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]
LEGATO(LGTO) - 2024 Q2 - Quarterly Report