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<SEC-DOCUMENT>0001127264-02-000102.txt : 20020515
<SEC-HEADER>0001127264-02-000102.hdr.sgml : 20020515
<ACCEPTANCE-DATETIME>20020515164633
ACCESSION NUMBER:		0001127264-02-000102
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20020331
FILED AS OF DATE:		20020515

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SMITH MIDLAND CORP
		CENTRAL INDEX KEY:			0000924719
		STANDARD INDUSTRIAL CLASSIFICATION:	CONCRETE PRODUCTS, EXCEPT BLOCK & BRICK [3272]
		IRS NUMBER:				541727060
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-13752
		FILM NUMBER:		02653228

	BUSINESS ADDRESS:	
		STREET 1:		ROUTE 28
		STREET 2:		P O BOX 300
		CITY:			MIDLAND
		STATE:			VA
		ZIP:			22728
		BUSINESS PHONE:		5404393266

	MAIL ADDRESS:	
		STREET 1:		RT 28
		STREET 2:		PO BOX 300
		CITY:			MIDLAND
		STATE:			VA
		ZIP:			22728
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>sm_10q.txt
<DESCRIPTION>FIRST QUARTER 2002 REPORT
<TEXT>
                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


               Quarterly Report Filed Under Section 13 or 15(d) of
                       the Securities Exchange Act of 1934



For the quarterly period ended                            Commission File Number
        March  31, 2002                                           1-13752
- ---------------------------------                                 -------



                            SMITH-MIDLAND CORPORATION
                            -------------------------
                             (Name of Small Business
                       Issuer As Specified In Its Charter)



           Delaware                                             54-1727060
- -------------------------------                                 ----------
(State or Other Jurisdiction of                              (I.R.S. Employer
 Incorporation or Organization)                           Identification Number)


                Route 28, P.O. Box 300, Midland, Virginia 22728
                -----------------------------------------------
                    (Address of Principal Executive Offices)


                                 (540) 439-3266
                                 --------------
                (Issuer's Telephone Number, Including Area Code)



         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

                  Yes   X                                     No
                      -------                                    -------


         As of May 6, 2002,  the Company  had  outstanding  3,682,451  shares of
Common Stock, $.01 par value per share.

                                       1
<PAGE>
                            SMITH-MIDLAND CORPORATION
                                      INDEX

PART I.  FINANCIAL INFORMATION                                       PAGE NUMBER
                                                                     -----------

         Item 1.  Financial Statements

                    Consolidated Balance Sheets;                              3
                    March 31, 2002 (Unaudited);
                    and December 31, 2001

                    Consolidated Statements of Operations                     4
                    (Unaudited); Three months ended
                    March 31, 2002  and 2001

                    Consolidated Statements of Cash Flows                     5
                    (Unaudited); Three months ended
                    March 31, 2002 and 2001

                    Notes to Consolidated Financial Statements (Unaudited)    6

         Item 2.  Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                       8


PART II.  OTHER INFORMATION

         Item 1.  Legal Proceedings                                           11

         Item 2.  Changes in Securities and Use of Proceeds                   11

         Item 3.  Defaults Upon Senior Securities                             11

         Item 4.  Submission of Matters to a Vote of Security Holders         11

         Item 5.  Other Information                                           11

         Item 6.  Exhibits and Reports on Form 8-K                            11

         Signatures                                                           12

                                       2
<PAGE>
<TABLE>
                                         PART I - Financial Information
Item 1.  Financial Statements

                                   SMITH-MIDLAND CORPORATION AND SUBSIDIARIES
                                           Consolidated Balance Sheets
                                                   (Unaudited)

                                                                                   March 31,        December 31,
                                                                                     2002               2001
         Assets                                                                 ------------        -----------
Current assets:
<S>                                                                             <C>                 <C>
   Cash and cash equivalents                                                    $    759,845        $   942,131
   Accounts receivable:
     Trade - billed, less allowances for doubtful accounts of
       $382,395 and $371,895                                                       5,080,140          5,934,359
     Trade - unbilled                                                                488,102            458,281
   Inventories:
     Raw materials                                                                   500,834            585,736
     Finished goods                                                                1,226,031          1,042,660
   Prepaid expenses and other assets                                                 301,192            188,836
                                                                                 -----------      ------------
       Total current assets                                                        8,356,144          9,152,003
                                                                                 -----------       ------------

Property and equipment, net                                                        2,748,048          2,672,665
                                                                                 -----------       ------------

