Friedman Industries, Incorporated is a manufacturer and processor of steel products and operates in two reportable segments; coil products and tubular products.
The coil product segment includes the operation of five hot-rolled coil processing facilities located in Hickman, AR; Decatur, AL; Granite City, IL; East Chicago, IN and Sinton, TX. The facilities in Granite City and East Chicago were acquired on April 30, 2022 from Plateplus, Inc ("Plateplus"). More information about the Plateplus transaction can be found in Note B to the Company's Financial Statements. The facility in Sinton is a newly constructed facility that commenced operations during October 2022. The Hickman, Granite City and East Chicago facilities operate temper mills and cut-to-length lines. The Decatur and Sinton facilities operate stretcher leveler cut-to-length lines. The equipment at all locations improves the flatness and surface quality of the coils and cuts the coils into sheet and plate of prescribed lengths. On a combined basis, the facilities are capable of cutting sheet and plate with thicknesses ranging from 16 gauge to 1" thick in widths ranging from 36" wide to 96" wide. The coil product segment sells its prime grade inventory under the Friedman Industries name but also maintains an inventory of non-standard coil products, consisting primarily of mill secondary and excess prime coils, which are sold through the Company's XSCP division. The coil product segment also processes customer-owned coils on a fee basis.
As discussed above, the Company commenced operations at its new facility in Sinton, Texas in October 2022 which is part of the coil product segment. The new facility is on the campus of Steel Dynamics, Inc.'s ("SDI") new flat roll steel mill in Sinton, Texas. The Company's new location consists of an approximately 70,000 square foot building located on approximately 26.5 acres leased from SDI under a 99-year agreement. The facility is equipped with one of the world's largest stretcher leveler cut-to-length lines, capable of handling material up to 1" thick, widths up to 96" and yields exceeding 100,000 psi. The total cost of the project is estimated to be $22 million. At September 30, 2022, the Company's construction in process related to the Sinton project was $22,035,059 consisting of $13,834,826 in cash payments and $8,200,233 of accrued capital expenditures. The Company expects to fund the remainder of the Sinton capital expenditure through a combination of cash generated from operations and funds drawn under the ABL Facility. The Company expects the remainder of fiscal 2023 to be a ramp up period for the facility and then expects the facility's annual shipments could be in the range of 110,000 tons to 140,000 tons for fiscal 2024.
The tubular product segment consists of the Company's Texas Tubular Products division ("TTP") located in Lone Star, Texas. TTP operates two electric resistance welded pipe mills with a combined outside diameter ("OD") size range of 2 3/8" OD to 8 5/8" OD. Both pipe mills are American Petroleum Institute ("API") licensed to manufacture line pipe and oil country pipe and also manufacture pipe for structural purposes that meets other recognized industry standards. TTP has a pipe finishing facility capable of applying threads and couplings to oil country tubular goods and performing other services that are customary in the pipe finishing process. The pipe finishing facility is currently idled. TTP's inventory consists of raw materials and finished goods. Raw material inventory consists of hot-rolled steel coils that TTP will manufacture into pipe. Finished goods inventory consists of pipe TTP has manufactured.
Six Months Ended September 30, 2022 Compared to Six Months Ended September 30, 2021
During the six months ended September 30, 2022 (the "2022 period"), sales and costs of goods sold increased $153,008,165 and $176,682,762, respectively, and gross profit decreased $23,674,597 compared to the amounts recorded during the six months ended September 30, 2021 (the "2021 period"). The increase in sales was primarily related to an increase in tons sold. Tons sold increased from approximately 108,500 tons in the 2021 period to approximately 221,500 tons in the 2022 period. The significant growth in sales volume was related to the acquisition of facilities and inventory from Plateplus, Inc. which is discussed in more detail in Note B to the Company's Financial Statements. Discussion of the change in sales is expanded upon at the segment level in the following paragraphs. Gross profit decreased from approximately $47,024,917 for the 2021 period to approximately $23,350,320 for the 2022 period. Gross profit as a percentage of sales decreased from approximately 29.7% for the 2021 period to approximately 7.5% for the 2022 period. Gross profit for the 2022 period included $2,116,540 in recognized losses related to hedging activities while gross profit for the 2021 period included $2,398,900 in recognized net gains related to hedging activities. Excluding the recognized hedging gains and losses, gross profit related to physical material as a percentage of sales was approximately 8.1% for the 2022 period compared to approximately 26.8% for the 2021 period.
