Table of nickel alloy contained in purchased stainless steel inventory. The sales price of stainless steel product (containing nickel alloy) is subject to a variable pricing component for alloys (nickel, chrome, molybdenum and iron) contained in the product. Each month, industry pricing indices are published which set the following month’s price surcharges for those alloys. The Company typically holds approximately six to seven months of inventory, with fixed priced purchase orders (where the alloy pricing index is “locked”, eliminating the Company’s exposure) consisting of approximately 50 percent of held stainless steel inventories. As a result, the eventual sales prices for approximately 50 percent of held stainless steel inventories will vary until a customer order commitment is received, and the selling price is established. The Company’s downside exposure is limited to the potential that the total of the fair value of the nickel contracts would be reduced to zero, if nickel pricing does not decline to the contracted strike prices. The program is designed to mitigate but not eliminate the Company's nickel pricing exposure. The Company had a hedge position equal to 1,351,000 of pounds of nickel, representing 53 percent of the Company’s total nickel content of stainless steel pounds in inventory at December 31, 2017. The fair value of the nickel contracts at December 31, 2017 was an asset of approximately $9,000.Contents

Item 88. Financial Statements and Supplementary Data

~~The Company's~~


Index to Financial Statements			Page
Report of Independent Registered Public Accounting Firm (Moss Adams, LLP; Irvine, CA; PCAOB ID: 659)			27
Report of Independent Registered Public Accounting Firm (BDO USA, P.C.; Chicago, IL; PCAOB ID: 243)			30
Consolidated Balance Sheets as of December 31, 2023 and 2022			31
Consolidated Statements of Income (Loss) for the years ended December 31, 2023 and 2022			32
Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022			33
Consolidated Statements of Shareholders' Equity for the years ended December 31, 2023 and 2022			35
Notes to Consolidated Financial Statements			36
Note 1: Summary of Significant Accounting Policies			36
Note 2: Discontinued Operations			42
Note 3: Revenue Recognition			44
Note 4: Fair Value of Financial Instruments			45
Note 5: Property, Plant and Equipment			47
Note 6: Debt			47
Note 7: Leases			48
Note 8: Accrued Expenses			50
Note 9: Shareholders' Equity			50
Note 10: Accounting for Share-Based Payments			51
Note 11: Income Taxes			54
Note 12: Earnings Per Share			54
Note 13: Industry Segments			57
Note 14: Benefit Plans and Collective Bargaining Agreements			59
Note 15: Commitments and Contingencies			60
Note 16: Supplemental Financial Information			61
Note 17: Subsequent Events			62

Table of Contents

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Ascent Industries Co.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of Ascent Industries Co. (and subsidiaries) (the “Company”) as of December 31, 2023, the related consolidated statements of income (loss), shareholders’ equity and cash flows for the year ended December 31, 2023, and the related notes and schedule (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the consolidated financial statements ~~related notes, report~~referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023, and the consolidated results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, because of the effect of the material weaknesses identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We also have audited the adjustments to the 2022 financial statements for the retrospective presentation of discontinued operations, as described in Note 2. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2022 financial statements of the Company other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2022 financial statements taken as a whole.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting included in Item 9A. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment in Item 9A:

Table of Contents

•Information Technology - Management did not design and maintain effective information technology (IT) general controls in the areas of user access, change management, segregation of duties, and cyber-security for systems supporting many of the Company's key financial reporting processes. As a result, IT application controls and business process controls that are dependent on the ineffective IT general controls, or that rely on data produced from systems impacted by the ineffective IT general controls, are also deemed ineffective, which affects substantially all financial statement account balances and disclosures within the Company.

•Inventory - Management did not design and maintain effective controls over inventory.

•Revenue recognition – Management did not design and maintain effective controls over revenue and accounts receivable.

•Period-end financial reporting, journal entries, reconciliations, and account analyses - Management did not design and maintain effective controls to detect potential material misstatements to period-end financial statements through review of account reconciliations and account analyses on a timely basis. Additionally, management did not design and maintain effective controls over the review of journal entries.

•Complex Accounting - Management did not design and maintain management review controls at a sufficient level of precision around complex accounting areas such as income taxes.

We considered the material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the Company’s consolidated financial statements as of and for the year ended December 31, 2023, and our opinion on such consolidated financial statements was not affected.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and ~~report~~directors of the ~~independent registered~~company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Table of Contents

Goodwill Impairment

As described in Note 1 to the consolidated financial statements, the Company tests goodwill for impairment annually as of October 1 or between annual tests if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying value. In the third quarter of the year, the Company concluded an interim assessment should be performed and this resulted in a goodwill impairment expense of $11,389,000. Testing goodwill for impairment involves significant management judgment, requiring an assessment of whether the carrying value of the reporting unit can be supported by its fair value, which is estimated by using valuation techniques, such as the market approach (earnings multiples or transaction multiples for the industry in which the reporting unit operates) or the income approach (discounted cash flow method).

The principal considerations for our determination that the goodwill impairment test is a critical audit matter were that our evaluation of management’s valuation methods and assumptions utilized in estimating the fair value of the reporting unit involved significant audit effort, including the use of specialists, as well as especially challenging and subjective auditor judgment when performing audit procedures and evaluating the results of those procedures.

The primary procedures we performed to address this critical audit matter included:

•Testing management’s process for determining the fair value estimate of the reporting unit by performing the following procedures:

•Evaluating the methodologies used by management, including the relative weight assigned to the valuations indicated by the market and income approaches, and assessing management’s specialist’s knowledge, skill, and ability as well as the specialist’s relationship to the Company.

•Testing the completeness, accuracy, and reliability of underlying data used in the valuation model, including the mathematical accuracy of the analysis.

•Evaluating the reasonableness of the guidelines companies and market multiples used by management.

•Evaluating the reasonableness of significant assumptions used by management, including projected revenue, projected operating margin, discount rate, including performing arithmetic analysis to replicate management’s model, and sensitivity analysis.

•Utilizing valuation specialists to assist in evaluating the appropriateness of methods used and reasonableness of significant assumptions applied in the valuation model.

/s/ Moss Adams LLP

Irvine, California

April 1, 2024

We have served as the Company's auditor since 2023.

Table of Contents

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Ascent Industries Co.

Oak Brook, Illinois

Opinion on the Consolidated Financial Statements

We have audited, before the effects of the adjustments to retrospectively apply the change in accounting described in Note 2, the accompanying consolidated balance sheet of Ascent Industries Co. (the “Company”) as of December 31, 2022, and the related consolidated statements of income (loss), shareholders’ equity, cash flows, and financial statement schedule for the year then ended (the 2022 consolidated financial statements before the effects of the adjustments discussed in Note 2 are not presented herein). In our opinion, the 2022 consolidated financial statements, before the effects of the adjustments to retrospectively apply the change in accounting in Note 2, present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the change in accounting described in Note 2 and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by Moss Adams, LLP.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm ~~follow~~registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on ~~subsequent pages~~a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of ~~this report.~~the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ BDO USA, P.C.

We served as the Company's auditor from 2021 to 2023.

Chicago, Illinois

March 31, 2023

Ascent Industries Co.

Consolidated Balance Sheets

As of December 31, ~~2017~~2023 and ~~December 31, 2016~~

2017 2016
Assets
Current assets
Cash and cash equivalents $ 14,706
$ 62,873
Accounts receivable, less allowance for doubtful accounts of $35,000 and $82,000, respectively 28,704,481
18,028,946
Inventories, net
Raw materials 37,748,316
31,973,073
Work-in-process 9,491,408
9,897,857
Finished goods 24,885,457
18,928,579
Total inventories, net 72,125,181
60,799,509
Prepaid expenses and other current assets 6,802,072
7,272,569
Indemnified contingencies - see Note 13 —
11,339,888
Total current assets 107,646,440
97,503,785

Property, plant and equipment, net 35,080,009
27,324,092
Goodwill 6,003,525
1,354,730
Intangible assets, net 10,880,521
12,308,838
Deferred charges, net and other non-current assets 263,655
146,618

Total assets $ 159,874,150
$ 138,638,063

Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 24,256,812
$ 16,684,508
Accrued expenses 8,993,454
15,950,787
Total current liabilities 33,250,266
32,635,295

Long-term debt 25,913,557
8,804,206
Long-term portion of earn-out liability 3,170,099
—
Long-term deferred sale-leaseback gain 5,933,350
6,267,623
Deferred income taxes 635,910
1,609,492
Other long-term liabilities 1,270,542
728,892

Shareholders' equity
Common stock, par value $1 per share - authorized 24,000,000 shares; issued 10,300,000 shares 10,300,000
10,300,000
Capital in excess of par value 35,193,152
34,714,206
Retained earnings 58,129,382
57,936,533
Accumulated other comprehensive loss (10,864 ) —
103,611,670
102,950,739
Less cost of common stock in treasury - 1,566,769 and 1,630,690 shares, respectively 13,911,244
14,358,184
Total shareholders' equity 89,700,426
88,592,555
Commitments and contingencies – see Note 13

Total liabilities and shareholders' equity $ 159,874,150
$ 138,638,063

2022

(in thousands, except par value and share data)


	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	1,851	$	1,440
Accounts receivable, net	26,604		33,202
Inventories
Raw materials	21,020		33,405
Work-in-process	13,711		10,811
Finished goods	17,575		23,455
Total inventories	52,306		67,671

Prepaid expenses and other current assets	4,879		7,770

Assets held for sale	2,912		380
Current assets of discontinued operations	861		59,912
Total current assets	89,413		170,375

Property, plant and equipment, net	29,755		35,534
Right-of-use assets, operating leases, net	27,784		29,142
Goodwill	—		11,389
Intangible assets, net	8,496		10,001
Deferred income taxes	5,808		1,353
Deferred charges, net	104		203
Other non-current assets	1,935		1,862
Long-term assets of discontinued operations	—		9,184
Total assets	$	163,295	$	269,043

Liabilities and Shareholders' equity
Current liabilities:
Accounts payable	$	16,416	$	14,114

Accrued expenses and other current liabilities	5,108		5,509
Current portion of note payable	360		387
Current portion of long-term debt	—		2,464

Current portion of operating lease liabilities	1,140		1,015
Current portion of finance lease liabilities	292		280
Current liabilities of discontinued operations	1,473		9,709
Total current liabilities	24,789		33,478
Long-term debt	—		69,085

Long-term portion of operating lease liabilities	29,729		30,869
Long-term portion of finance lease liabilities	1,307		1,242

Other long-term liabilities	60		68
Long-term liabilities of discontinued operations	—		42
Total liabilities	$	55,885	$	134,784

Commitments and contingencies – see Note 15

Shareholders' equity:
Common stock - $1 par value: 24,000,000 shares authorized; 11,085,103 and 10,094,821 shares issued and outstanding, respectively	$	11,085	$	11,085
Capital in excess of par value	47,333		47,021
Retained earnings	58,517		85,146

	116,935		143,252
Less cost of common stock in treasury - 990,282 and 924,504 shares, respectively	(9,525)		(8,993)
Total shareholders' equity	107,410		134,259
Total liabilities and shareholders' equity	$	163,295	$	269,043

See accompanying notes to consolidated financial statements.

Ascent Industries Co.

Consolidated Statements of ~~Operations and Other Comprehensive~~ Income (Loss)

~~Years~~For the years ended December 31, ~~2017~~, 2023 and 2022

(in thousands, except per share data)


	2023		2022
Net sales	$	193,179	$	261,993
Cost of sales	191,653		218,706
Gross profit	1,526		43,287

Selling, general and administrative expense	26,712		27,640
Acquisition costs and other	855		1,104



Goodwill impairment	11,389		—

Operating (loss) income from continuing operations	(37,430)		14,543
Other (income) and expense
Interest expense	4,238		2,742


Other, net	(593)		(209)
(Loss) income from continuing operations before income taxes	(41,075)		12,010
Income tax benefit	(6,924)		(5,568)
(Loss) income from continuing operations	$	(34,151)	$	17,578
Income from discontinued operations, net of tax	7,522		4,488
Net (loss) income	$	(26,629)	$	22,066

Net (loss) income per common share from continuing operations
Basic	$	(3.37)	$	1.72
Diluted	$	(3.37)	$	1.69

Net income per common share from discontinued operations
Basic	$	0.74	$	0.44
Diluted	$	0.74	$	0.43

Net (loss) income per common share
Basic	$	(2.63)	$	2.16
Diluted	$	(2.63)	$	2.12

Weighted average number of common shares outstanding:
Basic	10,140		10,230
Diluted	10,140		10,410

See accompanying notes to consolidated financial statements.

Ascent Industries Co.

Consolidated Statements of Cash Flows

For the years ended December 31, ~~2016~~2023 and 2022

(in thousands)


	2023		2022
Cash flows from operating activities:
Net (loss) income	$	(26,629)	$	22,066
Income from discontinued operations, net of tax	7,522		4,488
Net (loss) income from continuing operations	(34,151)		17,578
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation expense	6,161		6,421
Amortization expense	1,505		1,853
Amortization of debt issuance costs	99		99

Goodwill impairment	11,389		—


Deferred income taxes	(6,924)		(5,568)



Payments of earn-out liabilities in excess of acquisition date fair value	—		(372)
(Reduction of) provision for losses on accounts receivable	(180)		478
Provision for losses on inventories	3,318		2,615
Loss (gain) on disposal of property, plant and equipment	246		(18)

Non-cash lease expense	242		414




Issuance of treasury stock for director fees	—		364
Share-based compensation expense	1,023		1,355
Changes in operating assets and liabilities:
Accounts receivable	6,778		(264)
Inventories	12,245		(13,685)
Other assets and liabilities	515		(211)
Accounts payable	1,650		(6,269)
Accounts payable - related parties	—		(2)
Accrued expenses	(401)		(2,127)
Accrued income taxes	3,129		(7,923)
Net cash provided by (used in) operating activities - continuing operations	6,644		(5,262)
Net cash provided by operating activities - discontinued operations	16,434		10,839
Net cash provided by operating activities	23,078		5,577

Cash flows from investing activities:
Purchases of property, plant and equipment	(2,885)		(3,394)
Proceeds from disposal of property, plant and equipment	—		99



Net cash used in investing activities - continuing operations	(2,885)		(3,295)
Net cash provided by (used in) investing activities - discontinued operations	53,386		(1,680)
Net cash provided by (used in) investing activities	50,501		(4,975)

Cash flows from financing activities:
Borrowings from long-term debt	256,606		443,363
Proceeds from note payable	900		967

Proceeds from exercise of stock options	—		175
Payments on long-term debt	(328,155)		(442,206)
Payments on note payable	(928)		(580)
Principal payments on finance lease obligations	(305)		(266)

Payments on earn-out liabilities	—		(484)
Repurchase of common stock	(1,287)		(1,343)

Net cash used in financing activities - continuing operations	(73,169)		(374)
Net cash used in financing activities - discontinued operations	—		(808)
Net cash used in financing activities	(73,169)		(1,182)

Increase (decrease) in cash and cash equivalents	410		(580)
Less: Cash and cash equivalents of discontinued operations	—		4
Cash and cash equivalents, beginning of period	1,441		2,017
Cash and cash equivalents, end of period	$	1,851	$	1,441

See accompanying notes to consolidated financial statements.

Ascent Industries Co.

Consolidated Statements of Cash Flows

For the years ended December 31, ~~2015~~2023 and 2022

(in thousands)


	Year Ended December 31,
Supplemental Disclosure of Cash Flow Information	2023		2022
Cash paid for:
Interest	$	4,175	$	2,230
Income taxes	864		7,859

Noncash Investing Activities:
Capital expenditures, not yet paid	$	653	$	751

See accompanying notes to consolidated financial statements.

2017 2016 2015
Net sales $ 201,147,682
$ 138,565,782
$ 175,460,438

Cost of sales 173,066,732
121,661,303
150,141,663

Gross profit 28,080,950
16,904,479
25,318,775

Selling, general and administrative expense 24,874,589
22,672,872
21,937,988
Acquisition related costs 794,983
106,227
499,761
Business interruption proceeds —
—
(1,246,024 )
Goodwill impairment —
—
17,158,249
(Gain) loss on sale-leaseback (334,273 ) 2,371,778
—
Operating income (loss) 2,745,651
(8,246,398 ) (13,031,199 )
Other (income) and expense

Interest expense 985,366
932,572
1,352,806
Change in fair value of interest rate swap (96,696 ) 12,997
41,580
Earn-out adjustment 688,523
—
(4,897,448 )
Casualty insurance gain —
—
(923,470 )
Other, net (310,043 ) —
(134,389 )
Income (loss) before income taxes 1,478,501
(9,191,967 ) (8,470,278 )
Provision for (benefit from) income taxes 137,139
(2,198,000 ) 1,799,000

Net income (loss) from continuing operations 1,341,362
(6,993,967 ) (10,269,278 )

Net loss from discontinued operations, net of tax —
(99,334 ) (1,251,058 )

Net income (loss) $ 1,341,362
$ (7,093,301 ) $ (11,520,336 )

Other comprehensive loss, net of tax:
Unrealized gains on available for sale securities, net of tax of $186,384 355,482
—
—
Reclassification adjustment for gains included in net
income, net of tax of $189,633 (366,346 ) —
—
Comprehensive income (loss) $ 1,330,498
$ (7,093,301 ) $ (11,520,336 )

Net income (loss) per common share from continuing operations:
Basic $ 0.15
$ (0.81 ) $ (1.18 )
Diluted $ 0.15
$ (0.81 ) $ (1.18 )

Net loss per diluted common share from discontinued operations:

Basic $ —
$ (0.01 ) $ (0.14 )
Diluted $ —
$ (0.01 ) $ (0.14 )

Ascent Industries Co.

Consolidated Statements of Shareholders' Equity

Common Stock
Capital in Excess of
Par Value
Retained Earnings Accumulated Other Comprehensive Income (Loss) Cost of Common Stock in Treasury Total
Balance at January 3, 2015 $ 10,300,000
$ 34,054,374
$ 79,167,323
$ —
$ (14,068,144 ) $ 109,453,553

Net loss —
—
(11,520,336 ) —
—
(11,520,336 )
Payment of dividends, $0.30 per share —
—
(2,617,513 ) —
—
(2,617,513 )
Issuance of 26,118 shares of common stock from the treasury —
(102,237 ) —
—
231,290
129,053
Stock options exercised for 666 shares, net —
2,408
—
—
5,894
8,302
Employee stock option and grant compensation —
521,695
—
—
—
521,695
Purchase of 100,400 shares of common stock —
—
—
—
(820,460 ) (820,460 )
Balance at December 31, 2015 10,300,000
34,476,240
65,029,474
—
(14,651,420 ) 95,154,294

Net loss —
—
(7,093,301 ) —
—
(7,093,301 )
Dividend on stock grant forfeiture —
—
360
—
—
360
Issuance of 62,124 shares of common stock from the treasury —
(221,507 ) —
—
547,125
325,618
Employee stock option and grant compensation —
459,473
—
—
—
459,473
Purchase of 29,500 shares of common stock —
—
—
—
(253,889 ) (253,889 )
Balance at December 31, 2016 10,300,000
34,714,206
57,936,533
—
(14,358,184 ) 88,592,555

Net income —
—
1,341,362
—
—
1,341,362
Other comprehensive loss, net of taxes —
—
—
(10,864 ) —
(10,864 )
Payment of dividends, $0.13 per share —
—
(1,148,513 ) —
—
(1,148,513 )
Issuance of 58,532 shares of common stock from the treasury —
(227,939 ) —
—
515,409
287,470
Stock options exercised for 5,389 shares, net —
68,469
—
—
(68,469 ) —
Employee stock option and grant compensation —
638,416
—
—
—
638,416
Balance at December 31, 2017 $ 10,300,000
$ 35,193,152
$ 58,129,382
$ (10,864 ) $ (13,911,244 ) $ 89,700,426

~~Consolidated Statements of Cash Flows~~

~~Years~~For the years ended December 31, ~~2017, December 31, 2016~~2023 and ~~December 31, 2015~~2022

(in thousands, except share and per share data)

2017 2016 2015
Operating activities
Net income (loss) $ 1,341,362
$ (7,093,301 ) $ (11,520,336 )
Income from discontinued operations, net of tax —
99,334
1,251,058
Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation expense 5,294,695
4,235,203
4,356,911
Amortization expense 2,443,117
2,459,787
2,277,480
Non-cash interest expense on debt issuance costs 60,529
72,290
120,521
Goodwill impairment —
—
17,158,249
Deferred income taxes (1,037,183 ) (1,407,462 ) 150,462
Gain on sale of available for sale securities (310,043 ) —
—
Earn-out adjustments 688,523
—
(4,897,448 )
Provision for (reduction of) losses on accounts receivable 201,641
(45,151 ) 60,855
Provision for losses on inventories 1,196,428
983,505
2,003,885
Loss (gain) on sale of property, plant and equipment 25,730
2,294,917
(18,277 )
Amortization of deferred gain on sale-leaseback (334,273 ) (83,569 ) —
Straight line lease cost on sale-leaseback 397,071
101,633
—
Casualty insurance gain —
—
(923,470 )
Change in cash value of life insurance —
1,502
(82,504 )
Change in fair value of interest rate swap (96,696 ) 12,997
41,581
Issuance of treasury stock for director fees 287,500
330,000
118,762
Employee stock option and grant compensation 638,416
459,473
521,695
Dividend on stock grant forfeiture —
360
—
Changes in operating assets and liabilities:

Accounts receivable (10,877,176 ) (37,676 ) 11,380,941
Inventories (7,088,100 ) 2,032,621
4,173,337
Other assets and liabilities 11,229,799
(11,767,808 ) (653,420 )
Accounts payable 7,572,308
4,418,578
(9,122,368 )
Accrued expenses (9,424,395 ) 9,582,445
(2,059,303 )
Accrued income taxes 26,197
(1,294,557 ) 3,038,362
Net cash provided by continuing operating activities 2,235,450
5,355,121
17,376,973
Net cash used in discontinued operating activities —
(3,843,137 ) (849,974 )
Net cash provided by operating activities 2,235,450
1,511,984
16,526,999
Investing activities

Purchases of property, plant and equipment (5,278,608 ) (3,044,411 ) (10,905,230 )
Proceeds from sale of property, plant and equipment 72,789
22,215,362
21,500
Purchases of available for sale securities (4,382,865 ) —
—
Proceeds from available for sale securities 4,141,564
—
—
Acquisition of the stainless pipe and tube assets of Marcegaglia USA, Inc.
(11,953,513 ) (3,000,000 ) —
Proceeds from casualty insurance —
—
1,219,048
Proceeds from life insurance policies —
1,502,283
720,518
Net cash (used in) provided by investing activities (17,400,633 ) 17,673,234
(8,944,164 )
Financing activities

Net borrowings from line of credit 17,109,351
6,928,640
990,929
Payments on long-term debt —
(26,068,228 ) (4,700,570 )
Payments on capital lease obligation (124,999 ) (65,966 ) (13,355 )
Payments on earn-out liability to MUSA sellers (518,456 ) —
—
Payments of debt issuance costs (200,367 ) (54,326 ) (65,367 )
Proceeds from exercised stock options —
—
8,302
Dividends paid (1,148,513 ) —
(2,617,513 )
Purchase of common stock —
(253,889 ) (820,460 )
Net cash provided by (used in) financing activities 15,117,016
(19,513,769 ) (7,218,034 )
(Decrease) increase in cash and cash equivalents (48,167 ) (328,551 ) 364,801
Cash and cash equivalents at beginning of year 62,873
391,424
26,623
Cash and cash equivalents at end of year $ 14,706
$ 62,873
$ 391,424


	Common Stock							Treasury Stock
	Shares	Amount		Capital in Excess of Par Value		Retained Earnings		Shares	Amount		Total
Balance December 31, 2021	11,085	$	11,085	$	46,058	$	63,080	918	$	(8,633)	$	111,590
Net income	—	—		—		22,066		—	—		22,066

Issuance of 86,274 shares of common stock from treasury	—	—		(449)		—		(86)	813		364
Exercise of stock options for 18,098 shares, net	—	—		5		—		(18)	170		175
Share-based compensation	—	—		1,407		—			—		1,407
Repurchase of 110,404 shares of common stock	—	—		—		—		110	(1,343)		(1,343)
Balance December 31, 2022	11,085	$	11,085	$	47,021	$	85,146	924	$	(8,993)	$	134,259
Net loss	—	—		—		(26,629)		—	—		(26,629)
Issuance of 77,330 shares of common stock from treasury	—	—		(751)		—		(77)	751		—

Share-based compensation	—	—		1,063		—			—		1,063
Repurchase of 143,108 shares of common stock	—	—		—		—		143	(1,283)		(1,283)

Balance December 31, 2023	11,085	$	11,085	$	47,333	$	58,517	990	$	(9,525)	$	107,410

See accompanying notes to consolidated financial statements.

Ascent Industries Co.

Notes to Consolidated Financial Statements

Note 11: Summary of Significant Accounting Policies

~~Description~~Ascent Industries Co. is an industrials company focused on the production of ~~Business~~

~~Synalloy Corporation (the "Company"), a Delaware corporation,~~stainless steel pipe and tube and specialty chemicals. Ascent Industries Co. was incorporated in 1958 as the successor to a chemical manufacturing business founded in ~~1945. Its charter is perpetual. The name was changed on July 31, 1967 from~~1945 known as Blackman Uhler Industries Inc. On August 5, 2022, we filed with the Secretary of State of the State of Delaware a Certificate of Amendment to our Certificate of Incorporation to change our corporate name from Synalloy Corporation to Ascent Industries Co., effective August 10, 2022. The Company's executive ~~offices are~~office is located at ~~4510 Cox Road,~~1400 16th Street, Suite ~~201, Richmond, Virginia 23060.~~270, Oak Brook, Illinois 60523. Unless indicated otherwise, the terms "Ascent", "Company," "we" "us," and "our" refer to Ascent Industries Co. and its consolidated subsidiaries.

