Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 29, 2014 | 6-May-14 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'Synalloy Corporation | ' |
Entity Central Index Key | '0000095953 | ' |
Current Fiscal Year End Date | '--01-03 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 8,702,322 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 29-Mar-14 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 29, 2014 | Dec. 28, 2013 |
Current assets | ' | ' |
Cash and cash equivalents | $6,834,739 | $1,776,763 |
Accounts receivable, less allowance for doubtful accounts of $1,036,596 and $1,079,288, respectively | 39,008,693 | 34,089,364 |
Inventories, net | 58,089,875 | 55,856,803 |
Deferred income taxes | 3,747,854 | 3,776,647 |
Prepaid expenses and other current assets | 2,670,643 | 4,111,775 |
Total current assets | 110,351,804 | 99,611,352 |
Cash value of life insurance | 2,031,419 | 2,007,419 |
Property, plant and equipment, net of accumulated depreciation of $45,285,758 and $44,229,008, respectively | 36,480,536 | 35,883,376 |
Goodwill | 18,252,678 | 18,252,678 |
Intangible asset, net | 6,607,500 | 6,930,000 |
Deferred charges, net and other non-current assets | 516,634 | 575,546 |
Total assets | 174,240,571 | 163,260,371 |
Current liabilities | ' | ' |
Accounts payable | 22,677,895 | 12,430,290 |
Accrued expenses | 8,843,111 | 9,511,528 |
Current portion of long-term debt | 2,533,908 | 2,533,908 |
Other current liabilities | 165,500 | 147,500 |
Total current liabilities | 34,220,414 | 24,623,226 |
Long-term debt | 20,271,232 | 20,904,708 |
Long-term contingent consideration | 3,392,031 | 3,362,031 |
Deferred income taxes | 7,573,999 | 7,573,999 |
Other long-term liabilities | 818,730 | 698,294 |
Shareholders' equity | ' | ' |
Common stock, par value $1 per share - authorized 12,000,000 shares; issued 10,300,000 shares | 10,300,000 | 10,300,000 |
Capital in excess of par value | 33,682,022 | 33,657,714 |
Retained earnings | 78,113,876 | 76,337,597 |
Shareholders' equity before treasury stock | 122,095,898 | 120,295,311 |
Less cost of common stock in treasury: 1,604,766 and 1,612,200 shares, respectively | 14,131,733 | 14,197,198 |
Total shareholders' equity | 107,964,165 | 106,098,113 |
Commitments and contingencies – See Note 10 | ' | ' |
Total liabilities and shareholders' equity | $174,240,571 | $163,260,371 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 29, 2014 | Dec. 28, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Allowance for Doubtful Accounts Receivable, Current | $1,036,596 | $1,079,288 |
Assets | ' | ' |
Accumulated depreciation | $45,285,758 | $44,229,008 |
Shareholders' equity | ' | ' |
Common stock, par value (in dollars per share) | $1 | $1 |
Common stock, shares authorized (in shares) | 12,000,000 | 12,000,000 |
Common stock, shares issued (in shares) | 10,300,000 | 10,300,000 |
Common stock in treasury, at cost (in shares) | 1,604,766 | 1,612,200 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (USD $) | 3 Months Ended | |
Mar. 29, 2014 | Mar. 30, 2013 | |
Income Statement [Abstract] | ' | ' |
Net sales | $57,841,127 | $57,836,079 |
Cost of sales | 50,792,198 | 50,931,466 |
Gross profit | 7,048,929 | 6,904,613 |
Selling, general and administrative expense | 4,218,684 | 4,464,225 |
Acquisition related costs | -3,146 | 38,010 |
Operating income | 2,833,391 | 2,402,378 |
Other (income) and expense | ' | ' |
Interest expense | 265,688 | 341,825 |
Change in fair value of interest rate swap | 118,806 | -137,679 |
Other, net | -261,382 | -16,215 |
Income before income taxes | 2,710,279 | 2,214,447 |
Provision for income taxes | 934,000 | 749,000 |
Net income | $1,776,279 | $1,465,447 |
Net income per common share: | ' | ' |
Basic (dollars per share) | $0.20 | $0.23 |
Diluted (dollars per share) | $0.20 | $0.23 |
Weighted average shares outstanding: | ' | ' |
Basic (shares) | 8,690,496 | 6,362,634 |
Dilutive effect from stock options and grants (shares) | 10,209 | 58,864 |
Diluted (shares) | 8,700,705 | 6,421,498 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
Mar. 29, 2014 | Mar. 30, 2013 | |
Operating activities | ' | ' |
