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What changed in Southland Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Southland Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+177 added−176 removedSource: 10-K (2025-03-04) vs 10-K (2024-03-04)

Top changes in Southland Holdings, Inc.'s 2024 10-K

177 paragraphs added · 176 removed · 132 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeLabor costs continue to increase due to shortages of qualified workers. Hiring and retaining our skilled workers continues to be a priority to avoid future potential labor shortages. 6 Table of Contents Risk Management, Insurance, and Bonding We are insured to cover a broad range of exposures arising from our work in the construction industry.
Biggest changeSince the novel coronavirus (“COVID-19”) pandemic and Russia’s invasion of Ukraine, the construction industry continues to experience widespread supply chain impacts. Labor costs continue to increase due to inflation, shortages of qualified workers, and other factors. Hiring and retaining our skilled workers continues to be a priority to avoid future potential labor shortages.
Contracts that are awarded, but not yet started, are included in Backlog once a contract has been fully executed and/or we have received formal “Notice to Proceed” from the project owner. Although contract backlog reflects business that we consider to be firm, deferrals, cancellations, or scope adjustments may occur.
Contracts that are awarded, but not yet started, are included in Backlog once a contract has been fully executed and/or we have received a formal “Notice to Proceed” from the project owner. Although contract backlog reflects business that we consider to be firm, deferrals, cancellations, or scope adjustments may occur.
With the combined capabilities of these six subsidiaries, Southland has become a diversified industry leader with projects spanning North America in various end markets. In the second quarter of 2023, Southland decided to discontinue certain types of projects in its Materials & Paving business line (“M&P”) and sold assets related to producing large scale concrete and asphalt.
With the combined capabilities of these six primary subsidiaries, Southland has become a diversified industry leader with projects spanning North America in various end markets. In the second quarter of 2023, Southland decided to discontinue certain types of projects in its Materials & Paving business line (“M&P”) and sold assets related to producing large scale concrete and asphalt.
Our local management teams build relationships with current and potential customers in order to better understand and serve their needs which benefits us in the competitive bid process. We believe that our strategic relationships with customers will result in future opportunities.
Our local and corporate management teams build relationships with current and potential customers in order to better understand and serve their needs which benefits us in the competitive bid process. We believe that our strategic relationships with customers will result in future opportunities.
Government contracts contain specific procurement regulations, contract provisions, and a variety of other requirements related to formation, administration, project performance, and accounting. These agreements require certification of compliance. Our operations are subject to various statutes and executive orders.
Government contracts contain specific procurement regulations, contract provisions, and a variety of other requirements related to formation, administration, project performance, and accounting. These agreements often require certification of compliance. Our operations are subject to various statutes and executive orders.
Our Civil segment operates throughout North America and specializes in services that include the design and construction of water pipeline, pump stations, lift stations, water and wastewater treatment plants, concrete and structural steel, outfall, and tunneling.
Our Civil segment operates throughout North America and specializes primarily in services that include the design and construction of water pipeline, pump stations, lift stations, water and wastewater treatment plants, concrete and structural steel, outfall, and tunneling.
We also provide additional benefits to our employees, including a 401(k) Match Plan, healthcare and insurance benefits, paid time off, family leave, flexible work schedules, and employee assistance programs.
We also may provide additional benefits to our employees, including a 401(k) match plan, healthcare and insurance benefits, paid time off, family leave, flexible work schedules, and employee assistance programs.
Our Transportation segment operates throughout North America and specializes in services that include the design and construction of bridges, roadways, marine, dredging, ship terminals and piers, and specialty structures and facilities.
Our Transportation segment operates primarily throughout North America and specializes primarily in services that include the design and construction of bridges, roadways, marine, dredging, ship terminals and piers, and specialty structures and facilities.
This allows us to better manage costs by minimizing the use of third-party service providers, which can be more difficult to budget and can delay project schedules. Our expertise in a wide range of technical areas allows us to form internal joint ventures which contribute to better cost management. ● Significantly Owned Equipment Fleet .
This allows us to better manage costs by minimizing the use of third-party service providers, which can be more difficult to budget and can delay project schedules beyond our control. Our expertise in a wide range of technical areas allows us to form internal joint ventures which contribute to better cost management. ● Significantly Owned Equipment Fleet .
On February 14, 2023, the Company consummated the previously announced merger contemplated by the Merger Agreement, dated as of May 25, 2022 (the “Merger Agreement”), by and among Southland Holdings, Inc. (known prior to February 14, 2023 as Legato Merger Corp. II), Southland Holdings LLC, a Texas limited liability company, and Legato Merger Sub, Inc., a Delaware corporation.
On February 14, 2023, the Company consummated the merger contemplated by the Merger Agreement, dated as of May 25, 2022 (the “Merger Agreement”), by and among Southland Holdings, Inc. (known prior to February 14, 2023 as Legato Merger Corp. II), Southland Holdings LLC, a Texas limited liability company, and Legato Merger Sub, Inc., a Delaware corporation.
We make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange 9 Table of Contents Act as soon as reasonably practicable after we electronically file such materials with, or furnish it to, the SEC.
We make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such materials with, or furnish it to, the SEC.
In addition, we intend to disclose on our website any amendments to, or waivers from, our Code of Business Conduct that are required to be publicly disclosed pursuant to rules of the SEC. Additionally, all of our reports filed with the SEC are available via their website at sec.gov. ​
In addition, we intend to disclose on our website any amendments to, or waivers from, our Code of Business Conduct that are required to be publicly disclosed pursuant to rules of the SEC. Additionally, all of our reports filed with the SEC are available via their website at sec.gov. ​ 9 Table of Contents
These include but are not limited to: ● the Davis-Bacon Act which regulates wages and benefits, 7 Table of Contents ● Executive Order 11246 which establishes equal employment opportunity and affirmative action requirements, ● the Walsh-Healy Act which prescribes a minimum wage and regulates overtime and other working conditions, ● Executive Order 14063 which requires project labor agreements on all federal construction projects with contract values over $35 million, ● the Drug-Free Workplace Act, and ● the Federal Acquisition Regulation and the Federal Civil False Claims Act.
These include but are not limited to: ● the Davis-Bacon Act which regulates wages and benefits, ● the Walsh-Healy Act which prescribes a minimum wage and regulates overtime and other working conditions, ● Executive Order 14063 which requires project labor agreements on all federal construction projects with contract values over $35 million, 7 Table of Contents ● the Drug-Free Workplace Act, and ● the Federal Acquisition Regulation and the Federal Civil False Claims Act.
Backlog is adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations, and project deferrals, as appropriate.
Backlog is adjusted to reflect any known project cancellations, revisions to project scope and projected revenues, foreign currency exchange fluctuations, and project deferrals, as appropriate.
We are also subject to the rules and regulations promulgated by the Occupational Safety and Health Administration (“OSHA”) and the Mine Safety and Health Administration and other regulations. In addition, certain contracts within our government agency projects contain minimum Disadvantaged Business Enterprise (“DBE”) participation clauses.
We are also subject to the rules and regulations promulgated by the Occupational Safety and Health Administration (“OSHA”) and the Mine Safety and Health Administration and other regulations. In addition, certain contracts contain minimum Disadvantaged Business Enterprise (“DBE”) participation clauses.
Supply-chain disruption has continued for many of the materials and inputs that we need to complete our projects. Specifically, prices of oil, gas, and other fuel sources have increased. Additionally, the cost and availability of many construction materials and labor has impacted project costs and scheduling.
Supply-chain disruption has continued for many of the materials and inputs that we need to complete our projects. Specifically, prices of oil, gas, and other fuel sources have increased over time since certain projects were originally estimated. Additionally, the cost and availability of many construction materials and labor has impacted project costs and scheduling.
We maintain a strong balance sheet and bonding capacity to target large contract work. This limits the number of competitors we bid against, as smaller, local companies are often not able to bid on larger projects. ● Geographically Diverse .
We seek to maintain a strong balance sheet and bonding capacity to target varying sizes of contract work. This limits the number of competitors we bid against, as smaller, local companies are often not able to bid on larger or more technical projects. ● Geographically Diverse .
Fixed price contracts, particularly with federal, state, and local government customers, are expected to continue to represent a majority of our total Backlog. ​ ​ ​ ​ (Amounts in thousands) ​ Balance December 31, 2021 ​ $ 2,218,573 New contracts, change orders, and adjustments ​ 1,892,946 Gross Backlog ​ 4,111,519 Less: contract revenue recognized in 2022 ​ (1,137,634) Balance December 31, 2022 ​ $ 2,973,885 New contracts, change orders, and adjustments ​ 1,011,797 Gross Backlog ​ 3,985,682 Less: contract revenue recognized in 2023 ​ (1,150,716) Balance December 31, 2023 ​ $ 2,834,966 ​ Construction Costs and Raw Materials We manage our business to minimize or eliminate exposure to labor and material price increases, including through inflation, in our bids for projects, when possible.
Fixed price contracts, particularly with federal, state, and local government customers, are expected to continue to represent a majority of our total Backlog. ​ ​ ​ ​ (Amounts in thousands) ​ Balance December 31, 2022 ​ $ 2,973,885 New contracts, change orders, and adjustments ​ 1,011,797 Less: contract revenue recognized in 2023 ​ (1,150,716) Balance December 31, 2023 ​ $ 2,834,966 New contracts, change orders, and adjustments ​ 718,125 Less: contract revenue recognized in 2024 ​ (980,179) Balance December 31, 2024 ​ $ 2,572,912 ​ Construction Costs and Raw Materials We manage our business to minimize exposure to labor and material price increases, including through inflation or other factors, in our bids for projects, when possible.
Surety bond costs and our ability to obtain surety bonds are largely contingent on our working capital, Backlog, past performance and reputation, capitalization, management and technical expertise, and other factors at the underwriter’s discretion. To date, we have been able to acquire the level of surety bonds necessary to support our business.
Surety bond costs and our ability to obtain surety bonds are largely contingent on our working capital, Backlog, past performance and reputation, capitalization, management and technical expertise, and other factors at the underwriter’s discretion.
Contractors are selected for the pre-approved contractor lists by virtue of their prior performance for such customers, as well as their reputation, technical expertise, safety record, ability to obtain surety bonds, and experience.
We are often invited to bid on projects with customers who maintain pre-qualified contractor lists. Contractors are often selected for pre-approved contractor lists by virtue of their prior performance for such customers, as well as their reputation, technical expertise, safety record, ability to obtain surety bonds, experience, and other factors.
Our safety directors and site-specific safety managers work together to assess and control potential losses and liabilities both before and during our construction projects. Our safety record is in-line with industry standards. In our industry, we are generally required to possess various types of surety bonds guaranteeing our completion of projects for most public and private customer contracts.
Our safety record is in-line with industry standards. In our industry, we are generally required to possess various types of surety bonds guaranteeing our completion of projects for most public and private customer contracts.
Backlog consists of two components: (1) unearned revenue and (2) awarded but not started. Unearned revenue includes the revenue we expect to record in the future on in-progress contracts, including 100% of our consolidated joint venture contracts and our proportionate share of unconsolidated joint venture contracts.
