The Urgent Need for Change and The Superior Path Forward

MANAGEMENT PROMOTES THE WRONG BEHAVIORS IN ITS ACQUIRED COMPANIES ■ Synalloy has structured its acquisitions to include earnouts that do not properly incentivize the desired financial results In Synalloy's past four acquisitions - SPT, both Marcegaglia units and American Stainless Tubing, Inc. - management structured multi-year earnout payments that are 100% driven by division revenue, not any type of profitability metric We are very concerned that, after being acquired by Synalloy, the business unit leaders have no incentive to generate acceptable margins on their incremental revenue As Synalloy has shown, if not managed with a maniacal focus on operational efficiency, cyclical businesses can very quickly produce deteriorating margins even on higher revenue PRIVET FUND 01. 02. 03. 04. 05. Meaningful Change is Required at Synalloy UPG STRONGER TOGETHER PITTSBURGH BUSINESS TIMES Marcegaglia galvanized tube business, property in Munhall bought for $20M Synalloy Corp. announced the purchase of Marcegaglia's property and galvanized tube business in Munhall. We find it very concerning that the incumbent Board has repeatedly mishandled acquisitions, placing stockholder capital at risk without proper safeguards ASTI American Stainless Tubing, Inc. 40

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