REG - Somero Enterprises - Final Results
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RNS Number : 9497V Somero Enterprises Inc. 10 March 2026
10 March 2026
Somero(®) Enterprises, Inc.
("Somero" or "the Company" or "the Group")
Final Results
Stronger H2 drove resilient FY performance, strategic priorities progressing
Somero Enterprises, Inc. reports its annual results for the twelve months
ended 31 December 2025.
Financial Highlights
FY 2025 FY 2024 % Change
US$ US$
Revenue 88.9m 109.2m -19%
Adjusted EBITDA((1,2)) 17.5m 27.7m -37%
Adjusted EBITDA margin((1,2)) 20% 25% -500 bps
Profits before tax 15.2m 23.8m -36%
Adjusted net income((1,3)) 11.1m 18.6m -40%
Diluted adjusted net income per share((1,3)) 0.20 0.33 -39%
Cash flow from operations 17.8m 17.6m 1%
Net cash((4)) 33.2m 29.5m 13%
Ordinary dividend per share 10.2c 16.9c -40.0%
· Strong end to 2025 as anticipated: trading and profitability were in line with
revised market expectations, supported by seasonality and new product
contribution
o North America H2 revenue +14% vs H1
o Europe H2 revenue +55% vs H1
o Australia H2 revenue +58% vs H1
· Innovation delivered meaningful revenue: new and next-generation products
contributed US$ 13.0m revenue
· Disciplined action to protect profitability: cost measures helped offset lower
revenues and support EBITDA margin
· Operating cashflow improved: driven by higher advance customer deposits,
benefits from new US tax legislation, and lower capex and interim dividend
payout
· Continued returns to shareholders
o Paid US$ 9.3m in dividends (2024: US$ 15.8m)
o US$ 2.6m share buy-back (2024: US$ 2.6m)
Operational Highlights
· New leadership embedded: Tim Averkamp as CEO, Bob Scheuer as Chairman
· New product launches: SRS-4e (first electric-powered Boomed Laser Screed),
Hammerhead (Ride-on), S-15EZ (next-generation mid-sized Boomed Screed)
· Strategy in action: refreshed long-term strategy built on three pillars
translated into a concise plan and an operating cadence that turns priorities
into results
Post-Period Highlights
· Solid start to FY 2026: customers report improved activity and healthy
backlogs, whilst remaining cautious
· Strong product pipeline: multiple new product launches planned, including the
next-generation flagship Boomed screed and a new walk-behind screed
· European foothold strengthened: Somero Concrete Institute launched in Belgium,
bringing access to training in line with the US and supporting aftermarket
growth
· Disciplined returns and capital allocation:
o Final FY 2025 dividend of 6.2 cents per share, taking total ordinary dividends
for FY 2025 to US$ 5.5m (including interim)
o New share buyback program authorized for up to US$ 4m, to offset equity award
dilution and fund opportunistic repurchases
· FY 2026 outlook unchanged: revenue, profitability, and cash generation
expected to be broadly comparable to 2025
Notes:
1. The Company uses non-US GAAP financial measures to provide supplemental
information regarding the Company's operating performance. See further
information regarding non-GAAP measures below.
2. Adjusted EBITDA as used herein is a calculation of the Company's net income
plus tax provision, interest expense, interest income, foreign exchange loss,
other expense, depreciation, amortization stock-based compensation and
non-cash lease expense.
3. Adjusted net income as used herein is a calculation of net income plus
amortization of intangibles and excluding the tax impact of stock option and
RSU settlements and other special items.
4. Net cash is defined as cash and cash equivalents less borrowings under bank
obligations exclusive of deferred financing costs.
Tim Averkamp of Somero, said:
"FY 2025 underscored the resilience of Somero's business model. Despite
ongoing macroeconomic uncertainty, we delivered a disciplined performance,
measures to protect profitability, and made meaningful progress in the
development of our long‑term strategy. Our focus remained clear:
safeguarding the core business while continuing to invest for future growth.
Innovation remained central to our approach, with several new product
launches during the year delivering impactful results, including our first
electric boomed screed, the next‑generation S‑15EZ, and the Hammerhead
ride‑on screed. These products are expanding our addressable market,
strengthening our international footprint, and positioning the Company well as
customer confidence begins to recover.
As I reflect on my first year as Chief Executive Officer, I am excited to be
part of Somero and would like to thank our employees around the world for
their commitment, professionalism, and resilience throughout the year. As we
mark more than 40 years of Somero's history, this milestone reflects the
dedication of our people, the trust and loyalty of our customers, and the
support of our partners who have helped build the Company over four decades.
While customers remain prudent in the near term, sentiment toward 2026 is
showing early signs of improvement. With a refreshed strategy in action and
disciplined operating and growth platform, I am confident that the future for
Somero is bright."
Final Results Investor Presentation
As part of its engagement with investors, management will host a live virtual
presentation and Q&A on 17 March 2026 at 17:15 GMT.
To register to attend, please use the following link:
https://www.investormeetcompany.com/somero-enterprise-inc/register
(https://url.us.m.mimecastprotect.com/s/e9-MC73wYDsAnP7gF8f7IolF0C?domain=investormeetcompany.com)
Questions can be submitted pre-event via the Investor Meet Company platform up
until 9am the day before the meeting or at any time during the live
presentation. A recording will be made available following the conclusion of
the presentation.
Enquiries:
Somero Enterprises,
Inc.
www.somero.com
Tim Averkamp
CEO
+1 239 210 6500
Vincenzo LiCausi, CFO
Howard Hohmann, EVP Sales
Cavendish Capital Markets Ltd (NOMAD and Broker)
Matt Goode /Seamus Fricker (Corporate
Finance) +44 (0)20
7220 0500
Tim Redfern/Harriet Ward (ECM)
Alma PR (Financial PR Advisor)
somero@almapr.co.uk
David
Ison
+44 (0)20
3405 0205
Rebecca Sanders-Hewett
Will Merison
Notes to Editors:
Somero Enterprises provides industry-leading concrete-leveling equipment,
training, education and support to customers in over 90 countries. The
Company's cutting-edge technology allows its customers to install high-quality
horizontal concrete floors faster, flatter and with fewer people. Somero®
equipment that incorporates laser-technology and wide-placement methods is
used to place and screed the concrete slab in all building types and has been
specified for use in a wide range of commercial construction projects for
numerous global blue-chip companies.
Somero pioneered the Laser Screed® market in 1986 and has maintained its
market-leading position by continuing to focus on bringing new products to
market and developing patent-protected proprietary designs. In addition to its
products, Somero offers customers unparalleled global service, technical
support, training and education, reflecting the Company's emphasis on helping
its customers achieve their business and profitability goals, a key
differentiator to its peers.
For more information, visit www.somero.com (http://www.somero.com)
Chairman's and Chief Executive Officer's Statement
Overview
We finished 2025 strongly, delivering results in line with what we anticipated
as the year progressed, following a more challenging first half. We responded
decisively to the softer demand backdrop, preserving profitability while
continuing to support our customers and execute our strategic priorities.
During the year we also completed a smooth leadership transition, with Tim
Averkamp appointed Chief Executive Officer. This ensured continuity in the
way we run the business, incorporated valuable expertise and viewpoints, and
sharpened our focus on execution as we move into the next phase.
Revenue declined 19% to US$ 88.9m (2024: US$ 109.2m) reflecting lower volumes
across multiple regions and product categories. Our flexible cost structure
and disciplined cost measures supported adjusted EBITDA of US$ 17.5m (2024:
US$ 27.7m) and an adjusted EBITDA margin of 20% (2024: 25%). Pricing actions
and efficiency gains helped mitigate unabsorbed overhead, with gross margin of
52% (2024: 54%). Cash flow from operations was US$ 17.8m (2024: US$ 17.6m)
supported by higher advance customer deposits, benefits from new US tax
legislation and lower capex and interim dividend outflows. This translated to
a year-end cash balance of US$ 33.2m after returning US$ 9.3m through
dividends and US$ 2.6m through share buybacks. Inventory increased primarily
due to new products and lower sales volumes, while collections remained
strong.
End markets and competitive position
Long-term fundamentals for private non-residential construction remain
supported by structural demand drivers such as onshoring, data centers,
warehousing and logistics, power generation, battery plants and semiconductor
manufacturing. However, in 2025, tariffs and policy uncertainty, interest
rates and credit conditions, labor availability and geopolitical tensions
continued to weigh on project activity and equipment purchasing, with the
impact most pronounced on larger projects and demand for Boomed screeds.
Toward the end of 2025, a range of broad-based market indicators pointed to
stabilization, including steadier US private non-residential construction
spending and improving contractor sentiment and backlog measures. While
these indicators are not necessarily directly correlated with our trading,
they are positive, and consistent with what we are hearing from customers.
