GRAPEVINE, Texas, March 04, 2025--(BUSINESS WIRE)--Southland Holdings, Inc. (NYSE American: SLND and SLND WS) ("Southland"), a leading provider of specialized infrastructure construction services, today announced financial results for the quarter and full year ended December 31, 2024.
Fourth Quarter 2024 Results Include:
Revenue of $267.3 million for the quarter ended December 31, 2024, compared to $316.2 million for the quarter ended December 31, 2023.
Gross profit of $7.7 million for the quarter ended December 31, 2024, compared to $21.1 million in gross profit for the quarter ended December 31, 2023.
Net loss attributable to stockholders of $4.2 million, or $(0.09) per share for the quarter ended December 31, 2024, compared to a net loss attributable to stockholders of $5.6 million, or $(0.12) per share for the quarter ended December 31, 2023.
EBITDA of $(2.7) million for the quarter ended December 31, 2024, compared to $9.1 million for the quarter ended December 31, 2023.(1)
Backlog of $2.57 billion.(1)
Full Year 2024 Results Include:
Revenue of $980.2 million for the year ended December 31, 2024, compared to $1.2 billion for the year ended December 31, 2023.
Gross loss of $63.0 million for the year ended December 31, 2024, compared to $35.8 million in gross profit for the year ended December 31, 2023.
Net loss attributable to stockholders of $105.4 million, or $(2.19) per share for the year ended December 31, 2024, compared to a net loss attributable to stockholders of $19.3 million, or $(0.41) per share for the year ended December 31, 2023.
Adjusted Net loss attributable to stockholders of $105.4 million, or $(2.19) per share for the year ended December 31, 2024, compared to an adjusted net loss attributable to stockholders of $38.7 million, or $(0.82) per share for the year ended December 31, 2023.(1)
(1)
Please refer to "Non-GAAP Measures" and reconciliations for our non-GAAP financial measures, including, "Adjusted Net Loss," "Adjusted Net Loss Per Share," "EBITDA" and "Backlog"
"Despite the challenges we faced in 2024, I am proud of how our teams performed operationally under difficult conditions," said Frank Renda, Southland’s President & Chief Executive Officer. "As we move into 2025, we remain focused on executing our new core work with precision, winding down legacy work, and capitalizing on the great opportunities in our core markets. Sustained strong demand for Southland’s services positions us for long-term success."
2024 Fourth Quarter & Full Year Results
Condensed Consolidated Statements of Operations
Three Months Ended
(Amounts in thousands)
December 31, 2024
December 31, 2023
Revenue
$
267,250
$
316,189
Cost of construction
259,584
295,053
Gross profit
7,666
21,136
Selling, general, and administrative expenses
15,708
19,929
Operating income (loss)
(8,042)
1,207
Gain (loss) on investments, net
(207)
33
Other income, net
1,201
21
Interest expense
(9,617)
(5,681)
Losses before income taxes
(16,665)
(4,420)
Income tax expense (benefit)
(14,096)
2,919
Net loss
(2,569)
(7,339)
Net income (loss) attributable to noncontrolling interests
1,586
(1,776)
Net loss attributable to Southland Stockholders
$
(4,155)
$
(5,563)
Net loss per share attributable to common stockholders
Basic (1)
$
(0.09)
$
(0.12)
Diluted (1)
$
(0.09)
$
(0.12)
Weighted average shares outstanding
Basic (1)
47,877,558
47,877,558
Diluted (1)
47,877,558
47,877,558
____________________________
(1)
Basic net loss per share is the same as diluted net loss per share attributable to common stockholders for the three months ended December 31, 2024, and December 31, 2023, because the inclusion of potential shares of common stock would have been anti-dilutive for the period presented.
Revenue for the three months ended December 31, 2024, was $267.3 million, a decrease of $48.9 million, or 15.5%, compared to the three months ended December 31, 2023. Materials & Paving business contributed $35.6 million to revenue in the three months ended December 31, 2024.
