GRAPEVINE, Texas, Nov. 21, 2022 (GLOBE NEWSWIRE) -- Southland Holdings, LLC (“Southland”) announced financial results for the quarter ended September 30, 2022.

• Revenue of $335 million, an increase of 6% compared to the quarter ended September 30, 2021
• Operating income increased 228% to $46.8 million for the three months ended September 30, 2022, compared to $14.3 million in the three months ended September 30, 2021
• Operating income increased 89% to $61.7 million for the nine months ended September 30, 2022, compared to $32.6 million in the nine months ended September 30, 2021
• EBITDA increased 143% to $59.6 million for the three months ended September 30, 2022, compared to $24.6 million in the three months ended September 30, 2021
• EBITDA increased 44% to $96.2 million for the nine months ended September 30, 2022, compared to $66.6 million in the nine months ended September 30, 2021
• Gross profit margin of 19% for the three months ended September 30, 2022, compared to 9% in the quarter ended September 30, 2021
• Gross profit margin of 12% for the nine months ended September 30, 2022, compared to 8% in the nine months ended September 30, 2021
• Backlog increased to $2.37 billion as of September 30, 2022, from $1.98 billion as of June 30, 2022
• Record new awards of $1.6 billion, year to date through the date of this press release, an increase of approximately 154% compared to the same period in the prior year. Approximately $900 million of these awards were included in backlog as of September 30, 2022
  

Frank Renda, Southland’s CEO said, “We are extremely pleased with our third quarter results and our team’s execution throughout North America. Revenue increased 6% compared to the same quarter last year, which was driven by an increase in new project starts in the quarter. We achieved record EBITDA in the quarter and our gross profit margin expanded from 8% to 12% through the first nine months of the year compared to the first nine months of last year. We continue to see an improved bidding environment and a robust project pipeline. We have been awarded $1.6 billion of new work through today’s date for the year, which is an increase of 154% compared to new awards through the same date in the prior year. Backlog increased to $2.37 billion at the end of the quarter compared to $1.98 billion last quarter as a result of strong awards.”

“As we get closer to the consummation of our merger with Legato, our strong financial performance, recent project awards, and future opportunities continue to demonstrate the positive outlook we see for Southland,” Mr. Renda continued. “The tailwinds of needed investment in critical infrastructure across the geographies we serve remain at an all-time high. Our Transportation segment was recently awarded several bridge and lock projects and our Civil segment was awarded various water pipeline and water treatment projects across the country. We look forward to not only what these projects will do for our customers, but their ability to deliver value to our shareholders.”

2022 Third Quarter Results

Condensed Consolidated Statements of Operations (unaudited)

Revenue for the three months ended September 30, 2022, was $335.1 million, an increase of $19.7 million, or 6%, compared to the three months ended September 30, 2021.

Gross profit for the three months ended September 30, 2022 was $62.4 million, an increase of $33.0 million, or 112%, compared to the three months ended September 30, 2021. Our gross profit margin increased from 9% to 19% for the three months ended September 30, 2022 compared to the three months ended September 30, 2021.

Selling, general, and administrative costs for the three months ended September 30, 2022 were $15.6 million, an increase of $0.5 million, or 3%, compared to the three months ended September 30, 2021.

Condensed Consolidated Statements of Operations (unaudited)

Revenue for the nine months ended September 30, 2022 was $866.6 million, a decrease of $48.9 million, or 5%, compared to the nine months ended September 30, 2021.

Gross profit for the nine months ended September 30, 2022, was $105.1 million, an increase of $30.5 million, or 41%, compared to the nine months ended September 30, 2021. Our gross profit margin increased from 8% to 12% for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.

Selling, general, and administrative costs for the nine months ended September 30, 2022 were $43.4 million, an increase of $1.4 million, or 3%, compared to the nine months ended September 30, 2021. Selling, general, and administrative costs as a percent of revenue were 5% for the nine months ended September 30, 2022 compared to 4.6% for the nine months ended September 30, 2021.

Segment Revenue

Segment Gross Profit

EBITDA Reconciliation

Backlog

Condensed Consolidated Balance Sheets (unaudited)

Condensed Consolidated Statement of Cash Flows (unaudited)

About Southland

Southland is a leading provider of specialized infrastructure construction services across North America including bridges, tunneling, transportation and facilities, marine, steel structures, water and wastewater treatment, and water pipeline end markets. 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. Southland is headquartered in Grapevine, Texas.

On May 25th, 2022, Southland entered into an Agreement and Plan of Merger (the “Agreement”) with publicly-traded Legato Merger Corp. II, a special purpose acquisition company (NASDAQ: LGTO, LGTOU, and LGTOW) (“Legato”). Pursuant to the terms of the Agreement, a subsidiary of Legato will merge with and into Southland, with Southland surviving the merger as a wholly-owned subsidiary of Legato. The existing Southland management team will remain in place upon the closing of the merger. At such time, Legato’s name is expected to change to Southland Holdings, Inc.

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”) 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 believes that these non-GAAP financial measures provide an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing Southland’s financial measures with those of other similar companies. 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. The non-GAAP measures may also be presented differently in the SEC filings by Legato due to SEC rules.

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.

Southland Contacts:

Cody Gallarda
EVP, Chief Financial Officer
cgallarda@southlandholdings.com

Alex Murray
Corporate Development & Investor Relations
amurray@southlandholdings.com