Friedman Industries delivered a solid Q4 2024 with pronounced margin expansion and robust cash generation. Revenue reached $132.232 million, up 6.5% year-over-year and 14% quarter-over-quarter, while gross profit rose to $66.516 million for a gross margin of 50.3%. Operating income was $10.003 million (operating margin 7.56%), and net income was $4.959 million, translating to $0.70 per share. The quarter benefited from improved product mix and disciplined cost management, contributing to a meaningful step-up in profitability despite a cyclical steel environment.
Cash flow remained a bright spot: operating cash flow (CFO) was $3.962 million, capital expenditures were modest at $1.018 million, yielding free cash flow of $2.944 million. The company ended the period with cash of $5.891 million and a net cash position of approximately $2.954 million, underscoring a conservative balance sheet with very low leverage. The balance sheet shows total assets of $230.019 million against liabilities of $102.544 million and stockholders’ equity of $127.475 million, with a current ratio of 3.14 and a quick ratio near 1.00, signaling ample liquidity to navigate a cyclical steel market.
Valuation and cycle considerations suggest a mixed but constructive investment backdrop. FRD trades with a trailing P/E around 6.4 and a price-to-book ratio near 1.0, reflecting a defensible earnings profile in a volatile steel cycle but also implying sensitivity to macro-driven volume and steel pricing. The company’s two-segment Coil and Tubular operations provide some diversification within steel processing, aiding margin resilience when demand conditions improve. Investors should monitor steel-product demand signals, input costs, inventory dynamics, and continued capital discipline as the cycle evolves.