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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

|     |  |                                                                                                                                                                           
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|[X]  |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2007                                      
|     |  |                                                                                                                                                                           
|OR  
|     |  |                                                                                                                                                                           
|[  ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FROM THE TRANSITION PERIOD FROM                                                TO

COMMISSION FILE NUMBER 1-7521

FRIEDMAN INDUSTRIES, INCORPORATED

(Exact name of registrant as specified in its charter)


|                                                                     |  |                                                   
|-------------------------------------------------------------------- |  | --------------------------------------------------
|TEXAS
(State or other jurisdiction of
incorporation or organization) |  | 74-1504405
(I.R.S. Employer Identification
Number)

4001 HOMESTEAD ROAD, HOUSTON, TEXAS 77028-5585
(Address of principal executive office) (zip code)
Registrants telephone number, including area code (713) 672-9433



Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.

| |           |  |  |  |   
| | --------- |  |  |  | --
| | Yes     X |  |  |  | No







| |     |  |  |  |         
| | --- |  |  |  | --------
| | Yes |  |  |  | No     X

At June 30, 2007, the number of shares outstanding of the issuers only
class of stock was 6,712,108 shares of Common Stock.



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TABLE OF CONTENTS



|                                                        |                                                                                               |                                                             |  |  |  |  |  | 
|------------------------------------------------------- | --------------------------------------------------------------------------------------------- | ----------------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION                         
|                                                        | Item 1. Financial Statements                                                                 
|                                                        |                                                                                               | CONDENSED CONSOLIDATED BALANCE SHEETS  UNAUDITED          
|                                                        |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS  UNAUDITED  
|                                                        |                                                                                               | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  UNAUDITED
|                                                        |                                                                                               | CONDENSED NOTES TO QUARTERLY REPORT  UNAUDITED            
|                                                        | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                                        | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                                                        | Item 4. Controls and Procedures                                                              
|Part II  OTHER INFORMATION                            
|                                                        | Item 1. Legal Proceedings                                                                    
|                                                        | Item 1A. Risk Factors                                                                        
|                                                        | Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                          
|                                                        | Item 3. Defaults Upon Senior Securities                                                      
|                                                        | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                                                        | Item 5. Other Information                                                                    
|                                                        | Item 6. Exhibits                                                                             
|SIGNATURES                                             
|EXHIBIT INDEX                                          
|Certification Pursuant to Section 302 - William E. Crow
|Certification Pursuant to Section 302 - Ben Harper     
|Certification Pursuant to Section 906 - William E. Crow
|Certification Pursuant to Section 906 - Ben Harper     



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##### Table of Contents






Part I  FINANCIAL
INFORMATION




Item 1. Financial Statements




FRIEDMAN INDUSTRIES,
INCORPORATEDCONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

