FWP 1 d594565dfwp.htm FREE WRITING PROSPECTUS

Roadshow Presentation Follow-on Equity Offering September 2013 Free Writing Prospectus Registration Statement No. 333-185064

Forward – Looking Statements 2 Statements in this presentation that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve risks and uncertainties that could cause actual outcomes and results to differ materially from those described in the forward-looking statements. We believe that the expectations represented by our forward-looking statements are reasonable, yet there can be no assurance that such expectations will prove to be correct. Furthermore, unless otherwise stated, the forward-looking statements contained herein are made as of the date of the presentation, and we do not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise unless required by applicable legislation or regulation. The forward-looking statements contained herein are expressly qualified by this cautionary statement. Readers are cautioned that these forward-looking statements involve certain risks and uncertainties, including those contained in filings with the U.S. Securities and Exchange Commission. Information regarding market and industry statistics contained in this presentation is based on information available to us that we believe is accurate. It is generally based on management estimates and publications that are not produced for investment or economic analysis. We have filed a registration statement with the Securities and Exchange Commission for the offering to which this communication relates. Before you invest, you should read the prospectus and the prospectus supplement in that registration statement and other documents we have filed with the Securities and Exchange Commission for more complete information about us and this offering. The risks and uncertainties described under the caption “Risk Factors” of the prospectus and the prospectus supplement included in the registration statement should be considered in evaluating the forward-looking statements. You may obtain these documents, and the documents incorporated by reference therein for free by visiting EDGAR on the Securities and Exchange Commission’s web site at www.sec.gov.

Over-allotment Option: ..……….. Offering Summary 3 Issuer: …………………………… Synalloy Corporation Ticker/Exchange: ……………….. SYNL / NASDAQ Issue: …………………………….. Offering Size: ….………………… Use of Proceeds: ……….……… approximately $3.5 million in new equipment for the CRI Facility, approximately $2.0 million in new equipment for the Company's fabrication facilities and to pay down the Company's line of credit Lock-Up Provision: ……………… 90 days Expected Pricing: ……………….. Week of September 23, 2013 Bookrunners: …………………….. Sterne Agee and BB&T Capital Markets To fund growth initiatives including 15%, all primary 1,500,000 shares of common stock, all primary Common Stock Follow-on

Today’s Presenters 4 President and CEO since January 2011 and Director of the Company since 2004 Previously Managing Director of Avitas Capital, LLC – Investment Banking and Private Equity Previously Founder, President and CEO, BIZPORT, Ltd. – Document Management Company 30 years experience in business management, financial operations, logistics, and management consulting MBA in Finance from Virginia Commonwealth University CFO and Vice President of Finance since June 2010 Previously served as Assistant Vice President of Finance of Synalloy Previously Divisional Vice President of Finance, Buffets, Inc.; Vice President of Accounting and Corporate Controller at Ryan’s Restaurant Group, Inc.; Senior Audit Team Member at PriceWaterhouse LLP B.S. from Indiana University at South Bend; currently holds CPA Craig C. Bram – President & CEO Richard D. Sieradzki – CFO & Vice President of Finance

Investment Highlights 5 Fabrication business in the early stages of a major turnaround with backlog up 225% since the beginning of 2013 Poised for improved pipe manufacturing pricing and profitability following a favorable anti-dumping ruling Recently acquired production capacity in the Specialty Chemicals segment New Metals segment manufacturing initiatives providing increased throughput and efficiencies Proven M&A Capability Disciplined M&A Strategy – experienced at the Management and Board levels Palmer of Texas acquired in August 2012 at approximately 5.5X trailing EBITDA, performing in line with expectations and contributing to increasing margins CRI acquired in August 2013, adding much needed capacity at a significant discount to replacement value and accretive in first year Advantageous Macro Environment Shale “revolution” resulting in low natural gas prices and setting the stage for increased infrastructure spending for the foreseeable future Already serving the growing domestic energy market, and focused on additional opportunities Repositioned for Growth Recent expansion of sales and marketing has lead to successful penetration of new end markets with strong growth characteristics The shift in sales has not only provided the foundation for strong revenue growth, it will generate the opportunity to fuel margin expansion Growing list of blue chip customers across both segments Conditions Ripe to Excel

