Executive Summary
Friedman Industries reported a challenging QQ2 2025, characterized by a meaningful drop in revenue and persistent negative profitability, yet delivering meaningful operating cash flow driven by working capital dynamics. Revenue for Q2 2025 was 106.76 million, down 18.35% year over year and 6.80% quarter over quarter, while gross profit totaled 3.93 million for a minimal gross margin of 3.68%. The company posted a net loss of 0.68 million and an EPS of -0.097, with EBITDA of 0.79 million. The quarterly result reflects continued pressure from a cyclical steel environment and pricing pressure across the Coil and Tubular segments, which contributed to the negative operating and net income despite a positive cash flow from operations of 10.78 million and free cash flow of 9.94 million. Balance sheet metrics show a modest liquidity cushion (current ratio about 4.07) but a relatively high debt load (total debt 38.69 million; net debt 36.21 million) that underscores leverage risk in a cyclical cycle. Management commentary on the quarter (as captured in the transcript data) is not available in the provided materials, limiting quotes for qualitative framing; nonetheless, the cash flow dynamics suggest emphasis on working capital discipline and potential debt reduction going forward. The current environment implies limited near-term profitability upside without improved steel pricing, better product mix, or meaningful cost reductions, but cash generation remains a potential lever to deleverage and fund strategic initiatives.
Key Performance Indicators
QoQ: -6.80% | YoY:-18.35%
QoQ: 26.34% | YoY:-32.43%
QoQ: 83.98% | YoY:-121.23%
QoQ: -126.30% | YoY:-119.21%
QoQ: -126.32% | YoY:-120.29%
Key Insights
Revenue: 106.759 million (Q2 2025). YoY change: -18.35%; QoQ change: -6.80%. Gross Profit: 3.933 million; Gross Margin: 3.68%. YoY gross margin decline vs prior year; QoQ margin improved (+26.34%). Operating Income: -0.224 million; Operating Margin: -0.21%. Net Income: -0.675 million; Net Margin: -0.63%. EPS: -0.0974; Diluted EPS: -0.0974. EBITDA: 0.79 million; EBITDA Margin: 0.74%. Cash Flow from Operations: 10.783 million. Free Cash Flow: 9.937 million. Capex: -0.846 million. Net Change in Cas...
Financial Highlights
Revenue: 106.759 million (Q2 2025). YoY change: -18.35%; QoQ change: -6.80%. Gross Profit: 3.933 million; Gross Margin: 3.68%. YoY gross margin decline vs prior year; QoQ margin improved (+26.34%). Operating Income: -0.224 million; Operating Margin: -0.21%. Net Income: -0.675 million; Net Margin: -0.63%. EPS: -0.0974; Diluted EPS: -0.0974. EBITDA: 0.79 million; EBITDA Margin: 0.74%. Cash Flow from Operations: 10.783 million. Free Cash Flow: 9.937 million. Capex: -0.846 million. Net Change in Cash: -1.609 million; Cash at End of Period: 2.538 million. Working Capital impact: Change in Working Capital +10.374 million. Receivables: -1.865 million; Inventory: +14.751 million; Accounts Payables: +0.238 million; Other Working Capital: -2.750 million; Other Non-Cash: +0.228 million.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
106.76M |
-18.35% |
-6.80% |
| Gross Profit |
3.93M |
-32.43% |
26.34% |
| Operating Income |
-224.00K |
-121.23% |
83.98% |
| Net Income |
-675.00K |
-119.21% |
-126.30% |
| EPS |
-0.10 |
-120.29% |
-126.32% |
Key Financial Ratios
operatingProfitMargin
-0.21%
operatingCashFlowPerShare
$1.55
freeCashFlowPerShare
$1.43
dividendPayoutRatio
-41.2%
priceEarningsRatio
-41.17
Management Commentary
Management commentary not captured in the provided transcript data. Summary takeaways from the quarter’s numerical results indicate a focus on cash generation and balance sheet strength despite near-term profitability headwinds. Highlights include: (1) revenue softness in a cyclical steel environment, (2) compressed gross margins and a negative net income, (3) robust operating cash flow driven by working capital movements, and (4) a relatively high debt burden that constrains leverage flexibility. The company’s ability to sustain positive free cash flow during a period of margin compression is notable, but continued deleveraging and margin recovery are critical for long-term equity value creation.
Forward Guidance
No explicit quarterly guidance was provided in the available materials for QQ2 2025. Given the cyclicality of the steel sector, investors should monitor: (1) steel price/volume trends affecting Coil and Tubular segments, (2) utilization and cost structure improvements at the two segments, (3) working capital dynamics that drove the strong CFO in this quarter, (4) debt maturation and refinancing needs, and (5) any capex optimization opportunities to improve asset utilization. In a recovery scenario, improvements in product mix, price realization, and operating leverage could meaningfully lift profitability toward breakeven or positive margins, while the debt burden remains a key risk to be monitored.