Net income | $1,776,279 | $1,465,447 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ' | ' |
Depreciation expense | 1,056,750 | 936,973 |
Amortization expense | 342,297 | 393,975 |
Deferred income taxes | -431,055 | 37,005 |
(Reduction of) provision for losses on accounts receivable | -42,608 | 71,000 |
Provision for losses on inventory | 411,189 | 266,800 |
Cash value of life insurance | -24,000 | -27,000 |
Change in fair value of interest rate swap | 118,806 | -137,679 |
Environmental reserves | 18,000 | 14,875 |
Employee stock option and grant compensation | 80,733 | 80,730 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -4,876,721 | -4,174,786 |
Inventories | -2,644,261 | -1,125,563 |
Other assets and liabilities, net | 544,410 | -642,158 |
Accounts payable | 10,247,605 | 5,278,090 |
Accrued expenses | -587,921 | -3,131,378 |
Accrued income taxes | 1,355,859 | 521,321 |
Net cash provided by (used in) operating activities | 7,345,362 | -172,348 |
Investing activities | ' | ' |
Purchases of property, plant and equipment | -1,653,910 | -1,419,792 |
Proceeds from sale of property, plant and equipment | 0 | 52,366 |
Net cash used in investing activities | -1,653,910 | -1,367,426 |
Financing activities | ' | ' |
Net borrowings from line of credit | 0 | 1,087,819 |
Payments on Long-term Debt | -633,476 | -568,494 |
Proceeds from exercised stock options | 0 | 69,181 |
Net cash (used in) provided by financing activities | -633,476 | 588,506 |
Increase (decrease) in cash and cash equivalents | 5,057,976 | -951,268 |
Cash and cash equivalents at beginning of period | 1,776,763 | 1,085,261 |
Cash and cash equivalents at end of period | 6,834,739 | 133,993 |
Interest Paid | 235,941 | 284,864 |
Income Taxes Paid | $7,600 | $177,607 |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 29, 2014 | |
Basis of Presentation [Abstract] | ' |
Basis of Presentation | ' |
BASIS OF PRESENTATION | |
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included as required by Regulation S-X, Rule 10-01. Operating results for the three-month period ended March 29, 2014, are not necessarily indicative of the results that may be expected for the year ending January 3, 2015. For further information, refer to the consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 28, 2013. | |
Reclassifications | |
Certain prior year amounts have been reclassified to conform to the current year presentation in the accompanying condensed consolidated financial statements. These reclassifications had no material effect on previously reported results of operations or shareholders' equity. |
INVENTORIES
INVENTORIES | 3 Months Ended | |||||||
Mar. 29, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventories | ' | |||||||
INVENTORIES | ||||||||
Inventories are stated at the lower of cost (first-in, first-out method) or market. The components of inventories, net, are as follows: | ||||||||
Mar 29, 2014 | Dec 28, 2013 | |||||||
Raw materials | $ | 18,137,440 | $ | 16,557,350 | ||||
Work-in-process | 21,945,240 | 20,402,032 | ||||||
Finished goods | 18,007,195 | 18,897,421 | ||||||
$ | 58,089,875 | $ | 55,856,803 | |||||
STOCK_OPTIONS_AND_EMPLOYEE_STO
STOCK OPTIONS AND EMPLOYEE STOCK GRANTS | 3 Months Ended |
Mar. 29, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Stock Options and Employee Stock Grants | ' |
STOCK OPTIONS AND RESTRICTED STOCK | |
During the first three months of 2014, no stock options were exercised by officers or employees of the Company. Stock compensation expense was approximately $81,000 for the three month periods ended March 29, 2014 and March 30, 2013. | |
