LONGVIEW, Texas, Aug. 14, 2018 (GLOBE NEWSWIRE) -- Friedman Industries, Incorporated, headquartered in Longview, Texas, is a manufacturer and processor of steel products with operating plants in Hickman, Arkansas; Decatur, Alabama and Lone Star, Texas. The Company has two reportable segments; coil products and tubular products. The coil product segment consists of the operations in Hickman and Decatur where the Company processes hot-rolled steel coils using temper mills and cut-to-length lines. The tubular product segment consists of the operations in Lone Star where the Company manufactures electric resistance welded pipe, provides pipe finishing services and distributes pipe.
The Company announced today its results of operations for the first quarter. For the quarter ended June 30, 2018, the Company recorded net earnings of $3,599,893 ($0.51 diluted earnings per share) on sales of $48,193,318 compared to net earnings of $364,330, as adjusted for the change in accounting principle discussed below, ($0.05 diluted earnings per share) on net sales of $23,083,269 for the quarter ended June 30, 2017. Effective April 1, 2018, the Company changed its method for valuing prime coil inventory of the coil segment from the last-in, first-out (“LIFO”) method to the average cost method. The effects of the change in accounting principle from LIFO to average cost have been retrospectively applied to June 30, 2017 results. The Company believes the average cost method is preferable as it more closely resembles the physical flow of our inventory, it better matches revenues with expenses and it aligns with how we internally manage our business. As a result of the retrospective application of the change in accounting principle, certain financial statement line items in the Company’s consolidated balance sheet as of March 31, 2018 and its consolidated statement of operations and consolidated statement of cash flows for the quarter ended June 30, 2017 were adjusted as disclosed in Note B – Change In Accounting Principle of our quarterly report on Form 10-Q filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 14, 2018.
| SUMMARY OF OPERATIONS (unaudited) | ||||||||
| Three Months Ended June 30, | ||||||||
| 2018 | 2017 As Adjusted | |||||||
| Net Sales | $ | 48,193,318 | $ | 23,083,269 | ||||
| Total costs and | ||||||||
| other income | 43,430,805 | 22,573,978 | ||||||
| Earnings before | ||||||||
| income taxes | 4,762,513 | 509,291 | ||||||
| Income taxes | 1,162,620 | 144,961 | ||||||
| Net earnings | $ | 3,599,893 | $ | 364,330 | ||||
| Weighted average shares outstanding: | ||||||||
| Basic | 7,009,444 | 7,009,444 | ||||||
| Diluted | 7,009,444 | 7,009,444 | ||||||
| Net earnings per share: | ||||||||
| Basic | $ | 0.51 | $ | 0.05 | ||||
| Diluted | $ | 0.51 | $ | 0.05 | ||||
The improved results for the 2018 quarter were driven by an increased volume of shipments for both the coil and tubular segments. For the 2018 quarter, coil segment sales volume increased approximately 9,500 tons, or 36%, and tubular segment sales volume increased approximately 17,500 tons, or 250%, from the comparable 2017 quarter volumes. The Company’s results for the 2018 quarter were positively impacted by the effects of the U.S. government’s Section 232 steel trade actions, sustained improvement of the U.S. energy industry and the current steel industry and U.S. economic conditions in general. Management expects sales volumes in the second quarter to be similar to the first quarter volumes but expects both coil segment and tubular segment margins to contract somewhat.
For further information, please refer to the Company's Form 10-Q as filed with the SEC on August 14, 2018 or contact Alex LaRue, Chief Financial Officer – Secretary and Treasurer, at (903)758-3431.
