Fifth Consecutive Quarter of Year-Over-Year Growth in Net Sales, Net Income, and Adjusted EBITDA

Upcoming Rebrand to Ascent Industries Co. Better Aligns Go-to-Market Strategy with Long-Term Strategic Vision

Synalloy Corporation (NASDAQ:SYNL) ("Synalloy" or the "Company"), an industrials company focused on the production and distribution of industrial tubular products and specialty chemicals, is reporting its results for the second quarter ended June 30, 2022.

Second Quarter 2022 Summary

(in millions, expect per share and margin)	Q2 2022¹	Q2 2021	Change
Net Sales	$116.2	$83.1	40%
Gross Profit	$20.9	$14.1	48%
Gross Profit Margin	18.0%	17.0%	100bps
Net Income	$11.1	$2.9	283%
Diluted Earnings per share	$1.06	$0.31	242%
Adjusted EBITDA	$15.5	$9.8	58%
Adjusted EBITDA Margin	13.3%	11.7%	160bps

Management Commentary

"After a strong start to the year, we sustained our momentum and generated a fifth consecutive quarter of year-over-year growth across the top and bottom line," said Chris Hutter, president and CEO of Synalloy. "We continued to make progress on our transformation efforts through diversifying our supply chain, widening our sales funnel, and steadily growing our footprint and manufacturing capacity. In our metals segment, or what we will be referring to as tubular products going forward, we added new international suppliers which strengthened and diversified our supply chain network, resulting in lower lead times and incremental margin improvements. In specialty chemicals, we strengthened our sales team with key talent, allowing us to better cross-sell, build deeper relationships and provide higher quality customer service. We also enhanced our manufacturing capabilities with upgrades to existing equipment, the implementation of 24/7 operations in multiple facilities and investments in automation to better address the growing demand and long-term expansion goals for this segment.

"As recently announced, our rebrand to Ascent Industries Co.(‘Ascent') better reflects our go-forward strategic vision. Since the start of our transformation journey, our goal has always been to build best-in-class industrial manufacturing companies through maximizing efficiency across our operations and relentlessly innovating our production capabilities and portfolio of products. Rebranding to Ascent better aligns the company with our refreshed mission statement, our focus on unlocking the full potential of our existing operations, and identifying value-additive acquisition opportunities with strong research and development capabilities.

¹ The second quarter of 2022 included $8.4 million in net sales, $0.2 million in net income and $0.8 million in adjusted EBITDA from the acquisition of DanChem, which closed on October 22, 2021.

"For the back half of the year, we expect to continue executing on our strategic priorities: refining and progressing our commercial strategy, identifying and investing in automation and technology, further integrating our facilities to promote cross-functional work processes, and improving labor and asset mixes to maximize our working capital use. We remain steadfast in our commitment towards driving long-term, sustainable growth through our robust platform and creating value for our shareholders."

Second Quarter 2022 Financial Results

Net sales increased 40% to $116.2 million compared to $83.1 million in the prior year period, primarily driven by favorable product mix shifts and broad-based pricing increases.

Gross profit increased 48% to $20.9 million, or 18.0% of net sales, compared to $14.1 million, or 17.0% of net sales, in the second quarter of 2021. Gross profit and gross margin benefited from a shift to higher margin products, increased selling prices and an expanded supplier base, which offset the impact of increased raw material and freight costs.

Net income increased significantly to $11.1 million, or $1.06 diluted earnings per share, compared to $2.9 million, or $0.31 diluted earnings per share, in the second quarter of 2021. The increase was primarily a result of the strong sales and gross profit performance.

Adjusted EBITDA increased 58% to $15.5 million compared to $9.8 million in the second quarter of 2021. Adjusted EBITDA margin also improved 160 basis points to 13.3% compared to 11.7% in the prior year period.

Segment Results

Metals – Net sales in the second quarter of 2022 increased 28% to $87.2 million compared to $68.1 million in the second quarter of 2021. Operating income in the second quarter increased 72% to $12.9 million compared to $7.5 million in the prior year period. Adjusted EBITDA in the second quarter increased 46% to $14.7 million compared to $10.1 million in the prior year period. As a percentage of segment net sales, adjusted EBITDA improved 210 basis points to 16.9% compared to 14.8% in the second quarter of 2021.

Specialty Chemicals – Net sales in the second quarter of 2022 increased 94% to $29.0 million compared to $15.0 million in the second quarter of 2021. Operating income in the second quarter increased significantly to $2.6 million compared to $(0.4) million in the prior year period. Adjusted EBITDA in the second quarter increased significantly to $3.6 million compared to $0.8 million in the prior year period. Adjusted EBITDA margin improved 740 basis points to 12.6% compared to 5.2% in the second quarter of 2021.

