SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

                   Annual Report under Section 13 or 15(d) of
                       the Securities Exchange Act of 1934
                   For the Fiscal Year Ended December 31, 2002

                         Commission File Number 1-13752



                            SMITH-MIDLAND CORPORATION
                 (Name of Small Business Issuer in its Charter)


           Delaware                                              54-1727060
-------------------------------                              -------------------
(State or Other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

P.O. Box 300, 5119 Catlett Road,
         Midland, Virginia                                               22728
----------------------------------------                              ----------
(Address of Principal Executive Offices)                              (Zip Code)


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

         Securities Registered Under Section 12(b) of the Exchange Act:

                                                        Name of Each Exchange on
Title of Each Class                                         Which Registered
-------------------                                     ------------------------

Common Stock, $.01 par value per share                    Boston Stock Exchange

      Securities Registered Pursuant to Section 12(g) of the Exchange Act:

                     Common Stock, $.01 par value per share
                                (Title of Class)

                         Preferred Stock Purchase Rights
                                (Title of Class)
<PAGE>

         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
                               ---      ---

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. X
                                     ---
         The Issuer's revenues for its most recent fiscal year were $22,604,958.

The aggregate market value of the shares of Common Stock, held by
non-affiliates, based upon the closing price for such stock on March 20, 2003,
was $3,869,855.

As of March 20, 2003, the Company had outstanding 4,432,948 shares of Common
Stock, $.01 par value per share.

Transitional Small Business Disclosure Format

                           Yes     No X
                              ---    ---

                       Documents Incorporated By Reference
                                      None.

                                       2
<PAGE>

                           FORWARD-LOOKING STATEMENTS


         This Annual Report and related documents include "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Forward-looking statements involve known and unknown
risks, uncertainties and other factors which could cause the Company's actual
results, performance (financial or operating) or achievements expressed or
implied by such forward looking statements not to occur or be realized. Such
forward looking statements generally are based upon the Company's best estimates
of future results, performance or achievement, based upon current conditions and
the most recent results of operations. Forward-looking statements may be
identified by the use of forward-looking terminology such as "may," "will,"
"expect," "believe," "estimate," "anticipate," "continue," or similar terms,
variations of those terms or the negative of those terms. Potential risks and
uncertainties include, among other things, such factors as:

o    our high level of indebtedness and ability to satisfy the same,
o    our significant loss in 1998 under a material contract, and the litigation
     arising out of that contract,
o    our limited recent history of profitable operations,
o    the continued availability of financing in the amounts, at the times and on
     the terms required, to support our future business and capital projects,
o    the extent to which we are successful in developing, acquiring, licensing
     or securing patents for proprietary products,
o    changes in economic conditions specific to any one or more of our markets
     (including the availability of public funds and grants for construction),
o    changes in general economic conditions (such as interest rate changes),
o    adverse weather which inhibits the demand for our products,
o    our compliance with governmental regulations,
o    the outcome of pending and future litigation,
o    on material construction projects, our ability to produce and install
     product that conforms to contract specifications and in a time frame that
     meets the contract requirements,
o    the cyclical nature of the construction industry.
o    our exposure to increased interest expense payments should interest rates
     change and,
o    the other factors and information disclosed and discussed in other sections
     of this report.


         Investors and shareholders should carefully consider such risks,
uncertainties and other information, disclosures and discussions which contain
cautionary statements identifying important factors that could cause actual
results to differ materially from those provided in the forward-looking
statements. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.

                                       3
<PAGE>
                                     PART I


Item 1.  Description of Business
         -----------------------

         General

         Smith-Midland Corporation (the "Company") invents, develops,
manufactures, markets, leases, licenses, sells, and installs a broad array of
precast concrete products for use primarily in the construction, utilities and
farming industries. The Company's customers are primarily general contractors
and federal, state and local transportation authorities located in the
Mid-Atlantic and Northeastern regions of the United States. The Company's
operating strategy has involved producing innovative and proprietary products,
including Slenderwall(TM), a patented, lightweight, energy efficient concrete
and steel exterior wall panel for use in building construction; J-J Hooks(TM)
Highway Safety Barrier, a patented, positive-connected highway safety barrier;
Sierra Wall, a sound barrier primarily for roadside use; and Easi-Set(R)
transportable concrete buildings, also patented. In addition, the Company
produces generic highway sound barriers, utility vaults, farm products such as
cattleguards and water and feed troughs, and custom order precast concrete
products with various architectural surfaces.

         The Company was incorporated in Delaware on August 2, 1994. Prior to a
corporate reorganization completed in October 1994, the Company conducted its
business primarily through Smith-Midland Virginia, which was incorporated in
1960 as Smith Cattleguard Company, a Virginia corporation, and which
subsequently changed its name to Smith-Midland Corporation in 1985. The
Company's principal offices are located at 5119 Catlett Road, Midland, Virginia
22728 and its telephone number is (540) 439-3266. As used in this report, unless
the context otherwise requires, the term the "Company" refers to Smith-Midland
Corporation and its subsidiaries.

         Market

         The Company's market primarily consists of general contractors
performing public and private construction contracts, including the construction
of commercial buildings, public and private roads and highways, and airports;
municipal utilities; and federal, state, and local transportation authorities,
primarily located in the Mid-Atlantic and Northeastern states. The Company also
licenses its proprietary products to precast concrete manufacturers nationwide
and in Canada, Belgium, New Zealand, and Spain. The Company, in conjunction with
the establishment of its Slenderwall(TM) exterior cladding system, intends to
expand the market in which it currently competes.

         The precast concrete products market is affected by the cyclical nature
of the construction industry. In addition, the demand for construction varies
depending upon weather conditions, the availability of financing at reasonable
interest rates, overall fluctuations in the national and regional economies,
past overbuilding, labor relations in the construction industry, and the
availability of material and energy supplies. A substantial portion of the
Company's business is derived from local, state, and federal building projects,
which are further dependent upon budgets and, in many cases, voter-approved
bonds.

                                       4
<PAGE>

         Products

         Precast concrete products are cast at a manufacturing facility and
delivered to a site for installation, as contrasted to ready-mix concrete, which
is produced in a "batch plant," put into a mixer truck where it is mixed
thoroughly and delivered to a construction site to be poured and set at the
site. Precast concrete products are used primarily as parts of buildings or
highway structures, and may be used architecturally, as in a decorative wall of
a building, or structurally. Structural uses include building walls, frames,
floors, or roofs. The Company currently manufactures and sells a wide variety of
products for use in the construction, transportation and utility industries.

         Easi-Set Slenderwall(TM) Lightweight Construction Panels
         --------------------------------------------------------

         Each Slenderwall(TM) system is a prefabricated, energy-efficient,
lightweight exterior cladding system that is offered as a cost-effective
alternative to the traditional, piecemeal construction of the exterior walls of
buildings. The Company's Slenderwall system combines the essential components of
a wall system into a single unit ready for interior dry wall mounting
immediately upon installation. The base design of each Slenderwall panel
consists of a galvanized or stainless steel stud frame with an exterior sheath
of approximately two-inch thick, steel-reinforced, high-density, precast
concrete, with various available architectural surfaces. The exterior concrete
sheath is attached to the interior frame by strategically placed epoxy coated
steel connectors that suspend the exterior concrete approximately one-half inch
away from the steel frame.

         Slenderwall panels are approximately one-half the weight of brick walls
of equivalent size, permanence and durability. This lighter weight translates
into reduced construction costs resulting from less onerous structural and
foundation requirements as well as lower shipping costs. Additional savings
result from Slenderwall's reduced installation time and ease of erection, and
from the use of smaller cranes for installation.

         The Company custom designs and manufactures each Slenderwall exterior
cladding system. The exterior of the Slenderwall systems can be produced in a
variety of attractive architectural finishes, such as concrete, exposed stone,
granite or thin brick.

         Easi-Set  Sierra Wall(TM)
         ---------------------

         The Easi-Set Sierra Wall(TM)(the "Sierra Wall") combines the strength
and durability of precast concrete with a variety of finishes to provide an
effective and attractive sound and sight barrier for use around residential,
industrial, and commercial properties and alongside highways. With additional
reinforcement, the Sierra Wall can also be used as a retaining wall to retain
earth in both highway and residential construction. The Sierra Wall is typically
constructed of four-inch thick, steel-reinforced concrete panels that are
securely joined at an integral column by a tongue and groove connection system.
This tongue and groove connection system makes the Sierra Wall easy to install
and move if boundaries change or highways are relocated after the completion of
a project.

                                       5
<PAGE>

         The Company custom designs and manufactures each Sierra Wall to conform
to the specifications provided by the contractor. The width, height, strength,
and exterior finish of each wall varies depending on the terrain and
application. In addition, the Company offers increased noise abatement benefits
through the use of DuriSol(R), an optional, durable and patented
sound-absorbing, material that can be cast onto the exterior of the Sierra Wall.
The Company is a party to a licensing agreement with DuriSol, Inc. of Ontario,
Canada, ("DuriSol") permitting the Company to utilize the DuriSol(R)
sound-absorbing technology until December 31, 2003 and expects to be able to
renew this agreement. Under the Company's licensing agreement with DuriSol, the
Company has an exclusive license to use DuriSol in Virginia and a right of first
refusal for any new proprietary products developed by DuriSol. The Company pays
a royalty to DuriSol equal to $.25 per square foot of product manufactured using
DuriSol.

         The Sierra Wall is used primarily for highway projects as a noise
barrier as well as for residential purposes, such as privacy walls between
homes, security walls or windbreaks, and for industrial or commercial purposes,
such as to screen and protect shopping centers, industrial operations,
institutions or highways. The variety of available finishes enables the Company
to blend the Sierra Wall with local architecture, creating an attractive, as
well as functional, barrier.

         Easi-Set J-J Hooks(TM) Highway Safety Barrier
         ---------------------------------------------

         The Easi-Set J-J Hooks(TM) highway safety barrier (the "J-J Hooks
Barrier") is a crash tested and patented, positively connected, safety barrier
that the Company sells, rents, delivers, installs and licenses for use on
roadways to separate lanes of traffic, either temporarily for construction work
zone purposes or permanently for traffic control. Barriers are deemed to be
positively connected when the connectors on each end of the barrier sections are
interlocked with one another. The J-J Hooks Barriers interlock without the use
of a separate locking device. The primary advantage of a positive connection is
that a barrier with such a connection can withstand vehicle crashes at higher
speeds without separating. The Federal Highway Administration (the "FHWA")
requires that states use only positively connected barriers which meet NCHRP-350
test level 3 crash test requirements. J-J Hooks Barrier meets the requirements,
having received NCHRP-350 approval in March 1999.

         The proprietary feature of the J-J Hooks Barrier is the design of its
positive connection. Protruding from each end of a J-J Hooks Barrier section is
a fabricated bent steel connector, rolled in toward the end of the barrier (it
resembles the letter "J" when viewed from directly above). The connector
protruding from each end of the barrier is rolled identically so that when one
end of a barrier faces the end of another, the resulting "hooks" face each
other. To connect one section of a J-J Hooks Barrier to another, a contractor
merely positions the hook of an elevated section of the barrier above the hook
of a set section and lowers the elevated section into place. The positive
connection is automatically engaged.

         The Company believes that the J-J Hooks Barrier connection design is
superior to those of earlier highway safety barriers that were positively
connected through the "eye and pin" technique. Barriers incorporating this
technique have eyes or rings protruding from each end of the barrier, which must


                                       6
<PAGE>

be aligned during the setting process. Once set, a crew inserts pins through the
eyes and bolts the barrier sections together. Compared to this technique, the
J-J Hooks Barrier is easier and faster to install, and remove, requires a
smaller crew and eliminates the need for loose hardware to make the connection.

         In November 1990, the FHWA approved the J-J Hooks Barrier for use on
federally-aided highway projects following the successful completion of crash
testing based on National Cooperative Highway Research Program criteria. The J-J
Hooks Barrier has also been approved for use in state funded projects by 39
states, plus Washington, D.C. and Puerto Rico. The Company is in various stages
of the application process in 11 states and believes that approval in some of
the states will be granted; however no assurance can be given that approval will
be received from any or all of the remaining states or that such approval will
result in the J-J Hooks Barrier being used in such states. In addition, the J-J
Hooks Barrier has been approved by the appropriate authorities for use in the
countries of Spain, Belgium, Germany, New Zealand and Chile.

         Easi-Set Precast Building and Easi-Span(TM)
         -------------------------------------------

         The Easi-Set Precast Building is a transportable, prefabricated,
single-story, concrete utility building designed to be adaptable to a variety of
uses ranging from housing communications operations, traffic control systems,
mechanical and electrical stations, to inventory or supply storage, restroom
facilities or kiosks. The Easi-Set Precast Building is available in a variety of
exterior finishes and in five standard sizes, or it can be custom sized. The
roof and floor of each Easi-Set Precast Building are manufactured using the
Company's patented post-tensioned system, which helps seal the buildings against
moisture. As a freestanding unit, the Easi-Set Precast Building requires no
poured foundations or footings and can be easily installed within a few hours.
After installation the building can be moved, if desired, and reinstalled in a
new location.

