FRIEDMAN INDUSTRIES INC - Quarter Report: 2019 December (Form 10-Q)

frd20191231_10q.htm

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 DECEMBER 31, 2019

☐	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 other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

1121 JUDSON ROAD, SUITE 124, LONGVIEW, TEXAS 75601

(Address of principal executive offices) (Zip Code)

(903) 758-3431

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $1 Par Value	FRD	NYSE American

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At February 14, 2020, the number of shares outstanding of the issuer’s only class of stock was 6,999,444 shares of Common Stock.

TABLE OF CONTENTS

Part I — FINANCIAL INFORMATION		3
Item 1. Financial Statements		3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		11
Item 3. Quantitative and Qualitative Disclosures About Market Risk		15
Item 4. Controls and Procedures		15
Part II — OTHER INFORMATION		16
Item 6. Exhibits		16
SIGNATURES		17

Part I — FINANCIAL INFORMATION

Item 1.

Financial Statements

FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED

	December 31, 2019			March 31, 2019
ASSETS
CURRENT ASSETS:
Cash	$	22,333,323		$	11,667,161
Accounts receivable, net of allowances for bad debts and cash discounts of $68,415 at December 31, 2019 and $29,178 at March 31, 2019		9,845,626			13,183,411
Inventories		35,543,889			49,062,086
Other		1,568,674			543,549
TOTAL CURRENT ASSETS		69,291,512			74,456,207
PROPERTY, PLANT AND EQUIPMENT:
Land		1,452,799			1,452,799
Buildings and yard improvements		8,879,692			8,821,253
Machinery and equipment		39,746,407			38,176,497
Construction in progress		2,114,123			—
Less accumulated depreciation		(37,464,557	)		(36,540,591	)
		14,728,464			11,909,958
OTHER ASSETS:
Cash value of officers’ life insurance and other assets		169,187			235,817
Income taxes recoverable		40,639			—
TOTAL ASSETS	$	84,229,802		$	86,601,982

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	12,175,584		$	11,577,664
Income taxes payable		—			159,694
Dividends payable		139,989			279,978
Contribution to retirement plan		200,000			50,250
Employee compensation and related expenses		254,699			297,316
Current portion of financing lease		100,244			—
TOTAL CURRENT LIABILITIES		12,870,516			12,364,902
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS		97,176			210,257
DEFERRED INCOME TAX LIABILITY		916,787			1,545,246
OTHER NON-CURRENT LIABILITIES		404,367			—
TOTAL LIABILITIES		14,288,846			14,120,405
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common stock, par value $1:
Authorized shares — 10,000,000
Issued shares — 8,225,160 shares and 8,205,160 shares at December 31 and March 31, 2019, respectively		8,225,160			8,205,160
Additional paid-in capital		29,552,180			29,322,472
Treasury stock at cost (1,225,716 shares at December 31 and March 31, 2019)		(5,525,964	)		(5,525,964	)
Retained earnings		37,689,580			40,479,909
TOTAL STOCKHOLDERS’ EQUITY		69,940,956			72,481,577
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	84,229,802		$	86,601,982

FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED

	Three months ended December 31,						Nine months ended December 31,
	2019			2018			2019			2018
Net sales	$	28,150,817		$	43,326,080		$	109,121,717		$	144,951,427
Costs and expenses
Costs of goods sold		28,097,884			41,395,596			108,380,110			132,883,924
General, selling and administrative costs		1,200,393			1,054,100			3,662,630			3,836,279
Interest expense		2,463			1,792			2,463			17,545
		29,300,740			42,451,488			112,045,203			136,737,748
Interest and other income		(4,370	)		(6,275	)		(15,075	)		(75,325	)
Earnings (loss) before income taxes		(1,145,553	)		880,867			(2,908,411	)		8,289,004
Provision for (benefit from) income taxes:
Current		244,940			282,365			(49,584	)		2,097,540
Deferred		(509,490	)		(66,271	)		(628,459	)		(74,118	)
		(264,550	)		216,094			(678,043	)		2,023,422
Net earnings (loss)	$	(881,003	)	$	664,773		$	(2,230,368	)	$	6,265,582
Weighted average number of common shares outstanding:
Basic		6,999,444			7,009,444			6,999,444			7,009,444
Diluted		6,999,444			7,009,444			6,999,444			7,009,444
Net earnings (loss) per share:
Basic	$	(0.13	)	$	0.09		$	(0.32	)	$	0.89
Diluted	$	(0.13	)	$	0.09		$	(0.32	)	$	0.89
Cash dividends declared per common share	$	0.02		$	0.06		$	0.08		$	0.15

FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED

	Nine Months Ended December 31
	2019			2018
OPERATING ACTIVITIES
Net earnings (loss)	$	(2,230,368	)	$	6,265,582
Adjustments to reconcile net earnings (loss) to cash provided by (used in) operating activities:
Depreciation		923,966			1,072,788
Deferred taxes		(628,459	)		(74,118	)
Compensation expense for restricted stock		249,708			216,720
Change in postretirement benefits		8,215			22,291
Lower of cost or net realizable value inventory adjustment		955,605			—
Decrease (increase) in operating assets:
Accounts receivable, net		3,337,785			250,715
Inventories		12,562,592			(14,085,601	)
Income taxes recoverable		(40,639	)		—
Other assets		(1,025,125	)		(255,136	)
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses		567,114			6,494,080
Income taxes payable		(159,694	)		175,845
Contribution to retirement plan		149,750			155,000
Employee compensation and related expenses		(42,617	)		(277,933	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		14,627,833			(39,767	)
INVESTING ACTIVITIES
Purchase of property, plant and equipment		(3,223,856	)		(647,682	)
Change in cash surrender value of officers’ life insurance		(13,110	)		(18,825	)
NET CASH USED IN INVESTING ACTIVITIES		(3,236,966	)		(666,507	)
FINANCING ACTIVITIES
Cash dividends paid		(699,945	)		(771,039	)
Cash paid for principal portion of finance lease		(24,760	)		—
NET CASH USED IN FINANCING ACTIVITIES		(724,705	)		(771,039	)
INCREASE (DECREASE) IN CASH		10,666,162			(1,477,313	)
Cash at beginning of period		11,667,161			4,052,582
CASH AT END OF PERIOD	$	22,333,323		$	2,575,269

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 U.S. 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 consolidated financial statements and footnotes of Friedman Industries, Incorporated (the “Company”) included in its annual report on Form 10-K for the year ended March 31, 2019.

NOTE B — NEW ACCOUNTING STANDARDS

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 establishes a new lease accounting standard that requires lessees to recognize a right of use asset and related lease liability for most leases having lease terms of more than 12 months. Leases with a term of 12 months or less will be accounted for similar to prior guidance for operating leases. In July 2018, the FASB issued Accounting Standards Update No. 2018-10, Codification Improvements to Topic 842, Leases, to clarify how to apply certain aspects of the new standard. In July 2018, the FASB also issued Accounting Standards Update No. 2018-11, Leases (Topic 842): Targeted Improvements, to give entities another option for transition and to provide practical expedients to reduce the cost and complexity of implementing the new standard. ASU 2016-02 and all subsequently issued amendments, collectively "ASC 842," is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

The Company adopted ASC 842 on April 1, 2019 using the optional transition method under which the new standard is applied only to the most current period presented and the cumulative effect of applying the new standard to existing lease agreements is recognized at the date of initial application. The adoption of ASC 842 resulted in the recording of right-of-use lease assets and lease liabilities of approximately $63,000. The Company implemented the appropriate changes to business processes and controls to support recognition and disclosure under the new standard, including the new qualitative and quantitative disclosures. The Company also elected the package of transition practical expedients related to lease identification, lease classification, and initial direct costs. In addition, the Company made the following accounting policy elections: (1) the Company will not separate lease and non-lease components by class of underlying asset and (2) the Company will apply the short-term lease exemption by class of underlying asset. The adoption of this standard did not have an impact on the Company’s consolidated statement of operations or cash flows and did not result in a cumulative adjustment to retained earnings. See Note E – Leases for additional information.

In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments — Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires, among other things, the use of a new current expected credit loss ("CECL") model in order to determine the allowance for doubtful accounts with respect to accounts receivable. The CECL model requires estimation of lifetime expected credit loss with respect to receivables and recognition of allowances that, when deducted from the balance of the receivables, represent the net amounts expected to be collected. Subsequently, in November 2018, the FASB issued Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses (ASC 326), which clarifies that impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842, Leases. ASU 2016-13 called for an effective date for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. In November 2019, the FASB issued Accounting Standards Update 2019-10, Financial Instruments ‒ Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates (“ASU 2019-10”). ASU 2019-10 defers the effective date of ASU 2016-13 for SEC filers that are eligible to be smaller reporting companies, private companies, not-for-profit organizations and employee benefit plans to annual periods beginning after December 15, 2022, including interim periods within those annual periods. The Company qualifies as a smaller reporting company and does not expect to early adopt ASU 2016-13. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements.

In December 2019, the FASB issued Accounting Standards Update 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies accounting for income taxes by revising or clarifying existing guidance in ASC 740, as well as removing certain exceptions within ASC 740. ASU 2019-12 is effective for annual reporting periods beginning after December 15, 2020 and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements.

NOTE C — 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 raw materials and tubular inventory consists of both raw materials and finished goods. Cost for prime coil inventory is determined using the average cost method. Cost for non-standard coil inventory is determined using the specific identification method. Cost for tubular inventory is determined using the average cost method. All inventories are valued at the lower of cost or net realizable value.

A summary of inventory values by product group follows:

	December 31, 2019		March 31, 2019
Prime Coil Inventory	$	17,659,023	$	26,240,439
Non-Standard Coil Inventory		2,139,267		2,078,008
Tubular Raw Material		2,823,269		4,418,750
Tubular Finished Goods		12,922,330		16,324,889
	$	35,543,889	$	49,062,086

Tubular raw material inventory consists of hot-rolled steel coils that the Company will manufacture into pipe. Tubular finished goods inventory consists of pipe the Company has manufactured and new mill reject pipe that the Company purchases from U.S. Steel Tubular Products, Inc.

NOTE D — DEBT

On December 12, 2019, the Company’s $5,000,000 revolving line of credit facility expired and was not renewed. The Company did not have any borrowings outstanding under the Credit Facility at expiration and did not advance any funds under the Credit Facility during the quarter ended December 31, 2019.

