##### Table of Contents



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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

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

COMMISSION FILE NUMBER 1-7521

FRIEDMAN INDUSTRIES, INCORPORATED

(Exact name of registrant as specified in its charter)


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

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



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

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







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

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



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TABLE OF CONTENTS



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



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##### Table of Contents






Part I  FINANCIAL
INFORMATION




Item 1. Financial Statements




FRIEDMAN INDUSTRIES,
INCORPORATEDCONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

|                                            |                                                                                                                       |                                                              |                                            |             |                    |            |                |             |           |            | 
|------------------------------------------- | --------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | ------------------------------------------ | ----------- | ------------------ | ---------- | -------------- | ----------- | --------- | ---------- | 
|                                            |                                                                                                                       |                                                              |                                            |             | SEPTEMBER 30,
2007 |            | MARCH 31,
2007
|ASSETS                                     
|CURRENT ASSETS:                             |                                                                                                                       |                                                              |                                            |             |                    |            |                |            
|                                            | Cash and cash equivalents                                                                                             |                                                              | $                                          | 4,026,604   |                    |            | $              | 1,039,030   |          
|                                            | Accounts receivable, net of allowances for bad debts and cash
discounts of $37,276 at September 30 and March 31, 2007 |                                                              |                                            | 12,904,857  |                    |            |                | 17,261,553  |          
|                                            | Inventories                                                                                                           |                                                              |                                            | 22,159,736  |                    |            |                | 33,272,823  |          
|                                            | Prepaid
income taxes                                                                                                  |                                                              |                                            | 477,628     |                    |            |                |            |          
|                                            | Other                                                                                                                 |                                                              |                                            | 317,025     |                    |            |                | 157,963     |          
|                                            |                                                                                                                       |                                                              |                                            |             |                    |            |                |            
|                                            |                                                                                                                       |                                                              | TOTAL CURRENT ASSETS                       |             |                    | 39,885,850 |                |             |           | 51,731,369 | 
|PROPERTY, PLANT AND EQUIPMENT:              |                                                                                                                       |                                                              |                                            |             |                    |            |                |            
|                                            | Land                                                                                                                  |                                                              |                                            | 1,082,331   |                    |            |                | 1,082,331   |          
|                                            | Construction
in progress                                                                                              |                                                              |                                            | 7,346,565   |                    |            |                | 5,004,550   |          
|                                            | Buildings
and yard improvements                                                                                       |                                                              |                                            | 3,494,294   |                    |            |                | 3,494,294   |          
|                                            | Machinery and equipment                                                                                               |                                                              |                                            | 21,654,391  |                    |            |                | 21,236,184  |          
|                                            | Less accumulated depreciation                                                                                         |                                                              |                                            | (17,903,421 | )                  |            |                | (17,344,822 | )        
|                                            |                                                                                                                       |                                                              |                                            |             |                    |            |                |            
|                                            |                                                                                                                       |                                                              | 15,674,160                                 |             |                    |            | 13,472,537     |            
|OTHER ASSETS:                               |                                                                                                                       |                                                              |                                            |             |                    |            |                |            
|                                            | Cash
value of officers life insurance and other assets                                                               |                                                              |                                            | 691,400     |                    |            |                | 667,800     |          
|                                            |                                                                                                                       |                                                              |                                            |             |                    |            |                |            
|                                            |                                                                                                                       |                                                              | TOTAL ASSETS                               |             | $                  | 56,251,410 |                |             | $         | 65,871,706 | 
|                                            |                                                                                                                       |                                                              |                                            |             |                    |            |                |            
|LIABILITIES AND STOCKHOLDERS EQUITY       
|CURRENT LIABILITIES:                        |                                                                                                                       |                                                              |                                            |             |                    |            |                |            
|                                            | Accounts payable and accrued expenses                                                                                 |                                                              | $                                          | 10,850,323  |                    |            | $              | 21,875,516  |          
|                                            | Current
portion of long-term debt                                                                                     |                                                              |                                            | 54,028      |                    |            |                |            |          
|                                            | Dividends payable                                                                                                     |                                                              |                                            | 536,969     |                    |            |                | 536,969     |          
|                                            | Income taxes payable                                                                                                  |                                                              |                                            |            |                    |            |                | 46,742      |          
|                                            | Contribution to profit sharing plan                                                                                   |                                                              |                                            | 129,000     |                    |            |                | 256,000     |          
|                                            | Employee compensation and related expenses                                                                            |                                                              |                                            | 488,770     |                    |            |                | 551,356     |          
|                                            |                                                                                                                       |                                                              |                                            |             |                    |            |                |            
|                                            |                                                                                                                       |                                                              | TOTAL CURRENT LIABILITIES                  |             |                    | 12,059,090 |                |             |           | 23,266,583 | 
|LONG-TERM
DEBT LESS CURRENT PORTION         |                                                                                                                       |                                                              | 94,549                                     |             |                    |            |               |            
|DEFERRED
INCOME TAXES                       |                                                                                                                       |                                                              | 68,712                                     |             |                    |            | 1,934          |            
|POSTRETIREMENT BENEFITS OTHER THAN PENSIONS |                                                                                                                       |                                                              | 519,661                                    |             |                    |            | 493,191        |            
|STOCKHOLDERS EQUITY:                       |                                                                                                                       |                                                              |                                            |             |                    |            |                |            
|                                            | Common stock, par value $1:                                                                                           |                                                              |                                            |             |                    |            |                |             |          
|                                            |                                                                                                                       | Authorized
shares  10,000,000                               |                                            |             |                    |            |                |             |           |           
|                                            |                                                                                                                       | Issued
shares  7,887,824 at September 30 and March 31, 2007 |                                            |             | 7,887,824          |            |                |             | 7,887,824 |           
|                                            | Additional paid-in capital                                                                                            |                                                              |                                            | 28,887,517  |                    |            |                | 28,887,517  |          
|                                            | Treasury
stock at cost (1,175,716 shares at September 30 and March 31, 2007)                                          |                                                              |                                            | (5,475,964  | )                  |            |                | (5,475,964  | )        
|                                            | Retained
earnings                                                                                                     |                                                              |                                            | 12,210,021  |                    |            |                | 10,810,621  |          
|                                            |                                                                                                                       |                                                              |                                            |             |                    |            |                |            
|                                            |                                                                                                                       |                                                              | TOTAL STOCKHOLDERS EQUITY                 |             |                    | 43,509,398 |                |             |           | 42,109,998 | 
|                                            |                                                                                                                       |                                                              |                                            |             |                    |            |                |            
|                                            |                                                                                                                       |                                                              | TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |             | $                  | 56,251,410 |                |             | $         | 65,871,706 | 
|                                            |                                                                                                                       |                                                              |                                            |             |                    |            |                |            