Other assets:
   Note receivable, officer                                                          552,282            558,282
   Claims and accounts receivable                                                    960,254            960,254
   Other                                                                             273,890            296,965
                                                                                 -----------       ------------
         Total other assets                                                        1,786,426          1,815,501
                                                                                 -----------       ------------
       Total Assets                                                              $12,890,618       $ 13,640,169
                                                                                 ===========       ============

         Liabilities and Stockholders' Equity
Current liabilities:
   Current maturities of notes payable                                           $   580,340        $   604,135
   Accounts payable -- trade                                                       2,073,673          2,999,367
   Accrued expenses and other liabilities                                            579,830            732,710
   Customer deposits                                                                 331,633            266,716
                                                                                 -----------       ------------
     Total current liabilities                                                     3,565,476          4,602,928
Reserves for contract losses                                                       1,025,556          1,025,556
Notes payable -- less current maturities                                           3,980,889          3,998,862
Notes payable -- related parties                                                      66,056             68,777
                                                                                 -----------       ------------
     Total Liabilities                                                             8,637,977          9,696,123
                                                                                 -----------       ------------

Stockholders' equity:
   Preferred stock, $.01 par value, authorized 1,000,000 shares,
     none outstanding                                                                 --                  --
   Common stock, $.01 par value, authorized 8,000,000 shares,
     3,354,751 and 3,171,051 issued and outstanding                                   33,547             31,710
   Additional capital                                                              3,592,360          3,494,854
   Treasury Stock                                                                   (102,300)          (102,300)
   Retained earnings                                                                 729,034            519,782
                                                                                 -----------       ------------
     Total Stockholders' Equity                                                    4,252,641          3,944,046
                                                                                 -----------       ------------
          Total Liabilities and Stockholders'  Equity                            $12,890,618       $ 13,640,169
                                                                                 ===========       ============

             The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

                                                       3
<PAGE>
<TABLE>
                                  SMITH-MIDLAND CORPORATION AND SUBSIDIARIES
                                     Consolidated Statements of Operations
                                                  (Unaudited)

                                                                                     Three Months Ended
                                                                                           March 31,
                                                                                           ---------
                                                                                    2002              2001
                                                                                 ----------        ----------
<S>                                                                              <C>               <C>
Revenue
     Product sales and leasing                                                   $5,237,859        $4,861,287
     Royalties                                                                      169,737           166,988
                                                                                 ----------        ----------

Total Revenue                                                                     5,407,596         5,028,275

Cost of goods sold                                                                4,165,963         4,031,848
                                                                                 ----------        ----------

Gross profit                                                                      1,241,633           996,427
                                                                                 ----------        ----------

Operating expenses:
     General and administrative expenses                                            679,710           630,573
     Selling expenses                                                               229,689           130,934
                                                                                 ----------        ----------

     Total operating expenses                                                       909,399           761,507
                                                                                 ----------        ----------

Operating income                                                                    332,234           234,920
                                                                                 ----------        ----------

Other income (expense):
     Interest expense                                                               (74,654)         (134,253)
     Interest income                                                                 10,329            12,373
     Other, net                                                                     (31,257)          (83,960)
                                                                                 ----------        ----------

         Total other income (expense)                                               (95,582)         (205,840)
                                                                                 ----------        ----------

Income before income taxes                                                          236,652            29,080
Income tax expense                                                                   27,400                --
                                                                                 ----------        ----------

         Net income                                                              $  209,252        $   29,080
                                                                                 ==========        ==========

Basic income per share                                                           $      .06        $      .01
                                                                                 ==========        ==========

Diluted earnings per share                                                       $      .05        $      .01
                                                                                 ==========        ==========


            The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

                                                      4

<PAGE>
<TABLE>
                                  SMITH-MIDLAND CORPORATION AND SUBSIDIARIES
                                    Consolidated Statements of Cash Flows
                                                 (Unaudited)
                                                                                     Three Months Ended
                                                                                          March 31,
                                                                                          ---------
                                                                                     2002            2001
                                                                                 -----------     -----------
Cash flows from operating activities:
<S>                                                                              <C>             <C>
     Cash received from customers                                               $  6,296,911      $5,404,548
     Cash paid to suppliers and employees                                         (6,248,457)     (5,030,428)
     Income taxes paid, net                                                          (27,400)             --
     Interest paid                                                                   (74,654)       (134,252)
     Other                                                                           (20,928)         31,172
                                                                                ------------      ----------
       Net cash provided (absorbed) by operating activities                          (74,528)        271,040
                                                                                ------------      ----------

