Part I — FINANCIAL INFORMATION

Item 1. Financial Statements

FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS — UNAUDITED

(In thousands, except for share data)

The accompanying notes are an integral part of these financial statements.

FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED

(In thousands, except per share data)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME — UNAUDITED

(In thousands)

The accompanying notes are an integral part of these financial statements.

FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED

(In thousands)

Cash and restricted cash at SeptemberJune 30, 20222023 and March 31, 20222023 included $2,228,051approximately $1.5 million and $13,523,416,$2.4 million, respectively, of cash required to collateralize open derivative positions. These amounts are reported in "Other current assets" on the Company's consolidated balance sheets at SeptemberJune 30, 20222023 and March 31, 2022.2023. The Company had $4,158,248approximately $1.3 million in restricted cash at SeptemberJune 30, 20212022. 

The accompanying notes are an integral part of these financial statements.

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, 20222023.

Business Combinations

The results of a business acquired in a business combination are included in the Company’s financial statements from the date of acquisition. The Company allocates the purchase price to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to make significant judgments and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. Acquisition-related transaction costs are expensed in the period in which the costs are incurred. Please refer

Reclassifications

The unaudited condensed consolidated financial statements for the previous year may include certain reclassifications to Note B for additional discussionconform to the current presentation. To conform with the current year presentation, “Interest expense” on the unaudited condensed consolidated statements of operations was moved below the acquisition completed bycalculation of "Earnings From Operations". To conform with the Company duringcurrent year presentation, a gain of approximately $2.8 million reported in the quarter endedprior year as a component of "Other income, net" on the unaudited condensed consolidated statement of operations was moved to the line item "Gain on economic hedges of risk". These reclassifications had June 30, 2022.no

impact on previously reported net earnings or stockholder's equity.

NOTE B — BUSINESS COMBINATIONS

On April 30, 2022, (the “Acquisition Date”), the Company acquired certain assets and liabilities of Plateplus, Inc. (“Plateplus”), a wholly owned subsidiary of Metal One, Inc. (“Metal One” or “Seller”), whereby the Company acquired the real estate, buildings, equipment, inventory, and other assets of Plateplus’ East Chicago, IN and Granite City, IL facilities and certain steel inventory at Plateplus’ Loudon, TN and Houston, TX facilities (the “Transaction”). The East Chicago and Granite City facilities are steel coil processing facilities that produce the same type of products as the Company's facilities in Hickman, AR; Decatur, AL and  Sinton, TX. As a result of the Transaction, the Company expanded its footprint and distribution capabilities in the mid-western United States.

The Transaction resulted in the Company acquiring the assets noted above, for a total consideration of $76.5 million, of which $71.7 million was cash consideration and $4.8 million related to 516,041 shares of the Company's common stock issued to the Seller. The fair value of the 516,041 shares issued was determined based on the closing market price of the Company’s common stock on April 29, 2022, the last trading day prior to the Acquisition Date. At the Acquisition Date, theThe Transaction was funded with net borrowings of $64.0$71.9 million made under the Company's asset-based lending facility ("ABL Facility") provided by JPMorgan Chase Bank. An additional $7.9 million was funded by the ABL Facility during the quarter ended September 30, 2022 to pay the final net working capital adjustment.

The Transaction was accounted for using the acquisition method of accounting, in accordance with Topic 805, Business Combinations, whereby the consideration transferred and the acquired identifiable assets and liabilities assumed are recorded at their respective fair values. The excess of the consideration transferred over the fair values of these identifiable net assets is recorded as goodwill. The Transaction resulted in no residual goodwill. The estimated fair values of assets acquired and liabilities assumed are provisional and are based on the information that was available as of the Acquisition Date to estimate the fair value of assets acquired and liabilities assumed. Therefore, the provisional measurements of fair value reflected are subject to change and such changes could be significant. The Company expects to finalize its fair value estimates as soon as practicable but no later than one year from the Acquisition Date.

The following unaudited pro forma consolidated operating results give effect to the Transaction as if it had been completed as ofCompany recorded April 1, 2021. oneThese pro forma amounts are not necessarily indicative of the operating results that would have occurred if the Transaction had occurred on such date. The pro forma adjustments are based on certain assumptions that we believe are reasonable.