         The Company also offers Easi-Span(TM), a line of expandable precast
concrete buildings. Easi-Span(TM) is identical to and incorporates the
technology of the Easi-Set Precast Building, but is available in larger sizes
and, through its modular construction, can be combined in varied configurations
to permit expansion capabilities.

         The Company has sold its Easi-Set and Easi-Span Precast Buildings for
the following uses:

     o    Communications Operations -- to house fiber optics regenerators,
          switching stations and microwave transmission shelters, cellular phone
          sites, and cable television repeater stations.

     o    Government Applications -- to federal, state and local authorities for
          uses such as weather and pollution monitoring stations; military
          storage, housing and operations; park vending enclosures; rest rooms;
          kiosks; traffic control systems; school maintenance and athletic
          storage; airport lighting control and transmitter housing; and law
          enforcement evidence and ammunition storage.


                                       7
<PAGE>

     o    Utilities Installations -- for electrical switching stations and
          transformer housing, gas control shelters and valve enclosures, water
          and sewage pumping stations, and storage of contaminated substances or
          flammable materials which require spill containment.

     o    Commercial and Industrial Locations -- for electrical and mechanical
          housing, cemetery maintenance storage, golf course vending enclosures,
          mechanical rooms, rest rooms, emergency generator shelters, gate
          houses, automobile garages, hazardous materials storage, food or
          bottle storage, animal shelters, and range houses.


         Easi-Set Utility Vault
         ----------------------

         The Company produces a line of precast concrete underground utility
vaults ranging in size from 27 to 702 cubic feet. Each Easi-Set utility vault
normally comes with a manhole opening on the top for ingress and egress and
openings around the perimeter, in accordance with the customer's specifications,
to access water and gas pipes, electrical power lines, telecommunications
cables, or other such media of transfer. The utility vaults may be used to house
equipment such as cable, telephone or traffic signal equipment, and for
underground storage. The Company also manufactures custom-built utility vaults
for special needs.


         Sources of Supply

         All of the raw materials necessary for the manufacture of the Company's
products are available from multiple sources. To date, the Company has not
experienced significant delays in obtaining materials and believes that it will
continue to be able to obtain required materials from a number of suppliers at
commercially reasonable prices.


         Licensing

         The Company presently grants licenses, through it's wholly-owned
subsidiary Easi-Set Industries, for the manufacturing and distribution rights of
certain proprietary products, such as the J-J Hooks Barrier, Easi-Set and
Easi-Span Precast Buildings and SlenderwallTM, as well as certain
non-proprietary products, such as the Company's cattleguards, and water and feed
troughs. Generally, licenses are granted for a point of manufacture. The Company
receives an initial one-time license acquisition and training fee ranging from
approximately $20,000 to $50,000. License royalties vary depending on the
product licensed, but the range is typically between 4% to 6% of the sales of
the licensed product. In addition, Easi-Set Precast Building and SlenderwallTM
licensees pay the Company a flat monthly fee for co-op advertising and promotion
programs. The Company produces and distributes advertising materials and
promotes the licensed products through its own advertising subsidiary,
AdVentures.

                                       8
<PAGE>

         The Company has entered into 32 licensing agreements in the United
States, and has established at least one licensee in each of Canada, Belgium,
New Zealand, and Spain and sub-licensees in Canada.

         The Company is currently negotiating several new license arrangements
and, although no assurance can be given, expects to increase its licensing
activities. The Company completed its first licensing arrangement for its
SlenderwallTM exterior cladding system in 2001 which resulted in additional
start-up fees and royalties of $83,727. Additional licensees were added in 2002:
2 agreements amounting to $45,000.


         Marketing and Sales

         The Company uses an in-house sales force and, to a lesser extent,
independent sales representatives to market its precast concrete products
through trade show attendance, sales presentations, advertisements in trade
publications, and direct mail to end users.

         The Company has also established a cooperative advertising program in
which the Company and its Easi-Set and Easi-Span licensees combine resources to
promote certain precast concrete products. Licensees pay a flat monthly fee and
the Company pays any additional amounts required to advertise the products
across the country. Although the Company advertises nationally, the Company's
marketing efforts are concentrated on the region within a 250-mile radius from
its facilities, which includes most of Virginia, Delaware, the District of
Columbia, Maryland, North Carolina, South Carolina, and parts of Pennsylvania,
New York, New Jersey and West Virginia.

         The Company's sales result primarily from the submission of estimates
or proposals to general contractors who then include the estimates in their
overall bids to various government agencies and other end users that solicit
construction contracts through a competitive bidding process. In general, these
contractors solicit and obtain their construction contracts by submitting the
most attractive bid to the party desiring the construction. The Company's role
in the bidding process is to provide estimates to the contractors desiring to
include the Company's products or services in the contractor's bid. If a
contractor who accepts the Company's bid is selected to perform the
construction, the Company provides the agreed upon products or services. In many
instances, the Company provides estimates to more than one of the contractors
bidding on a single project. The Company occasionally negotiates with and sells
directly to end-users.


         Competition

         The precast concrete industry is highly competitive and consists of a
few large companies and many small to mid-size companies, several of which have
substantially greater financial and other resources than the Company.
Nationally, the precast concrete market is dominated by several large companies.
However, due to the weight and costs of delivery of precast concrete products,
competition in the industry tends to be limited by geographical location and
distance from the construction site and is fragmented with numerous
manufacturers in a large local area.

                                       9
<PAGE>

         The Company believes that the principal competitive factors for its
products are price, durability, ease of use and installation, speed of
manufacture and delivery time, ability to customize, FHWA and state approval,
and customer service. The Company believes that its plants in both Midland,
Virginia and Reidsville, North Carolina compete favorably with respect to each
of these factors in the Northeast and Mid-Atlantic regions of the United States.
Finally, the Company believes it offers a broad range of products that are
unique and technologically superior to competing products.


         Patents and Proprietary Information

         The Company holds U.S. and Canadian patents for the J-J Hooks Barrier
and the Easi-Set Precast Building, and a U.S. patent for the Slenderwall
exterior cladding system. The European patent for J-J Hooks Barrier was allowed
in December 1997 and has been registered in eleven European countries. The
earliest of the issued patents considered material to the Company's business
expired in 2001 and a new patent, with respect to this product, was allowed
March 2, 1999 which expires in 2017. The Company also owns three U.S. registered
trademarks (Easi-Set(R), Smith Cattleguard(R), and Smith-Midland Excellence in
Precast Concrete(R)), one Canadian registered trademark (Easi-Set(R)) and
licenses the rights to another (DuriSol(R)). The Company licenses the technology
used in DuriSol(R) products pursuant to an agreement that expires on December
31, 2003.

         While the Company intends to vigorously enforce its patent rights
against infringement by third parties, no assurance can be given that the
patents or the Company's patent rights will be enforceable or provide the
Company with meaningful protection from competitors or that its patent
applications will be allowed. Even if a competitor's products were to infringe
patents held by the Company, enforcing the patent rights in an enforcement
action would be very costly, and assuming the Company has sufficient resources,
would divert funds and resources that otherwise could be used in the Company's
operations. No assurance can be given that the Company would be successful in
enforcing such rights, that the Company's products or processes do not infringe
the patent or intellectual property rights of a third party, or that if the
Company is not successful in a suit involving patents or other intellectual
property rights of a third party, that a license for such technology would be
available on commercially reasonable terms, if at all.


         Government Regulation

         The Company frequently supplies products and services pursuant to
agreements with general contractors who have entered into contracts with federal
or state governmental agencies. The successful completion of the Company's
obligations under such contracts is often subject to the satisfactory inspection
or approval of such products and services by a representative of the contracting
agency. Although the Company endeavors to satisfy the requirements of each such
contract to which it is a party, no assurance can be given that the necessary
approval of its products and services will be granted on a timely basis or at
all and that the Company will receive any payments due to it. Any failure to
obtain such approval and payment may have a material adverse effect on the
Company's business.

                                       10
<PAGE>

         The Company's operations are subject to extensive and stringent
governmental regulations including regulations related to the Occupational
Safety and Health Act (OSHA) and environmental protection. The Company believes
that it is substantially in compliance with all applicable regulations. The cost
of maintaining such compliance is not considered by the Company to be
significant.

         The Company's employees in its manufacturing division operate
complicated machinery that may cause substantial injury or death upon
malfunction or improper operation. The Company's manufacturing facilities are
subject to the workplace safety rules and regulations of OSHA. The Company
believes that it is in compliance with the requirements of OSHA.

         During the normal course of its operations, the Company uses and
disposes of materials, such as solvents and lubricants used in equipment
maintenance, that are classified as hazardous by government agencies that
regulate environmental quality. The Company attempts to minimize the generation
of such waste as much as possible, and to recycle such waste where possible.
Remaining wastes are disposed of in permitted disposal sites in accordance with
applicable regulations.

         In the event that the Company is unable to comply with the OSHA or
environmental requirements, the Company could be subject to substantial
sanctions, including restrictions on its business operations, monetary liability
and criminal sanctions, any of which could have a material adverse effect upon
the Company's business.


         Employees

         As of March 22, 2002, the Company had 117 full-time and 8 part-time
employees, 101 of which are located at the Company's Midland facility, and 24 of
which are located at the Company's facility located in Reidsville, North
Carolina. None of the Company's employees are represented by labor organizations
and the Company is not aware of any activities seeking such organization. The
Company considers its relationships with its employees to be satisfactory.


Item 2.  Description of Property
         -----------------------

         Facilities

         The Company operates two manufacturing facilities. The primary
manufacturing operations are conducted in a 44,000 square foot manufacturing
plant on approximately 22 acres of land in Midland, Virginia, of which
approximately 19 acres are owned by the Company and three acres are leased from
Rodney I. Smith, the Company's President, at an annual rental rate of $6,000.
The manufacturing facility houses two concrete mixers and one concrete blender.
The plant also includes two environmentally controlled casting areas, two batch
plants, a form fabrication shop, a welding and metal fabrication facility, a
carpentry shop, and a quality control center. The Company's Midland facility
also includes a large storage yard for inventory and stored materials.

                                       11
<PAGE>

         The Company's second manufacturing facility is located in Reidsville,
North Carolina on five acres of owned land and includes an 8,000 square foot
manufacturing plant and administrative offices.

         The Company believes that its present facilities are adequate for its
current needs and that they are adequately covered by insurance. Substantially
all of the Company's facilities and equipment are used as collateral for a
long-term note, which as of December 31, 2002, had a balance of $3.7 million.
(see "Liquidity and Capital Resources").


Item 3.  Legal Proceedings
         -----------------

         In 1998, the Company began work on a contract to renovate the Bradley
Hall building (the "Bradley Hall project") at Rutgers University ("Rutgers").
The Bradley Hall project, which was completed in October 1999, involved the
design, production, and installation of Slenderwall(TM) panels by the Company.
While executing the Bradley Hall project, the original structure was found to be
not structurally sufficient to support the installation of the Slenderwall(TM)
panels as originally designed. This lead to cost overruns relating to re-design
of the panels, production of the panels with additional steel and reinforcing,
and installation costs. In that the Company was suffering losses on the project
and was unable to fund its commitments, in January 1999, the Company entered
into an agreement with Seacoast Builders Corporation ("Seacoast"), the prime
contractor for the project. Pursuant to the agreement, Seacoast agreed to
finance the cost of labor and small tools for the balance of the installation
phase of the project commencing January 13, 1999, (ii) the Company remained
responsible for the other services and materials required for the project,
including provision of the Slenderwall(TM) system, (iii) the Company was
required to reimburse Seacoast out of payments due the Company for Seacoast's
expenses plus 10% for overhead, and (iv) the Company remained liable for cost
overruns for which the Company was originally responsible for (the "Seacoast
Agreement"). The cost overruns over the course of the entire project totaled
approximately $1.6 million and the total loss to the Company on the job, before
recovery on any claims by the Company, totaled approximately $1.45 million,
which was recognized in fiscal 1999. Seacoast has filed claims in 1999 on the
Company's behalf, in the amount of $1.1 million. All conditions for claim
recognition have been satisfied and as of December 31, 2002 and 2001, $497,000
of the contract claim was included in claims receivable. The Company believes
that, based on the specific facts and circumstances and prior experience in
claims settlement, it will ultimately collect the recorded claim receivable.

