Smith-Midland (SMID) 10-Q 14 May 20 2020 Q1 Quarterly report Financial data

Document Entity Information

Document Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 01, 2020
Document Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Entity Registrant Name	SMITH MIDLAND CORP
Entity Central Index Key	0000924719
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Is Entity's Reporting Status Current?	Yes
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		5,183,991
Entity Interactive Data Current	Yes
Entity Incorporation State Country Code	DE
Entity File Number	1-13752

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets
Cash	$ 2,198	$ 1,364
Investment securities, available-for-sale, at fair value	1,162	1,176
Accounts receivable, net
Trade - billed (less allowance for doubtful accounts of $350 and $333), including contract retentions	9,444	12,723
Trade - unbilled	956	310
Inventories, net
Raw materials	597	488
Finished goods	1,574	1,754
Prepaid expenses and other assets	708	784
Refundable income taxes	464	432
Total current assets	17,103	19,031
Property and equipment, net	17,998	17,735
Deferred buy-back lease asset, net	4,861	5,042
Other assets	337	307
Total assets	40,299	42,115
Current liabilities
Accounts payable - trade	2,669	3,180
Accrued expenses and other liabilities	94	125
Deferred revenue	1,744	1,891
Accrued compensation	761	1,075
Dividend payable	0	282
Deferred buy-back lease obligation	1,037	966
Operating lease liabilities	81	81
Current maturities of notes payable	847	925
Customer deposits	492	1,077
Total current liabilities	7,725	9,602
Deferred revenue	117	241
Deferred buy-back lease obligation	4,853	5,183
Operating lease liabilities	275	296
Notes payable - less current maturities	4,660	4,086
Deferred tax liability	1,902	1,886
Total liabilities	19,532	21,294
Stockholders' equity
Preferred stock, $.01 par value; authorized 1,000,000 shares, none issued and outstanding	0	0
Common stock, $.01 par value; authorized 8,000,000 shares; 5,224,911 and 5,224,911 issued and 5,183,991 and 5,164,324 outstanding, respectively	52	52
Additional paid-in capital	6,242	6,242
Treasury stock, at cost, 40,920 shares	(102)	(102)
Other	(26)	(10)
Retained earnings	14,601	14,639
Total stockholders' equity	20,767	20,821
Total liabilities and stockholders' equity	$ 40,299	$ 42,115

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets
Allowance for doubtful accounts	$ 350	$ 333
Stockholders' equity
Preferred stock, par value	$ .01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ .01	$ .01
Common stock, shares authorized	8,000,000	8,000,000
Common stock, shares issued	5,224,911	5,224,911
Common stock, shares outstanding	5,183,991	5,164,324
Treasury shares	40,920	40,920

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenue
Total revenue	$ 9,825	$ 10,189
Cost of goods sold	8,225	7,967
Gross profit	1,600	2,222
General and administrative expenses	1,051	1,208
Selling expenses	591	567
Total operating expenses	1,642	1,775
Operating income	(42)	447
Other income (expense)
Interest expense	(56)	(44)
Interest income	9	11
Gain (loss) on sale of assets	36	2
Other income (expense)	4	14
Total other income (expense)	(7)	(17)
Income (loss) before income tax expense (benefit)	(49)	430
Income tax expense	(11)	99
Net income	$ (38)	$ 331
Basic earnings (loss) per share	$ (0.01)	$ 0.06
Weighted average number of common shares outstanding:
Basic (in thousands)	5,183	5,134
Diluted (in thousands)	5,183	5,142
Product sales
Revenue
Total revenue	$ 6,852	$ 7,503
Barrier rentals
Revenue
Total revenue	742	573
Royalty income
Revenue
Total revenue	268	306
Shipping and installation revenue
Revenue
Total revenue	$ 1,963	$ 1,807

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Treasury Stock	Accumulated Other Comprehensive Loss	Retained Earnings	Total
Beginning balance at Dec. 31, 2018	$ 51	$ 5,973	$ (102)	$ (37)	$ 12,962	$ 18,847
Other				15		15
Vesting of restricted stock		84				84
Net income					331	331
Ending balance at Mar. 31, 2019	51	6,057	(102)	(22)	13,293	19,277
Beginning balance at Dec. 31, 2019	52	6,242	(102)	(10)	14,639	20,821
Other				(16)		(16)
Vesting of restricted stock						0
Net income					(38)	(38)
Ending balance at Mar. 31, 2020	$ 52	$ 6,242	$ (102)	$ (26)	$ 14,601	$ 20,767

