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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, 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 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 June 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          
|                                             |                                                                                               | CONSOLIDATED STATEMENTS OF EARNINGS  UNAUDITED  
|                                             |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS  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                               
|Fifth Amend.to Amended Letter Agreement     
|Revolving Promissory Note                   
|Certification of CEO Pursuant to Section 302
|Certification of CFO Pursuant to Section 302
|Certification of CEO Pursuant to Section 906
|Certification of CFO Pursuant to Section 906




PART I  FINANCIAL
INFORMATION




Item 1. Financial Statements




FRIEDMAN INDUSTRIES, INCORPORATED
CONSOLIDATED BALANCE SHEETS  UNAUDITED

ASSETS

|                                            |                                                                 |                                                                               |                                            |             |               |            |                |             |           |            | 
|------------------------------------------- | --------------------------------------------------------------- | ----------------------------------------------------------------------------- | ------------------------------------------ | ----------- | ------------- | ---------- | -------------- | ----------- | --------- | ---------- | 
|                                            |                                                                 |                                                                               |                                            |             | JUNE 30, 2003 |            | MARCH 31, 2003
|                                            |                                                                 |                                                                               |                                            |             |               |            |               
|CURRENT ASSETS:                             |                                                                 |                                                                               |                                            |             |               |            |                |            
|                                            | Cash and cash equivalents                                       |                                                                               | $                                          | 458,518     |               |            | $              | 673,127     |          
|                                            | Accounts receivable, net of allowance of $7,276 in both periods |                                                                               |                                            | 9,792,478   |               |            |                | 9,966,061   |          
|                                            | Inventories                                                     |                                                                               |                                            | 22,410,128  |               |            |                | 24,032,268  |          
|                                            | Other                                                           |                                                                               |                                            | 106,023     |               |            |                | 98,044      |          
|                                            |                                                                 |                                                                               |                                            |             |               |            |                |            
|                                            |                                                                 |                                                                               | TOTAL CURRENT ASSETS                       |             |               | 32,767,147 |                |             |           | 34,769,500 | 
|PROPERTY, PLANT AND EQUIPMENT:              |                                                                 |                                                                               |                                            |             |               |            |                |            
|                                            | Land                                                            |                                                                               |                                            | 437,793     |               |            |                | 437,793     |          
|                                            | Buildings and improvements                                      |                                                                               |                                            | 4,063,579   |               |            |                | 4,063,579   |          
|                                            | Machinery and equipment                                         |                                                                               |                                            | 17,289,065  |               |            |                | 17,216,823  |          
|                                            | Less accumulated depreciation                                   |                                                                               |                                            | (15,162,527 | )             |            |                | (14,930,027 | )        
|                                            |                                                                 |                                                                               |                                            |             |               |            |                |            
|                                            |                                                                 |                                                                               | 6,627,910                                  |             |               |            | 6,788,168      |            
|OTHER ASSETS:                               |                                                                 |                                                                               |                                            |             |               |            |                |            
|                                            | Cash value of officers life insurance                          |                                                                               |                                            | 1,228,177   |               |            |                | 1,221,258   |          
|                                            |                                                                 |                                                                               |                                            |             |               |            |                |            
|                                            |                                                                 |                                                                               | TOTAL ASSETS                               |             | $             | 40,623,234 |                |             | $         | 42,778,926 | 
|                                            |                                                                 |                                                                               |                                            |             |               |            |                |            
|LIABILITIES AND STOCKHOLDERS EQUITY       
|CURRENT LIABILITIES:                        |                                                                 |                                                                               |                                            |             |               |            |                |            
|                                            | Accounts payable and accrued expenses                           |                                                                               | $                                          | 5,605,730   |               |            | $              | 9,870,888   |          
|                                            | Current portion of long-term debt                               |                                                                               |                                            | 68,496      |               |            |                | 68,496      |          
|                                            | Dividends payable                                               |                                                                               |                                            | 227,189     |               |            |                | 151,460     |          
|                                            | Income taxes payable                                            |                                                                               |                                            | 391,333     |               |            |                | 406,620     |          
|                                            | Contribution to profit sharing plan                             |                                                                               |                                            | 66,000      |               |            |                | 260,000     |          
|                                            | Employee compensation and related expenses                      |                                                                               |                                            | 307,281     |               |            |                | 277,924     |          
|                                            |                                                                 |                                                                               |                                            |             |               |            |                |            
|                                            |                                                                 |                                                                               | TOTAL CURRENT LIABILITIES                  |             |               | 6,666,029  |                |             |           | 11,035,388 | 
|LONG-TERM DEBT, less current portion        |                                                                 |                                                                               | 2,039,920                                  |             |               |            | 57,329         |            
|DEFERRED INCOME TAXES                       |                                                                 |                                                                               | 274,458                                    |             |               |            | 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 June 30, 2003 and March 31, 2003 |                                            |             | 7,573,239     |            |                |             | 7,573,239 |           
|                                            | Additional paid-in capital                                      |                                                                               |                                            | 27,710,369  |               |            |                | 27,710,369  |          
|                                            | Retained deficit                                                |                                                                               |                                            | (3,796,781  | )             |            |                | (4,036,857  | )        
|                                            |                                                                 |                                                                               |                                            |             |               |            |                |            
|                                            |                                                                 |                                                                               | TOTAL STOCKHOLDERS EQUITY                 |             |               | 31,486,827 |                |             |           | 31,246,751 | 
|                                            |                                                                 |                                                                               |                                            |             |               |            |                |            
|                                            |                                                                 |                                                                               | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |             | $             | 40,623,234 |                |             | $         | 42,778,926 | 
|                                            |                                                                 |                                                                               |                                            |             |               |            |                |            

