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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.02pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
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Not scored
Net-tone change vs last year's 10-K.
MD&A
-0.02pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
No section text extracted for this filing. The 10-K may use a non-standard template that the parser doesn't recognize - the original doc is still linked in the Stats tab.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
barrier+5
barriers+1
unable+1
Positive rising
exclusive+1
opportunities+1
MD&A (Item 7)
4,655 words
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the Consolidated Financial Statements of the Company (including the Notes thereto) included elsewhere in this report. Dollar and share amounts are in thousands, except for per share amounts.
The Company generates revenues primarily from the sale, leasing, licensing, shipping and installation of precast concrete products and systems for the construction, utility and farming industries. The Company’s operating strategy has involved producing and marketing innovative and proprietary products, including SlenderWall™, a proprietary, lightweight, energy efficient concrete and steel exterior wall panel for use in building construction; J-J Hooks® Barrier, a proprietary, positive-connected highway safety barrier; Sierra Wall™, a sound barrier primarily for roadside use; transportable concrete buildings; and SoftSound™, a highway sound attenuation system. In addition, the Company produces utility vaults; farm products such as cattleguards; and custom order precast concrete products with various architectural surfaces.
As a part of the construction industry, the Company’s sales and net income may vary greatly from quarter to quarter over a given year. Because of the cyclical nature of the construction industry, many factors outside of the Company’s control, such as weather and project delays, affect the Company’s production schedule, possibly causing a momentary slowdown in sales and net income. As a result of these factors, the Company is not always able to earn a profit for each period, therefore, please read Management’s Discussion and Analysis of Financial Condition and Results of Operations and the accompanying financial statements with these factors in mind.
Overview
Overall, the Company’s financial bottom line performance was significantly greater in 2025 when compared to 2024. The Company had net income for 2025 of $12,506 compared to net income of $7,675 for 2024. Total revenue increased by $14,937 to $93,445 in 2025 from $78,508 in 2024. The increase in sales is mainly from barrier rentals (including special barrier projects in the first and second quarters), shipping and installation, and Soundwall, SlenderWall® and Easi-Set building product sales. Fourth quarter 2025 revenues were $23,110 compared to $18,528 in the fourth quarter 2024. The increase in revenue for the fourth quarter 2025 as compared to the fourth quarter 2024 was primarily due to an increase in architectural sales, miscellaneous sales, Easi-Set building sales, and shipping and installation revenue.
Cost of sales as a percentage of revenue, not including royalties, decreased to 76% in 2025 compared to 78% in 2024. Cost of sales as a percentage of revenue, not including royalties, decreased slightly to 79% for the fourth quarter 2025 as compared to 80% for the fourth quarter 2024.
Operating income was $16,994 for 2025, as compared to $9,899 for 2024. Operating expenses for 2025 was $9,044 compared to $10,111 in 2024. The decrease is due to a decrease in general and administrative expenses. Total operating expense was $2,037 for the fourth quarter 2025 and $2,519 for the fourth quarter 2024.
Income tax expense for 2025 was $4,520 or an effective tax rate of 26.5%, as compared to $2,143, or an effective tax rate of 21.7% for 2024. The greater percentage in 2025 was mainly due to an increase in state taxes.
As of March 3, 2026, the Company’s sales backlog was approximately $53.1 million, as compared to approximately $59.5 million around the same time in the prior year. It is estimated that most of the projects in the current sales backlog will be produced within 12 months, but a few will be produced over multiple years. The Company anticipates similar sales volumes throughout 2026 compared to 2025 for product sales, although no assurance can be provided. Barrier rentals, exclusive of special barrier projects, is expected to be higher in 2026 than in 2025, although no assurance can be given; given the high level of special barrier projects in 2025, it is likely for there to be a decrease in 2026 from this revenue source. The Company also anticipates funding related to the Infrastructure Investment and Jobs Act to continue coming through the state and local governments in 2026 to further promote growth in the revenue backlog related to the highway and transportation markets, although no assurance can be provided. State and local programs that support infrastructure spending, including gas tax increases, special tax districts, new funding mechanisms are increasing in number and size as these entities increase their role in infrastructure investment. The Company continues to increase marketing and sales efforts towards SlenderWall® sales and barrier rentals, in line with long-term strategic objectives. In view of economic conditions that include government spending cutbacks and tariffs, there can be no assurance of anticipated levels of infrastructure spending.
