Friedman Reports Record Quarter, Progress on Sinton Facility

“We continued to position our business to take advantage of opportunities in an unprecedented industry environment during the second fiscal quarter,” Friedman President and CEO Michael J. Taylor said. “Hot-rolled steel prices for the 2021 quarter were approximately 280% higher than prices for the 2020 quarter. Our coil segment sales volume was solid and exceeded pre-pandemic levels, while our tubular segment sales volume was below pre-pandemic levels but improved from the prior-year quarter. Physical margins across all products remained at historic levels.”

Friedman’s coil segment sales more than quadrupled to $78.3 million as the average selling price per ton jumped from approximately $584 per ton last year to $1,884 per ton in the 2021 quarter. Volume for the 2021 quarter was approximately 13% higher than pre-pandemic levels, the company said.

Tubular segment sales for the 2021 quarter totaled $14.2 million, up from $6.4 million the prior year. As with coil, tubular revenues rose due to an increase in the average selling price per ton, which jumped from $634 to $1,223. Tubulars volume for the 2021 quarter was 15% lower than pre-pandemic levels due in part to weak conditions in the energy sector.

Friedman broke ground in August on a new $21 million coil processing facility on the campus of Steel Dynamics Inc.’s new mill in Sinton, Texas. The new location will consist of a 70,000-square-foot building on 26.5 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 in the facility, capable of handling material up to one-inch thick in widths up to 96 inches and yields exceeding 100,000 psi. Operations are expected to commence in April 2022.

“We are excited about the future of our new Sinton facility and the growth opportunity it provides for the company,” said Taylor. “After an initial ramp-up period during calendar 2022, we expect the facility’s annual shipments to be in the range of 110,000 to 140,000 tons for calendar 2023. Based on these volumes and historical average margins, we currently believe annual EBITDA for our Sinton facility could be in the range of $4.5 million to $5.5 million.”

Headquartered in Longview, Texas, Friedman is a manufacturer and processor of steel products with locations in Hickman, Ark.; Decatur, Ala., and Lone Star, Texas, plus the facility under construction in Sinton.

By Tim Triplett, Tim@SteelMarketUpdate.com