Southland Holdings, Inc.

I would like now to welcome everyone to the Southland fourth quarter and full year 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remark, there will be a question and answer session. If you would like to ask a question during this time, simply press bar followed by the number one on your telephone keypad. If you would like to withdraw your question, Press star, then the number two. Thank you. Alex, you may now begin your conference.

Good morning, everyone, and welcome to the Southland fourth quarter and full year 2024 conference call. This is Alex Murray, Director of Corporate Development and Investor Relations. Joining me today are Frank Renda, President and Chief Executive Officer, and Cody Gallardo, Executive Vice President and Chief Financial Officer. Before we begin, I'd like to remind everyone that this conference call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Forward-looking statements are uncertain and outside of Southland control. Southland's actual results financial conditions may differ materially from those projected in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements, and we do not undertake any duty to update these statements. For a discussion of some of the risks that could affect results, please see the risk factors section of Reform 10-K for the year ended December 31st, 2024 that was filed with the SEC last night. We will also refer to non-GAAP financial measures, and you will find reconciliation of these non-GAAP financial measures in the press release relating to this conference call, which can be found on the Investor Relations page of our website. With that, I will now turn the call over to Frank.

Thank you, Alex. Good morning, and thank you for joining Southland's fourth quarter and full year 2024 conference call. As we reflect on the year, I'd like to highlight and commend how our team has continued to push forward despite challenges, delivering key projects, maintaining operational excellence, and reinforcing our commitment to safety and community impact. We have successfully delivered several high-profile projects during the year. We completed the SR80 Bridge in Palm Beach, Florida, also known as the Mar-a-Lago Bridge. We also recently opened the East Haddon Bridge in Connecticut, improving connectivity and regional access. We completed a cruise destination project for a private entertainment client in the Caribbean. which demonstrates our ability to deliver complex infrastructure that enhances local economies. In our water resources group, we continue to expand our reach with the completion of the San Juan Lateral Project for the Bureau of Reclamation, providing essential water infrastructure to support communities in need. We also completed the Romeo Arm Slip Line project in Detroit, Michigan. Beyond our technical expertise, our strong safety culture makes these successes possible. I'm pleased to report that multiple projects, including Ashbridge's Bay Outfall Tunnel, SELA 26, and Mill Creek Drainage Relief Tunnel, have each surpassed 1 million safe work hours without a lost time incident. A testament to the dedication of our teams and our unwavering commitment to safety as the foundation of everything we do. Additionally, this year marked the 50th anniversary of two of our subsidiaries, a milestone that not only honors our rich history, but also the strong foundation we have established over many decades, which sets us up well to succeed for years to come. While this has been a demanding period, our team's resilience and ability to execute at a high level have positioned us for future success. I want to thank our employees and stakeholders for their commitment and continued trust in us. With that, let's turn to the quarter's results. Fourth quarter revenue was $267 million with a gross profit of $8 million. Excluding unfavorable adjustments from the M&P business and certain legacy projects, our gross profit in the quarter was $35 million. The unfavorable adjustments negatively impacted our results by $27 million. The unfavorable adjustments were driven by dispute resolutions and increased completion costs on certain legacy projects. At the end of the quarter, we had approximately $163 million of remaining M&P backlog and approximately $83 million of non-M&P legacy backlog. We are encouraged by the continued strong performance of our new core projects, which delivered double digit margins in the quarter. We ended the quarter with $2.57 billion of backlog. I'd also like to note that we currently have approximately $750 million of pending alternative delivery contracts not included in backlog, for which pre-construction phases are already underway. Notable alternative delivery projects include the earthquake ready Burnside Bridge in Portland, Oregon, and phase two of the North End Treatment Plant in Winnipeg. We are currently working on phase one of this project. Our new core work makes up approximately $2.3 billion of backlog. We have several new core projects that we expect to ramp up this year and create a more significant impact on results. This includes the $600 million Shands Bridge in Florida, the $410 million Robert F. Kennedy Bridge Rehab in New York, and the $243 million US 19 project in Florida, which we are in the early stages of their project life cycles. We also have several quicker burn water resource projects with strong margins that we expect to have a meaningful impact on 2025 results. We booked approximately $105 million in new awards during the quarter. This included a $60 million wastewater treatment plant in the southwest, several water resource emergency projects, and a broadband project for a private client. We continue to see a large pipeline of opportunities, particularly from our longstanding federal, state, and local clients. The ongoing capital infusion from the Infrastructure Investment and Jobs Act, combined with historically strong state and local infrastructure programs, provides a favorable tailwind for our business in the years ahead. Texas and Florida remain at the forefront of state-driven infrastructure investment with record-setting funding levels aimed at addressing critical transportation, water, and resilience needs. Given the sustained economic growth and population expansion in these areas, we anticipate continued prioritization of large-scale infrastructure projects. With our established presence and deep expertise in these key markets, we are well positioned to capitalize on these opportunities. In recent years, the timing of new project awards has been somewhat uneven with a tendency to ramp up in the back half of the year. We anticipate a similar pattern this year as project timelines and funding cycles influence the flow of opportunities. The demand in our core markets remains robust, driven by ongoing infrastructure needs and strong public and private sector investments. Given this favorable environment, we remain disciplined in our approach, prioritizing projects that align with our strategic goals, operational strength, and margin expectations. Our extensive pipeline of opportunities positions us well to secure a healthy share of projects while maintaining a selective quality over quantity approach to bidding. As we move forward, we are confident in our ability to capitalize on the right opportunities and drive long-term success. Upcoming opportunities in our civil segment include the $7 billion Iona Island Wastewater Treatment Plant Program in Vancouver and the $2 billion Northern Colorado Water Glade Reservoir Program in Fort Collins. We're also tracking the $600 million Jordan Lake Water Supply Program in North Carolina and additional phases of the Winnipeg North End Treatment Plant in Canada. In our transportation segment, we also expect to bid on the Verrazano-Narrows Bridge Rehab to New York and the Washington Bridge in Providence, Rhode Island. During the fourth quarter, we also successfully executed another strategic initiative to bolster our balance sheet. We converted $20 million of certain promissory notes due to myself and the two other founders of Southland, Tim Wynn and Rudy Renda, to common stock. We feel strongly about the long-term potential of Southland. This transaction reinforces our confidence in the business while improving the balance sheet. In closing, our strong new core backlog pipeline and the continued strong execution of new core projects give us confidence in our long-term trajectory. We are focused on delivering operational excellence, maintaining a disciplined approach to project selection, and driving sustainable profitability over the long term. As we move into 2025, our strategic priorities remain clear. Executing our core projects with precision, winding down legacy work, and strengthening our position in our core markets. With a talented and dedicated team and a favorable industry environment, we are well equipped to deliver long-term value to our stakeholders. With that, I will now turn the call over to Cody for a financial update.