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash Flows From Operating Activities
Net income (loss)	$ (38)	$ 331
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and amortization	572	426
Gain on sale of assets	(36)	(2)
Allowance for doubtful accounts	17	15
Stock compensation	0	84
Deferred taxes	16	3
(Increase) decrease in
Accounts receivable - billed	3,262	2,727
Accounts receivable - unbilled	(646)	750
Inventories	71	514
Prepaid expenses and other assets	41	514
Refundable income taxes	(32)	92
Increase (decrease) in
Accounts payable - trade	(511)	(1,482)
Accrued expenses and other liabilities	(31)	(25)
Deferred revenue	(271)	182
Accrued compensation	(314)	(815)
Deferred buy-back lease obligation	(259)	258
Customer deposits	(585)	(1,113)
Net cash provided by (used in) operating activities	1,256	2,459
Cash Flows From Investing Activities
Purchases of investment securities available-for-sale	(8)	(8)
Purchases of property and equipment	(669)	(1,049)
Deferred buy-back lease asset	0	(358)
Proceeds from sale of fixed assets	41	2
Net cash used in investing activities	(636)	(1,413)
Cash Flows From Financing Activities
Proceeds from the line-of-credit construction draw	0	500
Proceeds from long-term borrowings	2,701	0
Repayments of long-term borrowings	(2,205)	(178)
Dividends paid on common stock	(282)	(281)
Net cash used in financing activities	214	41
Net decrease in cash	834	1,087
Cash, beginning of period	1,364	1,946
Cash, end of period	2,198	3,033
Supplemental Cash Flow information:
Non-cash transaction - right of use asset and lease liability upon lease standard adoption	0	414
Cash payments for interest	56	44
Cash payments for income taxes	$ 1	$ 0

