10q10k10q10k.net

What changed in FRIEDMAN INDUSTRIES INC's 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of FRIEDMAN INDUSTRIES INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+34 added−29 removedSource: 10-K (2023-07-14) vs 10-K (2022-08-02)

Top changes in FRIEDMAN INDUSTRIES INC's 2023 10-K

34 paragraphs added · 29 removed · 19 edited across 4 sections

Item 1. Business

Business — how the company describes what it does

14 edited+14 added−10 removed0 unchanged
Biggest changeTTP operates two electric resistance welded pipe mills with a combined outside diameter (“OD”) size range of 2 3/8” OD to 8 5/8” OD. Both pipe mills are American Petroleum Institute (“API”) licensed to manufacture line pipe and oil country pipe and also manufacture pipe for structural purposes that meets other recognized industry standards.
Biggest changeBoth pipe mills are American Petroleum Institute (“API”) licensed to manufacture line pipe and oil country pipe and also manufacture pipe for structural purposes that meets other recognized industry standards. TTP has a pipe finishing facility capable of applying threads and couplings to oil country tubular goods and performing other services that are customary in the pipe finishing process.
Item 1. Business Friedman Industries, Incorporated (the “Company”), a Texas corporation incorporated in 1965, is a manufacturer and processor of steel products and operates in two reportable segments: coil products and tubular products.
Item 1. Business General Friedman Industries, Incorporated (the “Company”), a Texas corporation incorporated in 1965, is a manufacturer and processor of steel products and operates in two reportable segments: coil products and tubular products.
Executive Officers of the Company The following table sets forth as of March 31, 2022, for each executive officer of the Company, the name, age, officer positions and arrangements with other persons regarding his selection as an officer, if any, and the period during which such officer has served in such capacity: Name Age Position, Offices with the Company and Other Arrangements, if any Michael J.
Executive Officers of the Company The following table sets forth as of March 31, 2023, for each executive officer of the Company, the name, age, officer positions and arrangements with other persons regarding his selection as an officer, if any, and the period during which such officer has served in such capacity: Name Age Position, Offices with the Company and Other Arrangements, if any Michael J.
The Company makes shipments of coil products based on which facility offers the desired product or, if the product is available at both facilities, based on other factors, such as customer location, freight conditions and the ability of the facility to fulfill the order on a timely basis.
The Company makes shipments of coil products based on which facility offers the desired product or, if the product is available at multiple facilities, based on other factors, such as customer location, freight conditions and the ability of the facility to fulfill the order on a timely basis.
Taylor 63 President and Chief Executive Officer since September 2019; formerly Interim President and Interim Chief Executive Officer since February 2019; Chairman of the Board of Directors since June 2017; member of the Board of Directors since December 2016 Alex LaRue 36 Chief Financial Officer – Secretary and Treasurer since March 2018; formerly Vice President — Secretary and Treasurer since 2014; formerly Assistant Vice President — Secretary and Treasurer since 2013; formerly Controller — Texas Tubular Products since 2011 3
Taylor 64 President and Chief Executive Officer since September 2019; formerly Interim President and Interim Chief Executive Officer since February 2019; Chairman of the Board of Directors since June 2017; member of the Board of Directors since December 2016 Alex LaRue 37 Chief Financial Officer – Secretary and Treasurer since March 2018; formerly Vice President — Secretary and Treasurer since 2014; formerly Assistant Vice President — Secretary and Treasurer since 2013; formerly Controller — Texas Tubular Products since 2011 3
Loss of any of these suppliers could have a material adverse effect on the Company’s business. 2 Marketing The following table sets forth the approximate percentage of total sales contributed by each group of products and services during each of the Company’s last two fiscal years: Product and Service Groups 2022 2021 Coil Products 81 % 76 % Tubular Products 19 % 24 % Coil Products.
Loss of any of these suppliers could have a material adverse effect on the Company’s business. 2 Marketing The following table sets forth the approximate percentage of total sales contributed by each group of products and services during each of the Company’s last two fiscal years: Product and Service Groups Fiscal 2023 Fiscal 2022 Coil Products 89 % 81 % Tubular Products 11 % 19 % Coil Products.
Significant financial information relating to the Company’s business segments for the last two years is contained in Note 13 of the Consolidated Financial Statements included in the Company’s Annual Report to Shareholders for the fiscal year ended March 31, 2022, which financial statements are incorporated herein by reference in Item 8 hereof.
Significant financial information relating to the Company’s business segments for the last two years is contained in Note 13of the Consolidated Financial Statements included in the Company’s Annual Report to Shareholders for the fiscal year ended March 31, 2023, which financial statements are incorporated herein by reference in Item 8 hereof.
The Company’s principal customers for these products are steel and pipe distributors. In fiscal years 2022 and 2021, no individual tubular customer accounted for 10% or more of the Company’s total sales. The Company sells substantially all of its tubular products through its own sales force.
The Company sells its tubular products nationally to approximately 95 customers. The Company’s principal customers for these products are steel and pipe distributors. In fiscal years 2023 and 2022, no individual tubular customer accounted for 10% or more of the Company’s total sales. The Company sells all of its tubular products through its own sales force.
At March 31, 2022, the sales force was comprised of the Vice President of Sales – Tubular Division and two professional sales personnel. Sales personnel are paid on a salary and commission basis. Competition The Company is engaged in a non-seasonal, highly-competitive business. The Company competes with other processors of hot-rolled steel coils, tubular manufacturers, steel distributors and brokers.
