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 June 30, 2026

☐	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 August 1, 2026: 5,304,606 shares, net of treasury shares

SMITH-MIDLAND CORPORATION

Form 10-Q Index

PART I. FINANCIAL INFORMATION		Page

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	23

Item 4.	Controls and Procedures	23

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	25

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Mine Safety Disclosures	25

Item 5.	Other Information	25

Item 6.	Exhibits	25

	Signatures	26

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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	June 30, 2026		December 31, 2025
Current assets
Cash	$	10,663	$	11,884
Accounts receivable, net
Trade - billed (less allowances of approximately $871 and $539, respectively), including contract retentions		22,785		27,228
Trade – unbilled		1,785		1,173
Inventories, net
Raw materials		1,979		1,710
Finished goods		6,555		5,218
Prepaid expenses		1,127		1,511
Income tax receivable		1,190		23

Total current assets		46,084		48,747

Property and equipment, net		40,008		38,478

Other assets		601		504

Total assets	$	86,693	$	87,729

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	June 30, 2026			December 31, 2025
Current liabilities
Accounts payable - trade	$	5,647		$	5,482
Accrued expenses and other liabilities		1,044			907
Deferred revenue		1,505			1,128
Accrued compensation		1,715			2,164
Accrued income taxes		—			1,602
Operating lease liabilities		21			20
Current maturities of notes payable		661			648
Customer deposits		757			2,381

Total current liabilities		11,350			14,332

Deferred revenue		13,305			13,763
Operating lease liabilities		59			70
Notes payable - less current maturities		3,475			3,799
Deferred tax liability		1,465			1,461
Total liabilities		29,654			33,425

Commitments and contingencies (Note 5)

Stockholders’ equity
Preferred stock, $0.01 par value; authorized 1,000,000 shares, none issued and outstanding		—			—
Common stock, $0.01 par value; authorized 8,000,000 shares; 5,347,882 and 5,347,474 issued and 5,306,962 and 5,306,554 outstanding as of June 30, 2026 and December 31, 2025, respectively		54			54
Additional paid-in capital		7,791			7,776
Treasury stock, at cost, 40,920 shares		(102	)		(102	)
Retained earnings		49,296			46,576

Total stockholders' equity		57,039			54,304

Total liabilities and stockholders' equity	$	86,693		$	87,729

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 June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Revenue
Product sales	$	11,202		$	13,436		$	22,988		$	22,548
Barrier rentals		3,212			5,781			5,413			14,205
Royalty income		929			1,326			1,752			2,216
Shipping and installation revenue		8,020			5,643			14,782			9,915

Total revenue		23,363			26,186			44,935			48,884

Cost of sales		17,944			18,400			35,213			34,123

Gross profit		5,419			7,786			9,722			14,761

Operating expenses
General and administrative expenses		2,483			1,514			4,236			3,098
Selling expenses		951			754			1,773			1,758

Total operating expenses		3,434			2,268			6,009			4,856

Operating income		1,985			5,518			3,713			9,905

Other income (expense)
Interest expense		(66	)		(62	)		(113	)		(117	)
Interest income		51			6			116			13
Other income (expense)		(155	)		20			(140	)		28

Total other income (expense)		(170	)		(36	)		(137	)		(76	)

Income before income tax expense		1,815			5,482			3,576			9,829

Income tax expense		434			1,311			856			2,331

Net income	$	1,381		$	4,171		$	2,720		$	7,498

Basic and diluted earnings per common share	$	0.26		$	0.79		$	0.51		$	1.41

Weighted average number of common shares outstanding:
Basic		5,307			5,305			5,307			5,305
Diluted		5,307			5,305			5,307			5,305

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, 2025		5,347,474	$	54		(40,920	)	$	(102	)	$	7,776	$	46,576	$	54,304

Vesting of restricted stock		408		—		—			—			15		—		15

Net income		—		—		—			—			—		1,339		1,339

Balance, March 31, 2026		5,347,882	$	54		(40,920	)	$	(102	)	$	7,791	$	47,915	$	55,658

