Friedman Industries, Incorporated Announces Second Quarter Results
Friedman Industries reported Q2 FY2024 results with sales of $106.8 million and a net loss of $0.7 million ($0.10 loss per share), compared to net earnings of $3.5 million ($0.48 per share) in Q2 FY2023. The company faced challenging conditions due to industry-wide pricing pressure and soft demand. Sales volume included 121,500 tons of inventory sold and 18,000 tons of toll processing. Working capital balance stood at $111.7 million, with operating cash flow of $10.8 million. The company reduced debt by 22% during the quarter. Hot-rolled coil prices stabilized after declining since early 2024, leading to reduced hedging activities.
Friedman Industries ha riportato i risultati del secondo trimestre dell'anno fiscale 2024 con vendite di 106,8 milioni di dollari e una perdita netta di 0,7 milioni di dollari (perdita di 0,10 dollari per azione), rispetto agli utili netti di 3,5 milioni di dollari (0,48 dollari per azione) del secondo trimestre dell'anno fiscale 2023. L'azienda ha affrontato condizioni difficili a causa della pressione sui prezzi a livello di settore e della domanda debole. Il volume delle vendite includeva 121.500 tonnellate di inventario venduto e 18.000 tonnellate di lavorazione in conto terzi. Il saldo di capitale circolante si è attestato a 111,7 milioni di dollari, con un flusso di cassa operativo di 10,8 milioni di dollari. L'azienda ha ridotto il debito del 22% durante il trimestre. I prezzi dei coiled caldi si sono stabilizzati dopo un calo iniziato all'inizio del 2024, portando a una riduzione delle attività di copertura.
Friedman Industries informó los resultados del segundo trimestre del año fiscal 2024 con ventas de 106,8 millones de dólares y una pérdida neta de 0,7 millones de dólares (pérdida de 0,10 dólares por acción), en comparación con ganancias netas de 3,5 millones de dólares (0,48 dólares por acción) en el segundo trimestre del año fiscal 2023. La empresa enfrentó condiciones desafiantes debido a la presión en los precios a nivel de industria y a una demanda débil. El volumen de ventas incluyó 121.500 toneladas de inventario vendido y 18.000 toneladas de procesamiento por contrato. El saldo de capital de trabajo se situó en 111,7 millones de dólares, con un flujo de efectivo operativo de 10,8 millones de dólares. La empresa redujo su deuda en un 22% durante el trimestre. Los precios de bobinas laminadas en caliente se estabilizaron después de haber disminuido desde principios de 2024, lo que llevó a una reducción de las actividades de cobertura.
프리드먼 인더스트리즈는 2024 회계연도 2분기 결과를 보고했습니다. 매출은 1억 680만 달러였고, 순손실은 70만 달러(주당 0.10 달러 손실)였습니다. 이는 2023 회계연도 2분기에 350만 달러(주당 0.48 달러 수익)의 순이익과 비교됩니다. 회사는 업계 전반의 가격 압박과 부진한 수요로 인해 어려운 상황에 직면했습니다. 판매량에는 121,500톤의 재고 판매와 18,000톤의 가공 서비스가 포함되었습니다. 운영 자본 잔액은 1억 1,170만 달러였으며, 운영 현금 흐름은 1천 80만 달러였습니다. 회사는 분기 동안 부채를 22% 줄였습니다. 열간 압연 코일 가격은 2024년 초부터 하락한 후 안정세를 보였으며, 이에 따라 헤지 활동이 줄어들었습니다.
Friedman Industries a annoncé les résultats du deuxième trimestre de l'exercice 2024 avec des ventes de 106,8 millions de dollars et une perte nette de 0,7 million de dollars (perte de 0,10 dollar par action), contre un bénéfice net de 3,5 millions de dollars (0,48 dollar par action) au deuxième trimestre de l'exercice 2023. L'entreprise a dû faire face à des conditions difficiles en raison de la pression des prix à l'échelle de l'industrie et d'une demande faible. Le volume des ventes comprenait 121 500 tonnes d'inventaire vendu et 18 000 tonnes de traitement à façon. Le solde du fonds de roulement s'élevait à 111,7 millions de dollars, avec un flux de trésorerie opérationnel de 10,8 millions de dollars. L'entreprise a réduit sa dette de 22 % au cours du trimestre. Les prix des bobines laminées à chaud se sont stabilisés après avoir baissé depuis début 2024, ce qui a entraîné une réduction des activités de couverture.
Friedman Industries berichtete über die Ergebnisse des zweiten Quartals des Geschäftsjahres 2024 mit einem Umsatz von 106,8 Millionen Dollar und einem Nettoverlust von 0,7 Millionen Dollar (0,10 Dollar Verlust pro Aktie), im Vergleich zu einem Nettogewinn von 3,5 Millionen Dollar (0,48 Dollar pro Aktie) im zweiten Quartal des Geschäftsjahres 2023. Das Unternehmen sah sich aufgrund des Preisdrucks in der Branche und der schwachen Nachfrage herausfordernden Bedingungen gegenüber. Das Verkaufsvolumen umfasste 121.500 Tonnen verkauftes Inventar und 18.000 Tonnen Auftragsverarbeitung. Der Working-Capital-Saldo betrug 111,7 Millionen Dollar, mit einem operativen Cashflow von 10,8 Millionen Dollar. Das Unternehmen hat die Schulden im Quartal um 22% reduziert. Die Preise für warmgewalzte Coils stabilisierten sich nach einem Rückgang seit Anfang 2024, was zu einer Reduzierung der Hedging-Aktivitäten führte.
