##### 



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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 SEPTEMBER 30, 2003                                 
|     |  |                                                                                                                                                                           
|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 and 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

Indicate by check
mark whether the registrant is an accelerated filer (as defined in
Rule 12b-2 of the Exchange Act).

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

At September 30, 2003, the number of shares outstanding of the issuers only
class of stock was 7,573,239 shares of Common Stock.



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TABLE OF CONTENTS



|                                                   |                                                                                               |                                         |  |  |  |  |  | 
|-------------------------------------------------- | --------------------------------------------------------------------------------------------- | --------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION                    
|                                                   | Item 1. Financial Statements                                                                 
|                                                   |                                                                                               | CONSOLIDATED BALANCE SHEETS  UNAUDITED
|                                                   |                                                                                               | 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 2. Changes in 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 and Reports on Form 8-K                                                     
|SIGNATURES                                        
|EXHIBIT INDEX                                     
|Certification of Jack Friedman Pursuant to Sec.302
|Certification of Ben Harper Pursuant to Sec. 302  
|Certification of Jack Friedman Pursuant to Sec.906
|Certification of Ben Harper Pursuant to Sec. 906  




PART I  FINANCIAL
INFORMATION




Item 1. Financial Statements




FRIEDMAN INDUSTRIES, INCORPORATED
CONSOLIDATED BALANCE SHEETS  UNAUDITED

ASSETS

|                                            |                                                                 |                                                                                    |                                            |             |                    |            |                |             |           |            | 
|------------------------------------------- | --------------------------------------------------------------- | ---------------------------------------------------------------------------------- | ------------------------------------------ | ----------- | ------------------ | ---------- | -------------- | ----------- | --------- | ---------- | 
|                                            |                                                                 |                                                                                    |                                            |             | SEPTEMBER 30, 2003 |            | MARCH 31, 2003
|                                            |                                                                 |                                                                                    |                                            |             |                    |            |               
|CURRENT ASSETS:                             |                                                                 |                                                                                    |                                            |             |                    |            |                |            
|                                            | Cash and cash equivalents                                       |                                                                                    | $                                          | 739,343     |                    |            | $              | 673,127     |          
|                                            | Accounts receivable, net of allowance of $7,276 in both periods |                                                                                    |                                            | 9,275,711   |                    |            |                | 9,966,061   |          
|                                            | Inventories                                                     |                                                                                    |                                            | 22,381,358  |                    |            |                | 24,032,268  |          
|                                            | Other                                                           |                                                                                    |                                            | 422,383     |                    |            |                | 98,044      |          
|                                            |                                                                 |                                                                                    |                                            |             |                    |            |                |            
|                                            |                                                                 |                                                                                    | TOTAL CURRENT ASSETS                       |             |                    | 32,818,795 |                |             |           | 34,769,500 | 
|PROPERTY, PLANT AND EQUIPMENT:              |                                                                 |                                                                                    |                                            |             |                    |            |                |            
|                                            | Land                                                            |                                                                                    |                                            | 437,793     |                    |            |                | 437,793     |          
|                                            | Buildings and improvements                                      |                                                                                    |                                            | 4,088,149   |                    |            |                | 4,063,579   |          
|                                            | Machinery and equipment                                         |                                                                                    |                                            | 17,470,103  |                    |            |                | 17,216,823  |          
|                                            | Less accumulated depreciation                                   |                                                                                    |                                            | (15,395,027 | )                  |            |                | (14,930,027 | )        
|                                            |                                                                 |                                                                                    |                                            |             |                    |            |                |            
|                                            |                                                                 |                                                                                    | 6,601,018                                  |             |                    |            | 6,788,168      |            
|OTHER ASSETS:                               |                                                                 |                                                                                    |                                            |             |                    |            |                |            
|                                            | Cash value of officers life insurance                          |                                                                                    |                                            | 1,228,177   |                    |            |                | 1,221,258   |          
|                                            |                                                                 |                                                                                    |                                            |             |                    |            |                |            