Entering FY 2026, customers report healthy bidding activity and backlogs,
although caution persists.
Against this backdrop, we remain confident in Somero's competitive
positioning. The landscape has not changed materially, and we believe Somero
retains a clear market-leading position. There are higher levels of competitor
activity in certain international markets, particularly in Europe and we are
responding by executing on strategic initiatives focused on continuing to
invest in innovation, strengthening our sales and dealer channels and
expanding our European customer support platform. This includes leveraging our
Belgium service center and the recent launch of the Somero Concrete Institute
in Belgium, improving customer proximity and supporting growth in training,
parts and service revenues.
Regional Review
North America
North American sales declined 17% to US$ 68.1m (2024: US$ 82.2m), driven by
lower sales of Boomed screeds and 3D Profiler Systems. Revenue from direct
sales to new customers represented 17% of total revenue in the region (2024:
23%).
Customers continue to report healthy bidding and robust backlogs, though
project starts remain subdued, as previously reported. Importantly, long-term
demand drivers in non-residential construction remain intact. Ongoing labor
shortages are also reinforcing the need for automation and productivity
improvements, which supports demand for our solutions.
Europe
In Europe, sales declined 39% to US$ 8.9m (2024: US$ 14.6m), driven mostly by
a decrease in Boomed Screeds and Ride-on Screeds. Revenue from direct sales to
new customers represented 36% of total revenue in the region (2024: 32%).
Economic conditions in Europe remain subdued but appear to be stabilizing,
private investment is cautious amid trade uncertainty and structural pressures
including elevated construction costs and labor shortages. Pricing remains
competitive as contractors chase limited work, and we remain focused on
differentiating through performance and support.
Europe remains a priority market for Somero despite the current demand
backdrop. Our Belgium facility, opened in 2024, strengthened regional support
through local service and repair capability and now also hosts the Somero
Concrete Institute, bringing the same hands-on training program offered in the
US to European customers. We see clear demand in the region for a more
price-accessible, high-quality laser screed offering. The Hammerhead,
introduced in H2 2025, is designed to address that segment and has received
positive feedback to date. We are also progressing initiatives to strengthen
and expand our dealer channel to broaden our footprint and accelerate adoption
across Europe.
Australia
In Australia, revenue declined 15% to US$ 5.6m (2024: US$ 6.6m). Revenue from
direct sales to new customers represented 32% of total revenue in the region
(2024: 62%).
Looking ahead, non‑residential demand in Australia is, aggregate, expected
to hold, although project activity is likely to remain lumpy and sector
specific. We remain confident there is further opportunity to deepen
penetration in the region as we continue to build awareness and demonstrate
the productivity, reliability, and support that underpin Somero's value
proposition.
Rest of World
Our Rest of World region, which includes Latin America, the Middle East,
India, Southeast Asia, Korea and China, reported sales of US$ 6.3m (2024: US$
5.8m), representing a 9% increase. The main contributor to 2025 revenues was
the Middle East, which reported sales of US$ 2.2m compared to US$ 0.6m in
2024. As previously stated, given the relatively small base of business in
each region, trading tends to fluctuate from period to period.
Product Review
Demand across our product categories is driven by the mix of project types and
applications in the non-residential market, which can shift by region and over
time. As a result, our product mix and order patterns naturally fluctuate.
In 2025, lower industry activity impacted volumes across most product
categories. Boomed screed sales decreased 19% to US$ 34.8m (2024: US$ 43.1m)
and ride-on screed sales decreased 21% to US$ 16.1m (2024: US$ 20.3m). Sales
of 3D Profiler Systems and remanufactured machines decreased 27% and 18%,
respectively.
SkyScreed 36, introduced in 2019, continues to target the high-rise structural
segment where we see significant long-term potential. Sales were US$ 0.3m in
2025 (2024: US$ 0.4m). As with many new categories, adoption remains gradual
and near-term volumes can be uneven as the solution gains wider acceptance.
Parts and service revenue was more resilient, albeit declining to US$ 17.0m
(2024: US$ 19.1m), mainly in North America, Australia, and Rest of World,
commensurate with overall volume declines in those regions. In Europe, parts
and service revenue remained relatively stable, supported by our in-region
service and training capability, which continues to receive positive customer
feedback and supports ongoing customer retention and aftermarket demand.
For further product and geographic revenue details, see footnote 14.
Cashflow and Balance Sheet
Operating cash flow in 2025 was slightly above the prior year at US$ 17.8m
(2024: US$ 17.6m), with lower profits offset by higher advance customer
deposits, favorable impact of new US tax legislation, and lower capex
expenditures and interim dividend payout.
Capital expenditure was US$ 0.8m (2024: US$ 2.4m), relating primarily to
on-going product software programs and other routine investments. Dividends of
US$ 9.3m (2024: US$ 15.8) were paid, reflecting the Company's ongoing
commitment to disciplined return of cash to shareholders, alongside US$ 2.6m
share repurchases under the 2025 and residual 2024 buyback programs.
Net cash at 31 December 2025 was US$ 33.2m (31 December 2024: US$ 29.5m) after
the dividend payments, leaving the Company with ample liquidity to support
operations and strategic investments. The balance sheet remains debt-free with
access to an unutilized US$ 25.0m secured revolving line of credit, providing
a strong platform for future growth.
Strategic Update
Since the introduction of our strategic framework in our interim results, the
Company has moved from strategy definition to disciplined execution. While
market conditions remain uneven, we have made tangible progress across each
pillar of our strategic framework, focused on strengthening the core business,
advancing innovation, and positioning the Company for sustainable long‑term
growth and superior shareholder returns. The progress we have made on select
initiatives is summarised below.
1. Fortify - Reinforcing the foundation of the business to ensure
resilience, consistency, and operational discipline across cycles
Operational Discipline and Cost Management
· Took decisive actions in 2025 to align costs with demand while protecting core
capabilities
· Improved planning and inventory management helped stabilize margins and
preserve cash generation in a softer volume environment
· Embedding lean disciplines, including 6S and workplace organization, and
visual management, as a core element of our operating model to drive
productivity and support efficient scaling as volumes recover
Somero Concrete Institute Europe Launch
· Launched the Somero Concrete Institute in Belgium, extending our proven U.S.
training model into Europe
· Provides hands-on training, technical education and certification aligned with
Somero best practice
· Strengthens our European service footprint and supports better machine
utilization and aftermarket engagement
2. Innovate - Advancing technology and product development to expand our
addressable market and reinforce category leadership
2025 Product Development & Portfolio Expansion
· SRS-4e: electric-powered version of the SRS-4, progressing our electrification
roadmap in line with customer demand and sustainability-led adoption.
Electrification remains an important part of our long-term agenda
· Hammerhead: expands Somero into the broader small to mid-range contractor
segment with a more affordable, easy to use, and high-quality offering, with
strong early customer and dealer reception in the US and Europe
· S-15EZ: next-generation mid-sized Boomed screed designed to improve
productivity, quality, and ease of use as pour sizes trend smaller and
maneuverability becomes more important
2025 Technology Development
Advanced digital capability and telematics to enhance customer experience,
utilization, uptime, remote diagnostics and aftermarket opportunity
· Virtual Reality Training Simulation: VR‑based S‑22EZ training with mobile
access to enable flexible, remote learning. Improves efficiency, lowers
cost, and reinforces technology‑driven customer value.
· Somero Experts App: delivers digital manuals, checklists, and troubleshooting
tools to improve uptime and efficiency and simplify operator support and
machine management.
· Telematics Offering: Standard telematics on new S‑15EZ, S‑22EZ, and
S‑28EZ, harnesses digital technology to turn machine data into actionable
insight.
2026 Product Development & Portfolio Expansion
· S-22EZ+: updated "flagship" Boomed screed with 30+ features focused on
quality, automation, and ease of use
· Viper walk-behind laser screed: debuted at World of Concrete, designed for
tight spaces and on-deck applications
Beyond these launches, our product and innovation pipeline remains active.
Each product reflects years of R&D and direct engagement with customers
and dealers, giving us confidence that our pipeline is well aligned with
real-world demand as end markets evolve. We continue to advance new machines
that address customer pain points and enhance productivity, introduce
technologies that strengthen both our current and future products, and explore
opportunities in adjacent markets where Somero can apply its expertise to
broaden its reach.
