Smith Midland Corp 10-Q for FY2020 Q1

Smith Midland Corp (SMID)

10-Q 2020-05-14 For: 2020-03-31

Added on April 10, 2026

About this 10-Q

Smith Midland Corp filed this 10-Q on May 14, 2020, covering the quarter ended March 31, 2020 (FY2020 Q1).

Headline figures

Quarter ended March 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $9.83M; down 3.6% from $10.19M a year earlier
Net loss: $38K; compared with net income of $331K a year earlier
Diluted EPS: -$0.01; compared with $0.06 a year earlier

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Delaware	54-1727060
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value per share	SMID	OTCQX

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☑
Emerging growth company	☐

PART I. FINANCIAL INFORMATION	Page

Item 1. Financial Statements	3

Condensed Consolidated Balance Sheets	3

Condensed Consolidated Statements of Operations (Unaudited)	5

Condensed Consolidated Statements of Stockholders' Equity (Unaudited)	6

Condensed Consolidated Statements of Cash Flows (Unaudited)	7

Notes to Condensed Consolidated Financial Statements (Unaudited)	8

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3. Quantitative and Qualitative Disclosures About Market Risk	21

Item 4. Controls and Procedures	21

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	22

Item 1A. Risk Factors	22

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	22

Item 3. Defaults Upon Senior Securities	22

Item 4. Mine Safety Disclosures	23

Item 5. Other Information	23

Item 6. Exhibits	23

Signatures	24

ASSETS	March 31, 2020 (Unaudited)	December 31, 2019
Current assets
Cash	$2,198	$1,364
Investment securities, available-for-sale, at fair value	1,162	1,176
Accounts receivable, net
Trade - billed (less allowance for doubtful accounts of $350 and $333), including contract retentions	9,444	12,723
Trade - unbilled	956	310
Inventories, net
Raw materials	597	488
Finished goods	1,574	1,754
Prepaid expenses and other assets	708	784
Refundable income taxes	464	432

Total current assets	17,103	19,031

Property and equipment, net	17,998	17,735

Deferred buy-back lease asset, net	4,861	5,042

Other assets	337	307

Total assets	$40,299	$42,115

LIABILITIES AND STOCKHOLDERS' EQUITY	March 31, 2020 (Unaudited)	December 31, 2019
Current liabilities
Accounts payable - trade	$2,669	$3,180
Accrued expenses and other liabilities	94	125
Deferred revenue	1,744	1,891
Accrued compensation	761	1,075
Dividend payable	—	282
Deferred buy-back lease obligation	1,037	966
Operating lease liabilities	81	81
Current maturities of notes payable	847	925
Customer deposits	492	1,077

Total current liabilities	7,725	9,602

Deferred revenue	117	241
Deferred buy-back lease obligation	4,853	5,183
Operating lease liabilities	275	296
Notes payable - less current maturities	4,660	4,086
Deferred tax liability	1,902	1,886

Total liabilities	19,532	21,294

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; 5,224,911 and 5,224,911 issued and 5,183,991 and 5,164,324 outstanding, respectively	52	52
Additional paid-in capital	6,242	6,242
Treasury stock, at cost, 40,920 shares	(102)	(102)
Other	(26)	(10)
Retained earnings	14,601	14,639

Total stockholders' equity	20,767	20,821

Total liabilities and stockholders' equity	$40,299	$42,115

	Three Months Ended March 30,
	2020	2019
Revenue
Product sales	$6,852	$7,503
Barrier rentals	742	573
Royalty income	268	306
Shipping and installation revenue	1,963	1,807

Total revenue	9,825	10,189

Cost of goods sold	8,225	7,967

Gross profit	1,600	2,222

Operating expenses
General and administrative expenses	1,051	1,208
Selling expenses	591	567

Total operating expenses	1,642	1,775

Operating income (loss)	(42)	447

Other income (expense)
Interest expense	(56)	(44)
Interest income	9	11
Gain (loss) on sale of assets	36	2
Other income (expense)	4	14

Total other income (expense)	(7)	(17)

Income (loss) before income tax expense (benefit)	(49)	430

Income tax expense (benefit)	(11)	99

Net income (loss)	$(38)	$331

Basic earnings (loss) per share	$(0.01)	$0.06

Weighted average number of common shares outstanding:
Basic	5,183	5,134
Diluted	5,183	5,142

	Common Stock	Additional Paid-in Capital	Treasury Stock	Other	Retained Earnings	Total
Balance at December 31, 2019	$52	$6,242	$(102)	$(10)	$14,639	$20,821
Other	—	—	—	(16)	—	(16)
Vesting of restricted stock	—	—	—	—	—	—
Net income (loss)	—	—	—	—	(38)	(38)
Balance at March 31, 2020	52	6,242	(102)	(26)	14,601	20,767

