Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 08, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 0-19687 | |
Entity Registrant Name | Synalloy Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 57-0426694 | |
Entity Address, Address Line One | 1400 16th Street, | |
Entity Address, Address Line Two | Suite 270, | |
Entity Address, City or Town | Oak Brook, | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60523 | |
City Area Code | (804) | |
Local Phone Number | 822-3260 | |
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | SYNL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Smaller Reporting Company | true | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 10,259,533 | |
Entity Central Index Key | 0000095953 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 245 | $ 2,021 |
Accounts receivable, net of allowance for credit losses of $748 and $216, respectively | 63,932 | 50,126 |
Inventories, net | 134,529 | 103,249 |
Prepaid expenses and other current assets | 4,883 | 3,728 |
Assets held for sale | 785 | 855 |
Total current assets | 204,374 | 159,979 |
Property, plant and equipment, net | 42,177 | 43,720 |
Right-of-use assets, operating leases, net | 29,950 | 30,811 |
Goodwill | 12,637 | 12,637 |
Intangible assets, net | 12,940 | 14,382 |
Deferred charges, net | 253 | 302 |
Other non-current assets, net | 4,110 | 4,171 |
Total assets | 306,441 | 266,002 |
Current liabilities: | ||
Accounts payable | 56,167 | 32,318 |
Accounts payable - related parties | 2 | 2 |
Accrued expenses and other current liabilities | 10,800 | 12,407 |
Current portion of note payable | 871 | 0 |
Current portion of long-term debt | 2,464 | 2,464 |
Current portion of earn-out liabilities | 415 | 1,961 |
Current portion of operating lease liabilities | 1,061 | 1,104 |
Current portion of finance lease liabilities | 259 | 233 |
Total current liabilities | 72,039 | 50,489 |
Long-term debt, less current portion | 65,849 | 67,928 |
Long-term portion of operating lease liabilities | 31,445 | 32,059 |
Long-term portion of finance lease liabilities | 1,363 | 1,414 |
Deferred income taxes | 1,791 | 2,433 |
Other long-term liabilities | 70 | 89 |
Total non-current liabilities | 100,518 | 103,923 |
Commitments and contingencies – See Note 13 | ||
Shareholders' equity: | ||
Common stock, par value $1 per share; authorized 24,000,000 shares; issued 11,085,000 shares | 11,085 | 11,085 |
Capital in excess of par value | 46,162 | 46,058 |
Retained earnings | 84,397 | 63,080 |
Shareholders' equity before treasury stock | 141,644 | 120,223 |
Less: cost of common stock in treasury - 825,570 and 918,471 shares, respectively | 7,760 | 8,633 |
Total shareholders' equity | 133,884 | 111,590 |
Total liabilities and shareholders' equity | $ 306,441 | $ 266,002 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for credit loss | $ 748 | $ 216 |
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) | 11,085,000 | 11,085,000 |
Common stock in treasury, at cost (in shares) | 825,570 | 918,471 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
Net sales | $ 116,202 | $ 83,087 | $ 232,420 | $ 152,865 |
Cost of sales | 95,329 | 69,000 | 189,051 | 130,043 |
Gross profit | 20,873 | 14,087 | 43,369 | 22,822 |
Selling, general and administrative | 8,634 | 8,124 | 17,280 | 14,993 |
Acquisition costs and other | 157 | 0 | 688 | 0 |
Proxy contest costs and recoveries | 0 | 632 | 0 | 168 |
Earn-out adjustments | (109) | 1,044 | (7) | 1,270 |
Asset impairments | 0 | 233 | 0 | 233 |
Operating income | 12,191 | 4,054 | 25,408 | 6,158 |
Other expense (income) | ||||
Interest expense | 407 | 353 | 810 | 739 |
Loss on extinguishment of debt | 0 | 0 | 0 | 223 |
Change in fair value of interest rate swaps | 0 | 0 | 0 | (2) |
Other, net | (23) | 0 | (58) | 162 |
Income before income taxes | 11,807 | 3,701 | 24,656 | 5,036 |
Income tax provision | 750 | 815 | 3,339 | 1,056 |
Net income | $ 11,057 | $ 2,886 | $ 21,317 | $ 3,980 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 1.08 | $ 0.31 | $ 2.08 | $ 0.43 |
Diluted (in dollars per share) | $ 1.06 | $ 0.31 | $ 2.05 | $ 0.43 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 10,244 | 9,233 | 10,226 | 9,212 |
Dilutive effect from stock options and grants (in shares) | 187 | 98 | 151 | 103 |
Diluted (in shares) | 10,431 | 9,331 | 10,377 | 9,315 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating activities | ||
Net income | $ 21,317 | $ 3,980 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense | 4,208 | 3,591 |
Amortization expense | 1,442 | 1,360 |
Amortization of debt issuance costs | 49 | 46 |
Asset impairments | 0 | 233 |
Loss on extinguishment of debt | 0 | 223 |
Deferred income taxes | (642) | (76) |
Earn-out adjustments | (7) | 1,270 |
Payments on earn-out liabilities in excess of acquisition date fair value | (372) | 0 |
Provision for (reduction of) losses on accounts receivable | 532 | (362) |
Provision for losses on inventories | 1,234 | 368 |
Gain on disposal of property, plant and equipment | (5) | (81) |
Non-cash lease expense | 214 | 249 |
Change in fair value of interest rate swap | 0 | (2) |
Issuance of treasury stock for director fees | 364 | 0 |
Stock-based compensation expense | 452 | 456 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (14,339) | (12,536) |
Inventories | (32,442) | (5,482) |
Other assets and liabilities | (1,022) | (570) |
Accounts payable | 23,591 | 5,575 |
Accounts payable - related parties | 0 | 632 |
Accrued expenses | (1,795) | 1,370 |
Accrued income taxes | 110 | 4,751 |
Net cash provided by operating activities | 2,889 | 4,995 |
Investing activities | ||
Purchases of property, plant and equipment | (2,330) | (563) |
Proceeds from disposal of property, plant and equipment | 5 | 138 |
Net cash used in investing activities | (2,325) | (425) |
Financing activities | ||
Borrowings from long-term debt | 237,938 | 38,398 |
Proceeds from note payable | 967 | 0 |
Proceeds from exercise of stock options | 161 | 0 |
Payments on long-term debt | (240,017) | (40,269) |
Payments on note payable | (96) | 0 |
Principal payments on finance lease obligations | (126) | (19) |
Payments on earn-out liabilities | (1,167) | (1,944) |
Payments for termination of interest rate swap | 0 | (46) |
Payments of deferred financing costs | 0 | (165) |
Net cash used in financing activities | (2,340) | (4,045) |
(Decrease) increase in cash and cash equivalents | (1,776) | 525 |
Cash and cash equivalents at beginning of period | 2,021 | 236 |
Cash and cash equivalents at end of period | 245 | 761 |
Supplemental Disclosure of Cash Flow Information | ||
Interest | 699 | 620 |
Income taxes | 3,874 | 24 |
Noncash Investing Activities: | ||
Capital expenditures, not yet paid | $ 336 | $ 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Capital in Excess of Par Value | Retained Earnings | Cost of Common Stock in Treasury |
Beginning balance (in shares) at Dec. 31, 2020 | 10,300 | ||||
Beginning balance at Dec. 31, 2020 | $ 80,295 | $ 10,300 | $ 37,719 | $ 42,835 | $ (10,559) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 3,980 | 3,980 | |||
Issuance of shares of common stock from the treasury | 0 | (866) | 866 | ||
Stock-based compensation | 456 | 456 | |||
Ending balance (in shares) at Jun. 30, 2021 | 10,300 | ||||
Ending balance at Jun. 30, 2021 | 84,731 | $ 10,300 | 37,309 | 46,815 | (9,693) |
Beginning balance (in shares) at Mar. 31, 2021 | 10,300 | ||||
Beginning balance at Mar. 31, 2021 | 81,576 | $ 10,300 | 37,668 | 43,929 | (10,321) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 2,886 | 2,886 | |||
Issuance of shares of common stock from the treasury | 0 | (628) | 628 | ||
Stock-based compensation | 269 | 269 | |||
Ending balance (in shares) at Jun. 30, 2021 | 10,300 | ||||
Ending balance at Jun. 30, 2021 | 84,731 | $ 10,300 | 37,309 | 46,815 | (9,693) |
Beginning balance (in shares) at Dec. 31, 2021 | 11,085 | ||||
Beginning balance at Dec. 31, 2021 | 111,590 | $ 11,085 | 46,058 | 63,080 | (8,633) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 21,317 | 21,317 | |||
Issuance of shares of common stock from the treasury | 364 | (348) | 712 | ||
Exercise of stock options, net | 161 | 161 | |||
Stock-based compensation | 452 | 452 | |||
Ending balance (in shares) at Jun. 30, 2022 | 11,085 | ||||
Ending balance at Jun. 30, 2022 | 133,884 | $ 11,085 | 46,162 | 84,397 | (7,760) |
Beginning balance (in shares) at Mar. 31, 2022 | 11,085 | ||||
Beginning balance at Mar. 31, 2022 | 122,354 | $ 11,085 | 46,028 | 73,340 | (8,099) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 11,057 | 11,057 | |||
Issuance of shares of common stock from the treasury | 110 | (198) | 308 | ||
Exercise of stock options, net | 43 | 12 | 31 | ||
Stock-based compensation | 320 | 320 | |||
Ending balance (in shares) at Jun. 30, 2022 | 11,085 | ||||
Ending balance at Jun. 30, 2022 | $ 133,884 | $ 11,085 | $ 46,162 | $ 84,397 | $ (7,760) |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (Parenthetical) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Issuance of common stock from the treasury (in shares) | 32,701 | 66,809 | 75,783 | 92,172 |
