株探米国株
日本語 英語
エドガーで原本を確認する
false 0001883814 0001883814 2024-11-12 2024-11-12 0001883814 slnd:CommonStockParValue0.0001PerShareMember 2024-11-12 2024-11-12 0001883814 slnd:RedeemableWarrantsExercisableForSharesOfCommonStockAtExercisePriceOf11.50PerShareMember 2024-11-12 2024-11-12 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): November 12, 2024

 

 

SOUTHLAND HOLDINGS, INC.

(Exact Name of Registrant as Specified in Charter)

 

Delaware   001-41090   87-1783910
(State or Other Jurisdiction   (Commission   (IRS Employer
of Incorporation)   File Number)   Identification No.)

 

1100 Kubota Drive

Grapevine, TX 76051

(Address of Principal Executive Offices) (Zip Code)

 

(817) 293-4263

(Registrant’s Telephone Number, Including Area Code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c))

 

Securities registered pursuant to section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common stock, par value $0.0001 per share   SLND   NYSE American LLC
Redeemable warrants, exercisable for shares of common stock at an exercise price of $11.50 per share   SLND WS   NYSE American LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 


 

Item 2.02 Results of Operations and Financial Condition. 

 

On November 12, 2024, Southland Holdings, Inc., a Delaware corporation (the “Company”), issued a press release announcing financial results for the quarter ended September 30, 2024. Additional information is included in the Company’s press release. A copy of the Company’s press release is attached hereto as Exhibit 99.1. The foregoing description of the press release is qualified in its entirety by reference to the attached exhibit.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits:

 

Exhibit   Description
99.1   Press Release dated November 12, 2024.
104   Cover Page Interactive Data File (embedded within Inline XBRL document)

 

1


 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: November 12, 2024 SOUTHLAND HOLDINGS, INC.
     
  By: /s/ Frank S. Renda
    Name:  Frank S. Renda
    Title:  President and Chief Executive Officer

 

2

EX-99.1 2 southlandhold_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

Southland Announces Third Quarter 2024 Results

 

GRAPEVINE, Texas, November 12, 2024 – 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 ended September 30, 2024.

 

Revenue of $173.3 for the quarter ended September 30, 2024, compared to $312.5 million for the quarter ended September 30, 2023.

 

Gross loss of $51.1 million for the quarter ended September 30, 2024, compared to $29.5 million in gross profit for the quarter ended September 30, 2023.

 

Net loss attributable to stockholders of $54.7 million, or $(1.14) per share for the quarter ended September 30, 2024, compared to a net income attributable to stockholders of $3.8 million, or $0.08 per share for the quarter ended September 30, 2023.

 

EBITDA of $(58.7) million for the quarter ended September 30, 2024, compared to $22.3 million for the quarter ended September 30, 2023.(1)

 

Backlog of $2.74 billion, compared to $2.54 billion as of September 30, 2023.(1)

 

(1) Please refer to “Non-GAAP Measures” and reconciliations for our non-GAAP financial measures, including, “EBITDA” and “Backlog”

 

Southland’s President & Chief Executive Officer, Frank Renda, said, “While this quarter was disappointing due to legacy project impacts, I remain very confident in Southland’s long-term outlook. We finished the quarter with the highest quarter end cash balance we have had since becoming a public company and backlog of $2.7 billion. This positions us to capitalize on a promising pipeline of opportunities as demand for our services continues to be robust.”

 

2024 Third Quarter Results

 

Condensed Consolidated Statements of Operations (unaudited)

 

    Three Months Ended  
(Amounts in thousands)   September 30,
2024
    September 30,
2023
 
Revenue   $ 173,320     $ 312,472  
Cost of construction     224,425       282,943  
Gross profit (loss)     (51,105 )     29,529  
Selling, general, and administrative expenses     17,492       15,247  
Operating income (loss)     (68,597 )     14,282  
Gain (loss) on investments, net     5       (21 )
Other income, net     841       2,151  
Interest expense     (7,520 )     (6,231 )
Earnings (losses) before income taxes     (75,271 )     10,181  
Income tax expense (benefit)     (17,142 )     5,390  
Net income (loss)     (58,129 )     4,791  
Net income (loss) attributable to noncontrolling interests     (3,402 )     991  
Net income (loss) attributable to Southland Stockholders   $ (54,727 )   $ 3,800  
                 
Net income (loss) per share attributable to common stockholders                
Basic(1)   $ (1.14 )   $ 0.08  
Diluted(1)   $ (1.14 )   $ 0.08  
Weighted average shares outstanding                
Basic(1)     48,105,512       47,856,114  
Diluted(1)     48,105,512       47,872,042  

 

 
(1) Basic net income (loss) per share is the same as diluted net loss per share attributable to common stockholders for the three months ended September 30, 2024, because the inclusion of potential shares of common stock would have been anti-dilutive.

