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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

 

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 28, 2002

[  ]

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

 

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From _____ to ____

 

Commission file number 0-19687

SYNALLOY CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

 

57-0426694
(IRS Employer
Identification Number)

 

 

 

P.O. Box 5627
Croft Industrial Park
Spartanburg, South Carolina
(Address of principal executive offices)

 


29304
(Zip code)

(864) 585-3605
(Registrant's telephone number, including area code)

NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   X     No       .

Indicate by check mark whether the registrant is an accelerated filer as defined in Rule 12b-2 of the Exchange Act. Yes____ No _x_

The number of shares outstanding of the registrant's common stock as of September 28, 2002 was 5,964,304.

- 1 -



Synalloy Corporation

Index

 

 

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

Condensed consolidated balance sheets - September 28, 2002 and December 29, 2001

Condensed consolidated statements of operations - Three and nine months ended September 28, 2002 and September 29, 2001

Condensed consolidated statements of cash flows - Nine months ended September 28, 2002 and September 29, 2001

Notes to condensed consolidated financial statements - September 28, 2002

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 4. Control and Procedures

 

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 2. Changes in Securities

Item 3. Defaults upon Senior Securities

Item 4. Submission of Matters to a Vote of Security Holders

Item 5. Other Information

Item 6. Exhibits and Reports on Form 8-K

-2-

 

PART 1. FINANCIAL STATEMENTS

Synalloy Corporation

Condensed Consolidated Balance Sheets

Sep 28, 2002

Dec 29, 2001

   (Unaudited)   

      (Note)      

Assets

Current assets

Cash and cash equivalents

$

4,785

$

4,989

Accounts receivable, less allowance

for doubtful accounts

13,088,874

11,337,899

Inventories

Raw materials

6,487,423

7,101,443

Work-in-process

3,198,478

3,556,472

Finished goods

    9,286,211

  14,682,330

Total inventories

18,972,112

25,340,245

Deferred income taxes

325,000

325,000

Income taxes receivable

1,556,322

86,831

Prepaid expenses and other current assets

      703,926

      981,268

Total current assets

34,651,019

38,076,232

Cash value of life insurance

2,302,950

2,344,139

Investment

237,582

885,194

Property, plant & equipment, net of accumulated

depreciation of $35,107,000 and $36,622,000

21,908,955

25,500,074

Deferred charges and other assets

    2,773,587

    2,953,348

Total assets

$

  61,874,093

$

  69,758,987

Liabilities and Shareholders' Equity

Current liabilities

Notes payable

$

2,827,006

$

7,186,000

Accounts payable

8,270,875

6,425,074

Accrued expenses

2,183,801

1,900,479

Current portion of environmental reserves

    1,380,254

    1,423,959

Total current liabilities

14,661,936

16,935,512

Long-term debt, less current portion

10,000,000

10,000,000

Environmental reserves

945,020

1,361,005

Deferred compensation

814,092

1,074,644

Deferred income taxes

1,413,000

1,439,000

Contingencies

Shareholders' equity

Common stock, par value $1 per share - authorized

12,000,000 shares; issued 8,000,000 shares

8,000,000

8,000,000

Capital in excess of par value

9,491

9,491

Retained earnings

42,934,915

47,795,305

Accumulated other comprehensive income

183,000

231,391

Less cost of Common Stock in treasury:

2,065,696 shares

(17,087,361)

(17,087,361)

Total shareholders' equity

  34,040,045

  38,948,826

Total liabilities and shareholders' equity

$

  61,874,093

$

  69,758,987

Note: The balance sheet at December 29, 2001 has been derived from the audited financial statements at that date.

See accompanying notes to condensed consolidated financial statements.

