(864) 585-3605
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   X     No       .

Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of the Exchange Act. Yes ____ No   X  

The number of shares outstanding of the registrant's common stock as of July 2, 2005 was 6,072,480.

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Inventories are stated at the lower of cost (first-in, first-out method) or market.

At the end of 2004, the Company sold certain of the assets associated with the Blackman Uhler, LLC dye business effective January 31, 2005. The sale has been completed and relevant operations were transferred to the purchaser by the end of the first quarter of 2005. The operations of the Colors Segment are being reported as discontinued operations.

Included in Deferred Charges and Other Assets is $2,051,000 of goodwill representing the excess of cost over fair value of net assets of businesses acquired. The amount recorded is evaluated annually for impairment.

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The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking the hedge transactions. In this documentation, the Company specifically identifies the asset, liability and non-cancelable commitment that has been designated as a hedged item and states how the hedging instrument is expected to hedge the risks related to that item. The Company formally measures effectiveness of its hedging relationships both at the hedge inception and on an ongoing basis. The Company discontinues hedge accounting prospectively when it determines that the derivative is no longer effective in offsetting changes in the fair value or cash flows of a hedged item; when the derivative expires; when it is probable that the forecasted transaction will not occur; when a hedged firm commitment no longer meets the definition of a firm commitment; or when management determines that designation of the derivative as a hedge instrument is no longer appropriate.

In May 2005, the Company entered into a derivative transaction to hedge the price of nickel, a component of stainless steel raw materials. The futures contract covers approximately 100 metric tonnes of nickel and expires in December 2005. As of July 2, 2005, the condensed consolidated balance sheet includes a deferred current asset and an offsetting current liability of $179,000, representing the fair value of the contract on July 2, 2005. The effect on cash of settling this amount is expected to be offset by the difference in the price paid for the nickel surcharge component of the raw materials being hedged.

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The following is management's discussion of certain significant factors that affected the Company during the quarter ended July 2, 2005.

Consolidated sales for the quarter and first six months of 2005 from continuing operations were up, increasing 25 and 23 percent, respectively, compared to the same periods one year ago. The Company generated consolidated net income from continuing operations of $1,043,000, or $.17 per share for the second quarter of 2005 compared to net income from continuing operations of $653,000, or $.11 per share, in 2004's second quarter. For the first six months, the Company generated consolidated net income from continuing operations of $2,541,000, or $.41 per share compared to net income from continuing operations of $1,380,000, or $.23 per share in 2004. The Company recorded net losses from discontinued operations of $11,000, or $.00 per share, and $51,000, or $.01 per share, for the quarter and first six months of 2005, respectively, compared to losses of $212,000, or $.04 and $274,000, or $.05 for the same periods last year. As a result, the Company had net income of $1,032,000, or $.17 per share, and $2,490,000, or $.40 per share, for the second quarter and first six months of 2005, respectively, compared to net income of $441,000, or $.07 per share, and $1,106,000, or $.18 per share, for the same periods last year.

Sales in the Specialty Chemicals Segment were up 13 percent for the second quarter and 18 percent for the first six months of 2005, respectively, from the prior year. However, operating income declined 34 percent for the second quarter and four percent for the first six months, respectively, from the prior year. Although the Cleveland, Tennessee location continued to experience good increases in sales and profits, the Spartanburg, S.C. location performed poorly for the quarter in both sales and profits causing the operating income decline experienced in the quarter compared to the same quarter last year. Spartanburg's decline in sales came from a decline in contract manufacturing in the second quarter as contract customers' product requirements were either reduced or pushed out into subsequent quarters. The reduction in sales created the poor operating results coming primarily from negative manufacturing variances. As discussed in previous quarters, the Segment has introduced a new line of fire retardant chemicals and began receiving orders for the products at the end of the first quarter of 2005. Sales order activity has increased steadily throughout the second quarter to a variety of customers. Applications for this new line of chemicals include mattresses, furniture and home appliances. Proposed Federal fire retardant regulations governing mattress flammability are expected to become effective in January 2007, and management expects similar regulations covering furniture and appliances to follow shortly thereafter. Regulations already exist in California requiring mattress manufacturers to utilize fire retardant products that conform to the new regulations in their production process which began January 1, 2005. Qualifications of our products continue to have good success in each of the applications. In addition, our products offer a safer alternative to the use of certain compounds used in products currently servicing these industries. As we begin the third quarter, activity among the major mattress manufacturers related to this issue has picked up significantly caused by the expected 2007 regulation deadline. Based on the positive test results our products continue to achieve, management continues to expect the demand for fire retardant products to ramp up in the fourth quarter of 2005 and grow into significant volumes in the first six months of 2006. Management anticipates that sales activity from contract manufacturing at the Spartanburg location will improve during the third and fourth quarter to levels more consistent with the first quarter of 2005. This Segment's business tends to be impacted by general economic conditions, and assuming the increase in contract manufacturing and no significant downturn in the general economy, management expects this Segment to continue to operate profitably going forward.