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FRIEDMAN INDUSTRIES, INCORPORATED




CONDENSED CONSOLIDATED STATEMENTS
OF EARNINGS  UNAUDITED

|                                             |                                           |   |                                 |            |                               |   |            |            |      |   |            |            |  |   |             |            |  
|-------------------------------------------- | ----------------------------------------- | - | ------------------------------- | ---------- | ----------------------------- | - | ---------- | ---------- | ---- | - | ---------- | ---------- |  | - | ----------- | ---------- | -
|                                             |                                           |   | Three
months endedSeptember 30, |            | Six
months endedSeptember 30,
|                                             |                                           |   |                                 |           
|                                             |                                           |   | 2007                            |            | 2006                          |   | 2007       |            | 2006
|                                             |                                           |   |                                 |            |                               |   |            |            |     
|Net sales                                    |                                           | $ | 41,154,571                      |            |                               | $ | 51,629,944 |            |      | $ | 91,685,081 |            |  | $ | 104,253,674 |           
|Costs and expenses                           |                                           |   |                                 |            |                               |   |            |            |      |   |            |            |  |   |             |           
|                                             | Costs of goods sold                       |   |                                 | 38,722,209 |                               |   |            | 48,223,703 |      |   |            | 85,483,101 |  |   |             | 95,970,757 |  
|                                             | General, selling and administrative costs |   |                                 | 1,086,670  |                               |   |            | 1,306,226  |      |   |            | 2,506,163  |  |   |             | 2,880,683  |  
|                                             | Interest
expense                          |   |                                 |           |                               |   |            |           |      |   |            | 47,740     |  |   |             |           |  
|                                             | Gain on sale of assets                    |   |                                 |           |                               |   |            | (1,312,839 | )    |   |            |           |  |   |             | (1,312,839 | )
|
|                                             |                                           |   |                                 |            |                               |   |            |            |      |   |            |            |  |   |             |           
|                                             |                                           |   | 39,808,879                      |            |                               |   | 48,217,090 |            |      |   | 88,037,004 |            |  |   | 97,538,601  |           
|Interest and other income                    |                                           |   | (55,530                         | )          |                               |   | (66,335    | )          |      |   | (97,300    | )          |  |   | (123,783    | )         
|                                             |                                           |   |                                 |            |                               |   |            |            |      |   |            |            |  |   |             |           
|Earnings before income taxes                 |                                           |   | 1,401,222                       |            |                               |   | 3,479,189  |            |      |   | 3,745,377  |            |  |   | 6,838,856   |           
|Provision (benefit) for income taxes:        |                                           |   |                                 |            |                               |   |            |            |      |   |            |            |  |   |             |           
|                                             | Current                                   |   |                                 | 446,947    |                               |   |            | 1,036,186  |      |   |            | 1,205,262  |  |   |             | 2,303,543  |  
|                                             | Deferred                                  |   |                                 | 33,389     |                               |   |            | 175,140    |      |   |            | 66,778     |  |   |             | 122,309    |  
|                                             |                                           |   |                                 |            |                               |   |            |            |      |   |            |            |  |   |             |           
|                                             |                                           |   | 480,336                         |            |                               |   | 1,211,326  |            |      |   | 1,272,040  |            |  |   | 2,425,852   |           
|                                             |                                           |   |                                 |            |                               |   |            |            |      |   |            |            |  |   |             |           
|Net earnings                                 |                                           | $ | 920,886                         |            |                               | $ | 2,267,863  |            |      | $ | 2,473,337  |            |  | $ | 4,413,004   |           
|                                             |                                           |   |                                 |            |                               |   |            |            |      |   |            |            |  |   |             |           
|Average number of common shares outstanding: |                                           |   |                                 |            |                               |   |            |            |      |   |            |            |  |   |             |           
|                                             | Basic                                     |   |                                 | 6,712,108  |                               |   |            | 6,666,626  |      |   |            | 6,712,108  |  |   |             | 6,666,626  |  
|                                             | Diluted                                   |   |                                 | 6,777,070  |                               |   |            | 6,763,464  |      |   |            | 6,778,396  |  |   |             | 6,765,259  |  
|Net earnings per share:                      |                                           |   |                                 |            |                               |   |            |            |      |   |            |            |  |   |             |           
|                                             | Basic                                     |   | $                               | 0.14       |                               |   | $          | 0.34       |      |   | $          | 0.37       |  |   |             | 0.66       |  
|                                             | Diluted                                   |   | $                               | 0.14       |                               |   | $          | 0.34       |      |   | $          | 0.36       |  |   |             | 0.65       |  
|Cash dividends declared per common share     |                                           | $ | 0.08                            |            |                               | $ | 0.08       |            |      |   | 0.16       |            |  |   | 0.16        |           

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FRIEDMAN INDUSTRIES, INCORPORATED




CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS  UNAUDITED

|                                                 |                                                                               |                                             |                                                  |            |                               |            |           |            |            |            |  
|------------------------------------------------ | ----------------------------------------------------------------------------- | ------------------------------------------- | ------------------------------------------------ | ---------- | ----------------------------- | ---------- | --------- | ---------- | ---------- | ---------- | -
|                                                 |                                                                               |                                             |                                                  |            | Six
Months Ended
September 30
|                                                 |                                                                               |                                             |                                                  |            |                              
|                                                 |                                                                               |                                             |                                                  |            | 2007                          |            | 2006     
|                                                 |                                                                               |                                             |                                                  |            |                               |            |          
|OPERATING ACTIVITIES                             |                                                                               |                                             |                                                  |            |                               |            |           |           
|                                                 | Net earnings                                                                  |                                             | $                                                | 2,473,337  |                               |            | $         | 4,413,004  |           
|                                                 | Adjustments to reconcile net income to cash provided by
operating activities: |                                             |                                                  |            |                               |            |           |            |           
|                                                 |                                                                               | Depreciation                                |                                                  |            | 558,601                       |            |           |            | 475,201    |           
|                                                 |                                                                               | Provision (benefit) for deferred taxes      |                                                  |            | 66,778                        |            |           |            | 122,309    |           
|                                                 |                                                                               | Provision for postretirement benifits       |                                                  |            | 26,470                        |            |           |            | 23,724     |           
|                                                 |                                                                               | Gain on sale of assets                      |                                                  |            |                              |            |           |            | (1,312,839 | )         
|                                                 | Decrease (increase) in operating assets:                                      |                                             |                                                  |            |                               |            |           |            |           
|                                                 |                                                                               | Accounts receivable                         |                                                  |            | 4,356,696                     |            |           |            | (727,141   | )         
|                                                 |                                                                               | Prepaid income taxes                        |                                                  |            | (477,628                      | )          |           |            |           |           
|                                                 |                                                                               | Inventories                                 |                                                  |            | 11,113,087                    |            |           |            | 1,061,119  |           
|                                                 |                                                                               | Other                                       |                                                  |            | (159,062                      | )          |           |            | (260,690   | )         
|                                                 | Increase (decrease) in operating liabilities:                                 |                                             |                                                  |            |                               |            |           |            |           
|                                                 |                                                                               | Accounts payable and accrued expenses       |                                                  |            | (11,025,193                   | )          |           |            | 878,588    |           
|                                                 |                                                                               | Contribution to profit-sharing plan payable |                                                  |            | (127,000                      | )          |           |            | (121,000   | )         
|                                                 |                                                                               | Employee compensation and related expenses  |                                                  |            | (62,586                       | )          |           |            | 53,974     |           
|                                                 |                                                                               | Income taxes payable                        |                                                  |            | (46,742                       | )          |           |            | (143,196   | )         
|                                                 |                                                                               | Deferred credit for LIFO replacement        |                                                  |            |                              |            |           |            | 271,403    |           
|                                                 |                                                                               |                                             |                                                  |            |                               |            |           |           