         On February 15, 2000, Seacoast filed a suit in New Jersey Superior
Court in Monmouth County against Rutgers, Grad Associates, P.A., the architect
for the Bradley Hall project, and the Company. With respect to the Company,
Seacoast alleges, among other things, that the Company failed to pay Seacoast
$1,141,571 invoiced to the Company pursuant to the Seacoast agreement, that the
Company failed to pay sub-contractors and suppliers, and that the Company did
not complete all of the work and obligations required for the project. Seacoast
has indicated that it has withheld $386,753 from the Company to offset the
amount it alleges is due and owing from the Company. Seacoast claims that the
Company is liable to it with respect to all of the matters indicated above, as
well as any liquidated damages that may be assessed against Seacoast by Rutgers.
The actual amount of damages sought by Seacoast against the Company are not
specified. The Company has denied that it has any liability to Seacoast, and
asserts, among other things, it dutifully performed the work required of it
until such time as conditions beyond its control interfered with, frustrated,


                                       12
<PAGE>

and interrupted its performance. Moreover, the Company has asserted that the
conditions under which it was to perform its obligations related to the Bradley
Hall project materially changed. The Company has counterclaimed against Seacoast
in an amount in excess of $1,126,955 for Seacoast's failure to pay the Company
for the additional work performed by it. In addition, the Company has filed a
third party complaint against Sky-Lift Corporation ("Sky-Lift"), the initial
subcontractor responsible for installation of the Slenderwall(TM) panels. The
Company had entered into a sub-subcontract with Sky-Lift for the installation of
hardware required to attach the Slenderwall(TM) building panels and the erection
of the Slenderwall(TM) building panels. The Company has asserted that Sky-Lift
abandoned its work on the project causing the Company to sustain damages in
excess of $1,000,000, for which the Company is seeking damages. The Company also
seeks indemnification from Sky-Lift for any damages that may be found to be
owing by the Company to Seacoast.

         The Company also separately commenced a suit, in October 1999, against
Sky-Lift in the Supreme Court of New York, County of Westchester. The complaint
essentially covers the same matters as described in the third party action
disclosed in the immediately preceding paragraph.

         In June 2000, the Company received notice of a personal injury lawsuit
filed by Kenneth R. Hughes and Braunya P. Hughes in the United States District
Court for the District of Columbia. Mr. Hughes was a road construction worker
engaged in the transportation and relocation of pre-cast concrete barrier to
create temporary concrete walls at road construction sites for a third party
construction company. On or about June 20, 1997, Mr. Hughes suffered injuries
when a barrier section-coupling device apparatus failed. The suit alleges that
the Company sold the section-coupling device to the third party contractor and
was negligent in the design and manufacture of said barrier section-coupling
device. The suit seeks $10,000,000 in compensatory damages and $10,000,000 in
punitive damages. Management believes the suit to be without merit as there is
no evidence that indicates that the Company either sold or manufactured the
section-coupling device in question. In October 2002, the United States District
Court dismissed the claim, however, the case is currently on appeal. The Company
plans to vigorously defend its position, and believes that any settlement will
be covered under the Company's general liability insurance and therefore will
not adversely affect the financial statements.

         In January 2001, the Company received notice of a wrongful death
lawsuit filed by the Estate of Joy V. Snyder and her surviving children. The
suit was settled during 2002 with an award to the plaintiff of $50,000 that was
paid by insurance.

         The Company is not presently involved in any other litigation of a
material nature.


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

                                       13
<PAGE>

PART II
-------

Item 5.  Market for Common Equity and Related Stockholder Matters
         --------------------------------------------------------

         The Company's Common Stock has traded on the Boston Stock Exchange
("BSE") under the symbol "SMC" from December 13, 1995 to March 3, 2002. On March
4, 2002 the BSE amended the symbol to "SMID". The Company's Common Stock also
trades on the OTC Bulletin Board System under the symbol "SMID".

          As of March 22, 2003, there were approximately 78 record holders of
the Company's Common Stock. Management believes there are at least 411
beneficial owners of the Company's Common Stock.

         The following table sets forth the high and low closing prices on the
OTC Bulletin Board System for the Company's Common Stock for the periods
indicated. Such information was obtained from Yahoo Finance.


                                       High           Low
                                       ----           ---
2002
First Quarter                        $ 2.04           $1.40
Second Quarter                       $ 2.37           $1.50
Third Quarter                        $ 1.78           $1.20
Fourth Quarter                       $ 1.33           $ .98

2001
First Quarter                        $  .88           $ .56
Second Quarter                       $ 1.15           $ .62
Third Quarter                        $  .95           $ .67
Fourth Quarter                       $1 .48           $ .70

         In 1999, the stockholders of the Company approved an amendment of the
Company's Certificate of Incorporation to affect a one-for-three, one-for-two,
three-for-five, two-for-three or three-for-four reverse stock split of the
Common Stock of the Company, but as of the date of this report, the Board of
Directors has taken no action in this regard and does not at this time intend to
take any action. The reverse stock split was then contemplated as a means of
retaining the Company's NASDAQ listing. Instead, the Company intends to apply
for a listing on the BBX which will be a significant upgrade for both current
and potential investors.

         Dividends

         The Company has not paid dividends on its Common Stock since its
inception and may not pay any dividends to its stockholders in the foreseeable
future. The Company currently intends to reinvest earnings, if any, in the
development and expansion of its business. The declaration of dividends in the
future will be at the election of the Board of Directors and will depend upon
earnings, capital requirements and financial position of the Company, general
economic conditions and other pertinent factors. The Company's current loan
agreement with First International Bank prohibits the payment of dividends to
stockholders without the bank's prior written consent, except for dividends paid
in shares of the Company's Common Stock.

                                       14
<PAGE>

Shareholder Rights Plan

         The Company's Board of Directors adopted a Shareholder Rights Plan (the
"Plan") in January 2003. Under the Plan, preferred stock purchase rights (each,
a "Right") were distributed as a dividend at the rate of one Right for each
share of Common Stock outstanding as of the close of business on February 11,
2003 and automatically attach to shares issued thereafter. Each Right entitles
the holder to purchase one one-hundredth of a share of newly created Series A
Junior Participating Preferred Stock of the Company at an exercise price of
$8.00 (the "Exercise Price") per Right. In general, the Rights will be
exercisable if a person or group ("Acquiring Person") becomes the beneficial
owner of 15% or more of the outstanding Common Stock of the Company or announces
a tender offer for 15% or more of the Common Stock of the Company. When the
Rights become exercisable, a holder, other than the Acquiring Person, will have
the right to receive upon exercise Common Stock having a value equal to two
times the Exercise Price of the Right. If, after the Rights become exercisable,
the Company is acquired in a merger or similar transaction, each Right will
entitle the holder thereof, other than the Acquiring Person, to purchase, at the
Exercise Price, shares of the acquiring corporation having a value equal to two
times the Exercise Price of the Right. After a person or group becomes an
Acquiring Person, but before an Acquiring Person owns 50% or more of the
outstanding Common Stock of the Company, the Board of Directors of the Company
may extinguish the Rights by exchanging one share of Common Stock or an
equivalent security for each Right, other than Rights held by the Acquiring
Person. The Board of Directors will in general be entitled to redeem the Rights
for $.001 per Right at any time prior to any person or group becoming an
Acquiring Person. The Rights will expire on January 20, 2013.

Item 6.  Management's Discussion and Analysis
         ------------------------------------

         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.


         General

         The Company generates revenues primarily from the sale, shipping,
licensing, leasing 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
Slenderwall(TM), a patented, lightweight, energy efficient concrete and steel
exterior wall panel for use in building construction; J-J Hooks(TM) 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 food troughs, and custom order precast concrete
products with various architectural surfaces.

                                       15
<PAGE>


         Results of Operations

         Year ended December 31, 2002 compared to the year ended December 31,
2001

         For the year ended December 31, 2002, the Company had total revenue of
$22,604,958 compared to total revenue of $26,855,190 for the year ended December
31, 2001, a decrease of $4,250,232, or 16%. Sales include revenues from product
sales, royalty income, barrier rental income, installation income and shipping
income. Total product sales were $17,823,449 for the year ended December 31,
2002, compared to $20,470,542 for the same period in 2001, a decrease of
$2,647,093, or 13%. Sales of Soundwall and SlenderwallTM increased due to strong
product demand that partially compensated for the static or decreased sales in
the other products. Barrier rental revenue decreased to $519,469 for the year
ended December 31, 2002 from $1,722,696 for the year ended December 31, 2001.
The majority of this decrease came from two large contracts for special events
than totaled $1,446,588 in FY 2001. Shipping and installation revenue was
$3,686,887 for the year ended December 31, 2002 and $3,815,341 for the same
period in 2001, a decrease of $128,454, or 3%. The decrease is attributable to
the overall decrease in product and other sales. Royalty income totaled $575,153
for the year ended December 31, 2002, compared to $846,611 for the same period
in 2001. The decrease of $271,458, or 32%, was due in part to both a decrease in
royalties earned of $135,761 and a decrease in start-up fees of $78,138. The
Company believes that this decrease in royalties is a result of weak economic
conditions and that for the future, royalty income will increase overall and
become a larger part of the Company's overall revenues.

     Construction activity has weakened in the Company's primary markets in line
with general economic conditions. The Company's unfilled order backlog for
products is significantly less compared to last year. The Company's bid activity
does remain high and we expect the backlog to build up in the event that the
economy improves in 2003.

     Total cost of goods sold for the year ended December 31, 2002 was
$16,931,807, a decrease of $3,533,797, or 17%, from $20,465,604 for the year
ended December 31, 2001. The majority of the decrease was the result of the
lower volume of sales however, total cost of goods sold, as a percentage of
total revenue, also decreased to 75% for the year ended December 31, 2002, from
76% for the year ended December 31, 2001, as the Company benefited from the
implementation of numerous operations and production improvements.

     For the year ended December 31, 2002, the Company's general and
administrative expenses increased $11,440, or .4%, to $2,727,567, from
$2,716,127 during the same period in 2001. This leveling off of expense was due
to marginally higher personnel expense partially offset by decreases in
professional fees.

     Selling expenses for the year ended December 31, 2002 increased $195,898,
or 16%, to $1,383,611 from $1,187,713 for the year ended December 31, 2001. The
overall increase was due to adding more sales staff and increases in advertising
and professional fees offset in part by lower sales commissions earned based on
the reduced sales.

     The Company's operating income for the year ended December 31, 2002 was
$1,561,973, compared to operating income of $2,485,746 for the year ended
December 31, 2001, a decrease of $923,773, or 37%. The lower operating income
for the current year resulted from the decreased sales volume and higher
operating expenses partially offset by a slightly higher gross profit margin
percentage.

                                       16
<PAGE>

     Interest expense and loan fees was $301,888 for the year ended December 31,
2002, compared to $459,250 for the year ended December 31, 2001. The decrease of
$157,362, or 34%, was due to lower levels of debt outstanding in the 2002 period
with significantly lower average interest rates.

     Other expense, net of other income, totaled $159,533 in the year ended
December 31, 2002 versus other expense of $51,234 for the year ended December
31, 2001. The increase of $108,299 or 211% was primarily the result of the
recognition of Virginia state use taxes, a level of expense that is not expected
to be sustained.

    Income tax expense was $579,000 in the year ended December 31, 2002 compared
to $28,613 for the year ended December 31, 2001, an increase of $550,387. The
increase was primarily the result of the utilization of all remaining net
operating loss carryforwards in 2001 for which the Company had not previously
recorded a benefit. Income tax expense for 2002 also included an approximately
$78,000 net effect of a revision in the estimate of the net operating loss
carryforwards from 2001.

     Net income was $600,511 for the year ended December 31, 2002, compared to
net income of $1,993,993 for the same period in 2001. Basic net income per share
for the current year was $.16 compared to basic net income per share of $.65 for
the year ended December 31, 2001 with 3,774,291 weighted average shares
outstanding in the 2002 period versus 3,090,465 in the 2001 period. Diluted net
income per share for the current year was $.16 compared to $.58 for the same
period last year.

         Liquidity and Capital Resources

         The Company has financed its capital expenditures, operating
requirements and growth to date primarily with proceeds from operations,
supplemented by bank and other borrowings.The Company had $4,301,205 of total
indebtedness at December 31, 2002, of which $456,256 was scheduled to mature
within twelve months.

Schedule of Contractual Obligations
<TABLE>
                                                   Less than
                                  Total              1 year         1 to 3 years      4 to 5 years     Over 5 years
                                  -----              ------         ------------      ------------     ------------
<S>                             <C>                 <C>               <C>              <C>             <C>
Long term debtand               $4,228,505          $412,112          $624,224         $456,334        $2,735,835
capital leases

Debt to related parties            $43,707           $17,039           $26,668               $0                $0

Operating leases                   $28,993           $27,105              $992             $896                $0

Total contractual               $4,301,205          $456,256          $651,884         $457,230        $2,735,835
obligations
</TABLE>

         The Company has a $3,695,778 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 on 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


                                       17
<PAGE>

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. At December 31, 2002, the
Company was in violation of covenants related to fixed asset expenditures,
however, the Company was granted a waiver of the covenants by the USDA and the
bank. . The Company also has a $500,000 line of credit, under which there were
no outstanding borrowings at December 31, 2002.

