Southland (SLND)

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Morning Market Movers: GLXG, LAC, AIHS, RMSG See Big Swings
RTTNews· 2025-10-01 12:03
Core Insights - Premarket trading is showing notable activity with early price movements indicating potential opportunities before the market opens [1] Premarket Gainers - Galaxy Payroll Group Limited (GLXG) increased by 39% to $5.34 - Lithium Americas Corp. (LAC) rose by 31% to $7.52 - Senmiao Technology Limited (AIHS) gained 22% to $2.45 - The AES Corporation (AES) saw a 10% increase to $14.53 - Strive, Inc. (ASST) also increased by 10% to $2.77 - Shoulder Innovations, Inc. (SI) rose by 9% to $13.78 - Top KingWin Ltd (WAI) increased by 8% to $3.80 - Southland Holdings, Inc. (SLND) saw a 7% increase to $4.61 - CaliberCos Inc. (CWD) rose by 6% to $4.75 - Mannatech, Incorporated (MTEX) increased by 5% to $10.53 [3] Premarket Losers - Real Messenger Corporation (RMSG) decreased by 16% to $2.01 - Etoiles Capital Group Co., Ltd (EFTY) fell by 14% to $14.45 - Enanta Pharmaceuticals, Inc. (ENTA) dropped by 13% to $10.41 - CollPlant Biotechnologies Ltd. (CLGN) saw an 11% decrease to $2.39 - Fortress Biotech, Inc. (FBIO) declined by 10% to $3.30 - Uni-Fuels Holdings Limited (UFG) fell by 9% to $7.52 - Alset Inc. (AEI) decreased by 9% to $2.30 - JFB Construction Holdings (JFB) saw a 5% decline to $12.20 - SHF Holdings, Inc. (SHFS) dropped by 5% to $6.80 - Phio Pharmaceuticals Corp. (PHIO) decreased by 5% to $2.34 [4]
Southland Awarded Projects Totaling $130 Million
Businesswire· 2025-09-30 21:45
GRAPEVINE, Texas--(BUSINESS WIRE)--Southland Holdings, Inc. (NYSE American: SLND and SLND WS) ("Southland†) announced today it has been awarded two projects totaling approximately $130 million. This includes a bridge rehabilitation project for a private client in the Pacific Northwest through a subsidiary in its Transportation segment, American Bridge Company, and a water resource project in the City of Austin, Texas, through a subsidiary in its Civil segment, Oscar Renda Contracting. The proje. ...
Are Construction Stocks Lagging Alfa Laval (ALFVY) This Year?
ZACKS· 2025-08-20 14:41
Company Overview - Alfa Laval AB Unsponsored ADR (ALFVY) is a notable stock within the Construction group, which consists of 88 companies and is currently ranked 10 in the Zacks Sector Rank [2] - The Zacks Rank system, which focuses on earnings estimates and revisions, currently assigns ALFVY a rank of 1 (Strong Buy) [3] Performance Analysis - Over the past 90 days, the Zacks Consensus Estimate for ALFVY's full-year earnings has increased by 4.5%, indicating improved analyst sentiment [4] - Year-to-date, ALFVY has returned approximately 10%, outperforming the average gain of 9.3% for the Construction group [4] - In comparison, another Construction stock, Southland Holdings (SLND), has achieved a year-to-date return of 24.6% and has a Zacks Rank of 2 (Buy) [5] Industry Context - ALFVY is part of the Engineering - R and D Services industry, which includes 16 companies and is currently ranked 169 in the Zacks Industry Rank [6] - The Engineering - R and D Services industry has gained an average of 10.1% year-to-date, indicating that ALFVY is slightly underperforming its industry [6] - Southland Holdings operates within the Building Products - Miscellaneous industry, which consists of 30 stocks and is ranked 71, also having a year-to-date gain of 10.1% [7]
Southland (SLND) - 2025 Q2 - Earnings Call Transcript
2025-08-13 15:00
Financial Data and Key Metrics Changes - The company reported second quarter revenue of $215 million, a decrease of $36 million from the same period in 2024 [15] - Gross profit was $13.4 million, an increase of $53 million from the same period in 2024, resulting in a gross profit margin of 6.2%, up from negative 15.9% in the prior year [15][16] - The company reported a net loss of $10.3 million or $0.19 per share, compared to a net loss of $46 million or $0.96 per share in the same period last year [17] - EBITDA for the quarter was $4.2 million, compared to negative $49.9 million for the same period in 2024 [17] Business Line Data and Key Metrics Changes - The Civil segment had revenues of $81.5 million, an increase from $79.4 million in the same period in 2024, with a gross profit of $14.6 million and a gross profit margin of 17.9% [18] - The Transportation segment reported revenues of $133.9 million, a decrease of $38.3 million from the same period in 2024, with a gross loss of $1.2 million, improving from a gross loss of $49.2 million in the prior year [19] - The Materials and Paving business line contributed $21.7 million to revenue, with a remaining backlog of approximately $99 million, down from $139 million at the end of the last quarter [19][20] Market Data and Key Metrics Changes - The company noted strong demand driven by federal funding, particularly from the Infrastructure Investment and Jobs Act (IIJA), which is expected to provide a tailwind for the business for several more years [10][11] - State and local governments are developing long-term plans to address infrastructure needs, with significant investments such as the Texas Senate's resolution to allocate $20 billion for water infrastructure projects [11] Company Strategy and Development Direction - The company is focused on high-quality, high-margin work and is selectively adding new projects while winding down legacy work [12][13] - The strategy includes maintaining strong financial discipline and improving profitability over top-line growth [13][14] - The company aims to convert its new core backlog into profitable results and create long-term value for stakeholders [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustained investment and robust demand for infrastructure, particularly from federal and state governments [10] - The company anticipates that legacy projects will have less impact on overall results as they continue to wind down these projects [21] - Management expects civil margins to remain in the mid-teens and is optimistic about the long-term potential of both the Civil and Transportation segments [28][39] Other Important Information - The company added approximately $67 million in new awards during the quarter, bringing the total backlog to approximately $2.3 billion [9][21] - The company expects to burn approximately 41% of its backlog over the next twelve months [21] Q&A Session Summary Question: Are the new project opportunities more weighted towards the second half of the year or 2026? - Management indicated excitement about the second half and a strong pipeline, with