Smith-Midland Corporation (SMID) research, news, and more from GeoInvesting

Company description

Thu, 13 Aug 2009 04:00:00 GMT

Smith-Midland develops, manufactures, licenses, rents, and sells a broad array of precast concrete products for use primarily in the construction, transportation and utilities Industries.

Research

Fri, 11 Jul 2025 17:29:04 GMT

Smith-Midland Corporation (NASDAQ:SMID) ($35.59; $188.8M market cap) announced Q1 2025 results:

Q1 sales of $22.7 million vs. $16.8 million in the prior year
Q1 EPS: $0.62 vs. $0.21 in the prior year
Barrier rental revenue surged to $8.4 million vs. $893,000 prior year, due to a special barrier project.
Backlog was approximately $52 million as of May 2025 vs. $64.6 million in May 2024.
Preliminary Q2 2025 outlook: revenue, gross margin, and net income are expected to exceed prior-year Q2.
Capital spending was $595,000 in Q1 2025.
Cash stood at $9.0 million; debt totaled $4.9 million as of March 31, 2025.

Management Commentary:

"We are off to a very strong start in 2025, reporting a 35% revenue increase and a near tripling of net income on a year-over-year basis. Our first quarter marks the fourth consecutive quarter of revenue in excess of $20 million, thanks to a special barrier project and a 27% increase in Soundwall sales," said Ashley Smith, Chairman and Chief Executive Officer of Smith-Midland.

"We expect this momentum to continue as infrastructure spending at the federal, state and local levels should continue for road projects and other precast concrete products, including our utility vaults and Easi-Set structures. We have multiple opportunities with our barrier products through the upcoming replacement cycle driven by MASH-TL3 compliance and our growing rental fleet. We also continue to increase our sales efforts for SlenderWall and Easi-Set precast concrete products. Overall, we remain confident in our ability to effectively meet the demand of our customers across the multiple sectors we serve and deliver long-term value to our shareholders," concluded Smith.

Outlook:

“The Company anticipates consistent sales volume for the full year of 2025 compared to 2024, but on which there can be no assurance.”

Our Quick Take:

With the backlog down and comments about consistent revenue as 2024, the next few quarters could show muted growth.

Smith-Midland Corporation designs, manufactures, and sells a range of precast concrete products and systems for construction, transportation, utility, and erosion control applications.

Research

Wed, 28 May 2025 15:22:32 GMT

Smith-Midland Corporation (NASDAQ:SMID) ($29.97; $157.8M market cap) announced Q4 2024 and full-year results:

Q4 2024 sales of $18.5 million vs. $16.4 million in the prior year
Q4 2024 GAAP EPS of $0.26 vs. $0.04 in the prior year
Full-year 2024 sales of $78.5 million vs. $59.6 million in the prior year
Full-year 2024 GAAP EPS of $1.45 vs. $0.15 in the prior year
Backlog at March 2025 was approximately $59.5M
Continued investment in capacity expansion and rental fleet
Full-year utility product sales up 171% due to AI-related data center demand
Barrier rental revenue rose 90% year-over-year to $12.0M
Preliminary Q1 2025 revenue, gross margin, and net income expected to exceed Q1 2024 results

Our Quick Take:

We are continuing to watch the company’s momentum in its data center business.

"2024 was another record year for Smith-Midland, including our highest annual revenue and net income and the past three quarters represent the highest revenue quarters in company history," said Ashley Smith, Chairman and Chief Executive Officer of Smith-Midland. "Fourth quarter revenue increased 13 percent from the prior-year quarter, thanks to increased utility product sales and shipping and installation revenue."

"We believe the outlook for 2025 remains very favorable as funding from the Infrastructure and Jobs Act by state and local governments continues. Demand for utility vaults remains strong due to the continued need for data centers to support AI technology. The shift towards private/public highway projects and the approaching timeline for MASH-TL3 compliance remains an ongoing opportunity for our patented JJ-Hooks highway barrier system, and our larger rental fleet allows us to increase the quantity and scale of projects in which we can participate. We will continue to invest in our business. This includes increasing our sales efforts for SlenderWall and Easi-Set precast concrete products. Other continued investments include plant expansion in North Carolina, our investment in new soundwall forms and batch plant for anticipated increased production capacity in South Carolina and a substantial increase in our barrier rental fleet. Overall, we remain well-positioned to meet the increased demand across the multiple sectors we serve and deliver long-term value to our shareholders," concluded Smith.

Smith-Midland Corporation designs, manufactures, and sells a range of precast concrete products and systems for construction, transportation, utility, and erosion control applications.

Research

Tue, 26 Mar 2019 14:50:30 GMT

Smith-Midland Corp (OOTC:SMID) ($7.40; $37.5M market cap), a concrete product supplier, announced Q4 2018 results:

Sales of $11.7 million vs $10.0 million in the prior year
EPS of $0.17 vs $0.07 in the prior year

'The Company had significant earnings improvement in the fourth quarter 2018 of $0.17 per share. The guaranteed buy-back deferral on our largest barrier order ever continues to impact current earnings as the deferred buy-back revenue balance increased to $6.6 million and the deferred buy-back asset balance increased to $5.3 million, which impacted pre-tax net income for the year by $1.3 million. Moving forward, the Company will be recognizing the deferred income through 2022, increasing bottom line profits each year...

...Total Assets for the Company grew this year to $41.4 million at December 31, 2018 from $29.2 million at December 31, 2017, an increase of $12.2 million, or 41.8%, while only increasing outstanding debt on notes payable by $1 million. The continued reinvestment back into the Company prepares for the expected year over year sales growth with the high probability of accelerated infrastructure projects in our markets.

