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Ot: I saw that, a little patti cake here, a small memory pod there, and it got baked in as a fore-concluded mob rush.
I had best seats in the house for the play by play, but took an oath of being unbiased so did not mansion on the sparks. Anyway its your party, so I will root for the team, and maybe draw a mascot and fix up some tunes for the scholars who always show up later.
Ya, I'm guessing Wax Asset wanted to get out of a few of those shares picked up given it put them very very near the 20% threshold as a shareholder and it sounded like they are not activist type investors.
Would make sense to me, especially given they got that chunk at $1.77 per share. Oh how I wish the company could have been approached to suck up those shares at that level and retire them. Ah well.
Maybe if they go thru on South Carolina and get that up and running, we could start asking about a potential share buyback program in 2017 assuming they can continue generating cash at a good clip.
Make sure U keep an eye on that other company. IMO the best deal in the market rt now.
The company typically has a little more potential overhead cost to deal with seasonally in Q4 and Q1 due to weather (snow days/ice/etc) and such.
I wasn't thrilled with gross margins in Q4 given the whole lean manufacturing going on for so long, previous quarters where they earned better on those kinds of revenue #s in prior years, reduced steel and fuel prices helping, etc (and SGA was higher than I would have liked but think some of that G&A increase involves the shipping and install segment where there's a use tax).
I am thinking at least some of that lazy bottom line #/margin pressure was from several potential items that could have been a bit disruptive.
For instance, the company spent less than $900K on PPE thru 9 months but jumped it to over $1.6 million total at year end. Probably indicative of them anticipating increased production for awhile IMO.
So there very well may have been some disruption with moving/installing/using/tweaking equipment in Q4 given the PPE spend they had.
This often leads to better margins in a Q or two and continuing on but it takes a little time to settle into improved production results/training up on new equipment/tweaking production layout and all that kind of real world stuff that happens in manufacturing upgrades/upkeep.
The Papal visit happened right at the very end of Q3 so maybe there were some slight disruptive items like getting people and equipment back into place after that (no idea, just saying there were potential real world items with that 'monumental' project winding down late September that might have dragged a bit on Q4).
And as they mention in their reports, shipping and installation revenues have a use tax attached that I think gets categorized as G&A. From Q3 2015 report where they had light shipping and install:
"The increase in general and administrative expenses was due an increase in salaries partially offset by a decrease in use tax which was caused by a reduction in installation revenue."
So they had a decrease in use tax from lower Shipping & Installation revs in Q3 but had increased costs from the employee raises given in April. This might also mean Q1 (like Q4 2015) will have a bit higher G&A since there should be continued shipping and install work.
From the annual:
"Several of our larger customers are late in having their stored material products sent to their final destinations followed by their appropriate installation. Currently our storage yard is filled with stored material causing our revenues from shipping and installation to be less in 2015 compared to 2014. 2016 should improve over 2015 as of our current storage of the sold products will begin to ship and install in 2016."
They have made some mistakes in the past with money they've earned but much of that was with headwinds aimed at their industry and I think this time we are entering a prolonged moderate period of recovery.
So as mentioned Q1 might also carry a bit of elevated G&A cost given the potential for S&I revenue and the use tax associated with it.
I think after Q1, things will start to look pretty solid and I at least expect Q1 to be profitable as things pick up further with time.
I also think the company has a chance to increase pricing more on their main highway products such as JJ Hooks and Softsound Soundwall going forward.
This time around in 2016 we have: a bit of stability with the FAST Act, a pretty long list of under-served infrastructure needs in the country and their markets, a good amount of backlog, noticeable DOT increase spends in Virginia and North Carolina that should fuel projects for the next several years (helped by the FAST Act), some help from many commodity items like fuel/steel currently, and potentially we have an expansion project that shouldn't be too capital intensive and was formerly a Coreslab operation before closing some time between 2011-2014 I believe.
The expansion in SC (assuming gets done) will be happening with the tailwind backdrop vs the past decade of headwind backdrop so I'm with giving management the opportunity to show they can do this successfully now that they have a few things working in their favor compared to I think mid 2000s when it didn't work out for them and the industry in general was more expanded.
