Annual report pursuant to Section 13 and 15(d)

Industry Segments

v3.19.1
Industry Segments
 12 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]  
Industry Segments
Industry Segments
The Company's business is divided into two operating segments: Metals and Specialty Chemicals. The Company identifies such segments based on products and services, long-term financial performance and end markets targeted. The Metals Segment operates as three reporting units including Synalloy Metals, Inc., a wholly-owned subsidiary which owns 100 percent of BRISMET, Palmer and Specialty, both wholly-owned subsidiaries of the Company. BRISMET manufactures pipe and tube from stainless steel and other alloys, Palmer produces fiberglass and steel storage tanks and Specialty is a master distributor of seamless carbon pipe and tube. The Metal Segment's products, some of which are custom-produced to individual orders and required for corrosive and high-purity processes, are used principally by the chemical, petrochemical, pulp and paper, mining, power generation (including nuclear), water and wastewater treatment, liquid natural gas, brewery, food processing, petroleum, pharmaceutical and other industries. Products include pipe, storage tanks, pressure vessels and a variety of other components. The Specialty Chemicals Segment operates as one reporting unit which includes MS&C, a wholly owned subsidiary of the Company which owns 100 percent of MC, and CRI Tolling, a wholly owned subsidiary of the Company. The Specialty Chemicals Segment manufactures a wide variety of specialty chemicals for the carpet, chemical, paper, metals, mining, agricultural, fiber, paint, textile, automotive, petroleum, cosmetics, mattress, furniture, janitorial and other industries. MC manufactures lubricants, surfactants, defoamers, reaction intermediaries and sulfated fats and oils. CRI Tolling provides chemical tolling manufacturing resources to global and regional companies and contracts with other chemical companies to manufacture certain pre-defined products.
The chief operating decision maker evaluates performance and determines resource allocations based on a number of factors, the primary measure being operating income (loss). The accounting policies of the segments are the same as those described in the summary of significant accounting policies.
Segment operating income is the segment's total revenue less operating expenses. Identifiable assets, all of which are located in the United States, are those assets used in operations by each segment. The Metals Segment's identifiable assets did not include any goodwill in 2016. In relation to 2017 MUSA-Stainless and 2018 MUSA-Galvanized acquisitions (see Note 18), the Metals Segment recognized goodwill of $4,648,795 in 2017 and $3,796,467 in 2018, respectively. The Specialty Chemicals Segment's identifiable assets include goodwill of $1,354,730 in 2018 and 2017. Centralized data processing and accounting expenses are allocated to the two segments based upon estimates of their percentage of usage. Unallocated corporate expenses include environmental charges of $50,617, $37,748 and $48,000 for 2018, 2017 and 2016, respectively. Corporate assets consist principally of cash, certain investments and equipment.
Segment Information:
All values are for continuing operations only.
 
2018
 
2017
 
2016
Net sales
 
 
 
 
 
Metals Segment
$
222,242,145

 
$
152,957,195

 
$
90,214,537

Specialty Chemicals Segment
58,599,274

 
48,190,487

 
48,351,245

 
$
280,841,419

 
$
201,147,682

 
$
138,565,782

Operating income (loss)
 

 
 

 
 

Metals Segment
$
27,543,907

 
$
5,424,624

 
$
(4,820,374
)
Gain (loss) on sale-leaseback
239,604

 
239,604

 
(2,166,136
)
   Total Metals Segment
27,783,511

 
5,664,228

 
(6,986,510
)
Specialty Chemicals Segment
3,879,405

 
4,295,576

 
4,887,143

Gain (loss) on sale-leaseback
94,669

 
94,669

 
(205,642
)
   Total Specialty Chemicals Segment
3,974,074

 
4,390,245

 
4,681,501

 
31,757,585

 
10,054,473

 
(2,305,009
)
 
 
 
 
 
 
Unallocated corporate expenses
7,877,847

 
6,513,839

 
5,835,162

Earn-out adjustments
1,430,682

 
688,523

 
—

Acquisition related costs
1,211,797

 
794,983

 
106,227

Operating income (loss)
21,237,259

 
2,057,128

 
(8,246,398
)
Interest expense
2,210,506

 
985,366

 
932,572

Change in fair value of interest rate swap
(19,484
)
 
(96,696
)
 
12,997

Other income, net
2,572,598

 
(310,043
)
 
—

Income (loss) before income taxes
$
16,473,639

 
$
1,478,501

 
$
(9,191,967
)
 
 
 
 
 
 
Identifiable assets
 

 
 

 
 

Metals Segment
$
192,195,733

 
$
130,456,857

 
 
Specialty Chemicals Segment
28,174,675

 
25,394,078

 
 
Corporate
8,028,438

 
4,023,215

 
 
 
$
228,398,846

 
$
159,874,150

 
 
Depreciation and amortization
 

 
 

 
 

Metals Segment
$
7,197,814

 
$
6,280,681

 
$
5,132,506

Specialty Chemicals Segment
1,427,629

 
1,302,579

 
1,449,437

Corporate
149,734

 
154,552

 
113,047

 
$
8,775,177

 
$
7,737,812

 
$
6,694,990

Capital expenditures
 

 
 

 
 

Metals Segment
$
5,969,216

 
$
3,405,552

 
$
2,198,535

Specialty Chemicals Segment
1,297,762

 
1,649,967

 
475,703

Corporate
87,759

 
223,089

 
370,173

 
$
7,354,737

 
$
5,278,608

 
$
3,044,411

Sales by product group
 
 
 
 
 
Specialty chemicals
$
58,599,274

 
$
48,190,487

 
$
48,351,245

Stainless steel pipe
146,237,630

 
100,253,823

 
56,065,642

Seamless carbon steel pipe and tube
32,473,950

 
25,103,641

 
14,913,133

Liquid storage tanks and separation equipment
31,653,832

 
27,599,731

 
19,235,762

Galvanized pipe and tube
11,876,733

 
—

 
—

 
$
280,841,419

 
$
201,147,682

 
$
138,565,782

Geographic sales
 

 
 

 
 

United States
$
273,244,175

 
$
196,172,279

 
$
132,313,157

Elsewhere
7,597,244

 
4,975,403

 
6,252,625

 
$
280,841,419

 
$
201,147,682

 
$
138,565,782