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Summary of Smith-Midland Corporation FY Conference Call Company Overview - **Company**: Smith-Midland Corporation (NasdaqCM: SMID) - **Industry**: Precast Concrete Sector - **Founded**: 1960, family-run business - **Key Products**: J.J. Hook barrier, SlenderWall panel, Easi-Set concrete buildings, SoundWall Core Points and Arguments 1. **Concrete Barrier Replacement**: Every concrete safety barrier along U.S. highways is being replaced, which significantly impacts Smith-Midland's operations and growth potential [2][11][12] 2. **Infrastructure Investment Demand**: By 2040, global demand for new infrastructure investment is projected at $68 trillion, providing a substantial tailwind for the company [5] 3. **Proprietary Products**: Smith-Midland's proprietary products are the leading brands in their respective markets, with the J.J. Hook barrier being a key product with 100% gross margin and a 10% annual growth rate [4][18] 4. **Rental Division Growth**: The rental division has seen increased demand, with over 90% utilization of the rental fleet. The company has expanded its rental inventory from 50 miles to 100 miles in recent years [9][10][14] 5. **Regulatory Changes**: New Federal Highway Administration standards require the replacement of old-style barriers, driving demand for Smith-Midland's products [11][12] 6. **Licensing Revenue**: The company expects a significant increase in licensing revenue, particularly from California, where old-style barriers will be phased out by 2027 [12][18] 7. **Financial Performance**: Q3 2025 revenue was $11.9 million, an 11% increase from the previous year. The trailing 12-month revenue reached $88.9 million, a 33% increase year-over-year [23][25] 8. **Backlog and Future Outlook**: The current backlog stands at $54.8 million, indicating strong future demand. The company is optimistic about increasing its sales team to capitalize on this [26] 9. **Earnings Growth**: Earnings per share for the trailing 12 months is $2.23, up from $1.45 in 2024, reflecting improved operational efficiency and market conditions [27] Additional Important Insights 1. **Market Dynamics**: The Mid-Atlantic region is experiencing significant growth in construction, with North Carolina and South Carolina among the fastest-growing states [7] 2. **High-Security Projects**: The company has a division dedicated to high-security projects, which are high-risk but offer substantial rewards [16][17] 3. **Intellectual Property**: Smith-Midland holds patents and approvals that differentiate it from competitors, allowing for recurring royalty income that does not appear in the backlog [31][32] 4. **Data Center Projects**: The company is involved in providing concrete solutions for data centers, which are experiencing increased demand [32] This summary encapsulates the key points discussed during the conference call, highlighting the company's strategic positioning, market opportunities, and financial performance.

Core Insights - Smith-Midland Corporation (SMID) shares have declined 12.7% since the latest quarterly results, underperforming the S&P 500 Index's 3.2% decline during the same period [1] - The company's third-quarter 2025 revenues were $21.5 million, down from $23.6 million a year earlier, primarily due to the absence of large special barrier rental projects [2] - Net income for the quarter was $2.9 million, or 54 cents per diluted share, compared to $3.2 million, or 59 cents, in the prior year [2] Earnings & Revenue Performance - Revenues decreased due to the non-recurrence of large special barrier rental projects, while product sales increased by 11% to $11.9 million [2] - The gross margin slightly reduced to 26.8% from 27.9% in the prior-year period [2] Business Drivers and Product-Mix Trends - Core product sales showed growth, particularly in soundwalls ($2.8 million from $1.9 million) and Easi-Set/Easi-Span buildings ($2.7 million from $1.8 million) [3] - SlenderWall contributed $1.1 million in sales, reflecting resumed project activity [3] - Utility sales fell sharply to $1.2 million from $2.4 million, and architectural panel sales declined to $1 million from $1.6 million [4] Service Revenue Trends - Barrier rental revenues dropped to $3.3 million from $7.1 million due to the absence of special projects [5] - Shipping and installation revenues rose to $5.2 million from $4.8 million, supported by stronger activity in soundwalls and SlenderWall [5] - Royalty income increased by 13% to $1.1 million, aided by higher licensee barrier production volumes [5] Management Commentary - Management highlighted continued strength in core product business despite declines in service revenues [6] - CEO noted solid demand for new and upgraded highways and public infrastructure projects [6] - The company is expanding its barrier rental fleet to meet rising safety standards [6] Outlook and Guidance - Management provided directional indicators for the remainder of 2025, expecting product sales to increase compared to 2024 [11] - Shipping and installation revenues, along with royalty income, are expected to remain higher than year-ago levels [11] - The company does not anticipate additional special barrier rental projects in the final quarter of the year [12] Backlog and Other Developments - Backlog as of Nov. 1, 2025, was $54.8 million, down from $62.8 million a year earlier [13] - An arbitration settlement related to a 2015 SlenderWall sale resulted in the recovery of $458 in previously reserved receivables [14]

