Financial Performance - Revenue for Q1 2025 was $239,486,000, a decrease of 16.9% compared to $288,097,000 in Q1 2024[18] - Gross profit increased to $21,480,000, up 5.2% from $20,421,000 in the same period last year[18] - Net loss attributable to Southland Stockholders was $4,552,000, compared to a loss of $406,000 in Q1 2024[18] - Basic net loss per share attributable to common stockholders was $(0.08), compared to $(0.01) in Q1 2024[18] - Comprehensive loss attributable to Southland Stockholders was $4,881,000, compared to a loss of $778,000 in Q1 2024[19] - For the three months ended March 31, 2025, Southland Holdings reported a net loss of $2.786 million compared to a net income of $0.525 million for the same period in 2024[25] - EBITDA for Q1 2025 was $10.08 million, down from $10.95 million in Q1 2024[169] - Basic and diluted net loss per share for the three months ended March 31, 2025, is $(0.08), compared to $(0.01) for the same period in 2024[130] Assets and Liabilities - Total current assets as of March 31, 2025, were $884,954,000, slightly up from $881,652,000 as of December 31, 2024[17] - Total liabilities increased to $1,030,271,000 from $1,028,240,000 at the end of 2024[17] - Cash and cash equivalents decreased to $65,052,000 from $72,185,000 at the end of 2024[17] - Total stockholders' equity decreased to $159,130,000 from $163,658,000 as of December 31, 2024[17] - Long-term debt as of March 31, 2025, was $241,309,000, down from $255,625,000 as of December 31, 2024[79] - Total debt as of March 31, 2025, was $288.1 million, with $46.8 million due within the next twelve months[179] Revenue Segmentation - Civil segment revenue increased to $102.916 million, accounting for 43.0% of total revenue, compared to $84.273 million or 29.3% in the prior year[76] - Transportation segment revenue decreased to $136.570 million, representing 57.0% of total revenue, down from $203.824 million or 70.7% in the same period of 2024[76] - Revenue earned outside of the United States was 15% for the three months ended March 31, 2025, down from 26% in the same period of 2024[78] Costs and Expenses - Total cost of construction for the three months ended March 31, 2025, was $218.006 million, down from $267.676 million in the same period of 2024, a decrease of approximately 18.5%[77] - Selling, general, and administrative expenses for the three months ended March 31, 2025, were $16.5 million, an increase of $2.1 million, or 14.4%, compared to the same period in 2024[155] - Interest expense for the three months ended March 31, 2025, was $8.9 million, an increase of $3.2 million, or 56.9%, compared to the same period in 2024[156] Cash Flow - Net cash provided by operating activities was $6.429 million, a significant improvement from a net cash used of $9.897 million in the prior year[25] - Total cash, cash equivalents, and restricted cash at the end of the period was $81.116 million, down from $87.561 million at the beginning of the period[43] Contractual Obligations - As of March 31, 2025, the Company has $2.5 billion in Remaining Unsatisfied Performance Obligations (RUPO), expecting to recognize approximately 40% as revenue in the next twelve months[114] - Contract assets as of March 31, 2025, total $493.9 million, with costs incurred on uncompleted contracts amounting to $7.7 billion[115] - The Company recorded $487.3 million related to Unresolved Contract Modifications as of March 31, 2025[116] Backlog and Future Outlook - Total contract backlog as of March 31, 2025, was $2.47 billion, down from $2.57 billion at the end of 2024[170] - Civil segment backlog increased to $976.34 million as of March 31, 2025, from $961.21 million at the end of 2024[171] - Transportation segment backlog decreased to $1.49 billion as of March 31, 2025, from $1.61 billion at the end of 2024[171] - The company anticipates further spending on infrastructure related to economic stimulus initiatives, including the Infrastructure Investment and Jobs Act passed in 2021[141] - The company has identified new opportunities in both the Civil and Transportation segments, with a positive outlook for future projects despite existing risks and uncertainties[138] Compliance and Governance - The Company was in compliance with all applicable financial covenants under the Credit Agreement as of March 31, 2025[188] - There were no changes in internal control over financial reporting that materially affected the Company during the fiscal quarter ended March 31, 2025[197] - The Company’s management confirmed the effectiveness of disclosure controls and procedures as of the end of the reporting period[196] - No additional risk factors were identified, and there were no material changes to previously disclosed risk factors as of the fiscal year ended December 31, 2024[201]

Financial Performance - Revenue for Q1 2025 was $239.5 million, a decrease of $48.6 million, or 16.9%, compared to $288.1 million in Q1 2024[6] - Gross profit for Q1 2025 was $21.5 million, with a gross profit margin of 9.0%, up from 7.1% in Q1 2024[7] - Net loss attributable to stockholders was $4.6 million, or $(0.08) per share, compared to a net loss of $0.4 million, or $(0.01) per share in Q1 2024[3] - EBITDA for Q1 2025 was $10.1 million, down from $10.9 million in Q1 2024[11] - Net income for the three months ended March 31, 2025, was a loss of $2,786,000 compared to a profit of $525,000 for the same period in 2024[17] Revenue Breakdown - Civil segment revenue increased to $102.9 million, representing 43.0% of total revenue, while Transportation segment revenue decreased to $136.6 million, representing 57.0%[9] - The Materials & Paving business contributed $18.1 million to revenue in Q1 2025[6] Expenses and Costs - Selling, general, and administrative expenses increased by $2.1 million, or 14.4%, to $16.5 million in Q1 2025[8] - Interest expense rose to $8.9 million in Q1 2025, compared to $5.7 million in Q1 2024[11] - Total depreciation and amortization increased to $6,525,000 from $5,577,000 year-over-year, indicating higher asset utilization[17] - Cash paid for interest rose to $8,934,000, up from $5,527,000, reflecting increased borrowing costs[17] Cash Flow and