3. Amplify - Expanding Somero's reach, broadening market coverage, and
deploying capital to drive long‑term value creation
Commercial Coverage and Aftermarket
· Continued to strengthen dealer coverage in domestic and international markets
to improve proximity and responsiveness
· Introduced product-specific territory managers to increase specialist support
and accountability across key product lines
· This more integrated approach is designed to support adoption, utilization and
growth in parts, service and training revenue over the equipment lifecycle
Capital Allocation & M&A Framework
· Formalized a clear capital allocation framework, reinforcing our priorities
around balance sheet strength, disciplined investment and consistent
shareholder returns
· Developed an M&A framework focused on capability, addressable market
expansion and strengthening aftermarket and customer engagement
· Engaged experienced M&A advisory support and initiated early outreach,
positioning the Company to pursue opportunities selectively while maintaining
financial discipline
Although implementation remains in its early stages, initiatives are advancing
positively. The Board expects to continue refining priorities as programs
mature and to provide updates on milestones and outcomes as appropriate.
Capital Allocation, M&A Framework, Dividends and Share Buyback
Capital Allocation
1. Maintain a strong balance sheet
· Retain sufficient cash for operations and strategic initiatives, and a cushion
for unexpected market conditions
· Potential leverage of up to 2.0x net debt to EBITDA, reserved for M&A
· Reduce debt when appropriate
2. Invest in the business
· Accelerate growth through targeted organic investment
· Commercial expansion and excellence
· Manufacturing and operating efficiency, scale, and process discipline
· Innovation and productivity enhancements
3. Strategic acquisitions
· Pursue value-accretive M&A to advance the strategy and drive long-term
value creation
· Focus on acquisitions that build on the core and expand the total addressable
market
· See M&A Framework
4. Return capital to shareholders
· Ordinary dividend payout of 50% of adjusted net income¹
· No supplemental dividend declared for 2026 in support of M&A Framework
· Offset dilution from employee equity incentive programs¹
· Opportunistic share repurchases¹
¹ Subject to ongoing Board approval
M&A Framework
Framework & Activity
· Established a disciplined M&A framework aligned with strategic priorities
to accelerate our strategic roadmap
· Engaged experienced advisor to reinforce process discipline, targeted outreach
and opportunity assessment
· Market outreach and opportunity assessment underway, enabling selective and
financially disciplined execution
Strategic Filters
· Technology / Capability Expansion
· Portfolio / Product Enhancement
· Recurring Revenue
· Revenue Diversification
· Operational &/or Commercial Synergies
· Geographic & Market (TAM) Expansion
Financial Criteria
· Incremental Revenue
· ROIC > Cost of Capital
· Accretive Free Cash Flow
Dividends
Reflecting the Group's FY 2025 performance, strong financial position, and
outlook for 2026, the Board has declared a final FY 2025 ordinary dividend of
US$ 0.0624 per share. The final dividend is calculated using the Board
-approved payout ratio of 50% of adjusted net income, after considering the
Company's expected cash requirements. Together with the interim dividend of
US$ 0.0400 per share paid in October 2025, this brings the total FY 2025
ordinary dividend to US$ 0.1024 (2024: US$ 0.1693 per share). The final 2025
ordinary dividend will be payable on May 8, 2026, to shareholders on the
register at April 10, 2026 and the common stock will trade ex-dividend on
April 9, 2026.
Share Buyback
In 2025, the Company repurchased 856,785 shares under its share buyback
program, which is intended to offset dilution from ongoing equity award
programs (2024: 608,918 shares). The maximum price paid per share is no more
than the higher of 105% of the average middle market closing price for the
five business days preceding the repurchase, the price of the last independent
trade, and the highest current independent purchase bid. Shares repurchased
are intended to be cancelled and the Company will make further announcements
as and when purchases are made.
The Board has also approved a 2026 share buyback program of up to US$ 4.0m, to
mitigate future dilution from share issuances under the Company's equity award
programs and fund opportunistic share buybacks in accordance with the
Company's capital allocation framework.
Our People
The Board would like to thank our employees worldwide for their commitment and
professionalism throughout 2025. Their skill, flexibility, and focus on
customer outcomes helped Somero respond quickly to changing market conditions
while continuing to deliver high-quality products and service. This capability
is a key differentiator for the Group and supports both our operating model
and long-term performance. We remain committed to creating a rewarding
environment that invests in development, encourages high standards, and
provides opportunities for our people to grow.
Environmental, Social and Governance
The Board considers ESG factors as part of its ongoing oversight of the
business, with a focus on the issues most relevant to long-term performance
and stakeholder expectations.
A key material topic for Somero is the environmental impact of construction
activity and the role our equipment can play in improving efficiency.
Independent studies by Colorado State University and Middle Tennessee State
University found that use of Somero's laser screed technology in
non-residential slab-on-grade projects can reduce concrete usage and
associated construction-phase emissions by approximately 3%.
We continue to progress electrification in line with customer demand, with two
electric machines now introduced. Alongside this, we remain focused on
training and education for both customers and employees, supporting safer,
more productive job sites and improved equipment utilization. Somero also
engages with industry associations and trade groups to support best practice
across the sector. The Board remains committed to strong governance, including
maintaining an appropriately diverse and independent Board composition.
Conclusion and Outlook
Despite a challenging environment, our employees' skill and dedication drove
significant operational progress in 2025, with trading momentum improving in
the second half of the year, trading and profitability were in line with
revised market expectations. We maintained shareholder returns, launched two
new products and a next-generation machine that contributed meaningful
revenue, and progressed product development to support further new and
next-generation launches in 2026 and beyond.
Looking ahead, the Board continues to see compelling long-term demand
fundamentals for US non-residential construction, supported by various end
markets. Customers continue to report healthy bidding activity and backlogs,
and we expect Europe and Australia to remain contributors, alongside further
benefit from our product pipeline. At the same time, uncertainty around
tariffs and trade, geopolitical relations, immigration policy, and a
still-restrictive monetary environment remain a key constraint on near-term
decision-making and project starts.
In support of the Board's long-term growth agenda, we have committed to
targeted investment to drive strategic initiatives. With the planned
investments in 2026, we expect an increase in operating costs of approximately
US$ 2.0m.
For 2026, the Board expects revenue, profitability, and cash generation to be
broadly comparable to 2025. Expansion into a new customer segment, continued
execution of strategic initiatives, and steady customer activity are expected
to help offset ongoing weakness in large-line Boomed screeds and continued
global uncertainty. While some broad-based indicators and customer feedback
suggest conditions stabilized toward the end of 2025, we remain cautious in
our expectations given the uneven nature of recovery signals across end
markets.
Bob Scheuer
Non-Executive Chairman
Tim Averkamp
Chief Executive Officer
10 March 2026
FINANCIAL REVIEW
Summary of financial results Year ended December 31,
2025 2024
US$ 000 US$ 000
Except per share data Except per share data
Revenue 88,857 109,154
Cost of sales 42,661 50,350
Gross profit 46,196 58,804
Operating expenses
Selling, marketing and customer support 13,376 14,723
Engineering and product development 2,080 2,691
General and administrative 16,798 17,113
Total operating expenses 32,254 34,527
Operating income 13,942 24,277
Other income (expense)
Interest expense (55) (53)
Interest income 433 354
Foreign exchange impact 793 (918)
Other 88 139
Income before income taxes 15,201 23,799
Provision for income taxes 4,981 5,195
Net income 10,220 18,604
Basic earnings per share 0.19 0.34
Diluted earnings per share 0.18 0.33
Basic adjusted net income per share ((1), (2), (4)) 0.20 0.34
Diluted adjusted net income per share ((1), (2), (4)) 0.20 0.33
Other data
Adjusted EBITDA ((1), (2), (4)) 17,475 27,667
Adjusted net income ((1), (3), (4)) 11,070 18,590
Depreciation expense 2,081 1,688
Amortization of intangibles 142 142
Capital expenditures 795 2,449
Notes:
1. Adjusted EBITDA and Adjusted net income are not measurements of the
Company's financial performance under US GAAP and should not be considered as
an alternative to net income, operating income or any other performance
measures derived in accordance with US GAAP or as an alternative to US GAAP
cash flow from operating activities as a measure of profitability or
liquidity. Adjusted EBITDA and Adjusted net income are presented herein
because management believes they are useful analytical tools for measuring the
profitability and cash generation of the business. Adjusted EBITDA is also
used to determine pricing and covenant compliance under the Company's credit
facility and as a measurement for calculation of management incentive
compensation. The Company understands that although Adjusted EBITDA is
frequently used by securities analysts, lenders, and others in their
evaluation of companies, its calculation of Adjusted EBITDA may not be
comparable to other similarly titled measures reported by other companies.
2. Adjusted EBITDA as used herein is a calculation of net income plus tax
provision, interest expense, interest income, foreign exchange gain (loss),
other expense, depreciation, amortization, stock-based compensation, and
non-cash lease expense.
3. Adjusted net income as used herein is a calculation of net income plus
amortization of intangibles and excluding the tax impact of stock option and
RSU settlements and other special items.
