Ascent Industries (ACNT) 10-Q 11 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jul. 04, 2015	Aug. 05, 2015
Document Information [Line Items]
Entity Registrant Name	Synalloy Corporation
Entity Central Index Key	95,953
Current Fiscal Year End Date	--01-02
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		8,726,138
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jul. 4, 2015

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Jul. 04, 2015	Jan. 03, 2015
Current assets
Cash and cash equivalents	$ 231,272	$ 26,623
Accounts receivable, less allowance for doubtful accounts of $268,885 and $1,114,814, respectively	25,766,347	29,229,927
Inventories, net	70,252,313	67,674,670
Deferred income taxes	2,509,592	2,921,654
Prepaid expenses and other current assets	5,349,371	5,460,344
Total current assets	104,108,895	105,313,218
Cash value of life insurance	1,506,360	2,046,512
Property, plant and equipment, net of accumulated depreciation of $48,318,426 and $46,036,102, respectively	40,345,939	39,937,466
Goodwill	18,512,979	23,250,201
Intangible asset, net	15,873,675	17,001,525
Deferred charges, net and other non-current assets	459,647	300,308
Total assets	180,807,495	187,849,230
Current liabilities
Accounts payable	11,997,109	21,388,298
Accrued expenses	9,140,185	14,684,686
Current portion of long-term debt	4,533,908	4,533,908
Other current liabilities	144,868	126,000
Total current liabilities	25,816,070	40,732,892
Long-term debt	29,368,224	27,255,442
Long-term contingent consideration	2,396,100	2,596,516
Deferred income taxes	6,438,146	6,438,146
Long-term pension liability from the closure of Bristol Fab	173,656	713,181
Other long-term liabilities	658,000	659,500
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	34,324,954	34,054,374
Retained earnings	85,260,347	79,167,323
Shareholders' equity before treasury stock	129,885,301	123,521,697
Less cost of common stock in treasury: 1,573,862 and 1,589,698 shares, respectively	13,928,002	14,068,144
Total shareholders' equity	$ 115,957,299	$ 109,453,553
Commitments and contingencies – See Note 11
Total liabilities and shareholders' equity	$ 180,807,495	$ 187,849,230

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Jul. 04, 2015	Jan. 03, 2015
Statement of Financial Position [Abstract]
Allowance for Doubtful Accounts Receivable, Current	$ 268,885	$ 1,114,814
Assets
Accumulated depreciation	$ 48,318,426	$ 46,036,102
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)	1,573,862	1,589,698

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Loss from discontinued operations, net of tax			$ 0	$ (5,855,884)
Net sales	$ 50,163,448	$ 52,687,607	101,811,693	102,483,965
Cost of sales	41,747,379	43,502,351	84,454,005	85,434,473
Gross profit	8,416,069	9,185,256	17,357,688	17,049,492
Selling, general and administrative expense	5,744,523	4,415,490	11,133,528	8,494,846
Acquisition related costs	4,770	0	445,046	(3,146)
Operating income	2,666,776	4,769,766	5,779,114	8,557,792
Other (income) and expense
Interest expense	297,311	261,998	656,648	527,686
Change in fair value of interest rate swap	(183,337)	175,695	(13,917)	294,501
Palmer earn-out adjustment	0	(3,476,198)	(2,483,333)	(3,476,198)
Business interruption insurance proceeds	(480,000)	0	(480,000)	0
Other, net	(134,483)	(6,645)	(137,308)	(6,647)
Income from continuing operations before income taxes	3,167,285	7,814,916	8,237,024	11,218,450
Provision for income taxes	712,000	2,032,000	2,144,000	3,186,000
Net income from continuing operations	2,455,285	5,782,916	6,093,024	8,032,450
Loss from discontinued operations, net of tax	0	(5,382,629)	0	(5,855,884)
Net income	$ 2,455,285	$ 400,287	$ 6,093,024	$ 2,176,566
Net income per common share from continuing operations:
Basic	$ 0.28	$ 0.66	$ 0.70	$ 0.92
Diluted	0.28	0.66	0.70	0.92
Net loss per common share from discontinued operations:
Basic	0	(0.62)	0	(0.67)
Diluted	$ 0	$ (0.62)	$ 0	$ (0.67)
Weighted average shares outstanding:
Basic (shares)	8,722,473	8,700,725	8,718,501	8,695,610
Dilutive effect from stock options and grants (shares)	12,502	10,662	16,745	9,353
Diluted (shares)	8,734,975	8,711,387	8,735,246	8,704,963