At March 31, 2023, the sales force was comprised of the Vice President and General Manager – Tubular Division and two sales personnel. Competition The Company is engaged in a non-seasonal, highly-competitive business. The Company competes with other processors of hot-rolled steel coils, tubular manufacturers, steel distributors and brokers.
The Company believes that, generally, its ability to compete is dependent upon its ability to offer products at prices competitive with or below those of other steel suppliers, as well as its ability to provide products meeting customer specifications on a rapid-delivery basis. Human Capital Resources At March 31, 2022, the Company had 98 full-time employees and 1 part-time employee.
The Company believes that, generally, its ability to compete is dependent upon its ability to offer products at prices competitive with or below those of other steel suppliers, as well as its ability to provide products meeting customer specifications on a rapid-delivery basis.
The Company sells coil products and processing services to approximately 230 customers located primarily in the midwestern, southwestern and southeastern regions of the United States. The Company’s principal customers for these products and services are steel distributors and customers manufacturing steel products such as steel buildings, railroad cars, barges, tanks and containers, trailers, component parts and other fabricated steel products.
The Company’s principal customers for these products and services are steel distributors and customers manufacturing steel products such as steel buildings, railroad cars, barges, tanks and containers, trailers, component parts and other fabricated steel products. In fiscal years 2023 and 2022, sales of coil products to O'Neal Steel accounted for approximately 15% and 11% of the Company's total sales, respectively.
The Decatur facility is capable of cutting sheet and plate with thicknesses ranging from 14 gauge to ½” thick in widths ranging from 36" wide to 96" wide.
On a combined basis, the facilities are capable of cutting sheet and plate with thicknesses ranging from 16 gauge to 1” thick in widths ranging from 36” wide to 96” wide.
Coil products are sold on a wholesale, rapid-delivery basis in competition with other processors of hot-rolled steel coils. Shipments are made via unaffiliated truckers or by rail. On May 25, 2021, the Company announced plans for a new facility in Sinton, Texas that will be part of the coil product segment.
Coil products are sold on a wholesale, rapid-delivery basis in competition with other processors of hot-rolled steel coils. Shipments are made via unaffiliated truckers or by rail. The coil segment purchases its inventory from a limited number of suppliers. Loss of any of these suppliers could have a material adverse effect on the Company’s business.
The Company sells substantially all of its coil products through its own sales force. At March 31, 2022, the sales force was comprised of the Vice President of Sales – Coil Divisions and four professional sales personnel. Sales personnel are paid on a salary and commission basis. Tubular Products. The Company sells its tubular products nationally to approximately 110 customers.
No other individual coil products customer accounted for 10% or more of the Company's total sales for either of the two fiscal years. The Company sells all of its coil products through its own sales force. At March 31, 2023, the sales force was comprised of the Vice President of Sales – Coil Divisions and 23 sales personnel. Tubular Products.
Removed
Coil Products The coil product segment consists of the operation of two hot-rolled coil processing facilities; one in Hickman, Arkansas (“Hickman”) and the other in Decatur, Alabama (“Decatur”). The Hickman facility operates a temper mill and a cut-to-length line and the Decatur facility operates a stretcher leveler cut-to-length line.
Added
Coil Products The coil product segment consists of the operation of five hot-rolled coil processing facilities located in Hickman, Arkansas; Decatur, Alabama; East Chicago, Indiana; Granite City, Illinois and Sinton, Texas. The facilities in Granite City and East Chicago were acquired on April 30, 2022 from Plateplus, Inc ("Plateplus").
Removed
The equipment at both facilities improves the flatness and surface qualities of the coils and cuts the coils into sheet and plate of prescribed lengths. The Hickman facility is capable of cutting sheet and plate with thicknesses ranging from 14 gauge to ½” thick in widths ranging from 36” wide to 72” wide.
Added
More information about the Plateplus transaction can be found in Note 2 of the Consolidated Financial Statements included in the Company’s Annual Report to Shareholders for the fiscal year ended March 31, 2023. The facility in Sinton is a newly constructed facility that commenced operations during October 2022.
Removed
The coil product segment sells its prime grade inventory under the Friedman Industries name but also maintains an inventory of non-standard coil products, consisting primarily of mill secondary and excess prime coils, which are sold through the Company’s XSCP division. The coil product segment also processes customer-owned coils on a fee basis.
Added
The Hickman, Granite City and East Chicago facilities operate temper mills and cut-to-length lines. The Decatur and Sinton facilities operate stretcher leveler cut-to-length lines. The equipment at all locations improve the flatness and surface quality of the coils and cut the coils into sheet and plate of prescribed lengths.
Removed
The Hickman and Decatur facilities are substantially similar with respect to products produced.
Added
The vast majority of the coil product segment's revenue is generated from sales of Company owned inventory but the segment also generates revenue from the processing or storage of customer owned coils on a fee basis. The coil processing facilities are substantially similar with respect to products produced.
Removed
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 location consists of an approximately 70,000 square foot building located on approximately 26.5 acres leased from SDI under a 99-year agreement.
Added
Tubular Products The tubular product segment consists of the Company’s Texas Tubular Products division (“TTP”) located in Lone Star, Texas. TTP operates two electric resistance welded pipe mills with a combined outside diameter (“OD”) size range of 2 3/8” OD to 8 5/8” OD.
Removed
The Company contracted with Red Bud Industries to build one of the world’s largest stretcher leveler cut-to-length lines, capable of handling material up to 1” thick, widths up to 96” and yields exceeding 100,000 psi. The Company expects the equipment commissioning to occur during August 2022 and September 2022 and then expects expanded production levels beginning in October 2022.
Added
The pipe finishing facility is currently idled. All of the tubular segment's revenue is generated from sales of Company owned inventory. TTP purchases its inventory from a limited number of suppliers.
