Segment Details In the fiscal fourth quarter, Friedman Industries' net income was $4.9 million, down 21.4% from $6.3 million in the prior-year quarter. Revenues in Detail In the quarter under review, Friedman Industries' adjusted gross profit increased 1.5% to $27.5 million. However, the adjusted gross margin contracted 103 basis points (bps) to 20.8%. Friedman Industries, Incorporated (FRD) delivered earnings per share (EPS) of 71 cents in the fourth quarter of fiscal 2024, down 17.4% year over year. Full- ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Friedman Industries reported its second most profitable year in FY2024 with **$17.3 million** net earnings on **$516.3 million** sales, driven by **19%** volume growth Q4 Fiscal 2024 Highlights (Quarter ended March 31, 2024) | Metric | Value | | :--- | :--- | | Net Earnings ($ million) | $5.0 million | | Sales ($ million) | $132.2 million | | Sales Volume Increase (vs Q3) (%) | 13% | | Sales Volume Increase (vs Q4 2023) (%) | 9% | Fiscal Year 2024 Highlights (Year ended March 31, 2024) | Metric | Value | | :--- | :--- | | Net Earnings ($ million) | $17.3 million | | Sales ($ million) | $516.3 million | | Sales Volume Increase (vs FY 2023) (%) | 19% | | Year-End Working Capital ($ million) | $116.0 million | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management attributes fiscal 2024's strong profitability and **19%** sales volume growth to strategic assets, anticipating continued expansion - Fiscal 2024 was the second most profitable fiscal year in the company's history, demonstrating the quality of its assets and strategy[4](index=4&type=chunk) - Sales volume grew by approximately **19%** in fiscal 2024, driven by the new Sinton, TX facility, which is expected to continue ramping up towards full production capacity in fiscal 2025[4](index=4&type=chunk) - The company is expanding its market share among top US steel consumers and has proven its ability to remain profitable through steel price volatility[4](index=4&type=chunk) - Management's favorable outlook is supported by a recent dividend increase, with a focus on delivering long-term value and unlocking further growth from current assets[4](index=4&type=chunk) [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) Consolidated results show decreased net earnings for Q4 and FY2024, with increased total assets and liabilities strengthening stockholders' equity [Statements of Operations](index=2&type=section&id=Statements%20of%20Operations) FY2024 net sales were **$516.3 million** with **$17.3 million** net earnings, while Q4 sales increased to **$132.2 million** but net earnings decreased Summary of Operations (In thousands, except for per share data) | | Three Months Ended March 31, | Year Ended March 31, | | :--- | :--- | :--- | | | **2024 (in thousands)** | **2023 (in thousands)** | **2024 (in thousands)** | **2023 (in thousands)** | | **Net Sales** | **$132,232** | **$124,186** | **$516,251** | **$547,542** | | Earnings from operations | $6,933 | $7,254 | $24,518 | $21,074 | | **Net earnings** | **$4,958** | **$6,311** | **$17,345** | **$21,344** | | **Diluted EPS** | **$0.71** | **$0.86** | **$2.39** | **$2.91** | [Balance Sheets](index=2&type=section&id=Balance%20Sheets) As of March 31, 2024, total assets increased to **$230.0 million**, liabilities to **$102.5 million**, and stockholders' equity to **$127.5 million** Summarized Balance Sheets (In thousands) | | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$230,019** | **$199,312** | | Total Liabilities | $102,544 | $83,880 | | **Total Stockholders' Equity** | **$127,475** | **$115,432** | [Segment Performance](index=2&type=section&id=Segment%20Performance) Q4 2024 Flat-Roll segment sales and profit increased, while Tubular segment