Net income		—		—		—			—			—		1,381		1,381

Balance, June 30, 2026		5,347,882	$	54		(40,920	)	$	(102	)	$	7,791	$	49,296	$	57,039

Balance, December 31, 2024		5,346,526	$	54		(40,920	)	$	(102	)	$	7,717	$	34,070	$	41,738

Vesting of restricted stock		—		—		—			—			5		—		5

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

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)

		Six Months Ended June 30,
		2026			2025
Cash flows from operating activities:
Net income		$	2,720		$	7,498
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			1,986			1,302
(Gain) loss on sale of property and equipment			(1	)		—
Allowance for credit losses			332			198
Stock compensation			15			10
Deferred taxes			4			(10	)

(Increase) decrease in
Accounts receivable - billed			4,111			(11,091	)
Accounts receivable - unbilled			(612	)		87
Inventories			(1,606	)		(508	)
Prepaid expenses and other assets			287			(828	)
Income tax receivable			(1,167	)
	—

Increase (decrease) in
Accounts payable - trade			205			781
Accrued expenses and other liabilities			127			7
Deferred revenue			(81	)		3,698
Accrued compensation			(449	)		24
Accrued income taxes			(1,602	)		134
Customer deposits			(1,624	)		1,098
Net cash provided by (used in) operating activities			2,645			2,400
Cash flows from investing activities:
Purchases of property and equipment			(3,555	)		(2,515	)
Net cash provided by (used in) investing activities			(3,555	)		(2,515	)
Cash flows from financing activities:
Repayments of long-term borrowings			(311	)		(332	)
Net cash provided by (used in) financing activities			(311	)		(332	)
Net increase in cash			(1,221	)		(447	)
Cash
Beginning of period			11,884			7,548
End of period		$	10,663		$	7,101

Supplemental Cash Flow Information:
Cash payments for interest		$	113		$	117
Cash payments for income taxes		$	3,621		$	2,175
Non-Cash Investing Activities
Capital expenditures in accounts payable		$	86		$	570

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, 2025. There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The condensed consolidated December 31, 2025 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.

Recent Accounting Pronouncements

Effective January 1, 2026, the Company adopted ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The Company elected the practical expedient permitting entities to assume that current conditions as of the balance sheet date remain unchanged for the remaining life of certain short-term financial assets when estimating expected credit losses under ASC 326. The amendments were adopted prospectively. Adoption of the standard did not have a material impact on the Company’s condensed consolidated financial statements or related disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, requiring enhanced 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 its consolidated financial statements.

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Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers for product sales, royalty income and shipping and installation revenue. Revenue from barrier rentals is accounted for under ASC 842, Leases. Revenue accounted for (in thousands) under ASC 606 amounted to $20,151 and $20,406 during the three-months ended June 30, 2026 and 2025, respectively and $39,522 and $34,679 during the six-months ended June 30, 2026 and 2025, respectively. Revenue accounted for (in thousands) under ASC 842 amounted to $3,212 and $5,781 during the three-months ended June 30, 2026 and 2025, respectively and $5,413 and $14,205 during the six-months ended June 30, 2026 and 2025, respectively.

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 when the Company’s performance (i) creates or enhances an asset that the customer controls, or (ii) creates or enhances an asset that has no alternative use to the Company and the Company has an enforceable right to payment for performance completed to date, as defined in the contract.

To determine the amount of revenue to recognize over time, the Company measures progress toward complete satisfaction of its performance obligations using an output method based on units produced, which depicts the value transferred to the customer relative to the remaining value to be transferred. Costs associated with the units produced are recognized as incurred.

If a contract is projected to result in a loss, the entire contract loss is recognized in the period when the loss is first determined, and the amount of the loss is updated in subsequent reporting periods. Revenue recognition includes amounts related to contract assets and contract liabilities. If recognized revenue exceeds amounts billed, a contract asset is recorded in Accounts receivable, trade — unbilled. Conversely, if amounts billed exceed recognized revenue, a contract liability is recorded in Customer deposits. Changes in 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.

