Smith-Midland Q3 Earnings Skyrocket 146% Y/Y, Revenues Soar 51%

Core Insights - Smith-Midland Corporation (SMID) shares increased by 16.1% following the release of third-quarter 2024 earnings, outperforming the S&P 500 index, which declined by 2% during the same period [1] Financial Highlights & Comparison - The company reported a 51% increase in third-quarter 2024 revenues, reaching $23.6 million compared to $15.7 million in the same quarter of the previous year [2] - Earnings per diluted share rose to 59 cents from 24 cents year-over-year, driven by higher service revenues and improved gross margins [3] Other Key Business Metrics - Service revenues surged by 170% year-over-year to $12.8 million, with barrier rental revenues increasing to $7.1 million from $784,000 [4] - Shipping and installation revenue grew by 53% year-over-year to $4.8 million, supported by higher volumes of SlenderWall and architectural panels [4] - Royalty income increased by 16.5% year-over-year, reflecting greater barrier production by licensees [4] Product Sales Insights - Total product sales were $10.8 million, slightly down from $10.9 million in the prior-year quarter, but utility sales more than doubled to $2.4 million [5] - Architectural wall sales quintupled to $1.6 million, while barrier sales declined by 61.5% year-over-year to $546,000, aligning with the company's strategic shift to rentals [5] Margins & Efficiency - Gross margin improved to 27.9% in the third quarter of 2024 from 22.9% in the prior-year quarter, aided by better fixed-cost absorption [6] - Gross profit rose to $6.6 million from $3.6 million year-over-year, with operating income increasing to $3.8 million from $1.5 million [7] Management Commentary - CEO Ashley Smith emphasized record revenues and net income, attributing success to strong sector tailwinds and a focus on high-margin projects [8] - The Infrastructure Investment and Jobs Act is seen as a demand driver for products like utility vaults and barrier systems [8] Guidance & Outlook - The company anticipates continued growth into 2025, supported by a backlog of $62.8 million as of November 1, 2024, up from $60.2 million a year ago [9] - Management expects to fulfill most of the backlog within 12 months while managing inflationary pressures on labor and material costs [9] Other Developments - In the third quarter of 2024, the company was awarded a provisional patent and crash-tested the J-J Hook MASH 16 Low-Profile Barrier, reinforcing its innovation pipeline [10] - Capital expenditure for the quarter was $2 million, primarily for expanding production capacity [10]