Liquidity

As of June 30, 2022, total debt was $68.3 million under the Company's credit facility, compared to $70.4 million in debt at December 31, 2021. As of the end of the second quarter of 2022, the Company had $41.2 million of remaining available borrowing capacity under its credit facility, compared to $39.4 million at December 31, 2021.

Rebrand to Ascent Industries Co.

As a reminder, Synalloy's rebrand to Ascent Industries Co. will go into effect on August 10, 2022. The Company's stock ticker symbol will change from "SYNL" to "ACNT" on the Nasdaq stock exchange, and trading under the new stock ticker symbol will commence on August 10^th.

The Company's corporate website, including the investor relations portion of the site, will be relocating to www.ascentco.com. Additionally, the public will be able to reach the investor relations department at ACNT@gatewayir.com.

In celebration of the Company's rebrand, the executive leadership team will be visiting the Nasdaq MarketSite in Times Square, New York to ring the Nasdaq Stock Market Closing Bell on August 15, 2022. On the day of the ceremony, a live stream of the Nasdaq Closing Bell will be available at https://www.nasdaq.com/marketsite/bell-ringing-ceremony.

To view a video of the Company's rebranded vision coming to life, please click here.

Conference Call

Synalloy will conduct a conference call today at 5:00 p.m. Eastern time to discuss its results for the second quarter ended June 30, 2022.

Synalloy management will host the conference call, followed by a question-and-answer period.

Date: Tuesday, August 09, 2022

Time: 5:00 p.m. Eastern time

Live Call Registration Link: Here

Webcast Registration Link: Here

To access the call by phone, please register via the live call registration link above or here and you will be provided with dial-in instructions and details. If you have any difficulty connecting with the conference call, please contact Gateway Group at 1-949-574-3860.

The conference call will also be broadcast live and available for replay via the webcast registration link above or here. The webcast will be archived for one year in the investor relations section of the Company's website at www.synalloy.com.

About Synalloy Corporation

Synalloy Corporation (NASDAQ:SYNL) is a company that engages in a number of diverse business activities including the production of stainless steel and galvanized pipe and tube, the distribution of seamless tubular products, and the production of specialty chemicals. For more information about Synalloy Corporation, please visit its website at www.synalloy.com.

Forward-Looking Statements

This press release may include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other applicable federal securities laws. All statements that are not historical facts are forward-looking statements. Forward looking statements can be identified through the use of words such as "estimate," "project," "intend," "expect," "believe," "should," "anticipate," "hope," "optimistic," "plan," "outlook," "should," "could," "may" and similar expressions. The forward-looking statements are subject to certain risks and uncertainties 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 and to review the risks. as set forth in more detail in Synalloy Corporation's Securities and Exchange Commission filings, including our Annual Report on Form 10-K, which filings are available from the SEC or on our website. Synalloy Corporation assumes no obligation to update any forward-looking information included in this release.

Non-GAAP Financial Information

Financial statement information included in this earnings release includes 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.

Adjusted EBITDA 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. An item is excluded in the measure if its periodic value is inconsistent and sufficiently material that not identifying the item would render period comparability less meaningful to the reader or if including the item provides a clearer representation of normalized periodic earnings. The Company excludes in Adjusted EBITDA two categories of items: 1) Base EBITDA components, including: interest expense (including change in fair value of interest rate swap), income taxes, depreciation and amortization, and 2) Material transaction costs including: goodwill impairment, asset impairment, gain on lease modification, stock-based compensation, non-cash lease cost, acquisition costs and other fees, proxy contest costs and recoveries, loss on extinguishment of debt, earn-out adjustments, realized and unrealized (gains) and losses on investments in equity securities and other investments, retention costs and restructuring & severance costs 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 Condensed Consolidated Balance Sheets ($ in thousands)

	(Unaudited)
	June 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	245	$	2,021
Accounts receivable, net of allowance for credit losses of $748 and $216, respectively		63,932		50,126
Inventories, net		134,529		103,249
Prepaid expenses and other current assets		4,883		3,728
Assets held for sale		785		855
Total current assets		204,374		159,979
Property, plant and equipment, net		42,177		43,720
Right-of-use assets, operating leases, net		29,950		30,811
Goodwill		12,637		12,637
Intangible assets, net		12,940		14,382
Deferred charges, net		253		302
Other non-current assets, net		4,110		4,171
Total assets	$	306,441	$	266,002