Revenue recognized for product sales – over time (in thousands) are recorded in product sales under revenue in the consolidated financial statements which amounted to $4,329 and $8,409 during the three-months ended June 30, 2026 and 2025, respectively, and $9,808 and $13,142 during the six months ended June 30, 2026 and 2025, respectively.

Product Sales - Point in Time

For certain product sales that do not meet the criteria for recognition over time, the Company recognizes revenue at a point in time, generally upon shipment or delivery (as specified in the contract), when control of the product transfers to the customer and the Company has a present right to payment.

Revenue recognized for product sales – point in time (in thousands) are recorded in product sales under revenue in the consolidated financial statements which amounted to $6,873 and $5,027 during the three-months ended June 30, 2026 and 2025, respectively, and $13,180 and $9,406 during the six months ended June 30, 2026 and 2025, respectively.

Accounts Receivable and Contract Balances

The timing of when we bill our 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.

Accounts receivable, net includes the following components on the consolidated balance sheets:

	·	Trade – billed represents amounts that have been invoiced to customers for which the Company has an unconditional right to payment. Trade – billed is presented net of an allowance for expected credit losses.

	·	Trade – unbilled represents amounts related to performance obligations satisfied over time for which revenue has been recognized, but amounts have not yet been invoiced. Trade – unbilled is a contract asset.

The Company’s Accounts receivable trade – billed (in thousands), arising from Topic 606 is $21,750 and $25,618 as of June 30, 2026 and December 31, 2025, respectively.

Certain contracts include retention provisions, generally up to 10%, that are withheld from progress billings until the related work has been completed and approved. Contract retentions that have been invoiced are included within Trade – billed. The Company considers these amounts to be contract balances because collection may be contingent upon contractual completion and approval provisions.

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At June 30, 2026 and December 31, 2025, accounts receivable included contract retentions (in thousands) of approximately $1,277 and $1,135, respectively, which are considered contract assets.

For contracts recognized over time, contract assets arise when revenue recognized to date exceeds cumulative billings. Contract assets are presented as Trade – unbilled on our consolidated financial statements. When the Company subsequently invoices the customer, the related amounts are reclassified from Trade – unbilled to Trade – billed. The Company’s Accounts receivable trade – unbilled (i.e. contract assets) balances are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Accounts receivable trade – unbilled, beginning of the period	$	1,836	$	952	$	1,173	$	1,327
Accounts receivable trade – unbilled, end of the period		1,785		1,240		1,785		1,240
Amounts invoiced in the period from amounts included at the beginning of the period		1,012		638		773		1,099

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 June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Customer deposits, beginning of the period	$	2,051	$	2,160	$	2,381	$	1,539
Customer deposits, end of the period		757		2,637		757		2,637
Revenue recognized in the period from amounts included at the beginning of the period		1,673		395		2,092		229

For contracts where the Company has billed or received consideration in advance of transferring goods or services to the customer, the Company records a contract liability, deferred revenue, within accrued liabilities or other liabilities, as applicable, and recognizes revenue when the Company satisfies its performance obligations under the terms of the contract, which generally occurs over time as services are rendered or at a point in time upon delivery of the promised goods or services. Deferred revenue includes the non-lease components of barrier rental arrangements.

The Company’s deferred revenue (i.e. contract liabilities) balances (in thousands) related to Topic 606 are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Deferred revenue, beginning of the period	$	7,448	$	5,174	$	6,871	$	4,453
Deferred revenue, end of the period		7,222		6,175		7,222		6,175
Revenue recognized in the period from amounts included at the beginning of the period		757		75		4,361		109

Any uncollected billed amounts for our performance obligations recognized over time, including contract retentions, are the difference between the opening and closing balances of the Company’s contract assets and contract liabilities and primarily results from the timing difference between the Company’s performance and billings. The changes in the contract assets and contract liabilities balances during the quarters ended June 30, 2026 and 2025 were not materially affected by any other factors.

