10-Q

UNITED STATES

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 JUNE 30, 2015

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 incorporation or organization)	(I.R.S. Employer Identification Number)

19747 HWY 59 N, SUITE 200, HUMBLE, TEXAS 77338

(Address of principal executive offices) (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 (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  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). (Check one):    Yes  ¨    No  x

At June 30, 2015, the number of shares outstanding of the issuer’s only class of stock was 6,799,444 shares of Common Stock.

TABLE OF CONTENTS

Part I — FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 3. Quantitative and Qualitative Disclosures About Market Risk	9
Item 4. Controls and Procedures	9
Part II — OTHER INFORMATION	9
Item 6. Exhibits	9
SIGNATURES	10
EXHIBIT INDEX	11
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

2

Part I — FINANCIAL INFORMATION

Item 1. Financial Statements

FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED

	JUNE 30, 2015			MARCH 31, 2015
ASSETS
CURRENT ASSETS:
Cash	$	3,824,429		$	2,225,924
Accounts receivable, net of allowances for bad debts and cash discounts of $22,276 and $27,276 at June 30 and March 31, 2015, respectively		5,651,682			6,896,186
Inventories		40,169,832			40,850,666
Other		18,123			144,579
TOTAL CURRENT ASSETS		49,664,066			50,117,355
PROPERTY, PLANT AND EQUIPMENT:
Land		1,082,331			1,082,331
Buildings and yard improvements		7,101,615			7,026,980
Machinery and equipment		30,768,124			30,690,049
Construction in progress		8,056,697			7,374,177
Less accumulated depreciation		(31,084,176	)		(30,656,226	)
		15,924,591			15,517,311
OTHER ASSETS:
Deferred income tax asset		151,780			187,358
Cash value of officers’ life insurance and other assets		1,153,250			1,136,000
TOTAL ASSETS	$	66,893,687		$	66,958,024
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	1,370,147		$	2,148,555
Income taxes payable		62,974			—
Dividends payable		67,994			67,994
Contribution to profit sharing plan		102,000			51,000
Employee compensation and related expenses		502,533			383,562
TOTAL CURRENT LIABILITIES		2,105,648			2,651,111
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS		1,113,059			1,089,888
STOCKHOLDERS’ EQUITY:
Common stock, par value $1:
Authorized shares — 10,000,000
Issued shares — 7,975,160 at June 30 and March 31, 2015		7,975,160			7,975,160
Additional paid-in capital		29,003,674			29,003,674
Treasury stock at cost (1,175,716 shares at June 30 and March 31, 2015)		(5,475,964	)		(5,475,964	)
Retained earnings		32,172,110			31,714,155
TOTAL STOCKHOLDERS’ EQUITY		63,674,980			63,217,025
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	66,893,687		$	66,958,024

3

FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS — UNAUDITED

	THREE MONTHS ENDED JUNE 30,
	2015			2014
Net Sales	$	23,968,569		$	27,904,521
Costs and expenses
Costs of goods sold		21,826,676			26,862,460
General, selling and administrative costs		1,353,456			1,134,576
		23,180,132			27,997,036
Interest and other income		(17,250	)		(15,252	)
Earnings (loss) before income taxes		805,687			(77,263	)
Income tax provision (benefit):
Current		244,160			78,435
Deferred		35,578			(37,448	)
		279,738			40,987
Net earnings (loss)	$	525,949		$	(118,250	)
Average number of common shares outstanding:
Basic		6,799,444			6,799,444
Diluted		6,799,444			6,799,444
Net earnings (loss) per share:
Basic	$	0.08		$	(0.02	)
Diluted	$	0.08		$	(0.02	)
Cash dividends declared per common share	$	0.01		$	0.02