Results of Operations
Year ended December 31, 2025 compared to the year ended December 31, 2024
For the year ended December 31, 2025, the Company had total revenue of $93,446 compared to total revenue of $78,508 for the year ended December 31, 2024, an increase of $14,938 or 19%. Revenue includes product sales, barrier rentals, royalty income, and shipping and installation revenues. Product sales are further divided into soundwall, architectural and SlenderWall™ panels, miscellaneous wall panels, highway barriers, Easi-Set®/Easi-Span® buildings, utility products, and miscellaneous precast products. The following table summarizes the revenue by type and a comparison for the years ended December 31, 2025 and 2024 (in thousands):
Revenue by Type (Disaggregated Revenue)
Change
% Change
Product Sales:
Soundwall Sales
Architectural Sales
SlenderWall Sales
Miscellaneous Wall Sales
Barrier Sales
Easi-Set and Easi-Span Building Sales
Utility Sales
Miscellaneous Sales
Total Product Sales
Barrier Rentals
Royalty Income
Shipping and Installation Revenue
Total Service and Other Revenue
Total Revenue
The revenue items: soundwall sales, architectural panel sales, SlenderWall® sales, miscellaneous wall sales, miscellaneous 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, and shipping and installation revenue are recognized as revenue at a point in time.
Soundwall Sales – Soundwall panel sales increased by 24% in 2025 compared to 2024. The increase is due to higher production volumes at all three plants, as the Company increased production output to execute and deliver on the Company’s backlog. The Company expects soundwall panel sales to be similar in 2026 as compared to 2025, although no assurance can be provided.
Architectural Sales – Architectural panel sales decreased by 21% in 2025 compared to 2024. The decrease is related to production of two architectural projects in 2024 that did not recur in 2025. Architectural sales are expected to be similar in 2026, as compared to 2025, although no assurance can be provided.
SlenderWall® Sales – SlenderWall® panel sales were $3.6 million in 2025 compared to no production in 2024. SlenderWall® projects were produced in 2025 and 2023. The Company continues to focus sales initiatives on SlenderWall® , but no assurance can be given as to the success of this endeavor. SlenderWall® sales are expected to be similar in 2026 compared to 2025, although no assurance can be provided.
Miscellaneous Wall Sales – Miscellaneous wall sales are highly customized precast concrete products or retaining and lagging panels that do not fit other product categories. Miscellaneous wall sales decreased by 26% in 2025 when compared to 2024 due lower production volumes throughout the 2025 calendar year based on the timing of contract awards. Miscellaneous sales are expected to be similar in 2026 as compared to 2025, although no assurance can be provided.
Barrier Sales – Barrier sales increased by 12% in 2025 when compared to 2024. The increase is due to an increase in barrier customers in the North Carolina and South Carolina region in 2025. Barrier sales are expected to trend lower in 2026 than previous years as the Company continues to shift from barrier sales to barrier rentals.
Easi-Set® and Easi-Span® Building Sales – The Easi-Set® Buildings program includes Easi-Set®, plant assembled and Easi-Span®, site assembled, and an extensive line of pre-engineered restrooms. Building sales increased by 72% in 2025 as compared to 2024 due to increased sales at all locations, reflecting general product sale fluctuations. Building and restroom sales are expected to trend higher during 2026 as compared to 2025 due to demand from increased sales and marketing, although no assurance can be provided.
Utility Sales – Utility products are mainly comprised of underground utility vaults used in infrastructure construction. Utility products sales decreased by 45% in 2025 compared to 2024. The prior year sales reflected elevated demand in the Northern Virginia market driven by accelerated data center development. Sales are expected to increase in 2026 relative to 2025 due to continued data center expansion and related demand for dry utility vaults, although no assurance can be provided.
Miscellaneous Product Sales – Miscellaneous products are products that are produced or sold that do not meet the criteria defined for other revenue categories. Examples would include precast concrete slabs, blocks or small add-on items. For 2025, miscellaneous product sales decreased by 55% when compared to 2024. The decrease is mainly from the Virginia plant which had one large project in 2024 for the production of precast beams and platforms and no similar project in 2025. Miscellaneous product sales are expected to increase in 2026 based on pipeline opportunities reflecting increased demand in the overall market as compared to 2025, although no assurance can be given.
