サウスランド（SLND）2026年第2四半期決算説明会：クレーム調整と保証契約

要点

• 2026年第2四半期の売上高は、レガシープロジェクトの追加請求に関する回収可能性の再評価に伴う1億230万ドルの非現金減収要因を含め、前年同期の2億1,540万ドルから1億1,330万ドルに減少しました。
• サウスランドは7,120万ドルの売上総損失と、株主に帰属する8,430万ドルの純損失を計上しました。EBITDAは9,360万ドルの不利益な債権調整額を含め、マイナス7,340万ドルとなりました。
• 同社は財務支援合意書を通じて保証会社（シューリティ）からの支援を正式決定しました。2026年6月30日時点での保証付き資金調達額は合計約5,900万ドル、非保証資金調達額は合計約1億5,100万ドルとなりました。
• サウスランドは2026年9月30日までに、該当する保証会社に対して約1億5,100万ドルの永久・優先・無議決権・非転換の優先株を発行する見込みです。
• 当四半期末の受注残高は、前年末の20億3,000万ドルから減少し16億8,000万ドルとなりました。経営陣は、第2四半期の受注残高の約38%が今後12か月間で売上高に変換されると見込んでいます。
• 修正されたシニア信用供与枠は固定4%の現物支給（PIK）金利を適用し、定例の元金返済を停止するため、今後12か月間で約2,700万ドルの現金元利払い軽減効果が見込まれます。

主要財務データ

事業および業績の動向

土木（Civil）部門の売上高は前年同期の8,150万ドルに対して4,100万ドルとなりました。同部門は、2025年第2四半期に1,430万ドルの売上総利益を計上していたのに対し、2,710万ドルの売上総損失を計上しました。

交通（Transportation）部門の売上高は1億3,390万ドルから7,230万ドルに減少しました。売上総損失は130万ドルから4,420万ドルへと拡大しました。

資材・舗装（Materials & Paving）部門は売上高1,170万ドル、売上総損失1,630万ドルとなりました。同部門の残存受注残高は4,600万ドルで、全体の受注残高の約3%を占めています。資材・舗装部門以外のレガシー受注残高は3,500万ドルでした。

サウスランドは、AeconおよびMWHとともに、ウィニペグ・ノースエンド下水処理場プロジェクトから約1億9,000万ドルの契約額を獲得しました。経営陣によると、同契約は2030年に完了する予定であり、第3四半期の受注案件に計上される見込みです。

現在進行中の案件パイプラインには、橋梁、上水道、下水道、海洋、トンネル関連の案件が含まれています。経営陣は、テキサス州、フロリダ州、および北東部を、利用可能なインフラ案件が豊富な主要市場として挙げています。

経営陣のガイダンス

経営陣は、保証合意の完了と保証（ボンディング）枠の拡大を受け、2026年後半に入札活動が活発化すると見込んでいます。

同社は、16億8,000万ドルの受注残高のうち約38%が今後12か月間で売上高として認識されると見込んでいます。また、経営陣は複数のプロジェクトが2026年後半または2027年初めに建設契約へ進展する可能性があるものの、それらの機会に対する業績見通しは示していません。

サウスランドは、2026年の残りの期間を通じて、レガシー案件の追加請求の解決を進め、回収金を現金化することを目指しています。ただし、その時期や最終的な金額には依然として不確実性が残ります。

リスクと主な注目点

当四半期の業績は、レガシープロジェクトを巡る紛争の影響を強く受けました。サウスランドは契約上請求権があると考える金額の回収を進めていますが、経営陣は回収の時期や最終的な解決には不確実性が残るとしています。経営陣は第2四半期の再評価を一括調整と捉えているものの、追加請求権の評価は今後も四半期ごとに継続されます。

発行が予定されている優先株は無期限で、他のすべての株式に優先し、非転換型です。任意償還（コール）条項については、決算説明会の時点でも交渉が継続中でした。

修正されたシニア信用供与枠に基づく緩和措置が早期に終了した場合、当初の金利がさかのぼって適用されます。また、ワシントン州コンベンションセンターに関連する保証融資の返済条件についても交渉が続いています。

同社は、保証案件の施工をサポートするために保証会社からの融資に依存しつつ、レガシープロジェクトの終了を進めています。当四半期末時点の保証買掛金総額は2億9,890万ドルで、これにはワシントン州コンベンションセンターの判決に関連する金額が含まれています。

