Smith-Midland
Announces Second Quarter 2020 Results
●
Company reports 600 basis point improvement in Gross Margin over
the first quarter 2020, or 43%
●
Earnings Per Share increases 50% compared to the prior year second
quarter
●
Barrier Rental Revenue increases 56% over the prior year second
quarter
MIDLAND, VA. – Smith-Midland
Corporation (the Company) (OTCQX: SMID), which develops,
manufactures, licenses, rents, and sells a broad array of precast
concrete products for use primarily in the construction,
transportation, and utilities industries, today announced results
for the quarter ended June 30, 2020.
Second
Quarter 2020 Results
The
Company reported second quarter revenues of $10.5 million, a 4%
decrease from the prior-year quarter. Gross margin for the quarter
was 20%, an increase of 300 basis points from the second quarter of
2019. Pre-tax income for the second quarter of 2020 was $571,000
compared to pre-tax income of $374,000 in 2019, an increase of
$197,000. Net income for the second quarter increased 53% to
$441,000, as compared to net income of $288,000 in same quarter a
year ago. Diluted earnings per share for the quarter were $0.09,
compared to $0.06 in the second quarter of 2019.
Six
Months 2020 Results
The
Company reported six month revenues of $20.3 million for 2020, a 3%
decrease from the same period in the prior year. Pre-tax income for
the first half of 2020 was $522,000 compared to pre-tax income of
$813,000 in same period of 2019, a decrease of $291,000. Net income
for the first half of 2020 was $403,000, compared to net income of
$628,000 in first half of 2019. Diluted earnings per share were
$0.08 for the first half of 2020, compared to $0.12 for the first
six months of 2019.
CEO
Commentary
“We are
pleased with our second quarter results, showing both an
improvement to gross margin and net income despite the impact of
the COVID-19 pandemic that we are facing,” said Ashley Smith,
President and CEO of Smith-Midland. “The significant increase
in rental revenue, which carries higher margins than product sales,
helped improve gross margin by 600 basis points over the first
quarter 2020 and contributed to our bottom-line. This improvement
exemplifies the execution of our long-term strategy moving towards
barrier rentals as compared to barrier sales.
“The Company
was impacted during the second quarter due to the COVID-19
pandemic. Manufacturing experienced manpower challenges as
associates were unable to work, therefore reducing production
volumes. Currently, there is minimal workforce impact and
production has resumed as scheduled. However, there is still
significant uncertainty surrounding the impact of the COVID-19
pandemic with respect to funding projects, production volumes, and
the overall economy. Smith-Midland is closely monitoring the
current and potential future impacts of the pandemic on its
operations, employees, customers, and supply chain. The
Company continues to follow virus-prevention protocols consistent
with the recommendations provided by the U.S. Centers for Disease
Control and Prevention.”
“The increase
to our rental fleet at the end of 2019 has proven extremely
beneficial for the Company through the first six months of
2020,” Mr. Smith continued. “We delivered on the $1.1
million rental contract on I-81, and have also established the
largest rental backlog in the Company’s history. Despite the
current pandemic, we are optimistic for the remainder of the year,
and into 2021, with the current backlog, sizeable project bids, and
expected awards on various projects in our
markets.”
Balance
Sheet and Liquidity
As of
June 30, 2020, the Company had cash and investments totaling $5.6
million, with accounts receivable of $10.8 million. Total
outstanding debt on notes payable increased to $8.0 million at the
recent quarter end, with the Company receiving a loan under the
Paycheck Protection Plan in the amount of $2.7 million during the
second quarter of 2020.
About
Smith-Midland
Smith-Midland
develops, manufactures, licenses, rents, and sells a broad array of
precast concrete products for use primarily in the construction,
transportation and utilities industries. Management and the Board
own approximately 17.5% of SMID stock, aligning with shareholder
values.
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 COVID-19 outbreak may
significantly adversely affect future operations, product demand,
the impact of competitive products and pricing, capacity and supply
constraints or difficulties, general business and economic
conditions, our 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.
For more complete
information on Smith-Midland Corporation, visit the Company’s
website at SMITHMIDLAND.com. The “Investor Relations”
area will include the Company’s Form 10-K.