On February 20, 2014, the Compensation & Long-Term Incentive Committee of the Board of Directors of the Company approved stock option grants under the Company's 2011 Long-Term Incentive Stock Option Plan (the "2011 Plan"). Options for a total of 13,790 shares, with an exercise price of $14.76, were granted under the 2011 Plan to certain management employees of the Company. The exercise price was determined using the average of the high and low stock price on the day prior to the grant date. The per share weighted-average fair value of the stock options granted on February 20, 2014 was $6.70. The fair value of the option grants was estimated using the Black-Scholes option-pricing model based on a risk-free interest rate of two percent, an expected volatility of 52 percent, an expected life of seven years and a dividend yield of 1.80 percent. The stock options vest in 20 percent increments annually on a cumulative basis, beginning one year after the date of grant. In order for the options 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. The Company may terminate any portion of the grant that has not vested upon an employee's failure to comply with all conditions of the award or the 2011 Plan. | |
On September 30, 2013, the Company closed on an underwritten public offering of 2,000,000 shares of its common stock at a price of $15.75 per share. The underwriters also exercised their option to purchase and close upon an additional 300,000 shares of common stock at a price of $15.75 per share. The Company received net proceeds, after underwriting discounts and estimated expenses, of approximately $34,233,000. The Company is using the net proceeds from the offering to invest approximately $3,500,000 in new equipment for the CRI Tolling, LLC facility during 2014. The Company used $18,061,000 of the stock sale proceeds in 2013 to pay off the outstanding balance on the line of credit. |
INCOME_TAXES
INCOME TAXES | 3 Months Ended |
Mar. 29, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
INCOME TAXES | |
The Company did not have any unrecognized tax benefits accrued at March 29, 2014 and December 28, 2013. 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 or state income tax examinations for years before 2009. The Company's continuing practice is to recognize interest and/or penalties related to income tax matters in the provision for income taxes. |
PAYMENT_OF_DIVIDENDS
PAYMENT OF DIVIDENDS | 3 Months Ended |
Mar. 29, 2014 | |
Payments of Dividends [Abstract] | ' |
Payment of Dividends | ' |
PAYMENT OF DIVIDENDS | |
During 2013, the Company declared and paid a $0.26 per share dividend on December 3, 2013 for a total of $2,260,000. The Board presently plans to review at the end of each fiscal year the financial performance and capital needed to support future growth to determine the amount of cash dividend, if any, which is appropriate. |
SEGMENT_INFORMATION
SEGMENT INFORMATION | 3 Months Ended | |||||||
Mar. 29, 2014 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
Segment Information | ' | |||||||
SEGMENT INFORMATION | ||||||||
Three Months Ended | ||||||||
Mar 29, 2014 | Mar 30, 2013 | |||||||
Net sales | ||||||||
Metals Segment | $ | 41,406,000 | $ | 44,659,000 | ||||
Specialty Chemicals Segment | 16,435,000 | 13,177,000 | ||||||
$ | 57,841,000 | $ | 57,836,000 | |||||
Operating income | ||||||||
Metals Segment | $ | 2,245,000 | $ | 1,978,000 | ||||
Specialty Chemicals Segment | 1,641,000 | 1,293,000 | ||||||
3,886,000 | 3,271,000 | |||||||
Unallocated expenses | ||||||||
Corporate | 794,000 | 815,000 | ||||||
Acquisition related costs | (3,000 | ) | 38,000 | |||||
Interest expense | 266,000 | 342,000 | ||||||
Change in fair value of interest rate swap | 119,000 | (138,000 | ) | |||||
Income before income taxes | $ | 2,710,000 | $ | 2,214,000 | ||||
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended | ||||
Mar. 29, 2014 | |||||
Fair Value Disclosures [Abstract] | ' | ||||
Fair Value of Financial Instruments | ' | ||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | |||||
The Company makes estimates of fair value in accounting for certain transactions, in testing and measuring impairment, and in providing disclosures of fair value in its condensed consolidated financial instruments. 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 depending on the selection of these assumptions. The Company's most significant fair value estimates as of March 29, 2014 and December 28, 2013, respectively, related to purchase accounting adjustments in the CRI Tolling, LLC, as described further in Note 8 below, and Palmer of Texas, Inc. transactions, including the measurement of the contingent consideration, 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. | |||||