アナリストQ&Aの要点

経営陣は、財務支援合意書が保証付きプロジェクトの実行に必要な流動性支援を正式化するものであると述べました。保証会社は第2四半期中に約7,060万ドルを前払いし、ワシントン州コンベンションセンターを除く一般補償協定に基づく前払金総額は2億980万ドルに達しました。

保証枠（ボンディングキャパシティ）に関して、経営陣は交渉が行われていた上半期中、サウスランドの保証支援が制限された状態で事業を運営していたと述べました。合意の締結により、より広範な保証プログラムと入札活動の拡大が支援されると期待されています。

約1億5,100万ドルの優先株発行に関して、経営陣は同有価証券が永久かつ非転換型であることを確認しました。償還規定についてはまだ最終決定されていません。

経営陣は、第2四半期のレガシー案件の追加請求調整を一括の総合的再評価と位置付ける一方で、債権の回収可能性については今後も四半期ごとの見直しの対象となると強調しました。

決算説明会 文字起こし全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good morning. My name is Dara, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Southland Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Alex, you may begin your conference.

Alex Murray

Good morning, everyone, and welcome to the Southland Second Quarter 2026 Conference Call. This is Alex Murray, Vice President of Corporate Development and Investor Relations.

Joining me today are Frankie Renda, President and Chief Executive Officer; and Keith Bassano, 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 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 our Form 10-K for the year ended December 31, 2025, that was filed with the SEC on March 26, 2026, and the discussion in our Form 10-Q for the quarter ended June 30, 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 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.

Frankie S. Renda

Thank you, Alex. Good morning, and thank you for joining Southland's Second Quarter 2026 Conference Call. I will provide an overview of the series of agreements we entered into with our sureties. I will then review our quarterly results, including the legacy dispute adjustments recorded during the quarter, 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. As you know, our sureties have been providing support both through direct funding and by acquiring our term loan facility. We formalized that ongoing commitment into a financial assistance agreement and a second amendment to our term loan facility.

Together, these agreements give us the runway we need to complete our bonded work while putting the company in a much more sustainable capital structure. The financial assistance agreement governs the term on which our sureties have provided and will continue to provide financing with respect to our bonded construction projects.

As part of this agreement, the terms depend on whether certain sureties are providing go-forward bonding or not. Any surety that is party to the financial assistance agreement that has provided bonds to us after the retroactive effective date and is expected to continue to issue bonds to us is considered a bonding surety. Financing provided by those sureties is referred to as bonding surety financing. Bonding surety financing bears interest at 4% per annum with accrued interest capitalized and added to principal each year.

As of June 30, 2026, total bonding surety financing was approximately $59 million. Sureties providing financing that are not providing go-forward bonding are considered nonbonding sureties, and their funding is referred to as nonbonding financing.

As of June 30, 2026, total nonbonding financing was approximately $151 million. The agreement documents the terms of our nonbonding financing arrangements with our nonbonding sureties, including the future conversion of certain nonbonding financing into senior nonvoting preferred shares in accordance with the preferred share term sheet attached to the agreement.

Under the agreement, each applicable surety panel has determined the expected loss for the nonbonding financing expected to fund that panel's outstanding bonded projects through completion. The preferred shares term sheet contemplates that the amount initially converted into preferred shares equals the lesser of the nonbonding financing provided as of June 30, 2026, or 50% of that panel's expected loss.

Based on nonbinding financing as of June 30, we expect to convert and issue approximately $151 million of preferred shares allocated among the sureties based on their respective participation on the applicable panel. These preferred shares carry a stated value of $1,000 per share with a liquidation preference equal to that stated value.

They rank senior to any other class or series of our equity, have a perpetual maturity and are not convertible into any other securities of the company. We're required to issue them no later than September 30 of this year, and they can't be primed by any other equity without the applicable surety panel's consent. The preferred shares will be adjusted upward or downward based on actual loss once the applicable surety's projects are completed with the final preferred share amount limited to 50% of that actual loss.

And to the extent the amount initially issued exceeds 50% of the actual loss, that excess converts back to unsecured indebtedness. So the aggregate preferred shares outstanding equals 50% of actual loss at completion. The remaining portion of the nonbonding financing for which preferred shares are not issued will constitute unsecured indebtedness will bear no interest and will not be subject to mandatory amortization payments other than certain net cash flows from claims and 5% of annual operating cash flow.

