Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Jun. 30, 2016 | Aug. 15, 2016 | |
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) | 6,799,444 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Jun. 30, 2016 | Mar. 31, 2016 |
CURRENT ASSETS: | ||
Cash | $ 817,844 | $ 2,796,762 |
Accounts receivable, net of allowances for bad debts and cash discounts of $22,276 at June 30 and March 31, 2016, respectively | 7,347,698 | 4,822,386 |
Inventories | 39,859,532 | 41,939,128 |
Other | 25,274 | 143,380 |
TOTAL CURRENT ASSETS | 48,050,348 | 49,701,656 |
PROPERTY, PLANT AND EQUIPMENT: | ||
Land | 1,082,331 | 1,082,331 |
Buildings and yard improvements | 7,111,735 | 7,111,735 |
Machinery and equipment | 31,409,599 | 30,903,321 |
Construction in progress | 8,893,209 | 9,200,799 |
Less accumulated depreciation | (32,731,946) | (32,329,947) |
Property, plant, and equipment, net | 15,764,928 | 15,968,239 |
OTHER ASSETS: | ||
Deferred income tax asset | 449,658 | 408,502 |
Federal and state income taxes recoverable | 1,068,338 | |
Cash value of officers’ life insurance and other assets | 533,750 | 812,000 |
TOTAL ASSETS | 65,867,022 | 66,890,397 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 3,181,329 | 2,476,699 |
Dividends payable | 67,994 | 67,994 |
Contribution to retirement plan | 87,000 | 43,500 |
Employee compensation and related expenses | 313,845 | 277,557 |
TOTAL CURRENT LIABILITIES | 3,650,168 | 2,865,750 |
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS | 507,021 | 785,600 |
TOTAL LIABILITIES | 4,157,189 | 3,651,350 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS’ EQUITY: | ||
Common stock, par value $1: Authorized shares — 10,000,000 Issued shares — 7,975,160 at June 30 and March 31, 2016 | 7,975,160 | 7,975,160 |
Additional paid-in capital | 29,003,674 | 29,003,674 |
Treasury stock at cost (1,175,716 shares at June 30 and March 31, 2016) | (5,475,964) | (5,475,964) |
Retained earnings | 30,206,963 | 31,736,177 |
TOTAL STOCKHOLDERS’ EQUITY | 61,709,833 | 63,239,047 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 65,867,022 | $ 66,890,397 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) | Jun. 30, 2016 | Mar. 31, 2016 |
Allowances for bad debts and cash discounts | $ 22,276 | $ 27,276 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Common stock, issued shares (in shares) | 7,975,160 | 7,975,160 |
Treasury stock, shares (in shares) | 1,175,716 | 1,175,716 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Net Sales | $ 22,393,764 | $ 23,968,569 |
Costs and expenses | ||
Costs of goods sold | 23,646,752 | 21,826,676 |
General, selling and administrative costs | 1,092,750 | 1,353,456 |
Costs and expenses, total | 24,739,502 | 23,180,132 |
EARNINGS (LOSS) FROM OPERATIONS | (2,345,738) | 788,437 |
Interest and other income | (14,750) | (17,250) |
EARNINGS (LOSS) BEFORE INCOME TAXES | (2,330,988) | 805,687 |
Income tax provision (benefit): | ||
Current | (828,613) | 244,160 |
Deferred taxes | (41,156) | 35,578 |
Income tax | (869,769) | 279,738 |
NET EARNINGS (LOSS) | $ (1,461,219) | $ 525,949 |
Average number of common shares outstanding: | ||
Basic (in shares) | 6,799,444 | 6,799,444 |
Diluted (in shares) | 6,799,444 | 6,799,444 |
Net earnings (loss) per share: | ||
Basic (in dollars per share) | $ (0.21) | $ 0.08 |
Diluted (in dollars per share) | (0.21) | 0.08 |
Cash dividends declared per common share (in dollars per share) | $ 0.01 | $ 0.01 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
OPERATING ACTIVITIES | ||
Net earnings (loss) | $ (1,461,219) | $ 525,949 |
Adjustments to reconcile net earnings (loss) to cash provided by (used in) operating activities: | ||
Depreciation | 401,999 | 427,950 |
Deferred taxes | (41,156) | 35,578 |
Change in postretirement benefits | 14,420 | 23,171 |
Federal and state income taxes recoverable | (1,068,338) | |
Decrease (increase) in operating assets: | ||
Accounts receivable | (2,525,312) | 1,244,504 |
Inventories | 2,079,596 | 680,834 |
Other current assets | 118,106 | 126,456 |
Accounts payable and accrued expenses | 704,630 | (778,408) |
Income taxes payable | 62,974 | |
Contribution to retirement plan | 43,500 | 51,000 |
Employee compensation and related expenses | 36,288 | 118,971 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (1,697,486) | 2,518,979 |
INVESTING ACTIVITIES | ||
Purchase of property, plant and equipment | (198,688) | (835,230) |
Increase in cash surrender value of officers’ life insurance | (14,750) | (17,250) |
NET CASH USED IN INVESTING ACTIVITIES | (213,438) | (852,480) |