Construction of our newest manufacturing facility in North Carolina is slightly behind schedule due to construction and weather delays, as it continues to remain within the $3.3 million budget. We now expect production to begin at the new facility in the third quarter 2019. With plant capacity in North Carolina more than doubling, we continue to bid on larger contracts to be manufactured in the new plant.''

We have covered SMID before and it was once a GeoBargain. We often mentioned that investors should note that the quarterly results typically exhibit a fair amount of volatility. You can see our full coverage on SMID here.

Research

Mon, 07 May 2018 16:59:57 GMT

Smith-Midland Corp (OOTC:SMID) ($8.75; $44.4M market cap), a concrete product supplier, remains on watch. We have performed on-the-ground due diligence on SMID in the past, including an onsite visit you can read about here. In our last update in early February 2018 we stated we were watching SMID due to bullish commentary in its Q3 release. See our last update here.

Since then, SMID has reported its Q4 results which were less profitable than expected. The company also stated that Q1 2018 was off to a slow start due to unfavorable weather, but that they expect the final three quarters of 2018 to show significant bottom-line improvements over the first quarter. It's hard to know what this implies for year over year quarterly comparisons until the company Q1 2018 report. However, we are getting clues that SMID’s business is looking really healthy.

Last Friday, the company issued a press release announcing a major expansion at its Smith-Carolina plant. The company plans to invest $3 million in a new 15,000 square foot facility for future expansion. Management's comments regarding the expansion:

“There have been increasing demands from our customers. Our current facility is literally busting at the seams,” said Rod Smith, General Manager. “We are really looking forward to having the capacity to handle a burgeoning North Carolina market long into the future.”

We are considering adding SMID to our Buy on Pullback Mock Portfolio 7.0.

Research

Mon, 05 Feb 2018 16:47:38 GMT

$SMID ($9.80; 48.8M market cap) - Despite weak Q3 Numbers, we are placing SMID, a developer, manufacturer, and seller of a broad array of precast concrete products, back on watch due to bullish commentary in its Q3 2017 earnings release:

“Smith-Midland is actively pursuing, and has received letters of intent for a number of large project contracts for highway safety barrier, highway soundwall, and Slenderwall products, for which the Company expects to receive orders in the near future. If and when awarded, these projects will generate a backlog that will keep production near full capacity past 2018. Growth potential in both production volume and bottom line profitability is at the forefront of management’s strategy.”

We have performeddue diligence on SMID in the past, including an onsite visit you can read abouthere. The stock was a GeoBargain from late 2015 to mid-2016, during our emphasis on the government’s focus to bolster infrastructure in the US. The stock has more than tripled since it was coded as a GeoBargain in late 2015. Those investing in SMID need to know that quarterly financial results have typically exhibited a good amount of volatility, even as the company grows on annual basis.

Research

Tue, 01 Aug 2017 14:58:42 GMT

SMID ($7.53) announced that it was awarded a contract to supply 124,000 Linear Feet (LF) of J-J Hooks precast concrete safety barriers for the $336-million I-395 design-build project that will extend the Express Lanes along an eight-mile section of I-395 in Fairfax and Arlington Counties.

We cannot safely anticipate the revenue and income that SMID will derive from the project because it heavily depends on the progress of the project and the agreed upon unit rate. We are trying to get a better grip on the effect of this contract to the company’s financials going forward.

A positive indication is that the 124,000 LF project has been the biggest J-J Hooks related project that we could find so far. The latest J-J Hook related announcements was for over 39,000 LF of Hooks in February.

Research

Mon, 01 May 2017 14:55:31 GMT

SMID (7.18) - On Friday, during the trading day, SMIDannounced a possible licensing agreement with one of China’s largest construction companies, Nantong Sijian Construction Group.

“Nantong Sijian Construction Group (“NSCG”) Chairman Geng Yuhua and his team visited Smith-Midland Corp. for two days in mid-April. Based in Jiangsu Province, NSCG has 70,000 employees working in construction, including precast concrete, Smith-Midland’s specialty...

...While in the United States, NSCG will be visiting other companies that produce competing products to Smith-Midland Corp. hoping to find a cladding product that will work consistently with constructions methods. Accordingly, there can be no assurance that a licensing agreement with Smith-Midland Corp. will be established.”

SMID develops, manufactures, licenses, rents, and sells a broad array of precast concrete products for use in the construction, transportation and utilities industries.

We have performed due diligence on SMID in the past, including an onsite visit you can read about here. The stock was a GeoBargain from late 2015 to mid-2016, a time at which we began to emphasize the government’s focus on infrastructure. The stock has more than doubled since our late 2015 GeoBargain coding. Trump’s presidency brought many stock’s like SMID to the forefront, helping them outperform the market into the first part of 2017.

Research

Fri, 31 Mar 2017 17:36:43 GMT

SMID ($5.85), a GeoBargain from 11/2/2015 to 5/19/2016, announced Q4 2016 results:

Sales of $10 million vs $7.7 million in the prior year
EPS of $0.15 vs $0.03 in the prior year

Quotes from management:

“The Company ended the year extremely well with a profitable fourth quarter and a record year for revenues and profits. We are looking forward to 2017 for continued growth and profitability.

Smith-Columbia, our latest precast concrete factory acquisition located in South Carolina, has started fast and is highly profitable in its first year. New orders are continuing to arrive in Columbia at a rapid pace.”

Recall that our bullishness on the company stemmed from our optimism that infrastructure would heat up over the course of the next couple of years, even visiting their facilities at the height of our coverage. This indeed did happen, but our patience for the performance of the stock was tested, which ultimately led us to exiting our position (Obviously too early). Having said this, long-term investors have been handsomely rewarded.

