What changed in this filing

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Item 1. Business

2023-03-31 compared with 2022-03-29 · 41 added, 41 removed, 62 unchanged (57% of the section changed)

Synalloy Corporation, a Delaware corporation, was incorporated in 1958 as the successor to a chemical manufacturing business founded in 1945.

Its charter is perpetual.

The name was changed on July 31, 1967 from Blackman Uhler Industries, Inc.

The Company's executive office is located at 4510 Cox Road, Suite 201, Richmond, Virginia 23060.

Unless indicated otherwise, the terms "Synalloy", "Company," "we" "us," and "our" refer to Synalloy Corporation and its consolidated subsidiaries.

The Company's business is divided into two reportable operating segments, the Metals Segment and the Specialty Chemicals Segment.

The Metals Segment operates as three reporting units that include Bristol Metals, LLC ("BRISMET") and American Stainless Tubing, LLC ("ASTI") (collectively "Welded Pipe & Tube"), Palmer of Texas Tanks, Inc.

("Palmer"), and Specialty Pipe & Tube, Inc.

("Specialty").

The Metals Segment serves markets through pipe and tube and customers in the appliance, architectural, automotive and commercial transportation, brewery, chemical, petrochemical, pulp and paper, mining, power generation (including nuclear), water and waste-water treatment, liquid natural gas ("LNG"), food processing, pharmaceutical, oil and gas and other industries.

The Specialty Chemicals Segment operates as one reporting unit which includes Manufacturers Chemicals, LLC ("MC"), a wholly-owned subsidiary of Manufacturers Soap and Chemical Company ("MS&C"), CRI Tolling, LLC ("CRI") and DanChem Technologies, Inc ("DanChem").

Ascent Industries Co.

is an industrials company focused on the production and distribution of industrial tubular products including stainless steel and galvanized pipe and tube, seamless carbon pipe and tube, and specialty chemicals.

Ascent Industries Co.

was incorporated in 1958 as the successor to a chemical manufacturing business founded in 1945 known as Blackman Uhler Industries Inc.

On August 5, 2022, we filed with the Secretary of State of the State of Delaware a Certificate of Amendment to our Certificate of Incorporation to change our corporate name from Synalloy Corporation to Ascent Industries Co., effective August 10, 2022.

The Company's executive office is located at 1400 16th Street, Suite 270, Oak Brook, Illinois 60523.

Unless indicated otherwise, the terms "Ascent", "Company," "we" "us," and "our" refer to Ascent Industries Co.

and its consolidated subsidiaries.

The Company's business is divided into two reportable operating segments, Tubular Products and Specialty Chemicals.

The Tubular Products segment serves markets through pipe and tube and customers in the appliance, architectural, automotive and commercial transportation, brewery, chemical, petrochemical, pulp and paper, mining, power generation (including nuclear), water and waste-water treatment, liquid natural gas ("LNG"), food processing, pharmaceutical, oil and gas and other industries.

The Specialty Chemicals segment produces specialty products for the pulp and paper, coatings, adhesives, sealants and elastomers (CASE), textile, automotive, household, industrial and institutional ("HII"), agricultural, water and waste-water treatment, construction, oil and gas and other industries.

Metals Segment – The segment is comprised of four wholly-owned subsidiaries:

Synalloy Metals, Inc., which owns 100% of the membership interests of BRISMET, located in Bristol, Tennessee and Munhall, Pennsylvania;

Tubular Products – Tubular Products is comprised of BRISMET, located in Bristol, Tennessee and Munhall, Pennsylvania;

ASTI, located in Troutman and Statesville, North Carolina;

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Pipe is normally produced in standard 20-foot lengths, although BRISMET also has capabilities in the production of pipe without circumferential welds in lengths up to 60 feet.

BRISMET is one of the few domestic producers capable of making pipe in 48-

foot lengths up to 36 inches in diameter.

BRISMET is one of the few domestic producers capable of making pipe in 48-foot lengths up to 36 inches in diameter.

Additionally, BRISMET's Munhall facility manufactures ornamental stainless tube and galvanized carbon tube, as well as similar stainless pipe products as produced at the Bristol facility.

As of December 31, 2022, the Company made the decision to pursue an exit of the galvanized steel pipe and tube business at its Munhall facility.

The Company is in the process of winding down operations and expects to permanently cease the production of galvanized steel pipe and tube in the first half of 2023.

ASTI is a leading manufacturer of high-end ornamental stainless steel tube, supplying the automotive, commercial transportation, marine, food services, construction, furniture, healthcare, and other industries.

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Palmer is a manufacturer of fiberglass and steel storage tanks for the oil and gas, waste water treatment and municipal water industries.

