Friedman Industries Inc (FRD, Financial) filed Quarterly Report for the period ended 2010-06-30.
Friedman Industries Inc has a market cap of $39.3 million; its shares were traded at around $5.77 with a P/E ratio of 57.7 and P/S ratio of 0.6. The dividend yield of Friedman Industries Inc stocks is 2.8%. Friedman Industries Inc had an annual average earning growth of 9.9% over the past 10 years.FRD is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Coil product segment sales increased approximately $5,086,000 during the 2010 quarter. This increase resulted primarily from a increase in tons sold and a significant increase in the average selling price. Coil tons shipped increased from approximately 13,000 tons in the 2009 quarter to approximately 16,000 tons in the 2010 quarter and the average per ton selling price increased from approximately $525 per ton in the 2009 quarter to $738 in the 2010 quarter. Margins earned on sales of coil products were adversely impacted in both the 2009 quarter and the 2010 quarter by soft demand. Also, the Company incurred significant increases in the cost of coil material in the 2010 quarter that could not be readily passed on to its customers. Management believes that market conditions for coil products will not improve until the U.S. economy improves and generates significant improvement in demand for durable goods.
In August 2008, the Company began operating its new coil facility in Decatur, Alabama. This operation produced an operating loss of approximately $300,000 and $400,000 in the 2010 and 2009 quarters, respectively. The Company expects that this facility will continue to produce a loss until demand for coil products improves.
Tubular product segment sales increased approximately $11,890,000 during the 2010 quarter. This increase primarily resulted from a increase in tons sold which increased from approximately 8,000 tons in the 2009 quarter to approximately 23,000 tons sold in the 2010 quarter. The average per ton selling price of tubular products increased from approximately $627 per ton in the 2009 quarter to $759 in the 2010 quarter. Tubular product segment operating profits as a percentage of segment sales were approximately 1.7% and 18.9% in the 2009 and 2010 quarters, respectively. Extremely soft market conditions were experienced in the 2009 quarter as compared to stronger market conditions in the 2010 quarter. Also, since February 2010, the Company has received an increase in orders for finished tubular products from U. S. Steel Tubular Products, Inc. (USS), an affiliate of United States Steel Corporation.
The Company remained in a strong, liquid position at June 30, 2010. The current ratio was 6.4 at June 30, 2010 and March 31, 2010. Working capital was $42,323,484 at June 30, 2010, and $41,126,841 at March 31, 2010.
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 Companys 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. In the quarter ended June 30, 2010, LIFO inventories were reduced and are expected to be replaced by March 31, 2011. Also, in the quarter ended June 30, 2009, LIFO inventories were reduced and were partially replaced by March 31, 2010. Deferred credits of $94,064 and $496,702 were recorded at June 30, 2010 and June 30, 2009, respectively, to reflect replacement cost in excess of LIFO cost.
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Friedman Industries Inc has a market cap of $39.3 million; its shares were traded at around $5.77 with a P/E ratio of 57.7 and P/S ratio of 0.6. The dividend yield of Friedman Industries Inc stocks is 2.8%. Friedman Industries Inc had an annual average earning growth of 9.9% over the past 10 years.FRD is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
During the three months ended June 30, 2010, sales, costs of goods sold and gross profit increased $16,976,013, $14,125,655 and $2,850,358, respectively, from the comparable amounts recorded during the three months ended June 30, 2009. The increase in sales was related primarily to a substantial increase in tons sold which increased from approximately 22,000 tons in the 2009 quarter to approximately 39,000 tons in the 2010 quarter. Also, the average per ton selling price increased from approximately $564 per ton in the 2009 quarter to $750 per ton in the 2010 quarter. The increase in costs of goods sold was related primarily to the increase in tons sold and an increase in average per ton cost which rose from approximately $537 per ton in the 2009 quarter to approximately $662 in the 2010 quarter. Gross profit benefited from the sales increase as well as a significant increase in gross margins. Gross profit as a percentage of sales increased from approximately 4.8% in the 2009 quarter to approximately 11.8% in the 2010 quarter. During the 2009 quarter, the Company experienced a significant downturn in the U.S. economy and the Companys operations were adversely affected by extremely soft market conditions for durable goods and energy related products. In the 2010 quarter, the Company experienced improved market conditions for its tubular products but market demand for coil products remained soft. Accordingly, the improvement in results of operations during the 2010 quarter was related primarily to the tubular product segment of the Company.Coil product segment sales increased approximately $5,086,000 during the 2010 quarter. This increase resulted primarily from a increase in tons sold and a significant increase in the average selling price. Coil tons shipped increased from approximately 13,000 tons in the 2009 quarter to approximately 16,000 tons in the 2010 quarter and the average per ton selling price increased from approximately $525 per ton in the 2009 quarter to $738 in the 2010 quarter. Margins earned on sales of coil products were adversely impacted in both the 2009 quarter and the 2010 quarter by soft demand. Also, the Company incurred significant increases in the cost of coil material in the 2010 quarter that could not be readily passed on to its customers. Management believes that market conditions for coil products will not improve until the U.S. economy improves and generates significant improvement in demand for durable goods.
In August 2008, the Company began operating its new coil facility in Decatur, Alabama. This operation produced an operating loss of approximately $300,000 and $400,000 in the 2010 and 2009 quarters, respectively. The Company expects that this facility will continue to produce a loss until demand for coil products improves.
Tubular product segment sales increased approximately $11,890,000 during the 2010 quarter. This increase primarily resulted from a increase in tons sold which increased from approximately 8,000 tons in the 2009 quarter to approximately 23,000 tons sold in the 2010 quarter. The average per ton selling price of tubular products increased from approximately $627 per ton in the 2009 quarter to $759 in the 2010 quarter. Tubular product segment operating profits as a percentage of segment sales were approximately 1.7% and 18.9% in the 2009 and 2010 quarters, respectively. Extremely soft market conditions were experienced in the 2009 quarter as compared to stronger market conditions in the 2010 quarter. Also, since February 2010, the Company has received an increase in orders for finished tubular products from U. S. Steel Tubular Products, Inc. (USS), an affiliate of United States Steel Corporation.
The Company remained in a strong, liquid position at June 30, 2010. The current ratio was 6.4 at June 30, 2010 and March 31, 2010. Working capital was $42,323,484 at June 30, 2010, and $41,126,841 at March 31, 2010.
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 Companys 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. In the quarter ended June 30, 2010, LIFO inventories were reduced and are expected to be replaced by March 31, 2011. Also, in the quarter ended June 30, 2009, LIFO inventories were reduced and were partially replaced by March 31, 2010. Deferred credits of $94,064 and $496,702 were recorded at June 30, 2010 and June 30, 2009, respectively, to reflect replacement cost in excess of LIFO cost.
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