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Tuesday, May 25, 2021 9:07:32 AM
FRD - Stellar guidance:
Friedman Industries Provides Fourth Quarter Earnings Guidance and Announces New Sinton Facility
GlobeNewswire - May 25 09:00 EDT
LONGVIEW, Texas, May 25, 2021 (GLOBE NEWSWIRE) -- Friedman Industries, Incorporated (NYSE – American: trading symbol FRD), a manufacturer and processor of steel products, today announced guidance for its fiscal fourth quarter ending March 31, 2021, and announced plans for a new facility in Sinton, Texas to support future growth.
EARNINGS GUIDANCE
Friedman Industries announced guidance for its fourth quarter ending March 31, 2021, and expects to issue audited results in late June. The Company expects fourth quarter net earnings to be in the range of $9.5 million to $10.5 million, making it the most profitable quarter in Company history. The estimated net earnings translate to estimated diluted earnings per share in the range of $1.37 to $1.52. Comparatively, diluted earnings per share for the third quarter ending December 31, 2020 was $0.30.
“Rapidly increasing steel prices and our strategic decisions to implement risk management practices and expand our supply chain options ahead of a tightening of global supply are the primary factors driving the significant increase in expected fourth quarter results compared to those of the prior quarter,” said Michael J. Taylor, President and Chief Executive Officer.
“As we enter our 2022 fiscal year, we expect further improvement in operating results for the first quarter ending June 30, 2021 compared to the fourth quarter, due primarily to further escalation of steel prices, which has created a strong margin environment,” Taylor continued.
Estimates for the quarter ended March 31, 2021 are unaudited and subject to adjustment pending the completion of the Company’s financial statement audit. Statements about the quarter ending June 30, 2021 are based on expectations given current market conditions, which are subject to change.
NEW FACILITY PLANNED FOR SINTON, TEXAS UPGRADES PRODUCT PORTFOLIO AND ENABLES COMPANY TO SERVE BROADER CUSTOMER BASE
The Company is excited to announce plans for a new facility in Sinton, Texas, which is expected to be well positioned to capture additional demand growth with an expanded portfolio and geographic advantages. Steel Dynamics, Inc. (“SDI”) has invited Friedman Industries to locate the new facility on the campus of its new flat roll steel mill currently under construction in Sinton, Texas. SDI’s Sinton mill will be the most advanced electric arc furnace mini mill in the world and will have an estimated annual capacity of 3 million tons with capabilities of producing flat roll up to 1” thick and 84” wide at 100,000 psi yield.
Friedman Industries’ Sinton location will consist of an approximately 70,000 square foot building located on approximately 25 acres leased from SDI under a 99-year agreement. The Company has selected Red Bud Industries to build one of the world’s largest stretcher leveler cut-to-length lines, capable of handling material up to 1” thick, widths up to 96” and yields exceeding 100,000 psi.
“This facility will expand the size range and grades of materials we can deliver to our coil segment customers, while extending our competitive footprint to better serve customers in the Southwest United States and Mexico,” commented Taylor. “The strategic co-location with SDI will enable us to capture freight efficiencies that will enhance our competitiveness and reduce our environmental footprint. We believe this modest strategic investment will create significant long-term value for our shareholders, enabling Friedman to both better serve existing customers and capture new opportunities in a region that is seeing significant long-term business investment. We would like to thank the SDI team for this opportunity and look forward to the potential this investment creates for Friedman Industries and its shareholders.”
The Company expects the location to commence operations in April 2022, and estimates the total cost of the project to be $21 million. On May 19, 2021, Friedman Industries signed a credit agreement and related documents with JPMorgan Chase Bank N.A. for a $40 million 5-year asset-based revolving line of credit facility (“ABL Facility”). The Company expects to fund the Sinton capital expenditure through a combination of cash generated from operations and funds drawn under the ABL Facility. More information about the ABL Facility can be found in the Company’s Form 8-K filed with the SEC on May 25, 2021.
Friedman Industries also has coil product locations in Hickman, Arkansas and Decatur, Alabama.
STARTUP OF NEW DECATUR, ALABAMA EQUIPMENT
In March, the Company’s new stretcher leveler cut to length line was commissioned at its Decatur, Alabama coil processing plant. After a period of equipment tuning and operator training, the Company has expanded its commercial efforts during May 2021.
Taylor commented: “We are incredibly pleased with the response we are seeing and the potential we anticipate from this new equipment that positions us well in a favorable demand environment.”
ABOUT FRIEDMAN INDUSTRIES
Friedman Industries, Incorporated, headquartered in Longview, Texas, is a manufacturer and processor of steel products with current operating plants in Hickman, Arkansas; Decatur, Alabama and Lone Star, Texas. The Company has two reportable segments: coil products and tubular products. The coil product segment consists of the operations in Hickman and Decatur. The Hickman facility operates a coil-to-coil temper mill and a corrective leveling cut to length line. The Decatur facility operates a stretcher leveler cut to length line. The tubular product segment consists of the operations in Lone Star where the Company manufactures electric resistance welded pipe and distributes pipe.