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Dollar sales for the Metals Segment increased 32 percent for the second quarter and 26 percent for the first six months of 2005 from the same periods a year earlier. The increases resulted from 36 percent and 25 percent higher average selling prices partially offset by four percent and 17 percent lower unit volumes compared to last year's second quarter and year to date amounts, respectively. Operating income increased 60 percent and 78 percent for the quarter and year-to-date, respectively, compared to the same periods last year. Surcharges paid on stainless steel raw materials increased about 45 percent in the second quarter compared to the same quarter in 2004, but increased only about nine percent from the first quarter of 2005 halting the significant increases experienced over the past several quarters. The Segment was able to pass through most of these cost increases which accounted for most of the increase in selling prices. Consistent with the first quarter of 2005, commodity pipe sales in the second quarter contributed to the decline in lower unit volumes from the second quarter of 2004, partially offset by higher margin specialty alloy sales. Because of the steadily increasing raw material and selling prices experienced in the quarter and first six months, the Segment generated higher profits from selling lower cost inventories which, coupled with the increase in special alloy sales, contributed to the significant profit improvement experienced for the quarter and six months compared to the same periods last year. Piping systems generated operating profits in the quarter and six months of 2005 compared to losses experienced in the same periods of 2004. Piping systems' backlog improved to $18,000,000 at the end of the second quarter of 2005 which was up $5,100,000, or 40 percent, from the first quarter of 2005 and eight percent over the 2004 second quarter end backlog of $16,700,000. A significant amount of the increase came from a LNG project to be completed over the first half of 2006. Market conditions for commodity pipe softened during the second quarter carrying over into the beginning of the third quarter. However, specialty alloy sales continue to be strong and management remains optimistic about the current conditions that exist in the specialty alloy markets. The Segment has been successful in penetrating new markets, such as projects in the LNG industry, where management believes there is significant growth potential. If piping systems can continue to generate sufficient volume through its operations, and demand for commodity and special alloy piping continue at their current levels, management believes this Segment will continue to operate profitably.

Consolidated selling and administrative expense for the second quarter and first six months of 2005 increased $227,000, or ten percent, and $538,000, or eleven percent, respectively, compared to the same periods last year. However the expense was eight percent of sales for the quarter and year to date compared to nine percent for the same periods last year. The dollar increase for the quarter resulted principally from profit incentives and environmental compliance costs. The Company is providing income taxes at an effective tax rate of 30 percent in the first six months of 2005 compared to 35 percent in the same period last year, which resulted from reevaluating accruals for certain income tax contingencies provided for in previous periods.

At the end of 2004, the Company sold certain of the assets associated with the Blackman Uhler, LLC ("BU") dye business effective January 31, 2005. The sale has been completed and relevant operations were transferred to the purchaser by the end of the first quarter of 2005. The operations of the Colors Segment are being reported as discontinued operations and the loss from discontinued operations reported for the quarter and first six months of 2005 came primarily from payments of severance to terminated employees.

In the first six months of 2005, accounts receivable increased by $4,012,000 from the year ended 2004 amount. The increase resulted from the significant increase in sales, primarily in the Metals

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Segment, as discussed above, over the fourth quarter of 2004. Inventories declined $4,638,000 over the first six months compared to the 2004 year ended amount as a result of planned inventory reductions in the Metals Segment. The sale of the BU dye business, along with collections of its accounts receivables, generated approximately $4,000,000 of cash during the first quarter and was included in the net cash provided by discontinued operating activities. These funds and net cash generated from continuing operating activities were used to reduce long term debt by $11,064,000 by the end of the second quarter from the year end balance.

This Form 10-Q includes and incorporates by reference "forward-looking statements" within the meaning of the securities laws. All statements that are not historical facts are "forward-looking statements." The words "estimate," "project," "intend," "expect," "believe," "anticipate," "plan" and similar expressions identify 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. 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, unavailability of debt financing on acceptable terms and exposure to increased market interest rate risk, inability to comply with covenants and ratios required by our debt financing arrangements 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 in this Form 10-Q.

Based on the evaluation required by 17 C.F.R. Section 240.13a-15(b) or 240.15d-15(b) of the Company's disclosure controls and procedures (as defined in 17 C.F.R. Sections 240.13a-15(e) and 240.15d-15(e)), the Company's chief executive officer and chief financial officer concluded that the effectiveness of such controls and procedures, as of the end of the period covered by this quarterly report, was adequate.

No disclosure is required under 17 C.F.R. Section 229.308(c).

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