4. The Company uses non-US GAAP financial measures to provide supplemental
information regarding the Company's operating performance. The non-US GAAP
financial measures presented herein should not be considered in isolation
from, or as a substitute to, financial measures calculated in accordance with
US GAAP. Investors are cautioned that there are inherent limitations
associated with the use of each non-US GAAP financial measure. In particular,
non-US GAAP financial measures are not based on a comprehensive set of
accounting rules or principles, and many of the adjustments to the US GAAP
financial measures reflect the exclusion of items that may have a material
effect on the Company's financial results calculated in accordance with US
GAAP.
Net income to adjusted EBITDA reconciliation and
Adjusted net income reconciliation
Year ended December 31,
2025 2024
US$ 000 US$ 000
Adjusted EBITDA reconciliation
Net income 10,220 18,604
Tax provision 4,981 5,195
Interest expense 55 53
Interest income (433) (354)
Foreign exchange impact (793) 918
Other (88) (139)
Depreciation 2,081 1,688
Amortization 142 142
Non-cash lease expense 379 334
Stock-based compensation 931 1,226
Adjusted EBITDA 17,475 27,667
Adjusted net income reconciliation
Net income 10,220 18,604
Amortization 142 142
Valuation allowance on deferred tax assets 857 -
Tax impact of stock option & RSU settlements (149) (156)
Adjusted net income reconciliation 11,070 18,590
Notes:
1. Adjusted EBITDA and Adjusted net income are not measurements of the
Company's financial performance under US GAAP and should not be considered as
an alternative to net income, operating income or any other performance
measures derived in accordance with US GAAP or as an alternative to US GAAP
cash flow from operating activities as a measure of profitability or
liquidity. Adjusted EBITDA and Adjusted net income are presented herein
because management believes they are useful analytical tools for measuring the
profitability and cash generation of the business. Adjusted EBITDA is also
used to determine pricing and covenant compliance under the Company's credit
facility and as a measurement for calculation of management incentive
compensation. The Company understands that although Adjusted EBITDA is
frequently used by securities analysts, lenders, and others in their
evaluation of companies, its calculation of Adjusted EBITDA may not be
comparable to other similarly titled measures reported by other companies.
2. Adjusted EBITDA as used herein is a calculation of the Company's net income
plus tax provision, interest expense, interest income, foreign exchange gain
(loss), other expense, depreciation, amortization, stock-based compensation,
and non-cash lease expense.
3. Adjusted net income as used herein is a calculation of net income plus
amortization of intangibles and excluding the tax impact of stock option and
RSU settlements and other special items.
4. The Company uses non-US GAAP financial measures in order to provide
supplemental information regarding the Company's operating performance. The
non-US GAAP financial measures presented herein should not be considered in
isolation from, or as a substitute to, financial measures calculated in
accordance with US GAAP. Investors are cautioned that there are inherent
limitations associated with the use of each non-US GAAP financial measure. In
particular, non-US GAAP financial measures are not based on a comprehensive
set of accounting rules or principles, and many of the adjustments to the US
GAAP financial measures reflect the exclusion of items that may have a
material effect on the Company's financial results calculated in accordance
with US GAAP.
Revenues
The Company's consolidated revenues decreased by 19% to approximately US$
88.9m (2024: US$ 109.2m). The Company's revenues consist primarily of sales
from Boomed Screed products, which include the S-28EZ, S22-EZ, S-15R, S-15EZ,
SRS-6, SRS-4, and SRS-4e Laser Screed machines, sales from Ride-on Screed
products, which are drive through the concrete machines that include the
S-485, S-940, S940e, Hammerhead, and S-158C Laser Screed machines,
remanufactured machines sales, 3-D Profiler Systems, parts and service, and
other revenues which consist of revenue from sales of other equipment,
training and shipping charges.
Boomed Screed sales decreased to approximately US$ 34.8m (2024: US$ 43.1m),
Ride-on Screed sales decreased to approximately US$ 16.1m (2024: US$ 20.3m),
remanufactured machine sales decreased to approximately US$ 5.8m (2024: US$
7.1m), 3-D Profiler System sales decreased to approximately US$ 7.0m (2024:
US$ 9.6m) all decreases due as unit volume declines. Parts and service
revenue decreased to approximately US$ 17.0m (2024: US$19.1m) declining to a
lesser extent aided by the addition of the Belgium sales and service center.
All other revenues decreased to approximately US$ 8.3 (2024: US$ 10.0m) with
declines across most products.
Sales to customers located in North America contributed 77% of total revenue
(2024: 75%), sales to customers in Europe contributed 10% (2024: 14%), sales
to customers in Australia contributed 6% (2024: 6%) and sales to customers in
ROW (Latin America, India, China, Middle East, Korea and Southeast Asia)
contributed 7% (2024: 5%%).
Sales in North America totaled approximately US$ 68.1m (2024: US$ 82.2m) down
17%, primarily driven by a decrease in Boomed Screeds, Ride-on Screeds and 3-D
Profiler Systems. Sales in Europe were approximately US$ 8.9m (2024: US$
14.6m) down 39%, driven mostly by a decrease in Boomed Screeds and Ride-on
Screeds. Sales in Australia were approximately US$ 5.6m (2024: US$ 6.6m) down
15%, driven mostly by a decrease in Ride-on Screeds. Sales to customers in
ROW were approximately US$ 6.3m (2024: US$ 5.8m), increasing by 9% driven by
an increase in Boomed Screeds sold in the Middle East.
Gross profit
Gross profit decreased to approximately US$ 46.2m (2024: US$ 58.8m), with
gross margins decreasing to 52% compared to 54% in 2024, reflecting higher
input and logistical costs, lower volume scale and unabsorbed overhead, partly
offset by a price increase.
Operating expenses
Operating expenses excluding depreciation, amortization and stock-based
compensation for 2025 were approximately US$ 29.8m (2024: US$ 32.1m), which is
primarily reflective of lower headcount, variable incentive compensation,
partly offset by CEO onboarding and related expenses, and lapsing of a bad
debt reversal in the prior year.
Debt
As of December 31, 2025, the Company had no outstanding debt. In August
2022, the Company updated its credit facility to a US$ 25.0m secured revolving
line of credit, with a maturity date of August 2027. The interest rate on
the revolving credit line is based on the BSBY Index plus 1.25%. The
Company's credit facility is secured by substantially all of its business
assets.
Provision for income taxes
The provision for income taxes decreased to approximately US$ 5.0m, at an
overall effective tax rate of 33%, compared to a provision of approximately
US$ 5.2m in 2024, at an overall effective tax rate of 22%. The increase in
overall effective tax rate is due to a valuation allowance placed on foreign
deferred tax assets.
Earnings per share
Basic earnings per share represents income available to common stockholders
divided by the weighted average number of shares outstanding during the
period. Diluted earnings per share reflect additional common shares that
would have been outstanding if dilutive potential common shares had been
issued, as well as any adjustments to income that would result from the
assumed issuance. Potential common shares that may be issued by the Company
relate to outstanding restricted stock units.
Earnings per common share has been computed based on the following:
Year ended December 31,
2025 2024
US$ 000 US$ 000
Income available to stockholders 10,220 18,604
Basic weighted shares outstanding 54,604,352 55,126,730
Net dilutive effect of restricted stock units 818,232 632,703
Diluted weighted average shares outstanding 55,422,584 55,759,433
Per Share Per Share
US$ US$
Basic earnings per share 0.19 0.34
Diluted earnings per share 0.18 0.33
Basic adjusted net income per share 0.20 0.34
Diluted adjusted net income per share 0.20 0.33
Consolidated Balance Sheets
As of December 31, 2025 and December 31, 2024
As of December 31,
2025 2024
US$ 000 US$ 000
Assets
Current assets:
Cash and cash equivalents 33,164 29,486
Accounts receivable - net of allowance for credit losses of US$ 803 in 2025 6,978 9,251
and US$ 1,194 in 2024
Inventories - net 21,016 18,816
Prepaid expenses and other current assets 2,210 2,576
Income tax receivable 1,078 1,286
Total current assets 64,446 61,415
Accounts receivable, non-current - net 693 567
Property, plant, and equipment - net 25,477 26,763
Financing lease right-of-use assets - net 928 546
Operating lease right-of-use assets - net 1,998 2,224
Intangible assets - net 836 978
Goodwill 3,294 3,294
Deferred tax asset - 1,982
Other assets 258 347
Total assets 97,930 98,116
Liabilities and stockholders' equity
Current liabilities:
Accounts payable 6,765 3,544
Accrued expenses 5,319 7,409
Financing lease liability - current 292 229
Operating lease liability - current 356 332
Total current liabilities 12,732 11,514
Financing lease liability - long-term 523 247
Operating lease liability - long-term 1,710 1,967
Deferred tax liability 506 -
Other liabilities 47 87
Total liabilities 15,518 13,815
Stockholders' equity
Preferred stock, US$.001 par value, 50,000,000 shares authorized, no shares - -
issued and outstanding
Common stock, US$.001 par value, 80,000,000 shares authorized, 54,257,375 and 26 26
54,908,160 shares issued on December 31, 2025 and December 31, 2024,
respectively, and 54,065,489 and 54,908,160 shares outstanding on December 31,
2025 and December 31, 2024, respectively
Less: treasury stock, 191,886 shares as of December 31, 2025 and 0 shares as (589) -
of December 31, 2024 at cost
Additional paid in capital 9,386 10,947
Retained earnings 76,253 75,334
Other comprehensive loss (2,664) (2,006)
Total stockholders' equity 82,412 84,301
Total liabilities and stockholders' equity 97,930 98,116
See Notes to audited consolidated financial statements.