Cash flows from investing activities:
     Purchases of property and equipment                                            (168,612)        (89,545)
     (Increase) decrease in officer note receivable                                    6,000              --
                                                                                ------------      ----------
       Net cash absorbed by investing activities                                    (162,612)        (89,545)
                                                                                ------------      ----------

Cash flows from financing activities:
     Proceeds from borrowings                                                         40,263          48,404
     Repayments of borrowings                                                        (82,031)        (43,803)
     Repayments on borrowings - related parties, net                                  (2,721)             --
     Proceeds from warrants exercised                                                 99,343              --
                                                                                ------------      ----------
       Net cash provided by financing activities                                      54,854           4,601
                                                                                ------------      ----------


Net increase (decrease) in cash and cash equivalents                                (182,286)        186,096

Cash and cash equivalents at beginning of period                                     942,131         218,264
                                                                                ------------      ----------

Cash and cash equivalents at end of period                                      $    759,845      $  404,360
                                                                                =============     ==========

Reconciliation of net income (loss) to net cash provided
  (absorbed) by operating activities:

Net income (loss)                                                               $    209,252      $   29,080
Adjustments to reconcile net income (loss) to net cash
     provided  (absorbed) by operating activities:
       Depreciation and amortization                                                  93,229          94,433
         Decrease (increase) in:
         Accounts receivable - billed                                                854,219         604,026
         Accounts receivable - unbilled                                              (29,821)       (104,994)
         Inventories                                                                 (98,469)       (106,704)
         Prepaid expenses and other assets                                           (89,281)        (39,636)
       Increase (decrease) in:
         Accounts payable - trade                                                   (925,694)       (321,884)
         Accrued expenses and other liabilities                                     (152,880)        136,719
         Customer deposits                                                            64,917         (20,000)
                                                                                ------------      ----------
Net cash provided (absorbed) by operating activities                            $    (74,528)     $  271,040
                                                                                ============      ==========

           The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

                                                      5
<PAGE>

                   SMITH-MIDLAND CORPORATION AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

                                 March 31, 2002

Basis of Presentation

     As permitted by the rules of the  Securities and Exchange  Commission  (the
"Commission")  applicable to quarterly  reports on Form 10-QSB,  these notes are
condensed  and do not contain all  disclosures  required by  generally  accepted
accounting  principles.  Reference should be made to the consolidated  financial
statements and related notes included in the Smith-Midland  Corporation's Annual
Report on Form 10-KSB for the year ended December 31, 2001.

     In the opinion of management of Smith-Midland  Corporation (the "Company"),
the accompanying  financial  statements  reflect all adjustments which were of a
normal  recurring  nature  necessary  for a fair  presentation  of the Company's
results of operations for the three-month periods ended March 31, 2002 and 2001.

     The results disclosed in the consolidated  statements of operations are not
necessarily indicative of the results to be expected for any future periods.

Principles of Consolidation

     The Company's  accompanying  consolidated  financial statements include the
accounts of Smith-Midland  Corporation,  a Delaware corporation,  and its wholly
owned subsidiaries:  Smith-Midland Corporation, a Virginia corporation; Easi-Set
Industries,  Inc., a Virginia corporation;  Smith-Carolina  Corporation, a North
Carolina corporation; Concrete Safety Systems, Inc., a Virginia corporation; and
Midland  Advertising & Design,  Inc., a Virginia  corporation.  All  significant
inter-company accounts and transactions have been eliminated in consolidation.

Reclassifications

       Certain reclassifications have been made to the prior years' consolidated
financial statements to conform to the 2002 presentation.

Inventories

     Inventories are stated at the lower of cost, using the first-in,  first-out
(FIFO) method, or market.

Property and Equipment

     Property and equipment, net is stated at depreciated cost. Expenditures for
ordinary  maintenance  and repairs are charged to income as  incurred.  Costs of
betterments,  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  the  accounts  and any gain or loss on
disposition is reflected in income.