|                                            |                                                                                                                  |                                                         |                                            |             |               |            |                |             |           |            | 
|------------------------------------------- | ---------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------------------------------------------ | ----------- | ------------- | ---------- | -------------- | ----------- | --------- | ---------- | 
|                                            |                                                                                                                  |                                                         |                                            |             | JUNE 30,
2007 |            | MARCH 31,
2007
|ASSETS                                     
|CURRENT ASSETS:                             |                                                                                                                  |                                                         |                                            |             |               |            |                |            
|                                            | Cash and cash equivalents                                                                                        |                                                         | $                                          | 470,116     |               |            | $              | 1,039,030   |          
|                                            | Accounts receivable, net of allowances for bad debts and cash
discounts of $37,276 at June 30 and March 31, 2007 |                                                         |                                            | 16,905,139  |               |            |                | 17,261,553  |          
|                                            | Inventories                                                                                                      |                                                         |                                            | 25,714,242  |               |            |                | 33,272,823  |          
|                                            | Other                                                                                                            |                                                         |                                            | 144,724     |               |            |                | 157,963     |          
|                                            |                                                                                                                  |                                                         |                                            |             |               |            |                |            
|                                            |                                                                                                                  |                                                         | TOTAL CURRENT ASSETS                       |             |               | 43,234,221 |                |             |           | 51,731,369 | 
|PROPERTY, PLANT AND EQUIPMENT:              |                                                                                                                  |                                                         |                                            |             |               |            |                |            
|                                            | Land                                                                                                             |                                                         |                                            | 1,082,331   |               |            |                | 1,082,331   |          
|                                            | Construction
in progress                                                                                         |                                                         |                                            | 5,976,327   |               |            |                | 5,004,550   |          
|                                            | Buildings
and yard improvements                                                                                  |                                                         |                                            | 3,494,294   |               |            |                | 3,494,294   |          
|                                            | Machinery and equipment                                                                                          |                                                         |                                            | 21,523,952  |               |            |                | 21,236,184  |          
|                                            | Less accumulated depreciation                                                                                    |                                                         |                                            | (17,624,121 | )             |            |                | (17,344,822 | )        
|                                            |                                                                                                                  |                                                         |                                            |             |               |            |                |            
|                                            |                                                                                                                  |                                                         | 14,452,783                                 |             |               |            | 13,472,537     |            
|OTHER ASSETS:                               |                                                                                                                  |                                                         |                                            |             |               |            |                |            
|                                            | Cash
value of officers life insurance and other assets                                                          |                                                         |                                            | 679,600     |               |            |                | 667,800     |          
|                                            |                                                                                                                  |                                                         |                                            |             |               |            |                |            
|                                            |                                                                                                                  |                                                         | TOTAL ASSETS                               |             | $             | 58,366,604 |                |             | $         | 65,871,706 | 
|                                            |                                                                                                                  |                                                         |                                            |             |               |            |                |            
|LIABILITIES AND STOCKHOLDERS EQUITY       
|CURRENT LIABILITIES:                        |                                                                                                                  |                                                         |                                            |             |               |            |                |            
|                                            | Accounts payable and accrued expenses                                                                            |                                                         | $                                          | 12,613,009  |               |            | $              | 21,875,516  |          
|                                            | Current
portion of long-term debt                                                                                |                                                         |                                            | 54,028      |               |            |                |            |          
|                                            | Dividends payable                                                                                                |                                                         |                                            | 536,969     |               |            |                | 536,969     |          
|                                            | Income taxes payable                                                                                             |                                                         |                                            | 662,344     |               |            |                | 46,742      |          
|                                            | Contribution to profit sharing plan                                                                              |                                                         |                                            | 64,500      |               |            |                | 256,000     |          
|                                            | Employee compensation and related expenses                                                                       |                                                         |                                            | 660,468     |               |            |                | 551,356     |          
|                                            |                                                                                                                  |                                                         |                                            |             |               |            |                |            
|                                            |                                                                                                                  |                                                         | TOTAL CURRENT LIABILITIES                  |             |               | 14,591,318 |                |             |           | 23,266,583 | 
|LONG-TERM
DEBT LESS CURRENT PORTION         |                                                                                                                  |                                                         | 108,056                                    |             |               |            |               |            
|DEFERRED
INCOME TAXES                       |                                                                                                                  |                                                         | 35,323                                     |             |               |            | 1,934          |            
|POSTRETIREMENT BENEFITS OTHER THAN PENSIONS |                                                                                                                  |                                                         | 506,426                                    |             |               |            | 493,191        |            
|STOCKHOLDERS EQUITY:                       |                                                                                                                  |                                                         |                                            |             |               |            |                |            
|                                            | Common stock, par value $1:                                                                                      |                                                         |                                            |             |               |            |                |             |          
|                                            |                                                                                                                  | Authorized
shares  10,000,000                          |                                            |             |               |            |                |             |           |           
|                                            |                                                                                                                  | Issued
shares  7,887,824 at June 30 and March 31, 2007 |                                            |             | 7,887,824     |            |                |             | 7,887,824 |           
|                                            | Additional paid-in capital                                                                                       |                                                         |                                            | 28,887,517  |               |            |                | 28,887,517  |          
|                                            | Treasury
stock at cost (1,175,716 shares at June 30 and March 31, 2007)                                          |                                                         |                                            | (5,475,964  | )             |            |                | (5,475,964  | )        
|                                            | Retained
earnings                                                                                                |                                                         |                                            | 11,826,104  |               |            |                | 10,810,621  |          
|                                            |                                                                                                                  |                                                         |                                            |             |               |            |                |            
|                                            |                                                                                                                  |                                                         | TOTAL STOCKHOLDERS EQUITY                 |             |               | 43,125,481 |                |             |           | 42,109,998 | 
|                                            |                                                                                                                  |                                                         |                                            |             |               |            |                |            
|                                            |                                                                                                                  |                                                         | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |             | $             | 58,366,604 |                |             | $         | 65,871,706 | 
|                                            |                                                                                                                  |                                                         |                                            |             |               |            |                |            