Read more on our history with SMID here. Smith-Midland Corporation, through its subsidiaries, invents, develops, manufactures, markets, leases, licenses, sells, and installs precast concrete products primarily for use in the construction, highway, utilities, and farming industries in the United States.

Research

Tue, 15 Nov 2016 18:38:29 GMT

SMID ($4.05) announced Q3 2016 results:

Sales of $12.4 million vs $10.4 million in the prior year
EPS of $0.34 vs $0.23 in the prior year

Quotes from management:

"We expect all of our companies, Smith-Midland VA, Smith-Carolina, NC, Smith-Columbia, SC, Concrete Safety Systems and Easi-Set Worldwide to continue in a profitable manner. The Smith-Columbia precast plant has two significant barrier contracts and one moderate lagging panel contract. We have bid on several soundwall projects and management believes we have a fair chance of obtaining these contracts. We believe that 2016 will be an outstanding year for Smith-Midland."

Congrats to patient investors and contributor William Xion for his bullish call on SMID in March 2016. Unfortunately we bailed on the stock due to uncertainty on management's ability to consistently grow the company. As we stated when we removed SMID from the GeoBargain list.

Research

Tue, 13 Sep 2016 04:00:00 GMT

SMID ($3.70) - Ex-GeoBargain SMID announced it was selected to supply its soundwall product for the Virginia Department of Transportation (VDOT). The overall VDOT project is $31 million and we are analyzing SMID’s potential portion of the contract. From our initial rudimentary analysis, we think the value of this contract could be at least $1.5M in revenue. It’s worth noting that SMID has stated on several occasions that the price environment for its products has improved. Our analysis used the value of past contracts and may be conservative due to the better pricing environment.

SMID reached a new 52 week high of $3.80 on September 7, 2016. We coded SMID a GeoBargain on November 2, 2015 when the stock was trading at $3.10. On May 19, 2016 we stated, despite shares trading near book value ($2.40), that we were removing SMID from the GeoBargain list due to our lack of confidence that management could produce consistent profitability.

We noted that demand could still see significant increase due the passage of the $305 billion highway bill and that management did expect each segment to increase “slightly to meaningfully” in 2016 based on commentary from the 10-Q.

Patient investors in SMID were rewarded, even as we moved on to other opportunities.

Research

Wed, 31 Aug 2016 15:36:43 GMT

SMID ($3.74) - Ex-GeoBargain SMID reached a new 52 week high on August 26, 2016 of $3.76. We coded SMID a GeoBargain on November 2, 2015 when the stock was trading at $3.10. On May 19, 2016 we stated, despite shares trading near book value ($2.40), that we were removing SMID from the GeoBargain list due to our lack of confidence that management can produce consistent profitability.

We noted that demand could still see significant increase due the passage of the $305 billion highway bill and that management did expect each segment to increase slightly to meaningfully in 2016 based on commentary from the 10-Q.

Patient investors were rewarded, even though we moved on to other opportunities.

Research

Thu, 19 May 2016 15:26:00 GMT

Even though SMID is trading at book value, we are removing SMID as a GeoBargain due to our lack of confidence that management can produce consistent profitability even as revenues continue to increase. We will continue to actively track the story as the passage of the recent highway bill could still lead to a significant increase in demand for the Company’s products.

We encourage you to the read the segment by segment breakdown for Q1 2016. Management expects nearly every segment to increase slightly to meaningfully in 2016. See the full breakdown here.

Research

Wed, 18 May 2016 19:03:29 GMT

One of the biggest frustrations investors have with SMID is believing that management has turned a corner to put the company on path of consistent profitable growth. Q1 2016 financial results illustrate this point. While the top-line for the quarter was up a strong 92%, we were somewhat surprised the Company was not able to generate a profit on that level of revenue, as it did in Q4 on lower sales.

This quarter, SMID reported EPS loss of $0.02 on sales of $8.0 million, compared to a profit of $0.05 on sales of $7.7 million in the fourth quarter of 2015.

Another area of concern we have is management's grip on business conditions it normally outlines in its 10-Q and 10-K filings:

The Q3 2015 management discussion & analysis was decidedly bullish accompanied with what appeared to be some pretty good visibility out to June 2016.
The Q4 2015 management discussion & analysis introduced some less robust commentary

Now after reading through SMID's Q1 2016 filing 10-Q it seems management has a decidedly bullish outlook for 2016, at least from a top line perspective. We have less clarity on how margins will play out. One thing is clear to us, investors in SMID will need to exercise patience and deal with volatility in sales and earnings along a path to growth.

Here is the segment by segment breakdown for Q1 2016. As you can see below, management expects nearly every segment to increase slightly to meaningfully in 2016.

Wall Panel Sales - Wall sales are generally large contracts issued by general contractors for production and delivery of a specific wall panel for a specific construction project. Changes in the mix of wall sales depend on what contracts are being bid and what projects are in production during the period. Overall wall panel sales increased significantly during the three months ended March 31, 2016, compared to the same period in 2015. The following describes the changes by product type:

Soundwall sales increased by 725% for the three month period ended March 31, 2016 when compared to the same period in 2015. In addition to soundwall contracts that were obtained prior to a pick up in regional economic activity, with the passage of the federal highway bill, state highway departments are beginning to have more highway funds available for state projects which has increased the need for soundwall projects in Virginia. In addition, because of the availability of more projects, price for soundwall have increased modestly. Management expects that soundwall revenue should remain relatively strong during the remainder of the year.

Architectural panel sales decreased significantly during the three month period ended March 31, 2016, compared to the same period in 2015. The decrease resulted from having substantially completed one large project in 2015 with only minor amounts left to complete in the first quarter of 2016. The Company has two small architectural projects in its current backlog to be completed in 2016. While the construction economy has been trending up for the past 12 months, the volume of architectural projects continues to be less than that of other wall panel projects but not as competitive as 2015.

