EXHIBIT
    13.1
  THE
    COMPANYS ANNUAL
 REPORT TO SHAREHOLDERS FOR
 THE FISCAL YEAR ENDED MARCH 31, 2011




---



##### 



FRIEDMAN
 INDUSTRIES,
 INCORPORATED
  2011
 ANNUAL REPORT




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
    FINANCIAL HIGHLIGHTS
  2011

2010Net sales


$131,709,492



$65,132,170Net earnings


$8,155,637



$652,024Net earnings per share (Basic)


$1.20



$0.10Cash dividends per share


$0.84



$0.06Stockholders equity


$58,802,514



$56,358,410Working capital


$45,094,969



$41,126,841
   TO OUR SHAREHOLDERS:
             -s- William E. CrowWilliam E. Crow
    Chief Executive Officer and President  1




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
  OFFICERS
   Chief Executive Officer and
 President
   Senior Vice President  Finance
 and Secretary/Treasurer
   Senior Vice President  Sales and Marketing
   Vice President
   Vice President of Operations  Texas Tubular
    Division
   Vice President  Decatur Division
   Vice President
   Vice President of Sales  Coil Divisions
   Assistant Secretary
                                     DIRECTORS
   Chief Executive Officer and
 President
 Longview, Texas
   President, Piping Technology & Products, Inc. 
    (pipe fabrication)
 Houston, Texas
   Fulbright & Jaworski L.L.P. (law firm)
 Houston, Texas
   President, Ener-Tex
 International, Inc.
 (oilfield equipment sales)
 Houston, Texas
   President, Texas Iron and Metal
 (steel product sales)
 Houston, Texas
   Private investor and
 business consultant
 Houston, Texas
   Private investor; formerly, Partner, Weinstein
    Spira & Company (accounting firm)
 Houston, Texas
   Partner, PozmantierWilliams Insurance
    Consultants, LLC
 (insurance and risk management consultants)
 Houston, Texas
  ANNUAL REPORT ON FORM 10-K
  Shareholders may obtain without charge a copy of the
    Companys Annual Report on
    Form 10-K
    for the year ended March 31, 2011 as filed with the
    Securities and Exchange Commission.  Written requests should be
    addressed to:  Ben Harper, Senior Vice President, Friedman
    Industries, Incorporated, P.O. Box 21147, Houston,
    Texas 77226.
 2




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
  DESCRIPTION OF BUSINESS
                   Fiscal 2011

Fiscal 2010High

Low

High

LowFirst Quarter

$
6
.39


$5
.13

$
6
.95

$
4
.47Second Quarter


6
.90


5
.24


6
.67


5
.00Third Quarter


8
.94


6
.50


6
.22


4
.21Fourth Quarter


10
.45


7
.82


6
.10


5
.43       Fiscal 2011

Fiscal 2010First Quarter


$
.04

$
.03Second Quarter



.08


.01Third Quarter



.11


.01Special



.50


Fourth Quarter



.11


.01        3




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
  CONSOLIDATED BALANCE SHEETS
  ASSETS
  March 312011


2010CURRENT ASSETS:Cash and cash equivalents

$
7,210,290


$
19,812,881Accounts receivable, net of allowances for bad debts and cash
    discounts of $37,276 at March 31, 2011 and 2010,
    respectively


12,594,954



8,686,151Inventories


34,679,270



20,122,296Other


77,830



81,791TOTAL CURRENT ASSETS


54,562,344



48,703,119PROPERTY, PLANT AND EQUIPMENT:Land


1,082,331



1,082,331Buildings and yard improvements


7,014,180



7,000,839Machinery and equipment


29,876,767



29,374,766Less accumulated depreciation


(23,841,491
)


(21,963,333
)14,131,787



15,494,603OTHER ASSETS:Cash value of officers life insurance and other assets


890,000



834,000TOTAL ASSETS

$
69,584,131


$
65,031,722   LIABILITIES AND
    STOCKHOLDERS EQUITY
  March 312011


2010CURRENT LIABILITIES:Accounts payable and accrued expenses

$
7,338,762


$
6,912,741Dividends payable


747,939



67,994Current portion of long-term debt






13,507Income taxes payable


350,961



94,563Contribution to profit sharing plan


50,000



44,000Employee compensation and related expenses


979,713



443,473TOTAL CURRENT LIABILITIES


9,467,375



7,576,278DEFERRED INCOME TAXES


536,699



414,403POSTRETIREMENT BENEFITS OTHER THAN PENSIONS


777,543



682,631COMMITMENTS AND CONTINGENCIES






STOCKHOLDERS EQUITY:Common stock, par value $1:Authorized shares  10,000,000Issued shares  7,975,160 at March 31, 2011 and
    2010, respectively