expectations for continued demand [26] Question: How do civil margins trend in the second half of the year? - Management expects civil margins to remain strong, with long-term expectations in the mid-teens [28] Question: What is the outlook for operating cash flow in the back half of the year? - Management anticipates a pickup in operating cash flow in Q3 and Q4 due to the peak construction season [30] Question: Can you elaborate on the higher margin short duration work? - Management sees significant opportunities in the civil market and expects this trend to continue [35][36] Question: What is the target operating margin range for the company beyond 2026? - Management is optimistic about increasing margins and expects mid-teen civil margins and low-teen transportation margins in the near future [39] Question: What is the revenue impact from weather on each segment? - Management noted that while weather impacts were present, they expect revenue to normalize in the back half of the year [66]
Southland Holdings (SLND) Reports Q2 Loss, Lags Revenue Estimates
ZACKS· 2025-08-12 22:45
Core Insights - Southland Holdings (SLND) reported a quarterly loss of $0.19 per share, better than the Zacks Consensus Estimate of a loss of $0.28, and an improvement from a loss of $0.96 per share a year ago, resulting in an earnings surprise of +32.14% [1] - The company posted revenues of $215.38 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 9.08%, and down from $251.51 million year-over-year [2] - Southland shares have increased by approximately 38.2% since the beginning of the year, outperforming the S&P 500's gain of 8.4% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.21 on revenues of $247.7 million, and for the current fiscal year, it is -$0.68 on revenues of $972.9 million [7] - The estimate revisions trend for Southland was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Building Products - Miscellaneous industry, to which Southland belongs, is currently in the top 41% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]
Southland (SLND) - 2025 Q2 - Quarterly Report
2025-08-12 21:01
[PART I – Financial Information](index=6&type=section&id=PART%20I%20%E2%80%93%20Financial%20Information) This section presents Southland Holdings, Inc.'s unaudited financial statements and management's analysis of operations [ITEM 1. Financial Statements](index=6&type=section&id=ITEM%201.%20Financial%20Statements) This section presents Southland Holdings, Inc.'s unaudited condensed consolidated financial statements and related notes for the specified periods [Condensed Consolidated Balance Sheets (unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)) This section provides the unaudited condensed consolidated balance sheets for Southland Holdings, Inc. | (Amounts in millions) | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | Total assets | $ 1,185.27 | $ 1,203.65 | | Total liabilities | $ 1,019.80 | $ 1,028.24 | | Total equity | $ 165.47 | $ 175.41 | - Total assets decreased by **$18.38 million** from December 31, 2024, to June 30, 2025, while total liabilities decreased by **$8.44 million** and total equity decreased by **$9.94 million**[17](index=17&type=chunk) [Condensed Consolidated Statements of Operations (unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(unaudited)) This section presents the unaudited condensed consolidated statements of operations, detailing revenue, gross profit, and net loss | (Amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $ 215.38 | $ 251.51 | $ 454.87 | $ 539.61 | | Gross profit (loss) | $ 13.36 | $ (40.02) | $ 34.84 | $ (19.60) | | Operating income (loss)| $ (0.21) | $ (55.70) | $ 4.81 | $ (49.68) | | Net loss | $ (9.89) | $ (45.36) | $ (12.68) | $ (44.83) | | Net loss attributable to Southland Stockholders | $ (10.31) | $ (46.08) | $ (14.86) | $ (46.48) | | Basic EPS | $ (0.19) | $ (0.96) | $ (0.28) | $ (0.97) | - For the three months ended June 30, 2025, revenue decreased by **14.4% YoY**, while gross profit significantly improved from a loss of **$40.02 million** to a profit of **$13.36 million**. Net loss attributable to Southland Stockholders decreased by **77.6% YoY**[18](index=18&type=chunk) - For the six months ended June 30, 2025, revenue decreased by **15.7% YoY**, while gross profit improved from a loss of **$19.60 million** to a profit of **$34.84 million**. Net loss attributable to Southland Stockholders decreased by **68.1% YoY**[18](index=18&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss (unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20(unaudited)) This section presents the unaudited condensed consolidated statements of comprehensive loss, including foreign currency adjustments | (Amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $ (9.89) | $ (45.36) | $ (12.68) | $ (44.83) | | Foreign currency translation adjustment, net of tax | $ 2.48 | $ (0.70) | $ 2.16 | $ (1.28) | | Comprehensive loss, net of tax | $ (7.41) | $ (46.05) | $ (10.51) | $ (46.11) | | Comprehensive loss attributable to Southland Stockholders | $ (8.23) | $ (46.67) | $ (13.11) | $ (47.45) | - The comprehensive loss attributable to Southland Stockholders significantly decreased from **$(46.67) million** in Q2 2024 to **$(8.23) million** in Q2 2025, largely due to a positive foreign currency translation adjustment[21](index=21&type=chunk) [Condensed Consolidated Statements of Equity (unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity%20(unaudited)) This section details the unaudited condensed consolidated statements of equity, including common stock and accumulated deficit | (Amounts in millions) | Balance as of Dec 31, 2024 | Balance as of June 30, 2025 | | :--------------------- | :------------------------- | :-------------------------- | | Common Stock (shares) | 53,936,411 | 54,113,036 | | Additional Paid-In Capital | $ 292.17 | $ 292.74 | | Accumulated Deficit | $ (124.62) | $ (139.48) | | Total Equity | $ 175.41 | $ 165.47 | - Total equity decreased by **$9.94 million** from December 31, 2024, to June 30, 2025, primarily due to an increase in accumulated deficit, partially offset by an increase in additional paid-in capital[23](index=23&type=chunk) - Common stock shares outstanding increased from **53,936,411** to **54,113,036** during the six months ended June 30, 2025, mainly due to the issuance of RSUs[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows (unaudited)](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) This section presents the unaudited condensed consolidated statements of cash flows, categorizing activities into