Core Insights - Friedman Industries reported a net earnings of $2.2 million for Q2 fiscal 2026, a significant recovery from a net loss of $0.7 million in the same quarter last year, with net sales increasing by 42.7% to $152.4 million [2][10] - The company experienced record sales volume, selling approximately 154,500 tons of inventory and 24,500 tons of toll-processed material, marking a 28% year-over-year increase [2][10] - The flat-roll segment was the primary growth driver, with sales rising 47.2% to $143.3 million and operating profit jumping 113.5% to $5.7 million [3][10] Financial Performance - The tubular segment saw a mixed performance, with sales declining 3.6% to $9 million, but the average selling price per ton increased by 15% to $1,185, resulting in a swing to operating income of $0.9 million from a loss of $0.6 million [4][10] - Operating expenses increased due to higher volumes and acquisition-related costs, with processing and warehousing expenses rising 15.3% to $9.1 million and delivery expenses increasing 32.6% to $7.1 million [5][10] - Earnings before income taxes improved to $2.9 million from a loss of $0.9 million, aided by effective risk management and lower interest expenses [6][10] Balance Sheet and Equity - Total assets rose to $311.3 million as of September 30, 2025, from $226.8 million in March 2025, while total stockholders' equity increased to $139.3 million [7] - Liabilities grew to $172 million, reflecting higher borrowings associated with the company's expansion and acquisition strategy [7] Strategic Direction - Management highlighted the quarter as a significant milestone, emphasizing record sales volume and improved capacity utilization [8] - The company is focused on a strategic transformation that combines organic growth with selective acquisitions and disciplined capital allocation, including ongoing dividends and opportunistic share repurchases [8][9] - The acquisition of Century Metals & Supplies is expected to enhance margins and growth, broadening the product portfolio and geographic reach [12] Future Outlook - For Q3 fiscal 2026, the company expects sales volumes to remain consistent with Q2 levels, with additional tonnage from the Century acquisition anticipated to offset seasonal softness [11] - Management projects a modest sequential improvement in margins, supported by expected increases in metals pricing [11]

Financial Performance - Net earnings for the quarter ended September 30, 2025, were approximately $2.2 million, compared to a net loss of approximately $0.7 million for the same quarter in 2024[4]. - Sales for the 2025 quarter were approximately $152.4 million, representing a 43% increase year-over-year from approximately $106.8 million in 2024[5]. - The company achieved the highest sales volume in its history, with a 28% increase year-over-year and a 12% increase quarter-over-quarter, totaling approximately 154,500 tons of inventory sold[5]. Segment Performance - Flat-roll segment sales for the 2025 quarter totaled approximately $143.3 million, up from approximately $97.4 million in the 2024 quarter, with an operating profit of approximately $5.7 million[8]. - Tubular segment sales for the 2025 quarter were approximately $9.0 million, down from approximately $9.4 million in the 2024 quarter, but with an operating profit of approximately $0.9 million compared to a loss in the previous year[9]. Acquisitions and Integration - The acquisition of Century Metals & Supplies was completed on August 29, 2025, enhancing the company's product portfolio and geographic reach[5]. - The integration of Century Metals & Supplies is progressing well, with promising synergies expected to enhance future performance[12]. Asset and Future Outlook - Total assets as of September 30, 2025, were approximately $311.3 million, up from $226.8 million as of March 31, 2025[7]. - The company recognized a gain on hedging activities of approximately $0.9 million for the 2025 quarter[10]. - The company anticipates that third quarter fiscal 2026 sales volume will remain consistent with second quarter levels, with expected improvements in margins due to anticipated increases in metals pricing[11].

