smid_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number 1-13752

Smith-Midland Corporation

(Exact name of Registrant as specified in its charter)

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

5119 Catlett Road, P.O. Box 300

Midland, VA 22728

(Address, zip code of principal executive offices)

(540) 439-3266

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $0.01 par value per share, outstanding as of November 1, 2025: 5,304,606 shares, net of treasury shares

SMITH-MIDLAND CORPORATION

Form 10-Q Index

		Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)		3

Condensed Consolidated Balance Sheets		3

Condensed Consolidated Statements of Income		5

Condensed Consolidated Statements of Stockholders' Equity		6

Condensed Consolidated Statements of Cash Flows		7

Notes to Condensed Consolidated Financial Statements		8

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		16

Item 3. Quantitative and Qualitative Disclosures About Market Risk		25

Item 4. Controls and Procedures		25

PART II. OTHER INFORMATION

Item 1. Legal Proceedings		27

Item 1A. Risk Factors		27

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		27

Item 3. Defaults Upon Senior Securities		27

Item 4. Mine Safety Disclosures		27

Item 5. Other Information		27

Item 6. Exhibits		28

Signatures		29

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PART I — FINANCIAL INFORMATION

ITEM 1. Financial Statements

Smith-Midland Corporation

and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share data)

ASSETS	September 30, 2025		December 31,2024
Current assets
Cash	$	13,376	$	7,548
Accounts receivable, net
Trade - billed (less allowances of approximately $1,166 and $1,130, respectively), including contract retentions		25,460		19,420
Trade - unbilled		1,396		1,327
Inventories, net
Raw materials		2,498		2,078
Finished goods		5,392		4,599
Prepaid expenses		1,684		877

Total current assets		49,806		35,849

Property and equipment, net		35,126		31,704

Other assets		505		438

Total assets	$	85,437	$	67,991

The accompanying notes are an integral part of the condensed consolidated financial statements.

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Smith-Midland Corporation

and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share data)

(continued)

LIABILITIES AND STOCKHOLDERS' EQUITY	September 30, 2025			December 31, 2024
Current liabilities
Accounts payable - trade	$	5,740		$	4,741
Accrued expenses and other liabilities		466			429
Deferred revenue		3,688			4,313
Accrued compensation		2,110			1,770
Accrued income taxes		2,658			1,539
Operating lease liabilities		20			21
Current maturities of notes payable		657			658
Customer deposits		2,689			1,539

Total current liabilities		18,028			15,010

Deferred revenue		10,785			6,222
Operating lease liabilities		80			90
Notes payable - less current maturities		3,933			4,436
Deferred tax liability		484			494

Total liabilities		33,310			26,252

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; 5,346,526 and 5,346,526 issued and 5,304,606 and 5,304,606 outstanding, respectively		54			54
Additional paid-in capital		7,730			7,717
Treasury stock, at cost, 40,920 shares		(102	)		(102	)
Retained earnings		44,445			34,070

Total stockholders' equity		52,127			41,739

Total liabilities and stockholders' equity	$	85,437		$	67,991

The accompanying notes are an integral part of the condensed consolidated financial statements.

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Smith-Midland Corporation

and Subsidiaries

Condensed Consolidated Statements of Income

(Unaudited)

(in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Revenue
Product sales	$	11,911		$	10,753		$	34,459		$	34,621
Barrier rentals		3,269			7,053			17,474			9,303
Royalty income		1,083			958			3,299			2,403
Shipping and installation revenue		5,188			4,818			15,103			13,650

Total revenue		21,451			23,582			70,335			59,977

Cost of sales		15,692			17,004			49,815			44,353

Gross profit		5,759			6,578			20,520			15,624

Operating expenses
General and administrative expenses		1,100			1,720			4,198			4,938
Selling expenses		805			1,010			2,563			2,655

Total operating expenses		1,905			2,730			6,761			7,593

Operating income		3,854			3,848			13,759			8,031

Other income (expense)
Interest expense		(44	)		(56	)		(161	)		(175	)
Interest income		72			22			85			36
Gain on sale of assets		—			16			—			19
Other income (expense), net		(11	)		14			17			50

Total other income (expense)		17			(4	)		(59	)		(70	)

Income before income tax expense		3,871			3,844			13,700			7,961

Income tax expense		994			694			3,325			1,683

Net income	$	2,877		$	3,150		$	10,375		$	6,278

Basic and diluted earnings per common share	$	0.54		$	0.59		$	1.96		$	1.18

Weighted average number of common shares outstanding:
Basic		5,305			5,304			5,305			5,283
Diluted		5,305			5,304			5,304			5,283

The accompanying notes are an integral part of the condensed consolidated financial statements.

