##### Table of Contents



UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 FOR
THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009
 OR
 o
    
    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
  TEXAS
(State or other jurisdiction of 
incorporation or organization)
    
    74-1504405
(I.R.S. Employer Identification
Number)
 
 
  þ o
  o o
  Large accelerated filer oAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company þ  o þ




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TABLE OF CONTENTS  Part I  FINANCIAL INFORMATIONItem 1. Financial StatementsItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPart II  OTHER INFORMATIONItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 3. Defaults Upon Senior SecuritiesItem 4. Submission of Matters to a Vote of Security HoldersItem 5. Other InformationItem 6. ExhibitsSIGNATURESEXHIBIT INDEXEX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  
 Part I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
  CONDENSED CONSOLIDATED BALANCE SHEETS
 SEPTEMBER
          30, 2009
        
        
        MARCH
          31, 2009(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
        
        $
        21,089,469
        
        
        $
        16,880,110Accounts receivable,
            net of allowances for bad debts and cash discounts of
$22,276 and $37,276 at September 30
            and March 31, 2009, respectively
        
        
        3,634,288
        
        
        
        4,991,239Inventories
        
        
        17,581,049
        
        
        
        19,402,701Prepaid income taxes
        
        
        1,520,668
        
        
        
        1,299,796Other
        
        
        184,394
        
        
        
        99,531TOTAL CURRENT ASSETS
        
        
        44,009,868
        
        
        
        42,673,377PROPERTY, PLANT AND
            EQUIPMENT:Land
        
        
        1,082,331
        
        
        
        1,082,331Buildings and yard
            improvements
        
        
        7,001,389
        
        
        
        7,000,839Machinery and equipment
        
        
        29,383,963
        
        
        
        29,080,476Less accumulated depreciation
        
        
        (21,105,158)
        
        
        
        (20,152,959)16,362,525
        
        
        
        17,010,687OTHER ASSETS:Cash value of officers
            life insurance and other assets
        
        
        805,000
        
        
        
        776,000TOTAL ASSETS
        
        $
        61,177,393
        
        
        $
        60,460,064LIABILITIES AND
            STOCKHOLDERS EQUITYCURRENT LIABILITIES:Accounts payable and
            accrued expenses
        
        $
        3,970,924
        
        
        $
        2,662,209Current portion of
            long-term debt
        
        
        40,521
        
        
        
        54,028Deferred credit for
            LIFO inventory replacement
        
        
        111,052
        
        
        
        Dividends payable
        
        
        67,994
        
        
        
        339,972Contribution to profit
            sharing plan
        
        
        124,000
        
        
        
        40,000Employee compensation
            and related expenses
        
        
        312,004
        
        
        
        256,804TOTAL CURRENT LIABILITIES
        
        
        4,626,495
        
        
        
        3,353,013LONG-TERM DEBT LESS
            CURRENT PORTION
        
        
        
        
        
        
        13,507DEFERRED INCOME TAXES
        
        
        428,539
        
        
        
        363,864POSTRETIREMENT BENEFITS
            OTHER THAN PENSIONS
        
        
        648,980
        
        
        
        615,328STOCKHOLDERS
            EQUITY:Common stock, par value
            $1:Authorized shares 
            10,000,000Issued shares 
            7,975,160 at September 30 and March 31, 2009
        
        
        7,975,160
        
        
        
        7,975,160Additional paid-in
            capital
        
        
        29,003,674
        
        
        
        29,003,674Treasury stock at cost
            (1,175,716 shares at September 30 and March 31, 2009)
        
        
        (5,475,964
        )
        
        
        (5,475,964
        )Retained earnings
        
        
        23,970,509
        
        
        
        24,611,482TOTAL STOCKHOLDERS
            EQUITY
        
        
        55,473,379
        
        
        
        56,114,352TOTAL LIABILITIES AND
            STOCKHOLDERS EQUITY
        
        $
        61,177,393
        
        
        $
        60,460,064
 2




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FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS  UNAUDITED

