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For years, Keith Raniere won glowing endorsements from the Hollywood actresses, millionaires and Ivy League graduates who studied his teachings during self-help classes offered by his company Nxivm.

Most of them have now distanced themselves from Mr. Raniere after he was convicted and sentenced to 120 years in prison for using Nxivm (pronounced NEX-ee-um) to commit sex trafficking and other crimes.

Among other things, a jury found that women in Nxivm were recruited under false pretenses to join a secret sorority that Mr. Raniere formed, where they were branded with his initials near their pelvises, groomed to be his sexual partners and kept in line with blackmail.

Still, despite trial evidence that Mr. Raniere possessed child pornography, manipulated his followers by keeping them starved and sleep-deprived and committed a long list of federal crimes, a handful of these recruits insist that Mr. Raniere changed the world for good. And now, they are unleashing a public campaign to undermine his conviction.

Last month, eight of his female supporters including a former actress, corporate lawyer and doctor released videos online that pushed back against the groups reputation as a sex cult, saying they consented to being branded and were never forced into sexual relationships with Mr. Raniere.

At a news conference on the day of Mr. Ranieres sentencing, his supporters defended their time with Nxivm. Their comments came after they watched a former Nxivm member tell the court that Mr. Raniere sexually abused her starting when she was 15 and he was 45 an allegation that Mr. Ranieres lawyers have never disputed.

The effort to exonerate Mr. Raniere was in keeping with how Nxivm had long dealt with its critics; former members who challenged Mr. Ranieres methods were shunned from the community and sometimes targeted with lawsuits that drove them into bankruptcy.

Nxivm lured recruits with its expensive Executive Success Programs, tapping into a desire for personal growth within elite circles. Around 18,000 people have taken its courses since 1998.

What made Nxivm an illegal enterprise, prosecutors said, was the fraud, extortion, immigration violations and sex crimes that took place over 15 years under Mr. Ranieres direction. A jury convicted Mr. Raniere on all counts after a six-week trial last year. Five women in his inner circle have also pleaded guilty to felony charges.

And yet, Mr. Raniere maintains a small and loyal following among people with careers in law, medicine and business. In letters to the court last month, Mr. Ranieres supporters touted their degrees from top universities.

Cults like going after people who are bright because they will represent the cult very well, said Rachel Bernstein, a therapist who specializes in treating former cult members. Intelligence is not a predictor of cult involvement.

Cult experts say it is not uncommon for followers to stand by a leader who has gone to prison or died. Clinging to the group may be more comforting than the prospect of leaving, which may require finding a job or reconciling with family and long-lost friends.

Theyre what we call true believers, said Janja Lalich, a sociologist and cult expert who has worked with Nxivm defectors. It shows the depth of their indoctrination and the extent to which they have internalized his rhetoric.

During the pandemic, Mr. Ranieres supporters regularly danced outside the Brooklyn jail where he was housed. They released a jailhouse phone call with Mr. Raniere as a podcast.

One vocal supporter of Mr. Raniere is Nicki Clyne, the former television actress from Battlestar Galactica who now describes herself as an advocate for criminal justice reform.

Ms. Clyne has said she was part of the secret womens group inside Nxivm called DOS, an acronym for a Latin phrase meaning Lord/Master of the Obedient Female Companions.

Trial witnesses testified that the group had a pyramid structure where lower-ranking women were referred to as slaves and overseen by female masters who reported to Mr. Raniere.

To honor their vow to the group, the women were regularly required to hand over what was known as collateral, including nude photographs or the rights to their financial assets, according to trial testimony.

Prosecutors said it was extortion and fraud. Former DOS members testified at trial that they obeyed Mr. Ranieres sexual orders under the fear that their collateral would be released.

Ms. Clyne was not charged, but prosecutors said in a court filing last month that she had directed some women inside DOS to delete the collateral from their computers and transfer it to hard drives stored with her lawyer. Ms. Clyne denied the allegation in an emailed statement.

Ms. Clyne is married to Allison Mack, the former television actress who is awaiting sentencing after she pleaded guilty to crimes stemming from her role as a top DOS recruiter. Prosecutors have called it a sham marriage to allow Ms. Clyne, a Canadian native, to stay in the United States.

Ms. Clyne said in her statement that the marriage was born from genuine love.

With regards to Mr. Raniere, she said: If I discover that predatory, underage sex took place, I will denounce it wholeheartedly and reconsider my views.

She and other followers of Mr. Raniere were now reviewing the trial evidence and keeping an open mind, she said.

In the videos released last month, Ms. Clyne and seven other former DOS members said they voluntarily participated in the master-slave relationship.

Everyones going like, if you say anything different than whats been said, then youre an idiot, youve been brainwashed, youve been abused, Sahajo Haertel, who describes herself on LinkedIn as a humanitarian and entrepreneur, said in one video.

