SMITH MIDLAND CORP
For the period ended Mar 31, 2026. Filed Jun 10, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Jun 10, 2026
SMID$26.11+3.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001654954-25-013097
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-06-10.
0001654954-26-005829
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 56 previous paragraphs and 57 current paragraphs.
16 unchanged; 21 reworded; 19 added; 19 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
Overall, the Company’s financial performance for the first quarter of 2026 decreased compared to the first quarter of 2025. The Company reported net income of $1,339 for the three months ended March 31, 2026, compared to net income of $3,327 for the three months ended March 31, 2025. Total revenue decreased by $1,126 to $21,572 for the three months ended March 31, 2026 from $22,698 for the three months ended March 31, 2025. The decrease in revenue was primarily attributable to lower barrier rental revenue resulting from the absence of a large special barrier project that positively impacted the first quarter of 2025. This decrease was partially offset by increases in product sales and shipping and installation revenue.
Current report
Cost of sales as a percentage of revenue, excluding royalties, increased to 83% for the three months ended March 31, 2026 compared to 72% for the three months ended March 31, 2025. The increase was primarily due to the significant reduction in special project barrier rental revenue during the quarter. Special barrier rental projects generally carry higher margins and lower cost of sales percentages compared to product sales.
Current report
Operating income was $1,728 for the three month period ended March 31, 2026, as compared to $4,387 for the three month period ended March 31, 2025. Operating expenses for the first quarter of 2026 were $2,575 compared to $2,588 for the first quarter of 2025. The slight decrease was primarily attributable to lower selling expenses partially offset by higher general and administrative expenses.
Current report
Soundwall Sales - Soundwall sales decreased for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025. The decrease was primarily due to timing of project production schedules and shipment activity. The Company continues to maintain a soundwall backlog and expects production activity to increase throughout the remainder of 2026, although no assurance can be given.
Current report
Architectural Panel Sales – Architectural panel sales increased for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025 due to the commencement of architectural panel production activity during the quarter. The Company expects architectural panel activity to continue throughout 2026 and trend higher than 2025 production levels, although no assurance can be given.
Current report
SlenderWall Sales – The Company had no SlenderWall® sales in the three month period ended March 31, 2025 to compare to the production levels for the three month period ended March 31, 2026. Due to the commencement of production on certain SlenderWall® projects and sales expectations in 2026, the Company expects sales for the remainder of the year in this category to be consistent with the quarter ended March 31, 2026. The Company continues to focus sales and marketing initiatives on SlenderWall®, although no assurance can be provided regarding future project awards or production timing.
Current report
Barrier Sales - Barrier sales increased for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025 due to increased customer demand. Sales in this category are expected to trend lower throughout 2026 as compared to 2025. The Company continues to focus strategically on barrier rental opportunities in certain geographic regions while maintaining selective barrier sales activity.
Current report
Easi-Set® and Easi-Span Building Sales – Building sales increased significantly for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025 due to increased customer demand at multiple manufacturing facilities. The Company expects building sales activity to continue at elevated levels during 2026, although no assurance can be given.
Current report
Utility Sales – Utility sales increased for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025, reflecting increased demand in utility and infrastructure-related markets, including continued data center development activity in Northern Virginia. The Company expects utility sales activity to continue through the remainder of 2026 and trend higher than 2025 production levels, although no assurance can be given.
Current report
Barrier Rentals – Barrier rental revenue decreased significantly for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025. The decrease was primarily attributable to the absence of a large special barrier project that positively impacted the first quarter of 2025. Excluding special projects, the Company expects standard barrier rental activity to continue to trend positively throughout 2026, although no assurance can be provided. The Company also expects, to a lesser degree, special barrier projects to continue in 2026. In view of the anticipated lack of a special barrier project in the second quarter of 2026 as compared to one such project in the second quarter of 2025, the Company expects a significant decrease in such revenues for the 2026 second quarterly period.
Current report
Royalty Income – Royalty income decreased slightly for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025 due a large project which generated higher royalties from one licensee in the first quarter of 2025 that did not recur in the first quarter of 2026. The Company continues to expect long-term royalty opportunities associated with infrastructure spending and continued utilization of the J-J Hooks® barrier system. The Company expects royalties for 2026 to trend higher for the full year 2026, although no assurance can be given.