INTERIM FINANCIAL REPORTING

INTERIM FINANCIAL REPORTING	3 Months Ended
	Mar. 31, 2020
Accounting Policies [Abstract]
INTERIM FINANCIAL REPORTING	Basis of Presentation The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, we have condensed or omitted certain information and footnote disclosures that are included in our annual financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, summary of significant accounting policies, and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2019. The condensed consolidated December 31, 2019 balance sheet was derived from the audited financial statements included in the Form 10-K. Dollar amounts in the footnotes are stated in thousands, except for per share data. In the opinion of management, these condensed consolidated financial statements reflect all adjustments (which consist of normal, recurring adjustments) necessary for a fair presentation of the financial position and results of operations and cash flows for the periods presented. The results disclosed in the condensed consolidated statements of operations are not necessarily indicative of the results to be expected in any future periods. Although the ultimate impact is uncertain at this time, the coronavirus outbreak may significantly affect the Company's financial condition, liquidity, and results of operations. In this respect, the Company has already experienced the following negative impacts on its business: backlog reduction, lower production volumes, employee absence, bidding restrictions within certain key states, and delays in receipt of materials through the Company's supply chain. Recent Accounting Pronouncements In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. The guidance provides temporary optional expedients and exceptions related to contract modifications and hedge accounting to ease entities’ financial reporting burdens as the market transitions from the London Interbank Offered Rate and other interbank offered rates to alternative reference rates. The new guidance allows entities to elect not to apply certain modification accounting requirements, if certain criteria are met, to contracts affected by what the guidance calls reference rate reform. An entity that makes this election would consider changes in reference rates and other contract modifications related to reference rate reform to be events that do not require contract remeasurement at the modification date or reassessment of a previous accounting determination. The ASU notes that changes in contract terms that are made to effect the reference rate reform transition are considered related to the replacement of a reference rate if they are not the result of a business decision that is separate from or in addition to changes to the terms of a contract to effect that transition. The guidance is effective upon issuance and generally can be applied as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of the standard on its credit agreement accounted for under Codification topic ASC 470, “Debt”. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes”. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company does not intend to early adopt the standard and does not expect the standard to have a material effect on its consolidated financial condition and results of operations. Revenue Recognition Product Sales - Over Time Under Topic 606, the Company recognizes revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services provided. Revenue associated with contracts with customers is recognized over time as the Company's performance creates or enhances customer controlled assets or creates or enhances an asset with no alternative use, which the Company has an enforceable right to receive compensation as defined under the contract for performance completed. To determine the amount of revenue to recognize over time, the Company recognizes revenue over the contract terms based on the output method. The Company applied the "as-invoiced" practical expedient as the amount of consideration the Company has the right to invoice corresponds directly with the value of the Company's performance to date. As the output method is driven by units produced, the Company recognizes revenues based on the value transferred to the customer relative to the remaining value to be transferred. The Company also matches the costs associated with the units produced. If a contract is projected to result in a loss, the entire contract loss is recognized in the period when the loss was first determined and the amount of the loss updated in subsequent reporting periods. Revenue recognition also includes an amount related to a contract asset or contract liability. If the recognized revenue is greater than the amount billed to the customer, a contract asset is recorded in "Accounts receivable - unbilled". Conversely, if the amount billed to the customer is greater than the recognized revenue, a contract liability is recorded in "Customer deposits". Changes in the job performance, job conditions and final contract settlements are factors that influence management’s assessment of total contract value and therefore, profit and revenue recognition. A portion of the work the Company performs requires financial assurances in the form of performance and payment bonds or letters of credit at the time of execution of the contract. Some contracts include retention provisions of up to 10% which are generally withheld from each progress payment as retainage until the contract work has been completed and approved. Product Sales - Point in Time For certain product sales that do not meet the over time criteria, under Topic 606 the Company recognizes revenue when the product has been shipped to the destination in accordance with the terms outlined in the contract where a present obligation to pay exists as the customer has gained control of the product. Accounts Receivable and Contract Balances The timing of when we bill our customers is generally dependent upon billing terms, milestone billings based on the completion of certain phases of the work, or when services are provided or products are shipped. Projects with performance obligations recognized over time that have costs and estimated earnings recognized to date in excess of cumulative billings, are reported on our Condensed Consolidated Balance Sheets as "Accounts receivable - unbilled" (contract assets). Projects with performance obligations recognized over time that have cumulative billings in excess of costs and estimated earnings recognized to date, are reported on our Condensed Consolidated Balance Sheets as "Customer deposits" (contract liabilities). Any uncollected billed amounts for our performance obligations recognized over time, including contract retentions, are recorded within accounts receivable. At March 31, 2020 and December 31, 2019, accounts receivable included contract retentions of approximately $2,152 and $2,146, respectively. Our billed and unbilled revenue may be exposed to potential credit risk if our customers should encounter financial difficulties, and we maintain reserves for specifically-identified potential uncollectible receivables. At March 31, 2020 and December 31, 2019, our allowances for doubtful accounts were $350 and $333, respectively. Sale to Customer with a Buy-Back Guarantee The Company entered into a buy-back agreement with one specific customer. Under this agreement, the Company guaranteed to buy-back product at a predetermined price at the end of the long-term project, subject to the condition of the product. Although the Company receives payment in full as the product is produced, GAAP requires these transactions to be accounted for as operating leases. The amount of sale proceeds equal to the buy-back obligation, included in "Deferred buy-back lease obligation" in the liabilities section of the consolidated balance sheet, is deferred until the buy-back is exercised or expired. The remaining sale proceeds are deferred in the same account and recognized on a straight-line basis over the usage period, such usage period commencing on delivery to the job-site and ending at the time the buy-back is exercised or expired. The Company capitalizes the cost of the product on the consolidated balance sheet shown in "Deferred buy-back lease asset, net", and depreciates the value, less residual value, to cost of leasing revenue in "Cost of goods sold" over the estimated useful life of the asset. In the case the customer does not exercise the buy-back option and retains ownership of the product at the end of the usage period, the guaranteed buy-back liability and any deferred revenue balances related to the product are settled to revenue, and the net book value of the asset is expensed to cost of leasing revenue. If the customer exercises the buy-back guarantee option, the Company purchases the product back in the amount equal to the buy-back guarantee, we settle any remaining deferred balances, in excess of the buy-back payment, to leasing revenue, and we reclassify the net book value of the product on the consolidated balance sheet to "Inventories" or "Property and equipment, net" depending on the intended use at the time. The revenue is being recognized in accordance with Topic 842, Leases Barrier Rentals - Lease Income Leasing fees are paid by customers at the beginning of the lease period and are recorded as deferred revenue. The deferred revenue is then recognized each month as lease income for the duration of the lease, in accordance with Topic 842, Leases Royalty Income The Company licenses certain products to other precast companies to manufacture the Company's products to engineering specifications under the licensing agreements. The agreements are typically for five year terms and require royalty payments from 4% to 6% of total sales of licensed products, which are paid on a monthly basis. The revenues from licensing agreements are recognized in the month earned, in accordance with Topic 606-10-55-65. Shipping and Installation Shipping and installation revenues are recognized as a distinct performance obligation in the period the shipping and installation services are provided to the customer, in accordance with Topic 606. Disaggregation of Revenue In the following table, revenue is disaggregated by primary sources of revenue: Revenue by Type Three Months Ended March 31, 2020 2019 Change % Change Soundwall Sales $ 1,887 $ 2,114 $ (227 ) (11 )% Architectural Panel Sales 767 767 100 % SlenderWall Sales 923 1,963 (1,040 ) (53 )% Miscellaneous Wall Sales 903 363 540 149 % Barrier Sales 1,325 1,591 (266 ) (17 )% Easi-Set and Easi-Span Building Sales 559 1,034 (475 ) (46 )% Utility Sales 401 308 93 30 % Miscellaneous Sales 87 130 (43 ) (34 )% Total Product Sales 6,852 7,503 (651 ) (9 )% Barrier Rentals 742 573 169 29 % Royalty Income 268 306 (38 ) (12 )% Shipping and Installation Revenue 1,963 1,807 156 9 % Total Service Revenue 2,973 2,686 287 11 % Total Revenue $ 9,825 $ 10,189 $ (364 ) (4 )% The revenue items: soundwall sales, architectural sales, SlenderWall sales, miscellaneous wall sales, barrier rentals, and royalty income are recognized as revenue over time. The revenue items: barrier sales, Easi-Set and Easi-Span building sales, utility sales, miscellaneous sales, and shipping and installation revenue are recognized as revenue at the point in time. Warranties The Company's 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. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and assess performance. The Company currently operates in one operating and reportable business segment for financial reporting purposes.