Our operating results are significantly impacted by the market price of hot-rolled steel coil ("HRC"). The Company experienced significant volatility in steel price during both the 2022 period and the 2021 period. HRC prices were on a historic rise entering the 2021 period that continued until reaching an all-time high of approximately $1,950 per ton at the end of August 2021. These circumstances created a high margin environment during the 2021 period in a period of historically high steel prices. From September 2021 to February 2022, HRC prices declined approximately 52% until the Russian invasion of Ukraine triggered a sharp and abrupt increase. HRC prices increased approximately 60% from the beginning of March 2022 to the end of April 2022 and then declined approximately 47% by the end of the 2022 period. These circumstances created strong margins to start the 2022 period and then margin compression for the remainder of the 2022 period.
Coil product segment sales for the 2022 period totaled $272,599,185 compared to $131,018,657 for the 2021 period. For a more complete understanding of the average selling prices of goods sold, it is helpful to exclude any hedging related gains or losses that are captured in sales and any sales generated from processing of customer owned material. Coil segment sales for the 2022 period were reduced by $2,116,540 for the recognition of hedging related losses. Coil segment sales for the 2021 period were reduced by $7,751,460 for the recognition of hedging related losses. Sales generated from processing of customer owned material totaled $693,167 for the 2022 period compared to $658,925 for the 2021 period. Sales generated from coil segment inventory, excluding the impact of any hedging related gains or losses, totaled $274,022,558 for the 2022 period compared to $138,111,192 for the 2021 period. The average per ton selling price related to these shipments decreased from approximately $1,681 per ton in the 2021 period to approximately $1,367 per ton in the 2022 period. Inventory tons sold increased from approximately 82,000 tons in the 2021 period to approximately 200,500 tons in the 2022 period. The significant increase in sales volume was primarily attributable to the facilities and inventory acquired from Plateplus which account for approximately 119,000 tons of the 200,500 tons sold in the 2022 period. Coil segment operations recorded operating profits of approximately $12,425,000 and $37,529,000 for the 2022 period and 2021 period, respectively. The operating profit for the 2022 period includes recognized net losses on hedging activities of $2,116,540 while the 2021 period operating profit included recognized net gains on hedging activities of $2,609,000.
The Company's coil segment purchases its inventory from a limited number of suppliers. Loss of any of these suppliers could have a material adverse effect on the Company's business.
Tubular product segment sales for the 2022 period totaled $38,896,314 compared to $27,468,677 for the 2021 period. Sales increased due to an increase in the average selling price per ton, partially offset by a decline in the volume sold. For a more complete understanding of the average selling prices of goods sold, it is helpful to exclude any hedging related gains or losses that are captured in sales. Tubular segment sales for the 2022 period were not impacted by any hedging related gains or losses. Tubular segment sales for the 2021 period were reduced by $433,340 for the recognition of hedging related losses. Sales generated from tubular segment inventory, excluding the impact of any hedging related gains or losses, totaled $38,896,314 for the 2022 period compared to $27,902,017 for the 2021 period. The average per ton selling price related to these shipments increased from approximately $1,060 per ton in the 2021 period to approximately $1,831 per ton in the 2022 period. Tons sold decreased from approximately 26,500 tons in the 2021 period to approximately 21,000 tons in the 2022 period. The decline in sales volume was primarily related to a decline in mill reject pipe sales partially offset by an increase in manufactured pipe sales. U.S. Steel's Lone Star Tubular Operations was the Company's sole source of supply for mill reject pipe. With U.S. Steel's idling of their Lone Star Operations, the Company's receipts of mill reject pipe ceased in August 2020 and the inventory balance started to decline steadily each quarter. The Company sold out of mill reject pipe during the quarter ended June 30, 2022. Mill reject pipe sales volume was approximately 1,000 tons for the 2022 period compared to approximately 13,500 tons for the 2021 period. Manufactured pipe sales volume was approximately 20,000 tons for the 2022 period compared to approximately 13,000 tons for the 2021 period. The average selling price increase was also primarily related to this shift in sales mix between manufactured pipe and mill reject pipe. The selling price associated with manufactured pipe is typically much higher than the selling prices associated with mill reject pipe. The Company will continue to focus on the expansion of its manufactured pipe operations to counteract the impact of mill reject pipe sales ending. The tubular segment recorded operating profits of approximately $5,445,000 and $4,598,000 for the 2022 period and 2021 period, respectively. The operating profit for the 2021 period included recognized net losses on hedging activities of approximately $210,000 while the Company did not have any hedging related gains or losses affecting operating results for the 2022 period.
