索斯兰 (SLND) 2026财年第二季度业绩电话会议：索赔调整与担保交易

核心要点

• 2026财年第二季度营收从上年同期的2.154亿美元降至1.133亿美元，其中包括因重新评估历史项目索赔的可回收性而录得的1.023亿美元非现金营收冲减。
• Southland录得7120万美元毛亏损以及8430万美元归属于股东的净亏损。EBITDA为负7340万美元，其中包括9360万美元的不利索赔调整。
• 该公司通过财务援助协议确立了担保支持。截至2026年6月30日，履约担保融资总额约为5900万美元，非担保融资总额约为1.51亿美元。
• Southland预计将在2026年9月30日之前向相关担保公司发行约1.51亿美元的永续、优先、无表决权且不可转换的优先股。
• 本季度末在手订单额为16.8亿美元，低于年底的20.3亿美元。管理层预计第二季度在手订单中约有38%将在未来12个月内转化为营收。
• 修订后的高级信用设施采用4%的固定实物支付（PIK）利率，暂停预定的本金摊销，并在未来12个月内提供约2700万美元的预期现金偿债减免。

核心财务数据

业务与经营业绩

土木工程部门营收为4100万美元，而上年同期为8150万美元。该部门录得2710万美元的毛亏损，而2025财年第二季度毛利润为1430万美元。

交通运输部门营收从1.339亿美元降至7230万美元。其毛亏损从130万美元扩大至4420万美元。

材料与铺路部门产生1170万美元营收和1630万美元毛亏损。其剩余在手订单为4600万美元，约占总在手订单的3%。非材料与铺路部门的历史在手订单为3500万美元。

Southland与Aecon及MWH共同获得了温尼伯北端污水处理厂项目价值约1.9亿美元的合同。管理层表示，该合同预计将于2030年结束，并将计入第三季度新签合同。

在建及储备项目包括桥梁、水务、污水、海洋工程及隧道项目。管理层指出，德克萨斯州、佛罗里达州和东北部地区是其拥有大量可用基础设施项目的核心市场。

管理层业绩指引

随着担保协议的敲定和履约担保支持的扩大，管理层预计2026年下半年的竞标活动将有所增加。

该公司预计在其16.8亿美元的在手订单中，约有38%将在未来12个月内确认为营收。管理层还表示，有几个项目可能会在2026年下半年或2027年初转化为施工合同，但未对这些项目提供财务预测。

Southland预计在2026年剩余时间内，在解决历史项目索赔并将回收款转化为现金方面取得进展。然而，具体时间和最终金额仍存在不确定性。

风险与关键关注点

本季度的业绩受到历史项目纠纷的严重影响。尽管Southland继续追讨其认为按合同应得的款项，但管理层表示，回收款的具体时间和最终解决结果仍存在不确定性。尽管管理层将第二季度的重新评估视为一次性调整，但未来仍将按季度对索赔进行评估。

计划发行的优先股为永续型，优先于所有其他股权，且不可转换。在业绩电话会议举行时，可选赎回条款仍处于谈判中。

如果修订后的高级信用设施减免提前结束，将追溯适用原始利率。与华盛顿州会议中心相关的担保资金偿还条款也仍在谈判中。

该公司继续收尾历史项目，同时依靠担保资金来支持担保工作。截至季度末，担保应付款总额为2.989亿美元，其中包括与华盛顿州会议中心判决相关的金额。

分析师问答集锦

管理层表示，财务援助协议使执行受担保项目所需的流动性支持正式化。担保公司在第二季度预付款项约7060万美元，使通用赔偿协议下的预付款总额达到2.098亿美元（不包括华盛顿州会议中心）。

关于履约担保能力，管理层表示，在谈判进行期间，Southland在今年上半年的担保支持受到限制。协议达成后，预计将支持更广泛的担保计划并增加竞标活动。

关于约1.51亿美元的优先股发行，管理层确认该证券将是永续且不可转换的。赎回条款尚未最终确定。

管理层将第二季度历史索赔调整定性为一次性综合重新评估，同时强调索赔可回收性仍需接受季度审查。

业绩电话会议完整文字记录

完整财报电话会议逐字稿

管理层陈述

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.

分析师问答

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.