         At December 31, 2002, the Company had cash totaling $1,223,756 compared
to cash totaling $942,131 at December 31, 2001. During 2002, the financing
activities provided $296,852 (net) in cash which resulted from the exercise of
the Company's publicly traded warrants and the repayment of debt; used $660,028
in its investing activities, primarily for the purchase of new equipment. The
Company's operating activities provided cash of $644,801 (net) after deducting
the resources required to fund the Company's growth in infrastructure.

         Capital spending increased to $756,763 in 2002, from $403,528 in 2001
for various improvements in the plant and the existing infrastructure. The
Company intends to continue to fund capital improvements that enable
productivity increases or reduce product costs.

         As a result of the Company's debt burden, the Company is especially
sensitive to changes in the prevailing interest rates. Increases 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.

         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 before it receives payment. Although no assurance can be given, the
Company believes that anticipated cash flow from operations with adequate
project management on jobs, and existing credit facilities will be sufficient to
finance the Company's operations for at least the next 12 months. 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 financing, for which there can be no assurance of obtaining.


         Significant Accounting Policies and Estimates

         The Company's significant accounting policies are more fully described
in it's 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 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 financial statements, management has made its best
estimates and judgments of certain amounts included in the 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


                                       18
<PAGE>

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.

         The Company evaluates the adequacy of its allowance for doubtful
accounts 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 and comparative accounts receivable aging
statistics. Based on this information, along with consideration of the general
strength of the economy, the Company develops what it considers to be a
reasonable 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.

         The Company estimates inventory markdowns based on customer orders sold
below cost, to be shipped in the following period and on the amount of similar
unsold inventory at period end. The Company analyzes recent sales and gross
margins on unsold inventory in further estimating inventory markdowns. These
specific markdowns are reflected in the cost of sales and the related gross
margins at the conclusion of the appropriate sales period. This estimate
involves significant judgment by the management of the Company. Actual gross
margins on sales of excess inventory may differ from the Company's estimate.

         The Company 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 Slenderwall concrete
products are recognized upon completion of units produced under long-term
contracts. When necessary, provisions for estimated losses on these contracts
are made in the period in which such losses are determined. Changes in job
performance, conditions and contract settlements that affect profit are
recognized in the period in which the changes occur. Unbilled trade accounts
receivable represents revenue earned on units produced and not yet billed.

         Seasonality

         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 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 experiences 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.

                                       19
<PAGE>

         Inflation

         To date, management believes that the Company's operations have not
been materially affected by inflation.

         Recent Accounting Pronouncements

         In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities". This statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)". This Statement
requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred. This statement also
establishes that fair value is the objective for initial measurement of the
liability. The provisions of this statement are effective for exit or disposal
activities that are initiated after December 31, 2002. The adoption of SFAS 146
will not have an effect on the Company's financial statements.

         In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure - an amendment of FASB
Statement No. 123". This Statement amends FASB Statement No. 123, "Accounting
for Stock-Based Compensation", to provide alternative methods of transition for
a voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, this Statement amends the disclosure
requirements of Statement 123 to require prominent disclosures in both annual
and interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results. The
Company expects to continue using the intrinsic value method for accounting for
its employee stock options.

                                       20
<PAGE>

Item 7.  Financial Statements
         --------------------

         The following financial statements, which appear at the back portion of
the report, are filed as part of this report:

                                                                            Page
                                                                            ----

Report of Independent Certified Public Accountants....................       F-3

Consolidated Balance Sheets as of December 31, 2002 and 2001..........     F-4-5

Consolidated Statements of Operations for the years ended December
31, 2002 and 2001   ..................................................       F-6

Consolidated Statements of Changes in Stockholders' Equity for the
years ended December 31, 2002 and 2001 ...............................       F-7

Consolidated Statements of Cash Flows for the years ended December 31,
2002 and 2001     ....................................................     F-8-9

Summary of Significant Accounting Policies............................   F-10-14

Notes to Consolidated Financial Statements ............................  F-15-23



Item 8.  Changes In and Disagreements With Accountants on Accounting and
         ---------------------------------------------------------------
         Financial Disclosure
         --------------------

         None.




                                       21
<PAGE>

                                    PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         -------------------------------------------------------------
         Compliance with Section 16(a) of the Exchange Act
         -------------------------------------------------
<TABLE>
                                                  Director Or
                                                   Executive
Name                                     Age     Officer Since Position
----                                     ---     ------------- --------
<S>                                       <C>        <C>       <C>
Rodney I. Smith                           64         1970      Chief Executive Officer, President
                                                               and Chairman of the Board of
                                                               Directors

Ashley B. Smith                           40         1994      Vice President of Sales and
                                                               Marketing and Director

Wesley A. Taylor                          55         1994      Vice President of Administration
                                                               and Director

Andrew G. Kavounis                        77         1995      Director

James W. Dean                             65         2000      Vice President of Engineering
                                                               Smith-Midland Corp. (Virginia)

John K. Johnson                           52         2003      Chief Financial Officer

Michel Catteau                            36         2001      Chief Operating Officer
                                                               Smith-Midland Corp. (Virginia)
</TABLE>

Background

         The following is a brief summary of the background of each Director,
executive officer and key employee of the Company:

Rodney I. Smith. Chairman of the Board of Directors, Chief Executive Officer and
President. Rodney I. Smith co-founded the Company in 1960 and became its
President and Chief Executive Officer in 1965. He has served on the Board of
Directors and has been its Chairman since 1970. Mr. Smith is the principal
developer and inventor of the Company's proprietary and patented products. Mr.
Smith is the past President of the National Precast Concrete Association. Mr.
Smith has served on the Board of Trustees of Bridgewater College in Bridgewater,
Virginia since 1986.

Ashley B. Smith. Vice President of Sales and Marketing and Director. Ashley B.
Smith has served as Vice President of Sales and Marketing of the Company since
1990 and as a Director since 1994. Mr. Smith holds a Bachelor of Science degree
in Business Administration from Bridgewater College. Mr. Ashley B. Smith is the
son of Mr. Rodney I. Smith.

                                       22
<PAGE>

Wesley A. Taylor. Vice President of Administration and Director. Wesley A.
Taylor has served as Vice President of Administration of the Company since 1989
and as a Director since 1994, and previously held positions as Controller and
Director of Personnel and Administration. Mr. Taylor holds a Bachelor of Arts
degree from Northwestern State University.

Andrew Kavounis. Director. Andrew Kavounis has served as a Director of the
Company since December 1995. Mr. Kavounis was President of Core Development Co.,
Inc., a privately held construction and development concern, from 1991 until he
retired in 1995. From 1989 to 1991, Mr. Kavounis was the Executive Vice
President of the Leadership Group, a Maryland based builder and developer. Prior
to that time, Mr. Kavounis spent 37 years as an executive at assorted
construction and development companies, which included a position as the
National Vice President of Ryland Homes, a privately held company, in which
capacity he was directly responsible for the construction of 17,000 homes
annually, nationwide. Mr. Kavounis received a Bachelor of Science degree in
Chemical Engineering from Presbyterian College, a Bachelor of Science degree in
Civil and Mechanical Engineering from Wofford College, and a Master's degree in
Business Administration from the University of South Carolina.

James W. Dean. Vice President of Engineering, Smith Midland Corp.(Virginia). Mr.
Dean re-joined the company in November 2000. Prior to re-joining the Company,
from November 1994 to October 2000, Mr. Dean worked for a concrete erector,
Concrete Placement Systems. From December 1984 to October 1994, he served as the
Vice President of Operations for Smith-Midland Corporation (Virginia). Mr. Dean
holds a Bachelor of Science degree in Civil Engineering from Virginia
Polytechnic Institute.

John K. Johnson Chief Financial Officer. Mr. Johnson joined Smith Midland
Corporation in January 2003 as the Chief Financial Officer. Previously he was
the Chief Financial Officer to Iceweb, Inc., a communications company, from
March 2001 to January 2003. From February 2000 to March 2001 he was the
controller for Comstor, a distribution company, and from March 1999 to February
2000 he was the Director of Finance for Strayer Education, Inc., an education
company. From January 1997 to March 1999 he was the Controller/CFO for Dunn*IDP
Computer, Inc., a computer manufacturing and consulting company. Mr. Johnson is
a member of the American Institute of Certified Public Accountants where he is
involved with the business and industry section. Mr. Johnson received a BBA from
Southern Methodist University in 1972 and served as a commissioned officer in
the United States Air Force from 1972 - 1977. He received an MSBA from Boston
University in 1987.

Michel Catteau. Chief Operating Officer. Mr. Catteau has served as Chief
Operating Officer since February 2002. Prior to that he held the position of
Vice-President of Operations. Before joining Smith-Midland Mr. Catteau worked as
a Plant Manager and Project Manager for Precast Manufacturing Company in Saudi
Arabia from 1997 to 2000. From 1990 to 1997 he worked as a Manager at Catteau
Precast in Lier, Belgium. He holds a Bachelor of Science degree in Construction
Engineering from Louvain University, Belgium, and a Bachelor of Arts degree as a
translator English - Russian from the Hogeschool, Antwerp, Belgium.

                                       23
<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

         Section 16(a) ("Section 16(a)") of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), requires executive officers and Directors and
persons who beneficially own more than ten percent (10%) of the Company's Common
Stock to file initial reports of ownership on Form 3 and reports of changes in
ownership on Form 4 with the Securities and Exchange Commission (the
"Commission") and any national securities exchange on which the Corporation's
securities are registered.

         Based solely on a review of the copies of such forms furnished to the
Company and written representations from the executive officers and Directors,
the Company believes that all Section 16(a) filing requirements applicable to
its executive officers, Directors and greater than ten per cent (10%) beneficial
owners were satisfied.


Item 10.  Executive Compensation.

         The following table sets forth the compensation paid by the Company for
services rendered for the last three completed fiscal years to the executive
officers of the Company and its subsidiaries (the "named executive officers"),
whose cash compensation exceeded $100,000 during 2002:
<TABLE>

                                       Annual Compensation                          Long Term Compensation
                           --------------------------------------------- ---------------------------------------------

                                                                                Awards                 Payouts
                                                                         ---------------------- ----------------------
                                                                                     Securities
                                                               Other                  Under-                   All
        Name and                                               Annual    Restricted    Lying                  Other
        Principal                                             Compen-      Stock     Options/      LTIP      Compen-
        Position             Year       Salary      Bonus      sation      Awards      SARs      Payouts     Sation
                                          $           $          $           $          (#)         $           $
-------------------------- ---------- ----------- ---------- ----------- ----------- ---------- ----------- ----------
<S>                          <C>       <C>        <C>            <C>         <C>      <C>           <C>         <C>
     Rodney I. Smith         2002      170,962     189,081*      0           0           0          0           0
    President, Chief         2001      175,000     189,081       0           0        120,000       0           0
    Executive Officer        2000      175,000      54,500       0           0           0          0           0
   and Chairman of the
         Board.

     Michael Catteau         2002      100,352     13,670        0           0           0          0           0
 Chief Operating Officer     2001       70,498       450         0           0        20,000        0           0
                             2000        N/A         N/A        N/A         N/A         N/A        N/A         N/A

    Wesley A. Taylor         2002       82,963     33,120        0           0           0          0           0
    Vice President of        2001       68,879      1,788        0           0        20,000        0           0
   Administration and        2000       62,831      2,544        0           0           0          0           0
        Director

     Ashley B. Smith         2002       85,388     23,800        0           0           0          0           0
Vice President Sales and     2001       89,165      2,005        0           0        20,000        0           0
 Marketing and Director      2000       75,549      2,408        0           0           0          0           0

      James W. Dean          2002       89,837     21,135        0           0           0          0           0
    Vice President of        2001       97,117        0          0           0        20,000        0           0
       Engineering           2000        7,428        0          0           0           0          0           0
</TABLE>

*portion used to pay down note receivable

Compensation of Directors

         All non-employee Directors receive $500 per meeting as compensation for
their services as Directors and are reimbursed for expenses incurred in
connection with the performance of their duties. All employee Directors, except
Rodney I Smith, receive $250 per meeting as compensation for their services and
are reimbursed for expenses incurred in connection with the performance of their
duties. Rodney I. Smith receives no compensation as a Director, but is
reimbursed for expenses incurred in connection with the performance of his
duties as a Director.

                                       24
<PAGE>

Option Grants in Last Fiscal Year

         There were no option grants during 2002.