Stock options exercised, net (in shares) | 3,334 | 17,118 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Basis of Financial Statement 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 ("GAAP") 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. These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 (the "Annual Report"). The financial results for the interim periods may not be indicative of the financial results for the entire year. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP required management to make estimates and judgments that affect the amounts reported and disclosed in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. COVID-19 Update The COVID-19 pandemic and related responses by public health and governmental authorities to contain and combat the outbreak and spread have adversely affected many economic sectors, significantly disrupted the global supply chain and fueled producer price and consumer inflation. During the second quarter and first six months of 2022, aspects of the Company's business continued to be affected by macroeconomic factors related to the COVID-19 pandemic, specifically with labor shortages at our plants and other areas of our business. We continue to experience demand for our products, however, the full extent of the future impact of the COVID-19 pandemic on the Company's operational and financial performance is currently uncertain and will depend on many factors outside of the Company's control. Accounting Pronouncements Not Yet Adopted In March 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-04 "Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting." The ASU, and subsequent clarifications, provide practical expedients for contract modification accounting related to the transition away from the London Interbank Offered Rate (LIBOR) and other interbank offering rates to alternative reference rates. The expedients are applicable to contract modifications made and hedging relationships entered into on or before December 31, 2022. The Company intends to use the expedients where needed for reference rate transition. The Company continues to evaluate this standard update and does not currently expect a material impact to the Company’s financial statements or disclosures. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Acquisition of DanChem Technologies, Inc. On October 22, 2021, the Company completed the acquisition of DanChem, a contract manufacturer of chemical products located in Danville, Virginia. The Company accounted for the transaction as a business combination using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805 - "Business Combinations." The preliminary purchase price was $34.1 million including $1.5 million in cash obtained through the acquisition. The purchase price was paid in cash and funded through a drawdown of $34.5 million on the Company’s existing revolving credit facility. Amounts outstanding under the revolving line of credit portion of the facility currently bear interest, at the Company's option, at (a) the Base Rate (as defined in the Credit Agreement) plus 0.50%, or (b) LIBOR plus 150%. See Note 8 for more information on the Company's long-term debt. The table below summarizes the preliminary estimates of fair value of identifiable assets acquired and liabilities assumed in the Acquisition. These preliminary estimates of the fair value are subject to revisions, which may result in an adjustment to the preliminary values presented below. (in thousands) October 22, 2021 Cash and cash equivalents $ 1,533 Accounts receivable, net of allowance for credit losses of $118 5,358 Inventories, net 1,561 Prepaid expenses and other current assets 454 Property, plant and equipment, net 15,697 Right of use asset, operating leases, net 208 Intangible assets, net 5,750 Total identifiable assets acquired 30,561 Accounts payable 1,751 Accrued expenses and other current liabilities 1,622 Current portion of operating lease liabilities 51 Current portion of finance lease liabilities 215 Deferred income taxes 2,542 Long-term portion of operating lease liabilities 157 Long-term portion of finance lease liabilities 1,408 Total identifiable liabilities assumed 7,746 Net identifiable assets acquired 22,815 Transaction price 34,097 Goodwill $ 11,282 The Company is in the process of finalizing the value of deferred tax balances and the Company's estimates of these values was still preliminary on June 30, 2022 pending completion of the DanChem pre-acquisition tax returns. Therefore, these provisional amounts are subject to change as the Company continues to evaluate information required to complete the valuations throughout the measurement period, which will not exceed one year from the acquisition date. Goodwill is calculated as the excess of the purchase price over the fair value of the net assets acquired. The recognized goodwill is attributable to operational synergies, assembled workforce and growth opportunities and was allocated to the Company's Specialty Chemicals Segment . Substantially all of the goodwill resulting from this acquisition is not expected to be deductible for tax purposes. Approximately $0.1 million and $0.4 million of one-time, acquisition-related costs, is recognized in acquisition costs and other expenses in the unaudited condensed consolidated statement of operations for the three and six months ended June 30, 2022 . The Company identified DanChem’s customer relationships, product development know-how, and tradename as finite-lived assets with estimated fair values as of the acquisition date of $5.1 million, $0.5 million, and $0.2 million, respectively. The finite-lived assets are subject to amortization using either an accelerated or straight-line method over 15 years. Total net sales and operating income for DanChem for the three and six months ended June 30, 2022 were as follows: (in thousands) Three Months Ended June 30, 2022 Six Months Ended Net sales $ 8,387 $ 15,861 Operating income $ 207 $ 442 |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Revenue is generated primarily from contracts to produce, ship and deliver steel and specialty chemical products. The Company’s performance obligations are satisfied and revenue is recognized when control and title of the contract promised goods or services is transferred to our cus tomers for product shipped or services rendered. Revenues are recorded net of any sales incentives and discounts. Sales tax and other taxes we collect with revenue-producing activities are excluded from revenue. Shipping costs charged to customers are treated as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. Costs related to obtaining sales contracts are incidental and are expensed when incurred. Because customers are invoiced at the time title transfers and the Company’s right to consideration is unconditional at that time, the Company does not maintain contract asset balances. Additionally, the Company does not maintain material contract liability balances, as performance obligations for substantially all contracts are satisfied prior to customer payment for product. The Company offers industry standard payment terms. The following table presents the Company's revenues, disaggregated by product group. Substantially all of the Company's revenues are derived from contracts with customers where performance obligations are satisfied at a point-in-time. Three Months Ended June 30, Six Months Ended (in thousands) 2022 2021 2022 2021 Fiberglass and steel liquid storage tanks and separation equipment $ — $ 550 113 691 Heavy wall seamless carbon steel pipe and tube 12,094 11,131 24,498 18,949 Stainless steel pipe and tube 66,114 46,360 128,323 86,301 Galvanized pipe and tube 8,974 10,056 22,745 17,370 Specialty chemicals 29,020 14,990 56,741 29,554 Net sales $ 116,202 $ 83,087 $ 232,420 $ 152,865 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, we use a three-tier valuation hierarchy based upon observable and non-observable inputs: Level 1 - Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date. Level 2 - Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including: • Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in non-active markets; • Inputs other than quoted prices that are observable for the asset or liability; and • Inputs that are derived principally from or corroborated by other observable market data. Level 3 - Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using model-based techniques, including option pricing models, discounted cash flow models, probability weighted models, and Monte Carlo simulations. Assets and Liabilities Measured at Fair Value on a Recurring Basis The fair value hierarchy requires the use of observable market data when available. In instances where the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement has been determined on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability. Level 3: Contingent consideration (earn-out) liabilities The fair value of contingent consideration ("earn-out") liabilities resulting from the 2018 MUSA-Galvanized acquisition and the 2019 American Stainless acquisition are classified as Level 3. Each quarter-end, the Company re-evaluates its assumptions for all earn-out liabilities and adjusts to reflect the updated fair values. Changes in the estimated fair value of the earn-out liabilities are reflected in operating income in the periods in which they are identified. Changes in the fair value of the earn-out liabilities may materially impact and cause volatility in the Company's operating results. The significant unobservable inputs used in the fair value measurement of the Company's earn-out liabilities are the discount rate, timing of the estimated payouts, and future revenue projections. Significant increases (decreases) in any of those inputs would not have resulted in a