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, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 1100 Kubota Dr. Grapevine, TX 76051 (Address of principal executive offices) (Zip Code) EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41090 Southland Holdings ...

Exhibit 99.1 Southland Announces Second Quarter 2025 Results GRAPEVINE, Texas, August 12, 2025 -- 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, 2025. "We continue to be encouraged by the sustained margin improvement in our core business resulting from our disciplined approach to bidding and operations," said Frank Renda, Southland's President & ...

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]

Financial Performance - Total revenue for Q2 2024 was $251.5 million, a decrease of 2.2% compared to $256.9 million in Q2 2023[19] - Gross loss for Q2 2024 was $40.0 million, compared to a gross loss of $33.8 million in Q2 2023, indicating a worsening of 18.5%[19] - Net loss attributable to Southland stockholders for Q2 2024 was $46.1 million, significantly higher than the net loss of $12.8 million in Q2 2023[19] - The company reported a comprehensive loss of $46.1 million for Q2 2024, compared to a comprehensive loss of $10.6 million in Q2 2023[22] - For the six months ended June 30, 2024, Southland Holdings reported a net loss of $44,830,000, compared to a net loss of $16,167,000 for the same period in 2023, indicating a significant increase in losses[26] - 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 same period in 2023[147] - 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 same period in 2023[155] Assets and Liabilities - Total assets increased to $1.26 billion as of June 30, 2024, up from $1.20 billion at the end of 2023, reflecting a growth of 5.2%[17] - Current liabilities rose to $770.2 million as of June 30, 2024, compared to $584.0 million at the end of 2023, an increase of 31.8%[17] - Long-term debt decreased to $173.2 million as of June 30, 2024, down from $251.9 million at the end of 2023, a reduction of 31.1%[17] - As of June 30, 2024, total debt was $308.2 million, an increase from $300.9 million as of December 31, 2023[79] - As of June 30, 2024, total long-term debt was $307.8 million, with $134.5 million due within the next twelve months[190] Cash Flow - Cash flows from operating activities for the six months ended June 30, 2024, provided $17,534,000, contrasting with cash used in operating activities of $10,636,000 in the prior year[26] - Net cash provided by operating activities was $17.5 million for the six months ended June 30, 2024, compared to a net cash used of $(10.6) million in the same period in 2023[186] - Net cash used in financing activities was $15.1 million for the six months ended June 30, 2024, primarily due to $36.9 million in payments on notes payable[189] Segment Performance - Civil segment revenue increased to $79.4 million (31.6% of total revenue) for the three months ended June 30, 2024, compared to $65.6 million (25.5% of total revenue) in 2023[77] - Transportation segment revenue decreased to $172.1 million (68.4% of total revenue) for the three months ended June 30, 2024, from $191.4 million (74.5% of total revenue) in 2023[77] - Gross profit for the Civil segment was $9.2 million (11.5% of segment revenue) for the three months ended June 30, 2024, compared to $5.9 million (9.0% of segment revenue) in 2023[78] - The Transportation segment reported a gross loss of $49.2 million for the three months ended June 30, 2024, compared to a gross loss of $39.7 million in 2023[78] - Civil segment revenue increased by $25.1 million, or 18.1%, to $163.6 million, driven by projects in the Southwest, Colorado, and Texas[167] - Transportation segment revenue decreased by $17.2 million, or 4.4%, to $376.0 million, primarily due to declines in the M&P line and a street maintenance project in Texas[170] Equity and Stock - Southland's total equity as of June 30, 2024, was $215,550,000, a decrease from $262,866,000 as of June 30, 2023[26] - The company issued 3,448,283 shares of common stock to Southland Members for achieving the 2022 Base Target, while no shares were issued for 2023 performance targets[60] - The company has $4.3 million of unrecognized compensation cost related to stock-based compensation, which will be recognized over a remaining weighted-average period of 2.3 years[121] - As of June 30, 2024, the total outstanding Restricted Stock Units (RSUs) was 679,371 shares, with a weighted-average grant-date fair value of $5.31 per RSU[118] Debt and Financing - The weighted average interest rate on total debt increased to 7.01% as of June 30, 2024, from 6.12% as of December 31, 2023[79] - The company made borrowings of $24,678,000 on notes payable during the six months ended June 30, 2024, compared to $248,000 in the same period of 2023[26] - The net cash used in financing activities for the six months ended June 30, 2024, was $15,098,000, compared to $9,651,000 in the prior year[26] - The revolving credit facility was amended in August 2024, reducing the limit to $84.5 million and requiring a permanent principal reduction payment of $10.0 million by September 15, 2024[192] Operational Changes - Southland Holdings discontinued certain projects in its Materials & Paving business line, focusing resources on more profitable areas, although this did not qualify for Discontinued Operations treatment[32] - The company has identified new opportunities for growth in both its Civil and Transportation segments, with a positive outlook for future infrastructure projects[134] - The company has seen an increase in demand for specialty construction projects, driven by federal, state, and local infrastructure spending initiatives[137] Tax and Claims - The effective tax rate for Southland was 26.0% for the three months ended June 30, 2024, down from 61.0% for the same period in 2023[101] - Southland recorded $328.6 million related to claims as of June 30, 2024, an increase from $306.4 million as of December 31, 2023[107] - The CityLYNX Project has resulted in claims exceeding $115 million, with mediation scheduled for August 15, 2024[95] Miscellaneous - The company plans to adopt ASU 2023-05 in Q1 2025, which is expected to have no material impact on consolidated financial statements[49] - The company has not identified any triggering events for impairment assessments of long-lived assets during the reporting periods[46] - The company maintains cash in accounts exceeding federally insured limits, with no significant credit risk experienced[41]

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].