Smith-Midland Corporation Reports Strong Q1 2025 Financial Performance with 35% Revenue Growth

Smith-Midland Corporation reported a significant increase in financial performance for the first quarter of 2025, with net income rising to $3.3 million, or $0.63 per share, compared to $1.1 million, or $0.22 per share, in the same period last year. Total revenue for the quarter reached $22.7 million, marking a 35% increase from $16.8 million in the first quarter of 2024. This growth was primarily driven by a substantial rise in barrier rental income, which surged to $8.4 million from $893,000, alongside increased sales in soundwalls and Easi-Set buildings.

The company's cost of sales as a percentage of revenue decreased to 72% from 79% year-over-year, reflecting improved margins from the higher barrier rental revenue. Operating income also saw a notable increase, reaching $4.4 million compared to $1.5 million in the prior year. Operating expenses rose slightly to $2.6 million, attributed to higher selling expenses related to increased sales staff and commissions. The effective tax rate remained stable at 24% for both periods.

In terms of operational metrics, Smith-Midland's accounts receivable increased to $22.9 million from $19.4 million, reflecting higher sales volumes. The company’s cash position improved to $9 million, up from $7.5 million at the end of 2024, primarily due to enhanced cash collections from increased operating revenues. The sales backlog as of May 7, 2025, was approximately $52.4 million, down from $64.6 million a year earlier, indicating a need for continued focus on securing new contracts.

Strategically, the company is focusing on expanding its market presence, particularly in barrier rentals and SlenderWall sales, as part of its long-term growth objectives. Smith-Midland is also addressing material weaknesses in its internal controls over financial reporting, which were identified in previous assessments. The hiring of a new Chief Financial Officer and additional accounting personnel is part of the company's efforts to strengthen its financial oversight.

Looking ahead, Smith-Midland anticipates that funding from the Infrastructure Investment and Jobs Act will bolster growth in the highway and transportation sectors. However, the company acknowledges potential risks, including fluctuations in raw material costs and the cyclical nature of the construction industry, which could impact future performance. The management remains cautiously optimistic about achieving continued revenue growth while navigating these challenges.