We'll see what the coming years bring but I'm hopeful we will start to see a little margin expansion on most products, better royalties earned, higher barrier rental revs, higher revenues overall, expansion opportunity, and an improved more financially stable company over time doing a better job with return on assets and equity than in the past to help us long term shareholders out.
All IMO only.
Sellers only have so many shares to sell, buyers have an unlimited amount of money to buy. Eventually, this will catch some eyeballs as it is in the right industry with the right prospects, all IMHO.
Keepin' the faith for new highs.
2.65 you Bigfish in water now!!!
17K on bid of 2.40, nice to see some friendlies!
Thanks for the color you provided. The buying thesis remains intact for me, I just wish the selling would end. A lot of stock got dislodged with that big seller, once that is digested (I thought it would have by now), I think we creep higher.
OT- Hwy 99 is more an alternate route if there are accidents on I-5 I would say and has much less capacity.
Depends on what stretch but overall 99 is not near that of I-5 as far as getting to and from most places. There are signals and such since much of it is street front for businesses so for commuting purposes it tends not to be a good first choice unless your drive is a short distance.
OT: I have place near the I-99 is that congested bad?
We have a pretty good mess at I-5/I-90 interchange around Seattle.
The company didn't earn much in Q4 given the revs but with the recent influx of new people, swing shift ramp and the kind of 'learning curve' that sometimes goes with hiring more people might be parts of a couple factors that hindered margins a bit in Q4.
It'll probably be Q2 before we get a clearer look at how they're doing with the beginning of increased funding for highway projects in many locales. Much of the FAST Act $ isn't going to show until back half 2016 so I like the idea of them picking up the Georgia place now if they can successfully get it going.
Thanks ,hear Atlanta is making more in "roads", and SMID is tapping it for some space. Ha, actually Atlanta has in USA the top worst traffic delayed network route that some day will need to be attacked with barricades ( the heavier the better) to depart, detach, re-branch and un-crunch, but that is many moons away.
Sorry was slow to get back to you here.
Not much on the North Carolina $2 billion fund passage as far as SMID is concerned at this point sounds like.
Simple business, simple management team, and quite busy so probably good for them to focus on their core competencies right now with a fair amount of highway work getting going as the year progresses in Va and NC.
Assuming they do close on the SC place, it does seem Georgia would be within their reach for barrier rentals using the satellite idea they had previously brought up in 2014 although the offloaded barrier contract they would start with in SC is for barrier sales not rentals.
So from what I'm understanding, they would start with barrier production out of there to get the place up and running profitably and then over time move up to stuff like Slenderwall and probably Softsound Soundwall as things progress and markets dictate.
If they can get barriers going out of there, they have a big yard for storage (unlike North Carolina where they have very limited storage area). That might help expedite the idea of setting up satellites for barrier rentals/sales like they have at 6 places already (think most of their satellite locations right now are heavily tilted more north of North Carolina).
Would be nice if the company could advertise and leverage their high profile track record for barrier rentals (Super Bowl, Pres Inauguration, Pope visit, etc) to get the satellites more up and running for high profile events in a wider geographic area now that the market has picked up considerably from 2014 when satellite idea was first brought up by chairman.
I did notice that Q3 2015 had roughly $1 mill in barrier rentals outside Pope stuff and Q4 had an unseasonably high $450K for Q4. Hopefully that is partly due to some success from satellite branches, rentals are higher margin usually.
As some of these booked contracts get run thru production, I'm more hopeful margins will start to expand as newer contracts start production and new bids are won.
There's often a bit of lag between cement price increases (2014), ready-mix price increases (2015), and precast price increases (2016 hopefully?). For now it is a bit of wait and see to where things go come Q2's and Q3's more productive seasons.
At least they're busy and their yards are full as Q2 ramps up. I think they're on the right track as long as they don't misstep and the industry overall IMO is giving them some tailwind weather for the coming years. :)
Q1 might be a bit lazy with the snow they had and all but I definitely expect things to kick up quite a bit starting Q2 and staying busy for quite some time.
I'm hoping the acquisition can also help some top line growth for them given their limited side there. It looked like that was what they were doing by offloading a sizable JJ Hook barrier project to them early on.
