Earnings call transcript: Southland Holdings reports Q1 2025 revenue decline, stock surges 10%

Southland Holdings Inc. reported a mixed financial performance for the first quarter of 2025, with revenue declining but gross profit improving. Despite a net loss, the company’s stock surged by 10.27% following the earnings announcement. According to InvestingPro data, the company’s overall financial health score is rated as "WEAK," with particularly concerning metrics in profitability. The company’s strategic focus on infrastructure projects and robust backlog contributed to positive investor sentiment. Two analysts have recently revised their earnings expectations downward for the upcoming period, suggesting continued challenges ahead.

Key Takeaways

• Q1 2025 revenue decreased by $49 million compared to the previous year.
• Gross profit margin improved to 9% from 7.1% in Q1 2024.
• Southland’s stock rose by 10.27% following the earnings release.
• Strong demand for infrastructure projects and a $2.5 billion backlog.
• Leadership changes with new CFO and Chief Strategy Officer appointments.

Company Performance

Southland Holdings faced a challenging start to 2025, with a decline in revenue to $239 million, down from $288 million in Q1 2024. Despite the revenue drop, the company managed to increase its gross profit to $21.5 million, reflecting improved efficiency and cost management. The Civil Segment performed strongly, contributing significantly to the gross profit with a 22% margin.

Financial Highlights

• Revenue: $239 million (down $49 million YoY)
• Gross Profit: $21.5 million (up $1.1 million YoY)
• Gross Profit Margin: 9% (up from 7.1% YoY)
• Net Loss: $4.5 million ($0.08 per share)
• EBITDA: $10.1 million

Market Reaction

Following the earnings announcement, Southland Holdings’ stock price rose by 10.27%, closing at $4.08. This surge reflects positive investor sentiment driven by the company’s strong backlog and strategic focus on infrastructure projects. The stock’s performance has been impressive recently, with InvestingPro data showing a 27.15% return over the past six months, though it remains down 25.25% over the past year. The stock’s current position between its 52-week high of $5.98 and low of $1.85 suggests potential room for recovery. InvestingPro analysis indicates the stock is currently fairly valued based on multiple valuation models.

Outlook & Guidance

Southland Holdings is optimistic about its future, with a total backlog of $2.5 billion and plans to execute approximately 40% of it over the next 12 months. The company expects an interest expense of around $9.5 million per quarter and anticipates an effective tax rate between 20% and 24%. However, InvestingPro analysis suggests the company may face profitability challenges, with analysts not expecting profitability this year. Upcoming opportunities include major projects like the $450 million Black Creek Tunnel and the $600 million Jordan Lake water supply program. Want deeper insights? Access the comprehensive Pro Research Report for Southland Holdings and 1,400+ other US stocks through InvestingPro, featuring expert analysis and actionable intelligence.

Executive Commentary

CEO Frank Renda emphasized the company’s strategic bidding approach, stating, "We’re off to a strong start in 2025 driven by a disciplined bidding approach." CFO Keith Bassano added confidence in managing the backlog, saying, "We feel we have our arms wrapped around that backlog." These comments highlight the company’s focus on strategic growth and risk management.

Risks and Challenges

• Ongoing legacy project claims could impact financial performance.
• Potential interest rate increases may affect borrowing costs.
• Economic uncertainties could influence government infrastructure spending.
• The transition of leadership roles may pose integration challenges.
• Competitive pressures in the infrastructure sector may affect margins.

Southland Holdings remains focused on leveraging its strong government relationships and diverse capabilities to navigate these challenges and capitalize on growth opportunities in the infrastructure sector.

Full transcript - Southland Holdings Inc (SLND) Q1 2025:

Chloe, Conference Operator: Good morning. My name is Chloe, and I will be your conference operator today. At this time, I would like to welcome everyone to the Southland First Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer there question you.

Alex, you may begin your conference.

Alex Murray, Vice President of Corporate Development and Investor Relations, Southland: Good morning, everyone, and welcome to the Southland first quarter twenty twenty five conference call. This is Alex Murray, Vice President of Corporate Development and Investor Relations. Joining me today are Frank Renda, President and Chief Executive Officer and Keith Bassano, Chief Financial Officer. Before we begin, I’d like to remind everyone that this conference call may contain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward looking statements are neither historical facts nor assurances of future performance.