|                                                      |                                           |  |   |                                 |            |   |                               |            |            |      |   |            |            |   |   |             |             | 
|----------------------------------------------------- | ----------------------------------------- |  | - | ------------------------------- | ---------- | - | ----------------------------- | ---------- | ---------- | ---- | - | ---------- | ---------- | - | - | ----------- | ----------- | 
|                                                      |                                           |  |   | Three
months endedSeptember 30, |            |   | Six
months endedSeptember 30,
|                                                      |                                           |  |   |                                 |            |  
|                                                      |                                           |  |   | 2009                            |            |   | 2008                          |            |            | 2009 |   |            | 2008       |  
|                                                      |                                           |  |   |                                 |            |   |                               |            |            |      |   |            |            |  
|Net sales                                             |                                           |  | $ | 16,086,330                      |            |   | $                             | 71,074,140 |            |      | $ | 28,332,549 |            |   | $ | 130,672,836 |            
|Costs and expenses                                    |                                           |  |   |                                 |            |   |                               |            |            |      |   |            |            |   |   |             |            
|                                                      | Costs of goods sold                       |  |   |                                 | 15,460,372 |   |                               |            | 60,927,793 |      |   |            | 27,119,011 |   |   |             | 112,461,746 | 
|                                                      | General, selling and administrative costs |  |   |                                 | 926,315    |   |                               |            | 1,866,785  |      |   |            | 1,849,202  |   |   |             | 3,847,808   | 
|                                                      | Interest
expense                          |  |   |                                 |           |   |                               |            |           |      |   |            |           |   |   |             | 23,310      | 
|                                                      |                                           |  |   |                                 |            |   |                               |            |            |      |   |            |            |  
|                                                      |                                           |  |   | 16,386,687                      |            |   |                               | 62,794,578 |            |      |   | 28,968,213 |            |   |   | 116,332,864 |            
|Interest and other income                             |                                           |  |   | (14,500                         | )          |   |                               | (62,759    | )          |      |   | (29,000    | )          |   |   | (104,177    | )          
|                                                      |                                           |  |   |                                 |            |   |                               |            |            |      |   |            |            |  
|Earnings
(loss) before income taxes                   |                                           |  |   | (285,857                        | )          |   |                               | 8,342,321  |            |      |   | (606,664   | )          |   |   | 14,444,149  |            
|Provision for (benefit from)  income taxes:           |                                           |  |   |                                 |            |   |                               |            |            |      |   |            |            |   |   |             |            
|                                                      | Current                                   |  |   |                                 | (122,110   | ) |                               |            | 2,795,989  |      |   |            | (302,344   | ) |   |             | 4,820,260   | 
|                                                      | Deferred                                  |  |   |                                 | 42,500     |   |                               |            | 101,897    |      |   |            | 64,675     |   |   |             | 203,794     | 
|                                                      |                                           |  |   |                                 |            |   |                               |            |            |      |   |            |            |  
|                                                      |                                           |  |   | (79,610                         | )          |   |                               | 2,897,886  |            |      |   | (237,669   | )          |   |   | 5,024,054   |            
|                                                      |                                           |  |   |                                 |            |   |                               |            |            |      |   |            |            |  
|Net
earnings (loss)                                   |                                           |  | $ | (206,247                        | )          |   | $                             | 5,444,435  |            |      | $ | (368,995   | )          |   | $ | 9,420,095   |            
|                                                      |                                           |  |   |                                 |            |   |                               |            |            |      |   |            |            |  
|                                                     
|Weighted average number of common shares outstanding: |                                           |  |   |                                 |            |   |                               |            |            |      |   |            |            |   |   |             |            
|                                                      | Basic                                     |  |   |                                 | 6,799,444  |   |                               |            | 6,799,444  |      |   |            | 6,799,444  |   |   |             | 6,799,444   | 
|                                                      | Diluted                                   |  |   |                                 | 6,799,444  |   |                               |            | 6,799,444  |      |   |            | 6,799,444  |   |   |             | 6,799,444   | 
|Net
earnings (loss) per share:                        |                                           |  |   |                                 |            |   |                               |            |            |      |   |            |            |   |   |             |            
|                                                      | Basic                                     |  |   | $                               | (0.03      | ) |                               | $          | 0.80       |      |   | $          | (0.05      | ) |   | $           | 1.39        | 
|                                                      | Diluted                                   |  |   | $                               | (0.03      | ) |                               | $          | 0.80       |      |   | $          | (0.05      | ) |   | $           | 1.39        | 
|Cash dividends declared per common share              |                                           |  | $ | 0.01                            |            |   | $                             | 0.12       |            |      | $ | 0.04       |            |   | $ | 0.20        |            