Unearned revenue includes the revenue we expect to record in the future on in-progress contracts, including 100% of our consolidated joint venture contracts and our proportionate share of unconsolidated joint venture 5 Table of Contents contracts.
We track and maintain several key safety metrics, which senior management reviews monthly, and we evaluate management on their ability to provide safe working conditions on job sites and to create a strong safety culture.
Safety, Health, and Wellness We are committed to providing a safe environment for our employees. We pride ourselves in our above industry average workplace safety. We track and maintain several key safety metrics, which senior management reviews monthly, and we evaluate management on their ability to provide safe working conditions on job sites and to create a strong safety culture.
In our high-performance culture, everyone is treated fairly and respectfully and has equal access to opportunities based on capabilities and performance, regardless of gender, generation, sexual orientation, mental and physical ability, race, ethnicity, and other protected classes. Our workforce was made up of approximately 2,500 employees as of December 31, 2023, of which 600 were salaried and 1,900 were hourly.
In our high-performance culture, everyone is treated fairly and respectfully and has equal access to opportunities based on capabilities and performance, regardless of gender, generation, sexual orientation, mental and physical ability, race, ethnicity, and other protected classes.
While we may subcontract specialized activities such as blasting, hazardous waste removal and selected electrical/instrumentation work, we self-perform most of the work on our projects with our own resources, including field supervision, labor, and equipment. 5 Table of Contents Contract Backlog Contract backlog (“Backlog”) in our industry is an economic measure of the total value of work remaining to be performed on projects that we have been awarded.
While we may subcontract specialized activities such as blasting, hazardous waste removal and selected electrical/instrumentation work, we seek to self-perform most of the work on our projects with our own resources, including field supervision, labor, and equipment.
We have continued to mitigate these impacts to the extent possible by passing these costs on to our customers when possible and agreeing to fixed-cost contracts with suppliers and subcontractors for labor and materials. Our operations can be impacted by increases in prices, whether caused by inflation or other economic factors.
Changes in laws, policies or regulations, including tariffs and taxes, could impact the prices for materials or equipment. We have continued to mitigate these impacts to the extent possible by passing these costs on to our customers when possible and agreeing to fixed-cost contracts with suppliers and subcontractors for labor and materials.
We attempt to recover anticipated increases in the cost of labor, materials, equipment, and fuel through price escalation provisions in certain contracts and by considering the estimated increases in costs in our bidding on new work. We often seek to get fixed-price bids from subcontractors and suppliers upon signing new contracts to control costs.
Our operations can be impacted by increases in prices, whether caused by inflation or other factors. We attempt to recover anticipated increases in the cost of labor, materials, equipment, and fuel through price escalation provisions in certain contracts and by considering the estimated increases in costs in our bidding on new work.
We believe that we can compete favorably based on these factors. Many of our competitors have the ability to perform work in either the private or public sectors. When opportunities for work in one sector are reduced, competitors tend to look for opportunities in the other sector.
Many of our competitors have the ability to perform work in either the private or public sectors. When opportunities for work in one sector are reduced, competitors tend to look for opportunities in the other sector. This migration has the potential to reduce revenue growth and/or increase pressure on gross profit margins.
Our policy strictly forbids discrimination in employment on the basis of age, culture, gender, national origin, sexual orientation, physical appearance, race, or religion. We are an inclusive, diverse company with people of all backgrounds, experience, culture, styles, talents, and other protected classes.
Diversity and Inclusion We employ a dynamic mix of people to create the strongest company possible. Our policy strictly forbids discrimination in employment on the basis of age, culture, gender, national origin, sexual orientation, physical appearance, race, or religion.
This migration has the potential to reduce revenue growth and/or increase pressure on gross profit margins. We believe that the combination of our experience, reputation, and technical expertise are unmatched among companies of our size. This combination of skills has allowed us to pursue large-scale projects with fewer competitors.
We believe that the combination of our experience, reputation, and technical expertise are unmatched among companies of our size. This combination of skills has allowed us to pursue large-scale projects with fewer competitors. Contract Provisions and Subcontracting Our contracts are primarily obtained through competitive bidding. Occasionally, we obtain contracts through direct negotiations with customers.
As of December 31, 2023, about 500, or 20%, of our employees were represented by 8 Table of Contents a union. Estimated amounts for wage escalation related to the expiration of union contracts are included in our bids on various projects. Diversity and Inclusion We employ a dynamic mix of people to create the strongest company possible.
These agreements cover all necessary union professions and are subject to renewal periodically. As of December 31, 2024, approximately 300, or 14%, of our employees were represented by a union. Estimated amounts for wage escalation related to the expiration of union contracts are included in our bids on various projects.
Union Workforce. Several of our subsidiaries are a signatory to numerous local and regional collective bargaining agreements, both directly and through trade associations, as a union contractor. These agreements cover all necessary union professions and are subject to renewal periodically.
Our workforce was made up of approximately 2,100 employees as of December 31, 2024, of which approximately 500 were salaried and approximately 1,600 were hourly. Union Workforce. Several of our subsidiaries are signatory to numerous local and regional collective bargaining agreements, both directly and through trade associations, as a union contractor.
All of our policies have been procured with limits and deductibles or self-insured retention amounts of varying amounts per occurrence. We believe that our insurance coverage meets or exceeds our needs relating to any casualty or other type of insurance loss. Our safety team has created an atmosphere of safety at our projects.
We believe that our insurance coverage meets or exceeds our needs relating to casualty or other type of insurance loss. 6 Table of Contents Our safety team has created an atmosphere of safety at our projects. Our safety directors and site-specific safety managers work together to assess and control potential losses and liabilities both before and during our construction projects.
Professional and Career Development We strive to develop and sustain a skilled labor advantage by providing thorough on and off-site training programs, project management training, and leadership development programs. Safety, Health, and Wellness We are committed to providing a safe environment for our employees. We pride ourselves in our above industry average workplace safety.
We are an inclusive, diverse company with people of all backgrounds, experience, culture, styles, talents, and other protected classes. 8 Table of Contents Professional and Career Development We strive to develop and sustain a skilled labor advantage by providing thorough on and off-site training programs, project management training, and leadership development programs.
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Contract Provisions and Subcontracting Our contracts are primarily obtained through competitive bidding. Occasionally, we obtain contracts through direct negotiations with customers. We are often invited to bid on projects with customers who maintain pre-qualified contractor lists.
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Contract Backlog Contract backlog (“Backlog”) in our industry is an economic measure of the total value of work remaining to be earned on projects that have been awarded. Backlog consists of two components: (1) unearned revenue and (2) contracts awarded but not started.
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For the years ended December 31, 2023, December 31, 2022, and December 31, 2021, our industry has faced material impacts to profitability due to increased costs. We may incur increased project costs due to increased prices in the future. Due to the novel coronavirus (“COVID-19”) pandemic and Russia’s invasion of Ukraine, the construction industry has experienced widespread supply chain impacts.
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We often seek to get fixed-price bids from subcontractors and suppliers upon signing new contracts to control costs. However, our industry has continued to face material impacts to profitability due to increased costs. We may incur increased project costs due to increased prices in the future.
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Risk Management, Insurance, and Bonding We are insured to cover a broad range of exposures arising from our work in the construction industry. All of our policies have been procured with limits and deductibles or self-insured retention amounts of varying amounts per occurrence.
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Historically, we have been able to acquire the level of surety bonds necessary to support our business, but there can be no assurances that we can secure all necessary or appropriate surety bonds in the future or that such surety bonds can be economically secured. See “ Item 1A. Risk Factors ” for further discussion of related risks.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to Our Business and Industry ● We may lose business to competitors through competitive bidding processes. ● Our Backlog is subject to unexpected adjustments and cancellations. ● The loss of one or more customers could have an adverse effect on us. ● We are subject to risks related to government contracts and related procurement regulations. ● The timing of new contract starts, including delays, cancellations and scope alterations, may result in unpredictable fluctuations in our business. ● The nature of our contracts subjects us to risks associated with delays and cost overruns, which may not be recoverable and may result in reduced profits or losses that could have a material impact on us. ● If we are unable to accurately estimate contract risks, revenue or costs, economic factors such as inflation, the timing of new awards or the pace of project execution, we may incur a loss or achieve lower than anticipated profit. ● We may incur higher costs to lease, acquire and maintain equipment necessary for our operations. ● Supply chain interruptions, including availability of materials, products or equipment, may have a negative impact on our ability to complete projects. ● Some of our contracts have penalties for late completion. ● If we are unable to attract and retain qualified managers and skilled employees, our operating costs may increase. ● We depend on key personnel and we may not be able to operate and grow our business effectively if we lose the services of any of our key persons or are unable to attract qualified and skilled personnel in the future. ● Our employees work on projects that are inherently dangerous and in locations where there are high security risks, and a failure to maintain a safe work site could result in significant losses. ● We may incur liabilities or suffer negative financial or reputational impacts relating to health and safety matters. ● We are dependent upon suppliers and subcontractors to complete many of our contracts. ● Our participation in joint ventures exposes us to liability and/or harm to our reputation for failures by our partners. 10 Table of Contents ● Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could impair our ability to compete for contracts. ● During the ordinary course of our business, we may become subject to material lawsuits or indemnity claims. ● Systems and information technology interruption and breaches in data security and/or privacy could adversely impact our ability to operate and negatively impact our results of operations. ● Our inability to recover on contract modifications against project owners or subcontractors for payment or performance could negatively affect our business. ● Our failure to adequately recover on affirmative claims brought by us against project owners or other project participants for additional contract costs could have a negative impact on our liquidity and future operations. ● We may experience delays and defaults in customer payments, and we may pay our suppliers and subcontractors before receiving payment from our customers for the related services, which could result in a material adverse effect on our business. ● The COVID-19 pandemic has adversely impacted, and could continue to adversely impact, our business, financial condition and results of operations. ● Our indebtedness could lead to adverse consequences or adversely affect our financial position and prevent us from fulfilling our obligations under such indebtedness, and any refinancing of this debt could be at significantly higher interest rates. ● Our bonding requirements may limit our ability to incur indebtedness, which could limit our ability to refinance our existing credit facilities or to execute our business plan. ● We may be unable to win new contracts if we cannot provide customers with letters of credit or performance or other bonds. ● It can be difficult and expensive to obtain the insurance we need for our business operations. ● We have international operations that are subject to foreign economic and political uncertainties and risks.