|                                                 |                                                                               |                                             | NET CASH PROVIDED (USED) BY OPERATING
ACTIVITIES |            |                               | 6,696,758  |           |            |            | 4,734,456  |  
|INVESTING ACTIVITIES                             |                                                                               |                                             |                                                  |            |                               |            |           |           
|                                                 | Purchase of property, plant and equipment                                     |                                             |                                                  | (2,760,223 | )                             |            |           | (2,935,538 | )         
|                                                 | (Increase) in cash surrender value of officers life
insurance                |                                             |                                                  | (23,600    | )                             |            |           | (24,788    | )         
|                                                 | Proceeds from the sale of assets                                              |                                             |                                                  |           |                               |            |           | 1,388,318  |           
|                                                 |                                                                               |                                             |                                                  |            |                               |            |           |           
|                                                 |                                                                               |                                             | NET CASH USED IN INVESTING ACTIVITIES            |            |                               | (2,783,823 | )         |            |            | (1,572,008 | )
|FINANCING ACTIVITIES                             |                                                                               |                                             |                                                  |            |                               |            |           |           
|                                                 | Cash dividends paid                                                           |                                             |                                                  | (1,073,938 | )                             |            |           | (1,066,660 | )         
|                                                 | Principal payments on notes payable                                           |                                             |                                                  | (13,507    | )                             |            |           |           |           
|                                                 | Tax
benefit related to stock options                                          |                                             |                                                  |           |                               |            |           | 53,884     |           
|                                                 | Long-term debt                                                                |                                             |                                                  | 162,084    |                               |            |           |           |           
|                                                 |                                                                               |                                             |                                                  |            |                               |            |           |           
|                                                 |                                                                               |                                             | NET CASH PROVIDED (USED) IN FINANCING
ACTIVITIES |            |                               | (925,361   | )         |            |            | (1,012,776 | )
|                                                 |                                                                               |                                             |                                                  |            |                               |            |           |           
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                               |                                             | 2,987,574                                        |            |                               |            | 2,149,672 |           
|                                                 | Cash and cash equivalents at beginning of period                              |                                             |                                                  | 1,039,030  |                               |            |           | 1,982,526  |           
|                                                 |                                                                               |                                             |                                                  |            |                               |            |           |           
|CASH AND CASH EQUIVALENTS AT END OF PERIOD       |                                                                               | $                                           | 4,026,604                                        |            |                               | $          | 4,132,198 |           
|                                                 |                                                                               |                                             |                                                  |            |                               |            |           |           

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FRIEDMAN INDUSTRIES, INCORPORATED




CONDENSED NOTES TO QUARTERLY REPORT  UNAUDITED

NOTE A  BASIS OF PRESENTATION

The accompanying unaudited condensed, consolidated financial statements
have been prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. For further information,
refer to the financial statements and footnotes included in the Companys annual
report on Form 10-K for the year ended March 31, 2007.

NOTE B  INVENTORIES

Inventories consist
of prime coil, non-standard coil and tubular materials.
Prime coil inventory consists primarily of raw materials,
non-standard coil inventory consists primarily of finished goods and tubular
inventory consists of both raw materials and finished goods. Inventories are
valued at the lower of cost or replacement market. Cost for prime
coil inventory is
determined under the last-in, first-out (LIFO) method. Cost for
non-standard coil inventory is determined using the specific identification method. Cost for tubular
inventory is determined using the weighted average method.

During
the period ended September 30, 2006, LIFO inventories were reduced but
were replaced by March 31, 2007. A deferred credit of $271,403 was recorded at September 30, 2006 to reflect replacement costs in
excess of LIFO cost. LIFO  inventories were also reduced in the
period ended September 30, 2007 and are expected to be partially
replaced by March 31, 2008. Since this replacement is not expected to
have a significant impact on earnings, no deferred credit was recorded at September 30,
2007.

