Note 7 - Stock Based Compensation

3 Months Ended

Jun. 30, 2025

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

NOTE 7 — STOCK BASED COMPENSATION

The Company maintains the Friedman Industries, Incorporated 2016 Restricted Stock Plan (the “Plan”). The Plan is administered by the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) and continues indefinitely until terminated by the Board or until all shares allowed by the Plan have been awarded and earned. The aggregate number of shares of the Company’s Common Stock eligible for award under the Plan is 500,000 shares. Subject to the terms and provisions of the Plan, the Committee may, from time to time, select the employees, directors or consultants to whom awards will be granted and shall determine the amount and applicable restrictions of each award. Restricted awards entitle recipients to vote and receive non-forfeitable dividends during the restriction period. Because dividends are non-forfeitable, they are reflected in retained earnings. Forfeitures are accounted for upon their occurrence. Because the Company accounts for forfeitures as they occur, the non-forfeitable dividends are reclassified from retained earnings to additional stock compensation for the actual forfeitures that occurred.

The following table summarizes the activity related to restricted stock awards for the three months ended June 30, 2025:

				Weighted Average
	Number of Shares			Grant Date Fair Value Per Share
Unvested at March 31, 2025		18,026		$	7.07
Cancelled or forfeited		—			—
Granted		89,534			14.39
Vested		(14,000	)		4.32
Unvested at June 30, 2025		93,560		$	14.49

The Company measures compensation expense for restricted stock awards at the market price of the common stock as of the grant date. Compensation expense for awards with time based restrictions is recognized over the requisite service period applicable to each award. Compensation expense for awards with performance based restrictions is recognized once it is probable the performance conditions will be satisfied with a cumulative effect adjustment and the remaining expense recognized over the remaining service period. The stock awards granted during the three months ended June 30, 2025 consist of 53,221 time restricted shares with annual ratable vesting over a three year period and 36,313 performance restricted shares with vesting thresholds dependent on the percentage of average earnings before tax to average accounts receivable, inventory and net PP&E over a three year period. The Company recorded compensation expense of approximately $0.1 million and $0.05 million in the three months ended June 30, 2025 and 2024, respectively, relating to the restricted stock issued under the Plan. As of June 30, 2025, unrecognized compensation expense related to unvested restricted stock was approximately $1.3 million which is expected to be recognized over a weighted average period of approximately 2.8 years. As of June 30, 2025, a total of 24,438 shares were still available to be issued under the Plan.