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	56,167	$	32,318
Accounts payable - related parties		2		2
Accrued expenses and other current liabilities		10,800		12,407
Current portion of note payable		871		—
Current portion of long-term debt		2,464		2,464
Current portion of earn-out liabilities		415		1,961
Current portion of operating lease liabilities		1,061		1,104
Current portion of finance lease liabilities		259		233
Total current liabilities		72,039		50,489
Long-term debt		65,849		67,928
Long-term portion of operating lease liabilities		31,445		32,059
Long-term portion of finance lease liabilities		1,363		1,414
Deferred income taxes		1,791		2,433
Other long-term liabilities		70		89
Total non-current liabilities		100,518		103,923

Commitments and contingencies

Shareholders' equity:
Common stock, par value $1 per share; authorized 24,000,000 shares; issued 11,085,000 shares		11,085		11,085
Capital in excess of par value		46,162		46,058
Retained earnings		84,397		63,080
		141,644		120,223
Less: cost of common stock in treasury - 825,570 and 918,471 shares, respectively		7,760		8,633
Total shareholders' equity		133,884		111,590
Total liabilities and shareholders' equity	$	306,441	$	266,002

Note: The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements at that date. See accompanying notes to condensed consolidated financial statements.

SYNALLOY CORPORATION Condensed Consolidated Statements of Income - Comparative Analysis (Unaudited) ($ in thousands, except per share data)

		Three Months Ended June 30,				Six Months Ended June 30,
			2022		2021		2022		2021
Net sales
	Metals Segment	$	87,182	$	68,097	$	175,679	$	123,311
	Specialty Chemicals Segment		29,020		14,990		56,741		29,554
		$	116,202	$	83,087	$	232,420	$	152,865
Operating income (loss)
	Metals Segment	$	12,934	$	7,504	$	27,426	$	10,081
	Specialty Chemicals Segment		2,627		(414)		5,014		642

Unallocated expense (income)
	Corporate		3,322		1,360		6,351		3,127
	Acquisition costs and other		157		—		688		—
	Proxy contest costs and recoveries		—		632		—		168
	Earn-out adjustments		(109)		1,044		(7)		1,270
	Operating income		12,191		4,054		25,408		6,158
	Interest expense		407		353		810		739
	Change in fair value of interest rate swap		—		—		—		(2)
	Loss on extinguishment of debt		—		—		—		223
	Other, net		(23)		—		(58)		162
Income before income taxes			11,807		3,701		24,656		5,036
	Income tax provision		750		815		3,339		1,056
Net income		$	11,057	$	2,886	$	21,317	$	3,980

Net income per common share
	Basic	$	1.08	$	0.31	$	2.08	$	0.43
	Diluted	$	1.06	$	0.31	$	2.05	$	0.43

Average shares outstanding
	Basic		10,244		9,233		10,226		9,212
	Diluted		10,431		9,331		10,377		9,315

Other data:
	Adjusted EBITDA¹	$	15,453	$	9,763	$	32,414	$	14,639

¹The term Adjusted EBITDA 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. An item is excluded in the measure if its periodic value is inconsistent and sufficiently material that not identifying the item would render period comparability less meaningful to the reader or if including the item provides a clearer representation of normalized periodic earnings. The Company excludes in Adjusted EBITDA two categories of items: 1) Base EBITDA components, including: interest expense (including change in fair value of interest rate swap), income taxes, depreciation and amortization, and 2) Material transaction costs including: goodwill impairment, asset impairment, gain on lease modification, stock-based compensation, non-cash lease cost, acquisition costs and other fees, proxy contest costs and recoveries, loss on extinguishment of debt, earn-out adjustments, realized and unrealized (gains) and losses on investments in equity securities and other investments, retention costs and restructuring & severance costs from net income. For a reconciliation of this non-GAAP measure to the most comparable GAAP equivalent, refer to the Reconciliation of Net Income (Loss) to Adjusted EBITDA.

SYNALLOY CORPORATION Consolidated Statements of Cash Flows (Unaudited) ($ in thousands)