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Smith-Midland Corporation

and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(in thousands, except share data)

	Common Stock					Treasury Stock						Additional Paid-in			Retained
	Shares			Amount		Shares			Amount			Capital			Earnings		Total

Balance, December 31, 2024		5,346,526		$	54		(40,920	)	$	(102	)	$	7,717		$	34,070	$	41,739

Vesting of restricted stock		—			—		—			—			4			—		4

Net income		—			—		—			—			—			3,327		3,327

Balance, March 31, 2025		5,346,526		$	54		(40,920	)	$	(102	)	$	7,721		$	37,397	$	45,070

Vesting of restricted stock		—			—		—			—			4			—		4

Net income		—			—		—			—			—			4,171		4,171

Balance, June 30, 2025		5,346,526		$	54		(40,920	)	$	(102	)	$	7,725		$	41,568	$	49,245

Vesting of restricted stock		—			—		—			—			5			—		5

Net income		—			—		—			—			—			2,877		2,877

Balance, September 30, 2025		5,346,526		$	54		(40,920	)	$	(102	)	$	7,730		$	44,445	$	52,127

Balance, December 31, 2023		5,349,599		$	54		(40,920	)	$	(102	)	$	7,814		$	26,395	$	34,161

Vesting of restricted stock		—			—		—			—			5			—		5

Net income		—			—		—			—			—			1,147		1,147

Balance, March 31, 2024		5,349,599		$	54		(40,920	)	$	(102	)	$	7,819		$	27,542	$	35,313

Vesting of restricted stock		—			—		—			—			5			—		5

Settlement of restricted stock		(3,840	)		—		—			—			(117	)		—		(117	)

Net income		—			—		—			—			—			1,981		1,981

Balance, June 30, 2024		5,345,759		$	54		(40,920	)	$	(102	)	$	7,707		$	29,523	$	37,182

Stock granted		767			—		—			—			—			—		—

Vesting of restricted stock		—			—		—			—			5			—		5

Net income		—			—		—			—			—			3,150		3,150

Balance, September 30, 2024		5,346,526		$	54		(40,920	)	$	(102	)	$	7,712		$	32,673	$	40,337

The accompanying notes are an integral part of the condensed consolidated financial statements.

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Smith-Midland Corporation

and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

	Nine Months Ended September 30,
	2025			2024
Cash flows from operating activities:
Net income	$	10,375		$	6,278
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		1,915			1,996
(Gain) on sale of property and equipment		—			(19	)
Allowance for credit losses		36			271
Stock compensation		13			40
Settlement of restricted stock		—			(142	)
Deferred taxes		(10	)		(1	)
(Increase) decrease in
Accounts receivable - billed		(6,076	)		(884	)
Accounts receivable - unbilled		(69	)		(389	)
Inventories		(1,213	)		(1,092	)
Prepaid expenses and other assets		(874	)		186
Refundable income taxes		—			(23	)
Increase (decrease) in
Accounts payable - trade		1,044			(1,909	)
Accrued expenses and other liabilities		26			21
Deferred revenue		3,938			3,052
Accrued compensation		340			178
Accrued income taxes		1,119			(473	)
Customer deposits		1,150			(1,287	)
Net cash provided by (used in) operating activities		11,714			5,803
Cash flows from investing activities:
Purchases of property and equipment		(5,382	)		(5,543	)
Proceeds from the sale of property and equipment		-			25
Net cash provided by (used in) investing activities		(5,382	)		(5,518	)
Cash flows from financing activities:
Repayments of long-term borrowings		(504	)		(447	)
Net cash provided by (used in) financing activities		(504	)		(447	)
Net increase (decrease) in cash		5,828			(162	)
Cash
Beginning of period		7,548			9,175
End of period	$	13,376		$	9,013

Supplemental Cash Flow Information:
Cash payments for interest	$	161		$	175
Cash payments for income taxes	$	2,216		$	1,558
Non-Cash Investing Activities
Capital expenditures in accounts payable	$	381		$	478

The accompanying notes are an integral part of the condensed consolidated financial statements.

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Smith-Midland Corporation

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. INTERIM FINANCIAL REPORTING

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, we have condensed or omitted certain information and footnote disclosures that are included in our annual consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024. The condensed consolidated December 31, 2024 balance sheet was derived from the audited financial statements included in the Form 10-K. Dollar amounts in the footnotes are stated in thousands, except for per share data.

In the opinion of management, these condensed consolidated financial statements reflect all adjustments (which consist of normal, recurring adjustments) necessary for a fair presentation of the financial position and results of operations and cash flows for the periods presented. The results disclosed in the condensed consolidated statements of income are not necessarily indicative of the results to be expected in any future periods.