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014
Operating activities
Net income	$ 6,093,024	$ 2,176,566
Loss from discontinued operations, net of tax	0	5,855,884
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation expense	2,387,856	1,907,583
Amortization expense	1,180,587	684,701
Deferred income taxes	412,062	28,793
Palmer earn-out adjustment	(2,483,333)	(3,476,198)
(Reduction of) provision for losses on accounts receivable	(837,568)	77,000
Provision for losses on inventory	452,103	2,698,706
Gain on sale of property, plant and equipment	(12,000)	0
Cash value of life insurance	540,152	(48,000)
Change in fair value of interest rate swap	(13,917)	294,501
Environmental reserves	18,868	21,020
Issuance of treasury stock for director fees	118,762	110,501
Employee stock option and grant compensation	273,369	167,381
Changes in operating assets and liabilities:
Accounts receivable	4,301,148	(11,000,293)
Inventories	(711,559)	(86,720)
Other assets and liabilities, net	273,891	244,628
Accounts payable	(9,391,189)	6,831,155
Accrued expenses	(979,410)	4,436,161
Accrued income taxes	(334,748)	(1,073,082)
Net Cash Provided by Operating Activities, Continuing Operations	1,288,098	9,850,287
Net cash used in discontinued operating activities	0	(1,459,424)
Net cash provided by operating activities	1,288,098	8,390,863
Investing activities
Purchases of property, plant and equipment	(2,796,329)	(2,807,568)
Proceeds from sale of property, plant and equipment	12,000	0
Net Cash Used in Investing Activities, Continuing Operations	(2,784,329)	(2,807,568)
Net cash used in discontinued investing activities	0	(4,633)
Net cash used in investing activities	(2,784,329)	(2,812,201)
Financing activities
Net borrowings from line of credit	4,546,401	0
Payments of Long-term Debt	(2,433,619)	(1,266,952)
Proceeds from exercised stock options	8,302	0
Net cash provided by (used in) financing activities	1,700,880	(1,266,952)
Increase in cash and cash equivalents	204,649	4,311,710
Cash and cash equivalents at beginning of period	26,623	1,776,763
Cash and cash equivalents at end of period	231,272	6,088,473
Interest Paid	619,590	470,385
Income Taxes Paid	2,023,618	1,647,700
Payments Of Multiemployer Plan Withdrawal Obligation	$ (420,204)	$ 0

BASIS OF PRESENTATION

BASIS OF PRESENTATION	6 Months Ended
	Jul. 04, 2015
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 and six-month periods ended July 4, 2015 , are not necessarily indicative of the results that may be expected for the year ending January 2, 2016 . 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 January 3, 2015 . On August 29, 2014 the Company completed the sale of all of the issued and outstanding membership interests of its wholly owned subsidiary, Ram-Fab, LLC ("Ram-Fab"), to a subsidiary of Primoris Services Corporation. On June 27, 2014, the Company completed the planned closure of the Bristol Fabrication unit of Synalloy Fabrication, LLC ("Bristol Fab"). See Note 12, Discontinued Operations, for further information regarding the sale of Ram-Fab and the closure of Bristol Fab. The Company's financial results for its sold Ram-Fab and closed Bristol Fab businesses have been presented as discontinued operations for all periods presented in the accompanying condensed consolidated financial statements included in this Form 10-Q. 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.

RECENTLY ADOPTED ACCOUNTING STA

RECENTLY ADOPTED ACCOUNTING STANDARDS	6 Months Ended
	Jul. 04, 2015
Accounting Policies [Abstract]
Recently Adopted Accounting Standards	RECENTLY ADOPTED ACCOUNTING STANDARDS 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. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact that ASU 2014-09 will have on its consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis" , which modifies the consolidation model for reporting organizations under both the variable interest model and the voting interest model. The ASU is generally expected to reduce the number of situations where consolidation is required; however, in certain circumstances, the ASU may result in companies consolidating entities previously unconsolidated. The ASU will require all legal entities to re-evaluate previous consolidation conclusions under the revised model and is effective for periods beginning after December 15, 2015. The Company did not elect to early adopt the provisions of this ASU and does not believe its implementation will have any effect on the Company's financial statements. In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" , which changes the presentation of debt issuance costs. This ASU requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Currently, capitalized debt issuance costs are presented as an asset on the consolidated balance sheet. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015. The Company did not elect to early adopt the provisions of this ASU and does not believe its implementation will have a material effect on the Company's consolidated financial statements.