operating, investing, and financing | (Amounts in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $ 1.00 | $ 17.53 | | Net cash provided by investing activities | $ 0.76 | $ 2.98 | | Net cash used in financing activities | $ (26.10) | $ (15.10) | | Net increase (decrease) in cash and cash equivalents and restricted cash | $ (24.27) | $ 5.35 | - Net cash provided by operating activities significantly decreased from **$17.53 million** in H1 2024 to **$1.00 million** in H1 2025. Net cash used in financing activities increased from **$15.10 million** to **$26.10 million** in the same period[27](index=27&type=chunk) - The company experienced a net decrease in cash and cash equivalents and restricted cash of **$24.27 million** in H1 2025, compared to a net increase of **$5.35 million** in H1 2024[27](index=27&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed notes explaining the accounting policies and specific financial statement items [Note 1. Description of Business](index=12&type=section&id=Note%201.%20Description%20of%20Business) This note describes Southland Holdings, Inc.'s core business activities and recent corporate transactions - Southland Holdings, Inc. is a diverse leader in specialty infrastructure construction, operating through subsidiaries like Johnson Bros. Corporation and American Bridge Holding Company, focusing on bridges, tunnels, transportation, marine, steel structures, water and wastewater treatment, and water pipelines[29](index=29&type=chunk)[30](index=30&type=chunk) - The company completed a reverse recapitalization business combination with Legato Merger Corp. II on **February 14, 2023**, with Southland LLC as the accounting acquirer[32](index=32&type=chunk) [Note 2. Basis of Presentation](index=12&type=section&id=Note%202.%20Basis%20of%20Presentation) This note outlines the accounting principles and standards used in preparing the financial statements - The unaudited condensed consolidated financial statements are prepared in conformity with U.S. GAAP and SEC interim financial reporting rules, with certain information condensed or omitted[36](index=36&type=chunk)[37](index=37&type=chunk) - The company adopted ASU 2023-05 (Business Combinations-Joint Venture Formations) in **Q1 2025** and ASU 2023-07 (Segment Reporting) in **2025**, neither of which had a material impact on its consolidated financial statements[51](index=51&type=chunk)[52](index=52&type=chunk) - The company accounts for warrants as equity-classified instruments based on specific terms and applicable authoritative guidance (ASC 480 and ASC 815)[57](index=57&type=chunk)[59](index=59&type=chunk) [Note 3. Fair Value of Investments](index=19&type=section&id=Note%203.%20Fair%20Value%20of%20Investments) This note details the fair value measurements of the company's investments, particularly private equity | (Amounts in millions) | As of June 30, 2025 | As of December 31, 2024 | | :--------------------- | :------------------ | :---------------------- | | Private equity | $ 2.58 | $ 2.70 | | Total noncurrent | $ 2.58 | $ 2.70 | - All private equity investments are classified as **Level 3** in the fair value hierarchy, indicating significant unobservable inputs[60](index=60&type=chunk) [Note 4. Revenue](index=19&type=section&id=Note%204.%20Revenue) This note explains the company's revenue recognition policies and provides a breakdown by segment - Revenue is recognized over time using the input method (percentage of cost incurred to date) for firm fixed-price and fixed-price per unit contracts, with most contracts having a single performance obligation[61](index=61&type=chunk)[62](index=62&type=chunk) - Adjustments in contract estimates resulted in a decrease in gross profit of **$13.4 million** and **$26.7 million** for the three and six months ended June 30, 2025, respectively, a significant improvement compared to decreases of **$83.5 million** and **$108.5 million** in the prior year periods[68](index=68&type=chunk) Segment Revenue | (Amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Civil Revenue | $ 81.53 (37.9%) | $ 79.37 (31.6%) | $ 184.45 (40.5%) | $ 163.64 (30.3%) | | Transportation Revenue | $ 133.85 (62.1%) | $ 172.14 (68.4%) | $ 270.42 (59.5%) | $ 375.97 (69.7%) | | Total Revenue | $ 215.38 (100.0%) | $ 251.51 (100.0%) | $ 454.87 (100.0%) | $ 539.61 (100.0%) | Segment Gross Profit (Loss) | (Amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Civil Gross Profit | $ 14.61 (17.9%) | $ 9.16 (11.5%) | $ 37.24 (20.2%) | $ 27.03 (16.5%) | | Transportation Gross Profit (Loss) | $ (1.24) (0.9%) | $ (49.18) (28.6%) | $ (2.39) (0.9%) | $ (46.63) (12.4%) | | Total Gross Profit (Loss) | $ 13.36 (6.2%) | $ (40.02) (15.9%) | $ 34.84 (7.7%) | $ (19.60) (3.6%) | [Note 5. Debt](index=25&type=section&id=Note%205.%20Debt) This note provides details on the company's debt instruments, including secured notes and mortgage notes | (Amounts in millions) | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | Secured notes | $ 284.15 | $ 306.22 | | Mortgage notes | $ 0.35 | $ 0.39 | | Total debt, net | $ 278.62 | $ 300.15 | | Current portion | $ (48.90) | $ (44.53) | | Long-term debt | $ 229.73 | $ 255.63 | - The weighted average interest rate on total debt outstanding slightly decreased from **9.43%** as of December 31, 2024, to **9.39%** as of June 30, 2025[80](index=80&type=chunk) - The company entered into a new **$160.0 million** secured term loan facility (Credit Facility) on **September 30, 2024**, replacing the previous revolving credit facility, with a maturity date of **September 30, 2028**[82](index=82&type=chunk)[83](index=83&type=chunk) - As of June 30, 2025, **$17.3 million** was available under the Delayed Draw facility, and the company was in compliance with all Credit Agreement covenants[84](index=84&type=chunk)[90](index=90&type=chunk) [Note 6. Commitments and Contingencies](index=27&type=section&id=Note%206.%20Commitments%20and%20Contingencies) This note outlines the company's legal proceedings, self-insurance programs, and other contingent liabilities - The company is involved in various legal proceedings, including a significant claim against the City of Charlotte for over **$115 million** related to the CityLYNX Gold Line Phase 2 project, alleging numerous changes and interferences[93](index=93&type=chunk)[99](index=99&type=chunk)[102](index=102&type=chunk) - The aggregate range of possible loss related to reasonably possible matters and amounts in excess of accrued losses for probable contingencies was immaterial as of **June 30, 2025**, and **December 31, 2024**[97](index=97&type=chunk) - Southland is self-insured up to certain limits for workers' compensation, general liability, auto liability, and health insurance, maintaining accruals based on third-party data and claims history[104](index=104&type=chunk) [Note 7. Income Taxes](index=30&type=section&id=Note%207.