profit declined due to lower selling prices despite higher volume [Flat-Roll Segment Operations](index=2&type=section&id=Flat-Roll%20Segment%20Operations) Flat-Roll segment sales increased to **$120.6 million** in Q4 2024, with operating profit rising to **$9.6 million**, driven by higher selling prices and toll processing volume Flat-Roll Segment Performance (Q4) | Metric | 2024 Quarter | 2023 Quarter | | :--- | :--- | :--- | | Sales ($ million) | $120.6 million | $112.8 million | | Operating Profit ($ million) | $9.6 million | $7.7 million | | Sales Volume (Inventory) (tons) | ~120,000 tons | ~124,000 tons | | Sales Volume (Toll) (tons) | 29,500 tons | 14,000 tons | | Avg. Selling Price/ton ($) | $993 | $915 | [Tubular Segment Operations](index=3&type=section&id=Tubular%20Segment%20Operations) Tubular segment sales remained flat at **$11.6 million** in Q4 2024, but operating profit sharply declined to **$0.8 million** due to lower average selling prices Tubular Segment Performance (Q4) | Metric | 2024 Quarter | 2023 Quarter | | :--- | :--- | :--- | | Sales ($ million) | $11.6 million | $11.4 million | | Operating Profit ($ million) | $0.8 million | $2.5 million | | Tons Sold (tons) | ~9,500 tons | ~8,000 tons | | Avg. Selling Price/ton ($) | $1,216 | $1,404 | [Hedging Activities](index=4&type=section&id=Hedging%20Activities) Friedman Industries uses HRC futures to manage price risk, recognizing hedging gains of approximately **$1.1 million** in Q4 2024 and **$1.4 million** for the full fiscal year - The company uses HRC futures to manage price risk and aims to produce more consistent financial results over price cycles[13](index=13&type=chunk) Recognized Hedging Gains | Period | Gain Recognized ($ million) | | :--- | :--- | | Q4 Fiscal 2024 | ~$1.1 million | | Fiscal Year 2024 | ~$1.4 million | [Outlook](index=4&type=section&id=Outlook) Q1 fiscal 2025 sales volume is expected to be similar to Q4 fiscal 2024 despite downtime, with lower margins anticipated to be offset by **$5.3 million** in hedging gains - Sales volume for Q1 fiscal 2025 is expected to be similar to Q4 fiscal 2024, despite planned downtime for equipment installation and maintenance[14](index=14&type=chunk) - First-quarter margins are expected to be lower than fourth-quarter margins due to declining HRC prices[14](index=14&type=chunk) - The company anticipates the lower margin to be offset by hedging gains, which totaled approximately **$5.3 million** for Q1 fiscal 2025 as of the date of the release[14](index=14&type=chunk) [About Friedman Industries](index=4&type=section&id=About%20Friedman%20Industries) Friedman Industries, headquartered in Longview, Texas, manufactures and processes steel products through its flat-roll and tubular segments across US facilities - The company has two reportable segments: flat-roll products (operating in Hickman, AR; Decatur, AL; East Chicago, IN; Granite City, IL; Sinton, TX) and tubular products (operating in Lone Star, TX)[15](index=15&type=chunk) - The Sinton facility is newly constructed, commencing operations in October 2022, while the East Chicago and Granite City facilities were acquired in April 2022[15](index=15&type=chunk)

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 Co ...

March 31, 2024 Quarter Highlights: Fiscal Year March 31, 2024 Highlights: "We ended fiscal 2024 with a strong fourth quarter that made it our second most profitable fiscal year in Friedman's history," said Michael J. Taylor, President and Chief Executive Officer. "This result is evidence of the quality of our assets and our strategy, as well as the hard work and dedication of our team members, who make and deliver our products to customers every day." "I am pleased that investors are starting to recognize t ...