material difference in the fair value measurement of the earn-out liabilities for the six months ended June 30, 2022. The following table presents a summary of changes in fair value of the Company's Level 3 earn-out liabilities measured on a recurring basis for the six months ended June 30, 2022: (in thousands) MUSA-Galvanized American Stainless Total Balance December 31, 2021 $ 1,106 $ 855 $ 1,961 Earn-out payments during the period (684) (855) (1,539) Changes in fair value during the period (7) — (7) Balance June 30, 2022 $ 415 $ — $ 415 For the three and six months ended June 30, 2022, the Company had no unrealized gains or losses included in other comprehensive income for recurring Level 3 fair value instruments. Quantitative Information about Significant Unobservable Inputs Used in Level 3 Fair Value Measurements The following table summarizes the significant unobservable inputs in the fair value measurement of our contingent consideration (earn-out) liabilities as of June 30, 2022: Instrument Fair Value Principal Valuation Technique Significant Unobservable Inputs Range Weighted Contingent consideration (earn-out) liabilities $415 Probability Weighted Expected Return Discount rate - 5% Timing of estimated payouts 2022 - Future revenue projections $2.5M $2.5M The weighted average discount rate was calculated by applying an equal weighting to each contingent consideration's (earn-out liabilities) discount rate. The weighted average future revenue projection was calculated by applying an equal weighting of probabilities to each forecasted scenario within the valuation models to determine the probability weighted sales applicable to the contingent consideration (earn-out liabilities). Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis During the three and six months ended June 30, 2022, the Company's only significant measurements of assets or liabilities at fair value on a non-recurring basis subsequent to their initial recognition were certain assets classified as held for sale. Assets Held for Sale On February 17, 2021 the Board of Directors authorized the permanent cessation of operations at Palmer and the subleasing of the Palmer facility. As of December 31, 2021 the Company permanently ceased operations at the Palmer facility and determined that the remaining asset group met the criteria to be classified as held for sale, and therefore classified the related assets as held for sale on the consolidated balance sheets. The Company determined that the exit from this business did not represent a strategic shift that had a major effect on its consolidated results of operations, and therefore this business was not classified as discontinued operations. As of June 30, 2022, the remaining Palmer assets continue to be classified as held for sale. The results of operations for this business are included within the Metals Segment for all periods presented in this quarterly report. The Company uses observable inputs, such as prices of comparable assets in active markets to determine the fair value of the remaining assets. The Company classifies these fair value measurements as Level 2. The assets classified as held for sale are as follows: (in thousands) June 30, 2022 December 31, 2021 Inventory, net $ 547 $ 617 Property, plant and equipment, net 238 238 Assets held for sale $ 785 $ 855 The Company remains obligated under the terms of the leases for the rent and other costs that may be associated with the lease of the facility through 2036. The Company currently has a sublease for a portion of the Palmer facility and is actively pursuing a sublease for the remaining portion of the facility. The Company will continue to dispose of the remaining assets throughout fiscal 2022. During the three and six months ended June 30, 2021, the Company's only significant measurements of assets or liabilities at fair value on a non-recurring basis subsequent to their initial recognition were certain long-lived assets. During the three and six months ended June 30, 2021, the Company determined that technology associated with certain long lived assets within the Specialty Chemicals Segment was obsolete and, as a result, recognized a non-cash, pre-tax asset impairment charge of $0.2 million. Fair Value of Financial Instruments The fair values of cash and cash equivalents, accounts receivable, accounts payable and the Company's note payable approximated their carrying value because of the short-term nature of these instruments. The Company's revolving line of credit and long-term debt, which is based on a variable interest rate, are also reflected in the financial statements at carrying value which approximate fair values as of June 30, 2022. See Note 8 for further information on the Company's debt. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2022 | |
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: (in thousands) June 30, 2022 December 31, 2021 Raw materials $ 73,255 $ 48,745 Work-in-process 29,418 25,187 Finished goods 33,992 30,666 136,665 104,598 Less: inventory reserves (2,136) (1,349) Inventories, net $ 134,529 $ 103,249 |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consist of the following: (in thousands) June 30, 2022 December 31, 2021 Land $ 723 $ 723 Leasehold improvements 3,388 4,641 Buildings 1,475 53 Machinery, fixtures and equipment 111,497 110,127 Construction-in-progress 3,022 1,900 120,105 117,444 Less: accumulated depreciation and amortization (77,928) (73,724) Property, plant and equipment, net $ 42,177 $ 43,720 The following table sets forth depreciation expense related to property, plant and equipment: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Cost of sales $ 2,031 $ 1,713 $ 4,086 $ 3,447 Selling, general and administrative 61 61 122 144 Total depreciation $ 2,092 $ 1,774 $ 4,208 $ 3,591 |
Goodwill, Intangible Assets and
Goodwill, Intangible Assets and Deferred Charges | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Intangible Assets and Deferred Charges | Goodwill, Intangible Assets and Deferred Charges Goodwill The Company's goodwill balance of $12.6 million as of June 30, 2022 and year ended December 31, 2021 was attributable to the Specialty Chemicals Segment. Intangible Assets Intangible assets represent the fair value of intellectual, non-physical assets resulting from business acquisitions and are amortized over their estimated useful life using either an accelerated or straight-line method over a period of eight The balance of intangible assets subject to amortization are as follows: (in thousands) June 30, 2022 December 31, 2021 Intangible assets, gross $ 28,876 $ 28,876 Accumulated amortization of intangible assets (15,936) (14,494) Intangible assets, net $ 12,940 $ 14,382 Estimated amortization expense related to intangible assets for the next five years are as follows: (in thousands) Remainder of 2022 $ 1,442 2023 1,433 2024 1,336 2025 1,238 2026 1,141 2027 1,044 Thereafter 5,306 Deferred Charges Deferred charges represent debt issuance costs and are amortized over their estimated useful lives using the straight-line method over a period of four years. The balance of deferred charges subject to amortization are as follows: (in thousands) June 30, 2022 December 31, 2021 Deferred charges, gross $ 398 $ 398 Accumulated amortization of deferred charges (145) (96) Deferred charges, net $ 253 $ 302 |
Long-term Debt
Long-term Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Debt Short-term debt On June 6, 2022, the Company entered into a note payable in the amount of $1.0 million with an interest rate of 2.77% maturing April 1, 2023. The agreement is associated with the financing of the Company's insurance premium in the current year. As of June 30, 2022, the outstanding balance was $0.9 million. Long-term debt Long-term debt consists of the following: (in thousands) June 30, 2022 December 31, 2021 Revolving line of credit, due January 15, 2025 $ 63,849 $ 65,571 Term loan, due January 15, 2025 4,464 4,821 Total long-term debt 68,313 70,392 Less: Current portion of long-term debt (2,464) (2,464) Long-term debt, less current portion $ 65,849 $ 67,928 The Company and its subsidiaries have a Credit Agreement with BMO Harris Bank, N.A. ("BMO") which provides the Company with a four-year revolving credit facility with up to $150.0 million of borrowing capacity (the "Facility"). The initial borrowing capacity under the Facility totals $110.0 million consisting of a $105.0 million revolving line of credit and a $5.0 million delayed draw term loan. The revolving line of credit includes a $17.5 million machinery and equipment sub-limit which requires quarterly payments of $0.4 million with a balloon payment due upon maturity of the Facility in January 2025. The term loan requires quarterly payments of $0.2 million with a balloon payment due upon maturity of the Facility in January 2025. We have pledged all of our accounts receivable, inventory, and certain machinery and equipment as collateral for the Credit Agreement. Availability under the Credit Agreement is subject to the amount of eligible collateral as determined by the lenders' borrowing base calculations. Amounts outstanding under the revolving line of credit portion of the Facility currently bear interest, at the Company's option, at (a) the Base Rate (as defined in the Credit Agreement) plus 0.50%, or (b) LIBOR plus 1.50%. Amounts outstanding under the delayed draw term loan portion of the Facility bear interest at LIBOR plus 1.65%. The Facility also provides an unused commitment fee based on the daily used portion of the Facility. The weighted average interest rate per annum was 2.15% a s of June 30, 2022. Pursuant to the Credit Agreement, the Company was required to pledge all of its tangible and intangible properties, including the stock and membership interests of its subsidiaries. The Facility contains covenants requiring the maintenance of a minimum consolidated fixed charge coverage ratio if excess availability falls below the greater of (i) $7.5 million and (ii) 10% of the revolving credit facility (currently $10.5 million). As of June 30, 2022, the Company was in compliance with all debt covenants. As of June 30, 2022, the Company had $41.2 million of remaining available capacity under its credit facility. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Leases | Leases Balance Sheet Presentation Operating and finance lease amounts included in the unaudited condensed consolidated balance sheet are as follows (in thousands): Classification Financial Statement Line Item June 30, 2022 December 31, 2021 Assets Right-of-use assets, operating leases $ 29,950 $ 30,811 Assets Property, plant and equipment 1,605 1,640 Current liabilities Current portion of lease liabilities, operating leases 1,061 1,104 Current liabilities Current portion of lease liabilities, finance leases 259 233 Non-current liabilities Non-current portion of lease liabilities, operating leases 31,445 32,059 Non-current liabilities Non-current portion of lease liabilities, finance leases 1,363 1,414 Total Lease Cost Individual components of the total lease cost incurred by the Company are as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Operating lease cost $ 1,043 $ 1,023 $ 2,091 $ 2,046 Finance lease cost: Amortization of right-of-use assets 69 11 136 20 Interest on finance lease liabilities 9 1 18 1 Sublease income (32) — $ (65) $ — Total lease cost $ 1,089 $ 1,035 $ 2,180 $ 2,067 Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the unaudited condensed consolidated statement of operations. During the fourth quarter of 2021, the Company entered into a sublease agreement with a third party to sublease a portion of the Palmer facility. The sublease agreement continues through the remaining term of the Master Lease Agreement and will expire on September 30, 2036, unless terminated in accordance with the sublease agreement. The sublease provides for an annual base rent of approximately $0.1 million in the first year, which increases on an annual basis by 2.0%. The sublessee is responsible for its pro rata share of certain costs, taxes and operating expenses related to the subleased space. The sublease includes an initial security deposit of $0.1 million. Future expected cash receipts from the sublease as of June 30, 2022 are as follows: (in thousands) Sublease Receipts Remainder of 2022 $ 64 2023 129 2024 132 2025 134 2026 137 Thereafter 1,490 Total sublease receipts $ 2,086 Maturity of Leases The amounts of undiscounted future minimum lease payments under leases as of June 30, 2022 are as follows: (in thousands) Operating Finance Remainder of 2022 $ 1,873 $ 148 2023 3,645 283 2024 3,667 257 2025 3,687 244 2026 3,703 244 Thereafter 39,916 571 Total undiscounted minimum future lease payments 56,491 1,747 Imputed interest 23,985 125 Present value of lease liabilities $ 32,506 $ 1,622 Lease Term and Discount Rate Weighted-average remaining lease term June 30, 2022 December 31, 2021 Operating leases 14.05 years 14.43 years Finance leases 6.59 years 7.07 years Weighted-average discount rate Operating leases 8.30 % 8.30 % Finance leases 2.28 % 2.27 % |
Leases | Leases Balance Sheet Presentation Operating and finance lease amounts included in the unaudited condensed consolidated balance sheet are as follows (in thousands): Classification Financial Statement Line Item June 30, 2022 December 31, 2021 Assets Right-of-use assets, operating leases $ 29,950 $ 30,811 Assets Property, plant and equipment 1,605 1,640 Current liabilities Current portion of lease liabilities, operating leases 1,061 1,104 Current liabilities Current portion of lease liabilities, finance leases 259 233 Non-current liabilities Non-current portion of lease liabilities, operating leases 31,445 32,059 Non-current liabilities Non-current portion of lease liabilities, finance leases 1,363 1,414 Total Lease Cost Individual components of the total lease cost incurred by the Company are as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Operating lease cost $ 1,043 $ 1,023 $ 2,091 $ 2,046 Finance lease cost: Amortization of right-of-use assets 69 11 136 20 Interest on finance lease liabilities 9 1 18 1 Sublease income (32) — $ (65) $ — Total lease cost $ 1,089 $ 1,035 $ 2,180 $ 2,067 Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the unaudited condensed consolidated statement of operations. During the fourth quarter of 2021, the Company entered into a sublease agreement with a third party to sublease a portion of the Palmer facility. The sublease agreement continues through the remaining term of the Master Lease Agreement and will expire on September 30, 2036, unless terminated in accordance with the sublease agreement. The sublease provides for an annual base rent of approximately $0.1 million in the first year, which increases on an annual basis by 2.0%. The sublessee is responsible for its pro rata share of certain costs, taxes and operating expenses related to the subleased space. The sublease includes an initial security deposit of $0.1 million. Future expected cash receipts from the sublease as of June 30, 2022 are as follows: (in thousands) Sublease Receipts Remainder of 2022 $ 64 2023 129 2024 132 2025 134 2026 137 Thereafter 1,490 Total sublease receipts $ 2,086 Maturity of Leases The amounts of undiscounted future minimum lease payments under leases as of June 30, 2022 are as follows: (in thousands) Operating Finance Remainder of 2022 $ 1,873 $ 148 2023 3,645 283 2024 3,667 257 2025 3,687 244 2026 3,703 244 Thereafter 39,916 571 Total undiscounted minimum future lease payments 56,491 1,747 Imputed interest 23,985 125 Present value of lease liabilities $ 32,506 $ 1,622 Lease Term and Discount Rate Weighted-average remaining lease term June 30, 2022 December 31, 2021 Operating leases 14.05 years 14.43 years Finance leases 6.59 years 7.07 years Weighted-average discount rate Operating leases 8.30 % 8.30 % Finance leases 2.28 % 2.27 % |
Leases | Leases Balance Sheet Presentation Operating and finance lease amounts included in the unaudited condensed consolidated balance sheet are as follows (in thousands): Classification Financial Statement Line Item June 30, 2022 December 31, 2021 Assets Right-of-use assets, operating leases $ 29,950 $ 30,811 Assets Property, plant and equipment 1,605 1,640 Current liabilities Current portion of lease liabilities, operating leases 1,061 1,104 Current liabilities Current portion of lease liabilities, finance leases 259 233 Non-current liabilities Non-current portion of lease liabilities, operating leases 31,445 32,059 Non-current liabilities Non-current portion of lease liabilities, finance leases 1,363 1,414 Total Lease Cost Individual components of the total lease cost incurred by the Company are as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Operating lease cost $ 1,043 $ 1,023 $ 2,091 $ 2,046 Finance lease cost: Amortization of right-of-use assets 69 11 136 20 Interest on finance lease liabilities 9 1 18 1 Sublease income (32) — $ (65) $ — Total lease cost $ 1,089 $ 1,035 $ 2,180 $ 2,067 Reduction in carrying amounts of right-of-use assets held under finance leases is included in depreciation expense. Minimum rental payments under operating leases are recognized on a straight-line method over the term of the lease including any periods of free rent and are included in selling, general, and administrative expense on the unaudited condensed consolidated statement of operations. During the fourth quarter of 2021, the Company entered into a sublease agreement with a third party to sublease a portion of the Palmer facility. The sublease agreement continues through the remaining term of the Master Lease Agreement and will expire on September 30, 2036, unless terminated in accordance with the sublease agreement. The sublease provides for an annual base rent of approximately $0.1 million in the first year, which increases on an annual basis by 2.0%. The sublessee is responsible for its pro rata share of certain costs, taxes and operating expenses related to the subleased space. The sublease includes an initial security deposit of $0.1 million. Future expected cash receipts from the sublease as of June 30, 2022 are as follows: (in thousands) Sublease Receipts Remainder of 2022 $ 64 2023 129 2024 132 2025 134 2026 137 Thereafter 1,490 Total sublease receipts $ 2,086 Maturity of Leases The amounts of undiscounted future minimum lease payments under leases as of June 30, 2022 are as follows: (in thousands) Operating Finance Remainder of 2022 $ 1,873 $ 148 2023 3,645 283 2024 3,667 257 2025 3,687 244 2026 3,703 244 Thereafter 39,916 571 Total undiscounted minimum future lease payments 56,491 1,747 Imputed interest 23,985 125 Present value of lease liabilities $ 32,506 $ 1,622 Lease Term and Discount Rate Weighted-average remaining lease term June 30, 2022 December 31, 2021 Operating leases 14.05 years 14.43 years Finance leases 6.59 years 7.07 years Weighted-average discount rate Operating leases 8.30 % 8.30 % Finance leases 2.28 % 2.27 % |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity Share Repurchase Program On February 17, 2021, the Board of Directors re-authorized the Company's share repurchase program. The previous share repurchase program had a term of 24 months and terminated on February 21, 2021. The share repurchase program allows for repurchase of up to 790,383 shares of the Company's outstanding common stock over 24 months. The shares will be purchased from time to time at prevailing market prices, through open market or privately negotiated transactions, depending on market conditions. Under the program, the purchases will be funded from available working capital, and the repurchased shares will be returned to the status of authorized, but unissued shares of common stock or held in treasury. There is no guarantee as to the exact number of shares that will be repurchased by the Company, and the Company may discontinue purchases at any time that management determines additional purchases are not warranted. As of June 30, 2022, the Company has 790,383 shares of its share repurchase authorization remaining. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share data) 2022 2021 2022 2021 Numerator: Net income $ 11,057 $ 2,886 $ 21,317 $ 3,980 Denominator: Denominator for basic earnings per share - weighted average shares 10,244 9,233 10,226 9,212 Effect of dilutive securities: Employee stock options and stock grants 187 98 151 103 Denominator for diluted earnings per share - weighted average shares 10,431 9,331 10,377 9,315 Net income per share: Basic $ 1.08 $ 0.31 $ 2.08 $ 0.43 Diluted $ 1.06 $ 0.31 $ 2.05 $ 0.43 The diluted earnings per share calculations exclude the effect of potentially dilutive shares when the inclusion of those shares in the calculation would have an anti-dilutive effect. The Company had 0.1 million shares of common stock that were anti-dilutive for the three months ended June 30, 2022. The Company had an insignificant number of shares that were anti-dilutive for the six months ended June 30, 2022. The Company had 0.2 million shares of common stock that were anti-dilutive for both the three and six months ended June 30, 2021. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
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 2018 or state examinations for years before 2017. During the three and six months ended June 30, 2022 and 2021, the Company did not identify nor reserve for any unrecognized tax benefits. Our income tax provision and overall effective tax rates for the periods presented are as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Income tax provision $ 750 $ 815 $ 3,339 $ 1,056 Effective income tax rate 6.4 % 22.0 % 13.5 % 21.0 % The effective tax rate was 6.4% and 13.5% for the three and six months ended June 30, 2022. The June 30, 2022 effective tax rate was lower than the U.S. statutory rate of 21.0% primarily due to the year-to-date release of federal valuation allowances. In prior years, primarily due to the historical losses, the Company established valuation allowances against its certain deferred tax assets. At each reporting date, the Company considers new evidence, both positive and negative, that could affect its view of the future realization of its deferred tax assets. When the Company is able to demonstrate that it could generate taxable income on a sustained basis, its conclusion could change regarding the need for valuation allowance against its deferred tax assets. During the quarter ended June 30, 2022, the Company continued to generate pre-tax profits and as a result of sustained profitability evidenced by a strong earnings history and additional positive evidence, the Company determined it was more likely than not it would be able to support realization of certain deferred tax assets and released valuation allowances of $1.9 million. The remaining valuation allowances relate to certain U.S. state deferred tax assets that are not considered realizable based on the assessment of all available evidence as of June 30, 2022. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and 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. |
Industry Segments
Industry Segments | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Industry Segments | Industry Segments The Company's business is divided into two reportable operating segments, the Metals Segment and the Specialty Chemicals Segment. The Metals Segment operates as three reporting units that include Bristol Metals, LLC ("BRISMET") and American Stainless Tubing, LLC ("ASTI") (collectively "Welded Pipe & Tube"), Palmer of Texas Tanks, Inc. ("Palmer"), and Specialty Pipe & Tube, Inc. ("Specialty"). As discussed in Note 4 , the Company permanently ceased operations at Palmer as of December 31, 2021 and have classified the remaining assets as held for sale. The results of operations for this business are included within the Metals Segment for all periods presented in this quarterly report. The Metals Segment serves markets through pipe and tube and customers in the appliance, architectural, automotive and commercial transportation, brewery, chemical, petrochemical, pulp and paper, mining, power generation (including nuclear), water and waste-water treatment, liquid natural gas ("LNG"), food processing, pharmaceutical, oil and gas and other industries. The Specialty Chemicals Segment operates as one reporting unit which includes Manufacturers Chemicals, LLC ("MC"), a wholly-owned subsidiary of Manufacturers Soap and Chemical Company ("MS&C"), CRI Tolling, LLC ("CRI") and DanChem Technologies, Inc ("DanChem"). The Specialty Chemicals Segment produces specialty products for the pulp and paper, coatings, adhesives, sealants and elastomers (CASE), textile, automotive, household, industrial and institutional ("HII"), agricultural, water and waste-water treatment, construction, oil and gas and other industries. The following table summarizes certain information regarding segments of the Company's operations: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Net sales Metals Segment $ 87,182 $ 68,097 $ 175,679 $ 123,311 Specialty Chemicals Segment 29,020 14,990 56,741 29,554 $ 116,202 $ 83,087 $ 232,420 $ 152,865 Operating income (loss) Metals Segment $ 12,934 $ 7,504 $ 27,426 $ 10,081 Specialty Chemicals Segment 2,627 (414) 5,014 642 Unallocated corporate expenses 3,322 1,360 6,351 3,127 Acquisition costs and other 157 — 688 — Proxy contest costs and recoveries — 632 — 168 Earn-out adjustments (109) 1,044 (7) 1,270 Operating income 12,191 4,054 25,408 6,158 Interest expense 407 353 810 739 Loss on extinguishment of debt — — — 223 Change in fair value of interest rate swap — — — (2) Other, net (23) — (58) 162 Income before income taxes $ 11,807 $ 3,701 $ 24,656 $ 5,036 As of (in thousands) June 30, 2022 December 31, 2021 Identifiable assets Metals Segment $ 196,429 $ 160,625 Specialty Chemicals Segment 78,013 72,908 Corporate 31,999 32,469 $ 306,441 $ 266,002 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsThe Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the condensed consolidated financial statements. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Financial Statement Presentation | Basis of Financial Statement 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 ("GAAP") 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. These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 (the "Annual Report"). The financial results for the interim periods may not be indicative of the financial results for the entire year. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP required management to make estimates and judgments that affect the amounts reported and disclosed in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. |
Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Not Yet Adopted In March 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-04 "Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting." The ASU, and subsequent clarifications, provide practical expedients for contract modification accounting related to the transition away from the London Interbank Offered Rate (LIBOR) and other interbank offering rates to alternative reference rates. The expedients are applicable to contract modifications made and hedging relationships entered into on or before December 31, 2022. The Company intends to use the expedients where needed for reference rate transition. The Company continues to evaluate this standard update and does not currently expect a material impact to the Company’s financial statements or disclosures. |