4

FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED

	THREE MONTHS ENDED JUNE 30,
	2015			2014
OPERATING ACTIVITIES
Net earnings (loss)	$	525,949		$	(118,250	)
Adjustments to reconcile net earnings (loss) to cash provided by (used in) operating activities:
Depreciation		427,950			443,849
Deferred taxes		35,578			(37,448	)
Change in postretirement benefits		23,171			19,208
Decrease (increase) in operating assets:
Accounts receivable		1,244,504			1,240,793
Inventories		680,834			(3,624,589	)
Other current assets		126,456			100,189
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses		(778,408	)		(1,643,532	)
Income taxes payable		62,974			—
Contribution to profit sharing plan		51,000			52,500
Employee compensation and related expenses		118,971			(52,815	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		2,518,979			(3,620,095	)
INVESTING ACTIVITIES
Purchase of property, plant and equipment		(835,230	)		(521,512	)
Increase in cash surrender value of officers’ life insurance		(17,250	)		(15,250	)
NET CASH USED IN INVESTING ACTIVITIES		(852,480	)		(536,762	)
FINANCING ACTIVITIES
Cash dividends paid		(67,994	)		(135,989	)
NET CASH USED IN FINANCING ACTIVITIES		(67,994	)		(135,989	)
INCREASE (DECREASE) IN CASH		1,598,505			(4,292,846	)
Cash at beginning of period		2,225,924			15,081,024
CASH AT END OF PERIOD	$	3,824,429		$	10,788,178

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FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED NOTES TO QUARTERLY REPORT — UNAUDITED

NOTE A — BASIS OF PRESENTATION

The accompanying unaudited, condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by 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, 2015.

NOTE B — INVENTORIES

Inventories consist of prime coil, non-standard coil and tubular materials. Prime coil inventory consists primarily of raw materials, non-standard coil inventory consists primarily of raw materials, and tubular inventory consists of both raw materials and finished goods. Inventories are valued at the lower of cost or replacement market. Cost for prime coil inventory is determined using the last-in, first-out (“LIFO”) method. Cost for non-standard coil inventory is determined using the specific identification method. Cost for tubular inventory is determined using the weighted average method.

A summary of inventory values by product group follows:

	June 30, 2015		March 31, 2015
Prime Coil Inventory	$	9,778,816	$	8,419,340
Non-Standard Coil Inventory		1,521,315		1,804,635
Tubular Raw Material		1,247,618		1,888,849
Tubular Finished Goods		27,622,083		28,737,842
	$	40,169,832	$	40,850,666

NOTE C — DEBT

On May 8, 2015, the Company entered into a credit arrangement for a $5,000,000 revolving line of credit facility (the “Credit Facility”) with JPMorgan Chase Bank N.A. The Credit Facility expires on April 30, 2016. The Credit Facility contains financial covenants that require the Company to not permit: tangible net worth to be less than $57,000,000, ratio of total liabilities to tangible net worth to be greater than 1.00 to 1.00 and net income for any period of four consecutive fiscal quarters to be less than $1.00. At June 30, 2015, the Company did not have borrowings outstanding under the Credit Facility.

NOTE D — SEGMENT INFORMATION (in thousands)

	THREE MONTHS ENDED JUNE 30,
	2015			2014
Net sales
Coil	$	19,348		$	17,906
Tubular		4,621			9,999
Total net sales	$	23,969		$	27,905
Operating profit (loss)
Coil	$	2,155		$	(404	)
Tubular		(637	)		772
Total operating profit		1,518			368
Corporate expenses		729			460
Interest & other income		(17	)		(15	)
Earnings (loss) before income taxes	$	806		$	(77	)

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	June 30, 2015		March 31, 2015
Segment assets
Coil	$	22,608	$	21,249
Tubular		39,143		42,144
		61,751		63,393
Corporate assets		5,143		3,565
	$	66,894	$	66,958

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, profit sharing expense, corporate insurance expenses and office supplies. Corporate assets consist primarily of cash and the cash value of officers’ life insurance.

NOTE E — SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid income taxes of approximately $29,500 and $93,000 in the quarters ended June 30, 2015 and 2014, respectively. No interest was paid in the quarters ended June 30, 2015 and 2014, respectively. Noncash financing activities consisted of accrued dividends of $67,994 and $135,989 in the quarters ended June 30, 2015 and 2014, respectively.