PART I [Item 1. Business](index=3&type=section&id=Item%201.%20Business) Friedman Industries, established in 1965, manufactures and processes steel products through its flat-roll and tubular segments, serving distributors and manufacturers [Business Segments](index=3&type=section&id=Business%20Segments) The company operates two segments: flat-roll products, processing hot-rolled steel coils at five facilities, and tubular products, manufacturing pipes at its TTP division - The Company's operations are divided into two reportable segments: **flat-roll products** and **tubular products**[11](index=11&type=chunk) - The flat-roll segment operates **five hot-rolled coil processing facilities** across Arkansas, Alabama, Indiana, Illinois, and Texas, with new facilities added in 2022[12](index=12&type=chunk) - The tubular product segment, Texas Tubular Products (TTP) in Lone Star, Texas, operates **two API-licensed electric resistance welded pipe mills**[15](index=15&type=chunk) - Both flat-roll and tubular segments rely on a **limited number of suppliers**, posing a material adverse risk if any are lost[14](index=14&type=chunk)[16](index=16&type=chunk) [Marketing and Sales](index=4&type=section&id=Marketing%20and%20Sales) Flat-roll products comprised **92% of fiscal 2024 sales**, serving approximately 480 customers, while tubular products accounted for **8%**, serving 92 customers, primarily through dedicated internal sales forces Sales Contribution by Product Group (Fiscal Years 2024 & 2023) | Product and Service Groups | Fiscal 2024 | Fiscal 2023 | | :--- | :--- | :--- | | Flat-Roll Products | 92% | 89% | | Tubular Products | 8% | 11% | - The flat-roll segment serves approximately **480 customers**, with **O'Neal Steel** representing **16% of total company sales** in fiscal 2024[17](index=17&type=chunk) - The tubular segment sells to approximately **92 customers** nationally, primarily steel and pipe distributors, with no single customer accounting for **10% or more of total sales**[18](index=18&type=chunk) - As of March 31, 2024, the flat-roll sales force comprised **26 personnel**, and the tubular sales force had **three personnel**[18](index=18&type=chunk)[19](index=19&type=chunk) [Competition and Human Capital](index=4&type=section&id=Competition%20and%20Human%20Capital) The company competes in a highly competitive steel market based on price and delivery, employing **268 full-time U.S. employees** as of March 31, 2024, with a focus on talent and safety - The company competes in a **highly competitive market** against other steel processors, manufacturers, and brokers, primarily on **pricing and rapid delivery**[20](index=20&type=chunk) - As of March 31, 2024, the Company employed **268 full-time employees** in the United States[21](index=21&type=chunk) - The company's human capital strategy emphasizes attracting and retaining diverse talent through **competitive compensation and benefits**, and ensuring **employee health and safety** via established policies and training[22](index=22&type=chunk)[23](index=23&type=chunk) [Executive Officers of the Company](index=4&type=section&id=Executive%20Officers%20of%20the%20Company) As of March 31, 2024, key executive officers include Michael J. Taylor, President and CEO, and Alex LaRue, CFO – Secretary and Treasurer Executive Officers (as of March 31, 2024) | Name | Age | Position, Offices with the Company | | :--- | :--- | :--- | | Michael J. Taylor | 65 | President and Chief Executive Officer since September 2019; Chairman of the Board since June 2017 | | Alex LaRue | 38 | Chief Financial Officer – Secretary and Treasurer since March 2018 | [Item 1A. Risk Factors](index=6&type=section&id=Item%201A.%20Risk%20Factors) Disclosure of risk factors is not required for the registrant - Disclosure of risk factors is **not required**[26](index=26&type=chunk) [Item 1B. Unresolved Staff Comments](index=6&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - The Company has **no unresolved staff comments**[27](index=27&type=chunk) [Item 1C. Cybersecurity](index=6&type=section&id=Item%201C.%20Cybersecurity) The Board oversees the cybersecurity program, managed by the IT Director and aligned with NIST 2.0, employing comprehensive controls and training, with no material incidents reported - The Board of Directors oversees the cybersecurity program, managed by the IT Director and aligned with the **NIST Cybersecurity Framework 2.0**[28](index=28&type=chunk) - The company implements controls such as **firewalls, VPNs, multi-factor authentication**, and **automated intrusion detection systems**[29](index=29&type=chunk) - Employee training on cybersecurity threats is conducted, and critical systems are protected by **rigorous data backups and disaster recovery plans**[30](index=30&type=chunk)[31](index=31&type=chunk) - The company is **not aware of any prior incident** that has materially affected its data, operations, or financial reporting[32](index=32&type=chunk) [Item 2. Properties](index=7&type=section&id=Item%202.%20Properties) The company owns and leases multiple properties for its flat-roll and tubular segments across several states, with all owned properties held in fee and unencumbered Principal Properties Overview | Location | Type | Ownership | | :--- | :--- | :--- | | Lone Star, TX | Plant, Offices, Land | Owned | | Longview, TX | Offices | Leased | | Hickman, AR | Plant, Offices, Land | Owned | | Decatur, AL | Plant, Offices, Land | Owned | | Sinton, TX | Plant, Offices, Land | Leased (99-year lease) | | East Chicago, IN | Plant, Offices, Land | Owned | | Granite City, IL | Plant, Offices, Land | Leased | | The Woodlands, TX | Offices | Leased | - All owned real properties are held in fee and are **not subject to any mortgage or deed of trust**[33](index=33&type=chunk) [Item 3. Legal Proceedings](index=7&type=section&id=Item%203.