-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Beocc7bBluRhA0RiRRGOidLF9I8okD3Z0nBWaKAMBDSl7E8OcmEvrHDYOkahf2R2 LYFdhiXeGXBhseQkXKKm2A== 0000950129-02-005634.txt : 20021113 0000950129-02-005634.hdr.sgml : 20021113 20021113153813 ACCESSION NUMBER: 0000950129-02-005634 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20020930 FILED AS OF DATE: 20021113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRIEDMAN INDUSTRIES INC CENTRAL INDEX KEY: 0000039092 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES & ROLLING & FINISHING MILLS [3310] IRS NUMBER: 741504405 STATE OF INCORPORATION: TX FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07521 FILM NUMBER: 02819907 BUSINESS ADDRESS: STREET 1: 4001 HOMESTEAD RD CITY: HOUSTON STATE: TX ZIP: 77028 BUSINESS PHONE: 7136729433 MAIL ADDRESS: STREET 2: PO BOX 21147 CITY: HOUSTON STATE: TX ZIP: 77226 10-Q 1 h00929e10vq.txt FRIEDMAN INDUSTRIES, INCORPORATED - 9/30/2002 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002 OR [ ] 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 (I.R.S. Employer Identification incorporation or organization) 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 X No ___ At September 30, 2002, the number of shares outstanding of the issuer's only class of stock was 7,571,239 shares of Common Stock. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART I -- FINANCIAL INFORMATION FRIEDMAN INDUSTRIES, INCORPORATED CONSOLIDATED BALANCE SHEETS -- UNAUDITED ASSETS
SEPTEMBER 30, 2002 MARCH 31, 2002 ------------------ -------------- CURRENT ASSETS Cash and cash equivalents................................. $ 3,428,509 $ 4,683,894 Accounts receivable....................................... 8,314,756 7,485,217 Inventories -- Note B..................................... 22,175,052 23,502,201 Prepaid expenses and other current assets................. 388,349 135,676 ------------ ------------ Total Current Assets.............................. 34,306,666 35,806,988 PROPERTY, PLANT AND EQUIPMENT Land...................................................... 221,543 221,543 Buildings and improvements................................ 3,992,034 3,981,154 Machinery and equipment................................... 17,127,945 16,910,763 Less allowance for depreciation........................... (14,445,389) (13,963,024) ------------ ------------ 6,896,133 7,150,436 OTHER ASSETS Cash value of officers' life insurance.................... 1,161,258 1,029,031 ------------ ------------ $ 42,364,057 $ 43,986,455 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Trade accounts payable and accrued expenses............... $ 9,416,434 $ 9,353,386 Current portion of long-term debt......................... 468,496 833,750 Dividends payable......................................... 151,461 75,710 Contribution to profit-sharing plan....................... 132,000 260,000 Income taxes payable...................................... 10,875 87,472 Deferred credit for LIFO replacement...................... 195,647 -- Employee compensation and related expenses................ 302,339 186,788 ------------ ------------ Total Current Liabilities......................... 10,677,252 10,797,106 LONG-TERM DEBT, less current portion........................ 91,578 2,053,438 PROVISION FOR NONPENSION RETIREMENT BENEFITS................ 163,000 163,000 DEFERRED INCOME TAXES....................................... 497,560 481,560 STOCKHOLDERS' EQUITY Common stock: Par value $1 per share: Authorized 10,000,000 shares; Issued and outstanding shares -- 7,571,239 at September 30, 2002 and March 31, 2002, respectively............................... 7,571,239 7,571,239 Additional paid-in capital................................ 27,707,309 27,707,309 Retained deficit.......................................... (4,343,881) (4,787,197) ------------ ------------ Total Stockholders' Equity........................ 30,934,667 30,491,351 ------------ ------------ $ 42,364,057 $ 43,986,455 ============ ============
1 FRIEDMAN INDUSTRIES, INCORPORATED CONSOLIDATED STATEMENTS OF EARNINGS -- UNAUDITED