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2025 and 2024
As of December 31,
2025 2024
US$ 000 US$ 000
Except per share data Except per share data
Revenue 88,857 109,154
Cost of sales 42,661 50,350
Gross profit 46,196 58,804
Operating expenses
Sales, marketing, and customer support 13,376 14,723
Engineering and product development 2,080 2,691
General and administrative 16,798 17,113
Total operating expenses 32,254 34,527
Operating income 13,942 24,277
Other income (expense)
Interest expense (55) (53)
Interest income 433 354
Foreign exchange impact 793 (918)
Other 88 139
Income before income taxes 15,201 23,799
Provision for income taxes 4,981 5,195
Net income 10,220 18,604
Other comprehensive income
Cumulative translation adjustment (658) 323
Comprehensive income 9,562 18,927
Earnings per common share
Earnings per share - basic 0.19 0.34
Earnings per share - diluted 0.18 0.33
Weighted average number of common shares outstanding
Basic 54,604,352 55,126,730
Diluted 55,422,584 55,759,433
See Notes to audited consolidated financial statements.
Consolidated Statements of Changes in Stockholders' Equity
For the years ended December 31, 2025 and 2024
Common stock Treasury stock Other
Retained earnings Comprehensive
US$ 000 loss
US$ 000
Additional Total
paid-in Stockholders'
capital equity
US$ 000 US$ 000
Shares Amount Amount
US$ 000 Shares US$ 000
Balance - December 31, 2023 55,550,697 26 13,253 51,329 (213) 72,498 (2,329) 83,235
Cumulative translation adjustment - - - - - - 323 323
Net income - - - - - 18,604 - 18,604
Stock-based compensation - - 1,225 - - - - 1,225
Dividend - - - - - (15,768) - (15,768)
Cancellation of treasury stock (660,247) - (2,817) (660,247) 2,817 - - -
RSUs settled for cash - - (714) - - - - (714)
Share buy-back - - - 608,918 (2,604) - - (2,604)
New shares issued 17,710 - - - - - - -
Balance - December 31, 2024 54,908,160 26 10,947 - - 75,334 (2,006) 84,301
Cumulative translation adjustment - - - - - - (658) (658)
Net income - - - - - 10,220 - 10,220
Stock-based compensation - - 931 - - - - 931
Dividend - - - - - (9,301) - (9,301)
Cancellation of treasury stock (664,899) - (2,038) (664,899) 2,038 - - -
RSUs settled for cash - - (454) - - - - (454)
Share buyback - - - 856,785 (2,627) - - (2,627)
New shares issued 14,114 - - - - - - -
Balance - December 31, 2025 54,257,375 26 9,386 191,886 (589) 76,253 (2,664) 82,412
See Notes to audited consolidated financial statements.
Consolidated Statements of Cash Flows
For the years ended December 31, 2025 and 2024
Year ended December 31,
2025 2024
US$ 000 US$ 000
Cash flows from operating activities:
Net income 10,220 18,604
Adjustments to reconcile net income to net cash provided by operating
activities:
Deferred taxes 2,488 (308)
Depreciation and amortization 2,223 1,830
Non-cash lease expense 379 334
Provision for credit recoveries (234) (633)
Stock-based compensation 931 1,225
Gain on sale of property and equipment - (74)
Working capital changes:
Accounts receivable 2,381 81
Inventories (2,200) 559
Prepaid expenses and other current assets 366 (188)
Other assets 89 (106)
Accounts payable, accrued expenses and other liabilities 956 (312)
Income tax payable (receivable) 208 (3,385)
Net cash provided by operating activities 17,807 17,627
Cash flows from investing activities:
Property, plant, and equipment purchases (795) (2,449)
Net cash used in investing activities (795) (2,449)
Cash flows from financing activities:
Payment of dividend (9,301) (15,768)
RSUs settled for cash (454) (714)
Payments under financing leases (294) (240)
Share buy back (2,627) (2,604)
Net cash used in financing activities (12,676) (19,326)
Effect of exchange rates on cash and cash equivalents (658) 323
Net increase (decrease) in cash and cash equivalents 3,678 (3,825)
Cash and cash equivalents:
Beginning of period 29,486 33,311
End of period 33,164 29,486
See Notes to audited consolidated financial statements.
Notes to the Consolidated Financial Statements
As of December 31, 2025 and 2024
1. Organization and description of business
Nature of business
Somero Enterprises, Inc. (the "Company" or "Somero") designs, assembles,
remanufactures, sells, and distributes concrete leveling, contouring, and
placing equipment, related parts and accessories, and training services
worldwide. Somero's Operations and Support Offices are located in Michigan,
USA with Global Headquarters and Training Facilities in Florida, USA. Sales
and service offices are in Chesterfield, England; Kampenhout, Belgium;
Melbourne, Australia and New Delhi, India.
2. Summary of significant accounting policies
Basis of presentation
The consolidated financial statements of the Company have been prepared in
accordance with accounting principles generally accepted in the United States
of America ("U.S. GAAP").
Principles of consolidation
The consolidated financial statements include the accounts of Somero
Enterprises, Inc., and its subsidiaries. All significant intercompany
transactions and accounts have been eliminated in consolidation.
Use of estimates
The preparation of the consolidated financial statements in conformity with
U.S. GAAP requires management to make estimates and assumptions that affect
the amounts reported in the consolidated financial statements and accompanying
notes. Actual results could differ from those estimates.
Cash and cash equivalents
Cash includes cash on hand, cash in banks, and temporary investments with a
maturity of three months or less when purchased. The Company maintains
deposits in a number of financial institutions globally, which may at times
exceed amounts covered by insurance provided by the U.S. Federal Deposit
Insurance Corporation ("FDIC"). The Company has not experienced any losses
related to amounts in excess of FDIC limits.
Restricted Cash
Restricted cash of approximately US$ 333,000 and US$ 320,000 is included in
"Cash and cash equivalents" on the consolidated balance sheets as of December
31, 2025 and December 31, 2024. This represents cash deposited by the Company
into a guaranteed deposit account and designated as collateral for the
building lease in Australia and Belgium, in accordance with the lease
agreement.
Accounts receivable and allowances for credit losses
Financial instruments which potentially subject the Company to concentration
of credit risk consist primarily of accounts receivable. The Company's
accounts receivable are derived from revenue earned from a diverse group of
customers. The Company performs credit evaluations of its commercial customers
and maintains an allowance for credit losses based upon the expected ability
to collect accounts receivable. Allowances, if necessary, are established
for amounts determined to be uncollectible based on specific identification
and historical experience. As of December 31, 2025 and December 31, 2024,
the allowance for credit losses was approximately US$ 803,000 and US$
1,194,000, respectively. Provision for credit recoveries for the years ended
December 31, 2025 and 2024, was approximately US$ 234,000 and US$ 633,000,
respectively. The opening balance of accounts receivable on January 1, 2024
was US$ 9,266,000, which includes US$ 431,000 of non-current accounts
receivable.
Inventories
Inventories are stated using the first in, first out ("FIFO") method, at the
lower of cost or net realizable value ("NRV"). Provision for potentially
obsolete or slow-moving inventory is made based on management's analysis of
inventory levels and future sales forecasts. As of December 31, 2025 and
December 31, 2024, the provision for obsolete and slow-moving inventory was
approximately US$ 1,887,000 and US$ 1,163,000, respectively.
Intangible assets and goodwill
Intangible assets consist primarily of customer relationships, trademarks, and
patents, and are carried at their fair value when acquired, less accumulated
amortization. Intangible assets are amortized using the straight-line method
over a period of three to twelve years, which is their estimated period of
economic benefit.