NET INCOME (LOSS) PER SHARE

NET INCOME (LOSS) PER SHARE	3 Months Ended
	Mar. 31, 2020
Earnings Per Share [Abstract]
NET INCOME (LOSS) PER SHARE	Basic earnings (loss) per common share exclude all common stock equivalents, primarily restricted stock awards, and is computed using the weighted average number of common shares outstanding during the period. The diluted earnings (loss) per common share calculation reflects the potential dilutive effect of securities that could share in earnings of the Company. As of March 31, 2020, there are no outstanding stock options. For periods prior to March 31, 2020 outstanding options were excluded from the diluted earnings (loss) per share calculation when they would have an anti-dilutive effect. Earnings per share are calculated as follows: Three Months Ended March 31, 2020 2019 Basic income (loss) per share Net income (loss) $ (38 ) $ 331 Weighted average shares outstanding 5,183 5,134 Basic income (loss) per share $ (0.01 ) $ 0.06 Diluted income (loss) per share Net income (loss) $ (38 ) $ 331 Weighted average shares outstanding 5,183 5,134 Dilutive effect of stock options and restricted stock — 8 Total weighted average shares outstanding 5,183 5,142 Diluted income (loss) per share $ (0.01 ) $ 0.06

NOTES PAYABLE

NOTES PAYABLE	3 Months Ended
	Mar. 31, 2020
Notes Payable [Abstract]
NOTES PAYABLE	The Company has a mortgage note payable to Summit Community Bank (the “Bank”), with a balance of $447 as of March 31, 2020. The note has a maturity date of September 20, 2021 and a fixed interest rate of 3.99% annually with monthly payments of $26 and is secured by principally all of the assets of the Company. Under the terms of the note, the Bank will permit chattel mortgages on purchased equipment not to exceed $250 for any one individual loan so long as the Company is not in default. The Company has a mortgage note payable to the Bank for the construction of it's North Carolina facility. The note carries a ten year term at a fixed interest rate of 3.64% annually per the Promissory Note Rate Conversion Agreement, with monthly payments of $22, and is secured by all of the assets of Smith-Carolina and a guarantee by the Company. The balance of the note payable at March 31, 2020 was $2,150. On March 27, 2020, the Company completed the refinancing of existing loans with a note payable to the Bank in the amount of $2,701. A portion of the funds in the amount of $678 were secured for improvements to an existing five acre parcel for additional storage at the Midland, Virginia plant. The loan is collateralized by a first lien position on the Virginia property, building, and assets. The refinance also released the lien on the Smith-Columbia plant in Hopkins, South Carolina (Columbia). The interest rate per the Promissory Note is fixed at 3.99% per annum, with principal and interest payments payable monthly over 120 months in the amount of $27. The loan matures on March 27, 2030.The balance of the note payable at March 31, 2020 was $2,701. The Company additionally has 6 smaller installment loans with annual interest rates between 3.99% and 5.29%, maturing between 2020 and 2025, with varying balances totaling $209. Under the loan covenants with the Bank, the Company is limited to annual capital expenditures of $3,500 and must maintain tangible net worth of $10,000. The Company is in compliance with all covenants pursuant to the loan agreements as of March 31, 2020. In addition to the notes payable discussed above, the Company has a $4,000 line of credit with the Bank with no balance outstanding as of March 31, 2020. The line of credit is evidenced by a commercial revolving promissory note which carries a variable interest rate of prime and matures on October 1, 2020. 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. Key provisions of the line of credit require the Company (i) to obtain bank approval for capital expenditures in excess of $3,500 during the term of the loan; and (ii) to obtain bank approval prior to its funding any acquisition.