Barrier Rentals – Barrier rentals increased by 64% in 2025 as compared to 2024. This increase is mainly attributed to two special barrier projects, one in each of the first and second quarters of 2025 as well as an overall increase in utilization of rental barriers. As indicated above, the Company is continuing to shift its focus to barrier rentals compared to barrier sales with the significant increase in the rental fleet. Barrier rental revenue, excluding revenue from special barrier projects, is expected to trend higher in 2026 as compared to barrier rental revenue, excluding revenue from special barrier projects, in 2025, as funding is expected to continue related to the Infrastructure Investment and Jobs Act, although no assurance can be given. While the Company is unable to predict the volume of special barrier projects in 2026, in view of substantial projects in the first half of 2025, it is anticipated that there will be a decrease in revenue in 2026 from this revenue source.
Royalty Income – Royalties increased by 28% in 2025 as compared to 2024. The increase in royalties is mainly due to the increase in barrier royalties from existing licensees during 2025 compared to 2024. As anticipated funding continues related to the Infrastructure Investment and Jobs Act as well as adoption by state Department of Transportation (DOT) agencies of MASH approved barrier systems, the Company expects 2026 royalties to continue to increase compared to 2025, although no assurance can be given.
Shipping and Installation – Shipping revenue results from shipping our products to the customers’ final destination and is recognized when the shipping services take place. Installation activities include installation of our products at the customers’ construction site. Installation revenue results when attaching architectural wall panels to a building, installing an Easi-Set® building at a customers’ site, setting highway barrier, or setting any of our other precast products at a site specific to the requirements of the owner. Shipping and installation revenues increased by 21% in 2025 as compared to 2024. The increase is attributed to the increase in barrier rental from the special barrier projects, and shipping and installation of SlenderWall® and soundwalls. Shipping and installation revenue are expected to be similar in 2026 as compared to 2025, although no assurance can be provided.
Cost of Sales – Total cost of sales for the year ended December 31, 2025 was $67,408, an increase of $8,909, or 15%, from $58,498 for the year ended December 31, 2024. Total cost of sales as a percentage of total revenue, not including royalties, decreased to 76% for the year ended December 31, 2025 from 78% for the year ended December 31, 2024. The decrease in cost of sales as a percentage of revenue, not including royalties, is primarily due to the increase in revenue from the special barrier projects that were performed in the first and second quarters of 2025 which have a higher margin and lower cost of sales when compared to product margin and product cost of sales, and higher revenue levels in 2025 than in 2024 having a favorable effect on margins reflecting the absorption of fixed overhead costs.
General and Administrative Expenses – For the year ended December 31, 2025, the Company’s general and administrative expenses decreased by $886, or 14%, to $5,668 from $6,554 during the same period in 2024. General and administrative expenses were 6% and 8% of revenues for the years ended December 31, 2025 and 2024, respectively. Such expenses decreased due to lower staffing levels impacting salaries and wages and an arbitration settlement that included the recovery of $458 in previously reserved receivables which offset general and administrative expenses in the third quarter of 2025. Salaries and wages are expected to increase in 2026 compared to 2025 as additional administrative staff are hired.
Selling Expenses – Selling expenses for the year ended December 31, 2025 decreased by $181, or 5%, to $3,376 from $3,557 for the year ended December 31, 2024 due to lower staffing levels. The Company expects selling expenses to increase in future periods with the plan for additional sales associates and increased advertising spending aligning with the strategy to increase SlenderWall® sales and barrier rentals.
Operating Income – The Company had operating income for the year ended December 31, 2025 of $16,994 compared to operating income of $9,899 for the year ended December 31, 2024, an increase of $7,095, or 72%. The increase in operating income was mainly due to the increase in revenues, decrease in cost of sales as a percentage of revenue, and a decrease in operating expenses as a percent of revenue.
Income Tax Expense – The Company had income tax expense of $4,520 for the year ended December 31, 2025 compared to income tax expense of $2,143 for the year ended December 31, 2024. The Company had an effective rate of 26.5% for the year ended December 31, 2025 compared to an effective rate of 21.7% for the same period in 2024. The increase in the effective tax rate is attributed to continued true-up of state tax expense during 2025.
Net Income – The Company had net income of $12,506 for the year ended December 31, 2025, compared to net income of $7,675 for the year ended December 31, 2024. The basic and diluted earnings per share was $2.36 for 2025 compared to basic and diluted earnings per share of $1.45 for the year ended December 31, 2024. There were 5,305 basic and diluted weighted average shares outstanding in 2025, and 5,289 basic and diluted weighted average shares outstanding in 2024.
