NEW YORK Synalloy Corp. expects to post a fourth-quarter loss as labor efficiencies fell "well below profitable levels" at its fabrication subsidiaries after the company doubled staff to handle a growing backlog.
"Both of our fabrication units have had difficulty adding experienced welders to support our current backlog. As a result, we are now working with our customers to assess how we can better align our production capacity with their delivery schedules," the Spartanburg, S.C.-based company said Dec. 17.
Synalloys BristolFab unit experienced a pre-tax loss of $1.4 million during October and November as a result of the lower efficiencies.
The companys shipments of stainless pipe increased in October and November although the product mix was less favorable, with a higher percentage of shipments of pipe under 6 inches in diameter, which has a lower conversion margin than large-diameter pipe, the company said.
Synalloys business includes the production of stainless steel pipe, fiberglass and steel storage tanks, specialty chemicals, and stainless and carbon piping systems fabrication.