Slenderwall panel sales decreased by 88% during the three month period ended March 31, 2016 when compared to the same period in 2015. The decrease resulted from the completion of two Slenderwall projects during 2015. The Company has a $2 million Slenderwall project that begins production in May of 2016 and has been awarded a $3.2 million Slenderwall project that will start production later in 2016. In addition, the Company has bid several other Slenderwall projects and expects to be awarded one or more prior to the end of the year. Slenderwall sales should increase during 2016 and into 2017.

Miscellaneous wall panels significantly increased for the three month period ended March 31, 2016 when compared to the same period in 2015. The Company began a miscellaneous project in the fourth quarter of 2015 that will run through 2016 in the amount of $2.5 million. We expect sales to continue to be strong for the remainder of 2016 for miscellaneous wall panels. The market seems to be strong in this area as we have bid on several other projects that, if awarded, would begin later in the year.

Barrier Sales - Barrier sales increased significantly during the period ended March 31, 2016 compared to the same period in 2015. As discussed above in the soundwall panel sales, the passage of the federal highway bill created numerous highway projects in Virginia requiring soundwall panels, barrier sales and barrier rentals discussed below. The Company has commenced production under the $3.5 million barrier contract for the facility in Columbia, South Carolina and a large contract in its Midland, Virginia facility. Several more sales/barrier rental contracts are being reviewed now for bid, indicating that barrier sales and rentals should be strong for the remainder of 2016.

Easi-Set® and Easi-Span® Building Sales - Building and restroom sales increased 52% for the three months ended March 31, 2016, compared to the same period in 2015. The increase in sales was mainly due to the increase in restroom sales for state parks and other outside venues for the period. Management believes the Company will continue to see a slight increase in building and restroom sales for the remainder of 2016 as requests for bids has increased over the past six months.

Utility and Farm Product Sales - Utility and farm products sales decreased slightly over the three months ended March 31, 2016, compared to the same period in 2015. The Company received a large order for manholes on a local highway project for which delivery began in the fourth quarter of 2015 and has continued production during 2016. The project is running behind schedule and the contractor has slowed its production requirements, however, management believes it will pick back up this summer. Utility products are tied closely with infrastructure spending by federal, state and local governments and with the passage of the federal highway bill, sales and bids on these products seem to be slowly improving.

Miscellaneous Product Sales - Miscellaneous products are products produced and sold that do not meet the criteria defined for other revenue categories. Miscellaneous product sales decreased significantly for the three months ended March 31, 2016, compared to the same period in 2015. With the increase in soundwall projects, management has not focused on this product line as some of these projects tend to be difficult to manage. Management believes that miscellaneous sales may increase slightly during the remainder of the year.

Royalty Income - Royalty revenue was relatively flat for the three months ended March 31, 2016 compared to the same period in 2015. Barrier royalties were up for the three months ended March 31, 2016 compared to the same period in 2015, however the increase in barrier royalties was offset by the decline in building royalties for the same periods. All of the other royalties were at much lower levels than the barrier and building royalties and had little impact on the totals. Management believes that royalties will continue to increase moderately over the remainder of 2016 as a result of the continuing improvement in the construction industry.

Barrier Rentals - Barrier rentals increased significantly for the three month period ended March 31, 2016 compared to the same period in 2015. The increase in barrier rentals was due in part to the highway bill passed by Congress in 2015 discussed in the soundwall and barriers sales sections above. While sales increased significantly, the sales price itself also showed a slight increase. Management is aware of several special projects coming up during 2016 and is endeavoring to obtain these projects which also sell at increased margins.

Research

Fri, 13 May 2016 15:21:49 GMT

SMID ($2.39) - Reported Q1 2016 results:

Sales of $8.0 million vs $4.2 million in the prior year
Loss per share of $0.02 vs $0.11 in the prior year

Quotes from management:

“The Company powered through the tough winter months with a minor loss. As expected, shipping and installation has picked up through the spring time and we expect the second quarter financial results to improve.

The new State and National highway construction bills that have been passed recently have resulted in a significant amount of sales orders, helping to generate our $20 million backlog for the next 12 months.”

As we stated in our email on May 9, 2016, SMID has been one of our biggest disappointments. We stated we closed out our long position ahead of Q1 earnings as we are having a hard time reading management. While the topline for the quarter was strong, we are somewhat surprised the Company was not able to generate a profit on that level of revenue, as it did in Q4 on lower sales. We will look to reach out to management once again to discuss the quarterly results.

Research

Thu, 12 May 2016 16:43:25 GMT

SMID ($2.35) - As we stated in our email on May 9, 2016, SMID has been one of our biggest disappointments. We have decided to close out our long position ahead of upcoming Q1 2016 results. We announced we were taking a closer look at SMID on August 17, 2015 when the stock was trading at $2.35. We took a pre-earnings position on October 26, 2015 when the stock was trading at $2.95. The stock got as high as $3.59 on blowout Q3 results.

Research

Mon, 09 May 2016 14:53:21 GMT

GeoBargain SMID ($2.35) is probably one of our biggest disappointments. We announced we were taking a closer look at SMID on August 17, 2015 when the stock was trading at $2.35. We stated we were taking a pre-earnings position on October 26, 2015 when the stock was trading at $2.95. The stock got as high as $3.59 on blowout Q3 results. Management commentary in the Q3 press release and quarterly filing indicated the Company had good visibility into Q3 trends, expecting them to continue for a few quarters. Q4 results came in significantly less than Q3 and below our expectations. Furthermore, in the 10-k filing, management commentary regarding its product outlook was not nearly as bullish as is was for Q3. Frankly, we are having a hard time reading SMID management. We don’t plan to hold an aggressive position into upcoming Q1 2016 results. We are hoping the Company’s book value per share of $2.34 will offer some support if financial results disappoint. There is no doubt that SMID is participating in a favorable industry environment, especially with the passage of the highway bill in late 2015. We would like to have more confidence that management can capitalize on this opportunity. We will give SMID one more shot in the upcoming quarter before we remove from the GeoBargain list.