NOTE F — INCOME TAXES

The Company’s effective tax rate for the quarter ended June 30, 2015 approximated the statutory rate. The Company’s effective tax rate for the quarter ended June 30, 2014 differed from the statutory rate due primarily to a change in estimate related to state income taxes payable as of March 31, 2014.

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

Results of Operations

Three Months Ended June 30, 2015 Compared to Three Months Ended June 30, 2014

During the three months ended June 30, 2015, sales and costs of goods sold decreased $3,935,952 and $5,035,784, respectively, and gross profit increased $1,099,832 from the comparable amounts recorded during the three months ended June 30, 2014. The decrease in sales resulted from both a decline in tons sold and a decrease in the average selling price. Tons sold declined from approximately 39,000 tons in the 2014 quarter to approximately 38,000 tons in the 2015 quarter. The average per ton selling price decreased from approximately $710 per ton in the 2014 quarter to approximately $627 per ton in the 2015 quarter. The decrease in costs of goods sold was related primarily to a decline in the average per ton cost from approximately $684 per ton in the 2014 quarter to approximately $571 per ton in the 2015 quarter. The increase in gross profit was related primarily to improved margins earned on sales. Gross profit as a percentage of sales increased from approximately 3.7% in the 2014 quarter to approximately 8.9% in the 2015 quarter due primarily to improved market conditions for coil segment products.

Coil product segment sales increased approximately $1,442,000 during the 2015 quarter. This increase was related to an increase in coil tons sold partially offset by a decline in the average per ton selling price. Tons sold increased from approximately 24,000 tons in the 2014 quarter to approximately 30,500 tons in the 2015 quarter. The improvement in coil segment sales volume was primarily attributable to sales to customers manufacturing products used in the commercial freight industry. The average per ton selling price decreased from approximately $745 per ton in the 2014 quarter to approximately $633 per ton in the 2015 quarter. The average per ton cost of coil products sold decreased from approximately $746 per ton in the 2014 quarter to approximately $551 per ton in the 2015 quarter. Coil segment operations recorded an operating profit of approximately $2,155,000 in the 2015 quarter and an operating loss of approximately $404,000 in the 2014 quarter. In the 2015 quarter, the coil segment results benefitted from a decline in the cost of hot-rolled steel coils and an increase in tons sold. In addition, the average selling price per ton of coil products declined 15% while the average cost per ton declined 26%, resulting in improved margins earned on sales during the 2015 quarter. The Company continues to experience intense competition for sales due to the general availability of both domestic and foreign hot-rolled sheet and plate.

The Company is primarily dependent on Nucor Steel Company (“NSC”) for its supply of coil inventory. In the 2015 quarter, NSC continued to supply the Company with steel coils in amounts that were adequate for the Company’s purposes. The Company does not currently anticipate any significant change in such supply from NSC. Loss of NSC as a supplier could have a material adverse effect on the Company’s business.

Tubular product segment sales decreased approximately $5,378,000 during the 2015 quarter. This decrease resulted from both a decrease in the average per ton selling price and a decline in tons sold. The average per ton selling price of tubular products decreased from approximately $656 per ton in the 2014 quarter to approximately $601 per ton in the 2015 quarter. Tons sold declined from approximately 15,000 tons in the 2014 quarter to approximately 8,000 tons in the 2015 quarter. Tubular segment operations recorded

7

an operating loss of approximately $637,000 in the 2015 quarter and an operating profit of approximately $772,000 in the 2014 quarter. Tubular segment results for the 2015 quarter were negatively impacted by low market prices and reduced demand for the Company’s products used in the oil and gas industry. In the 2015 quarter, the Company experienced a reduction in tons produced, which had the effect of increasing the per ton cost of production and decreasing margins earned. Management believes the lower demand for its tubular products is related to soft market conditions created by oversupply, foreign competition and a decline in the U.S. energy business.

U. S. Steel Tubular Products, Inc. (“USS”) is the Company’s primary supplier of tubular products and coil material used in pipe manufacturing and is a major customer of finished tubular products. Certain finished tubular products used in the energy business are manufactured by the Company and sold to USS. Loss of USS as a supplier or customer could have a material adverse effect on the Company’s business. The Company can make no assurances as to orders from USS or the amounts of pipe and coil material that will be available from USS in the future.