But Mr. Ranieres supporters have gone further than just sharing their experiences: they have sought to publicly undermine confidence in the legal system by attacking the prosecutors, the victims and the judge who oversaw Mr. Ranieres trial.

Several showed up to the Brooklyn U.S. attorneys office in September with a video camera to ask prosecutors to sign an affidavit swearing that they followed due process. And last month, they filed a letter with the court that accused the government of tampering with evidence on Mr. Ranieres computer.

Mr. Ranieres lawyer, Marc Agnifilo, said during his clients sentencing that he did not believe the claim was valid and refused to file it himself, even after Mr. Raniere and his supporters asked him many, many times.

These publicity campaigns are distinct from the legal work in the case that has to be done, Mr. Agnifilo said in a statement.

Prosecutors have said Nxivm was financed largely by Clare Bronfman, an heiress to the Seagrams liquor fortune, who was sentenced to over six years in prison for her crimes on behalf of Nxivm.

Ronald Sullivan, a lawyer for Ms. Bronfman, said she was not funding the recent publicity effort.

None of Mr. Ranieres supporters testified at trial, which would have required them to answer questions under oath during cross-examination by prosecutors.

Ms. Clyne and another woman, Michele Hatchette, wrote in affidavits to the court last month that they chose not to testify because of threats from prosecutors. The judge dismissed the claim, saying there was scant and highly questionable evidence of any intimidation.

Ms. Hatchette appeared in a September television interview to defend Nxivm, saying, I think there is a difference between being branded and getting a brand.

But during the criminal investigation, Ms. Hatchette told prosecutors in interviews that she wanted to leave DOS after she was assigned to seduce Mr. Raniere, according to a court filing last month.

She only stayed, she told prosecutors, because of the material she had handed over as collateral, including letters addressed to the police that accused her siblings of abusing their children, the filing said.

In an emailed statement, Ms. Hatchette said: As a result of my experiences in DOS, I am a stronger, more confident woman than I ever thought I could be, and I have an unwavering trust in myself.

Mr. Ranieres relentless publicity campaign backfired with one longtime follower.

Ivy Nevares, 43, who dated Mr. Raniere, said in an interview that she decided to denounce him publicly after seeing the recent efforts to promote him. She said the attacks on his victims were abhorrent.

At Mr. Ranieres sentencing, Ms. Nevares told the court that she suffers from post-traumatic stress disorder after Mr. Raniere subjected her to indentured servitude during her nearly 17 years in Nxivm.

Pulled in by Mr. Ranieres teachings, Ms. Nevares moved from New York City to Nxivms headquarters near Albany, N.Y., where the group controlled her rent, her income and her work visa as a Mexican immigrant.

Mr. Raniere demanded she weigh 95 pounds and claimed his spiritual energy would kill him unless he had sex constantly, she told the court.

In early 2018, the government subpoenaed her to testify before a grand jury. On the advice of a lawyer provided by Ms. Bronfman, however, she invoked her Fifth Amendment right against self-incrimination, she said in the interview.

She left the group a few months later. It took her almost a year to stop viewing Mr. Raniere as a Jesus-type figure, she said. I was in the bubble of Nxivm for so long that I didnt know how I could navigate the world, she said.

Ms. Nevares said she wanted to warn the public about what she sees as efforts to rebuild Nxivm and Mr. Ranieres reputation.

If you want to go on believing hes God on Earth, thats fine, she said. But dont go around enrolling people into this very dangerous criminal organization.

Read more from the original source:
Nxivms Leader Is Guilty of Ugly Crimes. These Die-Hards Stand by Him. - The New York Times

Posted Fri, November 6th, 2020 1:48 pm by Andrew Hamm

This week we highlight cert petitions that ask the Supreme Court to review, among other things, conflicting lower-court decisions concerning a Trump administration rule that prohibits clinics that receive funds through the federal Title X program from providing referrals for abortion.

The Title X Family Planning Program provides grants to support health services, including cancer screening and pregnancy counseling. By statute, no Title X funds shall be used in programs where abortion is a method of family planning. In 2019, the Department of Health and Human Services issued its rule on the ground that [i]f a Title X project refers for abortion as a method of family planning, it is a program where abortion is a method of family planning. The previous rule had allowed Title X clinics to offer counseling regarding abortion and referrals upon request. Challengers of the rule claim that it will prevent providers from complying with requirements that all pregnancy counseling should be nondirective. The administration maintains that the rule resembles a 1988 rule that the Supreme Court upheld in Rust v. Sullivan. The petitions that ask the justices to resolve the legality of the rule come to the Supreme Court after the U.S. Court of Appeals for the 9th Circuit upheld the rule (American Medical Association v. Azar and Oregon v. Azar) and the en banc U.S. Court of Appeals for the 4th Circuit struck it down (Azar v. Mayor and City Council of Baltimore).

