Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 05, 2017 | |
Document Information [Line Items] | ||
Entity Registrant Name | Synalloy Corporation | |
Entity Central Index Key | 95,953 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 8,678,622 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 318,540 | $ 62,873 |
Accounts receivable, less allowance for doubtful accounts of $21,000 and $82,000, respectively | 26,042,656 | 18,028,946 |
Inventories | 68,391,949 | 60,799,509 |
Prepaid expenses and other current assets | 6,230,165 | 7,272,569 |
Indemnified contingencies - see Note 11 | 11,016,000 | 11,339,888 |
Total current assets | 111,999,310 | 97,503,785 |
Property, plant and equipment, net of accumulated depreciation of $46,305,755 and $45,219,309, respectively | 35,079,797 | 27,324,092 |
Goodwill | 4,944,072 | 1,354,730 |
Intangible assets, net of accumulated amortization of $8,732,742 and $8,148,162 | 12,711,258 | 12,308,838 |
Deferred charges, net and other non-current assets | 127,308 | 146,618 |
Total assets | 164,861,745 | 138,638,063 |
Current liabilities | ||
Accounts payable | 16,615,358 | 16,684,508 |
Accrued expenses | 17,215,446 | 16,087,434 |
Total current liabilities | 33,830,804 | 32,771,942 |
Long-term debt | 29,972,946 | 8,804,206 |
Deferred income taxes | 1,480,756 | 1,609,492 |
Long-term portion of deferred gain on sale-leaseback | 6,184,054 | 6,267,623 |
Other long-term liabilities | 3,945,588 | 592,245 |
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 | 34,751,284 | 34,714,206 |
Retained earnings | 58,672,470 | 57,936,533 |
Shareholders' equity before treasury stock | 103,723,754 | 102,950,739 |
Less cost of common stock in treasury: 1,621,378 and 1,630,690 shares, respectively | 14,276,157 | 14,358,184 |
Total shareholders' equity | 89,447,597 | 88,592,555 |
Commitments and contingencies – See Note 11 | ||
Total liabilities and shareholders' equity | $ 164,861,745 | $ 138,638,063 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for Doubtful Accounts Receivable, Current | $ 21,000 | $ 82,000 |
Assets | ||
Accumulated depreciation | $ 46,305,755 | $ 45,219,309 |
Shareholders' equity | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 24,000,000 | 24,000,000 |
Common stock, shares issued (in shares) | 10,300,000 | 10,300,000 |
Common stock in treasury, at cost (in shares) | 1,621,378 | 1,630,690 |
Intangible asset, net of accumulated amortization | $ 7,538,915 | $ 5,711,175 |
Unamortized debt issuance costs | $ 0 | $ 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net sales | $ 42,203,579 | $ 36,312,012 |
Cost of sales | 34,800,000 | 31,593,836 |
Gross profit | 7,403,579 | 4,718,176 |
Selling, general and administrative expense | 5,888,675 | 5,571,902 |
Acquisition related costs | 358,477 | 57 |
Loss on sale-leaseback | 0 | (21,560) |
Operating income (loss) | 1,156,427 | (853,783) |
Other expense (income) | ||
Interest expense | (180,315) | (281,296) |
Change in fair value of interest rate swaps | (41,430) | 293,653 |
Other, net | (34,395) | 0 |
Income (loss) before income taxes | 1,051,937 | (1,428,732) |
Provision for (benefit from) income taxes | 316,000 | (62,000) |
Net income (loss) | $ 735,937 | $ (1,366,732) |
Net income (loss) per common share from continuing operations, per basic share | $ 0.08 | $ (0.16) |
Net income (loss) per common share from continuing operations, per diluted share | $ 0.08 | $ (0.16) |
Weighted average shares outstanding: | ||
Basic (shares) | 8,673,799 | 8,634,563 |
Dilutive effect from stock options and grants (shares) | 34,325 | 0 |
Diluted (shares) | 8,708,124 | 8,634,563 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating activities | ||
Net income (loss) | $ 735,937 | $ (1,366,732) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||
Depreciation expense | 1,086,445 | 1,108,229 |
Amortization expense | 595,280 | 614,945 |
Non-cash interest expense on debt issuance costs | 13,610 | 16,637 |
Deferred income taxes | (128,736) | 1,621,685 |
Reduction of losses on accounts receivable | (61,000) | (36,981) |
Provision for (reduction of) losses on inventories | 236,855 | (149,526) |
Gain on sale of property, plant and equipment | 0 | (21,560) |
Amortization of gain on sale-leaseback | (83,569) | 0 |
Deferred rent adjustment on sale-leaseback | 101,633 | 0 |
Change in cash value of life insurance | 0 | (18,000) |
Change in fair value of interest rate swap | (41,430) | 293,653 |
Change in environmental reserves | 10,157 | 11,325 |
Employee stock option and grant compensation | 119,843 | 99,992 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (7,801,127) | (2,428,383) |
