Southland Holdings, Inc.

Good morning. My name is Sergio, and I will be your conference operator today. At this time, I would like to welcome everyone to the Southland Third Quarter 2025 Earnings Conference Call. All eyes have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press the star followed by the number Alex, you may begin your conference.

Good morning, everyone. Welcome to the Southland Third Quarter 2025 Conference Call. This is Alex Murray, Vice President of Corporate Development and Investor Relations. Joining me today are Frank Renda, President and Chief Executive Officer, and Keith Pisano, 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 uncertain and outside of Southland's control. Southland's actual results and financial condition may differ purely from those projected in 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 Factor section over Form 10-K for the year ended December 31, 2024, that was filed with the SEC on March 5, 2025, and discussion on Form 10-Q for the quarter ended September 30, 2025, that was filed with the SEC last night. We also refer to non-GAAP financial measures, and you'll find reconciliations in the press release related 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 third quarter 2025 conference call. Before we jump into this quarter's results, I'd like to highlight that this quarter marked the five-year anniversary of our acquisition of American Bridge Company. This quarter we also achieved substantial completion on the last of the 27 highly technical projects assumed in the acquisition. These projects included the Queens Ferry Crossing in Scotland, Edmonton Valley Light Rail in Canada, Queensborough Bridge in New York, and the SR 520 Montlake project in Washington. Closing out this final construction phase of the Legacy AB backlog is a major accomplishment. and testament to our operational expertise, technical knowledge, and ability to successfully execute some of the world's most complex infrastructure projects. Now to turn to this quarter's results. We reported third quarter revenue of $213 million and gross profit of $3.3 million. Consolidated gross profit margin was 1.5%. an increase from negative 29.5% in the prior year period. The improvement was driven by strong performance in our new core work and fewer impacts from legacy projects in this quarter versus the same quarter last year. Our new core work continues to perform at double-digit gross margins. Our civil business continues to perform very well with 10.5% gross margin in this quarter. This was inclusive of unfavorable non-cash adjustments from dispute resolutions that impacted revenue from gross profit by $8 million in the quarter. We continue to make progress resolving smaller disputes. A vast majority of our contract assets balance consists of money we are owed from legacy projects that were started prior to COVID where construction is complete. We expect our contract assets balance to continue to decrease and to collect a significant amount of cash from these legacy disputes. We have a clear plan to finalize the remaining legacy projects that are making progress toward their completion. As this work wraps up, we expect to significantly de-risk our earnings profile as we progress through next year. We have some more work to do, but we're getting closer to putting these projects completely behind us and focusing solely on our high quality new core backlog. During the quarter, we added approximately $151 million in new awards and contract adjustments. This was led by a $77 million bridge rehab contract in our transportation segment for a private client in the Pacific Northwest. and a $53 million water resource contract in our civil segment in Texas, bringing our total backlog to approximately $2.26 billion. All indications are that the robust demand for infrastructure will continue for years to come. Our outlook on the market remains positive. We continue to successfully execute our strategy of targeting short duration high margin projects in both public and private markets. In private markets, we are seeing strong demand for large scale data centers. We have been carefully evaluating data center opportunities over the last couple of years, maintaining a highly selective and disciplined approach to ensure we remain within our core capabilities. Many new data center sites are very large and are being built in rural areas. resulting in an ongoing need to build additional water resources to support these buildouts. Utility packages on the data center projects are getting larger, and the margin potential is very attractless. We are in discussions on several data center opportunities to leverage our utility and site development capabilities. The construction activities we are pursuing are very similar to the scopes in our existing core backlog and match our team's expertise very well. We expect to convert some of these opportunities to backlog in the coming quarters. While data center projects present a unique opportunity, our strategy remains the same, and we will continue to pursue a mix of private and public market opportunities. We continue to see strong demand for public market projects from federal, state, and local levels. The IIJA is well underway and driving strong demand for public market projects. Significant opportunities remain across our core business, with hundreds of billions in authorized funds still to be spent under the IIJA. At the state level, last week, Texans voted in favor of Proposition 4. the amendment proposed by the house joint resolution 7 which will allocate 20 billion dollars to the texas water fund over the next two decades this is a major commitment to one of our core markets and we are positioned well to help expand texas's water resources upcoming public market opportunities include numerous water resource projects in the midwest and the southwest we are also excited about several bridge opportunities in the southeast We have great visibility into future demands. We will continue to be focused on improving margins first, then growing backlog and revenue. We will ensure we have the right resources to build the work and continue to pursue projects that align with our core capabilities. In closing, as we reflect on the quarter, we have a similar message the past few quarters. While we have more work to do to get the legacy projects completely behind us, our core business is performing well. As we wrap up legacy projects, we expect to deliver strong and consistent results. With robust opportunities across our end markets, we expect to win our fair share of high margin projects. We maintain confidence in our long-term outlook and future direction of our business. With that, I'll now turn the call over to Keith for a financial update.