|                                            |                                                                 |                                                                                    | TOTAL ASSETS                               |             | $                  | 40,647,990 |                |             | $         | 42,778,926 | 
|                                            |                                                                 |                                                                                    |                                            |             |                    |            |                |            
|LIABILITIES AND STOCKHOLDERS EQUITY       
|CURRENT LIABILITIES:                        |                                                                 |                                                                                    |                                            |             |                    |            |                |            
|                                            | Accounts payable and accrued expenses                           |                                                                                    | $                                          | 5,795,571   |                    |            | $              | 9,870,888   |          
|                                            | Current portion of long-term debt                               |                                                                                    |                                            | 68,496      |                    |            |                | 68,496      |          
|                                            | Dividends payable                                               |                                                                                    |                                            | 227,249     |                    |            |                | 151,460     |          
|                                            | Income taxes payable                                            |                                                                                    |                                            | 155,378     |                    |            |                | 406,620     |          
|                                            | Contribution to profit sharing plan                             |                                                                                    |                                            | 132,000     |                    |            |                | 260,000     |          
|                                            | Employee compensation and related expenses                      |                                                                                    |                                            | 271,390     |                    |            |                | 277,924     |          
|                                            |                                                                 |                                                                                    |                                            |             |                    |            |                |            
|                                            |                                                                 |                                                                                    | TOTAL CURRENT LIABILITIES                  |             |                    | 6,650,084  |                |             |           | 11,035,388 | 
|LONG-TERM DEBT, less current portion        |                                                                 |                                                                                    | 2,025,609                                  |             |                    |            | 57,329         |            
|DEFERRED INCOME TAXES                       |                                                                 |                                                                                    | 265,458                                    |             |                    |            | 283,458        |            
|POSTRETIREMENT BENEFITS OTHER THAN PENSIONS |                                                                 |                                                                                    | 156,000                                    |             |                    |            | 156,000        |            
|STOCKHOLDERS EQUITY:                       |                                                                 |                                                                                    |                                            |             |                    |            |                |            
|                                            | Common stock, par value $1:                                     |                                                                                    |                                            |             |                    |            |                |             |          
|                                            |                                                                 | Authorized
shares  10,000,000                                                     |                                            |             |                    |            |                |             |           |           
|                                            |                                                                 | Issued and outstanding
shares  7,573,239 at September 30, 2003 and March 31, 2003 |                                            |             | 7,573,239          |            |                |             | 7,573,239 |           
|                                            | Additional paid-in capital                                      |                                                                                    |                                            | 27,710,369  |                    |            |                | 27,710,369  |          
|                                            | Retained deficit                                                |                                                                                    |                                            | (3,732,769  | )                  |            |                | (4,036,857  | )        
|                                            |                                                                 |                                                                                    |                                            |             |                    |            |                |            
|                                            |                                                                 |                                                                                    | TOTAL STOCKHOLDERS EQUITY                 |             |                    | 31,550,839 |                |             |           | 31,246,751 | 
|                                            |                                                                 |                                                                                    |                                            |             |                    |            |                |            
|                                            |                                                                 |                                                                                    | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |             | $                  | 40,647,990 |                |             | $         | 42,778,926 | 
|                                            |                                                                 |                                                                                    |                                            |             |                    |            |                |            

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FRIEDMAN INDUSTRIES, INCORPORATED
CONSOLIDATED STATEMENTS OF EARNINGS  UNAUDITED

Three Months Ended
    
    Six Months EndedSeptember 30,
    
    September 30,2003
    
    2002
    
    2003
    
    2002Net sales
    
    $
    25,410,689
    
    
    $
    27,776,049
    
    
    $
    50,614,859
    
    
    $
    53,337,347Costs and expensesCosts of goods sold
    
    
    23,910,932
    
    
    
    25,969,922
    
    
    
    47,166,445
    
    
    
    50,062,702General, selling and
administrative costs
    
    
    1,045,949
    
    
    
    1,097,760
    
    
    
    2,280,044
    
    
    
    2,141,756Interest
    
    
    14,374
    
    
    
    12,434
    
    
    
    23,106
    
    
    
    42,54824,971,255
    
    
    
    27,080,116
    
    
    
