Correct, if you are both flying round trip and want to use the companion code for both directions, you must use cash for your ticket in both directions and then you can use the companion code for your friend. You must both fly the same flight, on the same day, in the same cabin for any flight on which you want to use the companion fare.

If you just want to use the companion fare one way and fly on different flights home, you can buy a one way for yourself with cash and use the companion ticket for your friend to also fly one way. Then you can use miles for yourself to get home but your friend will then have to pay for his own flight home, whether in cash or miles.