Document_Entity_Information
Document Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 04, 2015 | Jun. 28, 2014 | |
Entity Information [Line Items] | |||
Entity Registrant Name | SMITH MIDLAND CORP | ||
Entity Central Index Key | 924719 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Smaller Reporting Company | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | FALSE | ||
Entity Common Stock, Shares Outstanding | 4,840,628 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $9,714,280 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets | ||
Cash and cash equivalents | $3,572,405 | $3,136,063 |
Investment securities, available-for-sale, at fair value | 1,013,417 | 915,341 |
Accounts receivable, net | ||
Trade - billed, (less allowance for doubtful accounts of $267,985 and $285,305) | 4,092,924 | 7,296,792 |
Trade - unbilled | 240,635 | 41,859 |
Inventories, net | ||
Raw materials | 353,089 | 861,129 |
Finished goods | 1,373,455 | 1,078,349 |
Prepaid expenses and other assets | 126,047 | 231,365 |
Prepaid income taxes | 722,948 | 0 |
Deferred taxes | 441,000 | 475,000 |
Total current assets | 11,935,920 | 14,035,898 |
Property and equipment, net | 4,106,611 | 4,322,995 |
Other assets | 255,385 | 297,915 |
Total assets | 16,297,916 | 18,656,808 |
Current liabilities | ||
Accounts payable - trade | 1,152,506 | 1,517,625 |
Accrued expenses and other liabilities | 539,549 | 927,829 |
Accrued compensation | 442,651 | 403,846 |
Income taxes payable | 0 | 302,263 |
Current maturities of note payable | 363,821 | 364,204 |
Customer deposits | 432,274 | 547,789 |
Total current liabilities | 2,930,801 | 4,063,556 |
Notes payable - less current maturities | 2,230,364 | 2,544,809 |
Deferred tax liability | 663,000 | 630,000 |
Total liabilities | 5,824,165 | 7,238,365 |
Commitments and contingencies | 0 | 0 |
Stockholders’ equity | ||
Preferred stock, $.01 par value; authorized 1,000,000 shares, none outstanding | 0 | 0 |
Common stock, $.01 par value; authorized 8,000,000 shares; 4,881,548 issued | 48,815 | 48,815 |
Additional paid-in capital | 5,041,438 | 5,041,438 |
Accumulated other comprehensive loss | -6,629 | -41,014 |
Retained earnings | 5,492,427 | 6,471,504 |
Stockholders' Equity before Treasury Stock | 10,576,051 | 11,520,743 |
Treasury stock, at cost, 40,920 shares | -102,300 | -102,300 |
Total stockholders’ equity | 10,473,751 | 11,418,443 |
Total liabilities and stockholders' equity | $16,297,916 | $18,656,808 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current Assets: | ||
Allowance for doubtful accounts | $285,305 | $230,749 |
Stockholders' equity | ||
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized (in shares) | 8,000,000 | 8,000,000 |
Common stock, shares issued (in shares) | 4,881,548 | 4,826,182 |
Treasury shares (in shares) | 40,920 | 40,920 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue | ||
Products sales and leasing | $16,609,047 | $21,897,695 |
Shipping and installation revenue | 4,269,157 | 4,267,469 |
Royalties | 1,592,633 | 1,545,378 |
Total revenue | 22,470,837 | 27,710,542 |
Cost of goods sold | 18,625,035 | 21,138,628 |
Gross profit | 3,845,802 | 6,571,914 |
General and administrative expenses | 2,979,835 | 3,088,403 |
Selling expenses | 2,218,269 | 2,322,837 |
Total operating expenses | 5,198,104 | 5,411,240 |
Gain on sale of assets | -174 | 61,634 |
Other | 157,540 | 57,362 |
Operating income | -1,194,936 | 1,279,670 |
Other income (expense) | ||
Interest expense | -116,229 | -132,026 |
Interest income | 8,327 | 3,538 |
Loss on investment securities available-for-sale | 0 | -68,680 |
Total other expense | -107,902 | -197,168 |
Income before income tax expense | -1,302,838 | 1,082,502 |
Income tax expense | -498,000 | 391,000 |
Net income | ($804,838) | $691,502 |
Basic earnings per share (in dollars per share) | ($0.16) | $0.14 |
Diluted earnings per share (in dollars per share) | ($0.16) | $0.14 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | |||
Statement of Comprehensive Income [Abstract] | ||||
Net income | ($804,838) | $691,502 | ||
Other comprehensive loss, net of tax: (1) | ||||
Net unrealized holding loss | -6,629 | [1] | -83,929 | [1] |
Reclassification adjustment for realized losses | 0 | [1] | 42,915 | [1] |
Comprehensive income | -811,467 | 650,488 | ||
Net unrealized holding loss, tax benefit | -3,000 | |||
Reclassification adjustment for realized losses, tax expense | $26,000 | |||
[1] | Net unrealized losses on available for sale securities are shown net of income tax benefits of $3,000. Reclassification adjustment for realized losses are shown net of income tax expense of $26,000. |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock |
Balance, beginning of period at Dec. 31, 2012 | $10,865,731 | $48,262 | $4,995,278 | $5,924,491 | ($102,300) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Dividends paid on common stock | -144,489 | -144,489 | ||||
Net unrealized holding loss | -41,014 | -41,014 | ||||
Proceeds from options exercised | 46,713 | 553 | 46,160 | |||
Net income | 691,502 | 691,502 | ||||
Balance, end of period at Dec. 31, 2013 | 11,418,443 | 48,815 | 5,041,438 | -41,014 | 6,471,504 | -102,300 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Dividends paid on common stock | -174,239 | -174,239 | ||||
Net unrealized holding loss | 34,385 | 34,385 | ||||
Net income | -804,838 | |||||
Balance, end of period at Dec. 31, 2014 | $10,473,751 | $48,815 | $5,041,438 | ($6,629) | $5,492,427 | ($102,300) |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of net income to net cash provided by operating activities | ||
Net income | ($804,838) | $691,502 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 636,644 | 634,869 |
Gain on sale of fixed assets | 174 | -61,634 |
Realized loss on investment securities available-for-sale | 0 | 68,631 |
Deferred taxes | 67,000 | -101,000 |
(Increase) decrease in | ||
Accounts receivable - billed | 3,203,868 | -2,544,063 |
Accounts receivable - unbilled | -198,776 | 356,525 |
Inventories | 212,934 | 164,628 |
Refundable income taxes | -722,948 | 173,155 |
Prepaid expenses and other assets | 164,660 | 47,055 |
Increase (decrease) in | ||
Accounts payable - trade | -365,115 | 595,536 |
Accrued expenses and other liabilities | -388,278 | 220,461 |
Accrued compensation | 38,805 | -29,020 |
Accrued income taxes payable | -302,264 | 302,262 |
Customer deposits | -115,515 | 300,939 |
Net cash provided by operating activities | 1,426,351 | 819,846 |
Cash Flows From Investing Activities | ||
Purchases of investment securities available-for-sale | -78,453 | -2,024,147 |
Sale of investment securities available-for-sale | 0 | 1,000,000 |
Purchases of property and equipment | -465,826 | -908,609 |
Proceeds from sale of fixed assets | 46,230 | 61,792 |
Net cash absorbed by investing activities | -498,049 | -1,870,964 |
Cash Flows From Financing Activities | ||
Proceeds from long-term borrowings | 55,159 | 2,303,339 |
Repayments of long-term borrowings | -372,880 | -2,385,856 |
Dividends paid on common stock | -174,239 | -144,489 |
Proceeds from options exercised | 0 | 46,713 |
Net cash absorbed by financing activities | -491,960 | -180,293 |
Net increase (decrease) in cash and cash equivalents | 436,342 | -1,231,411 |
Cash and cash equivalents | ||
Beginning of period | 3,136,063 | 4,367,474 |
End of period | 3,572,405 | 3,136,063 |
Supplemental schedule of non-cash investing activities | ||
Cash Payments for interest | 116,229 | 132,026 |
Cash Payments for income taxes | $48,609 | $19,600 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Accounting Policies [Abstract] | |||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies | ||||
Nature of Business | |||||
Smith-Midland Corporation and its wholly owned subsidiaries (the “Company”) develop, manufacture, license, sell and install precast concrete products for the construction, transportation and utilities industries in the Mid-Atlantic, Northeastern, and Midwestern regions of the United States. | |||||
Principles of Consolidation | |||||