Core Insights - The Intech S&P Mid Cap Diversified Alpha ETF (SMDX) has surpassed $100 million in assets under management within its first year, a significant achievement as only 11% of active ETFs reach this milestone [1][2][3] - Intech's ETF lineup, including SMDX and its large-cap counterpart LGDX, now exceeds $225 million in combined assets, indicating strong market traction [1][2] - The active design of SMDX combines small-cap breadth with mid-cap stability, providing a core investment option for those seeking simple exposure with a performance edge [3] Performance Metrics - As of September 30, 2025, SMDX has shown impressive performance: 7.55% over the last three months, 18.37% over six months, and 13.02% since inception [4] - In comparison, the benchmark S&P 1000 Index recorded returns of 6.66% over three months, 13.21% over six months, and 7.82% since inception, highlighting SMDX's outperformance [4] Company Background - Intech has over 38 years of experience in systematic investing, managing $15 billion in assets as of September 30, 2025, and is known for its research-driven approach [5] - The company aims to bridge the gap between passive and active investing, offering strategies that leverage diversification and rebalancing [2][5]

Financial Performance - For the three months ended September 30, 2025, the Company reported a net income of $2,877, compared to $3,150 for the same period in 2024, while for the nine months ended September 30, 2025, net income was $10,375, up from $6,278 in 2024[70]. - Total revenue for the three months ended September 30, 2025, was $21,451, a decrease of $2,131 from $23,582 in the same period of 2024; however, revenue for the nine months increased to $70,335 from $59,977 in 2024, primarily due to special barrier project sales[70]. - Operating income for the three months ended September 30, 2025, was $3,854, slightly up from $3,848 in 2024; for the nine months, it increased to $13,759 from $8,031[72]. - Income tax expense for the three months ended September 30, 2025, was $994, with an effective tax rate of 26%, compared to $694 and 18% in 2024; for the nine months, the tax expense was $3,325 at a 24% rate, up from $1,683 at 21%[73]. - Operating income for the nine-month period ended September 30, 2025, was $13,759, compared to $8,031 for the same period in 2024[91]. - Net income for the nine months ended September 30, 2025, was $10,375, compared to $6,278 for the same period in 2024[94]. Sales and Revenue Breakdown - Soundwall sales increased significantly for the three and nine months ended September 30, 2025, with sales of $2,846 for the quarter and $11,832 for the nine months, compared to $1,873 and $7,043 in 2024, respectively[76]. - SlenderWall sales for the three and nine months ended September 30, 2025, were $1,146 and $2,634, respectively, as the Company focused on sales initiatives for this product[79]. - Easi-Set® and Easi-Span building sales increased for both the three and nine-month periods ended September 30, 2025, due to increased sales at all manufacturing plants[82]. - Utility sales decreased significantly for both the three and nine-month periods ended September 30, 2025, but are expected to trend higher for the remainder of 2025[83]. - Royalty income increased for both the three and nine-month periods ended September 30, 2025, driven by higher barrier production volumes from licensees[86]. - Miscellaneous wall sales decreased for the nine-month period ended September 30, 2025, due to lower production volumes compared to 2024[80]. - Barrier sales decreased slightly for the nine-month period ended September 30, 2025, as the company shifted marketing efforts to higher margin barrier rentals[81]. Costs and Expenses - Cost of sales as a percentage of revenue increased to 77% for the three months ended September 30, 2025, compared to 75% in 2024, while it decreased to 74% for the nine months from 77% in 2024[71]. - General and administrative expenses decreased to $1,100 for the three months ended September 30, 2025, from $1,720 in 2024, and to $4,198 for the nine months from $4,938[89]. Cash and Inventory - The company's cash position increased to $13,376 on September 30, 2025, from $7,548 on December 31, 2024[101]. - Inventory increased to $7,890 on September 30, 2025, from $6,677 on December 31, 2024, primarily due to increased finished goods inventory[106]. Sales Backlog - The Company's sales backlog as of November 1, 2025, was approximately $54.8 million, down from $62.8 million a year ago, with most projects expected to be produced within 12 months[74]. - The Company anticipates that the majority of projects in the sales backlog will be produced within 12 months, with some extending several years[110]. Operational Challenges - The Company experienced a ransomware incident in the first quarter of 2025, which is being addressed with network security changes, and no ransom payment was made[66]. - The Company may experience reduced revenues from December through February due to seasonal impacts on the construction industry, necessitating sufficient working capital to fund operations during winter months[108]. Internal Controls and Management - Management identified material weaknesses in internal control over financial reporting, which have not been remediated as of September 30, 2025[112]. - The Company did not maintain appropriately designed entity-level controls impacting the control environment, risk assessment, and monitoring activities[113]. - Management has committed to remediation efforts, including hiring a new Chief Financial Officer with relevant experience in financial reporting and internal controls[117]. - The Company’s consolidated financial statements are believed to present fairly its financial position and results of operations in accordance with U.S. GAAP, despite identified material weaknesses[115]. - There were no changes in the Company's internal control over financial reporting that materially affected its controls during the quarter ended September 30, 2025[117]. - Management did not design and maintain effective processes to ensure all journal entries are properly reviewed and approved prior to posting[116]. Raw Material Costs - Raw material costs used in production have slightly increased for the first nine months of 2025, with expectations of further slight increases for the remainder of 2025[109].

