Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 8, 2024

FRIEDMAN INDUSTRIES, INCORPORATED

(Exact name of registrant as specified in its charter)

Texas

1-07521

74-1504405

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

1121 Judson Road Suite 124, Longview, Texas 75601

(Address of principal executive offices, including zip code)

(903) 758-3431

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d- 2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1 Par Value	FRD	NYSE American

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operation and Financial Condition.

On August 8, 2024, Friedman Industries, Incorporated (“Friedman” or the “Company”) issued a press release announcing its financial results for its first fiscal quarter ended June 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits

(d)	Exhibits

99.1	Press Release issued by Friedman Industries, Incorporated on August 8, 2024.

104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	FRIEDMAN INDUSTRIES, INCORPORATED
Date: August 8, 2024

	By: /s/ Alex LaRue
	Alex LaRue
	Chief Financial Officer, Secretary and Treasurer

Exhibit 99.1

FOR IMMEDIATE RELEASE

Friedman Industries, Incorporated Announces First Quarter Results

LONGVIEW, Texas, August 8, 2024 (Globe Newswire) -- Friedman Industries, Incorporated (NYSE American: FRD) announced today its results of operations for the quarter ended June 30, 2024.

June 30, 2024 Quarter Highlights:

●

Net earnings of approximately $2.6 million

●

Sales of approximately $114.6 million

●

Working capital balance at quarter-end of approximately $123.6 million

“We are pleased to report profitable results for our first quarter in a period of challenging price dynamics,” said Michael J. Taylor, President and Chief Executive Officer. “The first quarter results further highlight our strategy as we captured hedging gains of approximately $5.4 million that worked as intended to help offset physical margin compression we experienced during the quarter as HRC price continued a downward trend,” Taylor concluded.

For the quarter ended June 30, 2024 (the “2024 quarter”), the Company recorded net earnings of approximately $2.6 million ($0.37 diluted earnings per share) on net sales of approximately $114.6 million compared to net earnings of approximately $7.7 million ($1.04 diluted earnings per share) on net sales of approximately $137.3 million for the quarter ended June 30, 2023 (the “2023 quarter”). Sales volume for the 2024 quarter consisted of approximately 119,000 tons of inventory sold and another 24,000 tons of toll processing customer owned material compared to 2023 quarter sales volume consisting of approximately 129,000 tons of inventory sold and another 24,000 tons of toll processing. The decline in sales volume for the 2024 quarter was related to a combination of challenging conditions for some of our customers and extended planned downtime for equipment upgrades and maintenance at the Company’s Sinton and Decatur facilities.

The table below provides our unaudited statements of operations for the quarters ended June 30, 2024 and 2023:

SUMMARY OF OPERATIONS (unaudited)

(In thousands, except for per share data)

	Three Months Ended June 30,
	2024			2023

Net Sales	$	114,551		$	137,298

Cost of materials sold		96,414			108,203
Processing and warehousing expense		8,178			6,606
Delivery Expense		6,051			5,446
Selling, general and administrative expenses		4,511			5,937
Depreciation and amortization		795			749

Earnings (loss) from operations		(1,398	)		10,357

Gain on economic hedges of risk		5,375			430
Interest expense		(681	)		(540	)
Other income		3			6

Earnings before income taxes		3,299			10,253

Income tax expense		732			2,563

Net earnings	$	2,567		$	7,690

Net earnings per share:
Basic	$	0.37		$	1.04
Diluted	$	0.37		$	1.04

The table below provides summarized unaudited balance sheets as of June 30, 2024 and March 31, 2024:

SUMMARIZED BALANCE SHEETS (unaudited)

(In thousands)

	June 30, 2024		March 31, 2024
ASSETS:
Current Assets		162,416		170,064
Noncurrent Assets		60,374		59,955
Total Assets		222,790		230,019

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities		38,800		54,107
Noncurrent Liabilities		54,303		48,437
Total Liabilities		93,103		102,544

Total Stockholders' Equity		129,687		127,475

Total Liabilities and Stockholders' Equity		222,790		230,019

FLAT-ROLL SEGMENT OPERATIONS

Flat-roll product segment sales for the 2024 quarter totaled approximately $103.4 million compared to approximately $125.2 million for the 2023 quarter. The flat-roll segment had sales volume of approximately 109,000 tons from inventory and another 24,000 tons of toll processing for the 2024 quarter compared to approximately 120,000 tons from inventory and 24,000 tons of toll processing for the 2023 quarter. The average per ton selling price of flat-roll segment inventory decreased from approximately $1,038 per ton in the 2023 quarter to approximately $932 per ton in the 2024 quarter. The flat-roll segment recorded operating profits of approximately $2.7 million and $11.8 million for the 2024 quarter and 2023 quarter, respectively.

