Friedman Industries (FRD) 10-Q 14 Feb 18 2018 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Dec. 31, 2017	Feb. 14, 2018
Document Information [Line Items]
Entity Registrant Name	FRIEDMAN INDUSTRIES INC
Entity Central Index Key	39,092
Trading Symbol	frd
Current Fiscal Year End Date	--03-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		7,009,444
Document Type	10-Q
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Dec. 31, 2017	Mar. 31, 2017
CURRENT ASSETS:
Cash	$ 2,123,803	$ 1,461,695
Accounts receivable, net of allowances for bad debts and cash discounts of $21,052 and $27,276 at December 31 and March 31, 2017	7,054,181	8,939,051
Inventories	46,399,435	34,918,550
Other	380,576	113,540
TOTAL CURRENT ASSETS	55,957,995	45,432,836
PROPERTY, PLANT AND EQUIPMENT:
Land	1,452,799	1,082,331
Buildings and yard improvements	8,682,405	7,111,735
Machinery and equipment	39,237,369	31,451,479
Construction in progress		9,451,972
Less accumulated depreciation	(34,920,492)	(33,924,353)
Property, plant, and equipment, net	14,452,081	15,173,164
OTHER ASSETS:
Deferred income tax asset	463,728	1,165,950
Federal income taxes recoverable	866,894	913,347
Cash value of officers’ life insurance and other assets	206,125	578,000
TOTAL ASSETS	71,946,823	63,263,297
CURRENT LIABILITIES:
Accounts payable and accrued expenses	6,575,457	2,003,661
Dividends payable	70,094	70,094
Contribution to retirement plan	162,000	42,000
Employee compensation and related expenses	252,381	240,835
Revolving line of credit	3,750,000
TOTAL CURRENT LIABILITIES	10,809,932	2,356,590
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS	170,441	550,282
TOTAL LIABILITIES	10,980,373	2,906,872
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common stock, par value $1: Authorized shares — 10,000,000; Issued shares — 8,185,160 at September 30 and March 31, 2017	8,185,160	8,185,160
Additional paid-in capital	29,082,634	28,865,914
Treasury stock at cost (1,175,716 shares at December 31 and March 31, 2017)	(5,475,964)	(5,475,964)
Retained earnings	29,174,620	28,781,315
TOTAL STOCKHOLDERS’ EQUITY	60,966,450	60,356,425
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 71,946,823	$ 63,263,297

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Dec. 31, 2017	Mar. 31, 2017
Allowance for bad debt and cash discounts	$ 21,052	$ 27,276
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized (in shares)	10,000,000	10,000,000
Common stock, shares issued (in shares)	8,185,160	8,185,160
Treasury stock, shares (in shares)	1,175,716	1,175,716

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - Unaudited - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Net sales	$ 28,033,521	$ 15,988,745	$ 77,194,500	$ 56,700,015
Costs and expenses
Costs of goods sold	26,364,387	15,417,174	72,884,773	57,427,143
General, selling and administrative costs	999,220	957,305	2,962,139	2,965,884
Interest expense	8,451		8,451
Costs and expenses, total	27,372,058	16,374,479	75,855,363	60,393,027
Interest and other income	(4,375)	(14,755)	(13,125)	(44,255)
Earnings (loss) before income taxes	665,838	(370,979)	1,352,262	(3,648,757)
Provision for (benefit from) income taxes:
Current	46,452		46,452	(673,618)
Deferred	496,457	(134,354)	702,222	(673,413)
Income tax	542,909	(134,354)	748,674	(1,347,031)
Net earnings (loss)	$ 122,929	$ (236,625)	$ 603,588	$ (2,301,726)
Weighted average number of common shares outstanding:
Basic (in shares)	7,009,444	6,799,444	7,009,444	6,799,444
Diluted (in shares)	7,009,444	6,799,444	7,009,444	6,799,444
Net earnings (loss) per share:
Basic (in dollars per share)	$ 0.02	$ (0.03)	$ 0.09	$ (0.34)
Diluted (in dollars per share)	0.02	(0.03)	0.09	(0.34)
Cash dividends declared per common share (in dollars per share)	$ 0.01	$ 0.01	$ 0.03	$ 0.03