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FRIEDMAN INDUSTRIES, INCORPORATED




CONSOLIDATED STATEMENTS OF EARNINGS  UNAUDITED

|                                              |                                           |   |                             |            |      |   |            |            | 
|--------------------------------------------- | ----------------------------------------- | - | --------------------------- | ---------- | ---- | - | ---------- | ---------- | 
|                                              |                                           |   | THREE MONTHS ENDED JUNE 30,
|                                              |                                           |   |                            
|                                              |                                           |   | 2003                        |            | 2002
|                                              |                                           |   |                             |            |     
|Net sales                                     |                                           | $ | 25,204,170                  |            |      | $ | 25,561,298 |           
|Costs and expenses                            |                                           |   |                             |            |      |   |            |           
|                                              | Costs of goods sold                       |   |                             | 23,255,513 |      |   |            | 24,092,780 | 
|                                              | General, selling and administrative costs |   |                             | 1,234,095  |      |   |            | 1,043,996  | 
|                                              | Interest                                  |   |                             | 8,732      |      |   |            | 30,114     | 
|                                              |                                           |   |                             |            |      |   |            |           
|                                              |                                           |   | 24,498,340                  |            |      |   | 25,166,890 |           
|Interest and other income                     |                                           |   | (2,148                      | )          |      |   | (25,524    | )         
|                                              |                                           |   |                             |            |      |   |            |           
|Earnings before federal income taxes          |                                           |   | 707,978                     |            |      |   | 419,932    |           
|Provision (benefit) for federal income taxes: |                                           |   |                             |            |      |   |            |           
|                                              | Current                                   |   |                             | 249,713    |      |   |            | 134,777    | 
|                                              | Deferred                                  |   |                             | (9,000     | )    |   |            | 8,000      | 
|                                              |                                           |   |                             |            |      |   |            |           
|                                              |                                           |   | 240,713                     |            |      |   | 142,777    |           
|                                              |                                           |   |                             |            |      |   |            |           
|Net earnings                                  |                                           | $ | 467,265                     |            |      | $ | 277,155    |           
|                                              |                                           |   |                             |            |      |   |            |           
|Average number of common shares outstanding:  |                                           |   |                             |            |      |   |            |           
|                                              | Basic                                     |   |                             | 7,573,239  |      |   |            | 7,571,239  | 
|                                              | Diluted                                   |   |                             | 7,589,900  |      |   |            | 7,571,239  | 
|Net earnings per share:                       |                                           |   |                             |            |      |   |            |           
|                                              | Basic                                     |   | $                           | 0.06       |      |   | $          | 0.04       | 
|                                              | Diluted                                   |   | $                           | 0.06       |      |   | $          | 0.04       | 
|Cash dividends declared per common share      |                                           | $ | 0.03                        |            |      | $ | 0.02       |           

