Friedman Industries — Second Quarter 2026 Earnings Summary

Financial Performance

• Net sales for the quarter ended September 30, 2026, reached $286.8 million, an 88% increase year-over-year compared to $152.4 million in the prior-year quarter; six-month sales totaled $526.8 million, up 83% year-over-year.
• Net earnings for the quarter were $15.6 million ($2.19 diluted EPS), compared to $2.2 million ($0.32 diluted EPS) in the prior-year quarter; six-month net earnings were $28.4 million ($3.96 diluted EPS) versus $7.3 million ($1.03 diluted EPS) in the prior-year period.
• EBITDA for the quarter was $23.0 million, up from $4.7 million in the prior-year quarter; six-month EBITDA was $42.3 million compared to $12.8 million in the prior-year period.
• Sales volume reached approximately 219,500 tons in the quarter, a 23% increase year-over-year (up 40,500 tons), with six-month volume up 25% year-over-year.
• Operating earnings increased to $36.6 million for the quarter from $2.9 million in the prior-year quarter; six-month operating earnings were $57.6 million compared to $9.9 million.
• A $14.6 million loss on economic hedges of risk was recorded for the quarter (unrealized portion of $9.8 million), compared to an $851,000 gain in the prior-year quarter; six-month loss was $17.4 million versus a $1.1 million gain.
• Total assets were $425.5 million as of September 30, 2026, compared to $336.8 million as of March 31, 2026; total liabilities were $245.5 million versus $185.3 million.
• Total stockholders' equity was $180.1 million as of September 30, 2026, compared to $151.5 million as of March 31, 2026.

Guidance and Future Outlook

• The Company expects third-quarter sales volume to be consistent with seasonal trends.
• Management anticipates sequential improvement in sales margins for the third quarter driven by increases in average selling prices.
• The Company projects continued growth supported by an expanded operating platform, operational improvements, and commercial discipline.

Business Segments and Product Lines

• Flat-roll segment: Sales totaled $266.6 million for the quarter, up from $143.3 million in the prior-year quarter; operating earnings were $40.7 million compared to $5.7 million. Sales volume was 205,500 tons (185,500 tons inventory + 20,000 tons toll processing) versus 171,500 tons in the prior-year quarter. Average selling price for inventory tons was $1,430 per ton, up from $963 per ton.
• Tubular segment: Sales totaled $20.2 million for the quarter, up from $9.0 million in the prior-year quarter; operating earnings were $2.3 million compared to $0.9 million. Sales volume increased to 14,000 tons from 7,500 tons. Average selling price was $1,454 per ton, up from $1,185 per ton.
• Century Metals: The acquisition, closed in August 2025, contributed a full quarter of operations in the current period compared to one month in the prior-year quarter, driving significant volume growth.
• Legacy flat-roll facilities saw sales volume increase 15% year-over-year, outpacing industry peers in a constrained supply environment.

Market and Competitive Landscape

• The Company operated in a constrained supply environment, successfully maintaining inventory levels to meet customer demand.
• Friedman's growth in sales volume has outpaced industry peers.
• Higher metal prices contributed to stronger physical margins despite hedging losses.

Risks and Challenges

• Hedging activities resulted in a $14.6 million charge for the quarter, with $9.8 million being unrealized and related to open positions on inventory not yet sold.
• Forward-looking statements note risks including changes in demand and prices for products, government policy changes regarding steel, raw material availability, take-or-pay obligations, unplanned facility shutdowns, and increased competition from alternative materials.

Management Commentary and Tone

• CEO Michael J. Taylor described the second quarter as the "strongest in Friedman's history," citing record sales volume, revenue, and net earnings.
• Management highlighted success in maintaining inventory in a constrained supply environment and capitalizing on higher metal prices through physical margins.
• Taylor stated the Company enters the third quarter from a "position of strength" with a strong balance sheet and expanded operating platform.

Other Key Points

• The Company acquired Century Metals in August 2025, which is now fully integrated into results.
• The Company operates two segments: flat-roll products (processing carbon steel, stainless steel, and aluminum) and tubular products (manufacturing ERW pipe and OCTG).
• The Company uses EBITDA as a non-GAAP financial measure, defined as net earnings plus interest, taxes, depreciation, and amortization.