- Operating cash flow of $10.8 million in Q2
- 22% debt reduction during the quarter
- Working capital balance of $111.7 million
- Flat-roll segment recorded operating profits of $2.7 million
- Net loss of $0.7 million in Q2 2024 vs. $3.5 million profit in Q2 2023
- Sales declined to $106.8 million from $130.7 million YoY
- Sales volume decreased to 121,500 tons from 129,500 tons YoY
- Average selling price decreased in flat-roll segment to $858/ton from $983/ton
- Tubular segment recorded $0.6 million operating loss vs. break-even in prior year
Insights
Friedman Industries reported concerning Q2 FY2024 results, with a
- Significant margin compression due to industry-wide pricing pressure
- Flat-roll segment average selling price declined
12.7% to$858 per ton - Tubular segment recorded
$0.6 million operating loss
Despite challenges, positive indicators include
LONGVIEW, Texas, Nov. 12, 2024 (GLOBE NEWSWIRE) -- Friedman Industries, Incorporated (NYSE American: FRD) announced today its results of operations for the second fiscal quarter ended September 30, 2024.
September 30, 2024 Quarter Highlights:
- Sales of approximately
$106.8 million - Working capital balance at quarter-end of approximately
$111.7 million - Operating cash flow of approximately
$10.8 million during the quarter - Debt reduced
22% during the quarter
“We experienced challenging conditions during the second fiscal quarter driven by industry specific and macroeconomic factors,” said Michael J. Taylor, President and Chief Executive Officer. “Our margins were affected by industry-wide pricing pressure. Hot-rolled coil (“HRC”) prices stabilized during the quarter, after declining since the start of 2024, but a combination of soft demand from some customers and political uncertainty held off upward price momentum and volume. With steel prices reaching a floor and relative stability during the quarter, our inventory price risk decreased, and our hedging activities were reduced accordingly. Despite these circumstances, our team maintained sales volume from the preceding quarter and we reduced debt by
For the quarter ended September 30, 2024 (the “2024 quarter”), the Company recorded a net loss of approximately
The table below provides our unaudited statements of operations for the three- and six-month periods ended September 30, 2024 and 2023:
| SUMMARY OF OPERATIONS (unaudited) | ||||||||||||||||
| (In thousands, except for per share data) | ||||||||||||||||
| Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net Sales | $ | 106,759 | $ | 130,748 | $ | 221,310 | $ | 268,046 | ||||||||
| Cost of materials sold (excludes items shown separately below) | 88,761 | 110,275 | 184,656 | 217,911 | ||||||||||||
| Processing and warehousing expense | 7,861 | 7,409 | 16,558 | 14,582 | ||||||||||||
| Delivery expense | 5,381 | 6,521 | 11,432 | 11,966 | ||||||||||||
| Selling, general and administrative expense | 3,935 | 4,729 | 8,446 | 10,667 | ||||||||||||
| Depreciation and amortization | 823 | 759 | 1,618 | 1,508 | ||||||||||||
| Loss on disposal of property, plant and equipment | 222 | - | 222 | - | ||||||||||||
| Earnings (loss) from operations | (224) | 1,055 | (1,622) | 11,412 | ||||||||||||
| Gain on economic hedges of risk | 194 | 4,402 | 5,569 | 4,832 | ||||||||||||
| Interest expense | (869) | (805) | (1,550) | (1,345) | ||||||||||||
| Other income (expense) | (3) | 10 | - | 16 | ||||||||||||
| Earnings (loss) before income taxes | (902) | 4,662 | 2,397 | 14,915 | ||||||||||||
| Income tax expense (benefit) | (227) | 1,149 | 505 | 3,712 | ||||||||||||
| Net earnings (loss) | $ | (675) | $ | 3,513 | $ | 1,892 | $ | 11,203 | ||||||||
| Net earnings (loss) per share: | ||||||||||||||||
| Basic | $ | (0.10) | $ | 0.48 | $ | 0.27 | $ | 1.52 | ||||||||
| Diluted | $ | (0.10) | $ | 0.48 | $ | 0.27 | $ | 1.52 | ||||||||
The table below provides summarized unaudited balance sheets as of September 30, 2024 and March 31, 2024:
| SUMMARIZED BALANCE SHEETS (unaudited) | |||
| (In thousands) | |||
| September 30, 2024 | March 31, 2024 | ||
| ASSETS: | |||
| Current Assets | 148,044 | 170,064 | |
| Noncurrent Assets | 61,123 | 59,955 | |
| Total Assets | 209,167 | 230,019 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY: | |||
| Current Liabilities | 36,366 | 54,107 | |
| Noncurrent Liabilities | 44,037 | 48,437 | |
| Total Liabilities | 80,403 | 102,544 | |
| Total Stockholders' Equity | 128,764 | 127,475 | |
| Total Liabilities and Stockholders' Equity | 209,167 | 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 period than the corresponding improvement or contraction in our physical margins. For the 2024 quarter, we recognized a gain on hedging activities of approximately
OUTLOOK
The Company expects sales volume for its third quarter of fiscal 2025 to be slightly lower than the second quarter volume due primarily to the seasonal impact of the holidays. HRC price remained stable to start the third quarter resulting in minimal change to the Company’s sales prices and margins. As a result, the Company may experience a generally challenging margin environment in the third quarter.
“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.”
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 November 12, 2024 or contact Alex LaRue, Chief Financial Officer – Secretary and Treasurer, at (903)758-3431.
FAQ
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