FINANCING ACTIVITIES | ||
Cash dividends paid | (67,994) | (67,994) |
NET CASH USED IN FINANCING ACTIVITIES | (67,994) | (67,994) |
INCREASE (DECREASE) IN CASH | (1,978,918) | 1,598,505 |
Cash at beginning of period | 2,796,762 | 2,225,924 |
CASH AT END OF PERIOD | $ 817,844 | $ 3,824,429 |
Note A - Basis of Presentation
Note A - Basis of Presentation | 3 Months Ended |
Jun. 30, 2016 | |
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-Q and do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and footnotes of Friedman Industries, Incorporated (the “Company”) included in its annual report on Form 10-K for the year ended March 31, 2016. |
Note B - New Accounting Standar
Note B - New Accounting Standards | 3 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | NOTE B — NEW ACCOUNTING STANDARDS In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 establishes a new lease accounting standard that requires lessees to recognize a right of use asset and related lease liability for most leases having lease terms of more than 12 months. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. This new guidance is effective for annual and interim periods beginning after December 15, 2018, but can be early adopted. The Company is evaluating the impact that adoption of the provisions of ASU 2016-02 will have on its consolidated financial statements but does not expect a material impact. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 states that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. The update supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2016; early application is not permitted. In August 2015, the FASB issued Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date (“ASU 2015-14”). ASU 2015-14 defers the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period, and only permits entities to adopt the standard one year earlier as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is evaluating the impact that adoption of the provisions of ASU 2014-09 will have on its consolidated financial statements but does not expect a material impact. |
Note C - Inventories
Note C - Inventories | 3 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Inventory Disclosure [Text Block] | NOTE C — INVENTORIES Inventories consist of prime coil, non-standard coil and tubular materials. Prime coil inventory consists primarily of raw materials, non-standard coil inventory consists 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-out (“LIFO”) method. Cost for non-standard coil inventory is determined using the specific identification method. Cost for tubular inventory is determined using the weighted average method. LIFO inventories are valued at the lower of cost or market. All other inventories are valued at the lower of cost or net realizable value. A summary of inventory values by product group follows: June 30, March 31, Prime Coil Inventory $ 12,678,396 $ 14,168,626 Non-Standard Coil Inventory 1,504,441 992,163 Tubular Raw Material 358,570 1,566,048 Tubular Finished Goods 25,318,125 25,212,291 $ 39,859,532 $ 41,939,128 |
Note D - Debt
Note D - Debt | 3 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Debt Disclosure [Text Block] | NOTE D — DEBT On May 8, 2015, the Company entered into a credit arrangement for a $5,000,000 revolving line of credit facility (the “Credit Facility”) with JPMorgan Chase Bank N.A. The Credit Facility expired on April 30, 2016. The Company did not borrow any amounts under the Credit Facility. |
Note E - Segment Information
Note E - Segment Information | 3 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | NOTE E — SEGMENT INFORMATION (in thousands) THREE MONTHS ENDED 2016 2015 Net sales Coil $ 18,999 $ 19,348 Tubular 3,395 4,621 Total net sales $ 22,394 $ 23,969 Operating profit (loss) Coil $ (1,515 ) $ 2,155 Tubular (274 ) (637 ) Total operating profit (loss) (1,789 ) 1,518 Corporate expenses 557 729 Interest & other income (15 ) (17 ) Earnings (loss) before income taxes $ (2,331 ) $ 806 June 30, March 31, Segment assets Coil $ 26,188 $ 25,317 Tubular 36,792 37,543 62,980 62,860 Corporate assets 2,887 4,030 $ 65,867 $ 66,890 Corporate expenses reflect general and administrative expenses not directly associated with segment operations and consist primarily of corporate executive and accounting salaries, professional fees and services, bad debts, retirement plan contribution expense, corporate insurance expenses and office supplies. Corporate assets consist primarily of cash, the cash value of officers’ life insurance and federal and state income taxes recoverable. |
