Friedman Industries, Incorporated Announces Second Quarter Results

Core Insights - Friedman Industries reported a net loss of approximately $0.7 million for the second fiscal quarter ended September 30, 2024, compared to net earnings of approximately $3.5 million for the same quarter in 2023, with sales decreasing from approximately $130.7 million to $106.8 million [2][3][4] - The company experienced a decline in sales volume due to weaker demand and political uncertainty, with total sales volume for the 2024 quarter at approximately 121,500 tons of inventory sold and 18,000 tons of toll processing, down from 129,500 tons and 26,000 tons in the 2023 quarter [2][6][7] - Operating cash flow for the quarter was approximately $10.8 million, and the company reduced its debt by 22% during the quarter [1][2] Financial Performance - Net sales for the quarter were approximately $106.8 million, down from $130.7 million in the previous year, while cost of materials sold decreased from $110.3 million to $88.8 million [3][4] - The flat-roll segment reported sales of approximately $97.4 million, down from $120.5 million, with an average selling price per ton decreasing from approximately $983 to $858 [6] - The tubular segment's sales totaled approximately $9.4 million, compared to $10.2 million in the prior year, with an average selling price per ton decreasing from approximately $1,217 to $1,030 [7] Balance Sheet Overview - As of September 30, 2024, total assets were approximately $209.2 million, down from $230.0 million as of March 31, 2024, with current assets decreasing from $170.1 million to $148.0 million [5] - Total liabilities decreased from $102.5 million to $80.4 million, while total stockholders' equity increased from $127.5 million to $128.8 million [5] Market Conditions - The company faced industry-wide pricing pressure, with hot-rolled coil prices stabilizing after a decline earlier in 2024, but demand remained soft due to political uncertainty [1][2] - The outlook for the third quarter of fiscal 2025 anticipates slightly lower sales volume due to seasonal impacts, with stable HRC prices leading to minimal changes in sales prices and margins [9][10] Hedging Activities - The company recognized a gain on hedging activities of approximately $0.2 million for the quarter, with limited hedging activities due to a lack of price volatility [8]