These and otherpetitions of the weekare below:

City of San Antonio, Texas v. Hotels.com, L.P.20-334Issue: Whether, as the U.S. Court of Appeals for the 5th Circuit alone has held, district courts lack[] discretion to deny or reduce appellate costs deemed taxable in district court underFed. R. App. P. 39(e).

American Medical Association v. Azar20-429Issues: (1) Whether the Department of Health and Human Services rule for the Title X family planning program which prohibits and compels certain pregnancy-related speech between a Title X provider and her patient, proscribing abortion-related information but requiring information about non-abortion options is arbitrary and capricious; (2) whether the rule violates the Title X appropriations act, which requires that all pregnancy counseling under Title X shall be nondirective; and (3) whether the rule violatesSection 1554 of the Affordable Care Act, which requires that HHS shall not promulgate any regulation that harms patient care in any one of six ways, including by interfer[ing] with communications between a patient and her provider.

Azar v. Mayor and City Council of Baltimore20-454Issues: (1) Whether the Department of Health and Human Services rule, which prohibits Title X projects from providing referrals for abortion as a method of family planning, falls within the agencys statutory authority; and (2) whether the rule is the product of reasoned decisionmaking.

HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association20-472Issue: Whether, in order to qualify for a hardship exemption underSection 7545(o)(9)(B)(i)of the Renewable Fuel Standards, a small refinery needs to receive uninterrupted, continuous hardship exemptions for every year since 2011.

GE Capital Retail Bank v. Belton20-481Issue: Whether provisions of the Bankruptcy Code providing for a statutorily enforceable discharge of a debtors debts impliedly repeal theFederal Arbitration Act.

Bess v. United States20-489Issues: (1) Whether10 U.S.C. 825, which allows a military commander to hand select members to sit on a general court-martial panel, as applied in Pedro Bess case in which an all-white panel convicted a Black defendant of sexual misconduct against a white woman violates the Fifth Amendment; and (2) whether the lower court erred in declining to remand Bess case for additional factfinding.

Freeman v. Wainwright20-490Issue: Whether the statute of limitations for filing a habeas petition begins when the new judgment entered following resentencing becomes final.

Stanley v. ExpressJet Airlines Inc.20-495Issues: (1) Whether, and under what circumstances, claims arising under federal statute are subject to the Railway Labor Acts mandatory arbitration requirement; and (2) whether the undue hardship inquiry in a Title VII case is an affirmative defense to liability.

Oregon v. Azar20-539Issues: (1) Whether the Department of Health and Human Services final rule which prohibits Title X providers from communicating certain abortion-related information to their patients and requires physical separation of Title X-funded care from healthcare facilities that provide abortion services or certain abortion-related information violates appropriations statutes requiring that all pregnancy counseling in the Title X program shall be nondirective; (2) whether the final rule violates Section 1554 of the Affordable Care Act, which prohibits HHS from promulgating any regulation that creates unreasonable barriers to obtaining appropriate medical care, impedes timely access to such care, interferes with patient-provider communications regarding a full range of treatment options, restricts providers from disclosing all relevant information to patients making health care decisions, or violates providers ethical standards; and (3) whether the final rule is arbitrary and capricious, in violation of the Administrative Procedure Act, including by failing to respond adequately to concerns that (a) the rule requires medical professionals to violate medical ethics and (b) the counseling restrictions and physical-separation requirement impose significant costs and impair access to care.

Posted in City of San Antonio, Texas v. Hotels.com, L.P., American Medical Association v. Azar, Azar v. Mayor and City Council of Baltimore, HollyFrontier Cheyenne Refining, LLC v. Renewable Fuels Association, GE Capital Retail Bank v. Belton, Bess v. U.S., Freeman v. Wainwright, Stanley v. ExpressJet Airlines Inc., Oregon v. Azar, Featured, Cases in the Pipeline

Recommended Citation: Andrew Hamm, Petitions of the week: Three cases testing the legality of a federal ban on abortion referrals, SCOTUSblog (Nov. 6, 2020, 1:48 PM), https://www.scotusblog.com/2020/11/petitions-of-the-week-three-cases-testing-the-legality-of-a-federal-ban-on-abortion-referrals/

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Petitions of the week: Three cases testing the legality of a federal ban on abortion referrals - SCOTUSblog

Methinks it was President Gerald Ford who, after being sworn in to replace the disgraced Richard Nixon, wearily pronounced in his 1974 inauguration, My fellow Americans, our long national nightmare is over.

It would be tempting for President-elect Joe Biden to say the same thing but: a) it would be poor form and would deepen the already profound divisions that threaten the nation and b) it would be just plain wrong.

