The following is from the WallStreetReporter Interview (the points are also mentioned in the Annual Report but not in the same detail).
I'd like more clarification on some of these, perhaps at the annual meeting they'll say more. I don't necessarily like the idea of issuing shares after a 40% drop in the stock (65% off the highs)!
SIX INITIATIVES UNDERWAY AT SMITH-MIDLAND
In order to take the Company to the next level, Smith-Midland is working with several Investors who can provide the Company with expansion equity
through the sale of stock for immediate expansion initiatives in several
high return areas of our business.
#1. Our licensing Company (read precast equivalent to software), Easi-Set
Industries is now set to take advantage of years of expanding and
perfecting our licensing programs as well as fine-tuning our products
through actual field experience. In addition to the extremely successful JJ
Hooks Concrete Safety Barrier and the Easi-Set Transportable Precast
Buildings, Easi-Set is rolling out in the US, Canada and Mexico,
SlenderWall Precast Concrete/Steel Stud Exterior Cladding for commercial
and residential mid-rise and high-rise construction. The goal for
SlenderWall is 20 licensed precasters each manufacturing $12.5 million
SlenderWall sales per year totaling $250 million out of an $11 billion total
cladding in this market segment. Easi-Set is currently introducing Beach
Prisms, a shore erosion control product that uses the preferred natural
“soft” approach to this world-wide problem of shoreline protection.
Licensing revenues. All four of these products together could reach $17
million in royalties per year. Our track record shows that 50% of this
revenue will go to net profit (again read software). Equity investment $1.5
million for this expansion.
#2. Smith-Midland has entered into an agreement to purchase Columbia
Caststone, a $5 million per year, 5 year old precast concrete products
company in Columbia, South Carolina. This acquisition will allow our
combined precast companies to cover an 800 mile by 300 mile territory.
With the addition of SlenderWall, JJ Hooks and Easi-Set Buildings,
Columbia Caststone can become one of the most profitable precast
companies as a percentage of sales in the country. Equity needed for
purchase, $1.6 million plus $500K working capital.
#3. A New General Manager hired and working to expand Concrete Safety
Systems, our highway safety barrier rental company. Concrete Safety
Systems is as a percentage of sales, our second most profitable
company. We will take advantage of this unusual opportunity to expand in
a market segment where we have almost no competition. No equity
needed. We can expand Concrete Safety Systems out of profits.
#4. Regional Sales Manager hired for the introduction of Beach Prisms
shore erosion control product. A full profit product for production at the
Smith-Midland Precast Plant.
#5. Patent Application is in the Patent Office for new H2Out the worlds first
“in the caulk joint” secondary drainage and street level leak detection
product for panelized exterior cladding. A second line of caulking and
drainage strip located behind the exterior line of caulking exits all water
leakage to the exterior of the building preventing moisture and mold and
lawsuits from tenants and owners of buildings. Water intrusion and
resulting mold will be the next asbestos for trial attorneys. Owners of
H2Out-protected buildings will avoid this high risk.
#6. The Senior Management Team at Smith-Midland has committed to the
opening in the Philippines of an Engineering Office for the companies
construction products both for Smith-Midland, Easi-Set and its licensees.
The lower cost of this off-shore engineering office will bring hundreds of
thousands of savings to the bottom line of our companies.
The successful execution of these 6 initiatives will change Smith-Midland
Delaware and its group of companies into a power house organization in
our industry. Any equity provider that becomes our partner will certainly be
a part of an exciting profitable venture that is changing and improving
through innovation the way construction is done. |
