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8-K - FORM 8-K - SMITH MIDLAND CORP | smid-20201231_8kpr.htm |
Exhibit
99.1
Smith-Midland
Reports Fourth Quarter and Full Year 2020 Results
MIDLAND,
VA – March 30, 2021 – Smith-Midland Corporation
(NASDAQ: SMID) provider of innovative, high-quality proprietary and
patented precast concrete products and systems today announced
fourth quarter and year-end results for 2020.
Fourth Quarter 2020 Highlights
●
Pre-tax income for
the fourth quarter 2020 grew to $1.3 million compared to $1.0
million in fourth quarter 2019
●
Net income remained
strong year over year despite a slight reduction in revenues in the
fourth quarter 2020 compared to the same period in
2019
Full Year 2020 Highlights
●
Diluted earnings
per share increased an impressive 34 percent to $0.51 for full year
2020 compared to $0.38 for fiscal 2019
●
Net income
increased 37 percent for full year 2020 compared to
2019
●
Revenues for full
year 2020 totaled $43.8 million compared to $46.7 million in
2019
●
Barrier rental
revenues increased 176 percent in 2020 compared to
2019
●
Gross margin,
excluding royalties, increased to 22 percent in 2020 compared to 18
percent the prior year
“I
am extremely impressed with Smith-Midland’s performance and
ability to grow our earnings during such a pivotal year.”
Ashley Smith, Chief Executive Officer commented. “Despite a
dynamic macro environment throughout 2020, our team continued to
deliver. Deemed an essential business, we remained fully
operational, meeting the needs of our critical end markets while
working hard to keep our employees safe. We completed our uplisting
to NASDAQ and strengthened our liquidity position all while
delivering improved results including a notable 34 percent increase
in earnings per share. I am proud of our team members and
appreciate their hard work and dedication. We are excited about our
growth prospects moving forward. Longer-term, infrastructure spend
shows a positive outlook and there is a regulatory tailwind that we
could benefit from over the next few years. Last month we announced
Caltrans’ approval of our patented J-J Hooks self-aligning
barriers in California, which is home to the second largest highway
system in the United States, and will be a large focus for us in
2021. Our licensees are prepared to capitalize on this new
opportunity and future opportunities moving forward,”
concluded Ashley.
Fourth Quarter 2020 Results
The
Company reported 2020 fourth quarter revenues of $11.1 million
compared to $12.4 million for pre-COVID-19 fourth quarter 2019.
Pre-tax income for the fourth quarter 2020 increased to $1.3
million compared to $1.0 million in 2019. Net income was steady at
$0.7 million for the fourth quarter 2020 compared to $0.8 million
for the same period the prior year. Diluted earnings per share for
the fourth quarter were $0.13, compared to $0.15 in the fourth
quarter of 2019.
Full Year 2020 Results
Revenues
for the full year 2020 totaled $43.8 million compared to $46.7
million in 2019. Pre-tax income grew to $3.8 million for fiscal
2020 versus $2.5 million for fiscal 2019. Gross margin, excluding
royalties, improved 4 percentage points to 22 percent for full year
2020. Net income increased 37 percent from $1.9 million in 2019 to
$2.7 million for full year 2020. Diluted earnings per share
increased to $0.51 for 2020, compared to $0.38 for fiscal
2019.
Product Sales
Smith-Midland
reports revenue in two categories, products sales and service
revenue. Total product sales for fiscal 2020 equaled $26.7 million
yielding mixed results. While the Company saw some pressure in
soundwall sales, utility sales and barrier sales, the decline in
barrier sales was a result of management’s proactive shift to
barrier rentals to drive higher margins.
SlenderWall
and Easi-Set products lagged large projects that took place in 2019
while also seeing impacts from reduced activity due to COVID-19
during 2020. These two factors contributed to a notable decline in
the year over year comparison. Smith-Midland is very enthusiastic
about the patented SlenderWall product, and the Company continues
to drive growth opportunities particularly through investments in
sales initiatives to gain market share.
The
Company saw a significant year over year increase of 232 percent in
architectural panel sales resulting from a large project completed
during 2020. Additionally, Smith-Midland was awarded another large
architectural panel project with production commencing in the
fourth quarter 2020. Miscellaneous wall sales doubled in 2020 when
compared to the same period in 2019, and miscellaneous product
sales increased by 199 percent for fiscal 2020.
Service Revenue
Barrier
rental revenues increasing 176 percent was the primary contributor
to Smith-Midland’s significant increase in service revenues
totaling $17.1 million for full year 2020 compared to $14.4 million
in the prior year. The barrier rental increase was primarily driven
by a few short-term special projects and a decisive, strategic
shift to barrier rentals versus barrier sales resulting in an
increase in linear feet rented over the prior year yielding
favorable gross margin results.
Royalty
revenue increased 1 percent in 2020 compared to 2019. The second
half of the year saw an acceleration in royalties generated from
barriers and buildings. The Company is keenly focused on expanding
Smith-Midland’s licensing opportunities and broadening the
reach of the Company’s product offerings.
Shipping
and installation revenues which are derived both from shipping
products to the customer, and installation activities on customer
sites, decreased by 17 percent due to less SlenderWall and Easi-Set
building installation occurring when compared to 2019.
Balance Sheet and Liquidity
As of
December 31, 2020, Smith-Midland is pleased to report a notable
increase in cash and investments totaling $9.9 million dollars
compared to $2.5 million on December 31, 2019. Account receivables
total $10.5 million while outstanding debt for full year 2020
totals $4.9 million. The Company also received a PPP loan during
2020 of $2.7 million as a result of the CARES Act. Smith-Midland
significantly fortified the balance sheet and liquidity position
when compared to the prior year.
Macro Environment and Outlook
Looking
ahead, Smith-Midland continues to focus on optimizing our
operations while looking for new and innovative ways to drive
long-term shareholder value. The industry in which we operate is
highly fragmented and has seen an increase in M&A, primarily
through consolidation, which is consistent with the uptick in
overall infrastructure sentiment. Smith-Midland remains well
positioned to capitalize on pent up infrastructure opportunities
and regulatory demand is expected to increase in the coming years.
The Company’s patented, proprietary products are well
established leaders in niche markets with high compliance
requirements. Smith-Midland will remain nimble in the
Company’s approach to addressing macro challenges and will
continue to serve our customers and communities while maintaining
best practices for the safety and health of our employees and
stakeholders.
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. Management
and the board own approximately 20 percent 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 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.
Contact:
Media
Inquiries:
AJ
Krick, CFO
540-439-3266
investors@smithmidland.com
Investor
Relations:
Steven
Hooser or Deidra Roy
Three
Part Advisors, LLC
214-872-2710