NOTE E — LEASES

In February 2016, the FASB issued ASU 2016-02, Leases (“ASC 842”), to require lessees to recognize most leases on the balance sheet, while recognition on the statement of operations would be substantially unchanged. The new standard requires lessees to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use (“ROU”) asset on the balance sheet. The guidance requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the amount, timing and potential uncertainty of cash flows related to leases. Leases with a term of 12 months or less will be accounted for similar to prior guidance for operating leases. In July 2018, the FASB issued Accounting Standards Update No. 2018-10, Codification Improvements to Topic 842, Leases, to clarify how to apply certain aspects of the new standard. In July 2018, the FASB also issued Accounting Standards Update No. 2018-11, Leases (Topic 842): Targeted Improvements, to give entities another option for transition and to provide practical expedients to reduce the cost and complexity of implementing the new standard. ASU 2016-02 and all subsequently issued amendments, collectively "ASC 842," is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

The Company adopted ASC 842 on April 1, 2019 using the optional transition method under which the new standard is applied only to the most current period presented and the cumulative effect of applying the new standard to existing lease agreements is recognized at the date of initial application. Under this adoption method, reporting periods beginning after April 1, 2019 are presented under the new standard, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. The adoption of ASC 842 resulted in the recording of initial ROU asset and lease liabilities of approximately $63,000 at April 1, 2019. The Company also elected the package of transition practical expedients related to lease identification, lease classification, and initial direct costs. In addition, the Company made the following accounting policy elections: (1) the Company will not separate lease and non-lease components by class of underlying asset and (2) the Company will apply the short-term lease exemption by class of underlying asset. The adoption of this standard did not have an impact on the Company’s consolidated statement of operations or cash flows and did not result in a cumulative adjustment to retained earnings.

The Company’s lease of its office space in Longview, Texas is the only operating lease included in the ROU asset and lease liability. The lease calls for monthly rent payments of $2,728 and expires on April 30, 2021. The Company’s other operating leases for items such as IT equipment and storage space are either short-term in nature or immaterial.

In October 2019, the Company received a new heavy-duty forklift under a 5-year finance lease arrangement with a financed amount of $518,616 and a monthly payment of $9,074.

The components of lease expense were as follows for the three months and nine months ended December 31, 2019:

	Three Months Ended December 31, 2019		Nine Months Ended December 31, 2019
Finance lease – amortization of ROU asset	$	8,644	$	8,644
Finance lease – interest on lease liability		2,463		2,463
Operating lease expense		8,184		24,552
	$	19,291	$	35,659

Rental expense for operating leases classified under the previous accounting standard, Accounting Standards Codification Topic 840, for the three and nine months ended December 31, 2018 was $8,184 and $24,552, respectively.

The following table illustrates the balance sheet classification for ROU assets and lease liabilities as of December 31, 2019:

	December 31, 2019		Balance Sheet Classification
Assets
Operating lease right-of-use asset	$	41,557	Other assets
Finance lease right-of-use asset	$	509,972	Property, plant & equipment, net
Total right-of-use assets	$	551,529

Liabilities
Operating lease liability, current	$	30,802	Accrued expenses
Finance lease liability, current		100,244	Current portion of finance lease
Operating lease liability, non-current		10,755	Other non-current liabilities
Finance lease liability, non-current		393,612	Other non-current liabilities
Total lease liabilities	$	535,413

As of December 31, 2019, the weighted-average remaining lease term was 1.3 years for operating leases and 4.8 years for finance leases. The weighted average discount rate was 7% for operating leases and 1.9% for finance leases.

Maturities of lease liabilities as of December 31, 2019 were as follows:

	Operating Leases			Finance Leases
Fiscal 2020 (remainder of fiscal year)	$	8,184		$	27,222
Fiscal 2021		32,736			108,888
Fiscal 2022		2,728			108,888
Fiscal 2023		—			108,888
Fiscal 2024		—			108,888
Fiscal 2025		—			54,444
Total undiscounted lease payments	$	43,648		$	517,218
Less: imputed interest		(2,091	)		(23,362	)
Present value of lease liabilities	$	41,557		$	493,856

NOTE F – PROPERTY, PLANT AND EQUIPMENT

The Company commenced two capital expenditure projects during the three months ended December 31, 2019.

The first project is a building expansion at the Company’s coil processing facility in Hickman, Arkansas. The project will add an additional 22,000 square feet of storage space to the facility. This project is estimated to be complete by April 2020 with an estimated cost of $1,100,000.

The second project involves the installation of a stretcher leveler coil processing line at the Company’s coil processing facility in Decatur, Alabama. This equipment will replace the existing processing equipment that is currently present at the Decatur plant and will expand both the size range and grade of material that Decatur is able to process. The equipment is being constructed, fabricated and installed by Delta Steel Technologies. The Company currently expects installation of the new equipment to begin in October 2020 and expects commercial use to begin in February 2021. The Company currently estimates the cost of this project to be $5,800,000.

As of December 31, 2019, expenditures related to these projects totaled $2,114,123 with this amount reported as Construction in Progress on the Company’s Condensed Consolidated Balance Sheet.

NOTE G — STOCK BASED COMPENSATION

The Company maintains the Friedman Industries, Incorporated 2016 Restricted Stock Plan (the “Plan”). The Plan is administered by the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) and continues indefinitely until terminated by the Board or until all shares allowed by the Plan have been awarded and earned. The aggregate number of shares of the Company’s Common Stock eligible for award under the Plan is 500,000 shares. Subject to the terms and provisions of the Plan, the Committee may, from time to time, select the employees, directors or consultants to whom awards will be granted and shall determine the amount and applicable restrictions of each award. Forfeitures are accounted for upon their occurrence.

