Smith-Midland Q2 Earnings Double Y/Y on Record Revenues, Stock Rises
In its latest quarter, Smith-Midland reported revenues of $26.2 million, up 33% from $19.6 million in the year-ago period. Net income more than doubled year over year to $4.2 million, or 79 cents per diluted share, from $2 million, or 37 cents per share, in the same quarter of 2024. Gross profit improved to $7.8 million from $5.1 million, with margins expanding 360 basis points to 29.7%. Operating income stood at $5.5 million, up sharply from $2.7 million a year earlier.
Smith-Midland Corp. Price, Consensus and EPS Surprise
Smith-Midland Corp. price-consensus-eps-surprise-chart | Smith-Midland Corp. Quote
Other Key Business Metrics
Product sales in the quarter totaled $13.4 million, slightly above last year's $13.1 million. Within this category, soundwall sales more than doubled to $5.2 million from $2.2 million, supported by increased production across all facilities. Easi-Set and Easi-Span building sales also advanced strongly to $2.9 million, up from $1.5 million a year earlier. The company recorded $1.5 million in SlenderWall sales, compared with no such sales in the year-ago quarter. However, utility sales dropped to $871,000 from $2.1 million and miscellaneous product sales decreased to $852,000 from $2.2 million.
Service revenues saw the most dramatic increase to $12.8 million from $6.5 million in the prior-year period. Barrier rentals alone grew to $5.8 million from $1.4 million, buoyed by a large special barrier project and greater utilization of the core rental fleet. Shipping and installation revenues reached $5.6 million from $4.3 million, reflecting higher project activity. Royalty income increased 53% year over year to $1.3 million, supported by higher licensee production volumes.
Management Commentary
Chief executive officer Ashley Smith described the quarter as a 'new quarterly revenue record,' citing the benefits of special barrier rentals, higher SlenderWall and Soundwall sales, and a broad increase in demand across product lines. Smith highlighted continued support from federal, state and local infrastructure spending initiatives, along with the upcoming replacement cycle for barrier products under the MASH-TL3 safety standards. Management expressed optimism regarding both near and long-term prospects, emphasizing confidence in delivering shareholder value.
Factors Influencing the Headline Numbers
The surge in revenues and earnings was largely attributed to special barrier projects, which carry higher margins and boosted both sales and profitability. Soundwall and Easi-Set building sales contributed meaningfully as well, reflecting solid demand across multiple sectors. The company's focus on expanding its barrier rental fleet has shifted its revenue mix toward higher-margin recurring rental income rather than one-time product sales. This transition helped reduce the cost of sales as a percentage of revenues to 72% in the quarter from 77% a year earlier.
At the same time, management noted persistent inflationary pressures in raw materials and labor, though these were offset by improved scale and margin mix.
Guidance
The company cautioned that the two special barrier rental projects completed in the first half of 2025 are not expected to recur in the second half. Nevertheless, Smith-Midland is expanding its barrier rental inventory through 2025 and 2026 to meet anticipated demand. Backlog as of August 2025 stood at $54 million, slightly below $59 million a year earlier, with most projects expected to be produced within 12 months. Management also anticipates benefiting from increased infrastructure funding flowing through state, and local governments in late 2025 and beyond.
Other Developments
The company ended the quarter with $7.1 million in cash, down modestly from $7.5 million at the end of 2024. Accounts receivable rose significantly to $31.5 million, reflecting the higher volume of billed projects. Total debt stood at $4.8 million, leaving Smith-Midland with a relatively conservative balance sheet. Capital expenditure reached $1.9 million in the second quarter, with investments directed at expanding barrier production capacity and upgrading facilities.
In summary, Smith-Midland delivered a standout second quarter, setting a revenue record and more than doubling earnings from a year earlier. Strong demand for soundwalls, SlenderWall panels and Easi-Set buildings, combined with a growing barrier rental business, underpinned the results. While one-time barrier projects played a key role, the company's expanding rental fleet and robust backlog suggest momentum remains intact. Inflation and industry cyclicality remain risks, but management's focus on infrastructure-driven opportunities supports a constructive long-term outlook.
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