Southland (NYSEAM:SLND) Q4 2025 Earnings call March 27, 2026 10:00 AM ET Company ParticipantsAlex Murray - VP of Corporate Development and Investor RelationsFrank Renda - President and CEOKeith Bassano - CFOConference Call ParticipantsNone - AnalystOperatorGood morning. My name is Joanna, and I will be your conference operator today. At this time, I would like to welcome everyone to the Southland fourth quarter and full year 2025 conference call. All lines have been placed on mute to prevent any background ...

Core Insights - ADC Therapeutics has set a peak revenue target for ZYNLONTA between $600 million and $1 billion as it advances clinical trials LOTIS-5 and LOTIS-7 [2] Management Strategy - CEO Ameet Mallik emphasized a strategic focus on ZYNLONTA, which includes optimized life cycle management and the advancement of clinical trials [2] - The company aims to reduce operating costs by concentrating its efforts on ZYNLONTA and related trials [2]

Financial Data and Key Metrics Changes - The overall net operating income (NOI) for the fourth quarter of 2025 was $10.9 million, an increase from $7 million in the prior quarter [10] - Core Funds from Operations (FFO) was negative $5.9 million, compared to negative $7 million in the prior year [24] - The company reported a negative FFO of $7.1 million, or negative $4.49 per diluted share, an improvement from negative $8.7 million, or negative $23.21 per diluted share in the prior year [23] Business Line Data and Key Metrics Changes - Office segment NOI for Q4 2025 was $6.4 million, up from $5.2 million during Q4 2024, driven by increased occupancy and rental rates in properties located in Austin and Beverly Hills [19][20] - Hotel segment NOI for Q4 2025 was $2.1 million, consistent with the prior year [21] - Multifamily segment NOI decreased to a loss of $870,000 during Q4 2025, compared to income of $855,000 in the prior year, primarily due to unrealized losses on investments [21] Market Data and Key Metrics Changes - In Oakland, the vacancy rate declined to 8% from a high of 18% in 2001, with rent growth turning positive in 2025 after three years of declines [16] - The office segment occupancy rate reached 88.5% at the end of 2025, a 190 basis point increase from the third quarter and a 680 basis point improvement year-over-year [8][17] Company Strategy and Development Direction - The company is focusing on premier multifamily assets, strengthening its balance sheet, and improving liquidity [4] - The company completed the sale of its lending division for approximately $44.9 million, generating about $31.2 million in net cash proceeds [6][7] - The company plans to redeem approximately 2 million shares of Series A preferred stock, which is expected to improve annual FFO by approximately $16 million [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving cash flow in 2026, supported by rising net operating income across all segments [8] - The company anticipates lower interest expenses due to a potentially more favorable rate environment and plans to refinance the hotel following renovations [9] - Management noted that the company does not currently intend to initiate additional preferred stock redemptions but will evaluate requests as they arise [6] Other Important Information - The company has completed nine refinancings and fully retired its $169 million recourse credit facility [12] - The company is working on the extension of two more assets expected to be completed in Q2 2026 [12] Q&A Session Summary Question: What are the expectations for future cash flow improvements? - Management indicated that they see opportunities to improve cash flow in 2026, supported by several key drivers across the portfolio [8] Question: How is the company addressing its preferred stock redemptions? - Management stated that they do not currently intend to initiate additional preferred stock redemptions but will evaluate requests as they come in [6] Question: What is the status of the hotel renovations? - Management confirmed that the renovations at the Sheraton Grand Sacramento have been substantially completed and are expected to positively impact profitability [18]