Current report
Cost of Sales - Total cost of sales as a percentage of revenue, excluding royalties, for the three months ended March 31, 2026 was 83%, as compared to 72% for the three months ended March 31, 2025. The increase in cost of sales as a percentage of revenue was primarily due to the reduction in high-margin special barrier project revenue during the first quarter of 2026 as compared to the first quarter of 2025 as well as the relative increase in lower-margin product sales activity.
Current report
General and Administrative Expenses - For the three months ended March 31, 2026, the Company’s general and administrative expenses increased by $169 to $1,753 from $1,584 during the three month period ended March 31, 2025. The increase was primarily attributable to increased personnel-related costs, professional fees, and costs associated with internal control and financial reporting remediation activities. General and administrative expense as a percentage of total revenue was 8% and 7% for the three month periods ended March 31, 2026 and 2025, respectively.
Current report
Operating Income - The Company had operating income for the three month period ended March 31, 2026 of $1,728 compared to $4,387 for the three month period ended March 31, 2025. The 61% decrease was primarily attributable to lower revenues from the absence of a significant special barrier project, which occurred the first quarter of 2025 and did not occur in the first quarter of 2026, and the resulting increase in cost of sales as a percentage of revenue.
Current report
The Company’s outstanding notes payable are financed at fixed rates of interest. Accordingly, the Company’s exposure to fluctuating interest rates is limited primarily to any future borrowings under the variable rate line of credit or additional future indebtedness.
Current report
On March 31, 2026, the Company had cash totaling $13,217 compared to cash totaling $11,884 on December 31, 2025. The increase in cash was primarily the result of cash provided by operating activities totaling approximately $3.1 million during the quarter. Operating cash flow benefited from profitability, increased accounts payable balances, and deferred revenue activity, partially offset by increases in accounts receivable and inventory balances.
Current report
The Company’s cash flow from operations is affected by production schedules established by contractors, which generally provide for payment 30 to 90 days after products are produced. Certain architectural and infrastructure projects may also include retainage provisions that delay collection until project completion. These factors can create liquidity demands because the Company must fund a portion of production costs before receiving payment from customers.
Current report
If actual operating results, production schedules, sales levels, or collections on customer receivables are materially inconsistent with management’s expectations, the Company could encounter cash flow or liquidity challenges in future periods. In addition, significant deterioration in operating performance could impact the Company’s ability to comply with financial covenants under existing lending agreements.
Current report
The Company’s inventory totaled $7,217 at March 31, 2026 compared to $6,928 at December 31, 2025. The increase was primarily attributable to increased finished goods inventory and inventory maintained to support backlog production and anticipated barrier rental activity. Inventory turnover was 7.6, annualized for the three months ended March 31, 2026, compared to 7.5, annualized for the three month period ended March 31, 2025.
Removed paragraphs (19)
Previous report
Cost of sales as a percentage of revenue, not including royalties, increased to 77% for the three months ended September 30, 2025 compared to 75% for the three months ended September 30, 2024. The increase for the third quarter of 2025 as compared to the same quarter in 2024 is primarily due to the increase in revenue from a special barrier project that was performed in the third quarter of 2024 which have a higher margin and lower cost of sales when compared to product margin and product cost of sales. Cost of sales as a percentage of revenue, not including royalties, decreased to 74% for the nine months ended September 30, 2025 compared to 77% for the nine months ended September 30, 2024. The decrease for the nine month period 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.
Previous report
Operating income was $3,854 for the three month period ended September 30, 2025, as compared to an operating income of $3,848 for the three month period ended September 30, 2024. Operating income was $13,759 for the nine month period ended September 30, 2025, as compared to $8,031 for the nine month period ended September 30, 2024. Operating expenses for the third quarter of 2025 were $1,905 compared to $2,730 for the third quarter of 2024. Operating expenses for the first nine months of 2025 were $6,761 compared to $7,593 for the first nine months of 2024.
Previous report
Three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024 ** **
Previous report
Soundwall Sales - Soundwall sales were significantly higher for the three and nine month periods ended September 30, 2025, compared to the same periods in 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 increased backlog. Soundwall sales are expected to trend similarly throughout the remainder of 2025 as compared to the first nine months of 2025, although no assurance can be given.
Previous report
Architectural Panel Sales – Architectural panel sales commenced in the third quarter of 2025 as compared to no architectural panel sales in the first two quarters of 2025. In 2024 there was production of two architectural projects that started production at the end of the first quarter of 2024. Architectural sales are expected to trend higher throughout the remainder of 2025 as compared to the first nine months of 2025, although no assurance can be given.