Liquidity and Capital Resources
The Company financed its capital expenditures for 2025 with cash balances on hand. The Company had $4,447 of debt obligations at December 31, 2025, of which $648 is scheduled to mature within twelve months. For the year ended December 31, 2025, the Company made repayments of outstanding debt in the amount $647.
The Company has a mortgage note payable to Burke & Herbert Bank & Trust Company, formally Summit Community Bank (the “Bank”) for the construction of its 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 December 31, 2025 was $942.
The Company also has a note payable to the Bank in the amount of $1,279 as of December 31, 2025. The loan is collateralized by a first lien position on the Midland, VA plant, building, and assets. 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.
On February 10, 2022, the Company completed the financing for its acquisition of certain real property in Midland, VA from the fourth quarter of 2021, totaling approximately 29.8 acres, with a note payable to the Bank. The balance of the note payable at December 31, 2025 was $2,226. The loan is collateralized by a first lien position on the related real property. The interest rate is fixed at 4.09% per annum, with principal and interest payments payable monthly over 180 months for $21. The loan matures on February 10, 2037.
The Company additionally had one smaller installment loan with an annual interest rate of 2.90%, maturing in 2025, with a nominal balance at December 31, 2025.
Under the loan covenants with the Bank, the Company is limited to annual capital expenditures of $5,000 and has received a waiver for 2025 from the Bank. Also under the loan covenants with the Bank, the Company must maintain tangible net worth of $25,000. The Company is in compliance with all covenants pursuant to the loan agreements as of December 31, 2025.
In addition to the notes payable discussed above, the Company has a $5,000 line of credit with the Bank with no balance outstanding as of December 31, 2025. The line of credit is evidenced by a commercial revolving promissory note, which carries a variable interest rate of prime, with a floor of 4.99%. The line of credit was renewed on January 1, 2026 and matures January 1, 2027. 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 required the Company (i) to obtain bank approval for capital expenditures in excess of $5,000 during the term of the loan and (ii) to obtain bank approval prior to its funding of any acquisition. On October 1, 2023, the Company received a Commitment Letter from the Bank to provide a guidance line of credit specifically to purchase business equipment in an amount up to $1,500. The commitment provided for the purchase of equipment for which a note payable will be executed with a term not to exceed five years with an interest rate at the Wall Street Journal prime rate plus 0.50% with a floor of 3.50% per annum. The loan is collateralized by a first lien position on all equipment purchased under the line. The commitment for the guidance line of credit matured on October 1, 2025 and, as of that date, the Company had not purchased any equipment pursuant to the $1,500 commitment.
At December 31, 2025, the Company had cash totaling $11,884 compared to cash totaling $7,548 at December 31, 2024. Cash provided by operations was $14,204. Cash disbursements from investing activity was $9,202. Cash repayments on borrowings was $647. The increase in cash is primarily the result of higher net income and cash provided by operating activities.
Capital spending, including financed additions, increased from $6,629 in 2024 to $9,349 in 2025. The 2025 expenditures were primarily for a ramp up in barrier production to expand the rental fleet, attenuators and plant expansion. The 2024 expenditures were primarily for a new batch plant system for the South Carolina manufacturing facility, utility vault forms for increased production capacity, and crash cushions to expand the Company’s rental product offering. The Company, which expects product sales to be similar in 2026 as compared to 2025, intends to invest over $12,000 in 2026 for long-term strategic growth which includes continued barrier production, expansion of the Virginia and North Carolina manufacturing facilities, soundwall forms for increased production capacity, and miscellaneous manufacturing equipment. Anticipated capital expenditures exclude possible acquisitions.
The Company’s notes payable are financed at fixed rates of interest. This leaves the Company almost largely insulated from fluctuating interest rates. Increases in such rates will only affect the interest paid by the Company if new debt is obtained, or an available line of credit is drawn upon, with a variable interest rate.
The Company’s cash flow from operations is affected by production schedules set by contractors, which generally provide for payment 45 to 75 days after the products are produced and with some contracts, retainage may be held until the entire project is completed. This payment schedule could result in liquidity problems for the Company because it must bear the cost of production for its products before it receives payment. The Company’s days sales outstanding (DSO) in 2025 and 2024 were 94 and 88 days, respectively. Although no assurances can be given, the Company believes that its current cash resources, anticipated cash flow from operations, and the availability under the line of credit will be sufficient to finance the Company’s operations for at least the next 12 months.