Inventories | (2,395,295) | 3,518,504 |
Other assets and liabilities, net | 404,156 | 220,414 |
Accounts payable | (220,733) | (1,731,696) |
Accrued expenses | 103,473 | (1,709,867) |
Accrued income taxes | 428,014 | (2,010,017) |
Net cash used in continuing operating activities | (6,896,487) | (1,967,378) |
Net cash used in discontinued operating activities | 0 | (218,539) |
Net cash used in operating activities | (6,896,487) | (2,185,917) |
Investing activities | ||
Purchases of property, plant and equipment | (1,164,628) | (720,325) |
Proceeds from sale of property, plant and equipment | 0 | 55,463 |
Investments | (12,830,712) | 0 |
Net cash used in investing activities | (13,995,340) | (664,862) |
Financing activities | ||
Net borrowings from line of credit | 21,168,740 | 4,118,820 |
Payments on long-term debt | 0 | (1,133,476) |
Payments on capital lease obligation | (21,246) | (16,306) |
Purchase of common stock | 0 | (253,889) |
Net cash provided by financing activities | 21,147,494 | 2,715,149 |
Increase (decrease) in cash and cash equivalents | 255,667 | (135,630) |
Cash and cash equivalents at beginning of period | 62,873 | 391,424 |
Cash and cash equivalents at end of period | 318,540 | 255,794 |
Interest paid | 113,303 | 262,098 |
Income taxes paid | $ 23,665 | $ 310,400 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2017 | |
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 periods ended March 31, 2017 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 . 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 31, 2016 . |
RECENTLY ADOPTED ACCOUNTING STA
RECENTLY ADOPTED ACCOUNTING STANDARDS | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Standards | RECENTLY ISSUED 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. Two transition methods are available for implementing the requirements of ASU 2014-09: retrospectively for each prior reporting period presented or retrospectively with the cumulative effect of initial application recognized at the date of initial application. In March 2016, the FASB issued ASU 2016-08, " Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations ," to improve the operability and understandability of the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, " Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ," to clarify guidance for identifying performance obligations and licensing implementation. In May 2016, the FASB issued ASU 2016-12, " Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ," to clarify and improve the guidance for certain aspects of Topic 606. ASU 2015-14, " Deferral of the Effective Date ," defers the required implementation date of ASU 2014-09 for public business entities from annual reporting periods beginning after December 15, 2016 to annual reporting periods beginning after December 15, 2017. The company plans to adopt the new guidance in the first quarter of 2018 and is currently assessing when and which method it will choose for adoption, and is evaluating the impact of the adoption on its consolidated results of operations and financial position. 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 requires lessees to recognize lease contracts with a term greater than one year on the balance sheet, while recognizing expenses on the income statement in a manner similar to current guidance. For lessors, the update makes targeted changes to the classification criteria and the lessor accounting model to align the guidance with the new lessee model and revenue guidance. ASU 2016-02 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 ASU 2016-02 to add material right-of-use assets and lease liabilities to the consolidated balance sheets, 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 is 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. In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definiton of a Business" which provides a new framework for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017. 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. 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. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019. The Company elected to early adopt the provisions of this ASU in the quarterly period ending March 31, 2017. The implementation of this ASU did not have a material effect on the Company's consolidated financial statements. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Inventories are stated at the lower of cost or net realizable value. Cost is determined by either specific identification or weighted average methods. The components of inventories are as follows: Mar 31, 2017 Dec 31, 2016 Raw materials $ 31,683,122 $ 31,973,073 Work-in-process 11,948,944 9,897,857 Finished goods 24,759,883 18,928,579 $ 68,391,949 $ 60,799,509 |