Assets - Operating cash flow improved to a net cash provided of $6,429,000, a significant recovery from a net cash used of $9,897,000 in the prior year[17] - The company reported a net decrease in cash and cash equivalents of $6,445,000, compared to a decrease of $17,303,000 in the previous year[17] - Cash flows from investing activities showed a net cash provided of $1,117,000, contrasting with a net cash used of $432,000 in the prior year[17] - Total current assets as of March 31, 2025, were $884.9 million, slightly up from $881.7 million at the end of 2024[14] - Accounts receivable increased significantly by $8,565,000, while contract assets decreased by $10,684,000, indicating changes in revenue recognition[17] - The company had a beginning cash balance of $87,561,000 and ended the period with $81,116,000[17] Company Overview and Future Outlook - Southland is a leading provider of specialized infrastructure construction services, with a strong presence in North America[19] - The company will host a conference call on May 14, 2025, to discuss financial results and future outlook[18] Backlog Information - The backlog as of March 31, 2025, was $2.47 billion, reflecting a decrease from $2.57 billion at the end of 2024[12]

Financial Performance - The company recognized contract revenue of $1,150,716,000 in 2023, with a projection of $980,179,000 for 2024[46]. - Revenue for the year ended December 31, 2024, was $980.2 million, a decrease of $180.2 million, or 15.5%, compared to 2023[211]. - Cost of construction for the year ended December 31, 2024, was $1,043.2 million, a decrease of $81.4 million, or 7.2%, compared to 2023[212]. - Gross loss for the year ended December 31, 2024, was $63.0 million, an increase of $98.9 million, or 276.0%, compared to 2023[213]. - Selling, general, and administrative costs for the year ended December 31, 2024, were $63.3 million, a decrease of $3.9 million, or 5.8%, compared to 2023[214]. - Other income, net for the year ended December 31, 2024, was $3.6 million, a decrease of $19.9 million, or 84.6%, compared to 2023[215]. - Interest expense for the year ended December 31, 2024, was $29.5 million, an increase of $10.0 million, or 51.6%, compared to 2023[216]. - Income tax benefit for the year ended December 31, 2024, was $46.9 million, with an effective tax rate of 30.8%[217]. - Civil segment revenue for the year ended December 31, 2024, was $323.3 million, a decrease of $14.2 million, or 4.2%, compared to 2023[222]. - Gross profit in the Civil segment for the year ended December 31, 2024, was $16.7 million, or 5.2% of segment revenue, compared to $51.7 million, or 15.3% of segment revenue, for 2023[223]. - Transportation segment revenue for the year ended December 31, 2024, was $656.9 million, a decrease of $166.0 million compared to 2023[211]. Operational Challenges - Southland's operations are impacted by supply chain disruptions, particularly in the prices of oil, gas, and construction materials[48]. - Labor costs have increased due to inflation and shortages, making hiring and retaining skilled workers a priority[50]. - The company is exposed to risks related to government contracts, including potential penalties for late completion and the impact of budgetary changes on demand for services[83]. - The company’s backlog is subject to unexpected adjustments and cancellations, which could materially affect revenue and profits[81]. - The company may face significant adverse effects if it loses business from key customers, particularly government entities[82]. - Revenue is significantly influenced by project-based work awarded through competitive bidding, making it difficult to predict project timing and geographic distribution[87]. - Economic conditions, including recessions and low oil prices, can adversely affect customer budgets for capital expenditures, impacting demand for services[88]. - A substantial portion of revenue is generated from construction projects, which are subject to cyclical fluctuations due to economic downturns and material shortages[89]. - Adverse credit market conditions could impair the company's and its customers' borrowing capacity, negatively affecting operations and project execution[90]. - The company is exposed to risks of delays and cost overruns in complex projects, which could lead to reduced profits or losses[91]. - Supply chain disruptions may negatively impact the ability to complete projects, affecting overall operational efficiency[98]. - Weather conditions can significantly affect revenue and profitability, causing project delays and additional costs[100]. - Climate change-related events pose long-term risks that could disrupt operations and increase costs for both the company and its customers[101]. - Labor shortages in skilled personnel may increase operating costs and impair the company's ability to maintain productivity and support growth[102]. - The company operates in high-risk locations, incurring substantial security costs to maintain safety, which is critical to its reputation and performance[106]. Compliance and Regulatory Risks - The company is subject to various procurement regulations, including the Davis-Bacon Act and the Walsh-Healy Act, which may impose additional costs on operations[62]. - The company is committed to compliance with the Foreign Corrupt Practices Act, which prohibits improper payments to foreign officials[63]. - The company faces risks related to compliance with regulations, which could lead to termination of government contracts and adversely affect financial position and cash flows[86]. - Changes in laws and regulations may increase compliance costs and risks, potentially leading to fines and operational limitations[113]. - Violations of anti-bribery laws could result in significant penalties and damage to reputation, adversely affecting business operations[115]. - The company may face material lawsuits or claims that could divert management attention and adversely affect cash flows and reputation[116]. Cybersecurity and Technology - The company's cybersecurity program is governed by the IT Director, who has 20 years of experience and is a Certified Secure Infrastructure