Previous report
SlenderWall Sales - SlenderWall sales increased for the three and nine months ended September 30, 2025, as compared to the same periods in 2024. The Company produced SlenderWall projects in the nine month period ended September 30, 2025 and the Company did not have a SlenderWall project in production during the first nine months of 2024. The Company continues to focus sales initiatives on SlenderWall, but no assurance can be given as to the success of this endeavor.
Previous report
Barrier Sales - Barrier sales increased slightly for the three month period and decreased slightly for the nine month period ended September 30, 2025, compared to the same periods in 2024. The decrease over the nine month period is consistent with the Company’s continuing shift in marketing efforts from barrier sales to higher margin barrier rentals in the Delaware to Virginia region. Barrier sales are expected to trend similarly throughout the remainder of 2025 as compared to the first nine months of 2025, although no assurance can be given.
Previous report
Easi-Set® and Easi-Span Building Sales - Building and restroom sales increased for the three and nine month periods ended September 30, 2025, compared to the same periods in 2024, due to increased building sales at all manufacturing plants. Building and restroom sales are expected to continue to trend similarly throughout the remainder of 2025 compared to the first nine months of 2025.
Previous report
Utility Sales - Utility sales decreased significantly for the three and nine month periods ended September 30, 2025, compared to the same periods in 2024. During 2024, the Company has seen a surge in demand for utility vaults in the Northern Virginia market to support the data center growth. Utility sales are expected to trend higher for the remainder of 2025 as compared to the first nine months of 2025, although no assurance can be provided.
Previous report
Barrier Rentals – Barrier rentals decreased for the three month period and increased for the nine month period ended September 30, 2025 compared to the same periods in 2024. For the third quarter, the decrease is mainly attributed to a special barrier project performed by the Company in the third quarter of 2024 that did not recur in the third quarter of 2025. For the nine month period, 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. Barrier rental revenue, excluding revenue from special barrier projects, is expected to trend higher throughout the remainder of 2025 as compared to barrier rental revenue, excluding revenue from special barrier projects, in the first nine months of 2025, although no assurance can be given.
Previous report
Royalty Income – Royalties increased for the three and nine month periods ended September 30, 2025, compared to the same periods in 2024. The increase is related to higher barrier production volumes experienced by the Company’s licensees. It is expected that continued infrastructure spending and the start of production by licensees of a new, low profile barrier that utilizes the J-J Hook system, will continue to drive royalties. The Company expects royalties for 2025 to exceed royalty income for the full year 2024, although no assurance can be given.
Previous report
Cost of Sales - Cost of sales as a percentage of revenue, not including royalties, increased to 77% for the three months ended September 30, 2025 compared to 75% for the three months ended September 30, 2024. The increase for the third quarter of 2025 as compared to the same quarter in 2024 is primarily due to the increase in revenue from a special barrier project that was performed in the third quarter of 2024 which has a higher margin and lower cost of sales when compared to product margin and product cost of sales. Cost of sales as a percentage of revenue, not including royalties, decreased to 74% for the nine months ended September 30, 2025 compared to 77% for the nine months ended September 30, 2024. The decrease for the nine month period 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.
Previous report
General and Administrative Expenses - For the three months ended September 30, 2025, the Company's general and administrative expenses decreased to $1,100 from $1,720 during the same period in 2024. For the nine months ended September 30, 2025, the Company's general and administrative expenses decreased to $4,198 from $4,938 during the same period in 2024. General and administrative expense as a percentage of total revenue was 5% and 7% for the three month periods ended September 30, 2025 and 2024, respectively. General and administrative expense as a percentage of total revenue was 6% and 8% for the nine month periods ended September 30, 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 for the remainder of 2025 as compared to the first nine months of 2025 as additional administrative staff are hired.
Previous report
Operating Income - The Company had operating income for the three month period ended September 30, 2025 of $3,854 compared to $3,848 for the same period in 2024. The Company had operating income for the nine month period ended September 30, 2025 of $13,759 compared to $8,031 for the same period in 2024. For the nine month period, the increase is mainly due to the increase in revenue and decrease in cost of sales as a percent of revenue.