Forward looking statements are uncertain and outside of Southwind’s control. Southwind’s actual results and financial condition may differ materially from those projected in forward looking statements. Therefore, you should not rely on any of these forward looking statements, and we do not undertake any duty to update these statements. For a discussion of some of the risks that could affect results, please see the Risk Factors section of our Form 10 ks for the year ended 12/31/2024, that was filed with the SEC on 03/05/2025, and discussion on Form 10 Q for the quarter ended 03/31/2025, that was filed with the SEC last night. We also refer to non GAAP financial measures.

You’ll find reconciliations in the press release relating to this conference call, which can be found on the Investor Relations page of our website. With that, I will now turn the call over to Frank.

Frank Renda, President and Chief Executive Officer, Southland: Thank you, Alex. Good morning, and thank you for joining Southland’s first quarter twenty twenty five conference call. Before we dive into our quarterly results, I’d like to begin by highlighting the additions we have made to our leadership team. As previously announced, Keith Busano has been appointed our Chief Financial Officer. Keith brings more than fifteen years of experience in the engineering and construction sector.

Since joining the organization through our American Bridge subsidiary in 02/2008, he has consistently demonstrated outstanding leadership and financial discipline. We have also appointed Don Graul as Chief Strategy Officer. Don joined Southland following executive roles at AECOM, Parsons and most recently as Chief Executive Officer of the Branch Group. With experience in infrastructure construction and engineering, Don has directly worked on some of the largest infrastructure projects worldwide, totaling over $60,000,000,000 in construction costs. These leadership additions are part of our broader strategic efforts to strengthen Southland and position ourselves for better performance over the long term.

We believe Keith and Don’s experience and leadership will be important assets for Southland moving forward, and I’m excited to have them in these key roles. I’d also like to recognize a remarkable milestone within Southland. American Bridge Company, founded in 1900 through a JPMorgan consolidation of several bridge and steel firms, celebrated its hundred and twenty fifth anniversary this year. American Bridge has delivered many of the world’s most iconic spans and steel landmarks, including the Oakland Bay Bridge, the Las Vegas high roller, and so many more, consistently raising the bar for safety and engineering innovation. AB’s commitment to excellence has remained unmatched.

On behalf of the entire Southwind team, I congratulate the American Bridge workforce, past and present, on more than a hundred and twenty five years of world class performance. Now to discuss our quarterly results. We started the year with strong performance with revenue of $239,000,000, gross profit of $21,500,000, and positive cash flow from operations of $6,400,000 Consolidated gross profit margin was 9%, an increase from 7% in the prior year period. This improvement was driven by strong performance in our Civil segment, which delivered a gross profit margin of 22%. Despite the adverse weather we faced in some key markets, we produced the highest first quarter consolidated gross profit margin since before COVID.

Turning to the broader economic backdrop, I’d like to share our view on the potential impact of recent tariff actions and federal spending cut announcements. Based on what we know today, we do not expect the current tariffs to have a material effect on our current book of business. As we mentioned on our last call, our direct exposure to cross border material procurement is minimal. While we don’t anticipate a direct impact, there is a risk that tariffs could increase input cost over time. That said, Southland remains well positioned.

We have strong risk management practices in place, including the ability to lock in major material contracts early in project life cycles, which helps protect against cost escalations. We also do not believe that government spending cuts will affect demand. The bridges, water pipelines, tunnels, and treatment facilities we build are critical. We have not had a project in backlog be affected by any spending cuts, and we do not expect a material impact on our pipeline. Demand for our business remains extremely strong for federal and state clients, and we expect this trend to continue.

I’d also like to note that our historical client mix consists of approximately 80% government agencies and 20% private clients. Thanks to our diverse capabilities and strong relationships, we have the flexibility to adjust that mix in response to market demand. Because a substantial amount of our work is with government agencies and our projects are essential to the communities we work and live in, we are generally insulated from the effects of broader economic uncertainty. Combined with the sustained infrastructure investment, robust demand, particularly at the federal and state levels, we believe these factors will serve as strong tailwinds for our business for years to come. During the quarter, we added approximately 137,000,000 in new awards.