Recently Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Improvements to Income Tax Disclosures. The guidance is intended to improve income tax disclosure requirements by requiring (i) consistent categories and greater disaggregation of information in the rate reconciliation and (ii) the disaggregation of income taxes paid by jurisdiction. The guidance makes several other changes to the income tax disclosure requirements. This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted, and is required to be applied prospectively with the option of retrospective application. The Company is evaluating the impact of the standard on its financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, requiring additional disclosures about specified categories of expenses included in certain expense captions presented on the face of the income statement. This standard will be effective for the Company for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, and may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this guidance on the Company’s consolidated financial statements.

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Revenue Recognition

Product Sales - Over Time

The Company recognizes revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services provided. Revenue associated with contracts with customers for customized products is recognized over time as the Company's performance creates or enhances customer-controlled assets or creates or enhances an asset with no alternative use, which the Company has an enforceable right to receive compensation as defined under the contract for performance completed. To determine the amount of revenue to recognize over time, the Company recognizes revenue over the contract terms based on the output method. The Company applied the "as invoiced" practical expedient as the amount of consideration the Company has the right to invoice corresponds directly with the value of the Company's performance to date.

As the output method is driven by units produced, the Company recognizes revenues based on the value transferred to the customer relative to the remaining value to be transferred. The Company also matches the costs associated with the units produced. If a contract is projected to result in a loss, the entire contract loss is recognized in the period when the loss was first determined and the amount of the loss is updated in subsequent reporting periods. Revenue recognition also includes an amount related to a contract asset or contract liability. If the recognized revenue is greater than the amount billed to the customer, a contract asset is recorded in accounts receivable trade - unbilled. Conversely, if the amount billed to the customer is greater than the recognized revenue, a contract liability is recorded in customer deposits. Changes in the job performance, job conditions, and final contract settlements are factors that influence management’s assessment of total contract value and therefore, profit and revenue recognition.

A portion of the work the Company performs requires financial assurances in the form of performance and payment bonds at the time of execution of the contract. Some contracts include retention provisions of up to 10%, which are generally withheld from each progress payment as retainage until the contract work has been completed and approved.

Product Sales - Point in Time

For certain product sales, that do not meet the over time criteria, the Company recognizes revenue when the product has been shipped to the destination in accordance with the terms outlined in the contract where a present obligation to pay exists and the customers have gained control of the product.

Accounts Receivable and Contract Balances

The timing of when the Company bills the customers is generally dependent upon advance billing terms, milestone billings based on the completion of certain phases of the work, or when services are provided or products are shipped. The Company’s Accounts receivable trade – billed, arising from Topic 606 is $ 20,589 and $16,695 as of September 30, 2025 and December 31, 2024, respectively.

Projects with performance obligations recognized over time that have costs and estimated earnings recognized to date in excess of cumulative billings are reported on our Consolidated Balance Sheets as "Accounts receivable trade - unbilled" (contract assets). The Company’s Accounts receivable trade – unbilled (i.e. contract assets) balances are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Accounts receivable trade – unbilled, beginning of the period	$	1,240	$	927	$	1,327	$	525
Accounts receivable trade – unbilled, end of the period		1,396		914		1,396		914
Amounts invoiced in the period from amounts included at the beginning of the period		549		830		1,189		428

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Projects with performance obligations recognized over time that have cumulative billings in excess of costs and estimate earnings recognized to date, are reported on our Consolidated Balance Sheets as "Customer deposits" (contract liabilities). The Company’s Customer deposits (i.e. contract liabilities) balances are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Customer deposits, beginning of the period	$	2,637	$	2,581	$	1,539	$	2,779
Customer deposits, end of the period		2,689		1,492		2,689		1,492
Revenue recognized in the period from amounts included at the beginning of the period		855		2,483		423		2,684

The Company’s deferred revenue balances (in thousands) related to Topic 606 are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Deferred revenue, beginning of the period	$	6,175		3,499	$	4,453	$	2,685
Deferred revenue, end of the period		6,529		4,189		6,529		4,189
Revenue recognized in the period from amounts included at the beginning of the period		796		68		3,331		604

Any uncollected billed amounts for our performance obligations recognized over time, including contract retentions, are recorded within accounts receivable trade - billed. At September 30, 2025 and December 31, 2024 accounts receivable included contract retentions of approximately $1,130 and $1,523, respectively, which are considered contract assets.

Our billed and unbilled revenue may be exposed to potential credit risk if our customers should encounter financial difficulties, and we maintain an allowance for estimated expected credit losses. A considerable amount of judgment is required when determining expected credit losses. Estimates of such expected losses are recorded based on historical losses experienced by the Company, current macro- and micro-economic conditions, and expected macro- and micro-economic conditions. Additional reserves are accumulated when we believe a specific customer may not be able to meet its financial obligations due to deterioration in financial condition or credit rating. Factors relevant to our assessment include our prior collection history with our customers, the related aging of past due balances, projections of credit losses based on historical trends or past events, and forecasts of future economic conditions. During the quarter ended September 30, 2025, we recognized a bad debt recovery of $245, primarily related to collections of previously reserved receivables. At September 30, 2025 and December 31, 2024, total allowances for credit losses were $1,166 and $1,130, respectively.