Previous report
Income Tax Expense - The Company had an income tax expense of $994, or an effective tax rate of 26%, for the three months ended September 30, 2025, compared to income tax expense of $694, or an effective tax rate of 18% for the same period in 2024. The Company had an income tax expense of $3,325, or an effective tax rate of 24%, for the nine months ended September 30, 2025, compared to income tax expense of $1,683, or an effective tax rate of 21% for the same period in 2024. The rate was lower for the prior nine month period due in part to the tax impact of vested stock compensation in 2024.
Previous report
The Company additionally has one smaller installment loan with an annual interest rate of 2.90% maturing in 2025, with a balance at September 30, 2025 and December 31, 2024 totaling $4 and $13 respectively.
Previous report
On September 30, 2025, the Company had cash totaling $13,376 compared to cash totaling $7,548 on December 31, 2024. The increase in cash is primarily the result of cash provided by operating income net of cash used by the increase in accounts receivable and investing activities through capital spending as described in further detail below. The Company expects its cash position to be favorably affected to the extent that it is successful in collecting outstanding accounts receivable balances.
Previous report
The Company’s cash flow from operations is affected by production schedules set by contractors, which generally provide for payment 30 to 90 days after the products are produced, and with some architectural contracts, retainage may be held until the entire project is completed. This payment schedule may result in liquidity challenges for the Company because it must bear a portion of the cost of production before it receives payment from its customers. The Company’s average days sales outstanding, excluding the effect of unbilled revenue, was 91 days for the nine months ended September 30, 2025, compared to 85 days for the nine months ended September 30, 2024.
Previous report
The Company’s inventory was $7,890 on September 30, 2025, and $6,677 on December 31, 2024, or an increase of $1,213. The increase in inventory is mainly due to the increase of finished goods inventory compared to the prior year. The increase is primarily related to inventory needed on-hand for the anticipated delivery schedules including barrier production for the MASH TL3 compliance. The increased inventory in MASH TL3 compliant barriers is consistent with the Company’s continuing shift in marketing efforts from barrier sales to higher margin barrier rentals in the Delaware to Virginia region. Inventory turnover was 10.2, annualized for the nine months ended September 30, 2025, compared to 9.7, annualized for the same period in 2024.
Reworded paragraphs (21)
Previous wording
The Company invents, develops, manufactures, markets, leases, licenses, sells, and installs a broad array of precast concrete products and systems for use primarily in the construction, highway, utilities, and farming industries. The Company's customers are primarily general contractors and federal, state, and local transportation authorities located in the Mid-Atlantic and Northeastern regions and in parts of the Midwestern and Southeastern regions of the United States. The Company's operating strategy has involved producing innovative and proprietary products, including SlenderWall™, a patented, lightweight, energy-efficient concrete and steel exterior insulated wall panel for use in building construction; J-J Hooks® Highway Safety Barrier, a positive-connected highway safety barrier; and Easi-Set® transportable concrete buildings, also patented. In addition, the Company produces custom order precast concrete products with various architectural surfaces, as well as generic highway sound barriers, utility vaults, and farm products such as cattleguards.
Current wording
The Company invents, develops, manufactures, markets, leases, licenses, sells, and installs a broad array of precast concrete products and systems for use primarily in the construction, highway, utilities, and farming industries. The Company's customers are primarily general contractors and federal, state, and local transportation authorities located in the Mid-Atlantic and Northeastern regions and in parts of the Midwestern and Southeastern regions of the United States. The Company's operating strategy has involved producing innovative and proprietary products, including SlenderWall™, a lightweight, energy-efficient concrete and steel exterior insulated wall panel for use in building construction; J-J Hooks® Highway Safety Barrier, a positive-connected highway safety barrier; and Easi-Set® transportable concrete buildings. In addition, the Company produces custom order precast concrete products with various architectural surfaces, as well as generic highway sound barriers, utility vaults, and farm products such as cattleguards.
Previous wording
As of November 1, 2025, the Company’s sales backlog was approximately $54.8 million, as compared to approximately $62.8 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 funding related to the Infrastructure Investment and Jobs Act to continue coming through the state and local governments in the latter half of 2025 and beyond to further promote growth in the revenue related to the highway, transportation, and infrastructure markets, although no assurance can be provided. The Company continues to increase marketing and sales efforts towards SlenderWall sales and barrier rentals, in line with long-term strategic objectives.
Current wording
As of May 11, 2026, the Company’s sales backlog was approximately $48.1 million, as compared to approximately $52.4 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 funding related to the Infrastructure Investment and Jobs Act to continue to support growth opportunities in highway, transportation, and infrastructure markets in 2026 and beyond, although no assurance can be provided. The Company continues to focus marketing and sales efforts toward SlenderWall® products and barrier rentals in line with long-term strategic objectives.