INVENTORIES

INVENTORIES	6 Months Ended
	Jul. 04, 2015
Inventory Disclosure [Abstract]
Inventories	INVENTORIES, NET Inventories are stated at the lower of cost (first-in, first-out method) or market. The components of inventories, net, are as follows: Jul 4, 2015 Jan 3, 2015 Raw materials $ 41,728,493 $ 38,405,587 Work-in-process 7,388,871 7,128,602 Finished goods 21,134,949 22,140,481 $ 70,252,313 $ 67,674,670

STOCK OPTIONS AND EMPLOYEE STOC

STOCK OPTIONS AND EMPLOYEE STOCK GRANTS	6 Months Ended
	Jul. 04, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Options and Employee Stock Grants	STOCK OPTIONS AND RESTRICTED STOCK During the first six months of 2015, stock options for 666 shares of common stock were exercised by officers and employees for an aggregate exercise price of $8,302 . Stock compensation expense for the three and six month periods ended July 4, 2015 was approximately $130,000 and $273,000 , respectively, while stock compensation expense for the three and six month periods ended June 28, 2014 was approximately $87,000 and $167,000 , respectively. On February 10, 2015 , 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 32,531 shares, with an exercise price of $16.01 , 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 10, 2015 was $6.39 . 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 46 percent , an expected life of seven years and a dividend yield of two 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 May 12, 2015 , the Company issued to its non-employee directors an aggregate of 8,216 shares of its common stock in lieu of a total of $118,762 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 retainer fee.

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jul. 04, 2015
Income Tax Disclosure [Abstract]
Income Taxes	INCOME TAXES 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 2011. The Company completed its 2012 and 2013 federal income tax return examination by the Internal Revenue Service during the second quarter of 2015 without a material financial statement effect. The Company recorded an effective tax rate of 22% and 26% for the three and six month periods ended July 4, 2015, respectively, as the Company experienced non-taxable gains associated with an earn-out adjustment made during the first quarter of 2015 combined with life insurance proceeds received in excess of cash surrender value for a former officer of the Company. The effective tax rates for the three and six months of the prior year were 26% and 28%, respectively. A non-taxable earn-out adjustment was also made in the prior year. The higher rate in the prior year resulted from the Company using a 35% Federal Income Tax rate for 2014 based upon projected 2014 taxable income from continuing operations. A 34% rate was used in 2015. The Company had $1,438,000 and $1,504,000 accrued for unrecognized tax benefits at July 4, 2015 and January 3, 2015, respectively. The decrease in the liability during the first six months of 2014 resulted from the settlement of the 2012 / 2013 Federal Income Tax Audit. The Company expects to eliminate the remaining balance of $1,438,000 for unrecognized tax benefits during 2015 when all of the necessary filings for method changes are completed and approved by the Internal Revenue Service. The Company's continuing practice is to recognize interest and/or penalties related to income tax matters in the provision for income tax.