The accompanying consolidated financial statements include the accounts of Smith-Midland Corporation and its wholly owned subsidiaries. The Company’s wholly owned subsidiaries consist of Smith-Midland Corporation, a Virginia corporation, Smith-Carolina Corporation, a North Carolina corporation, Easi-Set Industries, Inc., a Virginia corporation, Concrete Safety Systems, Inc., a Virginia corporation, and Midland Advertising and Design, Inc., doing business as Midland Advertising + Design, a Virginia corporation. All material intercompany accounts and transactions have been eliminated in consolidation. | |||||
Cash and Cash Equivalents | |||||
The Company considers all unrestricted cash and money market accounts purchased with an original maturity of three months or less as cash and cash equivalents. | |||||
Investments | |||||
Investments in marketable securities are classified as available-for-sale and are stated at market value with unrealized holding gains and losses excluded from earnings and reported as a separate component of stockholders' equity until realized. | |||||
Inventories | |||||
Inventories are stated at the lower of cost, using the first-in, first-out (FIFO) method, or market. Inventory reserves were approximately $90,000 at December 31, 2014 and 2013. | |||||
Property and Equipment | |||||
Property and equipment is stated at cost. Expenditures for ordinary maintenance and repairs are charged to income as incurred. Costs of betterments, renewals, and major replacements are capitalized. At the time properties are retired or otherwise disposed of, the related cost and allowance for depreciation are eliminated from the accounts and any gain or loss on disposition is reflected in income. | |||||
Depreciation is computed using the straight-line method over the following estimated useful lives: | |||||
Years | |||||
Buildings | Oct-33 | ||||
Trucks and automotive equipment | 10-Mar | ||||
Shop machinery and equipment | 10-Mar | ||||
Land improvements | 15-Oct | ||||
Office equipment | 10-Mar | ||||
Income Taxes | |||||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. | |||||
As of December 31, 2014, the Company has not identified any unrecognized tax positions. The Company files tax returns in the U.S. Federal and various state jurisdictions. The Company recognized, when applicable interest and penalties related to income taxes in other income (expense) in its consolidated statement of income (loss). The Company is no longer subject to U.S. or state tax examinations for the years prior to 2011. The Company does not believe there will be any material changes in unrecognized tax positions over the next twelve months. | |||||
Stock Options | |||||
Stock based compensation is measured based on the fair value of the award on the date of grant and the corresponding expense is recognized over the period during which an employee is required to provide services in exchange for the award. The fair value of each stock option is estimated using a Black-Scholes option pricing model based on certain assumptions including expected term, risk-free interest rate, stock price volatility and dividend yield. The assumption for expected term is based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected term at the grant date. The historical volatility of the Company’s stock is used as the basis for the volatility assumption. See Note 6 of Notes to the Consolidated Financial Statements for additional information related to stock based compensation. There have been no option grants since 2008. Substantially all options become vested and exercisable ratably over a three-year period. | |||||
Revenue Recognition | |||||
The Company primarily recognizes revenue on the sale of its standard precast concrete products at shipment date, including revenue derived from any projects to be completed under short-term contracts. Installation of the Company’s standard products is typically performed by the customer; however, in some circumstances, the Company will install certain products at the time of delivery and will recognize the installation revenue at that time. The installation activities are usually completed the day of delivery or the following day. In utility building sales, the majority of the buildings are erected on the Company’s site and delivered completely installed. | |||||
Leasing fees are paid at the beginning of the lease agreement and recorded to a deferred revenue account. As the revenue is earned each month during the contract, the amount earned is recorded as lease income and an equivalent amount is debited to deferred revenue. | |||||
Royalties are recognized as revenue as they are earned. The Company licenses certain other precast companies to produce its licensed products to our engineering specifications under licensing agreements. The agreements are typically for five year terms and require royalty payments from 4% to 6% which are paid on a monthly basis. The revenue from licensing agreements are recognized in the month earned. | |||||
Certain sales of Soundwall, architectural precast panels and Slenderwall™ concrete products revenue is recognized using the percentage of completion method for recording revenues on long term contracts under ASC 605-35. The contracts are executed by both parties and clearly stipulate the requirements for progress payments and a schedule of delivery dates. Provisions for estimated losses on contracts are made in the period in which such losses are determined. | |||||
Shipping revenues are recognized in the period the shipping services are provided to the customer. | |||||
Smith-Midland products are typically sold pursuant to an implicit warranty as to merchantability only. Warranty claims are reviewed and resolved on a case by case method. Although the Company does incur costs for these types of expense, historically the amount of expense is minimal. | |||||
Shipping and Handling | |||||
Amounts billed to customers are recorded in sales and the costs associated with the shipping and handling are recorded as cost of goods sold. | |||||
Sales and Use Taxes | |||||
Use taxes on construction materials are reported gross in general and administrative expense. | |||||
Risks and Uncertainties | |||||
The Company sells products to highway contractors operating under government funded highway programs and other customers and extends credit based on an evaluation of the customer’s financial condition, generally without requiring collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure to credit losses and maintains allowances for anticipated losses. Management reviews accounts receivable on a weekly basis to determine the probability of collection. Any accounts receivable that are deemed to be uncollectible along with a general reserve, which is calculated based upon the aging category of the receivable, is included in the overall allowance for doubtful accounts. Management believes the allowance for doubtful accounts at December 31, 2014 is adequate. However, actual write-offs may exceed the recorded allowance. Due to inclement weather, the Company may experience reduced revenues from December through February and may realize the substantial part of its revenues during the other months of the year. | |||||
Fair Value of Financial Instruments | |||||
The carrying value for each of the Company’s financial instruments (consisting of cash and cash equivalents, accounts receivable, accounts payable and short-term line of credit) approximates fair value because of the short-term nature of those instruments. The estimated fair value of the long-term debt approximates carrying value based on current rates offered to the Company for debt of the similar maturities. | |||||
Estimates | |||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||
Reclassifications | |||||
Certain minor reclassifications have been made to prior year amounts to conform to the current year presentation. | |||||
Advertising Costs | |||||
The Company expenses all advertising costs as incurred. Advertising expense was approximately $512,000 and $530,000 in 2014 and 2013, respectively. | |||||
