8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): November 9, 2021

SMITH-MIDLAND CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	1-13752	54-1727060
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

P.O. Box 300, 5119 Catlett Road

Midland, Virginia 22728

(Address of principal executive offices)

(540) 439-3266

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value per share	SMID	NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On November 9, 2021 Smith-Midland Corporation issued a press release announcing its financial results for the quarter ended September 30, 2021.

A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No	Exhibit Description
99.1	Press release, dated November 9, 2021
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

The information filed as Exhibit 99.1 to this Form 8K is being furnished in accordance with Item 2.02 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SMITH-MIDLAND CORPORATION
Date: November 9, 2021	By:	/s/ Adam J. Krick
		Adam J. Krick
		Chief Financial Officer

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EX-99.1

EXHIBIT 99.1

ATTENTION: News Director /Assignment Editor

HEADLINE: Smith-Midland Reports Third Quarter 2021 Financial Results

EPS increased 137 percent

MIDLAND, VA / ACCESSWIRE / November 9, 2021 / Smith-Midland Corporation (NASDAQ:SMID) provider of innovative, high-quality proprietary and patented precast concrete products and systems today announced third quarter results for 2021.

Third Quarter 2021 Highlights

· Earnings per share improved 137 percent

· Royalty income increased 40 percent

· Barrier rental fleet grew by 49 percent

· SlenderWall sales exceeded $1 million

· Total product sales increased 11 percent

"We continue to make great strides against our long-term growth initiatives. Additionally, the strong tailwinds due to the recently announced "Infrastructure Investment and Jobs Act" are expected to generate significant opportunities across our portfolio of proprietary, patented, and customized products. We remain uniquely positioned in the market to benefit from road construction across the United States as we have MASH-TL3 approval in 38 states for our patented JJ-Hook highway safety barrier. Our recent contract expansion providing rental highway barriers for the I-64 Hampton Roads Bridge-Tunnel (HRBT) project, the largest civil construction contract ever awarded by the Virginia Department of Transportation (VDOT), further demonstrates the markets adoption of our barrier rental business model. As evidenced by the expansion, our barrier rental business remains robust as we surpass performance of historic quarters in late 2020 and early 2021. We are pleased to see sequential growth quarter over quarter as we normalize from third quarter 2020 which included multiple short-term, complex, high margin barrier rental projects that did not recur in third quarter 2021. To meet customer demand, we expanded the barrier rental fleet by 49 percent year-over-year which is serving us well as we meet demand for additional rental barrier within our market area," said Ashley Smith, Chief Executive Officer.

"We are gaining traction with SlenderWall sales initiatives and we plan to build on our momentum to gain market share with this differentiated, propriety, lightweight cladding system. Our royalty revenues are also on a strong trajectory posting 40 percent and 53 percent increases for the three and nine month's results, respectively. Although we do face challenges including global supply chain and logistics disruptions as well as continued impacts from the pandemic, overall Smith-Midland remains in a strong position to continue to grow our business. We have a solid balance sheet, a disciplined management team, and alignment with our stakeholders with a focus on driving long-term shareholder value," concluded Smith.

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Third Quarter 2021 Results

The Company reported 2021 third quarter revenues of $13.1 million compared to 2020 third quarter revenues of $12.5 million. Operating income for third quarter 2021 totaled $1.3 million compared to $2.0 million in third quarter 2020. Net income increased 138 percent to $3.7 million in third quarter 2021 compared to $1.5 million for the third quarter 2020. Earnings per share improved 137 percent to $0.71 in third quarter 2021 as compared to $0.30 in third quarter 2020. Profitability in the third quarter 2021 was positively impacted by the forgiveness of the PPP loan in the amount of $2,692.

Nine Month 2021 Results

For the nine months ended September 30, 2021, the Company reported $40.6 million in revenue compared to $32.8 million during the same period in 2020. Operating income increased to $6.3 million from $2.6 million improving approximately 146 percent over the same period of last year. Net income for the nine months ended September 30, 2021 totaled $7.5 million compared to $2.0 million in the same period last year. Earnings per share increased 282 percent to $1.45 compared to $0.38 in the same period of 2020.

Product Sales

Total product sales for the third quarter 2021 improved 11 percent to $7.2 million compared to $6.5 million in the third quarter 2020. A large SlenderWall project recently awarded to the Company began production at the end of the second quarter 2021 resulting in a notable increase in SlenderWall revenues both sequentially and year-over-year to $1.0 million. Smith-Midland is investing in SlenderWall sales initiatives resulting in a strong pipeline of activity. Soundwall contributed $2.4 million in revenue as the Company continues to fulfill a large Soundwall contract. Production on the contract is expected through 2021 and as it is fulfilled, Soundwall revenues may trend lower during the fourth quarter 2021. Barrier sales contributed $1.0 million compared to $1.7 million in the prior year. The Company continues to shift customers to barrier rental with strong adoption. Smith-Midland recently won multiple data center projects resulting in a 251 percent increase in utility sales for the third quarter 2021 when compared to the prior year. Utility sales are expected to continue to grow.

Service Revenue

Service revenue which is comprised of royalty income, barrier rental revenue, and shipping and installation totaled $5.9 million for the third quarter 2021 compared to $6.0 million in the prior year. Royalty income increased 40 percent for third quarter 2021 compared to 2020 and 53 percent for the nine months ended September 30, 2021, exceeding royalty revenue for the full 2020 fiscal year. Increases in barrier royalties for the Company's proprietary, interlocking JJ-Hooks highway barriers were the primary drivers of the increases. Barrier rentals contributed $1.7 million in revenue for third quarter 2021 compared to $3.2 million in 2020. Third quarter 2020 included multiple short-term, complex, high margin barrier projects that did not recur in third quarter 2021. Barrier rentals increased significantly for the nine-month period ended September 30, 2021 when compared to the same period in 2020 primarily due to the higher quantity of linear feet rented than the previous year. Smith-Midland continues to build out the barrier rental fleet growing by 49 percent year over year. Shipping and installation revenue increased 48 percent to $3.5 million compared to $2.4 million in the prior year.

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Balance Sheet and Liquidity

As of September 30, 2021, Smith-Midland's cash and investments totaled $16.2 million compared to $10.0 million as of December 31, 2020. Account receivables were approximately $12.6 million; and debt totaled $4.3 million. Capital spending declined year over year to $1.2 million compared to $2.5 million in 2020.

Macro Environment and Outlook

Smith-Midland and businesses around the world continue to face many macro challenges. The Company's manufacturing facilities were slightly impacted by COVID-19 during the third quarter 2021 temporarily reducing production volumes and increasing labor costs. Smith-Midland's proactive stance on raw material inventories provides stability for customers despite global disruptions. The barrier rental business is strong, and the fleet is expanding. Sales initiatives are gaining traction as evidenced by the recent SlenderWall win as the Company intends to aggressively pursue market share. The Company's growing licensee network generates healthy royalties and extends the geographic reach of the Company's patented products. Regulatory tailwinds, including, but not limited to the "Infrastructure Investment and Jobs Act," which marks the largest infrastructure investment in U.S. history, and macro off-site modular construction trends favor Smith-Midland's portfolio of products over the long-term. Backlog was approximately $28.5 million recorded as of November 1, 2021, compared to $20.6 million in 2020. Management will continue to execute against the Company's long-term growth strategy focusing on continuously enhancing shareholder value.

About Smith-Midland

Smith-Midland invents, 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 17.5 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, 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.

Company Contact:
AJ Krick, CFO
540-439-3266
investors@smithmidland.com

Investor Relations:
Steven Hooser or Deidra Roy
Three Part Advisors, LLC
214-872-2710

3

SMITH-MIDLAND CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

	September 30, 2021		December 31, 2020
	(Unaudited)
	ASSETS
Current assets
Cash	$	14,995	$	8,764
Investment securities, available-for-sale, at fair value		1,243		1,228
Accounts receivable, net
Trade - billed (less allowance for doubtful accounts of approximately $425 and $400, respectively), including contract retentions		12,572		9,798
Trade - unbilled		483		742
Inventories, net
Raw materials		1,697		643
Finished goods		1,499		1,551
Prepaid expenses and other assets		622		615
Total current assets		33,111		23,341
Property and equipment, net		18,249		18,602
Deferred buy-back lease asset, net		3,608		4,237
Other assets		278		319
Total assets	$	55,246	$	46,499

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SMITH-MIDLAND CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

	September 30, 2021			December 31, 2020
	(Unaudited)
	LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable - trade	$	3,166		$	1,866
Accrued expenses and other liabilities		789			875
Deferred revenue		3,056			1,774
Accrued compensation		1,250			1,318
Accrued income taxes		1,486			470
Deferred buy-back lease obligation		1,090			1,203
Operating lease liabilities		88			85
Current maturities of notes payable		486			740
Customer deposits		1,623			569
Total current liabilities		13,034			8,900
Deferred revenue		1,277			600
Deferred buy-back lease obligation		3,000			3,790
Operating lease liabilities		144			211
Notes payable - less current maturities		3,879			4,196
PPP loan - less current portion		-			2,692
Deferred tax liability		2,458			2,461
Total liabilities		23,792			22,850
Stockholders' equity
Preferred stock, $.01 par value; authorized 1,000,000 shares, none issued and outstanding		-			-
Common stock, $.01 par value; authorized 8,000,000 shares; 5,326,595 and 5,279,411 issued and 5,202,158 and 5,202,158 outstanding, respectively		53			52
Additional paid-in capital		6,663			6,405
Treasury stock, at cost, 40,920 shares		(102	)		(102	)
Retained earnings		24,840			17,294
Total stockholders' equity		31,454			23,649
Total liabilities and stockholders' equity	$	55,246		$	46,499

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SMITH-MIDLAND CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2021			2020			2021			2020
Revenue
Product sales	$	7,205		$	6,485		$	21,868		$	20,036
Barrier rentals		1,708			3,171			8,667			4,820
Royalty income		676			484			1,788			1,165
Shipping and installation revenue		3,511			2,375			8,302			6,768
Total revenue		13,100			12,515			40,625			32,789
Cost of goods sold		9,898			8,674			28,388			24,971
Gross profit		3,202			3,841			12,237			7,818
Operating expenses
General and administrative expenses		1,215			1,271			3,880			3,553
Selling expenses		719			521			2,010			1,684
Total operating expenses		1,934			1,792			5,890			5,237
Operating income (loss)		1,268			2,049			6,347			2,581
Other income (expense)
Interest expense		(47	)		(53	)		(145	)		(166	)
Interest income		10			8			29			26
Gain (loss) on sale of assets		205			(8	)		293			58
Gain on forgiveness of PPP loan		2,692			-			2,692			-
Other income		8			22			41			41
Total other income (expense)		2,868			(31	)		2,910			(41	)
Income (loss) before income tax expense (benefit)		4,136			2,018			9,257			2,540
Income tax expense (benefit)		442			469			1,711			588
Net income (loss)	$	3,694		$	1,549		$	7,546		$	1,952
Basic and diluted earnings (loss) per common share	$	0.71		$	0.30		$	1.45		$	0.38
Weighted average number of common shares outstanding:
Basic		5,202			5,184			5,202			5,184
Diluted		5,220			5,184			5,217			5,184

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SMITH-MIDLAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)

	Nine Months Ended September 30,
	2021			2020
Cash flows from operating activities:
Net income (loss)	$	7,546		$	1,952
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		1,976			1,791
Gain on forgiveness of PPP loan		(2,692	)		-
Gain (loss) on sale of assets		(293	)		(58	)
Unrealized (gain) loss on investment securities available for sale		5			(16	)
Allowance for doubtful accounts		25			55
Stock compensation		258			-
Deferred taxes		(3	)		(5	)
(Increase) decrease in
Accounts receivable - billed		(2,799	)		2,915
Accounts receivable - unbilled		259			(393	)
Inventories		(1,002	)		78
Prepaid expenses and other assets		10			(96	)
Refundable income taxes		-			309
Increase (decrease) in
Accounts payable - trade		1,300			(681	)
Accrued expenses and other liabilities		(86	)		891
Deferred revenue		1,959			2
Accrued compensation		(68	)		267
Accrued income taxes		1,016			305
Deferred buy-back lease obligation		(903	)		(855	)
Customer deposits		1,054			(483	)
Net cash provided by (used in) operating activities		7,562			5,978
Cash flows from investing activities:
Purchases of investment securities available-for-sale		(20	)		(22	)
Purchases of property and equipment		(1,210	)		(2,501	)
Proceeds from sale of fixed assets		466			144
Net cash provided by (used in) investing activities		(764	)		(2,379	)
Cash flows from financing activities:
Proceeds from long-term borrowings		50			5,426
Repayments of long-term borrowings		(617	)		(2,658	)
Dividends paid on common stock		-			(282	)
Net cash provided by (used in) financing activities		(567	)		2,486
Net increase (decrease) in cash		6,231			6,085
Cash
Beginning of period		8,764			1,364
End of period	$	14,995		$	7,449
Supplemental Cash Flow information:
Cash payments for interest	$	145		$	166
Cash payments for income taxes	$	713		$	1
Non-cash transaction - PPP loan forgiveness	$	2,692		$	-

SOURCE: Smith-Midland Corporation

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XML

Cover	Nov. 09, 2021
Cover [Abstract]
Entity Registrant Name	SMITH-MIDLAND CORPORATION
Entity Central Index Key	0000924719
Document Type	8-K
Amendment Flag	false
Entity Emerging Growth Company	false
Document Period End Date	Nov. 09, 2021
Entity File Number	1-13752
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	54-1727060
Entity Address Address Line 1	P.O. Box 300
Entity Address Address Line 2	5119 Catlett Road
Entity Address City Or Town	Midland
Entity Address State Or Province	VA
Entity Address Postal Zip Code	22728
City Area Code	540
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Local Phone Number	439-3266
Security 12b Title	Common Stock, $0.01 par value per share
Trading Symbol	SMID
Security Exchange Name	NASDAQ