FRD 10-Q Quarterly Report Sept. 30, 2011

FRIEDMAN INDUSTRIES INC

10-Ks and 10-Qs

10-Q	Quarter ended Sept. 30, 2025
10-Q	Quarter ended June 30, 2025
10-K	Fiscal year ended March 31, 2025
10-Q	Quarter ended Dec. 31, 2024
10-Q	Quarter ended Sept. 30, 2024
10-Q	Quarter ended June 30, 2024
10-K	Fiscal year ended March 31, 2024
10-Q	Quarter ended Dec. 31, 2023
10-Q	Quarter ended Sept. 30, 2023
10-Q	Quarter ended June 30, 2023
10-K	Fiscal year ended March 31, 2023
10-Q	Quarter ended Dec. 31, 2022
10-Q	Quarter ended Sept. 30, 2022
10-Q	Quarter ended June 30, 2022
10-K	Fiscal year ended March 31, 2022
10-Q	Quarter ended Dec. 31, 2021
10-Q	Quarter ended Sept. 30, 2021
10-Q	Quarter ended June 30, 2021
10-K	Fiscal year ended March 31, 2021
10-Q	Quarter ended Dec. 31, 2020
10-Q	Quarter ended Sept. 30, 2020
10-Q	Quarter ended June 30, 2020
10-K	Fiscal year ended March 31, 2020
10-Q	Quarter ended Dec. 31, 2019
10-Q	Quarter ended Sept. 30, 2019
10-Q	Quarter ended June 30, 2019
10-K	Fiscal year ended March 31, 2019
10-Q	Quarter ended Dec. 31, 2018
10-Q	Quarter ended Sept. 30, 2018
10-Q	Quarter ended June 30, 2018
10-K	Fiscal year ended March 31, 2018
10-Q	Quarter ended Dec. 31, 2017
10-Q	Quarter ended Sept. 30, 2017
10-Q	Quarter ended June 30, 2017
10-K	Fiscal year ended March 31, 2017
10-Q	Quarter ended Dec. 31, 2016
10-Q	Quarter ended Sept. 30, 2016
10-Q	Quarter ended June 30, 2016
10-K	Fiscal year ended March 31, 2016
10-Q	Quarter ended Dec. 31, 2015
10-Q	Quarter ended Sept. 30, 2015
10-Q	Quarter ended June 30, 2015
10-K	Fiscal year ended March 31, 2015
10-Q	Quarter ended Dec. 31, 2014
10-Q	Quarter ended Sept. 30, 2014
10-Q	Quarter ended June 30, 2014
10-K	Fiscal year ended March 31, 2014
10-Q	Quarter ended Dec. 31, 2013
10-Q	Quarter ended Sept. 30, 2013
10-Q	Quarter ended June 30, 2013
10-K	Fiscal year ended March 31, 2013
10-Q	Quarter ended Dec. 31, 2012
10-Q	Quarter ended Sept. 30, 2012
10-Q	Quarter ended June 30, 2012
10-K	Fiscal year ended March 31, 2012
10-Q	Quarter ended Dec. 31, 2011
10-Q	Quarter ended Sept. 30, 2011
10-Q	Quarter ended June 30, 2011
10-K	Fiscal year ended March 31, 2011
10-Q	Quarter ended Dec. 31, 2010
10-Q	Quarter ended Sept. 30, 2010
10-Q	Quarter ended June 30, 2010
10-K	Fiscal year ended March 31, 2010
10-Q	Quarter ended Dec. 31, 2009

PROXIES

DEF 14A	Filed on Sept. 18, 2025
DEF 14A	Filed on Sept. 18, 2024
DEF 14A	Filed on July 26, 2024
DEF 14A	Filed on Sept. 13, 2023
DEF 14A	Filed on July 28, 2023
DEF 14A	Filed on Sept. 13, 2022
DEF 14A	Filed on Aug. 2, 2022
DEF 14A	Filed on July 29, 2021
DEF 14A	Filed on July 28, 2020
DEF 14A	Filed on July 26, 2019
DEF 14A	Filed on July 20, 2018
DEF 14A	Filed on July 20, 2017
DEF 14A	Filed on July 20, 2016
DEF 14A	Filed on July 27, 2015
DEF 14A	Filed on July 17, 2014
DEF 14A	Filed on July 19, 2013
DEF 14A	Filed on July 19, 2012
DEF 14A	Filed on July 25, 2011
DEF 14A	Filed on July 26, 2010
DEF 14A	Filed on None