    49,469,595
    
    
    
    52,247,006Interest and other income
    
    
    (1,873
    )
    
    
    (14,735
    )
    
    
    (4,021
    )
    
    
    (40,259
    )Earnings before federal
income taxes
    
    
    441,307
    
    
    
    710,668
    
    
    
    1,149,285
    
    
    
    1,130,600Provision (benefit) for federal
income taxes:Current
    
    
    159,045
    
    
    
    233,626
    
    
    
    408,758
    
    
    
    368,403Deferred
    
    
    (9,000
    )
    
    
    8,000
    
    
    
    (18,000
    )
    
    
    16,000150,045
    
    
    
    241,626
    
    
    
    390,758
    
    
    
    384,403Net earnings
    
    $
    291,262
    
    
    $
    469,042
    
    
    $
    758,527
    
    
    $
    746,197Average number of common
shares outstanding:Basic
    
    
    7,573,239
    
    
    
    7,571,239
    
    
    
    7,573,239
    
    
    
    7,571,239Diluted
    
    
    7,632,571
    
    
    
    7,571,239
    
    
    
    7,615,163
    
    
    
    7,571,239Net earnings per share:Basic
    
    $
    0.04
    
    
    $
    0.06
    
    
    $
    0.10
    
    
    $
    0.10Diluted
    
    $
    0.04
    
    
    $
    0.06
    
    
    $
    0.10
    
    
    $
    0.10Cash dividends declared
per common
share
    
    $
    0.03
    
    
    $
    0.02
    
    
    $
    0.06
    
    
    $
    0.04


2



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FRIEDMAN INDUSTRIES, INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS  UNAUDITED

Six Months EndedSeptember 30,2003
    
    2002OPERATING ACTIVITIESNet earnings
    
    $
    758,527
    
    
    $
    746,197Adjustments to reconcile net earnings to cash
provided (used) by operating activities:Depreciation
    
    
    465,000
    
    
    
    482,366Provision for deferred taxes
    
    
    (18,000
    )
    
    
    16,000Decrease (increase) in operating assets:Accounts receivable
    
    
    690,350
    
    
    
    (829,539
    )Inventories
    
    
    1,650,910
    
    
    
    1,327,149Other
    
    
    (324,339
    )
    
    
    (252,673
    )Increase (decrease) in operating liabilities:Accounts payable and accrued expenses
    
    
    (4,075,317
    )
    
    
    63,048Contribution to profit-sharing plan
    
    
    (128,000
    )
    
    
    (128,000
    )Employee compensation and related expenses
    
    
    (6,534
    )
    
    
    115,551Federal income taxes payable
    
    
    (251,242
    )
    
    
    (76,597
    )Deferred credit for LIFO replacement
    
    
    
    
    
    
    195,647NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES
    
    
    (1,238,645
    )
    
    
    1,659,149INVESTING ACTIVITIESPurchase of property, plant and equipment
    
    
    (277,850
    )
    
    
    (228,062
    )(Increase) decrease in cash value of officers life
insurance
    
    
    (6,919
    )
    
    
    (132,227
    )NET CASH PROVIDED (USED) IN INVESTING
ACTIVITIES
    
    
    (284,769
    )
    
    
    (360,289
    )FINANCING ACTIVITIESCash dividends paid
    
    
    (378,649
    )
    
    
    (227,131
    )Principal payments on notes payable
    
    
    (31,721
    )
    
    
    (2,431,353
    )Increase in notes payable
    
    
    2,000,000
    
    
    
    104,239NET CASH PROVIDED (USED) IN FINANCING
ACTIVITIES
    
    
    1,589,630
    
    
    
    (2,554,245
    )INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    66,216
    
    
    
    (1,255,385
    )Cash and cash equivalents at beginning of period
    
    
    673,127
    
    
    
    4,683,894CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    739,343
    
    
    $
    3,428,509


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FRIEDMAN INDUSTRIES, INCORPORATED




NOTES TO QUARTERLY REPORT  UNAUDITED
THREE MONTHS ENDED SEPTEMBER 30, 2003

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, 2003.