Previous wording
Overall, the Company’s financial bottom line performance was higher for the first nine months of 2025 when compared to the first nine months of 2024. The Company had net income for the three and nine months ended September 30, 2025 of $2,877 and $10,375, respectively, compared to a net income of $3,150 and $6,278 for the three and nine months ended September 30, 2024, respectively. Total revenue of $21,451 was $2,131 lower for the three months ended September 30, 2025 from $23,582 for the three months ended September 30, 2024. The lower revenue in the third quarter of 2025 when compared to the third quarter of 2024 was due primarily to a special barrier project that occurred in the third quarter of 2024 that did not recur in the third quarter of 2024. Total revenue increased by $10,358 to $70,335 for the nine months ended September 30, 2025 from $59,977 for the nine months ended September 30, 2024. The increase in revenue for the nine month period is mainly from special barrier project sales that occurred in the first and second quarters of 2025, an increase in soundwall sales, SlenderWall sales, Easi-Set building sales, royalty income, and shipping and installation revenue.
Current wording
Three months ended March 31, 2026, compared to the three months ended March 31, 2025 ** **
Previous wording
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 barrier, Easi-Set® buildings, utility products, and miscellaneous precast products. The following table summarizes the sales by product type and comparison for the three and nine month periods ended September 30, 2025 and 2024.
Current wording
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 barrier, Easi-Set® and Easi-Span buildings, utility products, and miscellaneous precast products. The following table summarizes the sales by product type and comparison for the three month periods ended March 31, 2026 and 2025.
Previous wording
Miscellaneous Wall Sales - Miscellaneous wall sales increased for the three month period and decreased for the nine month period ended September 30, 2025 compared to the same periods in 2024. For the nine month period, miscellaneous wall sales were down due to lower production volumes as compared to 2024. Miscellaneous wall sales are expected to trend similarly through the remainder of 2025 as the first nine months of 2025, 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 for the three month period ended March 31, 2026 compared to the three month period ended March 31, 2025 primarily due to normal fluctuations in project timing and product mix. Based on the Company’s backlog for these products, miscellaneous wall sales are expected to trend lower through the remainder of 2026 as compared to 2025..
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, concrete blocks, or small add-on items. Miscellaneous product sales decreased for the three and nine month periods ended September 30, 2025, compared to the same periods in 2024. The decrease is mainly from the Virginia plant which had one large project in the first nine months of 2024 for the production of precast beams and platforms and no similar project in the first nine months of 2025. Miscellaneous product sales are expected to trend similarly throughout the remainder of 2025 as compared to the first nine months of 2025, although no assurance can be given.
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, concrete blocks, or small add-on items. Miscellaneous product sales decreased for the three month period ended March 31, 2026, compared to the three month period ended March 31, 2025. Miscellaneous product sales are expected to trend lower through the remainder of 2026 as compared to 2025, although no assurance can be provided.
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® or Easi-Span 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 for the three and nine month periods ended September 30, 2025 compared to the same periods in 2024. The increase is mainly attributed to the increase in barrier rental from the special barrier projects, and shipping and installation of SlenderWall and soundwalls.
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® or Easi-Span 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 revenue increased for the three month period ended March 31, 2026 compared to the same period in 2025 primarily due to increased product sales, including building, utility, and barrier products.
Previous wording
Selling Expenses* -* Selling expenses for the three months ended September 30, 2025 decreased to $805 from $1,010 for the same period in 2024. The slight decrease is due to a reduction in staffing levels impacting salaries and wages. Selling expenses for the nine months ended September 30, 2025 decreased by $92 to $2,563 from $2,655 in the same nine month period in 2024. Similarly to the third quarter, the slight decrease for the nine month period is due to a reduction in staffing levels impacting salaries and wages. 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 three months ended March 31, 2026 decreased to $822 from $1,004 for the three month period ended March 31, 2025. The decrease was primarily attributable to lower commission expense associated with reduced barrier rental revenues. As a percentage of sales, selling expense was 4% and 5% for the three month periods ended March 31, 2026 and 2025, respectively. The Company continues to expect selling expenses to increase for the remainder of 2026 as compared to 2025 based on the plan for additional sales associates and increased advertising spending aligning with the strategy to increase SlenderWall® sales and barrier rentals.