10-Q 1 h85415e10vq.htm FORM 10-Q e10vq

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2011


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FROM THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-7521

FRIEDMAN INDUSTRIES, INCORPORATED

(Exact name of registrant as specified in its charter)


TEXAS (State or other jurisdiction of incorporation or organization)		74-1504405 (I.R.S. Employer Identification Number)

4001 HOMESTEAD ROAD, HOUSTON, TEXAS 77028-5585
(Address of principal executive office) (zip code)

(713) 672-9433
(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer o
(Do not check if a smaller reporting company)

Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

At September 30, 2011, the number of shares outstanding of the issuer’s only class of stock was 6,799,444 shares of Common Stock.

TABLE OF CONTENTS


Part I — FINANCIAL INFORMATION
	Item 1. Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
Part II — OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 1A. Risk Factors
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
	Item 3. Defaults Upon Senior Securities
	Item 4. [Removed and Reserved]
	Item 5. Other Information
	Item 6. Exhibits
SIGNATURES
EXHIBIT INDEX
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

Part I — FINANCIAL INFORMATION

Item 1. Financial Statements

FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED


	September 30, 2011			March 31, 2011
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	19,564.487		$	7,210,290
Accounts receivable, net of allowances for bad debts and cash discounts of $37,276 at September 30 and March 31, 2011		12,273,432			12,594,954
Inventories		26,259,453			34,679,270
Other		233,653			77,830

TOTAL CURRENT ASSETS		58,331,025			54,562,344
PROPERTY, PLANT AND EQUIPMENT:
Land		1,082,331			1,082,331
Buildings and yard improvements		7,014,180			7,014,180
Machinery and equipment		30,085,255			29,876,767
Less accumulated depreciation		(24,757,691	)		(23,841,491	)

		13,424,075			14,131,787

OTHER ASSETS:
Cash value of officers’ life insurance and other assets		920,500			890,000


TOTAL ASSETS	$	72,675,600		$	69,584,131

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	8,238,005		$	7,338,762
Income taxes payable		59,150			350,961
Deferred credit for LIFO inventory replacement		30,981			—
Dividends payable		883,928			747,939
Contribution to profit sharing plan		150,200			50,000
Employee compensation and related expenses		825,370			979,713


TOTAL CURRENT LIABILITIES		10,187,634			9,467,375
DEFERRED INCOME TAXES		491,348			536,699
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS		815,641			777,543
STOCKHOLDERS’ EQUITY:
Common stock, par value $1:
Authorized shares — 10,000,000
Issued shares — 7,975,160 at September 30 and March 31, 2011		7,975,160			7,975,160
Additional paid-in capital		29,003,674			29,003,674
Treasury stock at cost (1,175,716 shares at September 30 and March 31, 2011)		(5,475,964	)		(5,475,964	)
Retained earnings		29,678,107			27,299,644


TOTAL STOCKHOLDERS’ EQUITY		61,180,977		$	58,802,514


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	72,675,600		$	69,584,131

FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED


	Three months ended						Six months ended
	September 30,						September 30,
	2011			2010			2011			2010
Net sales	$	42,039,282		$	29,353,262		$	80,974,738		$	58,575,494
Costs and expenses
Costs of goods sold		37,152,879			25,465,549			71,931,510			51,249,843
General, selling and administrative costs		1,426,427			1,264,251			2,846,246			2,538,721

		38,579,306			26,729,800			74,777,756			53,788,564
Interest and other income		(15,250	)		(14,000	)		(33,122	)		(28,027	)

Earnings before income taxes		3,475,226			2,637,462			6,230,104			4,814,957
Provision for (benefit from) income taxes:
Current		1,182,993			866,631			2,129,135			1,622,589
Deferred		(22,675	)		(13,600	)		(45,350	)		(27,200	)

		1,160,318			853,031			2,083,785			1,595,389

Net earnings	$	2,314,908		$	1,784,431		$	4,146,319		$	3,219,568


Weighted average number of common shares outstanding:
Basic		6,799,444			6,799,444			6,799,444			6,799,444
Diluted		6,799,444			6,799,444			6,799,444			6,799,444
Net earnings per share:
Basic	$	0.34		$	0.26		$	0.61		$	0.47
Diluted	$	0.34		$	0.26		$	0.61		$	0.47
Cash dividends declared per common share	$	0.13		$	0.08		$	0.26		$	0.12

FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED


	Six Months Ended
	September 30,
	2011			2010
OPERATING ACTIVITIES
Net earnings	$	4,146,319		$	3,219,568
Adjustments to reconcile net earnings to cash provided by operating activities:
Depreciation		916,200			932,401
Provision for deferred taxes		(45,350	)		(27,200	)
Provision for postretirement benefits		38,098			47,456
Decrease (increase) in operating assets:
Accounts receivable, net		321,522			452,077
Inventories		8,419,817			(7,169,653	)
Other		(155,823	)		(136,600	)
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses		899,242			2,919,533
Contribution to profit-sharing plan		100,200			111,000
Employee compensation and related expenses		(154,343	)		296,925
Income taxes payable		(291,811	)		263,672
Deferred credit for LIFO inventory replacement		30,981			—

NET CASH PROVIDED BY OPERATING ACTIVITIES		14,225,052			909,179
INVESTING ACTIVITIES
Purchase of property, plant and equipment		(208,488	)		(464,404	)
Increase in cash surrender value of officers’ life insurance		(30,500	)		(28,000	)

NET CASH USED IN INVESTING ACTIVITIES		(238,988	)		(492,404	)
FINANCING ACTIVITIES
Cash dividends paid		(1,631,867	)		(339,972	)
Principal payments on notes payable		—			(13,507	)

NET CASH USED IN FINANCING ACTIVITIES		(1,631,867	)		(353,479	)

INCREASE IN CASH AND CASH EQUIVALENTS		12,354,197			63,296
Cash and cash equivalents at beginning of period		7,210,290			19,812,881

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	19,564,487		$	19,876,177

FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED NOTES TO QUARTERLY REPORT — UNAUDITED

NOTE A — BASIS OF PRESENTATION

The accompanying unaudited, condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the financial statements and footnotes included in the Company’s annual report on Form 10-K for the year ended March 31, 2011.

NOTE B — INVENTORIES

Inventories consist of prime coil, non-standard coil and tubular materials. Prime coil inventory consists primarily of raw materials, non-standard coil inventory consists primarily of finished goods and tubular inventory consists of both raw materials and finished goods. Inventories are valued at the lower of cost or replacement market. Cost for prime coil inventory is determined under the last-in, first-out (“LIFO”) method. Cost for non-standard coil inventory is determined using the specific identification method. Cost for tubular inventory is determined using the weighted average method.

During the quarter and the six month period ended September 30, 2011, LIFO inventories were reduced and are expected to be replaced by March 31, 2012. A deferred credit of $30,981 was recorded at September 30, 2011 to reflect replacement cost in excess of LIFO cost.

A summary of inventory values by product group follows:


	September 30,		March 31,
	2011		2011
Prime Coil Inventory	$	6,908,189	$	7,239,465
Non-Standard Coil Inventory		2,312,598		1,722,224
Tubular Raw Material		2,510,575		6,086,291
Tubular Finished Goods		14,528,091		19,631,290

	$	26,259,453	$	34,679,270

NOTE C — SEGMENT INFORMATION (in thousands)


			Three Months Ended September 30,						Six Months Ended September 30,

			2011			2010			2011			2010

Net sales
	Coil		$	15,710		$	13,236		$	31,140		$	25,333
	Tubular			26,330			16,117			49,835			33,242

		Total net sales	$	42,040		$	29,353		$	80,975		$	58,575

Operating profit
	Coil		$	329		$	218		$	—		$	(106	)
	Tubular			3,867			3,059			7,783			6,304

		Total operating profit		4,196			3,277			7,783			6,198
	Corporate expenses			736			654			1,586			1,411
	Interest & other income			(15	)		(14	)		(33	)		(28	)

		Total earnings before taxes	$	3,475		$	2,637		$	6,230		$	4,815


	September 30,		March 31,
	2011		2011
Segment assets
Coil	$	23,129	$	25,150
Tubular		29,026		36,334

		52,155		61,484
Corporate assets		20,521		8,100

	$	72,676	$	69,584

Corporate expenses reflect general and administrative expenses not directly associated with segment operations and consist primarily of corporate executive and accounting salaries, professional fees and services, bad debts, accrued profit sharing expense, corporate insurance expenses and office supplies. Corporate assets consist primarily of cash and cash equivalents and the cash value of officers’ life insurance.