When Nixon boarded Marine One and lifted off from the White House lawn some 46 years ago, we could rest assured that the unindicted Watergate co-conspirator would slink away quietly to rehabilitate his image and, thanks to Fords pardon, escape the clutches of federal prosecutors sharpening their knives and lying in wait.

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The nation wont be so lucky this time around. The long national nightmare of whats left of the Trump presidency will continue like a dreadful reality TV show that networks refuse to cancel because it attracts lots of eyeballs.

There are so many unanswered questions here: Will Trump concede? Will he cooperate with the transition? And, of course, the one concern on everyones mind: Where will the Trump presidential library be located and what will be inside it?

Worse yet, unlike Nixon, Trump will surely need a legal defense fund. It is not hard to imagine that Trump will resign shortly before President-elect Joe Bidens inauguration and that, after being sworn in for the briefest presidency in history, Vice President Mike Pence will pardon his ex-boss preemptively. But that wont stop local prosecutors such as New York Attorney General Letitia James, who said only a few days ago that she is continuing an investigation into the Trump family and the Trump Organization related to financial impropriety.

Furthermore, there is bound to be a barrage of civil lawsuits, in which case Trump cannot invoke the Fifth Amendment and will be forced to testify. Imagine the ratings. So no, our long national nightmare is anything but over. Its merely transitioning to the next hellish level.

Notwithstanding the complex web of problems confronting our nation, the reasons for Trumps demise itself are actually quite simple. Defeating an incumbent president is a terribly difficult feat to accomplish. The last time it happened was George H.W. Bush in 1992, and before that, Jimmy Carter in 1980. Unlike Trump, both Bush and Carter were weakened by credible primary challenges. Prior to 1980, the last time an incumbent president had been denied a second term was Herbert Hoover in the throes of the Great Depression in 1932.

Throwing out an incumbent president is a high hurdle not only because of the power of incumbency but because the vast majority of successful politicians understand the art of addition. They realize they need to build on their core group of supporters in order to have a more successful term in office and thereby grease the skids for re-election.

Trump, on the other hand, has practiced the science of subtraction. In his four years in office, he has made little effort to reach out to people who did not support him, though its worth noting that he did a little better this year with black males and Latino males than in 2016.

Be that as it may, Trump not only throws red meat to his followers at rallies and on his Twitter feed, but he routinely slaughters an entire cow and hurls it out to his salivating fans, while offending others who held their collective noses and voted for him four years ago. And his poor handling of the COVID-19 pandemic spoke directly to the question he asked wary voters in 2016: What the hell do you have to lose? The question has now been answered.

You cant belittle and insult entire groups and classes of people, blow up institutional norms, provide atrocious leadership in a crisis and then expect love in return. Politics doesnt work that way and neither does human nature.

Think about all the presidents and other political leaders and the inclusive language most of them try to use in their speeches. Have you ever heard Donald Trump say, for example, the aforementioned My fellow Americans ?

Trump has done a disservice to the nation by deepening the urban-rural divide. No matter who had emerged victorious, 40% of the country will still despise and resent the other 40% for the foreseeable future.

On the state level, Trump was soundly rejected in Connecticut by a margin of nearly 58-40%, losing six out of eight counties, winning onlyyou guessed itthe most rural: Litchfield and Windham.

Trumps coattails were not enough to push my former state representative Brian Ohler over the finish line in his rematch against Democrat Maria Horn in the Figthin 64th.

The five members of the states U.S House delegationDemocrats allwon handily. Democratic candidates for General Assembly celebrated gains up and down the ballot, as Senate Dems solidified their majority and their colleagues in the House appear to have done the same. The only questions now are whether Sen. Chris Murphy winds up in the Biden administration, and whether Gov. Ned Lamont, who will be 67 in January, will run for a second term.

State Republican Party chairman J.R. Romano, a strong Trump supporter, is packing it in, opting against pursuing a second five-year term. Good luck finding a replacement. It will likely be a thankless job.

Let this grim era of demonization in America begin to end here and now, Biden said in his victory speech. I pledge to be a president who seeks not to divide, but unify.

Im rooting for him and Vice President-elect Kamala Harris, whose historic election is a story in its own right, but Biden will be pushing up daisies before this grim era ends. The nation aches for their success.

Contributing op-ed columnist Terry Cowgill lives in Lakeville, blogs at CTDevilsAdvocate and is managing editor of The Berkshire Edge in Great Barrington, Mass. Follow him on Twitter @terrycowgill or email him at [emailprotected]

DISCLAIMER: The views, opinions, positions, or strategies expressed by the author are theirs alone, and do not necessarily reflect the views, opinions, or positions of CTNewsJunkie.com.