Financial Data and Key Metrics Changes - Total revenues for Q4 2025 grew 2% to $184.2 million compared to $180.5 million in Q4 2024, with communication service revenues increasing 3% [16] - Operating income for Q4 2025 was $15.7 million, up from $8.7 million in the same period last year, reflecting cost management efforts [17] - Adjusted EBITDA for Q4 2025 increased 8% to $50 million from $46.2 million in Q4 2024, while full-year Adjusted EBITDA rose 3% to $190 million [18] Business Segment Performance Changes - International segment revenues increased nearly 3% to $97.3 million in Q4 2025, with full-year revenue up 1% to $381.9 million [19] - Domestic segment revenues increased 1% to $86.9 million in Q4 2025, but full-year revenue declined just under 2% to $346.1 million [20] - Adjusted EBITDA for the international segment increased 1% to $32.7 million in Q4 2025, while domestic segment Adjusted EBITDA increased 11% to $21.6 million in Q4 2025 [19][20] Market Data and Key Metrics Changes - The number of homes passed by high-speed broadband increased 25% over the past year, primarily due to fiber-fed fixed wireless solutions deployed in Alaska [9] - The company received provisional BEAD awards totaling over $150 million in key markets, expanding opportunities for high-speed broadband in underserved communities [10] Company Strategy and Industry Competition - The company is focused on mobility, high-speed data, and differentiated carrier and enterprise solutions, with a strategic shift away from legacy subsidized consumer offerings [5][8] - The pending sale of the Southwest U.S. tower portfolio for up to $297 million is expected to enhance financial flexibility and support long-term growth plans [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's progress and ability to generate long-term value for shareholders, emphasizing a disciplined approach to capital allocation [12][28] - The 2026 outlook anticipates Adjusted EBITDA to increase modestly from 2025 levels, despite headwinds from the conclusion of high-cost funding support [24][25] Other Important Information - Total cash equivalent and restricted cash increased to $117.2 million at year-end 2025, while total debt rose to $565.2 million [21] - Capital expenditures for 2025 were $90 million, reflecting a commitment to maintaining normalized levels of CapEx [22] Q&A Session Summary Question: How might the sale of the tower assets impact the business model in the US? - Management stated that the business model remains unchanged, continuing to provide carrier managed services on third-party towers [30] Question: Are legacy services nearing a point where they stop detracting from overall growth? - Management indicated that reductions in broadband subscribers are due to shutting down legacy services, with expectations for growth in high-speed data subscribers driven by BEAD outcomes [31][33] Question: What changes have been made in the go-to-market strategy to accelerate service growth? - Management highlighted investments in fiber facilities and a new leadership team in Alaska, aiming to enhance customer interaction and improve subscriber acquisition [34]

Financial Data and Key Metrics Changes - Consolidated revenue in Q4 2025 decreased by 28%, with HDMC revenue down 10% and HDFS revenue down 59% [25] - Consolidated operating income for Q4 was a loss of $361 million, compared to a loss of $193 million in Q4 2024 [26] - For the full year 2025, consolidated revenue was $4.5 billion, a 14% decrease compared to the previous year, and operating income was $387 million, down from $417 million in 2024 [27] Business Line Data and Key Metrics Changes - HDMC retail performance saw North American sales of new motorcycles increase by 5% in Q4, while international sales decreased by 10%, leading to a global retail sales decline of 1% [27][28] - HDFS revenue for Q4 was $106 million, down from $257 million in the prior year, primarily due to lower retail and wholesale finance receivables [38] - LiveWire's consolidated revenue increased by 9% in Q4, driven by a 61% increase in electric motorcycle units [42] Market Data and Key Metrics Changes - North American retail sales for the full year 2025 were down 13%, while EMEA retail sales declined by 11% [28][30] - In Latin America, Q4 retail sales increased by 10%, with both Brazil and Mexico showing growth [30] - Asia-Pacific retail sales were down 15% for the full year, with significant weakness in China [29] Company Strategy and Development Direction - The company is focused on stabilizing the business by restoring dealer confidence and aligning wholesale activity with retail demand [6][12] - Immediate priorities include improving dealer profitability, reigniting brand momentum, and reducing costs [7] - A strategic plan is expected to be announced in May 2026, aiming for sustainable growth and improved dealer relationships [4][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2025 was a challenging year, with macro-driven pressures and internal challenges [4] - The company expects 2026 to be a transition year as it resets the business and finalizes its new strategy [12] - Margins are anticipated to be under pressure in the near term due to production runs being below wholesale [13] Other Important Information - Dealer inventory at the end of Q4 was down 17% compared to the previous year, exceeding the target reduction of 10% [30] - The company is conducting a thorough review of its cost base and operating expenses to align with current demand [20] - A dividend of $1 billion was facilitated from HDFS to HDI in Q4, with further dividends expected [45] Q&A Session Summary Question: Inquiry about HDFS operating income expectations - Management indicated that HDFS operating income for 2026 is expected to be between $45 million and $60 million, with a long-term view of potentially tripling that figure [53][54] Question: Wholesale guidance and inventory levels - Management noted that Q1 2026 wholesale shipments are expected to be down slightly, with a potential increase in Q2 as dealers are positioned for the season [60][63] Question: Retail sales expectations and LiveWire investment - Management expressed optimism about retail sales growth in 2026, particularly with new model introductions, while also confirming continued investment in LiveWire despite potential losses [66][68]