                                        6
<PAGE>

Depreciation  is computed  using the  straight-line  method  over the  following
estimated useful lives:

                                                                     Years

       Buildings...................................................  10-33
       Trucks and automotive equipment.............................   3-10
       Shop machinery and equipment................................   3-10
       Land improvements...........................................  10-30
       Office equipment............................................   3-10


Income Taxes

     The  provision  for  income  taxes  is based on  earnings  reported  in the
financial statements.  A deferred income tax asset or liability is determined by
applying  currently  enacted tax laws and rates to the expected  reversal of the
cumulative  temporary  differences  between  the  carrying  value of assets  and
liabilities for financial statement and income tax purposes. Deferred income tax
expense is measured by the change in the deferred  income tax asset or liability
during the year.

     No provision for federal income taxes was made for the  three-month  period
ended  March 31,  2002 or 2001 due to the  availability  of net  operating  loss
carryforwards. As of December 31, 2001 the Company has approximately $275,000 in
net  operating  loss  carryforwards  which the  Company  believes  will be fully
absorbed in the current year. At that time, a provision for federal income taxes
will be established.

Revenue Recognition

     The  Company  primarily  recognizes  revenue  on the  sale of its  standard
precast concrete  products at shipment date,  including revenue derived from any
projects to be completed under short-term  contracts.  Installation services for
precast  concrete  products,  leasing and royalties are recognized as revenue as
they are earned on an accrual basis.  Licensing  fees are  recognized  under the
accrual  method  unless  collectibility  is in doubt,  in which event revenue is
recognized as cash is received.  Certain  sales of soundwall  and  SlenderwallTM
concrete products are recognized upon completion of production and customer site
inspections. Provisions for estimated losses on contracts are made in the period
in which such losses are determined.

Estimates

     The preparation of these financial  statements  requires management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses. Actual results could differ from those estimates.

Net Income Per Share

     Basic income per share is computed by dividing  income  available to common
stockholders by the weighted average number of common shares outstanding for the
period.  Diluted  income per share  reflects the  potential  dilutive  effect of
securities  that could share in earnings  of an entity.  Earnings  per share was
calculated as follows:
<TABLE>
                                                               Three Months Ended
                                                                    March 31,
                                                                    ---------
                                                              2002              2001
                                                           ----------        ----------
<S>                                                        <C>               <C>
Net income                                                 $  209,252        $   29,080
                                                           ==========        ==========

Average Shares Outstanding
     For basic earnings per share                           3,255,471         3,050,798
     Dilutive effect of stock options and warrants            875,458                --
                                                           ----------        ----------
Average Shares Outstanding for diluted earnings per share   4,130,929         3,050,798
                                                           ==========        ==========
Basic income per share                                     $      .06        $      .01
                                                           ==========        ==========
Diluted earnings per share                                 $      .05        $      .01
                                                           ==========        ==========
</TABLE>


                                        7
<PAGE>

Item 2.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations


General

     The Company generates revenues primarily from the sale, licensing, leasing,
shipping and  installation of precast  concrete  products for the  construction,
utility and farming  industries.  The Company's  operating strategy has involved
producing  innovative  and  proprietary  products,  including  SlenderwallTM,  a
patented,  lightweight,  energy efficient concrete and steel exterior wall panel
for  use in  building  construction;  J-J  HooksTM  Highway  Safety  Barrier,  a
patented,  positive-connected  highway  safety  barrier;  Sierra  Wall,  a sound
barrier primarily for roadside use; and  transportable  concrete  buildings.  In
addition,   the  Company  produces   utility  vaults,   farm  products  such  as
cattleguards  and water and feed  troughs,  and custom  order  precast  concrete
products with various architectural surfaces.


     This Form 10-QSB contains  forward-looking  statements  which involve risks
and  uncertainties.  The Company's actual results may differ  significantly from
the results discussed in the forward-looking  statements and the results for the
three months ended March 31, 2002 are not necessarily  indicative of the results
for the Company's operations for the year ending December 31, 2002. Factors that
might cause such a difference  include,  but are not limited to, product demand,
the impact of competitive products and pricing,  capacity and supply constraints
or  difficulties,  general business and economic  conditions,  the effect of the
Company's  accounting  policies and other risks detailed in the Company's Annual
Report on Form  10-KSB  and  other  filings  with the  Securities  and  Exchange
Commission.

