SMITH MIDLAND CORP

Previous wording

The Company generates revenues primarily from the sale, leasing, licensing, shipping and installation of precast concrete products and systems for the construction, utility and farming industries. The Company's operating strategy has involved producing and marketing innovative and proprietary products, including SlenderWall™, a patent pending, lightweight, energy efficient concrete and steel exterior wall panel for use in building construction; J-J Hooks® Barrier, a patented positive-connected highway safety barrier; Sierra Wall™, a patented sound barrier primarily for roadside use; transportable concrete buildings; and SoftSound™, a highway sound attenuation system. In addition, the Company produces utility vaults; farm products such as cattleguards; and custom order precast concrete products with various architectural surfaces.

Current wording

The Company generates revenues primarily from the sale, leasing, licensing, shipping and installation of precast concrete products and systems for the construction, utility and farming industries. The Company’s operating strategy has involved producing and marketing innovative and proprietary products, including SlenderWall™, a proprietary, lightweight, energy efficient concrete and steel exterior wall panel for use in building construction; J-J Hooks® Barrier, a proprietary, positive-connected highway safety barrier; Sierra Wall™, a sound barrier primarily for roadside use; transportable concrete buildings; and SoftSound™, a highway sound attenuation system. In addition, the Company produces utility vaults; farm products such as cattleguards; and custom order precast concrete products with various architectural surfaces.

Previous wording

Overall, the Company’s financial bottom line performance was significantly greater in 2024 when compared to 2023. The Company had net income for 2024 of $7,675 compared to net income of $795 for 2023. Total revenue increased by $18,928 to $78,508 in 2024 from $59,580 in 2023. The increase in sales is mainly from barrier rentals, shipping and installation, and utility product sales. Fourth quarter 2024 revenues were $18,528 compared to $16,389 in the fourth quarter 2023. The increase in revenue for the fourth quarter 2024 as compared to the fourth quarter 2023 was primarily due to an increase in soundwall sales, architectural sales, utility sales, miscellaneous sales, Easi-Set building sales, and shipping and installation revenue.

Current wording

Overall, the Company’s financial bottom line performance was significantly greater in 2025 when compared to 2024. The Company had net income for 2025 of $12,506 compared to net income of $7,675 for 2024. Total revenue increased by $14,937 to $93,445 in 2025 from $78,508 in 2024. The increase in sales is mainly from barrier rentals (including special barrier projects in the first and second quarters), shipping and installation, and Soundwall, SlenderWall® and Easi-Set building product sales. Fourth quarter 2025 revenues were $23,110 compared to $18,528 in the fourth quarter 2024. The increase in revenue for the fourth quarter 2025 as compared to the fourth quarter 2024 was primarily due to an increase in architectural sales, miscellaneous sales, Easi-Set building sales, and shipping and installation revenue.

Previous wording

Cost of sales as a percentage of revenue, not including royalties, decreased to 78% in 2024 compared to 86% in 2023. Cost of sales as a percentage of revenue, not including royalties, decreased to 80% for the fourth quarter 2024 as compared to 85% for the fourth quarter 2023.

Current wording

Cost of sales as a percentage of revenue, not including royalties, decreased to 76% in 2025 compared to 78% in 2024. Cost of sales as a percentage of revenue, not including royalties, decreased slightly to 79% for the fourth quarter 2025 as compared to 80% for the fourth quarter 2024.

Previous wording

Operating income was $9,899 for 2024, as compared to $1,118 for 2023. Operating expenses for 2024 was $10,111 compared to $9,534 in 2023. The increase is due to a minor increase in general and administrative expenses. Total operating expense was $2,519 for the fourth quarter 2024 and $2,580 for the fourth quarter 2023.

Current wording

Operating income was $16,994 for 2025, as compared to $9,899 for 2024. Operating expenses for 2025 was $9,044 compared to $10,111 in 2024. The decrease is due to a decrease in general and administrative expenses. Total operating expense was $2,037 for the fourth quarter 2025 and $2,519 for the fourth quarter 2024.

Previous wording

Income tax expense for 2024 was $2,143, or an effective tax rate of 21.7%, as compared to $528, or an effective tax rate of 40.0% for 2023, adversely affecting net income in 2023. The greater percentage in 2023 was mainly due to an increase in state tax liability for a true-up of state tax expense.

Current wording

Income tax expense for 2025 was $4,520 or an effective tax rate of 26.5%, as compared to $2,143, or an effective tax rate of 21.7% for 2024. The greater percentage in 2025 was mainly due to an increase in state taxes.

Previous wording

As of March 3, 2025, the Company’s sales backlog was approximately $59.5 million, as compared to approximately $60.8 million around the same time in the prior year. It is estimated that most of the projects in the current sales backlog will be produced within 12 months, but a few will be produced over multiple years. The Company anticipates greater sales volumes throughout 2025, although no assurance can be provided. The Company also anticipates funding related to the Infrastructure Investment and Jobs Act to continue coming through the state and local governments in 2025 and beyond to further promote growth in the revenue backlog related to the highway and transportation markets, although no assurance can be provided. State and local programs that support infrastructure spending, including gas tax increases, special tax districts, new funding mechanisms are increasing in number and size as these entities increase their role in infrastructure investment. The Company continues to increase marketing and sales efforts towards SlenderWall sales and barrier rentals, in line with long-term strategic objectives. In view of the policies of the new Administration and DOGE, including without limitation with respect to government spending cutbacks and tariffs, there can be no assurance of anticipated levels of infrastructure spending.

Current wording

As of March 3, 2026, the Company’s sales backlog was approximately $53.1 million, as compared to approximately $59.5 million around the same time in the prior year. It is estimated that most of the projects in the current sales backlog will be produced within 12 months, but a few will be produced over multiple years. The Company anticipates similar sales volumes throughout 2026 compared to 2025 for product sales, although no assurance can be provided. Barrier rentals, exclusive of special barrier projects, is expected to be higher in 2026 than in 2025, although no assurance can be given; given the high level of special barrier projects in 2025, it is likely for there to be a decrease in 2026 from this revenue source. The Company also anticipates funding related to the Infrastructure Investment and Jobs Act to continue coming through the state and local governments in 2026 to further promote growth in the revenue backlog related to the highway and transportation markets, although no assurance can be provided. State and local programs that support infrastructure spending, including gas tax increases, special tax districts, new funding mechanisms are increasing in number and size as these entities increase their role in infrastructure investment. The Company continues to increase marketing and sales efforts towards SlenderWall® sales and barrier rentals, in line with long-term strategic objectives. In view of economic conditions that include government spending cutbacks and tariffs, there can be no assurance of anticipated levels of infrastructure spending.

Previous wording

For the year ended December 31, 2024, the Company had total revenue of $78,508 compared to total revenue of $59,580 for the year ended December 31, 2023, an increase of $18,928 or 32%. Revenue includes product sales, barrier rentals, royalty income, and shipping and installation revenues. Product sales are further divided into soundwall, architectural and SlenderWall™ panels, miscellaneous wall panels, highway barriers, Easi-Set®/Easi-Span® buildings, utility products, and miscellaneous precast products. The following table summarizes the revenue by type and a comparison for the years ended December 31, 2024 and 2023 (in thousands):

Current wording

For the year ended December 31, 2025, the Company had total revenue of $93,446 compared to total revenue of $78,508 for the year ended December 31, 2024, an increase of $14,938 or 19%. Revenue includes product sales, barrier rentals, royalty income, and shipping and installation revenues. Product sales are further divided into soundwall, architectural and SlenderWall™ panels, miscellaneous wall panels, highway barriers, Easi-Set®/Easi-Span® buildings, utility products, and miscellaneous precast products. The following table summarizes the revenue by type and a comparison for the years ended December 31, 2025 and 2024 (in thousands):

Previous wording

Soundwall Sales – Soundwall panel sales increased by 54% in 2024 compared to 2023. The increase is due to higher production volumes at all three plants, as the Company increased production output to execute and deliver on the Company’s increased backlog. The Company expects soundwall panel sales to be similar in 2025 as compared to 2024, although no assurance can be provided.

Current wording

Soundwall Sales – Soundwall panel sales increased by 24% in 2025 compared to 2024. The increase is due to higher production volumes at all three plants, as the Company increased production output to execute and deliver on the Company’s backlog. The Company expects soundwall panel sales to be similar in 2026 as compared to 2025, although no assurance can be provided.

Previous wording

Architectural Sales – Architectural panel sales increased by 272% in 2024 compared to 2023. The increase is related to production of two architectural projects that started production at the end of the first quarter of 2024. Architectural sales are expected to be similar in 2025, as compared to 2024, although no assurance can be provided.

Current wording

Architectural Sales – Architectural panel sales decreased by 21% in 2025 compared to 2024. The decrease is related to production of two architectural projects in 2024 that did not recur in 2025. Architectural sales are expected to be similar in 2026, as compared to 2025, although no assurance can be provided.

Previous wording

SlenderWall Sales – SlenderWall panel sales decreased by 100% in 2024 compared to 2023. A SlenderWall project was in production during the first half of 2023, and the Company did not have a SlenderWall project in production during 2024. The Company continues to focus sales initiatives on SlenderWall, but no assurance can be given as to the success of this endeavor. SlenderWall sales are expected to increase in 2025 compared to 2024, as several SlenderWall projects are anticipated to start in the first half of 2025.

Current wording

SlenderWall® Sales – SlenderWall® panel sales were $3.6 million in 2025 compared to no production in 2024. SlenderWall® projects were produced in 2025 and 2023. The Company continues to focus sales initiatives on SlenderWall® , but no assurance can be given as to the success of this endeavor. SlenderWall® sales are expected to be similar in 2026 compared to 2025, although no assurance can be provided.

Previous wording

Miscellaneous Wall Sales – Miscellaneous wall sales are highly customized precast concrete products or retaining and lagging panels that do not fit other product categories. Miscellaneous wall sales decreased by 20% in 2024 when compared to 2023 due lower production volumes in the second and third quarter 2024. Miscellaneous sales are expected to be similar in 2025, as compared to 2024, although no assurance can be provided.

Current wording

Miscellaneous Wall Sales – Miscellaneous wall sales are highly customized precast concrete products or retaining and lagging panels that do not fit other product categories. Miscellaneous wall sales decreased by 26% in 2025 when compared to 2024 due lower production volumes throughout the 2025 calendar year based on the timing of contract awards. Miscellaneous sales are expected to be similar in 2026 as compared to 2025, although no assurance can be provided.

Previous wording

Barrier Sales – Barrier sales decreased by 50% in 2024 when compared to 2023. The decrease is due to the completion of large barrier projects in North Carolina and South Carolina during 2023. The decrease is consistent with the Company’s focus to shift from barrier sales to barrier rentals. Barrier sales are expected to trend lower in 2025 than previous years as the Company continues to shift from barrier sales to barrier rentals.

Current wording

Barrier Sales – Barrier sales increased by 12% in 2025 when compared to 2024. The increase is due to an increase in barrier customers in the North Carolina and South Carolina region in 2025. Barrier sales are expected to trend lower in 2026 than previous years as the Company continues to shift from barrier sales to barrier rentals.

Previous wording

Easi-Set® and Easi-Span® Building Sales – The Easi-Set® Buildings program includes Easi-Set®, plant assembled and Easi-Span®, site assembled, and an extensive line of pre-engineered restrooms. Building sales increased by 41% in 2024 as compared to 2023 due to increased sales at all locations, reflecting general product sale fluctuations. Building and restroom sales are expected to trend higher during 2025 as compared to 2024 due to demand from increased sales and marketing, although no assurance can be provided.

Current wording

Easi-Set® and Easi-Span® Building Sales – The Easi-Set® Buildings program includes Easi-Set®, plant assembled and Easi-Span®, site assembled, and an extensive line of pre-engineered restrooms. Building sales increased by 72% in 2025 as compared to 2024 due to increased sales at all locations, reflecting general product sale fluctuations. Building and restroom sales are expected to trend higher during 2026 as compared to 2025 due to demand from increased sales and marketing, although no assurance can be provided.

Previous wording

Utility Sales – Utility products are mainly comprised of underground utility vaults used in infrastructure construction. Utility product sales increased by 171% in 2024 compared to 2023. The increase is related to the increase in the market for dry utility vaults to support the growth in data centers. Utility sales are expected to be similar during 2025 as compared to 2024, although no assurance can be provided.

Current wording

Utility Sales – Utility products are mainly comprised of underground utility vaults used in infrastructure construction. Utility products sales decreased by 45% in 2025 compared to 2024. The prior year sales reflected elevated demand in the Northern Virginia market driven by accelerated data center development. Sales are expected to increase in 2026 relative to 2025 due to continued data center expansion and related demand for dry utility vaults, although no assurance can be provided.

Previous wording

Miscellaneous Product Sales – Miscellaneous products are products that are produced or sold that do not meet the criteria defined for other revenue categories. Examples would include precast concrete slabs, blocks or small add-on items. For 2024, miscellaneous product sales increased by 120% when compared to 2023. The increase is mainly from the Virginia plant that started production on one large project for the production of precast beams and platforms. Miscellaneous product sales are expected to trend lower during 2025 as compared to 2024, although no assurance can be provided.

Current wording

Miscellaneous Product Sales – Miscellaneous products are products that are produced or sold that do not meet the criteria defined for other revenue categories. Examples would include precast concrete slabs, blocks or small add-on items. For 2025, miscellaneous product sales decreased by 55% when compared to 2024. The decrease is mainly from the Virginia plant which had one large project in 2024 for the production of precast beams and platforms and no similar project in 2025. Miscellaneous product sales are expected to increase in 2026 based on pipeline opportunities reflecting increased demand in the overall market as compared to 2025, although no assurance can be given.

Previous wording

Barrier Rentals – Barrier rentals increased by 90% in 2024 as compared to 2023. Revenue from the Company’s core rental barrier fleet increased by 52% in 2024 as compared to 2023. This increase is attributed to an increase in utilization of rental barrier. Barrier rental revenue also increased due to multiple special barrier projects occurring and completed during the third quarter 2024. As indicated above, the Company is continuing to shift its focus to barrier rentals compared to barrier sales with the significant increase in the rental fleet that occurred during prior years. Barrier rental revenue, excluding revenue from special barrier projects, is expected to trend higher in 2025 as compared to barrier rental revenue, excluding revenue from special barrier projects, in 2024, as funding is expected to increase related to the Infrastructure Investment and Jobs Act, although no assurance can be given.

Current wording

Barrier Rentals – Barrier rentals increased by 64% in 2025 as compared to 2024. This increase is mainly attributed to two special barrier projects, one in each of the first and second quarters of 2025 as well as an overall increase in utilization of rental barriers. As indicated above, the Company is continuing to shift its focus to barrier rentals compared to barrier sales with the significant increase in the rental fleet. Barrier rental revenue, excluding revenue from special barrier projects, is expected to trend higher in 2026 as compared to barrier rental revenue, excluding revenue from special barrier projects, in 2025, as funding is expected to continue related to the Infrastructure Investment and Jobs Act, although no assurance can be given. While the Company is unable to predict the volume of special barrier projects in 2026, in view of substantial projects in the first half of 2025, it is anticipated that there will be a decrease in revenue in 2026 from this revenue source.

Previous wording

Royalty Income – Royalties increased by 24% in 2024 as compared to 2023. The increase in royalties is mainly due to the increase in barrier royalties during 2024 compared to 2023. As funding increases related to the Infrastructure Investment and Jobs Act, as anticipated, the Company expects 2025 royalties to continue to increase compared to 2024, although no assurance can be given.

Current wording

Royalty Income – Royalties increased by 28% in 2025 as compared to 2024. The increase in royalties is mainly due to the increase in barrier royalties from existing licensees during 2025 compared to 2024. As anticipated funding continues related to the Infrastructure Investment and Jobs Act as well as adoption by state Department of Transportation (DOT) agencies of MASH approved barrier systems, the Company expects 2026 royalties to continue to increase compared to 2025, although no assurance can be given.

Previous wording

Shipping and Installation – Shipping revenue results from shipping our products to the customers' final destination and is recognized when the shipping services take place. Installation activities include installation of our products at the customers’ construction site. Installation revenue results when attaching architectural wall panels to a building, installing an Easi-Set® building at a customers' site, setting highway barrier, or setting any of our other precast products at a site specific to the requirements of the owner. Shipping and installation revenues increased by 48% for 2024 when compared to 2023. The increase is mainly attributed to the increase in shipping and installation of SlenderWall and architectural panels. This increase in shipping and installation revenue correlates with the increased production of SlenderWall panels that occurred, and for which revenue was previously recognized, throughout 2023.

Current wording

Shipping and Installation – Shipping revenue results from shipping our products to the customers’ final destination and is recognized when the shipping services take place. Installation activities include installation of our products at the customers’ construction site. Installation revenue results when attaching architectural wall panels to a building, installing an Easi-Set® building at a customers’ site, setting highway barrier, or setting any of our other precast products at a site specific to the requirements of the owner. Shipping and installation revenues increased by 21% in 2025 as compared to 2024. The increase is attributed to the increase in barrier rental from the special barrier projects, and shipping and installation of SlenderWall® and soundwalls. Shipping and installation revenue are expected to be similar in 2026 as compared to 2025, although no assurance can be provided.

Previous wording

Cost of Sales – Total cost of sales for the year ended December 31, 2024 was $58,498, an increase of $9,570, or 20%, from $48,928 for the year ended December 31, 2023. Total cost of sales as a percentage of total revenue, not including royalties, decreased to 78% for the year ended December 31, 2024 from 86% for the year ended December 31, 2023. The decrease in cost of sales as a percentage of revenue, not including royalties, is mainly due to higher revenue levels in 2024 than in 2023 having a favorable effect on margins reflecting the absorption of fixed overhead costs. In addition, the decrease in cost of sales as a percentage of revenue, not including royalties, was due to production throughout 2024 related to contracts that factored in the rising inflationary costs experienced throughout 2022 and 2023, and a one-time expense related to panels the Company chose to remake for one specific customer related to defective steel from a supplier used in the initial product in 2023.

Current wording

Cost of Sales– Total cost of sales for the year ended December 31, 2025 was $67,408, an increase of $8,909, or 15%, from $58,498 for the year ended December 31, 2024. Total cost of sales as a percentage of total revenue, not including royalties, decreased to 76% for the year ended December 31, 2025 from 78% for the year ended December 31, 2024. The decrease in cost of sales as a percentage of revenue, not including royalties, is primarily due to the increase in revenue from the special barrier projects that were performed in the first and second quarters of 2025 which have a higher margin and lower cost of sales when compared to product margin and product cost of sales, and higher revenue levels in 2025 than in 2024 having a favorable effect on margins reflecting the absorption of fixed overhead costs.

Previous wording

General and Administrative Expenses – For the year ended December 31, 2024, the Company's general and administrative expenses increased by $564, or 9%, to $6,554 from $5,990 during the same period in 2023. General and administrative expenses for the year ended December 31, 2023 increased over the prior year due higher salary and wage rates, and an increase in the allowance for credit losses. General and administrative expenses were 8% and 10% of revenues for the years ended December 31, 2024 and 2023, respectively.

Current wording

General and Administrative Expenses – For the year ended December 31, 2025, the Company’s general and administrative expenses decreased by $886, or 14%, to $5,668 from $6,554 during the same period in 2024. General and administrative expenses were 6% and 8% of revenues for the years ended December 31, 2025 and 2024, respectively. Such expenses decreased due to lower staffing levels impacting salaries and wages and an arbitration settlement that included the recovery of $458 in previously reserved receivables which offset general and administrative expenses in the third quarter of 2025. Salaries and wages are expected to increase in 2026 compared to 2025 as additional administrative staff are hired.

Previous wording

Selling Expenses – Selling expenses for the year ended December 31, 2024 increased by $13, or 0%, to $3,557 from $3,544 for the year ended December 31, 2023. The Company expects selling expenses to increase in future periods with the plan for additional sales associates and increased advertising spending aligning with the strategy to increase SlenderWall sales and barrier rentals.

Current wording

Selling Expenses – Selling expenses for the year ended December 31, 2025 decreased by $181, or 5%, to $3,376 from $3,557 for the year ended December 31, 2024 due to lower staffing levels. The Company expects selling expenses to increase in future periods with the plan for additional sales associates and increased advertising spending aligning with the strategy to increase SlenderWall® sales and barrier rentals.

Previous wording

Operating Income – The Company had operating income for the year ended December 31, 2024 of $9,899 compared to operating income of $1,118 for the year ended December 31, 2023, an increase of $8,781, or 785%. The increase in operating income was mainly due to the increase in revenues, decrease in cost of sales as a percentage of revenue, and a relatively flat operating expenses as a percent of revenue.

Current wording

Operating Income – The Company had operating income for the year ended December 31, 2025 of $16,994 compared to operating income of $9,899 for the year ended December 31, 2024, an increase of $7,095, or 72%. The increase in operating income was mainly due to the increase in revenues, decrease in cost of sales as a percentage of revenue, and a decrease in operating expenses as a percent of revenue.

Previous wording

Income Tax Expense – The Company had income tax expense of $2,143 for the year ended December 31, 2024 compared to income tax expense of $528 for the year ended December 31, 2023. The Company had an effective rate of 21.7% for the year ended December 31, 2024 compared to an effective rate of 40.0% for the same period in 2023. The decrease in the effective tax rate is attributed to the increase in the Company’s state tax liability for a true-up of state tax expense during 2023.

Current wording

Income Tax Expense – The Company had income tax expense of $4,520 for the year ended December 31, 2025 compared to income tax expense of $2,143 for the year ended December 31, 2024. The Company had an effective rate of 26.5% for the year ended December 31, 2025 compared to an effective rate of 21.7% for the same period in 2024. The increase in the effective tax rate is attributed to continued true-up of state tax expense during 2025.

Previous wording

Net Income – The Company had net income of $7,675 for the year ended December 31, 2024, compared to net income of $795 for the same period in 2023. The basic and diluted earnings per share was $1.45 for 2024 compared to basic and diluted earnings per share of $0.15 for the year ended December 31, 2023. There were 5,289 basic and diluted weighted average shares outstanding in 2024, and 5,258 basic and 5,292 diluted weighted average shares outstanding in 2023.

Current wording

Net Income – The Company had net income of $12,506 for the year ended December 31, 2025, compared to net income of $7,675 for the year ended December 31, 2024. The basic and diluted earnings per share was $2.36 for 2025 compared to basic and diluted earnings per share of $1.45 for the year ended December 31, 2024. There were 5,305 basic and diluted weighted average shares outstanding in 2025, and 5,289 basic and diluted weighted average shares outstanding in 2024.

Previous wording

The Company financed its capital expenditures for 2024 with cash balances on hand. The Company had $5,094 of debt obligations at December 31, 2024, of which $658 is scheduled to mature within twelve months. During the twelve months ended December 31, 2024, the Company made repayments of outstanding debt in the amount $635.

Current wording

The Company financed its capital expenditures for 2025 with cash balances on hand. The Company had $4,447 of debt obligations at December 31, 2025, of which $648 is scheduled to mature within twelve months. For the year ended December 31, 2025, the Company made repayments of outstanding debt in the amount $647.

Previous wording

The Company has a mortgage note payable to Burke & Herbert Bank & Trust Company, formally Summit Community Bank (the “Bank”) for the construction of its North Carolina facility. The note carries a ten-year term at a fixed interest rate of 3.64% annually per the Promissory Note Rate Conversion Agreement, with monthly payments of $22, and is secured by all of the assets of Smith-Carolina and a guarantee by the Company. The balance of the note payable at December 31, 2024 was $1,166.

Current wording

The Company has a mortgage note payable to Burke & Herbert Bank & Trust Company, formally Summit Community Bank (the “Bank”) for the construction of its North Carolina facility. The note carries a ten-year term at a fixed interest rate of 3.64% annually per the Promissory Note Rate Conversion Agreement, with monthly payments of $22, and is secured by all of the assets of Smith-Carolina and a guarantee by the Company. The balance of the note payable at December 31, 2025 was $942.

Previous wording

The Company also has a note payable to the Bank in the amount of $1,536 as of December 31, 2024. The loan is collateralized by a first lien position on the Midland, VA plant, building, and assets. The interest rate per the Promissory Note is fixed at 3.99% per annum, with principal and interest payments payable monthly over 120 months in the amount of $27. The loan matures on March 27, 2030.

Current wording

The Company also has a note payable to the Bank in the amount of $1,279 as of December 31, 2025. The loan is collateralized by a first lien position on the Midland, VA plant, building, and assets. The interest rate per the Promissory Note is fixed at 3.99% per annum, with principal and interest payments payable monthly over 120 months in the amount of $27. The loan matures on March 27, 2030.

Previous wording

On February 10, 2022, the Company completed the financing for its acquisition of certain real property in Midland, VA from the fourth quarter of 2021, totaling approximately 29.8 acres, with a note payable to the Bank. The balance of the note payable at December 31, 2024 was $2,379. The loan is collateralized by a first lien position on the related real property. The interest rate is fixed at 4.09% per annum, with principal and interest payments payable monthly over 180 months for $21. The loan matures on February 10, 2037.

Current wording

On February 10, 2022, the Company completed the financing for its acquisition of certain real property in Midland, VA from the fourth quarter of 2021, totaling approximately 29.8 acres, with a note payable to the Bank. The balance of the note payable at December 31, 2025 was $2,226. The loan is collateralized by a first lien position on the related real property. The interest rate is fixed at 4.09% per annum, with principal and interest payments payable monthly over 180 months for $21. The loan matures on February 10, 2037.

Previous wording

The Company additionally has one smaller installment loan with an annual interest rate of 2.90%, maturing in 2025, with a balance totaling $13.

Current wording

The Company additionally had one smaller installment loan with an annual interest rate of 2.90%, maturing in 2025, with a nominal balance at December 31, 2025.

Previous wording

In addition to the notes payable discussed above, the Company has a $5,000 line of credit with the Bank with no balance outstanding as of December 31, 2024. The line of credit is evidenced by a commercial revolving promissory note, which carries a variable interest rate of prime, with a floor of 4.99%. The line of credit was renewed on January 1, 2025 and matures January 1, 2026. The loan is collateralized by a first lien position on the Company's accounts receivable and inventory and a second lien position on all other business assets. Key provisions of the line of credit required the Company (i) to obtain bank approval for capital expenditures in excess of $5,000 during the term of the loan and (ii) to obtain bank approval prior to its funding of any acquisition. On October 1, 2023, the Company received a Commitment Letter from the Bank to provide a guidance line of credit specifically to purchase business equipment in an amount up to $1,500. The commitment provided for the purchase of equipment for which a note payable will be executed with a term not to exceed five years with an interest rate at the Wall Street Journal prime rate plus 0.50% with a floor of 3.50% per annum. The loan is collateralized by a first lien position on all equipment purchased under the line. The commitment for the guidance line of credit matured on October 1, 2024. As of October 31, 2024, the Company had not purchased any equipment pursuant to the $1,500 commitment.

Current wording

In addition to the notes payable discussed above, the Company has a $5,000 line of credit with the Bank with no balance outstanding as of December 31, 2025. The line of credit is evidenced by a commercial revolving promissory note, which carries a variable interest rate of prime, with a floor of 4.99%. The line of credit was renewed on January 1, 2026 and matures January 1, 2027. The loan is collateralized by a first lien position on the Company’s accounts receivable and inventory and a second lien position on all other business assets. Key provisions of the line of credit required the Company (i) to obtain bank approval for capital expenditures in excess of $5,000 during the term of the loan and (ii) to obtain bank approval prior to its funding of any acquisition. On October 1, 2023, the Company received a Commitment Letter from the Bank to provide a guidance line of credit specifically to purchase business equipment in an amount up to $1,500. The commitment provided for the purchase of equipment for which a note payable will be executed with a term not to exceed five years with an interest rate at the Wall Street Journal prime rate plus 0.50% with a floor of 3.50% per annum. The loan is collateralized by a first lien position on all equipment purchased under the line. The commitment for the guidance line of credit matured on October 1, 2025 and, as of that date, the Company had not purchased any equipment pursuant to the $1,500 commitment.

Previous wording

At December 31, 2024, the Company had cash totaling $7,548 compared to cash totaling $9,175 at December 31, 2023. Cash provided by operations was $5,584. Cash disbursements from investing activity was $6,576. Cash repayments on borrowings was $635. The decrease in cash is primarily the result of cash used for capital expenditures, specifically the expansion of the manufacturing facility in North Carolina.

Current wording

At December 31, 2025, the Company had cash totaling $11,884 compared to cash totaling $7,548 at December 31, 2024. Cash provided by operations was $14,204. Cash disbursements from investing activity was $9,202. Cash repayments on borrowings was $647. The increase in cash is primarily the result of higher net income and cash provided by operating activities.

