Highest Quarterly Revenue of $16.8 Million; Backlog of $64.6 Million
MIDLAND, VA / ACCESSWIRE / June 11, 2024 / Smith-Midland Corporation (NASDAQ:SMID) a provider of innovative, high-quality proprietary and patented precast concrete products and systems today announced its first quarter results for the period ended March 31, 2024.
First Quarter 2024 Summary (compared to prior-year quarter)
- Revenue increased 30 percent to $16.8 million
- Product sales increased 30 percent to $10.8 million
- Service revenue increased 31 percent to $6.0 million
- Operating income of $1.5 million, compared to $54,000
- Net income of $1.1 million, or $0.22 and $0.21 per basic and diluted share, respectively, compared to $80,000 or $0.02 per basic and diluted share
- Started construction to double the size of its North Carolina plant
"We are off to a strong start in 2024, posting a 30 percent increase in revenue from the prior-year quarter and our highest quarterly revenue," said Ashley Smith, Chairman and Chief Executive Officer of Smith-Midland. "The increase was primarily driven by increased production of our soundwall and utility products and increased shipping and installation. We are experiencing a strong demand for our utility vaults in response to the continued growth of data centers. Our prospects for the remainder of the year remain very favorable, thanks to the inflow of infrastructure funding expected in the latter half of 2024 at the state and local level, as well as our backlog. We remain well-positioned to deliver strong growth and create long-term value for our shareholders."
First Quarter 2024 Results
The Company reported 2024 first quarter revenues of $16.8 million compared to revenues of $12.8 million in the first quarter of 2023. Product sales for the quarter were $10.8 million, a 30 percent increase from the prior-year quarter. Service revenue, which includes barrier rentals, royalty income and shipping and installation, increased 31 percent from the prior-year quarter to $6.0 million.
Gross profit increased to $3.9 million compared to $2.2 million in the prior year quarter due to the higher revenue base. Gross margin for the quarter improved by 480 basis points from the previous year's quarter to 23%, due primarily to higher production volume and better fixed cost absorption.
Operating income for the quarter was $1.5 million compared to $54,000 in the prior-year quarter. Net income for the first quarter was $1.1 million, or $0.22 and $0.21 per basic and diluted share, respectively, compared to net income of $80,000, or $0.02 per basic and diluted share in the first quarter of 2023.
Product Sales
Total product sales for the first quarter of 2024 were $10.8 million compared to $8.2 million in the prior-year quarter. Soundwall sales were $3.0 million compared to $1.0 million in the first quarter of 2023. The increase is primarily related to higher production volumes, specifically at the North Carolina and South Carolina plants. Miscellaneous wall sales increased to $1.8 million from $1.2 million in the prior-year quarter due to increased production volumes at the Virginia and South Carolina plants. Utility product sales increase to $1.7 million for the first quarter of 2024 compared to $275,000 in the prior-year quarter. Barrier sales were $1.7 million compared to $2.8 million in the first quarter of 2023.
Service Revenue
Service revenue, which is comprised of royalty income, barrier rental revenue, and shipping and installation totaled $6.0 million, compared to $4.6 million in the first quarter of 2023. Shipping and installation revenue increased 48 percent from the previous year quarter to $4.5 million. The increase is mainly attributable to the shipping and installation of SlenderWall and architectural panels that were previously produced throughout 2023. Royalty income totaled $575,000 compared to $411,000 in the first quarter of 2023, due to higher barrier production volumes by the Company's licensees. Barrier rental revenue for the first quarter of 2024 was $893,000 compared to $1.1 million in the prior-year quarter due to a shift towards longer-term rental projects from short-term rental projects.
Balance Sheet and Liquidity
As of March 31, 2024, Smith-Midland's cash totaled $6.8 million compared to cash totaling $9.2 million at the end of 2023. Account receivables totaled $20.1 million and debt totaled $5.6 million as of March 31, 2024. Capital spending totaled $1.8 million for the first quarter of 2024.
Macro Environment and Outlook
The Company anticipates increased sales volume for the full year of 2024 compared to 2023. Infrastructure initiatives across the United States is expected to drive greater bidding activity and a subsequent increase in backlog for its portfolio of patented, proprietary, and custom products. Backlog was approximately $64.6 million as of May 2024 compared to $51.4 million in backlog one year prior. The majority of the backlog is anticipated to be fulfilled within 12 months; however, some projects will have a multi-year timeline. The Company remains focused on long-term strategic growth initiatives to drive shareholder value.
About Smith-Midland
Smith-Midland develops, manufactures, licenses, rents, and sells a broad array of precast concrete products and systems for use primarily in the construction, transportation, and utility industries.