Synalloy Overview 6 Company Overview Synalloy Metals Comprised of BRISMET, Synalloy Fabrication and Palmer Targets customers requiring materials which are: 3 Facilities totaling 520k sq. ft Comprised of Manufacturers Chemicals and CRI Tolling Produces specialty chemicals for a diverse set of industries Longstanding blue chip customer base Stable, attractive margins (1) LTM as of June 29, 2013. (2) Adjusted for non-cash items and for inventory gains/losses attributable to movement in nickel prices; Adjusted EBITDA is a non-GAAP metric – see Appendix for reconciliation tables. Synalloy Chemicals Diversified industrial manufacturer of metal and specialty chemical products sold into a wide range of end markets Revenues (1) : $217.5MM Adjusted EBITDA (1)(2) : $17.9MM Approximately 600 employees Founded in 1945 and headquartered in Spartanburg, SC Business Segments • Corrosion-resistant • Suitable for high-purity processes • Over 1,100 specialty formulations

Our Products and Services 7 Stainless Steel Pipes Titanium Pipes Super Duplex Pipes Nickel Alloy Pipes Bending X-Ray Heat Treating Freight/ Logistics Fiberglass Tanks Steel Tanks Field Erected Tanks Tank Accessories Sulfated Derivatives Additives Lubricants Defoamers Dry Blending High Viscosity Liquid Mixing Dispersions

Oil and Gas Select End Markets Served 8 Metals Segment Power Chemicals Water/Waste Water Specialty Chemicals Segment Agricultural Metal Working Paper Petroleum & Mining

Experienced Management Team 9 Title Years of Experience Craig Bram President and CEO 30+ Richard Sieradzki CFO and Vice President of Finance 35+ Kyle Pennington President – Synalloy Metals 25+ John Tidlow Executive Vice President – Synalloy Fabrication 25+ Kevin Hrebenar Executive Vice President of Operations – Synalloy Chemicals 25+ Greg Gibson 20+ Executive Vice President of Sales – Synalloy Chemicals

BRISMET – Overview 11 North American leader in welded stainless steel and special alloy pipe production Operates a 190,000 square- foot facility in Bristol, TN Produces welded pipe sizes from ½” to 120” Capabilities Forming X-Ray / Testing End Preparation Surface Finishing Heat Treatment Welding Cold Working / Plannishing Diverse equipment capabilities to provide large and small diameter pipe in a wide range of schedules/wall thicknesses, gauges and long lengths Stainless Steel Pipes Titanium Pipes Super Duplex Pipes Nickel Alloy Pipes Product Overview Business Overview

BRISMET – Key Relationships 12 Customer Breakdown End Markets 40% 25% 20% 5% 5% 5% Oil & Gas Power/Energy Chemical Pulp & Paper Mining Water/Waste Water 71% 63% 55% 29% 37% 45% 0% 25% 50% 75% 100% 2010 2011 2012 Top 10 Other

Synalloy Fabrication – Overview 13 Comprised of BristolFab and, its sister company, Ram-Fab LLC Provides complete turn-key pipe fabrication solutions across a wide variety of market segments Fabrication capabilities from 1/2” to 144” (12.7 millimeters to 4 meters) in diameter Combined union and non-union fabrication capabilities allow for comprehensive fabrication offerings for both domestic and international projects Services include: Modular Construction, OEM Services, and Commercial Bonding Business Description Industry leader in high nickel alloy, stainless steel, carbon and chrome pipe fabrication for over 40 years Bristol, Tennessee Crossett, Arkansas Capabilities Cutting / Forming / Bending Warehousing Freight Logistics Surface Finishing Heat Treatment Painting X-Ray

Synalloy Fabrication – Key Relationships 14 End Markets Customer Breakdown 50% 15% 15% 10% 10% Chemicals Water & Waste Water Oil & Gas Mining Power & Energy Pulp & Paper 87% 92% 91% 13% 8% 9% 0% 25% 50% 75% 100% 2010 2011 2012 Top 10 Other

Palmer of Texas – Overview 15 Fiberglass Tanks Steel Tanks Field Erected Tanks Tank Accessories Strategically located in the heart of the Permian Basin in West Texas with direct access to emerging shale oil plays, Palmer is able to provide customers with the majority of their tank battery Capabilities On-site Delivery / Setup Drafting / Engineering Field Services Painting / Coating Operates a 125,000 square- foot facility situated on 20 acres in Andrews, TX Produces fiberglass and steel tanks for 50 to 1,000 barrels of volume Product Overview Business Overview Industry leader in manufacturing fiberglass and steel liquid storage tanks and separation equipment

Palmer of Texas – Permian Focused 16 Key Relationships Increasing End Market Demand The Permian Basin accounts for two-thirds of oil production in Texas and approximately 15% of the entire United States 2012 Permian Basin production was 1.25 million bbl/d and is expected to grow to 1.85 million bbl/d by 2015 and to 3.5 million bbl/d by 2025 (1) Over 492 rigs (~25% of US total) are operating in the Permian Basin (1) (1) U.S. Energy Information Administration 2013 Short-Term Energy Outlook Report.