The following table summarizes the activity related to restricted stock awards for the nine months ended December 31, 2019:

	Number of Shares		Weighted Average Grant Date Fair Value Per Share
Unvested at March 31, 2019		180,000	$	7.03
Cancelled or forfeited		—		—
Granted		20,000		7.62
Vested		—		—
Unvested at December 31, 2019		200,000	$	7.09

Of the 200,000 unvested shares at December 31, 2019, 160,000 shares have five year cliff vesting restrictions with vesting occurring on January 4, 2022, 20,000 shares have two year cliff vesting restrictions with vesting occurring on March 13, 2021 and 20,000 shares have five year cliff vesting restrictions with vesting occurring on April 1, 2024. Compensation expense is recognized over the requisite service period applicable to each award. The Company recorded compensation expense of $249,708 and $216,720 in nine months ended December 31, 2019 and 2018, respectively, relating to the stock awards issued under the Plan.

NOTE H — SEGMENT INFORMATION (in thousands)

	Three Months Ended December 31,						Nine Months Ended December 31,
	2019			2018			2019			2018
Net sales
Coil	$	21,001		$	28,731		$	77,604		$	94,688
Tubular		7,150			14,595			31,518			50,263
Total net sales	$	28,151		$	43,326		$	109,122		$	144,951

Operating profit (loss)
Coil	$	(93	)	$	744		$	575		$	5,847
Tubular		(468	)		650			(1,670	)		4,348
Total operating profit (loss)		(561	)		1,394			(1,095	)		10,195
Corporate expenses		587			517			1,826			1,963
Interest expense		2			2			2			18
Interest & other income		(4	)		(6	)		(15	)		(75	)
Total earnings (loss) before taxes	$	(1,146	)	$	881		$	(2,908	)	$	8,289

	December 31, 2019		March 31, 2019
Segment assets
Coil	$	35,272	$	43,104
Tubular		26,354		31,520
		61,626		74,624
Corporate assets		22,604		11,978
	$	84,230	$	86,602

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, retirement plan contribution expense, corporate insurance expenses and office supplies. Corporate assets consist primarily of cash, the cash value of officers’ life insurance and income taxes recoverable.

NOTE I — REVENUE

Revenue is generated primarily from contracts to manufacture or process steel products. Most of the Company’s revenue is generated by sales of material out of the Company’s inventory but a portion of the Company’s revenue is derived from processing of customer owned material. Generally, the Company’s performance obligations are satisfied, control of our products is transferred, and revenue is recognized at a single point in time, when title transfers to our customer for product shipped or when services are provided. Revenues are recorded net of any sales incentives. Shipping and other transportation costs charged to customers are treated as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. Costs related to obtaining sales contracts are incidental and expensed when incurred. Because customers are invoiced at the time title transfers and the Company’s rights to consideration are unconditional at that time, the Company does not maintain contract asset balances. Additionally, the Company does not maintain contract liability balances, as performance obligations are satisfied prior to customer payment for product. The Company offers industry standard payment terms.

The Company has two reportable segments: Coil and Tubular. Coil primarily generates revenue from temper passing and cutting to length hot-rolled steel coils. Coil segment revenue consists of three main product types: Prime Coil, Non-Standard Coil and Customer Owned Coil. Tubular primarily generates revenue from the manufacture, distribution and processing of steel pipe. Tubular segment revenue consists of three main product or service types: Manufactured Pipe, Mill Reject Pipe and Pipe Finishing Services. The following table disaggregates our revenue by product for each of our reportable business segments for the three and nine month periods ended December 31, 2019 and 2018, respectively:

	Three Months Ended December 31,				Nine Months Ended December 31,
	2019		2018		2019		2018
Coil Segment:
Prime Coil		18,662,211		25,074,965		67,827,299		79,426,810
Non-standard Coil		2,153,277		3,350,738		9,197,245		14,355,617
Customer Owned Coil		185,870		305,289		578,891		906,209
		21,001,358		28,730,992		77,603,435		94,688,636
Tubular Segment:
Manufactured Pipe		5,748,647		10,767,166		26,225,323		35,936,762
Mill Reject Pipe		1,400,812		3,761,188		5,292,959		13,489,029
Pipe Finishing Services		-		66,734		-		837,000
		7,149,459		14,595,088		31,518,282		50,262,791

NOTE J — STOCKHOLDERS’ EQUITY

The following tables reflect the changes in stockholders’ equity for each quarterly period within the nine months ended December 31, 2019 and December 31, 2018:

	Common Stock		Additional Paid-In Capital		Treasury Stock			Retained Earnings
BALANCE AT MARCH 31, 2019	$	8,205,160	$	29,322,472	$	(5,525,964	)	$	40,479,909
Net earnings		—		—		—			194,772
Issuance of restricted stock		20,000		—		—			—
Paid in capital – restricted stock awards		—		63,236		—			—
Cash dividends ($0.04 per share)		—		—		—			(279,978	)
BALANCE AT JUNE 30, 2019	$	8,225,160	$	29,385,708	$	(5,525,964	)	$	40,394,703
Net loss		—		—		—			(1,544,137	)
Paid in capital – restricted stock awards		—		83,236		—			—
Cash dividends ($0.02 per share)		—		—		—			(139,990	)
BALANCE AT SEPTEMBER 30, 2019	$	8,225,160	$	29,468,944	$	(5,525,964	)	$	38,710,576
Net loss		—		—		—			(881,003	)
Paid in capital – restricted stock awards		—		83,236		—			—
Cash dividends ($0.02 per share)		—		—		—			(139,993	)
BALANCE AT DECEMBER 31, 2019	$	8,225,160	$	29,552,180	$	(5,525,964	)	$	37,689,580