The Company's business is divided into two reportable operating segments, the Metals Segment and the Specialty Chemicals Segment. The Metals Segment currently operates as three reportable units including Bristol Metals, LLC ("BRISMET"), Palmer of Texas Tanks, Inc. ("Palmer")Tubular Products and Specialty ~~Pipe & Tube, Inc. ("Specialty"). Two other operations, Bristol Fab and Ram-Fab, were sold or closed during 2014; see Note 19. BRISMET manufactures stainless steel and special alloy~~Chemicals. The Tubular Products segment serves markets through pipe and tube ~~Palmer manufactures~~and customers in the appliance, architectural, automotive and commercial transportation, brewery, chemical, petrochemical, pulp and paper, mining, power generation (including nuclear), water and waste-water treatment, liquid ~~storage solutions~~natural gas ("LNG"), food processing, pharmaceutical, oil and ~~separation equipment~~gas and ~~Specialty is a master distributor of seamless carbon pipe and tube.~~ other industries.

The Specialty Chemicals ~~Segment operates as one reportable unit and is comprised of Manufacturers Chemicals, LLC ("MC") and CRI Tolling, LLC ("CRI Tolling") and~~segment produces specialty ~~chemicals.~~products for the pulp and paper, coatings, adhesives, sealants and elastomers (CASE), textile, automotive, household, industrial and institutional ("HII"), agricultural, water and waste-water treatment, construction, oil and gas and other industries.

Below are those accounting policies considered by the Company to be significant.

Principles of Consolidation

- The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are ~~wholly owned. The Metals Segment is comprised of~~ ~~three~~ ~~subsidiaries: Synalloy Metals, Inc. which owns~~ ~~100 percent~~ ~~of BRISMET, located in Bristol, Tennessee~~wholly-owned. Intercompany transactions and ~~Munhall, Pennsylvania; Palmer, located in Andrews, Texas and Specialty, located in Mineral Ridge, Ohio and Houston, Texas.The Specialty Chemicals Segment consists of two subsidiaries: Manufacturers Soap and Chemical Company ("MS&C") which owns~~ ~~100 percent~~ ~~of MC, located in Cleveland, Tennessee and CRI Tolling, located in Fountain Inn, South Carolina. All significant intercompany transactions~~balances have been eliminated.

Use of Estimates - The preparation of the Company's financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates that affect the reported amounts of assets, liabilities, sales and expenses, and related disclosures of contingent assets and liabilities. Significant items subject to such estimates and assumptions include the carrying value of property, plant and equipment; intangible assets; the fair value of assets or liabilities acquired in a business combination; valuation allowances for receivables, inventories and deferred income tax assets and liabilities; environmental liabilities; liabilities for potential tax deficiencies; and, potential litigation claims and settlements. The Company bases these estimates on historical results and various other assumptions believed to be reasonable, all of which form the basis for making estimates concerning the carrying value of assets and liabilities that are readily available from other sources. Actual results may differ from these estimates.

Cash and Cash Equivalents

- The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company maintains cash ~~balances~~levels in bank accounts that, at ~~financial institutions with strong credit ratings.~~times, may exceed federally-insured limits.

Accounts Receivable

- Accounts receivable from the sale of products are recorded at net realizable value and the Company generally grants credit to customers on an unsecured basis. Substantially all of the Company's accounts receivable are due from companies located throughout the United States. The Company provides an allowance for ~~doubtful accounts~~credit losses for ~~projected uncollectable~~expected uncollectible amounts. The allowance is based upon an analysis of accounts receivable balances with similar risk characteristics on a ~~review~~collective basis, considering factors such as the aging of ~~outstanding~~ receivables balances, historical ~~collection~~loss experience, current information, and ~~existing economic conditions.~~future expectations. Each reporting period, the Company reassesses whether any accounts receivable no longer share similar risk characteristics and should instead be evaluated as part of another pool or on an individual basis. The Company performs periodic credit evaluations of its customers' financial condition and generally does not require collateral. Receivables are generally due within 30 to 60 days. Delinquent receivables are written off based on individual credit evaluations and specific circumstances of the customer.

~~Inventories~~The opening and closing balances of our accounts receivables from continuing operations are as follows (in thousands):


(in thousands)	January 1, 2022		December 31, 2022		December 31, 2023
Accounts receivables, net	$	33,417	$	33,202	$	26,604

Ascent Industries Co.

Notes to Consolidated Financial Statements

Activity in the allowance for credit losses from continuing operations were as follows:


(in thousands)	2023		2022
Balance at beginning of period	$	643	$	164
Current period provision for expected credit losses	953		820
Deductions from allowance	(1,133)		(341)

Balance at end of period	$	463	$	643

Inventories ~~are~~- Inventory is stated at the lower of cost or net realizable ~~value.~~value ("LCNRV"). Cost is determined by either specific identification or weighted average methods.

~~Inventory cost is adjusted when its net realizable value is estimated to be below estimated selling price.~~ At the end of each quarter, all facilities review recent sales reports to identify sales price trends that would indicate products or product lines that are being sold below our cost. This would indicate that an adjustment would be required. An LCNRV adjustment is recorded when the Company's inventory cost, based upon a historical price, is greater than the current selling price of that product. During the year ended December 31, 2023, LCNRV adjustments of $0.6 million required by our Specialty Chemicals segment. During the year ended December 31 2022, no significant LCNRV adjustments were required by our Specialty Chemicals segment.

Stainless steel, both in its raw material (coil or plate) or finished goods (pipe and tube) state is purchased/sold using a base price plus an additional surcharge which is dependent on current nickel prices. As raw materials are purchased, it is priced to the Company based upon the surcharge at that date. When the selling price of the finished pipe is set for the customer, approximately three months later, the then-current nickel surcharge is used to determine the proper selling prices. An LCNRV adjustment is recorded when the Company's inventory cost, based upon a historical nickel price, is greater than the current selling price of that product due to a reduction in the nickel surcharge. LCNRV adjustments of $0.6 million and $0.3 million were required by our Tubular Products segment's continuing operations during the years ended December 31, 2023 and 2022, respectively.

In addition, the Company establishes inventory reserves for:

•Estimated obsolete or unmarketable ~~inventory.~~ inventory - The Company ~~identified~~identifies aged inventory items with slow or no sales activity for finished goods or slow or no usage for raw materials for a certain period of time. For those inventory items, ~~not currently being marketed and unable to be sold,~~ a reserve ~~was~~is established for ~~100 percent~~a percentage of the inventory cost less any estimated scrap ~~proceeds.~~proceed and is based on our current knowledge with respect to inventory levels, sales trends and historical experience. The Company reserved ~~$411,157~~$5.6 million and ~~$697,000 at~~$2.8 million for continuing operations as of December 31, ~~2017~~2023 and ~~December 31, 2016,~~2022, respectively.

•Estimated quantity ~~losses.~~ losses - The Company performs an annual physical count of inventory during the fourth quarter each ~~year. For those facilities that complete their physical inventory counts before the end of December, a~~year for all facilities. A reserve is established for the potential quantity losses that could occur subsequent to their physical inventory. This reserve is based upon the

most recent physical inventory results. ~~At December 31, 2017 and December 31, 2016, the~~The Company had ~~$285,627~~$0.5 million and ~~$268,579, respectively,~~$0.2 million reserved for physical inventory quantity ~~losses.~~losses for continuing operations as of December 31, 2023 and 2022, respectively.

Property, Plant and Equipment

- Property, plant and equipment are stated at cost. Depreciation is ~~provided~~determined based on the straight-line method over the estimated useful life of the assets. Substantially all depreciation is recorded within cost of goods sold on the consolidated statements of income (loss). Leasehold improvements are depreciated over the shorter of their useful lives or the remaining non-cancellable lease term, buildings are depreciated over a range of ~~ten~~10 years to 40 years, and machinery, fixtures and equipment are depreciated over a range of three years to 20 years. The costs of software licenses are amortized over five years using the straight-line method. The Company continually reviews the recoverability of the carrying value of long-lived assets. The Company also reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. When the future undiscounted cash flows of the operation to which the assets relate do not exceed the carrying value of the asset, the assets are written down to fair value.

Business Combinations

~~Acquisitions~~ - Business combinations are accounted for using the acquisition method of ~~accounting for business combinations.~~accounting. Under this method, the total consideration transferred to consummate the ~~acquisition~~business combination is allocated to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values as of the closing date of the ~~acquisition.~~transaction. The acquisition method of accounting requires extensive use of estimates and judgments to allocate the consideration transferred to the identifiable tangible and intangible assets acquired, if any, and liabilities assumed.

Ascent Industries Co.

Notes to Consolidated Financial Statements

Goodwill ~~Intangible Assets and Deferred Charges~~

- Goodwill ~~arising from~~is the excess of the purchase price over the fair value of ~~net~~identifiable assets acquired, less fair value of ~~businesses acquired,~~liabilities assumed, in a business combination. The Company reviews goodwill for impairment at the reporting unit level, which is the operating segment level or one level below the operating segment level. Goodwill is not amortized but is ~~reviewed annually, at the reporting unit level, in the fourth quarter~~evaluated for impairment ~~and~~at least annually on October 1 or whenever events or changes in circumstances indicate that it is more likely than not that the carrying ~~value~~amount may not be recoverable. ~~In 2017,~~The evaluation begins with a qualitative assessment to determine whether a quantitative impairment test is necessary. If, after assessing qualitative factors, we determine it is more likely than not that the ~~evaluation involved comparing~~fair value of the ~~estimated~~reporting unit is less than the carrying amount, then the quantitative goodwill impairment test is performed.

The quantitative goodwill impairment test used to identify potential impairment compares the fair value of a reporting unit with its carrying amount, including goodwill. Fair value represents the price a market participant would be willing to pay in a potential sale of the reporting unit and is based on a combination of an income approach, based on discounted future cash ~~flow model,~~flows, and a market approach, based on market multiples applied to free cash flow. If the fair value exceeds the carrying value, then no goodwill impairment has occurred. If the carrying value of the ~~associated~~ reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to ~~its~~that excess, limited to the total amount of goodwill allocated to that reporting unit. Any impairment identified is included within "goodwill impairment" in the consolidated statements of income (loss).

A reporting unit is an operating segment or a business unit one level below that operating segment, for which discrete financial information is prepared and regularly reviewed by segment management. During 2023 and 2022, goodwill was allocated to the Specialty Chemicals reporting unit.

The changes in the carrying ~~value, including goodwill. No~~amount of goodwill ~~impairment was identified as a result of the testing procedures performed~~ for the years ended December 31, ~~2017~~2023 and 2022 were as follows:


(in thousands)	Specialty Chemicals
Balance December 31, 2021	$	12,637
Purchase Price Allocation Revision	(1,248)
Balance December 31, 2022	11,389
Goodwill Impairment	(11,389)
Balance December 31, 2023	$	—

During the third quarter of 2023, the Company determined potential indicators of impairment within the Specialty Chemicals reporting unit, with an associated goodwill balance of $11.4 million existed. Macroeconomic conditions and pressures, increased risks within the broader specialty chemicals business, reporting unit operating losses and a decline in the reporting unit's net sales compared to forecast, collectively, indicated that the reporting unit had experienced a triggering event and the need to perform a quantitative evaluation of goodwill. The Company performed a discounted cash flow analysis and a market multiple analysis for the Specialty Chemicals reporting unit to determine the reporting unit's fair value. The discounted cash flow analysis included management assumptions for expected sales growth, capital expenditures and overall operational forecasts while the market multiple analysis included historical and projected performance, market capitalization, volatility and multiples for industry peers. Determining the fair value of the reporting unit and allocation of that fair value to individual assets and liabilities within the reporting unit to determine the implied fair value of the goodwill is judgmental in nature and requires the use of significant management estimates and assumptions. Any changes in the judgments, estimates, or assumptions could produce significantly different results. As a result of the goodwill impairment evaluation, it was concluded that the estimated fair value of the Specialty Chemicals reporting unit was below its carrying value by 27.6% resulting in a goodwill impairment charge of $11.4 million for the year ended December 31, ~~2016.~~2023.

Intangible Assets - Intangible assets ~~represent~~consists of customer relationships, trademarks and trade names, and represents the fair value of intellectual, non-physical assets resulting from business ~~acquisitions. Deferred charges represent other intangible assets~~acquisitions and ~~debt issuance costs. Intangible assets~~ are amortized over their estimated useful lives using either an accelerated or straight-line ~~method. Deferred charges are amortized over their estimated useful lives using the straight-line method. Deferred charges are amortized~~method over a period ~~ranging from three~~of 15 years. Amortization expense is recorded in selling, general and administrative expense on the consolidated statements of income (loss).

Ascent Industries Co.

Notes to ~~ten years~~Consolidated Financial Statements

The gross carrying amount and accumulated amortization of intangible assets ~~are amortized over a period ranging~~ from ~~eight~~continuing operations consist of the following:


	2023				2022
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Definite-lived intangible assets:
Customer related	$	14,604	$	(6,685)	$	14,604	$	(5,201)
Trademarks and trade names	150		(17)		150		(12)
Other	500		(56)		500		(40)
Total definite-lived intangible assets	$	15,254	$	(6,758)	$	15,254	$	(5,253)

The Company recorded amortization expense related to ~~15 years. The weighted average amortization period for the customer relationships is approximately eleven years. Deferred charges and~~ intangible assets ~~totaled $21,837,351~~from continuing operations of $1.5 million and ~~$20,708,496 at December 31, 2017~~$1.9 million for 2023 and ~~December 31, 2016,~~2022, respectively. ~~Accumulated amortization of deferred charges and intangible assets as of December 31, 2017 and December 31, 2016 totaled $10,693,175 and $8,253,040, respectively.~~

Estimated amortization expense for the next five fiscal years based on existing intangible assets is as follows:


(in thousands)
2024	$	1,487
2025	1,324
2026	1,102
2027	930
2028	786
Thereafter	2,867
Total	$	8,496

Deferred Charges - Deferred charges represent debt issuance costs and are amortized over their estimated useful lives using the straight-line method over a period of four years and is recorded in interest expense on the consolidated statements of income (loss).

Deferred charges totaled $0.4 million as of December 31, 2023 and 2022, respectively. Accumulated amortization of deferred charges as of December 31, 2023 and ~~intangible assets is: 2018 - $2,380,950, 2019 - $2,246,816, 2020 - $2,073,384; 2021 - $1,899,298;~~ 2022 ~~- $1,677,948;~~totaled $0.3 million and ~~thereafter - $865,780.~~ $0.2 million, respectively.

The Company recorded amortization expense related to deferred charges of ~~$2,443,117, $2,459,787~~$0.1 million for 2023 and ~~$2,277,480~~2022.

Long-Lived Asset Impairment - The carrying amounts of long-lived assets are reviewed whenever certain events or changes in circumstances indicate that the carrying amounts may not be recoverable. A potential impairment has occurred for ~~2017, 2016~~long-lived assets held-for-use if projected future undiscounted cash flows expected to result from the use and ~~2015, respectively, which excludes amortization expense~~eventual disposition of ~~debt issuance costs, which~~the assets are less than the carrying amounts of the assets. An impairment loss is ~~reflected~~recorded for long-lived assets held-for-use when the carrying amount of the asset is not recoverable and exceeds its fair value.

Long-lived assets that are expected to be sold within the next 12 months and meet the other relevant held-for-sale criteria are classified as long-lived assets held-for-sale. An impairment loss is recorded for long-lived assets held-for-sale when the carrying amount of the asset exceeds its fair value less cost to sell. A long-lived asset is not depreciated while its classified as held-for-sale.

For long-lived assets to be abandoned, the Company considers the asset to be disposed of when it ceases to be used. Until it ceases to be used, the Company continues to classify the asset as held-for-use and test for potential impairment accordingly. If the Company commits to a plan to abandon a long-lived asset before the end of its previously estimated useful life, its depreciable life is re-evaluated.

Gains and losses on the disposal of assets are recorded as the difference between the net proceeds received, if any, and net carrying values of the assets disposed and are included in loss on disposal of assets and adjustments to assets held for sale, net in the consolidated statements of comprehensive (loss) income.

Ascent Industries Co.

Notes to Consolidated Financial Statements

Fair value measurements associated with long-lived asset impairments are included in Note 4 of the notes to the consolidated financial ~~statements~~statements.

Discontinued Operations - The Company accounts for and classifies a business as ~~interest expense.~~a discontinued operation when the following criteria are met: the disposal group is a component of an entity, the component of the entity meets the held for sale criteria in accordance with our policy described above and the component of the entity represents a strategic shift in the entity's operating and financial results. See N o te 2 for discussion on the Company's discontinued operations.

~~Earn-Out Liability~~Assets Held for Sale - The Company classifies long-lived assets or disposal groups as held for sale in the period when all of the following conditions have been met:

~~In connection with~~ •the ~~acquisition~~Board of ~~Bristol Metals-Munhall~~Directors have approved and committed to a plan to sell the assets or disposal group;

•the asset or disposal group is available for immediate sale in its present condition;

•an active program to locate a buyer and other actions required to complete the sale have been initiated;

•the sale of the asset or disposal group is probable and expected to be completed within one year;

•the asset or disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and,

•it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

We initially measure a long-lived asset or disposal group that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell and recognize any loss in the period in which the held for sale criteria are met. Gains are not recognized until the date of sale. We cease depreciation and amortization of a long-lived asset, or assets within a disposal group, upon their designation as held for sale and subsequently assess fair value less any costs to sell at each reporting period until the asset or disposal group is no longer classified as held for sale. See Note 4 for discussion on ~~February 28, 2017,~~the Company's assets held for sale.

Leases - The Company determines whether an arrangement is a lease at contract inception. For leases in which the Company is ~~required to make contingent earn-out payments~~the lessee, the Company recognizes a right-of-use asset and corresponding lease liability on the consolidated balance sheets equal to the ~~prior owners based upon actual sales levels of stainless steel pipe and tube (outside diameter of ten inches or less). The Company determined the fair~~present value of the ~~earn-out liability~~fixed lease payments over the lease term. Lease liabilities represent an obligation to make lease payments arising from a lease while right-of-use assets represent a right to use an underlying asset during the lease term. The Company does not separate lease and non-lease components for its underlying assets. Leases with an initial term of 12 months or less are not recorded on the ~~acquisition date~~consolidated balance sheets.

If readily determinable, the rate implicit in the lease is used to discount lease payments to present value; however, the Company's leases generally do not provide a readily determinable implicit rate. When the implicit rate is not determinable, the Company's estimated incremental borrowing rate is utilized, determined on a fully collateralized and fully amortizing basis, to discount lease payments based on information available at lease commencement. The Company determines the appropriate incremental borrowing rate by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances. Such adjustments include assuming the Store Capital lease would require two lenders with the secondary lender being secured on a second lien requiring mezzanine rates. Lease costs are recognized on a straight-line basis over the lease term.

Right-of-use assets and operating lease liabilities are remeasured upon certain modifications to leases using ~~a Monte Carlo simulation model. Future changes to~~ the ~~fair~~present value of the ~~earn-out liability will~~remaining lease payments and estimated incremental borrowing rate upon lease modification. The difference between the remeasured right-of-use asset and the operating lease liabilities are recognized as a gain or loss within operating expenses. The Company reviews any changes to its lease agreements for potential modifications and/or indicators of impairment of the respective right-of-use asset. Operating leases are included in right-of-use assets, current portion of operating lease liabilities and long-term portion of operating lease liabilities on the accompanying consolidated balance sheets. Finance leases are included in property, plant and equipment, current portion of finance lease liabilities and long-term portion of finance lease liabilities. See Note 7 for additional information on the Company's leases.

The Company subleases portions of certain properties that are not used in its operations. Sublease income was $0.4 million for 2023. Sublease income was $0.2 million for 2022.

Revenue Recognition - Revenues are recognized when control of the promised goods or services is transferred to our customers upon shipment, in an amount that reflects the consideration we expect to be ~~determined~~entitled to in exchange for those goods or services. The Company's revenues are derived from contracts with customers where performance obligations are satisfied

Ascent Industries Co.

Notes to Consolidated Financial Statements

at a point-in-time or over-time. For certain contracts under which the Company produces product with no alternative use and for which the Company has an enforceable right to payment during the production cycle, product in which the material is customer owned or in which the customer simultaneously consumes the benefits throughout the production cycle, progress toward satisfying the performance obligation is measured using an output method of units produced. Certain customer arrangements consist of bill-and-hold characteristics under which transfer of control has been met (including the passing of title and significant risk and reward of ownership to the customers). Therefore, the customers can direct the use of the bill-and-hold inventory while we retain physical possession of the product until it is shipped to a customer at a point in time in the future.

Our contracts with customers may include multiple performance obligations. For such arrangements, revenue for each ~~quarter-end~~performance obligation is based on its standalone selling price and revenue is recognized as each performance obligation is satisfied. The Company generally determines standalone selling prices based on the prices charged to ~~income~~customers using the adjusted market assessment approach or ~~expense~~expected cost plus margin. Deferred revenues are recorded when cash payments are received in advance of satisfying the ~~“Earn-Out Adjustment” line item in~~performance obligation, including amounts which are refundable. See Note 3 for additional information on the ~~Consolidated Statements of Operations and Other Comprehensive Income.~~Company's revenue.

~~Revenue Recognition~~

~~Revenue from product sales is recognized~~Shipping Costs - Shipping costs are treated as fulfillment activities at the time ~~ownership~~control and title of ~~goods transfers~~the promised good and services rendered are transferred to the ~~customer and the earnings process is complete.~~

~~Shipping Costs~~

customer. Shipping costs from continuing operations of approximately ~~$7,502,945, $4,488,041~~$3.4 million and ~~$5,155,011~~$4.3 million in ~~2017, 2016~~2023 and ~~2015,~~2022, respectively, are recorded in cost of goods ~~sold.~~sold on the consolidated statements of income (loss).

Share-Based Compensation - Share-based payments to employees, including grants of employee stock options, are recognized in the consolidated statements of income (loss) as compensation expense (based on their estimated fair values at grant date) generally over the vesting period of the awards using the straight-line method. Any forfeitures of share-based awards are recorded as they occur. See Note 10 for additional information on the Company's accounting for share-based payments.

~~Research and Development Expenses~~

~~The Company incurred research and development expense of approximately $556,181, $603,067 and $548,257 in 2017, 2016 and 2015, respectively.~~

Income Taxes

- Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing accounts and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in fiscal years in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities were remeasured at December 22, 2017 as a result of the Tax Act signed into law on December 22,2017. See Note 10 for further explanation.rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that such assets will be realized.

Additionally, the Company maintains ~~the required~~ reserves for ~~any and all~~ uncertain tax ~~provisions.~~provisions, if necessary. See Note 11 for additional information on the Company's income taxes.

Earnings Per Share ~~of Common Stock~~

- Earnings per share of common stock are computed based on the weighted average number of basic and diluted shares outstanding during each period.

~~Fair Market Value~~

~~The Company makes estimates of fair value in accounting~~ See Note 12 for certain transactions, in testing and measuring impairment and in providing disclosures of fair value in its consolidated financial statements. The Company determines the fair values of its financial instruments for disclosure purposes by maximizing the use of observable inputs and minimizing the use of unobservable inputs when measuring fair value. Fair value disclosures for assets and liabilities are grouped in three levels. The levels prioritize the inputs used to measure the fair value of the assets or liabilities. These levels are:

~~Level 1~~ ~~- Quoted prices (unadjusted) in active markets for identical assets or liabilities.~~

~~Level 2~~ - Inputs other than quoted prices that are observable for assets and liabilities, either directly or indirectly. These inputs include quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are less active.

~~Level 3~~ ~~- Unobservable inputs that are supported by little or no market activity for assets or liabilities and includes certain pricing models, discounted cash flow methodologies and similar techniques.~~

Estimates of fair value using levels 2 and 3 may require judgments as to the timing and amount of cash flows, discount rates, and other factors requiring significant judgment, and the outcomes may vary widely dependingadditional information on the ~~selection of these assumptions. The~~ Company's most significant fair value estimates as of December 31, 2017 and December 31, 2016 relate to the purchase price allocation relating to the acquisition of the stainless steel operations of MUSA, earn-out liabilities, nickel forward option contracts, estimating the fair value of the reporting units in testing goodwill for impairment, estimating the fair value of the interest rate swap and providing disclosures of the fair values of financial instruments.earnings per share.

~~Use of Estimates~~

The preparation of the consolidated financial statements requires management to make estimates and assumptions, primarily for testing goodwill for impairment, determining balances for the earn-out liability and certain employee benefit accruals, estimating fair value of identifiable assets acquired and liabilities assumed as a result of business acquisitions and for establishing reserves on accounts receivable, inventories and environmental issues, that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Concentrations of Credit Risk

- Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash deposits and trade accounts receivable.

~~Recent accounting pronouncements~~

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers (Topic 606)", which changes the criteria for recognizing revenue. The standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard requires a five-step process for recognizing revenue including identifying the contract with the customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract and recognizing revenue when (or as) the entity satisfies a performance obligation. Two transition methods are available for implementing the requirements of Topic 606: retrospectively for each prior reporting period presented or retrospectively with the cumulative effect of initial application recognized at the date of initial application. The FASB has issued several amendments to the standard, which are intended to promote a more consistent application of the principles outlined in the standard. The new standard is effective for the Company for annual periods in fiscal years beginning after December 15, 2017. The Company ~~will adopt~~monitors the ~~new guidance on January 1, 2018, using the modified retrospective transition method..~~

~~The Company assessed the impact the new standard will have on the consolidated~~ financial ~~statements~~institutions where it invests its cash and cash equivalents as well as ~~its business processes, internal controls,~~performs credit reviews of potential customers when extending credit to purchase and ~~accounting policies. As part~~periodic reviews of ~~its assessment,~~existing customers to mitigate exposure and risk. The Tubular Products segment has one customer that accounted for approximately 17% of the segment's revenues for 2023. There were no customers representing more than 10% of the Tubular Products segment's revenues for 2022. The Specialty Chemicals segment has one customer that accounted for approximately 24% of the segment's revenues for 2023 and 21% of the segment's revenues for 2022.