Previous wording

The Company's notes payable are financed at fixed rates of interest. This leaves the Company almost impervious to fluctuating interest rates. Increases in such rates will only affect the interest paid by the Company if new debt is obtained, or an available line of credit is drawn upon, with a variable interest rate.

Current wording

The Company’s notes payable are financed at fixed rates of interest. This leaves the Company almost largely insulated from fluctuating interest rates. Increases in such rates will only affect the interest paid by the Company if new debt is obtained, or an available line of credit is drawn upon, with a variable interest rate.

Previous wording

The Company’s cash flow from operations is affected by production schedules set by contractors, which generally provide for payment 45 to 75 days after the products are produced and with some contracts, retainage may be held until the entire project is completed. This payment schedule could result in liquidity problems for the Company because it must bear the cost of production for its products before it receives payment. The Company's days sales outstanding (DSO) in 2024 and 2023 were 88 and 113 days, respectively. Although no assurances can be given, the Company believes that its current cash resources, anticipated cash flow from operations, and the availability under the line of credit will be sufficient to finance the Company’s operations for at least the next 12 months.

Current wording

The Company’s cash flow from operations is affected by production schedules set by contractors, which generally provide for payment 45 to 75 days after the products are produced and with some contracts, retainage may be held until the entire project is completed. This payment schedule could result in liquidity problems for the Company because it must bear the cost of production for its products before it receives payment. The Company’s days sales outstanding (DSO) in 2025 and 2024 were 94 and 88 days, respectively. Although no assurances can be given, the Company believes that its current cash resources, anticipated cash flow from operations, and the availability under the line of credit will be sufficient to finance the Company’s operations for at least the next 12 months.

Previous wording

The Company’s accounts receivable balance, net of allowance for credit losses, at December 31, 2024 was $19,420, compared to accounts receivable balance, net of allowance for credit losses, of $17,209 at December 31, 2023. The increase is primarily the result of increased revenue. The Company expects DSO to trend downwards, with increased collection efforts, although no assurance can be provided.

Current wording

The Company’s accounts receivable balance, net of allowance for credit losses, at December 31, 2025 was $27,228, compared to accounts receivable balance, net of allowance for credit losses, of $19,420 at December 31, 2024. The increase is primarily the result of increased revenue. The Company expects DSO to trend downwards, with increased collection efforts, although no assurance can be provided.

Previous wording

The Company’s inventory at December 31, 2024 was $6,677 and at December 31, 2023 was $5,150, an increase of $1,528. The annual inventory turns for 2024 and 2023 were 10.0 and 15.0, respectively.

Current wording

The Company’s inventory at December 31, 2025 was $6,928 and at December 31, 2024 was $6,677, an increase of $251. The annual inventory turns for 2025 and 2024 were 8.5 and 10.0, respectively.

Previous wording

Management believes that the Company's operations were affected by inflation in 2024 and 2023, particularly in the purchases of labor costs will increase in 2025, although no assurance can be given regarding future pricing or costs.

Current wording

Management believes that the Company’s operations were affected by inflation in 2025 and 2024, particularly in the purchases of labor costs and raw materials, and no assurance can be given regarding future pricing or costs.

Previous wording

As of March 3, 2025, the Company's sales backlog was approximately $59.5 million as compared to approximately $60.8 million at approximately the same time in 2024. It is estimated that most of the projects in the sales backlog will be produced within 12 months, but a few will be produced over multiple years. The backlog remained consistent with the prior year level due to continued sales efforts for products to be produced at all three manufacturing facilities, as well as consistent sales efforts in barrier rentals. The Company expects the backlog to increase with continued bidding on large infrastructure and SlenderWall/architectural projects, although no assurance can be given.

Current wording

As of March 3, 2026, the Company’s sales backlog was approximately $53.1 million as compared to approximately $59.5 million at approximately the same time in 2025. It is estimated that most of the projects in the sales backlog will be produced within 12 months, but a few will be produced over multiple years. The backlog was $6.4 million lower than the prior year primarily due to the completion of some large projects during the year and the timing of new contract awards. Backlog levels may fluctuate based on the timing of infrastructure project awards. Management expects, but there can be no assurance, backlog to increase in 2026 as bidding activity associated with infrastructure initiatives and products continues.