Southland (SLND) Q3 Earnings call transcript Nov 13, 2024

In the third quarter of 2024, Southland Holdings, Inc., a leading player in the infrastructure construction industry, reported a challenging financial performance with revenue of $173 million and a gross loss of $51 million. This quarter's results were significantly impacted by unfavorable adjustments from the M&P business and legacy projects, which negatively impacted the company's results by $71 million. Despite these setbacks, Southland remains optimistic, highlighting the strength of its strategic initiatives and the promising outlook for its new core projects.

Focus on Strategic Initiatives

Southland's leadership team, led by Frank Renda, President and CEO, and Cody Gallarda, Executive Vice President and CFO, provided insights into the company's financial performance and strategic initiatives during the earnings call. The company's focus on its strategic initiatives is evident in the solid performance of its new core projects, which delivered double-digit margins and underscored the strength of Southland's strategic direction. This performance gives the company confidence in its ability to sustain success in the long term.

Strengthening the Balance Sheet

Southland has taken significant steps to bolster its balance sheet. The company successfully executed several strategic initiatives, including the $42.5 million real estate transaction and the $160 million senior secured term loan facility with Callodine Commercial Finance. These moves have significantly strengthened Southland's financial position, providing the company with additional flexibility to capitalize on new opportunities and respond swiftly to market changes.

Looking Ahead

Despite the challenges faced in the third quarter, Southland is optimistic about the future. The company's backlog, which stands at $2.74 billion, is the strongest it has ever been, and the pipeline of opportunities is the most robust and promising the company has ever seen. Southland is well-positioned to capitalize on this opportunity, with a focus on securing smaller dollar, shorter duration projects that yield quick cash flow. The company is also exploring opportunities in key markets, including Texas and Florida, where billions of dollars are planned to be spent on infrastructure in the coming years.

A Tale of Resilience and Optimism

Southland's earnings call reveals a company that is navigating challenges with resilience and optimism. While the third quarter was marked by significant non-cash losses, the company's strategic initiatives and financial strength position it well for a return to profitability in 2025. With a focus on its core markets and a commitment to capitalizing on the best pipeline of opportunities it has ever seen, Southland is charting a course for long-term success.