%20Income%20Taxes) This note discusses the company's effective tax rates, valuation allowances, and the impact of recent tax legislation | Period | Effective Tax Rate (2025) | Effective Tax Rate (2024) | | :--------------------- | :------------------------ | :------------------------ | | Three Months Ended June 30 | 0.6% | 26.0% | | Six Months Ended June 30 | 2.9% | 25.9% | - The effective tax rate for the three and six months ended June 30, 2025, was significantly lower than the prior year, primarily due to state income taxes, federal tax credits, valuation allowances against certain deferred tax assets, and foreign income inclusion through GILTI[106](index=106&type=chunk) - The company maintains valuation allowances of **$2.9 million** for certain U.S. subsidiaries, **$7.8 million** for Canadian subsidiaries, and **$16.6 million** for United Kingdom operations against net deferred tax assets due to uncertainty of utilization[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) - The recently signed 'One Big Beautiful Bill Act' is expected to decrease the time needed to utilize current net deferred tax assets due to favorable changes in business interest expense limitation and R&D capitalization[110](index=110&type=chunk) [Note 8. Remaining Unsatisfied Performance Obligations](index=32&type=section&id=Note%208.%20Remaining%20Unsatisfied%20Performance%20Obligations) This note details the company's remaining unsatisfied performance obligations and their expected revenue recognition timeline - As of June 30, 2025, Southland had **$2.3 billion** in Remaining Unsatisfied Performance Obligations (RUPO), with approximately **41%** expected to be recognized as revenue in the next twelve months[114](index=114&type=chunk) - RUPO includes unearned revenue and awarded but not started contracts, primarily consisting of fixed-price contracts with government customers[112](index=112&type=chunk)[113](index=113&type=chunk) [Note 9. Cost and Estimated Earnings on Uncompleted Contracts](index=32&type=section&id=Note%209.%20Cost%20and%20Estimated%20Earnings%20on%20Uncompleted%20Contracts) This note presents contract assets, liabilities, and unresolved contract modifications related to uncompleted contracts | (Amounts in millions) | June 30, 2025 | December 31, 2024 | | :--------------------- | :------------ | :---------------- | | Contract assets | $ 500.52 | $ 483.18 | | Contract liabilities | $ (250.94) | $ (249.71) | | Net contract position | $ 249.58 | $ 233.48 | - The company recorded **$486.0 million** in Unresolved Contract Modifications as of June 30, 2025, an increase from **$469.8 million** as of December 31, 2024, representing additional costs and profits believed to be recoverable[115](index=115&type=chunk) - Contract liabilities of **$175.1 million** were recognized as revenue during the six months ended June 30, 2025, compared to **$123.0 million** in the prior year period[116](index=116&type=chunk) [Note 10. Noncontrolling Interests Holders](index=33&type=section&id=Note%2010.%20Noncontrolling%20Interests%20Holders) This note identifies the company's controlling interests in joint ventures and partnerships - Southland holds controlling interests in several joint ventures and partnerships, including **84.7%** in Oscar Renda Contracting, Inc. and **70.0%** in the Southland Astaldi joint venture[117](index=117&type=chunk)[118](index=118&type=chunk) - The Southland Technicore Mole joint venture was dissolved in **November 2024**, reducing the company's interest to **0%** from **65%** in the prior year[118](index=118&type=chunk) [Note 11. Related Party Transactions](index=33&type=section&id=Note%2011.%20Related%20Party%20Transactions) This note discloses transactions with related parties, including subcontractor costs and real estate deals - Cost of construction related to a subcontractor with minority employee ownership increased to **$0.7 million** for Q2 2025 (from **$0.4 million** in Q2 2024) and **$1.6 million** for H1 2025 (from **$1.5 million** in H1 2024)[121](index=121&type=chunk) - In **July 2024**, the company closed a **$42.5 million** real estate sale-leaseback transaction where the CEO and co-COO hold a combined **25%** indirect minority interest in the purchasing entity[123](index=123&type=chunk) [Note 12. Share Based Compensation](index=35&type=section&id=Note%2012.%20Share%20Based%20Compensation) This note details the activity and unrecognized compensation cost for the company's share-based awards RSU Activity | RSU Activity (shares) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Outstanding, beginning balance | 599,547 | 173,333 | | Granted | 582,868 | 681,310 | | Vested | (176,525) | (133,704) | | Forfeited | (217,759) | — | | Canceled | (38,814) | (41,568) | | Outstanding, ending balance | 749,317 | 679,371 | PSU Activity | PSU Activity (shares) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Outstanding, beginning balance | 304,880 | — | | Granted | — | 304,880 | | Forfeited | (131,190) | — | | Outstanding, ending balance | 173,690 | 304,880 | - Total unrecognized compensation cost as of June 30, 2025, was **$3.4 million**, to be recognized over a weighted-average period of **1.5 years**[128](index=128&type=chunk) [Note 13. Loss per Share](index=36&type=section&id=Note%2013.%20Loss%20per%20Share) This note presents the basic and diluted loss per share calculations and the treatment of dilutive securities | (Amounts in millions, except shares and per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to common stockholders, basic and diluted | $ (10.31) | $ (46.08) | $ (14.86) | $ (46.48) | | Weighted average common shares outstanding — basic | 54,008,088 | 48,030,951 | 53,985,325 | 47,978,012 | | Net loss per share — basic | $ (0.19) | $ (0.96) | $ (0.28) | $ (0.97) | - Dilutive securities (warrants and unvested RSUs) were excluded from diluted EPS calculations for both periods as their inclusion would have been antidilutive due to the net loss[129](index=129&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of Southland Holdings, Inc.'s financial condition and operational results for the reported periods [Overview](index=37&type=section&id=Overview) This section provides a general overview of Southland Holdings, Inc.'s business and operational scope - Southland Holdings, Inc. is a diverse