Synalloy Reports Double Digit Increases in Second Quarter 2013 Sales and Net Income for Both the Metals and Specialty Chemicals

Synalloy Reports Double Digit Increases in Second Quarter 2013 Sales and Net
Income for Both the Metals and Specialty Chemicals Segments

SPARTANBURG, S.C., July 19, 2013 (GLOBE NEWSWIRE) -- Synalloy Corporation
(Nasdaq:SYNL), a holding company owning subsidiaries that engage in a number
of diverse business activities including the production of stainless steel
pipe, fiberglass and steel storage tanks, specialty chemicals and fabrication
of stainless and carbon steel piping systems, announces that the second
quarter of 2013 produced net sales of $56,273,000, up 20% compared to net
sales of $46,878,000 for the second quarter of 2012. Net income for the second
quarter of 2013 was $1,913,000 or $0.30 per share, up 76% over net earnings of
$1,090,000, or $0.17 per share for the same quarter in the prior year. For the
first six months, net sales for 2013 were $114,109,000, an increase of 21%
from $94,250,000 for the same period in the prior year. Net income was
$3,378,000 or $0.53 per share for the first six months of 2013, up 39% over
net income of $2,427,000, or $0.38 per share for the first six months of 2012.

Earnings before interest, change in fair value of interest rate swap, income
taxes, depreciation and amortization ("EBITDA"), a non-GAAP measure of
earnings, was $4,017,000 in the second quarter of 2013, or $0.62 per share.
This was an increase of 67% over the second quarter of 2012 when EBITDA was
$2,400,000, or $0.38 per share. For the first six months of 2013, EBITDA was
$7,765,000 or $1.21 per share compared with $5,218,000 or $0.82 per share for
2012, which represents a year-over-year increase of 49%.

Metals Segment

Sales during the second quarter of 2013 totaled $41,869,000, an increase of
21% from $34,632,000 for the same quarter last year. Operating income was
$2,087,000 and $1,460,000 for the second quarters of 2013 and 2012,
respectively, an increase of $627,000 or 43%. The Company purchased 100% of
the common stock of Palmer of Texas ("Palmer") on August 21, 2012. Excluding
Palmer's sales results, sales for the second quarter 2013 would have been 1%
lower than the prior year. The sales decrease resulted from a 3% decrease in
unit volumes partially offset by a 2% increase in average selling prices. In
the second quarter, the Segment experienced commodity unit volumes increasing
11% while non-commodity unit volume decreased 22%. Selling prices for
commodity pipe decreased approximately 15% while selling prices for
non-commodity pipe increased approximately 31%. Shipments of carbon steel pipe
associated with the Bechtel nuclear plant remained strong in the second
quarter of 2013. The Company classifies carbon steel pipe sales as
non-commodity. Shipments of stainless steel pipe in the second quarter of 2013
were constrained as distributors continued to monitor nickel prices and kept
their large re-stocking buys on hold, as surcharges decreased each month. The
Segment remains focused on international sales efforts which show
year-over-year growth. Special alloy bookings, backlog and shipments were
strong in the second quarter of 2013. Fabrication bookings and sales have
improved covering the full range of markets for pipe fabrication with power,
chemicals, petro-chemicals and mining showing considerable improvement.

Sales for the first six months of 2013 increased 22% to $86,529,000 and
operating income for the first six months of 2013 was $4,048,000, up 34% from
net sales and operating income of $70,654,000 and $3,032,000, respectively,
for the same period of 2012. Excluding Palmer's sales for the first six months
of 2013, sales for the Metals Segment for 2013 approximated prior year levels.
The 2% decrease in unit volumes was completely offset by a 2% increase in
average selling prices.