NOTE D — SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid income taxes of approximately $2,380,000 and $1,491,000 in the six months ended September 30, 2011 and 2010, respectively. The Company paid no interest in the six months ended September 30, 2011 and 2010, respectively. Non-cash financing activities consisted of accured dividends of $1,767,856 and $815,933 in the six months ended September 30, 2011 and 2010, respectively.

NOTE E — SUBSEQUENT EVENTS

The Company evaluated subsequent events through the date of this filing.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Six Months Ended September 30, 2011 Compared to Six Months Ended September 30, 2010

During the six months ended September 30, 2011, sales, costs of goods sold and gross profit increased $22,399,244, $20,681,667 and $1,717,577, respectively, from the comparable amounts recorded during the six months ended September 30, 2010. The increase in sales was related primarily to a substantial increase in tons sold which increased from approximately 79,000 tons in the 2010 period to approximately 96,000 tons in the 2011 period. Also, the average per ton selling price increased from approximately $740 per ton in the 2010 period to $847 per ton in the 2011 period. The increase in costs of goods sold was related primarily to the increase in tons sold and an increase in average per ton cost which increased from approximately $647 per ton in the 2010 period to $752 in the 2011 period. The increase in gross profit was related primarily to the tubular product segment which experienced a 34% increase in tons sold. Overall, gross profit as a percentage of sales decreased from approximately 12.5% in the 2010 period to approximately 11.2% in the 2011 period. In the 2011 period, the Company incurred an increase in material costs but was unable to pass all of this increase on to its customers.

Coil product segment sales increased approximately $5,807,000 during the 2011 period. This increase resulted from an increase in tons sold and an increase in the average selling price. Coil tons shipped increased from approximately 35,000 tons in the 2010 period to approximately 37,000 tons in the 2011 period. The average per ton selling price increased from approximately $723 per ton in the 2010 period to $852 per ton in the 2011 period. The coil product segment recorded no or minimal operational income in the 2010 and the 2011 periods. Coil products are related primarily to durable goods. Management believes that operations of this segment have been adversely impacted in both the 2010 and 2011 periods by soft demand. In addition, management believes that market conditions for coil products will not improve until the U.S. economy improves and generates significant improvement in demand for durable goods.

In August 2008, the Company began operating its coil facility in Decatur, Alabama. This operation produced an operating loss of approximately $566,000 and $525,000 in the 2011 and 2010 periods, respectively. The Company expects that this facility will continue to produce losses until demand for coil products improves.

The Company is primarily dependent on Nucor Steel Company (“NSC”) for its supply of coil inventory. In the 2011 period, NSC continued to supply the Company with steel coils in amounts that were adequate for the Company’s purposes. The Company does not currently anticipate any significant change in such supply from NSC. Loss of NSC as a supplier could have a material adverse effect on the Company’s business.

Tubular product segment sales increased approximately $16,593,000 during the 2011 period. This increase primarily resulted from an increase in tons sold which increased from approximately 44,000 tons in the 2010 period to approximately 59,000 tons sold in the 2011 period. The average per ton selling price of tubular products increased from approximately $754 per ton in the 2010 period to $844 per ton in the 2011 period. Tubular product segment operating profits as a percentage of segment sales were approximately 19.0% and 15.6% in the 2010 and 2011 periods, respectively. In the 2011 period, the Company incurred an increase in material costs and was unable to pass all of this increase on to its customers.

U. S. Steel Tubular Products, Inc. (“USS”) is the Company’s primary supplier of tubular products and coil material used in pipe manufacturing and is a major customer of finished tubular products. Certain finished tubular products used in the energy business are manufactured by the Company and sold to USS. Beginning in December 2008, USS reduced orders for these finished tubular products. Also, in February 2009, USS announced that it was temporarily idling its plant in Lone Star, Texas, due to weak market conditions. From February 2009 until February 2010, the Company received few orders from USS and a significantly reduced supply of pipe and coil material from USS. During this period, USS reopened its Lone Star facility and since February 2010, the Company has received an increase in orders for finished tubular products from USS and an increase in the supply of tubular products and coil material used in the production of pipe. Loss of USS as a supplier or customer could have a material adverse effect on the Company’s business. The Company can make no assurances as to orders from USS or the amounts of pipe and coil material that will be available from USS in the future.