Accounting Pronouncements Recently Adopted - On March 31, 2023, the Company ~~reviewed its~~adopted ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting. The ASU, and subsequent clarifications, provide practical expedients for contract ~~portfolio~~modification accounting related to the transition away from the London Interbank Offered Rate (LIBOR) and ~~determined how its contracts should be accounted~~other interbank offering rates to alternative reference rates. The expedients are applicable to contract modifications made and hedging relationships entered into on or before December 31, 2024. The Company intends to use the expedients where needed for ~~under Topic 606. Based on the assessment performed, the company determined that the primary form~~reference rate transition. The adoption of contracts with customers impacting revenue recognition are individual sales orders. The Company’s sales orders consist of distinct goods with stand-alone selling prices and are typically completed within 12 months from inception. No significant long-term sales contracts requiring revenue to be recognized over a period of time in excess of one year have been identified.

The main performance obligation included in sales orders is the manufacture and distribution of goods as prescribed by our customers. This performance obligation is satisfied upon the transfer of title of each distinct item, which occurs at a point-in-time. Consistent with manufacturing and distribution industry norms, the Company’s transfer of title of goods is determined by FOB shipping terms. Recognizing revenue in accordance with shipping terms is consistent with the Company’s current revenue recognition policy under ASC Topic 605, therefore we do not expect any significant change in the timing under which we recognize revenue.

~~Shipping and handling of goods is considered a part of the fulfillment of our performance obligation regardless of whether shipping terms are shipping point or destination. This position is supported~~this standard by the practical expedient provided under Topic 606 which allows a company to account for shipping and handling as activities to fulfill the promise to transfer the good if that methodology is consistently applied. For revenues recognized on orders prior to completion of shipping activities offsetting shipping costs are accrued. This practice is consistent with the Company’s current accounting policy and will not result in any financial statement impact.

~~Based on the assessment performed, the~~ Company does not believe the standard will have a material impact on its consolidated financial statements or internal controls over financial reporting, other than for the disclosures required by the standard.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~“Leases (Topic 842),”~~ to increase the transparency and comparability of lease recognition and disclosure. The update establishes a right of use ("ROU") model which requires lessees to recognize lease contracts with a term greater than one year on the balance sheet as ROU assets and lease liabilities. Leases will be classified as either financing or operating which will determine expense classification and recognition. Topic 842 is effective for fiscal years beginning after December 15, 2018 and must be applied using the modified retrospective approach. Early adoption is permitted. While the Company expects Topic 842 to add material ROU assets and lease liabilities to the consolidated balance sheets related to its current land and building operating leases, it is evaluating other effects that the new standard will have on the consolidated financial statements.

~~In March 2016, the FASB issued ASU No. 2016-09,~~ ~~"Improvements to Employee Share-Based Payment Accounting (Topic 718)."~~ The amendments in this updated guidance include changes to simplify the Codification for several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows and was effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. The Company implemented this standard on January 1, 2017 and it did not have a material effect on the ~~Company's~~ consolidated financial ~~statements.~~statements or footnote disclosures..

Ascent Industries Co.

Notes to Consolidated Financial Statements

Accounting Pronouncements Not Yet Adopted - In ~~January 2017,~~November 2023, the ~~FASB~~Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU ~~No. 2017-01,~~ ~~"Business Combinations (Topic 805): Clarifying~~expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the ~~Definition~~chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a ~~Business"~~ ~~which provides~~reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a ~~new framework for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Topic 805~~single reportable segment. The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal ~~years beginning~~year ended December 31, 2024, and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and footnote disclosures.

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The amendments also require that all entities disclose more detailed information about income taxes paid, including by jurisdiction; pretax income (or loss) from continuing operations; and income tax expense (or benefit). The ASU is effective for the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and footnote disclosures.

Recent accounting pronouncements pending adoption not discussed in this Form 10-K are either not applicable to the Company or are not expected to have a material impact on the Company.

Note 2: Discontinued Operations

Munhall Closure

During the second quarter of 2023, the Board of Directors of the Company made the decision to permanently cease operations at Munhall. The Company ceased operations effective August 31, 2023. It is anticipated that the complete exit and disposal of all assets at Munhall will be completed within one year from the date the decision was made to permanently cease operations. The strategic decision to cease operations at Munhall is part of the Company’s ongoing efforts to consolidate manufacturing to drive an increased focus on its core operations and to improve profitability while driving operational efficiencies.

As a result of this decision, during the second quarter of 2023, the Company incurred asset impairment charges of $6.4 million related to the write down of inventory and long-lived assets as well as $1.4 million in increased reserves on accounts receivable at the facility. During the third quarter of 2023, the Company incurred additional asset impairment charges of $2.4 million related to the write down of inventory to net realizable value. Certain assets of Munhall were also classified as held for sale and the results of operations previously reported under the Tubular Products segment have been classified as discontinued operations for all periods presented. See Note 4 for further discussion of the assets held for sale and related fair value measurements.

Divestiture of Specialty Pipe & Tube, Inc.

On December 22, 2023, the Company and its wholly-owned subsidiary Specialty Pipe & Tube, Inc. (“SPT”) entered into an Asset Purchase Agreement pursuant to which Ascent and SPT sold substantially all of the assets primarily related to SPT to Specialty Pipe & Tube Operations, LLC, a Delaware limited liability company. The consideration for the transaction was approximately $55 million of cash proceeds subject to certain closing adjustments. The transaction closed on December 22, 2023. Ascent and Purchaser also entered into a Transition Services Agreement (the “TSA”) and an Employee Leasing Agreement (the “ELA”) each dated December 22, 2023, pursuant to which Ascent has agreed to provide certain transition services and to lease certain employees to Purchaser immediately after the closing for certain agreed upon transition periods. As result of the sale, SPT results of operations are classified under discontinued operations for all periods presented. Prior to the divestiture, SPT was reported under the Company's Tubular Products segment.

Ascent Industries Co.

Notes to Consolidated Financial Statements

The following table presents the aggregate carrying amounts of the classes of assets and liabilities of the Company's discontinued operations:


(in thousands)	December 31, 2023		December 31, 2022
Carrying amounts of assets included as part of discontinued operations:
Cash and cash equivalents	$	—	$	1
Accounts receivable, net	778		11,918
Inventories	—		46,781
Prepaid expenses and other current assets	83		1,212
Current assets classified as discontinued operations	861		59,912
Property, plant and equipment, net	—		6,812
Right-of-use assets, operating leases, net	—		82
Intangible assets, net	—		386
Other non-current assets, net	—		1,904
Long-term assets classified as discontinued operations	—		9,184
Total assets classified as discontinued operations	$	861	$	69,096

Carrying amounts of current liabilities included as part of discontinued operations:
Accounts payable	$	107	$	8,617
Accrued expenses and other current liabilities	1,366		1,051
Current portion of operating lease liabilities	—		41
Total current liabilities classified as discontinued operations	$	1,473	$	9,709

Carrying amounts of long-term liabilities included as part of discontinued operations:
Long-term portion of operating lease liabilities	$	—	$	42
Total liabilities classified as discontinued operations	$	1,473	$	9,751

In May of 2023, the Company was named as a defendant in a lawsuit filed in the U.S. District Court for the Western District of Pennsylvania, asserting various claims for breach of contracts resulting in losses to the plaintiff and seeking damages in the amount of $0.8 million plus prejudgment interest and attorney's fees. Although we continue to defend ourselves against the claims, we believe we may incur a material loss in this matter and that our financial statements could be materially affected by an adverse decision regarding the assessment of damages incurred by the plaintiff. Accordingly, the Company has an estimated liability of $1.0 million for expected losses related to this lawsuit as of December ~~15, 2017.~~ 31, 2023.

Ascent Industries Co.

Notes to Consolidated Financial Statements

The financial results of the Company's discontinued operations are presented as income from discontinued operations, net of tax on the consolidated statements of income (loss). The following table summarizes the results of the Company's discontinued operations:


	(Unaudited)
	Three Months Ended December 31,				Year Ended December 31,
(in thousands)	2023		2022		2023		2022
Net sales	$	7,214	$	27,381	$	64,760	$	152,154
Cost of sales	8,115		30,674		64,507		138,909
Gross profit	(901)		(3,293)		253		13,245

Selling, general and administrative expense	1,261		2,088		7,587		7,311
Acquisition costs and other	355		96		568		96
Gain on sale of assets	(26,348)		—		(26,348)		—
Asset impairments	—		—		8,720		—
Earnout adjustments	—		—		—		(7)

Operating income (loss) of discontinued operations	23,831		(5,477)		9,726		5,845
Loss on classification as held for sale	—		—		83		—
Income (loss) from discontinued operations before income taxes	23,831		(5,477)		9,643		5,845
Income tax provision (benefit)	5,157		(1,102)		2,121		1,357
Net income (loss) from discontinued operations	$	18,674	$	(4,375)	$	7,522	$	4,488

Note 3: Revenue Recognition

Revenue is generated primarily from contracts to produce, ship and deliver steel and specialty chemical products. The Company’s performance obligations are satisfied and revenue is recognized when control and title of the contract promised goods or services is transferred to our customers for product shipped or services rendered. Sales tax and other taxes we collect with revenue-producing activities are excluded from revenue. Shipping costs charged to customers are treated as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. Costs related to obtaining sales contracts are incidental and are expensed when incurred. Because customers are invoiced at the time title transfers and the Company’s right to consideration is unconditional at that time, the Company does not ~~believe its implementation will have a material effect on~~maintain contract asset balances. Additionally, the ~~Company's consolidated financial statements.~~

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~"Intangibles - Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment,"~~ which requires an entity to no longer perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured using the difference between the carrying amount and the fair value of the reporting unit. Topic 350 is effective for fiscal years beginning after December 15, 2019. The Company elected to early adopt the provisions of this ASU in 2017. The implementation of this ASU did not have a material effect on the Company's consolidated financial statements.

~~In May 2017, the FASB issued ASU 2017-09,~~ ~~"Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting,"~~ which amends the scope of modification accounting for share-based payment arrangements, provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under Topic 718. Topic 718 is effective for fiscal years beginning after December 15, 2017. The Company does not ~~believe its implementation will have a~~maintain material ~~effect on~~contract liability balances, as performance obligations for substantially all contracts are satisfied prior to customer payment for product. The Company offers industry standard payment terms.

The following table presents the Company's ~~consolidated financial statements.~~revenues, disaggregated by product group from continuing operations:


(in thousands)	2023		2022
Fiberglass and steel liquid storage tanks and separation equipment	$	50	$	411
Stainless steel pipe and tube	109,513		154,040
Specialty chemicals	83,616		107,542
Net sales	$	193,179	$	261,993

The Company's revenues are derived from contracts with customers where performance obligations are satisfied at a point-in-time or over-time. Performance obligations are supported by contracts with customers, providing a framework for the nature of the distinct goods, services or bundle of goods and services. The timing of satisfying the performance obligation is typically indicated by the terms of the contract. The following table represents the Company's revenue recognized at a point- in-time and over-time.


(in thousands)	2023		2022
Point-in-time	$	175,280	$	235,344
Over-time	$	17,899	$	26,649

Ascent Industries Co.

Notes to Consolidated Financial Statements

Note 24: Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, we use a three-tier valuation hierarchy based upon observable and non-observable inputs:

Level 1 - Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date.

Level 2 - Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:

•Quoted prices for similar assets or liabilities in active markets;

•Quoted prices for identical or similar assets or liabilities in non-active markets;

•Inputs other than quoted prices that are observable for the asset or liability; and

•Inputs that are derived principally from or corroborated by other observable market data.

Level 3 - Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using model-based techniques, including option pricing models, discounted cash flow models, probability weighted models, and Monte Carlo simulations.

The Company's financial instruments include cash and cash equivalents, accounts receivable, ~~derivative instruments,~~ accounts payable, notes payable, earn-out liabilities, revolving line of credit, and ~~debt instruments.~~ long-term debt.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

For ~~short-term instruments, other than those required to be reported~~the fiscal year ended December 31, 2023 and 2022, the Company's only significant measurements of assets and liabilities at fair value on a ~~recurring~~non-recurring basis subsequent to their initial recognition were certain long-lived assets, certain assets held for sale and goodwill (see Note 1 to the consolidated financial statements for ~~which~~ additional ~~disclosures~~information regarding this Level 3 fair value measurement).

Long-lived assets

The Company reviews the carrying amounts of long-lived assets whenever certain events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Company assesses performance quarterly against historical patterns, projections of future profitability, and whether it is more likely than not that the assets will be disposed of significantly prior to the end of their estimated useful life for evidence of possible impairment. An impairment loss is recognized when the carrying amount of the asset (disposal) group is not recoverable and exceeds fair value. The Company estimates the fair values of assets subject to long-lived asset impairment based on the Company's own judgments about the assumptions market participants would use in pricing the assets and observable market data, when available.

During the fourth quarter of 2022, the Company began a strategic reassessment of certain operations to drive an increased focus on its core operations and to continue to improve overall performance and operating profitability. As a result of this reassessment, management and the Board of Directors decided to pursue an exit of the Company's galvanized pipe and tube operations at its Munhall facility ("Munhall"). During the first quarter of 2023, it was determined that a continued change in the use of the assets of the Munhall facility had occurred before the end of their previous useful lives, and therefore, had experienced a triggering event and were evaluated for recoverability. Based on this evaluation of the Munhall assets, it was determined the assets were recoverable and no impairment was recorded during the first quarter.

During the second quarter of 2023, the Board of Directors of the Company made the decision to permanently cease operations at the Munhall facility. The Company ceased operations effective August 31, 2023. As a result of this decision, it was determined to be more likely than not that the assets of Munhall would be sold or otherwise disposed of significantly before the end of their previously estimated useful lives, and therefore, experienced a triggering event and were evaluated for recoverability. Based on this evaluation, inventory at Munhall was written down to its net realizable value of $16.0 million and certain long-lived assets, including intangible assets, were written down to their estimated fair value of $2.6 million, resulting in asset impairment charges of $6.4 million in the second quarter of 2023.

Ascent Industries Co.

Notes to Consolidated Financial Statements

During the third quarter of 2023, the remaining inventory at Munhall was written down to its net realizable value of $4.0 million resulting in asset impairment charges of $2.4 million in the third quarter of 2023. See Note 2 for further information on the Company's discontinued operations.

Assets Held-for-Sale

As a result of the Company's decision to cease operations and exit Munhall, during the year end December 31, 2023, certain assets of Munhall were classified as held for sale and classified as Level 2 fair value measurements. The Company remains obligated under the terms of the leases for the rent and other costs that may be associated with the lease of the Munhall facility through 2036. The Company is actively pursuing a sublease for the facility.

Munhall assets classified as held for sale as are as follows:


(in thousands)	December 31, 2023		December 31, 2022

Property, plant and equipment, net	2,374		—
Other assets, net	538		—
Assets held for sale	$	2,912	$	—

On February 17, 2021 the Board of Directors authorized the permanent cessation of operations at Palmer and the subleasing of the Palmer facility. As of December 31, 2021, the Company permanently ceased operations at the Palmer facility and determined that the remaining asset group met the criteria to be classified as held for sale, and therefore classified the related assets as held for sale on the consolidated balance sheets. The Company determined that the exit from this business did not represent a strategic shift that had a major effect on its consolidated results of operations, and therefore this business was not classified as discontinued operations. As of December 31, 2023, the remaining Palmer assets continue to be classified as held for sale with the remaining assets to be disposed of in the first quarter of 2023. The results of operations for this business are included ~~below, management concluded~~within the ~~historical carrying value is a reasonable estimate~~Tubular Products segment for all periods presented in this annual report. The Company uses observable inputs, such as prices of comparable assets in active markets to determine the fair value ~~because~~ of the ~~short period of time between the origination of such instruments and their expected realization. Therefore,~~remaining assets. The Company classifies these fair value measurements as Level 2.

Palmer assets classified as held for sale as of December 31, ~~2017~~2023 and ~~December 31, 2016,~~2022 are as follows:


(in thousands)	2023		2022
Inventory, net	$	—	$	198
Property, plant and equipment, net	—		182
Assets held for sale	$	—	$	380

The Company remains obligated under the ~~carrying amount~~terms of the leases for the rent and other costs that may be associated with the lease of the facility through 2036. During the fourth quarter of 2022, the Company entered into an amended sublease agreement with a third party to sublease the entirety of the Palmer facility. The sublease agreement amends the previous sublease agreement entered into in the fourth quarter of 2021 and continues through the remaining term of the Master Lease Agreement. The sublease will expire on September 30, 2036, unless terminated in accordance with the amended sublease agreement. The sublease provides for an annual base rent of approximately $0.4 million in the first year, which increases on an annual basis by 2.0%. The sublessee is responsible for its pro rata share of certain costs, taxes and operating expenses related to the subleased space. The sublease includes an initial security deposit of $0.1 million.

Fair Value of Financial Instruments

The fair values of cash and cash equivalents, accounts receivable, accounts payable and the Company's note payable approximated their carrying value because of the short-term nature of these instruments. The Company's revolving line of credit and long-term debt, which is based on a variable interest rate, ~~approximates their fair value.~~

~~During 2017,~~are also reflected in the ~~Company sold shares of Level 1 available for sales securities. Proceeds from the sale totaled $4,141,564~~financial statements at carrying value which resulted in a realized gain of $310,043 which is included in other income on the accompanying consolidated statements of operations. As a result of the sale, unrealized gains of $555,979, $366,346 net of taxes, were reclassified out of accumulated other comprehensive income ("AOCI") with the realized gain on sale included in earnings. As of December 31, 2017, the Company has additional available for sale securities with unrealized losses of $14,111, $10,864 net of taxes, which is included in AOCI at December 31, 2017. The Company used the average cost method to determine the realized gain or loss for each transaction. Theapproximates fair value ~~of available for sale securities held by the Company~~ as of December 31, ~~2017 was $537,233 and is included in prepaid expenses and other current assets on the accompanying consolidated balance sheets.~~2023. The ~~Company did not have any available for sale securities held at December 31, 2016.~~

The Company has two Level 2 financial assets and liabilities. The fair value of the interest rate swap contract entered into on August 21, 2012 was an asset of $127,981 and $31,285 at December 31, 2017 and December 31, 2016, respectively. The interest rate swap was priced using discounted cash flow techniques. Changes in the swap fair value was recorded in current assets or liabilities, as appropriate, with corresponding offsetting entries to other income (expense). Significant inputs to the discounted cash flow model include projected future cash flows based on projected one-month LIBOR and the average margin for companies with similar credit ratings and similar maturities. It is classified as Level 2 as it is not actively traded and is valued using pricing models that use observable market inputs. See Note 17 for further discussion of interest rate swap.

To manage the impact on earnings of fluctuating nickel prices, the Company enters into three-month forward option contracts, which are classified as Level 2. At December 31, 2017, the Company had contracts in place with notional quantities totaling 1,351,494 pounds with strike prices ranging from $3.75 to $4.64 per pound. At December 31, 2016, the Company had contracts in place with notional quantities totaling 638,168 pounds with strike prices ranging from $3.92 to $4.38 per pound. The fair value of the option contracts were an asset of $9,027 and $87,283 at December 31, 2017 and December 31, 2016, respectively. The fair value of the contracts was priced using discounted cash flows techniques based on forward curves and volatility levels by asset class determined on the basis of observable market inputs, when available. Changes in their fair value were recorded to cost of goods sold with corresponding offsetting entries to other current assets.

The fair value of earn-out liabilities resulting from the MUSA acquisition discussed in Note 18 is classified as Level 3. The fair value was estimated by applying the Monte Carlo simulation approach using management's projection of pounds shipped and price per unit. Each quarter-end the Company re-evaluates its assumptions and adjusts to the estimated present value of the expected payments to be made.

Earn-out liabilities associated with the acquisitions of Palmer in 2012 and Specialty in 2014 were adjusted to zero during 2015 and gains of approximately $2,483,333 and $2,414,115, respectively, were recognized. The Palmer earn-out period expired August 21, 2015 and the Specialty earn-out period expired on November 22, 2016. No earn-out payments were made in 2015 or 2016.

~~There were no changes in the~~ carrying amount of ~~the earn-out liability~~cash and cash equivalents are considered Level 1 measurements. The carrying amounts of accounts receivable, accounts payable, note payable, revolving line of credit and long-term debt are considered Level 2 measurements. See Note 6 for ~~the year ended December 31, 2016. The following table presents a summary of changes in fair value of~~further information on the Company's ~~Level 3 liabilities measured on a recurring basis for 2017:~~debt.

Balance at December 31, 2016 $ —
Fair value of earn-out liability associated with the MUSA acquisition at February 28, 2017 4,663,783
Earn-out payments to MUSA sellers (518,456 )
Change in fair value during the period 688,523
Balance at December 31, 2017 $ 4,833,850

Ascent Industries Co.

There were no transfers of assets or liabilities between Level 1, Level 2 and Level 3 in the years ended December 31, 2017 or December 31, 2016. There have also been no changes in the fair value methodologies used by the Company during the years ended December 31, 2017 or December 31, 2016.Notes to Consolidated Financial Statements

Note 35: Property, Plant and Equipment

Property, plant and equipment consist of the following:


(in thousands)	2023		2022
Land	$	723	$	723
Leasehold improvements	3,079		3,495
Buildings	1,534		1,534
Machinery, fixtures and equipment	93,758		98,225
Construction-in-progress	1,330		1,657
	100,424		105,634
Less accumulated depreciation and amortization	(70,669)		(70,100)
Property, plant and equipment, net	$	29,755	$	35,534

2017 2016
Land $ 62,916
$ 62,916
Leasehold improvements 544,186
120,915
Buildings 412,301
641,526
Machinery, fixtures and equipment 81,229,311
66,099,880
Machinery and equipment under capital lease 401,077
199,767
Construction-in-progress 2,881,654
5,418,397
85,531,445
72,543,401
Less accumulated depreciation 50,451,436
45,219,309
Property, plant and equipment, net $ 35,080,009
$ 27,324,092

The ~~Company recorded~~following table sets forth depreciation expense ~~of $5,294,695, $4,235,203,~~related to property, plant and $4,356,911 for 2017, 2016 and 2015, respectively. Accumulated depreciation includes $86,357 and $25,341 at December 31, 2017 and December 31, 2016, respectively, for assets acquired under capital leases.equipment:


(in thousands)	2023		2022
Cost of sales	$	5,918	$	6,196
Selling, general and administrative	243		225
Total depreciation	$	6,161	$	6,421

Note ~~4 Goodwill~~6: Debt

~~There were no changes~~Short-term debt

On June 13, 2023, the Company entered into a note payable in the ~~carrying~~ amount of ~~goodwill for~~$0.9 million with an interest rate of 3.70% maturing April 1, 2024. The agreement is associated with the ~~year ended December 31, 2016. The change in the carrying amount of goodwill by segment for the year ended December 31, 2017 was as follows:~~

Specialty Chemicals Segment Metals Segment Total
Balance at December 31, 2016 $ 1,354,730
$ —
$ 1,354,730
Acquisition of MUSA —
4,648,795
4,648,795
Balance at December 31, 2017 $ 1,354,730
$ 4,648,795
$ 6,003,525

~~In 2015, the fair value of all reporting units exceeded their carrying value. However, the impairment of the Specialty and Palmer reporting units was primarily driven by the significant compression~~financing of the Company's ~~stock price as a result of temporary business declines being experienced~~insurance premium in the Metals Segment. These declines primarily related to lower oil prices that caused significantly reduced demand for Palmer and Specialty's products and, secondarily, related to lowered nickel surcharges which affected both pounds shipped and selling prices for the BRISMET reporting unit. Other companies in the oil and gas sector were similarly affected as a result of declining commodity prices. This temporary business decline resulted in a significant gap between the fair value of the Company based on the discounted cash flow analysis and the market capitalization of the Company ascurrent year. As of December 31, ~~2015. Therefore,~~2023, the outstanding balance was $0.4 million.

Credit Facilities


(in thousands)	2023		2022
Revolving line of credit, due January 15, 2025	$	—	$	67,442
Term loan, due January 15, 2025	—		4,107
Total long-term debt	—		71,549
Less: Current portion of long-term debt	—		(2,464)
Long-term debt, less current portion	$	—	$	69,085

During the first quarter of 2023, the Company ~~recorded a goodwill impairment charge of $17,158,249 for~~entered into an Amended and Restated Credit Agreement with BMO Harris Bank, N.A. ("BMO") to replace LIBOR with the ~~Palmer and Specialty operations during~~Secured Overnight Funding Rate ("SOFR").

During the fourth quarter of ~~2015 resulting~~2023, the Company entered into a Limited Consent, Second Amendment to Credit Agreement and Omnibus Amendment to Loan Documents with BMO Bank N.A. and the other lenders under the Company’s credit facility (the “Credit Facility Amendment”). The Credit Facility Amendment contains a consent for the SPT divestiture, released the lien on the assets of SPT and removed SPT as a loan party. The Credit Facility Amendment also reduced the maximum revolving loan commitment under the credit facility from $105 million to $80 million, and increased the interest rate for the credit facility from SOFR plus an interest rate margin of between 1.60% and 1.70% to SOFR plus an interest rate margin of between 1.85% and 2.10%, depending on average availability under the credit facility and the Company’s consolidated fixed charge coverage ratio. As required by the Credit Facility Amendment, the Company used the proceeds from the SPT divestiture to prepay in ~~no goodwill remaining~~full the term loan in the ~~Metals Segment as~~original principal amount of ~~December 31, 2015.~~

~~Note 5 Long-term Debt~~

2017 2016
$65,000,000 Revolving line of credit, due October 30, 2020 $ 25,913,557
$ 8,804,206

~~On August 31, 2016,~~$5 million under the ~~Company amended its Credit Agreement with its bank to create a new~~ credit facility and used the remaining proceeds to prepay in part the ~~form~~revolving loans under the credit facility.