INTANGIBLE ASSETS AND DEFERRED
INTANGIBLE ASSETS AND DEFERRED CHARGES (Notes) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Policy [Policy Text Block] | INTANGIBLE ASSETS AND DEFERRED CHARGES Deferred charges and intangible assets totaled $21,700,000 at March 31, 2017 and $20,708,000 at December 31, 2016. Accumulated amortization of deferred charges and intangible assets totaled $8,861,000 at March 31, 2017 and $8,253,000 at December 31, 2016. Estimated amortization expense for the next five years is: remainder of 2017 - $1,889,000 ; 2018 - $2,344,000 ; 2019 - $2,156,000 ; 2020 - $1,998,000 ; 2021 - $1,899,000 ; and thereafter - $2,553,000 . |
STOCK OPTIONS AND RESTRICTED ST
STOCK OPTIONS AND RESTRICTED STOCK | 3 Months Ended |
Mar. 31, 2017 | |
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 2017, no stock options were exercised by officers and employees of the Company. Stock compensation expense for the three-month period ended March 31, 2017 and March 31, 2016 was approximately $120,000 and $100,000 , respectively. On February 8, 2017, the Compensation & Long-Term Incentive 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. 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 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. 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. For the three months ended March 31, 2017 and March 31, 2016 the Company had weighted average shares of common stock, in the form of stock grants and options, of 227,643 and 269,344 , respectively, which were not included in the diluted earnings per share calculation as their effect was anti-dilutive. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2017 | |
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 examinations for years before 2014 or state income tax examinations for years before 2012. The effective tax rate was 30 percent for the three-month period ended March 31, 2017. The 2017 effective tax rate was lower than the statutory rate of 34 percent primarily due to state tax expense and other permanent differences, including the manufacturer's exemption. The effective tax rate of four percent for the three-month period ended March 31, 2016 was lower than the 34 percent statutory rate primarily due to state tax expense and permanent differences reducing the amount of tax benefit of the pre-tax loss for that period. The year over year change in the effective rate is primarily related to the difference in the Company’s operating results combined with the effect that the permanent differences had on the effective tax rate calculation, especially in the prior year. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION The following table summarizes certain information regarding segments of the Company's operations: Three Months Ended Mar 31, 2017 Mar 31, 2016 Net sales Metals Segment $ 29,710,000 $ 23,962,000 Specialty Chemicals Segment 12,494,000 12,350,000 $ 42,204,000 $ 36,312,000 Operating income (loss) Metals Segment $ 1,565,000 $ (771,000 ) Specialty Chemicals Segment 1,508,000 1,210,000 3,073,000 439,000 Unallocated straight line lease cost 102,000 — Unallocated corporate expenses 1,457,000 1,293,000 Acquisition related costs 358,000 — Operating income (loss) 1,156,000 (854,000 ) Interest expense 180,000 281,000 Change in fair value of interest rate swap (41,000 ) 294,000 Other income (35,000 ) — Income (loss) from operations before income taxes $ 1,052,000 $ (1,429,000 ) As of Mar 31, 2017 Dec 31, 2016 Identifiable assets Metals Segment $ 136,303,000 $ 109,689,000 Specialty Chemicals Segment 24,854,000 22,908,000 Corporate 3,705,000 6,041,000 $ 164,862,000 $ 138,638,000 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2017 | |
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 31, 2017 relate to the purchase price allocation relating to the acquisition of the stainless steel operations of Marcegaglia USA, Inc. ("MUSA"), contingent consideration liability, testing goodwill for impairment, the interest rate swap and disclosures of the fair values of financial instruments. As of March 31, 2017 and December 31, 2016, the carrying amounts for cash and cash equivalents, accounts receivable, accounts payable and borrowings under the Company's bank debt, which are based on variable interest rates, approximate their fair value. The Company has one Level 2 financial instrument. It is classified as Level 2 as it is not actively traded and is valued using pricing models that use observable market inputs. The fair value of the interest rate swap contract entered into on August 21, 2012 was an asset of $72,000 and $31,000 at March 31, 2017 and December 31, 2016 , 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 to other income (expense) with corresponding offsetting entries to long-term assets or liabilities, as appropriate. 