%20Legal%20Proceedings) The company reports no material pending legal proceedings - The Company is **not a party to any material pending legal proceedings** during fiscal year 2024[36](index=36&type=chunk) [Item 4. Mine Safety Disclosures](index=7&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - This item is **not applicable**[37](index=37&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=9&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NYSE American under 'FRD', with approximately **156 shareholders of record** as of April 26, 2024, and stock price and dividend details incorporated by reference - The Company's Common Stock is traded on the **NYSE American** under the symbol **FRD**[40](index=40&type=chunk) - As of April 26, 2024, there were approximately **156 shareholders of record**[42](index=42&type=chunk) - Information on stock prices and cash dividends is incorporated by reference from the Company's Annual Report to Shareholders for fiscal year ended March 31, 2024[41](index=41&type=chunk) [Item 6. Selected Financial Data](index=9&type=section&id=Item%206.%20Selected%20Financial%20Data) Disclosure of selected financial data is not required for the registrant - Disclosure of selected financial data is **not required**[43](index=43&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=9&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Information for this item is incorporated by reference from the 'Management's Discussion and Analysis' section of the Company's Annual Report to Shareholders for fiscal year ended March 31, 2024 - Information for this item is **incorporated by reference** from the Company's Annual Report to Shareholders for the fiscal year ended March 31, 2024[44](index=44&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=9&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Disclosure of quantitative and qualitative information about market risk is not required for the registrant - Disclosure of quantitative and qualitative information about market risk is **not required**[45](index=45&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=9&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The company's consolidated financial statements for fiscal years ended March 31, 2024 and 2023, along with auditor reports and Schedule II, are incorporated by reference from the Annual Report - The Consolidated Balance Sheets, Statements of Operations, Comprehensive Income, Stockholders' Equity, Cash Flows, and Notes to Consolidated Financial Statements for fiscal years ended March 31, 2024 and 2023 are **incorporated by reference**[46](index=46&type=chunk) - Schedule II — Valuation and Qualifying Accounts is also **incorporated by reference**[47](index=47&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=9&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with accountants on accounting and financial disclosure - **None reported**[48](index=48&type=chunk) [Item 9A. Controls and Procedures](index=9&type=section&id=Item%209A.%20Controls%20and%20Procedures) Information regarding controls and procedures is incorporated by reference from the 'Management's Report on Internal Control Over Financial Reporting' section of the Company's Annual Report - Information regarding controls and procedures is **incorporated by reference** from the Company's Annual Report to Shareholders[49](index=49&type=chunk) [Item 9B. Other Information](index=10&type=section&id=Item%209B.%20Other%20Information) The company reports no other information - **None reported**[50](index=50&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=10&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This section is not applicable to the company - This item is **not applicable**[51](index=51&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=11&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors and corporate governance is incorporated by reference from the 2024 proxy statement, with executive officer details in Item 1, and a Code of Conduct and Ethics adopted for all personnel - Information regarding directors and corporate governance is **incorporated by reference** from the Company's proxy statement for the 2024 Annual Meeting of Shareholders[53](index=53&type=chunk) - Information regarding executive officers is **incorporated by reference** from Item 1 of this Form 10-K[54](index=54&type=chunk) - The Company has adopted the **Friedman Industries, Incorporated Code of Conduct and Ethics**[55](index=55&type=chunk) [Item 11. Executive Compensation](index=11&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's proxy statement for the 2024 Annual Meeting of Shareholders - Information for this item is **incorporated by reference** from the Company's proxy statement[56](index=56&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=11&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and equity compensation plans is incorporated by reference from the company's 2024 proxy statement and Note 3 of the Consolidated Financial Statements - All information regarding security ownership and related matters is **incorporated by reference** from the Company's proxy statement and the Notes to Consolidated Financial Statements in the Annual Report[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) [Item 13. Certain Relationships, Related Transactions and Director Independence](index=11&type=section&id=Item%2013.