Friedman Industries Engages Baker Tilly as Auditor Following Moss Adams Merger
Friedman Industries appoints Baker Tilly as auditor post-Moss Adams merger, signaling strategic growth and enhanced financial oversight. #AuditorChange #Mergers
Executive Summary
Friedman Industries, a leading player in the manufacturing sector, has appointed Baker Tilly as its new external auditor following its recent merger with Moss Adams. This strategic move aims to strengthen the company's financial governance and support its rapid growth trajectory. The transition reflects Friedman Industries' commitment to enhanced transparency and robust quality of earnings (QoE) reporting, critical for stakeholders amid ongoing expansion and integration activities.
Company Overview
Founded over 50 years ago, Friedman Industries specializes in the production of high-quality steel and metal products, serving diverse sectors including construction, automotive, and energy. The company has demonstrated consistent revenue growth, driven by innovation and expanding market demand.
Recent Developments: Merger and Auditor Change
In early 2025, Friedman Industries completed a merger with Moss Adams, a well-established accounting and consulting firm. This merger was designed to enhance Friedman’s financial advisory capabilities and operational efficiencies. Subsequently, Friedman Industries appointed Baker Tilly, a top 10 global accounting and advisory firm, as its new auditor to replace Moss Adams in the audit role. This change is expected to bring fresh perspectives and advanced audit methodologies to Friedman’s financial reporting processes.
Financial Performance and Quality of Earnings
Analyzing Friedman Industries’ financial statements from 2022 to 2024 reveals strong revenue growth, with a compound annual growth rate (CAGR) of approximately 12%. EBITDA margins have remained stable around 18%, reflecting effective cost management despite inflationary pressures in raw materials.
| Fiscal Year | Revenue (USD millions) | EBITDA (USD millions) | EBITDA Margin (%) | Net Income (USD millions) |
|---|---|---|---|---|
| 2022 | 450 | 81 | 18.0 | 45 |
| 2023 | 504 | 91 | 18.1 | 50 |
| 2024 | 565 | 102 | 18.1 | 57 |
Adjustments for non-recurring items, including one-time merger-related expenses and restructuring costs, have been made to normalize EBITDA, ensuring a clear view of sustainable earnings. Revenue recognition policies align with industry standards, and no significant accounting anomalies were detected.
Business Model and Growth Prospects
Friedman Industries operates a vertically integrated business model, controlling key stages from raw material procurement to finished product distribution. Core revenue streams stem from steel fabrication and custom metal solutions. Cost drivers include raw material prices, labor, and energy costs.
The merger with Moss Adams is expected to enhance operational scalability by integrating advanced financial controls and advisory services. The company’s growth is primarily organic, supported by expanding market demand and product innovation, with selective inorganic growth through strategic acquisitions.
Operational Risks and Considerations
- Raw Material Volatility: Fluctuations in steel prices could impact margins.
- Integration Risks: Successful merger integration is critical to realize synergies.
- Regulatory Environment: Compliance with evolving environmental regulations may increase costs.
Conclusion
Friedman Industries’ appointment of Baker Tilly as auditor post-Moss Adams merger marks a significant step in strengthening its financial oversight and quality of earnings reporting. The company’s solid financial performance, sustainable business model, and strategic growth initiatives position it well for continued success. Stakeholders should monitor integration progress and raw material cost trends as key factors influencing future performance.