-3-

Synalloy Corporation

Condensed Consolidated Statements of Operations

(Unaudited)

Three Months Ended

Nine Months Ended

 Sep 28, 2002

 Sep 29, 2001

 Sep 28, 2002

Sep 29, 2001

Net sales

$

21,957,953

$

22,997,272

$

64,393,722

$

70,704,758

Cost of sales

Before inventory write down

19,276,350

20,379,983

58,149,517

61,855,526

Inventory write down

               -

               -

   2,470,565

               -

  Total cost of sales

19,276,350

20,379,983

60,620,082

61,855,526

Gross profit

2,681,603

2,617,289

3,773,640

8,849,232

Selling, general and

  administrative expense

2,435,023

2,859,959

8,095,115

7,906,518

Cost of writing down

  property and equipment

              -

              -

  2,267,643

              -

Operating income (loss)

246,580

(242,670)

(6,589,118)

942,714

Other (income) and expense

  Gain on sale of investment

-

-

(89,016)

-

  Interest expense

181,985

205,894

613,318

716,983

  Other, net

           491

        3,563

        25,497

      10,713

Income (loss) before taxes

64,104

(452,127)

(7,138,917)

215,018

Provision (benefit) for income taxes

       22,000

  (159,000)

(2,514,000)

       76,000

Income (loss) before   cumulative effect of a change
  in accounting principle

42,104

(293,127)

(4,624,917)

139,018

Cumulative effect of a change

  in accounting principle

              -

              -

   (235,473)

              -

Net income (loss)

$

      42,104

$

  (293,127)

$

(4,860,390)

$

     139,018

Net income (loss) per common share

  Basic and diluted

Before cumulative effect of a

  change in accounting principle

$.01

($.05)

($.78)

$.02

Cumulative effect of a change
  in accounting principle

         -

          -

($.04)

        -

$.01

($.05)

($.82)

$.02

Dividends paid per

  common share

$.00

$.05

$.00

$.10

Average shares outstanding

    Basic

5,964,304

5,964,325

5,964,304

5,964,347

    Diluted

5,964,304

5,965,156

5,964,304

5,964,936

See accompanying notes to condensed consolidated financial statements

-4-

Synalloy Corporation

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended

Sep 28, 2002

Sep 29, 2001

Operating activities

Net (loss) income

$

(4,860,390)

$

139,019

Adjustments to reconcile net (loss) income to net cash

  provided by operating activities:

Depreciation expense

2,477,264

2,258,458

Amortization of deferred charges

118,374

252,326

Deferred compensation

(260,552)

(289,474)

Deferred income taxes

(26,000)

-

Provision for losses on accounts receivable

138,865

229,581

Provision for write down of inventories

2,470,565

-

Loss (gain) on sale of property, plant and equipment

13,276

(23,400)

Provision for write down of plant and equipment

2,267,643

-

Write-off of goodwill

362,473

-

Cash value of life insurance

41,189

(52,455)

Environmental reserves

(459,690)

(326,565)

Changes in operating assets and liabilities:

Accounts receivable

(1,889,840)

(745,456)

Inventories

3,897,568

2,830,047

Other assets

(264,609)

269,341

Accounts payable and accrued expenses

2,042,292

(42,216)

Income taxes payable

 (1,469,491)

      897,914

Net cash provided by operating activities

4,598,937

5,397,120

Investing activities

Purchases of property, plant and equipment

(1,767,437)

(4,722,259)

Proceeds from sale of property, plant and equipment

568,202

551,317

Proceeds from sale of investments

584,088

-

Proceeds from (increase) in note receivables

       375,000

      (41,000)

Net cash used in investing activities

(240,147)

(4,211,942)

Financing activities

Proceeds from revolving lines of credit

27,620,568

24,969,000

Payments on revolving lines of credit

(31,979,562)

(25,222,000)

Purchase of treasury stock

-

(361)

Dividends paid

                 -

     (894,651)

Net cash used in financing activities

  (4,358,994)

  (1,148,012)

(Decrease) increase in cash and cash equivalents

(204)

37,166

Cash and cash equivalents at beginning of year

         4,989

            467

Cash and cash equivalents at end of period

$

          4,785

$

        37,633

See accompanying notes to condensed consolidated financial statements.

