Southland (US:SLND)2025-05-14 15:02Financial 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]