Reports 13 Percent Increase in Backlog to $32.7 Million
MIDLAND, VA / ACCESSWIRE / May 12, 2022 / Smith-Midland Corporation (NASDAQ:SMID), a provider of innovative, high-quality proprietary and patented precast concrete products and systems today announced its results for the first quarter ended March 31, 2022.
First Quarter 2022 Highlights Compared to First Quarter 2021
- Revenue of $10.4 million, a decrease of 31%
- SlenderWall sales of $1 million
- Operating expenses decreased 5 percent
- Backlog increased 13 percent to $32.7 million
- Received updated J-J Hooks approval from Florida DOT
- Continued strong balance sheet with sufficient liquidity
Additional Highlights Subsequent to the Quarter
- Awarded $2 million soundwall contract for the Hampton Roads Bridge Tunnel Project
- Increased barrier buy-back agreement to 325,000 linear feet to more than double the rental fleet
- Awarded $6.6 million contract, marking the largest project for the North Carolina plant
"The overall results for the first quarter in 2022 are less favorable compared to the record first quarter results in 2021, primarily due to non-recurring special projects that took place in the first quarter of 2021 and from a reduced production volume as we experienced operational disruptions related to required approvals and timing of large projects in the first quarter of 2022. However, first quarter 2022 results reflected continued growth in barrier rental revenue from the core rental barrier fleet, increased sales for SlenderWall, and increased royalty revenues. Looking at the remainder of the year, we are confident in our ability to build upon last year given the strong market outlook, increased backlog, and recent progress on our long-term growth initiatives," said Ashley B. Smith, President and Chief Executive Officer. "Regulatory tailwinds and additional funding for federal and state infrastructure continue to generate considerable long-term opportunities, and with the expansion of our barrier rental fleet, we are in the best position in the Company's history to be able to capture additional market share over the long-term."
"We continue to make great strides in executing our long-term growth initiatives. During the quarter, we received additional approval from the Florida DOT for our J-J Hooks barrier to be used in freestanding applications. Recently, we announced the expansion of our participation in the Hampton Roads Bridge-Tunnel (HRBT) project, the largest civil construction contract ever awarded by the Virginia Department of Transportation. Additionally, we have announced an increase to our rental buy-back agreement pursuant to which we will purchase barrier that will more than double the rental capacity of our rental barrier fleet by the end of the year. Finally, we signed a $6.6 million contract for a project with the North Carolina Department of Transportation, which is the largest contract in the history of our North Carolina plant. We plan to build on this momentum to gain market share with our differentiated, proprietary products," Mr. Smith continued.
"I am proud of our entire team and excited about the opportunities in front of us. Smith-Midland remains in a favorable position to grow despite global supply chain challenges, logistical disruptions, and COVID-19. We have a strong balance sheet, a disciplined management team, and we are aligned with our stakeholders to focus on driving long-term shareholder value," Mr. Smith concluded.
First Quarter 2022 Results
The Company reported 2022 first quarter revenues of $10.4 million compared to $15.2 million in the first quarter of 2021. Operating loss for first quarter of 2022 was $0.2 million compared to operating income of $3.8 million in the first quarter of 2021. Net loss for the quarter was $0.1 million, or $0.02 loss per share, compared to net income of $2.9 million, or $0.55 earnings per share in the first quarter of 2021. The results for the quarter were largely driven by the absence of multiple short-term special projects that occurred during the same quarter of the prior year. Additionally, the Company experienced operational delays related to large project timing and approvals required to initiate production.
Product Sales
Total product sales for the first quarter of 2022 decreased 21 percent to $5.9 million compared to $7.4 million in the same quarter of the prior year. This decrease is primarily due to lower Architectural panel sales related to a project that completed production in the second half of 2021, delays in customer approvals, and the Company's strategic business shift from barrier sales to rentals. SlenderWall sales were approximately $1 million for the quarter, and are expected to trend higher for the duration of 2022. Utility sales increased 74 percent from the first quarter of 2021.
Service Revenue
Service revenue, which is comprised of royalty income, barrier rental revenue, and shipping and installation, totaled $4.6 million for the first quarter of 2022 compared to $7.8 million in the same quarter of the prior year. Shipping and installation revenue increased 67 percent from the first quarter of 2021 to $2.7 million. The increase is primarily due to the shipping and installation of SlenderWall and Architectural panels. Barrier rental revenue was $1.5 million compared to $5.8 million in the first quarter of 2021. While total barrier rental revenue decreased due to multiple short-term special projects that occurred during the first quarter of 2021, revenue from the core rental barrier fleet increased by 12 percent.
