Friedman Industries Files FY2024 10-K

Ticker: FRD · Form: 10-K · Filed: Jun 11, 2024 · CIK: 39092

Sentiment: neutral

Topics: 10-K, annual-report, steel-manufacturing

TL;DR

Friedman Industries filed its 2024 10-K. Steel company based in TX.

AI Summary

Friedman Industries, Inc. filed its annual report for the fiscal year ended March 31, 2024. The company, incorporated in Texas, operates in the steel manufacturing sector. Its principal executive offices are located at 1121 Judson Road, Suite 124, Longview, TX 75601, with a mailing address of PO Box 2192, Longview, TX 75606. The filing details its operations and financial standing for the reported period.

Why It Matters

This 10-K filing provides investors and stakeholders with a comprehensive overview of Friedman Industries' financial performance and operational status for the fiscal year ending March 31, 2024, crucial for investment decisions.

Risk Assessment

Risk Level: medium — The filing is a standard annual report and does not inherently indicate elevated risk without further financial analysis.

Key Players & Entities

FAQ

What is Friedman Industries' primary business sector?

Friedman Industries, Inc. operates in the STEEL WORKS, BLAST FURNACES & ROLLING & FINISHING MILLS sector, as indicated by its Standard Industrial Classification code [3310].

In which state was Friedman Industries incorporated?

Friedman Industries, Inc. was incorporated in Texas.

What is the fiscal year-end date for this filing?

The fiscal year-end date for this filing is March 31, 2024.

What is the company's main business address?

The company's business address is 1121 Judson Road, Suite 124, Longview, TX 75601.

What is the SEC file number for Friedman Industries?

The SEC file number for Friedman Industries, Inc. is 1-7521.

Filing Stats: 4,570 words · 18 min read · ~15 pages · Grade level 13.1 · Accepted 2024-06-11 16:13:55

Key Financial Figures

Filing Documents

Business

Item 1. Business General Friedman Industries, Incorporated (the "Company"), a Texas corporation incorporated in 1965, is a manufacturer and processor of steel products and operates in two reportable segments: flat-roll products and tubular products. The flat-roll segment was previously referred to as the coil segment. The Company is now using flat-roll to describe the segment due to it being a more common term used in the Company's industry. Significant financial information relating to the Company's business segments for the last two years is contained in Note 13of the Consolidated Financial Statements included in the Company's Annual Report to Shareholders for the fiscal year ended March 31, 2024, which financial statements are incorporated herein by reference in Item 8 hereof. Flat-Roll Products The flat-roll product segment consists of the operation of five hot-rolled coil processing facilities located in Hickman, Arkansas; Decatur, Alabama; East Chicago, Indiana; Granite City, Illinois and Sinton, Texas. The facilities in Granite City and East Chicago were acquired on April 30, 2022 from Plateplus, Inc ("Plateplus"). More information about the Plateplus transaction can be found in Note 2 of the Consolidated Financial Statements included in the Company's Annual Report to Shareholders for the fiscal year ended March 31, 2024. The facility in Sinton is a newly constructed facility that commenced operations during October 2022. The Hickman, Granite City and East Chicago facilities operate temper mills and cut-to-length lines. The Decatur and Sinton facilities operate stretcher leveler cut-to-length lines. The equipment at all locations improve the flatness and surface quality of the coils and cut the coils into sheet and plate of prescribed lengths. On a combined basis, the facilities are capable of cutting sheet and plate with thicknesses ranging from 16 gauge to 1" thick in widths ranging from 36" wide to 96" wide. The vast majority of flat-roll product se

Risk Factors

Item 1A. Risk Factors Not required.

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments None.

Cybersecurity

Item 1C. Cybersecurity Cybersecurity Governance The Board of Directors (the "Board") of the Company is responsible for the oversight of the Company's cybersecurity program and recognizes the risks that cybersecurity threats may impose on the Company, its business partners, employees and investors. The Company's IT Director is responsible for overall IT governance, risk and compliance including the Company's cybersecurity program. The Audit Committee of the Board collaborates with the full Board and the IT Director to facilitate alignment of overall IT related controls and processes. We have a formalized IT Security Incident Report process which provides a method to document and communicate details of security incidents to appropriate stakeholders. The Board and the Audit Committee receive periodic briefings on cybersecurity and help set priorities and strategic direction. As part of continuous improvement, our cybersecurity program is being aligned with the NIST Cybersecurity Framework 2.0 to help ensure comprehensive controls and oversight. Cybersecurity Controls We have implemented a modern, comprehensive set of controls that restrict access to systems using a combination of firewalls, virtual private networks, multi-factor authentication and enforced use of corporate controlled compliant devices. We make extensive use of best-in-class automated intrusion prevention, intrusion detection and response systems which constantly monitor activity, build usage patterns and respond or alert when unusual activity is detected. We have experienced staff who perform root cause analysis, respond to any immediate threat, and implement improved controls for future prevention. Our cybersecurity tools are fully integrated and collect data from various sources to build relationships and detect more complex multi-channel attack strategies. Application controls are role-based and designed to protect data confidentiality and provide overall data integrity. A risk-based approach

