Friedman Industries, Incorporated Announces First Quarter Results
Friedman Industries (NYSE American: FRD) announced its Q1 2024 results, reporting net earnings of $2.6 million ($0.37 diluted EPS) on net sales of $114.6 million. This compares to net earnings of $7.7 million ($1.04 diluted EPS) on net sales of $137.3 million in Q1 2023. The company's working capital balance at quarter-end was $123.6 million.
Sales volume decreased to 119,000 tons of inventory sold and 24,000 tons of toll processing, down from 129,000 tons and 24,000 tons respectively in Q1 2023. The decline was attributed to challenging customer conditions and planned downtime for equipment upgrades. The company captured hedging gains of $5.4 million, offsetting physical margin compression due to declining HRC prices.
Friedman Industries (NYSE American: FRD) ha annunciato i risultati del primo trimestre 2024, riportando utili netti di 2,6 milioni di dollari (0,37 dollari per azione diluita) su vendite nette di 114,6 milioni di dollari. Questo è un confronto con gli utili netti di 7,7 milioni di dollari (1,04 dollari per azione diluita) su vendite nette di 137,3 milioni di dollari nel primo trimestre 2023. Alla fine del trimestre, il capitale circolante dell'azienda era di 123,6 milioni di dollari.
Il volume delle vendite è diminuito a 119.000 tonnellate di inventario venduto e 24.000 tonnellate di lavorazione a pagamento, in calo rispetto a 129.000 tonnellate e 24.000 tonnellate rispettivamente nel primo trimestre 2023. Il calo è stato attribuito a condizioni difficili dei clienti e a un'interruzione pianificata per aggiornamenti delle attrezzature. L'azienda ha registrato guadagni da copertura di 5,4 milioni di dollari, che hanno compensato la compressione del margine fisico dovuta al calo dei prezzi HRC.
Friedman Industries (NYSE American: FRD) anunció sus resultados del primer trimestre de 2024, reportando ganancias netas de 2.6 millones de dólares (0.37 dólares por acción diluida) sobre ventas netas de 114.6 millones de dólares. Esto se compara con ganancias netas de 7.7 millones de dólares (1.04 dólares por acción diluida) sobre ventas netas de 137.3 millones de dólares en el primer trimestre de 2023. Al final del trimestre, el saldo de capital de trabajo de la empresa era de 123.6 millones de dólares.
El volumen de ventas disminuyó a 119,000 toneladas de inventario vendido y 24,000 toneladas de procesamiento por contrato, en comparación con 129,000 toneladas y 24,000 toneladas respectivamente en el primer trimestre de 2023. La disminución se atribuyó a condiciones desafiantes en los clientes y a un tiempo de inactividad planificado para mejoras de equipos. La empresa capturó ganancias de cobertura de 5.4 millones de dólares, compensando la compresión del margen físico debido a la caída de los precios de HRC.
프리드먼 인더스트리즈 (NYSE American: FRD)는 2024년 1분기 실적을 발표하며 순이익 260만 달러 (희석 주당순이익 0.37달러)를 순매출 1억 1,460만 달러에 기록했습니다. 이는 2023년 1분기에 순이익 770만 달러 (희석 주당순이익 1.04달러) 및 순매출 1억 3,730만 달러와 비교됩니다. 분기 말 회사의 운전 자본 잔고는 1억 2,360만 달러였습니다.
판매량은 119,000톤의 재고 판매 및 24,000톤의 수수료 가공으로 감소했으며, 이는 2023년 1분기의 129,000톤 및 24,000톤에서 감소한 수치입니다. 감소는 고객의 어려운 상황과 장비 업그레이드를 위한 계획된 가동 중단에 기인합니다. 회사는 540만 달러의 헤지 이익을 기록했으며, 이는 HRC 가격 하락으로 인한 물리적 마진 압박을 상쇄했습니다.
Friedman Industries (NYSE American: FRD) a annoncé ses résultats du premier trimestre 2024, reportant un bénéfice net de 2,6 millions de dollars (0,37 dollar par action diluée) sur des ventes nettes de 114,6 millions de dollars. Cela se compare à un bénéfice net de 7,7 millions de dollars (1,04 dollar par action diluée) sur des ventes nettes de 137,3 millions de dollars au premier trimestre 2023. Le solde du fonds de roulement de l'entreprise à la fin du trimestre était de 123,6 millions de dollars.
Le volume des ventes a diminué à 119 000 tonnes d'inventaire vendu et 24 000 tonnes de traitement sous contrat, par rapport à 129 000 tonnes et 24 000 tonnes respectivement au premier trimestre 2023. La baisse a été attribuée à des conditions difficiles pour les clients et à un temps d'arrêt planifié pour des mises à niveau d'équipement. L'entreprise a capturé des gains de couverture de 5,4 millions de dollars, compensant la compression de la marge physique due à la baisse des prix de l'HRC.