 

 


 

Revenue for the three months ended September 30, 2024, was $173.3 million, a decrease of $139.2 million, or 44.5%, compared to the three months ended September 30, 2023. Materials & Paving business contributed $17.5 million to revenue in the three months ended September 30, 2024.

 

Gross loss for the three months ended September 30, 2024, was $51.1 million, compared to gross profit of $29.5 million for the three months ended September 30, 2023. Gross margin decreased from 9.5% to (29.5)% for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. Materials & Paving business negatively impacted gross loss by $18.3 million in the three months ended September 30, 2024.

 

Selling, general, and administrative costs for the three months ended September 30, 2024, were $17.5 million, an increase of $2.2 million, or 14.7%, compared to the three months ended September 30, 2023. Selling, general, and administrative costs as a percent of revenue were 10.1% for the three months ended September 30, 2024, compared to 4.9% for the three months ended September 30, 2023.

 

Condensed Consolidated Statements of Operations (unaudited)

 

    Nine Months Ended  
(Amounts in thousands)   September 30,
2024
    September 30,
2023
 
Revenue   $ 712,929     $ 844,228  
Cost of construction     783,635       829,550  
Gross profit (loss)     (70,706 )     14,678  
Selling, general, and administrative expenses     47,566       47,266  
Operating loss     (118,272 )     (32,588 )
Loss on investments, net     (18 )     (3 )
Other income, net     2,430       23,559  
Interest expense     (19,895 )     (13,790 )
Losses before income taxes     (135,755 )     (22,822 )
Income tax benefit     (32,796 )     (11,446 )
Net loss     (102,959 )     (11,376 )
Net income (loss) attributable to noncontrolling interests     (1,749 )     2,314  
Net loss attributable to Southland Stockholders   $ (101,210 )   $ (13,690 )
                 
Net loss per share attributable to common stockholders                
Basic(1)   $ (2.11 )     (0.29 )
Diluted(1)   $ (2.11 )     (0.29 )
Weighted average shares outstanding                
Basic(1)     48,020,822       46,771,938  
Diluted(1)     48,020,822       46,771,938  

 

 
(1) Basic net loss per share is the same as diluted net loss per share attributable to common stockholders for the nine months ended September 30, 2024, and September 30, 2023, because the inclusion of potential shares of common stock would have been anti-dilutive for the periods presented.

 

Revenue for the nine months ended September 30, 2024, was $712.9 million, a decrease of $131.3 million, or 15.6%, compared to the nine months ended September 30, 2023. Materials & Paving business contributed $65.0 million to revenue in the nine months ended September 30, 2024.

 

Gross loss for the nine months ended September 30, 2024, was $70.7 million, compared to gross profit of $14.7 million for the nine months ended September 30, 2023. Gross margin decreased from 1.7% to (9.9)% for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. Materials & Paving business negatively impacted gross loss by $75.4 million in the nine months ended September 30, 2024.

 

Selling, general, and administrative costs for the nine months ended September 30, 2024, were $47.6 million, an increase of $0.3 million, or 0.6%, compared to the nine months ended September 30, 2023. Selling, general, and administrative costs as a percent of revenue were 6.7% for the nine months ended September 30, 2024, compared to 5.6% for the nine months ended September 30, 2023.

 

2


 

Segment Revenue

 

    Three Months Ended  
(Amounts in thousands)   September 30,
2024
    September 30,
2023
 
          % of Total           % of Total  
Segment   Revenue     Revenue     Revenue     Revenue  
Civil   $ 55,849       32.2 %   $ 90,708       29.0 %
Transportation     117,471       67.8 %     221,764       71.0 %
Total revenue   $ 173,320       100.0 %   $ 312,472       100.0 %

 

    Nine Months Ended  
(Amounts in thousands)   September 30,
2024
    September 30,
2023
 
          % of Total           % of Total  
Segment   Revenue     Revenue     Revenue     Revenue  
Civil   $ 219,490       30.8 %   $ 229,264       27.2 %
Transportation     493,439       69.2 %     614,964       72.8 %
Total revenue   $ 712,929       100.0 %   $ 844,228       100.0 %

 

Segment Gross Profit (Loss)

 

    Three Months Ended  
(Amounts in thousands)   September 30,
2024
    September 30,
2023
 
          % of Segment     Gross     % of Segment  
Segment   Gross Loss     Revenue     Profit     Revenue  
Civil   $ (18,336 )     (32.8 )%   $ 12,465       13.7 %
Transportation     (32,769 )     (27.9 )%     17,064       7.7 %
Gross profit (loss)   $ (51,105 )     (29.5 )%   $ 29,529       9.5 %

 