7,975,160



7,975,160Additional paid-in capital


29,003,674



29,003,674Treasury stock at cost (1,175,716 shares at March 31,
    2011 and 2010, respectively)


(5,475,964
)


(5,475,964
)Retained earnings


27,299,644



24,855,540TOTAL STOCKHOLDERS EQUITY


58,802,514



56,358,410TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

$
69,584,131


$
65,031,722    4




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
  CONSOLIDATED STATEMENTS OF EARNINGS
  Year Ended March 312011


2010Net sales

$
131,709,492


$
65,132,170Costs and expenses:Cost of products sold


114,401,307



60,206,969Selling, general and administrative


5,251,610



3,840,619119,652,917



64,047,58812,056,575



1,084,582Interest and other income


57,138



86,490EARNINGS BEFORE INCOME TAXES


12,113,713



1,171,072Income taxes:Current


3,835,780



468,509Deferred


122,296



50,5393,958,076



519,048NET EARNINGS

$
8,155,637


$
652,024Weighted average number of common shares outstanding:Basic


6,799,444



6,799,444Diluted


6,799,444



6,799,444Net earnings per share:Basic

$
1.20


$
0.10Diluted

$
1.20


$
0.10   CONSOLIDATED STATEMENTS OF
 STOCKHOLDERS
    EQUITY
 AdditionalCommon


Paid-In


Treasury


RetainedStock


Capital


Stock


EarningsBALANCE AT MARCH 31, 2009

$
7,975,160


$
29,003,674


$
(5,475,964
)

$
24,611,482Net earnings














652,024Cash dividends ($0.06)














(407,966
)BALANCE AT MARCH 31, 2010


7,975,160



29,003,674



(5,475,964
)


24,855,540Net earnings














8,155,637Cash dividends ($0.84)














(5,711,533
)BALANCE AT MARCH 31, 2011

$
7,975,160


$
29,003,674


$
(5,475,964
)

$
27,299,644    5




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended March 312011


2010OPERATING ACTIVITIESNet earnings

$
8,155,637


$
652,024Adjustments to reconcile net earnings to net cash provided by
    operating activities:Depreciation


1,878,158



1,890,375Deferred taxes


122,296



50,539Change in post-retirement benefits other than pensions


94,912



67,303Changes in operating assets and liabilities:Accounts receivable, net


(3,908,803
)


(3,694,912
)Inventories


(14,556,974
)


(719,595
)Prepaid income taxes






1,299,796Other


3,961



17,740Accounts payable and accrued expenses


426,021



4,250,532Contribution to profit sharing plan


6,000



4,000Employee compensation and related expenses


536,240



186,669Income taxes payable


256,398



94,563Net cash provided (used) by operating activities


(6,986,154
)


4,099,034INVESTING ACTIVITIESPurchase of property, plant and equipment


(515,342
)


(374,291
)Increase in cash value of officers life insurance


(56,000
)


(58,000
)Net cash used in investing activities


(571,342
)


(432,291
)FINANCING ACTIVITIESCash dividends paid


(5,031,588
)


(679,944
)Principal payments on long-term debt


(13,507
)


(54,028
)Net cash used in financing activities


(5,045,095
)


(733,972
)Increase (decrease) in cash and cash equivalents


(12,602,591
)


2,932,771Cash and cash equivalents at beginning of year


19,812,881



16,880,110Cash and cash equivalents at end of year

$
7,210,290


$
19,812,881    6




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
  NOTES TO CONSOLIDATED
 FINANCIAL STATEMENTS
  1.  SUMMARY
    OF SIGNIFICANT ACCOUNTING POLICIES
           last-in, first-out
    March 312011


2010Prime coil inventory

$
7,239,465


$
4,643,951Non-standard coil inventory


1,722,224



504,351Tubular raw material


6,086,291



3,698,531Tubular finished goods


19,631,290



11,275,463$
34,679,270



20,122,296  7




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
  1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    (Continued)
    Buildings