Note F - Supplemental Cash Flow
Note F - Supplemental Cash Flow Information | 3 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Cash Flow, Supplemental Disclosures [Text Block] | NOTE F — SUPPLEMENTAL CASH FLOW INFORMATION The Company paid income taxes of approximately $13,500 and $29,500 in the quarters ended June 30, 2016 and 2015, respectively. No interest was paid in the quarters ended June 30, 2016 and 2015, respectively. Noncash financing activities consisted of accrued dividends of $67,994 in both the quarters ended June 30, 2016 and 2015, respectively. The quarter ended June 30, 2016 included a $293,000 non-cash transaction to transfer ownership of a life insurance policy from the Company to an officer upon retirement. |
Note G - Income Taxes
Note G - Income Taxes | 3 Months Ended |
Jun. 30, 2016 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | NOTE G — INCOME TAXES The Company’s effective tax rate for the quarter ended June 30, 2016 differed from the statutory rate due primarily to state income tax benefits resulting from the loss before taxes. The Company’s effective tax rate for the quarter ended June 30, 2015 approximated the statutory rate. |
Note C - Inventories (Tables)
Note C - Inventories (Tables) | 3 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Inventory, Current [Table Text Block] | June 30, March 31, Prime Coil Inventory $ 12,678,396 $ 14,168,626 Non-Standard Coil Inventory 1,504,441 992,163 Tubular Raw Material 358,570 1,566,048 Tubular Finished Goods 25,318,125 25,212,291 $ 39,859,532 $ 41,939,128 |
Note E - Segment Information (T
Note E - Segment Information (Tables) | 3 Months Ended |
Jun. 30, 2016 | |
Notes Tables | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | THREE MONTHS ENDED 2016 2015 Net sales Coil $ 18,999 $ 19,348 Tubular 3,395 4,621 Total net sales $ 22,394 $ 23,969 Operating profit (loss) Coil $ (1,515 ) $ 2,155 Tubular (274 ) (637 ) Total operating profit (loss) (1,789 ) 1,518 Corporate expenses 557 729 Interest & other income (15 ) (17 ) Earnings (loss) before income taxes $ (2,331 ) $ 806 June 30, March 31, Segment assets Coil $ 26,188 $ 25,317 Tubular 36,792 37,543 62,980 62,860 Corporate assets 2,887 4,030 $ 65,867 $ 66,890 |
Note C - Summary of Inventory V
Note C - Summary of Inventory Values by Product Group (Details) - USD ($) | Jun. 30, 2016 | Mar. 31, 2016 |
Prime Coil Inventory [Member] | ||
Raw materials | $ 12,678,396 | $ 14,168,626 |
Non-standard Coil Inventory [Member] | ||
Raw materials | 1,504,441 | 992,163 |
Tubular Inventory [Member] | ||
Raw materials | 358,570 | 1,566,048 |
Finished goods | 25,318,125 | 25,212,291 |
Inventories | $ 39,859,532 | $ 41,939,128 |
Note D - Debt (Details Textual)
Note D - Debt (Details Textual) - Revolving Credit Facility [Member] - JPMorgan Chase Bank N.A. [Member] - USD ($) | Jun. 30, 2016 | May 08, 2015 |
Long-term Line of Credit | $ 0 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 5,000,000 |
Note E - Segment Information (D
Note E - Segment Information (Details) - USD ($) | 3 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2016 | |
Operating Segments [Member] | Coil [Member] | |||
Net sales | $ 18,999,000 | $ 19,348,000 | |
Total net sales | 18,999,000 | 19,348,000 | |
Operating profit (loss) | (1,515,000) | 2,155,000 | |
Identifiable assets | 26,188,000 | $ 25,317,000 | |
Operating Segments [Member] | Tubular [Member] | |||
Net sales | 3,395,000 | 4,621,000 | |
Total net sales | 3,395,000 | 4,621,000 | |
Operating profit (loss) | (274,000) | (637,000) | |
Identifiable assets | 36,792,000 | 37,543,000 | |
Operating Segments [Member] | |||
Operating profit (loss) | (1,789,000) | 1,518,000 | |
Identifiable assets | 62,980,000 | 62,860,000 | |
Corporate, Non-Segment [Member] | |||
Corporate expenses | 557,000 | 729,000 | |
Identifiable assets | 2,887,000 | 4,030,000 | |
Net sales | 22,393,764 | 23,968,569 | |
Total net sales | 22,393,764 | 23,968,569 | |
Operating profit (loss) | (2,345,738) | 788,437 | |
Interest & other income | (14,750) | (17,250) | |
Earnings (loss) before income taxes | (2,330,988) | $ 805,687 | |
Identifiable assets | $ 65,867,022 | $ 66,890,397 |
Note F - Supplemental Cash Fl18
Note F - Supplemental Cash Flow Information (Details Textual) - USD ($) | 3 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Mar. 31, 2016 | |
Interest Paid, Net | $ 0 | $ 0 | |
Dividends Payable, Current | 67,994 | 67,994 | $ 67,994 |
Income Taxes Paid | 13,500 | $ 29,500 | |
Other Significant Noncash Transaction, Value of Consideration Given | $ 293,000 |