THREE MONTHS ENDED SIX MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------- ------------------------- 2002 2001 2002 2001 ----------- ----------- ----------- ----------- Net sales................................ $27,776,049 $24,975,561 $53,337,347 $52,861,224 Costs and expenses Costs of goods sold.................... 25,969,922 23,276,854 50,062,702 49,291,024 General, selling and administrative costs............................... 1,097,760 1,026,197 2,141,756 2,127,443 Interest............................... 12,434 79,867 42,548 188,949 ----------- ----------- ----------- ----------- 27,080,116 24,382,918 52,247,006 51,607,416 Interest and other income................ (14,735) (9,354) (40,259) (15,002) ----------- ----------- ----------- ----------- Earnings before federal income taxes..... 710,668 601,997 1,130,600 1,268,810 Provision for federal income taxes: Current................................ 233,626 196,178 368,403 414,394 Deferred............................... 8,000 8,500 16,000 17,000 ----------- ----------- ----------- ----------- 241,626 204,678 384,403 431,394 ----------- ----------- ----------- ----------- Net earnings............................. $ 469,042 $ 397,319 $ 746,197 $ 837,416 =========== =========== =========== =========== Average number of common shares outstanding: Basic.................................. 7,571,239 7,568,839 7,571,239 7,568,839 Diluted................................ 7,571,239 7,568,839 7,571,239 7,568,839 Net earnings per share: Basic.................................. $ 0.06 $ 0.05 $ 0.10 $ 0.11 Diluted................................ $ 0.06 $ 0.05 $ 0.10 $ 0.11 Cash dividends declared per common share.................................. $ 0.02 $ 0.03 $ 0.04 $ 0.07
2 FRIEDMAN INDUSTRIES, INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS -- UNAUDITED
SIX MONTHS ENDED SEPTEMBER 30, -------------------------- 2002 2001 ----------- ----------- OPERATING ACTIVITIES Net earnings.............................................. $ 746,197 $ 837,416 Adjustments to reconcile net earnings to cash provided by operating activities: Depreciation........................................... 482,366 446,400 Provision for deferred taxes........................... 16,000 17,000 Decrease (increase) in operating assets: Accounts receivable.................................... (829,539) 1,607,435 Inventories............................................ 1,327,149 3,431,747 Other.................................................. (252,673) (122,273) Increase (decrease) in operating liabilities: Accounts payable and accrued expenses.................. 63,048 (4,954,227) Contribution to profit-sharing plan.................... (128,000) (144,000) Employee compensation and related expenses............. 115,551 23,468 Federal income taxes payable........................... (76,597) (75,606) Deferred credit for LIFO replacement................... 195,647 572,396 ----------- ----------- NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES..................................... 1,659,149 1,639,756 INVESTING ACTIVITIES Purchase of property, plant and equipment................. (228,062) (293,009) (Increase) decrease in cash value of officers' life insurance.............................................. (132,227) (21,184) ----------- ----------- NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES..................................... (360,289) (314,193) FINANCING ACTIVITIES Cash dividends paid....................................... (227,131) (605,491) Principal payments on notes payable....................... (2,431,353) (400,000) Increase in notes payable................................. 104,239 -- ----------- ----------- NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES..................................... (2,554,245) (1,005,491) ----------- ----------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............ (1,255,385) 320,072 Cash and cash equivalents at beginning of period.......... 4,683,894 669,076 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD.................. $ 3,428,509 $ 989,148 =========== ===========
3 FRIEDMAN INDUSTRIES, INCORPORATED NOTES TO QUARTERLY REPORT -- UNAUDITED SIX MONTHS ENDED SEPTEMBER 30, 2002 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 accounting principles generally accepted in the United States 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, 2002. NOTE B -- INVENTORIES Inventories consist of prime coil, non-standard coil and tubular materials. Prime coil inventory ("prime 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. Prime inventory is valued using the last-in, first-out (LIFO) method and non-standard coil and tubular inventories are valued using the first-in, first-out method. Beginning April 1, 2002, the Company combined two prime inventory LIFO pools into one LIFO pool to consolidate inventories of similar characteristics. There was no cumulative effect and no material impact on income during each of the last five fiscal years resulting from the combination. This combination did not significantly affect earnings for the quarter or the six months ended September 30, 2002. LIFO inventories were liquidated during each of the quarters ended September 30, 2001 and September 30, 2002. In connection with the replacement of these liquidations, the Company charged costs of goods sold and recorded a deferred credit for $572,396 and $195,647 at September 30, 2001 and September 30, 2002, respectively. During the quarter ended September 30, 2001, the Company recorded an increase in earnings before taxes of approximately $131,000 due to the liquidation and non-replacement of LIFO inventories carried at costs prevailing in preceding years as compared to current cost at September 30, 2001. NOTE C -- SEGMENT INFORMATION -- UNAUDITED