PAYMENT OF DIVIDENDS

PAYMENT OF DIVIDENDS	6 Months Ended
	Jul. 04, 2015
Payments of Dividends [Abstract]
Payment of Dividends	PAYMENT OF DIVIDENDS During 2014, the Company declared and paid a $0.30 per share dividend on December 9, 2014 for a total of $2,633,000 . The Company's Board of Directors 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	6 Months Ended
	Jul. 04, 2015
Segment Reporting [Abstract]
Segment Information	SEGMENT INFORMATION The operating results of the Bristol Fab and Ram-Fab units have been classified as discontinued operations and are not included in the operating results presented below. See Note 12, Discontinued Operations, for further information regarding the closure and sale of the related divisions. The following table summarizes certain information regarding segments of the Company's continuing operations: Three Months Ended Six Months Ended Jul 4, 2015 Jun 28, 2014 Jul 4, 2015 Jun 28, 2014 Net sales Metals Segment $ 33,943,000 $ 35,832,000 $ 69,404,000 $ 69,193,000 Specialty Chemicals Segment 16,220,000 16,856,000 32,408,000 33,291,000 $ 50,163,000 $ 52,688,000 $ 101,812,000 $ 102,484,000 Operating income Metals Segment $ 2,352,000 $ 4,118,000 $ 5,468,000 $ 7,159,000 Specialty Chemicals Segment 1,566,000 1,715,000 3,026,000 3,357,000 3,918,000 5,833,000 8,494,000 10,516,000 Unallocated expenses Corporate 1,246,000 1,063,000 2,269,000 1,962,000 Acquisition related costs 5,000 — 445,000 (3,000 ) Interest expense 297,000 262,000 657,000 528,000 Change in fair value of interest rate swap (183,000 ) 176,000 (14,000 ) 294,000 Palmer earn-out adjustment — (3,476,000 ) (2,483,000 ) (3,476,000 ) Business interruption insurance proceeds (480,000 ) — (480,000 ) — Other income (134,000 ) (7,000 ) (137,000 ) (7,000 ) Income from continuing operations before income taxes $ 3,167,000 $ 7,815,000 $ 8,237,000 $ 11,218,000

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	6 Months Ended
	Jul. 04, 2015
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 July 4, 2015 and January 3, 2015 related to related to purchase accounting adjustments in the Specialty Pipe & Tube, Inc. ("Specialty") acquisition, as described further in Note 9, the re-measurement of the contingent consideration for Palmer of Texas Tanks, Inc. ("Palmer"), 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 July 4, 2015 and January 3, 2015, 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 a liability of $7,000 and an asset of $11,000 at July 4, 2015 and January 3, 2015 , 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 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. The fair value of the interest rate swap contract entered into on September 3, 2013 resulted in a liability of $183,000 and $215,000 at July 4, 2015 and January 3, 2015 , 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 payments ("earn-out") are classified as Level 3. The amount of the remaining earn-out liability to the former shareholders of Palmer was eliminated at April 4, 2015. Accordingly, the Company adjusted the earn-out liability by recognizing a gain of approximately $2,483,000 during the first quarter of 2015. During the second quarter 2015, the Company determined that the projected first year sales for Specialty would not result in an earn-out payment for year one and decreased the earn-out reserve by approximately $2,419,000 . The amount of the initial earn-out liability due to the prior owner of Specialty was determined using management's best estimate of Specialty's sales for the two-year earn-out period 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. Subsequent to the original earn-out reserve calculation for Specialty, additional information concerning the extent that changes in oil prices effected overall Specialty sales levels was obtained. With this new information, it was evident that an oil price fluctuation factor should have been applied to the projected earn-out sales levels for the initial earn-out valuation, instead of assuming that they would remain constant. As this information supporting the adjustment to Specialty earn-out liability was discovered subsequent the acquisition date but within one year from the date of the transaction, November 22, 2014, and relates to the valuation of an identifiable liability, the Company reduced goodwill as the offset to the reduction in Specialty's earn-out liability. The Company's cost of borrowing at inception was used to determine the present value of expected payments. Each quarter-end, the Company re-evaluates the assumptions and adjusts to the estimated present value of the expected payments to be made, if required. 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 six-month period ended July 4, 2015 : Level 3 Liabilities Balance at January 3, 2015 $ 7,256,387 Interest expense charged during 2015 42,081 Reduction due to the finalization of Specialty's beginning balance sheet (2,419,035 ) Change in fair value of Palmer's contingent consideration liability (2,483,333 ) Balance at July 4, 2015 $ 2,396,100 There were no transfers of assets or liabilities between Level 1, Level 2 and Level 3 in the six-month period ended July 4, 2015 or year ended January 3, 2015 . During the first six months of 2015, there have been no changes in the fair value methodologies used by the Company.