Fair Value of Financial Instruments | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, we use a three-tier valuation hierarchy based upon observable and non-observable inputs: Level 1 - Unadjusted quoted prices that are available in active markets for identical assets or liabilities at the measurement date. Level 2 - Significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including: • Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in non-active markets; • Inputs other than quoted prices that are observable for the asset or liability; and • Inputs that are derived principally from or corroborated by other observable market data. Level 3 - Significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using model-based techniques, including option pricing models, discounted cash flow models, probability weighted models, and Monte Carlo simulations. |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Preliminary Allocation of Total Consideration of Assets Acquired and Liabilities Assumed | The table below summarizes the preliminary estimates of fair value of identifiable assets acquired and liabilities assumed in the Acquisition. These preliminary estimates of the fair value are subject to revisions, which may result in an adjustment to the preliminary values presented below. (in thousands) October 22, 2021 Cash and cash equivalents $ 1,533 Accounts receivable, net of allowance for credit losses of $118 5,358 Inventories, net 1,561 Prepaid expenses and other current assets 454 Property, plant and equipment, net 15,697 Right of use asset, operating leases, net 208 Intangible assets, net 5,750 Total identifiable assets acquired 30,561 Accounts payable 1,751 Accrued expenses and other current liabilities 1,622 Current portion of operating lease liabilities 51 Current portion of finance lease liabilities 215 Deferred income taxes 2,542 Long-term portion of operating lease liabilities 157 Long-term portion of finance lease liabilities 1,408 Total identifiable liabilities assumed 7,746 Net identifiable assets acquired 22,815 Transaction price 34,097 Goodwill $ 11,282 |
Schedule of Business Acquisitions, by Acquisition | Total net sales and operating income for DanChem for the three and six months ended June 30, 2022 were as follows: (in thousands) Three Months Ended June 30, 2022 Six Months Ended Net sales $ 8,387 $ 15,861 Operating income $ 207 $ 442 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Product Group | The following table presents the Company's revenues, disaggregated by product group. Substantially all of the Company's revenues are derived from contracts with customers where performance obligations are satisfied at a point-in-time. Three Months Ended June 30, Six Months Ended (in thousands) 2022 2021 2022 2021 Fiberglass and steel liquid storage tanks and separation equipment $ — $ 550 113 691 Heavy wall seamless carbon steel pipe and tube 12,094 11,131 24,498 18,949 Stainless steel pipe and tube 66,114 46,360 128,323 86,301 Galvanized pipe and tube 8,974 10,056 22,745 17,370 Specialty chemicals 29,020 14,990 56,741 29,554 Net sales $ 116,202 $ 83,087 $ 232,420 $ 152,865 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Changes in Fair Value of Company's Earn-Out Liability | The following table presents a summary of changes in fair value of the Company's Level 3 earn-out liabilities measured on a recurring basis for the six months ended June 30, 2022: (in thousands) MUSA-Galvanized American Stainless Total Balance December 31, 2021 $ 1,106 $ 855 $ 1,961 Earn-out payments during the period (684) (855) (1,539) Changes in fair value during the period (7) — (7) Balance June 30, 2022 $ 415 $ — $ 415 |
Schedule of Level 3 Assets and the Valuation Techniques Used to Measure Fair Value | The following table summarizes the significant unobservable inputs in the fair value measurement of our contingent consideration (earn-out) liabilities as of June 30, 2022: Instrument Fair Value Principal Valuation Technique Significant Unobservable Inputs Range Weighted Contingent consideration (earn-out) liabilities $415 Probability Weighted Expected Return Discount rate - 5% Timing of estimated payouts 2022 - Future revenue projections $2.5M $2.5M |
Schedule of Assets Held for Sale | The assets classified as held for sale are as follows: (in thousands) June 30, 2022 December 31, 2021 Inventory, net $ 547 $ 617 Property, plant and equipment, net 238 238 Assets held for sale $ 785 $ 855 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Components of Inventories | The components of inventories are as follows: (in thousands) June 30, 2022 December 31, 2021 Raw materials $ 73,255 $ 48,745 Work-in-process 29,418 25,187 Finished goods 33,992 30,666 136,665 104,598 Less: inventory reserves (2,136) (1,349) Inventories, net $ 134,529 $ 103,249 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consist of the following: (in thousands) June 30, 2022 December 31, 2021 Land $ 723 $ 723 Leasehold improvements 3,388 4,641 Buildings 1,475 53 Machinery, fixtures and equipment 111,497 110,127 Construction-in-progress 3,022 1,900 120,105 117,444 Less: accumulated depreciation and amortization (77,928) (73,724) Property, plant and equipment, net $ 42,177 $ 43,720 The following table sets forth depreciation expense related to property, plant and equipment: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Cost of sales $ 2,031 $ 1,713 $ 4,086 $ 3,447 Selling, general and administrative 61 61 122 144 Total depreciation $ 2,092 $ 1,774 $ 4,208 $ 3,591 |
Goodwill, Intangible Assets a_2
Goodwill, Intangible Assets and Deferred Charges (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets Subject to Amortization | The balance of intangible assets subject to amortization are as follows: (in thousands) June 30, 2022 December 31, 2021 Intangible assets, gross $ 28,876 $ 28,876 Accumulated amortization of intangible assets (15,936) (14,494) Intangible assets, net $ 12,940 $ 14,382 |
Schedule of Estimated Amortization Expense | Estimated amortization expense related to intangible assets for the next five years are as follows: (in thousands) Remainder of 2022 $ 1,442 2023 1,433 2024 1,336 2025 1,238 2026 1,141 2027 1,044 Thereafter 5,306 |
Schedule of Deferred Charges | The balance of deferred charges subject to amortization are as follows: (in thousands) June 30, 2022 December 31, 2021 Deferred charges, gross $ 398 $ 398 Accumulated amortization of deferred charges (145) (96) Deferred charges, net $ 253 $ 302 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consists of the following: (in thousands) June 30, 2022 December 31, 2021 Revolving line of credit, due January 15, 2025 $ 63,849 $ 65,571 Term loan, due January 15, 2025 4,464 4,821 Total long-term debt 68,313 70,392 Less: Current portion of long-term debt (2,464) (2,464) Long-term debt, less current portion $ 65,849 $ 67,928 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Schedule of Operating and Finance Leases Recorded in Consolidated Balance Sheet | Operating and finance lease amounts included in the unaudited condensed consolidated balance sheet are as follows (in thousands): Classification Financial Statement Line Item June 30, 2022 December 31, 2021 Assets Right-of-use assets, operating leases $ 29,950 $ 30,811 Assets Property, plant and equipment 1,605 1,640 Current liabilities Current portion of lease liabilities, operating leases 1,061 1,104 Current liabilities Current portion of lease liabilities, finance leases 259 233 Non-current liabilities Non-current portion of lease liabilities, operating leases 31,445 32,059 Non-current liabilities Non-current portion of lease liabilities, finance leases 1,363 1,414 |
Schedule of Operating and Finance Leases Discount Rates, Total Lease Cost and Weighted Average Remaining Lease Terms | Individual components of the total lease cost incurred by the Company are as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Operating lease cost $ 1,043 $ 1,023 $ 2,091 $ 2,046 Finance lease cost: Amortization of right-of-use assets 69 11 136 20 Interest on finance lease liabilities 9 1 18 1 Sublease income (32) — $ (65) $ — Total lease cost $ 1,089 $ 1,035 $ 2,180 $ 2,067 Weighted-average remaining lease term June 30, 2022 December 31, 2021 Operating leases 14.05 years 14.43 years Finance leases 6.59 years 7.07 years Weighted-average discount rate Operating leases 8.30 % 8.30 % Finance leases 2.28 % 2.27 % |
Schedule of Maturities For Sub Leases | Future expected cash receipts from the sublease as of June 30, 2022 are as follows: (in thousands) Sublease Receipts Remainder of 2022 $ 64 2023 129 2024 132 2025 134 2026 137 Thereafter 1,490 Total sublease receipts $ 2,086 |
Schedule of Maturities For Operating Leases | The amounts of undiscounted future minimum lease payments under leases as of June 30, 2022 are as follows: (in thousands) Operating Finance Remainder of 2022 $ 1,873 $ 148 2023 3,645 283 2024 3,667 257 2025 3,687 244 2026 3,703 244 Thereafter 39,916 571 Total undiscounted minimum future lease payments 56,491 1,747 Imputed interest 23,985 125 Present value of lease liabilities $ 32,506 $ 1,622 |
Schedule of Maturities For Finance Leases | The amounts of undiscounted future minimum lease payments under leases as of June 30, 2022 are as follows: (in thousands) Operating Finance Remainder of 2022 $ 1,873 $ 148 2023 3,645 283 2024 3,667 257 2025 3,687 244 2026 3,703 244 Thereafter 39,916 571 Total undiscounted minimum future lease payments 56,491 1,747 Imputed interest 23,985 125 Present value of lease liabilities $ 32,506 $ 1,622 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of the Computation of Basic and Diluted Loss Per Share | The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share data) 2022 2021 2022 2021 Numerator: Net income $ 11,057 $ 2,886 $ 21,317 $ 3,980 Denominator: Denominator for basic earnings per share - weighted average shares 10,244 9,233 10,226 9,212 Effect of dilutive securities: Employee stock options and stock grants 187 98 151 103 Denominator for diluted earnings per share - weighted average shares 10,431 9,331 10,377 9,315 Net income per share: Basic $ 1.08 $ 0.31 $ 2.08 $ 0.43 Diluted $ 1.06 $ 0.31 $ 2.05 $ 0.43 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Provision for Income Taxes and Effective Tax Rates | Our income tax provision and overall effective tax rates for the periods presented are as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Income tax provision $ 750 $ 815 $ 3,339 $ 1,056 Effective income tax rate 6.4 % 22.0 % 13.5 % 21.0 % |
