Southland Holdings, Inc.

Good morning. My name is Tracy and I will be your conference operator today. At this time, I would like to welcome everyone to the Southland first quarter 2026 earnings conference call. All lines 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. To withdraw your question, press star one again. Thank you. Alex, you may begin your conference.

Good morning, everyone, and welcome to the Southland First Quarter 2026 conference call. This is Alex Murray, Vice President of Corporate Development and Investment Relations. Joining me today are Frank Renda, President and Chief Executive Officer, and Keith DeSanto, 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's control. Southland's actual results and financial condition may differ materially from those projected in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements, but we do not undertake any duty to update these statements. For discussion of some of the risks that could affect these results, please see the risk factor section of Reform 10-K for the year ended December 31st, 2025, that was filed with the SEC on March 26th, 2026, and the discussion in Form 10-Q for the quarter ended March 31st, 2026, that was filed with the SEC last night. We will also refer to non-GAAP financial measures, and you will find reconciliations in the press release relating to this conference call, which can be found on the Investment 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 first quarter 2026 conference call. I will provide an update on the strategic plan outline during our late March call as well as review our quarterly results, including progress on the wind down of legacy projects and the strength of our current pipeline of opportunities. Turning to our strategic plan and capital structure, we continue to make strong progress against the framework outlined in March. On March 17th, our surety partners assumed the debt under our senior credit facility and waived all principal and interest payments through maturity, providing meaningful flexibility as we execute the next phase of our plan. We are now in the final stages of completing a credit amendment for this facility. which is expected to close as part of the broader financing agreement. During the first quarter, our surety partners also advanced approximately $125 million to support active bonded projects, bringing total surety advances to $139 million. Their continued support reflects confidence in both our operating plan and execution strategy. None of these amounts are due prior to May 13, 2027, and we are actively working toward extending these maturities further as part of the broader agreement. We believe an agreement in principle is substantially complete and are focused on finalizing the remaining details. Additional information will be provided once the agreement is executed. The working capital support has materially strengthened operations and enabled continued progress across our backlog over the past several months. As part of a broader plan, we have also initiated the monetization of EIDL assets and non-core real estate. While these transactions take time to execute properly, we expect activity to build over the coming quarters with proceeds directed towards debt reduction. We're moving with urgency while maintaining a disciplined approach to ensure these assets are monetized thoughtfully and at attractive values. Turning to this quarter's results, First quarter revenue was $172 million, inclusive of the revenue reversal of $18 million from non-cash adjustments related to legacy dispute negotiations and resolutions. Gross loss for the quarter was $4.8 million, primarily driven by unfavorable adjustments of $26 million from legacy dispute resolutions and the NMP business, of which $18 million were non-cash impacts. These adjustments reflect continued progress in addressing legacy matters and further positioning the business for improved operational performance going forward. Importantly, we expect to collect approximately $11 million in the coming weeks from the resolution of a legacy dispute with proceeds intended to further reduce the senior term loan facility. The income statement impact associated with this resolution was recorded in the first quarter and we expect a further balance sheet impact to be recognized in the second quarter due to the timing of billing and cash receipt. This represents another step forward in converting legacy matters into liquidity and strengthening the balance sheet. The vast majority of our contract assets balance relates to legacy projects where construction activities are already completed. We continue to actively pursue all avenues to collect the amounts owed to us and expect to make meaningful progress throughout 2026 to resolving these matters and converting them into cash, which we intend to use to further reduce our debt and strengthen our balance sheet. Our legacy portfolio also continues to shrink. We are down to $71 million of M&P backlog, with three projects in active construction and 42 million of non-M&P legacy backlog remaining. We expect the three M&P projects to be substantially completed this year and one remaining non-M&P legacy project to go into 2027. As these projects are completed and outstanding disputes are resolved, we expect our overall earnings risk to continue declining. At the same time, our core backlog remains strong and continues to demonstrate the quality of our underlying business. This was highlighted in the quarter by a 14% gross margin in our civil segment driven by execution on core projects. The $48 million data center project announced last quarter remains on track for completion within the next two months and is an example of our strategy to focus on high-margin, short-duration projects within our core markets. This project is being led by a team of tenured managers, which is the same group executing short duration, high margin emergency projects in the region. The market backdrop across our core in market also remains strong. Federal, state and local infrastructure funding continues to translate into active procurement for water, bridge, marine and tunnel work. As we move towards finalizing the broader financing agreement, We expect increased bonding support and bidding activity to continue increasing with several key bids and proposals expected to be submitted this week. We expect a combination of improving financial flexibility, a shrinking legacy portfolio, and strong market demand positions as well to convert upcoming opportunities into awards over the coming months. Active pursuits in our pipeline include the Phase 3 Winnipeg North End Sewage Treatment Plant, packages on the GDOT I-285 top end express lanes in Georgia, various marine and bridge opportunities in the southeast, packages on the Gardiner Expressway rehabilitation in Toronto, the MoDOT Liberty Bend Bridge design build in Missouri, a 42-inch pipeline CMAR in Texas, the NTMWD Fossil Creek Wastewater Treatment Plant design build in Texas, the DW Pipeline and Tunnel in Dallas, the Claiborne Pell Bridge rehabilitation in Rhode Island, and the MTA Bronx Whitestone Bridge rehabilitation in New York. In summary, we have begun executing the strategic plan we outlined in March. Our surety partners have provided capital to support execution Our senior credit facility has been restructured to provide meaningful cash debt service relief, and we are nearing completion of the broader financing agreement. While we are encouraged by this progress, more important work remains ahead. Our operational priorities continue to be winding down legacy projects, collecting cash on outstanding legacy disputes, executing on our strong core backlog and targeting new high margin opportunities that align with our core capabilities. Lastly, I want to thank our experienced team for their continued dedication, resilience and commitment as we execute on these priorities. The steps ahead have been carefully planned for, and we are now focused on putting the final pieces in place to complete this transition. With the right team, deep industry experience, and a clear strategic focus, I know we are well positioned to navigate the path ahead and create long-term value. With that, I'll now turn the call over to Keith for a financial update.