From February 2009 until February 2010, the Company downsized its tubular division to a level more commensurate with operations. Since February 2010, the Company has increased the level of operations of the tubular division to support an increase in production requirements.

During the 2011 period, general, selling and administrative costs increased $307,525 from the amount recorded during the 2010 period. This increase was related primarily to increases in bonuses and commissions associated with increased earnings and volume and to a contribution to a charitable organization.

Income taxes increased $488,396 from the amount recorded in the 2010 period. This increase was related primarily to the increase in earnings before taxes in the 2011 period. Effective tax rates were 33.4% and 33.1% in the periods ended 2011 and 2010, respectively.

Three Months Ended September 30, 2011 Compared to Three Months Ended September 30, 2010

During the three months ended September 30, 2011, sales, costs of goods sold and gross profit increased $12,686,020, $11,687,330 and $998,690, respectively, from the comparable amounts recorded during the three months ended September 30, 2010. The increase in sales was related primarily to an increase in tons sold which increased from approximately 40,000 tons in the 2010 quarter to approximately 50,000 tons in the 2011 quarter. Also, the average per ton selling price increased from approximately $730 per ton in the 2010 quarter to $841 per ton in the 2011 quarter. The increase in costs of goods sold was related to the increase in tons sold and an increase in the average per ton cost which increased from approximately $633 per ton in the 2010 quarter to $743 in the 2011 quarter. Gross profit primarily benefited from the sales increase. The increase in gross profit was related primarily to the Company’s tubular product segment. Gross profit as a percentage of sales declined from approximately 13.2% in the 2010 quarter to approximately 11.6% in the 2011 quarter. In the 2011 quarter, the Company incurred an increase in material costs but was unable to pass all of this increase on to its customers.

Coil product segment sales increased approximately $2,474,000 during the 2011 quarter. This increase was related primarily to an increase in the average selling price per ton which increased from approximately $709 in the 2010 quarter to $812 in the 2011 quarter. Coil tons shipped increased from approximately 18,700 tons in the 2010 quarter to approximately 19,300 tons in the 2011 quarter. Coil segment operations reflected an operational income of approximately $218,000 and $329,000 in the 2010 and 2011 quarters, respectively. Coil products are related primarily to durable goods. Management believes that operations of this segment have been adversely impacted in both the 2010 and 2011 quarters by soft demand. In addition, management believes that market conditions for coil products will not improve until the U.S. economy improves and generates significant improvement in the demand for durable goods.

In August 2008, the Company began operating its coil facility in Decatur, Alabama. This operation produced an operating loss of approximately $215,000 and $320,000 in the 2010 and 2011 quarters, respectively. The Company expects that this facility will continue to produce a loss until demand for coil products improves.

The Company is primarily dependent on NSC for its supply of coil inventory. In the 2011 quarter, NSC continued to supply the Company with steel coils in amounts that were adequate for the Company’s purposes. The Company does not currently anticipate any significant change in such supply from NSC. Loss of NSC as a supplier could have a material adverse effect on the Company’s business.

Tubular product segment sales increased approximately $10,213,000 during the 2011 quarter. This increase resulted primarily from an increase in tons sold which increased from approximately 22,000 tons in the 2010 quarter to approximately 31,000 tons in the 2011 quarter. In addition, the average per ton selling price of tubular products increased from approximately $748 per ton in the 2010 quarter to $859 in the 2011 quarter. Tubular product segment operating profits as a percentage of segment sales were approximately 19.0% and 14.7% in the 2010 and 2011 quarters, respectively. In the 2011 quarter, the Company incurred an increase in material costs and was unable to pass all of this increase on to its customers.

USS is the Company’s primary supplier of tubular products and coil material used in pipe manufacturing and is a major customer of finished tubular products. Certain finished tubular products used in the energy business are manufactured by the Company and sold to USS. Beginning in December 2008, USS reduced orders for these finished tubular products. Also, in February 2009, USS announced that it was temporarily idling its plant in Lone Star, Texas, due to weak market conditions. From February 2009 until February 2010, the Company received few orders from USS and a significantly reduced supply of pipe and coil material from USS. During this period, USS reopened its Lone Star facility and since February 2010, the Company has received an increase in orders for finished tubular products from USS and an increase in the supply of tubular products and coil material used in the production of pipe. Loss of USS as a supplier or customer could have a material adverse effect on the Company’s business. The Company can make no assurances as to orders from USS or the amounts of pipe and coil material that will be available from USS in the future.