Results of Operations

     Three months ended March 31, 2002  compared to the three months ended March
31, 2001

     For the three months ended March 31, 2002, the Company had total revenue of
$5,407,596  compared to total revenue of  $5,028,275  for the three months ended
March 31,  2001,  an  increase  of  $379,321  or 8%.  Total  product  sales were
$4,448,087  for the three months ended March 31, 2002 compared to $4,277,046 for
the same  period in 2001,  an  increase of $171,041 or 4%. The sales mix changed
with  barrier,   soundwall,  and  SlenderwallTM  registering  significant  sales
increases but  architectural,  utility and building  sales  showing  significant
decreases.  Shipping and installation  revenue was $789,772 for the three months
ended March 31, 2002 and  $584,241  for the same period in 2001,  an increase of
$205,531,   or  35%,  resulting  primarily  from  higher  revenues  for  product
installation on major contracts.  Royalties increased to $169,737 in the current
quarter from $166,988 in the three months ended March 31, 2001.  The increase of
$2,749,  or 2%, was due to increased  barrier royalties based on increased sales
activity by the  Company's  licensees in the 2002 period as compared to the 2001
period.

     Total  cost of goods sold for the three  months  ended  March 31,  2002 was
$4,165,963, an increase of $134,115, or 3%, from $4,031,848 for the three months
ended March 31, 2001. The increase was a result of the increased volume as total
cost of goods sold, as a percentage of total  revenue,  decreased to 77% for the
three months ended March 31, 2002, from 80% for the three months ended March 31,
2001. The cost of products sold averaged 73% in the first quarter of 2002 versus
75% for the first quarter of 2001, which earlier quarter included an addition to
the  reserve  for  contract  losses  of  $69,000.   The  cost  of  shipping  and
installation  exceeded  shipping  and  installation  revenue in the three months
ending  March 31,  2002 by $115,108  versus a loss of  $220,869  for the quarter
ending  March 31, 2001.  The lower loss was a result of the higher  installation
revenues.

     For the  three  months  ended  March 31,  2002 the  Company's  general  and
administrative  expenses  increased  $49,137,  or 8%, to $679,710  from $630,573
during the same period in 2001.  The majority of the increase was  attributed to
higher salary expenses in the quarter ending March 31, 2002 .

                                       8
<PAGE>

     Selling  expenses  for the three  months  ended  March 31,  2002  increased
$98,755 to $229,689  from  $130,934 for the three months ended March 31, 2001 an
increase of 75%,  primarily  as a result of  increases in salaries due to higher
staffing levels, and additional advertising expenses in the quarter ending March
31, 2002, as the Company increased its sales effort.

     The  Company's  operating  income for the three months ended March 31, 2002
was $332,234,  compared to an operating  income of $234,920 for the three months
ended March 31, 2001,  an increase of $97,314,  or 41%.  The improved  operating
income resulted from a 25% increase in gross profit reduced by a 19% increase in
operating expenses.

       Interest  expense was $74,654 for the three  months ended March 31, 2002,
compared to $134,253 for the three months ended March 31, 2001.  The decrease of
$59,599,  or 44%,  was due to lower levels of average  debt  outstanding  in the
quarter  ending March 31, 2002 compared to the quarter ending March 31, 2001 and
significantly lower average interest rates in the current quarter as most of the
Company's debt is tied to the prime interest rate.

     Other expenses, net fell by $52,703 or 63% for the quarter ending March 31,
2002 to  $31,257  from  $83,960  for the  quarter  ending  March 31,  2001.  The
reduction was due to a combination of higher levels of miscellaneous  income and
lower use tax expenses in the current quarter.

     Net income was  $209,252  for the three  months  ended March 31, 2002 after
$27,400 of income tax expense  compared to net income of $29,080  with no income
tax expense for the same period in 2001.  Basic  earnings per share for the 2002
three month period was $0.06  compared to basic  earnings per share of $0.01 for
the three months ended March 31, 2001.


Liquidity and Capital Resources

     The  Company  generally  finances  its  capital   expenditures,   operating
requirements  and  growth  with  proceeds  from  operations,  and bank and other
borrowings.  As of March  31,  2002,  however,  the  Company  has  approximately
1,030,000  publicly traded warrants  outstanding.  The warrants have an exercise
price of $.60 and expire on August 31,  2002.  If  exercised,  the Company  will
receive   approximately   $618,000  in  cash.  The  Company  had  $4,561,229  of
indebtedness at March 31, 2002, of which $580,340 was scheduled to mature within
twelve months.

