Financial Performance - Revenue for the three months ended March 31, 2023, was $274,829,000, representing an increase of 6.5% compared to $258,486,000 for the same period in 2022[16] - Gross profit for the same period was $18,943,000, significantly up from $4,931,000 in the prior year, indicating a gross margin improvement[16] - Net loss attributable to Southland Holdings Stockholders for Q1 2023 was $4,664,000, a reduction from a net loss of $13,601,000 in Q1 2022, reflecting a 65.7% improvement[16] - Operating income for Q1 2023 was $3,372,000, a turnaround from an operating loss of $9,368,000 in Q1 2022[16] - Comprehensive loss for the three months ended March 31, 2023, was $3,760,000, compared to a comprehensive loss of $14,680,000 in the same period last year[18] - For the three months ended March 31, 2023, Southland Holdings reported a net loss of $4,266,000, an improvement from a net loss of $12,973,000 for the same period in 2022[23] - Adjusted EBITDA for the three months ended March 31, 2023, increased to $12.7 million from $1.4 million compared to the same period in 2022, primarily due to an increase in gross profit of $14.0 million[137] Assets and Liabilities - Total assets increased to $1,172,915,000 as of March 31, 2023, up from $1,125,305,000 at the end of 2022, marking a growth of 4.2%[15] - Total liabilities rose to $899,495,000 as of March 31, 2023, compared to $765,421,000 at the end of 2022, an increase of 17.5%[15] - Cash and cash equivalents decreased to $28,930,000 from $57,915,000 at the end of 2022, a decline of 50%[15] - Accounts receivable, net, increased to $178,723,000 from $135,678,000, reflecting a growth of 31.7%[15] - Total debt as of March 31, 2023, was $295.6 million, an increase from $273.8 million as of December 31, 2022, representing a 7.9% increase[72] Cash Flow - Cash flows from operating activities resulted in a net cash outflow of $34,779,000, compared to a net cash outflow of $37,687,000 in the prior year[23] - Net cash used in operating activities was $34.8 million during the three months ended March 31, 2023, compared to $37.7 million for the same period in 2022[146] - Net cash provided by financing activities was $6.1 million for the three months ended March 31, 2023, compared to $17.1 million for the same period in 2022[149] Revenue Segmentation - The Civil segment generated revenue of $73.0 million, accounting for 26.6% of total revenue, while the Transportation segment generated $201.8 million, representing 73.4% of total revenue[70] - Revenue earned outside of the United States was 23% for the three months ended March 31, 2023, compared to 15% for the same period in 2022[71] - Revenue from the Civil segment for the three months ended March 31, 2023, was $73.0 million, a decrease of $2.1 million, or 3%, compared to the same period in 2022[132] - Revenue from the Transportation segment for the three months ended March 31, 2023, was $201.8 million, an increase of $18.4 million, or 10%, compared to the same period in 2022[134] Merger and Corporate Structure - The merger with Legato II was completed on February 14, 2023, with Southland LLC becoming a wholly owned subsidiary of Legato II[29] - The company completed a merger with Legato II on February 14, 2023, which may impact future operations and financial performance[120] - The company is actively involved in merger considerations as indicated by the Form of Merger Consideration Note referenced in the report[188] Shareholder Information - The weighted average shares outstanding for the period was 44,407,831, with a net loss per share of $(0.11)[16] - The company issued 33,793,111 shares of Common Stock to former Southland Members, receiving net proceeds of $17.1 million, with transaction costs of $9.9 million included in additional paid-in capital[49] - Southland Members have the potential to receive up to 10,344,828 additional shares of common stock based on performance targets, with $23.6 million recorded as earnout liabilities[52] - The company has 44,407,831 shares of Common Stock and 14,385,500 warrants outstanding, each exercisable at an exercise price of $11.50 per share[50] Tax and Compliance - The effective tax rate for the three months ended March 31, 2023, was negative 69.75%, primarily due to a pre-tax loss and changes in the U.S. consolidated filing structure[85] - The company recorded a benefit to income tax of $3.8 million for the three months ended March 31, 2023, due to the removal of a previously recorded valuation allowance[85] - The report emphasizes compliance with the Securities Exchange Act of 1934, ensuring regulatory adherence[190] Backlog and Future Revenue - Remaining Unsatisfied Performance Obligations (RUPO) as of March 31, 2023, was $2.862 billion, up from $1.999 billion as of March 31, 2022, indicating a 43.2% increase[89] - The company expects to recognize approximately 45% of its RUPOs as revenue during the next twelve months[89] - Backlog as of March 31, 2023, was $2.861 billion, down from $2.974 billion at the end of 2022, after recognizing $282.1 million in contract revenue[157] - The transportation segment backlog was $2.169 billion as of March 31, 2023, down from $2.214 billion at the end of 2022[159] - The civil segment backlog was $692.8 million as of March 31, 2023, down from $760.2 million at the end of 2022[160] Operational Costs - Cost of construction for the three months ended March 31, 2023, was $255.9 million, an increase of $2.3 million, or 1%, compared to the same period in 2022[123] - Selling, general, and administrative expenses for the three months ended March 31, 2023, were $15.6 million, an increase of $1.3 million, or 9%, compared to the same period in 2022[125] - Interest expense for the three months ended March 31, 2023, was $3.3 million, an increase of $1.3 million, or 65%, compared to the same period in 2022[127] Risk Factors and Governance - The company has not identified any additional risk factors beyond those previously disclosed in its Annual Report as of December 31, 2022[167] - The company is engaged in enhancing internal controls over financial reporting following the Business Combination[164] - The report highlights the importance of corporate governance through the inclusion of indemnification agreements and non-redemption agreements[188]
LEGATO(LGTO) - 2023 Q1 - Quarterly Report