Southland Holdings, Inc. (NYSE American: SLND and SLND WS) (“Southland”), a leading provider of specialized infrastructure construction services, today announced financial results for the quarter ended June 30, 2024.

• The Board of Directors has appointed Frank Renda as Interim Chairman of the Board.
• Revenue of $251.5 million for the quarter ended June 30, 2024, compared to $256.9 million for the quarter ended June 30, 2023.
• Gross loss of $40.0 million for the quarter ended June 30, 2024, compared to $33.8 million in gross loss for the quarter ended June 30, 2023.
• Net loss attributable to stockholders of $46.1 million, or $(0.96) per share for the quarter ended June 30, 2024, compared to a net loss attributable to stockholders of $12.8 million, or $(0.27) per share for the quarter ended June 30, 2023.
• Adjusted Net Loss attributable to stockholders of $46.1 million, or $(0.96) per share for the quarter ended June 30, 2024, compared to an Adjusted Net Loss attributable to stockholders of $35.4 million, or $(0.76) per share for the quarter ended June 30, 2023. ⁽¹⁾
• Adjusted EBITDA of $(49.9) million for the quarter ended June 30, 2024, compared to $(42.2) million for the quarter ended June 30, 2023. ⁽¹⁾
• New Awards of $374.8 million for the quarter ended June 30, 2024.
• Backlog of $2.74 billion, compared to $2.64 billion as of March 31, 2024.
• Positive cash flow from operations of $27.4 million for the quarter ended June 30, 2024.

Southland settled several contract disputes that are reflected in the second quarter 2024 income statement. These settlements resulted in approximately $58 million of cash that is expected to be collected in the third quarter 2024. As a result of these specific settlements, an approximate $40 million non-recurring charge was recorded in the second quarter. All of this non-recurring charge, related to dispute settlements, was in the Materials & Paving business.

Southland’s President & Chief Executive Officer, Frank Renda, said, “We continue to make strides in putting our legacy projects behind us and improving our balance sheet and liquidity profile. While we are disappointed about making the decision to settle for less than we believe we were owed in certain circumstances, it was the best decision for Southland’s long-term outlook. We will avoid a lengthy legal process on these disputes that could have tied up our resources for years. In addition to the $58 million of settlements, we closed on a real estate transaction that put approximately $25 million on the balance sheet in the third quarter. I’m also encouraged by the $27 million of positive cash flow from operations our teams generated in the second quarter before taking into consideration the recent dispute settlements. With the recent dispute settlements and other initiatives to strengthen our balance sheet, we are in a much stronger position today to negotiate our remaining legacy disputes and we will continue to vigorously pursue all of the money we are owed. Lastly, we had $375 million of new project awards in our core business in the quarter and continue to see strong demand across our core end markets. I remain extremely confident in our core business and the long-term outlook for Southland, despite the headwinds we face in the legacy business.”

2024 Second Quarter Results

Revenue for the three months ended June 30, 2024, was $251.5 million, a decrease of $5.4 million, or 2.1%, compared to the three months ended June 30, 2023. Materials & Paving business contributed $8.9 million to revenue in the three months ended June 30, 2024.

Gross loss for the three months ended June 30, 2024, was $40.0 million, an increase of $6.2 million, or (18.4)%, compared to gross loss of $33.8 million for the three months ended June 30, 2023. Gross loss increased to (15.9)% from (13.2)% for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. Materials & Paving business negatively impacted gross loss by $46.8 million in the three months ended June 30, 2024.

Selling, general, and administrative costs for the three months ended June 30, 2024, were $15.7 million, a decrease of $0.8 million, or 4.7%, compared to the three months ended June 30, 2023. Selling, general, and administrative costs as a percent of revenue were 6.2% for the three months ended June 30, 2024, compared to 6.4% for the three months ended June 30, 2023.

Revenue for the six months ended June 30, 2024, was $539.6 million, an increase of $7.9 million, or 1.5%, compared to the six months ended June 30, 2023. Materials & Paving business contributed $47.5 million to revenue in the six months ended June 30, 2024.

Gross loss for the six months ended June 30, 2024, was $19.6 million, an increase of $4.8 million, or (32.0)%, compared to gross loss of $14.9 million for six months ended June 30, 2023. Gross loss margin increased from (2.8)% to (3.6)% for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. Materials & Paving business negatively impacted gross loss by $57.1 million in the six months ended June 30, 2024.

Selling, general, and administrative costs for the six months ended June 30, 2024, were $30.1 million, a decrease of $1.9 million, or 6.1%, compared to the six months ended June 30, 2023. Selling, general, and administrative costs as a percent of revenue were 5.6% for the six months ended June 30, 2024, compared to 6.0% for the six months ended June 30, 2023.

Segment Revenue

Segment Gross Profit (Loss)

Adjusted EBITDA Reconciliation

Backlog

Adjusted Net Loss and Adjusted Net Loss Per Share Attributable to Common Stock Reconciliation

Conference Call

Southland will host a conference call at 10:00 a.m. Eastern Time on Tuesday, August 13, 2024. The call may be accessed here, or at www.southlandholdings.com. Following the conference call, a replay will be available on Southland’s website.

About Southland

Southland is a leading provider of specialized infrastructure construction services. With roots dating back to 1900, Southland and its subsidiaries form one of the largest infrastructure construction companies in North America, with experience throughout the world. The company serves the bridges, tunnelling, communications, transportation and facilities, marine, steel structures, water and wastewater treatment, and water pipeline end markets. Southland is headquartered in Grapevine, Texas.

For more information, please visit Southland’s website at www.southlandholdings.com.

Non-GAAP Financial Measures

This press release includes certain unaudited financial measures not presented in accordance with generally accepted accounting principles (“GAAP”), including but not limited to earnings before interest, taxes, depreciation, and amortization (“EBITDA”), adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”), backlog, adjusted net income (loss), adjusted net income (loss) per share and certain ratios and other metrics derived therefrom. Note that other companies may calculate these non-GAAP financial measures differently, and therefore such financial measures may not be directly comparable to similarly titled measures of other companies. Further, these non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. Southland believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Southland’s financial condition and results of operations. Southland also believes that these non-GAAP financial measures provide an additional tool for investors to use in evaluating ongoing operating results and trends. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which items of expense and income are excluded or included in determining these non-GAAP financial measures.

Please see the accompanying tables for reconciliations of the following non-GAAP financial measures for Southland’s current and historical results: adjusted net income (loss) per share attributable to common stock (a non-GAAP financial measure) to net income (loss) per share attributable to common stock; and adjusted net income (loss) attributable to common stock, and Adjusted EBITDA (non-GAAP financial measures) to net income (loss) attributable to common stock.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on Southland’s current beliefs, expectations and assumptions regarding the future of Southland’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of Southland’s control. Southland’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements.

Any forward-looking statement made by Southland in this press release is based only on information currently available to Southland and speaks only as of the date on which it is made. Southland undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240812194514/en/