Smith-Midland 2025 Q1 Earnings Strong Performance as Net Income Surges 190%

Smith-Midland (SMID) reported its fiscal 2025 Q1 earnings on July 10th, 2025. The company demonstrated a significant increase in performance compared to the previous year. Revenue for the quarter surged by 35.5%, reaching $22.70 million, while net income rose dramatically by 190.1% to $3.33 million. The company achieved a record high for fiscal Q1 net income, the highest in over 20 years. Smith-Midland's positive outlook is further supported by increased infrastructure spending.

The company's revenue for fiscal 2025 Q1 was bolstered by strong performances across various segments. Total product sales reached $9.11 million, led by Soundwall sales contributing $3.78 million. Miscellaneous wall sales and barrier sales added $601,000 and $1.30 million, respectively. Easi-Set and Easi-Span building sales brought in $2.06 million, while utility sales amounted to $1.01 million. Miscellaneous product sales accounted for $353,000. Service revenue was substantial, totaling $13.59 million, with barrier rentals at $8.43 million, royalty income at $890,000, and shipping and installation revenue at $4.27 million.

Smith-Midland's EPS for 2025 Q1 rose impressively by 186.4% to $0.63, up from $0.22 in 2024 Q1, showcasing continued earnings growth. The substantial increase in net income to $3.33 million further underscores the company's strengthened profitability and commitment to driving financial success. The EPS performance indicates a robust financial outcome for the quarter.

The strategy of purchasing Smith-Midland shares 30 days post-earnings report has proven highly rewarding over the past three years, delivering a total return of 175.03%, significantly surpassing the benchmark return of 50.31%. This approach yielded an excess return of 124.72%, demonstrating the effectiveness of the 30-day holding period in capturing gains beyond market movements. The strategy's compound annual growth rate (CAGR) stood at a solid 26.96%, indicating consistent growth during this period. However, the Sharpe Ratio was relatively low at 0.38, and the maximum drawdown reached -71.66%, underscoring the importance of risk management due to high volatility marked at 71.23%.

CEO Commentary
“We are off to a very strong start in 2025, reporting a 35% revenue increase and a near tripling of net income on a year-over-year basis. Our first quarter marks the fourth consecutive quarter of revenue in excess of $20 million, thanks to a special barrier project and a 27% increase in Soundwall sales,” said Ashley Smith, Chairman and Chief Executive Officer of Smith-Midland. He emphasized confidence in continued momentum, driven by federal, state, and local infrastructure spending. Smith highlighted opportunities in barrier products due to MASH-TL3 compliance and ongoing efforts to enhance sales in SlenderWall and Easi-Set products, underscoring a commitment to long-term value for shareholders.

Guidance
The Company anticipates consistent sales volume for the full year of 2025 compared to 2024, with an expectation that second quarter 2025 revenue will be substantially greater than in the second quarter of 2024. The gross margin and net income are both expected to surpass the prior year's second quarter levels, driven by increased demand and strategic marketing efforts. Smith-Midland projects that most of the current backlog, approximately $52 million, will be fulfilled within 12 months, with several SlenderWall projects slated to commence production in the latter half of 2025.

Additional News
Smith-Midland recently announced the appointment of Dominic Hunter as its new Chief Financial Officer, a strategic move to strengthen its financial leadership. In addition, the company received a NASDAQ deficiency notice regarding a delayed Form 10-K filing, highlighting the importance of timely financial reporting and compliance. Furthermore, Smith-Midland was awarded a $5 million SlenderWall contract for an FBI project, marking a significant milestone for the company's expansion in high-profile government contracts. These developments underscore Smith-Midland's proactive approach to enhancing its corporate governance and expanding its portfolio with noteworthy projects.