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Friedman Industries Inc Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 13, 2012 03:06PM

Friedman Industries Inc (FRD) filed Quarterly Report for the period ended 2012-09-30. Friedman Industries has a market cap of $71.9 million; its shares were traded at around $10.71 with a P/E ratio of 8.6 and P/S ratio of 0.4. The dividend yield of Friedman Industries stocks is 4.9%. Friedman Industries had an annual average earning growth of 15.4% over the past 10 years.



Highlight of Business Operations:

During the six months ended September 30, 2012, sales, costs of goods sold and gross profit decreased $8,205,898, $7,587,225 and $618,673, respectively, from the comparable amounts recorded during the six months ended September 30, 2011. The decrease in sales was related primarily to a decline in the average per ton selling price from approximately $847 per ton in the 2011 period to $756 per ton in the 2012 period. In both the 2012 and 2011 periods, the Company sold approximately 96,000 tons. The decrease in costs of goods sold was related primarily to a decline in the average per ton cost from approximately $752 per ton in the 2011 period to $668 in the 2012 period. The decrease in gross profit was related primarily to the decline in sales. Overall, gross profit as a percentage of sales increased from approximately 11.2% in the 2011 period to approximately 11.6% in the 2012 period.

Tubular product segment sales decreased approximately $10,618,000 during the 2012 period. This decrease resulted from both a decline in tons sold and a decrease in the average per ton selling price. Tons sold declined from approximately 59,000 tons in the 2011 period to approximately 52,000 tons sold in the 2012 period. The average per ton selling price of tubular products decreased from approximately $844 per ton in the 2011 period to $758 per ton in the 2012 period. The tubular product segment recorded a decrease in operational income of approximately $1,361,000 during the 2012 period. This decrease was related primarily to the decrease in sales, which management believes is related to softer demand for tubular products associated with energy production. Tubular product segment operating profits as a percentage of segment sales were approximately 16.4% and 15.6% in the 2012 and 2011 periods, respectively.

During the three months ended September 30, 2012, sales, costs of goods sold and gross profit decreased $8,705,212, $7,595,607 and $1,109,605, respectively, from the comparable amounts recorded during the three months ended September 30, 2011. The decrease in sales was related to both a decline in tons sold and a decrease in the average per ton selling price. Tons sold declined from approximately 50,000 tons in the 2011 quarter to approximately 46,000 tons in the 2012 quarter. The average per ton selling price decreased from approximately $841 per ton in the 2011 quarter to $720 per ton in the 2012 quarter. The decrease in costs of goods sold was related to the decrease in tons sold and a decline in the average per ton cost, which decreased from approximately $743 per ton in the 2011 quarter to $638 in the 2012 quarter. The decline in gross profit was related primarily to the sales decrease. Gross profit as a percentage of sales declined from approximately 11.6% in the 2011 quarter to approximately 11.3% in the 2012 quarter.

Coil product segment sales increased approximately $1,012,000 during the 2012 quarter. This increase was related primarily to an increase in tons sold offset by a decrease in the average selling price per ton. Coil tons shipped increased from approximately 19,000 tons in the 2011 quarter to 23,000 tons in the 2012 quarter. The average selling price per ton decreased from approximately $812 in the 2011 quarter to $735 in the 2012 quarter. Coil segment operations reflected an operational income of approximately $274,000 and $329,000 in the 2012 and 2011 quarters, respectively. Coil products are related primarily to durable goods. Management believes that operations of this segment have been adversely impacted in both the 2012 and 2011 quarters by soft demand. In addition, management believes that market conditions for coil products will not improve until the U.S. economy improves and generates significant improvement in the demand for durable goods.

Tubular product segment sales decreased approximately $9,718,000 during the 2012 quarter. This decrease resulted from both a decline in tons sold and a decrease in the average per ton selling price. Tons sold decreased from approximately 31,000 tons in the 2011 quarter to 24,000 tons in the 2012 quarter. The average per ton selling price of tubular products decreased from approximately $859 per ton in the 2011 quarter to $705 in the 2012 quarter. The tubular product segment recorded a decrease in operational income of approximately $1,131,000 during the 2012 quarter. This decrease was related primarily to the decrease in sales, which management believes is related to softer demand for tubular products associated with energy production. Tubular product segment operating profits as a percentage of segment sales were approximately 16.5% and 14.7% in the 2012 and 2011 quarters, respectively.

Read the The complete Report



Stocks Discussed: FRD,
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