leader in specialty infrastructure construction, with a history dating back to **1900**, specializing in bridges, tunnels, transportation, marine, steel structures, water and wastewater treatment, and water pipelines[133](index=133&type=chunk) - The company operates through **six primary subsidiaries**, including Johnson Bros. Corporation and American Bridge Company, with projects spanning North America[134](index=134&type=chunk) [Key Factors Affecting Results of Operations](index=37&type=section&id=Key%20Factors%20Affecting%20Results%20of%20Operations) This section discusses the primary internal and external factors influencing the company's operational performance - The company operates in **two reportable segments**: Civil (water pipeline, treatment plants, tunneling) and Transportation (bridges, roadways, marine, specialty structures), both with positive future outlooks and new opportunities[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) - Competition in the construction industry is high, but Southland leverages its equipment ownership, ability to self-perform across disciplines, experience, reputation, and technical expertise for complex projects[138](index=138&type=chunk)[142](index=142&type=chunk) - Increased demand for specialty construction projects is anticipated due to economic stimulus spending, including the Infrastructure Investment and Jobs Act[141](index=141&type=chunk) - The company discontinued certain types of projects in its Materials & Paving (M&P) business line within the Transportation segment in **Q2 2023**, selling related assets to reallocate resources to core operations[149](index=149&type=chunk) Materials & Paving Contribution | (Amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $ 21.70 | $ 8.90 | $ 39.80 | $ 47.50 | | Gross Loss | $ (3.80) | $ (46.80) | $ (12.90) | $ (57.10) | [Results of Operations](index=41&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue, gross profit, and net loss, for the reported periods Three Months Ended June 30, 2025 vs. 2024 | (Amounts in millions) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :--------------------- | :------------ | :------------ | :--------- | :--------- | | Revenue | $ 215.38 | $ 251.51 | $ (36.13) | (14.4)% | | Cost of construction | $ 202.02 | $ 291.53 | $ (89.52) | (30.7)% | | Gross profit (loss) | $ 13.36 | $ (40.02) | $ 53.39 | 133.4% | | SG&A expenses | $ 13.57 | $ 15.68 | $ (2.11) | (13.4)% | | Operating loss | $ (0.21) | $ (55.70) | $ 55.49 | 99.6% | | Interest expense | $ (9.98) | $ (6.72) | $ (3.26) | 48.6% | | Net loss | $ (9.89) | $ (45.36) | $ 35.47 | 78.2% | Six Months Ended June 30, 2025 vs. 2024 | (Amounts in millions) | June 30, 2025 | June 30, 2024 | Change ($) | Change (%) | | :--------------------- | :------------ | :------------ | :--------- | :--------- | | Revenue | $ 454.87 | $ 539.61 | $ (84.74) | (15.7)% | | Cost of construction | $ 420.03 | $ 559.21 | $ (139.19) | (24.9)% | | Gross profit (loss) | $ 34.84 | $ (19.60) | $ 54.44 | 277.8% | | SG&A expenses | $ 30.04 | $ 30.07 | $ (0.04) | (0.1)% | | Operating income (loss)| $ 4.81 | $ (49.68) | $ 54.48 | 109.7% | | Interest expense | $ (18.86) | $ (12.38) | $ (6.48) | 52.4% | | Net loss | $ (12.68) | $ (44.83) | $ 32.15 | 71.7% | - The significant improvement in gross profit and operating results for both periods is primarily due to the absence of certain prior year net unfavorable adjustments, particularly in the Transportation segment and related to the M&P business line exit[154](index=154&type=chunk)[162](index=162&type=chunk) - Interest expense increased substantially due to higher interest rates on external borrowings, increased amortization of deferred financing costs, and interest related to a real estate transaction[156](index=156&type=chunk)[164](index=164&type=chunk) [Segment Results](index=45&type=section&id=Segment%20Results) This section provides a detailed breakdown of revenue and gross profit performance by the Civil and Transportation segments Segment Revenue (Three Months Ended June 30) | Segment | 2025 Revenue ($ millions) | 2025 % of Total | 2024 Revenue ($ millions) | 2024 % of Total | | :------------- | :------------------------ | :-------------- | :------------------------ | :-------------- | | Civil | 81.53 | 37.9% | 79.37 | 31.6% | | Transportation | 133.85 | 62.1% | 172.14 | 68.4% | | Total | 215.38 | 100.0% | 251.51 | 100.0% | Segment Gross Profit (Loss) (Three Months Ended June 30) | Segment | 2025 Gross Profit ($ millions) | 2025 % of Segment Revenue | 2024 Gross Profit (Loss) ($ millions) | 2024 % of Segment Revenue | | :------------- | :----------------------------- | :------------------------ | :------------------------------------ | :------------------------ | | Civil | 14.61 | 17.9% | 9.16 | 11.5% | | Transportation | (1.24) | (0.9)% | (49.18) | (28.6)% | | Total | 13.36 | 6.2% | (40.02) | (15.9)% | - Civil segment revenue increased by **2.7%** in Q2 2025, driven by new water pipeline and facility projects, while its gross profit margin improved from **11.5%** to **17.9%**[168](index=168&type=chunk)[169](index=169&type=chunk) - Transportation segment revenue decreased by **22.2%** in Q2 2025 due to projects nearing completion, but its gross loss significantly decreased from **$49.2 million** to **$1.2 million**, primarily due to the absence of prior year unfavorable adjustments in the M&P business line[170](index=170&type=chunk)[171](index=171&type=chunk) [Key Business Metrics](index=47&type=section&id=Key%20Business%20Metrics) This section presents key non-GAAP financial metrics, including EBITDA and backlog, to assess operational performance EBITDA Reconciliation | (Amounts in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to Southland Stockholders | $ (10.31) | $ (46.08) | $ (14.86) | $ (46.48) | | Depreciation and amortization | 5.38 | 5.57 | 11.90 | 11.15 | | Income tax benefit | (0.06) | (15.96) | (0.37) | (15.65) | | Interest expense | 9.98 | 6.72 | 18.86 | 12.38 | | Interest income | (0.80) | (0.18) | (1.25) | (0.36) | | EBITDA | 4.19 | (49.92) | 14.27 | (38.97) | - EBITDA significantly improved from a loss of **$49.92 million** in Q2 2024 to a profit of **$4.19 million** in Q2 2025, and from a loss of **$38.97 million** in H1 2024 to a profit of **$14.27 million** in H1 2025[181](index=181&type=chunk) Backlog by Segment (June 30, 2025) | Segment | Balance December 31, 2024 ($ millions) | New contracts, change orders, and adjustments ($ millions) | Less: contract revenue recognized in 2025 ($ millions) | Balance June 30, 2025 ($ millions) | | :------------- | :------------------------------------- | :-------------------------------------------------------- | :----------------------------------------------------- | :--------------------------------- | | Civil | 961.21 | 179.51 | (183.08) | 957.64 | | Transportation | 1,611.71 | 23.75 | (271.79) | 1,363.66 | | Total | 2,572.91 | 203.26 | (454.87) | 2,321.30 | - Total backlog decreased from **$2.57 billion** as of December 31, 2024, to **$2.32 billion** as of June 30, 2025, with the Transportation segment experiencing a larger reduction[183](index=183&type=chunk) [Liquidity, Capital Commitments and Resources](index=50&type=section&id=Liquidity%2C%20Capital%20Commitments%20and%20Resources) This section discusses the company's sources and uses of liquidity, capital commitments, and overall financial resources - Principal liquidity sources are cash from operations, borrowings, and existing cash. Uses include working capital, debt service, and equipment investment[186](index=186&type=chunk) - The company does not expect to materially rely on cash exercise of warrants for funding, as the common stock price is below the **$11.50** exercise price[187](index=187&type=chunk) - Management believes cash flow from operations, available cash, and other financing sources will be adequate for liquidity needs for at least the next **twelve months**[188](index=188&type=chunk) - Net cash used in financing activities was **$26.1 million** for H1 2025, primarily due to **$25.2 million** in payments on notes payable[193](index=193&type=chunk) - As of June 30, 2025, total debt was **$278.6 million**, with **$48.9 million** due within the next **twelve months**[194](index=194&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there are no quantitative and qualitative disclosures about market risk applicable to the company for the reported period - The company has no material quantitative and qualitative disclosures about market risk for the reported period[209](index=209&type=chunk) [ITEM 4. Controls and Procedures](index=56&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the fiscal quarter ended June 30, 2025 [Evaluation of Disclosure Controls and Procedures](index=56&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section reports on the effectiveness of the company's disclosure controls and procedures - Management, including the CEO and CFO, determined that the company's disclosure controls and procedures were effective as of **June 30, 2025**[211](index=211&type=chunk) [Changes in Internal Control over Financial Reporting](index=56&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section addresses any material changes in the company's internal control over financial reporting - There were no changes in internal control over financial reporting during the fiscal quarter ended **June 30, 2025**, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[212](index=212&type=chunk) [PART II – Other Information](index=57&type=section&id=PART%20II%20%E2%80%93%20Other%20Information) This section contains other required information not covered in the financial statements, including legal and risk factors [ITEM 1. Legal Proceedings](index=57&type=section&id=ITEM%201.%20Legal%20Proceedings) This section refers to Note 6 of the financial statements for details on legal proceedings, commitments, and contingencies - Information regarding legal proceedings is detailed in **Note 6 – 'Commitments and Contingencies'** within the unaudited condensed consolidated financial statements[215](index=215&type=chunk) [ITEM 1A. Risk Factors](index=57&type=section&id=ITEM%201A.%20Risk%20Factors) This section states that no additional risk factors have been identified, and no material changes have occurred regarding previously disclosed risk factors from the Annual Report on Form 10-K - No new risk factors have been identified, and no material changes have occurred to the risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended **December 31, 2024**[216](index=216&type=chunk) [ITEM 5. Other Information](index=57&type=section&id=ITEM%205.%20Other%20Information) This section confirms that no directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the last fiscal quarter - No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the last fiscal quarter[217](index=217&type=chunk) [ITEM 6. Exhibits](index=58&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including key agreements, corporate documents, and financial statements - The exhibits include the Agreement and Plan of Merger, corporate charter documents, warrant agreements, the First Amendment to Credit Agreement, an employment agreement, and certifications from the Principal Executive and Financial Officers[219](index=219&type=chunk) - Financial statements for the quarter ended **June 30, 2025**, are provided in Inline XBRL format as **Exhibit 101**[219](index=219&type=chunk) [Signatures](index=60&type=section&id=Signatures) This section contains the required signatures of the registrant's authorized officers, including the President, Chief Executive Officer, Chief Financial Officer, and Treasurer, certifying the filing of the report - The report is signed by **Frank Renda**, President and Chief Executive Officer, and **Keith Bassano**, Chief Financial Officer and Treasurer, on **August 12, 2025**[221](index=221&type=chunk)
Southland (SLND) - 2025 Q2 - Quarterly Results
2025-08-12 20:36
[Executive Summary & Business Outlook](index=1&type=section&id=1.%20Executive%20Summary%20%26%20Business%20Outlook) Southland Holdings, Inc. is a leading North American infrastructure construction firm, with its CEO noting margin improvements and anticipating future growth from government initiatives [Company Overview](index=1&type=section&id=1.1.%20Company%20Overview) Southland Holdings, Inc. is a leading provider of specialized infrastructure construction services in North America, with a history dating back to 1900 - Southland Holdings, Inc. is a leading provider of specialized infrastructure construction services[2](index=2&type=chunk)[25](index=25&type=chunk) - The company and its subsidiaries form one of the largest infrastructure construction companies in North America, with experience globally, serving markets such as bridges, tunneling, transportation, and water treatment[25](index=25&type=chunk) [CEO Commentary](index=1&type=section&id=1.2.