FRIEDMAN INDUSTRIES INC
For the period ended Mar 31, 2025. Filed Jun 12, 2025.
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FY2025 · Filed Jun 12, 2025
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EX-13.1 · 4. LEASES
4. LEASES
The Company has an operating lease for the Granite City, IL facility with an expiration date of* August 31, 2028and optional renewal provisions for up to4* renewal terms offive years each. The lease calls for monthly rental payments that adjust on an annual basis. The monthly rental payment in place at* March 31, 2025* and remaining in place until adjustment in* September 2025is approximately $13,000 per month. The anticipated execution of renewal options for this lease is included in the ROU asset and lease liability calculation. The Company has an operating lease for administrative office space in The Woodlands, TX with an expiration date of February 28, 2029and a renewal option forone* additional 60 month term. The lease calls for monthly rental payments that adjust on an annual basis. The monthly rental payment in place at* March 31, 2025* and remaining in place until adjustment in* March 2026is approximately $12,000 per month. The Company’s lease of its office space in Longview, Texas is the only other operating lease included in the Company's ROU assets and lease liabilities. This lease expires on April 30, 2027*and calls for monthly rental payments of approximately $5,000. The Company’s other operating leases for items such as IT equipment and storage space are either short-term in nature or immaterial.
In* October 2019,the Company received a new heavy-duty forklift under a 5-year finance lease arrangement with a financed amount of approximately $0.5 million and a monthly payment of approximately $9,000. The last payment under this lease was made in October 2024.*
The components of expense related to leases were as follows for the fiscal years ended* March 31, 2025* and2024 (in thousands):
| Fiscal 2025 | Fiscal 2024 | |
|---|---|---|
| Finance lease – amortization of ROU asset | $54 | $106 |
| Finance lease – interest on lease liability | — | 3 |
| Operating lease expense | 384 | 234 |
| $438 | $343 |
The following table illustrates the balance sheet classification for ROU assets and lease liabilities as of* March 31, 2025* and2024 (in thousands):
| March 31, 2025 | March 31, 2024 | Balance Sheet Classification | |
|---|---|---|---|
| Assets | |||
| Operating lease right-of-use asset | $2,841 | $2,841 | Operating lease right-of-use asset |
| Finance lease right-of-use asset | 378 | 404 | Property, plant & equipment |
| Total right-of-use assets | $3,219 | $3,245 | |
| Liabilities | |||
| Operating lease liability, current | $160 | $101 | Accrued expenses |
| Finance lease liability, current | — | 54 | Current portion of finance lease |
| Operating lease liability, non-current | 2,752 | 2,782 | Non-current lease liabilities |
| Total lease liabilities | $2,912 | $2,937 | |
Asof* March 31, 2025*, the weighted-average remaining lease term was 19.3 years for operating leases. The weighted average discount rate was 7.5% for operating leases.
Maturities of lease liabilities asof* March 31, 2025* were as follows (in thousands):
| Operating | Finance | |
|---|---|---|
| Leases | Leases | |
| Fiscal 2026 | 363 | — |
| Fiscal 2027 | 371 | — |
| Fiscal 2028 | 324 | — |
| Fiscal 2029 | 303 | — |
| Fiscal 2030 and beyond | 4,740 | — |
| Total undiscounted lease payments | $6,101 | $— |
| Less: imputed interest | (3,189) | — |
| Present value of lease liability | $2,912 | $— |
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