THREE MONTHS ENDED SIX MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------ ------------------ 2002 2001 2002 2001 ------- ------- ------- ------- IN THOUSANDS IN THOUSANDS Net sales Coil................................................ $16,361 $12,251 $30,405 $26,261 Tubular............................................. 11,415 12,725 22,932 26,600 ------- ------- ------- ------- Total net sales............................. $27,776 $24,976 $53,337 $52,861 ======= ======= ======= ======= Operating profit Coil................................................ $ 573 $ 260 $ 940 $ 196 Tubular............................................. 721 887 1,307 2,287 ------- ------- ------- ------- Total operating profit...................... 1,294 1,147 2,247 2,483 Corporate expenses.................................. 584 474 1,113 1,040 Interest expense.................................... 13 80 43 189 Interest & other income............................. (14) (9) (40) (15) ------- ------- ------- ------- Total earnings before taxes................. $ 711 $ 602 $ 1,131 $ 1,269 ======= ======= ======= =======
4
SEPTEMBER 30, ------------------ 2002 2001 ------- ------- Segment assets Coil...................................................... $19,818 $18,250 Tubular................................................... 17,880 22,993 ------- ------- 37,698 41,243 Corporate assets.......................................... 4,666 2,038 ------- ------- Total assets...................................... $42,364 $43,281 ======= =======
NOTE D -- ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS Effective April 1, 2002, the Company adopted FAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets. This statement addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supercedes FAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, and the accounting and reporting provisions of Accounting Principles Board Opinion No. 30, Reporting the Results of Operations, for a disposal of a segment or a business. In November 2001, the Company ceased operations at its Houston coil facility (the "facility"). To the extent possible, sales and production were transferred to other Company locations. Machinery and equipment associated with the facility other than the overhead cranes attached to the buildings will be deployed at other Company locations. Land and buildings and improvements with carrying values net of accumulated depreciation of $35,942 and $69,969, respectively are expected to be sold in the next 12 months. Estimated proceeds are expected to exceed the net book value. 5 FRIEDMAN INDUSTRIES, INCORPORATED ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS SIX MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO SIX MONTHS ENDED SEPTEMBER 30, 2001 During the six months ended September 30, 2002, sales and costs of goods sold increased $476,123 and $771,678, respectively, and related gross profit declined $295,555 from the comparable amounts recorded during the six months ended September 30, 2001. During the 2002 period, an increase of $4,143,727 in sales of coil products was offset by a decrease of $3,667,604 in sales of tubular products. Tons of coil products sold increased approximately 12% and the average per ton selling price increased approximately 4% from the levels recorded during the 2001 period. A decline in coil sales associated with the closure of the Houston coil facility in November 2001 was more than offset by an increase in sales relative to the XSCP Division which began operations in December 2001. During the 2002 period, tubular tons sold and the average selling price per ton declined approximately 5% and 9%, respectively. Coil operations benefited from somewhat stronger market conditions while tubular operations were adversely impacted by soft market conditions during the 2002 period. Management believes the soft market conditions for tubular products were related to the overall weakness in the energy sector of the United States economy. An increase in gross profit of $688,518 related to coil operations was offset by a decline in gross profit of $984,073 associated with tubular operations. Gross profits as a percentage of sales were approximately 6.8% and 6.1% during the 2001 and 2002 periods, respectively. This decrease was related primarily to reduced margins experienced by tubular operations. Interest expense decreased $146,401 from the amount recorded during the 2001 period. This decrease was primarily