NOTE B  INVENTORIES

Inventories consist
of prime coil, non-standard coil and tubular materials.
Prime coil inventory (prime 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 inventory is
determined under the last-in, first-out (LIFO) method. Cost for tubular
inventory is determined using the weighted average method. Cost for non-standard inventory is determined using the specific identification method.

NOTE C  NEW ACCOUNTING
PRONOUNCEMENT

In January 2003, the
FASB issued FASB Interpretation No. 46 (FIN 46). FIN 46
requires that unconsolidated variable interest entities must be
consolidated by their primary beneficiaries. A primary beneficiary is
the party that absorbs a majority of the entitys expected losses or
residual benefits. FIN 46 applies immediately to variable
interest entities created after January 31, 2003. On October 9, 2003, the FASB issued staff position 46-6 and deferred the application
of FIN 46 to variable interest entities existing prior to February 1, 2003. No variable interest entities have been created
after January 31, 2003. Management is currently evaluating the
effect of variable interest entities, if any, created prior to
January 31, 2003.

NOTE D  STOCK BASED COMPENSATION

The Company follows
Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees (APB 25), for its
employee stock options. Under APB 25, because the exercise price
of the Companys employee stock options equals the market price
of the underlying stock on the date of grant, no compensation expense
is recognized. The fair value of options was estimated using a
Black-Scholes option pricing model with the following weighted
average assumptions: risk-free interest rates of 3.0%, a dividend
yield of 3.4%, volatility factor of the expected market price of the
Companys common stock of 0.42, and a weighted average expected
life of the option of four years.

The following
schedule reflects the impact on net income and earnings per common
share if the Company had applied the fair value recognition
provisions of Statements of Financial Accounting Standards
No. 123, Accounting for Stock-Based Compensation, to stock
based employee compensation for the three and six months ended September 30:

|                                                         |  |   |         |                                 |  |                               |         |      |  |      |         |  |  |   |         |  |  | 
|-------------------------------------------------------- |  | - | ------- | ------------------------------- |  | ----------------------------- | ------- | ---- |  | ---- | ------- |  |  | - | ------- |  |  | 
|                                                         |  |   |         | Three Months EndedSeptember 30, |  | Six Months EndedSeptember 30,
|                                                         |  |   |         |                                 |  |                              
|                                                         |  |   |         | 2003                            |  | 2002                          |         | 2003 |  | 2002
|                                                         |  |   |         |                                 |  |                               |         |      |  |     
|Reported
net income                                      |  | $ | 291,262 |                                 |  | $                             | 469,042 |      |  | $    | 758,527 |  |  | $ | 746,197 | 
|Less:
compensation expenses per SFAS No. 123, net of tax |  |   | .00     |                                 |  |                               | .00     |      |  |      | 31,582  |  |  |   | .00     | 
|                                                         |  |   |         |                                 |  |                               |         |      |  |      |         |  |  |   |         | 
|Pro
forma net income                                     |  | $ | 291,262 |                                 |  | $                             | 469,042 |      |  | $    | 726,945 |  |  | $ | 746,197 | 
|                                                         |  |   |         |                                 |  |                               |         |      |  |      |         |  |  |   |         | 
|BASIC
EARNINGS PER COMMON SHARE:                         |  |   |         |                                 |  |                               |         |      |  |      |         |  |  |   |         | 
|Reported
net income                                      |  |   | .04     |                                 |  |                               | .06     |      |  |      | .10     |  |  |   | .10     | 
|Less:
compensation expense per SFAS No. 123, net of tax  |  |   | .00     |                                 |  |                               | .00     |      |  |      | .00     |  |  |   | .00     | 
|                                                         |  |   |         |                                 |  |                               |         |      |  |      |         |  |  |   |         | 
|Pro
forma net income                                     |  |   | .04     |                                 |  |                               | .06     |      |  |      | .10     |  |  |   | .10     | 
|                                                         |  |   |         |                                 |  |                               |         |      |  |      |         |  |  |   |         | 
|DILUTED
EARNINGS PER COMMON SHARE:                       |  |   |         |                                 |  |                               |         |      |  |      |         |  |  |   |         | 
|Reported
net income                                      |  |   | .04     |                                 |  |                               | .06     |      |  |      | .10     |  |  |   | .10     | 
|Less:
compensation expense per SFAS No. 123, net of tax  |  |   | .00     |                                 |  |                               | .00     |      |  |      | .00     |  |  |   | .00     | 
|                                                         |  |   |         |                                 |  |                               |         |      |  |      |         |  |  |   |         | 
|Pro
forma net income                                     |  |   | .04     |                                 |  |                               | .06     |      |  |      | .10     |  |  |   | .10     | 
|                                                         |  |   |         |                                 |  |                               |         |      |  |      |         |  |  |   |         | 

