COMMUNIQUÉ DE PRESSE

par Smith-Midland Corporation (NASDAQ:SMID)

Smith-Midland Reports First Quarter 2023 Financial Results

Revenue Increased 23% to $12.8 Million; Backlog of $51.4 Million

MIDLAND, VA / ACCESSWIRE / May 15, 2023 / Smith-Midland Corporation (NASDAQ:SMID) a provider of innovative, high-quality proprietary and patented precast concrete products and systems announces their first quarter results for the period ended March 31, 2023.

First Quarter 2023 Highlights Compared to First Quarter 2022

  • Revenue increased 23 percent to $12.8 million from $10.4 million
  • Product sales increased 41 percent to $8.2 million from $5.9 million
  • Service revenue unchanged at $4.6 million
  • Operating income of $54,000, a $227,000 improvement
  • Net income of $80,000, or $0.02 per diluted share
  • Awarded contracts for $6 million to manufacture and install Architectural panels and columns
  • Awarded $5 Million in SoftSound® Noise Wall contracts for Northern Virginia Extension project

"Our first quarter 2023 results experienced continued momentum from 2022. Revenue increased 23 percent from the prior-year quarter, thanks to increased product sales, particularly for our SlenderWall product and retaining walls for multiple projects as well as barrier sales related to major projects in the Carolinas," said Ashley Smith, Chairman and Chief Executive Officer of Smith-Midland. "We also secured multiple contract awards to begin the year, including a $5 million award for SoftSound noise walls in Virginia and $6 million of our architectural walls and columns in Virginia and New Jersey. Overall, we remain well-positioned to capitalize on the multiple tailwinds present across the entire infrastructure sector, positioning us to deliver strong growth and create long-term shareholder value," concluded Smith.

First Quarter 2023 Results

The Company reported 2023 first quarter revenues of $12.8 million compared to revenues of $10.4 million in the first quarter of 2022. Product sales for the quarter were $8.2 million, a 41 percent increase from the prior-year quarter. Service revenue, which includes barrier rentals, royalty income and shipping and installation, was unchanged compared to the first quarter of 2022 at $4.6 million.

Gross profit increased to $2.2 million compared to $1.6 million in the prior year quarter due to the higher revenue base. Gross margin for the quarter improved by 110 basis points from the previous year's quarter to 16.9%, due primarily to higher production volume and improved fixed cost absorption.

Operating income for the quarter was $54,000 compared to an operating loss of $173,000 in the prior-year quarter. Net income for the first quarter was $80,000, or $0.02 per diluted share, compared to a net loss of $119,000, or $0.02 loss per share in the first quarter of 2022.

Product Sales

Total product sales for the first quarter of 2023 were $8.2 million compared to $5.9 in the prior-year quarter. Soundwall sales were $1.0 million compared to $1.4 million in the first quarter of 2022. The decrease is associated with the timing of completed projects. SlenderWall sales were $1.3 million, a 34 percent increase compared to the first quarter of 2022, as a large project was in production in the first three months of 2023. Miscellaneous wall sales increased to $1.2 million from $351,000 in the prior-year quarter due to the increased amount of retaining wall projects in production. Barrier sales tripled from $914,000 to $2.8 million in the first quarter of 2023, due primarily to large barrier projects in North Carolina and South Carolina. Easi-Set and Easi-Span Building Sales increased 64 percent from the prior-year quarter to $1 million.

Service Revenue

Service revenue, which is comprised of royalty income, barrier rental revenue, and shipping and installation, totaled $4.6 million, unchanged from the first quarter of 2022. Shipping and installation revenue increased 15 percent from the previous year quarter to $3.1 million. The increase is mainly attributable to the increase in shipping and installation of SlenderWall and architectural panels that were produced in the second half of 2022. Royalty income decreased slightly to $411,000 from $427,000 in the first quarter of 2022, due to weather related delays in projects experienced by licensees. Barrier rental revenue for the first quarter of 2023 was $1.1 million compared to $1.5 million in the prior-year quarter due to a slight slowdown in large barrier rental projects in the current period.

Balance Sheet and Liquidity

As of March 31, 2023, cash totaled $3.9 million compared to cash totaling $6.7 million for the year ended December 31, 2022. Account receivables totaled $17.9 million; and debt totaled $6.2 million as of March 31, 2023. Capital spending totaled $1.2 million for the first quarter of 2023.

Macro Environment and Outlook

With the significant backlog and continued strength in bidding activity, Smith-Midland anticipates increased sales volumes for the remainder of 2023 and continuing into 2024. The immediate outlook of continued infrastructure initiatives across the United States are anticipated to yield positive momentum across our portfolio of patented, proprietary, and custom products. While we see a continually dynamic macro environment, including increases in labor and material costs, we are working hard to mitigate these effects, to attract and retain quality labor, and to manage input costs. Backlog was approximately $51.4 million as of May 2023. 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 located 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, 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
investors@smithmidland.com

Investor Relations:
Steven Hooser or John Beisler
Three Part Advisors, LLC
214-872-2710

SMITH-MIDLAND CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

ASSETS
March 31, 2023
(Unaudited)
December 31,
2022
Current assets


Cash
$3,936$6,726
Accounts receivable, net
Trade - billed (less allowances of approximately $937 and $781, respectively), including contract retentions
17,86716,223
Trade - unbilled
2,534990
Inventories, net
Raw materials
2,7051,776
Finished goods
2,2862,042
Prepaid expenses
776706
Refundable income taxes
476477

Total current assets
30,58028,940

Property and equipment, net
25,67625,124

Other assets
243249

Total assets
$56,499$54,313

SMITH-MIDLAND CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(continued)

LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, 2023
(Unaudited)
December 31,
2022
Current liabilities


Accounts payable - trade
$6,440$5,816
Accrued expenses and other liabilities
745799
Deferred revenue
2,0012,243
Accrued compensation
640788
Accrued income taxes
168146
Operating lease liabilities
6477
Current maturities of notes payable
636618
Customer deposits
2,494737

Total current liabilities
13,18811,224

Deferred revenue
2,4752,174
Operating lease liabilities
3445
Notes payable - less current maturities
5,5585,730
Deferred tax liability
2,0872,085

Total liabilities
23,34221,258

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; 5,345,189 and 5,345,189 issued and 5,256,413 and 5,256,413 outstanding, respectively
5353
Additional paid-in capital
7,5257,440
Treasury stock, at cost, 40,920 shares
(102)(102)
Retained earnings
25,68125,664

Total stockholders' equity
33,15733,055

Total liabilities and stockholders' equity
$56,499$54,313

SMITH-MIDLAND CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
(in thousands, except per share data)


Three Months Ended March 31,

20232022
Revenue


Product sales
$8,242$5,851
Barrier rentals
1,1201,485
Royalty income
411427
Shipping and installation revenue
3,0692,672

Total revenue
12,84210,435

Cost of goods sold
10,6768,787

Gross profit
2,1661,648

Operating expenses
General and administrative expenses
1,3501,159
Selling expenses
762662

Total operating expenses
2,1121,821

Operating income (loss)
54(173)

Other income (expense)
Interest expense
(64)(48)
Interest income
63
Gain on sale of assets
8239
Other income
2520

Total other income (expense)
4914

Income (loss) before income tax expense (benefit)
103(159)

Income tax expense (benefit)
23(40)

Net income (loss)
$80$(119)

Basic and diluted earnings (loss) per common share
$0.02$(0.02)

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