 1. Legal Proceedings

None

Item 2. Changes In Securities

None

None

None

None

None

The Company did not file any reports on Form 8-K during the three months ended September 28, 2002.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SYNALLOY CORPORATION
		(Registrant)
Date:  November 8, 2002	By:	/s/ Ralph Matera
		Ralph Matera

		President and Chief Executive Officer
Date:  November 8, 2002	By:	/s/ Gregory M. Bowie
		Gregory M. Bowie
		Vice President Finance

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I, Gregory M. Bowie, certify that: