Smith-Midland (SMID) Q1 2024 earnings summary

Executive summary

• Net income for Q1 2024 was $1,147,000, up from $80,000 in Q1 2023, driven by higher revenues and improved cost absorption.

• Total revenue increased 30% year-over-year to $16,756,000, mainly from soundwall, utility, miscellaneous product, and shipping/installation sales.

• Operating income rose to $1,509,000 from $54,000 in the prior year quarter.

• Sales backlog as of May 7, 2024, was $64.6 million, up from $51.4 million a year earlier, with most to be fulfilled within 12 months.

• Construction began to double the size of the North Carolina plant to support growth.

Financial highlights

• Gross profit for Q1 2024 was $3,911,000, up from $2,166,000 in Q1 2023, with gross margin up 480 basis points to 23% due to higher production and better cost absorption.

• Cost of sales as a percentage of revenue (excluding royalties) decreased to 79% from 86% year-over-year.

• Basic and diluted EPS for Q1 2024 were $0.22 and $0.21, respectively, compared to $0.02 for both in Q1 2023.

• Cash at March 31, 2024, was $6,801,000, down from $9,175,000 at year-end 2023, mainly due to capital spending and increased receivables.

• Debt increased to $5.6 million from $4.4 million at year-end 2023.

Outlook and guidance

• Most of the $64.6 million sales backlog is expected to be produced within 12 months, with some projects extending over multiple years.

• Anticipated infrastructure funding is expected to support further growth in highway and transportation markets in late 2024 and beyond.

• Expects increased sales volume for full-year 2024, supported by infrastructure funding and a strong backlog.

• Marketing and sales efforts are being increased for SlenderWall and barrier rentals.

• Focus remains on long-term strategic growth and shareholder value creation.