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FRIEDMAN INDUSTRIES, INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS  UNAUDITED

|                                           |                                                                                         |                                                |                                           |            |                               |           |           |            |            |            |  
|------------------------------------------ | --------------------------------------------------------------------------------------- | ---------------------------------------------- | ----------------------------------------- | ---------- | ----------------------------- | --------- | --------- | ---------- | ---------- | ---------- | -
|                                           |                                                                                         |                                                |                                           |            | Six
Months Ended
September 30
|                                           |                                                                                         |                                                |                                           |            | 2009                          |           | 2008     
|OPERATING ACTIVITIES                       |                                                                                         |                                                |                                           |            |                               |           |           |           
|                                           | Net earnings (loss)                                                                     |                                                | $                                         | (368,995   | )                             |           | $         | 9,420,095  |           
|                                           | Adjustments to reconcile net earnings (loss)  to cash provided by
operating activities: |                                                |                                           |            |                               |           |           |            |           
|                                           |                                                                                         | Depreciation                                   |                                           |            | 952,200                       |           |           |            | 607,200    |           
|                                           |                                                                                         | Provision for deferred taxes                   |                                           |            | 64,675                        |           |           |            | 203,794    |           
|                                           |                                                                                         | Provision for postretirement benefits          |                                           |            | 33,652                        |           |           |            | 32,789     |           
|                                           | Decrease (increase) in operating assets:                                                |                                                |                                           |            |                               |           |           |            |           
|                                           |                                                                                         | Accounts
receivable, net                       |                                           |            | 1,356,951                     |           |           |            | (5,282,581 | )         
|                                           |                                                                                         | Prepaid income taxes                           |                                           |            | (220,872                      | )         |           |            |           |           
|                                           |                                                                                         | Inventories                                    |                                           |            | 1,821,652                     |           |           |            | (5,515,605 | )         
|                                           |                                                                                         | Other                                          |                                           |            | (84,863                       | )         |           |            | (130,522   | )         
|                                           | Increase (decrease) in operating liabilities:                                           |                                                |                                           |            |                               |           |           |            |           
|                                           |                                                                                         | Accounts payable and accrued expenses          |                                           |            | 1,308,715                     |           |           |            | 11,682,799 |           
|                                           |                                                                                         | Contribution to profit-sharing plan            |                                           |            | 84,000                        |           |           |            | (47,000    | )         
|                                           |                                                                                         | Employee compensation and related expenses     |                                           |            | 55,200                        |           |           |            | 963,297    |           
|                                           |                                                                                         | Income taxes payable                           |                                           |            |                              |           |           |            | 312,822    |           
|                                           |                                                                                         | Deferred credit for LIFO inventory replacement |                                           |            | 111,052                       |           |           |            |           |           
|                                           |                                                                                         |                                                |                                           |            |                               |          
|                                           |                                                                                         |                                                | NET CASH PROVIDED BY OPERATING
ACTIVITIES |            |                               | 5,113,367 |           |            |            | 12,247,088 |  
|INVESTING ACTIVITIES                       |                                                                                         |                                                |                                           |            |                               |           |           |           
|                                           | Purchase of property, plant and equipment                                               |                                                |                                           | (304,039   | )                             |           |           | (1,686,455 | )         
|                                           | Increase in cash surrender value of officers life
insurance                            |                                                |                                           | (29,000    | )                             |           |           | (27,999    | )         
|                                           |                                                                                         |                                                |                                           |            |                               |          
|                                           |                                                                                         |                                                | NET CASH USED IN INVESTING ACTIVITIES     |            |                               | (333,039  | )         |            |            | (1,714,454 | )
|FINANCING ACTIVITIES                       |                                                                                         |                                                |                                           |            |                               |           |           |           
|                                           | Cash dividends paid                                                                     |                                                |                                           | (543,956   | )                             |           |           | (883,928   | )         
|                                           | Principal payments on notes payable                                                     |                                                |                                           | (27,013    | )                             |           |           | (6,627,014 | )         
|                                           |                                                                                         |                                                |                                           |            |                               |          
|                                           |                                                                                         |                                                | NET CASH USED IN FINANCING
ACTIVITIES     |            |                               | (570,969  | )         |            |            | (7,510,942 | )
|                                           |                                                                                         |                                                |                                           |            |                               |          
|INCREASE IN CASH AND CASH EQUIVALENTS      |                                                                                         |                                                | 4,209,359                                 |            |                               |           | 3,021,692 |           
|                                           | Cash and cash equivalents at beginning of period                                        |                                                |                                           | 16,880,110 |                               |           |           | 2,643,922  |           
|                                           |                                                                                         |                                                |                                           |            |                               |          
|CASH AND CASH EQUIVALENTS AT END OF PERIOD |                                                                                         | $                                              | 21,089,469                                |            |                               | $         | 5,665,614 |           
|                                           |                                                                                         |                                                |                                           |            |                               |          