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FRIEDMAN INDUSTRIES, INCORPORATED




CONSOLIDATED STATEMENTS OF CASH FLOWS  UNAUDITED

|                                                 |                                                                               |                                             |                                                  |           |                             |            |            |            |            |            |  
|------------------------------------------------ | ----------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------------------ | --------- | --------------------------- | ---------- | ---------- | ---------- | ---------- | ---------- | -
|                                                 |                                                                               |                                             |                                                  |           | THREE MONTHS ENDED JUNE 30,
|                                                 |                                                                               |                                             |                                                  |           |                            
|                                                 |                                                                               |                                             |                                                  |           | 2003                        |            | 2002      
|                                                 |                                                                               |                                             |                                                  |           |                             |            |           
|OPERATING ACTIVITIES                             |                                                                               |                                             |                                                  |           |                             |            |            |           
|                                                 | Net earnings                                                                  |                                             | $                                                | 467,265   |                             |            | $          | 277,155    |           
|                                                 | Adjustments to reconcile net income to cash provided by
operating activities: |                                             |                                                  |           |                             |            |            |            |           
|                                                 |                                                                               | Depreciation                                |                                                  |           | 232,500                     |            |            |            | 241,766    |           
|                                                 |                                                                               | Provision for deferred taxes                |                                                  |           | (9,000                      | )          |            |            | 8,000      |           
|                                                 | Decrease (increase) in operating assets:                                      |                                             |                                                  |           |                             |            |            |            |           
|                                                 |                                                                               | Accounts receivable                         |                                                  |           | 173,583                     |            |            |            | (271,431   | )         
|                                                 |                                                                               | Inventories                                 |                                                  |           | 1,622,140                   |            |            |            | 1,408,408  |           
|                                                 |                                                                               | Other current assets                        |                                                  |           | (7,979                      | )          |            |            | (53,600    | )         
|                                                 | Increase (decrease) in operating liabilities:                                 |                                             |                                                  |           |                             |            |            |            |           
|                                                 |                                                                               | Accounts payable and accrued expenses       |                                                  |           | (4,265,158                  | )          |            |            | (1,801,026 | )         
|                                                 |                                                                               | Contribution to profit-sharing plan payable |                                                  |           | (194,000                    | )          |            |            | (194,000   | )         
|                                                 |                                                                               | Employee compensation and related expenses  |                                                  |           | 29,357                      |            |            |            | 9,109      |           
|                                                 |                                                                               | Federal income taxes payable                |                                                  |           | (15,287                     | )          |            |            | 134,777    |           
|                                                 |                                                                               |                                             |                                                  |           |                             |            |            |           
|                                                 |                                                                               |                                             | NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES |           |                             | (1,966,579 | )          |            |            | (240,842   | )
|INVESTING ACTIVITIES                             |                                                                               |                                             |                                                  |           |                             |            |            |           
|                                                 | Purchase of property, plant and equipment                                     |                                             |                                                  | (72,242   | )                           |            |            | (140,764   | )         
|                                                 | Increase in cash surrender value of officers life
insurance                  |                                             |                                                  | (6,919    | )                           |            |            | (21,184    | )         
|                                                 |                                                                               |                                             |                                                  |           |                             |            |            |           
|                                                 |                                                                               |                                             | NET CASH USED IN INVESTING ACTIVITIES            |           |                             | (79,161    | )          |            |            | (161,948   | )
|FINANCING ACTIVITIES                             |                                                                               |                                             |                                                  |           |                             |            |            |           
|                                                 | Cash dividends paid                                                           |                                             |                                                  | (151,460  | )                           |            |            | (75,710    | )         
|                                                 | Principal payments on notes payable                                           |                                             |                                                  | (17,409   | )                           |            |            | (2,179,483 | )         
|                                                 | Proceeds of long-term notes                                                   |                                             |                                                  | 2,000,000 |                             |            |            | 69,493     |           
|                                                 |                                                                               |                                             |                                                  |           |                             |            |            |           
|                                                 |                                                                               |                                             | NET CASH PROVIDED (USED) IN FINANCING
ACTIVITIES |           |                             | 1,831,131  |            |            |            | (2,185,700 | )
|                                                 |                                                                               |                                             |                                                  |           |                             |            |            |           
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                               |                                             | (214,609                                         | )         |                             |            | (2,588,490 | )         
|                                                 | Cash and cash equivalents at beginning of period                              |                                             |                                                  | 673,127   |                             |            |            | 4,683,894  |           
|                                                 |                                                                               |                                             |                                                  |           |                             |            |            |           
|CASH AND CASH EQUIVALENTS AT END OF PERIOD       |                                                                               | $                                           | 458,518                                          |           |                             | $          | 2,095,404  |           
|                                                 |                                                                               |                                             |                                                  |           |                             |            |            |           