Aggregated Option Exercises in Last Fiscal Year and Year-End Option Values

<TABLE>
                                                            Number of
                            Shares                      Underlying Shares          Value of Unexercised
                           Acquired                    Unexercised Options         In-the-Money Options
                              on         Value        at Fiscal Year End (#)     at Fiscal Year-End ($)(1)
                           Exercise     Realized      ----------------------     -------------------------
        Name                  (#)         ($)       Exercisable  Unexercisable   Exercisable  Unexercisable
        ----               --------     --------    -----------  -------------   -----------  -------------
<S>                           <C>         <C>          <C>           <C>            <C>            <C>
Rodney I. Smith              0           0           73,334         86,666            29,084            25,466
Michael Catteau              0           0            6,666         13,334             1,300             2,600
Wesley A. Taylor             0           0           32,916         13,334            12,850             2,600
Ashley B. Smith              0           0           36,116         13,334            14,333             2,600
James W. Dean                0           0            6,666         13,334             1,300             2,600
</TABLE>
--------
(1) Value is based on the closing sales price of the Company's Common Stock on
December 31, 2002 ($1.19), the last trading day of 2002, less the option
exercise price.

Employment Contracts and Termination of Employment and Change in Control
Arrangements.

         The Company entered into a four-year Employment Agreement with Rodney
I. Smith, its current President and Chief Executive Officer, effective as of
September 30, 2002. The term of employment automatically renews commencing on
the date one year after the effective date, and on an annual basis thereafter,
for an additional one year, unless earlier terminated or not renewed as provided
for therein. The agreement provides for an annual base salary of $99,000 ("Base
Salary"), which will be reviewed at least annually and adjusted from time to
time at the determination of the Board of Directors. It also provides for an
annual royalty fee of $99,000 payable as consideration for Mr. Smith's
assignment to the Company of all of his rights, title and interest in and to the
Patents (as defined in the agreement). Payment of the royalty continues only for
as long as the Company is using the inventions underlying the non-expired
Patents. Mr. Smith is also entitled to bonuses as follows (the "Bonus"): (i) a
performance-based bonus as determined by the Board each calendar year, and (ii)
a $27,000 quarterly bonus equal to one-twentieth of the then outstanding
principal balance on the loan (the "Loan") made by the Company to Mr. Smith in
the aggregate amount of $540,000, and the unpaid interest accrued thereon during
the quarter, and a cash amount which reimburses Mr. Smith for certain taxes
payable by him as a result of such quarterly bonus. Payment of the Bonuses that
are equal to one-twentieth of the Loan and the quarterly interest thereon are
paid in the form of forgiveness of such principal and interest. Once the Loan
has been fully repaid, no further quarterly Bonus in respect of the Loan shall
be payable.

         Mr. Smith's employment agreement provides further that if Mr. Smith (i)
voluntarily leaves the employ of the Company within six months of his becoming
aware of a Change of Control (as defined in the agreement) of the Company, then
he shall be entitled to receive a lump sum amount equal to three times the
five-year average of his combined total annual compensation, which includes the
Base Salary and Bonus, less one dollar ($1.00), and certain other unpaid accrued
amounts as of the date of his termination, or (ii) is terminated by the Company
without Cause (as defined in the agreement) or leaves the Company with Good
Reason (as defined in the agreement), Mr. Smith shall be entitled to a lump sum
payment equal to three times the combined Base Salary and Bonus paid during the
immediately preceding calendar year, and such other upaid accrued amounts. In
any of such cases, the Company will provide Mr. Smith with certain Company
fringe benefits for two years, subject to certain conditions as provided for in


                                       25
<PAGE>

the agreement, and all of Mr. Smith's unvested options to purchase Company stock
shall become fully vested and exercisable on the date of termination. Mr. Smith
will be entitled to exercise all such options for three years from the date of
termination. The Company will have no further obligations to Mr. Smith, other
than with respect to the payment of royalties.

         In the event Mr. Smith's employment by the Company is terminated as a
result of Mr. Smith's (i) death, his estate shall be entitled to a lump sum
payment of one times the combined Base Salary and Bonus, and certain other
accrued and unpaid amounts, or (ii) disability, Mr. Smith shall be entitled to
Base Salary and Bonus for a period of one year commencing with the date of
termination, and all other unpaid accrued amounts. In either of such cases the
outstanding principal balance of the Loan, and any accrued interest thereon,
shall be forgiven in full, and payment shall be made to reimburse for taxes
payable as a result thereof.

         In the event Mr. Smith's employment is terminated for cause or Mr.
Smith voluntarily leaves the employ of the Company for no reason, Mr. Smith
shall be entitled to accrued but unpaid Base Salary and Bonus up to the date of
termination, and all other unpaid amounts. The Company shall have no further
obligations to Mr. Smith, other than with respect to the Loan.

         The employment agreement also contains Noncompetition and
Nonsolicitation covenants for one year following Mr. Smith's termination of
employment for any reason.

                                       26
<PAGE>

Item 11.  Security Ownership of Certain Beneficial Owners and Management.
          ---------------------------------------------------------------

         The following table sets forth, as of March 20, 2003, certain
information concerning ownership of the Company's Common Stock by (i) each
person known by the Company to own of record or be the beneficial owner of more
than five percent (5%) of the Company's Common Stock, (ii) named Executive
Officers and Directors, and (iii) all Directors and Executive Officers as a
group. Except as otherwise indicated, the Stockholders listed in the table have
sole voting and investment powers with respect to the shares indicated.


Name and Address of                       Number of Shares         Percentage of
Beneficial Owner(1)                     Beneficially Owned(2)        of Class
-------------------                     ---------------------        --------

Rodney I. Smith (1)(3)(4)(5)                   689,132                 15.3

Ashley B. Smith(1)(3)(4)(6)                    126,583                  2.8

Wesley A. Taylor(1)(7)                          32,916                    *

Andrew Kavounis(1)(8)                            3,000                    *

Michael Catteau (1)(9)                           6,666                    *

James Dean (1)(10)                              12,335                    *


All directors, executive officers and
key employees as a group (6 persons)(2)(11)    870,632                 19.0
-------------------------------
 *     Less than 1%

(1)  The address for each of Messrs. Rodney I. Smith, Ashley B. Smith, Taylor,
     Kavounis, Catteau and Dean is c/o Smith-Midland Corporation, P.O. Box 300,
     5119 Catlett Road, Midland, Virginia 22728.

(2)  Pursuant to the rules and regulations of the Securities and Exchange
     Commission, shares of Common Stock that an individual or group has a right
     to acquire within 60 days pursuant to the exercise of options or warrants
     are deemed to be outstanding for the purposes of computing the percentage
     ownership of such individual or group, but are not deemed to be outstanding
     for the purpose of computing the percentage ownership of any other person
     shown in the table.

(3)  Ashley B. Smith is the son of Rodney I. Smith. Each of Rodney I. Smith and
     Ashley B. Smith disclaims beneficial ownership of the other's shares of
     Common Stock.

(4)  Does not include an aggregate of 77,972 shares of Common Stock held by
     Matthew Smith and Roderick Smith, sons of Rodney I. Smith, and brothers of
     Ashley B. Smith, and shares held by Merry Robin Bachetti, sister of Rodney
     I. Smith and aunt of Ashley B. Smith, for which each of Rodney I. Smith and
     Ashley B. Smith disclaims beneficial ownership.

(5)  Includes 100,000 shares of Common Stock that have been deposited into an
     irrevocable trust (the "Trust") for the benefit of Hazel Smith, the income
     beneficiary of the Trust and former wife of Rodney I. Smith, and mother of
     Mr. Smith's children. Mr. Smith is the trustee of the Trust and, as such,
     may vote the shares, as he deems fit. Includes options to purchase 73,334
     shares.

                                       27
<PAGE>

(6)  Includes options to purchase 36,116 shares.

(7)  Includes options to purchase 32,916 shares.

(8)  Includes options to purchase 3,000 shares.

(9)  Includes options to purchase 6,666 shares.

(10) Includes options to purchase 6,666 shares.

(11) Includes options to purchase 158,698 shares for all directors, executive
     officers and key employees as a group.

EQUITY COMPENSATION PLAN INFORMATION
<TABLE>
                                         Number of  securities to  Weighted         average  Number   of   securities
                                         be listed upon  exercise  exercise     price    of  remaining  available for
                                         of outstanding  options,  outstanding     options,  future   issuance  under
                                         warrants, and rights (a)  warrants and rights (b)   equity      compensation
                                                                                             plans         (excluding
                                                                                             securities  reflected in
                                                                                             column (a))

<S>                                                       <C>                         <C>                     <C>
Equity  compensation  plans approved by                   501,925                     $1.04                   523,075
security holders

Equity  compensation plans not approved                         0                        $0                         0
by security holders

Total                                                     501,925                     $1.04                   523,075
</TABLE>

Item 12.  Certain Relationships and Related Transactions.
          -----------------------------------------------

         At December 31, 2002, the Company owned an unsecured note for
approximately $463,519 receivable from Mr. Rodney I. Smith, the Company's
President and majority shareholder, accruing interest at a rate of 6% per annum.
This note was extended by the Board of Directors at their July 22, 2002 meeting
to mature on December 31, 2007. The Board also approved the use of bonuses to
pay off the loan and any applicable taxes (more fully described in Item 10).
Principal received on the note were $94,763 for the year ended December 31, 2002
and $72,418 the year ended December 31, 2001. Total interest received on this
note was approximately $33,497 and $37,800 for the years ended December 31, 2002
and 2001, respectively.


                                       28
<PAGE>

Item 13.  Exhibits and Reports on Form 8-K
          --------------------------------

(a)      Exhibits.

         (1) The following exhibits are filed herewith:

Exhibit
Number   Description
------   -----------

3.1       Certificate of Incorporation, as amended (Incorporated by reference to
          the Company's Registration Statement on Form SB-2 (No. 33-89312)
          declared effective by the Commission on December 13, 1995).
3.2       Bylaws of the Company adopted on January 21, 2003 (Incorporated by
          reference to the Company's Registration Statement on Form 8-A (No.
          000-25964) filed with the Commission on January 24, 2003).
4.1       Specimen Common Stock Certificate (Incorporated by reference to the
          Company's Registration Statement on Form SB-2 (No. 33-89312) declared
          effective by the Commission on December 13, 1995).
4.2       Rights Agreement, dated as of January 21, 2003, between the Company
          and Computershare Trust Company, Inc., as rights agent, including the
          Form of Certificate of Designations, the Form of Rights Certificate
          and the Summary of Rights to Purchase Preferred Shares attached
          thereto as Exhibits A, B, and C, respectively (Incorporated by
          reference to the Company's Registration Statement on Form 8-A (No.
          000-25964) filed with the Commission on January 24, 2003).
10.1      Lease Agreement, dated January 1, 1995, between the Company and Rodney
          I. Smith (Incorporated by reference to the Company's Registration
          Statement on Form SB-2 (No. 33-89312) declared effective by the
          Commission on December 13, 1995).
10.2      Collateral Assignment of Letters Patent, dated between the Company and
          Rodney I. Smith (Incorporated by reference to the Company's
          Registration Statement on Form SB-2 (No. 33-89312) declared effective
          by the Commission on December 13, 1995).
10.3      Form of License Agreement between the Company and its Licensee
          (Incorporated by reference to the Company's Registration Statement on
          Form SB-2 (No. 33-89312) declared effective by the Commission on
          December 13, 1995).
10.4      Promissory Note from Rodney I. Smith to the Company, dated as of
          December 31, 1997 (Incorporated by reference to the Company's Annual
          Report on Form 10-KSB for the year ended December 31, 1997 (Commission
          File No.: 001-13752), filed with the Commission on April 15, 1998).
10.5      First National Bank of New England Loan Agreement, dated June 25, 1998
          (Incorporated by reference to the Company's Quarterly Report on Form
          10-QSB for the quarter ended June 30, 1998 (Commission File
          No.:001-13752), filed with the Commission on August 19, 1998).
10.6      First National Bank of New England Loan Note, dated June 25, 1998
          (Incorporated by reference to the Company's Quarterly Report on Form
          10-QSB for the quarter ended June 30, 1998 (Commission File
          No.:001-13752), filed with the Commission on August 19, 1998).
10.7      Continuation of Exclusive License Agreement between DuriSol Resources,
          Inc. and Smith-Midland Corporation, with an effective date of January
          1, 1999, dated May 3, 1999 (Incorporated by reference to the Company's
          Annual Report on Form 10-KSB for the year ended December 31, 1999
          (Commission File No.: 001-13752), filed with the Commission on April
          14, 2000).
10.8      First National Bank of New England Commercial Loan Agreement dated
          December 20, 1999 (Incorporated by reference to the Company's Annual
          Report on Form 10-KSB for the year ended December 31, 1999 (Commission
          File No.: 001-13752), filed with the Commission on April 14, 2000).