The Company’s accounts receivable balance, net of allowance for credit losses, at December 31, 2025 was $27,228, compared to accounts receivable balance, net of allowance for credit losses, of $19,420 at December 31, 2024. The increase is primarily the result of increased revenue. The Company expects DSO to trend downwards, with increased collection efforts, although no assurance can be provided.
The Company’s inventory at December 31, 2025 was $6,928 and at December 31, 2024 was $6,677, an increase of $251. The annual inventory turns for 2025 and 2024 were 8.5 and 10.0, respectively.
Critical Accounting Policies and Estimates
The Company’s significant accounting policies are more fully described in its Summary of Accounting Policies to the Company’s consolidated financial statements. The preparation of financial statements in conformity with accounting principles generally accepted within the United States of America requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying financial statements and related notes. In preparing these consolidated financial statements, management has made its best estimates and judgments of certain amounts included in the consolidated financial statements, giving due consideration to materiality. The Company does not believe there is a great likelihood that materially different amounts would be reported related to the accounting policies described below, however, application of these accounting policies involves the exercise of judgment and the use of assumptions as to future uncertainties and as a result, actual results could differ from these estimates.
Allowance for Credit Losses -The Company evaluates the adequacy of its allowance for credit losses at the end of each quarter. In performing this evaluation, the Company analyzes the payment history of its significant past due accounts, subsequent cash collections on these accounts, comparative accounts receivable aging statistics, macro-economic conditions, and other customer specific considerations existing and known as of the time of the analysis. Based on this information, along with other related factors, the Company develops an estimate of the uncollectible amounts included in accounts receivable. This estimate involves significant judgment by the management of the Company. Actual uncollectible amounts may differ from the Company’s estimate.
Over-Time Revenue Recognition- The Company recognizes revenue on the sale of its standard precast concrete products, and the associated shipping and installation revenue, at shipment date, including revenue derived from any projects to be completed under short-term contracts. Leasing and royalties are recognized as revenue over time. Certain sales of soundwall, SlenderWall® , and other architectural concrete products are recognized over time because as the Company’s performance creates or enhances customer-controlled assets or creates or enhances an asset with no alternative use, and the Company has an enforceable right to receive compensation. Over time product contracts are estimated based on the number of units produced (output method) during the period multiplied by the unit rate stated in the contract. 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 trade - 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.
Seasonality
The Company services the construction industry primarily in areas of the United States where construction activity may be inhibited by adverse weather during the winter. As a result, the Company may experience reduced revenues from December through February and realize the substantial part of its revenues during the other months of the year. The Company may experience lower profits, or losses, during the winter months, and as such, must have sufficient working capital to fund its operations at a reduced level until the spring construction season. The failure to generate or obtain sufficient working capital during the winter may have a material adverse effect on the Company.
Inflation
Management believes that the Company’s operations were affected by inflation in 2025 and 2024, particularly in the purchases of labor costs and raw materials, and no assurance can be given regarding future pricing or costs.
Backlog
As of March 3, 2026, the Company’s sales backlog was approximately $53.1 million as compared to approximately $59.5 million at approximately the same time in 2025. It is estimated that most of the projects in the sales backlog will be produced within 12 months, but a few will be produced over multiple years. The backlog was $6.4 million lower than the prior year primarily due to the completion of some large projects during the year and the timing of new contract awards. Backlog levels may fluctuate based on the timing of infrastructure project awards. Management expects, but there can be no assurance, backlog to increase in 2026 as bidding activity associated with infrastructure initiatives and products continues.
The risk exists that recessionary economic conditions may adversely affect the Company more than it has experienced to date. To mitigate these economic and other risks, the Company has a broader product offering than most competitors and has historically been a leader in innovation and new product development in the industry. The Company is continuing this strategy through the development, marketing and sales efforts for its new products.
The Company continues to evaluate both production and administrative processes, and has streamlined many of these processes through lean activities. During 2025 and 2024, the Company, through lean activities, continued to see positive effects in production and office areas. The lean business philosophy is a long-term, customer focused approach to continuous improvement by eliminating waste and providing value. It is management’s intention to continue on the lean journey while implementing a lean culture throughout the Company to help reach our goals for 2026. The Company’s lean efforts are aimed to increase quality to the customer, significantly reduce defects, while increasing production capacity and sales volume. In order to meet these goals, substantial improvements through lean tools and lean thinking are being implemented company wide.