Removed
The total cost of the project is estimated to be $21 million. The coil segment purchases its inventory from a limited number of suppliers. Loss of any of these suppliers could have a material adverse effect on the Company’s business. Tubular Products The tubular product segment consists of the Company’s Texas Tubular Products division (“TTP”) located in Lone Star, Texas.
Added
The Company sells coil products and processing or storage services to approximately 520 customers located primarily in the midwestern, southwestern and southeastern regions of the United States.
Removed
TTP has a pipe finishing facility capable of applying threads and couplings to oil country tubular goods and performing other services that are customary in the pipe finishing process. The pipe finishing facility is currently idled. TTP’s inventory consists of raw materials and finished goods. Raw material inventory cons ists of hot-rolled steel coils that TTP will manufacture into pipe.
Added
Human Capital Employee Base At March 31, 2023, the Company had 234 full-time employees and 1 part-time employee, of which 59 were salaried and 176 were hourly wage earners. At March 31, 2022, the Company had 98 full-time employees and 1 part-time employee, of which 22 were salaried and 77 were hourly wage earners.
Removed
Finished goods inventory consists of pipe TTP has manufactured and mill reject pipe that TTP purchased from U.S. Steel Tubular Products, Inc. TTP purchases its inventory from a limited number of suppliers.
Added
All of the Company's employees are based in the United States. Talent Management and Diversity The Company's success and growth depend in large part on our ability to attract, develop, and retain a diverse population of talented employees at all levels of our organization.
Removed
For the fiscal year ended March 31, 2022, sales of coil products to O'Neal Steel accounted for approximately 11% of the Company's total sales. No individual coil products customer accounted for 10% or more of the Company's total sales for the fiscal year ended March 31, 2021.
Added
Our goal is to foster an inclusive and respectful work environment where employees are comfortable to express ideas and openly communicate throughout the organization with the goal of continuously improving our company.
Added
Our compensation programs are designed to ensure that we attract and retain the right talent and are focused on rewarding employees based on their individual performance as well as company performance that is made possible by their efforts.
Added
Our employee benefits programs are structured to provide competitive benefits that are effective in attracting and retaining talent and that address the needs of a diverse employee base. Safety and Wellness The health and safety of our workforce is fundamental to the success of our company.
Added
We have established policies and work procedures aimed at ensuring the safety of our employees. We seek to have our employees actively engaged in the safety process through initial trainings and ongoing regular meetings. We believe safety is a shared responsibility of everyone within our organization.
Added
The Company recognizes the importance of our employees' wellness and provides industry leading benefit programs and employee policies that help ensure employees' physical, mental and work-life balance needs are met.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−0 removed0 unchanged
Biggest changeProperties The principal real properties of the Company are described in the following table: Location Approximate Size Ownership Lone Star, Texas Plant — Texas Tubular Products 161,000 sq. feet Owned(1) Offices — Texas Tubular Products 12,200 sq. feet Owned(1) Land — Texas Tubular Products 122.4 acres Owned(1) Longview, Texas Offices 5,100 sq. feet Leased(2) Hickman, Arkansas Plant and Warehouse — Coil Products 64,600 sq. feet Owned(1) Offices — Coil Products 2,500 sq. feet Owned(1) Land — Coil Products 26.2 acres Owned(1) Decatur, Alabama Plant and Warehouse — Coil Products 48,000 sq. feet Owned(1) Offices — Coil Products 2,000 sq. feet Owned(1) Land — Coil Products 47.3 acres Owned(1) Sinton, Texas Plant and Warehouse 70,000 sq. feet Leasehold Improvement (3) Offices — Coil Products 3,100 sq. feet Leasehold Improvement (3) Land — Coil Products 26.5 acres Leased(3) (1) All of the Company’s owned real properties, plants and offices are held in fee and are not subject to any mortgage or deed of trust.
Biggest changeProperties The principal real properties of the Company are described in the following table: Location Approximate Size Ownership Lone Star, Texas Plant — Texas Tubular Products 161,000 sq. feet Owned(1) Offices — Texas Tubular Products 12,200 sq. feet Owned(1) Land — Texas Tubular Products 122.4 acres Owned(1) Longview, Texas Offices 5,100 sq. feet Leased(2) Hickman, Arkansas Plant and Warehouse — Coil Products 64,600 sq. feet Owned(1) Offices — Coil Products 2,500 sq. feet Owned(1) Land — Coil Products 26.2 acres Owned(1) Decatur, Alabama Plant and Warehouse — Coil Products 48,000 sq. feet Owned(1) Offices — Coil Products 2,000 sq. feet Owned(1) Land — Coil Products 47.3 acres Owned(1) Sinton, Texas Plant and Warehouse 70,000 sq. feet Leasehold Improvement (3) Offices — Coil Products 3,100 sq. feet Leasehold Improvement (3) Land — Coil Products 26.5 acres Leased (3) East Chicago, Indiana Plant and Warehouse 150,900 sq. feet Owned (1) Offices — Coil Products 3,200 sq. feet Owned (1) Land — Coil Products 5.0 acres Owned (1) Granite City, Illinois Plant and Warehouse 321,000 sq. feet Leasehold Improvement (4) Offices — Coil Products 4,400 sq. feet Leasehold Improvement (4) Land — Coil Products 31.1 acres Leased(4) (1) All of the Company’s owned real properties, plants and offices are held in fee and are not subject to any mortgage or deed of trust.
(2) The office lease is with a non-affiliated party, expires on April 30, 2024, and requires a monthly rental payment by the Company of $4,878. (3) The associated lease is a 99 year lease with Steel Dynamics Inc. that calls for an annual rental payment of $1 and has an expiration date of February 19, 2120 .
(2) The office lease is with a non-affiliated party, expires on April 30, 2024, and requires a monthly rental payment by the Company of approximately $5,000. (3) The associated lease is a 99 year lease with Steel Dynamics Inc. that calls for an annual rental payment of $1 and has an expiration date of February 19, 2120.
Added
(4) The associated lease is with America's Central Port District and was assigned to the Company during the acquisition of this facility. The lease expires on August 31, 2023 and requires a quarterly rental payment of approximately $19,000. The Company is in the process of extending this lease .