Ascent Industries Co.

Notes to Consolidated Financial Statements

The borrowing capacity under the credit facility totals $80.0 million consisting of ~~an asset-based~~a $80.0 million revolving line of credit inwhich includes a $17.5 million machinery and equipment sub-limit.

We have pledged all of our accounts receivable, inventory, and certain machinery and equipment as collateral for the Credit Agreement. Availability under the Credit Agreement is subject to the amount of ~~$45,000,000. The Line was used to refinance and consolidate all previous debt agreements. The maturity date~~eligible collateral as determined by the lenders' borrowing base calculations. Amounts outstanding under the revolving line of credit currently bear interest at (a) the ~~Line was February 28, 2019. Interest on the Line was calculated using the One Month LIBOR~~Base Rate (as defined in the Credit Agreement), plus ~~a pre-defined spread. Borrowings~~0.75% or (b) SOFR plus 1.85%. The Credit Agreement also provides an unused commitment fee based on the daily used portion of the credit facility.

The revolving line of credit interest rate was 6.20% and 5.18% as of December 31, 2023 and 2022, respectively. Average borrowings under the ~~Line~~revolving line of credit during 2023 and 2022 were ~~limited to an amount equal to~~$55.6 million and $71.0 million with a ~~Borrowing Base calculation (as defined~~weighted average interest rate of 7.22% and 3.67%, respectively.

The term loan interest rate was 6.38% as of December 31, 2022.

The Company made interest payments on all credit facilities of $4.0 million and 2.6 million in 2023 and 2022, respectively.

As of December 31, 2023, the ~~Credit Agreement) that includes eligible accounts receivable and inventory.~~Company has no principal payments outstanding on long-term debt.

Pursuant to the Credit Agreement, the Company was required to pledge all of its tangible and intangible properties, including the stock and membership interests of its subsidiaries. ~~In the~~The Credit Agreement contains covenants requiring the ~~Company's bank agreed to release its liens on the real estate properties covered by the Purchase and Sale Agreement with Store Funding, as described in Note 12.~~

~~On October 30, 2017, the Company amended its Credit Agreement with its bank to increase the limit~~maintenance of ~~the Line by $20,000,000 to a maximum of $65,000,000 and extended the maturity date to October 30, 2020. None of the other provisions of the Credit Agreement were changed as a result of this amendment.~~

~~Covenants under the Credit Agreement include maintaining~~ a minimum consolidated fixed charge coverage ratio if excess availability falls below the greater of (i) $7.5 million and ~~a limitation on~~(ii) 10% of the ~~Company’s maximum amount~~revolving credit facility (currently $8.0 million). As of capital expenditures per year, which is in line with currently projected needs. The Company evaluated this transaction and determined the restructuring should be accounted for as a debt modification. The Company incurred lender and third party costs associated with the debt restructuring that were capitalized on the balance sheet in non-current assets. At December 31, ~~2017,~~2023, the Company was in compliance with all financial debt covenants.

~~The line~~As of ~~credit interest rates were 3.44 percent and~~ ~~2.62 percent~~ at December 31, ~~2017~~ ~~and~~ ~~December 31, 2016, respectively. Additionally,~~2023, the Company ~~is required~~had $61.8 million of remaining availability under it credit facility.

Note 7: Leases

The Company's portfolio of leases contains both finance and operating leases that relate to ~~pay a fee equal to~~ ~~0.125 percent~~ ~~on the average daily unused amount~~real estate and manufacturing equipment. Substantially all of the ~~line~~value of ~~credit on a quarterly basis. As~~the Company's lease portfolio relates to the Master Lease with Store Master Funding XII, LLC (“Store”), an affiliate of ~~December 31, 2017, the amount available for borrowing under the line of credit~~Store Capital Corporation ("Store Capital") that was ~~$56,726,959~~ ~~of which $25,913,557 was borrowed, leaving $30,813,402 of availability. Average line of credit borrowings outstanding during fiscal~~ ~~2017~~ ~~and~~ ~~2016~~ ~~were $27,895,901 and $6,830,114 with weighted average interest rates of 3.09 percent and~~ ~~2.88 percent, respectively.~~

~~The Company made interest payments on all credit facilities of $856,651 in 2017, $826,478~~entered into in 2016 and ~~$1,149,163~~amended with the American Stainless acquisition in ~~2015.~~2019 as well as the sale of land at the Munhall facility in 2020. As of December 31, 2023, operating lease liabilities related to the master lease agreement with Store Capital totaled $30.6 million, or 94% of the total lease liabilities on the consolidated balance sheet.

During the year ended December 31, 2023, the Company entered into new operating lease agreements resulting in an additional $0.5 million of right-of-use assets and lease liabilities.

Balance Sheet Presentation

Operating and finance lease amounts from continuing operations are as follows (in thousands):


		Year Ended December 31,
Classification	Financial Statement Line Item	2023		2022
Operating lease assets	Right-of-use assets, operating leases	$	27,784	$	29,142
Finance lease assets	Property, plant and equipment, net	1,543		1,494
Current liabilities	Current portion of lease liabilities, operating leases	1,140		1,015
Current liabilities	Current portion of lease liabilities, finance leases	292		280
Non-current liabilities	Non-current portion of lease liabilities, operating leases	29,729		30,869
Non-current liabilities	Non-current portion of lease liabilities, finance leases	$	1,307	$	1,242

Ascent Industries Co.

Notes to Consolidated Financial Statements

Total Lease Cost

Individual components of the total lease cost incurred by the Company are as follows:


	Year Ended December 31,
(in thousands)	2023		2022
Operating lease cost1	$	3,945	$	4,108
Finance lease cost:
Reduction in carrying amount of right-of-use assets	334		273
Interest on finance lease liabilities	85		36
Sublease income	(394)		(187)
Total lease cost	$	3,970	$	4,230

1Includes short term leases, which are immaterial

Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the consolidated statements of income (loss).

Maturity of Leases

The amounts of undiscounted future minimum lease payments under leases as of December 31, 2023 are as follows:


(in thousands)	Operating		Finance
2024	$	3,651	$	367
2025	3,671		361
2026	3,691		361
2027	3,765		361
2028	3,840		303
Thereafter	32,312		85
Total undiscounted minimum future lease payments	50,930		1,838
Imputed Interest	(20,061)		(239)
Total lease liabilities	$	30,869	$	1,599

Lease Term and Discount Rate


	Year Ended December 31,
	2023		2022
Weighted-average discount rate
Operating leases	8.33	%	8.27	%
Finance leases	5.92	%	2.32	%
Weighted-average remaining lease term
Operating leases	12.67 years		13.59 years
Finance leases	5.07 years		6.06 years

Ascent Industries Co.

Notes to Consolidated Financial Statements

Note 68: Accrued Expenses

Accrued expenses for continuing operations consist of the following:


(in thousands)	2023		2022
Salaries, wages, and commissions	$	1,706	$	1,989

Taxes, other than income taxes	359		844
Advances from customers	62		98
Insurance	1,129		553
Professional fees	694		482

Warranty reserve	4		29

Benefit plans	427		383


Customer rebate liability	243		194
Other accrued items	484		937
Total accrued expenses	$	5,108	$	5,509

2017 2016
Indemnified legal judgment (See Note 13) $ —
$ 11,000,000
Salaries, wages, and commissions 3,219,190
2,133,814
Taxes, other than income taxes 921,476
479,489
Current portion of earn-out liability 1,663,751
—
Advances from customers 184,874
571,738
Insurance 372,000
209,000
Professional fees 343,706
40,073
Warranty reserve 37,771
180,000
Benefit plans 208,717
159,253
Insurance financing liability 224,961
167,724
Customer rebate liability 439,912
157,445
Current portion, environmental reserves 549,000

184,887
Current portion, deferred gain sale-leaseback 334,273
334,273
Other accrued items 493,823
333,091
Total accrued expenses $ 8,993,454
$ 15,950,787

Note ~~7 Environmental Compliance Costs~~9: Shareholders' Equity

AtAuthorized shares of common stock were $24.0 million ($1.00 par value) at December 31, ~~2017~~2023 and ~~December 31, 2016, the Company had accrued $549,000 and $589,887, respectively,~~2022.

Share Repurchase Program

The share repurchase program allows for ~~remediation costs which, in management's best estimate, is sufficient~~repurchase of up to satisfy anticipated costs of known remediation requirements as outlined below. Expenditures related to costs currently accrued are not discounted to their present values and are expected to be made over the next year. As a result790,383 shares of the ~~evolving nature of~~Company's outstanding common stock and expires on February 17, 2025. The shares will be purchased from time to time at prevailing market prices, through open market or privately negotiated transactions, depending on market conditions. Under the ~~environmental regulations,~~program, the ~~difficulty in estimating the extent and remedy of environmental contamination~~purchases will be funded from available working capital, and the ~~availability and application~~repurchased shares will be returned to the status of ~~technology,~~authorized, but unissued shares of common stock or held in treasury. There is no guarantee as to the ~~estimated costs for future environmental compliance and remediation are subject to uncertainties and it is not possible to predict~~exact number of shares that will be repurchased by the ~~amount or timing of future costs of environmental matters which may subsequently be determined.~~

~~Prior to 1987, the~~ Company, utilized certain products at its chemical facilities that are currently classified as hazardous materials. Testing of the groundwater in the areas of the former wastewater treatment impoundments at these facilities disclosed the presence of certain contaminants. In addition, several solid waste management units ("SWMUs") at the plant sites have been identified. During 2014, at the former Augusta, GA plant site, the Georgia Department of Natural Resources, Environmental Protection Division ("EPD") closed the surface impoundment regulated unit since the Company met post-closure clean-up goals and the Company ~~renewed~~may discontinue purchases at any time that management determines additional purchases are not warranted. As of December 31, 2023, the ~~Corrective Action Permit,~~Company has 536,871 shares of its share repurchase authorization remaining.

Shares repurchased for the year ended December 31, 2023 and 2022 were as follows:


	Year Ended December 31,
	2023		2022
Number of shares repurchased	143,108		110,404
Average price per share	$	8.97	$	12.16
Total cost of shares repurchased1	$	1,287,416	$	1,345,540

1Includes broker fees incurred as part of repurchase transactions

Dividends

At the end of each fiscal year the Board reviews the financial performance and capital needed to support future growth to determine the amount of cash dividend, if any, which ~~includes a site-wide corrective action plan, long-term monitoring~~is appropriate. In 2023 and ~~institutional controls.~~ 2022, no dividends were declared or paid by the Company.

Ascent Industries Co.

Notes to Consolidated Financial Statements

Note 10: Accounting for Share-Based Payments

Overview of Share-Based Payment Plans

The Company has ~~accrued~~ ~~$474,000~~a number of active and ~~$514,887 at~~ ~~December 31, 2017~~ ~~and December 31, 2016, respectively, for the completion of the site-wide corrective action plan,~~inactive equity incentive plans (the "Incentive Plans") under which should be finished by the end of the second quarter of 2018. As part of the Asset Purchase Agreement for the sale of the former Spartanburg facility, the purchaser also agreed to pay for all future annual monitoring and reporting costs at the Augusta facility required by the EPD until the site -wide corrective action plan is completed.

~~The Company has identified and evaluated~~ ~~two~~ SWMUs at its plant in Bristol, Tennessee that revealed residual groundwater contamination. An Interim Corrective Measures Plan to address the final area of contamination identified was submitted for regulatory approval and was approved in ~~March 2005. The Company has~~ ~~$75,000~~ ~~accrued at~~ ~~December 31, 2017~~ ~~and December 31, 2016, to provide for estimated future remedial and cleanup costs.~~

The Company does not anticipate any insurance recoveries to offset the environmental remediation costs it has incurred. Due to the uncertainty regarding court and regulatory decisions, and possible future legislation or rulings regarding the environment, many insurers will not cover environmental impairment risks, particularly in the chemical industry. Hence, the Company has been ~~unable~~authorized to ~~obtain this coverage at an affordable price.~~grant share-based awards to key employees and non-employee directors. A total of 0.8 million shares have been authorized for grant to key employees and non-employee directors under the Company's currently active Incentive Plans. As of December 31, 2023, there were 0.4 million shares remaining available for grants under the currently active equity Incentive Plans.

~~Note 8 Deferred Compensation~~

The Company ~~has deferred~~recognized share-based compensation ~~agreements with certain former officers providing~~expense within SG&A expense on the consolidated statements of income (loss) of $1.1 million and $1.4 million in 2023 and 2022, respectively.

Total unrecognized share-based payment expense for ~~payments for the longer of~~ ~~ten years~~ ~~or life from age~~ 65~~. The present value of such vested future payments,~~ ~~$159,080~~ at ~~December 31, 2017~~ ~~and $171,015~~all share-based payment plans was $0.8 million at December 31, ~~2016, has been accrued.~~2023, of which $0.6 million is expected to be recognized in 2024, $0.1 million in 2025, and $0.1 million thereafter. This results in these amounts being recognized over a weighted-average period of 1.57 years.

~~Note 9~~ Stock Options

Stock ~~Grants~~options have terms of 10 years and ~~New Stock Issues~~vest in 20% or 33% increments annually on a cumulative basis, beginning one year after the date of grant, and are assigned an exercise price equal to the average of the high and low common stock price on the day prior to the date of grant. Options are expensed on a straight-line basis over the grant vesting period, which is considered to be the requisite service period. There was no compensation expense charged against income for options in 2023. Compensation expense charged against income for options was insignificant for 2022.

~~A summary~~The fair value of ~~activity~~each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. When determining expected volatility, the Company considers the historical volatility of the Company’s stock price. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the ~~Company's~~time of grant, based on the options’ expected term. The Company granted no new options in 2023 or 2022.

Transactions related to stock ~~option plans is~~options for the year ended December 31, 2023 are summarized as follows:


	Weighted Average Exercise Price		Options Outstanding	Weighted Average Contractual Term (in years)	Intrinsic Value of Options














Outstanding at December 31, 2022	$	13.66	118,142	5.2	$	—
Exercised	—		—
Canceled, forfeited, or expired	13.70		(11,945)
Outstanding at December 31, 2023	$	13.65	106,197	4.8	$	—
Vested and expected to vest at December 31, 20231	$	—	—	—	$	—
Exercisable options	$	13.65	106,197	4.8	$	—

Weighted
Average
Exercise
Price

Options
Outstanding

Weighted
Average
Contractual
Term
(in years)

Intrinsic
Value of
Options

Options
Available
At January 3, 2015 $ 12.25
157,295
6.9 $ 852,810
169,384
  Granted February 10, 2015 $ 16.01
32,532
(32,532 )
  Exercised $ 12.47
(666 ) $ 1,511

  Expired $ 14.08
(15,176 )
15,176
At December 31, 2015 $ 12.79
173,985
6.4 $ —
152,028
  Exercised $ —
—
$ —

  Expired $ 16.01
(937 )
937
At December 31, 2016 $ 12.77
173,048
5.4 $ —
152,965
  Exercised $ 11.55
(25,632 ) $ 78,818

  Expired $ 15.26
(1,905 ) 1,905
At December 31, 2017 $ 12.96
145,511
4.6 $ 156,445
154,870
Exercisable options $ 12.45
119,861
4.2 $ 156,445

Options expected to vest:

Grant Date Fair Value
At December 31, 2015 $ 13.76
85,960
7.3 $ 6.57

   Vested $ 12.71
(41,737 ) $ 6.91

   Forfeited options $ 16.01
(937 )
At December 31, 2016 $ 14.72
43,286
7.1 $ 6.24

  Vested $ 14.35
(17,574 ) $ 5.96

  Forfeited options $ 15.38
(62 )
At December 31, 2017 $ 14.72
25,650
6.5 $ 6.41

1Includes outstanding vested and nonvested options

~~The following table summarizes information about~~

Restricted Stock Awards

Restricted stock ~~options outstanding at~~ ~~December 31, 2017~~:

Range of Exercise Prices Outstanding Stock Options Exercisable Stock Options
Shares Weighted Average Shares Weighted Average Exercise Price
Exercise Price Remaining Contractual Life in Years
$ 11.55
56,710
$ 11.55
3.06 56,710
$ 11.55
$ 11.35
25,076
$ 11.35
4.10 25,076
$ 11.35
$ 13.70
27,801
$ 13.70
5.10 22,084
$ 13.70
$ 14.76
8,109
$ 14.76
6.14 4,865
$ 14.76
$ 16.01
27,815
$ 16.01
7.11 11,126
$ 16.01

145,511

119,861

~~The 2011 Plan is an incentive~~awards are valued based on the average of the high and low common stock ~~option plan, therefore there are no income tax consequences~~price on the day prior to the ~~Company when an option is granted or exercised. The stock options will~~date of grant. In general, these awards vest in ~~20 percent~~either 20% or 33% increments annually on a cumulative basis, beginning one year after the date of grant. ~~In order for~~Certain of these awards vest 100% at the ~~options to vest, the employee must be in the continuous employment~~end of ~~the Company since~~a three-year period from the date of ~~the~~ grant. Any portion of the grant that has not vested will be forfeited upon termination of employment. Shares representing grants that have not yet vested will be held in escrow by the Company. An employee will not be entitled to any voting rights with respect to any shares not yet vested, and the shares are not transferable. On February 10, 2015, the Company granted options to purchase 32,532 shares of its commons stock at an exercise price of $16.01 per share to participants in the 2011 Plan.

The per share weighted-average fair value of this stock option grant was $6.39. The Black-Scholes model for this grant was based on a risk-free interest rate of two percent, an expected life of seven years, an expected volatility of 0.46 and a dividend yield of two percent.

In 2017 and 2015, options for 25,632 and 666 shares were exercised by employees and directors for an aggregate exercise price of $296,050 and $8,302, respectively. The proceeds received by the Company were generated from the surrender of 20,243 shares previously owned from employees and directors in 2017 and from cash received of $8,302 in 2015. No options were exercised by employees or directors in 2016. At the 2017, 2016 and 2015 respective year ends, options to purchase 119,861, 129,762 and 88,025 shares with weighted average exercise prices of $12.45, $12.12 and $11.85, respectively, were fully exercisable. Compensation cost charged against income before taxes for the options was approximately $80,966 for 2017, $135,085 for 2016 and $278,341 for 2015. As of December 31, 2017, there was $86,280 of unrecognized compensation cost related to unvested stock options granted under the Company's stock option plans. The weighted average period over which the stock option compensation cost is expected to be recognized is 1.90 years.

The Compensation & Long-Term Incentive Committee ("Compensation Committee") of the Board of Directors of the Company approves stock grants under the Company's 2005 Stock Awards Plan to certain management employees of the Company. The stock grants will vest in 20 percent increments annually on a cumulative basis, beginning one year after the date of grant. In order for the grants to vest, the employee must be in the continuous employment of the Company since the date of the grant. Any portion of the grant that has not vested will be forfeited upon termination of employment. Shares representing grants that have not yet vested will be held in escrow by the Company. An employee will not be entitled to any voting rights with respect to any shares not yet vested, and the shares are not transferable. On January 5, 2015, 3,000 shares, with a market price of $17.95 per share, were granted under the Plan to external consultants of the Company. The Company's 2005 Stock Awards Plan expired on February 3, 2015 at which time no further grants could be awarded. There are outstanding awards under this plan that will vest over the next three years.

The 2015 Stock Awards Plan was approved by the Compensation Committee of the Board of Directors of the Company and authorizes the issuance of up to 250,000 shares which can be awarded for a period of ten years from the effective date of the plan. Prior to May 9, 2017, as discussed below, the stock awards vest in 20 percent increments annually on a cumulative basis, beginning one year after the date of grant from shares held in treasury with the Company. In order for the awards to vest, the employee must be in the continuous employment of the Company since the date of the award. ~~Any~~Except for death, disability, or qualifying retirement, any portion of an award that has not vested is forfeited upon termination of employment. ~~The Company may terminate any portion of the award that has not vested upon an employee's failure to comply with all conditions of the award or the 2015 Stock Awards Plan.~~ An employee is not entitled to any voting rights with respect to any shares not yet vested, and the shares are not transferable.

~~On February 19, 2016,~~

Ascent Industries Co.

Notes to Consolidated Financial Statements

All awards are expensed on a straight-line basis over the Compensation Committee of the Company's Board of Directors approved stock grants under the Company's 2015 Stock Awards Plan to certain management employees of the Company where 50,062 shares with a market price of $7.51 per share were granted under the Plan. On May 5, 2016, the Compensation Committee of the Company's Board of Directors approved stock grants under the Company's 2015 Stock Awards Plan to certain management employees of the Company where 42,193 shares with a market price of $8.05 per share were granted under the Plan.

On February 8, 2017, the Compensation Committee of the Company's Board of Directors approved stock grants under the Company's 2015 Stock Awards Plan to certain management employees of the Company where 44,687 shares with a market price of $12.30 per share were granted under the Plan.

Effective May 1, 2017, the Company's Board of Directors approved the First Amendment to the 2015 Stock Awards Plan. The amendment grants the Committee the authority to establish and amend vesting schedules for stock awards made pursuant to the 2015 Stock Awards Plan. On May 9, 2017, the Committee approved the amendment of the vesting schedules for the May 5, 2016 and February 8, 2017 stock grants reducing thegrant vesting period, ~~from five years~~which is considered to ~~three years. As a result of this amendment, compensation expense increased in 2017 by $75,756 and $67,180, for~~be the ~~five employees receiving grants on May 5, 2016 and eight employees receiving grants on February 8, 2017, respectively.~~

~~A summary of plan activity for the 2005 and 2015 Stock Awards Plans is as follows:~~

Shares
Weighted Average
Grant Date Fair Value
Outstanding at January 3, 2015 66,403
$ 15.00
Granted January 5, 2015 3,000
$ 17.95
Vested (17,903 ) $ 13.86
Forfeited (60 ) $ 13.34
Outstanding at December 31, 2015 51,440
$ 15.57
Granted February 19, 2016 50,062
$ 7.51
Granted May 5, 2016 42,193
$ 8.05
Vested (21,133 ) $ 13.12
Forfeited (1,260 ) $ 17.73
Outstanding at December 31, 2016 121,302
$ 10.03
Granted February 8, 2017 44,687
$ 12.30
Vested (34,322 ) $ 10.45
Outstanding at December 31, 2017 131,667
$ 10.69

Compensation expense on the grants issued is charged against earnings equally before forfeitures, if any, over a period of 60 months from the date of the grants for grants prior to May 5, 2016, with the offset recorded in Shareholders' Equity. Compensation expense on grants issued after that date is charged against earnings over 36 months. Compensation cost charged against income for the awards was approximately $557,450, $354,538 net of income taxes, or $0.04 per share for 2017, $324,388, $206,311 net of income taxes, or $0.02 per share for 2016 and $243,354, $154,773 net of income taxes, or $0.02 per share, for 2015. As of December 31, 2017, there was $1,073,914 of total unrecognized compensation cost related to unvested stock grants under the Company's Stock Awards Plan.requisite service period. The weighted average period over which the restricted stock ~~grant~~awards compensation ~~cost~~expense is expected to be recognized is ~~2.12~~1.54 years.

~~Each~~Transactions related to restricted stock awards for the year ended December 31, 2023 are summarized as follows:


	Shares	Weighted Average Grant Date Fair Value















Nonvested at December 31, 2022	79,103	$	17.31
Granted	47,158	9.74
Vested	(47,875)	15.74
Forfeited	(10,179)	15.56
Nonvested at December 31, 2023	68,207	$	12.57

Performance Stock Units

The Company issues performance stock units classified as equity awards which contain market conditions that must be satisfied for an employee to earn the right to benefit from the award. Performance stock units vest upon the achievement of specific thirty-day volume-weighted average price targets of a share of the Company's common stock over a period of three years. In order for the awards to vest, the employee must be in the continuous employment of the Company ~~allows~~since the date of the award. Except for death, disability, or qualifying retirement, any portion of an award that has not vested is forfeited upon termination of employment. An employee is not entitled to any voting rights with respect to any shares not yet vested, and the shares are not transferable.

The performance stock units are divided into tranches, each ~~non-employee director~~one vesting on the date the thirty-day volume-weighted average price of the Company's common stock `meets or exceeds the price target as set forth in the table below:


	Shares	Volume Weighted Average Price Target
Tranche I	4,902	$	13.00
Tranche II	52,566	15.00
Tranche III	4,902	16.00
Tranche IV	2,566	17.50
Tranche V	4,902	19.00
Tranche VI	52,567	20.00
Tranche VII	2,230	22.50
Tranche VIII	100,000	25.00
Tranche IX	40,000	27.50
Tranche X	30,000	30.00
Tranche XI	30,000	$	35.00

The fair value of the performance stock units granted with a market performance condition are determined using a Monte Carlo simulation considering historical performance of the Company's stock as well as the probability of attaining the market performance condition determined on the date of grant. Expense is recognized on a straight-line method over the requisite service period. Performance stock units do not have dividend rights. The weighted average period over which the performance stock units compensation expense is expected to ~~elect~~be recognized is 1.71 years.

The weighted-average grant-date fair value per unit of performance stock units granted was $0.64 and $3.92 in 2023 and 2022, respectively. There were no performance stock units vesting in 2023 and 2022.

Ascent Industries Co.

Notes to Consolidated Financial Statements

Transactions related to performance stock units for the year ended December 31, 2023 were as follows:


	Units	Weighted-Average Grant Date Fair Value








Outstanding at December 31, 2022	159,663	$	3.92
Granted	172,405	0.64

Forfeited	(7,433)	4.73
Outstanding at December 31, 2023	324,635	$	2.16

Inducement Awards

The Company has previously granted stock-based awards to incoming executive officers as incentives to enter into an at-will employment agreement with the Company. These inducement awards were approved by the Compensation Committee of the Board of Directors and did not require shareholder approval in accordance with NASDAQ Rule 5635(c)(4). In accordance with the rule, the only persons eligible to receive ~~up to 100 percent~~incentive awards are individuals not previously an employee or director of ~~their annual retainer in restricted stock.~~the Company.

