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SECURITIES AND EXCHANGE COMMISSION
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TEXAS (State or other jurisdiction of incorporation or organization) | 74-1504405 (I.R.S. Employer Identification Number) |
(Address of principal executive office) (zip code)
Registrant’s telephone number, including area code (713) 672-9433
Large accelerated filer o | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company þ |
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DECEMBER 31, 2010 | MARCH 31, 2010 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 16,446,866 | $ | 19,812,881 | ||||
Accounts receivable, net of allowances for bad debts and cash discounts of $37,276 at December 31 and March 31, 2010 | 7,170,514 | 8,686,151 | ||||||
Inventories | 27,245,319 | 20,122,296 | ||||||
Other | 146,638 | 81,791 | ||||||
TOTAL CURRENT ASSETS | 51,009,337 | 48,703,119 | ||||||
PROPERTY, PLANT AND EQUIPMENT: | ||||||||
Land | 1,082,331 | 1,082,331 | ||||||
Buildings and yard improvements | 7,003,239 | 7,000,839 | ||||||
Machinery and equipment | 29,853,708 | 29,374,766 | ||||||
Less accumulated depreciation | (23,370,033 | ) | (21,963,333 | ) | ||||
14,569,245 | 15,494,603 | |||||||
OTHER ASSETS: | ||||||||
Cash value of officers’ life insurance and other assets | 876,000 | 834,000 | ||||||
TOTAL ASSETS | $ | 66,454,582 | $ | 65,031,722 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable and accrued expenses | $ | 7,331,280 | $ | 6,912,741 | ||||
Current portion of long-term debt | — | 13,507 | ||||||
Income taxes payable | 125,651 | 94,563 | ||||||
Dividends payable | 747,939 | 67,994 | ||||||
Contribution to profit sharing plan | 200,000 | 44,000 | ||||||
Employee compensation and related expenses | 574,416 | 443,473 | ||||||
TOTAL CURRENT LIABILITIES | 8,979,286 | 7,576,278 | ||||||
DEFERRED INCOME TAXES | 373,603 | 414,403 | ||||||
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS | 753,816 | 682,631 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Common stock, par value $1: | ||||||||
Authorized shares — 10,000,000 | ||||||||
Issued shares — 7,975,160 at December 31 and March 31, 2010 | 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 December 31 and March 31, 2010) | (5,475,964 | ) | (5,475,964 | ) | ||||
Retained earnings | 24,845,007 | 24,855,540 | ||||||
TOTAL STOCKHOLDERS’ EQUITY | 56,347,877 | 56,358,410 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 66,454,582 | $ | 65,031,722 | ||||
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FRIEDMAN INDUSTRIES, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
Three months ended December 31, | Nine months ended December 31, | |||||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||||
Net sales | $ | 31,135,887 | $ | 13,470,721 | $ | 89,711,381 | $ | 41,803,270 | ||||||||||
Costs and expenses | ||||||||||||||||||
Costs of goods sold | 27,365,134 | 12,604,699 | 78,614,977 | 39,723,710 | ||||||||||||||
General, selling and administrative costs | 1,160,888 | 881,678 | 3,699,609 | 2,730,880 | ||||||||||||||
28,526,022 | 13,486,377 | 82,314,586 | 42,454,590 | |||||||||||||||
Interest and other income | (15,034 | ) | (42,988 | ) | (43,061 | ) | (71,988 | ) | ||||||||||
Earnings (loss) before income taxes | 2,624,899 | 27,332 | 7,439,856 | (579,332 | ) | |||||||||||||
Provision for (benefit from) income taxes: | ||||||||||||||||||
Current | 905,005 | 26,071 | 2,527,594 | (124,238 | ) | |||||||||||||
Deferred | (13,600 | ) | 42,500 | (40,800 | ) | (44,860 | ) | |||||||||||
891,405 | 68,571 | 2,486,794 | (169,098 | ) | ||||||||||||||
Net earnings (loss) | $ | 1,733,494 | $ | (41,239 | ) | $ | 4,953,062 | $ | (410,234 | ) | ||||||||
Weighted average number of common shares outstanding: | ||||||||||||||||||
Basic | 6,799,444 | 6,799,444 | 6,799,444 | 6,799,444 | ||||||||||||||
Diluted | 6,799,444 | 6,799,444 | 6,799,444 | 6,799,444 | ||||||||||||||
Net earnings (loss) per share: | ||||||||||||||||||
Basic | $ | 0.25 | $ | (0.01 | ) | $ | 0.73 | $ | (0.06 | ) | ||||||||
Diluted | $ | 0.25 | $ | (0.01 | ) | $ | 0.73 | $ | (0.06 | ) | ||||||||
Cash dividends declared per common share | $ | 0.61 | $ | 0.01 | $ | 0.73 | $ | 0.05 |
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FRIEDMAN INDUSTRIES, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
Nine Months Ended December 31 | |||||||||||
2010 | 2009 | ||||||||||