Research

Tue, 29 Mar 2016 19:44:37 GMT

SMID ($2.72) reported Q4 2015 results:

Q4 sales of $7.7 million vs $4.4 million in the prior year period
Q4 EPS of $0.05 vs a loss of $0.12 in the prior year

Quotes from management:

“It is personally gratifying to me that we were able to deliver on our projected increased profitability and that the Great Recession is largely over for Smith-Midland...

...As always, we continue to look ahead to the future of the Company and what to expect for 2016 and beyond. As most of you are aware, a $305 billion, five year highway bill was passed by Congress and signed by the President giving some added stability to highway work. For Smith-Midland and our nationwide network of Easi-Set Worldwide licensees this allows us the opportunity to quote on an increasing list of highway projects. We currently have seven soundwall projects in production or waiting to start production in the near future. These projects as well as our other projects in progress should keep us profitable for the remainder of 2016.”

Product	% Of Sales	Projection
Soundwall	10.9%	Increase vs 2015
Architectural Panel	7.8%	Decrease slightly vs 2015
Slenderwall	10.2%	Unknown
Misc wall	8.2%	Flat to 2015
Barrier Sales	9.2%	Unknown
Beach Prisms	>1%	Unknown
Easi-Set and Easi-Span	9.8%	Increase vs 2015
Utility and Farm	9.1%	Slightly above 2015
Misc product	1.7%	Unknown
Royalties	5.8%	Increase vs 2015
Barrier Rentals	13.3%	Decrease vs 2015
Shipping and Install	12.3%	Increase vs 2015

In summarizing the table we see that going through 2016, about business that represents

50% of the company’s business is expected to improve,
20% is expected to decrease
21% is unknown

While we expected sequentially down results from the Company’s historically strongest Q3 quarter, we were hoping for slightly stronger Q4 results. As we have talked about in our past coverage of SMID, the company has a history of delivering inconsistent quarterly financial results. This is the one factor that has held back investors from taking shares to higher valuation multiples. It’s a good news that the company believes it will remain profitable for 2016, but investors will likely want more clarity on revenue growth before placing their bets. We plan to contact management.

Research

Wed, 16 Mar 2016 15:12:44 GMT

Recently, Geo co-founder Maj Soueidan visited SMID ($2.55) for a first-person look at company facilities and to speak with management regarding the company’s workflow and competitive advantages. Maj was given a tour of the grounds and was able to see the various products (slender walls, vaults, etc.) in stock and ready for delivery. In the end, the visit was very informative and confirmed what we had already understood to be a solid business.

Summary

Site visit to Smith-Midland yields valuable insight into plant operations.
SMID management informs Geo's President on plant workflow.
Key take away - Management is confident that the company's competitive advantages can help it outperform peers.

See the details of the visit here.

Comments & Business Outlook

Tue, 09 Feb 2016 15:37:58 GMT

MIDLAND, VA--(Marketwired - Feb 9, 2016) - Smith-Midland Corporation (OTCQX: SMID) Civil Wall Solutions and Shirley Contracting have selected Smith-Midland to supply precast sound wall products for two major Virginia Department of Transportation road projects that are currently underway. The Route 29-Route 250 Interchange in Charlottesville and the Interstate 66 widening project near Chapman's Mill will both facilitate traffic flow without disrupting nearby historic and residential areas.

Smith-Midland will supply 47,751 square feet (379 panels) of precast sound wall and retaining wall for the Route 29-Route 250 Interchange improvement project in Charlottesville, Va. The company's sound wall combines the unmatched strength and durability of precast concrete with finishes designed to match the surrounding environment. Smith-Midland will also provide 3,716 linear feet (104 total) of pre-stressed posts for the project.

Scheduled for completion in March, the project will feature SoftSound™ sound absorptive concrete with a dry stack stone form liner finish on the highway side, and a stamped dry stack stone finish on the residential side to meet historic Charlottesville's aesthetic requirements.

A superior sound absorptive technology, SoftSound is a proprietary material molded and compressed to meet the desired technical and aesthetic requirements. It combines highly specialized mineralized wood-chip aggregate using cement as a binder in a specific and exacting manufacturing process. Once installed, SoftSound surpasses other products for sound absorption, durability, strength, and moldability.

Situated between Haymarket and Gainesville, Va., the Interstate 66 widening project will incorporate 240,000 square feet (1,035 panels) of precast sound wall and 13,644 linear feet (637 total) of pre-stressed posts. Started in January and scheduled for completion in May, the project also features SoftSound sound-absorptive concrete finished with a simulated stone form liner. When complete, the wall will match the nearby historic Chapman's Mill.

"We're pleased to be involved with these sound wall projects in Virginia's historic areas, where our precast products and finishes not only fulfill functional needs," said Matthew Smith, Smith-Midland's Vice President of Sales and Marketing, "but also meet the aesthetic requirements of our state's highly-valued historic cities and towns."

Research

Fri, 04 Dec 2015 14:38:08 GMT

SMID Declares Special Dividend; House Passes Transportation Bill

$SMID’s ($3.40) Board of Directors declared a special dividend of $0.04 per share to be paid on December 30, 2015 to shareholders of record as of December 18, 2015. In other positive news for SMID, The House on Thursday passed a $305 billion measure to fund highways and mass-transit projects for the next five years. The passage of this bill should take a huge bit of uncertainty off companies’ growth prospects that play in the construction space. We will be searching for other companies that could benefit from this development.