Specialist[177]. - The company maintains cybersecurity risk insurance and conducts regular vulnerability audits, reporting results to senior management[176]. - The company employs a Risk Assessment Score based on NIST standards to manage cybersecurity risks across all platforms[173]. - Cybersecurity risks, including data breaches, could lead to significant operational disruptions and financial losses[117]. Strategic Focus and Future Outlook - In Q2 2023, Southland discontinued certain projects in its Materials & Paving business line, focusing on more profitable areas[26]. - The company has identified a positive future outlook for its Civil and Transportation segments, with ongoing identification of new opportunities for growth[193]. - The company anticipates increased demand for specialty construction projects due to federal, state, and local infrastructure spending initiatives[196]. - The company emphasizes selective bidding on projects that align with profitability objectives and market opportunities[35]. - The company aims for a mix of large-scale and small-scale projects to mitigate risks associated with specific customers or projects[35]. Workforce and Employment - As of December 31, 2024, the company had approximately 2,100 employees, with 500 salaried and 1,600 hourly[65]. - Approximately 14% of the workforce, or about 300 employees, were represented by a union as of December 31, 2024[66]. - The company emphasizes a diverse and inclusive workplace, with policies against discrimination based on various protected classes[67]. - The company has a commitment to workplace safety, tracking key safety metrics that are reviewed monthly by senior management[70]. - The company provides competitive compensation and benefits packages, including a 401(k) match plan and healthcare benefits[72]. Financial Structure and Market Risks - The company does not intend to pay dividends for the foreseeable future, relying solely on appreciation in the value of its securities for returns[161]. - The company may issue additional equity securities in the future, which could dilute earnings per share and stockholders' percentage ownership[171]. - The company is classified as a "controlled company," which may allow it to take advantage of exemptions from certain corporate governance requirements under NYSE rules[162]. - The trading price of the company's securities is likely to be volatile, influenced by various factors including market conditions and operational performance[153]. - If the company's securities are delisted from NYSE, they may be quoted on an over-the-counter market, leading to reduced liquidity and increased volatility[151]. - Future sales or perceived future sales by the company or stockholders could cause the market price of its securities to decline[157]. - The company's actual operating and financial results may differ from guidance provided to the public, potentially affecting trading prices[160]. - The Initial Stockholders and Southland Members are not subject to contractual restrictions regarding the transfer of their shares, which could impact the market price of the company's Common Stock[158].

Financial Performance - Revenue for Q4 2024 was $267.3 million, a decrease of 15.5% compared to $316.2 million in Q4 2023[5] - Gross profit for Q4 2024 was $7.7 million, down from $21.1 million in Q4 2023, resulting in a gross margin decrease from 6.7% to 2.9%[10] - Net loss attributable to stockholders for Q4 2024 was $4.2 million, or $(0.09) per share, compared to a net loss of $5.6 million, or $(0.12) per share in Q4 2023[5] - Full year 2024 revenue was $980.2 million, a decrease of 15.5% from $1.2 billion in 2023[14] - Full year 2024 gross loss was $63.0 million, compared to a gross profit of $35.8 million in 2023, with a gross margin decline from 3.1% to (6.4)%[15] - Net loss attributable to stockholders for the full year 2024 was $105.4 million, or $(2.19) per share, compared to a net loss of $19.3 million, or $(0.41) per share in 2023[13] - Adjusted EBITDA for Q4 2024 was $(2.7) million, compared to $9.1 million in Q4 2023[20] - Adjusted net loss attributable to common stockholders for Q4 2024 was $4,155,000, compared to $5,563,000 in Q4 2023, reflecting a 25.2% improvement[22] - The diluted loss per share attributable to common stock for the year ended December 31, 2024, was $2.19, compared to $0.41 for the year ended December 31, 2023[22] Backlog and Business Segments - The backlog as of December 31, 2024, was $2.57 billion, down from $2.83 billion at the end of 2023[21] - The Materials & Paving business contributed $35.6 million to revenue in Q4 2024 and $100.6 million for the full year 2024[9][14] Expenses and Cash Flow - Selling, general, and administrative expenses for Q4 2024 were $15.7 million, a decrease of 21.2% compared to $19.9 million in Q4 2023[11] - Net cash provided by operating activities for the year ended December 31, 2024, was $1,927,000, a significant recovery from a net cash used of $10,264,000 in 2023[29] - The company reported a net loss of $105,528,000 for the year ended December 31, 2024, compared to a net loss of $18,715,000 for the previous year[29] Assets and Liabilities - Total current assets decreased to $881,652,000 as of December 31, 2024, from $942,536,000 as of December 31, 2023, representing a decline of 6.5%[26] - Cash and cash equivalents increased to $72,185,000 as of December 31, 2024, from $49,176,000 as of December 31, 2023, marking a 46.8% increase[26] - Total liabilities rose to $1,028,240,000 as of December 31, 2024, compared to $940,504,000 as of December 31, 2023, indicating a 9.3% increase[26] - Total stockholders' equity decreased to $175,409,000 as of December 31, 2024, from $260,564,000 as of December 31, 2023, reflecting a decline of 32.7%[26] - The company had a total of 53,936,411 shares issued and outstanding as of December 31, 2024, compared to 47,891,984 shares as of December 31, 2023, representing an increase of 12.6%[26] Cash Management - The company experienced a net increase in cash and cash equivalents and restricted cash of $23,741,000 for the year ended December 31, 2024, compared to a decrease of $8,171,000 in 2023[29] - Southland