SLND Southland Holdings Inc

 

 

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): May 13, 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 May 13, 2024, Southland Holdings, Inc., a Delaware corporation (the “Company”), issued a press release announcing financial results for the quarter ended March 31, 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 May 13, 2024.
104		Cover Page Interactive Data File (embedded within Inline XBRL document)

 

 

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: May 13, 2024	SOUTHLAND HOLDINGS, INC.
	By:	/s/ Frank S. Renda
		Name: Frank S. Renda
		Title: President and Chief Executive Officer

 

 

Exhibit 99.1

 

Southland Announces First Quarter 2024 Results

 

GRAPEVINE, Texas, May 13, 2024 (Business Newswire) -- 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 March 31, 2024.

 

●

Revenue of $288.1 million for the quarter ended March 31, 2024, up 5% from $274.8 million for the quarter ended March 31, 2023.

 

●

Gross profit of $20.4 million for the quarter ended March 31, 2024, compared to $18.9 million for the quarter ended March 31, 2023.

 

●

Net loss attributable to stockholders of $0.4 million, or $(0.01) per share for the quarter ended March 31, 2024, compared to a net loss attributable to stockholders of $4.7 million, or $(0.11) per share for the quarter ended March 31, 2023.

 

●

Adjusted Net Loss attributable to stockholders of $0.4 million, or $(0.01) per share for the year ended March 31, 2024, compared to an Adjusted Net Loss attributable to stockholders of $1.5 million, or $(0.03) per share for the year ended March 31, 2023. (1)

 

●

Adjusted EBITDA of $10.9 million for the quarter ended March 31, 2024, compared to $12.7 million for the quarter ended March 31, 2023. (1)

 

●

Backlog of $2.64 billion, compared to $2.83 billion as of December 31, 2023.

 

 

(1)	Please refer to “Non-GAAP Measures” and reconciliations for our non-GAAP financial measures, including, “Adjusted Net Loss,” “Adjusted Net Loss Per Share,” and “Adjusted EBITDA”

 

Southland’s President and Chief Executive Officer, Frank Renda, said, “We had a good start to the year in our seasonally slowest quarter, with revenue increasing by 5% and gross margins improving slightly from the prior year. Demand in our core markets for infrastructure construction services remains extremely healthy driven by significant federal spending and robust state and local programs.”

 

2024 First Quarter Results

 

Condensed Consolidated Statements of Operations (unaudited)

 

		Three Months Ended
(Amounts in thousands)		March 31, 2024				March 31, 2023
Revenue		$	288,097			$	274,829
Cost of construction			267,676				255,886
Gross profit			20,421				18,943
Selling, general, and administrative expenses			14,394				15,571
Operating income			6,027				3,372
Loss on investments, net			(76	)			(32	)
Other income (loss), net			536				(2,599	)
Interest expense			(5,655	)			(3,254	)
Earnings (losses) before income taxes			832				(2,513	)
Income tax expense			307				1,753
Net income (loss)			525				(4,266	)
Net income attributable to noncontrolling interests			931				398
Net loss attributable to Southland Stockholders		$	(406	)		$	(4,664	)
Net loss per share attributable to common stockholders
Basic(1)		$	(0.01	)			(0.11	)
Diluted(1)		$	(0.01	)			(0.11	)
Weighted average shares outstanding
Basic(1)			47,925,072				44,407,831
Diluted(1)			47,925,072				44,407,831

 

(1)

Basic net loss per share is the same as diluted net loss per share attributable to common stockholders for the three months ended March 31, 2024, and March 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 March 31, 2024, was $288.1 million, an increase of $13.3 million, or 4.8%, compared to the three months ended March 31, 2023. Materials & Paving business contributed $38.6 million to revenue in the three months ended March 31, 2024.

 

Gross profit for the three months ended March 31, 2024, was $20.4 million, an increase of $1.5 million, or 7.8%, compared to gross profit of $18.9 million for the three months ended March 31, 2023. Gross profit margin increased from 6.9% to 7.1% for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. Materials & Paving business negatively impacted gross profit by $10.4 million in the three months ended March 31, 2024.