Our consolidated statements of operations for the three month and six month periods ended September 30, 2022, include net sales-time transaction specific costs of approximately $69.4$0.8 million and $123 million, respectively, and earnings from operations of approximately $1.5 million and $5.7 million, respectively, attributable to the East Chicago and Granite City facilities acquired from Plateplus. At the Acquisition Date, the Company acquired the inventory on hand at Plateplus' Houston and Loudon facilities and also assumed inventory on order related to these locations. Plateplus provided toll processing services for this material for a period of time following the Acquisition Date with these services having concluded by August 31, 2022. In addition to the East Chicago and Granite City sales and earnings from operations, our consolidated statements of operations for the three month and six month periods ended September 30, 2022, include net sales of approximately $14.7 million and $43.4 million, respectively, and a loss from operations of approximately $1.7 million forin the three months ended September 30, 2022 and earnings from operations of approximately $300,000 for the six months ended September 30, 2022 attributable to sales of inventory from Houston and Loudon where the fixed assets were not acquired. The Company recorded transaction specific costs of approximately $460,000 and $1,212,000 in the three month and six month periods ended SeptemberJune 30, 2022 as a component of "Selling, general and administrative" expenses on the Condensed Consolidated Statementscondensed consolidated statement of Operations. Information about the debt issuance costs associated with the acquisition financing is provided in Note D.operations.

NOTE C — 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. Cost for prime coil inventory is determined using the average cost method. Cost for non-standard coil inventory is determined using the specific identification method. Cost for tubular inventory is determined using the average cost method. All inventories are valued at the lower of cost or net realizable value.

A summary of inventory values by product group follows:follows (in thousands):

Tubular raw material inventory consists of hot-rolled steel coils that the Company will manufacture into pipe. Tubular finished goods inventory consists of pipe the Company has manufactured.

NOTE D – DEBT

         On June 22,2021, the Small Business Administration authorized full forgiveness of the Company's Paycheck Protection Program loan. The gain of $1,706,614 from this extinguishment of debt included both principal and interest and is recorded asCompany has a component of "Other income (loss), net" on the Company's Condensed Consolidated Statement of Operations for the six months ended September 30,2021.

On March 8, 2021, the Company entered into a Credit Agreement providing for a $10$150 million revolving line of creditasset-based lending facility (the "Interim Credit Facility)("ABL Facility") in place with JPMorgan Chase Bank, N.A. (the "Bank"). The Interim Credit Facility had an expiration date of July 15, 2021 becauseas the Company was evaluating options for longer term credit arrangements. On April 12, 2021, the Company executed a first amendment to the Interim Credit Facility that increased the size of the facility from $10 million to $20 million. On May 19, 2021, the Company entered into an Amendedarranging agent and Restated Credit Agreement ("ABL Facility") with the Bank that amended and restated the Interim Credit Facility and provided for asset-based revolving loans in an aggregate principal amount up to $40 million. On March 11, 2022, the Company executed a first amendment to the ABL Facility which increased the size of the facility from $40 million to $75 million. On April 29, 2022, the Company entered into a Second Amendment to the ABL Facility. The Second Amendment increased the revolving loans available under the ABL facility from an aggregate principal amount of up to $75 million to an aggregate principal amount of up to $150 million. On July 6, 2022, the Company entered into a Third Amendment to the ABL Facility. The Third Amendment to the ABL Facility provided for the syndication of the asset-based revolving loans available thereunder with BMO Harris Bank, N.A. ("BMO") with JPMorgan Chase Bank serving as the arranging agent (the "Agent"). The Third Amendment also amended provisions of the ABL Facility authorizing the Agent to make protective advances under the ABL Facility and added a covenant requiring each of the Company and its subsidiaries to maintain the Agent as its principal depository bank. In connection with the Third Amendment, the Company also entered into a Revolving Note payable to BMO in a principal amount of up to $50 million establishing BMO as a one-third syndicated participant in the Company's ABL facility.participant. The ABL Facility matures on May 19, 2026 and is secured by substantially all of the assets of the Company. The Company can elect borrowings on a floating rate basis or a term basis. Floating rate borrowings accrue interest at a rate equal to the prime rate minus 1% per annum. Term rate borrowings accrue interest at a rate equal to the SOFR rate applicable to the selected term plus 1.8% per annum. Availability of funds under the ABL Facility is subject to a borrowing base calculation determined as the sum of (a) 90% of eligible accounts receivable, plus (b) the product of 85% multiplied by the net orderly liquidating value percentage identified in the most recent inventory appraisal multiplied by eligible inventory. The ABL Facility contains a springing financial covenant whereby the financial covenant is only tested when availability falls below the greater of 15% of the revolving commitment or $22.5 million. The financial covenant restricts the Company from allowing its fixed charge coverage ratio to be, as of the end of any calendar month, less than 1.10 to 1.00 for the trailing twelve-month period then ending. The fixed charge coverage ratio is calculated as the ratio of (a) EBITDA, as defined in the ABL Facility, minus unfinanced capital expenditures to (b) cash interest expense plus scheduled principal payments on indebtedness plus taxes paid in cash plus restricted payments paid in cash plus capital lease obligation payments plus cash contributions to any employee pension benefit plans. The ABL Facility contains other representations and warranties and affirmative and negative covenants that are usual and customary. If certain conditions precedent are satisfied, the ABL facility may be increased by up to an aggregate of $25 million, in minimum increments of $5 million. At SeptemberJune 30, 20222023, the Company had a balance of $36,219,441approximately $39.3 million under the ABL Facility with an applicable interest rate of 3.04%7.25%. At SeptemberJune 30, 20222023, the Company's applicable borrowing base calculation supported access to $114approximately $111.0 million of the ABL Facility.