Previous wording
Interest Expense - Interest expense was $44 and $56 for the three month periods ended September 30, 2025 and 2024, respectively. Interest expense was $161 and $175 for the nine month periods ended September 30, 2025 and 2024, respectively. The Company expects interest expense for the full year of 2025 to be lower compared to the full year of 2024 due to the decrease in level of indebtedness.
Current wording
Interest Expense - Interest expense was $47 and $55 for the three month periods ended March 31, 2026 and 2025, respectively. The decrease was primarily attributable to lower outstanding indebtedness balances during 2026. The Company expects interest expense for the full year of 2026 to be lower compared to the full year of 2025 due to the decrease in level of indebtedness on all notes which are fixed interest rates.
Previous wording
Income tax expense for the three month period ended September 30, 2025 was $994, or an effective tax rate of 26%, as compared to an income tax expense of $694, or an effective tax rate of 18% for the three month period ended September 30, 2024. Income tax expense for the nine month period ended September 30, 2025 was $3,325, or an effective tax rate of 24%, as compared to an income tax expense of $1,683 or an effective tax rate of 21% for the nine month period ended September 30, 2024.
Current wording
Income Tax Expense - The Company had income tax expense of $422, or an effective tax rate of 24%, for the three months ended March 31, 2026, compared to income tax expense of $1,020, or an effective tax rate of 24%, for the three month period ended March 31, 2025.
Previous wording
Net Income - The Company had net income of $2,877 and $10,375 for the three and nine months ended September 30, 2025, respectively, compared to $3,150 and $6,278 for the three and nine months ended September 30, 2024, respectively. The basic and diluted earnings per share was $0.54 and $1.96, respectively, for the three and nine months ended September 30, 2025, and the basic and diluted earnings per share was $0.59 and $1.18, respectively, for the three and nine months ended September 30, 2024, respectively.
Current wording
Net Income - The Company had net income of $1,339 for the three months ended March 31, 2026, compared to net income of $3,327 for the three month period ended March 31, 2025. Basic and diluted earnings per share were both $0.25 for the three months ended March 31, 2026, compared to $0.63 and $0.62, respectively, for the three month period ended March 31, 2025.
Previous wording
The Company has a mortgage note payable to Burke & Herbert Bank & Trust Company, formerly 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 September 30, 2025 and December 31, 2024 was $980 and $1,166 respectively. The loan matures on October 10, 2029.
Current wording
The Company has a mortgage note payable to Burke & Herbert Bank & Trust Company, formerly 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, with monthly payments of approximately $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 March 31, 2026 and December 31, 2025 was $884 and $942, respectively.
Previous wording
The Company also has a note payable to the Bank in the amount of $1,342 and $1,536 as of September 30, 2025 and December 31, 2024 respectively. 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 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 $1,211 and $1,279 as of March 31, 2026 and December 31, 2025, respectively. The loan is collateralized by a first lien position on the Midland, Virginia plant, building, and assets. The interest rate is fixed at 3.99% per annum, with principal and interest payments payable monthly in the amount of approximately $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 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. The balance of the note payable on September 30, 2025 and December 31, 2024 was $2,264 and $2,379 respectively.
Current wording
On February 10, 2022, the Company completed financing related to its acquisition of certain real property in Midland, Virginia totaling approximately 29.8 acres. 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 in the amount of approximately $21. The loan matures on February 10, 2037. The balance of the note payable on March 31, 2026 and December 31, 2025 was $2,186 and $2,226, respectively.
Previous wording
Under the loan covenants with the Bank, the Company is limited to annual capital expenditures of $5,000 and must maintain tangible net worth of $25,000. The Company is in compliance with the tangible net worth loan covenant and has received waivers from the Bank for the capital expenditure loan covenant as of September 30, 2025 and December 31, 2024.
Current wording
Under the loan covenants with the Bank, the Company must maintain tangible net worth of $25,000. The previous covenant in which the Company was limited to annual capital expenditures of $5,000 has been discontinued effective January 1, 2026. The Company is in compliance with all covenants pursuant to the loan agreements as of March 31, 2026.
Previous wording
In addition to the notes payable discussed above, the Company has a revolving line of credit evidenced by promissory note with the Bank, with the available amount of $5,000 with no balance outstanding as of September 30, 2025 and 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 amount available is based on the lower of the maximum $5,000 or 50% of eligible cash, inventory, and accounts receivable balances at the financial statement date. Key provisions of the line of credit require 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. The line of credit is collateralized by a first lien position on the Company's accounts receivable, inventory, and equipment.