Core Insights - Harley-Davidson reported a challenging year in 2025, with significant declines in revenue and motorcycle shipments, but is taking steps to stabilize the business and restore dealer confidence [1] Financial Performance - Full year 2025 revenue decreased by 14% to $4.473 billion from $5.187 billion in 2024 [1] - Fourth quarter revenue was down 28% to $496 million compared to $688 million in the same quarter of 2024 [1] - HDMC operating loss for 2025 was $29 million, a significant decline from an operating income of $278 million in 2024 [1] - Diluted EPS for 2025 was $2.78, down 19% from $3.44 in 2024, while the fourth quarter reported a diluted EPS loss of $2.44 [1] Motorcycle Shipments and Sales - Global motorcycle shipments for 2025 totaled 124,477 units, down 16% from 148,862 units in 2024 [1] - Global retail motorcycle sales decreased by 12% to 132,535 units in 2025 from 151,229 units in 2024 [1] - In North America, retail motorcycle sales increased by 5% in Q4 2025, but full year sales were down 13% [1] Harley-Davidson Financial Services (HDFS) - HDFS reported record-high operating income of $490 million for 2025, up from $248 million in 2024, driven by favorable credit loss provisions [1] - HDFS revenue decreased by 16% to $869 million in 2025 from $1.039 billion in 2024 [1] LiveWire Performance - LiveWire, the electric motorcycle segment, reported a 9% increase in revenue in Q4 2025, with an operating loss of $18 million, which is 30% less than the previous year [1] - For the full year, LiveWire sold 653 electric motorcycles, a slight increase from 612 units in 2024 [1] Capital Management - The company returned $434 million to shareholders through share repurchases and dividends in 2025 [1] - Cash and cash equivalents at year-end 2025 were $3.1 billion, up from $1.6 billion in 2024 [1] 2026 Outlook - For 2026, Harley-Davidson expects capital investments of $175 to $200 million and global motorcycle wholesale shipments of 130,000 to 135,000 units [1] - The company anticipates HDMC operating income to range from a loss of $40 million to a profit of $10 million [1]