Industry Segments (Tables)
Industry Segments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following table summarizes certain information regarding segments of the Company's operations: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2022 2021 2022 2021 Net sales Metals Segment $ 87,182 $ 68,097 $ 175,679 $ 123,311 Specialty Chemicals Segment 29,020 14,990 56,741 29,554 $ 116,202 $ 83,087 $ 232,420 $ 152,865 Operating income (loss) Metals Segment $ 12,934 $ 7,504 $ 27,426 $ 10,081 Specialty Chemicals Segment 2,627 (414) 5,014 642 Unallocated corporate expenses 3,322 1,360 6,351 3,127 Acquisition costs and other 157 — 688 — Proxy contest costs and recoveries — 632 — 168 Earn-out adjustments (109) 1,044 (7) 1,270 Operating income 12,191 4,054 25,408 6,158 Interest expense 407 353 810 739 Loss on extinguishment of debt — — — 223 Change in fair value of interest rate swap — — — (2) Other, net (23) — (58) 162 Income before income taxes $ 11,807 $ 3,701 $ 24,656 $ 5,036 As of (in thousands) June 30, 2022 December 31, 2021 Identifiable assets Metals Segment $ 196,429 $ 160,625 Specialty Chemicals Segment 78,013 72,908 Corporate 31,999 32,469 $ 306,441 $ 266,002 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Oct. 22, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Business Acquisition [Line Items] | |||||
Acquisition costs and other | $ 157 | $ 0 | $ 688 | $ 0 | |
Revolving Credit Facility | ABL Line Of Credit, Due January 15, 2025 | Line of Credit | Base Rate | |||||
Business Acquisition [Line Items] | |||||
Basis spread on variable rate (as a percent) | 0.50% | ||||
Revolving Credit Facility | ABL Line Of Credit, Due January 15, 2025 | Line of Credit | London Interbank Offered Rate (LIBOR) | |||||
Business Acquisition [Line Items] | |||||
Basis spread on variable rate (as a percent) | 150% | ||||
DanChem Technologies, Inc. | |||||
Business Acquisition [Line Items] | |||||
Purchase price | $ 34,100 | ||||
Cash consideration | 1,500 | ||||
Business combination, purchase price funded by drawdown on revolving credit facility | 34,500 | ||||
Acquisition costs and other | $ 100 | $ 400 | |||
Intangible assets, net | $ 5,750,000 | ||||
Weighted average amortization period for intangible assets (in years) | 15 years | ||||
DanChem Technologies, Inc. | Customer Relationships | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, net | $ 5,100 | ||||
DanChem Technologies, Inc. | Product Development Know-How | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, net | 500 | ||||
DanChem Technologies, Inc. | Trade Names | |||||
Business Acquisition [Line Items] | |||||
Intangible assets, net | $ 200 |
Acquisitions - Fair Value of As
Acquisitions - Fair Value of Assets Identified and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Oct. 22, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 12,637 | $ 12,637 | |
DanChem Technologies, Inc. | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 1,533,000 | ||
Accounts receivable, net of allowance for credit losses of $118 | 5,358,000 | ||
Inventories, net | 1,561,000 | ||
Prepaid expenses and other current assets | 454,000 | ||
Property, plant and equipment, net | 15,697,000 | ||
Right of use asset, operating leases, net | 208,000 | ||
Intangible assets, net | 5,750,000 | ||
Total identifiable assets acquired | 30,561,000 | ||
Accounts payable | 1,751,000 | ||
Accrued expenses and other current liabilities | 1,622,000 | ||
Current portion of operating lease liabilities | 51,000 | ||
Current portion of finance lease liabilities | 215,000 | ||
Deferred income taxes | 2,542,000 | ||
Long-term portion of operating lease liabilities | 157,000 | ||
Long-term portion of finance lease liabilities | 1,408,000 | ||
Total identifiable liabilities assumed | 7,746,000 | ||
Net identifiable assets acquired | 22,815,000 | ||
Transaction price | 34,097,000 | ||
Goodwill | 11,282,000 | ||
Allowance for credit losses | $ 118 |
Acquisitions - Schedule of Fina
Acquisitions - Schedule of Financial Information (Details) - DanChem Technologies, Inc. - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Business Acquisition [Line Items] | ||
Net sales | $ 8,387 | $ 15,861 |
Operating income | $ 207 | $ 442 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregated Revenues by Source (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 116,202 | $ 83,087 | $ 232,420 | $ 152,865 |
Fiberglass and steel liquid storage tanks and separation equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 0 | 550 | 113 | 691 |
Heavy wall seamless carbon steel pipe and tube | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 12,094 | 11,131 | 24,498 | 18,949 |
Stainless steel pipe and tube | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 66,114 | 46,360 | 128,323 | 86,301 |
Galvanized pipe and tube | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 8,974 | 10,056 | 22,745 | 17,370 |
Specialty chemicals | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 29,020 | $ 14,990 | $ 56,741 | $ 29,554 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Summary of Changes in Fair Value of Company's Earn-Out Liability (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Earn-out payments during the period | $ 1,167 | $ 1,944 |
Level 3 Inputs | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 1,961 | |
Earn-out payments during the period | (1,539) | |
Changes in fair value during the period | (7) | |
Ending balance | 415 | |
Level 3 Inputs | MUSA-Galvanized | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 1,106 | |
Earn-out payments during the period | (684) | |
Changes in fair value during the period | (7) | |
Ending balance | 415 | |
Level 3 Inputs | American Stainless | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 855 | |
Earn-out payments during the period | (855) | |
Changes in fair value during the period | 0 | |
Ending balance | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Unrealized gain (loss) included in OCI | $ 0 | $ 0 | ||
Specialty Chemicals Segment | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Asset impairments | $ 200,000 | $ 200,000 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Summary of Fair Value Level 3 Assets and Valuation Technique (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Discount rate | Weighted Average | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Discount rate applied to earn-out payments | 0.05 |
Future revenue projections | Weighted Average | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Fair value measurement input | $ 2,500 |
Level 3 Inputs | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Business combination, contingent consideration, liability | $ 415 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Assets Held For Sale (Details) - Discontinued Operations, Held-for-sale - Palmer Facility - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Inventory, net | $ 547 | $ 617 |
Property, plant and equipment, net | 238 | 238 |
Total assets of disposal group classified as held for sale | $ 785 | $ 855 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 73,255 | $ 48,745 |
Work-in-process | 29,418 | 25,187 |
Finished goods | 33,992 | 30,666 |
Inventory, gross | 136,665 | 104,598 |
Less: inventory reserves | (2,136) | (1,349) |
Inventories, net | $ 134,529 | $ 103,249 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||||
Total property, plant and equipment, gross | $ 120,105 | $ 120,105 | $ 117,444 | ||
Less: accumulated depreciation and amortization | (77,928) | (77,928) | (73,724) | ||
Property, plant and equipment, net | 42,177 | 42,177 | 43,720 | ||
Total depreciation | 2,092 | $ 1,774 | 4,208 | $ 3,591 | |
Cost of sales | |||||
Property, Plant and Equipment [Line Items] | |||||
Total depreciation | 2,031 | 1,713 | 4,086 | 3,447 | |
Selling, general and administrative | |||||
Property, Plant and Equipment [Line Items] | |||||
Total depreciation | 61 | $ 61 | 122 | $ 144 | |
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property, plant and equipment, gross | 723 | 723 | 723 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property, plant and equipment, gross | 3,388 | 3,388 | 4,641 | ||
Buildings | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property, plant and equipment, gross | 1,475 | 1,475 | 53 | ||
Machinery, fixtures and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property, plant and equipment, gross | 111,497 | 111,497 | 110,127 | ||
Construction-in-progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property, plant and equipment, gross | $ 3,022 | $ 3,022 | $ 1,900 |
Goodwill, Intangible Assets a_3
Goodwill, Intangible Assets and Deferred Charges - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 12,637 | $ 12,637 |
Deferred charges, amortization period (in years) | 4 years | |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (in years) | 8 years | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (in years) | 15 years |
Goodwill, Intangible Assets a_4
Goodwill, Intangible Assets and Deferred Charges - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible assets, gross | $ 28,876 | $ 28,876 |
Accumulated amortization of intangible assets | (15,936) | (14,494) |
Intangible assets, net | $ 12,940 | $ 14,382 |
Goodwill, Intangible Assets a_5