reported cash paid for income taxes of $1,561 and cash paid for interest of $28,047, compared to $7,587 and $18,277 respectively in the previous period[30] - The company obtained lease assets in exchange for new leases valued at $18,718, an increase from $13,875[30] - Assets obtained in exchange for notes payable amounted to $27,365, up from $10,884[30] - Southland's related party payable exchanged for notes payable was $3,797, indicating a change from the previous period[30] - The company issued post-merger earnouts shares valued at $35,000[30] Future Outlook and Company Information - Southland's conference call is scheduled for March 5, 2025, at 10:00 a.m. Eastern Time[31] - The company emphasizes the importance of non-GAAP financial measures, including Adjusted EBITDA, to provide insights into financial trends[34] - Southland is a leading provider of specialized infrastructure construction services, with a history dating back to 1900[32] - The company operates in various sectors, including bridges, tunneling, and water treatment, making it one of the largest infrastructure construction companies in North America[32] - Forward-looking statements indicate that actual results may differ materially from projections due to inherent uncertainties and risks[36]

Financial Performance - Revenue for Q3 2024 was $173.32 million, a decrease of 44.6% compared to $312.47 million in Q3 2023[19] - Gross loss for Q3 2024 was $51.11 million, compared to a gross profit of $29.53 million in Q3 2023[19] - Net loss attributable to Southland stockholders for Q3 2024 was $54.73 million, compared to a net income of $3.80 million in Q3 2023[19] - Operating loss for Q3 2024 was $68.60 million, compared to an operating income of $14.28 million in Q3 2023[19] - Comprehensive loss for Q3 2024 was $57.89 million, compared to a comprehensive income of $2.82 million in Q3 2023[20] - Basic net loss per share for Q3 2024 was $(1.14), compared to a basic net income per share of $0.08 in Q3 2023[19] - For the nine months ended September 30, 2023, Southland Holdings reported a net loss of $11,376,000, compared to a net loss of $102,959,000 for the same period in 2024, indicating a significant increase in losses year-over-year[28] - Revenue for the nine months ended September 30, 2024, was $712.9 million, a decrease of $131.3 million, or 15.6%, compared to the same period in 2023[163] - Gross loss for the nine months ended September 30, 2024, was $70.7 million, an increase of $85.4 million, or 581.7%, compared to the same period in 2023[165] - The net loss attributable to common stockholders for the three months ended September 30, 2024, was $54.727 million, compared to a net income of $3.800 million for the same period in 2023, reflecting a significant decline[134] - For the nine months ended September 30, 2024, the net loss attributable to common stockholders was $101.210 million, compared to a loss of $13.690 million for the same period in 2023, indicating a substantial increase in losses[134] Assets and Liabilities - Total current assets decreased to $883.92 million as of September 30, 2024, from $942.54 million as of December 31, 2023[17] - Total liabilities increased to $1.03 billion as of September 30, 2024, compared to $940.50 million as of December 31, 2023[17] - Total stockholders' equity decreased to $149.06 million as of September 30, 2024, from $249.62 million as of December 31, 2023[17] - Cash and cash equivalents increased to $91.38 million as of September 30, 2024, from $49.18 million as of December 31, 2023[17] - The total cash and cash equivalents at the end of the period increased to $106,748,000 as of September 30, 2024, up from $46,752,000 in 2023, demonstrating improved liquidity[28] - The company reported a loss on extinguishment of debt of $28,379,000 in 2024, while there was no such loss reported in 2023, indicating increased financial restructuring efforts[28] - The company entered into a $160.0 million term loan facility on September 30, 2024, to replace the previous revolving credit facility[86] - Total debt as of September 30, 2024, was $318.3 million, with $43.1 million due within the next twelve months[200] Cash Flow and Financing Activities - Cash flows from operating activities showed a net cash used of $36,588,000 for the nine months ended September 30, 2023, while in 2024, the company generated $12,242,000 in cash from operating activities, indicating a turnaround in cash flow management[28] - Net cash provided by operating activities was $12.2 million for the nine months ended September 30, 2024, compared to a net cash used of $36.6 million for the same period in 2023[196][197] - Net cash provided by investing activities was $2.3 million for the nine months ended September 30, 2024, driven by $4.5 million in proceeds from the sale of property and equipment[198] - Net cash provided by financing activities was $28.4 million for the nine months ended September 30, 2024, primarily from $167.8 million in borrowings on notes payable[199] Segment Performance - Civil segment revenue was $55.85 million (32.2% of total) for the three months ended September 30, 2024, compared to $90.71 million (29.0% of total) in 2023[82] - Transportation segment revenue was $117.47 million (67.8% of total) for the three months ended September 30, 2024, down from $221.76 million (71.0% of total) in 2023[82] - Revenue from the Transportation segment for the three months ended September 30, 2024, was $117.5 million, a decrease of $104.3 million, or 47.0%, compared to the same period in 2023[175] - Civil segment backlog increased to $990.7 million, while Transportation segment backlog decreased to $1.7 billion as of September 30, 2024[191] Operational Changes and Strategic Initiatives - The company has decided to discontinue certain types of projects in its Materials & Paving business line, focusing resources on more profitable lines of business, which is expected to enhance overall profitability[34] - Southland Holdings completed a merger with Legato II, which was accounted for as a reverse recapitalization, allowing the company to expand its operational capabilities and market presence[36] - The company