The Company incurred debt issuance costs of $239,887approximately $0.4 million in connection with the Second Amendment to the ABL Facility and $154,000 in connection with the Third Amendment to the ABL Facility. The Company recorded these debt issuance costs as non-current other assets and will amortizeis amortizing these costs on an equal monthly basis over the remaining term of the ABL facility.

 NOTE E — LEASES

The Company was assigned an operating lease associated with the real property and leasehold improvements for the Granite City, IL facility acquired from Plateplus pursuant to the Transactiontransaction disclosed in Note B. The current lease expires August 31, 2023 but contains a 20 year extension option in favor ofand the Company whichis in the Company expects to exercise.process of renewing the lease. The lease calls for quarterly rental payments of $18,832.approximately $19,000. The Company recognized an initial right-of-use ("ROU") asset and lease liability of $1,237,097approximately $1.2 million during the June 30, 2022 quarter related to this lease. The anticipated 20 year extensionrenewal of this lease is included in the ROU asset and lease liability calculation. The Company’s lease of its office space in Longview, Texas is the only other operating lease included in the Company's ROU assets and lease liabilities. The lease calls for monthly rent payments of $4,878approximately $5,000 and expires on April 30, 2024. The Company’s other operating leases for items such as IT equipment and storage space are either short-term in nature or immaterial.

In October 2019, the Company receivedacquired a new heavy-duty forklift under a 5-year finance lease arrangement with a financed amount of $518,616approximately $0.5 million and a monthly payment of $9,074.approximately $9,000.

The components of expense related to leases for the three and sixmonths ended SeptemberJune 30, 20222023 and 20212022 are as follows:follows (in thousands):

The following table illustrates the balance sheet classification for ROU assets and lease liabilities as of SeptemberJune 30, 20222023 and March 31, 20222023 (in thousands):

As of SeptemberJune 30, 20222023, the weighted-average remaining lease term was 19.6 19.4 years for operating leases and 21.3 years for finance leases. The weighted average discount rate was 2.7%2.6% for operating leases and 1.9% for finance leases.

Maturities of lease liabilities as of SeptemberJune 30, 20222023 were as follows:follows (in thousands):

NOTE F — PROPERTY, PLANT AND EQUIPMENT

OnIn May 25, 2021,October 2022, the Company announced plans for acompleted its new facility in Sinton, Texas, that would bewhich is part of the flat-roll product segment (previously referred to as the coil product segment.segment) at a total completed cost of approximately $22.2 million. The new facility is on the campus of Steel Dynamics, Inc.'s ("SDI") new flat roll steel mill in Sinton, Texas. The Company's new locationTexas and consists of an approximately 70,000 square foot building located on approximately 26.5 acres leased from SDI under a 99-year agreement with an annual rental payment of $1. The facility is equipped with a stretcher leveler cut-to-length line that is capable of handling material up to 1” thick, widths up to 96” and yields exceeding 100,000 psi. The Company put the facility into service at the end of October 2022 and estimates the total cost of the project to be approximately $22 million. 