Sales Performance - Sales for the six months ended September 30, 2025, increased by approximately $65.9 million to a total of $362.4 million compared to the same period in 2024[67]. - Flat-roll segment sales for the 2025 period totaled approximately $267.4 million, up from $200.8 million in 2024, with an average selling price per ton increasing from approximately $895 to $946[69]. - Tubular segment sales for the 2025 period decreased to approximately $19.8 million from $20.5 million in 2024, despite an increase in average selling price per ton from approximately $1,087 to $1,196[71]. - Sales volume for the six months ended September 30, 2025, included approximately 296,500 tons from inventory and 43,500 tons of toll processing, compared to 240,000 tons and 42,000 tons, respectively, in 2024[67]. Profitability - Adjusted gross profit for the six months ended September 30, 2025, was approximately $55.4 million, representing an increase of $18.7 million from the prior year, with a gross profit margin of 19.3%[67]. - The Company expects third quarter fiscal 2026 sales volume to remain consistent with second quarter levels, with margins anticipated to improve modestly due to expected increases in metals pricing[92]. Costs and Expenses - Selling, general and administrative costs increased by approximately $3.3 million in the 2025 period, primarily due to higher incentive compensation and transaction-related expenses from the acquisition of Century Metals & Supplies[73]. - Income tax provision increased from approximately $0.5 million in 2024 to approximately $2.4 million in 2025, with an effective tax rate of 24.5%[74]. Liquidity and Financial Position - The company's current ratio was 3.2 at September 30, 2025, down from 4.3 at March 31, 2025, indicating a decrease in liquidity[87]. - The Company believes its current cash position and cash flows from operations are adequate to fund expected cash requirements for the next 12 months[90]. Acquisition Impact - The acquisition of Century Metals & Supplies resulted in notable increases in accounts receivable, inventory, fixed assets, accounts payable, and ABL facility debt[88]. - The Company’s financial statements preparation involves significant estimates and judgments, particularly related to the Century Metals & Supplies business combination[93]. Hedging Activities - The Company recognized hedging-related gains of approximately $1.1 million in the 2025 period, down from $5.6 million in the 2024 period[68]. - The Company recognized hedging gains of approximately $1.1 million and $5.6 million for the six months ended September 30, 2025, and 2024, respectively, related to economic hedges of risk[91]. - The Company’s hedging activities are classified as economic hedges with mark-to-market accounting treatment, which may result in gains or losses being recognized in different fiscal periods[91]. Debt and Financing - The Company renewed its asset-based lending facility (ABL Facility) for $125 million, maturing on August 29, 2030, with a current balance of approximately $84.2 million and an interest rate of 5.8%[89]. - The ABL Facility allows for borrowings based on a borrowing base calculation, which includes 90% of eligible accounts receivable and 85% of eligible inventory's net orderly liquidating value[89]. - The ABL Facility includes a financial covenant requiring a fixed charge coverage ratio of at least 1.00 to 1.00 for the trailing twelve-month period[89]. - The Company may increase the ABL Facility by up to $75 million, in minimum increments of $5 million, if certain conditions are met[89]. Forward-Looking Statements - Forward-looking statements regarding future sales, prices, and margins involve risks and uncertainties that could cause actual results to differ materially[94].

Core Viewpoint - Friedman Industries has acquired Century Metals and Supplies, Inc., enhancing its market presence and product offerings in the southeastern U.S. and Latin American markets [1][2]. Group 1: Acquisition Details - The acquisition includes working capital, buildings, processing and other equipment, and related real estate [1]. - Century Metals has generated average annual revenues of approximately $111.0 million over the past three fiscal years [1]. - The transaction is an all-cash purchase and is expected to be immediately accretive [1]. Group 2: Strategic Implications - The acquisition broadens Friedman's reach into new regions and enhances its core hot-rolled steel business [2]. - It adds coil slitting capabilities and expands the product portfolio to include cold-rolled, coated, and stainless steels, as well as non-ferrous materials like aluminum, copper, and brass [2]. - The acquisition provides strategic access to growing residential and corrosion-resistant markets [2]. Group 3: Company Background - Friedman Industries is headquartered in Longview, Texas, and operates multiple manufacturing plants across the U.S. [4]. - The company has two reportable segments: flat-roll products and tubular products, processing both ferrous and non-ferrous coils [4].