In general, 50% of the inducement awards vest based on the achievement of thirty-day volume weighted average price targets of a Company share of stock and 50% vest on the third anniversary of the grant date. The ~~number~~fair value of ~~restricted shares issued is~~the market based portion of inducement awards are determined byusing a Monte Carlo simulation considering historical performance of the Company's stock as well as the probability of attaining the market condition determined on the date of grant. The fair value of the time based portion of inducement awards are determined based on the average of the high and low common stock price on the day prior to the date of grant. Transactions related to inducement stock awards as of December 31, 2023 were as follows:


	Units	Weighted-Average Grant Date Fair Value




Outstanding December 31, 2022	21,686	$	10.61

Vested	—	—
Forfeited/Canceled	(16,784)	$	10.72
Outstanding December 31, 2023	4,902	$	10.21

There were no inducement awards that vested in 2023. The total fair value of inducement awards vesting was approximately $0.2 million in 2022 The weighted average period over which inducement award compensation cost is expected to be recognized is 0.51 years.

Non-Employee Director Compensation Plan

Non-employee directors are paid an annual retainer of $115,000. Each non-employee director appointed to serve as a chairperson of a standing board committee receives the following annual retainer: Audit Committee: $10,000; Compensation Committee: $7,500; Nominating and Corporate Governance Committee: $6,000. The committee chairperson retainer is in addition to the board retainer. Each director has the opportunity to elect to receive 100% of the retainer in restricted stock with a minimum of $30,000 of the retainer in restricted stock. The amount of the retainer elected to be paid in restricted stock vests quarterly over a one year period. The number of restricted shares is determined by the average of the high and low sale price of the Company's stock on the day prior to the Annual Meeting of ~~Shareholders or~~Shareholders. In 2023, the ~~date prior to the appointment to the Board for those individuals that are appointed mid-term. On May 18, 2017, May 5, 2016 and May 12, 2015, non-employee directors received~~Company issued an aggregate of ~~24,209, 40,991 and 8,216~~27,432 shares ~~respectively,~~ of restricted stock to non-employee directors in lieu of ~~total~~$0.3 million of their annual cash retainer ~~fees of $287,500, $330,000 and $118,750, respectively.~~fees. The ~~shares granted~~weighted average period over which the non-employee director award compensation expense is expected to ~~the directors are not registered under the Securities Act of 1933 and are subject~~be recognized is 1.23 years.

Ascent Industries Co.

Notes to ~~forfeiture in whole or in part upon the occurrence of certain events.~~Consolidated Financial Statements

Note 1011: Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities ~~and assets~~from continuing operations are as follows at the respective year ends:


(in thousands)	2023		2022
Deferred income tax assets:

Inventory valuation reserves	$	1,829	$	963

Inventory capitalization	360		907




Accrued bonus	127		150

State net operating loss carryforwards	2,239		1,572
Federal net operating loss carryforwards	2,209		1,088


Lease liabilities	7,415		7,744


Interest Limitation Carryforwards	1,396		555
Intangible asset basis differences	2,564		3,262
Other	1,932		1,192
Total deferred income tax assets	20,071		17,433
State valuation allowance	(1,641)		(1,371)
Total net deferred income tax assets	18,430		16,062

Deferred income tax liabilities:
Fixed asset basis differences	5,478		7,184
Prepaid expenses	445		418
Lease assets	6,699		7,107


Total deferred income tax liabilities	12,622		14,709
Deferred income taxes, net	$	5,808	$	1,353

2017 2016
Deferred income tax assets:
Sale leaseback deferred gain $ 1,382,270
$ 2,387,309
Inventory valuation reserves 209,745
379,005
Allowance for doubtful accounts 7,944
28,556
Inventory capitalization 943,203
1,780,957
Environmental reserves 124,029
199,191
Interest rate swap —
15,185
Warranty accrual 8,132
62,035
Deferred compensation 36,617
60,745
Accrued bonus 483,238
337,028
Accrued expenses 24,749
77,629
State net operating loss carryforwards 2,069,258
1,724,843
Other 479,338
389,530
Total deferred income tax assets 5,768,523
7,442,013
Valuation allowance (2,087,860 ) (1,790,051 )
Total net deferred income tax assets 3,680,663
5,651,962
Deferred income tax liabilities:
Tax over book depreciation and amortization 3,971,816
6,946,812
Prepaid expenses 174,322
211,300
Interest rate swap 87,016
—
Other 83,419
103,342
Total deferred income tax liabilities 4,316,573
7,261,454
Deferred income taxes $ (635,910 ) $ (1,609,492 )

Significant components of the provision for income taxes ~~from continuing operations~~ are as follows:


(in thousands)	2023		2022
Current:
Federal	$	(561)	$	(189)
State	191		137
Total current	(370)		(52)
Deferred:
Federal	(5,965)		(4,903)
State	(589)		(613)
Total deferred	(6,554)		(5,516)
Total	$	(6,924)	$	(5,568)

2017 2016 2015
Current:
Federal $ 1,067,490
$ (980,495 ) $ 1,415,142
State 106,832
190,230
233,626
Total current 1,174,322
(790,265 ) 1,648,768
Deferred:

Federal (1,043,384 ) (1,329,302 ) (47,530 )
State 6,201
(78,433 ) 197,762
Total deferred (1,037,183 ) (1,407,735 ) 150,232
Total $ 137,139
$ (2,198,000 ) $ 1,799,000

Ascent Industries Co.

~~Tax benefit from discontinued operations amounted~~Notes to ~~$51,000 and $651,000 for the fiscal years ended 2016 and 2015, respectively. The Company did not have any discontinued operations for 2017.~~Consolidated Financial Statements

The reconciliation of income tax computed at the U. S. federal statutory tax rates to income tax expense is:


(in thousands)

(in thousands)

Amount
Amount
Tax at U.S. statutory rates
Tax at U.S. statutory rates
Tax at U.S. statutory rates
State income taxes, net of federal tax benefit
State income taxes, net of federal tax benefit
State income taxes, net of federal tax benefit
Federal and State valuation allowance
Federal and State valuation allowance
Federal and State valuation allowance

	2017					2016					2015
	Amount			%		Amount			%		Amount			%
Tax at U.S. statutory rates	$	502,690		34.0	%	$	(3,125,382	)	34.0	%	$	(2,880,574	)	34.0	%
State income taxes, net of federal tax benefit	65,546			4.4	%	(48,842		)	0.5	%	285,426			(3.4	)%
State valuation allowance	8,498			0.6	%	95,961			(1.0	)%	94,068			(1.1	)%
Life insurance cash surrender value	—			—	%	503,700			(5.5	)%	—			—	%
Earn-out adjustments	—			—	%	—			—	%	(857,061		)	10.1	%
Manufacturing exemption	(116,980		)	(7.9	)%	—			—	%	(187,604		)	2.2	%

Stock option compensation	226			—	%	45,929			(0.5	)%	94,637			(1.1	)%
Uncertain tax positions	—			—	%	—			—	%	(139,000		)	1.6	%
Rate change effects	(380,961		)	(25.8	)%	—			—	%	—			—	%

Stock option compensation

Stock option compensation

Tax Benefits Associated with Palmer Closure

Tax Benefits Associated with Palmer Closure

Tax Benefits Associated with Palmer Closure
Other nondeductible expenses
Other nondeductible expenses
Other nondeductible expenses

Goodwill impairment

Goodwill impairment

Goodwill impairment	—			—	%	—			—	%	5,405,302			(63.8	)%
Other, net	58,120			4.0	%	330,634			(3.6	)%	(16,194		)	0.3	%
Other, net
Other, net
Total	$	137,139		9.3	%	$	(2,198,000	)	23.9	%	$	1,799,000		(21.2	)%
Total
Total

~~Income~~The Company's effective tax rate for 2023 was less than the U.S. statutory rate of 21% primarily driven by tax benefits associated with non-deductible goodwill impairment. The Company's effective tax rate for 2022 was less than the U.S. statutory rate of 21% primarily driven by tax benefits associated with the closure of Palmer and the release of valuation allowances on certain deferred tax assets, partially offset by state taxes.

The Company made income tax payments of ~~$2,576,515, $991,888~~$0.9 million and ~~$2,250,558 were made~~$7.8 million in ~~2017, 2016~~2023 and ~~2015,~~2022, respectively. The Company has $10.5 million of U.S. Federal net operating loss carryforwards and $6.6 million of interest limitation carryforwards at the end of 2023 compared to $5.2 million of U.S. Federal net operating loss carryforwards and $2.6 million interest limitation carryforwards at the end of 2022. The Company believes that these carryforwards are more likely than not to be utilized in future periods. The majority of these carryforwards are not subject to expiration.

In addition, on a gross basis the Company had state net operating loss carryforwards of $49.0 million and $37.2 million at the end of ~~fiscal years 2017~~2023 and ~~2016~~2022, respectively. As of ~~$49,711,027 and $49,676,851, respectively. These~~the end of 2023, the Company had recognized a state valuation allowance of $1.6 million. This represents a $0.3 million increase year-over-year primarily driven by losses in jurisdictions for which we believe it is not more likely than not to be utilized in future periods. The majority of these losses will expire between the years of ~~2018~~2023 and ~~2037. A valuation allowance has been set up against $49,612,725 of these state net operating loss carryforwards because it is~~2043, while certain losses are not more likely than not that the losses will be realized in the foreseeable future. The portion of the valuation allowance for the net operating loss carryforwards was $2,064,674 and $1,724,843 at December 31, 2017 and December 31, 2016, respectively. In addition, a $23,186 valuation allowance was established at December 31, 2017 for other deferred tax assets. This resulted in a valuation allowance increase of $297,809 all relatedsubject to ~~continuing operations.~~expiration.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. The Company is no longer subject to U.S. federal examinations for years before ~~2014~~2020 or state ~~income tax~~ examinations for years before ~~2013. The Company completed its 2012 and 2013 federal income tax return examination by the Internal Revenue Service during the second quarter of 2015.~~2019.

The Company had no uncertain tax position activity during ~~2017~~2023 or ~~2016.~~2022. The Company's continuing practice is to recognize interest and/or penalties related to income tax matters in the provision for income taxes. The Company had no accruals for uncertain tax positions including interest and penalties at the end of ~~2017.~~2023.

~~On December 22, 2017, the Tax Cuts and Jobs Act (“The Act”) was signed into law by the President of the United States, enacting significant changes~~

Ascent Industries Co.

Notes to the Internal Revenue Code effective January 1, 2018. The Act includes a number of provisions including, but not limited to, a permanent reduction of the U.S. corporate tax rate from 35 percent to 21 percent, eliminating the deduction for domestic production activities, limiting the tax deductibility of interest expense, accelerating the expensing of certain business assets and reducing the amount of executive pay that could qualify as a tax deduction. Many effects of The Act are international in nature, such as the one-time transition tax, base erosion anti-abuse tax and the global intangible low-taxed income tax, and thus would not pertain to the Company as it has no international operations. The Company's net deferred tax liability as of December 31, 2017 was determined based on the new permanently enacted corporate income tax rate of 21 percent. As a result, the 2017 income tax provision was reduced by $380,961 for a one-time non-cash revaluation adjustment of the net deferred tax liabilities.Consolidated Financial Statements

On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of The Act. The Company's revaluation of its deferred tax assets and liabilities is provisional and subject to further clarification of the new law, including but not limited to US state conformity that cannot be estimated at this time and measurement of underlying tax basis in certain business assets. The ultimate impact may differ from provisional amounts due to, among other things, additional analysis, changes in interpretations and assumptions the Company has made, and additional regulatory guidance that may be issued. Further guidance may be forthcoming from federal and state agencies, which could result in additional adjustments. The accounting is expected to be completed no later than the filing of the 2017 U.S. corporate income tax return in 2018.

Note ~~11 Benefit Plans~~12: Earnings Per Share

The following table sets forth the computation of basic and ~~Collective Bargaining Agreements~~diluted earnings per share:


(in thousands, except per share data)	2023		2022
Numerator:
Net (loss) income from continuing operations	$	(34,151)	$	17,578
Net income from discontinued operations	7,522		4,488
Net (loss) income	(26,629)		22,066
Denominator:
Weighted average common shares outstanding	10,140		10,230
Effect of dilutive securities:
Employee stock options and stock grants	—		180
Denominator for diluted earnings per share - weighted average shares	10,140		10,410

Net (loss) income per share from continuing operations:
Basic	$	(3.37)	$	1.72
Diluted	$	(3.37)	$	1.69

Net income per share from discontinued operations:
Basic	$	0.74	$	0.44
Diluted	$	0.74	$	0.43

Net (loss) income per share:
Basic	$	(2.63)	$	2.16
Diluted	$	(2.63)	$	2.12

The diluted earnings per share calculations exclude the effect of potentially dilutive shares when the inclusion of those shares in the calculation would have an anti-dilutive effect. The Company ~~has a 401(k) Employee Stock Ownership Plan (the "401(k)/ESOP Plan") covering all non-union employees. Employees could contribute to the 401(k)/ESOP Plan up to~~ ~~100 percent~~had an $0.1 million shares of ~~their wages with a maximum of~~ ~~$18,000~~ ~~for~~ ~~2017. Under the Economic Growth and Tax Relief Reconciliation Act, employees who are age~~ 50 ~~or older could contribute an additional~~ ~~$6,000~~ ~~per year for a maximum of~~ ~~$24,000~~ ~~for~~ ~~2017. Contributions by the employees are invested~~common stock that were anti-dilutive in one or more funds at the direction of the employee; however, employee contributions cannot be invested in Company stock. For the year ended December 31, 2015, contributions by the Company were made in cash and then used by the 401(k)/ESOP Plan Trustee to purchase Company stock. Effective January 1, 2016, contributions by the Company are made in accordance with the investment elections made by each participant for their deferral contributions.2023. The Company ~~contributes on behalf~~had 0.2 million shares of ~~each eligible participant a matching contribution equal~~common stock that were anti-dilutive in 2022.

Ascent Industries Co.

Notes to ~~a percentage determined each year by the Board of Directors. For~~ ~~2017~~, ~~2016~~ ~~and~~ ~~2015~~ ~~the maximum was 100 percent of employee contributions up to a maximum of~~ ~~four percent~~ ~~of their eligible compensation. The matching contribution is applied to the employee accounts after each payroll. Matching contributions of approximately~~ ~~$608,473~~, ~~$516,991~~ ~~and~~ ~~$541,260~~ ~~were made for~~ ~~2017~~, ~~2016~~ ~~and~~ ~~2015, respectively. The Company may also make a discretionary contribution, which if made, would be distributed to all eligible participants regardless of whether they contribute to the 401(k)/ESOP Plan.~~ No ~~discretionary contributions were made to the 401(k)/ESOP Plan in~~ ~~2017~~, ~~2016~~ or ~~2015~~.Consolidated Financial Statements

The Company also has a 401(k) and Profit Sharing Plan (the "Bristol Plan") covering all employees of the United Steel Workers of America, Local Union 4586 Collective Bargaining Agreement ("CBA"). Employees could contribute to the Bristol Plan up to 60 percent of pretax annual compensation, as defined in the Plan, with a maximum of $18,000 for 2017. Under the Economic Growth and Tax Relief Reconciliation Act, employees who are age 50 or older could contribute an additional $6,000 per year for a maximum of $24,000 for 2017. The Company contributes three percent of a participant's eligible compensation for the plan year, regardless of whether the participants contribute to the Bristol Plan. The Company's contributions were $174,229, $136,763 and $147,005 for 2017, 2016 and 2015, respectively. Additional profit sharing amounts may also be contributed at the option of the Company's Board of Directors, which if made, would be allocated to participants based on the ratio of the participant's compensation to the total compensation of all participants eligible to participate in the Bristol Plan. No discretionary contributions were made to the Bristol Plan in 2017, 2016 or 2015.

In connection with the MUSA acquisition discussed in Note 18, the Company assumed the rights and obligations pursuant to the CBA between MUSA and the United Steel Workers of America, Local Union 5852-22 (the " Munhall Union"). As a part of this CBA, the Company assumed the obligation of participating in the Steelworkers Pension Trust (plan number 499; EIN: 23-6648508), a union-sponsored multi-employer defined benefit plan (the "Munhall Plan"), which covers all the Company's eligible Munhall Union employees. The Munhall Plan has a plan year that coincides with the calendar year. Per the most recent available annual funding notice, the plan was at least 80 percent funded for the plan year ended December 31, 2016. Per the terms of the agreement the Company contributes 3.75 percent of each participant's eligible compensation for the plan year. Munhall Union employees make no contributions to the Munhall Plan. The Company's contributions are less than 5 percent of total contributions to the plan based on contributions for the plan year ended December 31, 2016. The Company's contributions to the Munhall Plan totaled $69,245 for the year ended December 31, 2017. Additionally, as part of the CBA with the Munhall Union, members of the union are eligible to make deferral contributions to the Company's 401(k)/ESOP Plan per the plan guidelines; however they do not receive matching contributions of the 401(k)/ESOP Plan.

The Company also maintains a CBA with the United Steel Workers of America, Local Union 4564-07, which represents employees at the Specialty-Mineral Ridge facility. In connection with this CBA, the Company contributes to union-sponsored defined contribution retirement plans. Contributions relating to these plans were approximately $29,042, ~~$22,256~~ ~~and~~ ~~$37,712~~ ~~for 2017,~~ ~~2016~~ ~~and~~ ~~2015, respectively.~~

~~Note 12 Leases~~

On August 31, 2016, Synalloy and its operating subsidiaries ("the Synalloy Companies") entered into a Purchase and Sale Agreement ("PSA") with Store Capital Acquisitions, LLC, a Delaware limited liability company and an affiliate of Store Capital Corporation (“Store Capital Acquisitions”). Store Capital Acquisitions assigned its rights under the PSA to Store Master Funding XII, LLC, a Delaware limited liability company ("Store Funding"), prior to closing.

On September 30, 2016, pursuant to the terms and conditions of the PSA, the Synalloy Companies completed the sale of their real estate properties in Tennessee, South Carolina, Texas and Ohio to Store Funding for a purchase price of $22,000,000. The net book value of the real estate properties sold totaled $17,769,883 and the Company recognized a loss on the sale of certain locations of $2,455,347. The Company also recognized a deferred gain of $6,685,464 on the sale of certain locations which is being amortized on the straight-line method over the initial lease term of 20 years. The deferred gain recognized during the fourth quarter of 2016 totaled $83,568 and reduced the net loss recognized at December 31, 2016 in the accompanying consolidated statements of

operations to $2,371,778. The deferred gain recognized during 2017 totaled $334,273. Concurrent with the sale of its real properties, the Company leased back all real properties sold to Store Funding. The closing of the sale-leaseback transaction provided the Company with net proceeds (after transaction-related costs) of $21,925,000. The net proceeds were used to pay down debt under the Company's credit agreement, as described in Note 5.

The initial non-cancellable term of the lease is 20 years, with two renewal options of ten years each. The lease includes a rent escalator equal to the lesser of 1.25 times the percentage increase in the Consumer Price Index since the previous increase or two percent. The lease met the operating lease requirements and has been accounted for as such. For each location, the Company simultaneously entered into a sublease with each operating subsidiary.

The Company leases office space in Spartanburg, South Carolina and Richmond, Virginia, property for a storage yard in Mineral Ridge, Ohio, manufacturing and warehouse space in Munhall, Pennsylvania and various manufacturing and office equipment at each of its locations, all under operating leases.

~~The amount of future minimum lease payments under operating leases are as follows:~~ ~~2018~~ - ~~$2,744,596~~; ~~2019~~ - ~~$2,861,487~~; ~~2020~~ - ~~$2,903,841~~; ~~2021~~ - ~~$2,892,396; 2022 - $2,883,906; and thereafter - $33,783,129. Rent expense related to operating leases was~~ ~~$3,339,600~~, ~~$1,143,895~~ ~~and~~ ~~$685,903~~ in ~~2017~~, ~~2016~~ ~~and~~ ~~2015, respectively.~~

~~The Company leases machinery and equipment for its manufacturing facility in Cleveland, Tennessee under capital leases. Future minimum commitments for capital leases are as follows:~~

Year ending December 31:
2018 $ 85,464
2019 85,464
2020 70,080
2021 38,781
2022 18,407
Total minimum lease payments 298,196
Less imputed interest costs 15,177
Present value of net minimum lease payments $ 283,019

The current portion due under the capital lease is included in accrued expenses and the long-term portion is included in other long-term liabilities in the accompanying consolidated balance sheets as of December 31, 2017 and December 31, 2016.

Note ~~13 Commitments~~13: Industry Segments

Ascent Industries Co. has two reportable segments: Tubular Products and ~~Contingencies~~

Specialty Chemicals. The ~~Company is from time-to-time subject to various claims, other possible legal actions for product liability~~Tubular Products segment includes the operating results of the Company’s plants involved in the production of stainless steel pipe and tube. The Tubular Products segment serves markets through pipe and tube and customers in the appliance, architectural, automotive and commercial transportation, brewery, chemical, petrochemical, pulp and paper, mining, power generation (including nuclear), water and waste-water treatment, liquid natural gas ("LNG"), food processing, pharmaceutical, oil and gas and other ~~damages,~~industries.

On January 1, 2023, the Company changed the grouping of certain immaterial revenue and ~~other matters arising out of the normal conduct of the Company's business. No significant claims~~ expenses ~~were incurred during 2017, 2016 or 2015,~~associated with the ~~exception of the items discussed below. Any legal costs associated with commitments or contingencies are expensed as incurred.~~

~~In January 2014,~~ceased Palmer operations. As a Metals Segment customer filed suit against Palmer and Synalloy and another unrelated defendant in Texas state court alleging breach of warranty, among other claims. The plaintiff’s claim for damages did not state a dollar amount. This matter arose out of products manufactured and sold by Palmerresult, certain prior period Tubular Products segment results have been reclassified to All Other to be comparable to the current period's presentation. During the second quarter of 2023, the Board of Directors made the decision to permanently cease operations at the Company’s ~~acquisition of all of Palmer's outstanding stock in~~Munhall facility, which was effective August ~~2012. During August and September 2016, the parties~~31, 2023. As a result, certain prior period Tubular Products segment results have been reclassified to ~~the lawsuit tried the matter in a bench trial in the District Court of Harris County, Texas, 333rd Judicial District (the “Court”).~~remove Munhall's results from continuing operations to discontinued operations. On December 31, 2016, the Court entered final judgment in favor of the Plaintiff and Synalloy and against Palmer. The Court ordered Palmer to pay the Plaintiff approximately $8,600,000 in damages, plus pre- and post-judgment interest, and approximately $1,040,000 in attorneys’ fees. The Court ruled Synalloy has no liability to the Plaintiff. The former shareholders of Palmer are contractually bound, pursuant to the Stock Purchase Agreement by and among Synalloy and the former shareholders dated August 10, 2012, to hold harmless and indemnify Synalloy and Palmer from any and all costs and damages, including the judgment described above and all associated attorneys' fees, arising out of this matter. At December 31, 2016,22, 2023, the Company ~~recorded $11,000,000 in accrued expenses~~ and ~~current assets to reflect the legal liability and corresponding indemnified receivable due from the former shareholders of Palmer. On June 30, 2017, the plaintiff~~its wholly-owned subsidiary Specialty Pipe & Tube, Inc. (“SPT”) entered into ~~settlement agreements with Palmer/Synalloy and the former shareholders of Palmer, respectively,~~an Asset Purchase Agreement pursuant to which ~~the parties agreed to settle~~Ascent and release the judgment in full. On August 31, 2017, the former shareholders of Palmer satisfied the financial conditions specified in their settlement agreement with the plaintiff, and the plaintiff filed a Release of Final Judgment with the Court. Because the former shareholders of Palmer were contractually bound, pursuant to the Stock Purchase Agreement

~~by and among Synalloy and the former shareholders dated August 10, 2012, to hold harmless and indemnify Synalloy and Palmer from any and~~SPT sold substantially all costs and damages, including the judgment described above and all associated attorneys' fees, arising out of this matter, neither Synalloy nor Palmer contributed to the payments required by the settlement agreements. The legal liability and corresponding indemnified receivable due from the former shareholders of Palmer were reduced to zero at August 31, 2017.

In September 2014, a Metals Segment customer filed suit against Synalloy Fabrication, LLC (discontinued operation) and its surety in the United States District Court for the District of Maryland (Baltimore Division) alleging breach of contract, among other claims. The plaintiff's claim for damages was approximately $3,300,000 plus attorney's fees. This matter arose from a disagreement over the scope of a pipe fabrication project and whether an enforceable contract exists between the parties. On March 11, 2016, the United States District Court of Maryland (Baltimore Division) granted summary judgment regarding liability in favor of the ~~plaintiff by ruling that an enforceable contract existed between the parties and the Company breached the agreement.~~assets primarily related to SPT to Specialty Pipe & Tube Operations, LLC, a Delaware limited liability company. The transaction closed on December 22, 2023. As a result, prior period Tubular Products segment results have been reclassified to remove SPT's results from continuing operations to discontinued operations.

The Specialty Chemicals segment includes the operating results of ~~this ruling,~~ the ~~remaining issue~~Company’s plants involved in the ~~case was the amount~~production of ~~the plaintiff's damages. Consequently, the Company increased the facility closing liability to a level of $3,000,000~~specialty chemicals. The Specialty Chemicals segment produces products for the ~~estimated costs associated with~~pulp and paper, coatings, adhesives, sealants and elastomers (CASE), textile, automotive, household, industrial and institutional ("HII"), agricultural, water and waste-water treatment, construction, oil and gas and other industries.

The chief operating decision maker evaluates performance and determines resource allocations based on a number of factors, the ~~claim for~~primary measures being operating income and Adjusted earnings (loss) before interest, income taxes, depreciation and amortization. Adjusted earnings (loss) before interest, income taxes, depreciation and amortization excludes certain items that management believes are not indicative of future results.