Goodwill is not amortized but is subject to impairment tests on an annual
basis, and the Company has chosen December 31 as its periodic assessment
date. Goodwill represents the excess cost of the business combination over
the Company's interest in the fair value of the identifiable assets and
liabilities. Goodwill arose from the Company's prior sale from Dover
Corporation to The Gores Group in 2005 and the purchase of the Line Dragon,
LLC business assets in January 2019. The Company did not incur a goodwill
impairment loss for the periods ended December 31, 2025 nor December 31, 2024.
Revenue recognition
The Company generates revenue by selling equipment, parts, accessories,
service agreements and training. The Company recognizes revenue for equipment,
parts, and accessories when it satisfies the performance obligation of
transferring the control to the customer. For product sales where shipping
terms are FOB shipping point, revenue is recognized upon shipment. For
arrangements which include FOB destination shipping terms, revenue is
recognized upon delivery to the customer. The Company recognizes the revenue
for service agreements and training once the service or training has occurred.
As of December 31, 2025 and December 31, 2024, there were approximately US$
467,000 and US$ 520,000, respectively, of extended service agreement
liabilities. The opening balance of extended service agreement liabilities on
January 1, 2024 was US$ 600,000. During the years ended December 31, 2025 and
2024, approximately US$ 438,000 and US$ 489,000 respectively, of revenue was
recognized related to the amounts recorded as liabilities on the consolidated
balance sheets in the prior year (deferred contract revenue).
As of December 31, 2025 and December 31, 2024, there were approximately US$
3,561,000 and US$ 505,000, respectively, in customer deposit liabilities for
advance payments received during the period for contracts expected to ship
following the end of the period. The opening balance of customer deposit
liabilities for advance payments received on January 1, 2024 was US$
1,635,000. As of December 31, 2025 and December 31, 2024, there are no
significant contract costs such as sales commissions or costs deferred.
Interest income on financing arrangements is recognized as interest accrues,
using the effective interest method.
Warranty liability
The Company provides warranties on all equipment sales ranging from 60 days to
three years, depending on the product. Warranty liabilities are estimated
net of the warranty passed through to the Company from vendors, based on
specific identification of issues and historical experience.
US$ 000
Balance, January 1, 2024 (1,290)
Warranty charges 497
Accruals (394)
Balance, December 31, 2024 (1,187)
Balance, January 1, 2025 (1,187)
Warranty charges 343
Accruals (431)
Balance, December 31, 2025 (1,275)
Property, plant, and equipment
Property, plant, and equipment is stated at cost, net of accumulated
depreciation and amortization. Land is not depreciated. Depreciation is
computed using the straight-line method over the estimated useful lives of the
assets, which is 31.5 to 40 years for buildings (depending on the nature of
the building), 15 years for improvements, and 3 to 10 years for machinery and
equipment.
Income taxes
The Company determines income taxes using the asset and liability approach.
Tax laws require items to be included in tax filings at different times than
the items are reflected in the consolidated financial statements. Deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to temporary differences between the consolidated financial
statement carrying amounts of existing assets and liabilities and their
respective tax basis and operating loss and tax credit carry forwards.
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. Deferred tax assets are reduced
by a valuation allowance, if necessary, to the extent that it appears more
likely than not that such assets will be unrecoverable.
The Company evaluates tax positions that have been taken or are expected to be
taken in its tax returns and records a liability for uncertain tax
positions. This involves a two-step approach to recognizing and measuring
uncertain tax positions. First, tax positions are recognized if the weight
of available evidence indicates that it is more likely than not that the
position will be sustained upon examination, including resolution of related
appeals or litigation processes, if any. Second, the tax position is measured
as the largest amount of tax benefit that has a greater than 50% likelihood of
being realized upon settlement.
Stock-based compensation
The Company recognizes the cost of employee services received in exchange for
an award of equity instruments in the consolidated financial statements over
the period the employee is required to perform the services in exchange for
the award (presumptively the vesting period). The Company measures the cost
of employee services in exchange for an award based on the grant-date fair
value of the award. Compensation related to stock-based payments was
approximately US$ 931,000 and US$ 1,225,000 for the year ended December 31,
2025 and 2024, respectively. In addition, the Company settled approximately
US$ 454,000 and US$ 714,000 in restricted stock units for cash during the year
ended December 31, 2025 and 2024, respectively.
Transactions in and translation of foreign currency
The functional currency for the Company's subsidiaries outside the United
States is the applicable local currency. The preparation of the consolidated
financial statements requires the translation of these financial statements to
USD. Balance sheet amounts are translated at period-end exchange rates and
the statement of comprehensive income accounts are translated at average
rates. The resulting gains or losses are charged directly to accumulated
other comprehensive income. The Company is also exposed to market risks
related to fluctuations in foreign exchange rates because some sales
transactions, and some assets and liabilities of its foreign subsidiaries, are
denominated in foreign currencies other than the designated functional
currency. Gains and losses from transactions are included as foreign
exchange impact in the accompanying consolidated statements of comprehensive
income.
Comprehensive income
Comprehensive income is the combination of reported net income and other
comprehensive income ("OCI"). OCI is changes in equity of a business
enterprise during a period from transactions and other events and
circumstances from non-owner sources not included in net income.
Earnings per share
Basic earnings per share represents income available to common stockholders
divided by the weighted average number of common shares outstanding during the
year. Diluted earnings per share reflect additional common shares that would
have been outstanding if dilutive potential common shares had been issued
using the treasury stock method.
Potential common shares that may be issued by the Company relate to
outstanding restricted stock units. Earnings per common share have been
computed based on the following:
Year ended December 31,
2025 2024
US$ 000 US$ 000
Net income 10,220 18,604
Basic weighted shares outstanding 54,604,352 55,126,730
Net dilutive effect of restricted stock units 818,232 632,702
Diluted weighted average shares outstanding 55,422,584 55,759,432
Fair value
The carrying values of cash and cash equivalents, accounts receivable,
accounts payable, and other current assets and liabilities approximate fair
value because of the short-term nature of these instruments.
New accounting pronouncements
In December 2023, the FASB issued ASU 2023-09
(https://www.fasb.org/page/ShowPdf?path=ASU%202023-09.pdf&title=ACCOUNTING%20STANDARDS%20UPDATE%202023-09%E2%80%94Income%20Taxes%20(Topic%20740):%20Improvements%20to%20Income%20Tax%20Disclosures)
, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures". This
update enhances the transparency of income tax disclosures by requiring
consistent categories and greater disaggregation of information in the rate
reconciliation, as well as disaggregation of income taxes paid by
jurisdiction. The Company adopted this guidance for the year ended December
31, 2025 on a prospective basis. The adoption of this ASU resulted in
increased disaggregation in our rate reconciliation table, particularly
regarding state and foreign tax effects, but did not have a material impact on
the Company's consolidated financial statements.
3. Inventories
Inventories consisted of the following: December 31, 2025 December 31, 2024
US$ 000 US$ 000
Raw material 11,081 10,229
Finished goods and work in process 6,118 5,974
Remanufactured 3,817 2,613
Total 21,016 18,816
4. Goodwill and intangible assets
Goodwill represents the excess of the cost of a business combination over the
fair value of the net assets acquired. The Company is required to test
goodwill for impairment at the reporting unit level annually and when events
or circumstances indicate the fair value of a unit may be below its carrying
value. The following table reflects other intangible assets:
Weighted average December 31, 2025 December 31, 2024
Amortization Period US$ 000 US$ 000
Capitalized cost Patents 12 years 19,247 19,247
Intangible Assets 7,434 7,434
26,681 26,681
Accumulated amortization Patents 12 years 18,891 18,819
Intangible Assets 6,954 6,884
25,845 25,703
Net carrying costs Patents 12 years 356 428
Intangible Assets 480 550
836 978
Amortization expense associated with the intangible assets in each of the
years ended December 31, 2025 and 2024 was approximately US$ 142,000 and US$
142,000, respectively. The amortization expense for each of the next 5 years
will be approximately US$ 142,000 and the remaining amortization thereafter
will be approximately US$ 126,000.
5. Property, plant, and equipment
Property, plant, and equipment consist of the following:
December 31, December 31,
2025 2024
US$ 000 US$ 000
Land 864 864
Building and improvements 26,407 26,291
Machinery and equipment 10,481 9,794
37,752 36,949
Less: accumulated depreciation and amortization (12,275) (10,186)
25,477 26,763
Depreciation expense for the year ended December 31, 2025 and 2024 was
approximately US$ 2,081,000 and US$ 1,688,000, respectively.
6. Line of credit
In August 2022, the Company updated its credit facility to a US$ 25.0m secured
revolving line of credit, with a maturity date of August 2027. The interest
rate on the revolving credit line is based on the BSBY Index plus 1.25%. The
Company's credit facility is secured by substantially all its business assets.