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FRIEDMAN INDUSTRIES, INCORPORATED




CONDENSED CONSOLIDATED STATEMENTS
OF EARNINGS  UNAUDITED

|                                             |                                           |   |                             |            |      |   |            |            |  
|-------------------------------------------- | ----------------------------------------- | - | --------------------------- | ---------- | ---- | - | ---------- | ---------- | -
|                                             |                                           |   | THREE MONTHS ENDED JUNE 30,
|                                             |                                           |   |                            
|                                             |                                           |   | 2007                        |            | 2006
|                                             |                                           |   |                             |            |     
|Net sales                                    |                                           | $ | 50,530,510                  |            |      | $ | 52,623,730 |           
|Costs and expenses                           |                                           |   |                             |            |      |   |            |           
|                                             | Costs of goods sold                       |   |                             | 46,760,892 |      |   |            | 47,747,054 |  
|                                             | General, selling and administrative costs |   |                             | 1,419,493  |      |   |            | 1,574,457  |  
|                                             | Interest
expense                          |   |                             | 47,740     |      |   |            |           |  
|
|                                             |                                           |   |                             |            |      |   |            |           
|                                             |                                           |   | 48,228,125                  |            |      |   | 49,321,511 |           
|Interest and other income                    |                                           |   | (41,770                     | )          |      |   | (57,448    | )         
|                                             |                                           |   |                             |            |      |   |            |           
|Earnings before income taxes                 |                                           |   | 2,344,155                   |            |      |   | 3,359,667  |           
|Provision (benefit) for income taxes:        |                                           |   |                             |            |      |   |            |           
|                                             | Current                                   |   |                             | 758,315    |      |   |            | 1,267,357  |  
|                                             | Deferred                                  |   |                             | 33,389     |      |   |            | (52,831    | )
|                                             |                                           |   |                             |            |      |   |            |           
|                                             |                                           |   | 791,704                     |            |      |   | 1,214,526  |           
|                                             |                                           |   |                             |            |      |   |            |           
|Net earnings                                 |                                           | $ | 1,552,451                   |            |      | $ | 2,145,141  |           
|                                             |                                           |   |                             |            |      |   |            |           
|Average number of common shares outstanding: |                                           |   |                             |            |      |   |            |           
|                                             | Basic                                     |   |                             | 6,712,108  |      |   |            | 6,666,626  |  
|                                             | Diluted                                   |   |                             | 6,779,583  |      |   |            | 6,766,927  |  
|Net earnings per share:                      |                                           |   |                             |            |      |   |            |           
|                                             | Basic                                     |   | $                           | 0.23       |      |   | $          | 0.32       |  
|                                             | Diluted                                   |   | $                           | 0.23       |      |   | $          | 0.32       |  
|Cash dividends declared per common share     |                                           | $ | 0.08                        |            |      | $ | 0.08       |           

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FRIEDMAN INDUSTRIES, INCORPORATED




CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS  UNAUDITED

|                                                 |                                                                               |                                             |                                                  |            |                             |            |            |            |            |            |  
|------------------------------------------------ | ----------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------------------ | ---------- | --------------------------- | ---------- | ---------- | ---------- | ---------- | ---------- | -
|                                                 |                                                                               |                                             |                                                  |            | THREE MONTHS ENDED JUNE 30,
|                                                 |                                                                               |                                             |                                                  |            |                            
|                                                 |                                                                               |                                             |                                                  |            | 2007                        |            | 2006      
|                                                 |                                                                               |                                             |                                                  |            |                             |            |           
|OPERATING ACTIVITIES                             |                                                                               |                                             |                                                  |            |                             |            |            |           
|                                                 | Net earnings                                                                  |                                             | $                                                | 1,552,451  |                             |            | $          | 2,145,141  |           
|                                                 | Adjustments to reconcile net income to cash provided by
operating activities: |                                             |                                                  |            |                             |            |            |            |           
|                                                 |                                                                               | Depreciation                                |                                                  |            | 279,300                     |            |            |            | 237,600    |           
|                                                 |                                                                               | Provision (benefit) for deferred taxes      |                                                  |            | 33,389                      |            |            |            | (52,831    | )         
|                                                 |                                                                               | Change
in post retirement benefits          |                                                  |            | 13,235                      |            |            |            | 11,862     |           
|                                                 | Decrease (increase) in operating assets:                                      |                                             |                                                  |            |                             |            |            |            |           
|                                                 |                                                                               | Accounts receivable                         |                                                  |            | 356,414                     |            |            |            | (1,681,810 | )         
|                                                 |                                                                               | Inventories                                 |                                                  |            | 7,558,581                   |            |            |            | 2,722,840  |           
|                                                 |                                                                               | Other current assets                        |                                                  |            | 13,239                      |            |            |            | 91,883     |           
|                                                 | Increase (decrease) in operating liabilities:                                 |                                             |                                                  |            |                             |            |            |            |           
|                                                 |                                                                               | Accounts payable and accrued expenses       |                                                  |            | (9,262,507                  | )          |            |            | (3,673,496 | )         
|                                                 |                                                                               | Contribution to profit-sharing plan payable |                                                  |            | (191,500                    | )          |            |            | (188,500   | )         
|                                                 |                                                                               | Employee compensation and related expenses  |                                                  |            | 109,112                     |            |            |            | 59,705     |           
|                                                 |                                                                               | Federal income taxes payable                |                                                  |            | 615,602                     |            |            |            | 931,692    |           
|                                                 |                                                                               | Deferred credit for LIFO replacement        |                                                  |            |                            |            |            |            | 125,275    |           
|                                                 |                                                                               |                                             |                                                  |            |                             |            |            |           
|                                                 |                                                                               |                                             | NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES |            |                             | 1,077,316  |            |            |            | 729,361    |  
|INVESTING ACTIVITIES                             |                                                                               |                                             |                                                  |            |                             |            |            |           
|                                                 | Purchase of property, plant and equipment                                     |                                             |                                                  | (1,259,545 | )                           |            |            | (1,450,766 | )         
|                                                 | Decrease
(increase) in cash surrender value of officers life
insurance       |                                             |                                                  | (11,800    | )                           |            |            | (12,394    | )         
|                                                 |                                                                               |                                             |                                                  |            |                             |            |            |           
|                                                 |                                                                               |                                             | NET CASH USED IN INVESTING ACTIVITIES            |            |                             | (1,271,345 | )          |            |            | (1,463,160 | )
|FINANCING ACTIVITIES                             |                                                                               |                                             |                                                  |            |                             |            |            |           
|                                                 | Cash dividends paid                                                           |                                             |                                                  | (536,969   | )                           |            |            | (533,330   | )         
|                                                 | Long-term
debt                                                                |                                             |                                                  | 162,084    |                             |            |            |           |           
|                                                 |                                                                               |                                             |                                                  |            |                             |            |            |           
|                                                 |                                                                               |                                             | NET CASH PROVIDED (USED) IN FINANCING
ACTIVITIES |            |                             | (374,885   | )          |            |            | (533,330   | )
|                                                 |                                                                               |                                             |                                                  |            |                             |            |            |           
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                               |                                             | (568,914                                         | )          |                             |            | (1,267,129 | )         
|                                                 | Cash and cash equivalents at beginning of period                              |                                             |                                                  | 1,039,030  |                             |            |            | 1,982,526  |           
|                                                 |                                                                               |                                             |                                                  |            |                             |            |            |           
|CASH AND CASH EQUIVALENTS AT END OF PERIOD       |                                                                               | $                                           | 470,116                                          |            |                             | $          | 715,397    |           
|                                                 |                                                                               |                                             |                                                  |            |                             |            |            |           

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FRIEDMAN INDUSTRIES, INCORPORATED




CONDENSED NOTES TO QUARTERLY REPORT  UNAUDITED

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 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 financial statements and footnotes included in the Companys annual
report on Form 10-K for the year ended March 31, 2007.