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 this interest rate swap contract approximates its carrying value. The fair value of contingent consideration liabilities ("earn-out") resulting from the MUSA acquisition discussed in Note 9 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. The following table presents a summary of changes in fair value of the Company's Level 3 liability during the period: Level 3 Inputs Balance at December 31, 2016 $ — Present value of the earn-out liability associated with the MUSA acquisition 3,604,330 Change in fair value during the period 17,286 Balance at March 31, 2017 $ 3,621,616 There were no transfers of assets or liabilities between Level 1, Level 2 and Level 3 in the three-month period ended March 31, 2017 or year ended December 31, 2016 . During the first three months of 2017, there have been no changes in the fair value methodologies used by the Company. |
ACQUISITION
ACQUISITION | 3 Months Ended |
Mar. 31, 2017 | |
Business Acquisition [Line Items] | |
Business Combination Disclosure [Text Block] | ACQUISITIONS Acquisition of the Stainless 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 Marcegaglia USA, Inc. ("MUSA") located in Munhall, PA (the "MUSA Stainless Acquisition") 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 current credit facility (See Note 10). The purchase price for the transaction, which excludes real estate and certain other assets, totaled approximately $14,954,000 . The assets purchased from MUSA include inventory, production and maintenance supplies and equipment. 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. The transaction is being accounted for using the acquisition method of accounting for business combinations. Under this method, the total consideration transferred to consummate the acquisition 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. The acquisition method of accounting requires extensive use of estimates and judgments to allocate the consideration transferred to the identifiable tangible and intangible assets, if any, acquired and liabilities assumed. Because the acquisition closed on February 28, 2017, the allocation of the consideration transferred in the consolidated financial statements is preliminary and will be adjusted upon completion of the final valuation of the assets acquired and liabilities assumed. Such adjustments could be significant. The final valuation is expected to be completed as soon as practicable but no later than twelve months after the closing date of the acquisition. MUSA will receive quarterly earn-out payments for a period of four 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. As of February 28, 2017, the Company forecasted earn out payments to be $4,063,000 , which was discounted to a present value of $3,604,000 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. At March 31, 2017, the fair value of the earn-out totaled $3,622,000 with $722,000 of this liability classified as a current liability since the payments will be made quarterly. As part of the MUSA transaction, BRISMET assumed all of MUSA's rights and obligations pursuant to the Collective Bargaining Agreement between MUSA and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union AFL-CIO, on behalf of Local Union 5852-22 (the "Union") dated October 1, 2013 (the "CBA"). At the closing of the transaction, BRISMET and the Union amended the CBA to include a modest wage increase and to extend the CBA's termination date to September 30, 2018. 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 manufacturing equipment and inventory $ 14,953,513 Total uses of funds $ 14,953,513 The total purchase price allocated to BRISMET'S Munhall facility's net tangible and identifiable intangible assets based on their estimated fair values as of February 28, 2017 for purposes of the consolidated financial statements. These amounts are subject to change based on the results of the final valuations of assets acquired and liabilities assumed, which are expected to be completed within the twelve months following the acquisition. The fair value assigned to the customer list intangible will be 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 is reflected as goodwill. Goodwill consists of manufacturing cost synergies expected