%20CEO%20Commentary) Frank Renda, Southland's President & CEO, expressed encouragement regarding sustained margin improvement in the core business due to disciplined bidding and operations - CEO Frank Renda is encouraged by sustained **margin improvement** in the core business, attributed to disciplined bidding and operations[3](index=3&type=chunk) - The company maintains a **positive outlook for the second half of the year**, expecting to capitalize on opportunities from the IIJA and other government spending initiatives[3](index=3&type=chunk) [Second Quarter 2025 Financial Results](index=1&type=section&id=2.%20Second%20Quarter%202025%20Financial%20Results) Southland reported a decrease in revenue but significant improvements in gross profit and a reduction in net loss for Q2 2025 compared to Q2 2024, alongside a positive EBITDA and a substantial backlog [Key Financial Highlights](index=1&type=section&id=2.1.%20Key%20Financial%20Highlights) Southland reported a decrease in revenue but significant improvements in gross profit and a reduction in net loss for Q2 2025 compared to Q2 2024, alongside a positive EBITDA and a substantial backlog Q2 2025 Key Financial Highlights (YoY) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | Chunk Num | | :-------------------------------- | :----------------- | :----------------- | :----- | :-------- | | Revenue | $215.4 | $251.5 | -14.4% | 5 | | Gross Profit (Loss) | $13.4 | $(40.0) | Improved | 5 | | Gross Profit Margin | 6.2% | (15.9)% | +22.1 pp | 5 | | Net Loss Attributable to Stockholders | $(10.3) | $(46.1) | Reduced | 5 | | Net Loss Per Share | $(0.19) | $(0.96) | Reduced | 5 | | EBITDA | $4.2 | $(49.9) | Improved | 5 | | Backlog (as of June 30, 2025) | $2,320.0 | N/A | N/A | 5 | [Condensed Consolidated Statements of Operations](index=1&type=section&id=2.2.%20Condensed%20Consolidated%20Statements%20of%20Operations) The condensed consolidated statements of operations for the three months ended June 30, 2025, show a net loss of $9.89 million, a significant improvement from a $45.36 million net loss in the prior year period, driven by a shift from gross loss to gross profit Condensed Consolidated Statements of Operations (Three Months Ended June 30) | (Amounts in thousands) | June 30, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------ | | Revenue | $215,382 | $251,512 | | Cost of construction | 202,019 | 291,534 | | Gross profit (loss) | 13,363 | (40,022) | | Selling, general, and administrative expenses | 13,572 | 15,680 | | Operating loss | (209) | (55,702) | | Gain on investments, net | 59 | 53 | | Other income, net | 182 | 1,053 | | Interest expense | (9,983) | (6,720) | | Losses before income taxes | (9,951) | (61,316) | | Income tax benefit | (61) | (15,961) | | Net loss | (9,890) | (45,355) | | Net income attributable to noncontrolling interests | 416 | 722 | | Net loss attributable to Southland Stockholders | $(10,306) | $(46,077) | | Net loss per share attributable to common stockholders (Basic & Diluted) | $(0.19) | $(0.96) | | Weighted average shares outstanding (Basic & Diluted) | 54,008,088 | 48,030,951 | [Detailed Q2 Income Statement Analysis](index=3&type=section&id=2.3.%20Detailed%20Q2%20Income%20Statement%20Analysis) For Q2 2025, revenue decreased by 14.4% year-over-year, while gross profit significantly improved from a loss to a profit, with gross margin increasing by 22.1 percentage points - Revenue for Q2 2025 was **$215.4 million**, a **decrease of $36.1 million (14.4%)** compared to Q2 2024, with the Materials & Paving business contributing $21.7 million[7](index=7&type=chunk) - Gross profit for Q2 2025 was **$13.4 million**, a substantial improvement from a gross loss of $40.0 million in Q2 2024, with gross margin increasing from (15.9)% to **6.2%**[8](index=8&type=chunk) - Selling, general, and administrative costs decreased by **$2.1 million (13.4%)** to $13.6 million in Q2 2025, though as a percentage of revenue, SG&A costs slightly increased from 6.2% to 6.3%[9](index=9&type=chunk) [Six Months Ended June 30, 2025 Financial Results](index=3&type=section&id=3.%20Six%20Months%20Ended%20June%2030%2C%202025%20Financial%20Results) For the six months ended June 30, 2025, Southland reported a net loss of $12.68 million, a significant reduction from $44.83 million in the prior year, primarily due to a turnaround from gross loss to gross profit and improved operating income [Condensed Consolidated Statements of Operations](index=3&type=section&id=3.1.%20Condensed%20Consolidated%20Statements%20of%20Operations) For the six months ended June 30, 2025, Southland reported a net loss of $12.68 million, a significant reduction from $44.83 million in the prior year, primarily due to a turnaround from gross loss to gross profit and improved operating income Condensed Consolidated Statements of Operations (Six Months Ended June 30) | (Amounts in thousands) | June 30, 2025 | June 30, 2024 | | :--------------------------------- | :------------ | :------------ | | Revenue | $454,868 | $539,609 | | Cost of construction | 420,025 | 559,210 | | Gross profit (loss) | 34,843 | (19,601) | | Selling, general, and administrative expenses | 30,037 | 30,074 | | Operating income (loss) | 4,806 | (49,675) | | Gain (loss) on investments, net | 76 | (23) | | Other income, net | 925 | 1,589 | | Interest expense | (18,857) | (12,375) | | Losses before income taxes | (13,050) | (60,484) | | Income tax benefit | (374) | (15,654) | | Net loss | (12,676) | (44,830) | | Net income attributable to noncontrolling interests | 2,182 | 1,653 | | Net loss attributable to Southland Stockholders | $(14,858) | $(46,483) | | Net loss per share attributable to common stockholders (Basic & Diluted) | $(0.28) | $(0.97) | | Weighted average shares outstanding (Basic & Diluted) | 53,985,325 | 47,978,012 | [Detailed YTD Income Statement Analysis](index=3&type=section&id=3.2.%20Detailed%20YTD%20Income%20Statement%20Analysis) Year-to-date revenue for 2025 decreased by 15.7% compared to 2024, but gross profit significantly improved from a loss to a profit, with gross margin increasing by 11.3 percentage points - Revenue for the six months ended June 30, 2025, was **$454.9 million**, a **decrease of $84.7 million (15.7%)** compared to the same period in 2024, with the Materials & Paving business contributing $39.8 million[12](index=12&type=chunk) - Gross profit for the six months ended June 30, 2025, was **$34.8 million**, a significant improvement from a gross loss of $19.6 million in the prior year, with gross margin increasing from (3.6)% to **7.7%**[13](index=13&type=chunk) - Selling, general, and administrative costs for the six months ended June 30, 2025, were **$30.0 million**, a slight decrease of $0.1 million (0.1%), while as a percentage of revenue,
Is Quanta Services (PWR) Outperforming Other Construction Stocks This Year?
