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Smith-Midland Posts Y/Y Earnings Rise in 2024 on Strong Product Demand
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Shares of Smith-Midland Corporation (SMID - Free Report) have fallen 2.7% since reporting results for the fourth quarter of 2024. This compares with the S&P 500 index’s 0.4% decline over the same time frame. Over the past month, the stock has gained 5.9% against the S&P 500’s 6.5% rally.
Earnings & Revenue Performance
Smith-Midland delivered record results for 2024, with revenues rising 32% to $78.5 million from $59.6 million in 2023. Net income surged nearly tenfold to $7.7 million, or $1.45 per diluted share, from $795,000, or 15 cents per diluted share, in the prior year. The company’s gross margin expanded significantly to 25.5% from 17.9% in 2023, driven by improved fixed-cost absorption and the absence of one-time production expenses that weighed on the prior-year results.
For the fourth quarter of 2024, Smith-Midland reported revenues of $18.5 million, marking a 13% increase from the same quarter in 2023. Product sales in the quarter climbed 23% to $11 million, while service revenues were flat at $7.5 million. The gross profit for the quarter increased to $4.4 million from $3.1 million a year earlier, resulting in a gross margin of 23.7%, a 460-basis-point improvement.
Smith-Midland Corp. Price, Consensus and EPS Surprise
Operating income for the fourth quarter of 2024 reached $1.9 million from $542,000 in the fourth quarter of 2023. Net income rose to $1.4 million, or 26 cents per diluted share, from $230,000, or 4 cents per diluted share.
Product-wise, 2024 soundwall sales rose 54% to $11.8 million, whereas utility sales skyrocketed 171% to $7.8 million, supported by demand from the data center market. Easi-Set and Easi-Span building sales rose 41% to $6.7 million. Architectural panel sales jumped to $4.2 million from $1.1 million in 2023 due to two large projects initiated in early 2024. On the downside, SlenderWall sales fell to zero in 2024 from $5.3 million in the prior year, and barrier sales dropped 50% to $3.9 million, reflecting a deliberate strategic shift toward rentals.
Service revenues, totaling $32.9 million for 2024, were driven by a 90% increase in barrier rental revenues to $12 million, and a 48% rise in shipping and installation revenues to $17.6 million. Royalty income also rose 24% year over year to $3.3 million.
Management Commentary
CEO Ashley Smith expressed confidence in the company's position, highlighting 2024 as a record year for revenues and net income. He attributed the fourth-quarter performance to rising utility product sales and installation revenues.
Looking ahead, Smith pointed to favorable conditions, supported by government infrastructure spending, strong demand for utility vaults linked to the AI-driven data center boom, and regulatory compliance timelines that benefit the company’s J-J Hooks barrier system. The company intends to capitalize on these trends through continued investment in sales, facilities and product development.
Factors Influencing the Headline Numbers
The surge in earnings and margins can be traced to a broader and higher-value sales mix, particularly in soundwall, utility and architectural panels, coupled with an operational shift from low-margin barrier sales to higher-margin rentals. Additionally, 2023’s results were negatively impacted by one-time expenses from remaking defective panels, which did not recur in 2024. The improvement in the gross margin also benefited from better absorption of fixed costs amid higher production volumes.
While SlenderWall sales contributed nothing to revenues in 2024, their absence was partially offset by installation revenues for panels produced in 2023. Management expects SlenderWall production to resume in the first half of 2025, which can restore this product line as a revenue contributor.
Guidance
The company anticipates increased sales volume in 2025, supported by a steady backlog and ongoing infrastructure initiatives. As of March 2025, the backlog stood at $59.5 million, down slightly from $60.8 million a year earlier. Management expects the majority of this to convert into revenues within 12 months. They also provided a preliminary outlook indicating that first-quarter 2025 revenues, gross margin and net income are expected to exceed first-quarter 2024 results.
Other Developments
In the year, Smith-Midland expanded its North Carolina plant, doubled its space, and invested in new soundwall forms and a batch plant in South Carolina. It also significantly increased its barrier rental fleet. Capital expenditure totaled $6.6 million in 2024, up from $5 million in 2023. These investments align with the company’s strategy to scale capacity and capture more high-margin, rental-driven revenue opportunities.
In summary, Smith-Midland capped 2024 with robust financial performance and continues to position itself for growth through strategic shifts in product focus, geographic expansion and infrastructure spending tailwinds.
