Annual report pursuant to Section 13 and 15(d)

Industry Segments

v2.4.1.9
Industry Segments
 12 Months Ended
Jan. 03, 2015
Segment Reporting [Abstract]  
Industry Segments
Industry Segments
The Company operates in two principal industry segments: metals and specialty chemicals. The Company identifies such segments based on products and services. The Metals Segment consists of 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 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, many 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 and a variety of other components. The Specialty Chemicals Segment consists of Manufacturers Soap and Chemical Company, a wholly owned subsidiary of the Company which owns 100 percent of MC, and CRI Tolling, LLC, 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.
Segment operating income is the segment's total revenue less operating expenses, excluding interest expense and income taxes. 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 include goodwill of $21,895,000 and $15,898,000 in 2014 and 2013, respectively, and the Specialty Chemicals Segment's identifiable assets include goodwill of $1,355,000 in 2014 and 2013. 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 income of $13,000 for 2014 and environmental charges of $17,000 and $46,000 for 2013 and 2012, respectively. Corporate assets consist principally of cash, certain investments, and equipment.
One customer accounted for ten percent of the Metals Segment's revenues in 2013. There were no customers representing more than ten percent of the Metals Segment's revenues in2014 and 2012. The Specialty Chemicals Segment has one domestic customer that accounted for approximately 31 percent of revenues for 2014 with a different domestic customer representing 40 percent of revenues for 2013, and 28 percent of revenues in 2012. The change in customers resulted from two of the three product lines which use our products being sold to another company in early 2014. The Specialty Chemicals Segment successfully retained the acquiring company's business. This new customer is a large global company, and the purchases by this customer are derived from two different business units that operate autonomously from each other. Even so, loss of this customer's revenues would have a material adverse effect on the Specialty Chemicals Segment and the Company.
In order to establish stronger business relationships, the Metals Segment uses only a few raw material suppliers. Seven suppliers furnish about 82 percent of total dollar purchases of raw materials, with one supplier furnishing 42 percent. However, the Company does not believe that the loss of this supplier would have a materially adverse effect on the Company as raw materials are readily available from a number of different sources, and the Company anticipates no difficulties in fulfilling its requirements. For the Specialty Chemicals Segment, most raw materials are generally available from numerous independent suppliers and about 49 percent of total purchases are from its top eight suppliers. While some raw material needs are met by a sole supplier or only a few suppliers, the Company anticipates no difficulties in fulfilling its raw material requirements. 
Segment Information:
All values are for continuing operations only.
(Amounts in thousands)
2014
 
2013
 
2012
Net sales
 
 
 
 
 
Metals Segment
$
134,304

 
$
140,233

 
$
114,788

Specialty Chemicals Segment
65,201

 
56,518

 
51,374

 
$
199,505

 
$
196,751

 
$
166,162

Operating income
 

 
 

 
 

Metals Segment
$
13,511

 
$
1,263

 
$
5,660

Specialty Chemicals Segment
6,130

 
5,743

 
4,843

 
19,641

 
7,006

 
10,503

Less unallocated corporate expenses
3,292

 
3,243

 
3,165

Operating income
16,349

 
3,763

 
7,338

Acquisition related costs
302

 
264

 
881

Interest expense
1,092

 
1,357

 
601

Change in fair value of interest rate swap
426

 
(741
)
 
114

Palmer earn-out adjustment
(3,476
)
 
—

 
—

Gain on bargain purchase, net of taxes
—

 
(1,077
)
 
—

Other income, net
—

 
(148
)
 
(135
)
Income before income taxes
$
18,005

 
$
4,108

 
$
5,877

 
 
 
 
 
 
Identifiable assets
 

 
 

 
 

Metals Segment
$
145,558

 
$
111,952

 
 
Specialty Chemicals Segment
32,504

 
28,041

 
 
Corporate
9,787

 
10,499

 
 
  Assets held for sale
—

 
12,768

 
 
 
$
187,849

 
$
163,260

 
 
Depreciation and amortization
 

 
 

 
 

Metals Segment
$
4,078

 
$
3,809

 
$
2,339

Specialty Chemicals Segment
974

 
659

 
435

Corporate
139

 
204

 
188

 
$
5,191

 
$
4,672

 
$
2,962

Capital expenditures
 

 
 

 
 

Metals Segment
$
3,123

 
$
4,194

 
$
3,353

Specialty Chemicals Segment
4,913

 
1,397

 
1,066

Corporate
30

 
57

 
123

 
$
8,066

 
$
5,648

 
$
4,542

Geographic sales
 

 
 

 
 

United States
$
191,032

 
$
189,447

 
$
156,795

Elsewhere
8,473

 
7,304

 
9,367

 
$
199,505

 
$
196,751

 
$
166,162