                                       29
<PAGE>

10.9      First National Bank of New England Commercial Term Promissory Note
          dated December 20, 1999 (Incorporated by reference to the Company's
          Annual Report on Form 10-KSB for the year ended December 31, 1999
          (Commission File No.: 001-13752), filed with the Commission on April
          14, 2000).
10.10     Employment Agreement, dated September 30, 2002, between the Company
          and Rodney I. Smith.
10.11     1994 Stock Option Plan (as amended through October 1, 2002)
          (Incorporated by reference to the Company's Registration Statement on
          Form S-8 (No.: 333-102892) filed with the Commission on January 31,
          2003).
21        List of Subsidiaries of the Company (Incorporated by reference to the
          Company's Annual Report on Form 10-KSB for the year ended December 31,
          1995 (Commission File No.: 001-13752) filed with the Commission on
          April 15, 1996).
23        Consent of BDO Seidman, LLP.
99.1      Certification of Rodney I. Smith pursuant to 18 U.S.C. Section 1350.
99.2      Certification of John K. Johnson pursuant to 18.U.S.C. Section 1350.


(b)      Reports on Form 8-K. None.


Item 14.  Controls and Procedures.
          ------------------------

         Our principal executive and financial officers have concluded, based on
their evaluation as of a date within 90 days before the filing of this Form
10-KSB, that our disclosure controls and procedures under Rule 13a-14 of the
Securities Exchange Act of 1934 are effective to ensure that information we are
required to disclose in the reports we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms, and include controls and procedures designed to
ensure that information we are required to disclose in such reports is
accumulated and communicated to management, including our principal executive
and financial officers, as appropriate to allow timely decisions regarding
required disclosure.

         Subsequent to our evaluation, there were no significant changes in
internal controls or other factors that could significantly affect these
internal controls.

                                       30
<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) 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:    March 28, 2003              By:  /s/ Rodney I. Smith
                                          ------------------------------
                                              Rodney I. Smith, President
                                              (principal executive officer)

                                     By: /s/ John K. Johnson.
                                         -------------------------------
                                             John K. Johnson, CFO
                                             (principal financial and accounting
                                             officer)


         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant in the capacities and on
the dates indicated.

Name                                   Capacity                   Date
----                                   --------                   ----


/s/ Rodney I. Smith                    Director                   March 28, 2003
------------------------------
Rodney I. Smith



/s/ Wesley A. Taylor                   Director                   March 28, 2003
------------------------------
Wesley A. Taylor


/s/ Ashley Smith                       Director                   March 28, 2003
------------------------------
Ashley Smith



/s/ Andrew Kavounis                    Director                   March 28, 2003
------------------------------
Andrew Kavounis


                                       31
<PAGE>

                                 CERTIFICATIONS

I, Rodney I. Smith, certify that:

1.   I have reviewed this annual report on Form 10-KSB of Smith-Midland
     Corporation;

2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report.

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent functions):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:    March 28, 2003              /s/ Rodney I. Smith
                                     -------------------
                                         Rodney I. Smith
                                         Chairman of the Board, Chief Executive
                                         Officer and President

                                       32
<PAGE>

I, John K. Johnson, certify that:

1.   I have reviewed this annual report on Form 10-KSB of Smith-Midland
     Corporation;

2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report.

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent functions):

     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:    March 28, 2003                      /s/ John K. Johnson
                                             -------------------
                                                 John K. Johnson
                                                 Chief Financial Officer


                                       33

<PAGE>

Report of Independent Certified Public Accountants



To the Board of Directors
Smith-Midland Corporation
Midland, Virginia

We have audited the accompanying consolidated balance sheets of Smith-Midland
Corporation and subsidiaries as of December 31, 2002 and 2001, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the years then ended. These financial statements are the responsibility of the
Corporation's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Smith-Midland
Corporation and subsidiaries at December 31, 2002 and 2001, and the results of
their operations and their cash flows for the years then ended in conformity
with accounting principles generally accepted in the United States of America.





                                                                BDO Seidman, LLP


Richmond, Virginia
March 10, 2003


                                      F-3
<PAGE>
<TABLE>
                                                                      Smith-Midland Corporation
                                                                               and Subsidiaries

                                                                    Consolidated Balance Sheets
===============================================================================================

December 31,                                                     2002                  2001
-----------------------------------------------------------------------------------------------

     Assets (Note 2)
<S>                                                      <C>                   <C>
Current assets
   Cash                                                  $  1,223,756          $    942,131
   Accounts receivable
     Trade - billed, (less allowance for doubtful
       accounts of $242,739 and $371,895)                   4,950,528             5,934,359
     Trade - unbilled                                         351,986               458,281
   Inventories
     Raw materials                                            498,984               585,736
     Finished goods                                         1,490,635             1,042,660
   Prepaid expenses and other assets                          310,054               188,836
-----------------------------------------------------------------------------------------------

Total current assets                                        8,825,943             9,152,003
-----------------------------------------------------------------------------------------------

Property and equipment, net (Note 1)                        3,018,729             2,672,665
-----------------------------------------------------------------------------------------------

Other assets
   Notes receivable, officer (Note 3)                         463,519               558,282
   Claims and accounts receivable (Note 7)                    960,254             1,020,183
   Other (Note 3)                                             230,393               237,036
-----------------------------------------------------------------------------------------------

Total other assets                                          1,654,166             1,815,501
-----------------------------------------------------------------------------------------------

                                                          $13,498,838           $13,640,169
===============================================================================================
                                                 See accompanying summary of accounting policies
                                                  and notes to consolidated financial statements

                                               F-4

<PAGE>
                                                                             Smith-Midland Corporation
                                                                                      and Subsidiaries

                                                                           Consolidated Balance Sheets
                                                                                           (continued)

=======================================================================================================

December 31,                                                             2002                  2001
-------------------------------------------------------------------------------------------------------

     Liabilities and Stockholders' Equity

Current liabilities
   Accounts payable - trade                                      $  1,978,437          $  2,999,367
   Accrued expenses and other liabilities                             934,271               732,710
   Current maturities of notes payable (Note 2)                       412,112               604,135
   Customer deposits                                                   71,265               266,716
-------------------------------------------------------------------------------------------------------

Total current liabilities                                           3,396,085             4,602,928

Reserve for contract loss (Note 7)                                  1,001,682             1,025,556

Notes payable - less current maturities (Note 2)                    3,816,393             3,998,862

Notes payable - related parties (Note 3)                               43,707                68,777
-------------------------------------------------------------------------------------------------------

Total liabilities                                                   8,257,867             9,696,123
-------------------------------------------------------------------------------------------------------

Commitments and contingencies (Notes 5 and 7)

Stockholders' equity (Note 6)
   Preferred stock, $.01 par value; authorized 1,000,000
     shares, none outstanding                                               -                     -
   Common stock, $.01 par value; authorized 8,000,000
     shares; 4,432,948 and 3,171,051 issued and outstanding            44,329                31,710
   Additional paid-in capital                                       4,178,649             3,494,854
   Retained earnings                                                1,120,293               519,782
-------------------------------------------------------------------------------------------------------

                                                                    5,343,271             4,046,346
Treasury stock, at cost, 40,920 shares                               (102,300)             (102,300)
-------------------------------------------------------------------------------------------------------

Total stockholders' equity                                          5,240,971             3,944,046
-------------------------------------------------------------------------------------------------------

                                                                  $13,498,838           $13,640,169
=======================================================================================================
                                                        See accompanying summary of accounting policies
                                                         and notes to consolidated financial statements


                                                  F-5

<PAGE>
                                                           Smith-Midland Corporation
                                                                    and Subsidiaries

                                               Consolidated Statements of Operations

=====================================================================================

Year Ended December 31,                                2002                  2001
-------------------------------------------------------------------------------------

Revenue
   Products sales and leasing                   $22,029,805           $26,008,579
   Royalties                                        575,153               846,611
-------------------------------------------------------------------------------------

Total revenue                                    22,604,958            26,855,190

Cost of goods sold                               16,931,807            20,465,604
-------------------------------------------------------------------------------------

Gross profit                                      5,673,151             6,389,586
-------------------------------------------------------------------------------------

Operating expenses
   General and administrative expenses            2,727,567             2,716,127
   Selling expenses                               1,383,611             1,187,713
-------------------------------------------------------------------------------------

Total operating expenses                          4,111,178             3,903,840
-------------------------------------------------------------------------------------

Operating income                                  1,561,973             2,485,746
-------------------------------------------------------------------------------------

Other income (expense)
   Interest expense and loan fees                  (301,888)             (459,250)
   Interest income (Note 3)                          78,959                47,344
   Other, net                                      (159,533)              (51,234)
-------------------------------------------------------------------------------------

Total other income (expense)                       (382,462)             (463,140)
-------------------------------------------------------------------------------------

Income before income tax                          1,179,511             2,022,606
Income taxes (Note 4)                               579,000                28,613
-------------------------------------------------------------------------------------

Net income                                     $    600,511           $ 1,993,993
=====================================================================================

Basic earnings per share (Note 8)              $        .16           $       .65
=====================================================================================

Diluted earnings per share (Note 8)            $        .16           $       .58
=====================================================================================
                                      See accompanying summary of accounting policies
                                       and notes to consolidated financial statements


                                         F-6

<PAGE>
                                                                                            Smith-Midland Corporation
                                                                                                     and Subsidiaries

                                                                      Consolidated Statements of Stockholders' Equity
=====================================================================================================================

                                                     Additional        Retained
                                        Common         Paid-In         Earnings        Treasury
                                         Stock         Capital        (Deficit)         Stock           Total
---------------------------------------------------------------------------------------------------------------------

Balance, December 31, 2000                $30,917       $3,453,222     $(1,474,211)      $(102,300)     $1,907,628

Warrants exercised                            793           41,632               -               -          42,425

Net income                                      -                -       1,993,993               -       1,993,993
---------------------------------------------------------------------------------------------------------------------

Balance, December 31, 2001                 31,710        3,494,854         519,782        (102,300)      3,944,046

Warrants exercised                         12,619          683,795               -               -         696,414

Net income                                      -                -         600,511               -         600,511
---------------------------------------------------------------------------------------------------------------------

Balance, December 31, 2002                $44,329       $4,178,649     $ 1,120,293       $(102,300)     $5,240,971
=====================================================================================================================
                                                                      See accompanying summary of accounting policies
                                                                       and notes to consolidated financial statements


                                                         F-7


<PAGE>
                                                                        Smith-Midland Corporation
                                                                                 and Subsidiaries

                                                            Consolidated Statements of Cash Flows

=================================================================================================

Year Ended December 31,                                             2002                  2001
--------------------------------------------------------------------------------------------------

Cash Flows From Operating Activities
   Cash received from customers                              $23,752,774           $24,436,973
   Cash paid to suppliers and employees                      (22,697,023)          (22,782,393)
   Income taxes paid, net                                       (110,226)              (28,613)
   Interest paid                                                (301,888)             (459,250)
   Other                                                           1,164                (3,890)
--------------------------------------------------------------------------------------------------

Net cash provided by operating activities                        644,801             1,162,827
--------------------------------------------------------------------------------------------------

Cash Flows From Investing Activities
   Purchases of property and equipment                          (756,763)             (403,528)
   Proceeds from sale of fixed assets                              1,972                70,972
   Repayments on officer note receivable                          94,763                72,418
--------------------------------------------------------------------------------------------------

Net cash absorbed by investing activities                       (660,028)             (260,138)
--------------------------------------------------------------------------------------------------

Cash Flows From Financing Activities
   Proceeds from borrowings                                      223,294               234,285
   Repayments of borrowings                                     (597,786)             (437,121)
   Repayments on borrowings - related parties, net               (25,070)              (18,411)
   Proceeds from warrants exercised                              696,414                42,425
--------------------------------------------------------------------------------------------------

Net cash provided (absorbed) by financing activities             296,852              (178,822)
--------------------------------------------------------------------------------------------------

Net increase in cash                                             281,625               723,867

Cash, beginning of year                                          942,131               218,264
--------------------------------------------------------------------------------------------------

Cash, end of year                                           $  1,223,756        $      942,131
=================================================================================================


                                                F-8


                                                                                     continued...
<PAGE>
                                                                        Smith-Midland Corporation
                                                                                 and Subsidiaries

                                                            Consolidated Statements of Cash Flows
                                                                                      (continued)

==================================================================================================

Year Ended December 31,                                             2002                  2001
--------------------------------------------------------------------------------------------------

Reconciliation of net income to net cash
   provided by operating activities

Net income                                                   $   600,511            $1,993,993
Adjustments to reconcile net income to net cash
   Provided by operating activities
     Depreciation and amortization                               407,563               363,732
     Deferred taxes                                               44,000                     -
     (Gain) loss on sale of fixed assets                           1,164               (18,923)
     (Increase) decrease in
       Accounts receivable - billed                              597,078            (1,812,241)
       Accounts receivable - unbilled                            106,295              (455,876)
       Inventories                                              (361,223)              423,982
       Prepaid expenses and other assets                         332,107              (113,616)
     Increase (decrease) in
       Accounts payable - trade                               (1,020,930)              517,129
       Accrued expenses and other liabilities                    133,687               414,747
       Customer deposits                                        (195,451)             (150,100)
--------------------------------------------------------------------------------------------------

Net cash provided by operating activities                    $   644,801            $1,162,827
==================================================================================================
                                                   See accompanying summary of accounting policies
                                                    and notes to consolidated financial statements



                                                F-9

<PAGE>
                                                       Smith-Midland Corporation
                                                                and Subsidiaries

                                      Summary of Significant Accounting Policies
================================================================================


Nature of Business            Smith-Midland Corporation and its wholly-owned
                              subsidiaries (the "Company") develop, manufacture,
                              license, sell and install precast concrete
                              products for the construction, transportation and
                              utilities industries primarily in the Mid-Atlantic
                              region.