Financial Results - Smith-Midland Corporation announced its financial results for the quarter ended September 30, 2025[3]. - The press release was issued on November 13, 2025, detailing the company's performance[3]. - The report is part of the requirements under the Securities Exchange Act of 1934[6]. Company Information - The company is listed on NASDAQ under the symbol SMID[2]. - Dominic L. Hunter serves as the Chief Financial Officer of Smith-Midland Corporation[7].

Core Insights - Smith-Midland Corporation reported a revenue of $21.5 million for Q3 2025, a decrease from $23.6 million in the prior-year quarter [1] - Product sales increased by 11 percent to $11.9 million compared to the same quarter last year [1] - Gross margin decreased to 26.8% from 27.9% year-over-year [1] - Operating income fell to $3.6 million from $3.8 million in the prior-year quarter [1] - Net income was reported at $2.9 million, or $0.54 per diluted share, down from $3.2 million and $0.59 per diluted share in the previous year [1] Financial Performance - Revenue: $21.5 million in Q3 2025 vs. $23.6 million in Q3 2024 [1] - Product Sales: Increased by 11% to $11.9 million [1] - Gross Margin: 26.8% in Q3 2025 vs. 27.9% in Q3 2024 [1] - Operating Income: $3.6 million in Q3 2025 vs. $3.8 million in Q3 2024 [1] - Net Income: $2.9 million in Q3 2025 vs. $3.2 million in Q3 2024 [1]

Core Viewpoint - Smith-Midland Corporation is set to release its third quarter 2025 financial results on November 13, 2025, after market close, indicating a proactive approach to investor communication [1] Group 1: Financial Results - The company will announce its third quarter 2025 financial results on November 13, 2025 [1] Group 2: Investor Engagement - CEO Ashley Smith and CFO Dominic Hunter will present and conduct one-on-one investor meetings at the Southwest IDEAS Conference on November 20, 2025 [1]

Core Viewpoint - Smith-Midland Corporation (SMID) has received an "Outperform" recommendation due to multiple growth drivers that support sustained margin expansion and earnings visibility [1] Group 1: Growth Drivers - The transition towards a higher-margin rental-based model is supported by infrastructure tailwinds from the Infrastructure Investment and Jobs Act (IIJA) [1][6] - The company's barrier rental business is experiencing significant growth, driven by the national replacement cycle for highway barriers that meet MASH-TL3 standards [3][4] - Smith-Midland's backlog reached $54 million as of August 1, 2025, with most projects expected to complete within 12 months, benefiting from IIJA funding [6][8] Group 2: Financial Performance - Barrier rental revenues increased to $14.2 million in the first half of 2025, up from $2.3 million a year earlier, indicating strong demand and fleet utilization [4] - Gross margin expanded by 360 basis points year over year to 29.7% in Q2 2025, with operating income nearly doubling to $5.5 million [12] - The cost of sales decreased to 72% of revenues from 77% a year prior, reflecting improved operational efficiency [13] Group 3: Market Position and Strategy - The shift towards a recurring revenue base offers margin resilience and lower cyclicality compared to traditional one-time sales [5] - Federal and state spending programs are driving demand for Soundwall and Easi-Set modular building systems, which saw revenue increases of 137% and 95%, respectively, in the first half of 2025 [7] - The company is well-positioned to capture demand from data center expansions, particularly in Northern Virginia, enhancing its product diversification [9][10] Group 4: Future Outlook - Continued margin improvement is anticipated in the second half of 2025, with a trajectory towards double-digit EBITDA margins by fiscal 2026 [14] - The management team is addressing internal control weaknesses and maintaining a healthy balance sheet, positioning the company to outperform the broader construction sector through 2026 [16] - The evolution from a cyclical precast manufacturer to a recurring revenue infrastructure solutions provider presents a compelling growth story in the reindustrializing U.S. economy [16]

Core Insights - Smith-Midland Corporation has secured two significant contracts totaling over $2 million, utilizing its proprietary SlenderWall® architectural precast cladding system, which is designed to be lighter, stronger, and more energy-efficient than traditional precast options [1][6] Contract Details - The first contract is with Gilbane Building Company for a precast package exceeding $1 million for the Northern Virginia Community College's (NVCC) Medical Education Campus expansion, covering 34,000 square feet, with production underway and installation scheduled for November 2025 [2][3] - The second contract involves supplying SlenderWall panels for a $1.2 million project at Central Hudson Gas & Electric Corporation's training facility in Lake Katrine, New York, with production starting this summer and installation set for December 2025 [4] Product Features - SlenderWall offers advantages such as reduced material use, built-in insulation, and low-maintenance finishes, making it a sustainable choice for utility and infrastructure projects [5] - The system is noted for its superior energy efficiency, durability, and reduced environmental impact, aligning with the company's commitment to sustainable construction practices [6] Company Overview - Smith-Midland Corporation develops, manufactures, licenses, rents, and sells a variety of precast concrete products primarily for the construction, transportation, and utility industries [7] - The company operates three manufacturing facilities located in Midland, VA, Reidsville, NC, and Columbia, SC, and has a subsidiary, Easi-Set Worldwide, which licenses the production and sale of precast products [8]