ACQUISITION

ACQUISITION	6 Months Ended
	Jul. 04, 2015
Business Combinations [Abstract]
Acquisition	ACQUISITIONS Acquisition of Specialty Pipe & Tube, Inc. ("Specialty") On November 21, 2014, the Company entered into a stock purchase agreement with The Davidson Corporation ("Davidson") to purchase all of the issued and outstanding stock of Specialty. Specialty is a master distributor of seamless carbon pipe and tube, with a focus on heavy wall, large diameter products. The Company views the Specialty acquisition as an excellent complement to the product offerings of the Metals segment with similar end markets and consistent profit margins. Specialty's results of operations since the acquisition date are reflected in the Company's condensed consolidated statements of operations. During the second quarter of 2015, the Company finalized the purchase price allocation for the Specialty acquisition. Additional information was obtained surrounding the proper lifespan of Specialty's steel pipe. Transactions occurring after the acquisition date indicated that the inventory was undervalued. As a result, the Company changed its accounting policy for valuing inventory and the fair value of inventory increased and goodwill decreased by approximately $2,318,000 . Also, as a result of this change in estimate, approximately $486,000 was recorded as income in the second quarter of 2015 to eliminate the amounts expensed subsequent to the acquisition date. This was a prospective adjustment and did not have an impact on prior periods. Also, with oil industry demand decreasing, it became evident that Specialty's projected sales for the first year of acquisition will not result in an earn-out payment. The estimates used to value the earn-out liability at the acquisition date did not properly reflect the impact of potential oil price fluctuations that ultimately occurred. Had the facts and circumstances that occurred been properly reflected in the beginning valuation at the business combination date, the value of the earn-out would have been lower than what was recorded. Therefore, since this adjustment was identified within one year of the business combination date, the beginning earn-out liability and goodwill were reduced by $2,419,000 . These adjustments caused goodwill related to the Specialty acquisition to decrease from $5,994,000 to $1,257,000 . The amount of Specialty's revenues and pre-tax earnings included in the condensed consolidated statements of operation for the three and six month periods ended July 4, 2015 was as follows: Three months ended Six months ended Jul 4, 2015 Jul 4, 2015 Revenues $ 4,385,000 $ 10,646,000 Pre-tax earnings $ 702,000 $ 1,449,000

FINANCING ARRANGEMENT FINANCING

FINANCING ARRANGEMENT FINANCING ARRANGEMENT	6 Months Ended
	Jul. 04, 2015
Debt Disclosure [Abstract]
Long-term Debt	FINANCING ARRANGEMENT In connection with the acquisition of Specialty, discussed in Note 9, on November 21, 2014, the Company modified its Credit Agreement with its current bank to provide for a five -year term loan, expiring November 21, 2019, in the amount of $10,000,000 that requires equal monthly payments of $166,667 , plus interest, calculated using the One Month LIBOR (as defined in the Credit Agreement), plus a pre-defined spread, based on the Company's Total Funded Debt to EBITDA ratio (as defined in the Credit Agreement). In conjunction with the Specialty acquisition, the Amended Credit Agreement also increased the limit of the credit facility by $15,000,000 to a maximum of $40,000,000 , and extended the maturity date to November 21, 2017 .

CONTINGENCIES

CONTINGENCIES	6 Months Ended
	Jul. 04, 2015
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.

DISCONTINUED OPERATION (Notes)