Earnings Per Share | |||||
Earnings per share are based on the weighted average number of shares of common stock and dilutive common stock equivalents outstanding. Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in earnings of an entity. | |||||
Long-Lived Assets | |||||
The Company reviews the carrying values of its long-lived and identifiable intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable based on undiscounted estimated future operating cash flows. When any such impairment exists, the related assets will be written down to fair value. No impairment losses have been recorded through December 31, 2014. | |||||
Recent Accounting Pronouncement | |||||
In November 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update (“ASU”) 2014-17, Business Combinations: Pushdown Accounting. This ASU amended the Business Combination Accounting Standards Codification to provide guidance on whether and at what threshold an acquired entity that is a business or nonprofit activity can apply pushdown accounting in its separate financial statements. The Company’s adoption of FASB ASU No. 2013-17 effective November 14, 2014 did not have an impact on the Company’s consolidated results of operations, financial position and related disclosures. | |||||
In August 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements- Going Concern (Subtopic 205-40). The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in the U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The guidance is effective for annual periods ending after December 15, 2016 and for annual periods thereafter. Early adoption is permitted. The Company does not expect this ASU to have a material impact on the Company’s consolidated results of operations, financial position and related disclosures. | |||||
In June 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-12, Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation - Stock Compensation. As a result, the target is not reflected in the estimation of the award's grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the | |||||
performance condition will be achieved. The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. Early adoption is permitted. The Company does not expect this ASU to have a material impact on the Company’s consolidated results of operations, financial position and related disclosures. | |||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. | |||||
The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard in 2017. | |||||
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements and Property, Plant and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has or will have a major effect on an entity's operations and financial results. The new standard is effective in annual periods beginning on or after December 15, 2014 with | |||||
early adoption permitted. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. The Company’s adoption of FASB ASU No. 2014-08 is not expected to have an impact on the Company’s consolidated results of operations, financial position and related disclosures. | |||||
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes: Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists . This ASU amended the Income Taxes Topic of the Accounting Standards Codification to eliminate a diversity in practice for the presentation of unrecognized tax benefits when net operating loss carryforwards, similar tax losses or tax credit carryforwards exist. The amendment requires that the unrecognized tax benefit be presented as a reduction of the deferred tax assets associated with the carryforwards except in certain circumstances when it would be reflected as a liability. This guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2013. The Company’s adoption of FASB ASU No. 2013-11 effective January 1, 2014 did not have an impact on the Company’s consolidated results of operations, financial position and related disclosures. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT | ||||||||
Property and equipment consists of the following: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Land and land improvements | $ | 580,612 | $ | 598,926 | |||||
Buildings | 4,149,078 | 3,934,605 | |||||||
Machinery and equipment | 7,011,943 | 8,997,995 | |||||||
Rental equipment | 1,092,384 | 978,514 | |||||||
12,834,017 | 14,510,040 | ||||||||
Less: accumulated depreciation | 8,727,406 | 10,187,045 | |||||||
$ | 4,106,611 | $ | 4,322,995 | ||||||
Depreciation expense and amortization was approximately $637,000 and $635,000 for the years ended December 31, 2014 and 2013, respectively. |
Notes_Payable
Notes Payable | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes Payable [Abstract] | |||||||||
NOTES PAYABLE | NOTES PAYABLE | ||||||||
Notes payable consist of the following: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Note payable to a Bank, maturing June 2021; with monthly payments of approximately $25,000 of principal and interest fixed at 3.99%; collateralized by principally all assets of the Company. | $ | 1,814,825 | $ | 2,043,832 | |||||
Note payable to a Bank, maturing April 2021; with monthly payments of approximately $6,200 of principal and interest at prime at variable rate (5.29% at December 31, 2013); collateralized by certain property of the Company. | 398,964 | 445,882 | |||||||
Installment notes, collateralized by certain machinery and equipment maturing at various dates, primarily through 2016, with interest at 1.0% through 6.7%. | 380,396 | 419,299 | |||||||
Line of credit evidenced by a note payable to a Bank, with the maximum amount of $2,000,000, maturing September 12, 2015, with interest only payments and an initial rate of 4.49% adjustable monthly. The loan is collateralized by a first lien position on the Company's accounts receivable and inventory and a second lien position on all other business assets. | — | — | |||||||
2,594,185 | 2,909,013 | ||||||||
Less current maturities | 363,821 | 364,204 | |||||||
$ | 2,230,364 | $ | 2,544,809 | ||||||
The Company’s note payable, with a balance of $1,814,825 at December 31, 2014, is secured by all of the assets of the Company. The loan agreement includes certain restrictive covenants, which require the Company to maintain minimum levels of tangible net worth, places limits on annual capital expenditures and the payment of cash dividends. At December 31, 2014, the Company was in compliance with all covenants pursuant to the loan agreement as amended except for the payment of a cash dividend on December 30, 2014, for which the Company received approval prior to payment. | |||||||||
The aggregate amounts of notes payable maturing in each of the next five years and thereafter are as follows: | |||||||||
Year Ending December 31, | |||||||||
2015 | $ | 363,821 | |||||||
2016 | 368,270 | ||||||||
2017 | 384,480 | ||||||||
2018 | 390,342 | ||||||||
2019 | 362,751 | ||||||||
Thereafter | 724,521 | ||||||||
$ | 2,594,185 | ||||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS |
The Company currently leases a portion of its Midland, Virginia property from its CEO, on a month-to-month basis, as additional storage space for the Company's finished work product. The lease agreement calls for an annual rent of $24,000. See additional items discussed in Note 8. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||
INCOME TAXES | INCOME TAXES | ||||||||||||||
Income tax expense (benefit) is comprised of the following: | |||||||||||||||
December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Federal: | |||||||||||||||
Current | $ | (450,000 | ) | $ | 432,000 | ||||||||||
Deferred | 39,000 | (88,000 | ) | ||||||||||||
(411,000 | ) | 344,000 | |||||||||||||
State: | |||||||||||||||
Current | (91,000 | ) | 60,000 | ||||||||||||
Deferred | 4,000 | (13,000 | ) | ||||||||||||
(87,000 | ) | 47,000 | |||||||||||||
$ | (498,000 | ) | $ | 391,000 | |||||||||||
The provision for income taxes differs from the amount determined by applying the federal statutory tax rate to pre-tax income as a result of the following: | |||||||||||||||