    Nine Months Ended  
(Amounts in thousands)   September 30,
2024
   

September 30,

2023

 
          % of Segment     Gross     % of Segment  
Segment   Gross Profit     Revenue     Profit     Revenue  
Civil   $ 8,694       4.0 %   $ 27,137       11.8 %
Transportation     (79,400 )     (16.1 )%     (12,459 )     (2.0 )%
Gross profit (loss)   $ (70,706 )     (9.9 )%   $ 14,678       1.7 %

 

Adjusted EBITDA Reconciliation

 

    Three Months Ended     Nine Months Ended  
(Amounts in thousands)   September 30,
2024
    September 30,
2023
    September 30,
2024
    September 30,
2023
 
Net income (loss) attributable to Southland Stockholders   $ (54,727 )   $ 3,800     $ (101,210 )   $ (13,690 )
Depreciation and amortization     5,776       7,968       16,925       24,704  
Income tax expense (benefit)     (17,142 )     5,390       (32,796 )     (11,446 )
Interest expense     7,520       6,231       19,895       13,790  
Interest income     (167 )     (1,060 )     (527 )     (1,358 )
EBITDA     (58,740 )     22,329       (97,713 )     12,000  
Transaction related costs     -       -       -       1,594  
Contingent earnout consideration non-cash expense reversal     -       -       -       (20,689 )
Adjusted EBITDA   $ (58,740 )   $ 22,329     $ (97,713 )   $ (7,095 )

 

3


 

Backlog

 

(Amounts in thousands)      
Balance December 31, 2023   $ 2,834,966  
New contracts, change orders, and adjustments     615,151  
Less: contract revenue recognized in 2024     (712,928 )
Balance September 30, 2024   $ 2,737,189  

 

Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share Attributable to Common Stock Reconciliation

 

    Three Months Ended     Nine Months Ended  
(Amounts in thousands except shares and per share data)   September 30,
2024
    September 30,
2023
    September 30,
2024
    September 30,
2023
 
Reconciliation of adjusted net loss attributable to common stock:                                
Net income (loss) attributable to common stock (GAAP as reported)   $ (54,727 )   $ 3,800     $ (101,210 )   $ (13,690 )
Adjustments:                                
Transaction related costs     -       -       -       1,594  
Contingent earnout consideration non-cash expense     -       -       -       (20,689 )
Income tax impact of adjustments(1)     -       -       -       (311 )
Adjusted net income (loss) attributable to common stockholders   $ (54,727 )   $ 3,800     $ (101,210 )   $ (33,096 )
                                 
Weighted average shares outstanding for diluted and adjusted diluted earnings per share(2)     48,105,512       47,872,042       48,020,822       46,771,938  
                                 
Diluted income (loss) per share attributable to common stock(2)   $ (1.14 )   $ 0.08     $ (2.11 )   $ (0.29 )
Adjusted diluted income (loss) per share attributable to common stock(2)   $ (1.14 )   $ 0.08     $ (2.11 )   $ (0.71 )

 

 
(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 income (loss) per share is the same as diluted net income (loss) per share attributable to common stockholders for the three and nine months ended September 30, 2024, and the nine months ended September 30, 2023, because the inclusion of potential shares of common stock would have been anti-dilutive for the periods presented.

 

4


 

Condensed Consolidated Balance Sheets (unaudited)

 

    As of  
(Amounts in thousands, except share and per share data)   September 30,
2024
    December 31,
2023
 
ASSETS                
Current assets                
Cash and cash equivalents   $ 91,378     $ 49,176  
Restricted cash     15,370       14,644  
Accounts receivable, net     193,124       194,869  
Retainage receivables     108,651       109,562  
Contract assets     456,176       554,202  
Other current assets     19,223       20,083  
Total current assets     883,922       942,536  
                 
Property and equipment, net     114,034       102,150  
Right-of-use assets     13,584       12,492  
Investments - unconsolidated entities     125,588       121,648  
Investments - limited liability companies     2,590       2,590  
Investments - private equity     3,095       3,235  
Deferred tax asset     39,334       11,496  
Goodwill     1,528       1,528  
Intangible assets, net     1,418       1,682  
Other noncurrent assets     1,701       1,711  
Total noncurrent assets     302,872       258,532  
Total assets   $ 1,186,794     $ 1,201,068  
                 
LIABILITIES AND EQUITY                
Current liabilities                
Accounts payable   $ 164,897     $ 162,464  
Retainage payable     35,954       40,950  
Accrued liabilities     101,939       124,667  
Current portion of long-term debt     43,072       48,454  
Short-term lease liabilities     8,829       14,081  
Contract liabilities     243,505       193,351  
Total current liabilities     598,196       583,967  
                 
Long-term debt     275,237       251,906  
Long-term lease liabilities     6,085       5,246  
Deferred tax liabilities     1,952       2,548  
Long-term accrued liabilities     58,075       49,109  
Financing obligations, net     41,464       -  
Other noncurrent liabilities     47,751       47,728  
Total long-term liabilities     430,564       356,537  
Total liabilities     1,028,760       940,504  
                 