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FRIEDMAN INDUSTRIES, INCORPORATED




NOTES TO QUARTERLY REPORT  UNAUDITED
THREE MONTHS ENDED JUNE 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, nonstandard 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 and to existing
variable interest entities in the periods beginning after
June 15, 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 months ended June 30:

|                                                         |  |   |         |      |  |      |         |  |  | 
|-------------------------------------------------------- |  | - | ------- | ---- |  | ---- | ------- |  |  | 
|                                                         |  |   |         | 2003 |  | 2002
|                                                         |  |   |         |      |  |     
|Reported
net income                                      |  | $ | 467,265 |      |  | $    | 277,155 | 
|Less:
compensation expenses per SFAS No. 123, net of tax |  |   | 31,582  |      |  |      | .00     | 
|                                                         |  |   |         |      |  |      |         | 
|Pro
forma net income                                     |  | $ | 435,683 |      |  | $    | 277,155 | 
|                                                         |  |   |         |      |  |      |         | 
|BASIC
EARNINGS PER COMMON SHARE:                         |  |   |         |      |  |      |         | 
|Reported
net income                                      |  |   | .06     |      |  |      | .04     | 
|Less:
compensation expense per SFAS No. 123, net of tax  |  |   | .00     |      |  |      | .00     | 
|                                                         |  |   |         |      |  |      |         | 
|Pro
forma net income                                     |  |   | .06     |      |  |      | .04     | 
|                                                         |  |   |         |      |  |      |         | 
|DILUTED
EARNINGS PER COMMON SHARE:                       |  |   |         |      |  |      |         | 
|Reported
net income                                      |  |   | .06     |      |  |      | .04     | 
|Less:
compensation expense per SFAS No. 123, net of tax  |  |   | .00     |      |  |      | .00     | 
|                                                         |  |   |         |      |  |      |         | 
|Pro
forma net income                                     |  |   | .06     |      |  |      | .04     | 
|                                                         |  |   |         |      |  |      |         | 

NOTE E  RENEWAL OF CREDIT
FACILITY

During the quarter
ended June 30, 2003, the Company extended its revolving line of
credit facility through April 1, 2006.

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NOTE F  SEGMENT INFORMATION

|                 |                         |                             |   |                    |        |      |   |        |        | 
|---------------- | ----------------------- | --------------------------- | - | ------------------ | ------ | ---- | - | ------ | ------ | 
|                 |                         |                             |   | THREE MONTHS ENDED
|                 |                         |                             |   | JUNE 30,          
|                 |                         |                             |   |                   
|                 |                         |                             |   | 2003               |        | 2002
|                 |                         |                             |   |                    |        |     
|                 |                         |                             |   | IN THOUSANDS      
|Net sales        |                         |                             |   |                    |        |      |   |       
|                 | Coil                    |                             | $ | 13,395             |        |      | $ | 14,044 |       
|                 | Tubular                 |                             |   | 11,809             |        |      |   | 11,517 |       
|                 |                         |                             |   |                    |        |      |   |       
|                 |                         | Total net sales             |   | $                  | 25,204 |      |   | $      | 25,561 | 
|                 |                         |                             |   |                    |        |      |   |       
|Operating profit |                         |                             |   |                    |        |      |   |       
|                 | Coil                    |                             | $ | 710                |        |      | $ | 367    |       
|                 | Tubular                 |                             |   | 769                |        |      |   | 586    |       
|                 |                         |                             |   |                    |        |      |   |       
|                 |                         | Total operating profit      |   |                    | 1,479  |      |   |        | 953    | 
|                 | Corporate expenses      |                             |   | 764                |        |      |   | 529    |       
|                 | Interest expense        |                             |   | 9                  |        |      |   | 30     |       
|                 | Interest & other income |                             |   | (2                 | )      |      |   | (26    | )     
|                 |                         |                             |   |                    |        |      |   |       
|                 |                         | Total earnings before taxes |   | $                  | 708    |      |   | $      | 420    | 
|                 |                         |                             |   |                    |        |      |   |       