A summary of inventory values follows:

September 30,
    

March 31,2007
    
    2007Prime
Coil Inventory
    
    $
    7,119,647
    
    
    $
    11,034,422Non-Standard
Coil Inventory
    
    
    723,270
    
    
    
    665,234Tubular Raw Material
    
    
    1,145,143
    
    
    
    5,854,255Tubular Finished Goods
    
    
    13,171,676
    
    
    
    15,718,912$
    22,159,736
    
    
    $
    33,272,823


NOTE C  LONG-TERM DEBT

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

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

NOTE D  STOCK BASED COMPENSATION



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


The aggregate intrinsic value of
exercisable and outstanding options at September
30, 2007 was $579,211.

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NOTE E  SEGMENT INFORMATION

|                 |                         |                             |   |                                   |        |                                |   |        |        |      |   |        |        |  |   |        |         | 
|---------------- | ----------------------- | --------------------------- | - | --------------------------------- | ------ | ------------------------------ | - | ------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------- | 
|
|                 |                         |                             |   | Three Months Ended 
September 30, |        | Six Months Ended September 30,
|                 |                         |                             |   |                                  
|                 |                         |                             |   | 2007                              |        | 2006                           |   | 2007   |        | 2006
|                 |                         |                             |   |                                   |        |                                |   |        |        |     
|                 |                         |                             |   | (in thousands)                    |        | (in thousands)                
|Net sales        |                         |                             |   |                                   |        |                                |   |        |        |      |   |        |        |  |   |       
|                 | Coil                    |                             | $ | 19,575                            |        |                                | $ | 26,806 |        |      | $ | 40,650 |        |  | $ | 54,691 |        
|                 | Tubular                 |                             |   | 21,580                            |        |                                |   | 24,824 |        |      |   | 51,035 |        |  |   | 49,563 |        
|                 |                         |                             |   |                                   |        |                                |   |        |        |      |   |        |        |  |   |       
|                 |                         | Total net sales             |   | $                                 | 41,155 |                                |   | $      | 51,630 |      |   | $      | 91,685 |  |   | $      | 104,254 | 
|                 |                         |                             |   |                                   |        |                                |   |        |        |      |   |        |        |  |   |       
|Operating profit |                         |                             |   |                                   |        |                                |   |        |        |      |   |        |        |  |   |       
|                 | Coil                    |                             | $ | 544                               |        |                                | $ | 505    |        |      | $ | 1,480  |        |  | $ | 2,057  |        
|                 | Tubular                 |                             |   | 1,268                             |        |                                |   | 2,202  |        |      |   | 3,525  |        |  |   | 4,988  |        
|                 |                         |                             |   |                                   |        |                                |   |        |        |      |   |        |        |  |   |       
|                 |                         | Total operating profit      |   |                                   | 1,812  |                                |   |        | 2,707  |      |   |        | 5,005  |  |   |        | 7,045   | 
|                 | Corporate expenses      |                             |   | 466                               |        |                                |   | 608    |        |      |   | 1,309  |        |  |   | 1,643  |        
|                 | Interest
expense        |                             |   |                                  |        |                                |   |       |        |      |   | 48     |        |  |   |       |        
|                 | Gain
on sale of assets  |                             |   |                                  |        |                                |   | (1,313 | )      |      |   |       |        |  |   | (1,313 | )      
|                 | Interest & other income |                             |   | (55                               | )      |                                |   | (67    | )      |      |   | (97    | )      |  |   | (124   | )      
|                 |                         |                             |   |                                   |        |                                |   |        |        |      |   |        |        |  |   |       
|                 |                         | Total earnings before taxes |   | $                                 | 1,401  |                                |   | $      | 3,479  |      |   | $      | 3,745  |  |   | $      | 6,839   | 
|                 |                         |                             |   |                                   |        |                                |   |        |        |      |   |        |        |  |   |       

|               |                  |  |   |                   |        |                |   |        |        | 
|-------------- | ---------------- |  | - | ----------------- | ------ | -------------- | - | ------ | ------ | 
|               |                  |  |   | September
30,2007 |        | March
31,2007 
|               |                  |  |   | (in thousands)    |        | (in thousands)
|Segment assets |                  |  |   |                   |        |                |   |       
|               | Coil             |  | $ | 25,062            |        |                | $ | 27,601 |       
|               | Tubular          |  |   | 25,936            |        |                |   | 36,491 |       
|               |                  |  |   |                   |        |                |   |       
|               |                  |  |   | 50,998            |        |                |   | 64,092 |       
|               | Corporate assets |  |   | 5,253             |        |                |   | 1,780  |       
|               |                  |  |   |                   |        |                |   |       
|               |                  |  |   | $                 | 56,251 |                |   | $      | 65,872 | 
|               |                  |  |   |                   |        |                |   |       

Corporate expenses
reflect general and administrative expenses not directly associated
with segment operations and consist primarily of corporate executive
and accounting salaries, professional fees and services, bad debts,
accrued profit sharing expense, corporate insurance expenses and
office supplies. Corporate assets consist primarily of cash and cash
equivalents and the cash value of officers life insurance.