from combining MUSA's laser mill capabilities 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. The preliminary allocation of the total consideration paid to the fair value of the assets acquired and liabilities assumed as of February 28, 2017 is as follows: Inventories $ 5,434,000 Other current assets - production and maintenance supplies 1,548,701 Property, plant and equipment 7,576,733 Customer list intangible 992,000 Goodwill 3,589,342 Contingent consideration (3,604,330 ) Other liabilities assumed (582,933 ) $ 14,953,513 BRISMET's Munhall facility's results of operations since acquisition are reflected in the Company's consolidated statements of operations. The amount of BRISMET's Munhall facility's revenues and pre-tax earnings included in the consolidated statements of operations for the three months ended March 31, 2017 was $1,112,000 for revenues and $179,000 for income before taxes. The following unaudited pro-forma information is provided to present a summary of the combined results of the Company's operations with BRISMET's Munhall facility as if the acquisition had occurred on January 1, 2016. The unaudited pro-forma 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) Three Months Ended Mar 31, 2017 Mar 31, 2016 Pro-forma revenues $ 47,128,000 $ 41,473,000 Pro-forma net income (loss) 584,000 (1,543,000 ) Earnings (loss) per share: Basic $ 0.07 $ (0.18 ) Diluted $ 0.07 $ (0.18 ) The pro-forma calculation excludes non-recurring acquisition costs of $358,000 which were incurred by the Company during 2017. These expenditures included $160,000 for professional fees associated with the preparation and audit of MUSA's historical carved out stainless steel financial statements and intangible assets identification and valuation, $139,000 of travel costs, $21,000 of legal fees and $38,000 of other miscellaneous costs. 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 MUSA's customer list intangible and an estimated amount of interest expense associated with the additional line of credit borrowings. |
FINANCING ARRANGEMENT FINANCING
FINANCING ARRANGEMENT FINANCING ARRANGEMENT | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Pursuant to the Credit Agreement in place with the Company's bank, the Company is subject to certain covenants under the Credit Agreement including maintaining a minimum fixed charge coverage ratio and a limitation on the Company’s maximum amount of capital expenditures per year, which is in line with currently projected needs. At March 31, 2017, the Company was in compliance with all debt covenants. |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Mar. 31, 2017 | |
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. In January 2014, 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 Palmer prior to the Company’s acquisition of all of Palmer's outstanding stock in August 2012. In August and September 2016, the parties to the lawsuit tried the matter in a bench trial in the District Court of Harris County, Texas, 333rd Judicial District (the “Court”). On December 31, 2016 (but made available to the parties to the lawsuit on January 3, 2017), 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. Palmer filed a motion for a new trial with the Court at the end of January 2017, which the court denied. Palmer is currently proceeding with an appeal of the matter. 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, 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. At March 31, 2017, there were no changes in the amounts recorded for the legal liability and indemnified receivable. Other than the matters discussed in this note, management is not currently aware of any other asserted or unasserted matters which could have a material effect on the financial condition or results of operations of the Company. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
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 periods ended March 31, 2017 , are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 . 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 31, 2016 . |