At time of substantial completion of surety's bonded projects, provided that we are not in default at the applicable time, each surety will forgive the portion of its nonbonding financing that is unsecured indebtedness if its bonded projects achieve substantial completion or all project dispositions with respect to such projects are consummated within 20% of the applicable expected loss amount.

As part of the agreement, we also reached terms on an amendment to our senior credit facility. So long as we remain in compliance with the facility, the amendment sets the interest rate at a fixed 4% with accrued interest capitalized and added to principal and suspends both the scheduled principal payments and the early termination premium.

If that relief were to end early, the original interest rate would apply retroactively. Together, this represents approximately $27 million of cash debt service relief over the next 12 months. During the second quarter, our surety partners advanced approximately $71 million to support active bonded projects, bringing total surety advances to $210 million, exclusive of the Washington State Convention Center.

Their continued support reflects confidence in both our plan and execution strategy. Turning to this quarter's results. Second quarter revenue was $113 million, inclusive of a revenue reversal of approximately $102 million from noncash adjustments related to legacy dispute negotiations and resolutions.

Gross loss for the quarter was $71 million, primarily driven by the unfavorable adjustment from legacy disputes, which impacted gross loss by approximately $94 million. We continue to actively pursue all avenues to collect the amounts owed to us and expect to make progress throughout the remainder of 2026 in resolving these matters and converting them into cash.

Our legacy portfolio also continues to shrink. We are down to $46 million of material and paving backlog and $35 million of non-M&T legacy backlog remaining. The market backdrop across our core end markets also remains strong. Federal, state and local infrastructure funding continues to translate into active procurement for water, bridge, marine and tunnel work.

Moving along to backlog. We finished the quarter with $1.68 billion of backlog, down from $2.03 billion at year-end. With the financing agreement now in place, we expect bonding support and bidding activity to continue increasing. We expect the combination of improving financial flexibility, a shrinking legacy portfolio and strong market demand positions us well to convert upcoming opportunities into awards over the coming months.

This is evident in the recently announced Phase 3 Winnipeg North End Sewage Treatment Plant award which we secured alongside our partners, Aecon and MWH, representing approximately $190 million in contract value for Southland.

Active pursuits in our pipeline include additional packages at the Winnipeg North End sewage treatment plant, the Claiborne Pell Bridge rehabilitation in Rhode Island, the I-10 Calcasieu approach bridges in Louisiana, the MoDOT Liberty Bend Bridge design build in Missouri, the Bermuda Swing Bridge replacement, the MTA Bronx-Whitestone Bridge rehabilitation in New York, the Outerbridge Crossing repairs for the Port Authority and multiple tunnel marine and bridge opportunities across our core markets.

In summary, we have reached final agreement on a central element of 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 the broader financing agreement is now in place. With that, I'll now turn the call over to Keith for a financial update.

Keith Bassano

Thank you, Frank, and good morning, everyone. I will discuss an overview of our financial performance during the second quarter of 2026.

You can find additional details and information in the financial statements, footnotes and management's discussion and analysis that were filed on Form 10-Q last night.

Revenue in the second quarter was $113.3 million compared to $215.4 million in the same period in 2025. Gross loss in the quarter was $71.2 million compared to gross profit of $13 million in the second quarter of 2025. This was driven by unfavorable adjustments related to claims across several legacy projects. During the 3 months ended June 30, 2026, we performed a comprehensive reassessment of expected recoverability of claims on several projects, including substantially completed projects in light of recent developments and updated information available regarding the timing and the amount of potential recoveries.

As a result of this reassessment, we reduced the estimated value of certain claims and recorded a cumulative catch-up adjustment that negatively impacted revenue and gross profit for the quarter of $102.3 million and $93.6 million, respectively.

While the company continues to pursue recovery of amounts it believes are contractually due, the timing and the ultimate resolution of these matters remains uncertain. These adjustments reflect the derecognition of claim positions on work that is already constructed. Our contract assets balance declined to $272.3 million at the quarter end from $389.4 million at year-end.

The vast majority of that balance relates to legacy projects where construction activities are already completed. Selling, general and administrative expenses in the second quarter were $16.7 million, an increase of $3.1 million or 23.1% compared to the same period in 2025. The increase was primarily driven by a $3.2 million increase in bad debt expense associated with legacy adjustments, partially offset by lower compensation expense.