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NOTE E  SEGMENT INFORMATION  UNAUDITED

Three Months Ended
    
    Six Months EndedSeptember 30,
    
    September 30,2003
    
    2002
    
    2003
    
    2002IN THOUSANDS
    
    IN THOUSANDSNet salesCoil
    
    $
    13,157
    
    
    $
    16,361
    
    
    $
    26,552
    
    
    $
    30,405Tubular
    
    
    12,254
    
    
    
    11,415
    
    
    
    24,063
    
    
    
    22,932Total net sales
    
    $
    25,411
    
    
    $
    27,776
    
    
    $
    50,615
    
    
    $
    53,337Operating profitCoil
    
    $
    299
    
    
    $
    573
    
    
    $
    1,009
    
    
    $
    940Tubular
    
    
    660
    
    
    
    721
    
    
    
    1,429
    
    
    
    1,307Total operating profit
    
    
    959
    
    
    
    1,294
    
    
    
    2,438
    
    
    
    2,247Corporate expenses
    
    
    506
    
    
    
    584
    
    
    
    1,270
    
    
    
    1,113Interest expense
    
    
    14
    
    
    
    13
    
    
    
    23
    
    
    
    43Interest & other income
    
    
    (2
    )
    
    
    (14
    )
    
    
    (4
    )
    
    
    (40
    )Total earnings before taxes
    
    $
    441
    
    
    $
    711
    
    
    $
    1,149
    
    
    $
    1,131


September 30,
    
    March 31,2003
    
    2003Segment assetsCoil
    
    $
    17,250
    
    
    $
    18,967Tubular
    
    
    21,341
    
    
    
    21,84938,591
    
    
    
    40,816Corporate assets
    
    
    2,057
    
    
    
    1,963Total assets
    
    $
    40,648
    
    
    $
    42,779


5



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##### 






Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Six Months Ended September 30, 2003 Compared To Six Months Ended September 30,
2002

During
the six months ended September 30, 2003, sales and costs of goods
sold decreased $2,722,488 and $2,896,257, respectively, while gross
profit increased $173,769 from the comparable
amounts recorded during the six months ended September 30, 2002.
During the 2003 period, a decrease of $3,853,330 in sales of coil
products was partially offset by an increase of $1,130,842 in sales
of tubular products. The resulting $2,722,488 decrease in sales was
related primarily to an 11% decrease in total tons sold that was
partially offset by a 6% increase in the average selling prices per
ton. Gross profit was affected
adversely by the decrease in sales noted above but benefited from
improved margins. Gross profit as a percentage of sales increased
from 6.1% to 6.8%, period to period.

Interest
expense decreased $19,442 from the amount recorded during the 2002
period. This decrease was related to decreased average debt and lower
interest rates during the 2003 period.

Interest
and other income decreased $36,238 from the 2002 period as a result
of a decrease in average invested cash positions and lower interest
rates paid on such positions.

Three Months Ended September 30, 2003 Compared To Three Months Ended September
30, 2002

During the quarter ended
September 30, 2003, sales, costs of good sold and gross profit
decreased $2,365,360, $2,058,990 and $306,370, respectively, from the
comparable amounts recorded during the quarter ended
September 30, 2002. These decreases were related primarily to
the Companys coil operations which experienced an approximate
17% decrease in tons sold during the 2003 quarter. This decrease in
tons sold was related primarily to the Companys Lone Star,
Texas coil operations that were adversely
impacted by a reduction in steel coils received from this
locations primary coil supplier. Continued lack
of supply of steel coils at this location could have an adverse
impact on the Companys coil operations. Gross profits as a
percentage of sales were approximately 6.5% and 5.9% during the 2002
and 2003 quarters, respectively.