NOTE B  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 finished goods and tubular
inventory consists of both raw materials and finished goods. Inventories are
valued at the lower of cost or replacement market. Cost for prime
coil inventory is
determined under 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.

During
the quarter ended June 30, 2006, LIFO inventories were reduced but
were replaced by March 31, 2007. A deferred credit of $125,275 was recorded at June 30, 2006 to reflect replacement costs in
excess of LIFO cost.

A summary of inventory values follows:

June 30,
    

March 31,2007
    
    2007Prime
Coil Inventory
    
    $
    11,002,519
    
    
    $
    11,034,422Non-Standard
Coil Inventory
    
    
    618,979
    
    
    
    665,234Tubular Raw Material
    
    
    3,237,476
    
    
    
    5,854,255Tubular Finished Goods
    
    
    10,855,268
    
    
    
    15,718,912$
    25,714,242
    
    
    $
    33,272,823


NOTE C  LONG-TERM DEBT

The Company has a $10 million
revolving credit facility which expires April 1, 2010. There
were no amounts outstanding pursuant to the facility at June 30,
2007 and March 31, 2007.

In June 2007, the Company incurred an interest free, long-term liability of $162,084
related to the purchase of pipe loading equipment which is payable in 36 equal monthly payments.

NOTE D  STOCK BASED COMPENSATION



2007
    
    
    2006Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    ExerciseShares
    
    Price
    
    Shares
    
    PriceOutstanding at beginning of quarter
    
    
    88,836
    
    
    $
    2.33
    
    
    
    137,212
    
    
    $
    2.35Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Canceled or expired
    
    
    
    
    
    
    
    
    
    
    (2,894
    )
    
    $
    3.13Outstanding at end of quarter
    
    
    88,836
    
    
    $
    2.33
    
    
    
    134,318
    
    
    $
    2.33Exercisable at the end of the quarter
    
    
    88,836
    
    
    $
    2.33
    
    
    
    134,318
    
    
    $
    2.33Weighted average fair value of options
granted during the quarter
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    


The aggregate intrinsic value of
exercisable and outstanding options at June
30, 2007 was $650,280.

NOTE E  SEGMENT INFORMATION

|                 |                         |                             |   |                    |        |      |   |        |        | 
|---------------- | ----------------------- | --------------------------- | - | ------------------ | ------ | ---- | - | ------ | ------ | 
|                 |                         |                             |   | THREE MONTHS ENDED
|                 |                         |                             |   | JUNE 30,          
|                 |                         |                             |   |                   
|                 |                         |                             |   | 2007               |        | 2006
|                 |                         |                             |   |                    |        |     
|                 |                         |                             |   | (in thousands)    
|Net sales        |                         |                             |   |                    |        |      |   |       
|                 | Coil                    |                             | $ | 21,076             |        |      | $ | 27,885 |       
|                 | Tubular                 |                             |   | 29,455             |        |      |   | 24,739 |       
|                 |                         |                             |   |                    |        |      |   |       
|                 |                         | Total net sales             |   | $                  | 50,531 |      |   | $      | 52,624 | 
|                 |                         |                             |   |                    |        |      |   |       
|Operating profit |                         |                             |   |                    |        |      |   |       
|                 | Coil                    |                             | $ | 936                |        |      | $ | 1,552  |       
|                 | Tubular                 |                             |   | 2,257              |        |      |   | 2,786  |       
|                 |                         |                             |   |                    |        |      |   |       
|                 |                         | Total operating profit      |   |                    | 3,193  |      |   |        | 4,338  | 
|                 | Corporate expenses      |                             |   | 843                |        |      |   | 1,035  |       
|                 | Interest
expense        |                             |   | 48                 |        |      |   |       |       
|                 | Interest & other income |                             |   | (42                | )      |      |   | (57    | )     
|                 |                         |                             |   |                    |        |      |   |       
|                 |                         | Total earnings before taxes |   | $                  | 2,344  |      |   | $      | 3,360  | 
|                 |                         |                             |   |                    |        |      |   |       