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - Unaudited - USD ($)	9 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
OPERATING ACTIVITIES
Net earnings (loss)	$ 603,588	$ (2,301,726)
Adjustments to reconcile net earnings (loss) to cash provided by (used in) operating activities:
Depreciation	996,139	1,202,549
Deferred taxes	702,222	(673,413)
Compensation expense for restricted stock	216,720
Provision for postretirement benefits	5,159	43,262
Decrease (increase) in operating assets:
Accounts receivable, net	1,884,870	(106,616)
Inventories	(11,480,885)	7,375,622
Federal income taxes recoverable	46,453	(913,347)
Other	(267,036)	(39,312)
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses	4,571,796	(595,940)
Contribution to retirement plan	120,000	126,500
Employee compensation and related expenses	11,546	(85,157)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(2,589,428)	4,032,422
INVESTING ACTIVITIES
Purchase of property, plant and equipment	(275,056)	(655,032)
Change in cash surrender value of officers’ life insurance	(13,125)	(44,250)
NET CASH USED IN INVESTING ACTIVITIES	(288,181)	(699,282)
FINANCING ACTIVITIES
Borrowings under revolving line of credit	3,750,000
Cash dividends paid	(210,283)	(203,982)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	3,539,717	(203,982)
INCREASE IN CASH	662,108	3,129,158
Cash at beginning of period	1,461,695	2,796,762
CASH AT END OF PERIOD	$ 2,123,803	$ 5,925,920

Note A - Basis of Presentation

Note A - Basis of Presentation	9 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	NOTE A — BASIS OF PRESENTATION The accompanying unaudited, condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10 not 10 March 31, 2017.

Note B - Change in Accounting E

Note B - Change in Accounting Estimate	9 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
Accounting Changes [Text Block]	NOTE B — CHANGE IN ACCOUNTING ESTIMATE During the quarter ended June 30, 2017, April 1, 2017, $160,000, $98,000 $0.01 December 31, 2017.

Note C - New Accounting Standar

Note C - New Accounting Standards	9 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	NOTE C — NEW ACCOUNTING STANDARDS In August 2016, No. 2016 15, 2016 15” 2016 15 eight December 15, 2017, 2016 15 not In February 2016, No. 2016 02, 2016 02” 2016 02 12 12 December 15, 2018, 2016 02 not In May 2014, No. 2014 09, 2014 09” 2014 09 2014 09 was initially effective for interim and annual periods beginning after December 15, 2016 not August 2015, No. 2015 14, 2015 14” 2015 14 2014 09 December 15, 2017, one December 15, 2016, April 1, 2018. not two

Note D - Inventories

Note D - Inventories	9 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
Inventory Disclosure [Text Block]	NOTE D — INVENTORIES Inventories consist of prime coil, non-standard coil and tubular materials. Prime coil and non-standard coil inventories consist primarily of raw materials and tubular inventory consists of both raw materials and finished goods. Cost for prime coil inventory is determined using the last-in, first $6,051,000 December 31, 2017 $5,593,000 March 31, 2017. A summary of inventory values by product group follows: December 31, 7 March 31, 7 Prime Coil Inventory $ 13,320,717 $ 8,481,605 Non-Standard Coil Inventory 3,236,378 1,119,170 Tubular Raw Material 4,922,377 1,480,730 Tubular Finished Goods 24,919,963 23,837,045 $ 46,399,435 $ 34,918,550

Note E - Debt

Note E - Debt	9 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
Debt Disclosure [Text Block]	NOTE E — DEBT On December 11, 2017, $7,500,000 December 11, 2018 0.55%. may not 1 $50.0 2 50% December 31, 2017, $3,750,000 3.95%. 10 $2,000,000

Note F - Stock Based Compensati

Note F - Stock Based Compensation	9 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	NOTE F — STOCK BASED COMPENSATION The Company maintains the Friedman Industries, Incorporated 2016 500,000 may, As of December 31, 2017, 210,000 five January 4, 2022. No $1,444,800 60 $72,240 December 31, 2017 December 31, 2016, no