Biggest changeRisks Related to Our Business and Industry ● We may lose business to competitors through competitive bidding processes. ● Our Backlog is subject to unexpected adjustments and cancellations. ● The loss of one or more customers could have an adverse effect on us. ● We are subject to risks related to government contracts and related procurement regulations. ● The timing of new contract starts, including delays, cancellations and scope alterations, may result in unpredictable fluctuations in our business. ● The nature of our contracts subjects us to risks associated with delays and cost overruns, which may not be recoverable and may result in reduced profits or losses that could have a material impact on us. ● Our financial results are based upon estimates and assumptions that may differ from actual results. ● If we are unable to accurately estimate contract risks, revenue or costs, economic factors such as inflation, the timing of new awards or the pace of project execution, we may incur a loss or achieve lower than anticipated profit. ● Our accounting for revenue recognized over time could result in a reduction or elimination of previously reported revenue and profit. ● We may incur higher costs to lease, acquire and maintain equipment necessary for our operations. ● Supply chain interruptions, including availability of materials, products or equipment, may have a negative impact on our ability to complete projects. ● Some of our contracts have penalties for late completion. ● If we are unable to attract and retain qualified managers and skilled employees, our operating costs may increase. ● We depend on key personnel and we may not be able to operate and grow our business effectively if we lose the services of any of our key persons or are unable to attract qualified and skilled personnel in the future. ● Our employees work on projects that are inherently dangerous and in locations where there are high security risks, and a failure to maintain a safe work site could result in significant losses. ● We may incur liabilities or suffer negative financial or reputational impacts relating to health and safety matters. ● We are dependent upon suppliers and subcontractors to complete many of our contracts. ● Our participation in joint ventures exposes us to liability and/or harm to our reputation for failures by our partners. ● Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could impair our ability to compete for contracts. ● During the ordinary course of our business, we may become subject to material lawsuits or indemnity claims. 10 Table of Contents ● Systems and information technology interruption and breaches in data security and/or privacy could adversely impact our ability to operate and negatively impact our results of operations. ● Our inability to recover on contract modifications against project owners or subcontractors for payment or performance could negatively affect our business. ● Our failure to adequately recover on affirmative claims brought by us against project owners or other project participants for additional contract costs could have a negative impact on our liquidity and future operations. ● We may experience delays and defaults in customer payments, and we may pay our suppliers and subcontractors before receiving payment from our customers for the related services, which could result in a material adverse effect on our business. ● Our indebtedness could lead to adverse consequences or adversely affect our financial position and prevent us from fulfilling our obligations under such indebtedness, and any refinancing of this debt could be at significantly higher interest rates. ● Our bonding requirements may limit our ability to incur indebtedness, which could limit our ability to refinance our existing credit facilities or to execute our business plan. ● We may be unable to win new contracts if we cannot provide customers with letters of credit or performance or other bonds. ● It can be difficult and expensive to obtain the insurance we need for our business operations. ● We have international operations that are subject to foreign economic and political uncertainties and risks.
These risks could result in project delays, cost overruns or other problems and can include the following: ● Incorrect assumptions related to productivity, scheduling estimates or future economic conditions, including with respect to the impacts of inflation; ● Unanticipated technical problems, including design or engineering issues; ● Inaccurate representations of site conditions and unanticipated changes in the project execution plan; ● Project modifications creating unanticipated costs or delays and failure to properly manage project modifications; ● Inability to achieve guaranteed performance or quality standards with regard to engineering, construction or project management obligations; ● Insufficient or inadequate project execution tools and systems needed to record, track, forecast and control cost and schedule; ● Reliance on historical cost and/or execution data that is not representative of current or future economic and/or execution conditions; ● Failure to accurately estimate the timing and cost of projects, including due to inflation, supply chain disruption, rising construction costs or unforeseen increases in the cost of labor; ● Unanticipated increases in the cost of raw materials, components or equipment, including due to inflation or the imposition of import tariffs; ● Failure to properly make judgments in accordance with applicable professional standards, including engineering standards; ● Failure to properly assess and update appropriate risk mitigation strategies and measures; 14 Table of Contents ● Difficulties related to the performance of our customers, partners, subcontractors, suppliers or other third parties; ● Delays or productivity issues caused by weather; and ● Changes in local laws or difficulties or delays in obtaining permits, rights of way or approvals.
These risks could result in project delays, cost overruns or other problems and can include the following: ● Incorrect assumptions related to productivity, scheduling estimates or future economic conditions, including with respect to the impacts of inflation or tariffs; ● Unanticipated technical problems, including design or engineering issues; ● Inaccurate representations of site conditions and unanticipated changes in the project execution plan; ● Project modifications creating unanticipated costs or delays and failure to properly manage project modifications; ● Inability to achieve guaranteed performance or quality standards with regard to engineering, construction or project management obligations; ● Insufficient or inadequate project execution tools and systems needed to record, track, forecast and control cost and schedule; ● Reliance on historical cost and/or execution data that is not representative of current or future economic and/or execution conditions; ● Failure to accurately estimate the timing and cost of projects, including due to inflation, supply chain disruption, rising construction costs, unforeseen increases in the cost of labor, or other factors; ● Unanticipated increases in the cost of raw materials, components or equipment, including due to inflation or the imposition of import tariffs; ● Failure to properly make judgments in accordance with applicable professional standards, including engineering standards; ● Failure to properly assess and update appropriate risk mitigation strategies and measures; 14 Table of Contents ● Difficulties related to the performance of our customers, partners, subcontractors, suppliers or other third parties; ● Delays or productivity issues caused by weather; and ● Changes in local laws or difficulties or delays in obtaining permits, rights of way or approvals.
You may not be able to resell your securities at an attractive price due to a number of factors, including, but not limited to, the following: ● results of operations that vary from the expectations of securities analysts and investors; ● results of operations that vary from those of our competitors; 26 Table of Contents ● the impact of the COVID-19 pandemic and its continued effect on our business and financial conditions; ● changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors; ● declines in the market prices of securities generally; ● strategic actions by us or our competitors; ● announcements by our competitors of significant contracts, acquisitions, partnerships, other strategic relationships or capital commitments; ● any significant change in our management; ● changes in general economic or market conditions or trends in our industry or markets; ● changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business or industry; ● future sales of our Common Stock or other securities; ● investor perceptions or the investment opportunity associated with our securities relative to other investment alternatives; ● the public’s response to press releases or other public announcements, including our filings with the SEC; ● litigation or other disputes involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; ● guidance, if any, that we provide to the public, any changes in such guidance or our failure to meet such guidance; ● the development and sustainability of an active trading market for our securities; ● actions by institutional or activist stockholders; ● changes in accounting standards, policies, guidelines, interpretations or principles; and ● other events or factors, including those resulting from natural disasters, war, acts of terrorism, epidemics, pandemics or responses to such events.
You may not be able to resell your securities at an attractive price due to a number of factors, including, but not limited to, the following: ● results of operations that vary from the expectations of securities analysts and investors; ● results of operations that vary from those of our competitors; ● the impact of the COVID-19 pandemic and its continued effect on our business and financial conditions; ● changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors; ● declines in the market prices of securities generally; ● strategic actions by us or our competitors; ● announcements by our competitors of significant contracts, acquisitions, partnerships, other strategic relationships or capital commitments; ● any significant change in our management; ● changes in general economic or market conditions or trends in our industry or markets; ● changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business or industry; ● future sales of our Common Stock or other securities; ● investor perceptions or the investment opportunity associated with our securities relative to other investment alternatives; ● the public’s response to press releases or other public announcements, including our filings with the SEC; ● litigation or other disputes involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; ● guidance, if any, that we provide to the public, any changes in such guidance or our failure to meet such guidance; ● the development and sustainability of an active trading market for our securities; ● actions by institutional or activist stockholders; ● changes in accounting standards, policies, guidelines, interpretations or principles; and ● other events or factors, including those resulting from natural disasters, war, acts of terrorism, epidemics, pandemics or responses to such events.
We have the ability to redeem outstanding Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within a 30 trading-day period commencing at any time after the Warrants become exercisable and ending on the third business day prior to proper notice of such redemption provided that on the date we give notice of redemption and 29 Table of Contents during the entire period thereafter until the time we redeem the Warrants, we have an effective registration statement under the Securities Act covering the shares of Common Stock issuable upon exercise of the Warrants and a current prospectus relating to them is available.
We have the ability to redeem outstanding Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within a 30 trading-day period commencing at any time after the Warrants become exercisable and ending on the third business day prior to proper notice of such redemption provided that on the date we give notice of redemption and during the entire period thereafter until the time we redeem the Warrants, we have an effective registration statement under the Securities Act covering the shares of Common Stock issuable upon exercise of the Warrants and a current prospectus relating to them is available.
We will remain an emerging growth company until the earliest of: (i) the end of the fiscal year in which we have total annual gross revenue in excess of $1.235 billion; (ii) the last day of our fiscal year following the fifth anniversary of the date on which we consummated our initial public offering (the “IPO”) (or December 31, 2026); (iii) the date on which we issue more than $1.0 billion in non-convertible debt during the preceding three-year period; or (iv) the end of the fiscal year in which the market value of our Common Stock held by non-affiliates equals or exceeds $700 million as of the last business day of our most recently completed second fiscal quarter.
We will remain an emerging growth company until the earliest of: (i) the end of the fiscal year in which we have total annual gross revenue in excess of $1.235 billion; (ii) the last day of our fiscal year following the fifth anniversary of 25 Table of Contents the date on which we consummated our initial public offering (the “IPO”) (or December 31, 2026); (iii) the date on which we issue more than $1.0 billion in non-convertible debt during the preceding three-year period; or (iv) the end of the fiscal year in which the market value of our Common Stock held by non-affiliates equals or exceeds $700 million as of the last business day of our most recently completed second fiscal quarter.
For example, a catastrophic natural disaster could negatively impact any of our office locations and the locations of our customers or projects, has the potential to disrupt our and our customers’ businesses and may cause us to experience work stoppages, supply chain disruptions, project delays, financial losses and additional costs to resume operations, including increased insurance costs or loss of cover, legal liability and reputational losses.
For example, a catastrophic natural disaster could negatively impact any of our office locations and the locations of our customers or projects, has the potential to disrupt our and our customers’ businesses and may cause us to experience work stoppages, supply chain disruptions, project delays, financial losses and additional costs to resume operations, including increased insurance costs or loss of coverage, legal liability and reputational losses.
Under these rules, a company of which more than 50% of the voting power is held by an individual, a group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements of the NYSE, including (i) the requirement that a majority of the board of directors consist of independent directors, (ii) the requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities and (iii) the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
Under these rules, a company of which more than 50% of the voting power is held by an individual, a group or another company is a 28 Table of Contents “controlled company” and may elect not to comply with certain corporate governance requirements of the NYSE, including (i) the requirement that a majority of the board of directors consist of independent directors, (ii) the requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities and (iii) the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
Further, if we fail to comply with any of the regulations, requirements or statutes or if we have a substantial number of accumulated Occupational Safety and Health Administration, Mine Safety and Health Administration or other workplace safety violations, our existing government contracts could be terminated and we could be suspended from government contracting or subcontracting, including federally funded projects at the state level.
Further, 12 Table of Contents if we fail to comply with any of the regulations, requirements or statutes or if we have a substantial number of accumulated Occupational Safety and Health Administration, Mine Safety and Health Administration or other workplace safety violations, our existing government contracts could be terminated and we could be suspended from government contracting or subcontracting, including federally funded projects at the state level.
Further, if our securities were no longer listed on NYSE, they would not be covered securities and would be subject to regulation in each state in which they are offered. The price of our securities may change significantly, and you could lose all or part of your investment as a result.