December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Income taxes at statutory rate | $ | (445,000 | ) | 34 | % | $ | 368,000 | 34 | % | ||||||
Increase (decrease) in taxes resulting from: | |||||||||||||||
State income taxes, net of federal benefit | (47,000 | ) | 3.6 | % | 49,000 | 4.5 | % | ||||||||
Other | (6,000 | ) | (0.5 | )% | (26,000 | ) | (2.4 | )% | |||||||
$ | (498,000 | ) | 37.1 | % | $ | 391,000 | 36.1 | % | |||||||
Prepaid income taxes relate to amounts refundable from federal and state tax authorities for overpayment of estimated taxes that are expected to be applied towards future required payments. | |||||||||||||||
Deferred tax assets (liabilities) are as follows: | |||||||||||||||
December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Depreciation | $ | (663,000 | ) | $ | (630,000 | ) | |||||||||
Unrealized losses on investments available for sale | 3,000 | 27,000 | |||||||||||||
Provision for doubtful accounts | 105,000 | 111,000 | |||||||||||||
Vacation accrued | 91,000 | 86,000 | |||||||||||||
Deferred income | 161,000 | 170,000 | |||||||||||||
Other | 81,000 | 81,000 | |||||||||||||
Net deferred tax asset (liability) | (222,000 | ) | (155,000 | ) | |||||||||||
Current portion, net | 441,000 | 475,000 | |||||||||||||
Long-term portion, net | (663,000 | ) | (630,000 | ) | |||||||||||
$ | (222,000 | ) | $ | (155,000 | ) | ||||||||||
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2014 | |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS |
The Company has a 401(k) retirement plan (the "Plan") covering substantially all employees. Participants may contribute up to 10% of their compensation to the Plan. The Company contributes 50% of the participant's contribution, up to 4% of the participant's compensation, as a matching contribution. Total contributions for the years ended December 31, 2014 and 2013 were approximately $89,000 and $79,000, respectively. |
Stock_Options
Stock Options | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Compensation Related Costs [Abstract] | |||||||||||
STOCK OPTIONS | STOCK OPTIONS | ||||||||||
On September 19, 2008, the Board of Directors and Stockholders of the Company adopted the 2008 Stock Option Plan (the "2008 Plan"), which allows the Company to grant up to 500,000 options to employees, officers, directors and consultants to purchase shares of the Company's Common Stock. Options granted under the plan may be either Incentive Stock Options or Non-Qualified Stock Options. Incentive Stock Options may be granted only to employees of the Company, while Non-qualified options may be issued to non-employee directors, consultants, and others, as well as to employees of the Company. There were no grants of options during the years ended December 31, 2014 or 2013. | |||||||||||
Options generally vest over a three year period. The Company did not record any stock option expense for the years 2014 and 2013. As of December 31, 2013, the Company had recognized all remaining stock option expense for its outstanding stock options. | |||||||||||
There were no options exercised for the year ending December 31, 2014 and there were 55,366 options exercised in 2013. The intrinsic value of outstanding and exercisable options at December 31, 2014 was approximately $98,000. | |||||||||||
The following tables summarize activity under the stock option plans of the Company and the stock options outstanding at December 31, 2014: | |||||||||||
Weighted | Options | Vested and | |||||||||
Average | Outstanding | Exercisable | |||||||||
Exercise | |||||||||||
Price | |||||||||||
Balance, December 31, 2012 | $ | 1.82 | 425,965 | 425,965 | |||||||
Granted | — | — | — | ||||||||
Forfeited | — | — | — | ||||||||
Exercised | 0.84 | (55,366 | ) | (55,366 | ) | ||||||
Vested | — | — | — | ||||||||
Balance, December 31, 2013 | 1.96 | 370,599 | 370,599 | ||||||||
Granted | — | — | — | ||||||||
Forfeited | (1.91 | ) | (65,500 | ) | (65,500 | ) | |||||
Exercised | — | — | — | ||||||||
Vested | — | — | — | ||||||||
Balance, December 31, 2014 | $ | 1.97 | 305,099 | 305,099 | |||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES |
The Company has an employment agreement with its current CEO which automatically renews on an annual basis for an additional year, unless earlier terminated or not renewed as provided for therein. The agreement provides for an annual base salary of $99,000 and an annual royalty fee of $99,000 payable as consideration for the CEO’s assignment to the Company of all of his rights, title and interest in certain patents. Payment of the royalty continues only for as long as the Company is using the inventions underlying the patents. Additionally, if the CEO (i) voluntarily leaves the employ of the Company within six months of his becoming aware of a Change of Control (as defined in the agreement) of the Company, then he shall be entitled to receive a lump sum amount equal to three times the five-year average of his combined total annual compensation, which includes the Base Salary and bonus, less one dollar ($1.00), and certain other unpaid accrued amounts as of the date of his termination, or (ii) is terminated by the Company without Cause (as defined in the agreement) or leaves the Company with Good Reason (as defined in the agreement), the CEO shall be entitled to a lump sum payment equal to three times the combined Base Salary and bonus paid during the immediately preceding calendar year, and such other unpaid accrued amounts. In any of such cases, the Company will provide the CEO with certain Company fringe benefits for two years, subject to certain conditions as provided for in the agreement, and all of the CEO’s unvested options, if any, to purchase Company stock shall become fully vested and exercisable on the date of termination. The CEO will be entitled to exercise all such options for three years from the date of termination. | |
In the event the CEO’s employment by the Company is terminated as a result of the CEO’s (i) death, his estate shall be entitled to a lump sum payment of one times the combined Base Salary and bonus, and certain other accrued and unpaid amounts, or | |
(ii) disability, CEO shall be entitled to Base Salary and bonus for a period of one year commencing with the date of termination, and all other unpaid accrued amounts. | |
The Company is party to legal proceedings and disputes which may arise in the ordinary course of business. In the opinion of the Company, it is unlikely that liabilities, if any, arising from legal disputes will have a material adverse effect on the consolidated financial position of the Company. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | |||||||||
EARNINGS PER SHARE | EARNINGS (LOSS) PER SHARE | ||||||||
Earnings (loss) per share are calculated as follows: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Basic earnings (loss) per share | |||||||||
Income (loss) available to common shareholder | $ | (804,838 | ) | $ | 691,502 | ||||
Weighted average shares outstanding | 4,881,548 | 4,839,205 | |||||||
Basic earnings (loss) per share | $ | (0.16 | ) | $ | 0.14 | ||||
Diluted earnings (loss) per share | |||||||||
Income (loss) available to common shareholder | $ | (804,838 | ) | $ | 691,502 | ||||
Weighted average shares outstanding | 4,881,548 | 4,839,205 | |||||||
Dilutive effect of stock options | — | 41,248 | |||||||
Total weighted average shares outstanding | 4,881,548 | 4,880,453 | |||||||
Diluted earnings (loss) per share | $ | (0.16 | ) | $ | 0.14 | ||||
Outstanding options excluded from the diluted earnings per share calculation because they would have an anti-dilutive effect were 305,099 and 254,166 for the years ended December 31, 2014 and 2013, respectively. |
Fair_Value_Measurements_Notes
Fair Value Measurements (Notes) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
Fair Value Measurements | Fair Value Measurements | ||||||||||||
The Company applies the guidance that is codified under ASC 820-10 related to assets and liabilities recognized or disclosed in the financial statements at fair value on a recurring basis. ASC 820-10 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The provisions of ASC 820-10 only apply to the Company’s investment securities, which are carried at fair value. | |||||||||||||