I'll try and get a little phone time in with mngmnt this week to get some idea what they're planning/thinking with Georgia and report back.
2.35 had to "took" a bunch!
Hey swamp, I like this company too. Not as much as the other one we talked about but these guys also have some favorable tailwinds.
Here's a Va DOT link (think I mentioned the spend increase previous posts but don't know if I put links in) showing budget is up something like 21% YOY-
http://www.virginiadot.org/about/vdot_budget.asp
As for North Carolina and their fast track highway projects and such, there's this:
http://www.ncdot.gov/about/finance/
and this
http://www.artba.org/shop/on-demand-learning/thinking-outside-the-gas-tax/
here's the relevant commentary IMO relating to potential help for SMID-
"Jake Cashion, director of governmental affairs at the North Carolina Chamber of Commerce, will discuss how state lawmakers prevented a dramatic motor fuel tax cut, eliminated Highway Fund transfers, raised Division of Motor Vehicle fees, increased the tax on out-of-state motor vehicle purchases, and permitted municipalities to increase their local vehicle sales tax. North Carolina raised a total of $1.2 billion in additional transportation revenue availability this biennium, which includes $440 million annually in new revenues."
Anyhow, shows how states are trying to overcome hurdles to raise $ for badly needed road work/repairs that have been put off for so long.
2.41 close, unexpected sell-off but trying to get the 2.40's.
10K is out.
Tucked in the 10k is this note about expanding:
On March 27, 2016, the Company executed an agreement to purchase the land, building and fixtures of a facility located in Hopkins, South Carolina for a purchase price of $1,550,000. The facility is located on 39 acres of land and has approximately 40,000 square feet of production space. The closing of the purchase is subject to certain conditions, including a satisfactory appraisal and an environment study. The purchase will be financed by a new 10 year term facility, pursuant to a commitment letter, with the Company's current bank in the amount of $1,240,000 with the balance being provided from the Company's cash resources.
PRESS RELEASE:
Smith-Midland Corporation (OTCQX: SMID) announced that the Company reported total revenue of $29.2 million for 2015 compared to $22.5 million for 2014, an increase of $6.7 million, or 30%. The Company reported pre-tax income of $1.6 million for 2015 compared to a pre-tax loss of $1.3 million for 2014, an increase of $2.9 million. The Company reported net income of $1.1 million, compared to a net loss of $804,839 in 2014, an increase of $1.9 million. The basic and diluted income per share was $0.23 for 2015 while the basic and diluted loss per share was $0.16 for 2014.
The Company reported fourth quarter revenues of $7.7 million for 2015 compared to $4.4 million for 2014, an increase of $3.3 million, or 75%. The pre-tax income for the fourth quarter of 2015 was $304,760 compared to a pre-tax loss of $998,773, an increase of $1,303,533. The Company had net income for the fourth quarter of 2015 in the amount of $250,760 compared to a net loss of $618,773 in 2014, an increase of $869,534.
Rodney Smith, Chairman and CEO, stated, "I am pleased to report that the Company had another positive quarter for the three months ended December 31, 2015 as well as a very profitable year for 2015 as suggested in my earlier press releases of 2015. It is personally gratifying to me that we were able to deliver on our projected increased profitability and that the Great Recession is largely over for Smith-Midland.
"As always, we continue to look ahead to the future of the Company and what to expect for 2016 and beyond. As most of you are aware, a $305 billion, five year highway bill was passed by Congress and signed by the President giving some added stability to highway work. For Smith-Midland and our nationwide network of Easi-Set Worldwide licensees this allows us the opportunity to quote on an increasing list of highway projects. We currently have seven soundwall projects in production or waiting to start production in the near future. These projects as well as our other projects in progress should keep us profitable for the remainder of 2016."
Smith-Midland develops, manufactures, licenses, rents, and sells a broad array of precast concrete products for use primarily in the construction, transportation and utilities industries.
This announcement contains forward-looking statements, which involve risks and uncertainties. The Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors which might cause such a difference include, but are not limited to, product demand, the impact of competitive products and pricing, capacity and supply constraints or difficulties, general business and economic conditions, the effect of the Company's accounting policies and other risks detailed in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.