During the 2015 quarter, general, selling and administrative costs increased $218,880 from the amount recorded during the 2014 quarter. This increase was related primarily to an increase in bonuses associated with the increased earnings.

Income taxes in the 2015 quarter increased $238,751 from the amount recorded in the 2014 quarter. This increase was related primarily to the increase in earnings before taxes in the 2015 quarter.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

The Company remained in a strong, liquid position at June 30, 2015. The current ratios were 23.6 at June 30, 2015 and 18.9 at March 31, 2015. Working capital was $47,558,418 at June 30, 2015, and $47,466,244 at March 31, 2015.

During the quarter ended June 30, 2015, 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 inventories partially offset by expenditures related to the construction of the Company’s pipe-finishing facility and a decrease in accounts payable. 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 is continuing construction of its pipe-finishing facility in Lone Star, Texas. The Company currently estimates the total construction costs for the facility will be approximately $9,200,000. As of June 30, 2015, capitalized expenditures related to the construction of the facility totaled approximately $7,752,000. The Company expects the facility to be completed and operational in the third quarter of fiscal 2016.

The Company entered into a Credit Agreement on May 8, 2015 with JPMorgan Chase Bank N.A. to provide a $5,000,000 revolving line of credit facility (the “Credit Facility”). The Credit Facility expires on April 30, 2016. The Company has not borrowed any amounts under the Credit Facility as of August 13, 2015.

The Company believes that its current cash position along with cash flows from operations and borrowing capability due to its strong balance sheet 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. One such accounting policy that 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.

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. These forward-looking statements may include, but are not limited to, future results of operations, future production capacity, product quality and proposed expansion plans. Forward-looking statements may be made by management orally or in writing including, but not limited to, this Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of the Company’s filings with the 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”). Actual results and trends in the future may differ materially depending on a variety of factors including, but not limited to, changes in the demand for and prices of the Company’s products, changes in the demand for steel and steel products in general and the Company’s success in executing its internal operating plans, including any proposed expansion plans.

8

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 June 30, 2015. 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 June 30, 2015 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 June 30, 2015 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 June  30, 2015

Part II — OTHER INFORMATION

Item 6. Exhibits

Exhibits
31.1	—	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by William E. Crow
31.2	—	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by 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 William E. Crow
32.2	—	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, signed by 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.

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: August 13, 2015	By	/s/    ALEX LARUE
		Alex LaRue, Vice President – Secretary and Treasurer (Principal Financial Officer)

10

EXHIBIT INDEX

Exhibit No.	Description
Exhibit 31.1	—	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by William E. Crow
Exhibit 31.2	—	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, signed by Alex LaRue
Exhibit 32.1	—	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by William E. Crow
Exhibit 32.2	—	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by 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.

11

EX-31.1

EXHIBIT 31.1

I, William E. Crow, certify that:

1. I have reviewed this report on Form 10-Q of Friedman Industries, Incorporated;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 13, 2015

/S/ WILLIAM E. CROW

Chief Executive Officer and President

EX-31.2

EXHIBIT 31.2

I, Alex LaRue, certify that:

1. I have reviewed this report on Form 10-Q of Friedman Industries, Incorporated;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 13, 2015

/S/ ALEX LARUE

Vice President – Secretary and Treasurer

EX-32.1

EXHIBIT 32.1

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to Section 906

of The Sarbanes-Oxley Act of 2002

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 ended June 30, 2015, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, William E. Crow, Chief Executive Officer and President 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, as amended, that:

(1) The Report fully complies with the requirements 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: August 13, 2015

By	/s/ William E. Crow
Name:	William E. Crow
Title:	Chief Executive Officer and President

EX-32.2

EXHIBIT 32.2

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to Section 906

of The Sarbanes-Oxley Act of 2002

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 ended June 30, 2015, as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Alex LaRue, Vice President – Secretary and 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, as amended, that:

(1) The Report fully complies with the requirements 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: August 13, 2015

By	/s/ Alex LaRue
Name:	Alex LaRue
Title:	Vice President – Secretary and Treasurer