At SeptemberJune 30, 20222023, , the Company's construction in process relatedbalance of approximately $1.6 million consisted primarily of approximately $1.1 million associated with a project to upgrade a component of the SintonDecatur, AL processing line. The total project was $22,035,059 consistingis estimated to cost $2.1 million with completion expected during the March 31, 2024 quarter. The remaining construction in process balance is comprised of $13,834,826 in cash payments and $8,200,233 of accrued capital expenditures.several smaller projects.

NOTE G — STOCK BASED COMPENSATION

The Company maintains the Friedman Industries, Incorporated 2016 Restricted Stock Plan (the “Plan”). The Plan is administered by the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) and continues indefinitely until terminated by the Board or until all shares allowed by the Plan have been awarded and earned. The aggregate number of shares of the Company’s Common Stock eligible for award under the Plan is 500,000 shares. Subject to the terms and provisions of the Plan, the Committee may, from time to time, select the employees, directors or consultants to whom awards will be granted and shall determine the amount and applicable restrictions of each award. Restricted awards entitle recipients to vote and receive non-forfeitable dividends during the restriction period. Because dividends are non-forfeitable, they are reflected in retained earnings. Forfeitures are accounted for upon their occurrence. Because the Company accounts for forfeitures as they occur, the non-forfeitable dividends are reclassified from retained earnings to additional stock compensation for the actual forfeitures that occurred.

The following table summarizes the activity related to restricted stock units ("RSUs") for the sixthree months ended SeptemberJune 30, 20222023:

The Company measures compensation expense for RSUs at the market price of the common stock as of the grant date. Compensation expense is recognized over the requisite service period applicable to each award. The Company recorded compensation expense oexpenf $146,306se of approximately $78,000 and $247,741$73,000 in the sixthree months ended SeptemberJune 30, 20222023 and 20212022, respectively, relating to the RSUs issued under the Plan. As of SeptemberJune 30, 20222023, unrecognized compensation expense related to unvested RSUs was approximatelappry $399,000,oximately $0.2 million which is expected to be recognized over a weighted average period of approximately 1.9 years.1.2 years. As of SeptemberJune 30, 20222023, a total of 130,185122,485 shares were still available to be issued under the Plan.

NOTE H — DERIVATIVE FINANCIAL INSTRUMENTS

From time to time, we expect to use derivative financial instruments to minimize our exposure to commodity price risk that is inherent in our business. At the time derivative contracts are entered into, we assess whether the nature of the instrument qualifies for hedge accounting treatment according to the requirements of ASC 815 – Derivatives and Hedging (“ASC 815”). By using derivatives, the Company is exposed to credit and market risk. The Company’s exposure to credit risk includes the counterparty’s failure to fulfill its performance obligations under the terms of the derivative contract. The Company attempts to minimize its credit risk by entering into transactions with high quality counterparties and uses exchange-traded derivatives when available. Market risk is the risk that the value of the financial instrument might be adversely affected by a change in commodity prices. The Company manages market risk by continually monitoring exposure within its risk management strategy and portfolio. For those transactions designated as hedging instruments for accounting purposes, we document all relationships between hedging instruments and hedged items, as well as our risk-management objective and strategy for undertaking the various hedge transactions. We also assess, both at the hedge’s inception and on an ongoing basis, whether the derivatives used in hedging transactions are highly effective in offsetting changes in cash flows or fair value of hedged items.

From time to time, derivatives designated for hedge accounting may be closed prior to contract expiration. The accounting treatment of closed positions depends on whether the closure occurred due to the hedged transaction occurring early or if the hedged transaction is still expected to occur as originally forecasted. For hedged transactions that occur early, the closure results in the realized gain or loss from closure being recognized in the same period the accelerated hedged transaction affects earnings. For hedged transactions that are still expected to occur as originally forecasted, the closure results in the realized gain or loss being deferred until the hedged transaction affects earnings.