For more complete information on Smith-Midland Corporation, visit the Company's web site at SMITHMIDLAND.COM. The "Investor Relations" area will include the Company's Form 10-K
I think we'll get to new highs once the market realizes how much potential is here and soaks up that stock that hit the market. Right industry, right company, right stock.
Looks like the 10% shareholder is out. Not sure why they would sell at such a discount, but at least, they are out, and I'm in. Unless there is something they know that I don't, I'd say thanks for the deal!
Bought some SMID last week. Cheap stock.
News today.
http://finance.yahoo.com/news/300-000-square-feet-smith-131000169.html
What the dealio with the stock dump here?
Yup, I've got a large position already, give me a great price and I'll double down at least.
Crashing with the market. Looking to add soon...
What's with the volume to the downside today?
A positive:
Smith-Midland Corporation (OTCBB: SMID) announced today that as of December 31, 2015, the Company will be qualified to trade on the OTCQX(R) Best Marketplace, the top tier of the OTC Markets Group.
"We are pleased to be traded among the top 5% of companies on the OTCQX market. The OTCQX market consists of 486 securities of the 9,853 currently traded securities on the over-the-counter ("OTC") markets; of these 486 securities, Smith-Midland is in the OTCQX U.S. Premier tier of which there are only 98 securities. The OTCQX market is for established, investor-focused U.S. and global companies that have met high financial standards, are current in their disclosure and are sponsored by a professional third-party advisor. The companies found on OTCQX are distinguished by the excellence of their operations and diligence with which they convey their qualifications. The Board of Directors and management of Smith-Midland have worked diligently to increase the value of our stock for our investors. We anticipate that reaching OTC Markets Group's highest level of financial and compliance requirements will increase our visibility and allow us to attract more shareholders from a broader investment community," stated Rodney I. Smith, Chairman and CEO of Smith-Midland Corp.
Not happy about that last 4 filing. I own more shares than the Director sold, and I'm not going to put up more money just to let an insider get out. My bids are pulled.
I did a google search on that GEO report. Their price target is 2X today's price, which seems reasonable based on sales, book and any other metric you may look at. Yesterday's news of 4 pennies in dividends seemed to get some attention today.
The 5 year highway bill puts some uncertainty to rest at least. I think someone said that maybe the age of the directors might make them interested in finding a buyer. They mentioned somewhere that they look for acquisitions that looked right. I was happy to read that because too many companies do deals just to do a deal.
Definitely a potential beneficiary of federal funding for highway transportation getting thru. A lot of pent up demand on longer term projects at the state level since the feds couldn't offer much in the way of matching funds beyond the short term patches that have happened the last many many years so states and local munis have been reluctant on many projects.
I really think fed congress remains dysfunctional when looking at how they are paying for the funding but something is better than nothing. It seems EZ to just adopt a pay for miles driven plan or really easy to just up the gas tax but idgets will be idgets. At least some states have become a bit more creative in trying to fund infrastructure upkeep.
Given the low commodity prices looking to stay down for some time, it's a good time to get to working on physical infrastructure in the US. STRL has become my largest holding (other than cash and some SPY) due to the runup but SMID is close. I've sold a little of each but keep most for now.
The Geoinvesting article was well off the mark IMO if U saw that. This isn't about trying to trade or predict a quarter ahead IMO, it's about trying to find a bottom in spending on our highly aged infrastructure and potentially riding a secular change for awhile. If you are trying to trade this on a short term basis it might be worth buying on Q4 news if it turns out lackluster (seasonality, backlog down a bit sequentially, the juiced Q3 high margin barrier rental from Pope not in Q4).
I'm also getting into a few suppliers for homebuilding industry although don't want to get too crazy if Fed starts raising rates.
This company doesn't have much revenue leverage like STRL does but they should have some margin upside on the work they do if trends continue. Although barriers to entry aren't extremely high, they've been around a long time in the places they serve jumping thru approval hoops and such so should be able to pick up business quickly if/when more spending starts coming online.
All IMO only. Good luck.
For such a small company, they sure seem to have a big geographical reach. Work done on the Pope's visit in DC and PA. Highway bill - great stuff, low price.
Let the good times begin. Finally should see a sustainable expansion going forward with commodities slump. Been making this a larger holding along with Strl.