anticipates further spending on infrastructure projects due to economic stimulus initiatives, including the Infrastructure Investment and Jobs Act passed in 2021[145] - The company has seen an increase in demand for specialty construction projects at federal, state, and local levels, positioning itself favorably for future growth[145] Compliance and Regulatory Matters - The company plans to adopt ASU 2023-05 in the first quarter of 2025, which is expected to have no material impact on consolidated financial statements[53] - The SEC's new climate-related disclosure rules will apply to the company's financial statements beginning with the fiscal year ending December 31, 2025[58] - The company is in compliance with all financial covenants under the Credit Agreement as of September 30, 2024[208] Miscellaneous - The company issued 33,793,111 shares of common stock to former members of Southland, resulting in net proceeds of $17.1 million, with transaction costs of $9.9 million included in additional paid-in capital[61] - The company has not identified any triggering events for impairment assessments of long-lived assets during the three and nine months ended September 30, 2024[48] - A valuation allowance of $2.6 million was recorded against net deferred tax assets due to financial losses in Canadian operations during the three months ended September 30, 2024[114] - The company maintained a Liquidity of at least $20.0 million at all times, with a requirement to comply with TTM EBITDA Covenants when Liquidity falls below $30.0 million[91]

Financial Performance - Revenue for the quarter ended September 30, 2024, was $173.3 million, a decrease of $139.2 million, or 44.5%, compared to $312.5 million for the same quarter in 2023[5] - Gross loss for the quarter ended September 30, 2024, was $51.1 million, compared to a gross profit of $29.5 million for the same quarter in 2023, resulting in a gross margin decrease from 9.5% to (29.5)%[7] - Net loss attributable to stockholders for the quarter ended September 30, 2024, was $54.7 million, or $(1.14) per share, compared to a net income of $3.8 million, or $0.08 per share, for the same quarter in 2023[5] - EBITDA for the quarter ended September 30, 2024, was $(58.7) million, compared to $22.3 million for the same quarter in 2023[5] - For the nine months ended September 30, 2024, revenue was $712.9 million, a decrease of $131.3 million, or 15.6%, compared to $844.2 million for the same period in 2023[11] - Gross loss for the nine months ended September 30, 2024, was $70.7 million, compared to a gross profit of $14.7 million for the same period in 2023, with a gross margin decrease from 1.7% to (9.9)%[12] - Net loss attributable to stockholders for the nine months ended September 30, 2024, was $101.2 million, or $(2.11) per share, compared to a net loss of $13.7 million, or $(0.29) per share, for the same period in 2023[10] - The company reported a net loss of $102,959 thousand for the nine months ended September 30, 2024, compared to a loss of $11,376 thousand for the same period in 2023[23] Expenses and Liabilities - Selling, general, and administrative expenses for the quarter ended September 30, 2024, were $17.5 million, an increase of $2.2 million, or 14.7%, compared to the same quarter in 2023[8] - The total liabilities as of September 30, 2024, were $1,028,760 thousand, compared to $940,504 thousand as of December 31, 2023[21] - Cash paid for interest was $18.886 million, compared to $12.704 million[24] - Lease assets obtained in exchange for new leases totaled $9.881 million, up from $8.529 million[24] - Related party payables changed for notes payable amounted to $3.797 million[24] - No dividends were financed with notes payable, remaining at $0[24] Cash Flow and Assets - Total current assets as of September 30, 2024, were $883,922 thousand, a decrease from $942,536 thousand as of December 31, 2023[21] - Cash and cash equivalents increased to $91,378 thousand as of September 30, 2024, from $49,176 thousand as of December 31, 2023[21] - The net cash provided by operating activities for the nine months ended September 30, 2024, was $12,242 thousand, compared to net cash used of $(36,588) thousand for the same period in 2023[23] - The company had a net cash increase of $42,928 thousand for the nine months ended September 30, 2024, compared to a decrease of $(25,239) thousand for the same period in 2023[23] - The total stockholders' equity decreased to $149,064 thousand as of September 30, 2024, from $249,622 thousand as of December 31, 2023[21] Business Overview - Southland is a leading provider of specialized infrastructure construction services, with a history dating back to 1900[26] - The company operates in various sectors including bridges, tunneling, communications, and water treatment[26] Forward-Looking Statements - Southland's non-GAAP financial measures provide insights into financial trends and should not be considered in isolation[28] - Forward-looking statements are subject to uncertainties and risks that may affect actual results[30] - The company has no obligation to publicly update any forward-looking statements made[31] - Southland's conference call is scheduled for November 13, 2024, at 10:00 a.m. Eastern Time[25] Impact of Specific Business Segments - The Materials & Paving business negatively impacted gross loss by $18.3 million for the quarter and $75.4 million for the nine months ended September 30, 2024[7][12] Adjusted Financial Metrics - The adjusted net loss attributable to common stockholders for the nine months ended September 30, 2024, was $101,210 thousand, compared to a loss of $33,096 thousand for the same period in 2023[18] - The diluted income (loss) per share attributable to common stock for the three months ended September 30, 2024, was $(1.14), compared to $0.08 for the same period in 2023[18] - For the three months ended September 30, 2024, the net loss attributable to common stock was $54,727 thousand, compared to a net income of $3,800 thousand for the same period in 2023[18]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41090 Southland Holdings, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdicti ...

