NEW YORK Synalloy Corp. continues to grapple with the closure of its loss-making Bristol Fabrication unit, the company said in its quarterly earnings report.
The unit, which lost $2.26 million in the first six months of the year, was closed July 27, the Spartanburg, S.C.-based company said July 22. "Management continues to address staffing levels, customer requirements and outsourcing opportunities as we work to complete the backlog, profitably and on schedule."
Meanwhile, the companys metals business continues to benefit from a cost-cutting effort begun earlier this year (amm.com, Feb. 4).
"The company-wide cost cutting initiatives implemented in January had a favorable effect on profitability for the first six months of 2014," Synalloy said. "The segment is meeting or exceeding all of the financial metric targets that were implemented."
The metals segment recorded operating earnings of $4.04 million for the second quarter, up from $1.88 million in the same period a year earlier on sales that rose 7.4 percent to $41.94 million.
The segment also benefited from better margins on small-diameter pipe following a successful trade case filed by the Bristol Metals LLC subsidiary and other domestic producers against imports of welded stainless steel pressure pipe from Malaysia, Thailand and Vietnam (amm.com, June 25).
Synalloy, which produces stainless steel pipe, fiberglass and steel storage tanks, specialty chemicals and fabricates stainless and carbon steel piping systems, posted net income of $400,000 for the three months ended June 28, down 79.1 percent from more than $1.91 million a year earlier, on sales that rose 10 percent to $58.8 million.
The lower net income despite better operating performance in both the metals and specialty chemicals segments resulted from a $5.35-million hit from discontinued operations for the Bristol Fabrication closure.