ASC 820-10 clarifies that fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based on the highest and best use of the asset or liability. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. ASC 820-10 requires valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows: | |||||||||||||
Fair Value Hierarchy | Inputs to Fair Value Methodology | ||||||||||||
Level 1 | Quoted prices in active markets for identical assets or liabilities | ||||||||||||
Level 2 | Quoted prices for similar assets or liabilities; quoted markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the financial instrument; inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from, or corroborated by, observable market information | ||||||||||||
Level 3 | Pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption is unobservable or when the estimation of fair value requires significant management judgment | ||||||||||||
The Company categorizes a financial instrument in the fair value hierarchy based on the lowest level of input that is significant to its fair value measurement. | |||||||||||||
Smith-Midland Corporation | |||||||||||||
and Subsidiaries | |||||||||||||
Notes to Consolidated Financial Statements | |||||||||||||
(continued) | |||||||||||||
As of December 31, 2014 | |||||||||||||
Quoted Market Prices in Active Markets | Internal Models with Significant Observable | Internal Models | Total Fair Value | ||||||||||
(Level 1) | Market Parameters | with Significant Unobservable | Reported in | ||||||||||
(Level 2) | Market Parameters | Financial Statements | |||||||||||
(Level 3) | |||||||||||||
Mutual Funds | $ | 1,013,417 | $ | — | $ | — | $ | 1,013,417 | |||||
As of December 31, 2013 | |||||||||||||
Quoted Market Prices in Active Markets | Internal Models with Significant Observable | Internal Models | Total Fair Value | ||||||||||
(Level 1) | Market Parameters | with Significant Unobservable | Reported in | ||||||||||
(Level 2) | Market Parameters | Financial Statements | |||||||||||
(Level 3) | |||||||||||||
Mutual Funds | $ | 915,341 | $ | — | $ | — | $ | 915,341 | |||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Accounting Policies [Abstract] | |||||
Principles of Consolidation | Principles of Consolidation | ||||
The accompanying consolidated financial statements include the accounts of Smith-Midland Corporation and its wholly owned subsidiaries. The Company’s wholly owned subsidiaries consist of Smith-Midland Corporation, a Virginia corporation, Smith-Carolina Corporation, a North Carolina corporation, Easi-Set Industries, Inc., a Virginia corporation, Concrete Safety Systems, Inc., a Virginia corporation, and Midland Advertising and Design, Inc., doing business as Midland Advertising + Design, a Virginia corporation. All material intercompany accounts and transactions have been eliminated in consolidation. | |||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||
The Company considers all unrestricted cash and money market accounts purchased with an original maturity of three months or less as cash and cash equivalents. | |||||
Investments | Investments | ||||
Investments in marketable securities are classified as available-for-sale and are stated at market value with unrealized holding gains and losses excluded from earnings and reported as a separate component of stockholders' equity until realized. | |||||
Inventories | Inventories | ||||
Inventories are stated at the lower of cost, using the first-in, first-out (FIFO) method, or market. | |||||
Property and Equipment | Property and Equipment | ||||
Property and equipment is stated at cost. Expenditures for ordinary maintenance and repairs are charged to income as incurred. Costs of betterments, renewals, and major replacements are capitalized. At the time properties are retired or otherwise disposed of, the related cost and allowance for depreciation are eliminated from the accounts and any gain or loss on disposition is reflected in income. | |||||
Depreciation is computed using the straight-line method over the following estimated useful lives: | |||||
Years | |||||
Buildings | Oct-33 | ||||
Trucks and automotive equipment | 10-Mar | ||||
Shop machinery and equipment | 10-Mar | ||||
Land improvements | 15-Oct | ||||
Office equipment | 10-Mar | ||||
Income Taxes | Income Taxes | ||||
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. | |||||
As of December 31, 2014, the Company has not identified any unrecognized tax positions. The Company files tax returns in the U.S. Federal and various state jurisdictions. The Company recognized, when applicable interest and penalties related to income taxes in other income (expense) in its consolidated statement of income (loss). The Company is no longer subject to U.S. or state tax examinations for the years prior to 2011. The Company does not believe there will be any material changes in unrecognized tax positions over the next twelve months. | |||||
Stock Options | Stock Options | ||||
Stock based compensation is measured based on the fair value of the award on the date of grant and the corresponding expense is recognized over the period during which an employee is required to provide services in exchange for the award. The fair value of each stock option is estimated using a Black-Scholes option pricing model based on certain assumptions including expected term, risk-free interest rate, stock price volatility and dividend yield. The assumption for expected term is based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected term at the grant date. The historical volatility of the Company’s stock is used as the basis for the volatility assumption. See Note 6 of Notes to the Consolidated Financial Statements for additional information related to stock based compensation. There have been no option grants since 2008. Substantially all options become vested and exercisable ratably over a three-year period. | |||||
Revenue Recognition | Revenue Recognition | ||||
The Company primarily recognizes revenue on the sale of its standard precast concrete products at shipment date, including revenue derived from any projects to be completed under short-term contracts. Installation of the Company’s standard products is typically performed by the customer; however, in some circumstances, the Company will install certain products at the time of delivery and will recognize the installation revenue at that time. The installation activities are usually completed the day of delivery or the following day. In utility building sales, the majority of the buildings are erected on the Company’s site and delivered completely installed. | |||||
Leasing fees are paid at the beginning of the lease agreement and recorded to a deferred revenue account. As the revenue is earned each month during the contract, the amount earned is recorded as lease income and an equivalent amount is debited to deferred revenue. | |||||
Royalties are recognized as revenue as they are earned. The Company licenses certain other precast companies to produce its licensed products to our engineering specifications under licensing agreements. The agreements are typically for five year terms and require royalty payments from 4% to 6% which are paid on a monthly basis. The revenue from licensing agreements are recognized in the month earned. | |||||
Certain sales of Soundwall, architectural precast panels and Slenderwall™ concrete products revenue is recognized using the percentage of completion method for recording revenues on long term contracts under ASC 605-35. The contracts are executed by both parties and clearly stipulate the requirements for progress payments and a schedule of delivery dates. Provisions for estimated losses on contracts are made in the period in which such losses are determined. | |||||
Shipping revenues are recognized in the period the shipping services are provided to the customer. | |||||