Selling, general and administrative expense in the second quarter included $1.2 million of business transformation expense. Interest expense for the quarter totaled $7.3 million, a decrease of $2.7 million or 26.5% compared to the same period in 2025, primarily due to lower total debt outstanding.

Cash interest in the quarter was $4 million compared to $8.5 million in the first quarter, the difference primarily attributable to the suspended interest service on our senior term loan. Other income was $6.4 million compared to $0.6 million in the prior year period, primarily driven by gains on asset sales.

These gains are the result of progress made toward an initiative under our strategic plan to monetize noncore assets and reduce our debt. We recorded an income tax benefit of approximately $1.6 million for the quarter compared to a $61,000 benefit in the same period last year.

Our effective tax rate for the quarter was approximately 2%. As we discussed on our last call, we recorded a valuation allowance against our domestic deferred tax assets in the third quarter of 2025, which now stands at approximately $147 million as of the second quarter of 2026.

As a reminder, that valuation allowance does not limit our ability to use those deferred tax assets in the future. Net loss attributable to Southland stockholders in the second quarter was $84.3 million or a loss of $1.55 per diluted share compared to a net loss of $10.3 million or a loss of $0.19 per diluted share in the second quarter of 2025.

EBITDA in the second quarter was negative $73.4 million compared to a positive $4.2 million in the second quarter of 2025. As I mentioned earlier, this quarter's EBITDA was largely impacted by noncash unfavorable adjustments of $93.6 million related to our comprehensive reassessment of recoverability of claims.

Now to touch on segment performance for the quarter. Our Civil segment had revenue of $41 million compared to $81.5 million in the same period in 2025. Civil had a gross loss of $27.1 million compared to a gross profit of $14.3 million in the prior year period. Our Transportation segment had revenue of $72.3 million compared to $133.9 million in the same period in 2025. Transportation had a gross loss of $44.2 million compared to a gross loss of $1.3 million in the same period in the prior year.

The Materials & Paving business line contributed $11.7 million in the revenue and a gross loss of $16.3 million in the second quarter compared to a revenue of $21.7 million and a gross loss of $3.8 million in the same period in 2025. M&P now represents approximately 3% of total backlog. We finished the quarter with approximately $1.68 billion of backlog, of which we expect to recognize approximately 38% as revenue over the next 12 months.

During the quarter, our surety partners advanced approximately $70.6 million under our general indemnity agreements to support ongoing project performance, bringing total advances under those agreements to $209.8 million, excluding the Washington State Convention Center. Including amounts funded in connection with the Washington State Convention Center judgment, total surety payables were $298.9 million at quarter end.

Repayment of these amounts is not required prior to at least August 13, 2027. Repayment terms regarding the Washington State Convention Center are still being negotiated. As Frank noted, we also reached terms on a second amendment to our senior credit facility.

The amendment sets the interest rate at a fixed 4% and defers payment of that interest, so it is capitalized as payment in kind interest and added to principal rather than paid in cash. The credit amendment suspends the scheduled quarterly amortization payments and the early termination premium and it eliminates certain early maturity triggers tied to our other indebtedness.

The facility continues to mature in September of 2028. The amendment also removes our financial covenants on a going-forward basis. Our facility previously required us to maintain liquidity of at least $20 million at all times and tested a minimum EBITDA covenant in defined circumstances. As amended, those requirements apply only to periods prior to March of this year.

While we are encouraged to finalize these agreements, our focus remains on closing out our legacy work, improving the balance sheet through asset monetization and the surety partnership and executing on our core business. I'll now return the call back to the operator for questions.

Operator

[Operator Instructions] Your first question comes from Julio Romero with Sidoti & Company, LLC.

質疑応答

Julio Romero

So congratulations on completing the financial assistance agreement and the second amendment. Now that those are executed, could you maybe help investors understand kind of what changes for Southland from here from a go-forward liquidity basis, whether you anticipate needing additional surety funding beyond what's being provided? And what this all means for bonding capacity on new work going forward?

Keith Bassano

Yes. So let me -- this is Keith here. Let me start off with liquidity. So what this agreement does for the company is provides the liquidity that we need to execute on our bonded work.