Balance Sheet and Liquidity
As of March 31, 2022, Smith-Midland's cash totaled $14.8 million compared to $13.5 million as of December 31, 2021. Account receivables were approximately $12.5 million and debt totaled $6.9 million. Capital spending for the quarter was $0.2 million compared to $0.4 million in the first quarter of 2021.
Macro Environment and Outlook
Smith-Midland and its competitors continue to face many macro challenges including labor shortages, inflationary and raw material cost increases, and supply chain disruptions. Smith-Midland's proactive stance on raw material inventories continues to provide stability for customers despite these global challenges. The barrier rental business is strong and the fleet will more than double by the end of the year. Sales initiatives are gaining traction and the Company intends to aggressively pursue market share. Smith-Midland serves diverse end markets with innovative patented, proprietary, and customized products. The Company's growing licensee network generates healthy royalties and extends the geographic reach of the patented products. Regulatory tailwinds and macro off-site pre-fabricated construction trends favor Smith-Midland's portfolio of products over the long-term. Backlog was approximately $32.7 million recorded as of May 2, 2022, compared to approximately $29.0 million a year ago. Management will continue to execute against the Company's long-term growth strategy focusing on continuously enhancing shareholder value.
About Smith-Midland
Smith-Midland develops, manufactures, licenses, rents, and sells a broad array of precast concrete products and systems for use primarily in the construction, transportation, and utilities industries.
Forward-Looking Statements
This announcement contains forward-looking statements, which involve risks and uncertainties. The Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors which might cause such a difference include, but are not limited to, the risk that the coronavirus outbreak may adversely affect future operations, product demand, the impact of competitive products and pricing, capacity and supply constraints or difficulties, general business and economic conditions, out debt exposure, the effect of the Company's accounting policies and other risks detailed in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.
Company Contact:
AJ Krick, CFO
540-439-3266
investors@smithmidland.com
Investor Relations:
Steven Hooser or John Beisler
Three Part Advisors, LLC
214-872-2710
SMITH-MIDLAND CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
ASSETS | March 31, 2022 (Unaudited) | December 31, 2021 | ||||||
Current assets | ||||||||
Cash | $ | 14,818 | $ | 13,492 | ||||
Accounts receivable, net | ||||||||
Trade - billed (less allowance for doubtful accounts of approximately $467 and $437, respectively), including contract retentions | 12,047 | 10,013 | ||||||
Trade - unbilled | 463 | 439 | ||||||
Inventories, net | ||||||||
Raw materials | 1,194 | 1,143 | ||||||
Finished goods | 2,131 | 1,702 | ||||||
Prepaid expenses | 443 | 551 | ||||||
Refundable income taxes | 411 | 411 | ||||||
Total current assets | 31,507 | 27,751 | ||||||
Property and equipment, net | 21,632 | 21,926 | ||||||
Deferred buy-back lease asset, net | 3,171 | 3,390 | ||||||
Other assets | 260 | 258 | ||||||
Total assets | $ | 56,570 | $ | 53,325 | ||||
SMITH-MIDLAND CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(continued)
LIABILITIES AND STOCKHOLDERS' EQUITY | March 31, 2022 (Unaudited) | December 31, 2021 | ||||||
Current liabilities | ||||||||
Accounts payable - trade | $ | 3,525 | $ | 2,071 | ||||
Accrued expenses and other liabilities | 292 | 657 | ||||||
Deferred revenue | 2,383 | 2,454 | ||||||
Accrued compensation | 907 | 1,036 | ||||||
Accrued income taxes | 1,990 | 2,033 | ||||||
Deferred buy-back lease obligation | 3,462 | 3,776 | ||||||
Operating lease liabilities | 91 | 89 | ||||||
Current maturities of notes payable | 607 | 468 | ||||||
Customer deposits | 1,312 | 1,325 | ||||||
Total current liabilities | 14,569 | 13,909 | ||||||
Deferred revenue | 1,925 | 1,865 | ||||||
Operating lease liabilities | 98 | 122 | ||||||