Further, if our securities were no longer listed on NYSE, they would not be covered securities and would be subject to regulation in each state in which they are offered. 26 Table of Contents The price of our securities may change significantly, and you could lose all or part of your investment as a result.
If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation. Future sales, or the perception of future sales, by the Company or our stockholders in the public market could cause the market price of our securities to decline.
If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation. 27 Table of Contents Future sales, or the perception of future sales, by the Company or our stockholders in the public market could cause the market price of our securities to decline.
Government contracts are subject to specific procurement regulations, contract provisions and a variety of socioeconomic requirements relating to their formation, administration, performance and accounting and often include 12 Table of Contents express or implied certifications of compliance. Claims for civil or criminal fraud may be brought for violations of regulations, requirements or statutes.
Government contracts are subject to specific procurement regulations, contract provisions and a variety of socioeconomic requirements relating to their formation, administration, performance and accounting and often include express or implied certifications of compliance. Claims for civil or criminal fraud may be brought for violations of regulations, requirements or statutes.
If these shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our Common Stock could decline. 27 Table of Contents The Initial Stockholders and Southland Members are not subject to contractual restrictions regarding the transfer of their shares of Common Stock.
If these shares are sold, or if it is perceived that they will be sold, in the public market, the trading price of our Common Stock could decline. The Initial Stockholders and Southland Members are not subject to contractual restrictions regarding the transfer of their shares of Common Stock.
If we did, you would not have the same protections afforded to stockholders of companies subject to all of the corporate governance requirements of the NYSE. 28 Table of Contents The Warrants may never be in the money, and may expire worthless.
If we did, you would not have the same protections afforded to stockholders of companies subject to all of the corporate governance requirements of the NYSE. The Warrants may never be in the money, and may expire worthless.
The Warrant Agreement provides that the terms of the Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision.
The Warrant Agreement provides that the terms of the Warrants may be amended without the consent of any holder to cure any ambiguity or correct 29 Table of Contents any defective provision.
The loss of one or more customers could have an adverse effect on us. A few customers, including the federal, state and local governments and governmental agencies, comprise a significant portion of our revenue. Our customers may unilaterally reduce, fail to renew or terminate their contracts with us at any time.
The loss of one or more customers could have an adverse effect on us. A few customers, including the federal, state and local governments and governmental agencies, comprise a significant portion of our revenue. Our customers may unilaterally reduce, fail to renew, terminate their contracts with us, or revoke our ability to submit bids on new work at any time.
Foreign currency risks could have an adverse impact on revenue, earnings and/or Backlog. Our contracts may subject us to foreign currency risk, particularly when project revenue is denominated in a currency different than the expected costs. A project may be denominated in different currencies at various points in time as a project progresses.
Our contracts may subject us to foreign currency risk, particularly when project revenue is denominated in a currency different than the expected costs. A project may be denominated in different currencies at various points in time as a project progresses.
Often times, these estimates are particularly difficult to determine, and we must exercise significant judgment. Estimates may be used in our assessments of the allowance for doubtful accounts, useful lives of property and equipment, fair value assumptions in analyzing goodwill and long-lived asset impairments, self-insured claims liabilities, accounting for revenue recognized over time and provisions for income taxes.
Estimates may be used in estimated contract values and estimated costs at completion, our assessments of the allowance for doubtful accounts, useful lives of property and equipment, fair value assumptions in analyzing goodwill and long-lived asset impairments, self-insured claims liabilities, accounting for revenue recognized over time and provisions for income taxes.
To the extent that we choose not to use exemptions from various reporting requirements under the Exchange Act, we will incur additional compliance costs, which may impact our financial condition. 25 Table of Contents An established market for our securities may not be sustained. An active trading market for our securities may not be sustained.
Further, there is no guarantee that the exemptions described above available under the Exchange Act will result in significant savings. To the extent that we choose not to use exemptions from various reporting requirements under the Exchange Act, we will incur additional compliance costs, which may impact our financial condition. An established market for our securities may not be sustained.
Some of our competitors may have greater resources which may result in a decrease in new awards, a decrease in profit margins, or both. We do not obtain contracts from all of our bids and our inability to win bids at acceptable profit margins could adversely affect our business. Our Backlog is subject to unexpected adjustments and cancellations.
We do not obtain contracts from all of our bids and our inability to win bids at acceptable profit margins could adversely affect our business. Our Backlog is subject to unexpected adjustments and cancellations.
As a result, you will be relying solely on the appreciation in value of our securities to achieve a return on your investment. 11 Table of Contents ● We are a “controlled company” that could take advantage of exemptions to certain corporate governance requirements under NYSE rules in the future.
As a result, you will be relying solely on the appreciation in value of our securities to achieve a return on your investment. ● We are a “controlled company” that could take advantage of exemptions to certain corporate governance requirements under NYSE rules in the future. ● We may issue additional equity securities which could dilute earnings per share and stockholders’ percentage ownership. 11 Table of Contents Risks Relating to Southland’s Business and Industry We may lose business to competitors through competitive bidding processes.
Risks Relating to Southland’s Business and Industry We may lose business to competitors through competitive bidding processes. We are engaged in highly competitive businesses in which most customer contracts are awarded through bidding processes based on price and the acceptance of certain risks, along with other factors.
We are engaged in highly competitive businesses in which most customer contracts are awarded through bidding processes based on price and the acceptance of certain risks, along with other factors. We compete with other general and specialty contractors, regional, national and international, as well as small local contractors.
We compete with other general and specialty contractors, regional, national and international, as well as small local contractors. The strong competition in our markets requires maintaining skilled personnel and investing in technology and also puts pressure on profit margins.
The strong competition in our markets requires maintaining skilled personnel and investing in technology and also puts pressure on profit margins. Some of our competitors may have greater resources which may result in a decrease in new awards, a decrease in profit margins, or both.
Removed
Further, there is no guarantee that the exemptions described above available under the Exchange Act will result in significant savings.
Added
Often times, these estimates are particularly difficult to determine, and we must exercise significant judgment.
Removed
This will have the effect of reducing the potential “upside” of the holder’s investment in our company. ​ ​
Added
Net assets of foreign operations for the years ended December 31, 2024, and December 31, 2023, are approximately 62% and 47%, respectively, of our total net assets. Foreign currency risks could have an adverse impact on revenue, earnings and/or Backlog.
Added
Delaware law and our charter documents may impede or discourage a takeover or change in control. ​Anti-takeover provisions under Delaware law may impose an impediment to the ability of others to acquire control of us, even if a change of control would be of benefit to our stockholders.
Added
In addition, certain provisions of our Certificate of Incorporation and Bylaws also may impose an impediment or discourage others from a takeover.
Added
These provisions include, but are not limited to, restrictions on the ability of a stockholder to call a special meeting or nominate a director for election and our Board of Directors’ ability to authorize the issuance of preferred shares.​ These types of provisions may limit the ability of stockholders to obtain a premium for their shares and may make it more difficult for a third party to acquire us, even if the acquisition would be beneficial to our stockholders.
Added
An active trading market for our securities may not be sustained.
Added
This will have the effect of reducing the potential “upside” of the holder’s investment in our company. ​ We may issue additional equity securities and any such issuance may dilute earnings per share and stockholders’ percentage ownership. ​ We may in the future issue additional equity securities to pay for potential acquisitions or to otherwise fund our corporate initiatives.
Added
If we do issue additional equity securities, the issuance may dilute our earnings per share and stockholders' percentage ownership. ​

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our headquarters is in Grapevine, Texas. We own and lease other facilities throughout the United States and Canada.
Biggest changeItem 2. Properties We lease our headquarters in Grapevine, Texas and own and lease other facilities throughout the United States and Canada.
Legal Proceedings Legal proceedings are discussed in Note 17 of the Notes to Consolidated Financial Statements and are incorporated herein by reference. ​ Item 4. Mine Safety Disclosures Not applicable. ​ PART II
Legal Proceedings Legal proceedings are discussed in Note 17 of the Notes to Consolidated Financial Statements and are incorporated herein by reference. ​ Item 4. Mine Safety Disclosures Not applicable. ​ 31 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures ​ 31 PART II ​ 31 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities ​ 31 Item 6. Reserved ​ 32 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 32
Biggest changeItem 4. Mine Safety Disclosures ​ 31 PART II ​ 32 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities ​ 32 Item 6. Reserved ​ 32 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 32

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn addition, our ability to pay dividends may be limited by covenants of any 31 Table of Contents existing and future outstanding indebtedness we incur. We do not anticipate declaring any cash dividends to holders of Common Stock in the foreseeable future. ​
Biggest changeIn addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness we incur. We do not anticipate declaring any cash dividends to holders of Common Stock in the foreseeable future. ​
Holders As of February 27, 2024, we had 47,943,861 shares of Common Stock issued and outstanding held of record by 1,461 holders. Such numbers do not include Depository Trust Company participants or beneficial owners holding shares through nominee names. Dividends We have not paid any cash dividends on our Common Stock to date.
Holders As of February 24, 2025, we had 53,987,069 shares of Common Stock issued and outstanding held of record by 2,172 holders. Such numbers do not include Depository Trust Company participants or beneficial owners holding shares through nominee names. Dividends We have not paid any cash dividends on our Common Stock to date.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeResults of Operations The following table sets forth our consolidated statements of operations for the years ended December 31, 2023, December 31, 2022, and December 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Amounts in thousands) December 31, 2023 December 31, 2022 December 31, 2021 Revenue ​ $ 1,160,417 ​ $ 1,161,431 ​ $ 1,279,186 Cost of construction ​ 1,124,603 ​ 1,020,497 ​ 1,164,998 Gross profit ​ 35,814 ​ 140,934 ​ 114,188 Selling, general, and administrative expenses ​ 67,195 ​ 58,231 ​ 58,136 Operating income (loss) ​ (31,381) ​ 82,703 ​ 56,052 Gain (loss) on investments, net ​ 30 ​ (76) ​ 898 Other income, net ​ 23,580 ​ 2,204 ​ 2,780 Interest expense ​ (19,471) ​ (8,891) ​ (7,255) Earnings (loss) before income taxes ​ (27,242) ​ 75,940 ​ 52,475 Income tax expense (benefit) ​ (8,527) ​ 13,290 ​ 10,945 Net income (loss) ​ (18,715) ​ 62,650 ​ 41,530 Net income attributable to noncontrolling interests ​ 538 ​ 2,108 ​ 2,810 Net income (loss) attributable to Southland Stockholders ​ $ (19,253) ​ $ 60,542 ​ $ 38,720 ​ Revenue Revenue for the year ended December 31, 2023, was $1,160.4 million, a decrease of $1.0 million, or 0.1%, compared to the year ended December 31, 2022.