ZACKS· 2025-07-01 14:41
Group 1 - Quanta Services (PWR) is currently outperforming the Construction sector, with a year-to-date performance increase of 19.6%, while the sector has seen an average decline of 0.6% [4] - The Zacks Rank for Quanta Services is 2 (Buy), indicating a positive outlook based on earnings estimates and revisions [3] - Over the past three months, the consensus estimate for Quanta Services' full-year earnings has increased by 1.4%, reflecting improving analyst sentiment [3] Group 2 - Quanta Services is part of the Engineering - R and D Services industry, which consists of 17 companies and is currently ranked 97 in the Zacks Industry Rank [5] - The average performance of stocks in the Engineering - R and D Services industry has been a gain of 8.2% this year, indicating that Quanta Services is performing better than its industry peers [5] - Southland Holdings (SLND), another outperforming stock in the Construction sector, has increased by 28.6% year-to-date and has a Zacks Rank of 2 (Buy) [4][5]
Are Construction Stocks Lagging Gibraltar Industries (ROCK) This Year?
ZACKS· 2025-06-12 14:46
Company Performance - Gibraltar Industries (ROCK) has gained approximately 0.3% year-to-date, outperforming the average loss of 2.4% in the Construction sector [4] - The Zacks Consensus Estimate for Gibraltar Industries' full-year earnings has increased by 0.2% over the past quarter, indicating improved analyst sentiment [4] - Gibraltar Industries is currently ranked 2 (Buy) in the Zacks Rank system, suggesting a positive outlook for the stock [3] Industry Context - Gibraltar Industries is part of the Building Products - Miscellaneous industry, which consists of 30 companies and currently ranks 61 in the Zacks Industry Rank [6] - The average performance of the Building Products - Miscellaneous industry has seen a decline of 9% year-to-date, highlighting Gibraltar Industries' relative strength [6] - Another notable stock in the Construction sector, Southland Holdings (SLND), has increased by 14.5% year-to-date and also holds a Zacks Rank of 2 (Buy) [5]
Southland (SLND) - 2025 Q1 - Earnings Call Transcript
2025-05-14 15:02
Financial Data and Key Metrics Changes - Revenue for the first quarter was $239 million, down $49 million from the same period in 2024 [17] - Gross profit was $21.5 million, an increase of $1.1 million from the same period in 2024, with a gross profit margin of 9%, up from 7.1% in the prior year [18][19] - The company reported a net loss of $4.5 million or a loss of $0.08 per share, compared to a net loss of $400,000 or a loss of $0.01 per share in the same period last year [19] - EBITDA for the quarter was $10.1 million, compared to $10.9 million for the same period in 2024 [20] Business Line Data and Key Metrics Changes - The Civil segment had revenues of $103 million, up from $84 million in the same period in 2024, with a gross profit of $23 million, an increase of $5 million [20] - The Transportation segment had revenues of $137 million, a decrease of $67 million from the same period in 2024, with a gross loss of $1 million compared to a gross profit of $3 million in the prior year [21] - The materials and paving business line contributed $18 million to revenue but had a negative gross profit of $9 million due to increased project costs [21][22] Market Data and Key Metrics Changes - The company added approximately $137 million in new awards during the quarter, bringing the total backlog to approximately $2.5 billion [12][22] - The historical client mix consists of approximately 80% government agencies and 20% private clients, providing insulation from broader economic uncertainty [12] Company Strategy and Development Direction - The company is focused on strengthening its leadership team and enhancing performance, with recent appointments including a new CFO and Chief Strategy Officer [6][7] - The company aims to maintain a disciplined bidding approach and improve execution to drive strong margins [14] - Upcoming opportunities include significant projects in the Civil segment and transportation projects in various regions [13] Management's Comments on Operating Environment and Future Outlook - Management does not expect current tariffs to materially affect the business, citing minimal direct exposure to cross-border material procurement [10] - Demand for infrastructure projects remains strong, particularly from federal and state clients, with expectations for continued robust demand [11] - The company anticipates substantial completion of legacy projects by the end of 2025, with a focus on generating positive operating cash flow [50] Other Important Information - The company celebrated the 125th anniversary of its American Bridge subsidiary, highlighting its commitment to safety and engineering innovation [8] - The company has made significant progress in improving its balance sheet, with unrestricted cash position more than double compared to the end of Q1 last year [53] Q&A Session Summary Question: Outlook for Civil segment revenue - Management is optimistic about the Civil business, expecting strong double-digit margins and a potential shift towards civil projects as the paving business winds down [29][30] Question: Profit impact from Materials and Paving - The gross profit impact from Materials and Paving was $9 million, with a non-cash charge of $3.5 million related to a contract closeout [31] Question: Transportation booking outlook - Management is excited about the transportation market, with several projects in the pipeline and an expected uptick in bidding in the second half of the year [35] Question: Updates on alternative delivery projects - Progress is being made on the Winnipeg and Burnside Bridge projects, with expectations to develop them into construction contracts [42] Question: Bonding capacity status - The company maintains a strong relationship with surety partners and is targeting strategic projects in civil and transportation segments [44] Question: Margin profile expectations for the summer - Management anticipates a reduction in legacy impacts as new core projects ramp up, contributing positively to margins [50][52] Question: Free cash flow outlook - Positive operating cash flow was generated in Q1, with expectations for stronger cash flow in the latter half of the year [68]