STOCK COMPENSATION

STOCK COMPENSATION	3 Months Ended
	Mar. 31, 2020
Compensation Related Costs [Abstract]
STOCK COMPENSATION	The fair value of restricted stock awards is estimated to be the market price of the Company's common stock at the close of the date of grant. Restricted stock activity during the three months ended March 31, 2020 is as follows: Number of Shares Weighted Average Grant Date Fair Value per Share Balance, December 31, 2019 19,667 $ 5.45 Granted Vested 19,667 5.45 Forfeited — — Non-vested, end of period Awards are amortized to expense ratably, on an annual basis, over a three year vesting term, except one grant in January 2019 for 2,000 shares of restricted stock, which vested upon grant. There was stock compensation expense of less than $1 for the three months ended March 31, 2020 and $84 for the three months ended March 31, 2019. There is no unrecognized stock compensation cost as of March 31, 2020.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2020
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	O n April 16, 2020, the Company completed a note payable secured under the Paycheck Protection Program (the "PPP") to the Bank in the amount of $2,692. The PPP provides for loans to qualifying businesses, the proceeds of which may only be used for payroll costs, rent, utilities, mortgage interest, and interest on other pre-existing indebtedness (the "permissible expenses"). The interest rate per the Promissory Note, dated April 16, 2020 and executed by the Company in favor of the Bank, is fixed at 1.00% per annum, with principal and interest payments starting November 16, 2020, payable monthly over 18 months in the amount of $152. The loan matures on April 16, 2022. The proceeds of the loan must be utilized pursuant to the requirements of the PPP, and all or a portion of the loan may be forgiven in accordance with the PPP applicable rules, regulations, and guidelines. For further information, please reference the Company's Form 8-K filed on April 16, 2020.