Recently Adopted Accounting Standards | RECENTLY ISSUED 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. Two transition methods are available for implementing the requirements of ASU 2014-09: retrospectively for each prior reporting period presented or retrospectively with the cumulative effect of initial application recognized at the date of initial application. In March 2016, the FASB issued ASU 2016-08, " Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations ," to improve the operability and understandability of the implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, " Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing ," to clarify guidance for identifying performance obligations and licensing implementation. In May 2016, the FASB issued ASU 2016-12, " Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ," to clarify and improve the guidance for certain aspects of Topic 606. ASU 2015-14, " Deferral of the Effective Date ," defers the required implementation date of ASU 2014-09 for public business entities from annual reporting periods beginning after December 15, 2016 to annual reporting periods beginning after December 15, 2017. The company plans to adopt the new guidance in the first quarter of 2018 and is currently assessing when and which method it will choose for adoption, and is evaluating the impact of the adoption on its consolidated results of operations and financial position. 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 requires lessees to recognize lease contracts with a term greater than one year on the balance sheet, while recognizing expenses on the income statement in a manner similar to current guidance. For lessors, the update makes targeted changes to the classification criteria and the lessor accounting model to align the guidance with the new lessee model and revenue guidance. ASU 2016-02 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 ASU 2016-02 to add material right-of-use assets and lease liabilities to the consolidated balance sheets, 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 is 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. In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations (Topic 805): Clarifying the Definiton of a Business" which provides a new framework for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017. 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. 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. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019. The Company elected to early adopt the provisions of this ASU in the quarterly period ending March 31, 2017. The implementation of this ASU did not have a material effect on the Company's consolidated financial statements. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of components of inventories | Inventories are stated at the lower of cost or net realizable value. Cost is determined by either specific identification or weighted average methods. The components of inventories are as follows: Mar 31, 2017 Dec 31, 2016 Raw materials $ 31,683,122 $ 31,973,073 Work-in-process 11,948,944 9,897,857 Finished goods 24,759,883 18,928,579 $ 68,391,949 $ 60,799,509 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Three Months Ended Mar 31, 2017 Mar 31, 2016 Net sales Metals Segment $ 29,710,000 $ 23,962,000 Specialty Chemicals Segment 12,494,000 12,350,000 $ 42,204,000 $ 36,312,000 Operating income (loss) Metals Segment $ 1,565,000 $ (771,000 ) Specialty Chemicals Segment 1,508,000 1,210,000 3,073,000 439,000 Unallocated straight line lease cost 102,000 — Unallocated corporate expenses 1,457,000 1,293,000 Acquisition related costs 358,000 — Operating income (loss) 1,156,000 (854,000 ) Interest expense 180,000 281,000 Change in fair value of interest rate swap (41,000 ) 294,000 Other income (35,000 ) — Income (loss) from operations before income taxes $ 1,052,000 $ (1,429,000 ) As of Mar 31, 2017 Dec 31, 2016 Identifiable assets Metals Segment $ 136,303,000 $ 109,689,000 Specialty Chemicals Segment 24,854,000 22,908,000 Corporate 3,705,000 6,041,000 $ 164,862,000 $ 138,638,000 |
FAIR VALUE OF FINANCIAL INSTR20
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table presents a summary of changes in fair value of the Company's Level 3 liability during the period: Level 3 Inputs Balance at December 31, 2016 $ — Present value of the earn-out liability associated with the MUSA acquisition 3,604,330 Change in fair value during the period 17,286 Balance at March 31, 2017 $ 3,621,616 |
ACQUISITION Pro-forma informati
ACQUISITION Pro-forma information (Tables) - Marcegalia USA, Inc. [Member] | 3 Months Ended |
Mar. 31, 2017 | |
Business Acquisition [Line Items] | |
Schedule of Sources and Uses of Funds from Acquisition [Table Text Block] | 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 manufacturing equipment and inventory $ 14,953,513 Total uses of funds $ 14,953,513 |
Business Acquisition, Pro Forma Information [Table Text Block] | The unaudited pro-forma 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) Three Months Ended Mar 31, 2017 Mar 31, 2016 Pro-forma revenues $ 47,128,000 $ 41,473,000 Pro-forma net income (loss) 584,000 (1,543,000 ) Earnings (loss) per share: Basic $ 0.07 $ (0.18 ) Diluted $ 0.07 $ (0.18 ) |
Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The preliminary allocation of the total consideration paid to the fair value of the assets acquired and liabilities assumed as of February 28, 2017 is as follows: Inventories $ 5,434,000 Other current assets - production and maintenance supplies 1,548,701 Property, plant and equipment 7,576,733 Customer list intangible 992,000 Goodwill 3,589,342 Contingent consideration (3,604,330 ) Other liabilities assumed (582,933 ) $ 14,953,513 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 31,683,122 | $ 31,973,073 |
Work-in-process | 11,948,944 | 9,897,857 |
Finished goods | 24,759,883 | 18,928,579 |
Inventories | $ 68,391,949 | $ 60,799,509 |
INTANGIBLE ASSETS AND DEFERRE23
INTANGIBLE ASSETS AND DEFERRED CHARGES (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Intangible Assets and Deferred Charges [Abstract] | ||
Intangible Assets, (Excluding Goodwill), Including Deferred Charges | $ 21,700,000 | $ 20,708,000 |
Finite-Lived Intangibles Assets, Including Deferred Charges, Accumulated Amortization | 8,861,000 | $ 8,253,000 |
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year | 1,889,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 2,344,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 2,156,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 1,998,000 | |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 1,899,000 | |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | $ 2,553,000 |
STOCK OPTIONS AND RESTRICTED 24
STOCK OPTIONS AND RESTRICTED STOCK (Details) - USD ($) | Feb. 08, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Allocated Share-based Compensation Expense | $ 119,843 | $ 100,000 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 227,643 | 269,344 | |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options exercised (shares) | 0 | ||
2015 Stock Awards Plan [Member] | Stock Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Annual vesting rate (percent) | 20.00% | ||
Period after option grant before options can be exercised (years) | 1 year | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 44,687 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 12.30 |
INCOME TAXES Income Taxes (Deta
INCOME TAXES Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, Percent | 30.00% | 4.00% |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | 34.00% |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 42,203,579 | $ 36,312,012 | |
Operating income (loss) | 3,073,000 | 439,000 | |
Deferred rent adjustment on sale-leaseback | 101,633 | 0 | |
Acquisition related costs | 358,477 | 57 | |
Operating income (loss) | 1,156,427 | (853,783) | |
Interest expense | 180,315 | 281,296 | |
Change in fair value of interest rate swaps | (41,430) | 293,653 | |
Income (loss) before income taxes | 1,051,937 | (1,428,732) | |
Assets | 164,861,745 | $ 138,638,063 | |
Metals Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 29,710,000 | 23,962,000 | |
Operating income (loss) | 1,565,000 | (771,000) | |
Assets | 136,303,000 | 109,689,000 | |
Specialty Chemicals Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 12,494,000 | 12,350,000 | |
Operating income (loss) | 1,508,000 | 1,210,000 | |
Assets | 24,854,000 | 22,908,000 | |
Corporate [Member] | |||
Segment Reporting Information [Line Items] | |||
Less unallocated corporate expenses | 1,457,000 | 1,293,000 | |
Acquisition related costs | 358,000 | 0 | |
Operating income (loss) | 1,156,000 | (854,000) | |
Interest expense | 180,000 | 281,000 | |
Change in fair value of interest rate swaps | (41,000) | 294,000 | |
Other Income | (35,000) | 0 | |
Income (loss) before income taxes | 1,052,000 | (1,429,000) | |
Assets | 3,705,000 | $ 6,041,000 | |
Operating Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | $ 42,204,000 | $ 36,312,000 |
FAIR VALUE OF FINANCIAL INSTR27
FAIR VALUE OF FINANCIAL INSTRUMENTS (Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Intangible Assets, (Excluding Goodwill), Including Deferred Charges | $ 21,700,000 | $ 20,708,000 |
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value | $ 3,621,616 | 0 |
Term Loan [Member] | Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Variable rate basis on interest rate swap | LIBOR | |
Term Loan [Member] | Palmer of Texas [Member] | Interest Rate Swap [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset, Fair Value, Gross Asset | $ 72,000 | $ 31,000 |
FAIR VALUE OF FINANCIAL INSTR28
FAIR VALUE OF FINANCIAL INSTRUMENTS (Level 3 Liabilities Rollforward) (Details) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 0 |