Financial Data and Key Metrics Changes - The company reported adjusted net income of $30 million or $0.06 per diluted share in Q4 2025, compared to a net loss of $0.07 per diluted share in the previous quarter [5][6] - The unadjusted pre-provision, pre-tax net revenue improved by $51 million quarter-over-quarter, while adjusted pre-provision, pre-tax net revenue improved by $45 million versus Q3 [14] - The net interest margin (NIM) expanded by 14 basis points quarter-over-quarter, reaching 2.14%, including a one-time hedge gain of approximately $20 million [17][19] Business Line Data and Key Metrics Changes - The company experienced a 2% growth in net commercial and industrial (C&I) loans on a linked quarter basis, with a total commitment increase of 28% to $3 billion and originations rising by 22% to $2.1 billion [7][10] - The overall commercial real estate (CRE) exposure was reduced by $2.3 billion, with a concentration ratio now below 400% [7][22] - The multifamily portfolio declined by 13% or $4.3 billion year-over-year, with a reserve coverage of 1.83% [22][24] Market Data and Key Metrics Changes - Total CRE balances decreased by $12.1 billion or 25% since year-end 2023, aiding the strategy to diversify the loan portfolio [22] - The company reported a significant reduction in criticized and classified loans, down $330 million quarter-over-quarter, and a decrease in non-accrual loans by $267 million [26] Company Strategy and Development Direction - The company aims to solidify its balance sheet and reposition for growth, focusing on diversifying the loan portfolio and reducing reliance on wholesale funding [9][10] - The strategic initiatives over the past couple of years are expected to drive sustainable growth and profitability going forward [10][30] - The company plans to generate deposit growth across various business lines while maintaining discipline on pricing [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the bank's earning power continuing to strengthen in 2026, driven by growth in net interest income and margin expansion [8][30] - The management team highlighted the importance of proactive management of CRE exposure and improving the bank's credit profile [8][30] - The company anticipates a full year of profitability in 2026, with adjusted EPS forecasted to be in the range of $0.65-$0.70 [16] Other Important Information - The company reduced brokered deposits by almost $8 billion during the year, enhancing its liquidity position [10][19] - The CET1 capital ratio increased by almost 400 basis points, now ranking among the highest capitalized regional banks [9][18] Q&A Session Summary Question: Can you talk about the drivers behind the lowered net interest income guidance? - Management indicated that higher payoff activity, particularly related to multifamily and CRE loans, was the primary driver for the reduction [34][35] Question: How comfortable are you with funding loan growth through core deposit growth? - Management expressed confidence in core deposit growth, leveraging bank branches and new C&I relationships to drive deposits [46][50] Question: What are the prospects for capital return and stock buybacks? - Management noted that the board will consider how to deploy excess capital based on balance sheet growth and non-performing loans [52][53] Question: Can you provide updates on the rent-regulated portfolio and potential impacts from rent freezes? - Management stated that there is ongoing dialogue regarding rent regulations and emphasized that they have not seen a decline in liquidity in the multifamily portfolio [71][76] Question: What is the expected roll-on yield for new C&I and CRE loans? - New C&I loans are coming on at a spread to SOFR of 175 to 300 basis points, while new CRE loans are at 200-225 basis points [89]

Financial Data and Key Metrics Changes - Total assets decreased to $9.8 billion from $10.4 billion, primarily due to reduced wholesale funding and higher cost deposits [9] - Total gross loans decreased by $244.6 million to $6.7 billion, attributed to higher prepayments and repayments [9] - Total deposits decreased by $514 million to $7.8 billion, driven by efforts to reduce higher cost deposits [10] - Diluted income per share for the fourth quarter was $0.07, down from $0.35 in the third quarter [11] - Net interest income decreased to $90.2 million from $94.2 million, with net interest margin dropping to 3.78% from 3.92% [11] - Non-interest income increased to $22 million from $17.3 million, driven by gains from the sale and leaseback of banking centers [11] Business Line Data and Key Metrics Changes - The company focused on credit transformation, operational efficiency, and balance sheet optimization as part of its strategic plan [4][5] - The asset management segment saw an increase in assets under management to $3.3 billion, up by $87.2 million [10] Market Data and Key Metrics Changes - The company has significant deposits and assets under management in Venezuela, with nearly $2 billion in deposits and close to 50,000 customers [6][7] - The company anticipates growth opportunities in Venezuela due to potential reopening of the oil sector [7] Company Strategy and Development Direction - The board approved a three-year strategic plan focusing on stabilization, optimization, and growth [3] - The company aims to enhance shareholder value through disciplined execution and investment in human capital [4] - A share repurchase program was approved to recognize the intrinsic value of shares [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future and its ability to enhance shareholder value [3] - The company is focused on improving credit quality and asset management while navigating a challenging economic environment [25] - Management highlighted the importance of proactive credit risk management and operational efficiencies [25] Other Important Information - The company plans to maintain a strong capital position while balancing growth, buybacks, and dividends [24] - The efficiency ratio is targeted to improve towards 60% by year-end 2026 [32] Q&A Session Summary Question: What metrics can be used to measure the progress of the three-year program? - Management emphasized improvements in credit quality metrics and a disciplined approach to loan origination as critical measures of success [27][28] Question: Are there any financial targets outlined for the next couple of years? - Management aims for a return on assets close to 1% and an efficiency ratio around 60% by year-end 2026, with aspirations for further improvements in subsequent years [31][32] Question: What specific drivers will help reduce expenses in 2026? - Management highlighted the reduction of higher cost deposits and optimization of marketing expenses as key drivers for expense reduction [34][35] Question: How does the company view asset quality moving forward? - Management expects outflows to outweigh inflows in criticized loan buckets, projecting an improvement in asset quality [39] Question: How are recent events in Venezuela impacting the company? - Management sees potential growth opportunities in Venezuela, with expectations of increased deposits and asset management as the market stabilizes [41][42]