	Common Stock		Additional Paid-In Capital		Treasury Stock			Retained Earnings
BALANCE AT MARCH 31, 2018	$	8,185,160	$	29,154,874	$	(5,475,964	)	$	36,711,380
Net earnings		—		—		—			3,599,893
Paid in capital – restricted stock awards		—		72,240		—			—
Cash dividends ($0.03 per share)		—		—		—			(210,283	)
BALANCE AT JUNE 30, 2018	$	8,185,160	$	29,227,114	$	(5,475,964	)	$	40,100,990
Net earnings		—		—		—			2,000,916
Paid in capital – restricted stock awards		—		72,240		—			—
Cash dividends ($0.06 per share)		—		—		—			(420,567	)
BALANCE AT SEPTEMBER 30, 2018	$	8,185,160	$	29,299,354	$	(5,475,964	)	$	41,681,339
Net earnings		—		—		—			664,773
Paid in capital – restricted stock awards		—		72,240		—			—
Cash dividends ($0.06 per share)		—		—		—			(420,567	)
BALANCE AT DECEMBER 31, 2018	$	8,185,160	$	29,371,594	$	(5,475,964	)	$	41,925,545

NOTE K — SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid income taxes of approximately $259,000 and $1,846,000 in the nine months ended December 31, 2019 and 2018, respectively. The Company paid interest of $2,463 and $17,545 in the nine months ended December 31, 2019 and 2018, respectively. In the nine months ended December 31, 2019, there were noncash transactions totaling approximately $121,000 for the transfer of ownership of life insurance policies from the Company to officers upon their retirement. During the nine months ended December 31, 2019, non-cash investing activities consisted of the initial recognition of a finance lease right of use asset in the amount of $518,616.

NOTE L — INCOME TAXES

For the nine months ended December 31, 2019, the Company recorded an income tax benefit of $678,043, or 23.3% of pre-tax loss, compared to an income tax provision of $2,023,422, or 24.4% of pre-tax income, for the nine months ended December 31, 2018. For both nine month periods, the effective tax rate differed from the federal statutory rate due primarily to the inclusion of state tax expenses or benefits in the calculation.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Friedman Industries, Incorporated is a manufacturer and processor of steel products and operates in two reportable segments: coil products and tubular products.

The coil product segment includes the operation of two hot-roll coil processing facilities; one in Hickman, Arkansas and the other in Decatur, Alabama. Each facility operates a temper mill and a cut-to-length line. The temper mill improves the flatness and surface qualities of the coils and the cut-to-length line levels the steel and cuts the coils into sheet and plate of prescribed lengths. Combined, the facilities are capable of cutting sheet and plate with thicknesses ranging from 14 gauge to ½” thick. The coil product segment sells its prime grade inventory under the Friedman Industries name but also maintains an inventory of non-standard coil products, consisting primarily of mill secondary and excess prime coils, which are sold through the Company’s XSCP division. The coil product segment also processes customer-owned coils on a fee basis.

The tubular product segment consists of the Company’s Texas Tubular Products division (“TTP”) located in Lone Star, Texas. TTP operates two electric resistance welded pipe mills with a combined outside diameter (“OD”) size range of 2 3/8” OD to 8 5/8” OD. Both pipe mills are American Petroleum Institute (“API”) licensed to manufacture line pipe and oil country pipe and also manufacture pipe for structural purposes that meets other recognized industry standards. TTP has an API licensed pipe finishing facility that threads and couples oil country tubular goods and performs other services that are customary in the pipe finishing process. TTP’s inventory consists of raw materials and finished goods. Raw material inventory consists of hot-rolled steel coils that TTP will manufacture into pipe. Finished goods inventory consists of pipe TTP has manufactured and new mill reject pipe that TTP purchases from U.S. Steel Tubular Products, Inc.

Results of Operations

Nine Months Ended December 31, 2019 Compared to Nine Months Ended December 31, 2018

During the nine months ended December 31, 2019 (the “2019 period”), sales, costs of goods sold and gross profit decreased $35,829,710, $24,503,814 and $11,325,896, respectively, from the comparable amounts recorded during the nine months ended December 31, 2018 (the “2018 period”). The decrease in sales was related to both a decrease in tons sold and a decrease in the average per ton selling price. Tons sold decreased approximately 10% from approximately 175,500 tons in the 2018 period to approximately 157,500 tons in the 2019 period. Discussion of the sales decline is expanded upon at the segment level in the following paragraphs. Gross profit as a percentage of sales decreased from approximately 8.3% in the 2018 period to approximately 0.7% in the 2019 period.

Our operating results are significantly impacted by the market price of hot-rolled steel coil. The Company experienced significant volatility in steel price during both the 2019 period and the 2018 period. In March 2018, the Administration of the U.S. government announced trade actions under Section 232 of the Trade Expansion Act related to imports of steel and aluminum products. In November 2017, steel prices began to rise on speculation of potential trade actions. The rising prices gained momentum in January 2018 when the Commerce Department’s recommendations were provided to the Administration. From January 2018, steel prices continued to rise approximately 40% until reaching a peak in July 2018. Prices held near a 10 year high until September 2018 when prices started to decline and continued that downward trend through October 2019, dropping approximately 50%. The steel price volatility translated into volatility in the Company’s operating results for the 2019 and 2018 periods. Results for the 2019 period were negatively impacted by sustained margin compression associated with declines in steel price while the 2018 period was positively impacted by stronger margins associated with increases in steel price.

