The Wall Street Analyzer CEO Interview Series
NEW YORK, May 09, 2018 (GLOBE NEWSWIRE) — The Wall Street Analyzer recently conducted an interview with Synalloy’s (NASDAQ:SYNL) CEO Craig Bram and CFO Dennis Loughran. During their conversation Synalloy’s management went over recent trends in their metals and chemicals divisions, the company’s growth strategy, and upcoming milestones for the year. In terms of future growth, Bram stated that investors can expect to see a complimentary acquisition over the next 6 months.
Regarding their acquisition from last year in the metals sector, Bram said, “Going back to the acquisition of Marcegaglia last year the timing of that really couldn’t have been any better for us. Bristol Metals now has about 40% market share among domestic producers and we started the year anticipating about 56 million pounds of welded stainless steel pipe and tube shipments for this year. That would have been up from about 49 million pounds last year. And with our revised forecast – we would now expect to be somewhere between 65 and 70 million pounds of product in 2018.”
Synalloy also expects improvement in their chemical division which saw a slight decline in operating income. Bram elaborated, “We’ve got several products that involve an AKD wax, which provides the coating protection on paper, particularly cartons for things such as orange juice products. So, there is a wide range of new products. We’ve got some oil and gas downhole opportunities that we’re working on as well. We’re pretty bullish when we look at the second half of 2018 for our Chemical Segment.”
CFO Dennis Loughran outlined SYNL’s current financial goals, which involve running a lean balance sheet. “On a prospective basis—you’d be looking at debt being just under 0.75 to 1.0 times EBITDA at the end of the year, excluding any acquisitions. We’ll run a little bit over one right now, but we have goals that, excluding any acquisitions, we’ll have that number down under 1.0 by the end of the year…So, we’re pretty conservative with our balance sheet working capital, and we’re in good position to hit that target.”
When asked about the Synalloy’s investment outlook, Bram concluded, “When we look at our peer group most of the companies in that space are trading in about eight times EBITDA. If you look at Synalloy and you take the midpoint of our new forecast, you’re talking $29 million for 2018. If you put an eight multiple on that and then back out the projected debts you wind up with a share price somewhere between $20 and $21. So we believe, even after the recent run up in the stock, that the stock is still undervalued based on what our expectations are for this year. And that doesn’t obviously reflect any acquisitions that we may complete in the coming 6 to 12 months period. So we think it’s still a very attractive value story and think that the institutional folks ought to be looking at it that way.”
Synalloy’s market cap at the close of trading on May 7, 2018 was $160.7 million. Current data suggests that the threshold for inclusion in the Russell 2000 when the ranking occurs at the close of trading on May 11, 2018 will be approximately $155 million.
Synalloy trades on the NASDAQ Global Market under the symbol SYNL. Synalloy is structured as a holding company, currently comprised of two major groups: Metals and Chemicals. Under the leadership of CEO Craig Bram and the Board of Directors, Synalloy is focused on a clear business strategy and is in a strong financial position that will allow us to pursue both organic growth and growth through acquisitions. We will continue to seek new opportunities to expand our existing businesses, as well as to pursue new businesses with attractive fundamentals.
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FORWARD LOOKING STATEMENTS
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as SYNL or its management “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates” or other words or phrases of similar import. Similarly, such statements in this release that describe the company’s business strategy, outlook, objectives, plans, intentions, or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements. These risks and uncertainties include, among other things, product price volatility, product demand, market competition, and risk inherent in the operations of a company. We assume no obligation to update any written or oral forward-looking statement made by us or on our behalf as a result of new information, future events or other factors.
CONTACT Synalloy, Inc Dennis Loughran, CFO (804) 822-3266 The Wall Street Analyzer Juan Costello, Senior Analyst 347-529-5734