Note G - Segment Information

Note G - Segment Information	9 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
Segment Reporting Disclosure [Text Block]	NOTE G — SEGMENT INFORMATION (in thousands) Three Months Ended December 31, Nine Months Ended December 31, 201 7 2016 201 7 2016 Net sales Coil $ 22,410 $ 13,495 $ 60,547 $ 47,945 Tubular 5,624 2,494 16,648 8,755 Total net sales $ 28,034 $ 15,989 $ 77,195 $ 56,700 Operating profit (loss) Coil $ 1,178 $ 538 $ 2,483 $ (858 ) Tubular (53 ) (437 ) 261 (1,360 ) Total operating profit (loss) 1,125 101 2,744 (2,218 ) Corporate expenses 463 487 1,405 1,475 Interest & other income (4 ) (15 ) (13 ) (44 ) Total earnings (loss) before taxes $ 666 $ (371 ) $ 1,352 $ (3,649 ) December 31, 7 March 31, 7 Segment assets Coil $ 26,770 $ 21,833 Tubular 41,501 37,299 68,271 59,132 Corporate assets 3,676 4,131 $ 71,947 $ 63,263 Corporate expenses reflect general and administrative expenses not ’ life insurance, deferred taxes and federal income taxes recoverable.

Note H - Supplemental Cash Flow

Note H - Supplemental Cash Flow Information	9 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
Cash Flow, Supplemental Disclosures [Text Block]	NOTE H — SUPPLEMENTAL CASH FLOW INFORMATION The Company paid income taxes of approximately $8,000 $13,500 nine December 31, 2017 2016, no nine December 31, 2017 2016. $70,094 nine December 31, 2017 2016, $385,000 $293,000 nine December 31, 2017 2016,

Note I - Income Taxes

Note I - Income Taxes	9 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
Income Tax Disclosure [Text Block]	NOTE I — INCOME TAXES The effective tax rate for the nine December 31, 2017 provisional impact of the Tax Cuts and Jobs Act (the “Tax Act”), enacted on December 22, 2017 March 31, 2018, not The Tax Act reduces the federal corporate tax rate to 21.0% January 1, 2018. 15 30.8% for our fiscal 2018 January 1, 2018 December 31, 2017, $240,500 On December 22, 2017, 118 118” 118 period, which should not one 740 740” 118, 740 740 ’s best estimates based on records, information and current guidance. Additional information and analysis is required to finalize the impact that the Tax Act will have on the Company’s full fiscal year financial results. The Company currently anticipates finalizing and recording any resulting adjustments by the end of the fiscal year ending March 31, 2018. The Company ’s effective tax rate for the nine December 31, 2016

Note D - Inventories (Tables)

Note D - Inventories (Tables)	9 Months Ended
	Dec. 31, 2017
Notes Tables
Schedule of Inventory, Current [Table Text Block]	December 31, 7 March 31, 7 Prime Coil Inventory $ 13,320,717 $ 8,481,605 Non-Standard Coil Inventory 3,236,378 1,119,170 Tubular Raw Material 4,922,377 1,480,730 Tubular Finished Goods 24,919,963 23,837,045 $ 46,399,435 $ 34,918,550

Note G - Segment Information (T

Note G - Segment Information (Tables)	9 Months Ended
	Dec. 31, 2017
Notes Tables
Schedule of Segment Reporting Information, by Segment [Table Text Block]	Three Months Ended December 31, Nine Months Ended December 31, 201 7 2016 201 7 2016 Net sales Coil $ 22,410 $ 13,495 $ 60,547 $ 47,945 Tubular 5,624 2,494 16,648 8,755 Total net sales $ 28,034 $ 15,989 $ 77,195 $ 56,700 Operating profit (loss) Coil $ 1,178 $ 538 $ 2,483 $ (858 ) Tubular (53 ) (437 ) 261 (1,360 ) Total operating profit (loss) 1,125 101 2,744 (2,218 ) Corporate expenses 463 487 1,405 1,475 Interest & other income (4 ) (15 ) (13 ) (44 ) Total earnings (loss) before taxes $ 666 $ (371 ) $ 1,352 $ (3,649 ) December 31, 7 March 31, 7 Segment assets Coil $ 26,770 $ 21,833 Tubular 41,501 37,299 68,271 59,132 Corporate assets 3,676 4,131 $ 71,947 $ 63,263