No amounts were drawn under the secured revolving line of credit as of
December 31, 2025 and December 31, 2024.
Interest expense for the year ended December 31, 2025 and 2024 was
approximately US$ 55,000 and US$ 53,000, respectively, and relates primarily
to interest costs on leased vehicles.
7. Retirement program
The Company has a savings and retirement plan for its employees, which is
intended to qualify under Section 401(k) of the Internal Revenue Code ("IRC").
This savings and retirement plan provides for voluntary contributions by
participating employees, not to exceed maximum limits set forth by the IRC.
The Company's matching contributions vest immediately. The Company
contributed approximately US$ 990,000 and US$ 1,022,000 to the savings and
retirement plan during the year ended December 31, 2025 and 2024,
respectively.
8. Leases
The Company leases property, vehicles, and equipment under leases accounted
for as operating and finance leases. The leases have remaining lease terms of
less than 1 year to 7 years, some of which include options for renewal. The
exercise of these renewal options is at the sole discretion of the Company.
The right-of-use assets and related liabilities presented on the consolidated
balance sheets, reflect management's current expectations regarding the
exercise of renewal options. The components for lease expense were as
follows:
Year Ended Year Ended
December 31, 2025 December 31,
2024
US$ 000 US$ 000
Operating lease cost 573 688
Finance lease cost:
Amortization of right-of-use assets 309 396
Interest on lease liabilities 49 42
Total finance lease cost 358 438
As of December 31, 2025, the weighted average remaining lease term for finance
and operating leases was 2.9 years and 6.0 years, respectively, and the
weighted average discount rate was 8.2% and 6.0%, respectively. As of December
31, 2024, the weighted average remaining lease term for finance and operating
leases was 2.4 years and 6.7 years, respectively, and the weighted average
discount rate was 8.5% and 6.0%, respectively.
Maturities of lease liabilities represent the full 12 months of each
successive period as follows:
Operating Leases Finance Leases
US$ 000 US$ 000
2026 489 349
2027 489 293
2028 366 218
2029 279 59
2030 279 -
Thereafter 557 -
Total 2,459 919
Less imputed interest (393) (104)
Total
2,066
815
9. Supplemental cash flow and non-cash financing disclosures
Year ended December 31,
2025 2024
US$ 000 US$ 000
Cash paid for interest 48 69
Cash paid for taxes 2, 211 8,158
Finance lease liabilities arising from obtaining right-of-use assets 774 168
Operating lease liabilities arising from obtaining right-of-use assets - 652
10. Business and credit concentration
The Company's line of business could be significantly impacted by, among other
things, the state of the general economy, the Company's ability to continue to
protect its intellectual property rights, and the potential future growth of
competitors. Any of the foregoing may significantly affect management's
estimates and the Company's performance. On December 31, 2025 and December
31, 2024, the Company had four customers which represented 33% and three
customers that represented 19% of total accounts receivable, respectively.
11. Allowance for Credit Losses
The allowance for credit losses for accounts receivable
and the related activity as of December 31:
2025 2024
US$ 000 US$ 000
Beginning balance 1,194 1,862
Provision for credit losses - -
Write-offs (157) (35)
Recoveries (234) (633)
Ending balance 803 1,194
12. Commitments and contingencies
The Company has entered into employment agreements with certain members of
senior management. The terms of these are for renewable one-year periods and
include non-compete and non-disclosure provisions as well as provide for
defined severance payments in the event of termination or change in control.
The Company is also subject to various unresolved legal actions which arise in
the normal course of its business. Although it is not possible to predict with
certainty the outcome of these unresolved legal actions or the range of
possible losses, the Company believes these unresolved legal actions will not
have a material effect on its consolidated financial statements.
13. Income taxes
Income before income tax expense (benefit) for the year ended December 31,
2025 is as follows (in thousands):
2025
US$ 000
US income before tax 17,776
Foreign loss before tax (2,575)
Total income before tax 15,201
Significant components of the provision for income tax expense (benefit) are
as follows (in thousands):
2025 2024
US$ 000 US$ 000
Current Income Tax Expense
Federal 1,971 4,382
State 522 1,079
Foreign - 42
Total current income tax expense 2,493 5,503
Deferred Income Tax Expense (Benefit)
Federal 1,525 427
State 106 (20)
Foreign 857 (715)
Total deferred income tax expense (benefit) 2,488 (308)
Total income tax expense
4,981
5,195
As of December 2025 and 2024, the effects of temporary differences that give
rise to the deferred tax assets are as follows (in thousands):
2025 2024
Deferred tax assets: US$ 000 US$ 000
Provision for credit losses 120 109
Inventory 527 287
Accrued expenses 278 287
UK intangibles 142 142
Stock compensation 439 451
Foreign NOL 1,863 1,352
Foreign tax credit 357 357
Lease liability - 21
Capitalized research expenditures 71 1,612
Other 169 173
Gross deferred tax assets 3,966 4,791
Less: valuation allowance (2,005) (636)
Total deferred tax assets 1,961 4,155
Deferred tax liabilities:
Prepaid expenses (210) (186)
Fixed assets (1,724) (1,448)
Intangible assets (533) (526)
Right of use assets - (13)
Total deferred tax liabilities (2,467) (2,173)
Net deferred tax asset (liability) (506) 1,982
A reconciliation of the differences between the effective tax rate and the
federal statutory tax rate for the year ended December 31, 2024 is as follows
(in thousands):
2024
US$ 000
Consolidated Income Before Tax 23,799
Statutory Rate 21%
Statutory Rate Expense 4,998
State taxes 813
Foreign Taxes (314)
Permanent differences due to stock options & RSUs 38
Permanent differences due to other items 9
Foreign Derived Intangible Income (464)
Change in Valuation Allowance 182
Tax credits (197)
Other 130
5,195
A reconciliation of the differences between the effective tax rate and the
federal statutory tax rate for the year ended December 31, 2025 is as follows
(in thousands):
Amount Percent
U.S. Federal Statutory Rate 3,194 21.00%
State and Local Income Taxes, Net of Federal Income Tax Effect (a) 521 3.43%
Foreign Tax Effects:
United Kingdom
Change in Valuation Allowance 369 2.43%
Other (10) -0.06%
Belgium
Change in Valuation Allowance 396 2.60%
Other (54) -0.36%
Australia
Change in Valuation Allowance 615 4.04%
Other 92 0.61%
Italy
Other (11) -0.07%
Effects of Cross-Border Tax Laws:
Foreign Derived Intangible Income (195) -1.28%
Other 69 0.45%
Tax credits (115) -0.75%
Change in valuation allowance - 0.00%
Nontaxable or nondeductible items 127 0.84%
Changes in unrecognized tax benefit - 0.00%
Other (17) -0.11%
Effective tax rate 4,981 32.76%
(a) State taxes in Michigan, Florida, and Illinois make up the
majority (greater than 50 percent) of the effect of this category.
As of December 31, 2025, the Company has US$ 7.14 m of foreign loss
carryforwards with an indefinite carryforward life. Management assesses the
recoverability of our deferred tax assets as of the end of each quarter,
weighing all positive and negative evidence, and are required to establish and
maintain a valuation allowance for these assets if we determine that it is
more likely than not that some or all of the deferred tax assets will not be
realized. The weight given to the evidence is commensurate with the extent to
which the evidence can be objectively verified. If negative evidence exists,
positive evidence is necessary to support a conclusion that a valuation
allowance is not needed. As of December 31, 2025, management has determined
that a valuation allowance is currently needed against the Company's
Australia, Belgium, Italy, and UK deferred tax assets.
The Company files income tax returns in the U.S. federal jurisdiction and
various state jurisdictions. The Company has no open years for the tax year
2021 and forward at the end of December 31, 2025. The Company has open years
related to United Kingdom filings for the tax year 2021, and open years
related to Italian filings for tax years 2020 forward.
The Company adopted the accounting standard for uncertain tax positions, ASC
740-10, and as required by the standard, the Company recognizes the financial
statement benefit of a tax position only after determining that the relevant
tax authority would more likely than not sustain the position following an
audit. For tax positions meeting the more likely than not threshold, the
amount recognized in the consolidated financial statements is the largest
benefit that has a greater than 50 percent likelihood of being realized upon
ultimate settlement with the relevant tax authority.
Increases or decreases to the unrecognized tax benefits could result from
management's belief that a position can or cannot be sustained upon
examination based on subsequent information or potential lapse of the
applicable statute of limitation for certain tax positions.