The tubular segment purchases its inventory from a limited number of suppliers. Loss of any of these suppliers could have a material adverse effect on the Company's business.
General, Selling and Administrative Costs
During the 2022 period, general, selling and administrative costs increased $2,320,461 compared to the 2021 period. This increase is primarily associated with costs associated with the Plateplus transaction but partially offset by less incentive based compensation expense for the 2022 period. Cost for the 2022 period includes approximately $1,212,000 of one-time expenses related to the Plateplus transaction. Cost for the 2022 period includes approximately $2,344,000 of general, selling and administrative costs for the East Chicago and Granite City locations acquired from Plateplus.
For the 2022 period, the Company reported other income of $6,523,877. This income consists primarily of a $6,503,660 gain on derivative instruments not designated for hedge accounting. For the 2021 period, the Company reported other loss of $6,528,255. This loss consists primarily of a loss of $8,219,740 on derivative instruments not designated for hedge accounting partially offset by a $1,706,614 gain associated with the forgiveness of the Company's Paycheck Protection Program loan.
Income taxes decreased from a provision for the 2021 period of $7,271,580 to a provision for the 2022 period of $4,207,693. This decrease was primarily related to the lower earnings before income tax for the 2022 period but partially offset by the non-taxable treatment of the Paycheck Protection Program loan forgiveness which was recognized as part of earnings before income taxes for the 2021 period.
Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021
During the three months ended September 30, 2022 (the "2022 quarter"), sales and costs of goods sold increased $57,121,514 and $82,138,104, respectively, and gross profit decreased $25,016,590 compared to the amounts recorded during the three months ended September 30, 2021 (the "2021 quarter"). The increase in sales was primarily related to an increase in tons sold. Tons sold increased from approximately 54,500 tons in the 2021 quarter to approximately 117,000 tons in the 2022 quarter. The significant growth in sales volume was related to the acquisition of facilities and inventory from Plateplus, Inc. which is discussed in more detail in Note B to the Company's Financial Statements. Discussion of the change in sales is expanded upon at the segment level in the following paragraphs. Gross profit decreased from $29,694,982 for the 2021 quarter to $4,678,392 for the 2022 quarter. Gross profit as a percentage of sales decreased from approximately 32.1% for the 2021 quarter to approximately 3.1% for the 2022 quarter. Gross profit for the 2022 quarter included $1,490,360 in recognized losses related to hedging activities while gross profit for the 2021 quarter included $5,914,720 in recognized net gains related to hedging activities. Excluding the recognized hedging gains and losses, gross profit related to physical material as a percentage of sales was approximately 4.1% for the 2022 quarter compared to approximately 24.9% for the 2021 quarter.
Our operating results are significantly impacted by the market price of hot-rolled steel coil ("HRC"). The Company experienced significant volatility in steel price during both the 2022 quarter and the 2021 quarter. HRC prices were on a historic rise entering the 2021 quarter that continued until reaching an all-time high of approximately $1,950 per ton at the end of August 2021. These circumstances created a high margin environment during the 2021 quarter in a period of historically high steel prices. From September 2021 to February 2022, HRC prices declined approximately 52% until the Russian invasion of Ukraine triggered a sharp and abrupt increase. HRC prices increased approximately 60% from the beginning of March 2022 to the end of April 2022 and then declined approximately 47% by the end of the 2022 quarter. These circumstances created compressed margins during the 2022 quarter due to the downward trend in HRC prices during the quarter.