The accounting principles applied at the ~~year ended December 31, 2015. In June 2016,~~operating segment level are the ~~matter was settled for damages totaling $3,100,000. As a result,~~same as those applied at the ~~Company increased~~consolidated financial statement level. Intersegment sales and transfers are eliminated at the ~~facility closing liability and made a payment of $2,500,000 in June 2016. In September 2016, the remaining balance of $600,000 was paid in full. The amount required~~corporate consolidation level.

Ascent Industries Co.

Notes to ~~adjust the facility closing reserve as a result of the settlement is included in discontinued operations for 2016 and 2015 in the accompanying consolidated statement of operations.~~Consolidated Financial Statements

Other than the environmental contingencies discussed in Note 7 and the matters discussed in this Note 13, management is not currently aware of any other asserted or unasserted matters which could have a significant effect on the financial condition or results of operations of the Company.

~~Note 14 Earnings Per Share~~

The following table ~~sets forth~~summarizes certain information regarding segments of the ~~computation~~Company's continuing operations:


(in thousands)	2023		2022
Net sales
Tubular Products	$	109,513	$	154,040
Specialty Chemicals	83,616		107,542
All Other	50		411
	$	193,179	$	261,993
Operating (loss) income
Tubular Products	$	(11,210)	$	22,182
Specialty Chemicals	(12,558)		6,971
All Other	(801)		(509)
	(24,569)		28,644

Corporate
Unallocated corporate expenses	(12,018)		(12,997)
Acquisition costs and other	(843)		(1,104)


Total Corporate	(12,861)		(14,101)
Operating (loss) income	(37,430)		14,543
Interest expense	4,238		2,742

Other income, net	(593)		(209)
(Loss) income before income taxes	$	(41,075)	$	12,010

Identifiable assets
Tubular Products	$	70,548	$	89,050
Specialty Chemicals	49,547		72,990
Corporate & Other	42,339		37,907


	$	162,434	$	199,947
Depreciation and amortization
Tubular Products	$	3,145	$	3,451
Specialty Chemicals	4,432		4,749
Corporate & Other	89		74
	$	7,666	$	8,274
Capital expenditures
Tubular Products	$	1,104	$	2,076
Specialty Chemicals	1,519		1,140
Corporate & Other	262		178
	$	2,885	$	3,394
Sales by product group
Fiberglass and steel liquid storage tanks and separation equipment	$	50	$	411
Stainless steel pipe and tube	109,513		154,040
Specialty chemicals	83,616		107,542
	$	193,179	$	261,993
Geographic sales
United States	$	188,241	$	253,693
Elsewhere	4,938		8,300
	$	193,179	$	261,993

Ascent Industries Co.

Notes to Consolidated Financial Statements

Note 14: Benefit Plans and Collective Bargaining Agreements

The Company has a 401(k) Employee Stock Ownership Plan (the "401(k)/ESOP Plan") covering all non-union employees. Beginning January 1, 2023 the plan was extended to include all non-union and union employees at the Company's Virginia facility. Employees can contribute to the 401(k)/ESOP Plan up to 100% of ~~basic~~their wages with a maximum of $22,500 for 2023. Under the Economic Growth and ~~diluted earnings~~Tax Relief Reconciliation Act, employees who are age 50 or older could contribute an additional $7,500 per ~~share:~~year for a maximum of $30,000 for 2023. Contributions by the employees are invested in one or more funds at the direction of the employee; however, employee contributions cannot be invested in Company stock. Contributions by the Company are made in accordance with the investment elections made by each participant for his or her deferral contributions. The Company contributes on behalf of each eligible participant a matching contribution equal to a percentage determined each year by the Board of Directors. For 2023 and 2022 the maximum was 100% of employee contributions up to a maximum of 4% of their eligible compensation. The matching contribution is applied to the employee accounts after each payroll. Matching contributions of approximately $1.0 million were made for 2023 and $0.7 million for 2022. The Company may also make a discretionary contribution, which if made, would be distributed to all eligible participants regardless of whether they contribute to the 401(k)/ESOP Plan. No discretionary contributions were made to the 401(k)/ESOP Plan in 2023 or 2022.

2017 2016 2015
Numerator:
Net income (loss) from continuing operations $ 1,341,362
$ (6,993,967 ) $ (10,269,278 )
Net loss from discontinued operations, net of tax $ —
$ (99,334 ) $ (1,251,058 )
Denominator:

Denominator for basic earnings per share - weighted average shares 8,704,730
8,649,745
8,710,361
Effect of dilutive securities:

Employee stock options and stock grants 22,757
—
—
Denominator for diluted earnings per share - weighted average shares 8,727,487
8,649,745
8,710,361

Net earnings (loss) per share from continuing operations:

Basic $ 0.15
$ (0.81 ) $ (1.18 )
Diluted $ 0.15
$ (0.81 ) $ (1.18 )

Net loss per share from discontinued operations:
Basic $ —
$ (0.01 ) $ (0.14 )
Diluted $ —
$ (0.01 ) $ (0.14 )

The ~~diluted earnings per share calculations exclude~~Company has a 401(k) and Profit Sharing Plan (the "Bristol Plan") covering all employees as part of the ~~effect~~United Steel Workers of ~~potentially dilutive shares when~~America, Local Union 4586 Collective Bargaining Agreement (the "Bristol CBA"). Employees can contribute to the ~~inclusion~~Bristol Plan up to 60% of ~~those shares~~pretax annual compensation, as defined in the ~~calculation~~Bristol Plan, with a maximum of $22,500 for 2023. Under the Economic Growth and Tax Relief Reconciliation Act, employees who are age 50 or older could contribute an additional 7,500 per year for a maximum of 30,000 for 2023. During 2023 and 2022, the Company contributed 4% of a participant's eligible compensation regardless of whether the participants contribute to the Bristol Plan. The Company's contributions were $0.3 million for both 2023 and 2022. Additional profit sharing amounts may also be contributed at the option of the Company's Board of Directors, which if made, would ~~have an anti-dilutive effect.~~be allocated to participants based on the ratio of the participant's compensation to the total compensation of all participants eligible to participate in the Bristol Plan. No discretionary contributions were made to the Bristol Plan in 2023 or 2022.

During 2022, the Company also maintained a 401(k) Plan (the "Virginia Plan") covering substantially all employees at the Virginia facility. The Company ~~had weighted average shares~~contributed on behalf of ~~common stock~~each eligible participant a matching contribution equal to a percentage determined each year by the Board of ~~86,524 in~~ ~~2017~~, ~~295,287~~ in ~~2016~~Directors. For 2022 the maximum was 100% of employee contributions up to the first 3% of their eligible compensation and ~~229,025~~ in ~~2015~~50% for employee contributions from 3% to 6%. Matching contributions of $0.4 million were made under the Virginia Plan for 2022. The Company also maintains a Collective Bargaining Agreement (the "Virginia CBA") with the United Food and Commercial Workers, Local Union 400 (the "Virginia Union"), which represents employees at the Virginia facility and is required to make additional quarterly contributions for hourly employees who had a hire date prior to June 1, 2013. Additional quarterly matching contributions of approximately $34,734 were ~~not included in~~made for 2023 and $37,743 for 2022.

The Company maintains a Collective Bargaining Agreement (the "Mineral Ridge CBA") with the ~~diluted earnings per share calculation~~United Steel Workers of America, Local Union 4564-07, which represents employees at the Mineral Ridge facility. In connection with the Mineral Ridge CBA, the Company contributes to union-sponsored defined contribution retirement plans. Contributions relating to these plans were $37,818 and $40,835 for 2023 and 2022, respectively. The employees at this facility are covered under the Employee Leasing Services Agreement entered into as ~~their effect was anti-dilutive.~~ part of the sale of Specialty Pipe & Tube, Inc which closed December 22, 2023.

Ascent Industries Co.

Notes to Consolidated Financial Statements

Note ~~15 Industry Segments~~15: Commitments and Contingencies

~~The Company's business is divided into~~In October 2021, the Company acquired DanChem Technologies, Inc. ("DanChem"), a specialty chemical manufacturer based in Virginia. In June of 2020, DanChem received a demand letter from Henkel US Operations Corporation (“Henkel”), a former customer, asserting various claims for breach of contract alleging that product supplied by DanChem under four (4) purchase orders in 2018 and 2019 were defective and/or non-conforming and seeking approximately $315,000 in damages. DanChem responded in August 2020 disputing the claims and denying wrongdoing. Henkel was silent almost two ~~operating segments: Metals~~years and ~~Specialty Chemicals.~~then, in August 2022, sent another demand letter to DanChem asserting similar, if not identical claims, but now seeking alleged damages of approximately $3 million (with the main difference between the two demands being Henkel’s new claims for lost profits and other consequential damages). Henkel filed a lawsuit against DanChem in Connecticut state court in October 2022 seeking its newly alleged damages of approximately $3 million. The Company ~~identifies~~settled the lawsuit with Henkel during the third quarter of 2023.

In addition, from time to time, we are involved in various other legal proceedings arising from the normal course of business activities. We are not presently a party to any other 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~~litigation 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, someoutcome of which, ~~are custom-produced~~we believe, if determined adversely 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, 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. During 2015, the Company recorded an impairment charge of $17,158,249 of the total Metals Segment's goodwill as a result of the annual impairment analysis performed in the fourth quarter; see Note 4. The Metals Segment's identifiable assets did not include any goodwill in 2016. In relation to the acquisition of the stainless pipe and tube assets of MUSA (see Note 18), the Metals Segment recognized goodwill of $4,648,795 in 2017. The Specialty Chemicals Segment's identifiable assets include goodwill of ~~$1,354,730~~ in ~~2017~~ ~~and~~ ~~2016. 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 $37,748, $48,000 and $1,332 for~~

~~2017, 2016 and 2015, respectively. Corporate assets consist principally of cash, certain investments and equipment.~~

~~The Metals Segment had one customer that accounted for approximately 14 percent of revenues in 2015. There were no customers representing more than ten percent of the Metals Segment's revenues in 2017~~us, would individually, or 2016. The Specialty Chemicals Segment has one customer that accounted for approximately 23 percent, 25 percent and 31 percent of revenues for 2017, 2016 and 2015. The concentration of sales to this customer declined in 2016 as a result of this customer moving production of the certain products previously produced and sold by the Specialty Chemicals Segment in house. The loss of this customer wouldtaken together, have a material adverse effect on our business, operating results, cash flows, or financial condition. Defending such proceedings is costly and can impose a significant burden on management and employees. We may receive unfavorable preliminary or interim rulings in the ~~revenues~~course of ~~the Specialty Chemicals Segment~~litigation, and ~~the Company.~~there can be no assurances that favorable final outcomes will be obtained.

In order to establish stronger business relationships, the Metals Segment uses only a few raw material suppliers. Nine suppliers furnish about 80 percent of total dollar purchases of raw materials, with one supplier furnishing 40 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 52 percent of total purchases are from its top 15 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:~~60

~~All values are for continuing operations only.~~

2017 2016 2015
Net sales
Metals Segment $ 152,957,195
$ 90,214,537
$ 114,908,258
Specialty Chemicals Segment 48,190,487
48,351,245
60,552,180
$ 201,147,682
$ 138,565,782
$ 175,460,438
Operating income (loss)

Metals Segment $ 5,424,624
$ (4,820,374 ) $ 2,821,879
  Goodwill impairment —
—
(17,158,249 )
Business interruption proceeds —
—
1,246,024
Gain (loss) on sale-leaseback 239,604
(2,166,136 ) —
   Total Metals Segment 5,664,228
(6,986,510 ) (13,090,346 )
Specialty Chemicals Segment 4,295,576
4,887,143
5,664,843
Gain (loss) on sale-leaseback 94,669
(205,642 ) —
   Total Specialty Chemicals Segment 4,390,245
4,681,501
5,664,843
10,054,473
(2,305,009 ) (7,425,503 )
Unallocated straight line lease cost 397,071
101,633
—
Unallocated corporate expenses 6,116,768
5,733,529
5,105,935
Acquisition related costs 794,983
106,227
499,761
Operating income (loss) 2,745,651
(8,246,398 ) (13,031,199 )
Interest expense 985,366
932,572
1,352,806
Change in fair value of interest rate swap (96,696 ) 12,997
41,580
Earn-out adjustments 688,523
—
(4,897,448 )
Casualty insurance gain —
—
(923,470 )
Other income, net (310,043 ) —
(134,389 )
Income (loss) before income taxes $ 1,478,501
$ (9,191,967 ) $ (8,470,278 )

Identifiable assets

Metals Segment $ 130,456,857
$ 109,689,477

Specialty Chemicals Segment 25,394,078
22,907,672

Corporate 4,023,215
6,040,914

$ 159,874,150
$ 138,638,063

Depreciation and amortization

Metals Segment $ 6,280,681
$ 5,132,506
$ 5,172,251
Specialty Chemicals Segment 1,302,579
1,449,437
1,376,167
Corporate 154,552
113,047
85,973
$ 7,737,812
$ 6,694,990
$ 6,634,391
Capital expenditures

Metals Segment $ 3,405,552
$ 2,198,535
$ 7,398,517
Specialty Chemicals Segment 1,649,967
475,703
3,439,260
Corporate 223,089
370,173
67,453
$ 5,278,608
$ 3,044,411
$ 10,905,230
Sales by product group
Specialty chemicals $ 48,190,487
$ 48,351,245
$ 60,552,180
Stainless steel pipe 100,523,823
56,065,642
77,849,443
Seamless carbon steel pipe and tube 25,103,641
14,913,133
18,013,326
Liquid storage tanks and separation equipment 27,599,731
19,235,762
19,045,489
$ 201,417,682
$ 138,565,782
$ 175,460,438
Geographic sales

United States $ 196,172,279
$ 132,313,157
$ 167,185,319
Elsewhere 4,975,403
6,252,625
8,275,119
$ 201,147,682
$ 138,565,782
$ 175,460,438

Ascent Industries Co.

Notes to Consolidated Financial Statements

Note ~~16 Quarterly Results (Unaudited)~~

~~The following is a summary of quarterly operations for~~ ~~2017~~ ~~and~~ ~~2016~~:

First Quarter Second Quarter Third Quarter Fourth Quarter
2017
Net sales $ 42,203,579
$ 51,511,045
$ 54,595,924
$ 52,837,134
Gross profit 7,403,579
8,177,927
4,836,620
7,662,824
Net income (loss) from continuing operations 701,542
829,879
(1,206,752 ) 1,016,693
Net income from discontinued operations
—
—
—
—
Net income (loss) 701,542
829,879
(1,206,752 ) 1,016,693
Other comprehensive income (loss) —
366,346
(366,346 ) (10,864 )
Comprehensive income (loss) —
1,196,225
(1,573,098 ) 1,005,829

Per common share

Basic 0.08
0.10
(0.14 ) 0.11
Diluted 0.08
0.10
(0.14 ) 0.11

2016

Net sales from continuing operations $ 36,312,012
$ 34,906,668
$ 34,297,231
$ 33,049,871
Gross profit from continuing operations 4,718,176
3,997,594
4,504,419
3,684,290
Net loss from continuing operations (1) (1,366,732 ) (1,583,395 ) (2,608,276 ) (1,435,564 )
Loss from discontinued operations, net of tax —
(99,334 ) —
—
Net loss (1,366,732 ) (1,682,729 ) (2,608,276 ) (1,435,564 )
Other comprehensive income —
—
—
—
Comprehensive (loss) (1,366,732 ) (1,682,729 ) (2,608,276 ) (1,435,564 )

Per common share from continuing operations

Basic (0.16 ) (0.18 ) (0.30 ) (0.17 )
Diluted (0.16 ) (0.18 ) (0.30 ) (0.17 )

Per common share from discontinued operations
Basic —
(0.01 ) —
—
Diluted —
(0.01 ) —
—

~~(1) The Company recorded a loss of $2,455,347 in the third quarter of 2016 associated with the sale-leaseback transaction.~~

~~Note 17 Interest Rate Swap~~

As discussed in Note 5, the Company has an interest rate swap associated with its Line which effectively is expected to offset variable interest in the borrowing; hedge accounting was not utilized. The notional amount of the swap was $10,500,000 and $12,750,000 at December 31, 2017 and December 31, 2016, respectively. Therefore, the fair value is recorded in current assets or liabilities, as appropriate, with corresponding changes to fair value recorded to other income (expense). The Company recorded an asset of $127,981 and $31,285 for the fair value of the Palmer swap at December 31, 2017 and December 31, 2016, respectively.

~~Note 18 Acquisitions~~

~~Acquisition of the Stainless Steel Pipe and Tube Assets of Marcegaglia USA, Inc.~~

On December 9, 2016, the Company's subsidiary Bristol Metals, LLC ("BRISMET"), entered into a definitive agreement to acquire the stainless steel pipe and tube assets of MUSA located in Munhall, PA (the "Bristol Metals-Munhall") to enhance its on-going business with additional capacity and technological advantages. The transaction closed on February 28, 2017 and was funded through an increase to the Company's credit facility (See Note 5). The purchase price for the transaction, which excludes real estate and certain other assets, totaled $14,953,513. The assets purchased from MUSA include inventory, production and maintenance supplies and equipment less specific identified liabilities to be assumed. In accordance with the agreement, on December 9, 2016, BRISMET entered into an escrow agreement and deposited $3,000,000 into the escrow fund. The deposit was remitted to MUSA at the close of the transaction and was reflected as a credit against the purchase price.

~~A summary of sources and uses of proceeds for the acquisition is as follows:~~

Sources of funds:
Borrowings from revolving line of credit $ 14,953,513
Total sources of funds $ 14,953,513

Uses of funds:
Acquisition of MUSA Stainless assets $ 14,953,513
Total uses of funds $ 14,953,513

The transaction was accounted for using the acquisition method of accounting for business combinations. During the fourth quarter of 2017, the Company finalized the purchase price allocation for the Bristol Metals-Munhall acquisition.

MUSA will receive quarterly earn-out payments for a period of four years years following closing. Aggregate earn-out payments will be at least $3,000,000, with no maximum. Actual payouts will equate to three percent of BRISMET’s incremental revenue, if any, from the amount of small diameter stainless steel pipe and tube (outside diameter of ten inches or less) sold. At February 28, 2017, the acquisition date, the Company forecasted earn out payments to be $4,063,204, which was discounted to a present value of $3,604,330 using a discount rate applicable to future revenue of five percent. In determining the appropriate discount rate to apply to the contingent payments, the risk associated with the functional form of the earn-out, the credit risk associated with the payment of the earn-out and the methodology to quantify the earn-out were all considered. The fair value of the contingent consideration was estimated by applying the Monte Carlo simulation approach using management's estimates of pounds shipped.

In the second quarter of 2017, Management adjusted the selling price used in the earn-out calculation associated with the MUSA acquisition. Since this adjustment was determined within the measurement period, the beginning earn-out liability and goodwill were increased by $1,059,453. Goodwill related to Bristol Metals-Munhall increased from $3,589,342 to $4,648,795 and the fair value on contingent consideration was increased from $3,604,330 to $4,663,783. All other changes in fair value have been included as other (income) loss on the Company's consolidated statements of operations.

The total purchase price was allocated to Bristol Metals-Munhall facility's net tangible and identifiable intangible assets based on their estimated fair values as of February 28, 2017. The fair value assigned to the customer list intangible is being amortized on an accelerated basis over 15 years. The excess of the consideration transferred over the fair value of the net tangible and identifiable intangible assets and liabilities is reflected as goodwill. Goodwill consists of manufacturing cost synergies expected from combining laser mill capabilities acquired as part of Bristol Metals-Munhall with BRISMET's current operations. All of the goodwill recognized was assigned to the Company's Metals Segment and is expected to be deductible for income tax purposes.

16: Supplemental Financial Information (unaudited)

The following ~~table shows the initial estimate of value and revisions made during 2017:~~

Initial
estimate Revisions Final
Inventories $ 5,434,000
$ —
$ 5,434,000
Other current assets - production and maintenance supplies 1,548,701
—
1,548,701
Equipment 7,576,733
—
7,576,733
Customer list intangible 992,000
—
992,000
Goodwill 3,589,342
1,059,453
4,648,795
Earn-out liability (3,604,330 ) (1,059,453 ) (4,663,783 )
Other liabilities assumed (582,933 ) —
(582,933 )
$ 14,953,513
$ —
$ 14,953,513

~~Bristol Metals-Munhall's results of operations since acquisition are reflected in the Company's~~tables present certain unaudited consolidated statements of operations. The amount of Bristol Metals-Munhall's revenues and operating loss included in the consolidated statements of operations for the year ended December 31, 2017 was $25,766,689 and $245,408, respectively. The following unaudited pro-forma information is provided to present a summary of the combined results of the Company's operations with Bristol Metals-Munhall as if the acquisition had occurred on January 1, 2016. The unaudited pro-formaquarterly financial information ~~is for information purposes only and is not necessarily indicative of what the results would have been had the acquisition been completed on the date indicated above.~~

Pro-Forma (Unaudited)
2017 2016
Pro-forma revenues $ 206,071,634
$ 161,591,159
Pro-forma net income (loss) 1,441,258
(9,730,841 )
Earnings (loss) per share:
Basic 0.17
(1.12 )
Diluted 0.17
(1.12 )

The pro-forma calculation excludes non-recurring acquisition costs of $698,587 which were incurred by the Company during 2017. The stainless steel operations of MUSA's historical financial results were adjusted for both years to eliminate interest expense charged by the prior owner. Pro-forma net income was reduced for both years for the amount of amortization on Bristol Metal Munhall's customer list intangible and an estimated amount of interest expense associated with the additional line of credit borrowings.

On March 1, 2017, pursuant to the terms and conditions of the MUSA asset purchase agreement, the Company entered into a lease agreement to lease manufacturing and warehouse space at MUSA's Munhall, PA facility for $33,333 per month for the initial lease term of 15 months. In February 2018, the lease was amended to extend the term of the lease for the period beginning June 1, 2018 and ending May 31, 2023 and includes escalating rent payments. The lease met the operating lease requirements and has been accounted for as such; see Note 12.

~~Note 19 Dispositions and Closures~~

Associated with the closure of Bristol Fab in 2014, Bristol Fab's collective bargaining agreement with the Union expired and the Company was legally obligated to pay a withdrawal liability to the Union's pension fund of approximately $1,904,628. This obligation was payable over 26 months ending October 1, 2016 with an interest rate of 4.51 percent.

During 2016, the Company successfully completed the items and processes identified when the one-time closing charges were developed. A charge of $99,334 and $1,251,058, net of tax respectively, was recorded as discontinued operations during 2016 and 2015 for a legal claim filed against Synalloy Fabrication as discussed in Note 13. The matter was settled during 2016 and the settlement was paid in full by September 2016. As such, the facility closing reserve was zero as of December 31, 2016. Bristol Fab was reported as a part of the Metals Segment.

~~The Company's results from discontinued operations are summarized below:~~

2016 2015
Net sales $ —
$ —
Loss before income taxes $ (150,334 ) $ (1,902,058 )
Benefit from income taxes (51,000 ) (651,000 )
Net loss from discontinued operations $ (99,334 ) $ (1,251,058 )

~~Note 20 Payment of Dividends~~

At the end of each fiscal year the Board reviews the financial performance and capital needed to support future growth to determine the amount of cash dividend, if any, which is appropriate. In 2017, the Company paid a $0.13 cash dividend on November 6, 2017 for a total of $1,148,513. In ~~2016~~, no ~~dividends were declared or paid by the Company. In~~ ~~2015, the Company paid a~~ ~~$0.30~~ ~~cash dividend on~~ ~~December 8, 2015~~ ~~for a total payment of~~ ~~$2,617,513~~.

~~Note 21 Business Interruption Proceeds and Gain on Casualty Loss~~

On April 30, 2015, the Company's fiberglass tank fabrication facility at the Palmer complex in Andrews, Texas suffered fire damage including minor structural damage as well as damage to the electrical system and overhead cranes. The Company completed repairs to the facility and the losses were fully insured including business interruption coverage. Total business interruption insurance recoveries recognized during the year ended December 31, 2015 were $1,246,024 and is shown separately in operating income on the accompanying consolidated statements of operations. During the fourth quarter of 2015, the Company completed the insurance claim settlement for the fire and recorded a casualty insurance gain of $923,470, representing the excess of insurance proceeds over the net book value of assets damaged in the loss, and is shown separately in other income on the accompanying consolidated statements of operations for the year ended December 31, 2015.

~~Management's Annual Report on Internal Control Over Financial Reporting~~

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Management has excluded the Munhall facility's operations (acquired in the MUSA Stainless acquisition) from its assessment of internal control over financial reporting as of December 31, 2017 because this material acquisition closed in the first quarter of 2017. Total assets of $20.2 million and total revenue of $25.8 million associated with the Munhall facility represent approximately 15 percent and 17 percent, respectively, of the related financial statement amounts of the Metals Segment as of, and for the year ended, December 31, 2017.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies may deteriorate.

Management conducted an evaluation of the effectiveness of the Company's internal control over financial reporting as of December 31, 2017 using the criteria established by the Committee of Sponsoring Organizations of the Treadway Commission in the ~~Internal Control-Integrated Framework (COSO 2013).~~ ~~Based on that evaluation, management believes the Company's internal control over financial reporting was effective as of December 31, 2017.~~

The effectiveness of the Company's internal control over financial reporting as of December 31, 2017, has been audited by KPMG LLP, an independent registered public accounting firm, which also audited the Company's Consolidated Financial Statements for the year ended December 31, 2017. KPMG LLP's report on the Company's internal control over financial reporting is set forth below.

~~Changes in Internal Control Over Financial Reporting~~

There was no change in the Company's internal control over financial reporting that occurred during the Company's fourth quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. The Company believes that its disclosure controls and procedures were operating effectively as of December 31, 2017.

