Synalloy Corporation (SYNL), producer of steel products, reported fourth-quarter net earnings of $1.0 million or $0.16 per share, falling 30 percent from $1.5 million or $0.23 per share in the year-ago quarter.
Net sales for the quarter increased 7 percent to $40.2 million from $37.6 million last year. Sales in metal segment increased 9 percent as a result of a 16 percent increase in unit volumes partially offset by a 6 percent decrease in average selling prices.
Specialty chemicals segment revenue increased 2 percent from last year. The company attributed this increase to a favorable product mix, with additional sales of higher priced products, combined with slightly higher selling prices. The segment slipped to an operating loss for the quarter, due to an $817,000 charge to reserve for the potential uncollectable receivable balances for four customers. The bulk of the charge was for a customer who experienced financial difficulty during the last half of 2011. Even without the charge, the segment was impacted by increased raw material costs and the desire to maintain market share by not passing on all of the increased costs to customers.
Providing its outlook, Synalloy said excess capacity in the pipe manufacturing industry continued to present a difficult operating environment. Chemicals segment sales volumes are expected to continue to improve throughout 2012 as a result of aggressive product pricing.
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