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OP-ED | It's Easy to Beat Trump, But Defeating Trumpism, Not So Much - CT News Junkie

RICHMOND, Va.--(BUSINESS WIRE)--Synalloy Corporation (Nasdaq: SYNL), today announced its results for the third quarter of 2020. Net sales for the third quarter of 2020 totaled $59.3 million. This represents a decrease of $14.4 million or 19.5% when compared to net sales for the third quarter of 2019. Net sales for the first nine months of 2020 were $200.1 million, a decrease of $37.1 million or 15.6% from net sales for the first nine months of 2019. Excluding the curtailed Palmer operations, sales in the third quarter were $58.7 million, down 13.7% from the third quarter of 2019 and net sales for the first nine months of 2020 were $195.1 million, down 7.8% from the previous year periods.

The team has done a good job managing the factors that are within our control given the challenges presented by the COVID-19 pandemic, the proxy contest, and a business cycle trough year for our largest subsidiary, Bristol Metals, said Craig Bram, Synalloys President and CEO. I am proud of how the Company has performed so far this year.

For the third quarter of 2020, the Company recorded a net loss of $10.5 million, or $1.16 diluted loss per share, compared to a net loss of $1.0 million, or $0.11 diluted loss per share for the third quarter of 2019. The third quarter of 2020 was negatively impacted by:

For the first nine months of 2020, the Company reported a net loss of $18.7 million, or $2.06 diluted loss per share. This compares to a net loss of $2.1 million, or $0.24 diluted loss per share for the first nine months of 2019. The first nine months of 2020 were negatively impacted by:

The Company also reports its performance utilizing two non-GAAP financial measures: Adjusted Net (Loss) Income and Adjusted EBITDA. The Company's performance, as calculated under the two measures, is as follows:

Both the Adjusted Net Income and Adjusted EBITDA metrics for the first nine months of 2020 include add-backs of the non-cash goodwill impairment of $10.7 million, $6.1 million in non-cash asset impairment charges for the Palmer operation, $3.1 million in costs associated with the Company's proxy contest as noted above and $0.7 million in costs associated with the hotline investigation regarding the accounting for Palmer and other matters, found within acquisition costs and other. These costs were added back due to the nature of the charges as one-time charges unrelated to the ongoing operations of the Company.

The Company's results are periodically impacted by factors that are not included as adjustments to our non-GAAP measures, but which represent items that help explain differences in period to period results. As mentioned above, operating losses at Palmer totaled $0.9 million and $3.6 million for the third quarter and first nine months of 2020, respectively. Additionally results were negatively impacted by inventory price change losses which, on a pre-tax basis, totaled $1.6 million and $5.5 million for the third quarter and first nine months of 2020, respectively.

The third quarter certainly had its challenges, but looking at the core operations of the Company, there was solid improvement over the third quarter of last year. First, we had to overcome a sales decline of $9.4 million from the third quarter of last year, excluding the Palmer business. Inventory price change losses in the third quarter were up $1.0 million over last year, with most of the losses occurring in July 2020. As expected, inventory price change results in September were break-even. With current surcharges, we expect to post inventory price change profits in the fourth quarter. Expenses associated with the proxy contest and the hotline investigation regarding the accounting for Palmer and other matters combined to lower pre-tax results in the third quarter of this year by $0.9 million. In last years third quarter, we realized a gain from adjusting the earn-out of $1.2 million, as compared with a gain of $0.1 million in the third quarter of this year. Also in this year's third quarter, we took a $10.7 million non-cash goodwill impairment charge. Excluding the Palmer operations and taking into account the aforementioned items, we showed a $1.9 million improvement in pre-tax income over the third quarter of last year. Achieving this on a sales decline of $9.4 million, speaks to the Companys cost cutting efforts over the past twelve months, said Mr. Bram.

Metals Segment

The Metals Segment's net sales for the third quarter of 2020 totaled $47.1 million, a decrease of $13.0 million or 21.7% from the third quarter of 2019. Excluding the Palmer business, net sales for the third quarter of 2020 totaled $46.5 million, a decrease of $8.0 million, or 14.7%, from the same quarter last year.

Net sales for the first nine months of 2020 totaled $159.8 million, a decrease of $36.0 million, or 18.4%, from the first nine months of 2019. Excluding the Palmer business, net sales for the first nine months of 2020 totaled $154.8 million, a decrease of $15.3 million, or 9.0%, from the first nine months of 2019.

Sales of heavy wall seamless carbon pipe and tube were down 31.7% from last years third quarter, while pounds were down 26.1%, primarily due to decreased demand in the oil and gas sector. On a year to date basis, this product line contributed $2.8 million in Adjusted EBITDA, before corporate allocations. This was after inventory price change losses of $1.4 million.

Sales of welded pipe and tube in the third quarter of this year were down 11.8% over the third quarter of last year, while pounds were down 17.6%, primarily due to decreased levels of North American consumption of stainless steel welded pipe and tube impacting the Bristol Metals subsidiary. On a year to date basis, welded pipe and tube contributed $7.5 million in Adjusted EBITDA, before corporate allocations. This was after inventory price change losses of $4.1 million.