Biggest changeAs of December 31, 2024, approximately 6.3% of Southland’s Backlog was in M&P, and Southland estimates most of the active scope of this work to be substantially completed in the next twelve months. 35 Table of Contents Results of Operations Comparisons of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 The following table sets forth our consolidated statements of operations for the years ended December 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ (Amounts in thousands) December 31, 2024 December 31, 2023 Revenue ​ $ 980,179 ​ $ 1,160,417 Cost of construction ​ 1,043,219 ​ 1,124,603 Gross profit (loss) ​ (63,040) ​ 35,814 Selling, general, and administrative expenses ​ 63,274 ​ 67,195 Operating loss ​ (126,314) ​ (31,381) Gain (loss) on investments, net ​ (225) ​ 30 Other income, net ​ 3,631 ​ 23,580 Interest expense ​ (29,512) ​ (19,471) Losses before income taxes ​ (152,420) ​ (27,242) Income tax benefit ​ (46,892) ​ (8,527) Net loss ​ (105,528) ​ (18,715) Net income (loss) attributable to noncontrolling interests ​ (163) ​ 538 Net loss attributable to Southland Stockholders ​ $ (105,365) ​ $ (19,253) ​ Revenue Revenue for the year ended December 31, 2024, was $980.2 million, a decrease of $180.2 million, or 15.5%, compared to the year ended December 31, 2023.
Our current and future liquidity is greatly dependent upon our operating results, which are largely determined by overall economic conditions and our current contracts and Backlog. Our liquidity could be adversely affected by a disruption in the availability of credit.
Our current and future liquidity is greatly dependent upon our operating results, which are largely determined by overall economic conditions, our current contracts and Backlog. Our liquidity could be adversely affected by a disruption in the availability of credit.
We use the following non-GAAP measures to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that the non-GAAP financial information may be helpful in assessing our operating performance and facilitates an alternative comparison among fiscal periods. The non-GAAP financial measures are not, and should not be viewed as, a substitute for GAAP reporting measures.
We use the following non-GAAP measures to evaluate our ongoing operations and for internal planning, forecasting and compensation purposes. We believe that the non-GAAP financial information may be helpful in assessing our operating performance and facilitates an alternative comparison among fiscal periods. The non-GAAP financial measures are not, and should not be viewed as, a substitute for GAAP reporting measures.
However, we do not believe that the limited cash proceeds received in connection with the Business Combination will have a materially adverse impact on our operations or financial position. We will receive the proceeds from any exercise of Warrants for cash.
However, we do not believe that the limited cash proceeds received in connection with the Business Combination have had a materially adverse impact on our operations or financial position. We will receive the proceeds from any exercise of Warrants for cash.
Our Transportation segment operates throughout North America and specializes in services that include the design and construction of bridges, roadways, marine, dredging, ship terminals and piers, and specialty structures and facilities.
Our Transportation segment primarily operates throughout North America and specializes in services that include the design and construction of bridges, roadways, marine, dredging, ship terminals and piers, and specialty structures and facilities.
The primary differences from the federal statutory rate of 21% were (i) the revocation of Subchapter S-corporation status by Southland and its Qualified Subchapter S Subsidiary group of entities inclusive of Southland Contracting, Johnson Bros, Mole Constructors, Heritage Materials, and Southland RE Properties of $4.8 million, (ii) the benefit from the change in valuation allowance of $3.2 million primarily due to the change in domestic filing structure and the subsequent removal of the valuation allowance on American Bridge Holding Company domestic deferred tax assets, (iii) the benefit from foreign tax rate differences of $5.5 million due to operations in jurisdictions like Canada and the Bahamas with different effective tax rates, and (iv) the permanent inclusion difference of foreign income through Section 951A Global Intangible Low-Taxed Income (GILTI) of $8.2 million net of related deduction.
The primary differences from the federal statutory rate of 21% were (i) the revocation of Subchapter S-corporation status by Southland Holdings, LLC and its Qualified Subchapter S Subsidiary group of entities inclusive of Southland Contracting, Johnson Bros., Mole Constructors, Heritage Materials, and Southland RE Properties of $4.8 million, (ii) the benefit from the change in valuation allowance of $3.2 million primarily due to the change in domestic filing structure and the subsequent removal of the valuation allowance on American Bridge domestic deferred tax assets, (iii) the benefit from foreign tax rate differences of $5.5 million due to operations in jurisdictions like Canada and the Bahamas with different effective tax rates, and (iv) the permanent inclusion difference of foreign income through Section 951A Global Intangible Low-Taxed Income (GILTI) of $8.2 million net of related deduction.
Item 6. Reserved ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations References to the “Company,” “our,” “us,” “we,” or “Southland” refer to Southland Holdings, Inc. The following discussion and analysis contain forward-looking statements relating to future events or our future financial performance, which involve risk and uncertainties.
Item 6. Reserved ​ Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations References to the “Company,” “our,” “us,” “we,” or “Southland” refer to Southland Holdings, Inc. and its consolidated subsidiaries. The following discussion and analysis contain forward-looking statements relating to future events or our future financial performance, which involve risk and uncertainties.
Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate Adjusted EBITDA in the same fashion. Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
Our computation of EBITDA and Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate EBITDA and Adjusted EBITDA in the same fashion. Because of these limitations, non-GAAP financial measures should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP.
Although the construction business is highly competitive, there are few, if any, companies which compete in all of our 32 Table of Contents market areas, both geographically and from an end market perspective. The degree and type of competition is influenced by the type and scope of construction projects within individual markets.
Although the construction business is highly competitive, there are few, if any, companies which compete in all of our market areas, both geographically and from an end market perspective. The degree and type of competition is influenced by the type and scope of construction projects within individual markets.
If such a material adverse event were to occur, we may be unable to borrow under our revolving credit facility agreement or may be required to seek additional financing. In addition, we may be required to seek additional financing to refinance all or a significant portion of our existing debt on or prior to maturity.
If such an event were to occur, we may be unable to borrow under our revolving credit facility agreement or may be required to seek additional financing. In addition, we may be required to seek additional financing to refinance all or a significant portion of our existing debt on or prior to maturity.
To determine estimated transaction price and estimated cost at completion 33 Table of Contents we rely on our experience, and outside expert opinions on an as needed basis, with particular types of projects and customers using information that is reasonably available to us.
To determine estimated transaction price and estimated cost at completion we rely on our experience, and outside expert opinions on an as needed basis, with particular types of projects and customers using information that is reasonably available to us.
The CAMT is effective for tax years beginning on or after January 1, 2023. As of December 31, 2023, the excise tax on corporate share repurchases is not expected to impact Southland as Southland has no plans for repurchases in the coming year.
The CAMT is effective for tax years beginning on or after January 1, 2023. As of December 31, 2024, the excise tax on corporate share repurchases is not expected to impact the Company as the Company has no plans for repurchases in the coming year.
In light of the high level of redemptions, we may seek cash from (x) increasing institutional borrowings or increase the amount of our revolving credit facility, (y) selling off unused or underutilized construction assets, or (z) expediting or sale our claim settlements.
In light of the high level of redemptions, we may seek cash from (x) increasing institutional borrowings or increase the amount of our revolving credit facility, (y) selling off unused or underutilized construction assets, or (z) 40 Table of Contents expediting our claim settlements.
EBITDA assists management and the Board and may be useful to investors in comparing our operating performance consistently over time as it removes the impact of our capital structure and expenses that do not relate to our core operations. Additionally, it is also customary to manage our business using Adjusted EBITDA.
EBITDA assists management and the Board and may be useful to investors 38 Table of Contents in comparing our operating performance consistently over time as it removes the impact of our capital structure and expenses that do not relate to our core operations. Additionally, it is also customary to analyze our business using Adjusted EBITDA.
See Note 10 of the Notes to the Consolidated Financial Statements for further detail about our debt and the timing of expected future principal payments. ● Finance lease obligations of $7.4 million (of which $5.4 million are due in 2024) and operating lease obligations of $12.8 million (of which $9.1 million are due in 2024).
See Note 10 of the Notes to the Consolidated Financial Statements for further detail about our debt and the timing of expected future principal payments. ● Finance lease obligations of $7.4 million (of which $1.6 million are due in 2025) and operating lease obligations of $15.8 million (of which $9.5 million are due in 2025).
We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA on a supplemental basis. The reconciliation of net income (loss) to Adjusted EBITDA below should be reviewed, and no single financial measure should be relied upon to evaluate our business.
We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP financial measures on a supplemental basis. The reconciliation of net loss to non-GAAP financial measures below should be reviewed, and no single financial measure should be relied upon to evaluate our business.
Based on historical and anticipated future operating results, we believe cash flow from operations, available cash, amounts available to us under the revolving credit facility agreement, and other financing will be adequate to meet our liquidity needs for at least the next twelve months, including any anticipated requirements for working capital, capital expenditures, and scheduled debt service.
Based on historical and anticipated future operating results, we believe cash flow from operations, available cash, and other financing will be adequate to meet our liquidity needs for at least the next twelve months, including any anticipated requirements for working capital, capital expenditures and scheduled debt service.
As of December 31, 2022, the revolving credit facility agreement had been amended and increased to $100.0 million. In August 2023, the revolving credit facility was extended through January 15, 2025 and we incurred $0.3 million as deferred financing cost.
As of December 31, 2022, the Revolving Credit Facility agreement had been amended and increased to $100.0 million. In August 2023, the Revolving Credit Facility was extended through January 15, 2025.
These weather impacts can affect revenue and profitability in either of our business segments. Any quarter can be affected either negatively or positively by atypical weather patterns in any part of North America, or other areas in which we operate. Traditionally, our first quarter is the most weather-affected; however, this may or may not necessarily be true in future periods.
Any quarter can be affected either negatively or positively by atypical weather patterns in any part of North America, or other areas in which we operate. Traditionally, our first quarter is the most weather-affected; however, this may or may not necessarily be true in future periods.
We may also 40 Table of Contents seek to access the public or private equity markets to support our liquidity whenever conditions are favorable to us. There can be no assurance that we will be able to raise additional capital or obtain additional financing when needed or on terms that are favorable to us.
We may also seek to access the public or private equity markets to support our liquidity whenever conditions are favorable to us. There can be no assurance that we will be able to raise additional capital or obtain additional financing when needed or on terms that are favorable to us. See “ Item 1A.
We believe the likelihood that Warrant holders will exercise their Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock. On February 27, 2024, the closing price of our Common Stock was $4.70 per share.
We believe the likelihood that Warrant holders will exercise their Warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock. On February 24, 2025, the closing price of our Common Stock was $3.23 per share.
Quantitative and Qualitative Disclosures About Market Risk Not applicable. ​ Item 8. Financial Statements and Supplementary Data The information required by this Item is submitted as a separate section in the index on page F-1 of this Annual Report on Form 10-K. ​ Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. ​
Financial Statements and Supplementary Data The information required by this Item is submitted as a separate section in the index on page F-1 of this Annual Report on Form 10-K. ​ Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. ​
Although risk and uncertainty exist, including, but not limited to, the items addressed within our forward-looking statements and risk factors, we believe that we are well positioned to compete on new infrastructure projects in both the public and private sectors. We believe that we have the operational excellence, reputation, and technical skill to continue to grow our business.
Although risk and uncertainty exist, including, but not limited to, the items addressed within our forward-looking statements and risk factors, we believe that we are well positioned to compete on new infrastructure projects in both the public and private sectors.
