Smith-Midland Announces Strategic Expansion of Barrier Rental Fleet

Rhea-AI Summary

Smith-Midland Corporation (NASDAQ:SMID) has finalized a significant barrier buy-back agreement, doubling its fleet from 260,000 to 575,000 linear feet. This deal expands their barrier rental business and is estimated to cost approximately $5 million. CEO Ashley Smith highlighted that this investment aligns with their strategic initiatives and will enhance recurring revenue at a lower cost compared to building new barrier systems. The move also positions the company for larger project bids, marking a crucial step in their business development.

Positive

• Finalized barrier buy-back agreement increases rental fleet to 575,000 linear feet.
• Investment supports high-margin barrier rental business, improving revenue streams.
• Lower cost of acquisition compared to building new barriers enhances profitability.

Negative

• None.

Execution of Barrier Buy-Back Agreement more than Double's Fleet

MIDLAND, VA / ACCESSWIRE / May 4, 2022 / Smith-Midland Corporation (NASDAQ:SMID) provider of innovative, high-quality proprietary and patented precast concrete products and systems today announced it has finalized the terms of the barrier buy-back agreement from the largest barrier supply contract in the company's history. The company was able to negotiate an amendment to the agreement, acquiring an additional 115,000 linear feet of barrier, increasing the buy-back agreement to 325,000 linear feet. The total cost of the final agreement will cost approximately $5 million.

"In alignment with our long-term strategic initiatives, this investment in our high-margin barrier rental business advances our strong recurring revenue stream at a lower cost to us compared to building new barrier," said Ashley Smith, Chief Executive Officer of Smith-Midland. "This agreement is an important step in the execution of our strategic plan, and will expand our rental fleet inventory to 575,000 linear feet by the end of the year, providing us the scale to bid on larger projects in the future.

About Smith-Midland

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. Management and the board own approximately five percent of SMID stock, aligning with shareholder values.

Smith-Midland Corporation has three manufacturing facilities located in Midland, VA, Reidsville, NC, and Columbia, SC, and Concrete Safety Systems, our J-J Hooks Safety Barrier rental division. Easi-Set Worldwide, a wholly owned subsidiary of Smith-Midland Corporation, licenses the production and sale of Easi-Set products, including J-J Hooks and SlenderWall, and provides diversification opportunities to the precast industry worldwide. For more information, please call (540) 439-3266 or visit www.smithmidland.com.

Contact:

Media Inquiries:
AJ Krick, CFO
540-439-3266
investors@smithmidland.com

Investor Relations:
Steven Hooser
Three Part Advisors, LLC
214-872-2710

SOURCE: Smith-Midland Corporation

View source version on accesswire.com:
https://www.accesswire.com/700096/Smith-Midland-Announces-Strategic-Expansion-of-Barrier-Rental-Fleet

FAQ

What does the barrier buy-back agreement mean for Smith-Midland (SMID)?

The agreement allows Smith-Midland to significantly increase its rental fleet to 575,000 linear feet, improving its capacity to bid on larger projects.

How much is the barrier buy-back agreement worth for SMID?

The total cost of the finalized barrier buy-back agreement is approximately $5 million.

Why did Smith-Midland decide to acquire more barriers?

The acquisition aligns with their strategic initiatives to enhance recurring revenue while reducing costs compared to building new barriers.

When will the expanded rental fleet be available?

The expanded rental fleet of 575,000 linear feet is expected to be available by the end of the year.