 

-5-

Synalloy Corporation

Notes To Condensed Consolidated Financial Statements

(Unaudited)

September 28, 2002

NOTE 1--BASIS OF PRESENTATION

BASIS OF PRESENTATION: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States 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 footnotes required by generally accepted accounting principles 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. Operating results for the nine-month period ended September 28, 2002, are not necessarily indicative of the results that may be expected for the year ending December 28, 2002. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the period ended December 29, 2001.

CHANGE IN ACCOUNTING PRINCIPLE: In June 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets ("Statements") effective for fiscal years beginning after December 15, 2001. Under the new rules, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over their useful lives. The Company applied the new standards on accounting for goodwill and other intangible assets during the first nine months of 2002, which resulted in a one-time charge of $235,000, or $.04 per share, representing the cumulative effect of a change in accounting principle, recorded as a restatement in the first quarter and included in the year-to-date numbers. If the application of the non-amortization provisions of the State ments had been adopted as of the first quarter of 2001, net income and earnings per share would have increased by $28,000, or less than $.01 per share, and $83,000, or $.01 per share, for the three and nine months ended September 29, 2001, respectively.

NOTE 2--INVENTORIES

Inventories are stated at the lower of cost (first-in, first-out method) or market. An inventory charge of $2,471,000 was recorded in the second quarter of 2002, $1,800,000 for the Colors Group and $671,000 for the Metals Segment. The Company has historically sold off excess inventory slowly to avoid distressed pricing that would be required to dispose of the excess inventory more quickly. With the price erosion that occurred over the first six months of the year and weak business conditions that currently exist, excess inventories were not reduced as much as planned. Therefore, excess inventories were written down to reflect management's estimate of the values that can be realized under a plan to dispose of excess inventories as quickly as feasible.

NOTE 3--LEGAL MATTERS

The Company is from time to time subject to various claims, other possible legal actions for product liability and other damages, and other matters arising out of the normal conduct of the Company's business. Management believes that based on present information, it is unlikely that liability, if any, exists that would have a materially adverse effect on the consolidated operating results or financial position of the Company.

NOTE 4--COMPREHENSIVE INCOME

Comprehensive (loss) and income was ($3,744,000) and ($4,950,000) for the three and nine months ended September 28, 2002, respectively, and ($273,000) and $142,000 for the three and nine months ended September 29, 2001, respectively. Comprehensive income consists of net income less unrealized gains and (losses) on the Company's foreign equity investment, of $0 and ($48,000), net of deferred taxes of $0 and tax benefit of $26,000, for the three and nine months ended September 28, 2002, respectively, and $20,000 and $3,000, net of deferred income taxes of $7,000 and $1,000 for the three and nine months ended September 29, 2001, respectively, and is recorded in Shareholders' Equity.

-6-

Synalloy Corporation

Notes To Condensed Consolidated Financial Statements

(Unaudited)

September 28, 2002

NOTE 5--LONG-TERM DEBT

On July 26, 2002, the Company entered into a new Credit Agreement with a new bank to provide a $19,000,000 line of credit expiring on July 25, 2004, and refinanced the Company's notes payable and long term debt replacing the existing bank indebtedness. Although the line of credit does not expire until 2004, the Company anticipates reducing the amount owed under the line of credit to approximately $10,000,000 over the next twelve months and has therefore classified $2,827,000 as a current liability. Current interest rates are prime plus .25 percent or LIBOR plus 2.75 percent, and can vary based on EBITDA performance from prime to prime plus .75 percent and LIBOR plus 2.50 percent to LIBOR plus 3.25 percent. Borrowings under the Agreement are limited to a borrowing base calculation including eligible accounts receivable, inventories, and cash surrender value of the Company's life insurance as defined in the Agreement. As of September 28, 2002, the amount available for borrowing was $16,5 00,000 of which $12,827,000 was borrowed leaving $3,673,000 of availability. Covenants include, among others, maintaining certain EBITDA and tangible net worth amounts, and restrictions on the payment of dividends.