Smith-Midland Corporation has three manufacturing facilities in: Midland, VA, Reidsville, NC, and Columbia, SC, and a J-J Hooks® Safety Barrier rental firm, Concrete Safety Systems. Easi-Set Worldwide, a wholly owned subsidiary of Smith-Midland Corporation, licenses the production and sale of Easi-Set products, including J-J Hooks and SlenderWall®, and provides diversification opportunities to the precast industry worldwide. For more information, please call (540) 439-3266 or visit www.smithmidland.com.
Forward-Looking Statements
This announcement contains forward-looking statements, which involve risks and uncertainties. The Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors which might cause such a difference include, but are not limited to, product demand, the impact of competitive products and pricing, capacity and supply constraints or difficulties, our material weaknesses in internal controls, inflationary factors including potential recession, general business and economic conditions, our debt exposure, our high level of accounts receivables, the effect of the Company's accounting policies and other risks detailed in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.
Company Contact:
Stephanie Poe, CFO
540-439-3266
[email protected]
Investor Relations:
Steven Hooser or John Beisler
Three Part Advisors, LLC
214-872-2710
Smith-Midland Corporation
and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
ASSETS | March 31, 2024 (Unaudited) | December 31, 2023 | ||||||
Current assets | ||||||||
Cash | $ | 6,801 | $ | 9,175 | ||||
Accounts receivable, net | ||||||||
Trade - billed (less allowances of approximately $953 and $806, respectively), including contract retentions | 20,055 | 17,209 | ||||||
Trade - unbilled | 637 | 525 | ||||||
Inventories, net | ||||||||
Raw materials | 2,939 | 2,329 | ||||||
Finished goods | 4,012 | 2,821 | ||||||
Prepaid expenses | 1,246 | 1,266 | ||||||
Total current assets | 35,690 | 33,325 | ||||||
Property and equipment, net | 28,826 | 27,680 | ||||||
Other assets | 337 | 343 | ||||||
Total assets | $ | 64,853 | $ | 61,348 | ||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
Smith-Midland Corporation
and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(continued)
LIABILITIES AND STOCKHOLDERS' EQUITY | March 31, 2024 (Unaudited) | December 31, 2023 | ||||||
Current liabilities | ||||||||
Accounts payable - trade | $ | 6,944 | $ | 7,336 | ||||
Accrued expenses and other liabilities | 1,900 | 831 | ||||||
Deferred revenue | 3,217 | 2,717 | ||||||
Accrued compensation | 871 | 1,203 | ||||||
Accrued income taxes | 831 | 473 | ||||||
Operating lease liabilities | 34 | 43 | ||||||
Current maturities of notes payable | 640 | 636 | ||||||
Customer deposits | 2,950 | 2,779 | ||||||
Total current liabilities | 17,387 | 16,018 | ||||||
Deferred revenue | 5,572 | 4,424 | ||||||
Operating lease liabilities | - | 2 | ||||||
Notes payable - less current maturities | 4,931 | 5,092 | ||||||
Deferred tax liability | 1,650 | 1,651 | ||||||
Total liabilities | 29,540 | 27,187 | ||||||
Stockholders' equity | ||||||||
Preferred stock, $.01 par value; authorized 1,000,000 shares, none issued and outstanding | - | - | ||||||
Common stock, $.01 par value; authorized 8,000,000 shares; 5,349,599 and 5,349,599 issued and 5,308,679 and 5,308,679 outstanding, respectively | 54 | 54 | ||||||
Additional paid-in capital | 7,819 | 7,814 | ||||||
Treasury stock, at cost, 40,920 shares | (102 | ) | (102 | ) | ||||
Retained earnings | 27,542 | 26,395 | ||||||
Total stockholders' equity | 35,313 | 34,161 | ||||||
Total liabilities and stockholders' equity | $ | 64,853 | $ | 61,348 | ||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
Smith-Midland Corporation
and Subsidiaries
Condensed Consolidated Statements of Income
(unaudited)
(in thousands, except per share data)
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
Revenue | ||||||||
Product sales | $ | 10,752 | $ | 8,242 | ||||
Barrier rentals | 893 | 1,120 | ||||||
Royalty income | 575 | 411 | ||||||
Shipping and installation revenue | 4,536 | 3,069 | ||||||
Total revenue | 16,756 | 12,842 | ||||||
Cost of sales | 12,845 | 10,676 | ||||||
Gross profit | 3,911 | 2,166 | ||||||
Operating expenses | ||||||||