%20Certain%20Relationships%2C%20Related%20Transactions%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's proxy statement for the 2024 Annual Meeting of Shareholders - Information for this item is **incorporated by reference** from the Company's proxy statement[60](index=60&type=chunk) [Item 14. Principal Accountant Fees and Services](index=11&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's proxy statement for the 2024 Annual Meeting of Shareholders - Information for this item is **incorporated by reference** from the Company's proxy statement[61](index=61&type=chunk) PART IV [Item 15. Exhibits and Financial Statement Schedules](index=12&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and exhibits included or incorporated by reference into the Form 10-K, including the Annual Report, Code of Conduct, and various certifications - The financial statements and Schedule II — Valuation and Qualifying Accounts from the Company's Annual Report to Shareholders for fiscal year ended March 31, 2024, are **incorporated by reference**[63](index=63&type=chunk) - A list of **22 exhibits** is provided, including corporate governance documents, credit agreements, certifications, and Inline XBRL data files, with key exhibits filed herewith[65](index=65&type=chunk)[66](index=66&type=chunk)

FORM 10-Q Washington, D.C. 20549 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED December 31, 2023 OR ☐ 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 74-1504405 (State o ...

Sales Performance - Sales for the six months ended September 30, 2023, decreased by approximately $43.4 million to $257 million compared to the same period in 2022, despite an increase in tons sold from approximately 221,500 to 257,000 tons [71]. - Flat-roll segment sales for the 2023 period totaled approximately $245.7 million, down from $272.6 million in 2022, with average selling price per ton decreasing from approximately $1,367 to $1,011 [73]. - Tubular segment sales for the 2023 period were approximately $22.3 million, a decrease from $38.9 million in 2022, with tons sold dropping from approximately 21,000 to 16,000 tons [75]. - The Company expects sales volume for the third quarter of fiscal 2024 to be slightly lower than the second quarter volume due to seasonal impacts [94]. Profitability - Gross profit for the six months ended September 30, 2023, was approximately $22.2 million, with a gross profit margin of 8.3%, up from 7.5% in the prior year [71]. - Operating profits for the flat-roll segment increased to approximately $15.0 million in 2023 from $12.4 million in 2022, despite recognized losses on hedging activities [73]. - The tubular segment operated at a break-even level in the 2023 quarter, down from an operating profit of approximately $3.3 million in the 2022 quarter [85]. - The Company anticipates margin improvement during the third quarter and continuing into the fourth quarter due to increasing HRC prices, which have risen approximately $300 per ton [94]. Costs and Expenses - Selling, general and administrative costs decreased by approximately $0.2 million in the 2023 period compared to 2022, primarily due to one-time costs in the prior year [78]. - Income tax provision decreased from approximately $4.2 million in 2022 to approximately $3.7 million in 2023, with an effective tax rate of 24.9% for 2023 [79]. - The Company recognized a loss of approximately $0.4 million related to derivatives designated for hedge accounting for the six months ended September 30, 2023, while gaining approximately $4.8 million from derivatives not designated for hedge accounting [93]. Financial Position - The company's current ratio improved to 4.7 at September 30, 2023, compared to 3.2 at March 31, 2023, indicating better liquidity [89]. - The Company has a $150 million asset-based lending facility (ABL Facility) with a balance of approximately $54.4 million as of September 30, 2023, and an applicable interest rate of 7.5% [91]. - The Company's borrowing base calculation supported access to approximately $119.3 million under the ABL Facility as of September 30, 2023 [91]. - The Company had borrowings of approximately $34.2 million outstanding under the ABL Facility as of the filing date of the Form 10-Q [91]. - The Company believes its current cash position and cash flows from operations are adequate to fund expected cash requirements for the next 12 months [92]. Internal Controls - The Company has identified material weaknesses in internal control over financial reporting, which have not yet been remediated [101]. - The Company has engaged a consultant to assist with remediation efforts related to internal controls and has hired additional personnel to support these efforts [104]. - The Company expects the new ERP system to enhance the effectiveness of internal controls and reduce reliance on manual processes [104]. Future Outlook - The Company expects to continue monitoring and managing balance sheet components based on market conditions and operations [90].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2023 OR ☐ 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 74-1504405 (State or ot ...