If it is determined that hedged transactions associated with cash flow hedges are no longer probable of occurring, the gain or loss associated with the instrument is recognized immediately into earnings. 

From time to time, we may have derivative financial instruments for which we do not elect hedge accounting. 

The Company has forward physical purchase supply agreements in place with some of its suppliers for a portion of its monthly physical steel needs. These supply agreements are not subject to mark-to-market accounting due to the Company electing the normal purchase normal sale exclusion provided in ASC 815. 

At SeptemberJune 30, 20222023 the Company did not have any hot-rolled coil futures contracts designated as hedging instruments and classified as cash flow hedges. At March 31, 20222023, the Company held hot-rolled coil futures contracts which were designated as hedging instruments and classified as cash flow hedges, either as hedges of variable purchase prices or as hedges of variable sales prices. Accordingly, realized and unrealized gains and losses associated with the instruments arewere reported as a component of other comprehensive income and reclassified into earnings during the period in which the hedged transaction affects earnings. 

During the three month periods ended June 30, 2023 and six months ended September 30, 2022, the Company also entered into hot-rolled coil futures contracts that were not designated as hedging instruments for accounting purposes. Accordingly, the change in fair value related to these instruments was immediately recognized in earnings.earnings for these periods.  

The following table summarizes the fair value of the Company’s derivative financial instruments and the respective line in which they were recorded in the Consolidated Balance Sheet as of SeptemberJune 30, 20222023 (in thousands):

The following table summarizes the fair value of the Company’s derivative financial instruments and the respective line in which they were recorded in the Consolidated Balance Sheet as of March 31, 20222023 (in thousands):

All derivatives are presented on a gross basis on the Consolidated Balance Sheets.

At SeptemberJune 30, 20222023 and March 31, 20222023, the Company reported $743,380approximately $0.4 million and $933,200,$1.6 million, respectively, in "Other current assets" on its Consolidated Balance SheetsSheet related to futures contracts which were closed but were pending cash settlement.

The Company did not have any open cash flow hedges at September 30, 2022.

The following table summarizes the pre-tax gain (loss) recognized in other comprehensive income and the gain (loss)loss reclassified from accumulated other comprehensive loss into earnings for derivative financial instruments designated as cash flow hedges for the periods presented:presented (in thousands):

The estimated amount of net losses recognized in AOCI at September 30, 2022 expected to be reclassified into net earnings (loss) within the succeeding twelve months is $1,999,420 with all of this amount associated with closed hedges.

The following table summarizes the gains recognized in earnings for derivative instruments not designated as hedging instruments during the three and sixmonths ended SeptemberJune 30, 20222023 (in thousands):

The following table summarizes the lossesgains recognized in earnings for derivative instruments not designated as hedging instruments during the three and sixmonths ended SeptemberJune 30, 2021:2022(in thousands):

The notional amount (quantity) of our derivative instruments not designated as hedging instruments at SeptemberJune 30, 20222023 consisted of 5,160 tons of long positions with maturity dates ranging from October 2022 to December 2022 and 41,46022,180 tons of short positions with maturity dates ranging from October 2022July 2023to December 2023.

The following table reflectstables reflect the change in accumulated other comprehensive income (loss), net of tax, for the periods presented (in thousands)::

(1) The loss reclassified from AOCI is presented net of tax benefitsbenefits of $511,356approximately $0.1 million which are included in the provision for (benefit from) income taxes on the Company's Consolidated Statement of Operations for the sixthree months ended SeptemberJune 30, 2022.2023.

(1) The loss reclassified from AOCI is presented net of tax benefits of $1,819,688approximately $0.2 million which are included in the provision for (benefit from) income taxes on the Company's Consolidated Statement of Operations for the sixthree months ended SeptemberJune 30, 2021.2022.

At SeptemberJune 30, 20222023 and March 31, 20222023, cash of $2,228,051approximately $1.5 million and $13,523,416,$2.4 million, respectively, was held by our clearing agent to collateralize our open derivative positions. These cash requirements are included in "Other current assets" on the Company's Consolidated Balance Sheets at SeptemberJune 30, 20222023 and March 31, 20222023.