Core Viewpoint - Rigel Pharmaceuticals is presenting its strategic plan aimed at growth and development in the healthcare sector, focusing on expanding its commercial business and product pipeline while maintaining financial discipline [4]. Group 1: Strategic Objectives - The company has outlined four strategic objectives: grow the commercial business, in-license and add products to the commercial portfolio, advance the product pipeline in the clinic, and maintain financial discipline [4]. - These strategic objectives are interdependent and have been crucial in the company's development over the past five years [4]. Group 2: Historical Context - Five years ago, Rigel was primarily a one-product company with TAVALISSE for adult chronic ITP in the U.S. and had a limited development pipeline [5].

Financial Data and Key Metrics Changes - Diluted EPS finished at $5.53 per share, and net income was $206 million, both representing a 14% increase from the prior year [6][14] - The company generated $410 million in EBITDA, a 17.5% increase from the prior year [6][14] - Total revenue for the quarter was $4.51 billion, an increase of $559 million, or 14.2% from the prior year [9][14] - Gross profit was $1.12 billion, an increase of $163 million, or 17% from the prior year [10][14] Business Line Data and Key Metrics Changes - Same store sales were up 3.3% for the second quarter, or 7.5% on a two-year stack basis, with an average margin of 42.4% [7] - Same store prepared food and dispensed beverage sales increased by 4.8%, or 10.3% on a two-year stack basis, with an average margin of 58.6% [7] - Same-store grocery and general merchandise sales were up 2.7%, or 6.4% on a two-year stack basis, with an average margin of 36%, an increase of approximately 40 basis points from the prior year [8] Market Data and Key Metrics Changes - Same-store gallons sold were up 0.8%, with a fuel margin of 41.6 cents per gallon [8] - The Midcontinent region saw an approximate 2% decline in fuel gallons sold, indicating continued market share growth for the company [8] Company Strategy and Development Direction - The company is focused on balancing profitability and volume, with a strong emphasis on store execution and guest engagement [21] - The strategic plan is nearing completion, with expectations to continue gaining market share and enhancing the value proposition for customers [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to compete effectively in a challenging environment, noting that consumer behavior is becoming more discerning [72] - The company expects a sequential deceleration in EBITDA growth in the second half of the fiscal year due to higher prior year comparisons and the integration of recent acquisitions [33] Other Important Information - The board of directors voted to maintain the quarterly dividend at $0.57 per share, with share repurchases expected to total approximately $200 million for the fiscal year [15] - The company is approximately 80% hedged for cheese prices for the next four quarters, ensuring favorable pricing stability [52] Q&A Session Summary Question: Can you talk about the sustainability of fuel performance? - Management indicated that their consistent approach to balancing profitability and volume has contributed to their success, with a focus on store traffic driving fuel sales [21][22] Question: What impact will SEFCOS stores have on margins? - Management acknowledged that SEFCOS stores currently carry lower margins but expect improvements as they are rebranded and integrated into the Casey's model [27][28] Question: What are the drivers behind the updated EBITDA guidance? - Management clarified that the strong first half results will not be replicated in the second half due to higher prior year comparisons and the integration of FICOS [33] Question: How is the company addressing competition from private convenience stores? - Management expressed confidence in their competitive positioning, highlighting their differentiated offerings and strong performance in competitive markets [66][67] Question: What is the company's strategy regarding M&A? - The company remains focused on small tuck-in acquisitions while maintaining a high bar for asset quality, with no significant changes in their M&A strategy [35][36]