Sales and Revenue - In fiscal year 2023, coil products accounted for 89% of total sales, up from 81% in fiscal year 2022, while tubular products decreased to 11% from 19%[17] - Sales to O'Neal Steel represented approximately 15% of total sales in fiscal year 2023, compared to 11% in fiscal year 2022[17] Operations and Facilities - The company operates five coil processing facilities and a tubular products division, with significant investments in new facilities, including a newly constructed facility in Sinton, Texas, which began operations in October 2022[12] - The tubular products segment operates two electric resistance welded pipe mills, licensed by the American Petroleum Institute, with a size range of 2 3/8" OD to 8 5/8" OD[15] - The company’s coil processing facilities are capable of cutting sheet and plate with thicknesses ranging from 16 gauge to 1" thick and widths from 36" to 96"[12] Employment and Workforce - As of March 31, 2023, the company employed 234 full-time employees, a significant increase from 98 full-time employees in the previous year[21] - The company’s sales force for coil products consisted of 24 personnel, while the tubular products division had 3 sales personnel as of March 31, 2023[18][19] Supply Chain and Competition - The company relies on a limited number of suppliers for its inventory, and the loss of any supplier could adversely affect its business[14][16] - The company is engaged in a highly competitive market, competing with other processors of hot-rolled steel coils and tubular manufacturers[20] Safety and Employee Policies - The company has established policies for employee safety and wellness, emphasizing the importance of a safe work environment and employee engagement in safety processes[23] Financial Reporting and Compliance - The financial statements for the fiscal year ended March 31, 2023, include consolidated balance sheets and statements of operations for both 2023 and 2022[56] - The company plans to file definitive copies of the proxy statement for the 2023 Annual Meeting of Shareholders with the SEC within 120 days after the end of the fiscal year[52] - The report includes a schedule for valuation and qualifying accounts as part of the financial statement schedules[56] - The report includes certifications pursuant to the Sarbanes-Oxley Act of 2002, signed by key executives[59] - The report outlines the consent of the independent auditor, Moss Adams LLP, confirming the accuracy of the financial statements[58] Corporate Governance - The company has incorporated various amendments to its Articles of Incorporation and Bylaws, reflecting changes made in previous years[58] - The company has made several amendments to its credit agreement, indicating ongoing financial management strategies[58] - The Annual Report to Shareholders for the fiscal year ended March 31, 2023, is included as a key exhibit[58] - The report lists the company's subsidiaries, providing insight into its organizational structure[58]

Financial Performance - Sales for the nine months ended December 31, 2022, increased by $213.2 million to $372.8 million compared to $172.8 million for the same period in 2021, driven by an increase in tons sold from approximately 147,500 tons to approximately 335,000 tons [76]. - Gross profit for the nine months ended December 31, 2022, decreased to $29.5 million, down from $43.4 million in the prior year, with gross profit as a percentage of sales dropping from approximately 20.7% to 7.0% [76]. - The coil product segment's sales for the 2022 period totaled $372.8 million, with an average selling price per ton decreasing from approximately $1,737 to $1,222, while tons sold increased from approximately 111,000 to 306,500 [78]. - The tubular product segment's sales for the 2022 period increased to $50.5 million from $37.3 million in 2021, with the average selling price per ton rising from approximately $1,074 to $1,785, despite a decrease in tons sold from approximately 36,500 to 28,500 [80]. - Coil segment sales for Q4 2022 totaled $100,231,001, a significant increase from $41,795,586 in Q4 2021, with a sales volume increase from approximately 29,000 tons to 106,000 tons [89]. - Tubular segment