Friedman Industries (NYSE American: FRD) hat seine Ergebnisse für das erste Quartal 2024 bekannt gegeben und berichtete von netto Einnahmen in Höhe von 2,6 Millionen Dollar (0,37 Dollar verwässerter Gewinn pro Aktie) bei netto Verkaufszahlen von 114,6 Millionen Dollar. Dies steht im Vergleich zu netto Einnahmen von 7,7 Millionen Dollar (1,04 Dollar verwässerter Gewinn pro Aktie) bei netto Verkaufszahlen von 137,3 Millionen Dollar im ersten Quartal 2023. Der Betrag an Betriebskapital des Unternehmens zum Ende des Quartals betrug 123,6 Millionen Dollar.
Das Verkaufsvolumen sank auf 119.000 Tonnen verkauftes Inventar und 24.000 Tonnen Auftragsverarbeitung, gegenüber 129.000 Tonnen und 24.000 Tonnen im ersten Quartal 2023. Der Rückgang wurde auf herausfordernde Kundenbedingungen und geplante Ausfallzeiten für Geräte-Upgrades zurückgeführt. Das Unternehmen erzielte Hedging-Gewinne von 5,4 Millionen Dollar, die den Druck auf die physischen Gewinnmargen aufgrund fallender HRC-Preise ausglichen.
- Net earnings of $2.6 million in a challenging price environment
- Hedging gains of $5.4 million offsetting physical margin compression
- Strong working capital balance of $123.6 million at quarter-end
- Flat-roll segment recorded operating profits of $2.7 million
- Net earnings decreased from $7.7 million in Q1 2023 to $2.6 million in Q1 2024
- Net sales declined from $137.3 million in Q1 2023 to $114.6 million in Q1 2024
- Sales volume decreased from 129,000 tons to 119,000 tons year-over-year
- Tubular segment recorded an operating loss of $1.2 million compared to a $2.3 million profit in Q1 2023
- Average per ton selling price decreased in both flat-roll and tubular segments
Insights
Friedman Industries' Q1 FY2025 results show a mixed performance. While the company remained profitable with
The company's hedging strategy proved effective, with gains of
The strong balance sheet, with
The steel industry is facing challenging price dynamics, as evidenced by Friedman's results. The decline in average selling prices for both flat-roll (
Friedman's strategic focus on toll processing, maintaining 24,000 tons volume, indicates a prudent approach to diversifying revenue streams. The planned equipment upgrades, despite causing short-term volume reductions, position the company for improved efficiency and competitiveness in the long run.
The recent uptick in HRC prices and futures could signal a potential market recovery. However, investors should remain cautious as macro-economic headwinds persist. Friedman's ability to capitalize on the anticipated long-term demand growth will be important for future performance.
LONGVIEW, Texas, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Friedman Industries, Incorporated (NYSE American: FRD) announced today its results of operations for the quarter ended June 30, 2024.
June 30, 2024 Quarter Highlights:
- Net earnings of approximately
$2.6 million - Sales of approximately
$114.6 million - Working capital balance at quarter-end of approximately
$123.6 million
“We are pleased to report profitable results for our first quarter in a period of challenging price dynamics,” said Michael J. Taylor, President and Chief Executive Officer. “The first quarter results further highlight our strategy as we captured hedging gains of approximately
For the quarter ended June 30, 2024 (the “2024 quarter”), the Company recorded net earnings of approximately
The table below provides our unaudited statements of operations for the quarters ended June 30, 2024 and 2023:
| SUMMARY OF OPERATIONS (unaudited) | ||||||||
| (In thousands, except for per share data) | ||||||||
| Three Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Net Sales | $ | 114,551 | $ | 137,298 | ||||
| Cost of materials sold | 96,414 | 108,203 | ||||||
| Processing and warehousing expense | 8,178 | 6,606 | ||||||
| Delivery Expense | 6,051 | 5,446 | ||||||
| Selling, general and administrative expenses | 4,511 | 5,937 | ||||||
| Depreciation and amortization | 795 | 749 | ||||||
| Earnings (loss) from operations | (1,398 | ) | 10,357 | |||||
| Gain on economic hedges of risk | 5,375 | 430 | ||||||
| Interest expense | (681 | ) | (540 | ) | ||||
| Other income | 3 | 6 | ||||||
| Earnings before income taxes | 3,299 | 10,253 | ||||||
| Income tax expense | 732 | 2,563 | ||||||
| Net earnings | $ | 2,567 | $ | 7,690 | ||||
| Net earnings per share: | ||||||||
| Basic | $ | 0.37 | $ | 1.04 | ||||
| Diluted | $ | 0.37 | $ | 1.04 | ||||
The table below provides summarized unaudited balance sheets as of June 30, 2024 and March 31, 2024:
| SUMMARIZED BALANCE SHEETS (unaudited) | |||
| (In thousands) | |||
| June 30, 2024 | March 31, 2024 | ||
| ASSETS: | |||
| Current Assets | 162,416 | 170,064 | |
| Noncurrent Assets | 60,374 | 59,955 | |
| Total Assets | 222,790 | 230,019 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY: | |||
| Current Liabilities | 38,800 | 54,107 | |
| Noncurrent Liabilities | 54,303 | 48,437 | |
| Total Liabilities | 93,103 | 102,544 | |
| Total Stockholders' Equity | 129,687 | 127,475 | |
| Total Liabilities and Stockholders' Equity | 222,790 | 230,019 | |
FLAT-ROLL SEGMENT OPERATIONS
Flat-roll product segment sales for the 2024 quarter totaled approximately
TUBULAR SEGMENT OPERATIONS
Tubular product segment sales for the 2024 quarter totaled approximately
HEDGING ACTIVITIES