Our billed and unbilled revenue is subject to credit risk if our customers should encounter financial difficulties. The Company maintains an allowance for estimated expected credit losses on Trade-billed (and evaluates Trade-unbilled for expected credit losses, as applicable). 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 and current and future economic conditions. Management also considers when 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.

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At June 30, 2026 and June 30, 2025, total allowances for credit losses were $871 and $1,329, respectively (in thousands). The decrease in the allowance for credit losses was primarily attributable to improved collection trends, a reduction in aged receivable balances, particularly within accounts previously identified as having elevated credit risk, and a decline in customer accounts with specific credit concerns that had contributed to higher reserves in the prior year. Management will continue to monitor receivable aging, customer creditworthiness, project-specific risks, and broader economic conditions affecting the construction and infrastructure markets in which the Company operates when estimating expected credit losses.

The rollforward of our allowance for credit losses (in thousands) for the quarters ended June 30, 2026 and 2025, was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Balance at beginning of period	$	651	$	1,222	$	539	$	1,130
Provision for Expected Credit Losses		220		107		332		199
Balance at end of period		871		1,329		871		1,329

Barrier Rentals - Lease Income

Barrier Rental revenue historically comprises Standard Barrier Rental and Special Barrier Projects.

Standard Barrier Rental

The Company leases barriers to customers under operating leases in accordance with ASC 842, Leases. Customers are invoiced at lease commencement for the full lease term. The Company’s standard barrier rentals arrangements are generally for periods less than five years and may include provisions for additional charges if the barriers remain on rent beyond the contractual lease term. The Company evaluates the enforceable term in determining the lease term used for revenue recognition and in preparing its disclosure of future fixed lease payments. Amounts billed in advance of the related lease periods are recorded as deferred lease income within Deferred revenue on the balance sheet and recognized as lease income on a straight-line basis over the lease term. Lease income is presented in Barrier Rentals within Revenue in the consolidated financial statements. The Company recognizes operating lease income only to the extent collection is probable. If collectability is not probable, lease income is limited to amounts collected until collectability becomes probable.

Standard Barrier Rental arrangements also include non-lease components (accounted for under ASC 606, Revenue from Contracts with Customers), including delivery/shipping, installation, and removal/pickup services. These non-lease components are distinct from the lease component because: (i) the lease commences upon shipment from the Company’s facility, and delivery and installation occur after lease commencement; (ii) the components are separately priced with observable standalone selling prices; and (iii) the services can be performed by third parties. The Company allocates consideration between lease and non-lease components based on their relative stand-alone selling prices. Revenue allocated to delivery and installation services is recognized when the services are performed (generally upon delivery to the customer’s site, which occurs after lease commencement), and revenue allocated to removal/pickup services is recognized when performed (generally at the end of the lease term). Amounts billed in advance of performance related to the non-lease components are recorded as deferred revenue within Deferred revenue on the balance sheet and recognized as the related services are performed and is recognized within shipping and installation revenue on the consolidated statements of income.

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The Company’s deferred lease revenue balances (in thousands) related to Topic 842, Leases are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Deferred revenue, beginning of the period	$	8,307	$	6,788	$	8,020	$	6,062
Deferred revenue, end of the period		7,588		8,059		7,588		8,059
Revenue recognized in the period from amounts included at the beginning of the period		1,450		814		611		1,301

Special Barrier Projects

The Company provides barrier rentals as part of integrated Special Barrier Projects, which include deployment and 24/7 concierge-type services. These arrangements are evaluated under ASC 842, Leases. The Company contracts with a third-party event services firm, with the end-user also a party to the arrangement. Projects are delivered as a single bundled engagement, typically over a one- to two-week period.