They sure laid an egg for Q4 and backlog even decreased on the weak #s so ugly.
At least they got the inaugurul contract but hard to picture what will drive growth going forward. Probably worth waiting for some kind of major contract announce like that Maryland one a couple years back. That one contract really carried the company for awhile.
All IMO.
Thanx! Got it marked I'll check it out some.
Hmm, all 3 companies share management teams that just don't quite do/get what us shareholders want. Sure sounds very very familiar in microcap land
Yep seems selling in all those cases might bring a better return more closely aligned to 'fair' value. Can always hope...
I stayed away from Deep Doo Doo. I heard a few of the calls and management didn't make me feel so comfortable. Hope it works out OK for you.
I took my ADVC off the table. Not a bad return but not what I thought it could be. Its funny their EPS should really get a huge lift with all the shares they bought back and if they are no longer public thats another huge savings too. Still to me the huge upside would have been if Jason wanted to sell the company or just expanded into other segment (healthcare seemed most promising).
I've been out of SMID for a while. Only buying an uncomftable percentage when it feel under $1 a few years ago made it a so-so investment. I agree it was certainly a frustrating company to own always thinking they should be worth more/have more potential. Even though it seems they may be doing what I want them to do I'm a bit skeptical of them executing on it well so just watching for now.
MCC is http://microcapclub.com better note it I don't know if ihub police will delete this .
Thanx ghmm, not sure what MCC is? Ya Gilead is a good guy to keep up with.
Think SMID's had the barrier contract since Reagan so a fairly long-running streak of getting it.
Has been an easy start to the year at least with the investment side of life Looks like finally 'Deep Doo Doo' (my daughter's nickname for Deep Down) is getting a little love today.
I have held SMID for a long time with varying-sized positions just not feeling like it ever got that bump up enough to be fairly valued. The CapEx spending has been up and down so hard to pinpoint cash generation year to year and potential recurring dividends but was nice to get the small special div at end of last year.
I think last time (or the time before) they announced the inauguration contract pretty late (or even after the fact?) so could be nothing. They do have a string of doing it for like 100 years or so don't they .
I've been doing pretty well lately Bios and microcaps. Not a lot of new ideas (maybe thats good) as the ones I do go in have done pretty well (in microcaps MOC, ARG.TO, FIGI even ISDR has been OK). Got MOC from gilead he's in MCC you should consider it if your not already in. Hope all is well with you too.
Probably something that would take time.
Another note is I haven't seen anything about the Pres inauguration contract this go-round and it is next week or so I think (inauguration)? Wonder if they might miss it this year or maybe they just didn't PR it?
Hope you are doing well.
That is an interesting PR today! Its actually something extremely similar to what I've mentioned in passing to the company a couple of times (not that I am taking credit especially since I'm current not a shareholder). I wonder how well their execution will be on this and if they will broadly try to get licensee's and new licensee's to get a much bigger reach.
Another very solid report from SMID.
http://finance.yahoo.com/news/smc-announces-financial-results-quarter-220800915.html
Cash is up, Cap EX is way down at less than $100K thru 9 months. Hopefully a harbinger of cash generation going fwd to maybe allow for a div or something in the not too distant future- like maybe after Q1 2013 and the hopeful inaug contract.
Backlog was down a bit and not that impressive.
Starting to at the verbiage yet for the various products, this sounded a bit positive for Q4 (from 10Q):
"Barrier Sales – Barrier sales increased significantly during the three and nine months ended of September 30, 2012 compared to the same periods in 2011. The increase in sales relates primarily to several recent federal and state government contracts for road projects. While the overall barrier market has slowed over the last several years, management was successful in negotiating two additional barrier sales contracts for immediate production and delivery, that will continue this upward trend over the remainder of the year."
and this:
" Recent bidding activity, and increased contract awards for building products sales leads management to believe that building sales will continue to improve slightly during the remainder of 2012."
and this:
"The Company has seen some signs that a slight increase in utilities sales may be forthcoming. Several large road projects have been approved for funding in the Company's geographical area, indicating a slight improvement may be ahead for these products."
and this:
"Management believes that its core barrier rentals will increase slightly over the remainder of the year as it has been awarded a rental contract to provide barrier for a large highway project."