Coil product segment sales for the 2022 quarter totaled $129,722,213 compared to $78,323,927 for the 2021 quarter. For a more complete understanding of the average selling prices of goods sold, it is helpful to exclude any hedging related gains or losses that are captured in sales and any sales generated from processing of customer owned material. Coil segment sales for the 2022 quarter were reduced by $1,490,360 for the recognition of hedging related losses. Coil segment sales for the 2021 quarter were reduced by $3,065,780 for the recognition of hedging related losses. Sales generated from processing of customer owned material totaled $327,855 for the 2022 quarter compared to $366,991 for the 2021 quarter. Sales generated from coil segment inventory, excluding the impact of any hedging related gains or losses, totaled $130,884,718 for the 2022 quarter compared to $81,022,716 for the 2021 quarter. The average per ton selling price related to these shipments decreased from approximately $1,884 per ton in the 2021 quarter to approximately $1,228 per ton in the 2022 quarter. Inventory tons sold increased from approximately 43,000 tons in the 2021 quarter to approximately 106,500 tons in the 2022 quarter. The significant increase in sales volume was primarily attributable to the facilities and inventory acquired from Plateplus which account for approximately 65,000 tons of the 106,500 tons sold in the 2022 quarter. Coil segment operations recorded an operating loss of approximately $1,118,000 for the 2022 quarter compared to an operating profit of approximately $24,273,000 for the 2021 quarter. The operating profit for the 2022 quarter includes recognized net losses on hedging activities of $1,490,360 while the 2021 quarter operating profit included recognized net gains on hedging activities of $5,914,720.
The Company's coil segment purchases its inventory from a limited number of suppliers. Loss of any of these suppliers could have a material adverse effect on the Company's business.
Tubular product segment sales for the 2022 quarter totaled $19,970,196 compared to $14,246,968 for the 2021 quarter. Sales increased due to an increase in the average selling price per ton, offset by a slight decrease in tons sold. For a more complete understanding of the average selling prices of goods sold, it is helpful to exclude any hedging related gains or losses that are captured in sales. Tubular segment sales for the 2022 quarter were not impacted by any hedging related gains or losses. Tubular segment sales for the 2021 quarter were reduced by $21,000 for the recognition of hedging related losses. Sales generated from tubular segment inventory, excluding the impact of any hedging related gains or losses, totaled $19,970,196 for the 2022 quarter compared to $14,267,968 for the 2021 quarter. The average per ton selling price related to these shipments increased from approximately $1,223 per ton in the 2021 quarter to approximately $1,883 per ton in the 2022 quarter. Tons sold decreased from approximately 11,500 tons in the 2021 quarter to approximately 10,500 tons in the 2022 quarter. The decline in sales volume was primarily related to a decline in mill reject pipe sales partially offset by an increase in manufactured pipe sales. U.S. Steel's Lone Star Tubular Operations was the Company's sole source of supply for mill reject pipe. With U.S. Steel's idling of their Lone Star Operations, the Company's receipts of mill reject pipe ceased in August 2020 and the inventory balance started to decline steadily each quarter. The Company sold out of mill reject pipe during the quarter ended June 30, 2022. Mill reject pipe sales were approximately 5,500 tons for the 2021 quarter. All of the 2022 quarter's sales volume of approximately 10,500 tons was from manufactured pipe sales compared to approximately 6,000 tons for the 2021 period.. The average selling price increase was also primarily related to this shift in sales mix between manufactured pipe and mill reject pipe. The selling price associated with manufactured pipe is typically much higher than the selling prices associated with mill reject pipe. The Company will continue to focus on the expansion of its manufactured pipe operations to counteract the impact of mill reject pipe sales ending. The tubular segment recorded operating profits of approximately $3,341,000 and $1,997,000 for the 2022 quarter and 2021 quarter, respectively. The operating profit for the 2021 quarter included recognized net gains on hedging activities of $203,000 while the Company did not have any hedging related gains or losses affecting operating results for the 2022 quarter.
The tubular segment purchases its inventory from a limited number of suppliers. Loss of any of these suppliers could have a material adverse effect on the Company's business.
General, Selling and Administrative Costs
During the 2022 quarter, general, selling and administrative costs decreased $682,221 compared to the 2021 quarter. This decrease is due primarily to lower incentive related compensation in the 2022 quarter compared to the 2021 quarter. This decrease was mostly offset by increased payroll expenses associated with the additional sales, purchasing and administrative personnel that converted to Friedman employment after the Plateplus transaction and increased professional fees.