Gross profit for the three months ended December 31, 2024, was $7.7 million compared to gross profit of $21.1 million for the three months ended December 31, 2023. Gross margin decreased from 6.7% to 2.9% for the three months ended December 31, 2024, compared to the three months ended December 31, 2023. Materials & Paving business negatively impacted gross loss by $7.6 million in the three months ended December 31, 2024.
Selling, general, and administrative costs for the three months ended December 31, 2024, were $15.7 million, a decrease of $4.2 million, or 21.2%, compared to the three months ended December 31, 2023. Selling, general, and administrative costs as a percent of revenue were 5.9% for the three months ended December 31, 2024, compared to 6.3% for the three months ended December 31, 2023.
Condensed Consolidated Statements of Operations
Year Ended
(Amounts in thousands)
December 31, 2024
December 31, 2023
Revenue
$
980,179
$
1,160,417
Cost of construction
1,043,219
1,124,603
Gross profit (loss)
(63,040)
35,814
Selling, general, and administrative expenses
63,274
67,195
Operating loss
(126,314)
(31,381)
Gain (loss) on investments, net
(225)
30
Other income, net
3,631
23,580
Interest expense
(29,512)
(19,471)
Losses before income taxes
(152,420)
(27,242)
Income tax benefit
(46,892)
(8,527)
Net loss
(105,528)
(18,715)
Net income (loss) attributable to noncontrolling interests
(163)
538
Net loss attributable to Southland Stockholders
$
(105,365)
$
(19,253)
Net loss per share attributable to common stockholders
Basic (1)
$
(2.19)
$
(0.41)
Diluted (1)
$
(2.19)
$
(0.41)
Weighted average shares outstanding
Basic (1)
48,073,973
47,088,813
Diluted (1)
48,073,973
47,088,813
____________________________
(1)
Basic net loss per share is the same as diluted net loss per share attributable to common stockholders for the year ended December 31, 2024, and December 31, 2023, because the inclusion of potential shares of common stock would have been anti-dilutive for the period presented.
Revenue for the year ended December 31, 2024, was $980.2 million, a decrease of $180.2 million, or 15.5%, compared to the year ended December 31, 2023. Materials & Paving business contributed $100.6 million to revenue in the year ended December 31, 2024.
Gross loss for the year ended December 31, 2024, was $63.0 million compared to gross profit of $35.8 million for year ended December 31, 2023. Gross margin decreased from 3.1% to (6.4)% for the year ended December 31, 2024, compared to the year ended December 31, 2023. Materials & Paving business negatively impacted gross loss by $83.1 million in the year ended December 31, 2024.
Selling, general, and administrative costs for the year ended December 31, 2024, were $63.3 million, a decrease of $3.9 million, or 5.8%, compared to the year ended December 31, 2023. Selling, general, and administrative costs as a percent of revenue were 6.5% for the year ended December 31, 2024, compared to 5.8% for the year ended December 31, 2023.
Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share Attributable to Common Stock Reconciliation
Three Months Ended
Year Ended
(Amounts in thousands except shares and per share data)
December 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Reconciliation of adjusted net loss attributable to common stock:
Net loss attributable to common stock (GAAP as reported)
$
(4,155)
$
(5,563)
$
(105,365)
$
(19,253)
Adjustments:
Transaction related costs
—
—
—
1,594
Contingent earnout consideration non-cash expense
—
—
—
(20,689)
Income tax impact of adjustments (1)
—
—
—
(311)
Adjusted net loss attributable to common stockholders
$
(4,155)
$
(5,563)
$
(105,365)
$
(38,659)
Weighted average shares outstanding for diluted and adjusted diluted earnings per share (2)
48,232,271
47,877,558
48,073,973
47,088,813
Diluted loss per share attributable to common stock (2)
$
(0.09)
$
(0.12)
$
(2.19)
$
(0.41)
Adjusted diluted loss per share attributable to common stock (2)
$
(0.09)
$
(0.12)
$
(2.19)
$
(0.82)
____________________________
(1)
The income tax impact of adjustments that are subject to tax is determined using the incremental statutory tax rates of the jurisdictions to which each adjustment relates for the respective periods.