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Segment Information

3 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Information

NOTE D — SEGMENT INFORMATION (in thousands)

	THREE MONTHS ENDED JUNE 30,
	2015			2014
Net sales
Coil	$	19,348		$	17,906
Tubular		4,621			9,999
Total net sales	$	23,969		$	27,905
Operating profit (loss)
Coil	$	2,155		$	(404	)
Tubular		(637	)		772
Total operating profit		1,518			368
Corporate expenses		729			460
Interest & other income		(17	)		(15	)
Earnings (loss) before income taxes	$	806		$	(77	)

	June 30, 2015		March 31, 2015
Segment assets
Coil	$	22,608	$	21,249
Tubular		39,143		42,144
		61,751		63,393
Corporate assets		5,143		3,565
	$	66,894	$	66,958

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, profit sharing expense, corporate insurance expenses and office supplies. Corporate assets consist primarily of cash and the cash value of officers’ life insurance.

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Debt

3 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

Debt

NOTE C — DEBT

On May 8, 2015, the Company entered into a credit arrangement for a $5,000,000 revolving line of credit facility (the “Credit Facility”) with JPMorgan Chase Bank N.A. The Credit Facility expires on April 30, 2016. The Credit Facility contains financial covenants that require the Company to not permit: tangible net worth to be less than $57,000,000, ratio of total liabilities to tangible net worth to be greater than 1.00 to 1.00 and net income for any period of four consecutive fiscal quarters to be less than $1.00. At June 30, 2015, the Company did not have borrowings outstanding under the Credit Facility.

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Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2015	Mar. 31, 2015
CURRENT ASSETS:
Cash	$ 3,824,429	$ 2,225,924
Accounts receivable, net of allowances for bad debts and cash discounts of $22,276 and $27,276 at June 30 and March 31, 2015, respectively	5,651,682	6,896,186
Inventories	40,169,832	40,850,666
Other	18,123	144,579
TOTAL CURRENT ASSETS	49,664,066	50,117,355
PROPERTY, PLANT AND EQUIPMENT:
Land	1,082,331	1,082,331
Buildings and yard improvements	7,101,615	7,026,980
Machinery and equipment	30,768,124	30,690,049
Construction in progress	8,056,697	7,374,177
Less accumulated depreciation	(31,084,176)	(30,656,226)
Property, Plant and Equipment, Net, Total	15,924,591	15,517,311
OTHER ASSETS:
Deferred income tax asset	151,780	187,358
Cash value of officers' life insurance and other assets	1,153,250	1,136,000
TOTAL ASSETS	66,893,687	66,958,024
CURRENT LIABILITIES:
Accounts payable and accrued expenses	1,370,147	2,148,555
Income taxes payable	62,974
Dividends payable	67,994	67,994
Contribution to profit sharing plan	102,000	51,000
Employee compensation and related expenses	502,533	383,562
TOTAL CURRENT LIABILITIES	2,105,648	2,651,111
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS	1,113,059	1,089,888
STOCKHOLDERS' EQUITY:
Common stock, par value $1: Authorized shares - 10,000,000 Issued shares - 7,975,160 at June 30 and March 31, 2015	7,975,160	7,975,160
Additional paid-in capital	29,003,674	29,003,674
Treasury stock at cost (1,175,716 shares at June 30 and March 31, 2015)	(5,475,964)	(5,475,964)
Retained earnings	32,172,110	31,714,155
TOTAL STOCKHOLDERS' EQUITY	63,674,980	63,217,025
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 66,893,687	$ 66,958,024

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Basis of Presentation

3 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Basis of Presentation

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, 2015.

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Inventories

3 Months Ended

Jun. 30, 2015

Inventory Disclosure [Abstract]

Inventories

NOTE B — INVENTORIES

Inventories consist of prime coil, non-standard coil and tubular materials. Prime coil inventory consists primarily of raw materials, non-standard coil inventory consists primarily of raw materials, and tubular inventory consists of both raw materials and finished goods. Inventories are valued at the lower of cost or replacement market. Cost for prime coil inventory is determined using the last-in, first-out (“LIFO”) method. Cost for non-standard coil inventory is determined using the specific identification method. Cost for tubular inventory is determined using the weighted average method.