Current wording
In addition to the notes payable discussed above, the Company has a revolving line of credit evidenced by promissory note with the Bank, with the available amount of $5,000 with no balance outstanding as of March 31, 2026 and 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 May 1, 2027. The line of credit renewal excluded the previous limitation on annual capital expenditures. The amount available is based on the lower of the maximum $5,000 or 50% of eligible cash, inventory, and accounts receivable balances at the financial statement date. Key provisions of the line of credit require the Company to maintain a (i) Minimum Debt Service Coverage Ratio of 1.25x, tested annually,(ii) Minimum tangible net worth of $25 million and (iii) Debt-to-tangible net worth not greater than 3 to 1 tested annually. The line of credit is collateralized by a first lien position on the Company's accounts receivable, inventory, and equipment. The Company is in compliance with all covenants as of March 31, 2026.
Previous wording
The Company’s accounts receivable balances, net of allowance, at September 30, 2025 was $25,460, compared to $19,420 at December 31, 2024. This increase is due primarily to higher billings in the second and third quarters of 2025.
Current wording
The Company’s accounts receivable balances, net of allowance, at March 31, 2026 were $28,052 compared to $27,228 at December 31, 2025. The increase was primarily attributable to timing of project billings, increased product sales activity, and growth in unbilled receivables associated with over-time revenue recognition.
Previous wording
Capital spending for the nine months ended September 30, 2025 totaled $5,382 as compared to $5,543 for the same period in 2024. The 2025 expenditures were primarily for a ramp up in barrier production to expand the rental fleet, attenuators and plant expansion. The 2024 expenditures were primarily for a new batch plant system for the South Carolina manufacturing facility, utility vault forms for increased production capacity, and crash cushions to expand the Company’s rental product offering. The Company intends to invest over $6,000, for the full year 2025, which includes continued barrier production, expansion of the Virginia and North Carolina manufacturing facilities, soundwall forms for increased production capacity, and miscellaneous manufacturing equipment. Anticipated capital expenditures excludes possible acquisitions.
Current wording
Capital spending for the three months ended March 31, 2026 totaled approximately $1,630 compared to $595 for the three month period ended March 31, 2025. The 2026 expenditures were primarily related to investments in manufacturing equipment, production capacity expansion, and infrastructure improvements at the Company’s facilities. The Company, which expects product sales to be higher in 2026 as compared to 2025, intends to invest over $12,000 in 2026 for long-term strategic growth which includes continued barrier production, expansion of the Virginia and North Carolina manufacturing facilities, soundwall forms for increased production capacity, and miscellaneous manufacturing equipment. Anticipated capital expenditures exclude possible acquisitions.
Previous wording
If actual results regarding the Company's production, sales, and subsequent collections on customer receivables are materially inconsistent with management's expectations, the Company may in the future encounter cash flow and liquidity issues. If the Company's operational performance deteriorates significantly, it may be unable to comply with existing financial covenants and could cause defaults and acceleration under its loan agreements and lose access to the credit facility. 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
Although no assurances can be provided, the Company believes that its current cash resources, anticipated cash flow from operations, and availability under the line of credit will be sufficient to finance operations for at least the next 12 months.
Previous wording
Raw material costs used in production have slightly increased for the first nine months of 2025. The Company anticipates raw material prices to slightly increase for the remainder of 2025, although no assurance can be given regarding future pricing.
Current wording
Raw material costs used in production have slightly increased for the first three months of 2026. The Company anticipates raw material prices to slightly increase for the remainder of 2026, although no assurance can be given regarding future pricing.
Previous wording
As of November 1, 2025, the Company’s sales backlog was approximately $54.8 million, as compared to approximately $62.8 million at the same time in 2024. It is estimated that the majority of the projects in the sales backlog will be produced within 12 months, with a portion extending several years.
Current wording
As of May 11, 2026, the Company’s sales backlog was approximately $48.1 million, as compared to approximately $52.4 million at the same time in 2025. It is estimated that the majority of the projects in the sales backlog will be produced within 12 months, with a portion extending several years.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Income tax expense for the three month period ended March 31, 2026 was $422, or an effective tax rate of 24%, as compared to $1,020, or an effective tax rate of 24% for the three month period ended March 31, 2025.