Nice report today with 9 cents EPS and book value around $2.25 or so per share. Cost cutting in SG&A looked impressive.
Yep it was ugly especially on margins side. Might be the delays cost them on margins side but don't know if they specifically spelled that out in the Q (maybe get recaptured next Q, dunno).
Don't have time to pick thru it much but looks like the PR announce may have simply been clarifying backlog from previous Q having that $4+ mill contract included in it? If so, without it their backlog would be extremely weak. Although they did grow backlog over $1 mill sequentially on the $6+ mill revs so if they did have that larger contract included in last Q's backlog, they were able to generate more new backlog biz to some degree.
If you want to find cheap stuff that has dropped a lot, you might look at the housing market Some good deals out there.
At first glance the numbers and outlook seems pretty bad despite bringing up Warren's name in the PR . If it drops enough tomorrow I'll start looking at it closer but must things I see lately with bad releases don't drop nearly as much as I expect... perhaps I am too cheap .
Today's PR was a bit lame in that they obviously have been sitting on this contract win for awhile without PRing it as far as I know (started production in Sept), but as the stock price sank they apparently decided it was time to release the contract news?..
Guess I'm not surprised. Hope all is well with you lately!
It is a nice-sized award for the company and am glad to see them finally land a substantial contract outside the old Maryland biggie. A little hard to tell total timeframe for delivery with the word 'beginning' and no mention of end. But I'll take it at $4 mill. Company still trades pretty cheap although there could be some earnings weakness in that Q ended Sept potentially.
SLENDERWALL is Selected for The Alexander on the Hudson
Smith-Midland Corporation (SMC) is pleased to supply its SLENDERWALL® architectural precast concrete panel system as the exterior cladding for a Daibes Enterprises project, The Alexander located on the Hudson River in Edgewater, New Jersey. This unique 290-unit nine story apartment building is designed to replicate the architecture of New York City’s 1940-1950’s era Park Avenue.
The contract awarded to SMC is valued at more than $4 million dollars and features 1,024 LEED friendly exterior panels combining SLENDERWALL® and traditional architectural precast totaling approximately 99,579 square feet. The panels will be a buff color with an acid etched finish and historical details such as cornices, reveals, and bull noses.
Daibes Enterprises has elected to have the SLENDERWALL® precast panels insulated with closed cell foam insulation performed by SMC at their Midland, Virginia production facility. This value-added option offers a savings in both time and labor.
Production of the SLENDERWALL® panels started in September 2011 and delivery is scheduled to begin in January 2012. Mr. Fred Daibes, President of Daibes Enterprises, shared a special note that this building is being built as a tribute to his father.
SLENDERWALL®, because of its lightweight design (30 lbs/sf), can reduce building foundation and structure costs, shipping and installation costs. The proprietary 360º concrete-to-stud connection isolates the exterior precast concrete cladding from the structural stresses associated with wind loading, steel frame movement, expansion and contraction and seismic shock.
SLENDERWALL® combines time-proven components to create a true composite, light-weight wall system for both new construction and recladding projects. The combination of architectural precast concrete, insulated Nelson® anchors, welded-wire fabric and heavy-gauge stainless or galvanized steel studs create a single, efficient exterior wall system with unlimited design freedom.
About Smith-Midland Corporation (DE)
Smith-Midland Corporation (DE) is a publically traded company (OTC BB: SMID). Smith-Midland (VA) develops manufactures and sells a broad array of precast concrete products for use primarily in the construction, transportation and utilities industries. SMC has two manufacturing facilities located in Midland, Virginia and Reidsville, North Carolina. Easi-Set® Worldwide, a wholly-owned subsidiary of Smith-Midland Corporation (DE), licenses the production and sale of SMC developed products around the world. For more information, please call (540) 439-3266 or visit www.smithmidland.com or www.slenderwall.com.
Source: Business Wire (October 19, 2011 - 1:19 PM EDT)
News by QuoteMedia
It would have been nice for them to try to ballpark quantify what effect retooling had on the last Q (or has in general). Might be worth giving a call to company for clarification if they would do that (clarify).
