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Synalloy Corporation (SYNL) saw its loss narrow to $1.44 million in the quarter ended compared with $18.97 million, a year ago. On an adjusted basis, net loss from continuing operations for the quarter stood at $1.43 million, or $0.17 a share compared with a net profit of $0.18 million, or $0.02 a share in the last year period.
Revenue during the quarter dropped 7.07 percent to $33.05 million from $35.56 million in the previous year period. Total expenses were 1.41 percent of quarterly revenues, up from 49.07 percent for the same period last year.
However, the adjusted EBITDA for the quarter stood at negative $0.79 million compared with $1.80 million in the prior year period. At the same time, adjusted EBITDA margin stood at negative 2.39 percent for the quarter compared to 5.06 percent in the last year period.
"We believe that Q4 will mark a positive turning point for both of Synalloy's operating segments," said Craig Bram, president and chief executive officer. "The Chemical Segment has weathered the loss of its largest customer, losing approximately $7 million in annual revenue over the past three quarters. Through the addition of smaller accounts and an increased emphasis on cost control, the impact to Adjusted EBITDA was much less significant. Adjusted EBITDA in Q4 of 2016 was essentially flat with Q4 of 2015 and down only $623,000 for the year. Adjusted EBITDA margins actually improved by 150 basis points in Q4 and 170 basis points for the year. Year over year comparisons should turn favorable in Q2 of this year."
For fiscal year 2017, Synalloy Corporation expects revenue to be $184 million. The company forecasts net income to be $4.30 million.
Working capital increases
Synalloy Corporation has recorded an increase in the working capital over the last year. It stood at $64.73 million as at Dec. 31, 2016, up 11.03 percent or $6.43 million from $58.30 million on Dec. 31, 2015. Current ratio was at 2.98 as on Dec. 31, 2016, down from 3.19 on Dec. 31, 2015.
Days sales outstanding went up to 25 days for the quarter compared with 23 days for the same period last year.
Debt comes down significantly
Synalloy Corporation has recorded a decline in total debt over the last one year. It stood at $8.80 million as on Dec. 31, 2016, down 68.49 percent or $19.14 million from $27.94 million on Dec. 31, 2015. Total debt was 6.35 percent of total assets as on Dec. 31, 2016, compared with 18.75 percent on Dec. 31, 2015. Debt to equity ratio was at 0.10 as on Dec. 31, 2016, down from 0.29 as on Dec. 31, 2015. Interest coverage ratio improved to 304.70 for the quarter from 169.92 for the same period last year.
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