LEGATO(LGTO) - 2023 Q2 - Quarterly Report

Financial Performance - Total revenue for Q2 2023 was $256,927,000, a decrease of 5.4$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$65.6 million, a decrease of $9.3 million, or 12.4$191.4 million, a decrease of $6.8 million, or 3.4$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$290.7 million, an increase of $55.4 million, or 23.6$33.8 million, a decrease of $71.5 million, or 189.6$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$2,697,510, down from $2,973,886 at the end of 2022, reflecting a decrease of approximately 9.2$2,044,980 as of June 30, 2023, from $2,213,723 at the end of 2022, a decline of about 7.6$652,530 as of June 30, 2023, from $760,163 at the end of 2022, representing a decline of approximately 14.2$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]