INTERIM FINANCIAL REPORTING (Po

INTERIM FINANCIAL REPORTING (Policies)	3 Months Ended
	Mar. 31, 2020
Accounting Policies [Abstract]
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information, and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, we have condensed or omitted certain information and footnote disclosures that are included in our annual financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, summary of significant accounting policies, and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2019. The condensed consolidated December 31, 2019 balance sheet was derived from the audited financial statements included in the Form 10-K. Dollar amounts in the footnotes are stated in thousands, except for per share data. In the opinion of management, these condensed consolidated financial statements reflect all adjustments (which consist of normal, recurring adjustments) necessary for a fair presentation of the financial position and results of operations and cash flows for the periods presented. The results disclosed in the condensed consolidated statements of operations are not necessarily indicative of the results to be expected in any future periods. Although the ultimate impact is uncertain at this time, the coronavirus outbreak may significantly affect the Company's financial condition, liquidity, and results of operations. In this respect, the Company has already experienced the following negative impacts on its business: backlog reduction, lower production volumes, employee absence, bidding restrictions within certain key states, and delays in receipt of materials through the Company's supply chain.
Recent Accounting Pronouncements	In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. The guidance provides temporary optional expedients and exceptions related to contract modifications and hedge accounting to ease entities’ financial reporting burdens as the market transitions from the London Interbank Offered Rate and other interbank offered rates to alternative reference rates. The new guidance allows entities to elect not to apply certain modification accounting requirements, if certain criteria are met, to contracts affected by what the guidance calls reference rate reform. An entity that makes this election would consider changes in reference rates and other contract modifications related to reference rate reform to be events that do not require contract remeasurement at the modification date or reassessment of a previous accounting determination. The ASU notes that changes in contract terms that are made to effect the reference rate reform transition are considered related to the replacement of a reference rate if they are not the result of a business decision that is separate from or in addition to changes to the terms of a contract to effect that transition. The guidance is effective upon issuance and generally can be applied as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact of the standard on its credit agreement accounted for under Codification topic ASC 470, “Debt”. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes”. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company does not intend to early adopt the standard and does not expect the standard to have a material effect on its consolidated financial condition and results of operations.
Revenue Recognition	Product Sales - Over Time Under Topic 606, the Company recognizes revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for goods or services provided. Revenue associated with contracts with customers is recognized over time as the Company's performance creates or enhances customer controlled assets or creates or enhances an asset with no alternative use, which the Company has an enforceable right to receive compensation as defined under the contract for performance completed. To determine the amount of revenue to recognize over time, the Company recognizes revenue over the contract terms based on the output method. The Company applied the "as-invoiced" practical expedient as the amount of consideration the Company has the right to invoice corresponds directly with the value of the Company's performance to date. As the output method is driven by units produced, the Company recognizes revenues based on the value transferred to the customer relative to the remaining value to be transferred. The Company also matches the costs associated with the units produced. If a contract is projected to result in a loss, the entire contract loss is recognized in the period when the loss was first determined and the amount of the loss updated in subsequent reporting periods. Revenue recognition also includes an amount related to a contract asset or contract liability. If the recognized revenue is greater than the amount billed to the customer, a contract related asset is recorded in "Accounts receivable - unbilled". Conversely, if the amount billed to the customer is greater than the recognized revenue, a contract liability is recorded in "Customer deposits". Changes in the job performance, job conditions and final contract settlements are factors that influence management’s assessment of total contract value and therefore, profit and revenue recognition. A portion of the work the Company performs requires financial assurances in the form of performance and payment bonds or letters of credit at the time of execution of the contract. Some contracts include retention provisions of up to 10% which are generally withheld from each progress payment as retainage until the contract work has been completed and approved. Product Sales - Point in Time For certain product sales that do not meet the over time criteria, under Topic 606 the Company recognizes revenue when the product has been shipped to the destination in accordance with the terms outlined in the contract where a present obligation to pay exists as the customer has gained control of the product. Accounts Receivable and Contract Balances The timing of when we bill our customers is generally dependent upon billing terms, milestone billings based on the completion of certain phases of the work, or when services are provided or products are shipped. Projects with performance obligations recognized over time that have costs and estimated earnings recognized to date in excess of cumulative billings, are reported on our Condensed Consolidated Balance Sheets as "Accounts receivable - unbilled". Projects with performance obligations recognized over time that have cumulative billings in excess of costs and estimated earnings recognized to date, are reported on our Condensed Consolidated Balance Sheets as "Customer deposits" (contract liabilities). Any uncollected billed amounts for our performance obligations recognized over time, including contract retentions, are recorded within accounts receivable. At March 31, 2020 and December 31, 2019, accounts receivable included contract retentions of approximately $2,152 and $2,146, respectively. Our billed and unbilled revenue may be exposed to potential credit risk if our customers should encounter financial difficulties, and we maintain reserves for specifically-identified potential uncollectible receivables. At March 31, 2020 and December 31, 2019, our allowances for doubtful accounts were $350 and $333, respectively. Sale to Customer with a Buy-Back Guarantee The Company entered into a buy-back agreement with one specific customer. Under this agreement, the Company guaranteed to buy-back product at a predetermined price at the end of the long-term project, subject to the condition of the product. Although the Company receives payment in full as the product is produced, GAAP requires these transactions to be accounted for as operating leases. The amount of sale proceeds equal to the buy-back obligation, included in "Deferred buy-back lease obligation" in the liabilities section of the consolidated balance sheet, is deferred until the buy-back is exercised or expired. The remaining sale proceeds are deferred in the same account and recognized on a straight-line basis over the usage period, such usage period commencing on delivery to the job-site and ending at the time the buy-back is exercised or expired. The Company capitalizes the cost of the product on the consolidated balance sheet shown in "Deferred buy-back lease asset, net", and depreciates the value, less residual value, to cost of leasing revenue in "Cost of goods sold" over the estimated useful life of the asset. In the case the customer does not exercise the buy-back option and retains ownership of the product at the end of the usage period, the guaranteed buy-back liability and any deferred revenue balances related to the product are settled to revenue, and the net book value of the asset is expensed to cost of leasing revenue. If the customer exercises the buy-back guarantee option, the Company purchases the product back in the amount equal to the buy-back guarantee, we settle any remaining deferred balances, in excess of the buy-back payment, to leasing revenue, and we reclassify the net book value of the product on the consolidated balance sheet to "Inventories" or "Property and equipment, net" depending on the intended use at the time. The revenue is being recognized in accordance with Topic 842, Leases Barrier Rentals - Lease Income Leasing fees are paid by customers at the beginning of the lease period and are recorded as deferred revenue. The deferred revenue is then recognized each month as lease income for the duration of the lease, in accordance with Topic 842, Leases Royalty Income The Company licenses certain products to other precast companies to manufacture the Company's products to engineering specifications under the licensing agreements. The agreements are typically for five year terms and require royalty payments from 4% to 6% of total sales of licensed products, which are paid on a monthly basis. The revenues from licensing agreements are recognized in the month earned, in accordance with Topic 606-10-55-65. Shipping and Installation Shipping and installation revenues are recognized as a distinct performance obligation in the period the shipping and installation services are provided to the customer, in accordance with Topic 606. Disaggregation of Revenue In the following table, revenue is disaggregated by primary sources of revenue: Revenue by Type Three Months Ended March 31, 2020 2019 Change % Change Soundwall Sales $ 1,887 $ 2,114 $ (227 ) (11 )% Architectural Panel Sales 767 767 100 % SlenderWall Sales 923 1,963 (1,040 ) (53 )% Miscellaneous Wall Sales 903 363 540 149 % Barrier Sales 1,325 1,591 (266 ) (17 )% Easi-Set and Easi-Span Building Sales 559 1,034 (475 ) (46 )% Utility Sales 401 308 93 30 % Miscellaneous Sales 87 130 (43 ) (34 )% Total Product Sales 6,852 7,503 (651 ) (9 )% Barrier Rentals 742 573 169 29 % Royalty Income 268 306 (38 ) (12 )% Shipping and Installation Revenue 1,963 1,807 156 9 % Total Service Revenue 2,973 2,686 287 11 % Total Revenue $ 9,825 $ 10,189 $ (364 ) (4 )% The revenue items: soundwall sales, architectural sales, SlenderWall sales, miscellaneous wall sales, barrier rentals, and royalty income are recognized as revenue over time. The revenue items: barrier sales, Easi-Set and Easi-Span building sales, utility sales, miscellaneous sales, and shipping and installation revenue are recognized as revenue at the point in time.
Warranties	The Company's 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.
Use of Estimates	The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Segment Reporting	Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and assess performance. The Company currently operates in one operating and reportable business segment for financial reporting purposes.