As of March 29, 2014 and December 28, 2013, respectively, the carrying amounts for cash and cash equivalents, accounts receivable, accounts payable and borrowings under the Company's term loan, which are based on variable interest rates, approximate their fair value. | |||||
The Company does not currently have any Level 1 financial assets or liabilities. The Company has two Level 2 financial assets and liabilities. These are classified as Level 2 as they are not actively traded and are valued using pricing models that use observable market inputs. | |||||
The fair value of the interest rate swap contract entered into on August 21, 2012 resulted in an asset of $222,000 and $301,000 at March 29, 2014 and December 28, 2013, respectively. The interest rate swap was priced using discounted cash flow techniques which are corroborated by using non-binding market prices. Changes in its fair value were recorded in long-term 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. | |||||
The fair value of the interest rate swap contract entered into on September 3, 2013 resulted in a liability of $120,000 and $80,000 at March 29, 2014 and December 28, 2013, respectively. The interest rate swap was priced using discounted cash flow techniques which are corroborated by using non-binding market prices. Changes in its fair value were recorded in long-term 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. | |||||
The contingent consideration liability ("earn-out") is classified as Level 3. The amount of the total earn-out liability to the former shareholders of Palmer was determined using management's best estimate of earnings before interest, taxes, depreciation and amortization ("EBITDA") for the three-year period from the acquisition date which will determine the amount of the ultimate payment to be made. Factors such as volume increases, selling price increases and inflation were used to develop a base projection. Additional projected costs to improve employee turnover, safety, internal controls, etc. were deducted in order to determine projected EBITDA. The Company's cost of borrowing at inception was used to determine the present value of these expected payments. Each quarter-end, the Company will re-evaluate the assumptions and adjust to the estimated present value of the expected payments to be made. | |||||
The following table presents a summary of changes in fair value of the Company's Level 3 liabilities measured on a recurring basis for the three-month period ended March 29, 2014: | |||||
Level 3 Inputs | |||||
Balance at December 28, 2013 | $ | 5,862,031 | |||
Interest expense charged during the first quarter of 2014 | 30,000 | ||||
Change in fair value of contingent consideration liability | — | ||||
Balance at March 29, 2014 | $ | 5,892,031 | |||
There were no transfers of assets or liabilities between Level 1, Level 2 and Level 3 in the three-month period ended March 29, 2014 or year ended December 28, 2013. During the first three months of 2014, there have been no changes in the fair value methodologies used by the Company. |
ACQUISITION
ACQUISITION | 3 Months Ended |
Mar. 29, 2014 | |
Business Combinations [Abstract] | ' |
Acquisition | ' |
ACQUISITIONS | |
Acquisition of Color Resources, LLC | |
In August 2013, the Company completed the purchase of the business assets of Color Resources, LLC (“CRI”) and the building and land located in Fountain Inn, South Carolina where CRI was the sole tenant (the “CRI Facility”). CRI Tolling, LLC ("CRI Tolling"), a South Carolina limited liability company and wholly-owned subsidiary of the Company, is continuing CRI’s business as that of a toll manufacturer that provides outside manufacturing resources to global and regional chemical companies. On August 9, 2013, Synalloy purchased the CRI Facility for a total purchase price of $3,450,000. On August 26, 2013, the Company purchased certain assets and assumed certain operating liabilities of CRI through CRI Tolling for a total purchase price of $1,100,000. The assets purchased from CRI included accounts receivable, inventory, certain other assets, and equipment, net of