related to a reduction in interest rates paid on borrowings and in long-term debt. Interest and other income increased $25,257 from the 2001 period amount primarily as a result of an increase in invested cash positions during the 2002 period. Federal income taxes decreased $46,991 from the comparable amount recorded during the 2001 period. This decrease was related to the decrease in earnings before taxes as the effective tax rates were the same for both periods. THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2001 During the quarter ended September 30, 2002, sales, costs of goods sold and gross profit increased $2,800,488, $2,693,068 and $107,420, respectively, from the comparable amounts recorded during the quarter ended September 30, 2001. During the 2002 quarter, an increase of $4,110,533 in sales of coil products was partially offset by a decrease of $1,310,045 in sales of tubular products. Tons of coil products sold and the average per ton selling price increased approximately 21% and 10%, respectively, from the levels recorded during the 2001 quarter. A decline in coil sales associated with the closure of the Houston coil facility in November 2001 was more than offset by an increase in sales relative to the XSCP Division which began operations in December 2001. During the 2002 period, tubular tons sold decreased approximately 6% and the average selling price per ton declined approximately 5% from respective amounts recorded in the 2001 quarter. Coil operations benefited from somewhat stronger market conditions while tubular operations were adversely impacted by soft market conditions during the 2002 quarter. Management believes the soft market conditions for tubular products were related to the overall weakness in the energy sector of the United States economy. An increase in gross profit of $285,662 related to coil operations was offset by a decline in gross profit of $178,242 associated with tubular operations. Gross profits as a percentage of sales were approximately 6.8% and 6.5% during the 2001 and 2002 quarters, respectively. Interest expense decreased $67,433 from the amount recorded during the 2001 quarter. This decrease was related primarily to a decrease in long term debt. 6 Federal income taxes increased $36,948 from the comparable amount recorded during the 2001 quarter. This increase was related to the increase in earnings before taxes as the effective tax rates were the same for both quarters. FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES The Company remained in a strong, liquid position at September 30, 2002. Current ratios were 3.2 and 3.3 at September 30, 2002 and March 31, 2002, respectively. Working capital was $23,629,414 at September 30, 2002 and $25,009,882 at March 31, 2002. During the quarter ended September 30, 2002, the Company maintained assets and liabilities at levels it believed were commensurate with operations. The Company expects to continue to monitor and evaluate these balance sheet components depending on changes in market conditions and the Company's operations. The Company has a credit arrangement with a bank which provides for a revolving line of credit facility (the "revolving facility") and a term credit facility (the "term facility"). Pursuant to the revolving facility which expires April 1, 2004, the Company may borrow up to $10 million at an interest rate no greater than the bank's prime rate. At September 30, 2002, the Company had no borrowings outstanding under the revolving facility. The amount outstanding under the term facility bears interest at a stated rate of LIBOR plus 1.25% and requires quarterly principal payments of $200,000 plus accrued interest through March 1, 2003. In July 1997, the Company entered into a swap transaction with the bank pursuant to which it exchanged the term facility's LIBOR-based interest rate obligation for a fixed interest rate obligation of 8% to remain in effect for the entire term of the term facility. As of September 30, 2002, the principal amount of indebtedness outstanding under the term facility was $0.4 million. Notwithstanding the current market conditions, the Company believes its cash flows from operations and borrowing capability under its revolving facility 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. On an ongoing basis, the Company evaluates estimates and judgments. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. 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 and product quality. 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 and prices of the Company products, changes in the demand for steel and steel products in general and the Company's success in executing its internal operating plans. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not material. 