The roll forward of our allowance for credit losses for the quarter ended September 30, 2025, was as follows:

Balance at December 31, 2024	$	1,130
Provision for Expected Credit Losses		281
Bad Debt Recovery		(245	)
Balance at September 30, 2025	$	1,166

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Barrier Rentals - Lease Income

Leasing fees are paid by customers at the beginning of the lease agreement. We record amounts billed to customers in excess of recognizable revenue, as deferred revenue on the balance sheet. These amounted to $7,944 and $6,082 as of September 30, 2025 and December 31, 2024 respectively. Revenue is recognized on a straight-line basis each month as lease income for the duration of the lease, in accordance with Topic 842, Leases.

Royalty Income

The Company licenses certain products to other precast companies to produce the Company's products to engineering specifications under the licensing agreements. The agreements are typically for five-year terms and require royalty payments from 4% to 6% of total sales of licensed products, which are paid every month. The revenues from licensing agreements are recognized in the month earned.

Shipping and Installation

Shipping and installation revenues are recognized as a distinct performance obligation in the period the shipping and installation services are provided to the customer.

Disaggregation of Revenue

In the following table, revenue is disaggregated by primary sources of revenue:

Revenue by Type	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Soundwall Sales	$	2,846	$	1,873	$	11,832	$	7,043
Architectural Panel Sales		1,033		1,601		1,033		3,893
SlenderWall Sales		1,146		—		2,634		—
Miscellaneous Wall Sales		1,273		811		2,737		4,634
Barrier Sales		764		546		3,299		3,418
Easi-Set Building Sales		2,657		1,801		7,642		4,341
Utility Sales		1,166		2,383		3,051		6,112
Miscellaneous Sales		1,026		1,738		2,231		5,180
Total Product Sales		11,911		10,753		34,459		34,621
Barrier Rentals		3,269		7,053		17,474		9,303
Royalty Income		1,083		958		3,299	2,403
Shipping and Installation Revenue		5,188		4,818		15,103		13,650
Total Service Revenue		9,540		12,829		35,876		25,356

Total Revenue	$	21,451	$	23,582	$	70,335	$	59,977

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The revenue items: soundwall sales, architectural panel sales, SlenderWall sales, miscellaneous wall sales, miscellaneous sales, barrier rentals, and royalty income are recognized as revenue over time. The revenue items: barrier sales, Easi-Set and Easi-Span building sales, utility sales, and shipping and installation revenue are recognized as revenue at a point in time.

Warranties

Smith-Midland products are typically sold pursuant to an implicit warranty of merchantability only. Warranty claims are reviewed and resolved on a case-by-case method. Although the Company does incur costs for warranty claims, historically such amounts are minimal.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Concentration of Risk

Historically, various customers have comprised greater than 10% of revenue during a given quarter or year. These customers are typically not the same quarter to quarter or year to year. The Company views revenue details by jobs, and not by customers. In the event a customer were to go out of business during a project, it is likely that the owner of the project would assign a new contractor to the job, and the Company would complete its scope of work. Therefore, the Company believes that it does not have a short-term vulnerability of severe impact to operations. In cases where customers are less than 10% of revenue, the Company assesses if there is a near term severe impact. The Company has determined that no customer, if lost, would result in a near term severe impact to the Company’s operations.

For the three months ended September 30, 2025, no customer made up greater than 10% of the revenue for the Company. For the nine months ended September 30, 2025, the Company derived 18% of its revenue from one customer. For the three months ended September 30, 2024, the Company derived 17% of its revenue from one customer. For the nine months ended September 30, 2024 no customer made up greater than 10% of the revenue for the Company. As of September 30, 2025, one customer’s outstanding receivable balance equaled 16% of the total outstanding receivable balance. As of September 30, 2024, one customer’s outstanding receivable balance equaled 15% of the total outstanding receivable balance.

Segment Reporting

Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision-maker, or decision-making group, in deciding how to allocate resources and assess performance. The Company currently operates in one operating and reportable business segment for financial reporting purposes.

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2. EARNINGS PER SHARE

Earnings per share are calculated as follows (in thousands, except earnings per share):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025			2024
Basic earnings per common share

Net income	$	2,877	$	3,150	$	10,375		$	6,278

Weighted average shares outstanding		5,305		5,304		5,305			5,283

Basic earnings per common share	$	0.54	$	0.59	$	1.96		$	1.18

Diluted earnings per common share

Net income	$	2,877	$	3,150	$	10,375		$	6,278

Weighted average shares outstanding		5,305		5,304		5,305			5,283
Dilutive effect of restricted stock		—		—		(1	)		—

Total weighted average shares outstanding		5,305		5,304

SEC Form 10-Q filed by Smith-Midland Corporation