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Southland (SLND) - 2024 Q4 - Earnings Call Transcript
SLNDSouthland (SLND)2025-03-06 01:26
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Financial Data and Key Metrics Changes - Fourth quarter revenue was 267million,down267 million, down 49 million from Q4 2023, with a gross profit of 8million,downfrom8 million, down from 21 million in the same period last year [27][30] - Full-year revenue for 2024 was 980million,adecreasefrom2023,withagrossprofitofnegative980 million, a decrease from 2023, with a gross profit of negative 63 million compared to positive 36millionin2023[33][39]−Thecompanyreportedanetlossof36 million in 2023 [33][39] - The company reported a net loss of 4 million or negative 0.09pershareinQ42024,comparedtoanetlossof0.09 per share in Q4 2024, compared to a net loss of 6 million or negative 0.12pershareinQ42023[30]BusinessLineDataandKeyMetricsChanges−TheCivilsegmenthadrevenuesof0.12 per share in Q4 2023 [30] Business Line Data and Key Metrics Changes - The Civil segment had revenues of 104 million in Q4 2024, a decrease of 4millionfromQ42023,withagrossprofitof4 million from Q4 2023, with a gross profit of 8 million, down from 25million[31]−TheTransportationsegmentreportedrevenuesof25 million [31] - The Transportation segment reported revenues of 163 million in Q4 2024, down from 208millioninQ42023,withagrosslossof208 million in Q4 2023, with a gross loss of 0.4 million, an improvement from a gross loss of 3millioninthepreviousyear[31]−Forthefullyear,theCivilsegmenthadrevenuesof3 million in the previous year [31] - For the full year, the Civil segment had revenues of 323 million, down 14millionfrom2023,whiletheTransportationsegmenthadrevenuesof14 million from 2023, while the Transportation segment had revenues of 657 million, a decrease of approximately 166million[38][39]MarketDataandKeyMetricsChanges−ThecompanyendedQ42024withabacklogofapproximately166 million [38][39] Market Data and Key Metrics Changes - The company ended Q4 2024 with a backlog of approximately 2.57 billion, with 750millioninpendingalternativedeliverycontractsnotincludedinbacklog[15][41]−TheongoingcapitalinfusionfromtheInfrastructureInvestmentandJobsActisexpectedtoprovideafavorabletailwindforthebusiness,particularlyinTexasandFlorida,whichareleadingininfrastructureinvestment[19][20]CompanyStrategyandDevelopmentDirection−Thecompanyaimstoexecutecoreprojectswithprecision,winddownlegacywork,andstrengthenitspositionincoremarkets[25][24]−Thefocusisonmaintainingadisciplinedapproachtoprojectselectionanddrivingsustainableprofitabilityoverthelongterm[24][25]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceintheabilitytocapitalizeonopportunitiesanddrivelong−termsuccess,withexpectationsforpositiveEBITDAbytheendof2025[54][55]−Thedemandincoremarketsremainsrobust,drivenbyongoinginfrastructureneedsandstrongpublicandprivatesectorinvestments[21][19]OtherImportantInformation−Thecompanyconverted750 million in pending alternative delivery contracts not included in backlog [15][41] - The ongoing capital infusion from the Infrastructure Investment and Jobs Act is expected to provide a favorable tailwind for the business, particularly in Texas and Florida, which are leading in infrastructure investment [19][20] Company Strategy and Development Direction - The company aims to execute core projects with precision, wind down legacy work, and strengthen its position in core markets [25][24] - The focus is on maintaining a disciplined approach to project selection and driving sustainable profitability over the long term [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to capitalize on opportunities and drive long-term success, with expectations for positive EBITDA by the end of 2025 [54][55] - The demand in core markets remains robust, driven by ongoing infrastructure needs and strong public and private sector investments [21][19] Other Important Information - The company converted 20 million of certain promissory notes to common stock, reinforcing confidence in the business and improving the balance sheet [23] - The company expects to burn approximately 39% of its backlog in 2025 [41] Q&A Session Summary Question: How does the company see the book and burn work trending in 2025? - Management noted a lower than one book-to-burn ratio in Q4 but is excited about the $100 million in new awards and expects a back-weighted cadence for new awards in 2025 [48][50] Question: Will the company have positive EBITDA in 2025? - Management expects to return to positive EBITDA numbers by the end of 2025, with a stronger finish anticipated [54][55] Question: What is the expectation for cash flow in 2025? - Management expects strong cash flow from operations in 2025, with seasonality weighted towards the back half of the year [78] Question: Are there concerns about federal funding for projects? - Management remains optimistic about the pipeline and opportunities, expecting to win a fair share of projects despite potential funding concerns [84][86] Question: How is the company positioned regarding tariffs and supply chain disruptions? - The company primarily procures made-in-America materials, minimizing exposure to tariffs, and does not expect material impacts from supply chain disruptions [91][92]