NOTE F  SALE OF ASSETS

In September 2006,
the Company closed on the sale of real property owned by the company
in Houston, Texas. This sale resulted in a before tax gain of
$1,312,839. The proceeds from the sale of this property were used to
purchase and improve real property associated with the new coil
facility to be located in Decatur, Alabama.

Note G  RECENT ACCOUNTING PRONOUNCEMENT

In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No.
48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (FIN
48). This Interpretation provides guidance on recognition, classification and disclosure concerning
uncertain tax liabilities. The evaluation of a tax position requires recognition of a tax benefit
if it is more likely than not it will be sustained upon examination. We adopted this Interpretation
effective January 1, 2007. The adoption did not have a material impact on our consolidated
financial statements.

Note H  SUPPLEMENTAL CASH FLOW INFORMATION

The Company paid income taxes of approximately $2,027,000 and $2,690,000 in the periods ended
September 30, 2007 and 2006, respectively. The Company paid interest of approximately $48,000 and
$0 in the periods ended September 30, 2007 and 2006, respectively.

6



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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations Results of OperationsSix Months Ended September 30, 2007
Compared to Six Months Ended September 30, 2006 During the six months ended September 30, 2007, sales, costs of goods sold and
gross profit decreased $12,568,593, $10,487,656 and $2,080,937, respectively, from the comparable
amounts recorded during the six months ended September 30, 2006. The decrease in sales was related
to a decline in tons sold as well as a decrease in average selling prices.  Tons shipped decreased
from approximately 157,000 tons in the 2006 period to 145,000 tons in the 2007 period.  The
average per ton selling price decreased from approximately $664 per ton in the 2006 period to
approximately $632 per ton in the 2007 period.   The decline in costs of goods sold was primarily
related to the decrease in sales.  Average per ton costs of goods sold decreased from
approximately $611 per ton in the 2006 period to $589 per ton in the 2007 period.  The
decrease in gross profit was related primarily to the reduction in tons shipped.  In addition,
gross profit as a percentage of sales decreased from approximately 7.9% in the 2006 period to
6.8% in the 2007 period.   The Company experienced softer market conditions for its products in
the 2007 period compared to strong market conditions in the 2006 period. Coil product segment sales decreased approximately $14,041,000 during the 2007
period. This segment experienced decreases in both tons sold and average selling prices. Tons of
coil products sold declined from approximately 78,000 tons in the 2006 period to 61,000 tons in
the 2007 period. Average per ton selling price decreased from approximately $700 per ton to
approximately $662 per ton. Coil operating profit decreased approximately $577,000 due primarily
to the reduction in tons sold. Coil operating profit as a percentage of coil segment sales
decreased from approximately 3.8% in the 2006 period to 3.6% in the 2007 period. In the 2006 period, the Company phased out the Lone Star coil facility (LSCF).
The LSCF accounted for approximately 1% of total sales and generated a small loss in the 2006 period.
Certain LSCF assets will be redeployed to the Companys new coil operation to be located in
Decatur, Alabama in close proximity to the Nucor Steel Company
(NSC) steel mill located there. The Company expects to
have this new facility in operation in fiscal 2008. The Company is dependent on NSC for its supply
of coil inventory.  In the 2007 period, NSC continued to supply steel coils in amounts that were
adequate for the Companys purposes.  The Company does not currently anticipate any significant
change in such supply from NSC. Tubular product segment sales increased approximately $1,472,000 during the 2007
period.  This increase was primarily related to an increase in tons shipped in the 2007 period
which was partially offset by a decline in average selling price.  Tons shipped increased from
approximately 79,000 tons in the 2006 period to 84,000 tons in the 2007 period.  Average selling
prices declined from approximately $629 per ton in the 2006 period to $609 per ton in the 2007
period.  Tubular product segment operating profits as a percentage of segment sales were
approximately 10.1% and 6.9% in the 2006 and 2007 periods, respectively.   Margins were adversely
affected by softer market conditions in the 2007 period. Lone Star Steel Company (LSS) is the Companys primary supplier of tubular
products and coil material used in pipe manufacturing.  In June 2007, United States Steel
Corporation consummated its purchase of LSS.   In the 2007 period,
LSS continued to supply the Company with pipe in amounts that were adequate for the Companys
purposes. LSS has also been one of the Companys
principal customers for tubular products. A substantial portion of
the coil material purchased from LSS is manufactured into tubular
products and sold to LSS.  Beginning
in September 2007, the Company began to experience a decrease in the
tons of pipe historically produced for LSS which resulted in a
decrease in the Companys sales. The Company has been advised
that this reduction is associated with the adjustment of inventory
levels at LSS. If future production for LSS continues to be reduced,
the Company believes that its sales will decline but gross profit
will not be impacted proportionately as pipe produced for LSS is sold
to LSS at a reduced profit margin. During the 2007 period, general, selling and administrative costs decreased
$374,520 from the amount recorded during the 2006 period.  This decrease was related primarily
to decreases in commissions and bonuses associated with the decline in earnings and volume. 7