As discussed in Note 4 , on February 17, 2021 the Board of Directors authorized the permanent cessation of operations at Palmer and the subleasing of the Palmer facility.

As of December 31, 2021, the Company permanently ceased operations and is in the process of divesting all remaining assets at the facility.

The operating results of our Palmer business in Andrews, Texas, currently held for sale, are included within the Tubular Products segment for all periods presented in this annual report.

Palmer will be removed from the segment beginning in the first quarter of 2023.

Specialty is a leading master distributor of hot finish, seamless, carbon steel pipe and tube, with an emphasis on large outside diameters and exceptionally heavy wall thickness.

1 unchanged sentence

Operating from facilities located in Mineral Ridge, Ohio and Houston, Texas, Specialty is well-positioned to serve the major industrial and energy regions in the United States.

Specialty performs value-added processing on a majority of products shipped and typically processes and ships orders in 24 hours or less.

Specialty performs value-added processing on a majority of products shipped and

typically processes and ships orders in 24 hours or less.

Specialty plays a critical role in the domestic supply chain, by maintaining a diverse inventory of hard to find sizes of pipe and tube that support critical infrastructure applications across the United States.

At any given time, the Metals Segment relies on approximately 5 suppliers that furnish approximately 77% of total dollar purchases of raw materials and one supplier that furnishes 32% of total material purchases.

The majority of raw materials used by the segment are available from numerous independent suppliers and approximately 65% of total purchases are from its top 5 suppliers.

The Company does not anticipate that the loss of this supplier would have a materially adverse effect on the Company as raw materials are readily available from a number of different sources, and the Company anticipates no difficulties in fulfilling its requirements.

Specialty Chemicals Segment – The segment consists of the Company's three production facilities located in Cleveland, Tennessee, Fountain Inn, South Carolina and Danville, Virginia.

MC, CRI and DanChem are aggregated as one reporting unit and comprise the Specialty Chemicals Segment.

MC and CRI produce specialty formulations and intermediates for use in a wide variety of applications and industries.

MC's primary product lines focus on the production of defoamers, surfactants, and lubricating agents.

MC and CRI's end users include companies that supply agrochemical paper, metal working, coatings, water treatment, paint, mining, oil and gas, and janitorial and other applications.

MC's and CRI's sulfation products represent a renewable resource and are alternatives to non-renewable petroleum derivatives.

DanChem provides dedicated contract manufacturing services, as well as operating a multi-purpose plant with the ability to process a variety of difficult to handle materials including flammable solvents, viscous liquids and granular solids.

DanChem has long-term relationships with a number of leading chemical companies that outsource their manufacturing production to DanChem allowing those customers to reach their target markets quicker.

The Specialty Chemicals Segment maintains three laboratories for applied research and quality control which are staffed by 18 employees, including multiple chemists.

Specialty Chemicals – Specialty Chemicals consists of the Company's three production facilities located in Cleveland, Tennessee, Fountain Inn, South Carolina and Danville, Virginia.

The segment produces specialty formulations and intermediates for use in a wide variety of applications and industries with primary product lines focusing on the production of defoamers, surfactants, and lubricating agents.

End users include companies that supply agrochemical paper, metal working, coatings, water treatment, paint, mining, oil and gas, and janitorial and other applications.

The segments sulfation products represent a renewable resource and are alternatives to non-renewable petroleum derivatives.

The segment also provides dedicated contract manufacturing services, as well as operating a multi-purpose plant with the ability to process a variety of difficult to handle materials including flammable solvents, viscous liquids and granular solids.

The segment has long-term relationships with a number of leading chemical companies that outsource their manufacturing production to our production facilities allowing those customers to reach their target markets quicker.

The majority of raw materials used by the segment are available from numerous independent suppliers and approximately 31% of total purchases are from its top 5 suppliers.

1 unchanged sentence

See Note 13 to the consolidated financial statements, which are included in Item 8 of this Form 10-K, for financial information about the Company's segments.

Metals Segment – The Metals Segment utilizes a sales force comprised of inside sales employees, outside sales employees and independent manufacturers' representatives.

Tubular Products – The Tubular Products segment utilizes a sales force comprised of inside sales employees, outside sales employees and independent manufacturers' representatives.

The segment's products are sold to various distributors, OEM and end use customers.

There were no customers representing more than 10% of the Metals Segment's revenues for 2021 or 2020, respectively.

Specialty Chemicals Segment – Specialty chemicals are sold directly to various industries nationwide by sales representatives comprised of outside sales employees and independent manufacturers' representatives.

There were no customers representing more than 10% of the Tubular Products segment's revenues for 2022 or 2021, respectively.