NOTE 6--ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS

In August 2001, the FASB issued Statements of Financial Accounting Standards No. 144, Accounting for the Impairment or disposal of Long-Lived Assets, effective for fiscal years beginning after December 15, 2001. The Company completed an impairment assessment on the plant and equipment located at Spartanburg, S.C., and at the end of the second quarter of 2002, recorded a $2,267,000 impairment loss on the plant and equipment, $1,786,000 related to the Colors Group and $481,000 to the Specialty Chemicals Group. The impairment loss was calculated based on the excess of the carrying amount of the long-lived assets over their fair value. Management utilized its best estimate to determine fair values including market conditions, experience in acquiring and disposing of similar plant and equipment, and estimates of future cash flows, to test for recoverability of the long-lived assets. After completing an analysis of the business at the site and exploring other options that were available, it became apparent that the facility could not adequately recover the fixed costs related to the facility under current business conditions. Accordingly, a write-down of the plant and equipment was recorded.

7-

Synalloy Corporation

Notes To Condensed Consolidated Financial Statements

(Unaudited)

September 28, 2002

NOTE 7--SEGMENT INFORMATION

(Dollar amount in thousands)

THREE MONTHS ENDED

NINE MONTHS ENDED

Sep 28, 2002

Sep 29, 2001

Sep 28, 2002

Sep 29, 2001

Net sales

Colors Group

$

4,966

$

5,961

$

15,174

$

18,446

Specialty Chemicals Group

  5,870

  5,015

17,370

15,818

    Chemicals Segment

10,836

10,976

32,544

34,264

Metals Segment

11,122

12,021

31,850

36,441

$

21,958

$

22,997

$

64,394

$

70,705

Operating income (loss)

Colors Group

77

(64)

(4,393)

(117)

Specialty Chemicals Group

    357

     (495)

      (15)

     (190)

    Chemicals Segment

434

(559)

(4,408)

(307)

Metals Segment

       8

       533

  (1,525)

     1,973

442

(26)

(5,933)

1,666

Unallocated expenses

Corporate

196

217

590

723

Interest and debt expense, net of interest
  income

    182

    209

    616

    728

Income (loss)

    before income taxes
    and cumulative effect of
    a change in accounting
    principle

$

     64

$

    (452)

$

   (7,139)

$

    215

 

-8-

Synalloy Corporation

Management's Discussion and Analysis of Financial Condition

And Results of Operations


The following is management's discussion of certain significant factors that affected the Company during the quarter ended September 28, 2002.

Consolidated sales for the quarter and year to date were down, decreasing five and nine percent, respectively, compared to the same periods one year ago. However, the Company reported $42,000 of consolidated net income for the quarter, or $.01 per share compared to a $293,000 net loss, or $.05 per share for the same period one year ago. The Company experienced a $4,860,000 net loss, or $.81 per share, year to date compared to net income of $139,000, or $.02 per share for the same period last year. Excluding charges discussed below, the net loss year to date for 2002 was $ $1,492,000, or $.25 per share.

Sales in the Colors Group declined 17 percent and 18 percent for the quarter and year to date, respectively, from the same periods last year because of lower sales prices for dyes. After experiencing four consecutive quarters of operating losses, the Group had $77,000 of operating income for the quarter. The operating income reflects improved market conditions and the Group's efforts to lower operating expenses and material costs in its dye business over the past six months. Pigment colors continued to generate a small operating profit for the quarter consistent with the first six months. The year-to-date operating loss, before write-downs discussed below, occurred partly from the reduction of excess inventories and unabsorbed operating costs incurred in the first two quarters of 2002. Demand for textile dyes has returned to more normal levels than the extremely low levels experienced in the fourth quarter of 2001 and first two quarters of 2002. Pounds sold have increased by more than 20 p ercent over the preceding quarter for the second and third quarters reflecting increases in overall demand and market share. The combination of the cost savings and volume increases has resulted in increased profitability incrementally over the first three quarters of 2002. At the end of the second quarter, the Company recorded inventory and plant and equipment writedowns as discussed below. At the beginning of September, the Group implemented additional cost reductions including reductions of personnel and non-critical operating expense items. Management believes that the writedowns and cost reductions have lowered operating costs to levels that should allow the Group to operate at break even or better under current levels of sales and material costs, although there is no assurance that this will occur.