Properties

Item 2. Properties The principal real properties of the Company are described in the following table: Location Approximate Size Lone Star, Texas Plant — Texas Tubular Products 161,000 sq. feet Owned(1) Offices — Texas Tubular Products 12,200 sq. feet Owned(1) Land — Texas Tubular Products 122.4 acres Owned(1) Longview, Texas Offices — Administrative 5,100 sq. feet Leased(2) Hickman, Arkansas Plant and Warehouse — Flat Roll Products 64,600 sq. feet Owned(1) Offices — Flat Roll Products 2,500 sq. feet Owned(1) Land — Flat Roll Products 26.2 acres Owned(1) Decatur, Alabama Plant and Warehouse — Flat Roll Products 48,000 sq. feet Owned(1) Offices — Flat Roll Products 2,000 sq. feet Owned(1) Land — Flat Roll Products 47.3 acres Owned(1) Sinton, Texas Plant and Warehouse — Flat Roll Products 70,000 sq. feet Leasehold Improvement (3) Offices — Flat Roll Products 3,100 sq. feet Leasehold Improvement (3) Land — Flat Roll Products 26.5 acres Leased (3) East Chicago, Indiana Plant and Warehouse — Flat Roll Products 150,900 sq. feet Owned (1) Offices — Flat Roll Products 3,200 sq. feet Owned (1) Land — Flat Roll Products 5.0 acres Owned (1) Granite City, Illinois Plant and Warehouse — Flat Roll Products 321,000 sq. feet Leasehold Improvement (4) Offices — Flat Roll Products 4,400 sq. feet Leasehold Improvement (4) Land — Flat Roll Products 31.1 acres Leased (4) The Woodlands, Texas Offices — Administrative 5,000 sq. feet Leased (5) (1) All of the Company's owned real properties, plants and offices are held in fee and are not subject to any mortgage or deed of trust. (2) The office lease is with a non-affiliated party, expires on April 30, 2027, and requires a monthly rental payment of approximately $5,000. (3) The associated lease is a 99 year lease with Steel Dynamics Inc. that calls for an annual rental payment of $1 and has an expiration date of

Legal Proceedings

Item 3. Legal Proceedings The Company is not, and during fiscal year 2024 was not, a party to, nor is its property the subject of, any material pending legal proceedings.

Mine Safety Disclosures

Item 4. Mine Safety Disclosures Not applicable. 5 PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company's Common Stock is traded principally on the NYSE – American (Symbol: FRD). Reference is hereby made to the sections of the Company's Annual Report to Shareholders for the fiscal year ended March 31, 2024, entitled "Description of Business — Range of High and Low Sales Prices of Common Stock" and "Description of Business — Cash Dividends Declared Per Share of Common Stock", which sections are hereby incorporated herein by reference. The approximate number of shareholders of record of Common Stock of the Company as of April 26, 2024 was 156. Because many of the Company's common shares are held by brokers and other institutions on behalf of shareholders, the Company is unable to estimate the total number of individual shareholders represented by these record holders.

Selected Financial Data

Item 6. Selected Financial Data Not required.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Information with respect to Item 7 is hereby incorporated herein by reference from the section of the Company's Annual Report to Shareholders for the fiscal year ended March 31, 2024, entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations".

Quantitative and Qualitative Disclosures about Market Risk

Item 7A. Quantitative and Qualitative Disclosures about Market Risk Not required.

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data The following financial statements and notes thereto of the Company included in the Company's Annual Report to Shareholders for the fiscal year ended March 31, 2024, are hereby incorporated herein by reference: Consolidated Balance Sheets — March 31, 2024 and 2023 Consolidated Statements of Operations — Years ended March 31, 2024 and 2023 Consolidated Statements of Comprehensive Income — Years ended March 31, 2024 and 2023 Consolidated Statements of Stockholders' Equity — Years ended March 31, 2024 and 2023 Consolidated Statements of Cash Flows — Years ended March 31, 2024 and 2023

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Reports of Independent Registered Public Accounting Firm The following supplementary schedule for the Company for the years ended March 31, 2024 and 2023, is incorporated herein by reference above in this Item 8 from the Company's Annual Report to Shareholders for the fiscal year ended March 31, 2024. Schedule II — Valuation and Qualifying Accounts All other schedules for which provision is made in the applicable accounting regulation of the SEC are not required under the related instructions or are inapplicable and, therefore, have been omitted.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.

Controls and Procedures

Item 9A. Controls and Procedures Information with respect to Item 9A is hereby incorporated herein by reference from the sections of the Company's Annual Report to Shareholders for the fiscal year ended March 31, 2024, entitled " Management's Report on Internal Control Over Financial Reporting ".