Smith-Midland products are typically sold pursuant to an implicit warranty as to merchantability only. Warranty claims are reviewed and resolved on a case by case method. Although the Company does incur costs for these types of expense, historically the amount of expense is minimal. | |||||
Shipping and Handling | Shipping and Handling | ||||
Amounts billed to customers are recorded in sales and the costs associated with the shipping and handling are recorded as cost of goods sold. | |||||
Sales and Use Taxes | Sales and Use Taxes | ||||
Use taxes on construction materials are reported gross in general and administrative expense. | |||||
Risks and Uncertainties | Risks and Uncertainties | ||||
The Company sells products to highway contractors operating under government funded highway programs and other customers and extends credit based on an evaluation of the customer’s financial condition, generally without requiring collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure to credit losses and maintains allowances for anticipated losses. Management reviews accounts receivable on a weekly basis to determine the probability of collection. Any accounts receivable that are deemed to be uncollectible along with a general reserve, which is calculated based upon the aging category of the receivable, is included in the overall allowance for doubtful accounts. Management believes the allowance for doubtful accounts at December 31, 2014 is adequate. However, actual write-offs may exceed the recorded allowance. Due to inclement weather, the Company may experience reduced revenues from December through February and may realize the substantial part of its revenues during the other months of the year. | |||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||
The carrying value for each of the Company’s financial instruments (consisting of cash and cash equivalents, accounts receivable, accounts payable and short-term line of credit) approximates fair value because of the short-term nature of those instruments. The estimated fair value of the long-term debt approximates carrying value based on current rates offered to the Company for debt of the similar maturities. | |||||
Estimates | Estimates | ||||
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |||||
Reclassifications | Reclassifications | ||||
Certain minor reclassifications have been made to prior year amounts to conform to the current year presentation. | |||||
Advertising Costs | Advertising Costs | ||||
The Company expenses all advertising costs as incurred. | |||||
Earnings Per Share | Earnings Per Share | ||||
Earnings per share are based on the weighted average number of shares of common stock and dilutive common stock equivalents outstanding. Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in earnings of an entity. | |||||
Long-Lived Assets | Long-Lived Assets | ||||
The Company reviews the carrying values of its long-lived and identifiable intangible assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable based on undiscounted estimated future operating cash flows. When any such impairment exists, the related assets will be written down to fair value. No impairment losses have been recorded through December 31, 2014. | |||||
Subsequent Events | |||||
Recent Accounting Pronouncements | In November 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update (“ASU”) 2014-17, Business Combinations: Pushdown Accounting. This ASU amended the Business Combination Accounting Standards Codification to provide guidance on whether and at what threshold an acquired entity that is a business or nonprofit activity can apply pushdown accounting in its separate financial statements. The Company’s adoption of FASB ASU No. 2013-17 effective November 14, 2014 did not have an impact on the Company’s consolidated results of operations, financial position and related disclosures. | ||||
In August 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial Statements- Going Concern (Subtopic 205-40). The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in the U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The guidance is effective for annual periods ending after December 15, 2016 and for annual periods thereafter. Early adoption is permitted. The Company does not expect this ASU to have a material impact on the Company’s consolidated results of operations, financial position and related disclosures. | |||||
In June 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-12, Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation - Stock Compensation. As a result, the target is not reflected in the estimation of the award's grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the | |||||
performance condition will be achieved. The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. Early adoption is permitted. The Company does not expect this ASU to have a material impact on the Company’s consolidated results of operations, financial position and related disclosures. | |||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. | |||||
The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements and have not yet determined the method by which we will adopt the standard in 2017. | |||||
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements and Property, Plant and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU changes the criteria for determining which disposals can be presented as discontinued operations and modifies related disclosure requirements. Under the new guidance, a discontinued operation is defined as a disposal of a component or group of components that is disposed of or is classified as held for sale and represents a strategic shift that has or will have a major effect on an entity's operations and financial results. The new standard is effective in annual periods beginning on or after December 15, 2014 with | |||||
early adoption permitted. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. The Company’s adoption of FASB ASU No. 2014-08 is not expected to have an impact on the Company’s consolidated results of operations, financial position and related disclosures. | |||||
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes: Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists . This ASU amended the Income Taxes Topic of the Accounting Standards Codification to eliminate a diversity in practice for the presentation of unrecognized tax benefits when net operating loss carryforwards, similar tax losses or tax credit carryforwards exist. The amendment requires that the unrecognized tax benefit be presented as a reduction of the deferred tax assets associated with the carryforwards except in certain circumstances when it would be reflected as a liability. This guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2013. The Company’s adoption of FASB ASU No. 2013-11 effective January 1, 2014 did not have an impact on the Company’s consolidated results of operations, financial position and related disclosures. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Schedule of Property and Equipment | Depreciation is computed using the straight-line method over the following estimated useful lives: | ||||||||
Years | |||||||||
Buildings | Oct-33 | ||||||||
Trucks and automotive equipment | 10-Mar | ||||||||
Shop machinery and equipment | 10-Mar | ||||||||
Land improvements | 15-Oct | ||||||||
Office equipment | 10-Mar | ||||||||
Property and equipment consists of the following: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Land and land improvements | $ | 580,612 | $ | 598,926 | |||||
Buildings | 4,149,078 | 3,934,605 | |||||||
Machinery and equipment | 7,011,943 | 8,997,995 | |||||||
Rental equipment | 1,092,384 | 978,514 | |||||||
12,834,017 | 14,510,040 | ||||||||
Less: accumulated depreciation | 8,727,406 | 10,187,045 | |||||||
$ | 4,106,611 | $ | 4,322,995 | ||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Schedule of Property and Equipment | Depreciation is computed using the straight-line method over the following estimated useful lives: | ||||||||
Years | |||||||||
