SMITH MIDLAND CORP (SMID)·Q1 2024 Earnings Summary

Executive Summary

• Record quarter: revenue rose 30% year over year to $16.8M with gross margin up 480 bps to 23%, delivering operating income of $1.5M and diluted EPS of $0.21 .
• Mix shift aided profitability: higher production of soundwall and utility products plus strong shipping/installation activity supported margin expansion versus both Q4 2023 and the prior-year quarter .
• Backlog strengthened: backlog reached approximately $64.6M as of May 2024, up from ~$60.8M as of March 2024, underpinning visibility for the next 12 months .
• Guidance tone: management anticipates increased 2024 sales volume versus 2023; Q1 actuals exceeded the prior preliminary outlook of “at least +20% YoY revenue growth” by delivering +30% YoY and higher gross margin/net income .

What Went Well and What Went Wrong

What Went Well

• Margin expansion and earnings power: gross margin improved 480 bps YoY to 23%, with operating income jumping to $1.5M from $54k in Q1 2023 and net income rising to $1.1M (basic $0.22, diluted $0.21) .
• Product category strength: soundwall sales grew to $3.0M (from $1.0M), miscellaneous wall to $1.8M (from $1.2M), and utility products to $1.7M (from $0.275M), reflecting higher production volumes across plants .
• Positive demand drivers: “We are experiencing a strong demand for our utility vaults in response to the continued growth of data centers…inflow of infrastructure funding…as well as our backlog” — Ashley Smith, CEO .

What Went Wrong

• Barrier sales and rentals tempered: barrier product sales fell to $1.7M from $2.8M YoY and barrier rental revenue declined to $893k from $1.1M as projects shifted to longer-term rentals, impacting near-term rental revenue .
• Cash usage and working capital: cash decreased to $6.8M from $9.2M year-end, with accounts receivable rising to $20.1M; operating cash flow was -$777k in Q1, reflecting working capital build and inventory growth .
• Continued macro and internal control risks: management cited inflationary pressures and noted “material weaknesses in internal controls” among forward-looking risk factors .

Financial Results

Consolidated Performance vs Prior Periods

Revenue Composition (YoY)

Product Sales Breakdown (YoY)

Balance Sheet & Cash Flow Highlights

Actuals vs Consensus (Q1 2024)

Notes: S&P Global consensus data for SMID was unavailable due to retrieval limits; comparisons vs estimates cannot be provided at this time.

Guidance Changes

Earnings Call Themes & Trends

Note: No earnings call transcript was found for Q1 2024 in filings; themes compiled from quarterly press releases.

Management Commentary

• “We are off to a strong start in 2024, posting a 30 percent increase in revenue from the prior-year quarter and our highest quarterly revenue…primarily driven by increased production of our soundwall and utility products and increased shipping and installation.” — Ashley Smith, CEO .
• “We…expect funding from the Infrastructure and Jobs Act to reach state and local governments in the latter half of the year…strong demand for our utility vaults…need for data centers to support AI technology.” — Ashley Smith, CEO (Q4 2023 release) .
• “Started construction to double the size of its North Carolina plant.” — Company update (Q1 2024) .

Q&A Highlights

No public earnings call transcript was available in the filings or document catalog for Q1 2024; therefore, Q&A themes and clarifications cannot be provided [List: 0 earnings-call-transcript for 2024-01-01 to 2024-06-30].

Estimates Context

• S&P Global consensus estimates (EPS and revenue) for SMID Q1 2024 could not be retrieved due to API request limits; as a result, estimate comparisons are unavailable at this time. The company’s actuals were revenue of $16.756M and diluted EPS of $0.21 .
• Prior preliminary guidance indicated at least +20% YoY revenue for Q1 2024; actuals delivered +30% YoY, suggesting potential upward bias to sell-side models when available .
  Note: Consensus values would be sourced from S&P Global when accessible.

Key Takeaways for Investors

• Record quarterly revenue with broad-based strength across soundwall, utility, and shipping/installation supports margin expansion and improved earnings power versus both Q4 and the prior-year quarter .
• Backlog momentum (from ~$60.8M in March to ~$64.6M in May) enhances near-term visibility and underpins 2024 sales growth expectations .
• Mix shift nuances: barrier product sales and rental revenue softened YoY, with rentals skewing to longer-term projects; watch barrier rental cadence and margin mix in coming quarters .
• Capacity investment is a tangible growth lever: NC plant expansion underway to double capacity, positioning for anticipated infrastructure demand .
• Working capital elevated: AR and inventory builds drove negative operating cash flow in Q1; monitor cash conversion and receivables collection as backlog converts .
• Macro tailwinds vs internal risks: infrastructure funding and data-center demand are supportive, but inflationary pressures and disclosed material weaknesses in internal controls remain risk factors to execution .
• With preliminary guidance surpassed (actual +30% vs “≥20%”), estimate revisions could be constructive once consensus data are available; near-term stock catalysts center on backlog wins, barrier replacement opportunities, and progress on plant expansion .