Other Information

Item 9B. Other Information None.

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections Not applicable. 6 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance Except as otherwise set forth below, information with respect to Item 10 is hereby incorporated herein by reference from the Company's proxy statement in respect of the 2024 Annual Meeting of Shareholders, definitive copies of which are expected to be filed with the SEC on or before 120 days after the end of the Company's 2024 fiscal year. Information with respect to Item 10 regarding executive officers is hereby incorporated by reference from the information set forth under the caption "Executive Officers of the Company" in Item 1 of this Annual Report on Form 10-K. The Company has adopted the Friedman Industries, Incorporated Code of Conduct and Ethics (the "Code"), which applies to the Company's employees, directors and officers, including its principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. A copy of the Code is filed as an exhibit hereto.

Executive Compensation

Item 11. Executive Compensation Information with respect to Item 11 is hereby incorporated herein by reference from the Company's proxy statement in respect of the 2024 Annual Meeting of Shareholders, definitive copies of which are expected to be filed with the SEC on or before 120 days after the end of the Company's 2024 fiscal year.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Equity Compensation Plan Information The disclosure required pursuant to Item 201(d) of Regulation S-K is hereby incorporated herein by reference from the Company's proxy statement in respect of the 2024 Annual Meeting of Shareholders, definitive copies of which are expected to be filed with the SEC on or before 120 days after the end of the Company's 2024 fiscal year. Additional information with respect to Item 12 regarding equity compensation plan information relating to the Company is hereby incorporated herein by reference from Note 3 — Equity Compensation Plans and Capital Stock included in the Notes to Consolidated Financial Statements of the Company included in the Company's Annual Report to Shareholders for the fiscal year ended March 31, 2024.

Security Ownership Information

Security Ownership Information The additional information with respect to Item 12 regarding the security ownership of certain beneficial owners and management, and related matters, is hereby incorporated herein by reference from the Company's proxy statement in respect to the 2024 Annual Meeting of Shareholders, definitive copies of which are expected to be filed with the SEC on or before 120 days after the end of the Company's 2024 fiscal year.

Certain Relationships, Related Transactions and Director Independence

Item 13. Certain Relationships, Related Transactions and Director Independence Information with respect to Item 13 is hereby incorporated herein by reference from the Company's proxy statement in respect of the 2024 Annual Meeting of Shareholders, definitive copies of which are expected to be filed with the SEC on or before 120 days after the end of the Company's 2024 fiscal year.

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services Information with respect to Item 14 is hereby incorporated herein by reference from the Company's proxy statement in respect of the 2024 Annual Meeting of Shareholders, definitive copies of which are expected to be filed with the SEC on or before 120 days after the end of the Company's 2024 fiscal year. Audit Id: 659 Audit firm: Moss Adams LLP Audit location: Houston, Texas 7 PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules (a) Documents included in this report 1. Financial Statements The following financial statements and notes thereto of the Company are included in the Company's Annual Report to Shareholders for the fiscal year ended March 31, 2024, which is incorporated herein by reference: Consolidated Balance Sheets — March 31, 2024 and 2023 Consolidated Statements of Operations — Years ended March 31, 2024 and 2023 Consolidated Statements of Comprehensive Income — Years ended March 31, 2024 and 2023 Consolidated Statements of Stockholders' Equity — Years ended March 31, 2024 and 2023 Consolidated Statements of Cash Flows — Years ended March 31, 2024 and 2023

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Reports of Independent Registered Public Accounting Firm 2. Financial Statement Schedules The following financial statement schedule is included in the Company's Annual Report to Shareholders for the fiscal year ended March 31, 2024, which is incorporated herein by reference: Schedule II — Valuation and Qualifying Accounts All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions or are inapplicable and, therefore, have been omitted. 8 3. Exhibits Exhibit No. Description 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, as amended on November 8, 2021 (incorporated by reference from Exhibit 3.3 to the Company's Form 10-Q filed on November 19, 2021). 10.1 — Friedman Industries, Incorporated 2016 Restricted Stock Plan (incorporated by reference from Exhibit 4.2 to the Company's Form S-8 filed on December 21, 2016). 10.2 — Form of Friedman Industries, Incorporated Restricted Stock Award Agreement (incorporated by reference from Exhibit 4.3 to the Company's Form S-8 filed on December 21, 2016). 10.3 — First Amendment to the Friedman Industries, Incorporated 2016 Restricted Stock Plan (incorporated by reference from Appendix C to the Company's Form DEF 14A filed on July 26, 2019). 10.4 — Amended and Restated Credit Agreement dated May 19, 2021 (incorporated by reference from Exhibit 10.9 to the Company's Form 10-K for the fiscal year ended March 31, 2021 filed on July 7, 2021). 10.5 — Pledge and Security A

View Full Filing

View this 10-K filing on SEC EDGAR

View on Read The Filing