Present value of the earn-out liability associated with the MUSA acquisition | 3,604,330 |
Interest expense charged during the period | 17,286 |
Ending balance | $ 3,621,616 |
ACQUISITION (Narrative) (Detail
ACQUISITION (Narrative) (Details) - USD ($) | Feb. 28, 2017 | Feb. 28, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 09, 2016 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 4,944,072 | $ 1,354,730 | |||
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value | 3,621,616 | $ 0 | |||
Business Combination, Contingent Consideration, Liability, Current | $ 722,000 | ||||
Marcegalia USA, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 15 years | ||||
Revenues | $ 1,112,000 | ||||
Earn-out Payment Threshold, Minimum | $ 3,000,000 | $ 3,000,000 | |||
Earn-out Payments, Forecasted, High | 4,063,000 | 4,063,000 | |||
Business Combination, Consideration Transferred | 14,953,513 | 14,953,513 | |||
Escrow Deposit | $ 3,000,000 | ||||
Goodwill | $ 3,589,342 | 3,589,342 | |||
Business Acquisition, Contingent Consideration, Estimated Earn Out Payments, Discounted | $ 3,604,000 | ||||
Income before income taxes | 179,000 | ||||
Contingent Consideration [Member] | Marcegalia USA, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Fair Value Inputs, Discount Rate | 3.00% | ||||
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Marcegalia USA, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value | 3,621,616 | ||||
Acquisition-related Costs [Member] | Marcegalia USA, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Net income (loss) from continuing operations | 358,000 | ||||
Professional Audit Fees [Member] | Marcegalia USA, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Net income (loss) from continuing operations | 160,000 | ||||
Travel Costs [Member] | Marcegalia USA, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Net income (loss) from continuing operations | 139,000 | ||||
Legal Fees [Member] | Marcegalia USA, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Net income (loss) from continuing operations | 21,000 | ||||
Other Miscellaneous Costs [Member] | Marcegalia USA, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Net income (loss) from continuing operations | $ 38,000 |
ACQUISITION (Sources and Uses o
ACQUISITION (Sources and Uses of Funds) (Details) - USD ($) | Feb. 28, 2017 | Feb. 28, 2017 | Mar. 31, 2017 | Mar. 31, 2016 |
Uses of funds: | ||||
Acquisition of MUSA | $ 12,830,712 | $ 0 | ||
Marcegalia USA, Inc. [Member] | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Consideration Transferred | $ 14,953,513 | $ 14,953,513 | ||
Sources of funds: | ||||
Borrowing from revolving line of credit | 14,953,513 | |||
Uses of funds: | ||||
Acquisition of MUSA | $ 14,953,513 |
ACQUISITION (Preliminary Alloca
ACQUISITION (Preliminary Allocation of Total Consideration) (Details) - USD ($) | Mar. 31, 2017 | Feb. 28, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||
Goodwill | $ 4,944,072 | $ 1,354,730 | |
Marcegalia USA, Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Inventories | $ 5,434,000 | ||
Other current assets - production and maintenance supplies | 1,548,701 | ||
Property, plant and equipment | 7,576,733 | ||
Customer list intangible | 992,000 | ||
Goodwill | 3,589,342 | ||
Contingent consideration | (3,604,330) | ||
Other liabilities assumed | (582,933) | ||
Total net assets acquired | $ 14,953,513 |
ACQUISITION (Pro Forma Informat
ACQUISITION (Pro Forma Information) (Details) - Marcegalia USA, Inc. [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Business Acquisition [Line Items] | ||
Pro forma revenues | $ 47,128 | $ 41,473 |
Pro forma net income (loss) | $ 584 | $ (1,543) |
Earnings per share: | ||
Basic, dollar per share | $ 0.07 | $ (0.18) |
Diluted, dollars per share | $ 0.07 | $ (0.18) |
CONTINGENCIES Commitments and C
CONTINGENCIES Commitments and Contingencies (Details) - Palmer of Texas Customer Breach of Contract Case [Member] - Settled Litigation [Member] | Dec. 31, 2016USD ($) |
Product Liability Contingency [Line Items] | |
Loss Contingency, Damages Awarded, Value | $ 0 |
Loss Contingency Accrual | 11,000,000 |
Palmer of Texas [Member] | |
Product Liability Contingency [Line Items] | |
Loss Contingency, Damages Awarded, Value | 8,600,000 |
Litigation Settlement, Expense | $ 1,040,000 |
SALE LEASEBACK TRANSACTION (Det
SALE LEASEBACK TRANSACTION (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Sale Leaseback Transaction [Line Items] | ||
Long-term portion of deferred gain on sale-leaseback | $ 6,184,054 | $ 6,267,623 |