assumed payables. With the acquisition of CRI and CRI Facility, the Company is currently expanding the Company's production capacity from its Cleveland, Tennessee facility to further penetrate existing markets, as well as develop new ones, including those in the energy industry. The Company viewed both the building and operating assets of CRI together as one business, capable of providing a return to ownership by expanding the segment's production capacity. Accordingly, the acquisition meets the definition of a business and the transaction is structured in a way that meets the definition of a business combination. CRI Tolling's results of operations since the acquisition date are reflected in the Company's condensed consolidated statements of operations. | |
The amount of CRI Tolling's revenues and pre-tax earnings included in the condensed consolidated statements of operations for the three month period ended March 29, 2014 was $1,587,000 and $73,000, respectively. |
FINANCING_ARRANGEMENT_FINANCIN
FINANCING ARRANGEMENT FINANCING ARRANGEMENT | 3 Months Ended |
Mar. 29, 2014 | |
Debt Disclosure [Abstract] | ' |
Long-term Debt | ' |
FINANCING ARRANGEMENT | |
In connection with the acquisition of CRI and the CRI Facility discussed in Note 8, on August 9, 2013, the Company entered into a Second Amendment to its Credit Agreement with its current bank (the “Amended Credit Agreement”) to provide for a new ten-year term loan in the amount of $4,033,000, with monthly principal payments customized to account for the 20 year amortization of the real estate assets and five year amortization of the equipment assets purchased. The real estate portion of the loan of $3,485,000 represents 85 percent of the appraised value of the real estate and the equipment portion of the loan of $548,250 represents 75 percent of the purchase price of the equipment assets. Therefore, the total monthly principal payment is $23,659 during the first 60 months of the loan and will reduce to $14,521 for the remainder of the loan, plus accrued interest with the balance due at maturity. Interest is calculated using the One Month LIBOR (as defined in the Amended Credit Agreement), plus two percent. | |
Pursuant to the Amended Credit Agreement, the Company was required to pledge all of the acquired assets of CRI and the CRI Facility. This agreement also modified the definition of EBITDA (as defined in the Amended Credit Agreement) and the maximum amount of capital expenditures for the fiscal year ended December 28, 2013 to exclude assets acquired with the acquisition of CRI and the CRI Facility. On January 2, 2014, the Amended Credit Agreement was amended to extend the maturity date of the line of credit by one additional year to August 21, 2016. This amendment also modified certain financial covenants in the agreement including the Minimum Tangible Net Worth requirement (as defined in the Amended Credit Agreement) and the maximum amount of capital expenditures (as defined tin the the Amended Credit Agreement). No other provisions of the agreement were modified. | |
In conjunction with the new term loan, to mitigate the variability of the interest rate risk, the Company entered into an interest rate swap contract on September 3, 2013 with its current bank (the “interest rate swap”). The interest rate swap is for an initial notional amount of $4,033,250 with a fixed interest rate of 4.83 percent and runs for ten years to August 19, 2023, which equates to the date of the term loan. The notional amount of the interest rate swap decreases as monthly principal payments are made. Although the swap is expected to effectively offset variable interest in the borrowing, hedge accounting will not be utilized. Therefore, changes in its fair value are being recorded in long-term assets or liabilities, as appropriate, with corresponding offsetting entries to other income (expense). |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Mar. 29, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Contingencies | ' |
CONTINGENCIES | |
The Company is from time-to-time subject to various claims, possible legal actions for product liability and other damages, and other matters arising out of the normal conduct of the Company's business. | |