They mentioned fuel and steel prices I think before retooling was mentioned in the Q but that doesn't necessarily mean they're listed in importance of impact on margins.
Rearview driving, I wonder if the lousy Q4 2009 was from retooling as well when they were likely ramping up/switching over for the Maryland work. That was their only reported net loss Q in the last several years I think. If they were caught up retooling then (would make sense as their sales mix xhanged after that from more arch panels to more soundwall) it may explain why that Q was so weak in terms of margins/revs. Revs may have been temp affected with downtime.
The other factor of course is the big drop in backlog. Seemed like Rodney tried to hint at that glaring spot by mentioning beginning to see some uptick with more bids being out and some sense of potential biz.
He didn't sound very concrete about it though (think KiK patented cheesy puns on I-Hub already so I may owe him for that bad one).
Nice analysis LF. I didn't read over the Q so you saved me a skim through . I was wondering if they had any big one time charges. Too bad they can't seem to grow the royalties, guess so much for the added effort there.
I have a hard time figuring out how the market treats this stock I can't imagine it dropping whole lot given their BV and it appearing there is a new big shareholder who perhaps would be a buyer on weakness (then again he may want out ).
Posted this on another board for my general take glancing at the Q report:
SMID- Steep dropoff in margins and backlog.
The backlog #s are lowest in some time (years). There was one time where backlog dropped steeply sequentially but then bounced right back (I think Q 2006 reported backlog of $8.1 mill to Q1 2007 $11.6 mill). That was the only instance that comes to mind offhand of a steep drop in backlog like what we just saw in this report.
Margins as ghmm mentioned on VMC were probably impacted by the steep rise in gas/diesel prices in the Q, the company mentioned it. They mentioned retooling in the Q as a cost too going from mostly soundwall to the architectural panels.
The other element though that makes me a bit more cautious going forward is if the margins over the last year were somewhat inflated due to the big Maryland contract as it was processed thruout the year (company mentioned product mix YOY was less profitable so maybe hinting at that).
Royalties were a bit light too at $330K+ and obviously those dollars flow thru to the bottom line very well so a dropoff there YOY hurt margins too. The company did note they expected royalties to improve going fwd in 2011.
Wanted to see ARs come down a bit more and see cash. Maybe next Q. Could be tied to the delayed delivery of some Maryland soundwall panels as they noted shipment of the completed panels will continue into Q2 (contrary to previous announce I thought of them being shipped and done around January 2011 so some of it apparently slid out a bit for whatever reason).
It is the company's 16th out of 17th profitable Q but not that great obviously IMO.
Oh well, it is still a bit of value play trading around tangible book so if it drops off steeply I may add.
This is the 2nd Q in a row where margins came in a bit lighter than I was anticipating and may be a sign of the Maryland contract benefits. Still hard to gauge though with higher steel and fuel prices plus the retooling that happened in the Q.
There's always a chance they can win another nice award but that's guesswork obviously and waiting for that to actually happen is prudent given this Q's lower #s.
Was hoping for better from them on the margin side.
SMC Announces Financial Results for the Quarter Ended March 31, 2011
Smith-Midland Corp (OTCBB:SMID)
Intraday Stock Chart
Today : Friday 13 May 2011
Smith-Midland Corporation (OTCBB: SMID) announced the Company reported total revenue of approximately $7.6 million and pre-tax earnings of $291,000 for the three months ended March 31, 2011, as compared to total revenue of $6.4 million and pre-tax earnings of $807,000 for the same period in 2010. The Company had net income of $188,000 for the three months ended March 31, 2011, as compared to net income of $500,000 for the same period in 2010. Fully diluted earnings per share were $.04 for the three months ended March 31, 2011 and $.10 for the same period in 2010.
Rodney Smith, Chairman and CEO said, “Smith-Midland is pleased to report positive earnings for the three months ended March 31, 2011. Although first quarter earnings were below that of the same period in 2010, the company, as well the construction industry as a whole, is beginning to see signs of improvement from both the private and public sectors in the number of projects being financed and bid by owners and general contractors. Although we have been awarded several large architectural projects over the past few months, all of which will be produced in 2011, the Company’s overall performance during 2011 will depend on the construction industry’s continued improvement, and how successful Smith-Midland is in bidding and acquiring new contracts.”