Financial Performance - Revenue for the year ended December 31, 2023, was $1,160.4 million, a decrease of $1.0 million, or 0.1%, compared to 2022, primarily due to a $33.2 million decrease in the Transportation segment[202]. - Total revenue for the year ended December 31, 2023, was $1,160.4 million, a slight decrease from $1,161.4 million in 2022[221]. - Gross profit for the year ended December 31, 2023, was $35.8 million, a significant decrease from $140.9 million in 2022[201]. - Operating loss for the year ended December 31, 2023, was $(31.4) million, compared to an operating income of $82.7 million in 2022[201]. - Net loss attributable to Southland Stockholders for the year ended December 31, 2023, was $(19.3) million, compared to net income of $60.5 million in 2022[201]. - Selling, general, and administrative costs for the year ended December 31, 2023, were $67.2 million, an increase of $9.0 million, or 15.4%, compared to 2022[209]. - Interest expense for the year ended December 31, 2023, was $19.5 million, an increase of $10.6 million, or 119.0%, compared to 2022[214]. - Other income, net for the year ended December 31, 2023, was $23.6 million, an increase of $21.4 million, or 969.9%, compared to 2022[212]. - Income tax benefit for the year ended December 31, 2023, was $8.5 million, with an effective rate of 31.3%[217]. - Gross profit for the year ended December 31, 2023, was $35.8 million, a decrease of $105.1 million, or 74.6%, compared to 2022[207]. Project and Contract Management - As of December 31, 2023, Southland's contract backlog stands at $2,834,966,000, down from $2,973,885,000 in 2022[45]. - The gross backlog for Southland as of December 31, 2023, was $3,985,682,000, reflecting new contracts and adjustments of $1,011,797,000[45]. - Approximately 8.5% of Southland's backlog as of December 31, 2023, was in the Materials & Paving segment, which is expected to be substantially completed in the next 18 months[200]. - The company’s backlog is subject to unexpected adjustments and cancellations, which could materially affect revenue and profits[82]. Operational Challenges - The company has faced increased project costs due to supply chain disruptions and rising prices of oil, gas, and construction materials[47]. - The construction industry has experienced widespread supply chain impacts due to COVID-19 and geopolitical events, affecting labor costs and availability[49]. - Weather conditions can significantly impact revenue and profitability, causing project delays and additional costs[99]. - Climate change-related events pose long-term risks to the company's operations, potentially leading to increased costs and project cancellations[100]. - Labor shortages in skilled positions may increase operating costs and hinder the company's ability to maintain productivity and profitability[102]. - Supply chain interruptions may negatively affect the company's ability to complete projects, as sourcing materials from suppliers can be disrupted[97]. - The company faces risks associated with project delays and cost overruns, which may not be recoverable and could materially impact profits[91]. Workforce and Employment - As of December 31, 2023, the company had approximately 2,500 employees, with 600 salaried and 1,900 hourly[64]. - About 20% of the workforce, or approximately 500 employees, were represented by a union[65]. - The company emphasizes a diverse and inclusive workplace, with policies against discrimination based on various factors[67]. - The company has a commitment to workplace safety, tracking key safety metrics that are reviewed monthly by senior management[69]. - The company offers a competitive compensation and benefits package, including a 401(k) Match Plan and healthcare benefits[71]. Regulatory and Compliance Risks - The company is subject to various regulations, including the Foreign Corrupt Practices Act, which could expose it to significant penalties for non-compliance[62]. - Changes in laws and regulations may increase compliance costs and could adversely affect business operations and financial results[110]. - Violations of anti-bribery laws could result in significant penalties and damage to reputation, impacting business operations[111]. - The company may face material lawsuits or claims that could divert management attention and adversely affect cash flows[112]. Market and Economic Conditions - The company is vulnerable to cyclical market conditions, with demand for services affected by economic factors such as recessions, low oil prices, and political uncertainties[88]. - Economic downturns can lead to delays or cancellations of construction projects, adversely impacting revenue and profit generation[89]. - Adverse credit and financial market conditions may impair the company's and its customers' borrowing capacity, potentially leading to contract cancellations and project delays[90]. - A substantial portion of the company's revenue is derived from project-based work, making it difficult to predict project timing and geographic distribution, which can lead to cash flow unpredictability[87]. Strategic Focus and Business Model - Southland's business model emphasizes self-performance, allowing better cost management and minimizing reliance on third-party providers[34]. - The company targets a mix of large-scale and small-scale projects to mitigate risks associated with specific customers or projects[34]. - Southland maintains a strong balance sheet and bonding capacity, enabling it to target large contract work and limit competition[34]. Cybersecurity and Technology - The company employs risk management strategies based on NIST standards to mitigate cybersecurity risks[164]. - The cybersecurity operations are overseen by the IT Director, who has 20 years of experience and communicates regularly with the CFO[168]. - The company maintains cybersecurity risk insurance and conducts regular vulnerability audits[167]. Financial Strategy and Shareholder Returns - The company does not intend to pay dividends for the foreseeable future, relying on stock appreciation for returns[79]. - The company has not paid any cash dividends on its Common Stock to date and does not anticipate doing so in the foreseeable future[177]. - The company is classified as an "emerging growth company," which may affect the attractiveness of its common stock to investors due to reduced disclosure requirements[139]. - The company may face delisting from NYSE, which could limit trading and subject it to additional restrictions[142]. - If delisted, the company's securities may only be quoted on an over-the-counter market, leading to significant adverse consequences[143]. - The trading price of the company's securities is likely to be volatile, influenced by market conditions rather than operational performance[144]. - The company is classified as a "controlled company," which may allow it to take advantage of exemptions from certain corporate governance requirements[155].