An estimated cost at completion may fluctuate based on numerous items, including but not limited to: ● Complexity in original design, ● Owner-directed changes, ● Non-owner directed factors that necessitate change in scope or construction methodology, ● Differing site conditions, ● Productivity, ● Availability and cost of labor, equipment, or materials, ● Weather, ● Changes in technology, ● Governmental or environmental restrictions, ● Subcontractor and joint venture partner performance, ● Expected cost of warranties, ● Insurance costs, and ● Time to recover, or not recover, additional contract costs.
An estimated cost at completion may fluctuate based on numerous items, including but not limited to: ● Complexity in original design, ● Owner-directed changes, ● Non-owner directed factors that necessitate change in scope or construction methodology, ● Differing site conditions, ● Productivity, ● Availability and cost of labor, equipment, or materials, ● Weather, ● Changes in technology, ● Governmental or environmental restrictions, ● Subcontractor and joint venture partner performance, ● Expected and unexpected cost of warranties, ● Insurance, legal, and consultant costs, and ● Time to recover, or not recover, additional contract costs. 34 Table of Contents We recognize the impact of any changes in estimated transaction price or estimated cost at completion on a cumulative catch-up basis.
We are exposed to market risks relating to fluctuations in interest rates and currency exchange risks. Significant changes in market conditions could cause interest rates to increase and have a material impact on the financing needed to operate our business.
Risk Factors ” for further discussion of related risks. We are exposed to market risks relating to fluctuations in interest rates and currency exchange risks. Significant changes in market conditions could cause interest rates to increase and have a material impact on our free cash flow and the financing needed to operate our business.
Recent Events See section titled "Basis of Presentation” discussing the consummation of the Merger. 34 Table of Contents In the second quarter of 2023, Southland decided to discontinue certain types of projects in its Materials & Paving business line (“M&P”) and sold assets related to producing large scale concrete and asphalt. M&P is reported in the Transportation segment.
In the second quarter of 2023, Southland decided to discontinue certain types of projects in its Materials & Paving business line (“M&P”) and sold assets related to producing large scale concrete and asphalt. M&P is reported in the Transportation segment.
Gross profit in our Civil segment for the year ended December 31, 2023, was $51.7 million, or 15.3% of segment revenue, compared to $45.4 million, or 14.9% of segment revenue, for the year ended December 31, 2022.
Gross profit in our Civil segment for the year ended December 31, 2024, was $16.7 million, or 5.2% of segment revenue, compared to $51.7 million, or 15.3% of segment revenue, for the year ended December 31, 2023.
See Note 11 of the Notes to the Consolidated Financial Statements for further detail about our lease obligations and the timing of expected future payments. ● Amounts payable to Southland Members of $47.3 million (of which none is due in 2024).
See Note 11 of the Notes to the Consolidated Financial Statements for further detail about our lease obligations and the timing of expected future payments. ● Amounts payable on promissory notes of $40.6 million (none of which are due in 2025).
Gross loss in our Transportation segment for the year ended December 31, 2023, was $15.9 million, or (1.9)% of segment revenue, compared to $95.5 million gross profit, or 11.2% of segment revenue, for the year ended December 31, 2022.
Gross loss in our Transportation segment for the year ended December 31, 2024, was $79.8 million, or (12.1)% of segment revenue, compared to $15.9 million gross loss, or (1.9)% of segment revenue, for the year ended December 31, 2023.
Other income, net Other income, net for the year ended December 31, 2023 was $23.6 million, an increase of $21.4 million, or 969.9%, compared to the year ended December 31, 2022. The increase was primarily driven by a reversal of a non-cash contingent liability due to changes in the likelihood of earnout shares being issued based on 2023 performance.
The decrease was primarily driven by a reversal of a non-cash contingent liability in 2023 due to changes in the likelihood of earnout shares being issued based on 2023 performance. 36 Table of Contents Interest expense Interest expense for the year ended December 31, 2024, was $29.5 million, an increase of $10.0 million, or 51.6%, compared to the year ended December 31, 2023.
The following table sets forth summary change in cash, cash equivalent and restricted cash for the years ended December 31, 2023, December 31, 2022, and December 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Amounts in thousands) December 31, 2023 December 31, 2022 December 31, 2021 Net cash used in operating activities ​ $ (10,264) ​ $ (66,202) ​ $ (90,573) Net cash provided by (used in) investing activities ​ 4,488 ​ 5,562 ​ (8,499) Net cash provided by financing activities ​ (2,590) ​ 20,135 ​ 30,604 Effect of exchange rate changes ​ 195 ​ 1,254 ​ (686) Net change in cash, cash equivalents, and restricted cash ​ $ (8,171) ​ $ (39,251) ​ $ (69,154) ​ Net cash used in operating activities was $10.3 million during the year ended December 31, 2023, compared to $66.2 million and $90.6 million for the years ended December 31, 2022, and December 31, 2021, respectively.
Cash Flows Comparisons of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 The following table sets forth summary change in cash, cash equivalent and restricted cash for the years ended December 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ (Amounts in thousands) December 31, 2024 December 31, 2023 Net cash provided by (used in) operating activities ​ $ 1,927 ​ $ (10,264) Net cash provided by investing activities ​ 3,228 ​ 4,488 Net cash provided by (used in) financing activities ​ 18,781 ​ (2,590) Effect of exchange rate changes ​ (195) ​ 195 Net change in cash, cash equivalents, and restricted cash ​ $ 23,741 ​ $ (8,171) ​ Net cash provided by operating activities was $1.9 million during the year ended December 31, 2024, compared to net cash used in operating activities of $10.3 million for the year ended December 31, 2023.
Contractual Obligations Our contractual obligations and commitments as of December 31, 2023, include: ● Debt obligations of $300.9 million (of which $48.5 million are due in 2024).
Contractual Obligations Our contractual obligations and commitments as of December 31, 2024, include: 43 Table of Contents ● Debt obligations of $306.6 million (of which $44.5 million are due in 2025).
Liquidity, Capital Commitments and Resources Our principal sources of liquidity are cash generated from operations, funds from borrowings, and existing cash on hand. Our principal uses of cash typically include the funding of working capital obligations, debt service, and investment in machinery and equipment for our projects.
Our principal uses of cash typically include the funding of working capital obligations, debt service, and investment in machinery and equipment for our projects.
Key Factors Affecting Results of Operations Business Environment Our Civil segment operates throughout North America and specializes in services that include the design and construction of water pipeline, pump stations, lift stations, water and wastewater treatment plants, concrete and structural steel, outfall, and tunneling.
With the combined capabilities of these six primary subsidiaries, Southland has become a diversified industry leader with projects spanning North America in various end markets. 32 Table of Contents Key Factors Affecting Results of Operations Business Environment Our Civil segment primarily operates throughout North America and specializes in services that include the design and construction of water pipeline, pump stations, lift stations, water and wastewater treatment plants, concrete and structural steel, outfall, and tunneling.
Cost of construction for the year ended December 31, 2022, was $1,020.5 million, a decrease of $144.5 million, or 12.4%, compared to the year ended December 31, 2021.
Cost of construction Cost of construction for the year ended December 31, 2024, was $1,043.2 million, a decrease of $81.4 million, or 7.2%, compared to the year ended December 31, 2023.
The decrease was primarily attributable to a decrease in revenue of $33.2 million in our Transportation segment primarily due to impacts related to exiting the M&P business line, offset by an increase in revenue of $32.2 in our Civil segment due to new projects starting in 2023.
The decrease was attributable to a $166.0 million decrease in revenue in our Transportation segment primarily due to impacts related to exiting the M&P business line and a $14.2 million decrease in our Civil segment primarily due to projects that were substantially completed in 2023 compared to 2024, which was partially offset by new projects started in 2024.
Interest expense Interest expense for the year ended December 31, 2023, was $19.5 million, an increase of $10.6 million, or 119.0%, compared to the year ended December 31, 2022. The increase is primarily driven by an increase in external borrowings compared to the prior year and higher interest rates on the additional borrowings.
The increase is primarily driven by an increase in external borrowings compared to the prior year and higher interest rates on the additional borrowings. Income tax benefit Income tax benefit for the year ended December 31, 2024, was $46.9 million or an effective tax rate of 30.8%.
This can also result in the reversal of revenue recognized in a prior period, in the current period.
This can result in the recognition of revenue in a current period related to the satisfaction of performance obligations that occurred or partially occurred in a prior period. This can also result in the reversal of revenue recognized in a prior period, in the current period.
The increase was primarily driven by a $5.2 million increase in compensation and additional staffing, $1.9 million increase in public company costs, and a $1.9 million increase in bad debt. Selling, general, and administrative costs for the year ended December 31, 2022, were $58.2 million, an increase of $0.1 million, or 0.1%, compared to the year ended December 31, 2021.
Selling, general, and administrative costs Selling, general, and administrative costs for the year ended December 31, 2024, were $63.3 million, a decrease of $3.9 million, or 5.8%, compared to the year ended December 31, 2023. The decrease was primarily driven by a $5.2 million decrease in compensation offset by a $1.4 million increase in professional fees.
Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with the accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses earned and incurred, respectively, during the reporting period.
Our business may also be affected by overall economic market conditions, including but not limited to declines in spending by project owners, delays in new projects, by changes in client schedules, or for other reasons. 33 Table of Contents Critical Accounting Policies and Estimates The preparation of consolidated financial statements in conformity with the accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenues and expenses earned and incurred, respectively, during the reporting period.
The Company has concluded this action with M&P does not qualify for Discontinued Operations treatment and presentation under ASC 205-20 as it does not represent a strategic shift in the Company’s business. As of December 31, 2023, approximately 8.5% of Southland’s Backlog was in M&P, and Southland estimates this work to be substantially completed in the next 18 months.
Southland recorded the increased estimated future costs to finish these projects during the year ended December 31, 2023, in accordance with GAAP. The Company has concluded this action with M&P does not qualify for Discontinued Operations treatment and presentation under ASC 205-20 as it does not represent a strategic shift in the Company’s business.
Southland is based in Grapevine, Texas. It is the parent company of Johnson Bros. Corporation, American Bridge Company, Oscar Renda Contracting, Southland Contracting, Mole Constructors, and Heritage Materials. With the combined capabilities of these six subsidiaries, Southland has become a diversified industry leader with projects spanning North America in various end markets.
Southland is based in Grapevine, Texas. It is the parent company of Johnson Bros. Corporation, American Bridge Company, Oscar Renda Contracting, Southland Contracting, Mole Constructors, and Heritage Materials.
During the year ended December 31, 2023, the primary drivers in the $4.5 million in cash provided by investing activities were proceeds from sale of property and equipment of $8.8 million and distributions received from subsidiaries of $7.0 million which were partially offset by an increase in purchase of property and equipment of $10.8 million.
During the year ended December 31, 2024, the primary drivers in the $3.2 million in cash provided by investing activities were $6.5 million in proceeds from sale of property and equipment and $4.1 million in distributions received from investees, offset by $7.4 million in purchases of property and equipment. 41 Table of Contents Net cash provided by financing activities was $18.8 million during the year ended December 31, 2024, compared to net cash used in financing activities of $2.6 million for the year ended December 31, 2023.