Specialty Chemicals – Specialty chemicals are sold directly to various industries nationwide by sales representatives comprised of outside sales employees and independent manufacturers' representatives.

The Specialty Chemicals segment has one customer that accounted for approximately 21% of the segment's revenues for 2022 and 15% of the segment's revenues for 2021.

2 unchanged sentences

On October 22, 2021, the Company completed the acquisition of all of the issued and outstanding shares of common stock of DanChem Technologies, Inc.

The purpose of the transaction was to accelerate product development capabilities and provide entrance into new end-markets and applications within the Chemicals segment.

The purpose of the transaction was to accelerate product development capabilities and provide entrance into new end-markets and applications within the Specialty Chemicals segment.

The purchase price was $32.95 million before adjustments for working capital, transaction expenses, cash and debt.

The tangible assets purchased and liabilities assumed from DanChem included accounts receivable, inventory, equipment, real property and accounts payable.

See Note 2 for additional information on the DanChem acquisition.

Environmental

1 unchanged sentence

Liabilities are recorded when environmental assessments and/or cleanups are probable and the costs of these assessments and/or cleanups can be reasonably estimated.

Changes to laws and environmental issues, including climate change, are made or proposed with some frequency and some of the proposals, if adopted, might directly or indirectly result in a material reduction in the operating results of one or more of our operating units.

Changes to laws and environmental issues, including climate change, are made or proposed with some frequency and some of the proposals, if adopted, might directly or

indirectly result in a material reduction in the operating results of one or more of our operating units.

We are presently unable to quantify this risk.

The Company's businesses and products are generally not subject to seasonal impacts that result in significant variations in revenues from one quarter to another.

The Metals Segment's Welded Pipe & Tube Operations and the Specialty Chemicals Segment incur a significant dollar value of committed orders in advance of production.

The backlog of open orders for the Welded Pipe & Tube Operations were $91.5 million and $40.8 million at the end of 2021 and 2020, respectively.

The backlog of open orders for the Tubular Products segment were $49.8 million and $91.5 million at the end of 2022 and 2021, respectively.

The backlog of open orders for the Specialty Chemicals segment were $10.4 million and $12.9 million at the end of 2022 and 2021, respectively.

3 unchanged sentences

The health and safety of our workforce is fundamental to the success of our business.

We have a long-standing commitment to the safety and health of every employee that works in our facilities.

We are working to eliminate all injuries and incidents and our employees are making a daily commitment to follow safe work practices, look out for the safety of co-workers and ensuring safe working conditions for all employees.

We provide our employees upfront and ongoing safety training to ensure that safety policies and procedures are effectively communicated and implemented.

Personal protective equipment is provided to employees to safely perform their job responsibilities.

Because our business involves the manufacturing of physical products, many of our employees are unable to work from home.

In an effort to keep our employees safe and maintain operations during the COVID-19 pandemic, we have implemented new health-related measures, including social distancing, restrictions on visitors to our facilities, limiting in-person meetings and other gatherings, limiting company travel, increasing cleanings of our facilities and providing personal protective equipment and disinfecting agents to employees.

Talent Management

2 unchanged sentences

Factors that may affect our ability to attract and retain qualified employees include competition from other employers, availability of qualified individuals and opportunities for employee growth.

As of December 31, 2021, the Company had 707 employees, of which 638 were full-time employees.

As of December 31, 2022, the Company had 698 employees, all of which were full-time employees.

The Company considers relations with employees to be strong.

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We monitor employee turnover rates by plant and the Company as a whole.

The average employee tenure is approximately 8 years and we believe is driven by our competitive total rewards package offered to employees and development opportunities which promotes longer employee tenure.

The average employee tenure is approximately 7 years.

We believe our competitive total rewards package offered to employees and development opportunities help attract talent and promotes longer employee tenure.

Total Rewards

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The Company electronically files with the Securities and Exchange Commission ("SEC") its annual reports on Form 10-K, its quarterly reports on Form 10-Q, its periodic reports on Form 8-K, amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934 (the "1934 Act"), and proxy materials pursuant to Section 14 of the 1934 Act.

The SEC maintains a site on the internet, www.sec.gov , which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

The Company also makes its filings available, free of charge, through its Web site, www.synalloy.com , as soon as reasonably practical after the electronic filing of such material with the SEC.

The information on the Company's Web site is not incorporated into this Annual Report on Form 10-K or any other filing the Company makes with the SEC.

The SEC maintains a site on the internet at www.sec.gov which contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

The Company also makes its filings available, free of charge, through its website at www.ascentco.com as soon as reasonably practical after the electronic filing of such material with the SEC.

The information on the Company's website is not incorporated into this Annual Report on Form 10-K or any other filing the Company makes with the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business