General and administrative expenses | 1,549 | 1,350 | ||||||
Selling expenses | 853 | 762 | ||||||
Total operating expenses | 2,402 | 2,112 | ||||||
Operating income (loss) | 1,509 | 54 | ||||||
Other income (expense) | ||||||||
Interest expense | (60 | ) | (64 | ) | ||||
Interest income | 8 | 6 | ||||||
Gain on sale of assets | 3 | 82 | ||||||
Other income | 44 | 25 | ||||||
Total other income (expense) | (5 | ) | 49 | |||||
Income (loss) before income tax expense (benefit) | 1,504 | 103 | ||||||
Income tax expense (benefit) | 357 | 23 | ||||||
Net income (loss) | $ | 1,147 | $ | 80 | ||||
Basic earnings (loss) per common share | $ | 0.22 | $ | 0.02 | ||||
Diluted earnings (loss) per common share | $ | 0.21 | $ | 0.02 | ||||
Weighted average number of common shares outstanding: | ||||||||
Basic | 5,309 | 5,256 | ||||||
Diluted | 5,350 | 5,290 | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
Smith-Midland Corporation
and Subsidiaries
Condensed Consolidated Statements of Stockholders' Equity
(unaudited)
(in thousands, except share data)
Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Total | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
Balance, December 31, 2023 | 5,349,599 | $ | 54 | (40,920 | ) | $ | (102 | ) | $ | 7,814 | $ | 26,395 | $ | 34,161 | ||||||||||||||
Restricted stock issued | - | - | - | - | - | - | - | |||||||||||||||||||||
Vesting of restricted stock | - | - | - | - | 5 | - | 5 | |||||||||||||||||||||
Net income (loss) | - | - | - | - | - | 1,147 | 1,147 | |||||||||||||||||||||
Balance, March 31, 2024 | 5,349,599 | $ | 54 | (40,920 | ) | $ | (102 | ) | $ | 7,819 | $ | 27,542 | $ | 35,313 | ||||||||||||||
Balance, December 31, 2022 | 5,345,189 | $ | 53 | (40,920 | ) | $ | (102 | ) | $ | 7,440 | $ | 25,664 | $ | 33,055 | ||||||||||||||
Adoption of ASU 2016-13 | - | - | - | - | - | (63 | ) | (63 | ) | |||||||||||||||||||
Vesting of restricted stock | - | - | - | - | 85 | - | 85 | |||||||||||||||||||||
Net income (loss) | - | - | - | - | - | 80 | 80 | |||||||||||||||||||||
Balance, March 31, 2023 | 5,345,189 | $ | 53 | (40,920 | ) | $ | (102 | ) | $ | 7,525 | $ | 25,681 | $ | 33,157 | ||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
Smith-Midland Corporation
and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 1,147 | $ | 80 | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 641 | 594 | ||||||
(Gain) loss on sale of property and equipment | (352 | ) | (82 | ) | ||||
Allowance for credit losses | 147 | 92 | ||||||
Stock compensation | 5 | 85 | ||||||
Deferred taxes | (1 | ) | 1 | |||||
(Increase) decrease in | ||||||||
Accounts receivable - billed | (2,993 | ) | (1,800 | ) | ||||
Accounts receivable - unbilled | (112 | ) | (1,544 | ) | ||||
Inventories | (1,801 | ) | (1,173 | ) | ||||
Prepaid expenses | 20 | (70 | ) | |||||
Refundable income taxes | - | 2 | ||||||
Increase (decrease) in | ||||||||
Accounts payable - trade | (392 | ) | 624 | |||||
Accrued expenses and other liabilities | 1,069 | (54 | ) | |||||
Deferred revenue | 1,648 | 59 | ||||||
Accrued compensation | (332 | ) | (148 | ) | ||||
Accrued income taxes | 358 | 22 | ||||||
Customer deposits | 171 | 1,757 | ||||||
Net cash provided by (used in) operating activities | (777 | ) | (1,555 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (1,795 | ) | (1,164 | ) | ||||
Proceeds from the sale of property and equipment | 355 | 82 | ||||||
Net cash provided by (used in) investing activities | (1,440 | ) | (1,082 | ) | ||||
Cash flows from financing activities: | ||||||||
Repayments of long-term borrowings | (157 | ) | (153 | ) | ||||
Net cash provided by (used in) financing activities | (157 | ) | (153 | ) | ||||
Net increase (decrease) in cash | (2,374 | ) | (2,790 | ) | ||||
Cash | ||||||||
Beginning of period | 9,175 | 6,726 | ||||||
End of period | $ | 6,801 | $ | 3,936 | ||||
Supplemental Cash Flow Information: | ||||||||
Cash payments for interest | $ | 60 | $ | 64 | ||||
Cash payments for income taxes | $ | - | $ | - | ||||
Non-Cash Investing Activity: | ||||||||
Capital expenditures in accounts payable | $ | 2,099 | $ | 2,052 | ||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
SOURCE: Smith-Midland Corporation
View the original press release on accesswire.com