Coil Segment

Coil product segment sales for the 2019 period totaled $77,603,435 compared to $94,688,636 for the 2018 period, representing a sales decrease of $17,085,201 or approximately 18%. For a more complete understanding of the average selling prices of goods sold, it is helpful to isolate sales generated from processing of customer owned material and sales generated from coil segment inventory. Sales generated from processing of customer owned material totaled $578,891 for the 2019 period compared to $906,209 for the 2018 period. Sales generated from coil segment inventory totaled $77,024,544 for the 2019 period compared to $93,782,427 for the 2018 period. The decrease in coil segment sales was driven by a decrease in the average selling price per ton of material from inventory. The average per ton selling price related to these shipments decreased from approximately $890 per ton in the 2018 period to approximately $667 per ton in the 2019 period. The average selling price decline was partially offset by an increase in the volume of shipments. Inventory tons sold increased from approximately 105,500 tons in the 2018 period to approximately 115,500 tons in the 2019 period. Coil segment operations recorded operating profits of approximately $575,000 and $5,847,000 in the 2019 and 2018 periods, respectively.

Margins for the 2019 period were negatively impacted by declining hot-rolled steel prices and the effect of inventory with higher average costs flowing through cost of goods sold. Margins for the 2018 period were positively impacted by increasing hot-rolled steel prices and the effect of inventory with lower average costs flowing through cost of goods sold. Sales volume improved due primarily to the number of customers sold increasing from 144 in the 2018 period to 163 in the 2019 period.

The Company’s coil segment purchases its inventory from a limited number of suppliers. Loss of any of these suppliers could have a material adverse effect on the Company’s business.

Tubular Segment

Tubular product segment sales for the 2019 period totaled $31,518,282 compared to $50,262,791 for the 2018 period, representing a sales decrease of $18,744,509 or approximately 37%. For a more complete understanding of the average selling prices of goods sold, it is helpful to isolate sales generated from the finishing of customer owned pipe and sales generated from tubular segment inventory. The Company did not generate any sales from the finishing of customer owned pipe during the 2019 period but generated sales of $837,000 for the 2018 period related to these services. Sales generated from tubular segment inventory totaled $31,518,282 for the 2019 period compared to $49,425,791 for the 2018 period. Tons sold decreased from approximately 70,000 tons in the 2018 period to approximately 42,000 tons in the 2019 period. The average per ton selling price related to these shipments increased from approximately $704 per ton in the 2018 period to approximately $750 per ton in the 2019 period. Tubular segment operations recorded an operating loss of approximately $1,670,000 in the 2019 period and an operating profit of approximately $4,348,000 in the 2018 period.

Operating results for the 2019 period were negatively impacted by compressed margins associated with declining hot-rolled steel prices and softness in the U.S. energy industry. In contrast, the 2018 period was positively impacted by strong margins associated with increasing steel prices and a stronger U.S. energy market. The average selling price for the tubular segment increased in the 2019 period due to a shift in the segment’s sales mix between mill reject pipe and the Company’s manufactured pipe. The average selling price associated with the Company’s manufactured pipe is more than the average selling price associated with mill reject pipe. Shipments of mill reject pipe decreased from approximately 38,000 tons in the 2018 period to approximately 13,500 tons in the 2019 period. The higher shipping volume of mill reject pipe in the 2018 period was due primarily to a strategic effort to reduce the level of mill reject pipe inventory. At December 31, 2019, mill reject pipe inventory was at a desired level. Shipments of manufactured pipe decreased from approximately 32,000 tons in the 2018 period to approximately 28,500 tons in the 2019 period.

The Company’s tubular segment purchases its inventory from a limited number of suppliers. Loss of any of these suppliers could have a material adverse effect on the Company’s business.

General, Selling and Administrative Costs

During the 2019 period, general, selling and administrative costs decreased $173,649 compared to the 2018 period. This decrease was related primarily to decreases in bonuses and commissions associated with the decreased earnings.

Income Taxes

Income taxes in the 2019 period decreased $2,701,465 from the amount recorded in the 2018 period. This decrease was related primarily to the decrease in earnings before taxes for the 2019 period compared to the 2018 period.

Three Months Ended December 31, 2019 Compared to Three Months Ended December 31, 2018

During the three months ended December 31, 2019 (the “2019 quarter”), sales, costs of goods sold and gross profit decreased $15,175,263, $13,297,712 and $1,877,551, respectively, compared to the amounts recorded during the three months ended December 31, 2018 (the “2018 quarter”). The decrease in sales was related to both a decrease in tons sold and a decline in the average per ton selling price. Tons sold decreased approximately 12% from approximately 51,500 tons in the 2018 quarter to approximately 45,500 tons in the 2019 quarter. Discussion of the sales decline is expanded upon at the segment level in the following paragraphs. Gross profit as a percentage of sales decreased from approximately 4.5% in the 2018 quarter to approximately 0.2% in the 2019 quarter.