|               |                  |  |   |              |        |               |   |        |        | 
|-------------- | ---------------- |  | - | ------------ | ------ | ------------- | - | ------ | ------ | 
|               |                  |  |   | June
30,2007 |        | March
31,2007
|               |                  |  |   |              |        |              
|Segment assets |                  |  |   |              |        |               |   |       
|               | Coil             |  | $ | 27,067       |        |               | $ | 27,601 |       
|               | Tubular          |  |   | 30,085       |        |               |   | 36,491 |       
|               |                  |  |   |              |        |               |   |       
|               |                  |  |   | 57,152       |        |               |   | 64,092 |       
|               | Corporate assets |  |   | 1,215        |        |               |   | 1,780  |       
|               |                  |  |   |              |        |               |   |       
|               |                  |  |   | $            | 58,367 |               |   | $      | 65,872 | 
|               |                  |  |   |              |        |               |   |       

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,
accrued profit sharing expense, corporate insurance expenses and
office supplies. Corporate assets consist primarily of cash and cash
equivalents and the cash value of officers life insurance.

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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations Results of OperationsThree
Months Ended June 30, 2007 Compared to Three Months Ended June 30,
2006 During the three months ended June 30, 2007, sales,
costs of goods
sold and gross profit decreased $2,093,220, $986,162
and $1,107,058, respectively, from the comparable amounts recorded during the three months ended June 30, 2006.  The decrease in sales was related primarily to a decrease in tons sold.  The Company recorded tons sold of approximately 79,000 tons in the 2007 quarter compared to approximately 81,000 tons in the 2006 quarter.  In addition, average per ton selling prices in the 2007 quarter declined approximately $5 per ton from the level recorded in the 2006 quarter.  While average per ton selling prices declined, the average per ton costs of goods increased approximately $7 per ton and adversely impacted gross profit.  Gross profit as a percentage of sales decreased from approximately 9.3% in the 2006 quarter to approximately 7.5% in the 2007 quarter. During the 2006 quarter, the Company experienced strong market conditions for its products and recorded one of the most profitable quarters in Company history.   Somewhat softer market conditions were experienced in the 2007 quarter which resulted in reduced margins. Coil product segment sales decreased approximately $6,809,000
during the 2007 quarter.  This decrease resulted primarily from a decrease in tons sold as coil tonnage shipped
declined from approximately 41,000 tons in the 2006 quarter to approximately 31,000 tons in the 2007 quarter.
  The average per ton selling price was approximately the same for both quarters.   Coil operating profit as a
percentage of coil segment sales decreased from approximately 5.6% in the 2006 quarter to 4.4% in the 2007 quarter.
The Company experienced strong market conditions for coil products during the 2006 quarter and softer market conditions during the 2007 quarter.  As a result, the Company recorded a decrease in volume as well as reduced margins. In the 2006 quarter, the Companys phased out the Lone Star coil facility (LSCF).  The LSCF accounted for approximately 3% of total sales and generated a small profit in the 2006 quarter.  Certain LSCF assets will be redeployed to the Companys new coil facility which will be located in Decatur, Alabama in close proximity
to the Nucor Steel Company facility located there (NSC).  The Company expects to have this new facility in operation in fiscal 2008. The Company is primarily dependent on NSC for its supply of coil inventory.  In the 2007 quarter, NSC continued to supply the Company with steel coils in amounts that were adequate for the Companys purposes.   The Company does not currently anticipate any significant change in such supply from NSC. Tubular product segment sales increased approximately $4,716,000 during the 2007 quarter.  This increase primarily resulted from an increase in tons sold which increased from approximately 40,000 tons in the 2006 quarter to approximately 47,000 tons sold in the 2007 quarter.  The average per ton selling price of pipe products was approximately the same in both quarters.  Tubular product segment operating profits as a percentage of segment sales were approximately 11.3% and 7.7% in the 2006 and 2007 quarters, respectively.  The Company experienced strong market conditions for its pipe products in the 2006 quarter and softer market conditions in the 2007 quarter.  These softer market conditions had the effect of reducing average margins. During the 2007 quarter, Lone Star Steel Company (LSS), the Companys primary supplier
of tubular products and coil material used in pipe manufacturing, continued to supply such products
in amounts that were adequate for the Companys purposes.  On June 14, 2007, United States
Steel Corporation consummated its purchase of LSS.  While the potential impact of this purchase on
the Companys business is uncertain, the Company does not currently anticipate any significant change in such supply from LSS. During the 2007 quarter, general, selling and administrative costs decreased $154,964 from the amount recorded during the 2006 quarter.  This decrease was related primarily to a decrease in bonuses associated with reduced earnings. Interest expense in the 2007 quarter increased $47,740.  For two months in the 2007 quarter, the Company borrowed funds under its line of credit facility to support cash flow. Income taxes decreased $422,822 from the comparable amount recorded during the 2006 quarter.   This decrease was primarily related to the decrease in earnings before taxes.  Effective tax rates were 36.2% and 33.8% in the 2006 and 2007 quarters, respectively.  In the 2007 quarter, the Company benefited from a reduction in state taxes due to changes in state law and from a federal deduction associated with domestic activities production. 6