Management is not currently aware of any asserted or unasserted matters which could have a material effect on the financial condition or results of operations of the Company. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 29, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
SUBSEQUENT EVENTS | |
On April 24, 2014, the Company issued to its non-employee directors an aggregate of 7,088 shares of its common stock in lieu of a total of $110,500 of their annual cash retainer fees. The directors were given the option of receiving shares of common stock for all or any part of their annual Board retainer fee. | |
On April 29, 2014, the Company announced the planned closure of the Bristol Fabrication unit of Synalloy Fabrication, LLC ("Bristol Fab"). Bristol Fab incurred losses totaling $5,200,000 during the three year period 2011 through 2013. The collective bargaining agreement with the United Association of Journeyman and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada Local Union No. 538 (the "Union) expired in February 2014. The Company could not reach an agreement with the Union to reduce Bristol Fab's overall cost structure and return the unit to profitable levels. Upon closure of Bristol Fab, the Company is obligated to pay a withdrawal liability to the Union's pension fund of approximately $1,900,000. Additional costs associated with this closure cannot be determined at this time. The Company delivered WARN Notices to employees, union representatives and local elected officials on April 28, 2014. The closure of Bristol Fab is currently scheduled for June 27, 2014. This planned closure will not affect Ram-Fab, LLC, the Company's fabrication business located in Crossett, Arkansas, or any of the Company's other operating units. | |
The Company performs an evaluation of events that occur after the balance sheet date but before condensed consolidated financial statements are issued for potential recognition or disclosure of such events in its condensed consolidated financial statements. The Company evaluated subsequent events through the date that the condensed consolidated financial statements were issued. |
BASIS_OF_PRESENTATION_Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 29, 2014 | |
Basis of Presentation [Abstract] | ' |
Basis of Presentation | ' |
BASIS OF PRESENTATION | |
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included as required by Regulation S-X, Rule 10-01. Operating results for the three-month period ended March 29, 2014, are not necessarily indicative of the results that may be expected for the year ending January 3, 2015. For further information, refer to the consolidated financial statements and notes thereto included in the Company's annual report on Form 10-K for the year ended December 28, 2013. | |
Reclassifications | ' |
Reclassifications | |
Certain prior year amounts have been reclassified to conform to the current year presentation in the accompanying condensed consolidated financial statements. These reclassifications had no material effect on previously reported results of operations or shareholders' equity. |
INVENTORIES_Tables
INVENTORIES (Tables) | 3 Months Ended | |||||||
Mar. 29, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Schedule of components of inventories | ' | |||||||
Inventories are stated at the lower of cost (first-in, first-out method) or market. The components of inventories, net, are as follows: | ||||||||
Mar 29, 2014 | Dec 28, 2013 | |||||||
Raw materials | $ | 18,137,440 | $ | 16,557,350 | ||||
Work-in-process | 21,945,240 | 20,402,032 | ||||||
Finished goods | 18,007,195 | 18,897,421 | ||||||
$ | 58,089,875 | $ | 55,856,803 | |||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION (Tables) | 3 Months Ended | |||||||
Mar. 29, 2014 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
Segment Information | ' | |||||||
Three Months Ended | ||||||||
Mar 29, 2014 | Mar 30, 2013 | |||||||
Net sales | ||||||||
Metals Segment | $ | 41,406,000 | $ | 44,659,000 | ||||
Specialty Chemicals Segment | 16,435,000 | 13,177,000 | ||||||