On 10/26/15 we alerted members that we were taking a pre-earnings position in SMID, when the stock was trading at $2.95. On November 2, 2015, we published our research note detailing reasons for optimism. We followed up on November 3, 2015, by coding SMID as our newest GeoBargain.

Research

Fri, 13 Nov 2015 13:33:06 GMT

Once again, the GeoTeam has uncovered an information arbitrage opportunity (bullish Form 10-Q commentary not included in the press release) in Smith-Midland Corporation (SMID). SMID invents, develops, manufactures, markets, leases, licenses, sells, and installs an array of precast concrete products for use primarily in the construction, highway, utilities, and farming industries in the United States.

On 10/26/15 we alerted premium members that we were taking a pre-earnings position in SMID, when the stock was trading at $2.95. We had been tracking the company for several years and Q2 2015 commentary piqued our interest when management indicated the company was ready to embark on a new period of growth.

On November 2, 2015, we published our research note detailing our reasons for optimism. We followed up on November 3, 2015, by coding SMID as our newest GeoBargain.

On November 12, 2015, an hour before the close, SMID reported blow-out Q3 2015 results that exceeded even our expectations.

Total revenue of $10.4 million for three months ended September 30, 2015 was $4.4 million or 74.1% more than revenue generated in Q3 2014.
Net income of $1,152,056 for Q3 2015, compared to net income of $112,490 for the same period in 2014, a 1,000%+ increase.
Basic and diluted earnings per share were $0.24 and $0.23, respectively, for Q3 2015 vs. $0.02 basic and diluted earnings per share for Q3 2014.

Management’s commentary in the press release follows:

Rodney Smith, Chairman and CEO, stated, “The management and associates at the Company are extremely proud to be able to present the financial results for the third quarter of 2015, one of the best quarters on record for Smith-Midland. All of the associates of the Company have been instrumental in making this quarter so successful.

“Smith-Midland is five years into our lean journey and under President Ashley Smith’s leadership, we have made significant improvements such as highly improved production planning, many improvements in employee efficiency and significant product quality improvement, and the journey continues.

“One of our top priorities for the remainder of 2015 and also in 2016 is continuous New Product Development through our Smith-Midland Research and Development team. Arguably one of the best research and development teams in the Precast Industry, we are currently developing several new products which include Non Bolted Highway Parapet, Slenderwall III and a Highway Crash Cushion using SoftSound. Innovative product development has always been the key to the future for Smith-Midland from a sales and profitability standpoint and to maintain our competitive edge for the Company and our international family of Easi-Set licensees.”

In addition, the company provided bullish commentary in the Form 10Q MD&A that was not included in the press release . Following are excerpts from the MD&A regarding SMID’s revenue segments. We encourage you to read the entire filing here :

Soundwall sales - $871,711 – “Management expects that soundwall revenue should remain relatively strong during the remainder of the year and into 2016.”

Archetectural Panel sales - $412,176 – “While the construction economy has been trending up for the past 12 months, the volume of architectural projects continues to be less than that of other wall panel projects and also while not as competitive as last year, are still the most competitive bids.”

Slenderwall sales - $1,005,492 – “The two new Slenderwall projects that started in the second quarter of 2015 resulted in increased revenue for the nine months ended September 30, 2015, when compared to the same period in 2014. Slenderwall sales should remain strong throughout 2015 and into the 2016.”

Barrier sales – $617,101- “During the three and nine month periods ended September 30, 2015, we have received several medium size barrier orders which have not shipped as of yet, however, these orders are expected to ship in the fourth quarter of 2015 which should significantly increase barrier sales in the fourth quarter of 2015 over the fourth quarter of 2014.”

Easi-Set® and Easi-Span® Building Sales – $692,169 - “ Management believes that the Company may see a slight increase in building sales during the fourth quarter of 2015 over the fourth quarter of the prior year based on its current building backlog , but customer installation demands will control when final installation will be made.”

Miscellaneous Sales – $320,784 - “Management believes that miscellaneous sales will increase slightly during the fourth quarter of 2015 over the fourth quarter of the prior year.”

Royalty Income – $425,831 - “Management believes that royalties will continue to increase moderately over the remainder of 2015 as a result of the continuing improvement in the construction industry.”

Barrier Rentals – $3,137,761 - “The increase resulted primarily from two large rental contracts awarded the Company for two short-term barrier rental projects in Washington DC and Philadelphia, PA for the month of September 30, 2015. These projects were related to the Papal visit, and this type of special event may not be repeated in the near future or in the year 2016. The Company will endeavor to find this type of project in the future, but projects like this one are particularly few and far between. While the increase in revenue for barrier due to the special project was significant, regular barrier rentals excluding the special projects revenue were up significantly for both the three and nine months ended September 30, 2015 when compared to the same periods in 2014. The increase was due to the continued increase in the construction industry and particularly in highway infrastructure spending.”

Shipping and Installation – $1,223,599 - “With the shipping revenue generated by the current projects shipping and the new ones beginning to ship in November, shipping and installation revenue should increase in the fourth quarter of 2015 from the fourth quarter of the prior year. For the full year 2015, the Company will continue to be behind 2014 revenues based on the installation and shipping activities discussed above.”

The following quarterly charts give perspective on how far SMID has come since Q1 2012 and an indication of how much momentum the business currently has. Revenues, gross profits and net income are all strongly headed in the right direction. Also, quarterly revenue comps vs. the same period in the prior year are strong. Barring an unusually severe winter we expect SMID’s business momentum to continue well into 2016.