During the year ended December 31, 2023, the primary drivers in the $2.6 million cash used in financing activities was $13.0 million of payments on the revolving credit facility, $123.7 million of payments on notes payable and $4.8 million of payments on finance leases which were offset by $8.0 million in borrowing on a revolving credit facility, $115.2 million in borrowing on notes payable and $17.1 million in proceeds from the Merger.
During the year ended December 31, 2024, the primary drivers in the $18.8 million cash provided by financing activities were $168.1 million of borrowing on notes payable and $42.5 million in proceeds from financing obligations, offset by $95.0 million in payments on the revolving credit facility, $89.8 in payments on notes payable and $8.0 million in payments of deferred financing costs.
We believe that we can compete favorably in all of these factors. Many of our competitors have the ability to perform work in either the private or public sectors. When opportunities for work in one sector are reduced, competitors tend to look for opportunities in the other sector.
Many of our competitors have the ability to perform work in either the private or public sectors. When opportunities for work in one sector are reduced, competitors tend to look for opportunities in the other sector. This migration has the potential to reduce revenue growth and/or increase pressure on gross profit margins.
Revenue in our Civil segment for the year ended December 31, 2022, was $305.3 million, a decrease of $86.3 million, or 22%, compared to the year ended December 31, 2021.
Transportation Revenue in our Transportation segment for the year ended December 31, 2024, was $656.9 million, a decrease of $166.0 million, or 20.2%, compared to the year ended December 31, 2023.
Projects may remain in Backlog for extended periods of time as a result of schedule delays, regulatory requirements, project specific issues, or other reasons. Contract amounts from contracts where a transaction price cannot be reasonably estimated are not included within our Backlog amount . Below is our Backlog by segment.
Contract amounts from contracts where a transaction price cannot be reasonably estimated are not included within our Backlog amount. ​ Below is our Backlog by segment.
These projects contributed $17.4 million more gross profit for the year ended December 31, 2022 versus the year ended December 31, 2021. 38 Table of Contents Key Business Metrics Non-GAAP Financial Measures In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measures are useful in evaluating our operational performance.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023. Key Business Metrics Non-GAAP Financial Measures In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measures are useful in evaluating our operational performance.
Net cash provided by (used in) investing activities was $4.5 million, $5.6 million, and ($8.5) million during the years ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively.
Net cash provided by investing activities was $3.2 million during the year ended December 31, 2024, compared to $4.5 million for the year ended December 31, 2023.
We incurred $0.3 million as deferred financing cost in connection with the refinancing. The deferred financing costs are included in long-term debt on our consolidated balance sheets. Additionally, as part of the refinancing, we incurred a loss on extinguishment of debt of $0.6 million, which is included in other income, net on our consolidated statements of operations.
Additionally, as part of the refinancing, we incurred a loss on extinguishment of debt of $0.6 million, which was included in other income, net on our consolidated statements of operations and $0.6 million as bank service charges in connection with the refinancing. As of December 31, 2024, we had outstanding secured notes expiring between December 2025 and March 2033.
We define Backlog as anticipated revenue from the uncompleted portion of existing contracts and therefore can be estimated. ​ ​ ​ ​ (Amounts in thousands) ​ Balance December 31, 2021 ​ $ 2,218,573 New contracts, change orders, and adjustments ​ 1,892,946 Gross Backlog ​ 4,111,519 Less: contract revenue recognized in 2022 ​ (1,137,634) Balance December 31, 2022 ​ $ 2,973,885 New contracts, change orders, and adjustments ​ 1,011,797 Gross Backlog ​ 3,985,682 Less: contract revenue recognized in 2023 ​ (1,150,716) Balance December 31, 2023 ​ $ 2,834,966 ​ Backlog should not be considered a comprehensive indicator of future revenue as any of our contracts can be terminated by our customers on relatively short notice, and Backlog does not include future work for which we may be awarded or new awards for which we are awaiting an executed contract or authorized notice to proceed.
Contracts that are awarded, but not yet started, are included in Backlog once a contract has been fully executed and/or we have received a formal “Notice to Proceed” from the project owner. 39 Table of Contents ​ ​ ​ ​ (Amounts in thousands) Backlog Balance: December 31, 2022 ​ $ 2,973,885 New contracts, change orders, and adjustments ​ 1,011,797 Less: contract revenue recognized in 2023 ​ (1,150,716) Balance: December 31, 2023 ​ $ 2,834,966 New contracts, change orders, and adjustments ​ 718,125 Less: contract revenue recognized in 2024 ​ (980,179) Balance December 31, 2024 ​ $ 2,572,912 ​ Backlog should not be considered a comprehensive indicator of future revenue as many of our contracts can be terminated by our customers on relatively short notice, and Backlog does not include future work for which we may be awarded or new awards for which we are awaiting an executed contract or an authorized “Notice to Proceed.” In the event of a termination, we are typically reimbursed for all of our costs through a specific contractual date, our costs to demobilize from the project site, and in certain cases overhead costs and profit associated with the contract through the termination date.
We anticipate the further spending on infrastructure related to economic stimulus spending including the Infrastructure Investment and Jobs Act that was passed on 2021, and other federal, state, or local initiatives. We believe that the combination of our experience, reputation, and technical expertise are unmatched among companies of our size.
We have seen an increase in demand for specialty construction projects in recent years at the federal, state, and local level. We anticipate the further spending on infrastructure related to economic stimulus spending including the Infrastructure Investment and Jobs Act that was passed on 2021, and other federal, state, or local initiatives.
Southland recorded the increased estimated future costs to finish these projects during the year ended December 31, 2023, in accordance with GAAP. For the year ended December 31, 2023, M&P contributed $188.3 million to revenue and $86.6 million in gross loss.
This compares to the $188.3 million to revenue and $86.6 million to gross loss for the year ended December 31, 2023.
Segment Results ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended (Amounts in thousands) December 31, 2023 December 31, 2022 December 31, 2021 ​ ​ ​ ​ ​ % of Total ​ ​ ​ ​ % of Total ​ ​ ​ % of Total Segment Revenue Revenue Revenue Revenue Revenue Revenue Civil ​ $ 337,524 29.1 % $ 305,324 26.3 % $ 391,629 30.6 % Transportation ​ 822,893 70.9 % 856,107 73.7 % 887,557 69.4 % Total revenue ​ $ 1,160,417 100.0 % $ 1,161,431 100.0 % $ 1,279,186 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended (Amounts in thousands) ​ December 31, 2023 ​ December 31, 2022 December 31, 2021 ​ ​ ​ % of Segment ​ ​ % of Segment ​ ​ % of Segment Segment ​ Gross Profit Revenue ​ Gross Profit Revenue ​ Gross Profit Revenue ​ Civil ​ $ 51,686 15.3 % $ 45,464 14.9 % $ 40,913 10.4 % Transportation ​ (15,872) (1.9) % 95,470 11.2 % 73,275 8.3 % Gross profit ​ $ 35,814 3.1 % $ 140,934 12.1 % $ 114,188 8.9 % ​ Civil Revenue in our Civil segment for the year ended December 31, 2023, was $337.5 million, an increase of $32.2 million, or 10.5%, compared to the year ended December 31, 2022.
Segment Results ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ (Amounts in thousands) December 31, 2024 December 31, 2023 ​ ​ ​ ​ ​ % of Total ​ ​ ​ ​ % of Total Segment Revenue Revenue Revenue Revenue Civil ​ $ 323,288 33.0 % $ 337,524 29.1 % Transportation ​ 656,891 67.0 % 822,893 70.9 % Total revenue ​ $ 980,179 100.0 % $ 1,160,417 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ (Amounts in thousands) ​ December 31, 2024 ​ December 31, 2023 ​ ​ ​ % of Segment ​ ​ % of Segment Segment ​ Gross Profit Revenue ​ Gross Profit Revenue ​ Civil ​ $ 16,725 5.2 % $ 51,686 15.3 % Transportation ​ (79,765) (12.1) % (15,872) (1.9) % Gross profit (loss) ​ $ (63,040) (6.4) % $ 35,814 3.1 % ​ 37 Table of Contents Civil Revenue in our Civil segment for the year ended December 31, 2024, was $323.3 million, a decrease of $14.2 million, or 4.2%, compared to the year ended December 31, 2023.
Below is a reconciliation of net income to Adjusted EBITDA. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended (Amounts in thousands) December 31, 2023 December 31, 2022 December 31, 2021 Net income (loss) attributable to Southland Stockholders ​ $ (19,253) ​ $ 60,542 ​ $ 38,720 Depreciation and amortization ​ 30,529 ​ 45,697 ​ 47,468 Income taxes (benefit) ​ (8,527) ​ 13,290 ​ 10,945 Interest expense ​ 19,471 ​ 8,891 ​ 7,255 Interest income ​ (1,143) ​ (172) ​ (47) EBITDA ​ ​ 21,077 ​ ​ 128,248 ​ ​ 104,341 Transaction related costs ​ ​ 1,594 ​ ​ — ​ ​ — Contingent earnout consideration non-cash expense reversal ​ ​ (20,689) ​ ​ — ​ ​ — Adjusted EBITDA ​ $ 1,982 ​ $ 128,248 ​ $ 104,341 ​ Adjusted EBITDA for the year ended December 31, 2023, decreased by $126.3 million, or 98.5%, compared to the year ended December 31, 2022, due primarily to activity related to the M&P business line discussed in the Recent Events section and the decrease of net income.
Below is a reconciliation of net loss to these non-GAAP financial measures. ​ Comparisons of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended (Amounts in thousands) December 31, 2024 December 31, 2023 Net loss attributable to Southland Stockholders ​ $ (105,365) ​ $ (19,253) Depreciation and amortization ​ 23,298 ​ 30,529 Income tax benefit ​ (46,892) ​ (8,527) Interest expense ​ 29,512 ​ 19,471 Interest income ​ (991) ​ (1,143) EBITDA ​ ​ (100,438) ​ ​ 21,077 Transaction related costs ​ ​ — ​ ​ 1,594 Contingent earnout consideration non-cash expense reversal ​ ​ — ​ ​ (20,689) Adjusted EBITDA ​ $ (100,438) ​ $ 1,982 ​ Comparisons of the Year Ended December 31, 2023 to the Year Ended December 31, 2022 For discussion of EBITDA and Adjusted EBITDA for the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to Part II.
This was primarily attributable to increased revenues of $88.7 million for the year ended December 31, 2023, from new projects that substantially started in 2023.
The decrease was primarily attributable to decreased revenues of $48.7 million from projects substantially completed in 2023, offset by increased revenues of $33.0 million on a water project in North Dakota, for the year ended December 31, 2024 versus the same period in 2023.
Selling, general, and administrative costs Selling, general, and administrative costs for the year ended December 31, 2023, were $67.2 million, an increase of $9.0 million, or 15.4%, compared to the year ended December 31, 2022.
Gross profit (loss) Gross loss for the year ended December 31, 2024, was $63.0 million, an increase of $98.9 million, or 276.0%, compared to the year ended December 31, 2023.