 

Selling, general, and administrative costs for the three months ended March 31, 2024, were $14.4 million, a decrease of $1.2 million, or 7.6%, compared to the three months ended March 31, 2023. Selling, general, and administrative costs as a percent of revenue were 5.0% for the three months ended March 31, 2024, compared to 5.7% for the three months ended March 31, 2023.

 

Segment Revenue

 

		Three Months Ended
(Amounts in thousands)		March 31, 2024								March 31, 2023
Segment		Revenue				% of Total Revenue				Revenue				% of Total Revenue
Civil		$	84,273				29.3	%		$	72,989				26.6	%
Transportation			203,824				70.7	%			201,840				73.4	%
Total revenue		$	288,097				100.0	%		$	274,829				100.0	%

 

Segment Gross Profit

 

		Three Months Ended
(Amounts in thousands)		March 31, 2024								March 31, 2023
Segment		Gross Profit				% of Segment Revenue				Gross Profit				% of Segment Revenue
Civil		$	17,870				21.2	%		$	8,766				12.0	%
Transportation			2,551				1.3	%			10,177				5.0	%
Gross profit		$	20,421				7.1	%		$	18,943				6.9	%

 

Adjusted EBITDA Reconciliation

 

		Three Months Ended
(Amounts in thousands)		March 31, 2024				March 31, 2023
Net loss attributable to Southland Stockholders		$	(406	)		$	(4,664	)
Depreciation and amortization			5,577				8,560
Income tax expense			307				1,753
Interest expense			5,655				3,254
Interest income			(184	)			(137	)
EBITDA			10,949				8,766
Transaction related costs			-				1,035
Contingent earnout consideration non-cash expense reversal			-				2,936
Adjusted EBITDA		$	10,949			$	12,737

 

 

Backlog

 

(Amounts in thousands)
Balance December 31, 2023		$	2,834,966
New contracts, change orders, and adjustments			100,893
Less: contract revenue recognized in 2024			(296,947	)
Balance March 31, 2024		$	2,638,912

 

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

 

		Three Months Ended
(Amounts in thousands except shares and per share data)		March 31, 2024				March 31, 2023
Reconciliation of adjusted net income (loss) attributable to common stock:
Net loss attributable to common stock (GAAP as reported)		$	(406	)		$	(4,664	)
Adjustments:
Transaction related costs			-				1,035
Contingent earnout consideration non-cash expense			-				2,936
Income tax impact of adjustments(1)			-				(774	)
Adjusted net loss attributable to common stockholders		$	(406	)		$	(1,467	)
Weighted average shares outstanding for diluted and adjusted diluted earnings per share(2)			47,925,072				44,407,831
Diluted loss per share attributable to common stock(2)		$	(0.01	)			(0.11	)
Adjusted diluted loss per share attributable to common stock(2)		$	(0.01	)			(0.03	)

 

(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 loss per share attributable to common stockholders for three months ended March 31, 2024, and March 31, 2023, because the inclusion of potential shares of common stock would have been anti-dilutive for the period presented.

 

 

Condensed Consolidated Balance Sheets (unaudited)

 

		As of
(Amounts in thousands, except share and per share data)		March 31, 2024				December 31, 2023
ASSETS
Current assets
Cash and cash equivalents		$	31,239			$	49,176
Restricted cash			15,278				14,644
Accounts receivable, net			217,233				194,869
Retainage receivables			118,558				109,562
Contract assets			570,120				554,202
Other current assets			14,632				20,083
Total current assets			967,060				942,536
Property and equipment, net			102,773				102,150
Right-of-use assets			10,494				12,492
Investments - unconsolidated entities			124,628				121,648
Investments - limited liability companies			2,590				2,590
Investments - private equity			3,120				3,235
Deferred tax asset			11,896				11,496
Goodwill			1,528				1,528
Intangible assets, net			1,616				1,682
Other noncurrent assets			1,711				1,711
Total noncurrent assets			260,356				258,532
Total assets		$	1,227,416			$	1,201,068
LIABILITIES AND EQUITY
Current liabilities
Accounts payable		$	202,441			$	162,464
Retainage payable			43,422				40,950
Accrued liabilities			117,714				124,667
Current portion of long-term debt			46,425				48,454
Short-term lease liabilities			11,096				14,081
Contract liabilities			185,183				193,351
Total current liabilities			606,281				583,967
Long-term debt			255,590				251,906
Long-term lease liabilities			4,985				5,246
Deferred tax liabilities			2,250				2,548
Long-term accrued liabilities			49,593				49,109
Other noncurrent liabilities			47,738				47,728
Total long-term liabilities			360,156				356,537
Total liabilities			966,437				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 March 31, 2024 and December 31, 2023			-				-
Common stock, $0.0001 par value, authorized 500,000,000 shares, 48,025,688 and 47,891,984 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively			5				5
Additional paid-in-capital			270,801				270,330
Accumulated deficit			(19,659	)			(19,253	)
Accumulated other comprehensive loss			(1,832	)			(1,460	)
Total stockholders’ equity			249,315				249,622
Noncontrolling interest			11,664				10,942
Total equity			260,979				260,564
Total liabilities and equity		$	1,227,416			$	1,201,068

