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The Company is engaged in steel processing, pipe manufacturing and processing and steel and pipe distribution.
Business Summary:Friedman Industries is a Texas Corporation incorporated in 1965. The Company is engaged in steel processing, pipe manufacturing and processing and steel and pipe distribution. The Company has two product groups: coil and tubular products. The Company purchases hot-rolled steel coils, processes the coils into flat, finished sheet and plate and sells these products on a wholesale, rapid-delivery basis in competition with steel mills, importers and steel service centers. The Company also processes customer-owned coils on a fee basis. The steel coils are processed through cut-to-length lines which level the steel and cut it to prescribed lengths. In addition, the Company operates steel temper mills which improve the flatness and surface qualities of hot-rolled steel. The Company's processing machinery is heavy, mill-type equipment capable of processing steel coils weighing up to 25 tons. Coils are processed to the specifications required for a particular order. Shipments are made via unaffiliated truckers or by rail and could generally be made within 48 hours of receipt of the customer's order. Through its Texas Tubular Products Division (TTP) in Lone Star, Texas, the Company manufactures, purchases, processes and markets tubular products. The Company has manufactured and sold substantially its entire line and oil country pipe to U.S. Steel Tubular Products, Inc. (USS), an affiliate of United States Steel Corporation, pursuant to orders received from USS. In addition, the Company manufactures and markets to others pipe for structural and other miscellaneous applications. In recent years, the Company has purchased from USS and marketed to others pipe for structural applications for some sizes of pipe that exceed the capability of the TTP pipe mills. The Company's main customers for Coil Products are steel distributors and customers fabricating steel products such as storage tanks, steel buildings, farm machinery and equipment, construction equipment, transportation equipment, conveyors and other similar products. The Company sells substantially all of its coil products through its own sales force. The Company's main customers for Tubular Products are steel and pipe distributors, piling contractors and, historically, USS. The Company is engaged in a non-seasonal, highly-competitive business. The Company competes with steel mills, importers and steel service centers. It is subject to a range of environmental laws and regulations in each of the jurisdictions in which it operates.FRD appears to be manufacturing commodity products. (i.e. no moat, no easily apparent competitive advantage, need to do more research besides reading its business description) I'm not sure about its geographic location as that could be an advantage over competition. What do you think?
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