A summary of inventory values by product group follows:

	June 30, 2015		March 31, 2015
Prime Coil Inventory	$	9,778,816	$	8,419,340
Non-Standard Coil Inventory		1,521,315		1,804,635
Tubular Raw Material		1,247,618		1,888,849
Tubular Finished Goods		27,622,083		28,737,842
	$	40,169,832	$	40,850,666

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2015	Mar. 31, 2015
Statement of Financial Position [Abstract]
Allowances for bad debts and cash discounts	$ 22,276	$ 27,276
Common stock, par value	$ 1	$ 1
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	7,975,160	7,975,160
Treasury stock, shares	1,175,716	1,175,716

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Supplemental Cash Flow Information - Additional Information (Detail) - USD ($)	3 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Mar. 31, 2015
Supplemental Cash Flow Elements [Abstract]
Income taxes paid	$ 29,500	$ 93,000
Interest paid	0	0
Accrued dividends	$ 67,994	$ 135,989	$ 67,994

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Document and Entity Information - Jun. 30, 2015 - shares	Total
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Trading Symbol	FRD
Entity Registrant Name	FRIEDMAN INDUSTRIES INC
Entity Central Index Key	0000039092
Current Fiscal Year End Date	--03-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	6,799,444

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Condensed Consolidated Statements of Earnings - USD ($)	3 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Income Statement [Abstract]
Net sales	$ 23,968,569	$ 27,904,521
Costs and expenses
Costs of goods sold	21,826,676	26,862,460
General, selling and administrative costs	1,353,456	1,134,576
Costs and Expenses, Total	23,180,132	27,997,036
Interest and other income	(17,250)	(15,252)
Earnings (loss) before income taxes	805,687	(77,263)
Income tax provision (benefit):
Current	244,160	78,435
Deferred	35,578	(37,448)
Income Tax Expense (Benefit), Total	279,738	40,987
Net earnings (loss)	$ 525,949	$ (118,250)
Average number of common shares outstanding:
Basic	6,799,444	6,799,444
Diluted	6,799,444	6,799,444
Net earnings (loss) per share:
Basic	$ 0.08	$ (0.02)
Diluted	0.08	(0.02)
Cash dividends declared per common share	$ 0.01	$ 0.02

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Inventories (Tables)

3 Months Ended

Jun. 30, 2015

Inventory Disclosure [Abstract]

Summary of Inventory by Product Group

A summary of inventory values by product group follows:

	June 30, 2015		March 31, 2015
Prime Coil Inventory	$	9,778,816	$	8,419,340
Non-Standard Coil Inventory		1,521,315		1,804,635
Tubular Raw Material		1,247,618		1,888,849
Tubular Finished Goods		27,622,083		28,737,842
	$	40,169,832	$	40,850,666

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Income Taxes

3 Months Ended

Jun. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

NOTE F — INCOME TAXES

The Company’s effective tax rate for the quarter ended June 30, 2015 approximated the statutory rate. The Company’s effective tax rate for the quarter ended June 30, 2014 differed from the statutory rate due primarily to a change in estimate related to state income taxes payable as of March 31, 2014.

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Debt - Additional Information (Detail) - Revolving Credit Facility		3 Months Ended
	May. 08, 2015 USD ($)	Jun. 30, 2015 USD ($)
JPMorgan Chase Bank N.A.
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	$ 5,000,000
Line of credit facility, initiation date		May 08, 2015
Line of credit facility, expiry date	Apr. 30, 2016	Apr. 30, 2016
Line of credit facility, amount outstanding		$ 0
Maximum
Line of Credit Facility [Line Items]
Line of credit facility covenant terms minimum tangible net worth	$ 57,000,000
Financial covenant for net income for any period of four consecutive fiscal quarters	$ 1
Minimum
Line of Credit Facility [Line Items]
Ratio of total liabilities to tangible net worth	1

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Segment Information (Tables)