Operating income, which increased $627,000 for the second quarter of 2013 when
compared to the same quarter of 2012, and increased $1,016,000 for the first
six months of 2013 when compared to the same period of the prior year, was
impacted by the following factors:

a) Palmer was acquired August 21, 2012. Its second quarter and first six
months results were included in the 2013 Metals Segment results while Palmer's
results were not included during the same periods of the prior year since the
Company did not own their stock at that time. The Company is very pleased with
the performance of Palmer since the acquisition. The majority of the
integration plan has been completed and the Company believes it has an
excellent management team in place at Palmer.

b) Associated with the acquisition of Palmer, an intangible asset of
$9,000,000 was recorded for the customer base acquired by the Company. This
asset is amortized on an accelerated basis which resulted in an amortization
charge of $383,000 in the second quarter and $765,000 for the first six months
of 2013. This additional amortization, net of taxes, reduced second quarter
and first six months of 2013 earnings per share by $0.04 per share and $0.08
per share, respectively.

c) Margins were affected in the second quarter and first six months of 2013 by
foreign imports. Stainless steel pipe received from Malaysia, Vietnam and
Thailand are entering the country at significantly reduced prices. This factor
forced the Segment to reduce prices accordingly to retain market share. The
United States International Trade Commission (USITC) determined on June 28,
2013 that there is a reasonable indication that a U.S. industry is materially
injured by reason of imports of welded stainless steel pressure pipe from
these countries that are sold in the U.S. at less than fair value. All six
Commissioners hearing the unfair trade case voted in favor of the Company.
Margins on stainless steel piping should improve in the third and fourth
quarters as we await the preliminary ruling which is currently set for
October, 2013.

d) Declining nickel prices resulted in inventory losses in the second quarter
of this year of approximately $824,000 compared to an inventory loss of
$1,303,000 in the second quarter of 2012. For the first six months of 2013 and
2012, inventory losses were $1,389,000 and $2,210,000, respectively. The
impact to reported earnings was a favorable swing of approximately $0.06 per
share and $0.09 per share for the second quarter and first six months of 2013.

e) The fabrication units operating margins improved during the second quarter
of 2013 as a result of higher labor rate projects in our facilities.

Demand for manufactured pipe remains relatively strong, and the fabrication
unit has begun to see an improvement in quote requests and orders. See the
Outlook Section for further discussion.

Specialty Chemicals Segment

Sales for the Specialty Chemicals Segment in the second quarter of 2013 were
$14,404,000, which represented an 18% increase from $12,246,000 when compared
to the same quarter of 2012. Overall selling prices decreased 12% in the
second quarter when compared to 2012 due in part to a significant increase in
usage of a lower cost raw material that is reflected in the selling
price.Pounds sold increased 33% during the second quarter when compared to
the same period for 2012. With the increase in pounds sold and produced, the
additional production volume had a favorable effect onfixed operating costs
per pound of product produced, which decreased by 18% during the second
quarter of 2013 when compared to the same period of 2012. Operating income
for the second quarter of 2013 and 2012 was $1,596,000 and $1,076,000,
respectively, an increase of 48%.This increase resulted from the Segment
increasing contract or tolling sales and strengthening sales to direct
customers.The Segment continues to focus on changing the product mix to
higher-priced/higher-margin products and controlling operating and support
costs.

Specialty Chemicals Segment sales for the first six months of 2013 were
$27,580,000, up $3,984,000 or 17% from $23,596,000 for the same period of
2012.Operating income for the first six months of 2013 for the Specialty
Chemicals Segment was $2,889,000 compared to $2,205,000 for the first six
months of 2012, an increase of 31%. The additional Ashland defoamer sales
which began in the third quarter of 2012 contributed to the increase in
operating results for this segment.

Other Items

Unallocated corporate expenses for the second quarter of 2013 were $851,000
(1.5% of sales) compared to $848,000 (1.8% of sales) for the second quarter of
2012. This expense category was $1,703,000 (1.5% of sales) and $1,580,000
(1.7% of sales) for the first six months of 2013 compared to 2012.Additional
costs were incurred in 2013 as the Company strengthened its IT support team
(wages and travel), improved its SEC reporting software functionality,
recorded additional stock option compensation expense and incurred additional
professional fees associated with the Palmer acquisition.These increased
costs were partially offset by lower incentive based bonuses in 2013.

