薩斯蘭 (SLND) 2026 年第二季財報電話會議：索賠調整與履約保證交易

重點總覽

• 2026 財年第二季營收從去年同期的 2.154 億美元降至 1.133 億美元，其中包括因重新評估先前專案求償的可收回性，而調減的 1.023 億美元非現金營收。
• Southland 錄得 7,120 萬美元的毛損失及 8,430 萬美元的歸屬於股東淨損失。EBITDA 為負 7,340 萬美元，其中包括 9,360 萬美元的不利求償調整。
• 該公司透過財務協助協議正式確定了履約保證支持。截至 2026 年 6 月 30 日，履約保證融資總額約為 5,900 萬美元，非保證融資總額約為 1.51 億美元。
• Southland 預計將於 2026 年 9 月 30 日前，向相關保證公司發行約 1.51 億美元的永續、優先、無表決權且不可轉換特別股。
• 本季末在建訂單為 16.8 億美元，低於年底的 20.3 億美元。管理層預計第二季在建訂單中約有 38% 將在未來 12 個月內轉化為營收。
• 修訂後的優先信用額度採用固定 4% 的實物支付（PIK）利率，暫停預定的本金分期償還，並預計在未來 12 個月內提供約 2,700 萬美元的現金還本付息舒緩。

核心財務數據

業務與營運表現

土木工程部門營收為 4,100 萬美元，而去年同期為 8,150 萬美元。該部門錄得 2,710 萬美元的毛損失，而 2025 財年第二季則為毛利 1,430 萬美元。

交通運輸部門營收自 1.339 億美元降至 7,230 萬美元。其毛損失自 130 萬美元擴大至 4,420 萬美元。

建材與鋪面部門營收為 1,170 萬美元，毛損失為 1,630 萬美元。其剩餘在建訂單為 4,600 萬美元，約占總在建訂單的 3%。非建材與鋪面部門的先前專案在建訂單為 3,500 萬美元。

Southland 與 Aecon 及 MWH 合作，取得了溫尼伯北區污水處理廠專案約 1.9 億美元的合約金額。管理層表示該合約預計將於 2030 年結束，並將計入第三季的新增得標案。

進行中的潛在專案管道包括橋樑、水利、污水處理、海洋工程及隧道等機會。管理層指出現有重大基礎設施工程中，德州、佛羅里達州和東北部屬於其核心市場。

管理層展望

管理層預計，隨著履約保證協議的完成以及保證支持的擴大，2026 年下半年的投標活動將有所增加。

該公司預計其 16.8 億美元在建訂單中的約 38% 將在未來 12 個月內認列為營收。管理層還表示，有幾個專案可能會在 2026 年下半年或 2027 年初發展為施工合約，但未對這些機會提供財務預測。

Southland 預計在 2026 年剩餘時間內，在解決先前專案求償及將收回款項轉化為現金方面取得進展。然而，具體時程與最終金額仍存在不確定性。

風險與關鍵關注點

本季業績受到先前專案爭議的嚴重影響。儘管 Southland 繼續追討其認為依合約應得的款項，但管理層表示收回款項的時間和最終解決結果仍具不確定性。即使管理層將第二季的重新評估視為一次性調整，未來仍將每季對求償進行評估。

計劃發行的特別股為永續、順位優先於所有其他股權且不可轉換。在法說會召開時，選擇性贖回條款仍處於談判階段。

如果修訂後優先信用額度的紓困提前結束，將追溯適用原始利率。與華盛頓州會議中心相關的履約保證融資還款條款也仍在談判中。

該公司繼續清算先前專案，同時依賴履約保證融資來支持有保證的工程。季度末保證應付款項總額為 2.989 億美元，其中包括與華盛頓州會議中心判決相關的金額。

分析師問答亮點

管理層表示，財務協助協議正式確定了執行保證專案所需的流動性支持。保證公司在第二季預支了約 7,060 萬美元，使一般賠償協議下的預付款達到 2.098 億美元（不包括華盛頓州會議中心）。

在保證承作額度方面，管理層表示 Southland 在談判期間的上半年是在支持受限的情況下營運。完成的協議預計將支持更廣泛的保證計畫並增加投標活動。

關於約 1.51 億美元的特別股發行，管理層確認這些證券將是永續且不可轉換的。贖回條款尚未最終敲定。

管理層將第二季先前專案求償調整定性為一次性全面重新評估，同時強調求償可收回性仍將接受每季審查。

完整法說會逐字稿

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完整財報電話會議逐字稿

管理層陳述

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.

分析師問答

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.