The backlog for our subsidiary, Bristol Metals, LLC, as of September 30, 2020, was $24.1 million, a decrease of 18.3% when compared to the same period in 2019.

For our largest subsidiary Bristol Metals, 2020 has definitely been a trough year in the business cycle. Data from the Metals Service Center Institute (MSCI) shows that North American consumption of welded stainless-steel pipe is running at an annual pace of just over 93,000 tons in 2020, down about 5% from 2019. This volume is consistent with North American consumption during the previous trough of 2015-2016. During trough years, pricing gets very aggressive as manufacturers fight for critical volume. Bristol Metals has been successful so far this year in taking market share, with an increase of 210 basis points and shipments up about 3% over last year. Profitability between peak and trough years for welded stainless steel pipe is highly volatile. In the peak year of 2018, Bristol Metals contributed Adjusted EBITDA, before corporate overhead allocations, totaling $25.1 million. This was after inventory price change gains of $3.5 million. In the current trough year, Bristol Metals has contributed Adjusted EBITDA for the same nine-month period, before corporate overhead allocations, of $3.7 million. This is after inventory price change losses of $4.5 million, said Mr. Bram.

The Metals Segment's reported operating losses of $11.6 million for the third quarter of 2020 compared to operating income of $0.4 million for the third quarter of 2019. Excluding the Palmer business, operating losses for the third quarter of 2020 were $10.7 million as compared to operating income of $0.9 million for the same quarter last year.

For the first nine months of 2020, the Metals Segment reported operating losses of $19.8 million compared to operating income of $3.1 million for the same period of 2019. Excluding the Palmer business, operating losses were $16.2 million for the first nine months of 2020 as compared to operating income of $3.5 million for the same period of 2019.

Current quarter operating results were affected by nickel prices and resulting surcharges for 304 and 316 alloys. The third quarter of 2020 proved to be a more unfavorable environment than the third quarter of 2019, with net metal pricing losses of $1.6 million, compared to last year's $0.6 million in metal pricing losses. Net metal pricing losses for the first nine months of 2020 totaled $5.5 million, compared to $5.7 million in metal pricing losses for the same period of 2019.

In light of the decrease in the Company's market capitalization as of September 30, 2020, we concluded that a triggering event had occurred potentially indicating the fair value of certain reporting units was less than their carrying value as of September 30, 2020. Therefore, we performed a quantitative goodwill assessment as of September 30, 2020 that resulted in a non-cash goodwill impairment charge of $10.7 million in our Metals Segment.

"As some of our Metals peer group companies begin reporting their financial results for the September 30th ending quarter, it is apparent that the end markets that we serve have been challenging for everyone. Year over year sales for the quarter were down an average of 29% for our customers and down 33% for our suppliers," said Mr. Bram.

Specialty Chemicals Segment

Net sales for the Specialty Chemicals Segment in the third quarter of 2020 totaled $12.2 million, representing a $1.3 million or 9.9% decrease from the third quarter of 2019. Net sales for the first nine months of 2020 totaled $40.3 million, representing a $1.2 million, or 2.8%, decrease from the same period in 2019.

Operating income for the Specialty Chemicals Segment for the third quarter of 2020 was $1.1 million, an increase of $0.2 million from the same quarter of 2019. Operating income for the first nine months of 2020 totaled $3.5 million, an increase of $1.1 million over the same period of 2019. On a year to date basis, the Specialty Chemicals Segment contributed $5.5 million in Adjusted EBITDA, before corporate overhead allocations.

The U.S. specialty chemical industry continues to face significant downturns in demand due to weak industrial and manufacturing activities related to the COVID-19 pandemic. However, during the first nine months of 2020, the Specialty Chemicals Segment was able to demonstrate relative strength in sales by increasing production of hand sanitizer and cleaning aids to offset reduced production for the oil and gas industry. Additionally, the Specialty Chemicals Segments cost cutting efforts have generated a decrease in selling, general and administrative costs of $0.2 million and $0.6 million for the third quarter and first nine months of 2020, respectively. These cost cutting measures have allowed the Specialty Chemicals Segment to generate increased profits on lower sales volume.

Other Items

Unallocated corporate expenses for the third quarter of 2020 decreased $0.9 million or 35.6% to $1.5 million (2.6% of sales) compared to $2.4 million (3.2% of sales) for the same period in the prior year. The third quarter decrease resulted primarily from lower professional fees, incentive bonuses, and travel expenses in the period.

Interest expense was $0.5 million and $0.9 million for the third quarter of 2020 and 2019, respectively. The decrease was related to lower average debt outstanding in the third quarter of 2020 compared to the third quarter of 2019.