In the 2019 quarter, hot-rolled steel prices continued to decline until the end of October 2019 when domestic steel producers announced price increases and continued to increase prices throughout the remainder of the 2019 quarter. However, the Company continued to see downward sales price pressure and constrained margins throughout the 2019 quarter due to the time it takes for price changes to filter through the supply chain. In the 2018 quarter, hot-rolled steel prices started declining after a preceding period of approximately nine months where steel prices increased significantly. The 2018 quarter marked the start of a period of margin compression that would continue through the 2019 quarter.

Coil Segment

Coil product segment sales for the 2019 quarter totaled $21,001,358 compared to $28,730,992 for the 2018 quarter, representing a sales decrease of $7,729,634 or approximately 27%. For a more complete understanding of the average selling prices of goods sold, it is helpful to isolate sales generated from processing of customer owned material and sales generated from coil segment inventory. Sales generated from processing of customer owned material totaled $185,870 for the 2019 quarter compared to $305,289 for the 2018 quarter. Sales generated from coil segment inventory totaled $20,815,488 for the 2019 quarter compared to $28,425,703 for the 2018 quarter. The decrease in coil segment sales was driven by a decrease in the average selling price per ton of material from inventory partially offset by an increase in the volume of these shipments. The average per ton selling price related to these shipments decreased from approximately $905 per ton in the 2018 quarter to approximately $600 per ton in the 2019 quarter. Inventory tons sold increased from approximately 31,500 tons in the 2018 quarter to approximately 34,500 tons in the 2019 quarter. Coil segment operations recorded an operating loss of approximately $93,000 in the 2019 quarter and an operating profit of approximately $744,000 in the 2018 quarter.

Operating results for the 2019 quarter were negatively impacted by the continued margin compression associated with the recent decline in hot-rolled steel prices. Operating results for the 2018 quarter were positively impacted by the lasting effect of a significant increase in hot-rolled steel prices leading up to the 2018 quarter. Sales volume improved due primarily to the number of customers sold increasing from 97 in the 2018 quarter to 114 in the 2019 quarter.

The Company’s coil segment purchases its inventory from a limited number of suppliers. Loss of any of these suppliers could have a material adverse effect on the Company’s business.

Tubular Segment

Tubular product segment sales for the 2019 quarter totaled $7,149,459 compared to $14,595,088 for the 2018 quarter, representing a sales decrease of $7,445,629 or approximately 51%. For a more complete understanding of the average selling prices of goods sold, it is helpful to isolate sales generated from the finishing of customer owned pipe and sales generated from tubular segment inventory. The Company did not generate any sales from the finishing of customer owned pipe during the 2019 quarter but generated sales of $66,734 for the 2018 quarter related to these services. Sales generated from tubular segment inventory totaled $7,149,459 for the 2019 quarter compared to $14,528,354 for the 2018 quarter. The decrease in tubular segment sales was driven by a decrease in tons shipped from inventory and a decrease in the average selling price per ton for these shipments. Tons sold decreased from approximately 20,000 tons in the 2018 quarter to approximately 11,000 tons in the 2019 quarter. The average per ton selling price related to these shipments decreased from approximately $723 per ton in the 2018 quarter to approximately $646 per ton in the 2019 quarter. Tubular segment operations recorded an operating loss of approximately $468,000 in the 2019 quarter and an operating profit of approximately $650,000 in the 2018 quarter.

Operating results for the 2019 quarter were negatively impacted by compressed margins associated with the recent decline in hot-rolled steel prices and softness in the U.S. energy industry. In contrast, the 2018 quarter was positively impacted by stronger margins associated with the benefits of a significant increase in hot-rolled steel prices leading up to the 2018 quarter and a stronger U.S. energy industry. Shipments of mill reject pipe decreased from approximately 10,500 tons in the 2018 quarter to approximately 3,500 tons in the 2019 quarter. The higher shipping volume of mill reject pipe in the 2018 quarter was due primarily to a strategic effort to reduce the level of mill reject pipe inventory. At December 31, 2019, mill reject pipe inventory was at a desired level. Shipments of manufactured pipe declined from approximately 9,500 tons in the 2018 quarter to approximately 7,500 tons in the 2019 quarter due primarily to increased softness in the U.S. energy industry.

The Company’s tubular segment purchases its inventory from a limited number of suppliers. Loss of any of these suppliers could have a material adverse effect on the Company’s business.

General, Selling and Administrative Costs

During the 2019 quarter, general, selling and administrative costs increased $146,293 compared to the 2018 quarter. This increase was related primarily to an increase in selling expenses primarily associated with the expansion of our sales force and an increase in corporate expenses primarily associated with the recognition of bad debt expense.

Income Taxes

Income taxes in the 2019 quarter decreased $480,644 from the amount recorded in the 2018 quarter. This decrease was related primarily to the decrease in earnings before taxes for the 2019 quarter compared to the 2018 quarter.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

We believe the Company remained in a strong, liquid position at December 31, 2019. The current ratio was 5.4 at December 31, 2019 and 6.0 at March 31, 2019. Working capital was $56,420,996 at December 31, 2019 and $62,091,305 at March 31, 2019.

At December 31, 2019, the Company maintained assets and liabilities at levels it believed were commensurate with operations. Changes in balance sheet amounts occurred in the ordinary course of business. Cash increased primarily as a result of reductions in accounts receivable and inventory partially offset by expenditures for property, plant and equipment and the payment of cash dividends. The Company expects to continue to monitor, evaluate and manage balance sheet components depending on changes in market conditions and the Company’s operations.