OPERATING ACTIVITIES | |||||||||||
Net earnings (loss) | $ | 4,953,062 | $ | (410,234 | ) | ||||||
Adjustments to reconcile net earnings (loss) to cash provided by operating activities: | |||||||||||
Depreciation | 1,406,700 | 1,421,100 | |||||||||
Provision for deferred taxes | (40,800 | ) | (44,860 | ) | |||||||
Provision for postretirement benefits | 71,185 | 50,477 | |||||||||
Decrease (increase) in operating assets: | |||||||||||
Accounts receivable, net | 1,515,637 | 1,812,011 | |||||||||
Inventories | (7,123,023 | ) | 981,172 | ||||||||
Prepaid income taxes | — | (18,098 | ) | ||||||||
Other | (64,847 | ) | (54,460 | ) | |||||||
Increase (decrease) in operating liabilities: | |||||||||||
Accounts payable and accrued expenses | 418,539 | 1,195,635 | |||||||||
Contribution to profit-sharing plan | 156,000 | 126,000 | |||||||||
Employee compensation and related expenses | 130,943 | (15,630 | ) | ||||||||
Income taxes payable | 31,088 | — | |||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 1,454,484 | 5,043,113 | |||||||||
INVESTING ACTIVITIES | |||||||||||
Purchase of property, plant and equipment | (481,342 | ) | (367,733 | ) | |||||||
Increase in cash surrender value of officers’ life insurance | (42,000 | ) | (43,500 | ) | |||||||
NET CASH USED IN INVESTING ACTIVITIES | (523,342 | ) | (411,233 | ) | |||||||
FINANCING ACTIVITIES | |||||||||||
Cash dividends paid | (4,283,650 | ) | (611,949 | ) | |||||||
Principal payments on notes payable | (13,507 | ) | (40,521 | ) | |||||||
NET CASH USED IN FINANCING ACTIVITIES | (4,297,157 | ) | (652,470 | ) | |||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (3,366,015 | ) | 3,979,410 | ||||||||
Cash and cash equivalents at beginning of period | 19,812,881 | 16,880,110 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 16,446,866 | $ | 20,859,520 | |||||||
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December 31, | March 31, | |||||||
2010 | 2010 | |||||||
Prime Coil Inventory | $ | 8,131,154 | $ | 4,643,951 | ||||
Non-Standard Coil Inventory | 519,595 | 504,351 | ||||||
Tubular Raw Material | 1,003,527 | 3,698,531 | ||||||
Tubular Finished Goods | 17,591,043 | 11,275,463 | ||||||
$ | 27,245,319 | $ | 20,122,296 | |||||
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Three Months Ended December 31, | Nine Months Ended December 31, | |||||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||||
Net sales | ||||||||||||||||||
Coil | $ | 15,623 | $ | 7,622 | $ | 40,956 | $ | 25,038 | ||||||||||
Tubular | 15,513 | 5,849 | 48,755 | 16,765 | ||||||||||||||
Total net sales | $ | 31,136 | $ | 13,471 | $ | 89,711 | $ | 41,803 | ||||||||||
Operating profit (loss) | ||||||||||||||||||
Coil | $ | 384 | $ | (597 | ) | $ | 278 | $ | (930 | ) | ||||||||
Tubular | 2,688 | 936 | 8,992 | 1,513 | ||||||||||||||
Total operating profit | 3,072 | 339 | 9,270 | 583 | ||||||||||||||
Corporate expenses | 462 | 355 | 1,873 | 1,234 | ||||||||||||||
Interest & other income | (15 | ) | (43 | ) | (43 | ) | (72 | ) | ||||||||||
Total earnings (loss) before taxes | $ | 2,625 | $ | 27 | $ | 7,440 | $ | (579 | ) | |||||||||
December 31, | March 31, | |||||||
2010 | 2010 | |||||||
Segment assets | ||||||||
Coil | $ | 22,742 | $ | 20,377 | ||||
Tubular | 26,389 | 24,006 | ||||||
49,131 | 44,383 | |||||||
Corporate assets | 17,324 | 20,649 | ||||||
$ | 66,455 | $ | 65,032 | |||||
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FRIEDMAN INDUSTRIES, INCORPORATED
Part II — OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 1A. Risk Factors
Not required
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
a). Not applicable | |
b). Not applicable | |
c). Not applicable |
Item 3. Defaults Upon Senior Securities
a). Not applicable | |
b). Not applicable |
Item 4. [Removed and Reserved]
Item 5. Other Information
Not applicable
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 Ben Harper | |
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 Ben Harper |
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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 | |||
Dated: February 11, 2011 | |||
By | /s/ BEN HARPER | ||
Ben Harper, Senior Vice President-Finance | |||
(Principal Financial and Accounting Officer) | |||
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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 Ben Harper | |
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 Ben Harper |