Notes payable - less current maturities | 6,261 | 3,724 | ||||||
Deferred tax liability | 1,960 | 1,955 | ||||||
Total liabilities | 24,813 | 21,575 | ||||||
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; 5,353,095 and 5,353,095 issued and 5,229,658 and 5,229,658 outstanding, respectively | 53 | 53 | ||||||
Additional paid-in capital | 7,061 | 6,935 | ||||||
Treasury stock, at cost, 40,920 shares | (102 | ) | (102 | ) | ||||
Retained earnings | 24,745 | 24,864 | ||||||
Total stockholders' equity | 31,757 | 31,750 | ||||||
Total liabilities and stockholders' equity | $ | 56,570 | $ | 53,325 | ||||
SMITH-MIDLAND CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
(in thousands, except per share data)
| Three Months Ended March 31, | |||||||
| 2022 | 2021 | ||||||
Revenue | |||||||
Product sales | $ | 5,851 | $ | 7,420 | |||
Barrier rentals | 1,485 | 5,777 | |||||
Royalty income | 427 | 420 | |||||
Shipping and installation revenue | 2,672 | 1,601 | |||||
Total revenue | 10,435 | 15,218 | |||||
Cost of goods sold | 8,787 | 9,496 | |||||
Gross profit | 1,648 | 5,722 | |||||
Operating expenses | |||||||
General and administrative expenses | 1,159 | 1,325 | |||||
Selling expenses | 662 | 595 | |||||
Total operating expenses | 1,821 | 1,920 | |||||
Operating income (loss) | (173 | ) | 3,802 | ||||
Other income (expense) | |||||||
Interest expense | (48 | ) | (42 | ) | |||
Interest income | 3 | 9 | |||||
Gain (loss) on sale of assets | 39 | 46 | |||||
Other income (expense) | 20 | (7 | ) | ||||
Total other income (expense) | 14 | 6 | |||||
Income (loss) before income tax expense (benefit) | (159 | ) | 3,808 | ||||
Income tax expense (benefit) | (40 | ) | 941 | ||||
Net income (loss) | $ | (119 | ) | $ | 2,867 | ||
Basic and diluted earnings (loss) per share | $ | (0.02 | ) | $ | 0.55 | ||
Weighted average number of common shares outstanding: | |||||||
Basic | 5,230 | 5,202 | |||||
Diluted | 5,230 | 5,210 | |||||
SMITH-MIDLAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | (119 | ) | $ | 2,867 | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 703 | 646 | ||||||
(Gain) loss on sale of property and equipment | (39 | ) | (46 | ) | ||||
Unrealized (gain) loss on investment securities available for sale | - | 8 | ||||||
Allowance for doubtful accounts | 30 | - | ||||||
Stock compensation | 126 | 41 | ||||||
Deferred taxes | 5 | (4 | ) | |||||
(Increase) decrease in | ||||||||
Accounts receivable - billed | (2,064 | ) | (1,124 | ) | ||||
Accounts receivable - unbilled | (24 | ) | (59 | ) | ||||
Inventories | (480 | ) | (153 | ) | ||||
Prepaid expenses and other assets | 90 | 104 | ||||||
Increase (decrease) in | ||||||||
Accounts payable - trade | 1,454 | 701 | ||||||
Accrued expenses and other liabilities | (365 | ) | (211 | ) | ||||
Deferred revenue | (11 | ) | 521 | |||||
Accrued compensation | (129 | ) | 69 | |||||
Accrued income taxes | (43 | ) | 959 | |||||
Deferred buy-back lease obligation | (314 | ) | (301 | ) | ||||
Customer deposits | (13 | ) | 284 | |||||
Net cash provided by (used in) operating activities | (1,193 | ) | 4,302 | |||||
Cash flows from investing activities: | ||||||||
Purchases of investment securities available-for-sale | - | (7 | ) | |||||
Purchases of property and equipment | (196 | ) | (376 | ) | ||||
Proceeds from the sale of property and equipment | 39 | 46 | ||||||
Net cash provided by (used in) investing activities | (157 | ) | (337 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from long-term borrowings | 2,805 | - | ||||||
Repayments of long-term borrowings | (129 | ) | (195 | ) | ||||
Net cash provided by (used in) financing activities | 2,676 | (195 | ) | |||||
Net increase (decrease) in cash | 1,326 | 3,770 | ||||||
Cash | ||||||||
Beginning of period | 13,492 | 8,764 | ||||||
End of period | $ | 14,818 | $ | 12,534 | ||||
Supplemental Cash Flow Information: | ||||||||
Cash payments for interest | $ | 48 | $ | 42 | ||||
Cash payments for income taxes | $ | - | $ | - | ||||
SOURCE: Smith-Midland Corporation
View source version on accesswire.com:
https://www.accesswire.com/701051/Smith-Midland-Reports-First-Quarter-2022-Financial-Results