(2)
Basic net loss per share is the same as diluted net income (loss) per share attributable to common stockholders for the three months and the year ended December 31, 2024, and December 31, 2023, because the inclusion of potential shares of common stock would have been anti-dilutive for the period presented.
Condensed Consolidated Balance Sheets
(Amounts in thousands, except shares and per share data)
As of
ASSETS
December 31, 2024
December 31, 2023
Current assets
Cash and cash equivalents
$
72,185
$
49,176
Restricted cash
15,376
14,644
Accounts receivable, net
179,320
194,869
Retainage receivables
112,264
109,562
Contract assets
483,181
554,202
Other current assets
19,326
20,083
Total current assets
881,652
942,536
Property and equipment, net
116,328
102,150
Right-of-use assets
14,897
12,492
Investments - unconsolidated entities
126,705
121,648
Investments - limited liability companies
2,590
2,590
Investments - private equity
2,699
3,235
Deferred tax asset
54,531
11,496
Goodwill
1,528
1,528
Intangible assets, net
1,180
1,682
Other noncurrent assets
1,539
1,711
Total noncurrent assets
321,997
258,532
Total assets
1,203,649
1,201,068
LIABILITIES AND EQUITY
Current liabilities
Accounts payable
$
191,670
$
162,464
Retainage payable
33,622
40,950
Accrued liabilities
91,515
124,667
Current portion of long-term debt
44,525
48,454
Short-term lease liabilities
10,104
14,081
Contract liabilities
249,706
193,351
Total current liabilities
621,142
583,967
Long-term debt
255,625
251,906
Long-term lease liabilities
10,791
5,246
Deferred tax liabilities
292
2,548
Financing obligations, net
41,468
—
Long-term accrued liabilities
58,075
49,109
Other noncurrent liabilities
40,847
47,728
Total long-term liabilities
407,098
356,537
Total liabilities
1,028,240
940,504
Commitments and contingencies (see Note 17)
Stockholders' equity
Preferred stock, $0.0001 par value, authorized 50,000,000 shares, none issued and outstanding as of December 31, 2024 and December 31, 2023
—
—
Common stock, $0.0001 par value, authorized 500,000,000 shares, 53,936,411 and 47,891,984 issued and outstanding as of December 31, 2024 and December 31, 2023, respectively
5
5
Additional paid-in-capital
292,173
270,330
Accumulated deficit
(124,618)
(19,253)
Accumulated other comprehensive loss
(3,902)
(1,460)
Total stockholders' equity
163,658
249,622
Noncontrolling interest
11,751
10,942
Total equity
175,409
260,564
Total liabilities and equity
$
1,203,649
$
1,201,068
Condensed Consolidated Statement of Cash Flows
Year Ended
(Amounts in thousands)
December 31, 2024
December 31, 2023
Cash flows from operating activities:
Net loss
$
(105,528)
$
(18,715)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
23,298
30,529
Loss on extinguishment of debt
246
631
Deferred taxes
(44,751)
(12,341)
Change in fair value of earnout liability
—
(20,689)
Share-based compensation
2,049
891
Gain on sale of assets
(3,439)
(1,328)
Foreign currency remeasurement gain
(12)
(109)
Loss (earnings) from equity method investments
415
(7,740)
TZC investment present value accretion
(3,367)
(2,449)
Loss (gain) on trading securities, net
224
(26)
Changes in assets and liabilities:
Accounts receivable
9,924
(48,971)
Contract assets
70,713
(42,921)
Other current assets
757
4,136
Right-of-use assets
(2,410)
4,402
Accounts payable and accrued liabilities
(3,652)
46,608
Contract liabilities
56,426
61,775
Operating lease liabilities
2,538
(4,314)
Other
(1,504)
367
Net cash provided by (used in) operating activities
1,927
(10,264)
Cash flows from investing activities:
Purchase of property and equipment
(7,416)
(10,846)
Proceeds from sale of property and equipment
6,513
8,813
Purchase of trading securities
(89)
—
Proceeds from the sale of trading securities
401
61
Distributions received from equity method investees
—
7,000
Distributions received from investees
4,069
—
Capital contribution to unconsolidated investments
(250)
—
Capital contribution to equity method investees
—
(540)
Net cash provided by investing activities
3,228
4,488
Cash flows from financing activities:
Borrowings on revolving credit facility
5,000
8,000
Payments on revolving credit facility
(95,000)
(13,000)
Borrowings on notes payable
168,127
115,265
Payments on notes payable
(89,781)
(123,720)