Buildings | Oct-33 | ||||||||
Trucks and automotive equipment | 10-Mar | ||||||||
Shop machinery and equipment | 10-Mar | ||||||||
Land improvements | 15-Oct | ||||||||
Office equipment | 10-Mar | ||||||||
Property and equipment consists of the following: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Land and land improvements | $ | 580,612 | $ | 598,926 | |||||
Buildings | 4,149,078 | 3,934,605 | |||||||
Machinery and equipment | 7,011,943 | 8,997,995 | |||||||
Rental equipment | 1,092,384 | 978,514 | |||||||
12,834,017 | 14,510,040 | ||||||||
Less: accumulated depreciation | 8,727,406 | 10,187,045 | |||||||
$ | 4,106,611 | $ | 4,322,995 | ||||||
Notes_Payable_Tables
Notes Payable (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Notes Payable [Abstract] | |||||||||
Schedule of notes payable | Notes payable consist of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Note payable to a Bank, maturing June 2021; with monthly payments of approximately $25,000 of principal and interest fixed at 3.99%; collateralized by principally all assets of the Company. | $ | 1,814,825 | $ | 2,043,832 | |||||
Note payable to a Bank, maturing April 2021; with monthly payments of approximately $6,200 of principal and interest at prime at variable rate (5.29% at December 31, 2013); collateralized by certain property of the Company. | 398,964 | 445,882 | |||||||
Installment notes, collateralized by certain machinery and equipment maturing at various dates, primarily through 2016, with interest at 1.0% through 6.7%. | 380,396 | 419,299 | |||||||
Line of credit evidenced by a note payable to a Bank, with the maximum amount of $2,000,000, maturing September 12, 2015, with interest only payments and an initial rate of 4.49% adjustable monthly. The loan is collateralized by a first lien position on the Company's accounts receivable and inventory and a second lien position on all other business assets. | — | — | |||||||
2,594,185 | 2,909,013 | ||||||||
Less current maturities | 363,821 | 364,204 | |||||||
$ | 2,230,364 | $ | 2,544,809 | ||||||
Schedule of maturities of notes payable and capital leases | The aggregate amounts of notes payable maturing in each of the next five years and thereafter are as follows: | ||||||||
Year Ending December 31, | |||||||||
2015 | $ | 363,821 | |||||||
2016 | 368,270 | ||||||||
2017 | 384,480 | ||||||||
2018 | 390,342 | ||||||||
2019 | 362,751 | ||||||||
Thereafter | 724,521 | ||||||||
$ | 2,594,185 | ||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||
Schedule of components of income tax expense (benefit) | Income tax expense (benefit) is comprised of the following: | ||||||||||||||
December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Federal: | |||||||||||||||
Current | $ | (450,000 | ) | $ | 432,000 | ||||||||||
Deferred | 39,000 | (88,000 | ) | ||||||||||||
(411,000 | ) | 344,000 | |||||||||||||
State: | |||||||||||||||
Current | (91,000 | ) | 60,000 | ||||||||||||
Deferred | 4,000 | (13,000 | ) | ||||||||||||
(87,000 | ) | 47,000 | |||||||||||||
$ | (498,000 | ) | $ | 391,000 | |||||||||||
Schedule of effective income tax rate reconciliation | The provision for income taxes differs from the amount determined by applying the federal statutory tax rate to pre-tax income as a result of the following: | ||||||||||||||
December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Income taxes at statutory rate | $ | (445,000 | ) | 34 | % | $ | 368,000 | 34 | % | ||||||
Increase (decrease) in taxes resulting from: | |||||||||||||||
State income taxes, net of federal benefit | (47,000 | ) | 3.6 | % | 49,000 | 4.5 | % | ||||||||
Other | (6,000 | ) | (0.5 | )% | (26,000 | ) | (2.4 | )% | |||||||
$ | (498,000 | ) | 37.1 | % | $ | 391,000 | 36.1 | % | |||||||
Schedule of deferred tax assets (liabilities) | Deferred tax assets (liabilities) are as follows: | ||||||||||||||
December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Depreciation | $ | (663,000 | ) | $ | (630,000 | ) | |||||||||
Unrealized losses on investments available for sale | 3,000 | 27,000 | |||||||||||||
Provision for doubtful accounts | 105,000 | 111,000 | |||||||||||||
Vacation accrued | 91,000 | 86,000 | |||||||||||||
Deferred income | 161,000 | 170,000 | |||||||||||||
Other | 81,000 | 81,000 | |||||||||||||
Net deferred tax asset (liability) | (222,000 | ) | (155,000 | ) | |||||||||||
Current portion, net | 441,000 | 475,000 | |||||||||||||
Long-term portion, net | (663,000 | ) | (630,000 | ) | |||||||||||
$ | (222,000 | ) | $ | (155,000 | ) | ||||||||||
Stock_Options_Tables
Stock Options (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Compensation Related Costs [Abstract] | |||||||||||
Schedule of stock options activity | The following tables summarize activity under the stock option plans of the Company and the stock options outstanding at December 31, 2014: | ||||||||||
Weighted | Options | Vested and | |||||||||
Average | Outstanding | Exercisable | |||||||||
Exercise | |||||||||||
Price | |||||||||||
Balance, December 31, 2012 | $ | 1.82 | 425,965 | 425,965 | |||||||
Granted | — | — | — | ||||||||
Forfeited | — | — | — | ||||||||
Exercised | 0.84 | (55,366 | ) | (55,366 | ) | ||||||
Vested | — | — | — | ||||||||
Balance, December 31, 2013 | 1.96 | 370,599 | 370,599 | ||||||||
Granted | — | — | — | ||||||||
Forfeited | (1.91 | ) | (65,500 | ) | (65,500 | ) | |||||
Exercised | — | — | — | ||||||||
Vested | — | — | — | ||||||||
Balance, December 31, 2014 | $ | 1.97 | 305,099 | 305,099 | |||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Schedule of earnings per share | Earnings (loss) per share are calculated as follows: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Basic earnings (loss) per share | |||||||||
Income (loss) available to common shareholder | $ | (804,838 | ) | $ | 691,502 | ||||
Weighted average shares outstanding | 4,881,548 | 4,839,205 | |||||||
Basic earnings (loss) per share | $ | (0.16 | ) | $ | 0.14 | ||||
Diluted earnings (loss) per share | |||||||||
Income (loss) available to common shareholder | $ | (804,838 | ) | $ | 691,502 | ||||
Weighted average shares outstanding | 4,881,548 | 4,839,205 | |||||||
Dilutive effect of stock options | — | 41,248 | |||||||
Total weighted average shares outstanding | 4,881,548 | 4,880,453 | |||||||
Diluted earnings (loss) per share | $ | (0.16 | ) | $ | 0.14 | ||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
Schedule of Fair Value Measurements | The Company categorizes a financial instrument in the fair value hierarchy based on the lowest level of input that is significant to its fair value measurement. | ||||||||||||
Smith-Midland Corporation | |||||||||||||
and Subsidiaries | |||||||||||||
Notes to Consolidated Financial Statements | |||||||||||||
(continued) | |||||||||||||
As of December 31, 2014 | |||||||||||||
Quoted Market Prices in Active Markets | Internal Models with Significant Observable | Internal Models | Total Fair Value | ||||||||||
(Level 1) | Market Parameters | with Significant Unobservable | Reported in | ||||||||||
(Level 2) | Market Parameters | Financial Statements | |||||||||||
(Level 3) | |||||||||||||
Mutual Funds | $ | 1,013,417 | $ | — | $ | — | $ | 1,013,417 | |||||
As of December 31, 2013 | |||||||||||||
Quoted Market Prices in Active Markets | Internal Models with Significant Observable | Internal Models | Total Fair Value | ||||||||||
(Level 1) | Market Parameters | with Significant Unobservable | Reported in | ||||||||||
(Level 2) | Market Parameters | Financial Statements | |||||||||||
(Level 3) | |||||||||||||
Mutual Funds | $ | 915,341 | $ | — | $ | — | $ | 915,341 | |||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred Revenue Arrangement [Line Items] | ||
Inventory reserve | 90,000 | $90,000 |
Buildings | Minimum | ||
Deferred Revenue Arrangement [Line Items] | ||
Useful life | 10 years | |
Buildings | Maximum | ||
Deferred Revenue Arrangement [Line Items] | ||
Useful life | 33 years | |
Trucks and automotive equipment | Minimum | ||
Deferred Revenue Arrangement [Line Items] | ||
Useful life | 3 years | |
Trucks and automotive equipment | Maximum | ||
