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FRIEDMAN INDUSTRIES INC - Quarter Report: 2009 June (Form 10-Q)

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Table of Contents

 
 
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 JUNE 30, 2009
OR
     
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)

Registrant’s telephone number, including area code (713) 672-9433
 
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, 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 o                    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 oAccelerated 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 June 30, 2009, 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. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits
SIGNATURES
EXHIBIT INDEX
EX-31.1
EX-31.2
EX-32.1
EX-32.2


Table of Contents

Part I — FINANCIAL INFORMATION
Item 1. Financial Statements
FRIEDMAN INDUSTRIES, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
                 
    JUNE 30, 2009     MARCH 31, 2009  
    (Unaudited)        
ASSETS
               
CURRENT ASSETS:
               
Cash and cash equivalents
  $ 21,865,091     $ 16,880,110  
Accounts receivable, net of allowances for bad debts and cash discounts of $27,276 and $37,276 at June 30 and March 31, 2009, respectively
    3,756,781       4,991,239  
Inventories
    16,791,553       19,402,701  
Prepaid income taxes
    1,398,559       1,299,796  
Other
    47,709       99,531  
 
           
TOTAL CURRENT ASSETS
    43,859,693       42,673,377  
PROPERTY, PLANT AND EQUIPMENT:
               
Land
    1,082,331       1,082,331  
Buildings and yard improvements
    7,000,839       7,000,839  
Machinery and equipment
    29,286,300       29,080,476  
Less accumulated depreciation
    (20,629,059)       (20,152,959)  
 
           
 
    16,740,411     17,010,687
 
               
OTHER ASSETS:
               
Cash value of officers’ life insurance and other assets
    790,500       776,000  
             
 
TOTAL ASSETS
  $ 61,390,604     $ 60,460,064  
 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
CURRENT LIABILITIES:
               
Accounts payable and accrued expenses
  $ 3,584,034     $ 2,662,209  
Current portion of long-term debt
    54,028       54,028  
Deferred credit for LIFO inventory replacement
    496,702        
Dividends payable
    203,983       339,972  
Contribution to profit sharing plan
    82,000       40,000  
Employee compensation and related expenses
    204,043       256,804  
 
           
 
TOTAL CURRENT LIABILITIES
    4,624,790       3,353,013  
LONG-TERM DEBT LESS CURRENT PORTION
          13,507  
DEFERRED INCOME TAXES
    386,039       363,864  
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
    632,154       615,328  
STOCKHOLDERS’ EQUITY:
               
Common stock, par value $1:
               
Authorized shares — 10,000,000
               
Issued shares — 7,975,160 at June 30 and March 31, 2009
    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 June 30 and March 31, 2009)
    (5,475,964 )     (5,475,964 )
Retained earnings
    24,244,751       24,611,482  
 
           
 
TOTAL STOCKHOLDERS’ EQUITY
    55,747,621       56,114,352  
 
           
 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  $ 61,390,604     $ 60,460,064  
 
           

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FRIEDMAN INDUSTRIES, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) — UNAUDITED
                 
    THREE MONTHS ENDED JUNE 30,  
    2009     2008  
Net Sales
  $ 12,246,219     $ 59,598,696  
Costs and expenses
               
Costs of goods sold
    11,658,639       51,533,953  
General, selling and administrative costs
    922,887       1,981,023  
Interest expense
          23,310  
 
           
 
    12,581,526       53,538,286  
Interest and other income
    (14,500 )     (41,418 )
 
           
Earnings (loss) before income taxes
    (320,807 )     6,101,828  
Income tax provision (benefit):
               
Current
    (180,234 )     2,024,271  
Deferred
    22,175       101,897  
 
           
 
    (158,059 )     2,126,168  
 
           
Net earnings (loss)
  $ (162,748 )   $ 3,975,660  
 
           
Average number of common shares outstanding:
               
Basic
    6,799,444       6,799,444  
Diluted
    6,799,444       6,799,444  
Net earnings (loss) per share:
               
Basic
  $ (0.02 )   $ 0.58  
Diluted
  $ (0.02 )   $ 0.58  
Cash dividends declared per common share
  $ 0.03     $ 0.08  

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FRIEDMAN INDUSTRIES, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
                 
    THREE MONTHS ENDED JUNE 30,  
    2009     2008  
OPERATING ACTIVITIES
               
Net earnings (loss)
  $ (162,748 )   $ 3,975,660  
Adjustments to reconcile net earnings (loss) to cash provided by operating activities:
               