Interest expense for the second quarter of 2013 was $372,000 compared $46,000
for the second quarter of 2012.Interest expense increased $622,000 to
$714,000 for the first six months of 2013 compared to $92,000 for the same
period of 2012. Higher interest expense resulted from the additional
borrowings associated with the purchase of Palmer in August 2012. Also, as a
result of higher interest rates during 2013, the fair value of the interest
rate swap contract improved, and the Company increased other income by
$495,000 and $633,000 during the second quarter and first six months of 2013
to record the change in its fair value.

Other income of $135,000 for the first six months of 2012 was on account of
life insurance proceeds received in excess of its cash surrender value for a
former officer of the Company.

The Company's cash balance decreased $942,000 during the first six months of
2013 from $1,085,000 at the end of 2012 to $143,000 as of June29, 2013.As a
result of the Company's sales increasing 6% during the second quarter of 2013
compared to the fourth quarter 2012 with the majority of the second quarter
sales occurring in June 2013, net accounts receivable resulted in a use of
cash since it increased at June29, 2013 by $5,203,000 from the prior year
end. Net inventories increased $6,943,000 as of the end of the second quarter
2013 compared to the end of 2012 in support of the Bechtel nuclear project and
projected sales increases for both segments.The Company generated cash during
the first six months of 2013 as accounts payable increased $6,946,000 as of
the end of the second quarter of 2013. Accrued expenses decreased or used
$2,305,000 of cash as the 2012 management incentive bonuses were paid in
February 2013 and some of the cash deposits received from our customers were
utilized to offset their product shipments during the first six months of
2013. Capital expenditures for the first six months of 2013 were $3,062,000.
These items contributed to the Company borrowing $4,157,000, net, during the
first six months of 2013, resulting in $44,024,000 of bank debt outstanding as
of June29, 2013.

Outlook

The Metals Segment's business is highly dependent on its customers' capital
expenditures.We are seeing improvements in this area with increased quoting
activity, new project start ups and "on hold" projects being released for
completion. The Bechtel nuclear job was strong in the second quarter of 2013.
Sales are expected to remain strong throughout the third quarter of 2013 with
the project being completed in the fourth quarter. The Metals Segment is
experiencing a strong level of inquiries, especially from the chemical
industry.Profit margins on the new project activity are better than we
experienced in the fourth quarter 2012 and first quarter 2013. Stainless steel
surcharges, which affect our cost of raw materials, declined steadily from
March to September 2012 (in the range of 26%).In the fourth quarter 2012,
they were basically steady.For the first quarter of 2013, they increased in
the range of 10%, but have declined since April by 18%. The declining nickel
prices continue to hold back sales as distributors are waiting for the prices
to level out before placing large restocking orders. Our inventory gains and
losses are determined by a number of factors including sales mix and the
holding period of particular products. As a consequence, there may not be a
direct correlation between the direction of stainless steel surcharges and
inventory profits or losses at a particular point in time.Our experience has
been that over the course of a business cycle, this volatility has tended
towards zero. We believe we are the largest and most capable domestic producer
of non-commodity stainless steel pipe and an effective producer of commodity
stainless steel pipe which should serve us well in the long run. Our market
position remains strong in the commodity pipe market and we are experiencing
an upswing in special alloy demand. International quoting activity for our
stainless steel pipe remains strong, especially for Canadian oil sands
projects. Quoting activity has increased in Europe, Middle East and Asia which
follows our marketing development strategies. We also continue to be
optimistic about the fabrication business over the long term. Management
anticipates continued strong sales of fiberglass and steel tanks as the oil
drilling boom continues in the Permian Basin and Eagle Ford Shale areas of
Texas.During the remainder of 2013, we will continue to focus on gaining
production efficiencies and eliminating bottlenecks at Palmer to increase tank
production.