|               |                  |  |   |              |        |               |   |        |        | 
|-------------- | ---------------- |  | - | ------------ | ------ | ------------- | - | ------ | ------ | 
|               |                  |  |   | June 30,2003 |        | March
31,2003
|               |                  |  |   |              |        |              
|Segment assets |                  |  |   |              |        |               |   |       
|               | Coil             |  | $ | 17,260       |        |               | $ | 18,967 |       
|               | Tubular          |  |   | 21,607       |        |               |   | 21,849 |       
|               |                  |  |   |              |        |               |   |       
|               |                  |  |   | 38,867       |        |               |   | 40,816 |       
|               | Corporate assets |  |   | 1,756        |        |               |   | 1,963  |       
|               |                  |  |   |              |        |               |   |       
|               |                  |  |   |              | 40,623 |               |   |        | 42,779 | 
|               |                  |  |   |              |        |               |   |       

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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, 2003 Compared to Three Months Ended June 30, 2002

During the quarter
ended June 30, 2003, sales and costs of goods sold declined
$357,128 and $837,267, respectively, from the comparable amounts
recorded during the quarter ended June 30, 2002, which had the effect of increasing gross profit by $480,139.
Both coil and tubular operations experienced an increase in gross profit as the
result of average selling prices accelerating at a greater rate than related
costs of material. The Company experienced somewhat stronger market conditions
for its products and services in the 2003 quarter as compared to market conditions in the 2002 quarter, and accordingly, overall
operations reflected some improvement.

General, selling and administrative costs
increased $190,099 from the
amount recorded in the 2002 quarter. This increase was related primarily to
the write-off of a
bad debt incurred during the 2003 quarter and to variable expenses associated
with the increase in earnings.

Interest expense decreased $21,382 from the comparable amount recorded
during the 2002 quarter. This decrease was related primarily to a reduction in
interest rates paid on borrowings and reductions in short and long term debt.

Interest and other income decreased $23,376 primarily as the result of a
decrease in average invested cash positions during the 2003 quarter.

Federal income taxes during the 2003 quarter increased $97,936 from the
comparable amount recorded during the 2002 quarter. This increase was related to
the increase in earnings before taxes in the 2003 quarter since 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 June 30, 2003. Current
ratios were 4.9 and 3.2 at June 30, 2003 and March 31, 2003, respectively.
Working capital was $26,101,118 at June 30, 2003 and $23,734,112 at March 31,
2003. During the quarter ended June 30, 2003, the Company maintained assets and
liabilities at levels it believed were commensurate with operations. During the
quarter ended June 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 balance sheet components depending on changes
in market conditions and the Companys operations.

The Company has
extended its 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 June 30,
2003, the Company had borrowings of $2,000,000 outstanding under the revolving
facility.

7



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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

8



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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, 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 June 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 June 30, 2003 that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over financial reporting.

9



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##### 



FRIEDMAN INDUSTRIES, INCORPORATED

Three Months Ended June 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

None




Item 5. Other Information

Not applicable




Item 6. Exhibits and Reports on Form 8-K



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



| |        |                                                                                                                                                        
| | ------ | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.1  | Fifth Amendment to Amended and Restated
Letter Agreement                                                                                               
|
| | 10.2  | Revolving Promissory Note Between the
Company and JP Morgan Chase Bank                                                                                 
|
| | 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

10



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

11



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##### 






EXHIBIT INDEX

|             |  |                                                                                                                                                              
|------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No.  |  | Description                                                                                                                                                  
|             |  |                                                                                                                                                              
|Exhibit 10.1 |  |  Fifth Amendment to Amended and Restated
Letter Agreement                                                                                                   
|            
|Exhibit 10.2 |  |  Revolving Promissory Note Between the
Company and JP Morgan Chase Bank                                                                                     
|            
|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