3 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Information

	THREE MONTHS ENDED JUNE 30,
	2015			2014
Net sales
Coil	$	19,348		$	17,906
Tubular		4,621			9,999
Total net sales	$	23,969		$	27,905
Operating profit (loss)
Coil	$	2,155		$	(404	)
Tubular		(637	)		772
Total operating profit		1,518			368
Corporate expenses		729			460
Interest & other income		(17	)		(15	)
Earnings (loss) before income taxes	$	806		$	(77	)

	June 30, 2015		March 31, 2015
Segment assets
Coil	$	22,608	$	21,249
Tubular		39,143		42,144
		61,751		63,393
Corporate assets		5,143		3,565
	$	66,894	$	66,958

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Inventories - Summary of Inventory Values by Product Group (Detail) - USD ($)	Jun. 30, 2015	Mar. 31, 2015
Inventory [Line Items]
Inventory, Net	$ 40,169,832	$ 40,850,666
Prime Coil Inventory
Inventory [Line Items]
Raw Materials	9,778,816	8,419,340
Non-Standard Coil Inventory
Inventory [Line Items]
Raw Materials	1,521,315	1,804,635
Tubular
Inventory [Line Items]
Raw Materials	1,247,618	1,888,849
Finished Goods	$ 27,622,083	$ 28,737,842

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Segment Information - Segment Information (Detail) - USD ($)	3 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Mar. 31, 2015
Segment Reporting Information [Line Items]
Net sales	$ 23,968,569	$ 27,904,521
Interest & other income	(17,250)	(15,252)
Earnings (loss) before income taxes	805,687	(77,263)
Total assets	66,893,687		$ 66,958,024
Operating Segments
Segment Reporting Information [Line Items]
Operating profit (loss)	1,518,000	368,000
Total assets	61,751,000		63,393,000
Operating Segments | Coil
Segment Reporting Information [Line Items]
Net sales	19,348,000	17,906,000
Operating profit (loss)	2,155,000	(404,000)
Total assets	22,608,000		21,249,000
Operating Segments | Tubular
Segment Reporting Information [Line Items]
Net sales	4,621,000	9,999,000
Operating profit (loss)	(637,000)	772,000
Total assets	39,143,000		42,144,000
Corporate and other
Segment Reporting Information [Line Items]
Corporate expenses	729,000	$ 460,000
Total assets	$ 5,143,000		$ 3,565,000

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Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
OPERATING ACTIVITIES
Net earnings (loss)	$ 525,949	$ (118,250)
Adjustments to reconcile net earnings (loss) to cash provided by (used in) operating activities:
Depreciation	427,950	443,849
Deferred taxes	35,578	(37,448)
Change in postretirement benefits	23,171	19,208
Decrease (increase) in operating assets:
Accounts receivable	1,244,504	1,240,793
Inventories	680,834	(3,624,589)
Other current assets	126,456	100,189
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses	(778,408)	(1,643,532)
Income taxes payable	62,974
Contribution to profit sharing plan	51,000	52,500
Employee compensation and related expenses	118,971	(52,815)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	2,518,979	(3,620,095)
INVESTING ACTIVITIES
Purchase of property, plant and equipment	(835,230)	(521,512)
Increase in cash surrender value of officers' life insurance	(17,250)	(15,250)
NET CASH USED IN INVESTING ACTIVITIES	(852,480)	(536,762)
FINANCING ACTIVITIES
Cash dividends paid	(67,994)	(135,989)
NET CASH USED IN FINANCING ACTIVITIES	(67,994)	(135,989)
INCREASE (DECREASE) IN CASH	1,598,505	(4,292,846)
Cash at beginning of period	2,225,924	15,081,024
CASH AT END OF PERIOD	$ 3,824,429	$ 10,788,178

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Supplemental Cash Flow Information

3 Months Ended

Jun. 30, 2015

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

NOTE E — SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid income taxes of approximately $29,500 and $93,000 in the quarters ended June 30, 2015 and 2014, respectively. No interest was paid in the quarters ended June 30, 2015 and 2014, respectively. Noncash financing activities consisted of accrued dividends of $67,994 and $135,989 in the quarters ended June 30, 2015 and 2014, respectively.