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##### Table of Contents





In September 2006, the Company sold the real property owned by the Company in
Houston, Texas and signed a twelve month rental agreement to rent corporate office space at
this location for $1,400 per month.  This sale resulted in a before tax gain of $1,312,839.
Proceeds received from the sale were used to purchase and improve real property associated with
the Companys new coil operation to be located in Decatur, Alabama.

Interest expense increased $47,740 in the 2007 period.  For two months in the
2007 period, the Company borrowed funds pursuant to its line of
credit facility to support cash flow.

Interest and other income decreased $26,483 from the comparable amount
recorded in the 2006 period.  This decrease was associated primarily with a decrease in the
average invested cash positions in the 2007 period.

Income taxes decreased $1,153,812 from the comparable amount recorded
during the 2006 period.   This decrease was primarily related to the decrease in earnings before
taxes.  Effective tax rates were 35.5% and 34.0% in the 2006 and 2007 periods, respectively.
In the 2007 period, the Company benefited from a reduction in state
taxes due to changes in state law and from a federal tax decrease
associated with manufacturing companies.

Three Months Ended September 30, 2007 Compared to Three Months
Ended September 30, 2006

During the three months ended September 30, 2007, sales, costs of goods sold and gross profit decreased
$10,475,373, $9,501,494 and $973,879, respectively, from the comparable amounts recorded during the
three months ended September 30, 2006.  The decrease in sales was related primarily to a decrease in tons
sold which declined from approximately 76,000 tons in the 2006 quarter to 67,000 tons in the 2007 quarter.
In addition, the average selling price per ton decreased from approximately $682 per ton in the 2006
quarter to $619 per ton in the 2007 quarter.  The decrease in costs of goods sold was primarily related to the
decrease in sales.  The average per ton cost of goods decreased from approximately $637 in the 2006
quarter to $582 in the 2007 quarter.  The reduction in gross profit was related to the reduction in
tons sold and a decrease in margins.  Gross profit as percentage of sales declined from approximately 6.6% in the 2006 quarter to
approximately 5.9% in the 2007 quarter.  The Company experienced softer market conditions for its
products in the 2007 quarter compared to somewhat stronger market conditions in the 2006 quarter.

Coil product segment sales decreased approximately $7,231,000 during the 2007 quarter.  This decrease
was related primarily to decrease in tons sold which decreased from approximately 37,000 tons in the 2006
quarter to 30,000 tons in the 2007 quarter.  In addition, average selling prices decreased from
approximately $731 per ton in the 2006 quarter to $648 per ton in the 2007 quarter.  Coil operating profit
increased approximately $39,000 from the amount recorded in the 2006 quarter.  Coil operating profits as a
percentage of sales were approximately 1.9% and 2.8% in the 2006 and 2007 quarters, respectively.   In the
2006 quarter, coil operations were adversely affected by an increase in cost of material that could not be
passed along to customers in the short term.

Tubular product segment
sales decreased approximately $3,244,000 during the 2007 quarter.
This decrease
was related to a decrease in average per ton selling price and decline in tons sold.  The average per ton
selling price decreased from approximately $636 per ton in the 2006 quarter to $594 per ton in the 2007
quarter.  In addition, tons sold decreased from approximately 39,000 tons in the 2006 quarter to 36,000 tons
in the 2007 quarter.   Tubular product segment operating profits as a percentage of segment sales were
approximately 8.9% and 5.9% in the 2006 and 2007 quarters, respectively.  The Company experienced
somewhat softer market conditions for its pipe products in the 2007 quarter as compared to conditions in
the 2006 quarter.