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##### Table of Contents



FINANCIAL POSITION, LIQUIDITY AND
CAPITAL RESOURCES

The
Company remained in a strong, liquid position at June 30, 2007.
Current ratios were 3.0 and 2.2 at June 30, 2007 and
March 31, 2007, respectively. Working
capital was $28,642,903 at June 30, 2007 and $28,464,786 at
March 31, 2007.

During
the three months ended June 30, 2007, the Company maintained
assets and liabilities at levels it believed were commensurate with
operations. Changes in current assets and liabilities during the 2007 quarter were related primarily to the ordinary course of business of the
Company. In March 2007, the Company planned substantial pipe
production runs in March 2007 and April 2007 which required increased
inventories and accounts payable. These runs were completed as
planned and resulted in reduced inventories
and accounts payable  at June 30, 2007. The Company expects to
continue to monitor, evaluate and manage balance sheet components depending on changes in market conditions and the Companys operations.

During
the quarter ended June 30, 2007, the Company
purchased approximately $1,260,000 in fixed assets. These assets were
related primarily to equipment associated with the new coil operation to be located in
Decatur, Alabama. In connection with this planned new operation, the
Company phased out its coil processing facility in Lone Star, Texas
in the 2006 quarter and will redeploy certain of these assets to
this new coil facility. At the Decatur site, the Company is
constructing a coil processing facility to include a steel temper
mill and a steel cut-to-length line including a leveling line. The
Company expects to commence operations at the Decatur site in fiscal
2008. In addition to the funds used to purchase the real property in
Alabama, the Companys Board of Directors authorized up to an
additional $16 million to be used for capital expenditures and
operational cash requirements at this location. At June 30, 2007, the
Company had invested approximately $7,500,000 at this location and
expects to spend approximately $2,000,000 to complete this facility.

The Company has an arrangement with a bank which provides for a
revolving line of credit facility (the revolving facility).
Pursuant to the revolving facility, which expires April 1, 2010,
the Company may borrow up to $10 million at the banks
prime rate or 1.5% over LIBOR. The Company uses
the revolving facility to support cash flow and will borrow and repay
the note as working capital is required. At June 30, 2007 and
March 31, 2007, the Company had no borrowings
outstanding under the revolving facility.

The Company has
in the past and may in the future borrow funds on a term basis to build or improve facilities. The Company
currently has no plans to borrow any significant amount of  funds on a term basis.

Notwithstanding the current market conditions, the Company believes its
cash flows from operations and borrowing capability under its revolving facility
are adequate to fund its expected cash requirements for the next twenty-four
months.

CRITICAL ACCOUNTING POLICIES

The preparation of consolidated financial statements requires the Company
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses. One such accounting policy which requires
significant estimates and judgments is the valuation of LIFO inventories in the
Companys quarterly reporting. The quarterly valuation of inventory
requires estimates of the year end quantities which is inherently difficult.
Historically, these estimates have been materially correct. In
addition, the Company maintains an allowance for doubtful accounts
receivable by providing for specifically identified accounts where
collectibility is doubtful. On an ongoing basis, the Company evaluates estimates and
judgments. The Company bases its estimates on historical experience and on
various other assumptions that it believes to be reasonable under the
circumstances.