Federal income taxes decreased $91,581
from the comparable amount recorded during the 2002 quarter. This
decrease was primarily related to the decrease in earnings before
taxes as the effective tax rates were the same for both quarters.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

The Company remained in a strong, liquid position at September 30, 2003.
Current ratios were 4.9 and 3.2 at September 30, 2003 and
March 31, 2003,
respectively. Working capital was $26,168,711 at September 30,
2003 and
$23,734,112 at March 31, 2003. During the six months ended
September 30, 2003, the
Company maintained assets and liabilities at levels it believed were
commensurate with operations. During the six months ended
September 30, 2003, the Company paid down accounts payable by
using the cash flow generated from reducing inventories and borrowing
funds pursuant to the revolving facility described below. The Company expects to continue to monitor and
evaluate these balance sheet components depending on changes in market
conditions and the Company's operations.

The Company has a credit 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, 2006, the Company may borrow up to $6 million at an interest rate no
greater than the bank's prime rate. At September 30, 2003, the
Company had borrowings of $2,000,000 outstanding under the revolving facility.

6



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##### 



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 Companys 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 and a general
allowance based on the aging of the receivables compared to past experience and
current trends. On an on-going basis, the Company evaluates estimates and
judgements. 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 and product quality. 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.




Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not material




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 September 30, 2003. 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 September 30, 2003 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 recorded,
processed, summarized and reported, within the time periods specified in the SEC's rules and
forms.

There were no changes in the Companys internal control over financial reporting that
occurred during the fiscal quarter ended September 30, 2003 that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over financial reporting.

7



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##### 



FRIEDMAN INDUSTRIES, INCORPORATED

Three Months Ended September 30, 2003





Part II  OTHER INFORMATION




Item 1. Legal Proceedings

Not applicable




Item 2. Changes in securities and use of
proceeds



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

At the Annual Meeting of Shareholders held on September 10, 2003, the Companys shareholders elected eight
directors to the Companys Board of Directors. The number of shares voted for and withheld with respect to the election of each director was as follows:

Name
    
    Shares Voted For
    
    Shares WithheldJack Friedman
    
    
    6,803,572
    
    
    
    53,469Harold Friedman
    
    
    6,803,572
    
    
    
    53,469William E. Crow
    
    
    6,803,572
    
    
    
    53,469Charles W. Hall
    
    
    6,803,572
    
    
    
    53,469Alan M. Rauch
    
    
    6,803,572
    
    
    
    53,469Hershel M. Rich
    
    
    6,803,572
    
    
    
    53,469Kirk K. Weaver
    
    
    6,801,625
    
    
    
    55,416Joe L. Williams
    
    
    6,801,625
    
    
    
    55,416





Item 5. Other Information

Not applicable




Item 6. Exhibits and Reports on Form 8-K



| |             
| | ------------
| | a). Exhibits



| |        |                                                                                                                                                        
| | ------ | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | 31.1  | Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, signed by Jack Friedman                                                       
|
| | 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 Jack Friedman
|
| | 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   



| |                        
| | -----------------------
| | b). Reports on Form 8-K



| |     
| | ----
| | None

8



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##### 






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 November 14, 2003 |                                              |  |                
|                       | By                                           |  | /s/  BEN HARPER
|                       |                                              |  |                
|                       | Ben Harper, Senior Vice President-Finance   
|                       | (Principal Financial and Accounting Officer)
|                       |                                              |  |                

9



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##### 






EXHIBIT INDEX

|             |  |                                                                                                                                                              
|------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No.  |  | Description                                                                                                                                                  
|             |  |                                                                                                                                                              
|            
|Exhibit 31.1 |  |  Certification Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, signed by Jack Friedman                                                           
|            
|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 Jack Friedman
|            
|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