April 18, 2006 — Friedman Industries, Inc. announced that it intends to establish a new steel processing and distribution operation in Decatur, Ala. The company expects to locate the facility on approximately 47 acres in Morgan County, Ala., near Decatur, which it intends to purchase at a price of approximately $650,000.

The company expects that the Decatur processing facility will initially operate a hot roll steel temper mill and a hot roll steel cut-to-length and leveling line. In addition to the funds to be used to purchase the real property in Alabama, the company's Board of Directors has authorized up to an additional $16 million to be used for capital expenditures and working capital related to the acquisition, improvement and operation of the Decatur facility.

The company also announced that it intends to phase out and terminate its steel processing and distribution operations in Lone Star, Texas, and relocate the facility’s coil operations to the new Alabama facility. The company intends to utilize assets from the Lone Star facility for the coil processing facility it will construct at the Decatur site.

The company also announced that it intends to expand its pipe manufacturing operations in Lone Star, Texas, by making certain improvements to its pipe mill which originally began operation in April 2004 (the No. 2 Mill). These improvements are expected to increase the No. 2 Mill's productive capacity and capabilities.

The company has also entered into an earnest money contract for the sale of its real property in Houston, Texas. Closing is subject to standard conditions, including inspections and feasibility studies. The company anticipates closing on the sale within the next 60 to 90 days. Following the closing, the company plans to lease the office building located on the Houston property and to maintain its corporate office at such location. The company intends to use the proceeds of this sale to purchase and improve the property in Decatur, Ala.

Houston-based Friedman Industries is engaged in steel processing, pipe manufacturing and steel and pipe distribution.