sales for Q4 2022 reached $11,629,092, up from $9,860,357 in Q4 2021, driven by an increase in average selling price per ton from approximately $1,111 to $1,648, despite a decrease in tons sold from 10,500 to 7,000 [92]. Operating Profit and Costs - The company recorded operating profits of approximately $15.7 million for the coil segment in the 2022 period, down from $33.5 million in the 2021 period, impacted by recognized net losses on hedging activities [78]. - The operating profit for the coil segment in Q4 2022 was approximately $3,259,000, compared to an operating loss of approximately $4,032,000 in Q4 2021 [89]. - The tubular segment recorded an operating profit of approximately $692,000 for Q4 2022, a recovery from an operating loss of approximately $647,000 in Q4 2021 [92]. - General, selling, and administrative costs increased by $5.0 million in the 2022 period, primarily due to costs associated with the Plateplus transaction and increased personnel [84]. - General, selling, and administrative costs increased by $2,706,608 in Q4 2022 compared to Q4 2021, primarily due to increased payroll and professional fees [94]. Other Income and Tax Provisions - Other income for the 2022 period was reported at $7.3 million, primarily from a gain on derivative instruments, compared to a loss of $4.8 million in the 2021 period [85]. - Other income for Q4 2022 was reported at $826,039, down from $1,727,134 in Q4 2021, mainly due to a decrease in gains on derivative instruments [95]. - Income tax provision decreased from $6.3 million in the 2021 period to $4.6 million in the 2022 period, mainly due to lower earnings before income tax [86]. - Income taxes shifted from a benefit of $967,681 in Q4 2021 to a provision of $431,579 in Q4 2022, reflecting higher earnings before income taxes [96]. Future Expectations - The company expects sales volume for Q4 2023 to be between 115,000 tons and 125,000 tons, higher than Q3 2023 due to increased sales at the new Sinton, Texas facility [103]. - The company anticipates margin improvement in Q4 2023 due to rising prices in the hot-rolled coil market [104]. Internal Controls and Reporting - The Company has identified material weaknesses in internal control over financial reporting, which may lead to material misstatements not being prevented or detected timely [112]. - The Company did not design relevant control activities necessary to address all identified risks of material misstatement, and some controls were implemented late in the fiscal year [112]. - The Company has added eight accounting personnel from Plateplus to improve segregation of duties and execution of controls [115]. - The Company transferred the enterprise resource planning (ERP) system from Plateplus to enhance control processes and reduce reliance on manual execution [115]. - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were not effective as of the end of the reporting period due to unresolved material weaknesses [109]. - The Company expects that the additional accounting personnel and new ERP system will remediate the identified material weaknesses over time [116]. - The Company has not filed its Form 10-K and Form 10-Q reports timely for the fiscal year ended March 31, 2022, and subsequent quarters [109]. - Management believes that the consolidated financial statements fairly present the financial condition and results of operations in accordance with U.S. Generally Accepted Accounting Principles [110]. - There were no changes in the Company's internal control over financial reporting that materially affected its effectiveness during the fiscal quarter ended December 31, 2022 [117]. - The Company will continue to monitor and make changes to its procedures and controls as necessary to ensure effectiveness [116]. Operational Developments - The new facility in Sinton, Texas, commenced operations in October 2022, with expected annual shipments ranging from 110,000 tons to 140,000 tons for fiscal 2024 [73]. - The company experienced significant volatility in hot-rolled steel coil prices, with a decline of approximately 52% from September 2021 to February 2022, followed by a sharp increase of approximately 60% due to geopolitical events [77].