Core Insights - Friedman Industries' shares have increased by 14.8% since the earnings report for the quarter ended June 30, 2025, significantly outperforming the S&P 500 Index's 0.5% growth during the same period [1] - The company reported net earnings of $5 million, or $0.71 per diluted share, for the first quarter of fiscal 2026, compared to $2.6 million, or $0.37 per diluted share, a year earlier [2] - Net sales reached $134.8 million, reflecting a 17.7% increase from $114.6 million in the prior-year quarter [2] Financial Performance - The flat-roll division generated sales of $124.1 million, up 20% from $103.4 million, with operating income rising to $8.8 million from $2.7 million [3] - The tubular segment experienced a 4.1% sales decline to $10.7 million from $11.2 million, but operating results improved from a $1.2 million loss to a $1.3 million profit [3] - Adjusted gross profit increased by 60.3% to $29.1 million from $18.1 million, with margins expanding from 15.8% to 21.6% [4] Cash Flow and Debt Management - Operating cash flow was reported at $15.5 million, allowing for a $14.7 million reduction in debt [4] - The company ended the quarter with $117.5 million in working capital and a current ratio of 3.9 [4] - Debt under the $150 million asset-based lending facility stood at $33 million at quarter-end [4] Management Insights - CEO Michael J. Taylor emphasized improved margins and solid sales volume as key drivers of the strong fiscal first-quarter performance [5] - Taylor noted strengthened demand from certain customers and strategic efforts that enhanced facility capacity utilization [5] - The management expressed optimism about the long-term demand outlook for the industry [5] Market Conditions - The improved profitability was attributed to favorable market conditions for hot-rolled steel coil (HRC) compared to the prior-year period [6] - Although HRC prices softened slightly towards the end of the quarter, they remained stable enough to support stronger physical margins [6] - Hedging activities contributed positively, with a recorded gain of $0.3 million compared to a $5.4 million gain in the prior-year quarter [6] Future Guidance - For the second quarter of fiscal 2026, Friedman Industries expects sales volumes to be slightly higher than in the fiscal first quarter [7] - Management anticipates lower margins sequentially due to recent softening in HRC prices [7] Other Developments - On May 6, 2025, the company executed the fourth amendment to its credit agreement, extending the maturity date of its $150 million ABL Facility to August 19, 2026 [8] - The facility remains secured by substantially all of the company's assets, providing flexibility for future borrowing [8]

Core Insights - Friedman Industries reported strong financial results for Q1 FY2026, with revenue of $134.8 million, a 17.6% increase from $114.6 million in Q1 FY2025, and net earnings nearly doubled to $5.0 million from $2.6 million [1][2] - The diluted earnings per share rose significantly to $0.71, up 91.9% from $0.37 in the same quarter last year [2] Financial Performance - The flat-roll segment generated $124.1 million in revenue, a 20.0% increase from $103.4 million in Q1 FY2025, while the tubular segment revenue decreased by 4.5% to $10.7 million [2][5] - Total tons sold in the flat-roll segment increased to 141,500 from 119,000, indicating strong demand despite a slight decline in average selling price from $932 per ton to $926 per ton [5] Operational Highlights - The company achieved an operating cash flow of $15.5 million and reduced debt by $14.7 million, enhancing its balance sheet [6] - The focus on increasing operational efficiency and processing inventory effectively has been a priority, with over 160,000 tons processed [4][6] Business Model and Strategy - Friedman Industries operates primarily in two segments: flat-roll products and tubular products, with flat-roll products accounting for the majority of sales [3][8] - The company serves a diverse customer base, including over 440 customers in flat-roll and 80 in tubular, which helps mitigate risks associated with supplier concentration [10] Future Outlook - Management anticipates a slight increase in shipped volume for Q2 FY2026, although margins are expected to contract due to softening prices for Hot-Rolled Coil steel [11] - Key factors to monitor include price trends for core steel products and the company's ability to maintain profitability in both segments [12]