Note B - Change in Accounting17

Note B - Change in Accounting Estimate (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Depreciation			$ 996,139	$ 1,202,549
Net Income (Loss) Attributable to Parent	$ 122,929	$ (236,625)	$ 603,588	$ (2,301,726)
Earnings Per Share, Diluted	$ 0.02	$ (0.03)	$ 0.09	$ (0.34)
Service Life [Member]
Depreciation	$ (160,000)
Net Income (Loss) Attributable to Parent	$ 98,000
Earnings Per Share, Diluted	$ 0.01

Note D - Inventories (Details T

Note D - Inventories (Details Textual) - USD ($)	Dec. 31, 2017	Mar. 31, 2017
Excess of Replacement or Current Costs over Stated LIFO Value	$ 6,051,000	$ 5,593,000

Note D - Inventories - Summary

Note D - Inventories - Summary of Inventory Values by Product Group (Details) - USD ($)	Dec. 31, 2017	Mar. 31, 2017
Inventories	$ 46,399,435	$ 34,918,550
Prime Coil Inventory [Member]
Raw materials	13,320,717	8,481,605
Non-standard Coil Inventory [Member]
Raw materials	3,236,378	1,119,170
Tubular Inventory [Member]
Raw materials	4,922,377	1,480,730
Finished goods	$ 24,919,963	$ 23,837,045

Note E - Debt (Details Textual)

Note E - Debt (Details Textual) - Citizens National Bank [Member] - Revolving Credit Facility [Member] - USD ($)	1 Months Ended
	Dec. 31, 2017	Feb. 14, 2018
Line of Credit Facility, Maximum Borrowing Capacity	$ 7,500,000
Debt Instrument, Minimum Threshold of Shareholders' Equity	$ 50,000,000
Debt Instrument, Debt to Shareholders' Equity Maximum Threshold, Percent	50.00%
Long-term Line of Credit	$ 3,750,000
Line of Credit Facility, Interest Rate at Period End	3.95%
Subsequent Event [Member]
Long-term Line of Credit		$ 2,000,000
Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate	(0.55%)

Note F - Stock Based Compensa21

Note F - Stock Based Compensation (Details Textual) - 2016 Restricted Stock Plan [Member] - USD ($)	3 Months Ended	9 Months Ended
	Dec. 31, 2017	Dec. 31, 2017	Sep. 01, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized			500,000
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period		210,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		5 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options	$ 1,444,800	$ 1,444,800
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		5 years
Allocated Share-based Compensation Expense	$ 72,240

Note G - Segment Information -

Note G - Segment Information - Segment Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Mar. 31, 2017
Net sales	$ 28,033,521	$ 15,988,745	$ 77,194,500	$ 56,700,015
Interest & other income	(4,375)	(14,755)	(13,125)	(44,255)
Total earnings (loss) before taxes	665,838	(370,979)	1,352,262	(3,648,757)
Assets	71,946,823		71,946,823		$ 63,263,297
Operating Segments [Member]
Operating profit (loss)	1,125,000	101,000	2,744,000	(2,218,000)
Assets	68,271,000		68,271,000		59,132,000
Operating Segments [Member] | Coil [Member]
Net sales	22,410,000	13,495,000	60,547,000	47,945,000
Operating profit (loss)	1,178,000	538,000	2,483,000	(858,000)
Assets	26,770,000		26,770,000		21,833,000
Operating Segments [Member] | Tubular [Member]
Net sales	5,624,000	2,494,000	16,648,000	8,755,000
Operating profit (loss)	(53,000)	(437,000)	261,000	(1,360,000)
Assets	41,501,000		41,501,000		37,299,000
Corporate, Non-Segment [Member]
Corporate expenses	463,000	$ 487,000	1,405,000	$ 1,475,000
Assets	$ 3,676,000		$ 3,676,000		$ 4,131,000

Note H - Supplemental Cash Fl23

Note H - Supplemental Cash Flow Information (Details Textual) - USD ($)	9 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Mar. 31, 2017
Income Taxes Paid	$ 8,000	$ 13,500
Interest Paid, Net	0	0
Dividends Payable, Current	70,094	70,094	$ 70,094
Other Significant Noncash Transaction, Value of Consideration Given	$ 385,000	$ 293,000

Note I - Income Taxes (Details

Note I - Income Taxes (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Mar. 31, 2019	Mar. 31, 2018
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability	$ 240,500
Scenario, Forecast [Member]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		21.00%	30.80%