The effective tax rate was 19.4% and 10.6% for the three months ended September 30, 2020 and September 30, 2019, respectively, resulting in a tax benefit of $2.5 million and $0.1 million, respectively. The September 30, 2020 effective tax rate was approximately equal to the U.S. statutory rate of 21.0%.

The effective tax rate was 24.4% and 23.6% for the nine months ended September 30, 2020 and 2019, respectively, resulting in a tax benefit of $6.0 million and $0.7 million, respectively. The effective tax rate for the first nine months of 2020 was higher than the statutory rate of 21.0% due to the discrete treatment of costs attributable to our proxy contest, and tax benefits on our stock compensation plan and estimated tax benefits associated with the Coronavirus Aid, Relief and Economic Security Act (CARES Act) which was signed into law on March 27, 2020. The CARES Act includes various income and payroll tax provisions, notably enabling us to carry back net operating losses and recover taxes paid in prior years.

The Company's cash balance decreased $0.4 million to $0.2 million as of September 30, 2020 compared to $0.6 million at December 31, 2019. Fluctuations affecting cash flows during the nine months ended September 30, 2020 were comprised of the following:

a)

Net inventories decreased $9.2 million at September 30, 2020 when compared to December 31, 2019, mainly due to efforts to balance inventory with projected business levels and the write-down of inventory related to the Palmer business in the second quarter of 2020. Inventory turns increased from 1.62 turns at December 31, 2019, calculated on a three-month average basis, to 1.73 turns at September 30, 2020;

b)

Accounts payable decreased $1.6 million as of September 30, 2020 as compared to December 31, 2019, primarily due to the reduction of payables at the curtailed Palmer operations. Accounts payable days outstanding, calculated using a nine-month average basis, were approximately 30 days at September 30, 2020 and, also calculated using a nine-month average basis, approximately 36 days at December 31, 2019. Accounts payable days outstanding calculated using a three-month average basis was approximately 38 days at September 30, 2020;

c)

Net accounts receivable decreased $1.9 million at September 30, 2020 as compared to December 31, 2019, due primarily to the reduction of receivables at the curtailed Palmer operations. Days sales outstanding, calculated using a nine-month average basis, was 47 days outstanding at September 30, 2020 and, also using a nine-month average basis, 51 days at December 31, 2019. Days sales outstanding, calculated using a three-month average basis, was approximately 54 days outstanding at September 30, 2020;

d)

Capital expenditures for the first nine months of 2020 were $2.8 million; and

e)

The Company paid $3.2 million during the first nine months of 2020 related to the earn-out liabilities from the 2019 American Stainless, 2018 MUSA-Galvanized and 2017 MUSA-Stainless acquisitions.

The Company had $71.3 million of total borrowings outstanding with its lender as of September 30, 2020. The total is down $4.2 million from the balance at December 31, 2019. As of September 30, 2020, the Company had $7.5 million of remaining available capacity under its line of credit.

Pursuant to the Credit Agreement, the Company is subject to certain covenants including maintaining a minimum fixed charge coverage ratio of not less than 1.25, maintaining a minimum tangible net worth of not less than $60.0 million, and a limitation on the Companys maximum amount of capital expenditures per year, which is in line with currently projected needs.

The Company notified its bank of a technical default of the fixed charge coverage ratio in its Credit Agreement at the quarter ended September 30, 2020. To address the technical default, the Company entered into an amendment to its Credit Agreement with its bank subsequent to the end of the third quarter. On October 23, 2020, the Company entered into the Fifth Amendment to the Third Amended and Restated Loan Agreement (the "Fifth Amendment") with its bank. The Fifth Amendment amended the definition of the fixed charge coverage ratio to include in the numerator (i) the calculation of losses from the suspended operations of Palmer in the amount of $1,560,000, which is effective for the quarter ended June 30, 2020 and for the directly following three quarters after June 30, 2020, (ii) the calculation of losses from the suspended operations of Palmer in the amount of $740,000, which is effective for the quarter ended September 30, 2020 and for the directly following three quarters after September 30, 2020, and (iii) the extraordinary expenses related to the investigation of a whistleblower complaint in the amount of $636,000, which is effective for the quarter ended September 30, 2020 and for the directly following three quarters after September 30, 2020.

At September 30, 2020, the Company had a minimum fixed charge coverage ratio of 1.47 and a minimum tangible net worth of $67.7 million.

Outlook

The manufacturing sector will continue to face challenges over the next several quarters. As a result of the uncertainty related to the COVID-19 pandemic, we have suspended all Fiscal 2020 guidance and are not providing guidance at this time. With a restart of the economy pending, we cannot predict the impact on our various businesses. We remain diligent and thoughtful in managing profitability and liquidity while navigating these unprecedented times and continuing to execute our strategy.