The Company commenced two capital expenditure projects during the December 31, 2019 quarter. The first project is a building expansion at the Company’s coil processing facility in Hickman, Arkansas. The project will add an additional 22,000 square feet of storage space to the facility. We expect that the additional space will facilitate efficiency and safety improvements and will provide necessary space for future growth. This project is estimated to be complete by April 2020 with an estimated cost of $1,100,000. The second project involves the installation of a stretcher leveler coil processing line at the Company’s coil processing facility in Decatur, Alabama. This equipment will replace the existing processing equipment that is currently present at the Decatur plant and will expand both the size range and grade of material that Decatur is able to process. In relation to the current processing capabilities of the coil segment overall, the new equipment will increase the segment’s ability to process coils from up to 72” wide to up to 96” wide and will also allow for processing of higher strength grades than the segment’s current equipment is capable. The equipment is being constructed, fabricated and installed by Delta Steel Technologies. The Company currently expects installation of the new equipment to begin in October 2020 and expects commercial use to begin in February 2021. The Company currently estimates the cost of this project to be $5,800,000. The expenditures related to both of these projects are reported as Construction in Progress on the Company’s Condensed Consolidated Balance Sheet.

On December 12, 2019, the Company’s $5,000,000 revolving line of credit facility (the “Credit Facility”) expired and was not renewed. The Company did not have any borrowings outstanding under the Credit Facility at expiration and did not advance any funds under the Credit Facility during the quarter ended December 31, 2019.

The Company believes that its current cash position along with cash flows from operations and borrowing capability due to its financial position are adequate to fund its expected cash requirements for the next 24 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. Significant estimates that are subject to the Company’s assumptions include the determination of useful lives for fixed assets, determination of the allowance for doubtful accounts and the determination of net realizable value relative to inventory. The determination of useful lives for depreciation of fixed assets requires the Company to make assumptions regarding the future productivity of the Company’s fixed assets. The allowance for doubtful accounts requires the Company to draw conclusions on the future collectability of the Company’s accounts receivable. The determination of net realizable value when reviewing inventory value requires the Company to makes assumptions concerning sales trends, customer demand and steel industry market conditions. Actual results could differ from these estimates.

CAUTIONARY NOTE REGARDING 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, as amended) and that involve risk and uncertainty. Such statements may include those risks disclosed in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of this report. These forward-looking statements may include, but are not limited to, future changes in the Company’s financial condition or 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 U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including the Company’s Annual Report on Form 10-K and its other Quarterly Reports on Form 10-Q. Forward looking statements include those preceded by, followed by or including the words “will,” “expect,” “intended,” “anticipated,” “believe,” “project,” “forecast,” “propose,” “plan,” “estimate,” “enable,” and similar expressions, including, for example, statements about our business strategy, our industry, our future profitability, growth in the industry sectors we serve, our expectations, beliefs, plans, strategies, objectives, prospects and assumptions, and estimates and projections of future activity and trends in the oil and natural gas industry. These forward-looking statements are not guarantees of future performance. These statements are based on management’s expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Although forward-looking statements reflect our current beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. 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 government policy regarding steel, changes in the demand for steel and steel products in general, the Company’s success in executing its internal operating plans, changes in and availability of raw materials, our ability to satisfy our take or pay obligations under certain supply agreements, unplanned shutdowns of our production facilities due to equipment failures or other issues, increased competition from alternative materials and risks concerning innovation, new technologies, products and increasing customer requirements. Accordingly, undue reliance should not be placed on our forward looking statements. We undertake no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except to the extent law requires.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not required

Item 4.

Controls and Procedures

The Company’s management, with the participation of the Company’s principal executive officer (“CEO”) and principal financial officer, 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 Exchange Act), as of the end of the fiscal quarter ended December 31, 2019. Based on this evaluation, the Company’s CEO and principal financial officer have concluded that the Company’s disclosure controls and procedures were effective as of the end of the fiscal quarter ended December 31, 2019 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 principal financial officer, 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 December 31, 2019 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

FRIEDMAN INDUSTRIES, INCORPORATED

Three Months Ended December 31, 2019

Part II — OTHER INFORMATION

Item 6.

Exhibits

Exhibits

3.1	—	Articles of Incorporation of the Company, as amended (incorporated by reference from Exhibit 3.1 to the Company’s Form S-8 filed on December 21, 2016).
3.2	—	Articles of Amendment to the Articles of Incorporation of the Company, as filed with the Texas Secretary of State on September 22, 1987 (incorporated by reference from Exhibit 3.1 to the Company’s Form S-8 filed on December 21, 2016).
3.3	—	Amended and Restated Bylaws of the Company (incorporated by reference from Exhibit 3.2 to the Company’s Form S-8 filed on December 21, 2016).
31.1	—	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Michael J. Taylor
31.2	—	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Alex LaRue
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 Michael J. Taylor
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 Alex LaRue
101.INS	—	XBRL Instance Document
101.SCH	—	XBRL Taxonomy Schema Document
101.CAL	—	XBRL Calculation Linkbase Document
101.DEF	—	XBRL Definition Linkbase Document
101.LAB	—	XBRL Label Linkbase Document
101.PRE	—	XBRL Presentation Linkbase Document

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: February 14, 2020
	By	/s/ ALEX LARUE
		Alex LaRue, Chief Financial Officer – Secretary and Treasurer (Principal Financial Officer)