This combination of skills has allowed us to pursue complex projects with fewer competitors. Seasonality, Cyclicality, and Variability The results of our operations are subject to quarterly variations. Much of the variation is the result of weather, particularly rain, ice, snow, heat, wind, and named storms, which can impact our ability to perform construction activities.
We believe that the combination of our experience, reputation, and technical expertise are unmatched among companies of our size. This combination of skills has allowed us to pursue complex projects with fewer competitors. Seasonality, Cyclicality, and Variability The results of our operations are subject to quarterly variations.
Projects may remain in Backlog for extended periods of time as a result of schedule delays, regulatory requirements, project specific issues, or other reasons. Contract amounts from contracts where a transaction price cannot be reasonably estimated are not included within our Backlog amount.
Costs may include preconstruction and engineering services as well as that of our subcontractors. Our contracts do not typically grant us rights to revenue reflected in Backlog. Projects may remain in the Backlog for extended periods of time as a result of schedule delays, regulatory requirements, project specific issues, or other reasons.
In July 2023, we completed a routine refinancing of approximately $76.4 million of existing secured notes in exchange for a new equipment note in the amount of $113.5 million. The new equipment note is secured by specific construction equipment assets and has a five-year fully amortizing term at a fixed rate of 7.25%.
The equipment note is secured by specific construction equipment assets and has a five-year fully amortizing term at a fixed rate of 7.25%. We incurred $0.3 million as deferred financing cost in connection with the refinancing. The deferred financing costs are included in long-term debt on our consolidated balance sheets.
Adjusted EBITDA for the year ended December 31, 2022, increased by $23.9 million, or 22.9%, compared to the year ended December 31, 2021, due primarily to increased gross profit as discussed in the Civil and Transportation segment discussion. 39 Table of Contents Backlog We define Backlog as a measure of the total amount of revenue remaining to be earned on projects that have been awarded.
Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — EBITDA and Adjusted EBITDA” of our Annual Report on Form 10-K for the year ended December 31, 2023. Backlog We define Backlog as a measure of the total amount of revenue remaining to be earned on projects that have been awarded.
Other income, net for the year ended December 31, 2022 was $2.2 million, a decrease of $0.6 million, or 20.7%, compared to the year ended December 31, 2021. The decrease was primarily driven by a loss in foreign currency remeasurement due to the decrease in exchange rate in 2022 compared to 2021.
Other income, net Other income, net for the year ended December 31, 2024 was $3.6 million, a decrease of $19.9 million, or 84.6%, compared to the year ended December 31, 2023.
This was partially offset by a $20.0 million increase in contract liabilities and an amortization and depreciation amount of $45.7 million. During the year ended December 31, 2021, the primary driver in cash used in operating activities comes from a $188.7 million decrease in contract liabilities.
During the year ended December 31, 2024, the primary drivers in the $1.9 million in cash provided by operating activities were a decrease of $70.7 million in contract assets, an increase of $56.4 million in contract liabilities and $23.3 million in depreciation and amortization, offset by $105.5 million in gross loss and $44.8 million in deferred taxes.
The increase was primarily attributable to a $26.0 million increase in our Civil segment due to the new projects starting in 2023 and a $78.4 million increase in our Transportation segment related to exiting the M&P business.
The decrease was comprised of a $102.1 million decrease in our Transportation segment due to impacts related to exiting the M&P business line and more projects nearing substantial completion in 2024 compared to 2023, and a $20.7 million increase in our Civil segment due to new projects started in 2024, partially offset by projects that were substantially completed in 2023 compared to 2024.
The difference was attributable to increased borrowings and higher interest rates. 36 Table of Contents Income tax expense (benefit) Income tax benefit for the year ended December 31, 2023 was $8.5 million, or an effective rate of 31.3%.
Corporation’s separate state filings and Southland Mole of Canada, and (iv) the benefit of the release of uncertain tax position liability previously recorded for American Bridge federal NOL and depreciation matters prior to 2020 tax year. Income tax benefit for the year ended December 31, 2023, was $8.5 million, or an effective rate of 31.3%.
Civil ​ ​ ​ ​ ​ (Amounts in thousands) ​ Balance December 31, 2021 ​ $ 523,095 New contracts, change orders, and adjustments ​ 541,653 Gross Backlog ​ 1,064,748 Less: contract revenue recognized in 2022 ​ (304,585) Balance December 31, 2022 ​ $ 760,163 New contracts, change orders, and adjustments ​ 199,372 Gross Backlog ​ 959,535 Less: contract revenue recognized in 2023 ​ (325,077) Balance December 31, 2023 ​ $ 634,458 ​ Transportation ​ ​ ​ ​ ​ (Amounts in thousands) ​ Balance December 31, 2021 ​ $ 1,695,478 New contracts, change orders, and adjustments ​ 1,351,293 Gross Backlog ​ 3,046,771 Less: contract revenue recognized in 2022 ​ (833,049) Balance December 31, 2022 ​ $ 2,213,722 New contracts, change orders, and adjustments ​ 812,425 Gross Backlog ​ 3,026,147 Less: contract revenue recognized in 2023 ​ (825,639) Balance December 31, 2023 ​ $ 2,200,508 ​ ​ 43 Table of Contents Item 7A.
Civil ​ ​ ​ ​ ​ (Amounts in thousands) ​ Balance December 31, 2022 ​ $ 760,163 New contracts, change orders, and adjustments ​ 199,372 Less: contract revenue recognized in 2023 ​ (325,077) Balance December 31, 2023 ​ $ 634,458 New contracts, change orders, and adjustments ​ 643,433 Less: contract revenue recognized in 2024 ​ (316,684) Balance December 31, 2024 ​ $ 961,207 ​ Transportation ​ ​ ​ ​ ​ (Amounts in thousands) ​ Balance December 31, 2022 ​ $ 2,213,722 New contracts, change orders, and adjustments ​ 812,425 Less: contract revenue recognized in 2023 ​ (825,639) Balance December 31, 2023 ​ $ 2,200,508 New contracts, change orders, and adjustments ​ 74,692 Less: contract revenue recognized in 2024 ​ (663,495) Balance December 31, 2024 ​ $ 1,611,705 ​ Liquidity, Capital Commitments and Resources ​ Our principal sources of liquidity are cash generated from operations, funds from borrowings, and existing cash on hand.
The decrease in costs was primarily due to fewer project starts, and more projects nearing substantial completion in 2022 versus 2021. 35 Table of Contents Gross profit Gross profit for the year ended December 31, 2023, was $35.8 million, a decrease of $105.1 million, or 74.6%, compared to the year ended December 31, 2022.
The increase in gross loss was also primarily due to a project nearing completion which led to decreases in profit contribution of $20.7 million from a project in the Bahamas, for the year ended December 31, 2024 versus the same period in 2023.
In February 2024, the Company amended the revolving credit facility to restructure certain covenant levels. We are currently in compliance with all applicable debt covenants, as amended or waived. Revolving Credit Facility In July 2021, we entered into a revolving credit facility agreement with Frost Bank for $50.0 million.
As of December 31, 2024, we had a mortgage note expiring in February 2029. The interest rate on the mortgage note was 5.99%. The mortgage note is collateralized by certain real estate owned by Southland. Revolving Credit Facility In July 2021, we entered into a revolving credit facility agreement (“Revolving Credit Facility”) with Frost Bank for $50.0 million.
For the year ended December 31, 2021, the primary driver was borrowings of $206.2 million in new borrowings on notes payable and $67.0 million in borrowing on the revolving credit facility, which was partially offset by payments on notes payable of $153.6 million and repayments of $82.0 million on the revolving credit facility. 41 Table of Contents As of December 31, 2023, we had long-term debt of $300.4 million, of which $48.5 million is due within the next twelve months.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Cash Flows” of our Annual Report on Form 10-K for the year ended December 31, 2023. As of December 31, 2024, we had long-term debt of $300.2 million, of which $44.5 million is due within the next twelve months.
See Note 23 of the Notes to the Consolidated Financial Statements for further detail about the timing of expected future payments. 42 Table of Contents Backlog We define Backlog as a measure of the total amount of revenue remaining to be earned on projects that have been awarded.
See Note 23 of the Notes to the Consolidated Financial Statements for further detail about the timing of expected future payments . ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not applicable. ​ Item 8.
The primary differences from the statutory rate of 21% were (i) nondeductible losses with loss of benefit of $12.1 million due to the Subchapter S-Elections by multiple entities which increased the worldwide effective tax rate by 23.0% due to losses incurred on these entities, (ii) a decrease in valuation allowances of $18.7 million due to utilization of deferred tax assets through current operations, and (iii) state income taxes of $3.9 million.
The primary differences from the federal statutory rate of 21% were (i) state income tax benefit of $7.6 million, (ii) the benefit of foreign tax rate differences of $13.2 million due to operations in jurisdictions like Canada and the Bahamas, (iii) the expense recorded for the valuation allowance against the net deferred tax assets for Johnson Bros.
Removed
This migration has the potential to reduce revenue growth and/or increase pressure on gross profit margins. We have seen an increase in demand for specialty construction projects in recent years at the federal, state, and local level.
Added
Much of the variation is the result of weather, particularly rain, ice, snow, heat, wind, and named storms, which can impact our ability to perform construction activities. These weather impacts can affect revenue and profitability in either of our business segments.
Removed
Our business may also be affected by overall economic market conditions, including but not limited to declines in spending by project owners, delays in new projects, by changes in client schedules, or for other reasons.
Added
Recent Events See section titled "Basis of Presentation” discussing the consummation of the Merger.
Removed
We recognize the impact of any changes in estimated transaction price or estimated cost at completion on a cumulative catch-up basis. This can result in the recognition of revenue in a current period related to the satisfaction of performance obligations that occurred or partially occurred in a prior period.
Added
In December 2024, the Company agreed to issue an aggregate of 5,830,899 shares of common stock (the “Shares”), par value $0.0001 per share, in exchange for the full satisfaction and discharge of an aggregate of $20.0 million in outstanding amounts under certain promissory notes held by Frank Renda, Rudy Renda and Tim Winn (the “Transaction”) with a price per share of $3.43, calculated using the greater of (a) the volume-weighted average price per share of Common Stock, rounded to the nearest hundredth of a cent, on NYSE for the thirty consecutive trading days immediately preceding and ending on December 27, 2024 and (b) the closing price of Common Stock on NYSE on December 27, 2024.
Removed
Revenue for the year ended December 31, 2022, was $1,161.4 million, a decrease of $117.8 million, or 9.2%, compared to the year ended December 31, 2021. The decrease was primarily due to fewer project starts, and more projects nearing substantial completion in 2022 versus 2021.
Added
The $20.0 million conversion to shares of common stock was comprised of $13.2 million of secured notes and accrued interest thereupon along with $6.8 million of certain promissory notes and accrued interest thereupon. The Transaction was approved by the Company’s Audit Committee and Board of Directors.
Removed
Cost of construction Cost of construction for the year ended December 31, 2023, was $1,124.6 million, an increase of $104.1 million, or 10.2%, compared to the year ended December 31, 2022.

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