Valuation

We believe SMID should be valued between $7.00 and $7.50 per share based on two valuation approaches:

Projected operating results for four quarters with Q3 2015 as the base and estimating the next three quarters using historic quarterly revenue distribution % for the last four years. Q1 is the weakest quarter seasonally due to winter weather.

Applying a 10x multiple to estimated diluted EPS of $.76 implies a $7.60 value.

Competitor USCR has a Price/Sales ratio of .95. Applying that ratio to our four quarter revenue estimate of $37.1 million yields a $7.13 value.

Next Steps

We hope to interview management in the near future to determine how much of the recent momentum will carry through to future quarters. Given SMID’s recent performance and the seemingly inevitable increase in infrastructure spending on highways and bridges in the U.S., we are confident that Q3 2015 was not a one-off event. We anticipate SMID’s recent momentum will continue in the near term.

Research

Tue, 03 Nov 2015 17:08:41 GMT

Coded SMID ($3.10) As A GeoBargain

In our August 17, 2015 e-mail, when the stock was trading at $2.35 we stated that commentary from the Q2 2015 release indicated that the company may now be able to embark on a new period of growth. On October 26, 2015 we disclosed that we were taking a pre-earnings bet on $SMID. Yesterday, we coded $SMID as a GeoBargain and published our reasons for optimism. See our full research note here.

Research

Mon, 02 Nov 2015 05:00:00 GMT

Several factors have led us to take a pre earnings position in SMID. SMID invents, develops, manufactures, markets, leases, licenses, sells, and installs an array of precast concrete products for use primarily in the construction, highway, utilities, and farming industries in the United States. In our August 17, 2015 email we stated we have been tracking SMID for several years but that commentary from its Q2 2015 release indicated that company may now be able to embark on a new period of growth. Our reasons for optimism include:

Comments from the Q2 2015 release indicate Q3 has been shaping up strongly.
Comments in the Q2 Form 10-Q , that disclosed the company expects the profit generated in Q3 to exceed the loss recorded for the six months ended June 30, 2015, and put the company in a positive position for the nine months ended September 30. Further, Q4 is expected to produce another positive quarter of earnings as a result of the company’s current backlog, making 2015 a significant turnaround over 2014. Management believes that the positive quarterly earnings momentum of 2015 will continue into 2016.
Comments from the Q2 2015 press release follow:

“The company’s most important news today is for the month of July, 2015 (the first month of the third quarter), the company’s net income was almost comparable to the total earnings of the second quarter. Management believes that the third quarter of 2015 will show a significant increase over that of the second quarter of the year.

The Company continues to receive orders on a weekly basis, most of which will be put into production during 2015 with the remaining orders to be produced in 2016. At this point, we have enough orders to be profitable until the end of June 2016.

We have begun to make great strides in our journey to become a fully lean company which is making us a much more efficient and effective company for our customers, our associates and our shareholders. As always, the goal of management, our associates and our board of directors is to increase the value of the Company each and every day."

The 3 industries SMID serves should benefit as the economy improves. The company sells its products to the construction, utilities and farming industries.
New product offering gaining steam. The company's J-J Hooks Saftey Barrier product has been gaining traction as several state Department of Transportation have approved the product for highway use. Comments from several state departments suggest the products ease of use and assembly give it a competitive advantage over competing products.
The House Transportation and Infrastructure Committee on Thursday approved a bipartisan bill to spend up to $325 billion on transportation projects over the next six years.
We feel comfortable that the next several quarters will have favorable sales and EPS comparison compared to the prior year periods.

We feel the company is minimally on track to report a 12 month rolling EPS of $0.30. Apply a P/E multiple of 15 on our forward EPS assumption of $0.30 would equate to a price target of $4.50. Upside potential exist as our assumptions do not take into account any price increases.

Caveat:

Management has a recent history of gaining traction with its new growth initiatives in the past. (However, greater visibility and an improving economy should mitigate this caveat)
Economy takes turn for the worse.
Government budget issues at the Federal, State and Local level.
Operations can be negatively impacted in the colder months. (unusually cold weather could lead to construction delays)

Reasons For Tracking

Mon, 02 Nov 2015 05:00:00 GMT

Comments from the Q2 2015 release indicate Q3 has been shaping up strongly.
Comments in the Q2 Form 10-Q , that disclosed the company expects the profit generated in Q3 to exceed the loss recorded for the six months ended June 30, 2015, and put the company in a positive position for the nine months ended September 30. Further, Q4 is expected to produce another positive quarter of earnings as a result of the company’s current backlog, making 2015 a significant turnaround over 2014. Management believes that the positive quarterly earnings momentum of 2015 will continue into 2016.
Comments from the Q2 2015 press release follow:

The 3 industries SMID serves should benefit as the economy improves. The company sells its products to the construction, utilities and farming industries.
New product offering gaining steam. The company's J-J Hooks Saftey Barrier product has been gaining traction as several state Department of Transportation have approved the product for highway use. Comments from several state departments suggest the products ease of use and assembly give it a competitive advantage over competing products.
The House Transportation and Infrastructure Committee on Thursday approved a bipartisan bill to spend up to $325 billion on transportation projects over the next six years.
We feel comfortable that the next several quarters will have favorable sales and EPS comparison compared to the prior year periods.

We feel the company is minimally on track to report a 12 month rolling EPS of $0.30. Apply a P/E multiple of 15 on our forward EPS assumption of $0.30 would equate to a price target of $4.50. Upside potential exist as our assumptions do not take into account any price increases.

