Southland Announces First Quarter 2024 Results
Southland Holdings announced its Q1 2024 results, reporting a revenue of $288.1 million, a 5% increase from Q1 2023's $274.8 million. The gross profit rose to $20.4 million, up from $18.9 million. However, the company faced a net loss of $0.4 million, significantly improved from the $4.7 million loss in Q1 2023. The Adjusted EBITDA fell to $10.9 million from $12.7 million. The backlog decreased to $2.64 billion from $2.83 billion as of December 31, 2023. Despite the improvements in revenue and gross profit, the company saw a decline in its Adjusted EBITDA and backlog, affecting its long-term outlook.
- Revenue increased by 5% to $288.1 million in Q1 2024 from Q1 2023.
- Gross profit rose by 7.8% to $20.4 million.
- Net loss reduced to $0.4 million from $4.7 million year-on-year.
- Selling, general, and administrative costs decreased by 7.6% to $14.4 million.
- Income tax expense decreased to $0.3 million from $1.8 million.
- Adjusted EBITDA decreased to $10.9 million from $12.7 million.
- Backlog dropped to $2.64 billion from $2.83 billion as of December 31, 2023.
- Interest expense increased to $5.7 million from $3.3 million.
- Materials & Paving business negatively impacted gross profit by $10.4 million.
- Cash and cash equivalents decreased to $31.2 million from $49.2 million as of December 31, 2023.
Insights
Southland Holdings, Inc.'s first quarter results offer several notable takeaways for investors. First, revenue grew by
However, the company continues to report a net loss attributable to stockholders, narrowing from a loss of
One notable area of concern is the backlog, which decreased from
Adjusted EBITDA declined to
From a market perspective, Southland Holdings is experiencing moderate growth within a sector that is currently benefiting from significant infrastructure investments at both federal and local levels. The company's
However, the reduction in backlog from
Moreover, the company's diversification into the Materials & Paving business, contributing
Overall, Southland Holdings' ability to leverage its position in a healthy market environment will be crucial. Investors must weigh the positives of revenue growth and improved gross margins against the negatives of ongoing net losses, high interest expenses and a shrinking backlog.
-
Revenue of
$288.1 million 5% from$274.8 million -
Gross profit of
$20.4 million $18.9 million -
Net loss attributable to stockholders of
$0.4 million $(0.01) $4.7 million $(0.11) -
Adjusted Net Loss attributable to stockholders of
$0.4 million $(0.01) $1.5 million $(0.03) -
Adjusted EBITDA of
$10.9 million $12.7 million -
Backlog of
$2.64 billion $2.83 billion
(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
2024 First Quarter Results
Condensed Consolidated Statements of Operations (unaudited) |
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|
|
|
|
|
Three Months Ended |
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(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
Gross profit for the three months ended March 31, 2024, was
Selling, general, and administrative costs for the three months ended March 31, 2024, were
Segment Revenue
|
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|
|
|
|
|
|
|
|
|
Three Months Ended |
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(Amounts in thousands) |
March 31, 2024 |
|
March 31, 2023 |
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|
|
% of Total |
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|
|
|
% of Total |
Segment |
Revenue |
|
Revenue |
|
Revenue |
|
Revenue |
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Civil |
$ |
84,273 |
|
|
$ |
72,989 |
|
|
|
Transportation |
|
203,824 |
|
|
|
201,840 |
|
|
|
Total revenue |
$ |
288,097 |
|
|
$ |
274,829 |
|
|
|
Segment Gross Profit
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
||||||||
(Amounts in thousands) |
March 31, 2024 |
|
March 31, 2023 |
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|
|
|
% of Segment |
|
|
|
|
% of Segment |
|
Segment |
Gross Profit |
|
Revenue |
|
Gross Profit |
|
Revenue |
||
Civil |
$ |
17,870 |
|
|
$ |
8,766 |
|
|
|
Transportation |
|
2,551 |
|
|
|
10,177 |
|
|
|
Gross profit |
$ |
20,421 |
|
|
$ |
18,943 |
|
|
|
Adjusted EBITDA Reconciliation
|
|
|
|
|
|
|
Three Months Ended |
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(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 |
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(Amounts in thousands except shares and per share data) |
March 31, 2024 |
|
March 31, 2023 |
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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) |
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|
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(Amounts in thousands, except share and per share data) |
As of |
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ASSETS |
March 31, 2024 |
|
December 31, 2023 |
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Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
31,239 |
|
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