INTERIM FINANCIAL REPORTING (Ta

INTERIM FINANCIAL REPORTING (Tables)	3 Months Ended
	Mar. 31, 2020
Accounting Policies [Abstract]
Disaggregation of revenue	Revenue by Type Three Months Ended March 31, 2020 2019 Change % Change Soundwall Sales $ 1,887 $ 2,114 $ (227 ) (11 )% Architectural Panel Sales 767 767 100 % SlenderWall Sales 923 1,963 (1,040 ) (53 )% Miscellaneous Wall Sales 903 363 540 149 % Barrier Sales 1,325 1,591 (266 ) (17 )% Easi-Set and Easi-Span Building Sales 559 1,034 (475 ) (46 )% Utility Sales 401 308 93 30 % Miscellaneous Sales 87 130 (43 ) (34 )% Total Product Sales 6,852 7,503 (651 ) (9 )% Barrier Rentals 742 573 169 29 % Royalty Income 268 306 (38 ) (12 )% Shipping and Installation Revenue 1,963 1,807 156 9 % Total Service Revenue 2,973 2,686 287 11 % Total Revenue $ 9,825 $ 10,189 $ (364 ) (4 )%

NET INCOME (LOSS) PER SHARE (Ta

NET INCOME (LOSS) PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2020
Earnings Per Share [Abstract]
Schedule of earnings per share	Three Months Ended March 31, 2020 2019 Basic income (loss) per share Net income (loss) $ (38 ) $ 331 Weighted average shares outstanding 5,183 5,134 Basic income (loss) per share $ (0.01 ) $ 0.06 Diluted income (loss) per share Net income (loss) $ (38 ) $ 331 Weighted average shares outstanding 5,183 5,134 Dilutive effect of stock options and restricted stock — 8 Total weighted average shares outstanding 5,183 5,142 Diluted income (loss) per share $ (0.01 ) $ 0.06