Smith-Midland develops, manufactures, licenses, rents, and sells a broad array of precast concrete products for use primarily in the construction, transportation and utilities industries.
This announcement contains forward-looking statements, which involve risks and uncertainties. The Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors which might cause such a difference include, but are not limited to, product demand, the impact of competitive products and pricing, capacity and supply constraints or difficulties, general business and economic conditions, the effect of the Company's accounting policies and other risks detailed in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.
For more complete information on Smith-Midland Corporation, visit the Company’s web site at SMITHDELAWARE.com.
SMID is part of the SwingTrade Portfolio which is up 41.3% YTD and up 153.9% since October 1, 2009 inception.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=62722205
Seems like a decent assessment of the company/management. As far as management maybe they're near a bottom in ineffectiveness. Nowhere to go but up?
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Record earnings! Company looks to have just reported their best quarter EVER:
http://finance.yahoo.com/news/SMC-Announces-Financial-bw-15236986.html?.v=1
http://www.sec.gov/Archives/edgar/data/924719/000114420409026214/v149266_10q.htm
The company looks to be actively hiring : http://www.smithmidland.com/production.html
Not only that, the company is in a niche that should benefit nicely once infrastructure spending from the government picks up over the coming years- here is a cut and paste about one of their products that should benefit although several products stand to cater to the infrastructure spending:
JJ Hooks (from JJhooks.com):
The J-J Hooks highway traffic safety barrier connection system has become a “standard” on North American and international highways in recent years. It is the most widely used private connection design in the United States. Last year, local producers provided more than one million linear feet of barrier to US highway projects. It is the lowest cost barrier connection system available in the industry today.
Their raw materials are in large part comprised of steel and cement which have been declining in price lately.This should continue to help margins going forward.
At $15.9 million, they have near-record backlog even after the last two blowout quarters so business is looking very strong.
On top of the backlog, there is also recurring business from a repeat customer that adds to revenues and their seasonally stronger quarters lie ahead of them on top of expected continuing moderation of raw materials costs during 2009 (from the 10Q filed):
Seasonality
The Company services the construction industry primarily in areas of the United States where construction activity may be inhibited by adverse weather during the winter. As a result, the Company may experience reduced revenues from December through February and realize the substantial part of its revenues during the other months of the year. The Company may experience lower profits, or losses, during the winter months, and as such, must have sufficient working capital to fund its operations at a reduced level until the spring construction season. The failure to generate or obtain sufficient working capital during the winter may have a material adverse effect on the Company.
Inflation
Significant increases in the cost of steel, cement and other direct materials used in production and delivery, including fuel surcharges, have caused increases in cost of goods sold of the Company during the year ending December 31, 2008. Due to a downturn in the economy, [b]the Company expects these costs to continue to moderate during 2009.[/b]
Production Backlog
As of May 6, 2009, the Registrant's sales backlog was approximately $15,900,000, as compared to approximately $12,432,000 at the same date in 2008. The Company also maintains a regularly occurring repeat customer business, which should be considered in addition to the ordered production backlog described above. These orders typically have a quick turn around and represent purchases of a significant portion of the Company's inventoried standard products, such as highway safety barrier, utility and Easi-Set? building products. Historically, this regularly occurring repeat customer business is equal to approximately $6,500,000 annually.
In the production backlog, the repeat customer has been dropping the orders amount slightly but not a lot (from approx $7 million last year to about $6.5 million now).
Fairly recent news items that are currently or will soon be positively impacting 2009 earnings:
http://finance.yahoo.com/news/SMC-Announces-Financial-bw-15236986.html?.v=1
http://finance.yahoo.com/news/SmithMidland-Corporation-bw-14415945.html
http://biz.yahoo.com/e/090219/smid.ob8-k.html
http://www.smithmidland.com/press/commonwealth.html
http://www.smithmidland.com/press/m-square.html
http://www.smithmidland.com/press/mildep.html
http://www.smithmidland.com/press/inauguration.html
http://biz.yahoo.com/bw/090119/20090119005740.html?.v=1
All above is accurate to the best of my knowledge, verify things through your own DD and good luck.
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