In June 2007, United States
Steel Corporation consummated its purchase of LSS, one of the
Companys principal customers for tubular products and the
primary supplier of tubular products and coil material used in the
Companys pipe manufacturing operations.  A substantial portion
of coil material purchased from LSS is manufactured into tubular
products which are then sold to
LSS. In the 2007 quarter, the Company began to experience a decrease
in the tons of pipe historically produced for LSS which resulted in
a decrease in the Companys sales of approximately $1,300,000.
The Company has been advised that this reduction is associated with
the adjustment of inventory levels at LSS. If future production for
LSS continues to be reduced, the Company believes that its sales will
decline but gross profit will not be impacted proportionately as pipe
produced for LSS is sold to LSS at a reduced profit margin.

General, selling and administrative costs declined $219,556 from the amount recorded in the 2006 quarter.
This decline was related primarily to bonuses and commissions based on earnings or volume.

In September 2006, the Company sold the real property owned by the Company
in Houston, Texas and
signed a twelve month rental agreement to rent corporate office space at this
location for $1,400 per month.
This sale resulted in a before tax gain of $1,312,839.  Proceeds received from
the sale were used to
purchase and improve real property associated with the Companys new coil
operation to be located in
Decatur, Alabama.

Interest and other income decreased $10,805 from the comparable amount recorded in the 2006 quarter.
This decrease was associated primarily with a decrease in the average invested cash positions in the 2007
quarter.

Federal income taxes decreased $730,990 from the comparable amount recorded during the 2006 quarter.
This decrease was primarily related to the decrease in earnings before taxes.  Effective tax rates were
34.8% and 34.3% in the 2006 and 2007 quarters, respectively.

8



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##### Table of Contents



FINANCIAL POSITION, LIQUIDITY AND
CAPITAL RESOURCES

The
Company remained in a strong, liquid position at September 30, 2007.
Current ratios were 3.3 and 2.2 at September 30, 2007 and
March 31, 2007, respectively. Working
capital was $27,826,760 at September 30, 2007 and $28,464,786 at
March 31, 2007.

During
the three months ended September 30, 2007, the Company maintained
assets and liabilities at levels it believed were commensurate with
operations. Changes in current assets and liabilities during the 2007
period  were related primarily to the ordinary course of business of the
Company. The Company expects to
continue to monitor, evaluate and manage balance sheet components depending on changes in market conditions and the Companys operations.

During
the period ended September 30, 2007, the Company
purchased approximately $2,760,223 in fixed assets. These assets were
related primarily to equipment associated with the new coil operation to be located in
Decatur, Alabama. In connection with this planned new operation, the
Company phased out its coil processing facility in Lone Star, Texas
in the 2006 period and will redeploy certain of these assets to
this new coil facility. At the Decatur site, the Company is
constructing a coil processing facility to include a steel temper
mill and a steel cut-to-length line including a leveling line. The
Company expects to commence operations at the Decatur site in fiscal
2008. In addition to the funds used to purchase the real property in
Alabama, the Companys Board of Directors authorized up to an
additional $16 million to be used for capital expenditures and
operational cash requirements at this location. At September 30, 2007, the
Company had invested approximately $8,800,000 at this location and
expects to spend approximately $700,000 to complete this facility.

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

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

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

CRITICAL ACCOUNTING POLICIES

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

FORWARD-LOOKING STATEMENTS

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

9



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##### Table of Contents






Item 3. Quantitative and Qualitative Disclosures About Market Risk

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




Item 4. Controls and Procedures

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

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

10



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##### Table of Contents



FRIEDMAN INDUSTRIES, INCORPORATED

Three Months Ended September 30, 2007





Part II  OTHER INFORMATION




Item 1. Legal Proceedings

Not applicable




Item 1A. Risk Factors

Not applicable




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



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




Item 3. Defaults Upon Senior Securities



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




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

At the Annual Meeting of
Shareholders held on September 6, 2007, the Companys
shareholders elected nine 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
|Jack Friedman   |  | 4,290,222        |  | 1,593,772      
|Harold Friedman |  | 4,295,144        |  | 1,588,850      
|William E. Crow |  | 4,304,975        |  | 1,579,019      
|Durga D. Arawal |  | 5,523,090        |  | 360,904        
|Charles W. Hall |  | 4,053,564        |  | 1,830,430      
|Alan M. Rauch   |  | 5,510,972        |  | 373,022        
|Hershel M. Rich |  | 5,520,329        |  | 363,665        
|Joel Spira      |  | 5,647,735        |  | 236,259        
|Joe L. Williams |  | 4,291,312        |  | 1,592,682      




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     

11



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##### Table of Contents






SIGNATURES

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



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

12



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EXHIBIT INDEX

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