Financial Performance - Total revenue for Q3 2023 was $312,472,000, a decrease of 6.9% compared to $335,125,000 in Q3 2022[16] - Gross profit for Q3 2023 was $29,529,000, down from $62,410,000 in Q3 2022, representing a decline of 52.7%[16] - Net income for Q3 2023 was $4,791,000, a significant decrease from $36,123,000 in Q3 2022, reflecting a decline of 86.7%[16] - Operating income for Q3 2023 was $14,282,000, down from $46,804,000 in Q3 2022, a decrease of 69.5%[16] - Comprehensive income attributable to Southland stockholders for Q3 2023 was $2,173,000, compared to $38,939,000 in Q3 2022, a decrease of 94.4%[18] - For the nine months ended September 30, 2023, Southland Holdings reported a net loss of $11,376,000 compared to a net income of $42,478,000 for the same period in 2022[25] - Net income attributable to Southland Stockholders for the three months ended September 30, 2023, was $3.8 million, while for the nine months ended, it was a net loss of $13.7 million[103] - Gross profit for the nine months ended September 30, 2023, was $14.7 million, a decrease of $90.4 million, or 86.0%, compared to the same period in 2022[141] Assets and Liabilities - Total assets increased to $1,179,954,000 as of September 30, 2023, compared to $1,125,305,000 as of December 31, 2022, marking a growth of 4.8%[15] - Total liabilities rose to $913,785,000 as of September 30, 2023, up from $765,421,000 at the end of 2022, an increase of 19.4%[15] - The company’s total stockholders' equity decreased to $266,169,000 as of September 30, 2023, from $359,884,000 at the end of 2022, a decline of 26.0%[15] - The company reported a total debt of $309.6 million as of September 30, 2023, an increase from $273.8 million as of December 31, 2022[74] - As of September 30, 2023, long-term debt was $309.1 million, with $47.8 million due within the next twelve months[176] Cash Flow and Financing - Cash and cash equivalents decreased to $32,211,000 as of September 30, 2023, down from $57,915,000 at the end of 2022, a decline of 44.3%[15] - Cash flows used in operating activities for the nine months ended September 30, 2023, were $36,588,000, an improvement from $70,936,000 in the same period of 2022[25] - The company reported a net cash provided by financing activities of $11,730,000 for the nine months ended September 30, 2023, down from $15,695,000 in the same period of 2022[25] - Cash paid for interest increased to $12,704,000 in the nine months ended September 30, 2023, compared to $6,464,000 in the prior year[25] - The company has $90 million drawn on its revolving credit facility, with $10 million available as of September 30, 2023[76] - In July 2023, the company refinanced approximately $76.4 million of existing secured notes, resulting in a new equipment note of $113.5 million at a fixed rate of 7.25%[77] Revenue Segmentation - Civil segment revenue for Q3 2023 was $90.7 million, a 27% increase from $71.4 million in Q3 2022, while Transportation segment revenue was $221.8 million, a decrease of 16% from $263.7 million in Q3 2022[72] - Revenue for the nine months ended September 30, 2023, was $844.2 million, down 2.6% from $866.6 million for the same period in 2022[72] - Gross profit for the Civil segment in Q3 2023 was $12.5 million, representing 13.7% of segment revenue, compared to $8.9 million (12.5%) in Q3 2022; Transportation segment gross profit was $17.1 million (7.7%) compared to $53.5 million (20.3%) in Q3 2022[73] - Transportation segment revenue for the nine months ended September 30, 2023, was $615.0 million, a decrease of $30.4 million, or 4.7%, compared to the same period in 2022[159] Backlog and Contracts - Backlog as of September 30, 2023, is $2,541,319, down from $2,973,886 on December 31, 2022, reflecting a decrease of approximately 14.6%[183] - New contracts, change orders, and adjustments added $412,756 to the backlog during the period[183] - Remaining Unsatisfied Performance Obligations (RUPO) as of September 30, 2023, indicate that approximately 42% is expected to be recognized as revenue in the next twelve months[95] - The company recorded contract liabilities of $184.6 million as of September 30, 2023, compared to $131.6 million as of December 31, 2022[97] Corporate Actions and Governance - Southland Holdings merged with Legato Merger Corp. II on February 14, 2023, resulting in a reverse recapitalization[31] - The company filed a merger agreement with Southland Holdings, LLC on May 25, 2022[211] - The company has amended its bylaws and certificate of incorporation as of February 14, 2023[211] - The company has certifications from its Principal Executive Officer and Principal Financial Officer in compliance with the Sarbanes-Oxley Act[211] - Management evaluated the effectiveness of disclosure controls and procedures, determining they were effective as of the end of the reporting period[189] Market and Stock Performance - The closing price of common stock on November 9, 2023, was $5.65, significantly lower than the initial public offering price of $10.00 per unit[201] - 91.7% of shares with redemption rights were redeemed by holders, totaling 25,296,280 shares[198] - Warrants have an exercise price of $11.50, and if the market price remains below this, holders are unlikely to exercise them for cash[202]