Caveat:

Management has a recent history of gaining traction with its new growth initiatives in the past. (However, greater visibility and an improving economy should mitigate this caveat)
Economy takes turn for the worse.
Government budget issues at the Federal, State and Local level.
Operations can be negatively impacted in the colder months. (unusually cold weather could lead to construction delays)

Research

Mon, 26 Oct 2015 15:18:52 GMT

Taking A Pre-Earnings Position In SMID ($2.95)

Research

Mon, 17 Aug 2015 15:11:20 GMT

Taking closer look at $SMID

We have been tracking SMID ($2.35) for the last several years. Financial results from time to time have given us false hope that the company had recovered from the great recession of 2008. However, it appears that commentary from the Q2 2015 release indicates that the company may now be able to embark on a new period of growth. We may establish a trading position as we delve deeper into the story and draw up valuation scenarios. Quotes from the Q2 release:

“The company’s most important news today is for the month of July, 2015 (the first month of the third quarter), the company’s net income was almost comparable to the total earnings of the second quarter. Management believes that the third quarter of 2015 will show a significant increase over that of the second quarter of the year.

The Company continues to receive orders on a weekly basis, most of which will be put into production during 2015 with the remaining orders to be produced in 2016. At this point, we have enough orders to be profitable until the end of June 2016.

We have begun to make great strides in our journey to become a fully lean company which is making us a much more efficient and effective company for our customers, our associates and our shareholders. As always, the goal of management, our associates and our board of directors is to increase the value of the Company each and every day."

13D and 13G Activity

Wed, 22 May 2013 04:00:00 GMT

13D filed 5/22/2013

Purpose of transaction:

The Reporting Persons purchased the Shares based on the Reporting Persons’ belief that the Shares, when purchased, were undervalued and represented an attractive investment opportunity. Depending upon overall market conditions, other investment opportunities available to the Reporting Persons, the availability of Shares at prices that would make the purchase of additional Shares desirable, or the market price at which Shares are then currently trading that would make the sale of Shares desirable (in either case, including market prices that may exist as a result of this filing or other filings by the Reporting Persons), the Reporting Persons may increase or decrease their position in the Issuer through, among other things, the purchase or sale of Shares on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Persons may deem advisable. No Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D, except as set forth herein or such as would occur upon completion of any of the actions discussed herein.

Each of the Reporting Persons intends to review its investment in the Issuer on a continuing basis and to engage in discussions with management and the Board of Directors of the Issuer concerning the business, operations, corporate governance and future plans of the Issuer. Depending on various factors including, without limitation, the Issuer’s financial position and investment strategy, the price levels of the Shares, conditions in the securities market and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation,

communicating privately or publicly with other stockholders, the Issuer’s Board of Directors or other persons;
making proposals or director nominations to the Issuer;
soliciting proxies with respect to proposals or director nominees made by the Reporting Persons;
supporting proposals or director nominations made by the Reporting Persons or other stockholders;
purchasing additional Shares or selling some or all of their Shares;
orchanging their intention with respect to any and all matters referred to in this Item 4.

Fiscal Cliff

Wed, 21 Nov 2012 05:00:00 GMT

We will once again start tracking this ex-GeoSpecial. The company has a history of volatile sales and EPS growth, but recent reductions in company headcount and the introduction of new products may give the company some near term life. The company grew its revenues in the 2012 3rd quarter by 23%, reversing revenue declines in the previous 5 quarters. The company should be a direct beneficiary of infrastructure improvements that could be part of a fiscal cliff solution, as well as rebuilding efforts that take place due to hurricane sandy. Stock is selling below book value of $2.30.

Sandy

Wed, 21 Nov 2012 05:00:00 GMT

Refer to 11/21/2012 Fiscal Cliff Note.

GeoSpecial Notes

Thu, 01 Jul 2010 04:00:00 GMT

Added to the GeoSpecial list August, 13, 2009 @ $2.10.

Catalyst: Seemed like the company was on the verge of a an EPS break out

Peak performance: Reached a high of $2.30.
Current road block: Strong EPS performance was an aberration. Choppy quarters will likely always be an issue.
Current Price: $1.36

Removed from the GeoSpecial list.

Research

Thu, 13 Aug 2009 04:00:00 GMT

Smith Midland, involved in the concrete product industry reported significant increase in second quarter EPS. EPS increased 275% to $0.15, while revenue increased 10%. This follows the second consecutive quarter of significant top and bottom line growth. The GeoTeam has monitored this Smith Midland for several years, but felt the company lacked consistency in growth. We are attempting to ascertain how the Company has been able to post solid growth during a weakened economy. Comments from the second quarter press release indicate that the U.S. stimulus package will benefit Smith Midland in the near future. A final investment conclusion can not be made until management is interviewed However, with a PE of 5, a price of $1.85 and two solid quarters of growth a small investment in SMID may offer a favorable risk reward tradeoff. The GeoTeam may attempt to take a position in SMID in Thursday's (Aug 13, 2009) trading session.

Potential Valuation Scenarios

Thu, 13 Aug 2009 04:00:00 GMT

Valuation Scenarios

Added to GeoSpecial on list on August, 13, 2009. ($2.10).

Data Inputs:

Fiscal Year Ends in December

Date	08/13/09
Price (Current)	$2.10
12 Months Trailing EPS	$.39
Most Recent Quarter EPS Growth Rate	275.0%
Trailing P/E Ratio ^a,b	5.4
PEG Ratio (P/E divided by growth rate)	0.02

Short-Term Valuation Scenarios

Date	08/13/09
Price Based on P/E of 25 on Four Quarters Trailing EPS	$9.75
Price Based on P/E of 20 on Four Quarters Trailing EPS	$7.80
Price Based on P/E of 15 on Four Quarters Trailing EPS	$5.85
Price Based on P/E of 10 on Four Quarters Trailing EPS	$3.90

Peg Ratio Analysis - Common rule of thumb that PEG ratio should be less than 1.0

PEG Ratio Less than 1?

YES

These scenarios are not investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.