The Company’s personnel manage and execute all barrier movements under direction of customer authorized staff and officials. Based on this structure, the customer is considered to direct the use of the identified asset, indicating that a lease exists. The non-lease components are not distinct from the lease component, as they are highly interdependent and interrelated and not separately identifiable. Accordingly, the lease and non-lease components are not separated and are accounted for as a single combined component under ASC 842. Revenue is recognized on a straight-line basis over the project term, which reflects the continuous transfer of benefit over the duration of the engagement.

Royalty Income

The Company licenses certain products to other precast companies to produce the Company's products in accordance with the Company’s engineering specifications. Licensing agreements are typically for five-year terms and require royalty payments of 4% to 6% of the licensee’s total sales of licensed products. Royalty income is recognized in accordance with ASC 606 as the licensee’s sales of the licensed products occur in the period the licensees’ sales are earned and reported. Royalty income is presented under Royalty Income within Revenue in the consolidated financial statements.

Shipping and Installation

Shipping, installation and removal services are distinct performance obligations and are accounted for under ASC 606, Revenue from Contracts with Customers. Revenue is recognized in the period the shipping, installation, and removal services are provided to the customer. When shipping and installation services are billed in advance of performance, the Company records a contract liability and recognizes the revenue when the services are performed. Shipping, installation and removal revenue is presented as Shipping and Installation within Revenue in the consolidated financial statements.

Disaggregation of Revenue

In the following table, revenue is disaggregated by primary sources of revenue (in thousands):

Revenue by Type	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Soundwall Sales	$	2,456	$	5,206	$	5,806	$	8,985
Architectural Panel Sales		462		—		1,212		—
SlenderWall Sales		132		1,488		878		1,488
Miscellaneous Wall Sales		995		863		1,300		1,464
Barrier Sales		2,758		1,230		4,690		2,535
Easi-Set/Easi-Span Building Sales		2,151		2,926		5,087		4,985
Utility Sales		1,965		871		3,403		1,885
Miscellaneous Sales		284		852		612		1,205
Total Product Sales		11,202		13,436		22,988		22,548
Barrier Rentals		3,212		5,781		5,413		14,205
Royalty Income		929		1,326		1,752		2,216
Shipping and Installation Revenue		8,020		5,643		14,782		9,915
Total Service and Other Revenue		12,161		12,750		21,947		26,336

Total Revenue	$	23,363	$	26,186	$	44,935	$	48,884

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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 June 30, 2026, the Company derived none of its revenue from any individual customer that exceeded 10% of total revenue. For the six months ended June 30, 2026, the Company derived 10% of its revenue from one customer. As of June 30, 2026, one customer’s outstanding receivable balance exceeded 17% of the total outstanding receivable balance. For the three months ended June 30, 2025, the Company derived 16% and 10% of its revenue from two customers respectively. For the six months ended June 30, 2025, the Company derived 24% and 10% of its revenue from two customers respectively. As of June 30, 2025, three customers’ outstanding receivable balance exceeded 10% 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 (“CODM”) in deciding how to allocate resources and assess performance. The Company currently operates in one operating and reportable business segment for financial reporting purposes (the “Precast Concrete Segment”). The Company’s CODM is the Chief Executive Officer (“CEO”) and President.

The Precast Concrete Segment derives revenues from customers by providing products and services to customers. The accounting policies of the precast concrete segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the Precast Concrete Segment based on consolidated net income as reported on the consolidated statements of income and measures segment assets as total consolidated assets as reported on the consolidated balance sheets. The CODM uses consolidated net income and consolidated assets to allocate resources and assess performance. Significant segment expenses provided to the CODM are based on the expense breakout shown on the consolidated statements of income. The Precast Concrete Segment’s results are the same as reported on the consolidated statements of income and there are no adjustments or reconciling items.

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2. EARNINGS (LOSS) PER SHARE

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Basic earnings per common share

Net income	$	1,381	$	4,171	$	2,720	$	7,498

Weighted average shares outstanding		5,307		5,305		5,307		5,305

Basic earnings per common share	$	0.26	$	0.79