TUBULAR SEGMENT OPERATIONS

Tubular product segment sales for the 2024 quarter totaled approximately $11.2 million compared to approximately $12.1 million for the 2023 quarter. Sales volume increased from approximately 9,000 tons for the 2023 quarter to approximately 10,000 tons for the 2024 quarter. The average per ton selling price of tubular segment inventory decreased from approximately $1,358 per ton for the 2023 quarter to approximately $1,140 per ton for the 2024 quarter. The tubular segment recorded an operating loss of approximately $1.2 million for the 2024 quarter compared to an operating profit of approximately $2.3 million for the 2023 quarter.

HEDGING ACTIVITIES

We utilize hot-rolled coil (“HRC”) futures to manage price risk on unsold inventory and longer-term fixed price sales agreements. We typically account for our hedging activities under mark-to-market (“MTM”) accounting treatment and all hedging decisions are intended to protect the value of our inventory and produce more consistent financial results over price cycles. With MTM accounting treatment it is possible that hedging related gains or losses might be recognized in a different fiscal year or fiscal quarter than the corresponding improvement or contraction in our physical margins. For the 2024 quarter, we recognized a gain on hedging activities of approximately $5.4 million.

OUTLOOK

“Friedman remains in strong financial position and ready to capitalize on both short-term and long-term opportunities” Taylor said. “Despite the current macro-economic headwinds, I see a favorable long-term demand outlook for the industry and our products and believe we have a team uniquely qualified to recognize Friedman’s fullest potential.”

The Company expects sales volume for its second quarter of fiscal 2025 to be similar to the sales volume for the first quarter. The second quarter started with further decline in HRC price but as of the date of this release, HRC index prices have started to increase and HRC futures are pricing in further increases. The Company may experience a generally challenging margin environment in the second quarter but, if sustained, the increasing HRC price should result in improved physical margins toward the end of the second quarter and entering the third quarter.

ABOUT FRIEDMAN INDUSTRIES

Friedman Industries, Incorporated (“Company”), headquartered in Longview, Texas, is a manufacturer and processor of steel products with operating plants in Hickman, Arkansas; Decatur, Alabama; East Chicago, Indiana; Granite City, Illinois; Sinton, Texas and Lone Star, Texas. The Company has two reportable segments: flat-roll products and tubular products. The flat-roll product segment consists of the operations in Hickman, Decatur, East Chicago, Granite City and Sinton where the Company processes hot-rolled steel coils. The Hickman, East Chicago and Granite City facilities operate temper mills and corrective leveling cut-to-length lines. The Sinton and Decatur facilities operate stretcher leveler cut-to-length lines. The tubular product segment consists of the operations in Lone Star where the Company manufactures electric resistance welded pipe and distributes pipe through its Texas Tubular Products division.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, and such statements involve risk and uncertainty. Forward-looking statements include those preceded by, followed by or including the words “will,” “expect,” “intended,” “anticipated,” “believe,” “project,” “forecast,” “propose,” “plan,” “estimate,” “enable,” and similar expressions, including, for example, statements about our business strategy, our industry, our future profitability, growth in the industry sectors we serve, our expectations, beliefs, plans, strategies, objectives, prospects and assumptions, future production capacity and product quality. These forward-looking statements may include, but are not limited to, everything under the header “Outlook” above, including sales volumes, margins, hedging results, and potential price increases, expectations as to financial results during the Company’s upcoming fiscal quarters, future changes in the Company’s financial condition or results of operations, future production capacity, product quality and proposed expansion plans. Forward-looking statements may be made by management orally or in writing including, but not limited to, this news release.

Forward-looking statements are not guarantees of future performance. These statements are based on management’s expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Although forward-looking statements reflect our current beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements.

Actual results and trends in the future may differ materially depending on a variety of factors including, but not limited to, changes in the demand for and prices of the Company’s products, changes in government policy regarding steel, changes in the demand for steel and steel products in general and the Company’s success in executing its internal operating plans, changes in and availability of raw materials, our ability to satisfy our take or pay obligations under certain supply agreements, unplanned shutdowns of our production facilities due to equipment failures or other issues, increased competition from alternative materials and risks concerning innovation, new technologies, products and increasing customer requirements. Accordingly, undue reliance should not be placed on our forward-looking statements. Such risks and uncertainty are also addressed in our Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including the Company’s Annual Report on Form 10-K and its other Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except to the extent law requires.

For further information, please refer to the Company's Form 10-Q as filed with the SEC on August 8, 2024 or contact Alex LaRue, Chief Financial Officer – Secretary and Treasurer, at (903)758-3431.

Document And Entity Information	Aug. 08, 2024
Document Information [Line Items]
Entity, Registrant Name	FRIEDMAN INDUSTRIES, INCORPORATED
Document, Type	8-K
Document, Period End Date	Aug. 08, 2024
Entity, Incorporation, State or Country Code	TX
Entity, File Number	1-07521
Entity, Tax Identification Number	74-1504405
Entity, Address, Address Line One	1121 Judson Road Suite 124
Entity, Address, City or Town	Longview
Entity, Address, State or Province	TX
Entity, Address, Postal Zip Code	75601
City Area Code	903
Local Phone Number	758-3431
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	FRD
Security Exchange Name	NYSE
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0000039092