Statement of Cash Flow Disclosure
The amounts of cash income taxes paid by the Company were as follows:
2025
Jurisdiction
Federal 1,490
State and local 465
Foreign
Belgium 208
All other foreign 74
Income taxes, net of amounts refunded 2,237
14. Revenues by geographic region and segment reporting
The Company sells its products to customers throughout the world. The
Company operates as a single reportable segment for financial reporting
purposes. While revenue is disaggregated by geography, the business in
managed and evaluated as a single operating segment by the Chief Operating
Decision Makers ("CODM"), comprised of the Executive Leadership Team- CEO,
CFO, EVP of Sales and President of Global Operations. This is because all
geographic regions provide the same types of products and services to a
similar customer base, and the CODM assesses financial performance and
allocates resources on a consolidated basis rather than by individual
geography.
In making key decisions and allocating resources, the CODM primarily evaluates
the Company's consolidated profitability, with a focus on EBITDA, as this
metric provides a comprehensive view of operational performance. Revenue by
geography is reviewed to identify trends, but profitability remains the
primary measure of performance.
The accounting policies are the same in all geographies as described in the
summary of significant accounting policies. The chief operating decision
maker assesses performance and decides how to allocate resources based on
profitability reported on the income statement.
The following table shows the breakdown by geography during the year ended
December 31, 2025 and 2024:
USD $000 North America Europe Australia ROW ((1)) Total
2025 2024 2025 2024 2025 2024 2025 2024 2025 2024
Boomed screeds ((2)) 26,246 31,374 4,092 7,171 2,740 2,738 1,711 1,803 34,789 43,085
Ride-on screeds ((3)) 11,893 13,927 1,989 3,279 591 1,513 1,626 1,622 16,099 20,341
Remanufactured machines 5,440 5,829 - 1,034 - - 321 189 5,761 7,052
3-D Profiler System 5,782 8,576 378 228 798 792 - - 6,958 9,596
Parts & Service 12,875 14,360 1,660 1,893 792 1,075 1,648 1,778 16,975 19,107
Other ((4)) 5,856 8,158 754 1,000 628 434 1,037 381 8,275 9,973
Total 68,092 82,224 8,873 14,605 5,549 6,552 6,343 5,773 88,857 109,154
1. ROW includes Latin America, India, China, Middle East, Korea, and Southeast
Asia.
2. Boomed Screeds include the S-28EZ, S-22EZ, S-15R, S-15EZ, SRS-6, SRS-4 and
SRS-4e.
3. Ride-on Screeds include the S-940, S-940e, S-485, Hammerhead, and S-158C.
4. Other includes training and freight, as well as other equipment such as the
SkyScreed, SkyStrip(®), Somero Broom + Cure(®), STS-11M Topping Spreader,
STS-11HC Topping Spreader, Copperhead, Somero Line Dragon®, Mini Screed C and
S-PS50.
15. Stock-based compensation
The Company has stock-based compensation plans which are described below. The
compensation cost that has been charged against income for the plans was
approximately US$ 931,000 and US$ 1,225,000 for the years ended December 31,
2025 and 2024, respectively. The income tax effect recognized for
stock-based compensation was US$ 0.1m and US$ 0.2m, respectively, for the
years ended December 31, 2025 and 2024.
Restricted stock units
The Company regularly issues restricted stock units to employees subject to
Board approval. The Company establishes the fair market value of the
restricted stock units at the grant date, based on the stock price and
applicable exchange rate.
A summary of restricted stock unit activity in 2025 and 2024 is presented
below:
Grant date fair market value US$
Shares
Outstanding at January 1, 2024 570,750 2,901,453
Granted 265,063 1,043,174
Vested or settled for cash (180,962) (921,711)
Forfeited (8,502) (45,000)
Outstanding at December 31, 2024 646,349 2,977,916
Grant date fair market value US$
Shares
Outstanding at January 1, 2025 646,349 2,977,916
Granted 395,032 1,287,178
Vested or settled for cash (140,898) (907,244)
Forfeited (16,730) (65,000)
Outstanding at December 31, 2025 883,753 3,292,850
RSUs settled for cash were US$ 454,000 in 2025 and US$ 714,000 in 2024.
As of December 31, 2025, there was US$ 1,240,000 total unrecognized
compensation cost related to non-vested restricted stock units. Restricted
stock unit expense is being recognized over the three-year vesting period.
The weighted average remaining vesting period is 1.25 years.
16. Employee compensation
The Board approved management bonuses and profit-sharing payments totaling US$
736,000 and US$ 1.2m, partly paid in December 2025 and 2024, respectively. The
remainder to be paid in early 2026, based upon the Company meeting certain
financial targets. Amounts not paid during 2025 are included in accrued
expenses in the accompanying consolidated balance sheets.
Equity bonus plan
The Company has an Equity Bonus Plan, under which eligible senior managers may
choose to receive a percentage of their annual performance bonus in shares of
common stock. In March 2025, the Company issued 6,906 shares of common
stock, valued at US$ 23,000 at the time of grant. In March 2024, the Company
issued 5,310 shares of common stock, valued at US$ 21,000 at the time of
grant.
17. Share buyback
In February 2025 and 2024, the Board authorized on-market share buyback
programs for such number of its listed shares of common stock as are equal to
US$ 2,000,000 for each program. The maximum price paid per common share was
no more than the higher of 105 percent of the average middle market closing
price of common share for the five business days preceding the date of the
share buyback, the price of the last independent trade and the highest current
independent purchase bid. As of December 31, 2025, the Company purchased
657,140 shares of common stock for an aggregate value of US$ 1,996,000
pursuant to the share buyback program authorized in 2025, and 199,645 shares
of common stock for an aggregate value of US$ 631,000, which completed the
share buyback program authorized in 2024. In connection with the Company's
share buyback programs authorized in 2025 and 2024, 664,899 shares held in
treasury were cancelled in 2025.
18. Subsequent events
In preparing the consolidated financial statements, the Company has evaluated
all subsequent events and transactions for potential recognition or disclosure
through March 10, 2026, the date the consolidated financial statements were
available for issuance.
Dividend
The Board approved a dividend payout ratio of 50% of adjusted net income and
is pleased to announce a final 2025 dividend of 6.24 US cents per share that
will be payable on May 8, 2026 to shareholders on the register at April 10,
2026. Together with the interim dividend paid in October 2025 of 4.00 US
cents per share, this represents a full year regular dividend to shareholders
of 10.24 US cents per share.
Distribution amount: $0.0624 cents per share
Ex-dividend date: 9 April 2026
Dividend record date: 10 April 2026
Final day for currency election: 24 April 2026
Payment date: 8 May 2026
Equity bonus plan
In February 2026, the Board approved the 2025 Equity Bonus Plan, under which
eligible senior managers can elect to receive up to 100% of their 2025 annual
performance bonus in shares of common stock. The Company expects to issue
shares for awards under the 2025 Equity Bonus Plan in 2026.
Share buyback
In February 2026, the Board approved a share buyback program, pursuant to
which, the Board intends to carry out an on-market buyback of such number of
its listed shares of common stock as are equal to US$ 4,000,000. The purpose
of the program is to mitigate future dilution resulting from share issuances
under the Company's equity award programs and fund opportunistic share
repurchases. The Company estimates that the program will be fulfilled by the
end of 2026.
Other Unaudited Information
Dividend
All dividends, have the option of being paid in either GBP or USD subject to
the underlying agreements between shareholders and their brokers which Somero
cannot override. Payments in USD can be paid by Check or through CREST.
Payments in GBP can be paid via Check, CREST and BACS. The default option if
no election is made will be for a USD payment via check. Should shareholders
wish to change their current currency or payment methods, forms are available
through Computhershare Investor Services PLC at
https://www-uk.computershare.com/Investor/Content/c057a8a7-f4f8-4fcb-a497-836ce2f708d5
(https://www-uk.computershare.com/Investor/Content/c057a8a7-f4f8-4fcb-a497-836ce2f708d5)
.
If shares are held as Depositary Interests through a broker or nominee, the
holding company must be contacted and advised of the payment preferences.
Such requests are subject to the terms and conditions of the broker or
nominee.
Additional information on currency election and tax withholding can be found
at: https://investors.somero.com/aim-rule-26
(https://investors.somero.com/aim-rule-26) . Shareholders can also contact
Computershare Investor Services PLC by telephone at +44 (0370) 702 0000 or
email via webcorres@computershare.co.uk (mailto:webcorres@computershare.co.uk)
.
Annual General Meeting
The Annual General Meeting of Stockholders (the "AGM") of the Company will be
held 46980 State Hwy M26
Atlantic Mine, Michigan 49905 USA on June 17, 2026 at 9:00 am local time.
The notice of the AGM shall be released with the Annual Report and shall
include instructions for remote participation. Stockholders of record at the
close of business on April 21, 2026 will be entitled to receive notice of, and
vote at, the AGM.
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