$ | 57,841,000 | $ | 57,836,000 | |||||
Operating income | ||||||||
Metals Segment | $ | 2,245,000 | $ | 1,978,000 | ||||
Specialty Chemicals Segment | 1,641,000 | 1,293,000 | ||||||
3,886,000 | 3,271,000 | |||||||
Unallocated expenses | ||||||||
Corporate | 794,000 | 815,000 | ||||||
Acquisition related costs | (3,000 | ) | 38,000 | |||||
Interest expense | 266,000 | 342,000 | ||||||
Change in fair value of interest rate swap | 119,000 | (138,000 | ) | |||||
Income before income taxes | $ | 2,710,000 | $ | 2,214,000 | ||||
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended | ||||
Mar. 29, 2014 | |||||
Fair Value Disclosures [Abstract] | ' | ||||
Summary of changes in fair value of the Company's Level 3 liabilities measured on a recurring basis | ' | ||||
The following table presents a summary of changes in fair value of the Company's Level 3 liabilities measured on a recurring basis for the three-month period ended March 29, 2014: | |||||
Level 3 Inputs | |||||
Balance at December 28, 2013 | $ | 5,862,031 | |||
Interest expense charged during the first quarter of 2014 | 30,000 | ||||
Change in fair value of contingent consideration liability | — | ||||
Balance at March 29, 2014 | $ | 5,892,031 | |||
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Mar. 29, 2014 | Dec. 28, 2013 |
Inventory Disclosure [Abstract] | ' | ' |
Raw materials | $18,137,440 | $16,557,350 |
Work-in-process | 21,945,240 | 20,402,032 |
Finished goods | 18,007,195 | 18,897,421 |
Inventories, net | $58,089,875 | $55,856,803 |
STOCK_OPTIONS_AND_EMPLOYEE_STO1
STOCK OPTIONS AND EMPLOYEE STOCK GRANTS (Details) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | |
Sep. 30, 2013 | Mar. 29, 2014 | Mar. 30, 2013 | Feb. 20, 2014 | Mar. 29, 2014 | Sep. 30, 2013 | Dec. 28, 2013 | Sep. 30, 2013 | |
2011 Plan [Member] | 2011 Plan [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | ||||
Stock Options [Member] | Stock Options [Member] | Public Offering [Member] | Public Offering [Member] | Over-Allotment Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Allocated Share-based Compensation Expense | ' | $81,000 | $81,000 | ' | ' | ' | ' | ' |
Options granted (shares) | ' | ' | ' | 13,790 | ' | ' | ' | ' |
Options granted, weighted average exercise price (dollars per share) | ' | ' | ' | $14.76 | ' | ' | ' | ' |
Options granted, weighted average fair value (dollars per share) | ' | ' | ' | $6.70 | ' | ' | ' | ' |
Risk free interest rate (percent) | ' | ' | ' | 2.00% | ' | ' | ' | ' |
Expected volatility rate (percent) | ' | ' | ' | 52.00% | ' | ' | ' | ' |
Expected life (years) | ' | ' | ' | '7 years | ' | ' | ' | ' |
Expected dividend yield (percent) | ' | ' | ' | 1.80% | ' | ' | ' | ' |
Annual vesting rate (percent) | ' | ' | ' | ' | 20.00% | ' | ' | ' |
Period after option grant before options can be exercised (years) | ' | ' | ' | ' | '1 year | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | 2,000,000 | ' | 300,000 |
Share Price | ' | ' | ' | ' | ' | $15.75 | ' | $15.75 |
Proceeds from Issuance of Common Stock | 34,233,000 | ' | ' | ' | ' | ' | ' | ' |
Planned Payments to Acquire Machinery and Equipment | 3,500,000 | ' | ' | ' | ' | ' | ' | ' |
Repayments of Lines of Credit | ' | ' | ' | ' | ' | ' | $18,061,000 | ' |
PAYMENT_OF_DIVIDENDS_Details
PAYMENT OF DIVIDENDS (Details) (USD $) | 0 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 03, 2013 |
Payments of Dividends [Abstract] | ' |
Dividends paid (in dollars per share) | $0.26 |
Dividend payment dates | 3-Dec-13 |
Total outlay for dividends | $2,260 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | |
Mar. 29, 2014 | Mar. 30, 2013 | |
Segment Reporting Information [Line Items] | ' | ' |
Net sales | $57,841,127 | $57,836,079 |
Operating income | 3,886,000 | 3,271,000 |
Acquisition related costs | -3,146 | 38,010 |
Change in fair value of interest rate swap | 118,806 | -137,679 |
Income before income taxes | 2,710,279 | 2,214,447 |
Metals Segment [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Net sales | 41,406,000 | 44,659,000 |
Operating income | 2,245,000 | 1,978,000 |
Specialty Chemicals Segment [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Net sales | 16,435,000 | 13,177,000 |