Goodwill, Intangible Assets and Deferred Charges - Schedule of Estimated Amortization Expense (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2022 | $ 1,442 |
2023 | 1,433 |
2024 | 1,336 |
2025 | 1,238 |
2026 | 1,141 |
2027 | 1,044 |
Thereafter | $ 5,306 |
Goodwill, Intangible Assets a_6
Goodwill, Intangible Assets and Deferred Charges - Schedule of Deferred Charges (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Deferred charges, gross | $ 398 | $ 398 |
Accumulated amortization of deferred charges | (145) | (96) |
Deferred charges, net | $ 253 | $ 302 |
Long-term Debt - Narrative (Det
Long-term Debt - Narrative (Details) - USD ($) | Jan. 15, 2021 | Jun. 30, 2022 | Jun. 06, 2022 |
Notes Payable to Banks | |||
Line of Credit Facility [Line Items] | |||
Principal amount of debt | $ 1,000,000 | ||
Interest rate (as a percent) | 2.77% | ||
Outstanding balance | $ 900,000 | ||
Revolving line of credit, due January 15, 2025 | Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Initial borrowing capacity | $ 110,000,000 | ||
Weighted average interest rate (as a percent) | 2.15% | ||
Revolving line of credit, due January 15, 2025 | Delayed Draw Term Loan | |||
Line of Credit Facility [Line Items] | |||
Initial borrowing capacity | $ 5,000,000 | ||
Revolving line of credit, due January 15, 2025 | Delayed Draw Term Loan | London Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Basis spread (as a percent) | 1.65% | ||
Revolving line of credit, due January 15, 2025 | Secured Debt | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, periodic payment | $ 200,000 | ||
Revolving Credit Facility | Revolving line of credit, due January 15, 2025 | Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Debt term (in years) | 4 years | ||
Maximum borrowing capacity | $ 150,000,000 | ||
Initial borrowing capacity | $ 105,000,000 | $ 10,500,000 | |
Minimum amount of excess availability required to be had | $ 7,500,000 | ||
Percentage of minimum amount of excess availability required to be had (as a percent) | 10% | ||
Remaining borrowing capacity | $ 41,200,000 | ||
Revolving Credit Facility | Revolving line of credit, due January 15, 2025 | Line of Credit | Base Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread (as a percent) | 0.50% | ||
Revolving Credit Facility | Revolving line of credit, due January 15, 2025 | Line of Credit | London Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Basis spread (as a percent) | 1.50% | ||
Revolving Credit Facility | Revolving line of credit, due January 15, 2025 | Machinery and Equipment Sub Limit | |||
Line of Credit Facility [Line Items] | |||
Initial borrowing capacity | $ 17,500,000 | ||
Line of credit quarterly payments | $ 400,000 |
Long-term Debt - Summary of Lon
Long-term Debt - Summary of Long Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 68,313 | $ 70,392 |
Less: Current portion of long-term debt | (2,464) | (2,464) |
Long-term debt, less current portion | 65,849 | 67,928 |
Revolving Credit Facility | Revolving line of credit, due January 15, 2025 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 63,849 | 65,571 |
Secured Debt | Term loan, due January 15, 2025 | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 4,464 | $ 4,821 |
Leases - Schedule of Operating
Leases - Schedule of Operating and Finance Leases Recorded in the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Right-of-use assets, operating leases | $ 29,950 | $ 30,811 |
Finance lease, right of use asset | 1,605 | 1,640 |
Current portion of lease liabilities, operating leases | 1,061 | 1,104 |
Current portion of lease liabilities, finance leases | 259 | 233 |
Non-current portion of lease liabilities, operating leases | 31,445 | 32,059 |
Non-current portion of lease liabilities, finance leases | $ 1,363 | $ 1,414 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, plant and equipment, net | Property, plant and equipment, net |
Leases - Schedule of Total Leas
Leases - Schedule of Total Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Leases [Abstract] | ||||
Operating lease cost | $ 1,043 | $ 1,023 | $ 2,091 | $ 2,046 |
Finance lease cost: | ||||
Amortization of right-of-use assets | 69 | 11 | 136 | 20 |
Interest on finance lease liabilities | 9 | 1 | 18 | 1 |
Sublease income | (32) | 0 | (65) | 0 |
Total lease cost | $ 1,089 | $ 1,035 | $ 2,180 | $ 2,067 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Annual base rent | $ 100,000 | ||
Percentage annual increase in base rent (as a percent) | 2% | ||
Security deposit | $ 100,000 | ||
Right-of-use asset obtained in exchange for operating lease liability | $ 100,000 | $ 100,000 |
Leases - Future Expected Cash R
Leases - Future Expected Cash Receipts From Sublease (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Sublease Receipts [Abstract] | |
Remainder of 2022 | $ 64 |
2023 | 129 |
2024 | 132 |
2025 | 134 |
2026 | 137 |
Thereafter | 1,490 |
Total sublease receipts | $ 2,086 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities After Adoption of 842 (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Operating | |
Remainder of 2022 | $ 1,873 |
2023 | 3,645 |
2024 | 3,667 |
2025 | 3,687 |
2026 | 3,703 |
Thereafter | 39,916 |
Total undiscounted minimum future lease payments | 56,491 |
Imputed interest | 23,985 |
Present value of lease liabilities | 32,506 |
Finance | |
Remainder of 2022 | 148 |
2023 | 283 |
2024 | 257 |
2025 | 244 |
2026 | 244 |
Thereafter | 571 |
Total undiscounted minimum future lease payments | 1,747 |
Imputed interest | 125 |
Present value of lease liabilities | $ 1,622 |
Leases - Schedule of Weighted A
Leases - Schedule of Weighted Average Remaining Lease Term (Details) | Jun. 30, 2022 | Dec. 31, 2021 |
Weighted-average remaining lease term | ||
Operating leases | 14 years 18 days | 14 years 5 months 4 days |
Finance leases | 6 years 7 months 2 days | 7 years 25 days |
Weighted-average discount rate | ||
Operating leases | 8.30% | 8.30% |
Finance leases | 2.28% | 2.27% |
Shareholders' Equity - Stock Re
Shareholders' Equity - Stock Repurchase Program (Details) - shares | 6 Months Ended | |
Feb. 17, 2021 | Jun. 30, 2022 | |
First Share Repurchase Program | ||
Equity, Class of Treasury Stock [Line Items] | ||
Period for shares to be repurchased (in months) | 24 months | |
Amended Share Repurchase Program | ||
Equity, Class of Treasury Stock [Line Items] | ||
Period for shares to be repurchased (in months) | 24 months | |
Number of shares authorized to be repurchased (in shares) | 790,383 | |
Stock repurchase program, number of remaining shares authorized to be repurchased (in shares) | 790,383 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator: | ||||
Net income | $ 11,057 | $ 2,886 | $ 21,317 | $ 3,980 |
Denominator: | ||||
Denominator for basic earnings per share - weighted average shares (in shares) | 10,244 | 9,233 | 10,226 | 9,212 |
Employee stock options and stock grants (in shares) | 187 | 98 | 151 | 103 |
Denominator for diluted earnings per share - weighted average shares (in shares) | 10,431 | 9,331 | 10,377 | 9,315 |
Net income per share: | ||||
Basic (in dollars per share) | $ 1.08 | $ 0.31 | $ 2.08 | $ 0.43 |
Diluted (in dollars per share) | $ 1.06 | $ 0.31 | $ 2.05 | $ 0.43 |
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 100 | 200 | 0 | 200 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax provision | $ 750 | $ 815 | $ 3,339 | $ 1,056 |
Effective income tax rate | 6.40% | 22% | 13.50% | 21% |
Valuation allowance | $ 1,900 | $ 1,900 |
Industry Segments - Narrative (
Industry Segments - Narrative (Details) | 6 Months Ended |
Jun. 30, 2022 reporting_unit segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | segment | 2 |
Metals Segment | |
Segment Reporting Information [Line Items] | |
Number of reporting units | 3 |
Specialty Chemicals Segment | |
Segment Reporting Information [Line Items] | |
Number of reporting units | 1 |
Industry Segments - Schedule of
Industry Segments - Schedule of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||
Net sales | $ 116,202 | $ 83,087 | $ 232,420 | $ 152,865 | |
Operating income (loss) | 12,191 | 4,054 | 25,408 | 6,158 | |
Unallocated corporate expenses | 8,634 | 8,124 | 17,280 | 14,993 | |
Acquisition costs and other | 157 | 0 | 688 | 0 | |
Proxy contest costs and recoveries | 0 | 632 | 0 | 168 | |
Earn-out adjustments | (109) | 1,044 | (7) | 1,270 | |
Interest expense | 407 | 353 | 810 | 739 | |
Loss on extinguishment of debt | 0 | 0 | 0 | 223 | |
Change in fair value of interest rate swap | 0 | 0 | 0 | (2) | |
Other, net | (23) | 0 | (58) | 162 | |
Income before income taxes | 11,807 | 3,701 | 24,656 | 5,036 | |
Identifiable assets | 306,441 | 306,441 | $ 266,002 | ||
Metals Segment | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 87,182 | 68,097 | 175,679 | 123,311 | |
Specialty Chemicals Segment | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 29,020 | 14,990 | 56,741 | 29,554 | |
Operating segment | Metals Segment | |||||
Segment Reporting Information [Line Items] | |||||
Operating income (loss) | 12,934 | 7,504 | 27,426 | 10,081 | |
Identifiable assets | 196,429 | 196,429 | 160,625 | ||
Operating segment | Specialty Chemicals Segment | |||||
Segment Reporting Information [Line Items] | |||||
Operating income (loss) | 2,627 | (414) | 5,014 | 642 | |
Identifiable assets | 78,013 | 78,013 | 72,908 | ||
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Unallocated corporate expenses | 3,322 | $ 1,360 | 6,351 | $ 3,127 | |
Identifiable assets | $ 31,999 | $ 31,999 | $ 32,469 |