Deferred Revenue Arrangement [Line Items] | ||
Useful life | 10 years | |
Shop machinery and equipment | Minimum | ||
Deferred Revenue Arrangement [Line Items] | ||
Useful life | 3 years | |
Shop machinery and equipment | Maximum | ||
Deferred Revenue Arrangement [Line Items] | ||
Useful life | 10 years | |
Land improvements | Minimum | ||
Deferred Revenue Arrangement [Line Items] | ||
Useful life | 10 years | |
Land improvements | Maximum | ||
Deferred Revenue Arrangement [Line Items] | ||
Useful life | 15 years | |
Office equipment | Minimum | ||
Deferred Revenue Arrangement [Line Items] | ||
Useful life | 3 years | |
Office equipment | Maximum | ||
Deferred Revenue Arrangement [Line Items] | ||
Useful life | 10 years |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $12,834,017 | $14,510,040 |
Less: accumulated depreciation | 8,727,406 | 10,187,045 |
Property and equipment, net | 4,106,611 | 4,322,995 |
Depreciation expense | 637,000 | 635,000 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 580,612 | 598,926 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,149,078 | 3,934,605 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 7,011,943 | 8,997,995 |
Rental equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $1,092,384 | $978,514 |
Notes_Payable_and_Capital_Leas
Notes Payable and Capital Lease Maturities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Debt Disclosure [Abstract] | ||
2014 | $363,821 | |
2015 | 368,270 | |
2016 | 384,480 | |
2017 | 390,342 | |
2018 | 362,751 | |
Thereafter | 724,521 | |
Notes Payable | $2,594,185 | $2,909,013 |
Notes_Payable_Details
Notes Payable (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ||
Notes Payable | $2,594,185 | $2,909,013 |
Less current maturities | 363,821 | 364,204 |
Notes payable - less current maturities | 2,230,364 | 2,544,809 |
Note payable to a Bank | Note payable due June 2021 | ||
Debt Instrument [Line Items] | ||
Monthly payments | 25,000 | |
Interest rate | 3.99% | |
Note payable to a Bank | 1,814,825 | 2,043,832 |
Note payable to a Bank | Note Payable Due June 2021 | ||
Debt Instrument [Line Items] | ||
Monthly payments | 36,000 | |
Interest rate | 3.75% | |
Note payable to a Bank | Note payable due April 2021 | ||
Debt Instrument [Line Items] | ||
Monthly payments | 6,200 | |
Interest rate | 5.29% | |
Note payable to a Bank | 398,964 | 445,882 |
Capital lease obligation | ||
Debt Instrument [Line Items] | ||
Interest rate | 7.00% | |
Installment notes | ||
Debt Instrument [Line Items] | ||
Installment notes, collateralized by certain machinery and equipment maturing at various dates, primarily through 2016, with interest at 1.0% through 6.7%. | $380,396 | $419,299 |
Installment notes | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.00% | |
Installment notes | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.70% | |
Prime rate | Note payable to a Bank | Note Payable Due June 2021 | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.50% |
Related_Party_Transactions_Det
Related Party Transactions (Details) (CEO, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
CEO | |
Related Party Transaction [Line Items] | |
Annual rent | $24 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Federal: | ||
Current | ($450,000) | $432,000 |
Deferred | 39,000 | -88,000 |
Total Federal | -411,000 | 344,000 |
State: | ||
Current | -91,000 | 60,000 |
Deferred | 4,000 | -13,000 |
Total State | -87,000 | 47,000 |
Income tax benefit (expense) | -498,000 | 391,000 |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | ||
Income taxes at statutory rate | -445,000 | 368,000 |
State income taxes, net of federal benefit | -47,000 | 49,000 |
Other, including prior year (over) under accrual | -6,000 | -26,000 |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | ||
Income taxes at statutory rate | 34.00% | 34.00% |
State income taxes, net of federal benefit | 3.60% | 4.50% |
Other | -0.50% | -2.40% |
Effective income tax rate | 37.10% | 36.10% |
Components of Deferred Tax Assets and Liabilities [Abstract] | ||
Depreciation | -663,000 | -630,000 |
Unrealized losses on investments available for sale | 3,000 | 27,000 |
Provision for doubtful accounts | 105,000 | 111,000 |
Vacation accrued | 91,000 | 86,000 |
Deferred income | 161,000 | 170,000 |
Other | 81,000 | 81,000 |
Net deferred tax asset (liability) | -222,000 | -155,000 |
Current portion, net | 441,000 | 475,000 |
Long-term portion, net | ($663,000) | ($630,000) |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] | ||
Maximum annual contributions per employee, percent | 10.00% | |
Employer matching contribution, percent of match | 50.00% | |
Employer matching contribution, percent of employees' gross pay | 4.00% | |
Cost recognized | $89 | $79 |
Stock_Options_Details
Stock Options (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 19, 2008 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option expense (in dollars) | $0 | ||
Intrinsic value of options outstanding (in dollars) | 98,000 | ||
Intrinsic value of options exercisable (in dollars) | 112,000 | ||
Weighted Average Exercise Price | |||
Beginning balance (in dollars per share) | $1.96 | $1.82 | |
Granted (in dollars per share) | $0 | $0 | |
Forfeited (in dollars per share) | $1.91 | $0 | |
Exercised (in dollars per share) | $0 | $0.84 | |
Vested (in dollars per share) | $0 | $0 | |
Ending balance (in dollars per share) | $1.97 | $1.96 | |
Options Outstanding | |||
Beginning balance | 370,599 | 425,965 | |
Granted | 0 | 0 | |
Forfeited | -65,500 | 0 | |
Exercised | 0 | -55,366 | |
Vested | 0 | 0 | |
Ending balance | 305,099 | 370,599 | |
Vested and Exercisable | |||
Beginning balance | 370,599 | 425,965 | |
Granted | 0 | 0 | |
Forfeited | -65,500 | 0 | |
Exercised | 0 | -55,366 | |
Vested | 0 | 0 | |
Ending balance | 305,099 | 370,599 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of options authorized | 500,000 | ||
Vesting period | 3 years | ||
Stock option expense (in dollars) | $0 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (CEO, USD $) | 12 Months Ended |
Dec. 31, 2014 | |
CEO | |
Loss Contingencies [Line Items] | |
Annual base salary | $99,000 |
Annual royalty fee | 99,000 |
Voluntary termination period | 6 months |
Compensation multiplier due to Company upon voluntary termination within defined period | 3 |
Time period used to determine cancellation penalties | 5 years |
Amount subtracted from cancellation penalties | $1 |
Compensation multiplier due to employee upon voluntary termination with good reason | 3 |
Period following termination of continued fringe benefits | 2 years |
Period following termination options are exercisable | 3 years |
Compensation multiplier due to employee's estate upon death | 1 |
Period following termination due to disability of continued compensation | 1 year |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Basic earnings (loss) per share | ||
Income available to common shareholder (in dollars) | ($804,838) | $691,502 |
Weighted average shares outstanding | 4,881,548 | 4,839,205 |
Basic earnings per share (in dollars per share) | ($0.16) | $0.14 |
Diluted earnings (loss) per share | ||
Income (loss) available to common shareholder (in dollars) | $691,502 | |
Weighted average shares outstanding | 4,881,548 | 4,839,205 |
Dilutive effect of stock options | 0 | 41,248 |
Total weighted average shares outstanding | 4,881,548 | 4,880,453 |
Diluted earnings per share (in dollars per share) | ($0.16) | $0.14 |
Antidilutive securities excluded from computation of earnings per share | 254,166 | 254,166 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Mutual Funds [Member], USD $) | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Investments, Fair Value Disclosure | $1,013,417 |
Level 1 [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Investments, Fair Value Disclosure | 1,013,417 |
Level 2 [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Investments, Fair Value Disclosure | 0 |
Level 3 [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Investments, Fair Value Disclosure | $0 |