The sureties have been extremely supportive. And you saw that even further this quarter with an additional $70 million of bonding support or rather than surety payable support to help support the bonded work. We've seen consistent support from the sureties, and this agreement formalizes that support.

Frankie S. Renda

On the bonding front, Julio, we spent the first half of the year bidding with constrained bonding support as we work through the deal.

Now that the deal is finalized, we expect a comprehensive bonding program that supports the long-term plan. The Winnipeg North end award we announced in July is approximately $190 million of contract value that's going to be included in Q3 awards, and we expect bidding to pick up now that the deal is finalized.

Julio Romero

Excellent. And then for my follow-up here is just on the preferred shares you expect to issue $151 million, how should common shareholders kind of think about that? Is that going to be permanent in the capital structure? Is that a temporary kind of stabilization tool that you expect to redeem? Just help frame that for the common shareholder, if you could.

Keith Bassano

Yes. So these are perpetual shares. We will negotiate optional redemption terms. However, that's under negotiation at this time. And these are nonconvertible.

Operator

Your next question comes from Christian Schwab with Craig-Hallum Capital Group.

Benjamin Taxdahl

It's Ben Taxdahl on for Christian Schwab here. I just had one question on the legacy dispute adjustments and specifically on a go-forward basis.

Do you guys internally have like an idea of when the adjustments will be over and kind of business will get back to normal business, I guess, simply?

Keith Bassano

Yes. So during the quarter, again, these were the result of a comprehensive reassessment of expected recoverability on our claims in the portfolio of projects.

Entering into these agreements was critical for the company and critical for the business. We now have additional stakeholders in the claim recoveries as a result. We performed this reassessment, and we'll continue to evaluate claims on a quarterly basis. But we view this as a onetime adjustment in the quarter.

Operator

There are no further questions at this time. We'll take another question from Julio Romero.

Julio Romero

The award on the joint venture that you received last month that enters your civil backlog here in the third quarter. What is your portion of the project? When is that expected to convert to revenue? What's the expected duration of that project? And then any other projects that are similar to Winnipeg in terms of engagements in prior years that might convert to construction awards or future phases of awards in the future?

Frankie S. Renda

Yes. So the Winnipeg project, we are working on Phase 1. This is Phase 2 of the project, and there's multiple phases that we hope to tender on in the coming months and years.

But our portion is $190 million of construction contract -- $190 million contract that will conclude in 2030.

Keith Bassano

Julio, could you repeat that second portion of the question?

Julio Romero

Can you hear me?

Keith Bassano

Yes.

Julio Romero

Okay. Just when -- if there's like -- if there's other projects that are similar to Winnipeg in the sense that you kind of engaged or bidded on with a joint venture in the '23, '24 time frame that you're not actively bidding on projects of that size now or I would think you weren't in the earlier part of this year.

But any other projects that are similar to that in the sense that they might actually progress towards an award here in the coming back half of the year or '27?

Frankie S. Renda

Yes. There's quite a few projects that we have that are similar. We've got a couple of projects that we expect to turn into potential construction contracts in the back half of the year or early next year.

Julio Romero

Okay. Okay. Great. And then I guess I'm on anyway. I guess if you have a couple of other projects, I guess that's -- I guess that would be interpreted as a positive statement about the continued support you're getting from the surety partners that you have and your bonding capacity.

Frankie S. Renda

Yes. We expect bidding to ramp up in the last half of the year and going forward. There's a lot of demand in our industry, water, wastewater, bridges, marine, all sectors that we're going to strategically target. We're going to continue to hit those short duration projects, and there's multiple to choose from and surety support going forward is going to be really helpful.

Julio Romero

Great. And then geographically, where are you seeing private sector demand for those services?

Frankie S. Renda

There's a lot of work and there's really a lot of work all over the country right now. You hear the data centers really kicking off all over.

But as far as infrastructure projects, Texas, Florida, the Northeast, all of our core markets have a lot of work to choose from.

Operator

There are no further questions at this time. I'll now turn the call back to Frank for closing remarks.

Frankie S. Renda

Before we wrap up today, I'd like to thank our employees for their continued commitment and dedication to building some of the most challenging infrastructure projects across North America, especially as we work through this transition. I'd also like to thank our surety partners for their continued support and partnership as we work together to put Southland on a stronger path forward.

Thank you all for joining today, and I look forward to updating you on our next call. Thanks, everyone.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.