Specialty Chemicals Group sales were up 17 percent for the third quarter and 10 percent for the first nine months compared to the same periods last year. The improved operating performance for the quarter resulted from a significant increase in toll and other contract business compared to the third quarter of last year. The significant loss incurred in the third quarter of last year resulted from the absence of hydrogenated product sales resulting from the Augusta plant closing and moving of related equipment during the quarter, and limited toll production from weak demand. Business conditions have shown improvement through the first three quarters of 2002 for this Group causing the favorable comparisons of year-to-date sales and operating income to the same periods last year. Management believes this trend should continue through the end of 2002, although there is no assurance that this will occur.

In the Metals Segment, dollar sales declined 8 percent for the quarter and 13 percent for the first nine months from the same periods a year earlier as a result of 14 percent and 24 percent lower average selling prices partially offset by 7 percent and 15 percent higher unit volumes for the quarter and year to date, respectively. Market conditions experienced in the first six months of 2002 continued through the third quarter as commodity prices remained weak and sales of higher-priced piping systems stayed at a very low level. Despite the poor market conditions, the Segment returned to profitability after two consecutive quarters of operating losses. However, the decline in prices resulting from extremely competitive market conditions, together with a product mix composed of a lower percentage of higher-margin large diameter pipe and piping systems, continued to negatively impact profitability. As a result of the poor conditions, pip-

-9-

Synalloy Corporation

Management's Discussion and Analysis of Financial Condition

And Results Of Operations - Continued


ing systems sustained a modest operating loss for the quarter and is responsible for almost all of the year-to-date operating loss. Beginning in September, cost reductions, including reductions of personnel and non-critical operating expense items, were implemented and market conditions began to improve slightly. These two factors resulted in the Segment achieving the operating income for the quarter.

Over the last month of the third quarter and early into the fourth quarter, sales demand for commodity pipe has improved and pricing appears to have stabilized somewhat. In addition, piping systems backlog continues to increase from the extremely low levels that existed at the end of the first quarter. If these favorable trends continue, they provide the opportunity for profitability to improve for the fourth quarter over the third quarter and first six months of 2002, although there is no assurance that this will occur.

In accordance with the requirements of FAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," and FAS 142, "Goodwill and Other Intangible Assets," impairment assessments were performed in the second quarter of 2002 on the plant and equipment located at Spartanburg, S.C. and goodwill. The assessment resulted in the recording at the end of the second quarter of a $2,267,000 impairment loss on the plant and equipment, $1,786,000 related to the Colors Group and $481,000 to the Specialty Chemicals Group. The devastating effect of cheap imports on the domestic textile industry led to a huge decrease in demand for textile dyes over the past several years. Primarily because of this, our Spartanburg plant has been substantially underutilized. After completing an analysis of the business at the site and exploring other options that were available, it became apparent that the facility could not adequately recover the fixed costs related to the facility under current business condi tions. Accordingly, a write-down of the plant and equipment was recorded. The assessments also resulted in the write-off of $362,000 of goodwill, $201,000 in the Metals Segment and $161,000 in the Colors Group, which was recorded as a restatement in the first quarter reflecting the cumulative effect of a change in accounting principle, and is included in the year-to-date numbers above in accordance with FAS 142. An inventory charge of $2,471,000 was also recorded in the second quarter, $1,800,000 for the Colors Group and $671,000 for the Metals Segment. The Company has historically sold off excess inventory slowly to avoid distressed pricing that would be required to dispose of the excess inventory more quickly. With the price erosion that occurred over the first six months of the year and weak business conditions that existed, excess inventories were not reduced as much as planned. Most of the inventory write-down in the Metals Segment was the result of excess inventories of fittings, flanges and special al loy pipe related to the piping systems business. The unexpectedly low level of new orders impacted piping systems' products to the extent that use of some of this inventory became uncertain. Therefore, excess inventories were written down to reflect management's estimate of the values that could be realized under a plan to scrap, sell or return the excess inventory as quickly as feasible. Finally, a $97,000 environmental charge was accrued in the second quarter for the Colors Group to provide for a proposed settlement of a claim related to shipment of waste to an outside waste disposal site during the 1980s.