~~Report of Independent Registered Public Accounting Firm~~

~~To the Shareholders and Board of Directors~~

~~Synalloy Corporation:~~

~~Opinion on the ConsolidatedFinancial Statements~~

We have audited the accompanying consolidated balance sheets of Synalloy Corporation and subsidiaries (the “Company”) as of December 31, 2017 and 2016, the related consolidated statements of operations and other comprehensive income, shareholders’ equity, and cash flows for each of the ~~years in the three‑year period~~eight quarters ended December 31, ~~2017, and~~2023. This quarterly information has been prepared on the ~~related notes and financial statement schedule II (collectively, the consolidated financial statements). In our opinion,~~same basis as the consolidated financial statements ~~present~~and includes all adjustments necessary to state fairly ~~in all material respects,~~ the ~~financial position of~~information for the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.periods presented.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in ~~Internal Control - Integrated Framework (2013)~~ issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 13, 2018 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.


Unaudited, in thousands, except per share data	Quarter Ended
2023	March 31		June 30		September 30		December 31
Net sales	$	54,861	$	50,355	$	46,747	$	41,216
Gross profit	1,466		(776)		2,984		(2,148)
Loss from continuing operations	(5,788)		(6,150)		(14,678)		(7,535)
Income (loss) from discontinued operations, net of tax	588		(8,486)		(3,254)		18,674
Net (loss) income	(5,200)		(14,636)		(17,932)		11,139

Net loss per share from continuing operations:
Basic	(0.57)		(0.60)		(1.45)		(0.75)
Diluted	(0.57)		(0.60)		(1.45)		(0.73)
Net income (loss) per share from discontinued operations:
Basic	0.06		(0.83)		(0.32)		1.85
Diluted	0.06		(0.83)		(0.32)		1.80
Net (loss) income per share:
Basic	(0.51)		(1.44)		(1.77)		1.10
Diluted	(0.51)		(1.44)		(1.77)		1.07
Weighted-average shares:
Basic	10,148		10,170		10,135		10,107
Diluted	10,148		10,170		10,135		10,374

~~Basis for Opinion~~


Unaudited, in thousands, except per share data	Quarter Ended
2022	March 31		June 30		September 30		December 31
Net sales	$	71,238	$	72,443	$	64,132	$	54,180
Gross profit	15,791		14,350		8,257		4,889
Income (loss) from continuing operations	6,488		7,189		(600)		4,501
Income (loss) from discontinued operations, net of tax	3,770		3,868		1,224		(4,374)
Net income	10,258		11,057		624		127

Net income (loss) per share from continuing operations:
Basic	0.64		0.70		(0.06)		0.44
Diluted	0.63		0.69		(0.06)		0.43
Net income (loss) per share from discontinued operations:
Basic	0.37		0.38		0.12		(0.43)
Diluted	0.37		0.37		0.12		(0.42)
Net income per share:
Basic	1.00		1.08		0.06		0.01
Diluted	0.99		1.06		0.06		0.01
Weighted-average shares:
Basic	10,209		10,244		10,253		10,213
Diluted	10,320		10,431		10,465		10,416

~~These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is~~

Ascent Industries Co.

Notes to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.Consolidated Financial Statements

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~/s/ KPMG LLP~~

~~We have served as the Company’s auditor since 2015.~~

~~Richmond Virginia~~

~~March 13, 2018~~

~~Report of Independent Registered Public Accounting Firm~~

~~To the Shareholders and Board of Directors~~

~~Synalloy Corporation:~~

~~Opinion on Internal Control Over Financial Reporting~~

~~We have audited Synalloy Corporation and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2017, based on criteria established in~~ ~~Internal Control - Integrated Framework (2013)~~ issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in ~~Internal Control - Integrated Framework (2013)~~ ~~issued by the Committee of Sponsoring Organizations of the Treadway Commission.~~

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2017 and 2016, the related consolidated statements of operations and other comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2017, and the related notes and financial statement schedule II (collectively, the consolidated financial statements), and our report dated March 13, 2018 expressed an unqualified opinion on those consolidated financial statements.Note 17: Subsequent Events

The Company ~~acquired certain assets of Marcegaglia USA, Inc. (the Munhall facility) during 2017,~~evaluated subsequent events and ~~management excluded from its assessment of~~transactions that occurred after the ~~effectiveness of~~balance sheet date up to the ~~Company’s internal control over financial reporting as of December 31, 2017,~~date that the Munhall facility’s internal control over financial reporting associated with total assets (including amounts resulting from the purchase price allocation) of $20.2 million and total revenues of $25.8 million included in the consolidated financial statements ofwere available to be issued. Based upon this review, the Company as of and for the year ended December 31, 2017. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of the Munhall facility.

~~Basis for Opinion~~

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, includeddid not identify any subsequent events that would have required adjustment or disclosure in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

~~Definition and Limitations of Internal Control Over Financial Reporting~~

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

~~/s/ KPMG LLP~~

~~Richmond, Virginia~~

~~March 13, 2018~~

Item 99. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A9A. Controls and Procedures

a) Evaluation of Disclosure Controls and Procedures

~~Under~~The Company conducted an evaluation, under the supervision and with the participation of ~~the Company’s~~its management, ~~including the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, the Company conducted an evaluation~~ of the effectiveness of the design and operation of its disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, the Company’s principal executive and principal financial officers concluded as of December 31, 2023 that its disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses in its internal control over financial reporting discussed below.

(b) Management's Report on Internal Control Over Financial Reporting.

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as ~~such term is~~ defined ~~under Rule 13a-15(e) promulgated~~in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of ~~1934 (the “Exchange Act”),~~1934. The Company’s internal control over financial reporting is a process designed by, or under the supervision of, its CEO and CFO, or persons performing similar functions, and effected by its Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America (GAAP). The Company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as ~~amended. Based on this evaluation,~~necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures of the ~~Chief Executive Officer, Chief Financial Officer~~Company are being made only in accordance with authorization of management and ~~Chief Accounting Officer concluded that~~directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s ~~disclosure controls and procedures were effective as~~assets that could have a material effect on the financial statements.

Management assessed the effectiveness of the ~~end of December 31, 2017. There have been no significant changes in the~~ Company’s internal controls or in other factors that could significantly affect the internal controls subsequent to the date the Company completed the evaluation. Management has excluded the Munhall facility's operations (acquired in the MUSA Stainless acquisition) from its assessment of internal control over financial reporting as of December 31, ~~2017 because~~2023. In making this ~~material acquisition closed~~assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in the ~~first quarter~~2013 Internal Control-Integrated Framework. Based on its evaluation, management has concluded that the Company’s internal control over financial reporting was not effective at the reasonable assurance level as of ~~2017. Total assets~~December 31, 2023.

Material Weaknesses in Internal Control over Financial Reporting

A material weakness, as defined in the standards established by the Sarbanes-Oxley Act of ~~$20.2 million~~2002 (the “Sarbanes-Oxley Act”), is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

We previously identified material weaknesses in our internal control over financial reporting that continue to exist as of December 31, 2023:

•Information Technology - Management did not design and ~~total~~maintain effective information technology (IT) general controls in the areas of user access, change management, segregation of duties, and cyber-security for systems supporting many of the Company's key financial reporting processes. As a result, IT application controls and business process controls that are dependent on the ineffective IT general controls, or that rely on data produced from systems impacted by the ineffective IT general controls, are also deemed ineffective, which affects substantially all financial statement account balances and disclosures within the Company.

•Inventory - Management did not appropriately design and maintain effective controls over inventory.

•Revenue recognition – Management did not design and maintain effective controls over revenue and accounts receivable.

•Period-end financial reporting, journal entries, reconciliations, and account analyses - Management did not design and maintain effective controls to detect potential material misstatements to period-end financial statements through review of ~~$25.8 million associated~~account reconciliations and account analyses on a timely basis. Additionally, management did not design and maintain effective controls over the review of journal entries.

•Complex Accounting - Management did not design and maintain management review controls at a sufficient level of precision around complex accounting areas such as income taxes.

While there were no material misstatements in 2023, these material weaknesses, individually or in the aggregate, could result in misstatements of accounts or disclosures in the consolidated financial statements that would not be prevented or detected on a timely basis. Accordingly, management has concluded that these control deficiencies constitute material weaknesses.

Management’s Plan to Remediate the Remaining Material Weakness

In response to the identified deficiencies that aggregated to the aforementioned material weaknesses, management, with oversight from the Company's Audit Committee, is in the process of developing and executing a detailed plan for remediation. This plan includes engaging an external advisor to assist with enhancing, designing, and implementing general information technology controls, including user access provisioning, cyber-security, and segregation of duties. As the Company continues to evaluate the control deficiencies that gave rise to the material weaknesses, the Company may determine additional remediation measures are necessary.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the ~~Munhall facility represent approximately 15 percent~~policies or procedures may deteriorate. A control system, no matter how well designed and ~~17 percent, respectively,~~operated can provide only reasonable, but not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their cost.

Remediation of Previously Reported Material Weaknesses

Three material weaknesses reported in the prior year were remediated in 2023. These material weaknesses were as follows:

•Entity Level Activities – Management did not maintain appropriately designed entity-level controls impacting the control environment and effective monitoring activities to prevent or detect potential material misstatements to the financial statements. These deficiencies were attributed to:

◦Management did not have an appropriate structure and assignment of responsibility, including an insufficient number of qualified resources due to significant turnover in key personnel leading to insufficient oversight and accountability over the performance of controls.

◦Management had an insufficient evaluation and determination as to whether the components of internal control were present and functioning based upon evidence maintained for certain management review controls and activity level controls across a significant portion of the ~~related~~Company’s financial statement ~~amounts~~areas.

•Complex Accounting – Management did not appropriately design and implement management review controls at a sufficient level of precision around complex accounting areas including goodwill impairment and long-lived assets.

To respond to these material weaknesses, we have provided relevant training on internal controls over financial reporting to control owners and control preparers. We have also engaged third-party consultants and advisors to assist us in designing and implementing controls necessary to remediate these material weaknesses, including thorough review and rationalization of our existing control and the ~~Metals Segment~~completion of a robust risk assessment. The new measures have been determined to have operated effectively for a sufficient period of time to conclude that the material weaknesses previously identified have been remediated as of ~~and for~~December 31, 2023.

c) Changes in Internal Control over Financial Reporting

Other than the ~~year~~material weaknesses described above, there were no changes in the Company’s internal controls over financial reporting during the fiscal quarter ended December 31, ~~2017.~~2023 that materially affected, or are reasonably likely to have a materially affect, on our internal control over financial reporting.

Moss Adams, LLP, our independent registered public accounting firm, has issued their report on our internal control over financial reporting as of December 31, 2023, which is included in Item 8 under the heading “Report of Independent Registered Public Accounting Firm."

Item 9B9B. Other Information

Our directors and officers (as defined in Section 16 of the Exchange Act ("Section 16") may from time to time enter into plans for the purchase or sale of Ascent stock that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.

Any 10b5-1 trading arrangements adopted are precleared in accordance with Ascent's Insider Trading Policy and actual purchase or sale transactions made pursuant to such trading arrangements will be publicly disclosed in future Section 16 filings with the SEC.

No director or officer adopted, modified and/or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" as defined in Item 408 under Regulation S-K of the Exchange Act, during the last fiscal quarter.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

PART III

Item 1010. Directors, Executive Officers and Corporate Governance

In accordance with General Instruction G(3), information called for by Part III, Item 10, is incorporated herein by reference from the information appearing under the caption "Proposal 1 - Election of Directors," "Executive Officers," and "Section 16(a) Beneficial Ownership Reporting Compliance” in the definitive Proxy Statement for the ~~2016~~2024 Annual Meeting of Shareholders, which definitive Proxy Statement will be filed electronically with the SEC pursuant to Regulation 14A.

Code of ~~Ethics.~~Conduct. The Company's Board of Directors has adopted a Code of ~~Ethics~~Conduct that applies to the Company's Chief Executive Officer, Chief Financial Officer and corporate and divisional controllers. The Code of ~~Ethics~~Conduct is available on the Company's website at ~~www.synalloy.com~~www.ascentco.com. Any amendment to, or waiver from, this Code of ~~Ethics~~Conduct will be posted on the Company's website.

Audit Committee. The Company has a separately designated standing Audit Committee of the Board of Directors established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The members of the Audit Committee are ~~Anthony A. Callander,~~ Henry L. Guy, Aldo J. Mazzaferro, Jr. and ~~James W. Terry.~~John P. Schauerman.

Audit Committee Financial Expert. The Company's Board of Directors has determined that the Company has at least one "audit committee financial expert," as that term is defined by Item 407(d)(5) of Regulation S-K promulgated by the Securities and Exchange Commission, serving on its Audit Committee. Mr. ~~Anthony A. Callander~~John P. Schauerman meets the terms of the definition and is independent, as independence is defined for audit committee members in the rules of the NASDAQ Global Market. Pursuant to the terms of Item 407(d) of Regulation S-K, a person who is determined to be an "audit committee financial expert" will not be deemed an expert for any purpose as a result of being designated or identified as an "audit committee financial expert" pursuant to Item 407(d), and such designation or identification does not impose on such person any duties, obligations or liability that are greater than the duties, obligations or liability imposed on such person as a member of the Audit Committee and Board of Directors in the absence of such designation or identification. Further, the designation or identification of a person as an "audit committee financial expert" pursuant to Item 407(d) does not affect the duties, obligations or liability of any other member of the Audit Committee or Board of Directors.

Item 1111. Executive Compensation

In accordance with General Instruction G(3), information called for by Part III, Item 11, is incorporated herein by reference from the information appearing under the caption "Board of Directors and Committees - Compensation Committee Interlocks and

Insider Participation," "Director Compensation," "Discussion of Executive Compensation" and "Compensation Committee Report" in the definitive Proxy Statement for the ~~2018~~2024 Annual Meeting of Stockholders, which definitive Proxy Statement will be filed electronically with the SEC pursuant to Regulation 14A.

Item 1212. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

In accordance with General Instruction G(3), information called for by Part III, Item 12, is incorporated by reference from the information appearing under the caption "Beneficial Owners of More Than Five Percent of the Company's Common Stock" and "Security Ownership of Certain Beneficial Owners and Management" in the definitive Proxy Statement for the ~~2018~~2023 Annual Meeting of Shareholders, which definitive Proxy Statement will be filed electronically with the SEC pursuant to Regulation 14A.

Equity Compensation Plan Information. The following table sets forth aggregated information as of December 31, ~~2017~~2023 about all of the Company's equity compensation plans.


Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted average exercise price of outstanding options, warrants, and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))1 (c)
Equity compensation plans approved by security holders	106,197	$	13.65	421,528
Equity compensation plans not approved by security holders	—	—		—
Total	106,197	$	13.65	421,528

Plan Category

Number of securities to be issued upon exercise of outstanding options, warrants and rights
(a)
Weighted average exercise price of outstanding options, warrants and rights (b)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) ⁽¹⁾
(c)
Equity compensation plans approved by security holders 145,511
$ 12.96
192,984
Equity compensation plans not approved by security holders —
—
—
Total 145,511
$ 12.96
192,984

⁽¹⁾1Represents shares remaining available for issuance under the ~~2015 Stock Awards~~2022 Omnibus Equity Incentive Plan ~~and the 2011 Plan.~~

Non-employee directors are paid an annual retainer of ~~$95,000,~~$115,000. Each non-employee director appointed to serve as a chairperson of a standing board committee receives the following annual retainer: Audit Committee: $10,000; Compensation Committee: $7,500; Nominating and ~~each~~Corporate Governance Committee: $6,000. The committee chairperson retainer is in addition to the board retainer. Each director has the opportunity to elect to receive ~~100 percent~~100% of the retainer in restricted stock with a minimum of $30,000 of the retainer in restricted stock. ~~For 2017, non-employee directors received an aggregate of $287,500~~The amount of the ~~annual~~ retainer elected to be paid in restricted ~~stock.~~stock vests quarterly over a one year period. The number of restricted shares is determined by the average of the high and low sale price of the Company's stock on the day prior to the Annual Meeting of Shareholders. ~~For 2017, six non-employee directors each received~~In 2023, the Company issued an aggregate of ~~24,209 shares. Issuance~~27,432 shares of the shares granted to the directors is not registered under the Securities Act of 1933 and the shares are subject to forfeiture in whole or in part upon the occurrence of certain events. The above table does not reflect these shares issuedrestricted stock to non-employee ~~directors.~~directors in lieu of $0.3 million of their annual cash retainer fees.

Item 1313. Certain Relationships and Related Transactions, and Director Independence

In accordance with General Instruction G(3), information called for by Part III, Item 13, is incorporated by reference from the information appearing under the caption "Board of Directors and Committees – Related Party Transactions" and "– Director Independence" in the definitive Proxy Statement for the ~~2017~~2024 Annual Meeting of Shareholders, which definitive Proxy Statement will be filed electronically with the SEC pursuant to Regulation 14A.

Item 1414. Principal ~~Accountant~~Accounting Fees and Services

In accordance with General Instruction G(3), information called for by Part III, Item 14, is incorporated by reference from the information appearing under the caption "Independent Registered Public Accounting Firm - Fees Paid to Independent Registered Public Accounting Firm" and "– Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm" in the definitive Proxy Statement for the ~~2017~~2024 Annual Meeting of Shareholders, which definitive Proxy Statement will be filed electronically with the SEC pursuant to Regulation 14A.

PART IV

Item 1515. Exhibits and Financial Statement Schedules

(a)The following documents are filed as a part of this report:

1.Financial Statements: The following consolidated financial statements of Ascent Industries Co. are included in Part II, Item 8:


~~(a)~~ Consolidated Balance Sheets as of December 31, 2023 and 2022			~~The following documents are filed as a part of this report:~~


1. Consolidated Statements of Income (Loss) for the years ended December 31, 2023 and 2022			~~Financial Statements: The following consolidated financial statements~~
Consolidated Statements of ~~Synalloy Corporation are included in Part II, Item 8:~~Cash Flows for the years ended December 31, 2023 and 2022
Consolidated Statements of Shareholders' Equity for the years ended December 31, 2023 and 2022

~~Consolidated Balance Sheets at December 31, 2017 and December 31, 2016~~

~~Consolidated Statements of Operations for the years ended December 31, 2017, December 31, 2016 and December 31, 2015~~

~~Consolidated Statements of Shareholders' Equity for the years ended December 31, 2017, December 31, 2016 and December 31, 2015~~

~~Consolidated Statements of Cash Flows for the years ended December 31, 2017, December 31, 2016 and December 31, 2015~~ Ascent Logo.jpg

Notes to Consolidated Financial Statements

2.Financial Statements Schedule: The following consolidated financial statements schedule of Ascent Industries Co. is included in Item 15:


2. Schedule II - Valuation and Qualifying Accounts			~~Financial Statements Schedules: The following consolidated financial statements schedule of Synalloy Corporation is included in Item 15:~~

~~Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2017, December 31, 2016 and December 31, 2015~~

All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.


3.All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted.			~~Listing of Exhibits:~~

3.Listing of Exhibits:

See "Exhibit Index"

2. Financial Statement Schedule ~~II Valuation and Qualifying Accounts~~



Schedule II Valuation and Qualifying Accounts
(in thousands)	Balance at Beginning of Period		Charged to (Reduction of) Cost and Expenses		Deductions		Balance at End of Period
Year ended December 31, 2023
Deducted from asset account:
Inventory reserves	$	2,970	$	3,318	$	(169)	$	6,119
Year ended December 31, 2022
Deducted from asset account:
Inventory reserves	$	943	$	2,615	$	(588)	$	2,970

Column A Column B Column C Column D Column E
Description Balance at Beginning of Period Charged to (Reduction of) Cost and Expenses Deductions Balance at End of Period
Year ended December 31, 2017
Deducted from asset account:
   Allowance for doubtful accounts $ 82,000
$ 202,000
$ (249,000 ) $ 35,000
   Inventory reserves $ 966,000
$ 1,237,000
$ (1,506,000 ) $ 697,000

Year ended December 31, 2016
Deducted from asset account:
   Allowance for doubtful accounts $ 247,000
$ (45,000 ) $ (120,000 ) $ 82,000
   Inventory reserves $ 682,000
$ 984,000
$ (700,000 ) $ 966,000

Year ended December 31, 2015
Deducted from asset account:
   Allowance for doubtful accounts $ 1,115,000
$ 104,000
$ (972,000 ) (a) $ 247,000
   Inventory reserves $ 725,000
$ 767,000
$ (810,000 ) $ 682,000

(a) Allowance for doubtful accounts deductions for 2015 includes an $801,000 payment to the former owners of Palmer. Per the Stock Purchase Agreement between the former owners of Palmer and the Company (the "SPA"), the former owners of Palmer reimbursed Synalloy for all uncollected accounts receivable after 120 days of Synalloy's ownership. Synalloy increased the allowance for doubtful accounts to reflect the $801,000 payment to offset the outstanding accounts receivable at that time. Over the next two years, Synalloy collected approximately $299,000 on these old accounts and the accounts receivable balance was reduced accordingly. The SPA did not require the reimbursement of these subsequent collections to the former owners of Palmer; however, Synalloy management, on our own recognizance during the second quarter of 2015, reimbursed the $299,000 collected on these old accounts and eliminated the outstanding receivable and allowance for doubtful accounts balances. This transaction had no effect on earnings during any period.

~~Index to~~3. Exhibits


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date
2.1	Stock Purchase Agreement, dated as of October 22, 2021, by and between the Company and DanChem Holdings, LLC.†	8-K	001-05200	2.1	October 25, 2021

2.2	Asset Purchase Agreement by and among Specialty Pipe & Tube Operations LLC, Specialty Pipe & Tube, Inc., and Ascent Industries Co., as the sole shareholder of Specialty Pipe & Tube, Inc. dated as of December 22, 2023	8-K	001-05200	2.1	December 29, 2023

3.1	Amended and Restated Certificate of Incorporation of Registrant	8-K	001-05200	3.1	August 10, 2022

3.2	Amended and Restated Bylaws of Registrant	8-K	001-05200	3.2	August 10, 2022

4.1	Description of Common Stock	10-K	001-05200	4.2	March 29, 2022

10.1	Amended and Restated Synalloy Corporation 2015 Stock Awards Plan**	10-Q	001-05200	10.2	August 9, 2021

10.2	2011 Long-Term Incentive Stock Option Plan**	DEF 14A	000-19687	A	March 25, 2011

10.3	2022 Omnibus Equity Incentive Plan**	DEF 14A	001-05200	A	April 27, 2022

10.4	Agreement between Registrant's Bristol Metals, LLC subsidiary and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union Local 5852-22, dated March 12, 2018, but effective January 6, 2018	10-K	000-19687	10.11	March 13, 2018

10.5	Agreement between Registrant's Bristol Metals, LLC subsidiary and the United Steelworkers of America Local 4586, dated August 1, 2019	10-K	000-19687	10.31	March 6, 2020

10.6	Agreement between Registrant’s Specialty Pipe & Tube, Inc. subsidiary and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union Local 1375-18, dated July 1, 2020	10-K	001-05200	10.9	March 9, 2021

10.7	Credit Agreement, dated as of January 15, 2021, between Registrant and BMO Harris Bank N.A.	8-K	001-05200	99.1	January 19, 2021

10.8	Joinder Agreement, dated November 5, 2021, between Registrant and BMO Harris Bank N.A.	10-Q	001-05200	10.1	November 9, 2021

Incorporated by Reference

Exhibit Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

10.9

Limited Consent, Second Amendment to Credit Agreement and Omnibus Amendment to Loan Documents with BMO Bank N.A. and the other lenders party thereto dated as of December 22, 2023

8-K

001-05200

2.1

December 29, 2023

10.10

Employment Agreement between Registrant and Christopher G. Hutter

8-K

001-05200

99.3

October 28, 2020

10.11

Third Amended and Restated Master Lease Agreement, dated as of September 10, 2020, between Registrant and Store Master Funding XII, LLC

10-Q

001-05200

10.1

November 9, 2020

10.12

Transition Services Agreement between Specialty Pipe & Tube Operations LLC and Ascent Industries Co. dated as of December 22, 2023

8-K

001-05200

2.1

December 29, 2023

10.13

Employee Leasing Transition Services Agreement between Specialty Pipe & Tube Operations LLC and Ascent Industries Co. dated as of December 22, 2023

8-K

001-05200

2.1

December 29, 2023

Subsidiaries of the Registrant

23.1

Consent of Moss Adams LLP, independent registered public accounting firm

23.2

Consent of BDO USA , P .C., independent registered public accounting firm

31.1

Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer

31.2

Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer

32.1

Certifications Pursuant to 18 U.S.C. Section 1350

97.1

Ascent Industries Co. Clawback Policy

101.INS*

XBRL Instance Document

101.SCH*

XBRL Taxonomy Extension Schema

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase

101.LAB*

XBRL Taxonomy Extension Label Linkbase

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase

101.DEF*

XBRL Taxonomy Extension Definition Linkbase

Incorporated by Reference

Exhibit Number

Exhibit Description

Form

File No.