Proceeds from financing obligations
42,500
—
Payments of deferred financing costs
(7,982)
(565)
Pre-payment premium
(246)
(471)
Advances from (to) related parties
12
(242)
Payments on finance lease and financing obligations
(5,481)
(4,835)
Capital contributions from noncontrolling members
1,838
—
Distribution to members
—
(110)
Payment of taxes related to net share settlement of RSUs
(206)
—
Proceeds from merger of Legato II and Southland LLC
—
17,088
Net cash provided by (used in) financing activities
18,781
(2,590)
Effect of exchange rate on cash
(195)
195
Net increase (decrease) in cash and cash equivalents and restricted cash
23,741
(8,171)
Beginning of period
63,820
71,991
End of period
$
87,561
$
63,820
Supplemental cash flow information
Cash paid for income taxes
$
1,561
$
7,587
Cash paid for interest
$
28,047
$
18,277
Non-cash investing and financing activities:
Lease assets obtained in exchange for new leases
$
18,718
$
13,875
Assets obtained in exchange for notes payable
$
27,365
$
10,884
Related party payable exchanged for note payable
$
3,797
$
—
Conversion of promissory notes payable to equity
$
20,000
$
—
Distribution to joint venture partner
$
276
$
—
Issuance of post-merger earn out shares
$
—
$
35,000
Dividend financed with notes payable
$
—
$
50,000
Conference Call
Southland will host a conference call at 10:00 a.m. Eastern Time on Wednesday, March 5, 2025. The call may be accessed here, or at www.southlandholdings.com. Following the conference call, a replay will be available on Southland’s website.
About Southland
Southland is a leading provider of specialized infrastructure construction services. With roots dating back to 1900, Southland and its subsidiaries form one of the largest infrastructure construction companies in North America, with experience throughout the world. The company serves the bridges, tunnelling, communications, transportation and facilities, marine, steel structures, water and wastewater treatment, and water pipeline end markets. Southland is headquartered in Grapevine, Texas.
This press release includes certain unaudited financial measures not presented in accordance with generally accepted accounting principles ("GAAP"), including but not limited to earnings before interest, taxes, depreciation, and amortization ("EBITDA"), adjusted earnings before interest, taxes, depreciation, and amortization ("Adjusted EBITDA"), backlog, adjusted net income (loss), adjusted net income (loss) per share and certain ratios and other metrics derived therefrom. Note that other companies may calculate these non-GAAP financial measures differently, and therefore such financial measures may not be directly comparable to similarly titled measures of other companies. Further, these non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. Southland believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Southland’s financial condition and results of operations. Southland also believes that these non-GAAP financial measures provide an additional tool for investors to use in evaluating ongoing operating results and trends. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which items of expense and income are excluded or included in determining these non-GAAP financial measures.
Please see the accompanying tables for reconciliations of the following non-GAAP financial measures for Southland’s current and historical results: adjusted net income (loss) per share attributable to common stock (a non-GAAP financial measure) to net income (loss) per share attributable to common stock; and adjusted net income (loss) attributable to common stock, and Adjusted EBITDA (non-GAAP financial measures) to net income (loss) attributable to common stock.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on Southland’s current beliefs, expectations and assumptions regarding the future of Southland’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of Southland’s control. Southland’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements.
Any forward-looking statement made by Southland in this press release is based only on information currently available to Southland and speaks only as of the date on which it is made. Southland undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