Commitment and contingencies (Note 7)                
                 
Stockholders’ equity                
Preferred stock, $0.0001 par value, authorized 50,000,000 shares, none issued and outstanding as of September 30, 2024 and December 31, 2023     -       -  
Common stock, $0.0001 par value, authorized 500,000,000 shares, 48,105,512 and 47,891,984 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively     5       5  
Additional paid-in-capital     271,798       270,330  
Accumulated deficit     (120,463 )     (19,253 )
Accumulated other comprehensive loss     (2,276 )     (1,460 )
Total stockholders’ equity     149,064       249,622  
Noncontrolling interest     8,970       10,942  
Total equity     158,034       260,564  
Total liabilities and equity   $ 1,186,794     $ 1,201,068  

 

5


 

Condensed Consolidated Statement of Cash Flows (unaudited)

 

    Nine Months Ended  
(Amounts in thousands)   September 30,
2024
    September 30,
2023
 
Cash flows from operating activities:                
Net loss   $ (102,959 )   $ (11,376 )
Adjustments to reconcile net loss to net cash used in operating activities                
Depreciation and amortization     16,925       24,704  
Loss on extinguishment of debt     246       -  
Deferred taxes     (28,379 )     (22,148 )
Change in fair value of earnout liability     -       (20,689 )
Share based compensation     1,674       484  
Gain on sale of assets     (3,279 )     (118 )
Foreign currency remeasurement gain     (53 )     (37 )
Loss (earnings) from equity method investments     2,453       (5,102 )
TZC investment present value accretion     (3,367 )     (1,828 )
Loss on trading securities, net     18       3  
Changes in assets and liabilities:                
Accounts receivable     2,196       (69,471 )
Contract assets     97,801       (4,376 )
Other current assets     859       1,564  
Right-of-use assets     (1,096 )     4,034  
Accounts payable and accrued liabilities     (22,659 )     20,584  
Contract liabilities     50,115       53,048  
Operating lease liabilities     1,227       (3,991 )
Other     520       (1,873 )
Net cash provided by (used in) operating activities     12,242       (36,588 )
                 
Cash flows from investing activities:                
Purchase of property and equipment     (6,210 )     (7,475 )
Proceeds from sale of property and equipment     4,453       7,461  
Contributions to other investments     (59 )     -  
Distributions from other investments     181       47  
Distributions from investees     4,183       -  
Capital contribution to unconsolidated investments     (250 )     (540 )
Net cash provided by (used in) investing activities     2,298       (507 )
                 
Cash flows from financing activities:                
Borrowings on revolving credit facility     5,000       3,000  
Payments on revolving credit facility     (95,000 )     (8,000 )
Borrowings on notes payable     167,784       115,355  
Payments on notes payable     (80,613 )     (111,908 )
Proceeds from financing obligations     42,500       -  
Payments of deferred financing costs     (5,468 )     (578 )
Pre-payment premium     (246 )     -  
Advances from related parties     -       425  
Payments to related parties     -       (4 )
Payments on finance lease and financing obligations     (5,314 )     (3,538 )
Distribution to members     -       (110 )
Payment of taxes related to net share settlement of RSUs     (206 )     -  
Proceeds from merger of Legato II and Southland Holdings, LLC     -       17,088  
Net cash provided by financing activities     28,437       11,730  
                 
Effect of exchange rate on cash     (49 )     126  
                 
Net increase (decrease) in cash and cash equivalents and restricted cash     42,928       (25,239 )
Beginning of period     63,820       71,991  
End of period   $ 106,748     $ 46,752  
                 
Supplemental cash flow information                
Cash paid for income taxes   $ 1,079     $ 3,033  
Cash paid for interest   $ 18,886     $ 12,704  
Non-cash investing and financing activities:                
Lease assets obtained in exchange for new leases   $ 9,881     $ 8,529  
Assets obtained in exchange for notes payable   $ 23,286     $ 8,626  
Related party payable exchanged for note payable   $ 3,797     $ -  
Issuance of post-merger earn out shares   $ -     $ 35,000  
Dividend financed with notes payable   $ -     $ 50,000  

 

6


 

Conference Call

 

Southland will host a conference call at 10:00 a.m. Eastern Time on Wednesday, November 13, 2024. The call may be accessed here, or at 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.

 

For more information, please visit Southland’s website at southlandholdings.com.

 

Non-GAAP Financial Measures

 

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.

 

Southland Contacts:

 

Cody Gallarda

EVP, Chief Financial Officer

cgallarda@southlandholdings.com

 

Alex Murray

Corporate Development & Investor Relations

amurray@southlandholdings.com

 

7