Friedman Industries Reports Decline in Q3 Fiscal 2025 Performance

Friedman Industries, Incorporated reported a decline in financial performance for the third quarter of fiscal 2025, with net sales of $94.1 million, down from $116.0 million in the same period last year. The company experienced a net loss of $1.2 million, compared to a profit of $1.2 million in the prior year. For the nine months ending December 31, 2024, total sales were $315.4 million, a decrease from $384.0 million in the previous year, while net earnings fell to $740,000 from $12.4 million. The decline in revenue was attributed to reduced sales volume and lower average selling prices, particularly in the flat-roll segment, which saw a significant drop in operating profit.

The company’s flat-roll segment reported sales of $86.1 million for the quarter, down from $106.4 million a year earlier, with operating profits decreasing from $8.7 million to $1.3 million. The tubular segment also faced challenges, with sales falling to $7.9 million from $9.5 million, resulting in an operating loss of $234,000 compared to a loss of $116,000 in the previous year. The overall decrease in sales volume was linked to challenging market conditions, including customer hesitancy due to political uncertainty and extended downtime for equipment upgrades.

Friedman Industries maintained a strong balance sheet, with total assets of $210.3 million as of December 31, 2024, down from $230.0 million at the end of the previous fiscal year. Current assets decreased to $149.3 million, primarily due to a reduction in accounts receivable and cash. The company’s liabilities also decreased significantly, from $102.5 million to $82.9 million, reflecting a reduction in accounts payable and accrued expenses. The current ratio improved to 3.5, indicating a solid liquidity position.

The company continues to manage its operations with a focus on cost control, as evidenced by a reduction in selling, general, and administrative expenses, which fell by approximately $2.6 million compared to the previous year. Additionally, Friedman Industries has a $150 million asset-based lending facility, of which approximately $32.5 million was drawn as of December 31, 2024. The company expects to leverage this facility to support its operations and manage cash flow effectively.

Looking ahead, Friedman Industries anticipates an increase in sales volume for the fourth quarter of fiscal 2025, driven by stronger order activity. The company expects to see improvements in sales margins as hot-rolled coil prices stabilize and potentially increase. Management remains cautiously optimistic about the future, emphasizing the importance of monitoring market conditions and customer demand as they navigate the current economic landscape.