Smith Midland Corp 10-Q for FY2020 Q2

Smith Midland Corp (SMID)

10-Q 2020-08-11 For: 2020-06-30

Added on April 10, 2026

About this 10-Q

Smith Midland Corp filed this 10-Q on August 11, 2020, covering the quarter ended June 30, 2020 (FY2020 Q2).

Headline figures

Quarter ended June 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $10.45M; down 3.7% from $10.85M a year earlier
Net income: $441K; up 53.1% from net income of $288K a year earlier
Diluted EPS: $0.09; up 50.0% from $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	June 30, 2020 (Unaudited)	December 31, 2019
Current assets
Cash	$4,404	$1,364
Investment securities, available-for-sale, at fair value	1,189	1,176
Accounts receivable, net
Trade - billed (less allowance for doubtful accounts of $401 and $333), including contract retentions	10,757	12,723
Trade - unbilled	502	310
Inventories, net
Raw materials	642	488
Finished goods	1,466	1,754
Prepaid expenses and other assets	845	784
Refundable income taxes	296	432

Total current assets	20,101	19,031

Property and equipment, net	19,240	17,735

Deferred buy-back lease asset, net	4,655	5,042

Other assets	335	307

Total assets	$44,331	$42,115

LIABILITIES AND STOCKHOLDERS' EQUITY	June 30, 2020 (Unaudited)	December 31, 2019
Current liabilities
Accounts payable - trade	$3,118	$3,180
Accrued expenses and other liabilities	311	125
Deferred revenue	1,614	1,891
Accrued compensation	885	1,075
Dividend payable	—	282
Deferred buy-back lease obligation	1,184	966
Operating lease liabilities	82	81
Current maturities of notes payable	2,057	925
Customer deposits	826	1,077

Total current liabilities	10,077	9,602

Deferred revenue	512	241
Deferred buy-back lease obligation	4,410	5,183
Operating lease liabilities	254	296
Notes payable - less current maturities	5,965	4,086
Deferred tax liability	1,889	1,886

Total liabilities	23,107	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)
Retained earnings	15,032	14,629

Total stockholders' equity	21,224	20,821

Total liabilities and stockholders' equity	$44,331	$42,115

	Three Months Ended June 30,		Six Months Ended June 30,
	2020	2019	2020	2019
Revenue
Product sales	$6,699	$7,327	$13,550	$14,831
Barrier rentals	907	582	1,650	1,163
Royalty income	413	429	681	735
Shipping and installation revenue	2,431	2,514	4,394	4,312

Total revenue	10,450	10,852	20,275	21,041

Cost of goods sold	8,073	8,696	16,297	16,663

Gross profit	2,377	2,156	3,978	4,378

Operating expenses
General and administrative expenses	1,230	1,143	2,282	2,350
Selling expenses	574	640	1,164	1,207

Total operating expenses	1,804	1,783	3,446	3,557

Operating income (loss)	573	373	532	821

Other income (expense)
Interest expense	(57)	(40)	(113)	(85)
Interest income	9	11	17	21
Gain on sale of assets	30	10	66	12
Other income	16	20	20	44

Total other income (expense)	(2)	1	(10)	(8)

Income (loss) before income tax expense (benefit)	571	374	522	813

Income tax expense (benefit)	130	86	119	185

Net income (loss)	$441	$288	$403	$628

Basic and diluted earnings (loss) per common share	$0.09	$0.06	$0.08	$0.12

Weighted average number of common shares outstanding:
Basic	5,184	5,134	5,184	5,134
Diluted	5,184	5,143	5,184	5,141

	Common Stock	Additional Paid-in Capital	Treasury Stock	Retained Earnings	Total
Balance at December 31, 2019	$52	$6,242	$(102)	$14,629	$20,821
Vesting of restricted stock	—	—	—	—	—
Net income (loss)	—	—	—	(38)	(38)
Balance at March 31, 2020	52	6,242	(102)	14,591	20,783
Vesting of restricted stock	—	—	—	—	—
Net income (loss)	—	—	—	441	441
Balance at June 30, 2020	52	6,242	(102)	15,032	21,224

Revenue by Type	Three Months Ended June 30				Six Months Ended June 30
	2020	2019	Change	% Change	2020	2019	Change	% Change
Soundwall Sales	$2,200	$1,939	$261	13%	$4,087	$4,053	$34	1%
Architectural Panel Sales	766	424	342	81%	1,533	424	1,109	262%
SlenderWall Sales	—	772	(772)	(100)%	923	2,735	(1,812)	(66)%
Miscellaneous Wall Sales	1,128	406	722	178%	2,031	769	1,262	164%
Barrier Sales	945	1,817	(872)	(48)%	2,270	3,408	(1,138)	(33)%
Easi-Set and Easi-Span Building Sales	768	1,335	(567)	(42)%	1,328	2,369	(1,041)	(44)%
Utility Sales	388	449	(61)	(14)%	789	757	32	4%
Miscellaneous Sales	504	185	319	172%	589	316	273	87%
Total Product Sales	6,699	7,327	(628)	(9)%	13,550	14,831	(1,281)	(9)%
Barrier Rentals	907	582	325	56%	1,650	1,163	487	42%
Royalty Income	413	429	(16)	(4)%	681	735	(54)	(7)%
Shipping and Installation Revenue	2,431	2,514	(83)	(3)%	4,394	4,312	82	2%
Total Service Revenue	3,751	3,525	226	6%	6,725	6,210	515	8%

Total Revenue	$10,450	$10,852	$(402)	(4)%	$20,275	$21,041	$(766)	(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	—	$—

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:	August 11, 2020	By:	/s/ Ashley B. Smith
			Ashley B. Smith, Chief Executive Officer
			(Principal Executive Officer)


Date:	August 11, 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;

	Six Months Ended June 30,
	2020	2019
Cash flows from operating activities:
Net income (loss)	$403	$628
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	1,180	873
Gain on sale of assets	(66)	(12)
Unrealized (gain) loss	(3)	(24)
Allowance for doubtful accounts	68	56
Stock compensation	—	154
Deferred taxes	3	(90)
(Increase) decrease in
Accounts receivable - billed	1,898	1,141
Accounts receivable - unbilled	(192)	1,046
Inventories	134	557
Prepaid expenses and other assets	(101)	(41)
Refundable income taxes	136	697
Increase (decrease) in
Accounts payable - trade	(62)	(1,653)
Accrued expenses and other liabilities	186	(426)
Deferred revenue	(6)	345
Accrued compensation	(190)	(734)
Deferred buy-back lease obligation	(555)	36
Customer deposits	(251)	(417)
Net cash provided by (used in) operating activities	2,582	2,136
Cash flows from investing activities:
Purchases of investment securities available-for-sale	(15)	(16)
Purchases of property and equipment	(2,326)	(1,996)
Deferred buy-back lease asset	—	(361)
Proceeds from sale of fixed assets	71	7
Net cash provided by (used in) investing activities	(2,270)	(2,366)
Cash flows from financing activities:
Proceeds from the line-of-credit construction draw	—	500
Proceeds from long-term borrowings	5,426	49
Repayments of long-term borrowings	(2,416)	(343)
Dividends paid on common stock	(282)	(281)
Net cash provided by (used in) financing activities	2,728	(75)
Net increase (decrease) in cash	3,040	(305)
Cash
Beginning of period	1,364	1,946


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:	August 11, 2020