     The Company has a $3,774,011  note with First  International  Bank ("FIB"),
formerly  the First  National  Bank of New England,  headquartered  in Hartford,
Connecticut.  The note had an original term of twenty three years beginning June
25, 1998 with an interest  rate of 1.5% above prime,  secured by  equipment  and
real  estate.  The  loan  is  guaranteed  in  part  by the  U.S.  Department  of
Agriculture Rural Business-Cooperative Service's loan guarantee. Under the terms
of the note, the Company's  unfinanced  fixed asset  expenditures are limited to
$300,000 per year for a five year period.  In addition,  FIB will permit chattel
mortgages on purchased  equipment  not to exceed  $200,000 on an annual basis so
long as the Company is not in default. The Company also has a $500,000 operating
line of credit by FIB. This commercial  revolving promissory note, which carries
a variable  interest rate of 1% above prime, has been verbally  increased by FIB
to $750,000 with a maturity of May 2003.

     Capital spending  increased to $168,612 in the quarter ended March 31, 2002
from  $89,545 in the  comparable  period of the prior  year,  mainly  because of
routine  equipment  replacements.  Planned  capital  expenditures  for  2002 are
limited as stated  above by the FIB loan  agreement.  The Company  plans to make
additional capital expenditures for routine equipment replacement in the current
fiscal  year  but  has  no  other   significant  cash  commitments  for  capital
expenditures planned in 2002.

     As a result of the  Company's  substantial  debt  burden,  the  Company  is
especially  sensitive to changes in the prevailing interest rates.  Fluctuations
in such interest rates may materially and adversely affect the Company's ability
to finance its operations either by increasing the Company's cost to service its
current  debt,  or by creating a more  burdensome  refinancing  environment,  if
interest rates should increase.

                                       9
<PAGE>

     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.  This payment schedule has resulted in liquidity problems
for the Company  because it must bear the cost of  production  for its  products
long  before it receives  payment.  In the event cash flow from  operations  and
existing credit facilities are not adequate to support  operations,  the Company
is currently investigating  alternative sources of both short-term and long-term
financing, for which there can be no assurance of obtaining.

     As of March 31, 2002 the Company's backlog was  approximately  $7.1 million
versus a backlog of  approximately  $8.5 million as of March 31, 2001. As of May
6, 2002,  the  Company's  backlog had  decreased to  approximately  $6.3 million
versus a backlog of $8.3 million for the comparable period in 2001. The majority
of the projects  relating to the backlog as of May 6, 2002 are  contracted to be
constructed  in 2002.  The drop in the  Company's  backlog from the prior year's
level is due to (1) increased  production levels at the Company,  resulting in a
lower degree of deferral in commencing  projects,  and (2) a decreased  level of
new  sales  and  projects,  in view of the  slower  economy.  In the  event  the
decreased level of new sales and projects continues, future sales revenues could
be adversely effected.

Other Comments

       The Company services the construction  industry primarily in areas of the
United States where construction activity is inhibited by adverse weather during
the winter. As a result, the Company traditionally  experiences reduced revenues
from December  through March and realizes the  substantial  part of its revenues
during the other months of the year.  The Company  typically  experiences  lower
profits,  or losses,  during the winter months, and must have sufficient working
capital to fund its operations at a reduced level until the spring  construction
season.

     Management believes that the Company's  operations have not been materially
affected by inflation.



                                       10
<PAGE>




                           PART II - Other Information


Item 1.  Legal Proceedings.  Reference is made to Item 3 of the Company's Annual
         ------------------
         Report  on Form  10-KSB  for the  year  ended  December  31,  2001  for
         information as to reported legal proceedings.


Item 2.  Changes in Securities and Use of Proceeds.  None
         ------------------------------------------


Item 3.  Defaults Upon Senior Securities.  None
         -------------------------------


Item 4.  Submission of Matters to a Vote of Security Holders.   None
         ---------------------------------------------------


Item 5.  Other Information.  None.
         -----------------


Item 6.  Exhibits and Reports on Form 8-K. None.
         --------------------------------




                                       11
<PAGE>
                                   SIGNATURES


     In accordance  with the  requirements  of the Exchange Act, the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                            SMITH-MIDLAND CORPORATION




Date: May 15, 2002                     /s/ Rodney I. Smith
                                      -------------------------------
                                      Rodney I. Smith
                                      Chairman of the Board,
                                      Chief Executive Officer and President
                                      (principal executive officer)


Date: May 15, 2002                     /s/ Robert E. Albrecht, Jr.
                                      -------------------------------
                                      Robert E. Albrecht, Jr.
                                      Chief Financial Officer
                                      (principal financial and
                                      accounting officer)





                                       12

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