Financial Performance - Total revenue for Q2 2023 was $256,927,000, a decrease of 5.4% compared to $273,016,000 in Q2 2022[16] - Gross loss for Q2 2023 was $33,794,000, compared to a gross profit of $37,737,000 in Q2 2022[16] - Net loss attributable to stockholders for Q2 2023 was $12,826,000, compared to a net income of $19,406,000 in Q2 2022[16] - The company reported a comprehensive loss of $10,554,000 for Q2 2023, compared to a comprehensive income of $23,308,000 in Q2 2022[20] - For the six months ended June 30, 2023, Southland Holdings reported a net loss of $16,167,000 compared to a net income of $6,355,000 for the same period in 2022[27] - Total revenue for the six months ended June 30, 2023, was $531.8 million, a slight increase of $0.3 million or 0.1% compared to $531.5 million for the same period in 2022[156] - Basic and diluted net loss per share for the three months ended June 30, 2023, was $(0.27), compared to $(0.38) for the same period in 2022[105] Assets and Liabilities - Total current assets increased to $899,485,000 as of June 30, 2023, from $867,304,000 as of December 31, 2022[15] - Total liabilities rose to $908,635,000 as of June 30, 2023, compared to $765,421,000 as of December 31, 2022[15] - Cash and cash equivalents decreased to $39,124,000 as of June 30, 2023, from $57,915,000 as of December 31, 2022[15] - Total stockholders' equity decreased to $262,866,000 as of June 30, 2023, from $359,884,000 as of December 31, 2022[15] - Long-term debt as of June 30, 2023, was $233.2 million, an increase from $227.3 million as of December 31, 2022[76] - As of June 30, 2023, the company had long-term debt of $284.5 million, with $51.3 million due within the next twelve months[179] Revenue Segmentation - Civil segment revenue was $65.6 million, accounting for 25.5% of total revenue, while Transportation segment revenue was $191.4 million, making up 74.5% of total revenue[74] - Revenue from the Civil segment for Q2 2023 was $65.6 million, a decrease of $9.3 million, or 12.4%, compared to Q2 2022[150] - Revenue from the Transportation segment for Q2 2023 was $191.4 million, a decrease of $6.8 million, or 3.4%, compared to Q2 2022[154] - Civil segment revenue decreased by $11.3 million, or 7.6%, to $138.6 million for the six months ended June 30, 2023, primarily due to decreased activity in ongoing projects[157] - Transportation segment revenue increased by $11.6 million, or 3.0%, to $393.2 million, driven by contributions from a project in the Bahamas[160] Expenses - Selling, general, and administrative expenses for Q2 2023 were $16,448,000, up from $13,490,000 in Q2 2022[16] - Interest expense for Q2 2023 was $4.3 million, an increase of $2.2 million, or 108.5%, compared to Q2 2022[137] - Cost of construction for Q2 2023 was $290.7 million, an increase of $55.4 million, or 23.6%, compared to Q2 2022[133] - Gross loss for Q2 2023 was $33.8 million, a decrease of $71.5 million, or 189.6%, compared to Q2 2022[134] - Adjusted EBITDA for the six months ended June 30, 2023, decreased to negative $29.4 million from $36.6 million in the same period in 2022, primarily due to challenges in the M&P business line[164] Cash Flow - Cash flows from operating activities resulted in a net cash used of $10,636,000, significantly improved from $81,915,000 in the prior year[27] - The end cash balance as of June 30, 2023, was $54,108,000, down from $59,486,000 at the end of June 2022[27] - Net cash used in operating activities was $10.6 million for the six months ended June 30, 2023, significantly improved from $81.9 million in the same period in 2022[176] Backlog and Future Revenue - Remaining Unsatisfied Performance Obligations (RUPO) as of June 30, 2023, totaled $2.7 billion, down from $2.973 billion as of December 31, 2022[97] - The company expects to recognize approximately 44% of its RUPOs as revenue within the next twelve months[97] - The company's backlog as of June 30, 2023, was $2,697,510, down from $2,973,886 at the end of 2022, reflecting a decrease of approximately 9.2%[188] - The transportation segment's backlog decreased to $2,044,980 as of June 30, 2023, from $2,213,723 at the end of 2022, a decline of about 7.6%[190] - The civil segment's backlog also decreased to $652,530 as of June 30, 2023, from $760,163 at the end of 2022, representing a decline of approximately 14.2%[191] Mergers and Acquisitions - The merger with Legato II was accounted for as a reverse recapitalization, with Southland as the accounting acquirer[33] - Southland Holdings provided $17,088,000 in cash from the merger with Legato II, contributing to net cash provided by financing activities of $(9,651,000) in 2023[27] - The company issued 33,793,111 shares of Common Stock to former Southland Members, resulting in net proceeds of $17.1 million[54] - The company issued 3,448,283 shares of common stock to Southland Members for attaining the 2022 Base Target as per the Merger Agreement[56] Risk and Compliance - The company has not experienced significant losses in cash accounts and does not believe it is exposed to significant credit risk[42] - As of June 30, 2023, the company had an allowance for credit losses of $1.5 million[47] - The company did not identify any triggering events for impairment assessments for long-lived assets during the three and six months ended June 30, 2023[45] - The company has not reported any changes in internal control over financial reporting that materially affected its operations during the fiscal quarter ended June 30, 2023[196]