For the 2022 quarter, the Company reported other income of $3,756,174. This income consists primarily of a $3,749,420 gain on derivative instruments not designated for hedge accounting. For the 2021 quarter, the Company reported other loss of $6,840,317. This loss consists primarily of a $6,830,780 loss on derivative instruments not designated for hedge accounting.
Income taxes decreased from a provision for the 2021 quarter of $4,314,700 to a provision for the 2022 quarter of $734,609. The decrease in the provision for income taxes is primarily associated with the lower earnings before income taxes for the 2022 quarter.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's current ratio was 2.3 at September 30, 2022 and 2.1 at March 31, 2022. Working capital was $89,605,688 at September 30, 2022 and $64,551,208 at March 31, 2022.
During the six months ended September 30, 2022, the Company maintained assets and liabilities at levels it believed were commensurate with operations. Changes in balance sheet amounts occurred in the ordinary course of business and due to the transaction with Plateplus described in Note B. Accounts receivable and inventories increased significantly due primarily to the Plateplus transaction. Cash and restricted cash decreased primarily due to the Plateplus acquisition investing activities partially offset by cash generated from the Company's operating activities and by cash provided from the Company's credit facility. The Company expects to continue to monitor, evaluate and manage balance sheet components depending on changes in market conditions and the Company's operations.
In June 2021, the Small Business Administration authorized full forgiveness of the Company's Paycheck Protection Program loan.
On April 29, 2022, the Company entered into a Second Amendment to its asset-based lending facility ("ABL Facility") provided by JPMorgan Chase Bank, N.A. The Second Amendment increased the revolving loans available under the ABL facility from an aggregate principal amount of up to $75 million to an aggregate principal amount of up to $150 million. The ABL Facility matures on May 19, 2026 and is secured by substantially all of the assets of the Company. The Company can elect borrowings on a floating rate basis or a term basis. Floating rate borrowings accrue interest at a rate equal to the prime rate minus 1% per annum. Term rate borrowings accrue interest at a rate equal to the SOFR rate applicable to the selected term plus 1.8% per annum. Availability of funds under the ABL Facility is subject to a borrowing base calculation determined as the sum of (a) 90% of eligible accounts receivable, plus (b) the product of 85% multiplied by the net orderly liquidating value percentage identified in the most recent inventory appraisal multiplied by eligible inventory. The ABL Facility contains a springing financial covenant whereby the financial covenant is only tested when availability falls below the greater of 15% of the revolving commitment or $22.5 million. The financial covenant restricts the Company from allowing its fixed charge coverage ratio to be, as of the end of any calendar month, less than 1.10 to 1.00 for the trailing twelve month period then ending. The fixed charge coverage ratio is calculated as the ratio of (a) EBITDA, as defined in the ABL Facility, minus unfinanced capital expenditures to (b) cash interest expense plus scheduled principal payments on indebtedness plus taxes paid in cash plus restricted payments paid in cash plus capital lease obligation payments plus cash contributions to any employee pension benefit plans. The ABL Facility contains other representations and warranties and affirmative and negative covenants that are usual and customary. If certain conditions precedent are satisfied, the ABL facility may be increased by up to an aggregate of $25 million, in minimum increments of $5 million. On July 6, 2022, the Company entered into a Third Amendment to the ABL Facility. The Third Amendment to the ABL Facility provides for the syndication of the asset based revolving loans available thereunder with BMO Harris Bank, N.A. ("BMO") with JPMorgan Chase Bank serving as the arranging agent (the "Agent"). The Third Amendment also amends provisions of the ABL Facility authorizing the Agent to make protective advances under the ABL Facility and adds a covenant requiring each of the Company and its subsidiaries to maintain the Agent as its principal depository bank. In connection with the Third Amendment, the Company also entered into a Revolving Note payable to BMO in a principal amount of up to $50 million establishing BMO as a one-third syndicated participant in the Company's ABL facility. At September 30, 2022, the Company had a balance of $36,219,441 under the ABL Facility with an applicable interest rate of 3.04%. At September 30, 2022, the Company's applicable borrowing base calculation supported access to approximately $114 million of the ABL Facility. As of the filing date of this Form 10-Q, the Company had borrowings of approximately $34 million outstanding under the ABL Facility and the Company's most recent borrowing base calculation provided access to approximately $107 million of the ABL Facility.