STOCK COMPENSATION (Tables)

STOCK COMPENSATION (Tables)	3 Months Ended
	Mar. 31, 2020
Compensation Related Costs [Abstract]
Schedule of restricted stock award activity	Number of Shares Weighted Average Grant Date Fair Value per Share Balance, December 31, 2019 19,667 $ 5.45 Granted Vested 19,667 5.45 Forfeited — — Non-vested, end of period

INTERIM FINANCIAL REPORTING (De

INTERIM FINANCIAL REPORTING (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Total revenues	$ 9,825	$ 10,189
Change	$ (364)
Percent of change	(4.00%)
Product sales
Total revenues	$ 6,852	7,503
Change	$ (651)
Percent of change	(9.00%)
Product sales | Soundwall sales
Total revenues	$ 1,887	2,114
Change	$ (227)
Percent of change	(11.00%)
Product sales | Architectural panel sales
Total revenues	$ 767	0
Change	$ 767
Percent of change	100.00%
Product sales | SlenderWall sales
Total revenues	$ 923	1,963
Change	$ (1,040)
Percent of change	(53.00%)
Product sales | Miscellaneous wall sales
Total revenues	$ 903	363
Change	$ 540
Percent of change	149.00%
Product sales | Barrier sales
Total revenues	$ 1,325	1,591
Change	$ (266)
Percent of change	(17.00%)
Product sales | Easi-Set and Easi-Span building sales
Total revenues	$ 559	1,034
Change	$ (475)
Percent of change	(46.00%)
Product sales | Utility and farm product sales
Total revenues	$ 401	308
Change	$ 93
Percent of change	30.00%
Product sales | Miscellaneous sales
Total revenues	$ 87	130
Change	$ (43)
Percent of change	(34.00%)
Service revenue
Total revenues	$ 2,973	2,686
Change	$ 287
Percent of change	11.00%
Service revenue | Barrier rentals
Total revenues	$ 742	573
Change	$ 169
Percent of change	29.00%
Service revenue | Royalty income
Total revenues	$ 268	306
Change	$ (38)
Percent of change	(12.00%)
Service revenue | Shipping and installation revenue
Total revenues	$ 1,963	$ 1,807
Change	$ 156
Percent of change	9.00%

INTERIM FINANCIAL REPORTING (_2

INTERIM FINANCIAL REPORTING (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Contract retentions	$ 2,152	$ 2,146
Allowances for doubtful accounts	$ 350	$ 333

NET INCOME (LOSS) PER SHARE (De

NET INCOME (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Basic income (loss) per share
Net income (loss)	$ (38)	$ 331
Weighted average shares outstanding (in thousands)	5,183	5,134
Basic income per share	$ (0.01)	$ 0.06
Diluted income (loss) per share
Net income	$ (38)	$ 331
Weighted average shares outstanding (in thousands)	5,183	5,134
Dilutive effect of stock options and restricted stock (in thousands)	0	8
Total weighted average shares outstanding (in thousands)	5,183	5,142
Diluted income per share	$ (.01)	$ .06

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative) $ in Thousands	Mar. 31, 2020USD ($)
Other notes payable	$ 2,150
Summit Community Bank 1
Mortgage note payable	$ 447

STOCK COMPENSATION (Details)

STOCK COMPENSATION (Details) - Restricted Stock Awards	3 Months Ended
	Mar. 31, 2020$ / sharesshares
Non-vested, Number of Shares
Non-vested, beginning of period | shares	19,667
Granted | shares	0
Vested | shares	19,667
Forfeited | shares	0
Non-vested, end of period | shares	0
Non-vested, Weighted Average Grant Date Fair Value
Non-vested, beginning of period | $ / shares	$ 5.45
Granted | $ / shares	.00
Vested | $ / shares	5.45
Forfeited | $ / shares	.00
Non-vested, ending of period | $ / shares	$ .00

STOCK COMPENSATION (Details Nar

STOCK COMPENSATION (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Compensation Related Costs [Abstract]
Stock compensation	$ 0	$ 84
Unrecognized compensation cost related to non-vested restricted stock	$ 0	$ 0