Friedman Industries Provides Fourth Quarter Earnings Guidance and Announces New Sinton Facility
GlobeNewswire - May 25 09:00 EDT
LONGVIEW, Texas, May 25, 2021 (GLOBE NEWSWIRE) -- Friedman Industries, Incorporated (NYSE – American: trading symbol FRD), a manufacturer and processor of steel products, today announced guidance for its fiscal fourth quarter ending March 31, 2021, and announced plans for a new facility in Sinton, Texas to support future growth.
EARNINGS GUIDANCE
Friedman Industries announced guidance for its fourth quarter ending March 31, 2021, and expects to issue audited results in late June. The Company expects fourth quarter net earnings to be in the range of $9.5 million to $10.5 million, making it the most profitable quarter in Company history. The estimated net earnings translate to estimated diluted earnings per share in the range of $1.37 to $1.52. Comparatively, diluted earnings per share for the third quarter ending December 31, 2020 was $0.30.
“Rapidly increasing steel prices and our strategic decisions to implement risk management practices and expand our supply chain options ahead of a tightening of global supply are the primary factors driving the significant increase in expected fourth quarter results compared to those of the prior quarter,” said Michael J. Taylor, President and Chief Executive Officer.
“As we enter our 2022 fiscal year, we expect further improvement in operating results for the first quarter ending June 30, 2021 compared to the fourth quarter, due primarily to further escalation of steel prices, which has created a strong margin environment,” Taylor continued.
Estimates for the quarter ended March 31, 2021 are unaudited and subject to adjustment pending the completion of the Company’s financial statement audit. Statements about the quarter ending June 30, 2021 are based on expectations given current market conditions, which are subject to change.
NEW FACILITY PLANNED FOR SINTON, TEXAS UPGRADES PRODUCT PORTFOLIO AND ENABLES COMPANY TO SERVE BROADER CUSTOMER BASE
The Company is excited to announce plans for a new facility in Sinton, Texas, which is expected to be well positioned to capture additional demand growth with an expanded portfolio and geographic advantages. Steel Dynamics, Inc. (“SDI”) has invited Friedman Industries to locate the new facility on the campus of its new flat roll steel mill currently under construction in Sinton, Texas. SDI’s Sinton mill will be the most advanced electric arc furnace mini mill in the world and will have an estimated annual capacity of 3 million tons with capabilities of producing flat roll up to 1” thick and 84” wide at 100,000 psi yield.
Friedman Industries’ Sinton location will consist of an approximately 70,000 square foot building located on approximately 25 acres leased from SDI under a 99-year agreement. The Company has selected Red Bud Industries to build one of the world’s largest stretcher leveler cut-to-length lines, capable of handling material up to 1” thick, widths up to 96” and yields exceeding 100,000 psi.
“This facility will expand the size range and grades of materials we can deliver to our coil segment customers, while extending our competitive footprint to better serve customers in the Southwest United States and Mexico,” commented Taylor. “The strategic co-location with SDI will enable us to capture freight efficiencies that will enhance our competitiveness and reduce our environmental footprint. We believe this modest strategic investment will create significant long-term value for our shareholders, enabling Friedman to both better serve existing customers and capture new opportunities in a region that is seeing significant long-term business investment. We would like to thank the SDI team for this opportunity and look forward to the potential this investment creates for Friedman Industries and its shareholders.”
The Company expects the location to commence operations in April 2022, and estimates the total cost of the project to be $21 million. On May 19, 2021, Friedman Industries signed a credit agreement and related documents with JPMorgan Chase Bank N.A. for a $40 million 5-year asset-based revolving line of credit facility (“ABL Facility”). The Company expects to fund the Sinton capital expenditure through a combination of cash generated from operations and funds drawn under the ABL Facility. More information about the ABL Facility can be found in the Company’s Form 8-K filed with the SEC on May 25, 2021.
Friedman Industries also has coil product locations in Hickman, Arkansas and Decatur, Alabama.
STARTUP OF NEW DECATUR, ALABAMA EQUIPMENT
In March, the Company’s new stretcher leveler cut to length line was commissioned at its Decatur, Alabama coil processing plant. After a period of equipment tuning and operator training, the Company has expanded its commercial efforts during May 2021.
Taylor commented: “We are incredibly pleased with the response we are seeing and the potential we anticipate from this new equipment that positions us well in a favorable demand environment.”
ABOUT FRIEDMAN INDUSTRIES
Friedman Industries, Incorporated, headquartered in Longview, Texas, is a manufacturer and processor of steel products with current operating plants in Hickman, Arkansas; Decatur, Alabama and Lone Star, Texas. The Company has two reportable segments: coil products and tubular products. The coil product segment consists of the operations in Hickman and Decatur. The Hickman facility operates a coil-to-coil temper mill and a corrective leveling cut to length line. The Decatur facility operates a stretcher leveler cut to length line. The tubular product segment consists of the operations in Lone Star where the Company manufactures electric resistance welded pipe and distributes pipe.
I have seen lots of $1 stocks with strong earnings and solid balance sheets triple, quadruple and more, but I have yet to see one go below zero.
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