Depreciation
    476,101       303,600  
Provision for deferred taxes
    22,175       101,897  
Change in postretirement benefits
    16,826       16,344  
Decrease (increase) in operating assets:
               
Accounts receivable
    1,234,458       916,848  
Inventories
    2,611,148       10,584,263  
Prepaid income taxes
    (98,763 )      
Other current assets
    51,822       (103,731 )
Increase (decrease) in operating liabilities:
               
Accounts payable and accrued expenses
    921,825       (2,791,716 )
Contribution to profit sharing plan
    42,000       (110,000 )
Employee compensation and related expenses
    (52,761 )     653,947  
Income taxes payable
          1,680,516  
Deferred credit for LIFO replacement
    496,702       2,456,108  
 
           
NET CASH PROVIDED BY OPERATING ACTIVITIES
    5,558,785       17,683,736  
INVESTING ACTIVITIES
               
Purchase of property, plant and equipment
    (205,825 )     (1,146,924 )
Increase in cash surrender value of officers’ life insurance
    (14,500 )     (13,998 )
 
           
NET CASH USED IN INVESTING ACTIVITIES
    (220,325 )     (1,160,922 )
FINANCING ACTIVITIES
               
Cash dividends paid
    (339,972 )     (339,972 )
Long-term debt
    (13,507 )     (6,613,508 )
 
           
NET CASH USED IN FINANCING ACTIVITIES
    (353,479 )     (6,953,480 )
 
           
INCREASE IN CASH AND CASH EQUIVALENTS
    4,984,981       9,569,334  
Cash and cash equivalents at beginning of period
    16,880,110       2,643,922  
 
           
CASH AND CASH EQUIVALENTS AT END OF PERIOD
  $ 21,865,091     $ 12,213,256  
 
           

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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, 2009.
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 ended June 30, 2009, LIFO inventories were reduced but are expected to be replaced by March 31, 2010. A deferred credit of $496,702 was recorded at June 30, 2009 to reflect replacement cost in excess of LIFO cost.
     A summary of inventory values by product group follows:
                 
    June 30,     March 31,  
    2009     2009  
Prime Coil Inventory
  $ 3,834,946     $ 6,504,540  
Non-Standard Coil Inventory
    513,362       141,097  
Tubular Raw Material
    1,651,585       1,783,130  
Tubular Finished Goods
    10,791,660       10,973,934  
 
           
 
  $ 16,791,553     $ 19,402,701  
 
           
NOTE C — LONG-TERM DEBT
     The Company has a $10 million revolving credit facility (the “revolver”) which expires April 1, 2010. There were no amounts outstanding pursuant to the revolver at June 30 and March 31, 2009, respectively. At March 31, 2008, the Company owed $6,600,000 pursuant to the revolver at an average interest rate of approximately 4.4%. These loans were paid off in April and May 2008.
     In June 2007, the Company incurred an interest free, long-term liability of $162,084 related to the purchase of pipe loading equipment which is payable in 36 equal monthly payments. Regarding this liability, the Company owed $54,028 and $67,535 at June 30 and March 31, 2009, respectively.
NOTE D — STOCK BASED COMPENSATION
     In the quarter ended June 30, 2009 and the fiscal year ended March 31, 2009, the Company had no stock-based compensation. There were no unexercised options at June 30, 2009, and no options were exercised or granted nor stock vested during those periods.

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NOTE E — SEGMENT INFORMATION
                 
    THREE MONTHS ENDED  
    JUNE 30,  
    2009     2008  
    (in thousands)  
Net sales
               
Coil
  $ 7,011     $ 26,007  
Tubular
    5,235       33,592  
 
           
 
Total net sales
  $ 12,246     $ 59,599  
 
           
 
Operating profit
               
Coil
  $ 43     $ 585  
Tubular
    89       6,884  
 
           
 
Total operating profit
    132       7,469  
Corporate expenses
    468       1,385  
Interest expense
          23  
Interest & other income
    (15 )     (41 )
 
           
 
Earnings (loss) before income taxes
  $ (321   $ 6,102  
 
           
                 
    June 30,     March 31,  
    2009     2009  
Segment assets
               
Coil
  $ 18,994     $ 22,791  
Tubular
    18,334       18,703  
 
           
 
    37,328       41,494  
Corporate assets
    24,063       18,966  
 
           
 
  $ 61,391     $ 60,460  
 
           
     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, prepaid income taxes and the cash value of officers’ life insurance.
NOTE F — SUPPLEMENTAL CASH FLOW INFORMATION
The Company paid income taxes of approximately $0 and $173,000 in the quarters ended June 30, 2009 and 2008, respectively. Interest paid in the quarters ended June 30, 2009 and 2008 was approximately $0 and $34,000, respectively.
NOTE G — NEW ACCOUNTING PRONOUNCEMENTS
     In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 establishes a framework for measuring fair value in accordance with generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about fair value measurements. SFAS No. 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value, except for the measurement of share-based payments. The standard does not expand the use of fair value in any new circumstances. SFAS No. 157 was effective, for the Company, beginning the first quarter of fiscal year 2009. For certain types of financial instruments, SFAS No. 157 requires a limited form of retrospective transition, whereby the cumulative impact of the change in principle is recognized in the opening balance of retained earnings in the fiscal year of adoption. All other provisions of SFAS No. 157 were applied prospectively beginning in the first quarter of fiscal year 2009. Adoption of SFAS No. 157 did not have a material impact on our consolidated financial statements in the quarters ended June 30, 2008 and 2009.
     In May 2009, the FASB issued SFAS No. 165, “Subsequent Events,” (“SFAS No. 165”) which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. SFAS No. 165 provides guidance on the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The Company adopted SFAS No. 165 during the quarter ended June 30, 2009, and its application had no impact on the Company’s consolidated condensed financial statements. The Company evaluated subsequent events through the date the accompanying financial statements were issued, which was August 13, 2009.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
     Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
     During the three months ended June 30, 2009, sales, costs of goods sold and gross profit decreased $47,352,477, $39,875,314 and $7,477,163, respectively, from the comparable amounts recorded during the three months ended June 30, 2008. The decrease in sales was related primarily to a substantial decrease in tons sold. Tons sold declined from approximately 76,000 tons in the 2008 quarter to approximately 22,000 tons in the 2009 quarter. Average per ton selling prices declined as well. The average per ton selling price decreased from $781 per ton in the 2008 quarter to $564 per ton in the 2009 quarter. The decrease in costs of goods sold was related primarily to the decline in tons sold and a decrease in average per ton cost which declined from approximately $675 per ton in the 2008 quarter to $537 in the 2009 quarter. Gross profit was adversely affected by the decrease in tons sold and a substantial reduction in margins. Gross profit as a percentage of sales decreased from approximately 13.5% in the 2008 quarter to approximately 4.8% in the 2009 quarter. During the 2008 quarter, the Company experienced strong market conditions for its tubular products and recorded one of the most profitable quarters in Company history. During the 2009 quarter, the Company’s operations continued to be adversely affected by extremely soft market conditions for durable goods and energy related products resulting from the significant downturn in the U.S. economy.
     Coil product segment sales decreased approximately $18,996,000 during the 2009 quarter. This decrease resulted primarily from a decrease in tons sold as coil tonnage shipped declined from approximately 31,000 tons in the 2008 quarter to approximately 13,000 tons in the 2009 quarter. Also, the average per ton selling price declined from approximately $841 per ton in the 2008 quarter to $525 in the 2009 quarter. Coil operating profit as a percentage of coil segment sales decreased from approximately 2.2% in the 2008 quarter to 0.6% in the 2009 quarter. The Company believes that market conditions for coil products will remain soft until the U.S. economy improves and generates improved demand for durable goods.
     In August 2008, the Company began operating its new coil facility in Decatur, Alabama. This operation produced an operating loss of approximately $400,000 in the 2009 quarter. The Company expects that this facility will continue to produce a loss until demand for coil products improves.
     The Company is primarily dependent on Nucor Steel Company (“NSC”) for its supply of coil inventory. In the 2009 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 decreased approximately $28,357,000 during the 2009 quarter. This decrease primarily resulted from a decrease in tons sold which declined from approximately 45,000 tons in the 2008 quarter to approximately 8,000 tons sold in the 2009 quarter. The average per ton selling price of tubular products decreased from $739 per ton in the 2008 quarter to $627 per ton in the 2009 quarter. Tubular product segment operating profits as a percentage of segment sales were approximately 20.5% and 1.7% in the 2008 and 2009 quarters, respectively. During the 2008 quarter, market conditions for tubular products were strong and the Company recorded one of its most profitable quarters in Company history. In contrast, extremely soft market conditions were experienced in the 2009 quarter. The Company believes that market conditions will remain soft until the U.S. economy recovers and generates improved demand for tubular products.