Selling and administrative expense for the quarter decreased $425,000, or 15 percent, and increased $189,000, or two percent year to date, compared to the same periods last year. The cost reductions discussed above coupled with increased selling expenses from the acquisition of the Dalton, Georgia business in the third quarter of last year by the Specialty Chemicals Group caused the decline for the quarter. Year to date, increased selling expenses from the Dalton acquisition and the $97,000 waste disposal claim recorded in the second quarter as detailed above, accounted for the year to date increase.

-10-

Synalloy Corporation

Management's Discussion and Analysis of Financial Condition

And Results Of Operations - Continued


Cash flows from operations totaled $4,599,000 during the first nine months of 2002 compared to $5,397,000 generated during the same period one year ago. The decline came primarily from the net operating loss and a decrease in cash used from the increase in accounts receivable of $1,144,000 from the same period last year, offset by an increase in cash generated from reductions in inventory of $1,068,000 and an increase in accounts payable of $1,846,000 from the same period last year. The Company expects that available cash and existing lines of credit will be sufficient to meet normal operating requirements, including capital expenditures over the near term.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

The statements contained in this management discussion and analysis that is not historical facts may be forward looking statements. The forward looking statements are subject to certain risks and uncertainties, including without limitation those identified below, which could cause actual results to differ materially from historical results or those anticipated. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The following factors could cause actual results to differ materially from historical results or those anticipated: adverse economic conditions, the impact of competitive products and pricing, product demand and acceptance risks, raw material and other increased costs, customer delays or difficulties in the production of products, and other risks detailed from time to time in Synalloy's Securities and Exchange Commission filings. Synalloy Corporation assumes no obligation to update the information included h erein.

 

Item 4. Controls and Procedures.

(a)  Based on their evaluation of the issuer's disclosure controls and procedures (as defined in 17 C.F.R. Sections 240.13a-14(c) and 240.15d-14(c)) as of a date within 90 days prior to the filing of this quarterly report, the issuer's chief executive officer and chief financial officer concluded that the effectiveness of such controls and procedures was adequate.

(b)  There were no significant changes in the issuer's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

-11-

Synalloy Corporation

PART II:  OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 2. Changes In Securities

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters To A Vote Of Security Holders

None

Item 5. Other Information

None

Item 6. Exhibits and Reports on Form 8-K

None

The Company did not file any reports on Form 8-K during the three months ended September 28, 2002.

-12-

 

Synalloy Corporation

 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

SYNALLOY CORPORATION

 

 

(Registrant)

 

 

 

 

 

 

Date:  November 8, 2002

By:

/s/ Ralph Matera                    

 

 

Ralph Matera

 

 

President and Chief Executive Officer

 

 

 

Date:  November 8, 2002

By:

/s/ Gregory M. Bowie                   

 

 

Gregory M. Bowie

 

 

Vice President Finance

-13-

CERTIFICATIONS

I, Gregory M. Bowie, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Synalloy Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

  1. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date   November 8, 2002

/s/ Gregory M. Bowie

Gregory M. Bowie
Vice President, Finance

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I, Ralph Matera, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Synalloy Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

  1. The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date   November 8, 2002

/s/ Ralph Matera

Ralph Matera
Chief Executive Officer

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