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Smith-Midland Posts Y/Y Earnings Rise in 2024 on Strong Product Demand
Shares of Smith-Midland Corporation (SMID - Free Report) have fallen 2.7% since reporting results for the fourth quarter of 2024. This compares with the S&P 500 index’s 0.4% decline over the same time frame. Over the past month, the stock has gained 5.9% against the S&P 500’s 6.5% rally.
Earnings & Revenue Performance
Smith-Midland delivered record results for 2024, with revenues rising 32% to $78.5 million from $59.6 million in 2023. Net income surged nearly tenfold to $7.7 million, or $1.45 per diluted share, from $795,000, or 15 cents per diluted share, in the prior year. The company’s gross margin expanded significantly to 25.5% from 17.9% in 2023, driven by improved fixed-cost absorption and the absence of one-time production expenses that weighed on the prior-year results.
For the fourth quarter of 2024, Smith-Midland reported revenues of $18.5 million, marking a 13% increase from the same quarter in 2023. Product sales in the quarter climbed 23% to $11 million, while service revenues were flat at $7.5 million. The gross profit for the quarter increased to $4.4 million from $3.1 million a year earlier, resulting in a gross margin of 23.7%, a 460-basis-point improvement.
Smith-Midland Corp. Price, Consensus and EPS Surprise
Smith-Midland Corp. price-consensus-eps-surprise-chart | Smith-Midland Corp. Quote
Other Key Business Metrics
Operating income for the fourth quarter of 2024 reached $1.9 million from $542,000 in the fourth quarter of 2023. Net income rose to $1.4 million, or 26 cents per diluted share, from $230,000, or 4 cents per diluted share.
Product-wise, 2024 soundwall sales rose 54% to $11.8 million, whereas utility sales skyrocketed 171% to $7.8 million, supported by demand from the data center market. Easi-Set and Easi-Span building sales rose 41% to $6.7 million. Architectural panel sales jumped to $4.2 million from $1.1 million in 2023 due to two large projects initiated in early 2024. On the downside, SlenderWall sales fell to zero in 2024 from $5.3 million in the prior year, and barrier sales dropped 50% to $3.9 million, reflecting a deliberate strategic shift toward rentals.
Service revenues, totaling $32.9 million for 2024, were driven by a 90% increase in barrier rental revenues to $12 million, and a 48% rise in shipping and installation revenues to $17.6 million. Royalty income also rose 24% year over year to $3.3 million.
Management Commentary
CEO Ashley Smith expressed confidence in the company's position, highlighting 2024 as a record year for revenues and net income. He attributed the fourth-quarter performance to rising utility product sales and installation revenues.
Looking ahead, Smith pointed to favorable conditions, supported by government infrastructure spending, strong demand for utility vaults linked to the AI-driven data center boom, and regulatory compliance timelines that benefit the company’s J-J Hooks barrier system. The company intends to capitalize on these trends through continued investment in sales, facilities and product development.
Factors Influencing the Headline Numbers
The surge in earnings and margins can be traced to a broader and higher-value sales mix, particularly in soundwall, utility and architectural panels, coupled with an operational shift from low-margin barrier sales to higher-margin rentals. Additionally, 2023’s results were negatively impacted by one-time expenses from remaking defective panels, which did not recur in 2024. The improvement in the gross margin also benefited from better absorption of fixed costs amid higher production volumes.
While SlenderWall sales contributed nothing to revenues in 2024, their absence was partially offset by installation revenues for panels produced in 2023. Management expects SlenderWall production to resume in the first half of 2025, which can restore this product line as a revenue contributor.
Guidance
The company anticipates increased sales volume in 2025, supported by a steady backlog and ongoing infrastructure initiatives. As of March 2025, the backlog stood at $59.5 million, down slightly from $60.8 million a year earlier. Management expects the majority of this to convert into revenues within 12 months. They also provided a preliminary outlook indicating that first-quarter 2025 revenues, gross margin and net income are expected to exceed first-quarter 2024 results.
Other Developments
In the year, Smith-Midland expanded its North Carolina plant, doubled its space, and invested in new soundwall forms and a batch plant in South Carolina. It also significantly increased its barrier rental fleet. Capital expenditure totaled $6.6 million in 2024, up from $5 million in 2023. These investments align with the company’s strategy to scale capacity and capture more high-margin, rental-driven revenue opportunities.
In summary, Smith-Midland capped 2024 with robust financial performance and continues to position itself for growth through strategic shifts in product focus, geographic expansion and infrastructure spending tailwinds.