Synalloy Corporation (Nasdaq: SYNL) is a growth-oriented company that engages in a number of diverse business activities including the production of stainless steel and galvanized pipe and tube, the master distribution of seamless carbon pipe and tube, and the production of specialty chemicals. For more information about Synalloy Corporation, please visit our web site at http://www.synalloy.com.

Forward-Looking Statements

This earnings release includes and incorporates by reference "forward-looking statements" within the meaning of the federal securities laws. All statements that are not historical facts are "forward-looking statements." The words "estimate," "project," "intend," "expect," "believe," "should," "anticipate," "hope," "optimistic," "plan," "outlook," "should," "could," "may" and similar expressions identify forward-looking statements. The forward-looking statements are subject to certain risks and uncertainties, including without limitation those identified below, 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. The following factors could cause actual results to differ materially from historical results or those anticipated: adverse economic conditions; the impact of competitive products and pricing; product demand and acceptance risks; raw material and other increased costs; raw materials availability; employee relations; ability to maintain workforce by hiring trained employees; labor efficiencies; customer delays or difficulties in the production of products; new fracking regulations; a prolonged decrease in nickel and oil prices; unforeseen delays in completing the integrations of acquisitions; risks associated with mergers, acquisitions, dispositions and other expansion activities; financial stability of our customers; environmental issues; negative or unexpected results from tax law changes; unavailability of debt financing on acceptable terms and exposure to increased market interest rate risk; inability to comply with covenants and ratios required by our debt financing arrangements; ability to weather an economic downturn; loss of consumer or investor confidence, risks relating to the impact and spread of COVID-19 and other risks detailed from time-to-time in the Company's Securities and Exchange Commission filings. The Company assumes no obligation to update the 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 Net (Loss) Income and Adjusted Diluted (Loss) Earnings per Share are non-GAAP measures and exclude discontinued operations, goodwill impairment, asset impairment, gain on lease modification, stock option / grant costs, non-cash lease costs, acquisition costs and other fees, proxy contest costs, shelf registration costs, earn-out adjustments, gain on excess death benefit, realized and unrealized (gains) and losses on investments in equity securities, casualty insurance gain, all (gains) losses associated with a Sale-Leaseback, and retention costs from net income. They also utilize a constant effective tax rate to reflect tax neutral results.

Adjusted EBITDA is a non-GAAP measure and excludes discontinued operations, goodwill impairment, asset impairment, gain on lease modification, interest expense (including change in fair value of interest rate swap), income taxes, depreciation, amortization, stock option / grant costs, non-cash lease cost, acquisition costs and other fees, proxy contest costs, shelf registration costs, earn-out adjustments, gain on excess death benefit, realized and unrealized (gains) and losses on investments in equity securities, casualty insurance gain, all (gains) losses associated with a Sale-Leaseback and retention 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 Comparative Analysis

Condensed Consolidated Statement of Operations

(Amounts in thousands, except per share data)

Three Months EndedSeptember 30,

Nine Months EndedSeptember 30,

(unaudited)

2020

2019

2020

2019

Net sales

Metals Segment

47,079

60,121

159,761

195,728

Specialty Chemicals Segment

12,187

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Synalloy Reports Third Quarter 2020 Results - Business Wire

Are you getting tired of all the political TV ads? There is one reason these ads are on TV, the Citizens United decision by the Supreme Court. This decision has created a legal form of bribery and corruption. Citizens United gave corporations and political action committees the right to give millions to political candidates.

The U.S. Constitution gives the right to vote to citizens; corporations and PACs cannot vote. The Supreme Court has in the past denied corporations and PACs rights reserved for citizens. People are taxed and regulated differently than corporations. People enjoy the right in the Fifth Amendment against self-incrimination in criminal investigations, while corporations do not.

Personally I do not like the idea of an out-of-state corporation or PAC trying to influence the votes of Iowans. I do not like the idea these organizations giving large amounts of cash to candidates who are supposed to represent Iowans and thereby trying to corrupt or bribe an Iowa candidate. Even citizens should not be able to donate to a candidate they cannot actually vote for or against, and the amount of a donation should be limited. Just because a person has millions, it does not make their vote worth more than any other persons vote.

I would love to see a political campaign based on a candidates record, what they plan to do or their goals for the people they represent. Here is a unique idea: How about a campaign based on honesty and the truth, rather than lies and deception?

If candidates were required to give their opponents the same amount they spend on a negative ad so the opponents can respond, there would be far fewer negative ads.

During this election cycle, Republicans are using Citizens United money to prevent people voting by challenging absentee voting, eliminating polling locations and making people travel extended distances and stand in line during a pandemic to cast their vote. Following the election, Republicans undoubtedly will spend millions of Citizens United dollars to challenge the results of the election. This is just another method of taking your vote away.

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Searl Letter to the Editor 10/23/20 | Opinion | carrollspaper.com - Carroll Daily Times Herald