[Friedman Industries, Inc. Q1 FY2026 Earnings Release](index=1&type=section&id=Friedman%20Industries%2C%20Incorporated%20Announces%20First%20Quarter%20Results) [Financial Highlights and Performance Summary](index=1&type=section&id=June%2030%2C%202025%20Quarter%20Highlights) The company reported strong Q1 FY2026 results with significantly improved net earnings and sales, alongside robust operating cash flow Quarterly Performance Comparison | Metric | Q1 FY2026 (ended Jun 30, 2025) | Q1 FY2025 (ended Jun 30, 2024) | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $134.8 million | $114.6 million | +17.6% | | **Net Earnings** | $5.0 million | $2.6 million | +93.8% | | **Diluted EPS** | $0.71 | $0.37 | +91.9% | | **Earnings from Operations** | $7.0 million | -$1.4 million | N/A | - The increase in sales was driven by stronger customer demand and successful commercial efforts to increase capacity utilization[3](index=3&type=chunk) Sales Volume Breakdown | Sales Volume | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | **Inventory Sold** | 141,500 tons | 119,000 tons | | **Toll Processing** | 19,000 tons | 24,000 tons | - The company generated **$15.5 million in operating cash flow**, reduced debt by **$14.7 million**, and maintained a working capital balance of $117.5 million[5](index=5&type=chunk) [Consolidated Financial Statements](index=1&type=section&id=Consolidated%20Financial%20Statements) The statements show a significant turnaround in operational profitability and a strengthened balance sheet with reduced total liabilities [Summary of Operations (Income Statement)](index=1&type=section&id=SUMMARY%20OF%20OPERATIONS%20(unaudited)) Summary of Operations | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net Sales** | $134,777 | $114,551 | | **Costs of materials sold** | $105,704 | $96,414 | | **Earnings (loss) from operations** | $7,043 | $(1,398) | | **Gain on economic hedges of risk** | $276 | $5,375 | | **Net earnings** | $5,028 | $2,567 | [Summarized Balance Sheets](index=2&type=section&id=SUMMARIZED%20BALANCE%20SHEETS%20(unaudited)) Summarized Balance Sheets | (In thousands) | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | **Total Assets** | $219,078 | $226,822 | | **Total Liabilities** | $81,798 | $94,397 | | **Total Stockholders' Equity** | $137,280 | $132,425 | [Segment Performance](index=2&type=section&id=Segment%20Performance) The Flat-Roll segment showed strong growth while the Tubular segment saw declining sales but improved profitability [Flat-Roll Segment Operations](index=2&type=section&id=FLAT-ROLL%20SEGMENT%20OPERATIONS) Flat-Roll Segment Performance | Flat-Roll Segment | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | **Sales** | $124.1 million | $103.4 million | | **Sales Volume (Inventory)** | 132,500 tons | 109,000 tons | | **Avg. Selling Price** | ~$926 / ton | ~$932 / ton | | **Earnings from Operations** | $8.8 million | $2.7 million | [Tubular Segment Operations](index=3&type=section&id=TUBULAR%20SEGMENT%20OPERATIONS) Tubular Segment Performance | Tubular Segment | Q1 FY2026 | Q1 FY2025 | | :--- | :--- | :--- | | **Sales** | $10.7 million | $11.2 million | | **Sales Volume** | 9,000 tons | 10,000 tons | | **Avg. Selling Price** | ~$1,206 / ton | ~$1,140 / ton | | **Earnings (Loss) from Operations** | $1.3 million | $(1.2) million | [Hedging Activities](index=3&type=section&id=HEDGING%20ACTIVITIES) The company uses HRC futures to manage price risk, resulting in a recognized gain of approximately $0.3 million for the quarter - The company uses mark-to-market (MTM) accounting for its hedging activities, which can cause gains or losses to be recognized in different periods than the corresponding changes in physical margins[9](index=9&type=chunk) - A gain of approximately **$0.3 million** was recognized on hedging activities for the quarter ended June 30, 2025[9](index=9&type=chunk) [Business Outlook](index=3&type=section&id=OUTLOOK) The company expects slightly higher sales volume but lower margins in Q2 FY2026 due to softening hot-rolled coil prices - Sales volume for Q2 FY2026 is expected to be **slightly higher** than Q1 as the company works to increase capacity utilization[10](index=10&type=chunk) - Margins are expected to be **lower in Q2 FY2026** compared to Q1 due to softening HRC prices[10](index=10&type=chunk) - Management maintains a **positive long-term outlook**, citing a strong financial position and favorable long-term industry demand[11](index=11&type=chunk) [About the Company and Forward-Looking Statements](index=3&type=section&id=About%20the%20Company%20and%20Forward-Looking%20Statements) The company manufactures steel products and advises that forward-looking statements are subject to risks and uncertainties - The company operates plants in Arkansas, Alabama, Indiana, Illinois, and Texas[11](index=11&type=chunk) - The report's forward-looking statements, particularly under the "Outlook" section, are not guarantees of future performance and are subject to business risks and uncertainties[13](index=13&type=chunk)[14](index=14&type=chunk)

Part I — FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) For the quarter ended June 30, 2025, Friedman Industries reported significant year-over-year growth, with net sales increasing to $134.8 million from $114.6 million and net earnings rising to $5.0 million from $2.6 million. This performance translated to a diluted EPS of $0.71, up from $0.37 in the prior-year quarter. The balance sheet shows total assets of $219.1 million and total stockholders' equity of $137.3 million as of June 30, 2025. Cash flow from operations was a positive $15.5 million, a substantial improvement from a $6.1 million use of cash in the same period last year, primarily driven by a decrease in inventories [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | **Total Current Assets** | $157,929 | $166,467 | | Inventories | $103,458 | $113,689 | | **Total Assets** | **$219,078** | **$226,822** | | **Total Current Liabilities** | $40,476 | $38,324 | | Asset Based Lending Facility | $33,039 | $47,728 | | **Total Liabilities** | **$81,798** | **$94,397** | | **Total Stockholders' Equity** | **$137,280** | **$132,425** | - Total assets decreased from **$226.8 million** at March 31, 2025, to **$219.1 million** at June 30, 2025, primarily due to a reduction in inventories and cash[10](index=10&type=chunk) - Total liabilities decreased significantly from **$94.4 million** to **$81.8 million**, largely driven by a **$14.7 million** reduction in the asset-based lending facility balance[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Quarterly Statement of Operations (in thousands, except per share data) | Metric | Q1 FY2026 (Ended June 30, 2025) | Q1 FY2025 (Ended June 30, 2024) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net Sales | $134,777 | $114,551 | +17.7% | | Earnings (Loss) from Operations | $7,043 | $(1,398) | Significant Turnaround | | Net Earnings | $5,028 | $2,567 | +95.9% | | Diluted EPS | $0.71 | $0.37 | +91.9% | - The company experienced a significant turnaround in operating performance, moving from an operating loss of **$1.4 million** in Q1 2024 to an operating profit of **$7.0 million** in Q1 2025[11](index=11&type=chunk) - Gain on economic hedges of risk was substantially lower at **$0.28 million** compared to **$5.38 million** in the prior-year quarter, indicating that the improved operating performance was driven by core operations rather than hedging gains[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Quarterly Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $15,489 | $(6,059) | | Net Cash used in Investing Activities | $(1,784) | $(1,057) | | Net Cash from (used in) Financing Activities | $(14,981) | $5,365 | | **Decrease in Cash** | **$(1,276)** | **$(1,751)** | - Cash from operations improved significantly to a **$15.5 million** inflow, compared to a **$6.1 million** outflow in the prior year, mainly due to a **$10.2 million** decrease in inventories[13](index=13&type=chunk) - Financing activities used **$15.0 million** in cash, primarily due to net repayments of **$14.7 million** on the asset-based lending facility[13](index=13&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies and provide further breakdown of financial statement items. Key details include a decrease in inventory to $103.5 million, an outstanding balance of $33.0 million on the $150 million ABL facility, and segment performance showing the Flat-Roll division as the primary driver of revenue and operating income. The company also reported a $0.28 million gain on economic hedges and disaggregated its revenue, with Company Owned Flat-Roll Products contributing $122.8 million in the quarter Inventory Breakdown (in thousands) | Inventory Type | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Flat-Roll raw material | $71,441 | $85,865 | | Flat-Roll finished goods | $16,439 | $15,737 | | Tubular raw material | $9,619 | $7,055 | | Tubular finished goods | $5,959 | $5,032 | | **Total** | **$103,458** | **$113,689** | - The company has a **$150 million** asset-based lending facility, which was amended to extend the maturity date to August 19, 2026. As of June 30, 2025, the outstanding balance was approximately **$33.0 million** with an interest rate of 6.2%[21](index=21&type=chunk)[22](index=22&type=chunk) Segment Performance - Q1 FY2026 (in thousands) | Segment | Net Sales | Earnings from Operations | | :--- | :--- | :--- | | Flat-Roll | $124,067 | $8,786 | | Tubular | $10,710 | $1,329 | | Other | — | $(3,072) | | **Total** | **$134,777** | **$7,043** | - The company utilizes hot-rolled coil futures for economic hedges, recognizing a gain of **$0.28 million** for the quarter ended June 30, 2025, compared to a much larger gain of **$5.38 million** in the prior-year period[31](index=31&type=chunk)[36](index=36&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the strong quarterly performance to increased sales volume and improved margins. Sales volume rose to 141,500 tons from inventory (plus 19,000 tons toll processing) from 119,000 tons (plus 24,000 tons toll processing) year-over-year, driven by stronger demand and successful commercial efforts. Adjusted gross profit increased to $29.1 million from $18.1 million. The company's liquidity remains strong, with $103.7 million available under its ABL facility. Looking ahead, the company expects slightly higher sales volume in Q2 fiscal 2026 but anticipates lower margins due to softening hot-rolled coil prices [Results of Operations](index=20&type=section&id=Results%20of%20Operations) - Compared to the prior-year quarter, sales increased by **$20.2 million**, primarily due to higher sales volume. Adjusted gross profit (a non-GAAP measure) rose by **$10.9 million** to **$29.1 million**[55](index=55&type=chunk) - The market price of hot-rolled steel coil (HRC) was relatively stable at the top of a price cycle during the quarter, leading to increased margins. This contrasts with the declining price trend in the prior-year quarter which compressed