During the 2011 quarter, general, selling and administrative costs increased $162,176 from the amount recorded during the 2010 quarter. This increase was related primarily to increases in bonuses and commissions associated with increased earnings and volume and to a contribution to a charitable organization.

Income taxes in the 2011 quarter increased $307,287 from the amount recorded in the 2010 quarter. This increase was related primarily to the increase in earnings before taxes in the 2011 quarter. The effective tax rates were approximately 33.4% and 32.3% in the 2011 and 2010 quarters, respectively.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

The Company remained in a strong, liquid position at September 30, 2011. The current ratios were 5.7 and 5.8 at September 30, 2011 and March 31, 2011, respectively. Working capital was $48,143,391 at September 30, 2011 and $45,094,969 at March 31, 2011.

At September 30, 2011, the Company maintained assets and liabilities at levels it believed were commensurate with operations. Changes in balance sheet amounts primarily occurred in the ordinary course of business. Cash was primarily generated from a reduction in inventories. The Company expects to continue to monitor, evaluate and manage balance sheet components depending on changes in market conditions and the Company’s operations.

The Company has in the past and may in the future borrow funds on a term basis to build or improve facilities. The Company currently has no plans to borrow any significant amount of funds on a term basis.

Notwithstanding the current market conditions, the Company believes its cash flows from operations and borrowing capability due to its strong balance sheet are adequate to fund its expected cash requirements for the next 24 months.

CRITICAL ACCOUNTING POLICIES

The preparation of consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. One such accounting policy which requires significant estimates and judgments is the valuation of LIFO inventories in the Company’s quarterly reporting. The quarterly valuation of inventory requires estimates of the year end quantities which is inherently difficult. Historically, these estimates have been materially correct. In the period ended September 30, 2011, LIFO inventories were reduced and are expected to be replaced by March 31, 2012. A deferred credit of $30,981 was recorded at September 30, 2011 to reflect replacement cost in excess of LIFO cost.

FORWARD-LOOKING STATEMENTS

From time to time, the Company may make certain statements that contain forward-looking information (as defined in the Private Securities Litigation Reform Act of 1996, as amended) and that involve risk and uncertainty. These forward-looking statements may include, but are not limited to, future 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 Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of the Company’s filings with the Securities and Exchange Commission under the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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 the demand for steel and steel products in general and the Company’s success in executing its internal operating plans, including any proposed expansion plans.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required

Item 4. Controls and Procedures

The Company’s management, with the participation of the Company’s principal executive officer (“CEO”) and principal financial officer (“CFO”), evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act), as of the end of the fiscal quarter ended September 30, 2011. Based on this evaluation, the CEO and CFO have concluded that the Company’s disclosure controls and procedures were effective as of the end of the fiscal quarter ended September 30, 2011 to ensure that information that is required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

FRIEDMAN INDUSTRIES, INCORPORATED
Three Months Ended September 30, 2011

Part II — OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable

Item 1A. Risk Factors

Not required

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

a). Not applicable

b). Not applicable

c). Not applicable

Item 3. Defaults Upon Senior Securities

a). Not applicable

b). Not applicable

Item 4. [Removed and Reserved]

Item 5. Other Information

Not applicable

Item 6. Exhibits

Exhibits

	31.1 —		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by William E. Crow

	31.2 —		Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Ben Harper

	32.1 —		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by William E. Crow

	32.2 —		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Ben Harper

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 thereunto duly authorized.


	FRIEDMAN INDUSTRIES, INCORPORATED
Date: November 14, 2011
	By	/s/ Ben Harper
		Ben Harper, Senior Vice President-Finance
		(Principal Financial and Accounting Officer)

EXHIBIT INDEX


Exhibit No.		Description

Exhibit 31.1		— Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by William E. Crow
Exhibit 31.2		— Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Ben Harper
Exhibit 32.1		— Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by William E. Crow
Exhibit 32.2		— Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by Ben Harper

*101		Interactive Data Files.


*		Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability.

TABLE OF CONTENTS

Part I Financial Information Item 1. Financial Statements Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3. Defaults Upon Senior Securities Item 4. [removed and Reserved]Item 5. Other Information Item 6. Exhibits

Exhibits

EX-31.1 EX-31.2 EX-32.1 EX-32.2

FRD 10-Q Quarter ended Sept. 30, 2011

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Exhibits