The pipe fabrication backlog has increased in 2013 as the volume of quote
activity has strengthened with many projects utilizing special alloy
pipe.Approximately 64% of fabrication's current backlog comes from chemical
projects and an additional 24% is from water / wastewater projects. Total
fabrication backlog was $25,621,000 at June29, 2013, $19,254,000 at December
29, 2012 and $20,027,000 at June30, 2012.

Specialty Chemicals Segment's sales are expected to continue to show
improvement into the third quarter of 2013 when compared to the prior
year.Sales of the defoamer product line for applications in the water and
paint industries achieved targeted levels in the third quarter of 2012 and
therefore the large year-over-year sales increases that the Segment
experienced over the past several quarters will tighten.The Company still
expects sales levels to continue to improve throughout the remainder of 2013
as the result of aggressive product pricing, increased growth in sales to
direct customers and identifying new sales opportunities for product offerings
that have available production capacity.Management expects operating margins
to hold steady at current levels in spite of the anticipation of raw material
price increases over the next quarter.

For more information about Synalloy Corporation, please visit our web site at
www.synalloy.com.

Forward-Looking Statements

This earnings release includes and incorporates by reference "forward-looking
statements" within the meaning of the federal securities laws. All statements
that are not historical facts are "forward-looking statements." The words
"estimate," "project," "intend," "expect," "believe," "should," "anticipate,"
"hope," "optimistic," "plan," "outlook," "should," "could," "may" and similar
expressions identify 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. In conjunction with
our 2012 Palmer acquisition, our expectations for future sales and profits
which were included in our financial projections were our best estimates at
the time and actual results could be significantly different. Readers are
cautioned not to place undue reliance on these forward-looking statements. 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; raw materials availability;
employee relations; ability to maintain workforce by hiring trained employees;
customer delays or difficulties in the production of products; new fracking
regulations; a prolonged decrease in oil prices; unforeseen delays in
completing the integrations of Palmer; risks associated with mergers,
acquisitions, dispositions and other expansion activities; financial stability
of our customers; environmental issues; unavailability of debt financing on
acceptable terms and exposure to increased market interest rate risk;
inability to comply with covenants and ratios required by our debt financing
arrangements; ability to weather an economic downturn; loss of consumer or
investor confidence and other risks detailed from time-to-time in Synalloy
Corporation's Securities and Exchange Commission filings. Synalloy Corporation
assumes no obligation to update the information included in this release.

Non-GAAP Financial Information

Statements included in this earnings release include non-GAAP (Generally
Accepted Accounting Principles) measures and should be read along with the
accompanying tables which provide a reconciliation of non-GAAP measures to
GAAP measures. EBITDA is a non-GAAP measure and excludes interest, change in
fair value of interest rate swap, income taxes, depreciation and amortization
expenses from net income. Management believes that these non-GAAP measures
provide additional useful information to allow readers to compare the
financial results between periods. Non-GAAP measures should not be considered
as an alternative to any measure of performance or financial condition as
promulgated under GAAP, and investors should consider the company's
performance and financial condition as reported under GAAP and all other
relevant information when assessing the performance or financial condition of
the company. Non-GAAP measures have limitations as analytical tools, and
investors should not consider them in isolation or as a substitute for
analysis of the company's results or financial condition as reported under
GAAP.

SYNALLOY CORPORATION COMPARATIVE ANALYSIS                                  
                                                                      
               THREE MONTHS ENDED           SIX MONTHS ENDED              
               June 29, 2013  June 30, 2012 June 29, 2013 June 30, 2012   
(unaudited)                                                            
                                                                      
Net sales                                                              
Metals Segment  $41,869,000    $34,632,000   $86,529,000   $70,654,000     
Specialty
Chemicals       14,404,000     12,246,000    27,580,000    23,596,000      
Segment
               $56,273,000    $46,878,000   $114,109,000  $94,250,000     
Operating                                                              
income
Metals Segment  $2,087,000     $1,460,000    $4,048,000    $3,032,000      
Specialty
Chemicals       1,596,000      1,076,000     2,889,000     2,205,000       
Segment
               3,683,000      2,536,000     6,937,000     5,237,000       
Unallocated                                                            
expenses
Corporate       851,000        848,000       1,703,000     1,580,000       
Interest and    372,000        46,000        714,000       92,000          
debt expense
Change in fair
value of        (495,000)      —             (633,000)     —               
interest rate
swap
Other income    16,000         —             —             (135,000)       
                                                                      