We utilize hot-rolled coil (“HRC”) futures to manage price risk on unsold inventory and longer-term fixed price sales agreements. We typically account for our hedging activities under mark-to-market (“MTM”) accounting treatment and all hedging decisions are intended to protect the value of our inventory and produce more consistent financial results over price cycles. With MTM accounting treatment it is possible that hedging related gains or losses might be recognized in a different fiscal year or fiscal quarter than the corresponding improvement or contraction in our physical margins. For the 2024 quarter, we recognized a gain on hedging activities of approximately
OUTLOOK
“Friedman remains in strong financial position and ready to capitalize on both short-term and long-term opportunities,” Taylor said. “Despite the current macro-economic headwinds, I see a favorable long-term demand outlook for the industry and our products and believe we have a team uniquely qualified to recognize Friedman’s fullest potential.”
The Company expects sales volume for its second quarter of fiscal 2025 to be similar to the sales volume for the first quarter. The second quarter started with further decline in HRC price but as of the date of this release, HRC index prices have started to increase and HRC futures are pricing in further increases. The Company may experience a generally challenging margin environment in the second quarter but, if sustained, the increasing HRC price should result in improved physical margins toward the end of the second quarter and entering the third quarter.
ABOUT FRIEDMAN INDUSTRIES
Friedman Industries, Incorporated (“Company”), headquartered in Longview, Texas, is a manufacturer and processor of steel products with operating plants in Hickman, Arkansas; Decatur, Alabama; East Chicago, Indiana; Granite City, Illinois; Sinton, Texas and Lone Star, Texas. The Company has two reportable segments: flat-roll products and tubular products. The flat-roll product segment consists of the operations in Hickman, Decatur, East Chicago, Granite City and Sinton where the Company processes hot-rolled steel coils. The Hickman, East Chicago and Granite City facilities operate temper mills and corrective leveling cut-to-length lines. The Sinton and Decatur facilities operate stretcher leveler cut-to-length lines. The tubular product segment consists of the operations in Lone Star where the Company manufactures electric resistance welded pipe and distributes pipe through its Texas Tubular Products division.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, and such statements involve risk and uncertainty. Forward-looking statements include those preceded by, followed by or including the words “will,” “expect,” “intended,” “anticipated,” “believe,” “project,” “forecast,” “propose,” “plan,” “estimate,” “enable,” and similar expressions, including, for example, statements about our business strategy, our industry, our future profitability, growth in the industry sectors we serve, our expectations, beliefs, plans, strategies, objectives, prospects and assumptions, future production capacity and product quality. These forward-looking statements may include, but are not limited to, everything under the header “Outlook” above, including sales volumes, margins, hedging results, and potential price increases, expectations as to financial results during the Company’s upcoming fiscal quarters, future changes in the Company’s financial condition or results of operations, future production capacity, product quality and proposed expansion plans. Forward-looking statements may be made by management orally or in writing including, but not limited to, this news release.
Forward-looking statements are not guarantees of future performance. These statements are based on management’s expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Although forward-looking statements reflect our current beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements.
Actual results and trends in the future may differ materially depending on a variety of factors including, but not limited to, changes in the demand for and prices of the Company’s products, changes in government policy regarding steel, changes in the demand for steel and steel products in general and the Company’s success in executing its internal operating plans, changes in and availability of raw materials, our ability to satisfy our take or pay obligations under certain supply agreements, unplanned shutdowns of our production facilities due to equipment failures or other issues, increased competition from alternative materials and risks concerning innovation, new technologies, products and increasing customer requirements. Accordingly, undue reliance should not be placed on our forward-looking statements. Such risks and uncertainty are also addressed in our Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including the Company’s Annual Report on Form 10-K and its other Quarterly Reports on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except to the extent law requires.
For further information, please refer to the Company's Form 10-Q as filed with the SEC on August 8, 2024 or contact Alex LaRue, Chief Financial Officer – Secretary and Treasurer, at (903) 758-3431.
FAQ
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