Synalloy Metals – Drivers of Growth Automated steel tank line will be fully operational by the end of 2013, increasing production by approximately 30% 17 Palmer’s Steel Production Capacity Ramping Up Oil & Gas Demand in Palmer’s Immediate Area Receipt of Pressure Vessel Certification Will open up numerous additional clients who want to purchase tanks and pressure vessels from a single vendor Horizontal drilling technology and higher oil prices are driving a shale oil drilling boom in the Permian Basin and Eagle Ford Shale, increasing the need for tanks Anti-Dumping Ruling Potential Nickel Price Appreciation Nickel prices are currently at 2009 recessionary levels, where 30% of the world’s production is unprofitable, indicating potential for price increases Improving prices and margins following the soon to be implemented duty increases on imported pipe from Asian countries Strong Backlog Improving Conversion Margins Conversion margins on current backlog have improved substantially over prior years Current backlog is at a historical high - $63 million Favorable Natural Gas Price Environment Early stages of increased infrastructure spending due to lower natural gas prices from the shale “revolution”

Synalloy Chemicals – Overview 19 One of the largest custom chemical formulators in the U.S. with attractive, stable margins and longstanding customer relationships Select Products & Services Combines state of the art equipment and the most advanced technology to provide a wide variety of specialty chemicals for customers across over 20 industries Full service Chemical Manufacturer with high- temperature reaction vessels, extensive blending and mixing vessels, powder blending capabilities and a variety of methods for particle size reduction Business Overview Manufacturers Chemicals CRI Tolling High quality toll manufacturer that provides outside manufacturing resources including high viscosity mixing, liquid mixing, dispersions, wet milling, filtration & purification, liquid mixing, dispersions, and dry bulk bagging Dispersions Additives Lubricants Liquid Mixing 125,000 sq. ft. facility – Cleveland, TN 135,000 sq. ft. facility – Fountain Inn, SC

Key Relationships 20 Contract vs. Non-Contract Sales (1) (1) Data as of December 31, 2012. 60% 20% 20% Contract Manufacturing Intermediate Sales Direct Sales Manufacturers Chemicals Customer Breakout 55% 53% 56% 45% 47% 44% 0% 25% 50% 75% 100% 2010 2011 2012 Top 10 Other

Drivers of Growth 21 Represents a small percentage of total sales for the Specialty Chemicals group, with opportunities to penetrate the market with existing product lines Agriculture Mining Heavy users of defoamers and dust inhibitors with excellent potential to grow sales of existing products Existing Customers Sale of existing products to CRI customers Commercialization of late-stage development phase products at CRI Oil & Gas Substantially larger volume requirements than current customers of the Specialty Chemicals group with higher gross margins Product Development

Financial Overview

Consolidated Historical Financial Performance 23 $151.1 $170.6 $197.7 $217.5 $0 $50 $100 $150 $200 $250 2010 2011 2012 LTM 6/29/2013 Revenue Gross Profit (1) Net Income Adjusted EBITDA (1) $4.0 $5.8 $4.2 $5.2 $0 $2 $4 $6 $8 2010 2011 2012 LTM 6/29/2013 Note: Dollars in millions. (1) Adjusted for non-cash items and for inventory gains/losses attributable to movement in nickel prices; Adjusted EBITDA is a non-GAAP metric – see Appendix for reconciliation tables. 5.2% 7.7% 8.1% 8.2% Adj. EBITDA Margin 9.8% 13.3% 13.4% 13.6% Gross Profit Margin $14.9 $26.6 $0 $12 $18 $24 $30 2010 2011 2012 LTM 6/29/2013 $7.8 $13.1 $16.0 $17.9 $0 $10 $15 $20 2010 2011 2012 LTM 6/29/2013

Summary Balance Sheet 24 ($ in 000s) 6/29/2013 12/31/2012 Cash $143 $1,085 Current Assets 102,719 89,837 Long-term Assets 58,272 57,585 Total Assets $161,134 $148,507 Current Liabilities $29,620 $24,553 Other Liabilities 55,996 52,180 Total Liabilities 85,616 76,733 Shareholders' Equity 75,519 71,774 Total Liabilities and Shareholders' Equity $161,134 $148,507