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed1 unchanged
Biggest changeThe approximate number of shareholders of record of Common Stock of the Company as of April 29, 2022 was 175. Because many of the Company’s common shares are held by brokers and other institutions on behalf of shareholders, the Company is unable to estimate the total number of individual shareholders represented by these record holders.
Biggest changeThe approximate number of shareholders of record of Common Stock of the Company as of April 28, 2023 was 170. Because many of the Company’s common shares are held by brokers and other institutions on behalf of shareholders, the Company is unable to estimate the total number of individual shareholders represented by these record holders.
Reference is hereby made to the sections of the Company’s Annual Report to Shareholders for the fiscal year ended March 31, 2022, entitled “Description of Business — Range of High and Low Sales Prices of Common Stock” and “Description of Business — Cash Dividends Declared Per Share of Common Stock”, which sections are hereby incorporated herein by reference.
Reference is hereby made to the sections of the Company’s Annual Report to Shareholders for the fiscal year ended March 31, 2023, entitled “Description of Business — Range of High and Low Sales Prices of Common Stock” and “Description of Business — Cash Dividends Declared Per Share of Common Stock”, which sections are hereby incorporated herein by reference.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Information with respect to Item 7 is hereby incorporated herein by reference from the section of the Company’s Annual Report to Shareholders for the fiscal year ended March 31, 2022, entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.
Biggest changeItem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Information with respect to Item 7 is hereby incorporated herein by reference from the section of the Company’s Annual Report to Shareholders for the fiscal year ended March 31, 2023, entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Other FRD 10-K year-over-year comparisons