	Three Months Ended March 31,
	2020	2019
Cash flows from operating activities:
Net income (loss)	$(38)	$331
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	572	426
Gain on sale of assets	(36)	(2)
Allowance for doubtful accounts	17	15
Stock compensation	—	84
Deferred taxes	16	3
(Increase) decrease in
Accounts receivable - billed	3,262	2,727
Accounts receivable - unbilled	(646)	750
Inventories	71	514
Prepaid expenses and other assets	41	514
Refundable income taxes	(32)	92
Increase (decrease) in
Accounts payable - trade	(511)	(1,482)
Accrued expenses and other liabilities	(31)	(25)
Deferred revenue	(271)	182
Accrued compensation	(314)	(815)
Deferred buy-back lease obligation	(259)	258
Customer deposits	(585)	(1,113)
Net cash provided by (used in) operating activities	1,256	2,459
Cash flows from investing activities:
Purchases of investment securities available-for-sale	(8)	(8)
Purchases of property and equipment	(669)	(1,049)
Deferred buy-back lease asset	—	(358)
Proceeds from sale of fixed assets	41	2
Net cash provided by (used in) investing activities	(636)	(1,413)
Cash flows from financing activities:
Proceeds from the line-of-credit construction draw	—	500
Proceeds from long-term borrowings	2,701	—
Repayments of long-term borrowings	(2,205)	(178)
Dividends paid on common stock	(282)	(281)
Net cash provided by (used in) financing activities	214	41
Net increase (decrease) in cash	834	1,087
Cash
Beginning of period	1,364	1,946
End of period	$2,198	$3,033

Supplemental Cash Flow information:
Non-cash transaction - right of use asset and lease liability upon lease standard adoption	$—	$414
Cash payments for interest	$56	$44
Cash payments for income taxes	$1	$—

Revenue by Type	Three Months Ended March 31,
	2020	2019	Change	% Change
Soundwall Sales	$1,887	$2,114	$(227)	(11)%
Architectural Panel Sales	767	—	767	100%
SlenderWall Sales	923	1,963	(1,040)	(53)%
Miscellaneous Wall Sales	903	363	540	149%
Barrier Sales	1,325	1,591	(266)	(17)%
Easi-Set and Easi-Span Building Sales	559	1,034	(475)	(46)%
Utility Sales	401	308	93	30%
Miscellaneous Sales	87	130	(43)	(34)%
Total Product Sales	6,852	7,503	(651)	(9)%
Barrier Rentals	742	573	169	29%
Royalty Income	268	306	(38)	(12)%
Shipping and Installation Revenue	1,963	1,807	156	9%
Total Service Revenue	2,973	2,686	287	11%

Total Revenue	$9,825	$10,189	$(364)	(4)%

	Number of Shares	Weighted Average Grant Date Fair Value per Share
Balance, December 31, 2019	19,667	$5.45
Granted	—	—
Vested	19,667	5.45
Forfeited	—	—

Non-vested, end of period	—	$—

Revenue by Type (Disaggregated Revenue)	Three Months Ended March 31,
	2020	2019	Change	% Change
Soundwall Sales	$1,887	$2,114	$(227)	(11)%
Architectural Sales	767	—	767	100%
SlenderWall Sales	923	1,963	(1,040)	(53)%
Miscellaneous Wall Sales	903	363	540	149%
Barrier Sales	1,325	1,591	(266)	(17)%
Easi-Set and Easi-Span Building Sales	559	1,034	(475)	(46)%
Utility Sales	401	308	93	30%
Miscellaneous Product Sales	87	130	(43)	(34)%
Total Product Sales	6,852	7,503	(651)	(9)%
Barrier Rentals	742	573	169	29%
Royalty Income	268	306	(38)	(12)%
Shipping and Installation Revenue	1,963	1,807	156	9%
Total Service Revenue	2,973	2,686	287	11%

Total Revenue	$9,825	$10,189	$(364)	(4)%

Exhibit No.		Exhibit Description
31.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934.
31.2		Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934.
32.1		Certification pursuant 18 U.S.C. Section 1350 as adapted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document.
101.SCH		XBRL Taxonomy Extension Schema Document.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.



		SMITH-MIDLAND CORPORATION (Registrant)

Date:	May 14, 2020	By:	/s/ Ashley B. Smith
			Ashley B. Smith, Chief Executive Officer
			(Principal Executive Officer)


Date:	May 14, 2020	By:	/s/ Adam J. Krick
			Adam J. Krick, Chief Financial Officer
			(Principal Financial Officer)


1.	I have reviewed this quarterly report on Form 10-Q of Smith-Midland Corporation;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	By: /s/ Ashley B. Smith
	Ashley B. Smith
	Chief Executive Officer and President
	(principal executive officer)


	By: /s/ Adam J. Krick
	Adam J. Krick
	Chief Financial Officer
	(principal financial officer)

	Dated:	May 14, 2020