SMID - Smith-Midland Corporation Message Board

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Microcap & Penny Stocks : SMID - Smith-Midland Corporation

SMID 35.20

+1.3%

Dec 26 9:30 AM EST

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From: ghmm	9/11/2005 9:14:43 PM
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I think the last quarter numbers scared some people (temporarily). I must admit to being disappointed BUT the backlog continuing to rise helped to keep the strong outlook. One thing too that was mentioned in the 10Q that investors may have overlooked at first: "Cost of goods sold as a percentage of total revenue increased from 71% for the three months ended June 30, 2004 to 78% for the three months ended June 30, 2005. The majority of the increase was due to extra labor costs and materials related to complex forming of elaborate architectural detail related to one large project." Now I haven't spoken with anyone at the company but the fact that they mention it specifically in the 10Q seems to me that it was significant. If COGS were comparable to the 71% of Q2 '04 that would have been over 300K and keep in mind in the PR management said that they were getting better pricing so one could surmise margins are even better!! As has been mentioned by Gary and others on The Microcap Kitchen the Highway Bill should benefit them for a while to come! With the comments of management I am hopeful of a VERY good Q3 and perhaps even a good Q4 which is seasonally low (lets hope for good weather :) ). I think the picture is still very good from here, granted buying at 1, 2 provides a much safer cushion then 4 especially given the wide quarterly earnings variations. I am long and haven't sold so my opinion is likely biased. Please do your own DD.

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