Income before   2,939,000      1,642,000     5,153,000     3,700,000       
income taxes
Provision for   1,026,000      552,000       1,775,000     1,273,000       
income taxes
                                                                      
Net income      $1,913,000     $1,090,000    $3,378,000    $2,427,000      
                                                                      
Net income per                                                         
common share
Basic           $0.30          $0.17         $0.53         $0.38           
Diluted         $0.30          $0.17         $0.53         $0.38           
                                                                      
Average shares                                                         
outstanding
Basic           6,379,000      6,343,000     6,371,000     6,336,000       
Diluted         6,438,000      6,393,000     6,430,000     6,387,000       
                                                                      
Other data:                                                            
EBITDA (1)      $4,017,000     $2,400,000    $7,765,000    $5,218,000      
Backlog -       $25,621,000    $20,027,000                               
Fabrication
                                                                      
(1) The term EBITDA (earnings before interest, change in fair value of
interest rate swap, income taxes, depreciation and amortization) is a
non-GAAP financial measure that the Company believes is useful to
investors in evaluating its results to determine the value of a company.   
For a reconciliation of this non-GAAP measure to the most comparable
GAAP equivalent, refer to the Reconciliation of Net Income to EBITDA as
shown on next page.
                                                                          

Reconciliation of Net  THREE MONTHS ENDED          SIX MONTHS ENDED
Income to EBITDA
                      June 29, 2013 June 30, 2012 June 29, 2013 June30, 2012
(unaudited)                                                   
                                                             
Reconciliation of net                                         
income to EBITDA:
Net income             $1,913,000    $1,090,000    $3,378,000    $2,427,000
Adjustments:                                                  
Interest expense       372,000       46,000        714,000       92,000
Change in fair value   (495,000)     —             (633,000)     —
of interest rate swap
Income taxes           1,026,000     552,000       1,775,000     1,273,000
Depreciation           798,000       706,000       1,735,000     1,413,000
Amortization           403,000       6,000         796,000       13,000
                                                             
EBITDA                 $4,017,000    $2,400,000    $7,765,000    $5,218,000
                                                             
EBITDA per share,      $0.62         $0.38         $1.21         $0.82
diluted
                                                             

Condensed Consolidated Balance Sheets       June 29, 2013 December 29, 2012
                                           (unaudited)   
                                                        
Assets                                                   
Cash                                        $143,000      $1,085,000
Accounts receivable, net                    36,381,000    31,178,000
Inventories                                 57,106,000    50,163,000
Sundry current assets                       9,232,000     8,496,000
Total current assets                        102,862,000   90,922,000
Property, plant and equipment, net          29,262,000    28,035,000
Goodwill                                    18,253,000    18,253,000
Intangible asset, net                       7,695,000     8,460,000
Other assets                                3,063,000     2,837,000
                                                        
Total assets                                $161,135,000  $148,507,000
                                                        
Liabilities and Shareholders' Equity                     
Accounts payable                            $17,470,000   $10,524,000
Accrued expenses                            7,400,000     9,705,000
Current portion of long-term debt           2,250,000     2,274,000
Current portion of contingent consideration 2,500,000     2,500,000
Total current liabilities                   29,620,000    25,003,000
Long-term debt                              41,774,000    37,593,000
Long-term contingent consideration          5,794,000     5,709,000
Other long-term liabilities                 8,428,000     8,428,000
Shareholders' equity                        75,519,000    71,774,000
                                                        
Total liabilities and shareholders' equity  $161,135,000  $148,507,000

CONTACT: Rick Sieradzki at (864) 596-1558