This was led by two water resource projects totaling $97,000,000 bringing our total backlog to approximately $2,500,000,000 We continue to have strong visibility into demand across our pipeline for both public and private clients. With a robust pipeline, we are well positioned to win high quality work while remaining selective in our pursuit strategy. Upcoming opportunities in our Civil segment include the $450,000,000 Black Creek Tunnel in Toronto, packages from the $600,000,000 Jordan Lake water supply program, packages from the $2,000,000,000 Northern Colorado Water Glades reservoir program, and numerous water and wastewater opportunities in the Southwest and the Southeast regions. Upcoming opportunities in our transportation segment include several bridge projects in the Northeast and Florida. We also hope to continue to develop our dedicated sub role to KeyWit on the rebuild of Francis Scott Key Bridge in Baltimore.

In summary, we’re off to a strong start in 2025 driven by a disciplined bidding approach, improved execution driving strong margins, and continued strength in our core business. With a deep bench of leadership and a strong pipeline of critical infrastructure opportunities ahead, we’re confident in our ability to deliver value for our clients and for our stakeholders over the long term. Before turning it over to Keith, I would also like to thank our teams for participating in National Safety Week. Thanks to all employees for their continued commitment to safety. Your focus on making safety a priority every day is essential to our success.

We appreciate the role each of you plays in maintaining safe Sorry, everyone. We had some audio issues. I’m going to turn it over

Keith Bassano, Chief Financial Officer, Southland: to Keith for a financial update now. Thank you, Frank, and good morning, everyone. I’ll discuss an overview of our financial performance during the first quarter twenty twenty five. You can find additional details and information in the financial statements, footnotes and management’s discussion and analysis that were filed on Form 10 Q last night. Revenue for the quarter was $239,000,000 down $49,000,000 from the same period in 2024.

Gross profit was $21,500,000 an increase of $1,100,000 from the same period in 2024. Gross profit margin in the quarter was 9% compared to 7.1% in the prior year. Selling, general and administrative costs in the first quarter were $16,500,000 an increase of $2,100,000 compared to the same period in 2024. The increase was attributable to additional compensation expense and certain tax expense compared to the same period in 2024. Interest expense for the quarter totaled 8,900,000.0 up $3,200,000 from the prior year.

This increase was primarily driven by higher borrowing costs and additional interest expense related to a real estate transaction that was closed in the second half of last year. As previously discussed, we anticipate interest expense to average approximately $9,500,000 per quarter going forward. Income tax benefit was $300,000 for the quarter compared to income tax expense of $300,000 in the same period last year. As noted in prior quarters, we expect our effective tax rate to be in the 20% to 24% range subject to the impact of tax credits, non deductible expenses and state and local tax adjustments. We reported a net loss of $4,500,000 or a loss of $08 per share in the quarter compared to a net loss of $400,000 or a loss of $01 per share in the same period last year.

In the first quarter, we produced EBITDA or earnings before interest, taxes, depreciation and amortization of $10,100,000 compared to EBITDA of $10,900,000 for the same period in 2024. I’ll touch on segment performance for the quarter. Our Civil segment had revenues of $103,000,000 compared to revenue of $84,000,000 in the same period in 2024. Our Civil segment gross profit was $23,000,000 an increase of $5,000,000 from the same period in the prior year. As a percentage of revenue for the quarter, our Civil segment had gross profit margin of 20 compared to 21% in the same period in 2024.

For the quarter, our Transportation segment had revenues of $137,000,000 a decrease of $67,000,000 from the same period in 2024. Our Transportation segment had a gross loss of $1,000,000 a decrease from a gross profit of $3,000,000 in the same period in the prior year. As a percentage of revenue for the quarter, our Transportation segment had a negative gross profit margin of 1% compared to a positive gross profit margin of 1% for the same period in 2024. The materials and paving business line contributed $18,000,000 to revenue and negative $9,000,000 to gross profit in the first quarter. We experienced a non cash charge of $3,500,000 in connection with the scope finalization on a substantially complete paving project with the remainder of the materials and pavings gross profit impact attributable to increased project costs.