margins[56](index=56&type=chunk) - The Flat-roll segment's operating earnings increased to **$8.8 million** from **$2.7 million** YoY, driven by higher sales volume despite a slight decrease in average per-ton selling price[57](index=57&type=chunk) - The Tubular segment's operating results improved from a loss of **$1.2 million** to earnings of **$1.3 million** YoY, despite a decrease in tons sold, due to a higher average selling price per ton[60](index=60&type=chunk) [Financial Position, Liquidity and Capital Resources](index=22&type=section&id=FINANCIAL%20POSITION,%20LIQUIDITY%20AND%20CAPITAL%20RESOURCES) - The company's working capital was **$117.5 million** at June 30, 2025, down from **$128.1 million** at March 31, 2025. The current ratio stood at 3.9[66](index=66&type=chunk) - As of June 30, 2025, the company had an outstanding balance of **$33.0 million** on its **$150 million** ABL facility and had access to approximately **$103.7 million** under the borrowing base calculation[68](index=68&type=chunk) - Management believes its current cash position, cash flows from operations, and borrowing capability are adequate to fund expected cash requirements for the next 12 months and is in the process of renewing its credit arrangement[69](index=69&type=chunk) [Outlook](index=23&type=section&id=OUTLOOK) - The company expects sales volume for the second quarter of fiscal 2026 to be slightly higher than the first quarter[72](index=72&type=chunk) - Due to softening hot-rolled coil prices at the end of Q1 and start of Q2, the company anticipates lower margins for the second quarter compared to the first quarter[72](index=72&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that this disclosure is not required for this filing - Disclosure for this item is not required[76](index=76&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025. There were no material changes to the company's internal control over financial reporting during the quarter - Based on an evaluation as of the end of the quarter, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[77](index=77&type=chunk) - No changes occurred during the fiscal quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[78](index=78&type=chunk) Part II — OTHER INFORMATION [Item 5. Other Information](index=25&type=section&id=Item%205.%20Other%20Information) The company reported that none of its officers or directors adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - During the three months ended June 30, 2025, no officers or directors adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement for the purchase or sale of company securities[80](index=80&type=chunk) [Item 6. Exhibits](index=25&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act of 2002 and Inline XBRL documents - The exhibits filed with this report include certifications from the Principal Executive Officer and Principal Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act[81](index=81&type=chunk) - Interactive data files (Inline XBRL documents) are also included as exhibits[81](index=81&type=chunk)

Company Overview - Friedman Industries, Incorporated is a manufacturer and processor of steel products with operating plants in multiple locations including Hickman, Arkansas; Decatur, Alabama; East Chicago, Indiana; Granite City, Illinois; Sinton, Texas; and Lone Star, Texas [4] - The company has two reportable segments: flat-roll products and tubular products, with the flat-roll segment processing hot-rolled steel coils and the tubular segment manufacturing electric resistance welded pipe [4] Leadership Appointment - Gaurav Chhibbar has been appointed as the new Chief Operating Officer (COO) effective July 10, 2025, bringing a distinguished career in operations excellence, strategy, corporate finance, and M&A due diligence [1][2] - Michael Taylor, President and CEO, expressed confidence in Gaurav's leadership and strategic vision, which aligns with the company's future goals [3] Professional Background - Gaurav Chhibbar has extensive experience from roles at Boston Consulting Group, Metal Edge Partners, and Cargill, where he supported various sectors including financial sponsors and Fortune 100 firms [2] - He holds an MBA from The University of Chicago Booth School of Business and additional degrees in International Business and Engineering [3]

Group 1 - Friedman Industries has been added to the Russell 3000 Index, effective June 30, 2025, enhancing its market visibility and attracting investor capital [1][7] - The company aims to increase institutional ownership and improve capital inflows following its recent listing on Nasdaq in April 2025 [1][7] - Membership in the Russell 3000 Index also includes automatic inclusion in the small-cap Russell 2000 Index and relevant growth and value style indexes, which are widely utilized by investment managers [1][7] Group 2 - Friedman Industries is headquartered in Longview, Texas, and operates manufacturing plants in multiple states, including Arkansas, Alabama, Indiana, Illinois, and Texas [2] - The company has two reportable segments: flat-roll products and tubular products, with specific operations detailed for each segment [2]