Principles of                 The accompanying consolidated financial statements
Consolidation                 include the accounts of Smith-Midland Corporation
                              and its wholly-owned subsidiaries. All material
                              intercompany accounts and transactions have been
                              eliminated in consolidation.

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

Property and                  Property and equipment is stated at cost.
Equipment                     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.

                              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                       10-15
                              Office equipment                         3-10

Income Taxes                  Deferred tax assets and liabilities are recognized
                              for the future tax consequences attributable to
                              differences between the financial statement
                              carrying amounts of existing assets and
                              liabilities and their respective tax bases.
                              Deferred tax assets and liabilities are measured
                              using enacted tax rates expected to apply to
                              taxable income in the years in which those
                              temporary differences are expected to be recovered
                              or settled. The effect on deferred tax assets and
                              liabilities of a change in tax rates is recognized
                              in income in the period that includes the
                              enactment date.


                                      F-10
<PAGE>

                                                       Smith-Midland Corporation
                                                                and Subsidiaries

                                      Summary of Significant Accounting Policies
                                                                     (continued)
================================================================================


Stock Options                 The Company has elected to use the intrinsic value
                              method of accounting as prescribed by Accounting
                              Principles Board Opinion No. 25, Accounting for
                              Stock Issued to Employees, and related
                              Interpretations, for stock options granted to the
                              Company's employees. This method does not result
                              in the recognition of compensation expense when
                              employee stock options are granted if the exercise
                              price of the option equals or exceeds the fair
                              market value of the stock at the date of grant.

                              Statement of Financial Accounting Standards No.
                              123, Accounting for Stock-Based Compensation (SFAS
                              123), establishes alternative methods of
                              accounting for stock options. If the fair value
                              method prescribed by SFAS 123 had been adopted,
                              the effect on earnings would have been as follows:


                                                                                            2002                 2001
                              ---------------------------------------------------------------------------------------------

                              Net income, as reported                                   $600,511           $1,993,993

                              Less:  Total stock-based employee compensation
                                 expense determined under fair value based
                                 method for all awards, net of related tax effects       (58,100)             (63,109)
                              ---------------------------------------------------------------------------------------------

                              Proforma net income                                       $542,411           $1,930,884
                              =============================================================================================

                              Basic earnings per share:
                                 Reported                                               $    .16           $      .65
                                 Proforma                                                    .14                  .62

                              Diluted earnings per share:
                                 Reported                                               $    .16           $      .58
                                 Proforma                                                    .14                  .56

Revenue Recognition           The Company 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.

                                      F-11
<PAGE>
                                                       Smith-Midland Corporation
                                                                and Subsidiaries

                                      Summary of Significant Accounting Policies
                                                                     (continued)
================================================================================

Revenue Recognition           Certain sales of Soundwall and Slenderwall
(continued)                   concrete products are recognized upon completion
                              of units produced under long-term contracts. When
                              necessary, provisions for estimated losses on
                              these contracts are made in the period in which
                              such losses are determined. Changes in job
                              performance, conditions and contract settlements
                              which affect profit are recognized in the period
                              in which the changes occur. Unbilled trade
                              accounts receivable represents revenue earned on
                              units produced and not yet billed.

Shipping and Handling         Amounts billed to customers are recorded in sales
                              and the costs associated with the shipping and
                              handling are recorded as cost of goods sold.

Risks and Uncertainties       The Company sells products to highway contractors
                              operating under government funded highway programs
                              and other customers and extends credit based on an
                              evaluation of the customer's financial condition,
                              generally without requiring collateral. Exposure
                              to losses on receivables is principally dependent
                              on each customer's financial condition. The
                              Company monitors its exposure to credit losses and
                              maintains allowances for anticipated losses.
                              Management reviews accounts receivable on a
                              monthly basis to determine the probability of
                              collection. Any accounts receivable that are
                              deemed to be uncollectible along with a general
                              reserve, which is calculated based upon the aging
                              category of the receivable, is included in the
                              overall allowance for doubtful accounts.
                              Management believes the allowance for doubtful
                              accounts at December 31, 2002 is adequate.
                              However, actual write-offs may exceed the recorded
                              allowance.

                              Due to inclement weather, the Company may
                              experience reduced revenues from December through
                              February and may realize the substantial part of
                              its revenues during the other months of the year.

Fair Value of                 The carrying value for each of the Company's
Financial Instruments         financial instruments (consisting of cash,
                              accounts receivable and accounts payable)
                              approximates fair value because of the short-term
                              nature of those instruments. The estimated fair
                              value of the long-term debt approximates carrying
                              value based on current rates offered to the
                              Company for debt of the same maturities.

Estimates                     The preparation of financial statements in
                              conformity with generally accepted accounting
                              principles 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 during the reporting period.
                              Actual results could differ from those estimates.

                                      F-12
<PAGE>
                                                       Smith-Midland Corporation
                                                                and Subsidiaries

                                      Summary of Significant Accounting Policies
                                                                     (continued)
================================================================================

Earnings Per Share            Earnings per share is based on the weighted
                              average number of shares of common stock and
                              dilutive common stock equivalents outstanding.
                              Basic earnings per share is computed by dividing
                              income available to common shareholders by the
                              weighted average number of common shares
                              outstanding for the period. Diluted earnings per
                              share reflects the potential dilution of
                              securities that could share in earnings of an
                              entity.

Long-Lived Assets             The Company reviews the carrying values of its
                              long-lived and identifiable intangible assets for
                              possible impairment whenever events or changes in
                              circumstances indicate that the carrying amount of
                              assets may not be recoverable based on
                              undiscounted estimated future operating cash
                              flows. When any such impairment exists, the
                              related assets will be written down to fair value.
                              No impairment losses have been recorded through
                              December 31, 2002.

Recent Accounting             In June 2002, the FASB issued SFAS No. 146,
Pronouncements                "Accounting for Costs Associated with Exit or
                              Disposal Activities". This statement addresses
                              financial accounting and reporting for costs
                              associated with exit or disposal activities and
                              nullifies Emerging Issues Task Force (EITF) Issue
                              No. 94-3, "Liability Recognition for Certain
                              Employee Termination Benefits and Other Costs to
                              Exit an Activity (including Certain Costs Incurred
                              in a Restructuring)". This Statement requires that
                              a liability for a cost associated with an exit or
                              disposal activity be recognized when the liability
                              is incurred. This statement also establishes that
                              fair value is the objective for initial
                              measurement of the liability. The provisions of
                              this statement are effective for exit or disposal
                              activities that are initiated after December 31,
                              2002. The adoption of SFAS 146 will not have an
                              effect on the Company's financial statements.

                              In December 2002, the FASB issued SFAS No. 148,
                              "Accounting for Stock-Based Compensation -
                              Transition and Disclosure - an amendment of FASB
                              Statement No. 123". This Statement amends FASB
                              Statement No. 123, "Accounting for Stock-Based
                              Compensation", to provide alternative methods of
                              transition for a voluntary change to the fair
                              value based method of accounting for stock-based
                              employee compensation. In addition, this Statement
                              amends the disclosure requirements of Statement
                              123 to require prominent disclosures in both
                              annual and interim financial statements about the
                              method of accounting for stock-based employee
                              compensation and the effect of the method used on
                              reported results. The Company expects to continue
                              using the intrinsic value method for accounting
                              for its employee stock options.

                                      F-13
<PAGE>
                                                       Smith-Midland Corporation
                                                                and Subsidiaries

                                      Summary of Significant Accounting Policies
                                                                     (continued)
================================================================================

Reclassifications             Certain reclassifications have been made in the
                              prior year consolidated financial statements and
                              notes to conform to the December 31, 2002
                              presentation.



                                      F-14
<PAGE>
                                                       Smith-Midland Corporation
                                                                and Subsidiaries

                                      Notes to Consolidated Financial Statements
================================================================================


1.      Property and          Property and equipment consist of the following:
        Equipment
                               December 31,                                          2002                 2001
                              --------------------------------------------------------------------------------------------

                              Land and land improvements                            $  682,092          $   649,575
                              Buildings                                              2,412,198            2,333,311
                              Machinery and equipment                                5,855,101            5,311,048
                              Rental equipment                                         160,144              143,296
                              --------------------------------------------------------------------------------------------

                                                                                     9,109,535            8,437,230
                              Less:  accumulated depreciation                        6,090,806            5,764,565
                              --------------------------------------------------------------------------------------------

                                                                                    $3,018,729           $2,672,665
                              --------------------------------------------------------------------------------------------

2.      Notes Payable         Notes payable consist of the following:

                              December 31,                                                         2002                2001
                              ---------------------------------------------------------------------------------------------

                              Note payable to First International Bank, maturing
                              June 2021; with monthly payments of $37,087 of
                              principal and interest, interest at prime plus
                              1.5% (5.75% at December 31, 2002); collateralized
                              by principally all assets of the Company.                      $3,695,778         $3,806,428

                              Note payable to First International Bank, maturing
                              January 1, 2005; with monthly payments of $10,961
                              of principal and interest at prime plus 1.75%
                              (6.0% at December 31, 2002); collateralized by
                              blanket lien on Company assets.                                   226,851            337,610

                              Line of credit with First International Bank,
                              maturing May 1, 2002; interest payable monthly at
                              prime plus 1% (5.8% at December 31, 2001);
                              collateralized by accounts receivable and inventory.                    -            300,000



                                      F-15
<PAGE>

                                                       Smith-Midland Corporation
                                                                and Subsidiaries

                                      Notes to Consolidated Financial Statements
                                                                     (continued)
================================================================================


2.      Notes Payable         December 31,                                                         2002               2001
                              --------------------------------------------------------------------------------------------
        (continued)
                              Installment notes and capitalized leases
                              collateralized by certain machinery and equipment
                              maturing at various dates, primarily July 2003
                              through October 2007, with interest at 7.25%
                              through 11.07%.                                               $   305,876        $   152,967

                              Note payable to individual, maturing March 2003;
                              with monthly payments of $432 of principal and
                              interest, interest at 12%; collateralized by a
                              drop-deck trailer.                                                      -              5,992
                              --------------------------------------------------------------------------------------------

                                                                                              4,228,505          4,602,997
                              Less current maturities                                           412,112            604,135
                              --------------------------------------------------------------------------------------------

                                                                                             $3,816,393         $3,998,862
                              --------------------------------------------------------------------------------------------

                              The Company has a mortgage loan, with a balance of
                              $3,695,778 at December 31, 2002, which is
                              guaranteed in part by the U.S. Department of
                              Agriculture Rural Business - Cooperative Services.
                              The loan agreement includes certain restrictive
                              covenants, which require the Company to maintain
                              minimum levels of tangible net worth and limits on
                              total outstanding indebtedness and annual capital
                              expenditures. At December 31, 2002, the Company
                              was in violation of covenants related to fixed
                              asset expenditures, however, the Company was
                              granted a waiver of the covenants by the USDA and
                              the bank. The Company also has a $500,000 line of
                              credit, under which there were no outstanding
                              borrowings at December 31, 2002.



                                      F-16
<PAGE>
                                                       Smith-Midland Corporation
                                                                and Subsidiaries

                                      Notes to Consolidated Financial Statements
                                                                     (continued)
================================================================================

2.      Notes Payable         The aggregate amounts of notes payable maturing in
        (continued)           each of the next five years and thereafter are as
                              follows:

                               Year Ending December 31,               Amount
                              --------------------------------------------------

                                        2003                     $   412,112
                                        2004                         379,134
                                        2005                         245,090
                                        2006                         235,673
                                        2007                         220,661
                                     Thereafter                    2,735,835
                              --------------------------------------------------

                                                                  $4,228,505
                              --------------------------------------------------

3.      Related Party         The Company currently leases three and one half
        Transactions          acres of its Midland, Virginia property from its
                              President, on a month-to-month basis, as
                              additional storage space for the Company's
                              finished work product. The lease agreement calls
                              for annual rent of $6,000.

                              Notes payable - related parties are unsecured,
                              with no specified maturity date (but no earlier
                              than January 1, 2004) and bear interest at 10%.
                              Total interest expense related to these notes was
                              $2,361 and $1,589 for the years ended December 31,
                              2002 and 2001, respectively.

                              At December 31, 2002, the Company held an
                              unsecured note receivable for approximately
                              $463,500 from its President and majority
                              shareholder, accruing interest at a rate of 6% per
                              annum. Principal payments on the note were $94,763
                              for the year ended 2002 and $72,418 for the year
                              ended December 31, 2001. Total interest income on
                              this note was approximately $33,500 and $37,800
                              for the years ended December 31, 2002 and 2001,
                              respectively.