Exhibit

Filing Date

104

Cover Page Interactive Data File (formatted as Inline XBRL document and included in Exhibit ~~No.~~

~~from~~

~~Item 601 of~~

~~Regulation S-K~~

101*)

~~Description~~

~~1.1~~

~~Underwriting Agreement dated September 24, 2013, incorporated by reference to Registrant's Form 8-K filed September 24, 2013~~

~~3.1~~

~~Restated Certificate of Incorporation of Registrant, as amended, incorporated by reference to Registrant's Form 10-Q for the period ended April 2, 2005~~

~~3.2~~

~~Restated Certificate of Incorporation of Registrant, as amended, incorporated by reference to Registrant's Form 8-K filed May 18, 2015~~

~~3.3~~

Bylaws of Registrant, incorporated by reference to Registrant's Form 10-Q for the period ended March 31, 2001, as amended, which amendments are incorporated by reference to Registrant's Form 8-K filed August 13, 2007

~~4.1~~

~~Form of Common Stock Certificate, incorporated by reference to Registrant's Form 10-Q for the period ended March 31, 2001~~

~~10.1~~

~~Synalloy Corporation 2005 Stock Awards Plan, incorporated by reference to the Proxy Statement for the 2005 Annual Meeting of Shareholders~~

~~10.2~~

~~Synalloy Corporation 2015 Stock Awards Plan, incorporated by reference to the Proxy Statement for the 2015 Annual Meeting of Shareholders~~

~~10.3~~

~~Amendment 1 to the Synalloy Corporation 2005 Stock Awards Plan, incorporated by reference to Registrant's Form 10-K for the year ended December 29, 2007~~

~~10.4~~

~~Amendment 2 to the Synalloy Corporation 2005 Stock Awards Plan, incorporated by reference to Registrant's Form 10-K for the year ended January 3, 2015~~

~~10.5~~

~~2011 Long-Term Incentive Stock Option Plan, incorporated by reference to Registrant's Proxy Statement for the 2011 Annual Meeting of Shareholders~~

~~10.6~~

~~2015 Short-Term Cash Incentive and Restricted Stock Incentive Plan, incorporated by reference to Registrant's Form 10-K for the year ended December 31, 2015~~

~~10.7~~

~~2016 Short-Term Cash Incentive and Restricted Stock Incentive Plan, incorporated by reference to the Registrant's Form 10-K for the year ended December 31, 2016~~

~~10.8~~

~~2017 Short-Term Cash Incentive and Restricted Stock Incentive Plan~~

~~10.9~~

Agreement between Registrant's Bristol Metals, LLC subsidiary and the United Steelworkers of America Local 4586, dated February 1, 2015, incorporated by reference to Registrant's From 10-K for the year ended December 31, 2015

~~10.10~~

Agreement between Registrant's Specialty Pipe & Tube, Inc. subsidiary and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union Local 4564-07, dated July 1, 2014, incorporated by reference to Registrant's Form 10-K for the year ended January 3, 2015

~~10.11~~

Agreement between Registrant's Bristol Metals, LLC subsidiary and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union Local 5852-22, dated March 12, 2018, but effective January 6, 2018

~~10.12~~

Second Amended and Restated Loan Agreement, dated as of August 31, 2016, between Registrant and Branch Banking and Trust (“BB&T”), incorporated by reference to Registrant's Form 10-Q for the period ended September 30, 2016

~~10.13~~

~~Third Amended and Restated Loan Agreement, dated as of October 30, 2017, between Registrant and BB&T, incorporated by reference to Registrant's Form 10-Q for the period ended September 30, 2017~~

~~10.14~~

~~Employment Agreement dated January 24, 2011, between Registrant and Craig C. Bram, incorporated by reference to Registrant's Form 10-K for the year ended January 1, 2011~~

~~10.15~~

~~Amended Employment Agreement dated January 24, 2012, between Registrant and Craig C. Bram, incorporated by reference to Registrant's Form 10-K for the year ended December 31, 2011~~

~~10.16~~

~~Amended Employment Agreement dated January 24, 2013, between Registrant and Craig C. Bram, incorporated by reference to Registrant's Form 10-K for the year ended December 29, 2012~~

~~10.17~~

~~Amended Employment Agreement dated June 1, 2013, between Registrant and Craig C. Bram, incorporated by reference to Registrant's Form 8-K filed June 28, 2013~~

~~10.18~~

~~Amended Employment Agreement dated May 1, 2014, between Registrant and Craig C. Bram, incorporated by reference to Registrant's Form 10-K for the year ended January 3, 2015~~

~~10.19~~

~~Employment Agreement dated January 11, 2016, between Registrant and Dennis M. Loughran, incorporated by reference to Registrant's Form 8-K filed January 11, 2016.~~

~~10.20~~

~~Employment Agreement dated January 11, 2016, between Registrant and J. Kyle Pennington, incorporated by reference to Registrant's Form 8-K filed January 11, 2016.~~

~~10.21~~

~~Employment Agreement dated January 11, 2016, between Registrant and James G. Gibson, incorporated by reference to Registrant's Form 8-K filed January 11, 2016.~~

~~10.22~~

Stock Purchase Agreement, dated as of August 10, 2012, among Jimmie Dean Lee, James Varner, Steven C. O'Brate and Synalloy Corporation, incorporated by reference to Registrant's Form 8-K filed on August 24, 2012

~~10.23~~

~~Stock Purchase Agreement, dated as of November 21, 2014, between The Davidson Corporation and Synalloy Corporation, incorporated by reference to Registrant's Form 8-K filed on November 25, 2014~~

~~10.24~~

Purchase and Sale Agreement, dated as of September 1, 2016, by and between Store Capital Acquisition, LLC and Bristol Metals, LLC, Specialty Pipe & Tube, Inc., Palmer of Texas Tanks, Inc., Manufacturers Soap & Chemical Company, Manufacturers Chemicals, LLC, and Synalloy Corporation, incorporated by reference to Registrant's Form 10-Q for the period ended September 30, 2016

~~10.25~~

~~Master Lease Agreement, dated as of September 30, 2016 between Registrant and Store Master Funding XII, LLC, incorporated by reference to Registrant's Form 10-K for the year ended December 31, 2016~~

~~10.26~~

Asset Purchase Agreement, dated as of December 9, 2016, by and between Marcegaglia USA, Inc. and Bristol Metals, LLC, as amended by Amendment No. 1 to Asset Purchase Agreement, dated as of February 28, 2017, by and between Marcegaglia USA, Inc. and Bristol Metals, LLC, incorporated by reference to Registrant's Form 10-K for the year ended December 31, 2016

~~Subsidiaries of the Registrant~~

~~23.1~~

~~Consent of KPMG LLP, independent registered public accounting firm~~

~~31.1~~

~~Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer~~

~~31.2~~

~~Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer~~

~~31.3~~

~~Rule 13a-14(a)/15d-14(a) Certification of the Principal Accounting Officer~~

~~Certifications Pursuant to 18 U.S.C. Section 1350~~

101.INS*

~~XBRL Instance Document~~

101.SCH*

~~XBRL Taxonomy Extension Schema~~

101.CAL*

~~XBRL Taxonomy Extension Calculation Linkbase~~

101.LAB*

~~XBRL Taxonomy Extension Label Linkbase~~

101.PRE*

~~XBRL Taxonomy Extension Presentation Linkbase~~

101.DEF*

~~XBRL Taxonomy Extension Definition Linkbase~~

In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Annual Report on Form 10-K shall be deemed "furnished" and not "filed."

Constitutes management contract or compensatory plans

†

Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

Item 16. Form 10-K Summary

None.

~~Signatures~~

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~~

ASCENT INDUSTRIES CO.



By ~~/s/ Craig C. Bram~~By: /s/ J. Bryan Kitchen ~~Craig C. Bram~~J. Bryan Kitchen President, ~~and~~ Chief Executive Officer and Director (principal executive officer)		~~March 13, 2018~~April 1, 2024 Date

By ~~/s/ Dennis M. Loughran~~By: /s/ Ryan Kavalauskas ~~Dennis M. Loughran~~Ryan Kavalauskas ~~Senior Vice President and~~ Chief Financial Officer (principal accounting and financial officer)		~~March 13, 2018~~ ~~Date~~

By ~~/s/ Richard D. Sieradzki~~ ~~Richard D. Sieradzki~~ ~~Chief Accounting Officer~~ ~~(principal accounting officer)~~	~~March 13, 2018~~April 1, 2024 Date

~~Registrant~~

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the ~~date~~dates indicated.



By /s/ ~~Murray H. Wright~~Benjamin Rosenzweig ~~Murray H. Wright~~Benjamin Rosenzweig Executive Chairman of the Board		~~March 13, 2018~~April 1, 2024 Date

By /s/ ~~Anthony A. Callander~~Christopher G. Hutter ~~Anthony A. Callander~~Christopher G. Hutter Director		~~March 13, 2018~~April 1, 2024 Date

By ~~/s/ Amy J. Michtich~~ ~~Amy J. Michtich~~ ~~Director~~		~~March 13, 2018~~ ~~Date~~

By ~~/s/ James W. Terry, Jr.~~ ~~James W. Terry, Jr.~~ ~~Director~~	~~March 13, 2018~~ ~~Date~~

By /s/ Henry L. Guy Henry L. Guy Director	~~March 13, 2018~~April 1, 2024 Date

By /s/ ~~Susan S. Gayner~~John P. Schauerman ~~Susan S. Gayner~~John P. Schauerman Director		~~March 13, 2018~~April 1, 2024 Date

By /s/ ~~Craig C. Bram~~Aldo J. Mazzaferro, Jr. ~~Craig C. Bram~~Aldo J. Mazzaferro, Jr. ~~Chief Executive Officer and~~ Director		~~March 13, 2018~~April 1, 2024 Date

6472


~~Securities registered pursuant to Section 12(b)~~Title of ~~the Act~~each class	Trading Symbol	Name of ~~each~~ exchange on which ~~registered:~~registered
Common Stock, par value $1.00 ~~Par Value~~per share	ACNT	NASDAQ Global Market
~~(Title of Class)~~



Large accelerated filer	¨☐		Accelerated filer		x☒
Non-accelerated filer		¨ ~~Do not check if smaller reporting company~~ ☐		Smaller reporting company		¨☒
Emerging growth company		¨☐



			Page #
Disclosure Regarding Forward Looking Statements								2
Part I
			Item 1			Business		23
			Item 1A			Risk Factors		6
			Item 1B			Unresolved Staff Comments		1311
			Item 1C			Cybersecurity		11
			Item 2			Properties		1412
			Item 3			Legal Proceedings		1412
			Item 4			Mine Safety Disclosures		1412
Part II
			Item 5			Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity ~~Security~~Securities		1513
			Item 6			~~Selected Financial Data~~Reserved		1713
			Item 7			Management's Discussion and Analysis of Financial Condition and Results of Operations		1813
			Item 7A			Quantitative and Qualitative Disclosures about Market ~~Risks~~Risk		2725
			Item 8			Financial Statements and Supplementary Data		2826
				~~Notes to Consolidated Financial Statements~~			32
		~~Segment Information~~	47
		~~Management's Annual Report On Internal Control Over Financial Reporting~~	53
		~~Report of Independent Registered Public Accounting Firm~~ ~~- Consolidated Financial Statements - KPMG LLP~~	55
		~~Report of Independent Registered Public Accounting Firm - Internal Control - KPMG LLP~~	56
	Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			5863
			Item 9A			Controls and Procedures		5863
			Item 9B			Other Information		5865
			Item 9C			Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		65
Part III
			Item 10			Directors, Executive Officers and Corporate Governance		5866
			Item 11			Executive Compensation		5866
			Item 12			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		5966
			Item 13			Certain Relationships and Related Transactions, and Director Independence		5967
			Item 14			Principal ~~Accountant~~Accounting Fees and Services		5967
Part IV
			Item 15			Exhibits and Financial Statement Schedules		6067
			Item 16			~~Signatures~~Form 10-K Summary		6371
						~~Index to Exhibits~~Signatures		6272



Location	Principal Operations	Building Square Feet	Land Acres
Munhall, PA	Manufacturing stainless steel pipe	284,000	20.0
Bristol, TN	Manufacturing stainless steel pipe	275,000	73.1
Cleveland, TN	Chemical manufacturing and warehousing facilities	143,000	18.8
Fountain Inn, SC	Chemical manufacturing and warehousing facilities	136,834	16.9
Andrews, TX	Manufacturing liquid storage solutions and separation equipment	122,662	19.6
Houston, TX	Cutting facility and storage yard for heavy walled pipe	29,821	10.0
Mineral Ridge, OH	Cutting facility and storage yard for heavy walled pipe	12,000	12.0
Mineral Ridge, OH	Storage yard for heavy walled pipe	—	4.6
Richmond, VA	Corporate headquarters	5,911	—
Spartanburg, SC	Office space for corporate employees and shared service center	4,858	—
Augusta, GA	Chemical manufacturing ⁽¹⁾	—	46.0



	2017				2016
Quarter	High		Low		High		Low
1st	$	13.35	$	9.75	$	10.07	$	6.42
2nd	13.75		10.40		8.50		7.25
3rd	13.10		10.30		9.68		6.56
4th	15.30		11.88		11.70		8.57


☒
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ~~FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017~~


☐
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


~~(1)~~	~~Property owned by Company; plant was closed in 2001 and all structures and manufacturing equipment have been removed.~~



	12/12		12/13		12/14		12/15		12/16		12/17
Synalloy Corporation	$	100.00	$	109.05	$	127.38	$	51.74	$	82.35	$	101.67
Russell 2000	100.00		138.82		145.62		139.19		168.85		193.58
NASDAQ Non-Financial	100.00		141.29		164.62		176.19		189.29		247.35


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs1	Number of Shares that May Yet Be Purchased under the Program1

October 1, 2023 - October 31, 2023	10,436	$	8.34	10,436	573,588
November 1, 2023 - November 30, 2023	11,425	8.29		11,425	562,163
December 1, 2023 - December 31, 2023	25,292	7.96		25,292	536,871
As of December 31, 2023	47,153	$	8.12	47,153	536,871



Selected Financial Data and Other Financial Information
(Dollar amounts in thousands except for per share data)
	2017			2016			2015^(c)			2014 ^(a)			2013
Operations ^(b)
Net sales	$	201,148		$	138,566		$	175,460		$	199,505		$	196,751
Gross profit	28,081			16,904			25,319			32,929			19,798
Selling, general & administrative expense^(e)	24,875			22,673			21,938			16,530			15,987
Goodwill impairment	—			—			17,158			—			—
Operating income (loss)^(e)	2,746			(8,246		)	(13,031		)	16,098			3,547
Net income (loss) - continuing operations	1,341			(6,994		)	(10,269		)	12,619			2,898
Net loss - discontinued operations	—			(99		)	(1,251		)	(7,157		)	(1,137		)
Net income (loss)	1,341			(7,093		)	(11,520		)	5,462			1,761
Financial Position
Total assets^(d), ^(e)	159,874			138,638			149,043			187,633			163,068
Working capital^{(d), (f)}	74,396			64,868			58,310			64,580			74,992
Long-term debt, less current portion^(e)	25,914			8,804			23,410			27,039			20,713
Shareholders' equity	89,700			88,593			95,154			109,454			106,098
Financial Ratios
Current ratio^{(d), (e), (f)}	3.2:1			3.0:1			3.2:1			2.6:1			4.0:1
Gross profit to net sales^(b)	14		%	12		%	14		%	17		%	10		%
Long-term debt to capital^(e)	22		%	9		%	20		%	20		%	16		%
Return on average assets^{(b), (d), (e)}	1		%	(4		)%	(6		)%	7		%	2		%
Return on average equity^(b)	2		%	(7		)%	(10		)%	12		%	3		%
Per Share Data (Income/(Loss) – Diluted)
Net income (loss) - continuing operations	$	0.15		$	(0.81	)	$	(1.18	)	$	1.45		$	0.42
Net loss - discontinued operations	—			(0.01		)	(0.14		)	(0.82		)	(0.16		)
Net income (loss)	0.15			(0.82		)	(1.32		)	0.63			0.25
Dividends declared and paid	0.13			—			0.30			0.30			0.26
Book value	10.27			10.22			11.02			12.57			12.21
Other Data
Depreciation and amortization^{(b), (e)}	$	7,738		$	6,695		$	6,634		$	5,132		$	4,625
Capital expenditures^(b)	5,279			3,044			10,905			8,066			5,648
Employees at year end	533			412			411			464			670
Shareholders of record at year end	488			527			540			575			619
Average shares outstanding - diluted	8,727			8,650			8,710			8,715			6,947
Stock Price
Price range of common stock
High	$	15.30		$	11.70		$	18.49		$	18.84		$	17.38
Low	9.75			6.42			6.20			13.14			12.53
Close	13.40			10.95			6.88			17.67			15.53


		Year Ended December 31,
($ in thousands)		2023			2022
Consolidated
Net (loss) income from continuing operations		$	(34,151)		$	17,578
Adjustments:
	Interest expense	4,238			2,742

	Income taxes	(6,924)			(5,568)
	Depreciation	6,161			6,421
	Amortization	1,505			1,853
EBITDA		(29,171)			23,026
	Acquisition costs and other	856			1,104
	Shelf registration costs	—			12





	Goodwill impairment	11,389			—
	Gain on lease modification	—			(2)
	Stock-based compensation	594			962
	Non-cash lease expense	242			414
	Retention expense	26			—
	Restructuring and severance costs	130			74
Adjusted EBITDA		$	(15,934)		$	25,590
	% sales	(8.2)		%	9.8		%


a)	The addition of Bristol Metals-Munhall operations as noted above. The full-year 2017 and fourth quarter of 2017 operating results includes $443,000 and $558,000, respectively, for Bristol Metals-Munhall operations. These amounts do not reflect the earn-out adjustment for the year since that expense is not included in the Metals Segment's operating results.


c)	~~Year over year changes in volume, pricing and product mix, as noted above, combined for a 36 percent improvement in gross profit margins in 2017 compared to 2016.~~


d)	~~Operating income from both seamless carbon pipe and tube and storage tanks and vessels continued to show solid improvement over the prior year.~~



	2017					2016				2015
(Amounts in thousands)	Amount			%		Amount		%		Amount		%
Net sales	$	48,191		100.0	%	$	48,351	100.0	%	$	60,552	100.0	%
Cost of goods sold	39,217			81.4	%	38,884		80.4	%	50,064		82.7	%
Gross profit	8,974			18.6	%	9,467		19.6	%	10,488		17.3	%
Selling, general and administrative expense	4,678			9.7	%	4,579		9.5	%	4,823		8.0	%
(Gain) loss on sale-leaseback	(95		)	(0.2	)%	206		0.4	%	—		—	%
Operating income	$	4,391		9.1	%	$	4,682	9.7	%	$	5,665	9.3	%


a)	~~The Metals Segment recorded a pre-tax goodwill impairment charge of $17,158,000 in the fourth quarter of 2015. See the "Comparison of 2015 to 2014 - Metals Segment" section for further explanation.~~


b)	$2,166,000 in net charges associated with the loss recognized on three Metal Segment properties sold as part of the sale-leaseback transaction that took place during the third quarter. This amount is net of the deferred gain amortization of $60,000 recorded in the fourth quarter 2016.


c)	Lost contribution margin due to lower volumes across all segments as continued low oil and gas prices, as well as sustained lower levels of customer spending across all industrial classes, had an unfavorable effect on sales and profits for our storage tank and carbon pipe distribution facilities, as well as our stainless steel welded pipe markets.


d)	As a result of continued low nickel prices during 2016, the Company experienced metal price change loss of approximately $5,751,000 and $194,000 for the full-year and fourth quarter of 2016. This compares to metal price change loss of approximately $6,872,000 and $2,012,000, respectively, for the same periods of 2015.


a)	Lower sales due to in-sourcing of several products by customers who were able to absorb production due to weak demand for their other products, as well as delayed ramp-up of several new products due primarily to customer scheduling; and


b)	Lower selling prices per pound for oil based products. With the reduction in oil prices, the Specialty Chemicals Segment's raw material costs decreased, which resulted in lower passed through material value as part of the billed selling prices.



	4th Quarter						Full-Year
	2017			2016			2017			2016
Metals Segment Operating (Income) Loss	$	(60,000	)	$	(60,000	)	$	(239,000	)	$	2,166,000
Specialty Chemicals Segment Operating (Income) Loss	(24,000		)	(24,000		)	(95,000		)	206,000
Unallocated Corporate Expenses	—			64,000			—			165,000
Total incremental costs	$	(84,000	)	$	(20,000	)	$	(334,000	)	$	2,537,000



(Amounts in thousands)			Payment Obligations for the Year Ended
	Total		2018		2019		2020		2021		2022		Thereafter
Obligations:
Revolving credit facility	$	25,914	$	—	$	—	$	25,914	$	—	$	—	$	—
Interest on bank debt	2,401		891		891		619		—		—		—
Capital lease	298		85		85		70		39		19		—
Operating leases	48,069		2,745		2,861		2,904		2,892		2,884		33,783
Deferred compensation ⁽¹⁾	215		36		21		21		21		17		99
Total	$	76,897	$	3,757	$	3,858	$	29,528	$	2,952	$	2,920	$	33,882


⁽¹⁾	~~For a description of the deferred compensation obligation, see Note 8 to the Consolidated Financial Statements included in Item 8 of this Form 10-K.~~



Balance at December 31, 2016	$	—
Fair value of earn-out liability associated with the MUSA acquisition at February 28, 2017	4,663,783
Earn-out payments to MUSA sellers	(518,456		)
Change in fair value during the period	688,523
Balance at December 31, 2017	$	4,833,850



	Specialty Chemicals Segment		Metals Segment		Total
Balance at December 31, 2016	$	1,354,730	$	—	$	1,354,730
Acquisition of MUSA	—		4,648,795		4,648,795
Balance at December 31, 2017	$	1,354,730	$	4,648,795	$	6,003,525



	2017		2016
$65,000,000 Revolving line of credit, due October 30, 2020	$	25,913,557	$	8,804,206



	2017		2016
Indemnified legal judgment (See Note 13)	$	—	$	11,000,000
Salaries, wages, and commissions	3,219,190		2,133,814
Taxes, other than income taxes	921,476		479,489
Current portion of earn-out liability	1,663,751		—
Advances from customers	184,874		571,738
Insurance	372,000		209,000
Professional fees	343,706		40,073
Warranty reserve	37,771		180,000
Benefit plans	208,717		159,253
Insurance financing liability	224,961		167,724
Customer rebate liability	439,912		157,445
Current portion, environmental reserves	549,000		184,887
Current portion, deferred gain sale-leaseback	334,273		334,273
Other accrued items	493,823		333,091
Total accrued expenses	$	8,993,454	$	15,950,787



Range of Exercise Prices		Outstanding Stock Options				Exercisable Stock Options
		Shares	Weighted Average			Shares	Weighted Average Exercise Price
		Shares	Exercise Price		Remaining Contractual Life in Years	Shares	Weighted Average Exercise Price
$	11.55	56,710	$	11.55	3.06	56,710	$	11.55
$	11.35	25,076	$	11.35	4.10	25,076	$	11.35
$	13.70	27,801	$	13.70	5.10	22,084	$	13.70
$	14.76	8,109	$	14.76	6.14	4,865	$	14.76
$	16.01	27,815	$	16.01	7.11	11,126	$	16.01
		145,511				119,861



	Shares		Weighted Average Grant Date Fair Value
Outstanding at January 3, 2015	66,403		$	15.00
Granted January 5, 2015	3,000		$	17.95
Vested	(17,903	)	$	13.86
Forfeited	(60	)	$	13.34
Outstanding at December 31, 2015	51,440		$	15.57
Granted February 19, 2016	50,062		$	7.51
Granted May 5, 2016	42,193		$	8.05
Vested	(21,133	)	$	13.12
Forfeited	(1,260	)	$	17.73
Outstanding at December 31, 2016	121,302		$	10.03
Granted February 8, 2017	44,687		$	12.30
Vested	(34,322	)	$	10.45
Outstanding at December 31, 2017	131,667		$	10.69



Year ending December 31:
2018	$	85,464
2019	85,464
2020	70,080
2021	38,781
2022	18,407
Total minimum lease payments	298,196
Less imputed interest costs	15,177
Present value of net minimum lease payments	$	283,019



	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
2017
Net sales	$	42,203,579		$	51,511,045		$	54,595,924		$	52,837,134
Gross profit	7,403,579			8,177,927			4,836,620			7,662,824
Net income (loss) from continuing operations	701,542			829,879			(1,206,752		)	1,016,693
Net income from discontinued operations	—			—			—			—
Net income (loss)	701,542			829,879			(1,206,752		)	1,016,693
Other comprehensive income (loss)	—			366,346			(366,346		)	(10,864		)
Comprehensive income (loss)	—			1,196,225			(1,573,098		)	1,005,829

Per common share
Basic	0.08			0.10			(0.14		)	0.11
Diluted	0.08			0.10			(0.14		)	0.11

2016
Net sales from continuing operations	$	36,312,012		$	34,906,668		$	34,297,231		$	33,049,871
Gross profit from continuing operations	4,718,176			3,997,594			4,504,419			3,684,290
Net loss from continuing operations (1)	(1,366,732		)	(1,583,395		)	(2,608,276		)	(1,435,564		)
Loss from discontinued operations, net of tax	—			(99,334		)	—			—
Net loss	(1,366,732		)	(1,682,729		)	(2,608,276		)	(1,435,564		)
Other comprehensive income	—			—			—			—
Comprehensive (loss)	(1,366,732		)	(1,682,729		)	(2,608,276		)	(1,435,564		)

Per common share from continuing operations
Basic	(0.16		)	(0.18		)	(0.30		)	(0.17		)
Diluted	(0.16		)	(0.18		)	(0.30		)	(0.17		)

Per common share from discontinued operations
Basic	—			(0.01		)	—			—
Diluted	—			(0.01		)	—			—



Sources of funds:
Borrowings from revolving line of credit	$	14,953,513
Total sources of funds	$	14,953,513

Uses of funds:
Acquisition of MUSA Stainless assets	$	14,953,513
Total uses of funds	$	14,953,513



	Initial
	estimate			Revisions			Final
Inventories	$	5,434,000		$	—		$	5,434,000
Other current assets - production and maintenance supplies	1,548,701			—			1,548,701
Equipment	7,576,733			—			7,576,733
Customer list intangible	992,000			—			992,000
Goodwill	3,589,342			1,059,453			4,648,795
Earn-out liability	(3,604,330		)	(1,059,453		)	(4,663,783		)
Other liabilities assumed	(582,933		)	—			(582,933		)
	$	14,953,513		$	—		$	14,953,513



Pro-Forma (Unaudited)
	2017		2016
Pro-forma revenues	$	206,071,634	$	161,591,159
Pro-forma net income (loss)	1,441,258		(9,730,841		)
Earnings (loss) per share:
Basic	0.17		(1.12		)
Diluted	0.17		(1.12		)