DISCONTINUED OPERATION (Notes)	6 Months Ended
	Jul. 04, 2015
Discontinued Operations and Disposal Groups [Abstract]
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]	DISCONTINUED OPERATIONS On June 27, 2014, the Company completed the planned closure of Bristol Fab, and on August 29, 2014, the Company completed the sale of all of the issued and outstanding membership interests of its wholly-owned subsidiary, Ram-Fab, to a subsidiary of Primoris Services Corporation. All non-recurring costs associated with these dispositions have been included as discontinued operations in the consolidated financial statements as part of the Metals Segment. The Company's results from discontinued operations are summarized below. These operating results for the three and six month periods ended June 28, 2014 do not necessarily reflect what they would have been had Bristol Fab and Ram-Fab not been classified as discontinued operations. Three months ended Six months ended Jun 28, 2014 Jun 28, 2014 Net sales $ 10,666,000 $ 18,711,000 Loss before income taxes $ (7,744,000 ) $ (8,437,000 ) Benefit from income taxes (2,361,000 ) (2,581,000 ) Net loss from discontinued operations $ (5,383,000 ) $ (5,856,000 ) No assets or liabilities were held for sale at July 4, 2015 or January 3, 2015.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jul. 04, 2015
Subsequent Events [Abstract]
Subsequent Events	SUBSEQUENT EVENTS The Company performs an evaluation of events that occur after the balance sheet date but before the 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)	6 Months Ended
	Jul. 04, 2015
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 and six-month periods ended July 4, 2015 , are not necessarily indicative of the results that may be expected for the year ending January 2, 2016 . 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 January 3, 2015 . On August 29, 2014 the Company completed the sale of all of the issued and outstanding membership interests of its wholly owned subsidiary, Ram-Fab, LLC ("Ram-Fab"), to a subsidiary of Primoris Services Corporation. On June 27, 2014, the Company completed the planned closure of the Bristol Fabrication unit of Synalloy Fabrication, LLC ("Bristol Fab"). See Note 12, Discontinued Operations, for further information regarding the sale of Ram-Fab and the closure of Bristol Fab. The Company's financial results for its sold Ram-Fab and closed Bristol Fab businesses have been presented as discontinued operations for all periods presented in the accompanying condensed consolidated financial statements included in this Form 10-Q.
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.
Recently Adopted Accounting Standards	RECENTLY ADOPTED ACCOUNTING STANDARDS 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. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact that ASU 2014-09 will have on its consolidated financial statements. In February 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis" , which modifies the consolidation model for reporting organizations under both the variable interest model and the voting interest model. The ASU is generally expected to reduce the number of situations where consolidation is required; however, in certain circumstances, the ASU may result in companies consolidating entities previously unconsolidated. The ASU will require all legal entities to re-evaluate previous consolidation conclusions under the revised model and is effective for periods beginning after December 15, 2015. The Company did not elect to early adopt the provisions of this ASU and does not believe its implementation will have any effect on the Company's financial statements. In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" , which changes the presentation of debt issuance costs. This ASU requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. Currently, capitalized debt issuance costs are presented as an asset on the consolidated balance sheet. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015. The Company did not elect to early adopt the provisions of this ASU and does not believe its implementation will have a material effect on the Company's consolidated financial statements.

INVENTORIES (Tables)

INVENTORIES (Tables)	6 Months Ended
	Jul. 04, 2015
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: Jul 4, 2015 Jan 3, 2015 Raw materials $ 41,728,493 $ 38,405,587 Work-in-process 7,388,871 7,128,602 Finished goods 21,134,949 22,140,481 $ 70,252,313 $ 67,674,670

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	6 Months Ended
	Jul. 04, 2015
Segment Reporting [Abstract]
Segment Information	Three Months Ended Six Months Ended Jul 4, 2015 Jun 28, 2014 Jul 4, 2015 Jun 28, 2014 Net sales Metals Segment $ 33,943,000 $ 35,832,000 $ 69,404,000 $ 69,193,000 Specialty Chemicals Segment 16,220,000 16,856,000 32,408,000 33,291,000 $ 50,163,000 $ 52,688,000 $ 101,812,000 $ 102,484,000 Operating income Metals Segment $ 2,352,000 $ 4,118,000 $ 5,468,000 $ 7,159,000 Specialty Chemicals Segment 1,566,000 1,715,000 3,026,000 3,357,000 3,918,000 5,833,000 8,494,000 10,516,000 Unallocated expenses Corporate 1,246,000 1,063,000 2,269,000 1,962,000 Acquisition related costs 5,000 — 445,000 (3,000 ) Interest expense 297,000 262,000 657,000 528,000 Change in fair value of interest rate swap (183,000 ) 176,000 (14,000 ) 294,000 Palmer earn-out adjustment — (3,476,000 ) (2,483,000 ) (3,476,000 ) Business interruption insurance proceeds (480,000 ) — (480,000 ) — Other income (134,000 ) (7,000 ) (137,000 ) (7,000 ) Income from continuing operations before income taxes $ 3,167,000 $ 7,815,000 $ 8,237,000 $ 11,218,000