                              The Company was the beneficiary of individual life
                              insurance policies on the life of the President
                              with a total cash surrender value of approximately
                              $183,000 as of December 31, 2002 and 2001.
                              Borrowings of approximately $153,000, were
                              outstanding against the cash surrender value at
                              December 31, 2002 and 2001.


                                      F-17
<PAGE>
                                                       Smith-Midland Corporation
                                                                and Subsidiaries

                                      Notes to Consolidated Financial Statements
                                                                     (continued)
================================================================================

4.      Income Taxes          Income tax expense is comprised of the following:

                              Year Ended December 31,                 2002                2001
                              -------------------------------------------------------------------------

                              Federal
                                 Current                          $442,000             $24,100
                                 Deferred                           37,000                  -
                              -------------------------------------------------------------------------

                                                                   479,000              24,100
                              -------------------------------------------------------------------------

                              State
                                 Current                            93,000               4,513
                                 Deferred                            7,000                  -
                              -------------------------------------------------------------------------

                                                                   100,000               4,513
                              -------------------------------------------------------------------------

                                                                  $579,000             $28,613
                              -------------------------------------------------------------------------

                              The provision for income taxes differs from the
                              amount determined by applying the federal
                              statutory tax rate to pre-tax income as a result
                              of the following:

                              Year Ended December 31,                           2002                        2001
                              ----------------------------------------------------------------------------------------------

                                                                          Amount     Percent         Amount       Percent
                              ----------------------------------------------------------------------------------------------

                              Income taxes at statutory rate              $401,000      34%          $688,000        34%
                              Increase (decrease) in taxes
                                 resulting from:
                                   Reduction in valuation
                                     allowance                                   -       -           (785,000)      (39)
                                   State income taxes,
                                     net of federal benefit                 59,000       5             81,000         4
                                   Revision to estimated net
                                     operating loss carryforward,
                                     net                                    78,000       7                  -         -
                                   Other                                    41,000       3             44,613         2
                              ----------------------------------------------------------------------------------------------

                                                                          $579,000      49%        $   28,613         1%
                              ----------------------------------------------------------------------------------------------

                                      F-18
<PAGE>
                                                       Smith-Midland Corporation
                                                                and Subsidiaries

                                      Notes to Consolidated Financial Statements
                                                                     (continued)
================================================================================

4.      Income Taxes          Deferred tax assets (liabilities) are as follows:
        (continued)
                               December 31,                                       2002                 2001
                              ------------------------------------------------------------------------------------

                              Depreciation                                   $(196,000)           $(135,000)
                              Provision for doubtful accounts                   93,000              141,000
                              Vacation accrued                                  46,000               46,000
                              Deferred income                                   13,000               21,000
                              ------------------------------------------------------------------------------------

                              Net deferred tax asset (liability)               (44,000)              73,000
                              Deferred tax asset valuation allowance                 -              (73,000)
                              ------------------------------------------------------------------------------------

                                                                             $ (44,000)           $      -
                              ------------------------------------------------------------------------------------

                              The net deferred tax liability at December 31,
                              2002 is included in accrued expenses and other
                              liabilities in the consolidated balance sheet.

                              At December 31, 2001, the Company offset the
                              deferred tax asset with a valuation allowance
                              since it could not predict the timing of the
                              generation of future taxable income.

5.      Employee Benefit      The Company has a 401(k) retirement plan (the
        Plans                 "Plan") covering substantially all employees.
                              Participants may contribute up to 10% of their
                              compensation to the Plan. The Company contributes
                              50% of the participant's contribution, up to 4% of
                              the participant's compensation, as a matching
                              contribution. Total contributions for the years
                              ended December 31, 2002 and 2001 were
                              approximately $35,600 and $110,000, respectively.


                                      F-19
<PAGE>
                                                       Smith-Midland Corporation
                                                                and Subsidiaries

                                      Notes to Consolidated Financial Statements
                                                                     (continued)
================================================================================


6.      Stock Options         On August 5, 1994, the Board of Directors and
                              Stockholders of the Company adopted the 1994 Stock
                              Option Plan (the "1994 Plan"), which allows the
                              Company to grant options to employees, officers,
                              directors and consultants to purchase shares of
                              the Company's Common Stock. Options granted under
                              the plan may be either Incentive Stock Options or
                              Non-Qualified Stock Options. Incentive Stock
                              Options may be granted only to employees of the
                              Company, while Non-qualified options may be issued
                              to non-employee directors, consultants, and
                              others, as well as to employees of the Company. On
                              November 21, 2000, the maximum aggregate number of
                              options which may be granted under the 1994 Plan
                              was increased to 575,000 and was subsequently
                              increased to 1,025,000 on July 22, 2002. The
                              following tables summarize activity of the Plan
                              and the stock options outstanding at December 31,
                              2002:

                                                                   Weighted
                                                                    Average                      Vested
                                                                   Exercise       Options          and
                                                                     Price      Outstanding    Exercisable
                              ------------------------------------------------------------------------------

                              Balance, December 31, 2000             $1.07       174,975        102,255
                              Granted                                 1.02       343,000              -
                              Forfeited                               1.00       (11,550)          (366)
                              Vested                                  -                -         43,202
                              ------------------------------------------------------------------------------

                              Balance, December 31, 2001              1.04       506,425        145,091
                              Granted                                 -                -              -
                              Forfeited                               1.08        (4,500)          (500)
                              Vested                                  -                -        123,002
                              ------------------------------------------------------------------------------

                              Balance, December 31, 2002             $1.04       501,925        267,593
                              ------------------------------------------------------------------------------

                              The following table summarizes options outstanding
                              at December 31, 2002:

                                                             Options Outstanding                  Options Exercisible
                                                ----------------------------------------------  ------------------------
                                                                        Weighted Average
                                                    Number of        Remaining Contractual              Number
                              Exercise Prices         Shares              Life (Years)                 of Shares
                              ------------------------------------------------------------------------------------------

                                     $.56            88,000                     5.0                        79,000
                                   .80 - .81        204,000                     8.3                        68,001
                                  1.00 - 1.39       189,925                     3.7                       100,592
                                     3.50            20,000                     3.5                        20,000
                              ------------------------------------------------------------------------------------------

                                                    501,925                                               267,593
                              ------------------------------------------------------------------------------------------


                                      F-20
<PAGE>
                                                       Smith-Midland Corporation
                                                                and Subsidiaries

                                       Notes to Consolidated Financial Statements
                                                                     (continued)
===============================================================================


6.      Stock Options         The Company granted 343,000 stock options during
        (continued)           the year ended December 31, 2001. The fair value
                              of each option on the date of grant is estimated
                              using the Black-Scholes option pricing model with
                              the following assumptions: no dividend yield,
                              expected volatility of 88%, risk-free interest
                              rate of 5.07% and expected lives of seven to nine
                              years. Substantially all options become vested and
                              exercisable ratably over a five year period.

                              At December 31, 2001, the Company had 1,421,052
                              warrants outstanding with exercise prices ranging
                              from $.60 to $1.00. During 2002, 1,261,897
                              warrants were exercised and the remaining shares
                              expired in August 2002.

7.      Commitments           a)   In 1999, the Company, through the general
        and Contingencies          contractor, filed claims, in the amount of
                                   approximately $1,100,000 for damages and cost
                                   overruns incurred as a result of engineering
                                   and design flaws on a project to renovate a
                                   building at Rutgers University ("Rutgers").
                                   Specifically, after the Company commenced the
                                   Rutgers project, the Company found that the
                                   original structure was not structurally
                                   sufficient to support the panels as
                                   originally designed. The cost overruns relate
                                   to re-designing panels, producing panels with
                                   additional steel reinforcement, and erection
                                   of the panels on the structure. The general
                                   contractor filed suit against the Company,
                                   Rutgers, and the architect on the project,
                                   for damages. While the actual damages were
                                   not specified, based upon the pleadings, the
                                   general contractor is seeking in excess of
                                   $700,000 in damages from the Company. The
                                   Company filed a countersuit against the
                                   general contractor for damages in excess of
                                   $1,100,000. The Company also filed suit
                                   against Skylift Corporation, the Company's
                                   subcontractor, initially responsible for
                                   installation of construction panels, for
                                   approximately $1,000,000. The Company has
                                   approximately $1,002,000 due to the general
                                   contractor included in reserve for contract
                                   loss at December 31, 2002.

                                   The Company's outside counsel has provided
                                   the Company with an opinion that a legal
                                   basis exists for a claim against the general
                                   contractor and Rutgers. All conditions for
                                   claim recognition have been satisfied, and as
                                   of December 31, 2002, approximately $574,000
                                   of the potential $1,100,000 contract claim is
                                   included in claims receivable, as such
                                   amounts are probable (subject to negotiations
                                   and legal proceedings). The Company believes
                                   that, based on prior experience in claims
                                   settlement, it will ultimately collect the
                                   recorded claim receivable. In addition,
                                   approximately $386,000 of amounts due from
                                   the general contractor that are being
                                   disputed are included in claims receivable at
                                   December 31, 2002 and 2001.

                              b)   In January 2001, the Company received notice
                                   of a wrongful death lawsuit filed by the
                                   Estate of Joy V. Snyder and her surviving
                                   children. The suit was settled during 2002
                                   with an award to the plaintiff of $50,000
                                   that was paid by insurance.


                                      F-21
<PAGE>
                                                       Smith-Midland Corporation
                                                                and Subsidiaries

                                      Notes to Consolidated Financial Statements
                                                                     (continued)
================================================================================


7.      Commitments           c)   In June 2000, the Company received notice of
        and Contingencies          a personal injury lawsuit filed by Kenneth R.
        (continued)                Hughes and Braunya P. Hughes in the United
                                   States District Court for the District of
                                   Columbia. Mr. Hughes was a road construction
                                   worker engaged in the transportation and
                                   relocation of pre-cast concrete barrier to
                                   create temporary concrete walls at road
                                   construction sites for a third party
                                   construction company. On or about June 20,
                                   1997, Mr. Hughes suffered injuries when a
                                   barrier section-coupling device apparatus
                                   failed. The suit alleges that the Company
                                   sold the section-coupling device to the third
                                   party contractor and was negligent in the
                                   design and manufacture of said barrier
                                   section-coupling device. The suit seeks
                                   $10,000,000 in compensatory damages and
                                   $10,000,000 in punitive damages. Management
                                   believes the suit to be without merit as
                                   there is no evidence that indicates that the
                                   Company either sold or manufactured the
                                   section-coupling device in question. In
                                   October 2002, the United States District
                                   Court dismissed the claim, however, the case
                                   is currently on appeal. The Company plans to
                                   vigorously defend its position, and believes
                                   that any settlement will be covered under the
                                   Company's general liability insurance and
                                   therefore will not adversely affect the
                                   financial statements.

8.      Earnings Per Share    Earnings per share is calculated as follows:

                              Year ended December 31,                                    2002              2001
                              ---------------------------------------------------------------------------------------------

                              Basic earnings

                                 Income available to common shareholder                  $   600,511       $1,993,993
                              ---------------------------------------------------------------------------------------------

                                 Weighted average shares outstanding                       3,774,291        3,090,465
                              ---------------------------------------------------------------------------------------------

                                 Basic earnings per share                                $       .16       $      .65
                              ---------------------------------------------------------------------------------------------

                              Diluted earnings per share

                                 Income available to common shareholder                  $   600,511       $1,993,993
                              ---------------------------------------------------------------------------------------------

                                 Weighted average shares outstanding                       3,774,291        3,090,465
                                   Dilutive effect of stock options                           89,068           32,948
                                   Dilutive effect of warrants                                    -           338,364
                              ---------------------------------------------------------------------------------------------

                                 Total weighted average shares outstanding                 3,863,359        3,461,777
                              ---------------------------------------------------------------------------------------------

                                 Diluted earnings per share                              $       .16       $      .58
                              ---------------------------------------------------------------------------------------------
</TABLE>


                                      F-22
<PAGE>
                                                       Smith-Midland Corporation
                                                                and Subsidiaries

                                      Notes to Consolidated Financial Statements
                                                                     (continued)
================================================================================

9.      Subsequent Event      In January 2003, the Company's Board of Directors
                              adopted a Shareholder Rights Plan (the "Plan")
                              under which, preferred stock purchase rights
                              (each, a "Right") were distributed as a dividend
                              at the rate of one Right for each share of Common
                              Stock outstanding as of the close of business on
                              February 11, 2003 and automatically attach to
                              shares issued thereafter. In general, the Rights
                              will be exercisable if a person or group
                              ("Acquiring Person") becomes the beneficial owner
                              of 15% or more of the outstanding Common Stock of
                              the Company or announces a tender offer for 15% or
                              more of the Common Stock of the Company. The
                              Rights will expire on January 20, 2013.


                                      F-23