Pro Forma Capitalization 25 (1) Assumes the issuance of 1,500,000 shares of common stock at recent price of $16.02 per share, the receipt of $22.4MM of net proceeds, and the use of $3.5 million to purchase new equipment for the CRI Facility, $2.0 million to purchase new equipment for the our fabrication facilities, and remaining amounts to pay down our line of credit. June 29, 2013 Adjustments for As Adjusted for As Adjusted for CRI ($ in 000s) Actual CRI Acquisition CRI Acquisition Acquisition and Offering (1) Cash and cash equivalents $143 -- $143 $143 Long term debt, including current portion: Line of credit $23,399 $869 $24,268 $7,335 Term loan 20,625 -- 20,625 20,625 Mortgage and equipment loan -- 4,033 4,033 4,033 Total long term debt 44,024 4,902 48,926 31,993 Shareholder's Equity: Common stock, $1.00 par value; 12,000,000 shares authorized; 8,000,000 shares issued and 6,382,800 shares outstanding (actual) and 9,500,000 shares issued and 7,882,800 shares outstanding (as adjusted) 8,000 -- 8,000 9,500 Capital in excess of par value 1,545 -- 1,545 22,478 Retained earnings 80,215 -- 80,215 80,215 Cost of common stock in treasury (1,617,200 shares) (14,241) -- (14,241) (14,241) Total Shareholder's Equity 75,519 -- 75,519 97,952 Total Capitalization $119,543 $4,902 $124,445 $129,945

Investment Highlights 26 Fabrication business in the early stages of a major turnaround with backlog up 225% since the beginning of 2013 Poised for improved pipe manufacturing pricing and profitability following a favorable anti-dumping ruling Recently acquired production capacity in the Specialty Chemicals segment New Metals segment manufacturing initiatives providing increased throughput and efficiencies Proven M&A Capability Disciplined M&A Strategy – experienced at the Management and Board levels Palmer of Texas acquired in August 2012 at approximately 5.5X trailing EBITDA, performing in line with expectations and contributing to increasing margins CRI acquired in August 2013, adding much needed capacity at a significant discount to replacement value and accretive in first year Advantageous Macro Environment Shale “revolution” resulting in low natural gas prices and setting the stage for increased infrastructure spending for the foreseeable future Already serving the growing domestic energy market, and focused on additional opportunities Repositioned for Growth Recent expansion of sales and marketing has lead to successful penetration of new end markets with strong growth characteristics The shift in sales has not only provided the foundation for strong revenue growth, it will generate the opportunity to fuel margin expansion Growing list of blue chip customers across both segments Conditions Ripe to Excel

Appendix

Adjusted EBITDA Reconciliation 28 Consolidated Net Income $4.0 $5.8 $4.2 $5.2 Adjustments: Interest Expense 0.1 0.1 0.6 1.2 Change in Fair Value of Interest Rate Swap - - 0.1 (0.5) Tax Provision 2.1 3.0 2.1 2.6 Depreciation 2.6 2.6 2.9 3.2 Amortization - - 0.6 1.3 Inventory Loss (Gain) (1.0) 1.6 4.6 4.0 Acquisition Costs - - 0.9 0.9 Adjusted EBITDA $7.8 $13.1 $16.0 $17.9 LTM 2010 2011 2012 6/29/2013

Adjusted EBITDA Reconciliation 29 Metals Segment Net Income $3.7 $9.3 $6.1 $7.0 Adjustments: Interest Expense - - - - Change in Fair Value of Interest Rate Swap - - - - Tax Provision - - - - Depreciation 2.1 2.1 2.2 2.5 Amortization - - 0.6 1.3 Inventory Loss (Gain) (1.0) 1.6 4.6 4.0 Acquisition Costs - - - - Adjusted EBITDA $4.8 $13.0 $13.5 $14.8 LTM 2010 2011 2012 6/29/2013

Adjusted EBITDA Reconciliation 30 Chemicals Segment Net Income $4.0 $2.2 $4.8 $5.5 Adjustments: Interest Expense - - - - Change in Fair Value of Interest Rate Swap - - - - Tax Provision - - - - Depreciation 0.4 0.4 0.5 0.5 Amortization - - - - Inventory Loss (Gain) - - - - Acquisition Costs - - - - Adjusted EBITDA $4.4 $2.6 $5.3 $6.0 LTM 2010 2011 2012 6/29/2013

Adjusted EBITDA Reconciliation 31 Unallocated Corporate Net Income ($3.7) ($5.7) ($6.7) ($7.3) Adjustments: Interest Expense 0.1 0.1 0.6 1.2 Change in Fair Value of Interest Rate Swap - - 0.1 (0.5) Tax Provision 2.1 3.0 2.1 2.6 Depreciation 0.1 0.1 0.2 0.2 Amortization - - - - Inventory Loss (Gain) - - - - Acquisition Costs - - 0.9 0.9 Adjusted EBITDA ($1.4) ($2.5) ($2.8) ($2.9) LTM 2010 2011 2012 6/29/2013