FAIR VALUE OF FINANCIAL INSTR22

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	6 Months Ended
	Jul. 04, 2015
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 six-month period ended July 4, 2015 : Level 3 Liabilities Balance at January 3, 2015 $ 7,256,387 Interest expense charged during 2015 42,081 Reduction due to the finalization of Specialty's beginning balance sheet (2,419,035 ) Change in fair value of Palmer's contingent consideration liability (2,483,333 ) Balance at July 4, 2015 $ 2,396,100

DISCONTINUED OPERATION (Tables)

DISCONTINUED OPERATION (Tables)	6 Months Ended
	Jul. 04, 2015
Discontinued Operations and Disposal Groups [Abstract]
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]	Three months ended Six months ended Jun 28, 2014 Jun 28, 2014 Net sales $ 10,666,000 $ 18,711,000 Loss before income taxes $ (7,744,000 ) $ (8,437,000 ) Benefit from income taxes (2,361,000 ) (2,581,000 ) Net loss from discontinued operations $ (5,383,000 ) $ (5,856,000 )

INVENTORIES (Details)

INVENTORIES (Details) - USD ($)	Jul. 04, 2015	Jan. 03, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 41,728,493	$ 38,405,587
Work-in-process	7,388,871	7,128,602
Finished goods	21,134,949	22,140,481
Inventories, net	$ 70,252,313	$ 67,674,670

STOCK OPTIONS AND EMPLOYEE ST25

STOCK OPTIONS AND EMPLOYEE STOCK GRANTS (Details) - USD ($)	May. 12, 2015	Feb. 10, 2015	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cash received from exercised stock options					$ 8,302	$ 0
Allocated Share-based Compensation Expense			$ 130,000	$ 87,000	$ 273,000	$ 167,000
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options exercised (shares)					666
Options exercised, aggregate exercise price					$ 8,302
2011 Plan [Member] | Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (shares)		32,531
Options granted, weighted average exercise price (dollars per share)		$ 16.01
Options granted, weighted average fair value (dollars per share)		$ 6.39
Risk free interest rate (percent)		2.00%
Expected volatility rate (percent)		46.00%
Expected life (years)		7 years
Expected dividend yield (percent)		2.00%
Annual vesting rate (percent)					20.00%
Period after option grant before options can be exercised (years)					1 year
Non Employee Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Treasury stock issued to each nonemployee director (shares)	8,216
Annual cash retainer fees	$ 118,762

INCOME TAXES Income Taxes (Deta

INCOME TAXES Income Taxes (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 04, 2015	Jan. 03, 2015
Income Tax Disclosure [Abstract]
Liability for Uncertain Tax Positions, Noncurrent	$ 1,438	$ 1,504
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense	$ 1,438

PAYMENT OF DIVIDENDS (Details)

PAYMENT OF DIVIDENDS (Details) - Dec. 09, 2014 - USD ($) $ / shares in Units, $ in Thousands	Total
Payments of Dividends [Abstract]
Dividends paid (in dollars per share)	$ 0.30
Dividend payment dates	Dec. 9, 2014
Total outlay for dividends	$ 2,633

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014	Jul. 04, 2015	Jun. 28, 2014
Segment Reporting Information [Line Items]
Net sales	$ 50,163,448	$ 52,687,607	$ 101,811,693	$ 102,483,965
Operating income	3,918,000	5,833,000	8,494,000	10,516,000
Acquisition related costs	4,770	0	445,046	(3,146)
Change in fair value of interest rate swap	(183,337)	175,695	(13,917)	294,501
Palmer earn-out adjustment	0	(3,476,198)	(2,483,333)	(3,476,198)
Business interruption insurance proceeds	480,000	0	480,000	0
Income from continuing operations before income taxes	3,167,285	7,814,916	8,237,024	11,218,450
Metals Segment [Member]
Segment Reporting Information [Line Items]
Net sales	33,943,000	35,832,000	69,404,000	69,193,000
Operating income	2,352,000	4,118,000	5,468,000	7,159,000
Specialty Chemicals Segment [Member]
Segment Reporting Information [Line Items]
Net sales	16,220,000	16,856,000	32,408,000	33,291,000
Operating income	1,566,000	1,715,000	3,026,000	3,357,000
Corporate [Member]
Segment Reporting Information [Line Items]
Corporate	1,246,000	1,063,000	2,269,000	1,962,000
Acquisition related costs	5,000	0	445,000	(3,000)
Interest and debt expense	297,000	262,000	657,000	528,000
Change in fair value of interest rate swap	(183,000)	176,000	(14,000)	294,000
Palmer earn-out adjustment		(3,476,000)	(2,483,000)	(3,476,000)
Business interruption insurance proceeds	480,000	0	480,000	0
Other Income	134,000	7,000	137,000	7,000
Income from continuing operations before income taxes	3,167,000	7,815,000	8,237,000	11,218,000
Operating Segment [Member]
Segment Reporting Information [Line Items]
Net sales	$ 50,163,000	$ 52,688,000	$ 101,812,000	$ 102,484,000