	Six Months Ended June 30,
		2022		2021
Operating activities
Net income	$	21,317	$	3,980
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		4,208		3,591
Amortization expense		1,442		1,360
Amortization of debt issuance costs		49		46
Asset impairments		—		233
Loss on extinguishment of debt		—		223
Deferred income taxes		(642)		(76)
Earn-out adjustments		(7)		1,270
Payments of earn-out liabilities in excess of acquisition date fair value		(372)		—
Provision for (reduction of) losses on accounts receivable		532		(362)
Provision for losses on inventories		1,234		368
Gain on disposal of property, plant and equipment		(5)		(81)
Non-cash lease expense		214		249
Change in fair value of interest rate swap		—		(2)
Issuance of treasury stock for director fees		364		—
Stock-based compensation expense		452		456
Changes in operating assets and liabilities:
Accounts receivable		(14,339)		(12,536)
Inventories		(32,442)		(5,482)
Other assets and liabilities		(1,022)		(570)
Accounts payable		23,591		5,575
Accounts payable - related parties		—		632
Accrued expenses		(1,795)		1,370
Accrued income taxes		110		4,751
Net cash provided by operating activities		2,889		4,995
Investing activities
Purchases of property, plant and equipment		(2,330)		(563)
Proceeds from disposal of property, plant and equipment		5		138
Net cash used in investing activities		(2,325)		(425)
Financing activities
Borrowings from long-term debt		237,938		38,398
Proceeds from note payable		967		—
Proceeds from the exercise of stock options		161		—
Payments on long-term debt		(240,017)		(40,269)
Payments on note payable		(96)		—
Principal payments on finance lease obligations		(126)		(19)
Payments on earn-out liabilities		(1,167)		(1,944)
Payments for termination of interest rate swap		—		(46)
Payments for deferred financing costs		—		(165)
Net cash used in financing activities		(2,340)		(4,045)
(Decrease) increase in cash and cash equivalents		(1,776)		525
Cash and cash equivalents, beginning of period		2,021		236
Cash and cash equivalents, end of period	$	245	$	761

Supplemental Disclosure of Cash Flow Information
Cash paid for:
Interest	$	699	$	620
Income taxes	$	3,874	$	24

Noncash Investing Activities:
Capital expenditures, not yet paid	$	336	$	—

SYNALLOY CORPORATION Non-GAAP Financial Measures Reconciliation Reconciliation of Net Income to Adjusted EBITDA (Unaudited) ($ in thousands)

		Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)			2022		2021		2022		2021
Consolidated
Net income		$	11,057	$	2,886	$	21,317	$	3,980
Adjustments:
	Interest expense		407		353		810		739
	Change in fair value of interest rate swap		—		—		—		(2)
	Income taxes		750		815		3,339		1,056
	Depreciation		2,092		1,774		4,208		3,591
	Amortization		721		680		1,442		1,360
EBITDA			15,027		6,508		31,116		10,724
	Acquisition costs and other		157		—		688		—
	Proxy contest costs and recoveries¹		—		632		—		168
	Loss on extinguishment of debt		—		—		—		223
	Earn-out adjustments		(109)		1,044		(7)		1,270
	Loss on investment in equity securities and other investments		—		—		—		363
	Asset impairments		—		233		—		233
	Gain on lease modification		(2)		—		(2)		—
	Stock-based compensation		263		269		395		456
	Non-cash lease expense		107		124		214		249
	Retention expense		—		476		—		476
	Restructuring and severance costs		10		477		10		477
Adjusted EBITDA		$	15,453	$	9,763	$	32,414	$	14,639
	% sales		13.3 %		11.7 %		13.9 %		9.6 %

¹Proxy contest costs and recoveries for the three months ended June 30, 2021 are reimbursements of documented, out-of-pocket costs to Privet and UPG related to the 2020 shareholder activism. Proxy contest costs and recoveries for the six months ended June 30, 2021 are reimbursements of documented, out-of-pocket costs to Privet and UPG partially offset by insurance recoveries for costs related to the 2020 shareholder activism.

SYNALLOY CORPORATION Non-GAAP Financial Measures Reconciliation Reconciliation of Net Income to Adjusted EBITDA (Unaudited) ($ in thousands)
		Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)			2022		2021		2022		2021
Metals Segment
Net income		$	13,074	$	6,463	$	27,498	$	9,002
Adjustments:
	Depreciation expense		1,163		1,350		2,376		2,742
	Amortization expense		625		680		1,250		1,360
EBITDA			14,862		8,493		31,124		13,104
	Earn-out adjustments		(109)		1,044		(7)		1,270
	Stock-based compensation		(11)		46		24		83
	Non-cash lease expense		(1)		—		(1)		—
	Retention expense		—		476		—		476
	Restructuring and severance costs		—		50		—		50
Metals Segment Adjusted EBITDA		$	14,741	$	10,109	$	31,140	$	14,983
	% segment sales		16.9 %		14.8 %		17.7 %		12.2 %

Specialty Chemicals Segment
Net income (loss)		$	2,617	$	(414)	$	4,995	$	641
Adjustments:
	Interest expense		9		—		18		—
	Depreciation expense		915		390		1,800		776
	Amortization expense		96		—		192		—
EBITDA			3,637		(24)		7,005		1,417
	Acquisition costs and other		—		—		—		—
	Asset impairments		—		233		—		233
	Stock-based compensation		11		136		18		167
	Restructuring and severance costs		—		427		—		427
Specialty Chemicals Segment Adjusted EBITDA		$	3,648	$	772	$	7,023	$	2,244
	% segment sales		12.6 %		5.2 %		12.4 %		7.6 %

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Synalloy Reports Strong Second Quarter 2022 Results