 

 

Condensed Consolidated Statement of Cash Flows (unaudited)

 

		Three Months Ended
(Amounts in thousands)		March 31, 2024				March 31, 2023
Cash flows from operating activities:
Net income (loss)		$	525			$	(4,266	)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization			5,577				8,560
Deferred taxes			(642	)			(514	)
Change in fair value of earnout liability			-				2,936
Share based compensation			677				-
Gain on sale of assets			(2,385	)			(967	)
Foreign currency remeasurement (gain) loss			64				(5	)
Earnings from equity method investments			(1,907	)			(3,242	)
TZC investment present value accretion			(627	)			(603	)
Loss on trading securities, net			76				32
Changes in assets and liabilities:
Accounts receivable			(32,071	)			(49,278	)
Contract assets			(16,175	)			(30,306	)
Prepaid expenses and other current assets			5,450				119
Right-of-use assets			1,994				(1,764	)
Accounts payable and accrued expenses			40,059				33,705
Contract liabilities			(8,162	)			7,241
Operating lease liabilities			(1,883	)			1,820
Other			(467	)			1,753
Net cash used in operating activities			(9,897	)			(34,779	)
Cash flows from investing activities:
Purchase of property and equipment			(3,128	)			(1,166	)
Proceeds from sale of property and equipment			2,657				1,295
Contributions to other investments			(13	)			(81	)
Distributions from other investments			52				-
Net cash (used in) provided by investing activities			(432	)			48
Cash flows from financing activities:
Borrowings on revolving credit facility			5,000				3,000
Borrowings on notes payable			222				181
Payments on notes payable			(10,650	)			(12,382	)
Payments of deferred financing costs			(75	)			-
Advances from related parties			-				(493	)
Payments from related parties			125				6
Payments on finance lease			(1,359	)			(1,189	)
Distribution to members			-				(110	)
Payment of taxes related to net share settlement of RSUs			(206	)			-
Other			-				17,088
Net cash (used in) provided by financing activities			(6,943	)			6,101
Effect of exchange rate on cash			(31	)			190
Net decrease in cash and cash equivalents and restricted cash			(17,303	)			(28,440	)
Beginning of period			63,820				71,991
End of period		$	46,517			$	43,551
Supplemental cash flow information
Cash refunds from income taxes		$	454			$	87
Cash paid for interest		$	5,527			$	3,230
Non-cash investing and financing activities:
Lease assets obtained in exchange for new leases		$	1,252			$	6,416
Assets obtained in exchange for notes payable		$	3,341			$	2,299
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

 

 

Conference Call

 

Southland will host a conference call at 10:00 a.m. Eastern Time on Tuesday, May 14, 2024. 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.

 

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

 

v3.24.1.1.u2

Cover	May 13, 2024
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 13, 2024
Entity File Number	001-41090
Entity Registrant Name	SOUTHLAND HOLDINGS, INC.
Entity Central Index Key	0001883814
Entity Tax Identification Number	87-1783910
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1100 Kubota Drive
Entity Address, City or Town	Grapevine
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	76051
City Area Code	(817)
Local Phone Number	293-4263
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Common stock, par value $0.0001 per share
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	SLND
Security Exchange Name	NYSEAMER
Redeemable warrants, exercisable for shares of common stock at an exercise price of $11.50 per share
Title of 12(b) Security	Redeemable warrants, exercisable for shares of common stock at an exercise price of $11.50 per share
Trading Symbol	SLND WS
Security Exchange Name	NYSEAMER

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