FAIR VALUE OF FINANCIAL INSTR29

FAIR VALUE OF FINANCIAL INSTRUMENTS (Narrative) (Details) - USD ($)	3 Months Ended	6 Months Ended
	Apr. 04, 2015	Jul. 04, 2015	Jan. 03, 2015
Interest Rate Swap [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Variable rate basis on interest rate swap		LIBOR
Palmer of Texas [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Change in fair value of contingent consideration liability	$ 2,483,000	$ (2,483,333)
Specialty Pipe And Tube, Inc. [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Change in fair value of contingent consideration liability	$ 2,419,000	(2,419,035)
Term Loan [Member] | Palmer of Texas [Member] | Interest Rate Swap [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of interest rate swap, asset			$ 11,000
Term Loan [Member] | Palmer of Texas [Member] | Interest Rate Swap [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, liability		7,000
Term Loan [Member] | Color Resources, LLC [Member] | Interest Rate Swap [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, liability		$ 183,000	$ 215,000

FAIR VALUE OF FINANCIAL INSTR30

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	6 Months Ended
	Apr. 04, 2015	Jul. 04, 2015
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 7,256,387	$ 7,256,387
Interest expense charged during the year		42,081
Ending balance		2,396,100
Specialty Pipe And Tube, Inc. [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Change in fair value of contingent consideration liability	$ 2,419,000	$ (2,419,035)

ACQUISITION (Narrative) (Detail

ACQUISITION (Narrative) (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jul. 04, 2015	Jul. 04, 2015	Jan. 03, 2015
Business Acquisition [Line Items]
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Inventory	$ 2,318,000
Purchase accounting adjustments increase (decrease) in goodwill	(2,318,000)	$ (2,419,000)
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Financial Liabilities		2,419,000
Business Combination, Separately Recognized Transactions, Additional Disclosures, Acquisition Cost Expensed	486,000
Goodwill	18,512,979	18,512,979	$ 23,250,201
Specialty Pipe And Tube, Inc. [Member]
Business Acquisition [Line Items]
Goodwill	1,257,000	1,257,000	$ 5,994,000
Revenue of CRI since acquisition date	4,385,000	10,646,000
Pre-tax earnings of CRI since acquisition date	$ 702,000	$ 1,449,000

FINANCING ARRANGEMENT (Details)

FINANCING ARRANGEMENT (Details) - USD ($)	Nov. 21, 2014	Jul. 04, 2015	Jan. 03, 2015
Term Loan Due November 21, 2019 [Member]
Debt Instrument [Line Items]
Debt Instrument, Term	5 years
Term loan, amount	$ 10,000,000
Debt Instrument, Periodic Payment, Principal	166,667
Variable rate basis on interest rate swap			LIBOR
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line Of Credit Facility, Increase In Maximum Borrowing Capacity	15,000,000
Line of Credit Facility, Maximum Borrowing Capacity	$ 40,000,000
Interest Rate Swap [Member]
Debt Instrument [Line Items]
Variable rate basis on interest rate swap		LIBOR

DISCONTINUED OPERATION (Details

DISCONTINUED OPERATION (Details) - USD ($)	6 Months Ended
	Jul. 04, 2015	Jun. 28, 2014
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss from discontinued operations, net of tax	$ 0	$ (5,855,884)
Bristol Fab and Ram-fab [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net sales	10,666,000	18,711,000
Loss from discontinued operations, net of tax	(7,744,000)	(8,437,000)
(Benefit from) provision for income taxes	(2,361,000)	(2,581,000)
Net (loss) income from discontinued operations	$ (5,383,000)	$ (5,856,000)