20 yearsMachinery and equipment


10 yearsYard improvements


5 to 10 yearsLoaders and other rolling stock


5 to 10 years               short-term
     8




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
  1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    (Continued)
            2.  STOCK
    OPTIONS AND CAPITAL STOCK
       3.  LONG-TERM
    DEBT AND COMMITMENTS AND CONTINGENCIES
        9




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
  3.  LONG-TERM DEBT AND COMMITMENTS AND
    CONTINGENCIES (Continued)
    2012

$
37,0842013


30,0842014


2,5072015


2016


Total

$
69,675     4.  EARNINGS
    PER SHARE
     Year Ended March 312011


2010BasicNet earnings

$
8,155,637


$
652,024Weighted average common shares


6,799,444



6,799,444DilutiveNet earnings

$
8,155,637


$
652,024Weighted average common shares and common share equivalents


6,799,444



6,799,444    5.  INCOME
    TAXES
     Year Ended March 312011


2010FederalCurrent

$
3,531,397


$
536,886Deferred


122,296



50,5393,653,693



587,425StateCurrent


304,383



(68,377
)304,383



(68,377
)Total

$
3,958,076


$
519,048  10




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
  5.  INCOME TAXES (Continued)
    Year Ended March 312011


2010Income Tax Expense at
    U.S. federal statutory rate


34.0
%


34.0
%Benefit of tax deduction allowed to manufacturing companies


(3.0
)


(2.0)State and local income tax rates net of federal income tax
    benefit


1.7



1.3True-up of
    income taxes on prior year filings






11.0Provision for income taxes


32.7
%


44.3
%   true-up
      March 312011


2010Deferred tax liabilities:Depreciation

$
(1,812,570
)

$
(1,654,379
)Total deferred tax liabilities


(1,812,570
)


(1,654,379
)Deferred tax assets:Inventory capitalization


169,092



172,438LIFO Inventory


783,645



783,611Postretirement benefits other than pensions


264,365



232,095Other


58,769



51,832Total deferred tax assets


1,275,871



1,239,976Net deferred tax liability

$
(536,699
)

$
(414,403
)    6.  PROFIT
    SHARING PLAN
      11




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
  6.  PROFIT SHARING PLAN (Continued)
    7.  INDUSTRY
    SEGMENT DATA
     Year Ended March 312011


2010NET SALES:Coil

$
62,030,202


$
36,359,462Tubular


69,679,290



28,772,708TOTAL NET SALES

$
131,709,492


$
65,132,170OPERATING PROFIT (LOSS):Coil

$
1,368,244


$
(841,082
)Tubular


13,391,903



3,728,236TOTAL OPERATING PROFIT


14,760,147



2,887,154General corporate expenses


(2,703,572
)


(1,802,572
)Interest and other income


57,138



86,490TOTAL EARNINGS BEFORE INCOME TAXES

$
12,113,713


$
1,171,072IDENTIFIABLE ASSETS:Coil

$
25,150,156


$
20,376,579Tubular


36,333,623



24,005,95361,483,779



44,382,532General corporate assets


8,100,352



20,649,190TOTAL ASSETS

$
69,584,131


$
65,031,722DEPRECIATION:Coil

$
1,210,800


$
1,239,764Tubular


665,110



643,135Corporate and other


2,248



7,476$
1,878,158


$
1,890,375CAPITAL EXPENDITURES:Coil

$
24,591


$
188,002Tubular


490,751



186,289$
515,342


$
374,291    12




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
  7.  INDUSTRY SEGMENT DATA (Continued)
    8.  SUMMARY
    OF QUARTERLY RESULTS OF OPERATIONS (Unaudited)
     Quarter EndedJune 30,


September 30,


December 31,


March 31,2010


2010


2010


2011Net sales

$
29,222,232


$
29,353,262


$
31,135,887


$
41,998,111Gross profit


3,437,938



3,887,713



3,770,753



6,211,781Net earnings (loss)


1,435,137



1,784,431



1,733,494



3,202,575Basic(1)


.21



.26



.25



.47Diluted(1)


.21



.26



.25



.47    Quarter EndedJune 30,


September 30,


December 31,


March 31,2009


2009


2009


2010Net sales

$
12,246,219


$
16,086,330


$
13,470,721


$
23,328,900Gross profit


587,580



625,958



866,022



2,845,641Net earnings (loss)