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CONDENSED NOTES TO QUARTERLY REPORT  UNAUDITED
       September 30,
    
    
    March 31,2009
    
    
    2009Prime Coil Inventory
    
    $
    4,602,672
    
    
    $
    6,504,540Non-Standard Coil Inventory
    
    
    458,622
    
    
    
    141,097Tubular Raw Material
    
    
    2,215,107
    
    
    
    1,783,130Tubular
Finished Goods
    
    
    10,304,648
    
    
    
    10,973,934$
    17,581,049
    
    
    $
    19,402,701
      5




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Three Months Ended 
September 30,
    
    Six Months Ended September 30,2009
    
    2008
    
    2009
    
    2008(in thousands)
    
    (in thousands)Net salesCoil
    
    $
    10,406
    
    
    $
    22,880
    
    
    $
    17,417
    
    
    $
    48,887Tubular
    
    
    5,680
    
    
    
    48,194
    
    
    
    10,916
    
    
    
    81,786Total net sales
    
    $
    16,086
    
    
    $
    71,074
    
    
    $
    28,333
    
    
    $
    130,673Operating profit (loss)Coil
    
    $
    (377
    )
    
    $
    (2,332
    )
    
    $
    (334
    )
    
    $
    (1,747
    )Tubular
    
    
    488
    
    
    
    11,664
    
    
    
    577
    
    
    
    18,548Total operating profit
    
    
    111
    
    
    
    9,332
    
    
    
    243
    
    
    
    16,801Corporate expenses
    
    
    411
    
    
    
    1,053
    
    
    
    879
    
    
    
    2,438Interest
expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23Interest & other income
    
    
    (14
    )
    
    
    (63
    )
    
    
    (29
    )
    
    
    (104
    )Total
earnings (loss) before taxes
    
    $
    (286
    )
    
    $
    8,342
    
    
    $
    (607
    )
    
    $
    14,444 September 30,
    
    
    March 31,2009
    
    

2009(in thousands)Segment assetsCoil
    
    $
    19,678
    
    
    $
    22,791Tubular
    
    
    18,079
    
    
    
    18,70337,757
    
    
    
    41,494Corporate assets
    
    
    23,420
    
    
    
    18,966$
    61,177
    
    
    $
    60,460
       6




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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, 2009
Compared to Six Months Ended September 30, 2008
      7




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8




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Three
Months Ended September 30, 2009
Compared to Three Months Ended September 30, 2008
      9




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10




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FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
       CRITICAL ACCOUNTING POLICIES
  FORWARD-LOOKING STATEMENTS
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  11




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Item 4. Controls and Procedures
   12




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FRIEDMAN INDUSTRIES, INCORPORATED

Three Months Ended September 30, 2009





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

At the Annual Meeting of
Shareholders held on September 3, 2009, the Companys
shareholders elected ten 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
Withheld
|William E. Crow  |  | 4,142,909        |  | 1,975,560       | 
|Harold Friedman  |  | 4,278,645        |  | 1,839,824       | 
|Jack Friedman    |  | 4,278,080        |  | 1,840,389       | 
|Durga D. Agrawal |  | 4,220,043        |  | 1,898,426       | 
|Charles W. Hall  |  | 4,194,292        |  | 1,924,177       | 
|Alan M. Rauch    |  | 5,478,474        |  | 639,995         | 
|Max Reichenthal  |  | 4,197,633        |  | 1,920,836       | 
|Hershel M. Rich  |  | 5,482,953        |  | 635,516         | 
|Joel Spira       |  | 5,331,460        |  | 787,009         | 
|Joe L. Williams  |  | 4,199,097        |  | 1,919,372       | 




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     

13



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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           
|Dated: November 13, 2009 |                                              |  |                
|                         | By                                           |  | /s/  BEN HARPER
|                         |                                              |  |                
|                         | Ben Harper, Senior Vice President-Finance   
|                         | (Principal Financial and Accounting Officer)
|                         |                                              |  |                

14



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EXHIBIT INDEX
 Exhibit No.
    
    DescriptionExhibit 31.1
    
     Certification Pursuant to
Section 302 of the
Sarbanes-Oxley Act of 2002, signed by William E. CrowExhibit 31.2
    
     Certification Pursuant to
Section 302 of the
Sarbanes-Oxley Act of 2002, signed by Ben HarperExhibit 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. CrowExhibit 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