Financial Analysis

9. COMMITMENTS AND CONTINGENCIES 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.

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4. NOTES PAYABLE Notes payable consist of the following (in thousands): December 31, 2025 2024 Note payable to Burke & Herbert Bank & Trust, formally Summit Community Bank (the Bank), maturing February 2037; with monthly payments of approximately $21 of principal and interest fixed at 4.09%; net of $21 and $22 of unamortized deferred loan costs, respectively; collateralized by the related real property. $ 2,226 $ 2,379 Note payable to the Bank, maturing October 2029; with monthly payments of approximately $22 of principal and interest fixed at 3.64% under a Promissory Notes Rate Conversion Agreement; net of $13 and $16 of unamortized deferred loan costs, respectively; collateralized by all assets of Smith-Carolina Corporation and guaranteed by the Company. 942 1,166 Note payable to the Bank, maturing March 2030; with monthly payments of approximately $27 of principal and interest fixed at 3.99%; net of $18 and $22 of unamortized deferred loan costs, respectively; collateralized by the Companys property, plant, and buildings. 1,279 1,536 Installment note collateralized by certain machinery and equipment maturing in 2025; with monthly payments of $1.1 with an annual interest rate of 2.90%.The loan was paid off in full during the year ended December 31, 2025. 13 Total Notes Payable Outstanding 4,447 5,094 Less current maturities of notes payable (648 ) (658 ) Notes Payable-less current maturities $ 3,799 $ 4,436 The total notes payable balance is offset by debt issuance …

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Revenue by Type (Disaggregated Revenue) 2025 2024 Product Sales: Soundwall Sales $ 14,640 $ 11,825 Architectural Sales 3,337 4,205 SlenderWall Sales 3,568 - Miscellaneous Wall Sales 3,788 5,104 Barrier Sales 4,356 3,882 Easi-Set and Easi-Span Building Sales 11,482 6,666 Utility Sales 4,297 7,751 Miscellaneous Sales 2,808 6,191 Total Product Sales 48,276 45,624 Barrier Rentals 19,705 12,019 Royalty Income 4,172 3,261 Shipping and Installation Revenue 21,293 17,604 Total Service and Other Revenue 45,170 32,884 Total Revenue $ 93,446 $ 78,508

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8. STOCK COMPENSATION On October 13, 2016, the Board of Directors of the Company adopted the 2016 Equity Incentive Plan, which allows the Company to grant up to 400,000 shares of restricted common stock of the Company to employees, officers, directors and consultants and 89,303 share remain available to be granted as of December 31, 2025. The grants may be in the form of restricted or performance shares of common stock of the Company. The fair value of restricted stock awards is estimated to be the market price of the Companys common stock at the close of date of grant. The Company assumes no forfeitures as they are granted to key executives and board members. Restricted stock activity during the year ended December 31, 2025 is as follows: Service-Based Number of Shares Weighted Average Grant Date Fair Value per Share Non-vested, December 31, 2024 1,000 1,000 $ 19.15 Granted 1,948 1,948 36.24 Vested (1,948 ) (1,948 ) 28.62 Forfeited 1,000 ) (1,000 ) 28.62 Non-vested, December 31, 2025 In 2021, the Compensation Committee and Board of Directors approved a Long-Term Incentive Plan with respect to the grant of stock pursuant to the 2016 Equity Incentive Plan. The final equity amount earned was based on continued service through the three-year performance period ending on December 31, 2023, Board discretion, and performance results. The actual number of performance-based shares of common stock of the Company, if any, earned by the award recipients was determined based on measures …

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6. INCOME TAXES Income tax expense (benefit) is comprised of the following (in thousands): December 31, 2025 2024 Federal: Current $ 2,703 $ 2,660 Deferred 728 (1,016 ) Total Federal 3,431 1,644 State: Current 851 640 Deferred 238 (141 ) Total State 1,089 499 Income tax expense/(benefit) $ 4,520 $ 2,143 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which updated income tax disclosure requirements related to the income tax rate reconciliation and requires disclosure of income taxes paid by jurisdiction. The Company has applied ASU 2023-09 prospectively beginning in 2025. As such, our effective tax rate reconciliation for 2025 is reflected in a new table following the requirements set forth in ASU 2023-09 (in thousands), while the 2024 effective tax rate reconciliations are presented in the historical format as required by U.S. GAAP (in thousands). 2025 Income taxes at U.S. Federal Statutory Tax Rate $ 3,575 21.0 % Nontaxable or Nondeductible Items Other 27 0.2 % State and Local Income Tax, Net of Federal (National) Income Tax Effect (1) 893 21.0 % Other Adjustments 25 0.1 % Effective tax rate $ 4,520 26.5 % (1) State taxes in Virginia and the District of Columbia (DC) made up the majority (greater than 50 percent) of the tax effect in this category. The following table reconciles the U.S. statutory tax rate to our effective income tax rate for the years ended December 31, 2024, prior to the adoption of ASU 2023 …