(162,748
)


(206,247
)


(41,239
)


1,062,258Basic


(.02
)


(.03
)


(.01
)


.16Diluted


(.02
)


(.03
)


(.01
)


.16     (1)
    
    The sum of the quarterly earnings per share does not equal the
    annual amount reported as per share amounts were computed
    independently for each quarter.   13




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
  REPORT OF INDEPENDENT
    REGISTERED PUBLIC ACCOUNTING FIRM
  
           Hein
    & Associates LLP
     14




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FRIEDMAN INDUSTRIES, INCORPORATED
  MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
  13a-15(f)
       15




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FRIEDMAN INDUSTRIES, INCORPORATED
  MANAGEMENTS DISCUSSION
    AND ANALYSIS
 OF FINANCIAL CONDITION AND
    RESULTS OF
 OPERATIONS
  RESULTS OF OPERATIONS
  Year ended
    March 31, 2011 compared to year ended March 31,
    2010
             16




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FRIEDMAN INDUSTRIES, INCORPORATED
          true-up
  FINANCIAL
    CONDITION, LIQUIDITY AND SOURCES OF CAPITAL
          17




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##### 



FRIEDMAN INDUSTRIES, INCORPORATED
      OFF-BALANCE SHEET
    ARRANGEMENTS
    INFLATION
    CRITICAL
    ACCOUNTING POLICIES
    FORWARD-LOOKING
    STATEMENTS
   18




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FRIEDMAN INDUSTRIES, INCORPORATED
  TEN YEAR FINANCIAL
    SUMMARY
  Year Ended March 312011


2010


2009


2008


2007


2006


2005


2004


2003


2002Net sales

$
131,709,492


$
65,132,170


$
208,779,750


$
178,785,110


$
199,726,619


$
181,900,351


$
188,022,253


$
116,158,567


$
106,082,738


$
97,817,956Net earnings

$
8,155,637


$
652,024


$
13,673,406


$
4,465,127


$
7,018,318
(1)

$
6,453,888


$
6,246,043


$
2,535,991


$
1,432,017


$
940,039Current assets

$
54,562,344


$
48,703,119


$
42,673,377


$
49,422,594


$
51,731,369


$
47,551,003


$
43,498,759


$
37,829,701


$
34,769,500


$
35,806,988Current liabilities

$
9,467,375


$
7,576,278


$
3,353,013


$
14,784,366


$
23,266,583


$
18,383,193


$
14,959,516


$
12,639,763


$
11,035,388


$
10,797,106Working capital

$
45,094,969


$
41,126,841


$
39,320,364


$
34,638,228


$
28,464,786


$
29,167,810


$
28,539,243


$
25,189,938


$
23,734,112


$
25,009,882Total assets

$
69,584,131


$
65,031,722


$
60,460,064


$
66,958,392


$
65,871,706


$
55,930,889


$
50,796,342


$
46,028,123


$
42,778,926


$
43,986,455Stockholders equity

$
58,802,514


$
56,358,410


$
56,114,352


$
44,956,741


$
42,109,998


$
37,097,335


$
35,354,550


$
33,031,604


$
31,246,751


$
30,491,351Net earnings as a percent ofNet sales


6.2



1.0



6.5



2.5



3.5



3.5



3.3



2.2



1.3



1.0Stockholders equity


13.9



1.2



24.4



9.9



16.7



17.4



17.7



7.7



4.6



3.1Weighted average number of common shares outstanding: Basic


6,799,444



6,799,444



6,799,444



6,733,942



6,685,577



7,072,637



7,418,410



7,574,070



7,572,239



7,571,239Per shareNet earnings per share:Basic

$
1.20


$
0.10


$
2,01


$
0.66


$
1.05
(1)

$
0.91


$
0.84


$
0.33


$
0.19


$
0.12Stockholders equity

$
8.65


$
8.29


$
8.25


$
6.68


$
6.30


$
5.25


$
4.77


$
4.36


$
4.13


$
4.03Cash dividends per common 
    share

$
0.84


$
0.06


$
0.37


$
0.27


$
0.34


$
0.32


$
0.29


$
0.10


$
0.09


$
0.11     (1)
    Includes an after tax gain of
    $866,474 ($.13 per share basic) related to a gain on the sale of
    assets.