Operating income | 1,641,000 | 1,293,000 |
Corporate [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Corporate | 794,000 | 815,000 |
Acquisition related costs | -3,000 | 38,000 |
Interest and debt expense | 266,000 | 342,000 |
Change in fair value of interest rate swap | 119,000 | -138,000 |
Income before income taxes | 2,710,000 | 2,214,000 |
Operating Segments [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Net sales | $57,841,000 | $57,836,000 |
FAIR_VALUE_OF_FINANCIAL_INSTRU2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Narrative) (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 29, 2014 | Mar. 29, 2014 | Mar. 29, 2014 | Dec. 28, 2013 |
Fair Value, Inputs, Level 3 [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | Interest Rate Swap [Member] | |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ' | ' |
Fair value of interest rate swap, asset | ' | ' | $222 | $301 |
Fair value of interest rate swap, liability | ' | ' | $120 | $80 |
Variable rate basis on interest rate swap | ' | 'LIBOR | ' | ' |
Contingent consideration earn-out period (years) | '3 years | ' | ' | ' |
FAIR_VALUE_OF_FINANCIAL_INSTRU3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Level 3 Liabilities Rollforward) (Details) (Fair Value, Measurements, Recurring [Member], Fair Value, Inputs, Level 3 [Member], USD $) | 3 Months Ended |
Mar. 29, 2014 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' |
Beginning balance | $5,862,031 |
Interest expense charged during the year | 30,000 |
Change in fair value of contingent consideration liability | 0 |
Ending balance | $5,892,031 |
ACQUISITION_Narrative_Details
ACQUISITION (Narrative) (Details) (USD $) | 0 Months Ended | 3 Months Ended | |
Aug. 09, 2013 | Aug. 26, 2013 | Mar. 29, 2014 | |
CRI Facility [Member] | Color Resources, LLC - Certain Assets and Liabilities [Member] | CRI Tolling [Member] | |
Business Acquisition [Line Items] | ' | ' | ' |
Purchase price | $3,450,000 | $1,100,000 | ' |
Revenue of CRI since acquisition date | ' | ' | 1,587,000 |
Pre-tax earnings of CRI since acquisition date | ' | ' | $73,000 |
FINANCING_ARRANGEMENT_Details
FINANCING ARRANGEMENT (Details) (USD $) | 0 Months Ended | 0 Months Ended | |||||
Aug. 09, 2013 | Aug. 09, 2013 | Aug. 09, 2013 | Aug. 09, 2013 | Aug. 09, 2013 | Aug. 09, 2013 | Sep. 03, 2013 | |
Term Loan [Member] | Land and Building [Member] | Land and Building [Member] | Equipment [Member] | Equipment [Member] | London Interbank Offered Rate (LIBOR) [Member] | Interest Rate Swap [Member] | |
Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | |||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Term loan, term of contract | '10 years | ' | ' | ' | ' | ' | ' |
Term loan, amount | $4,033,000 | ' | $3,485,000 | ' | $548,250 | ' | ' |
Term loan, percentage of appraised asset value | ' | ' | 85.00% | ' | 75.00% | ' | ' |
Useful life of assets | ' | '20 years | ' | '5 years | ' | ' | ' |
Term loan, monthly payment for first 5 years of loan | 23,659 | ' | ' | ' | ' | ' | ' |
Term loan, monthly payment for remainder of loan | 14,521 | ' | ' | ' | ' | ' | ' |
Term loan, basis spread on variable rate | ' | ' | ' | ' | ' | 2.00% | ' |
Derivative, notional amount | ' | ' | ' | ' | ' | ' | $4,033,250 |
Derivative, fixed interest rate | ' | ' | ' | ' | ' | ' | 4.83% |
Derivative, term of contract | ' | ' | ' | ' | ' | ' | '10 years |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | 0 Months Ended | 36 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2013 | Apr. 24, 2014 | Dec. 28, 2013 | Apr. 29, 2014 | |
Common Stock [Member] | Common Stock [Member] | Non Employee Director [Member] | Bristol Fab [Member] | Bristol Fab [Member] | |
Public Offering [Member] | Over-Allotment Option [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | 2,000,000 | 300,000 | ' | ' | ' |
Treasury Stock Issued To Each Nonemployee Director (shares) | ' | ' | 7,088 | ' | ' |
Annual Cash Retainer Fees | ' | ' | $110,500 | ' | ' |
Cumulative adjusted net losses | ' | ' | ' | 5,200,000 | ' |
Loss Contingency, Estimate of Possible Loss | ' | ' | ' | ' | $1,900,000 |