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In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Improvements to Income Tax Disclosures. The guidance is intended to improve income tax disclosure requirements by requiring (i) consistent categories and greater disaggregation of information in the rate reconciliation and (ii) the disaggregation of income taxes paid by jurisdiction. The guidance makes several other changes to the income tax disclosure requirements. The Company adopted this standard prospectively on January 1, 2025. Accordingly, prior period disclosures have not been recast to conform to the current period presentation. The adoption resulted in expanded income tax disclosures, primarily related to the rate reconciliation and income taxes paid. The adoption resulted in expanded disclosures but did not impact the Companys financial position, results of operations, or cash flows. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , requiring enhanced disclosures about specified categories of expenses included in certain expense captions presented on the face of the income statement. This standard will be effective for the Company for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, and may be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the …

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7. EMPLOYEE BENEFIT PLANS The Company has a savings plan that qualifies under Section 401(k) of the Internal Revenue Code (IRC). Participating employees may elect to contribute a percentage of their salary, subject to certain limitations. The Company contributes 50% of the participants contribution, up to 4% of the participants compensation, as a matching contribution. Total match contributions (in thousands) by the Company for the years ended December 31, 2025 and 2024 were approximately $253 and $284, respectively. …

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5. RELATED PARTY TRANSACTIONS The Company has an employment agreement with its former Chief Executive Officer and Chairman of the Board, Rodney I. Smith. Mr. Smith received his salary, pursuant to the terms of the agreement, through September 2021. While Mr. Smith has ceased providing executive officer services pursuant to such agreement, the agreement provides for an annual royalty fee (in thousands) of $99 payable as consideration for his assignment to the Company of all of his rights, title and interest in certain patents. Payment of the royalty continues for as long as the Company is using the inventions underlying the unexpired patents.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include the accounts of Smith-Midland Corporation and its wholly-owned subsidiaries. The Companys wholly-owned subsidiaries consist of Smith-Midland Corporation, a Virginia corporation, Smith-Carolina Corporation, a North Carolina corporation, Smith-Columbia Corporation, a South 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 Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has not experienced any losses related to these balances. Inventories Inventories are stated at the lower of cost, using the first-in, first-out (FIFO) method, or net realizable value. Inventory reserves (in thousands) were approximately $149 and $173 at December 31, 2025 and 2024, respectively. Property and Equipment Property and equipment is stated at cost. Expenditures for ordinary maintenance and repairs are expensed as incurred. Costs of improvements, 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 …

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3. NOTES PAYABLE The Company has a mortgage note payable to Burke & Herbert Bank & Trust Company, formerly 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 March 31, 2026 and December 31, 2025 was $884 and $942 respectively. The Company also has a note payable to the Bank in the amount of $1,211 and $1,279 as of March 31, 2026 and December 31, 2025 respectively. 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 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 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 balance of the note payable on March 31, 2026 and December 31 …

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Revenue by Type Three Months Ended March 31, 2026 2025 Soundwall Sales $ 3,350 $ 3,779 Architectural Panel Sales 750 SlenderWall Sales 746 Miscellaneous Wall Sales 305 601 Barrier Sales 1,932 1,305 Easi-Set and Easi-Span Building Sales 2,936 2,060 Utility Sales 1,439 1,014 Miscellaneous Product Sales 328 353 Total Product Sales 11,786 9,112 Barrier Rentals 2,201 8,425 Royalty Income 823 890 Shipping and Installation Revenue 6,762 4,271 Total Service Revenue 9,786 13,586 Total Revenue $ 21,572 $ 22,698 …

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4. 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, 2025, is as follows: Performance-Based Service-Based Number of Shares Weighted Average Grant Date Fair Value per Share Non-vested, December 31, 2025 Granted 408 408 36.77 Vested (408 ) (408 ) 36.77 Forfeited Non-vested, March 31, 2026 During the three months ended March 31, 2026, the Company granted 408 fully vested service-based restricted stock awards to the Companys Chief Financial Officer with a grant-date fair value of $36.77 per share, resulting in total stock compensation expense of approximately $15 thousand recognized during the period. …

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Effective January 1, 2026, the Company adopted ASU 2025-05, Financial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The Company elected the practical expedient permitting entities to assume that current conditions as of the balance sheet date remain unchanged for the remaining life of certain short-term financial assets when estimating expected credit losses under ASC 326. The amendments were adopted prospectively. Adoption of the standard did not have a material impact on the Companys condensed consolidated financial statements or related disclosures. …

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"1. 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 consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025. The condensed consolidated December 31, 2025 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 income are not necessarily indicative of the results to be expected in any future periods. Recent Accounting Pronouncements Effective January 1, 2026, the Company adopted ASU 2025-05, Financial Instr …

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