     In recent years, U.S. Steel Tubular Products Inc. (“USS”), an affiliate of United States Steel Corporation, has been 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 are used in the energy business and 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. Since February 2009, the Company has received few orders from USS and a significantly reduced supply of pipe and coil material from USS. The Company believes that reduced orders for finished tubular products will continue until the U.S. economy recovers and generates improved demand for these products. Loss of USS as a supplier or customer could have an 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.
     The recently-depressed market conditions during the downturn of the U. S. economy, along with the significant decrease in orders from USS and the reduction in the supply of pipe and coil material from USS, have had an adverse effect on the Company’s tubular business. As a result, the Company downsized its tubular division to a level more commensurate with operations.
     During the 2009 quarter, general, selling and administrative costs decreased $1,058,136 from the amount recorded during the 2008 quarter. This decrease was related primarily to a reduction in bonuses and commissions associated with reduced earnings and volume.
     Income taxes declined $2,284,227 from the amount recorded in the 2008 quarter. This decrease was related primarily to the decrease in earnings (loss) before taxes. Effective tax rates were 35% and 49% in the quarters ended 2008 and 2009, respectively. In the 2009 quarter, the Company benefited from recoverable income taxes associated with both federal and state income taxes.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
     The Company remained in a strong, liquid position at June 30, 2009. Current ratios were 9.5 and 12.7 at June 30, 2009 and March 31, 2009, respectively. Working capital was $39,234,903 at June 30, 2009, and $39,320,364 at March 31, 2009.
     During the quarter ended June 30, 2009, 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 increased primarily as a result of decreases in accounts receivable and inventories. Accounts receivable declined due to a substantial decrease in sales in June 2009. Management reduced inventories to a level more commensurate with sales. The Company expects to continue to monitor, evaluate and manage balance sheet components depending on changes in market conditions and the Company’s operations.
     During the quarter ended June 30, 2008, the Company purchased approximately 1,147,000 in fixed assets. These assets were related primarily to buildings and equipment associated with the new coil operation located in Decatur, Alabama, which began operations in August 2008. The Decatur processing facility operates a steel temper mill and a cut-to-length line, including a levelling line.
     The Company has an arrangement with a bank which provides for a revolving line of credit facility (the “revolver”). Pursuant to the revolver, which expires April 1, 2010, the Company may borrow up to $10 million at an interest rate of the bank’s prime rate or 1.5% over LIBOR. The Company uses the revolver to support cash flow and will borrow and repay the note as working capital is required. At June 30, 2008 and 2009, the Company had no borrowings outstanding under the revolver. At March 31, 2008, the Company owed $6,600,000 pursuant to the revolver at an average interest rate of approximately 4.4%. These loans were paid off in April and May 2008.
     Historically, the Company has renewed the revolver approximately one year before its expiration date. As a result of the current lending environment, the Company may not be able to amend or extend the revolver or enter into a new credit arrangement on terms as favorable to the Company as the current revolver. As a result, the Company has chosen not to renew the revolver at the present time.
     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 twenty-four 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. At June 30, 2008, LIFO inventories were reduced and were partially replaced by March 31, 2009. A deferred credit of $2,456,108 was recorded at June 30, 2008, to reflect the replacement costs in excess of the LIFO cost associated with liquidated inventory. As replacement cost and liquidated cost of material were approximately equal, no significant gain or loss from this liquidation was recorded in fiscal 2009. In the quarter ended June 30, 2009, LIFO inventories were reduced and are expected to be replaced by March 31, 2010. A deferred credit of $496,702 was recorded at June 30, 2009, to reflect the replacement cost in excess of the 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) 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 and the Securities Exchange Act of 1934. 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

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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 Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the fiscal quarter ended June 30, 2009. 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 June 30, 2009 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 June 30, 2009 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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FRIEDMAN INDUSTRIES, INCORPORATED
Three Months Ended June 30, 2009
Part II — OTHER INFORMATION
Item 1. Legal Proceedings
     Not applicable
Item 1A. Risk Factors
     Not applicable
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. Submission of Matters to a Vote of Security Holders
     None
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

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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 August 13, 2009        
  By   /s/ Ben Harper    
    Ben Harper, Senior Vice President-Finance   
    (Principal Financial and Accounting Officer)   
 

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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