NOTE I — FAIR VALUE MEASUREMENTS

Accounting standards provide a comprehensive framework for measuring fair value and sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. Levels within the hierarchy are defined as follows:

Recurring Fair Value Measurements

At SeptemberJune 30, 20222023, our financial liabilities, net, measured at fair value on a recurring basis were as follows:follows (in thousands):

At March 31, 20222023, our financial liabilities, net, measured at fair value on a recurring basis were as follows:follows (in thousands):

At SeptemberJune 30, 20222023 and March 31, 20222023, the Company did not have any fair value measurements on a non-recurring basis.

NOTE J — SEGMENT INFORMATION (in thousands)

The Flat-roll segment was previously referred to as the Coil segment. The Company is now using Flat-roll to describe the segment due to it being a more common term used in the Company's industry. 

Operating profit is total net sales less operating expenses, excluding general corporate expenses, gain on economic hedges of risk, interest expense and other income. General corporate expenses reflect general and administrative expenses not directly associated with segment operations and consist primarily of corporate and accounting salaries, professional fees and services, bad debts, retirement plan contribution expense, corporate insurance expenses, restricted stock plan compensation expense and office supplies. Other income (loss) for theAt threeJune 30, and sixMarch 31, 2023,  month periods ended September 30, 2022 consisted primarily of gains related to derivatives not designated for hedge accounting of $3,749,420 and $6,503,660, respectively. Other income (loss) for the three months ended September 30, 2021 consisted primarily of a $6,830,780 loss related to derivatives not designated for hedge accounting. Other income (loss) for the six months ended September 30, 2021 consisted primarily of a $8,219,740 loss related to derivatives not designated for hedge accounting partially offset by a $1,706,614 gain from the PPP Loan forgiveness. Corporate assets consist primarily of cash, restricted cash, unamortized debt issuance costs and the cash value of officers’ life insurance. Although inventory is transferred at cost between product groups, there are no sales between product groups.

NOTE K — REVENUE

Revenue is generated primarily from contracts to manufacture or process steel products. Most of the Company’s revenue is generated by sales of material out of the Company’s inventory, but a portion of the Company’s revenue is derived from processing or storage of customer owned material. Generally, the Company’s performance obligations are satisfied, control of our products is transferred, and revenue is recognized at a single point in time, when title transfers to our customer for product shipped or when services are provided. Revenues are recorded net of any sales incentives. Shipping and other transportation costs charged to customers are treated as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. Costs related to obtaining sales contracts are incidental and expensed when incurred. Because customers are invoiced at the time title transfers and the Company’s rights to consideration are unconditional at that time, the Company does not maintain contract asset balances. Additionally, the Company does not maintain contract liability balances, as performance obligations are satisfied prior to customer payment for product. The Company offers industry standard payment terms.

The Company has two reportable segments: CoilFlat-roll and Tubular. CoilFlat-roll primarily generates revenue from cutting to length hot-rolled steel coils. CoilFlat-roll segment revenue consists of three main product types: Prime Coil, Non-Standard Coil and Customer Owned Coil. Tubular primarily generates revenue from manufacturing and distributingselling steel pipe. Tubular segment revenuepipe it has consisted of two mainmanufactured resulting in a single product types:type: Manufactured Pipe and Mill Reject Pipe. In March 2020, U.S. Steel announced the idling of their Lone Star Tubular Operations which was the Company's sole supplier of mill reject pipe. U.S. Steel's facility was idled as announced and the Company's receipts of mill reject pipe ceased in August 2020. At June 30, 2022, the Company was sold out of mill reject pipe so manufactured pipe was the sole revenue stream for the tubular segment for the three months ended September 30, 2022. The Company has expanded its focus on manufactured pipe sales to counteract the impact of mill reject pipe revenue concluding. The following table disaggregates our revenue by product for each of our reportable business segments for the three and sixmonths ended SeptemberJune 30, 20222023 and 20212022, respectively:respectively (in thousands):

NOTE L — STOCKHOLDERS’ EQUITY

The following tables reflect the changes in stockholders’ equity for each of the sixthree months ended SeptemberJune 30, 2023 and June 30, 2022 and September 30, 2021(in thousands):