The Company believes that its current cash position along with cash flows from operations and borrowing capability due to its financial position are adequate to fund its expected cash requirements for the next 12 months.
From time to time, the Company may use futures contracts to partially manage exposure to commodity price risk. The Company elects hedge accounting for some of its derivatives and classifies the transactions as either cash flow hedges or fair value hedges. From time to time, the Company may also transact futures contracts where hedge accounting is not elected. The Company recognized losses related to derivatives designated for hedge accounting of $1,490,360 and $2,116,540 for the three month and six month periods ended September 30, 2022. For derivatives not designated for hedge accounting, the Company recognized gains of $3,749,420 and $6,503,660 for the three month and six month periods ended September 30, 2022. See Note H for further information.
The Company expects sales volume of approximately 105,000 tons for its third quarter of fiscal 2023. The third quarter volume expectation is slightly lower than the second quarter volume due primarily to the impact of holidays during the third quarter of fiscal 2023. The Company expects slight margin improvement during the third quarter and for hedging activities to benefit the quarter's results. At the end of November 2022, multiple domestic steel producers announced price increases for hot-rolled coil. If the announced price increases gain acceptance, the Company would expect margin improvement entering the fourth fiscal quarter with additional margin improvement anticipated if steel mills were to announce further price increases.
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The more significant estimates and judgements include forecasted purchases of hot-rolled coil and forecasted sales of prime coil inventory and manufactured pipe inventory in relation to hedging activities and the fair value of the pipe-finishing facility, when impaired. From time to time, the Company hedges these forecasted purchases and sales and may designate those transactions for hedge accounting. If the original forecasts are subsequently reduced, it could result in the Company's hedged positions exceeding revised forecasts, thus warranting immediate recognition in earnings of previously deferred hedge income or losses associated with excess hedges. A pattern of missed forecasts could call into question the Company's ability to accurately predict forecasted transactions and the propriety of using hedge accounting in the future for similar forecasted transactions. To mitigate against the negative consequences of missing forecasts we have set an internal policy to designate hedging instruments for accounting purposes only up to 75% of forecasted sales or purchases. Determination of forecasted purchases of hot-rolled coil and forecasted sales of prime coil inventory and manufactured pipe inventory require the Company to make assumptions related to customer demand and the volume and timing of inventory purchases. The pipe-finishing facility impairment analysis requires assumptions related to future operations of the facility and estimates related to the replacement cost and value in exchange for the assets. Actual results could differ from these estimates.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
From time to time, the Company may make certain statements that contain forward-looking information (as defined in the Private Securities Litigation Reform Act of 1996, as amended) and that involve risk and uncertainty. Such statements may include those risks disclosed in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of this report, including the adequacy of cash and expectations as to future sales, prices and margins and our expectations for the construction and performance of our new Sinton, TX facility. These forward-looking statements may include, but are not limited to, future changes in the Company's financial condition or results of operations, future production capacity, product quality and proposed expansion plans. Forward-looking statements may be made by management orally or in writing including, but not limited to, this Management's Discussion and Analysis of Financial Condition and Results of Operations and other sections of the Company's filings with the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including the Company's Annual Report on Form 10-K and its other Quarterly Reports on Form 10-Q. Forward-looking statements include those preceded by, followed by or including the words "will," "expect," "intended," "anticipated," "believe," "project," "forecast," "propose," "plan," "estimate," "enable," and similar expressions, including, for example, statements about our business strategy, our industry, our future profitability, growth in the industry sectors we serve, our expectations, beliefs, plans, strategies, objectives, prospects and assumptions, and estimates and projections of future activity and trends in the oil and natural gas industry. These forward-looking statements are not guarantees of future performance. These statements are based on management's expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. Although forward-looking statements reflect our current beliefs, reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Actual results and trends in the future may differ materially depending on a variety of factors including, but not limited to, changes in the demand for and prices of the Company's products, changes in government policy regarding steel, changes in the demand for steel and steel products in general and the Company's success in executing its internal operating plans, changes in and availability of raw materials, unplanned shutdowns of our production facilities due to equipment failures or other issues, increased competition from alternative materials and risks concerning innovation, new technologies, products and increasing customer requirements. Accordingly, undue reliance should not be placed on our forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except to the extent law requires.
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