FORWARD-LOOKING STATEMENTS

From time to time, the Company may make certain statements that contain
forward-looking information (as defined in the Private Securities Litigation
Reform Act of 1996) and that involve risk and uncertainty. These forward-looking
statements may include, but are not limited to, future results of operations,
future production capacity, product quality and proposed expansion plans. Forward-looking statements may
be made by management orally or in writing including, but not limited to, this
Managements Discussion and Analysis of Financial Condition and Results of
Operations and other sections of the Companys filings with the Securities and
Exchange Commission under the Securities Act of 1933 and the Securities Exchange
Act of 1934. Actual results and trends in the future may differ materially
depending on a variety of factors including but not limited to changes in the
demand and prices of the Company products, changes in the demand for steel and
steel products in general and the Companys success in executing its internal
operating plans, including any proposed expansion plans.




Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the normal
course of business the Company is exposed to market risks primarily
from changes in the cost of steel in inventory and in interest rates.
The Company closely monitors exposure to market risks and develops
appropriate strategies to manage risk. With respect to steel
purchases, there is no recognized market to purchase derivative
financial instruments to reduce the inventory exposure risk on
changing commodity prices. The exposure to market risk associated
with interest rates relates primarily to debt. Recent debt balances
are minimal and, as a result, direct exposure to interest rates
changes is not significant.




Item 4. Controls and Procedures

The
Companys management, with the participation of the Companys principal
executive officer (CEO) and principal financial officer (CFO), evaluated the effectiveness of the
Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
promulgated under the Securities Exchange Act of 1934, as amended
(the Exchange Act)), as
of the end of the fiscal quarter ended June 30, 2007. Based on this evaluation, the CEO and CFO
have concluded that the Companys disclosure controls and procedures were effective as of the
end of the fiscal quarter ended June 30, 2007 to ensure that information that is required to be
disclosed by the Company in the reports it files or submits under the Exchange Act is (i) recorded,
processed, summarized and reported, within the time periods specified in the SECs rules and
forms and (ii) accumulated and communicated to the Companys management, including the CEO and CFO,
as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in the Companys internal control over financial reporting that
occurred during the fiscal quarter ended June 30, 2007 that have
materially affected, or are
reasonably likely to materially affect, the Companys internal control over financial reporting.

7



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##### Table of Contents



FRIEDMAN INDUSTRIES, INCORPORATED

Three Months Ended June 30, 2007





Part II  OTHER INFORMATION




Item 1. Legal Proceedings

Not applicable




Item 1A. Risk Factors

Not applicable




Item 2. Unregistered Sales of Equity Securities and Use of Proceeds



| |                   
| | ------------------
| | a). Not applicable
|
| | b). Not applicable
|
| | c). Not applicable




Item 3. Defaults Upon Senior Securities



| |                   
| | ------------------
| | a). Not applicable
|
| | b). Not applicable




Item 4. Submission of Matters to a Vote of Security
Holders

None




Item 5. Other Information

Not applicable




Item 6. Exhibits



| |         
| | --------
| | Exhibits



| |        |                                                                                                                                                          
| | ------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | 31.1  | Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, signed by William E. Crow                                                       
|
| | 31.2  | Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, signed by Ben Harper                                                            
|
| | 32.1  | Certification Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002, signed by William E. Crow
|
| | 32.2  | Certification Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002, signed by Ben Harper     

8



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.



|                     |                                              |  |                
|-------------------- | -------------------------------------------- |  | ---------------
|                     | FRIEDMAN INDUSTRIES, INCORPORATED           
|Date August 14, 2007 |                                              |  |                
|                     | By                                           |  | /s/  BEN HARPER
|                     |                                              |  |                
|                     | Ben Harper, Senior Vice President-Finance   
|                     | (Principal Financial and Accounting Officer)
|                     |                                              |  |                

9



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##### Table of Contents






EXHIBIT INDEX

|             |  |                                                                                                                                                                
|------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No.  |  | Description                                                                                                                                                    
|             |  |                                                                                                                                                                
|            
|Exhibit 31.1 |  |  Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, signed by William E. Crow                                                           
|            
|Exhibit 31.2 |  |  Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, signed by Ben Harper                                                                
|            
|Exhibit 32.1 |  |  Certification Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of The Sarbanes-Oxley Act of 2002, signed
    by William E. Crow
|            
|Exhibit 32.2 |  |  Certification Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of The Sarbanes-Oxley Act of 2002, signed
    by Ben Harper