Friedman Industries(FRD) - 2024 Q4 - Annual Report

PART I Item 1. Business Friedman Industries, established in 1965, manufactures and processes steel products through its flat-roll and tubular segments, serving distributors and manufacturers Business Segments 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] - 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] - The tubular product segment, Texas Tubular Products (TTP) in Lone Star, Texas, operates two API-licensed electric resistance welded pipe mills[15] - Both flat-roll and tubular segments rely on a limited number of suppliers, posing a material adverse risk if any are lost[14][16] Marketing and Sales 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] - 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] - As of March 31, 2024, the flat-roll sales force comprised 26 personnel, and the tubular sales force had three personnel[18][19] Competition and Human Capital 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] - As of March 31, 2024, the Company employed 268 full-time employees in the United States[21] - 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][23] Executive Officers of the Company 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 Disclosure of risk factors is not required for the registrant - Disclosure of risk factors is not required[26] Item 1B. Unresolved Staff Comments The company reports no unresolved staff comments - The Company has no unresolved staff comments[27] Item 1C. Cybersecurity 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] - The company implements controls such as firewalls, VPNs, multi-factor authentication, and automated intrusion detection systems[29] - Employee training on cybersecurity threats is conducted, and critical systems are protected by rigorous data backups and disaster recovery plans[30][31] - The company is not aware of any prior incident that has materially affected its data, operations, or financial reporting[32] Item 2. Properties 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] Item 3. Legal Proceedings 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] Item 4. Mine Safety Disclosures This section is not applicable to the company - This item is not applicable[37] PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 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] - As of April 26, 2024, there were approximately 156 shareholders of record[42] - 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] Item 6. Selected Financial Data Disclosure of selected financial data is not required for the registrant - Disclosure of selected financial data is not required[43] Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 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] Item 7A. Quantitative and Qualitative Disclosures about Market Risk 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] Item 8. Financial Statements and Supplementary Data 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] - Schedule II — Valuation and Qualifying Accounts is also incorporated by reference[47] Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with accountants on accounting and financial disclosure - None reported[48] Item 9A. Controls and Procedures 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] Item 9B. Other Information The company reports no other information - None reported[50] Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections This section is not applicable to the company - This item is not applicable[51] PART III Item 10. Directors, Executive Officers and Corporate Governance 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] - Information regarding executive officers is incorporated by reference from Item 1 of this Form 10-K[54] - The Company has adopted the Friedman Industries, Incorporated Code of Conduct and Ethics[55] Item 11. Executive Compensation 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] Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 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][58][59] Item 13. Certain Relationships, Related Transactions and Director Independence 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] Item 14. Principal Accountant Fees and Services 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] PART IV Item 15. Exhibits and Financial Statement Schedules 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] - 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][66]