7 ITEM 4. CONTROLS AND PROCEDURES Based on an evaluation of the disclosure controls and procedures conducted within 90 days prior to the filing date of this report on Form 10-Q, the principal executive officer and principal financial officer of the Company have concluded that the disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) promulgated under the Securities Exchange Act of 1934, as amended) are effective. There were no significant changes in the internal controls or in other factors that could significantly affect those controls subsequent to the date of the evaluation thereof. 8 FRIEDMAN INDUSTRIES, INCORPORATED SIX MONTHS ENDED SEPTEMBER 30, 2002 PART II -- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Not applicable ITEM 2. CHANGES IN SECURITIES a). Not applicable b). Not applicable c). Not applicable d). 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 At the Annual Meeting of Shareholders held on September 4, 2002, the Company's shareholders elected eight directors to the Company's Board of Directors. The number of shares voted for and withheld with respect to the election of each director was as follows:
NAME SHARES VOTED FOR SHARES WITHHELD ---- ---------------- --------------- Jack Friedman......................................... 6,859,146 39,888 Harold Friedman....................................... 6,858,351 40,683 William E. Crow....................................... 6,859,146 39,888 Charles W. Hall....................................... 6,859,146 39,888 Alan M. Rauch......................................... 6,859,146 39,888 Hershel M. Rich....................................... 6,859,146 39,888 Kirk K. Weaver........................................ 6,859,146 39,888 Joe L. Williams....................................... 6,859,146 39,888
ITEM 5. OTHER INFORMATION Not applicable ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a). Exhibits 99.1 -- Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by Jack Friedman 99.2 -- 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 b). Reports on Form 8-K None 9 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 November 13, 2002 By /s/ BEN HARPER ------------------------------------ Ben Harper, Senior Vice President-Finance (Chief Accounting Officer) Date November 13, 2002 By /s/ HAROLD FRIEDMAN ------------------------------------ Harold Friedman, Vice Chairman of the Board I, Jack Friedman, the Chairman of the Board and Chief Executive Officer of Friedman Industries, Incorporated, a Texas corporation, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Friedman Industries, Incorporated; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Dated: November 13, 2002 /s/ JACK FRIEDMAN Chairman of the Board and Chief Executive Officer 10 I, Ben Harper, Senior Vice President-Finance and Secretary/Treasurer of Friedman Industries, Incorporated, a Texas corporation, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Friedman Industries, Incorporated; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Dated: November 13, 2002 /s/ BEN HARPER Senior Vice President-Finance and Secretary/Treasurer 11 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION ----------- ----------- Exhibit 99.1 -- Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by Jack Friedman Exhibit 99.2 -- 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
12 EX-99.1 3 h00929exv99w1.txt CERTIFICATION SIGNED BY JACK FRIEDMAN EXHIBIT 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 NOT FILED PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934 In connection with the Quarterly Report of Friedman Industries, Incorporated (the "Company") on Form 10-Q for the period ending September 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jack Friedman, Chairman of the Board and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirement of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: November 13, 2002 By /s/ JACK FRIEDMAN ------------------------------------ Name: Jack Friedman Title: Chairman of the Board and Chief Executive Officer EX-99.2 4 h00929exv99w2.txt CERTIFICATION SIGNED BY BEN HARPER EXHIBIT 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 NOT FILED PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934 In connection with the Quarterly Report of Friedman Industries, Incorporated (the "Company") on Form 10-Q for the period ending September 30, 2002, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ben Harper, Senior Vice President-Finance and Secretary/Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirement of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: November 13, 2002 By /s/ BEN HARPER ------------------------------------ Name: Ben Harper Title: Senior Vice President-Finance and Secretary/Treasurer -----END PRIVACY-ENHANCED MESSAGE-----