We still anticipate to substantially complete these projects by the end of twenty twenty five. Our core operating results in this segment excluding Materials and Paving would have been $119,000,000 of revenue and $8,000,000 of gross profit for a gross profit margin of 7%. Consolidated core results in the quarter, excluding Materials and Paving, would have been $221,000,000 of revenue and $31,000,000 of gross profit for a gross profit margin of 14%. We finished the quarter with approximately $2,500,000,000 of backlog of which we expect to burn approximately 40% over the next twelve months. At the end of the quarter, we had approximately $139,000,000 of remaining M and P backlog and approximately $59,000,000 of non M and P legacy backlog.

We continue to make good progress winding down the legacy projects and expect the pace of revenue from the legacy projects to increase as we head into our peak construction season. Our new core backlog makes up over 90% of our total backlog and we’re excited about how the new core projects are performing. The new core projects continue to deliver strong double digit margins and we believe that will have more of an impact on the overall results in the coming quarters. Thank you for your time and interest in Southland. I’ll now pass the call back to the operator for questions.

Chloe, Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Our first question comes from the line of Adam Thalhimer from Thompson Davis. Your line is open.

Adam Thalhimer, Analyst, Thompson Davis: Hey, good morning guys. Nice quarter. And Keith, welcome to the call.

Keith Bassano, Chief Financial Officer, Southland: Thank you. Good morning. Thanks. Good morning, Adam.

Adam Thalhimer, Analyst, Thompson Davis: Morning. So wanted to start with maybe a question for Keith, but if you can give us a little bit of help in the Civil segment, how you’re thinking about top line. In some years, the revenue in Q2, Q3 in Civil dips versus Q1. I’m just curious if that’s the way you guys are modeling 2025.

Frank Renda, President and Chief Executive Officer, Southland: Perfect. No, Adam, we’re really excited about our Civil business. You know, we we had some pickups in the quarter from strong execution in the business, you know, but our core business is continuing to deliver strong double digit margins. So when you don’t have the impact from some of the legacy projects affecting a quarter, these types of returns are are what we could see. 22% is a pretty high bar to bar to set, but we feel like without the impacts from legacy write downs, this business can consistently deliver mid teen results.

Keith Bassano, Chief Financial Officer, Southland: Yes. So we did have the impact of seasonality in Q1, and we do expect the revenues to pick up in the later half of the year.

Adam Thalhimer, Analyst, Thompson Davis: Got it. Okay. And then I wanted to ask about M and P. The burn is going to pick up considerably the next three quarters. Just what are your early thoughts on what the profit impact could be from that?

Keith Bassano, Chief Financial Officer, Southland: Frank, if you don’t mind, let me let me take that one. So so in the quarter, the gross profit impact from M and P was 9,000,000. And as I mentioned on the call, about 3,500,000.0 of that was related to a non cash contract closeout charge. We feel we have our arms wrapped around that backlog and it’s appropriately at least stated as it stands. Again, that said, you know, we we will always continue to have that that risk as we close out that backlog.

But as we work through it and we we see the opportunity to to really generate some some positive operating cash flow as we work out the the claims and disputes, you know, not only related to M and P, but also to the the legacy backlog as a whole.

Adam Thalhimer, Analyst, Thompson Davis: Right. Okay. And then just last one for me, maybe for Frank. Frank, what’s your outlook on transportation booking specifically? And I think that’s the first time I’ve heard you mention the Baltimore Bridge job.

Frank Renda, President and Chief Executive Officer, Southland: Yeah. So transportation booking specifically, you know, there’s a lot of work out there, Adam. We’ve got, you know, we’ve got quite a few projects in the pipeline as far as the Francis Scott Key Bridge. You know, we were a dedicated sub to Keywood on the project, and, they’ve been selected or working through the design. It would a bit before we would get out there and do any work if that does turn into a possible subcontract opportunity for us.

But as far as is transportation in general, just really excited about the market. There’s tons of tons of jobs in the Northeast, the Southeast, Southwest that that really make a lot of sense on on the bridge side for us. So look for bidding to uptick in the second half of the year.

Adam Thalhimer, Analyst, Thompson Davis: All right. Thanks, guys. Good luck in Q2.

Frank Renda, President and Chief Executive Officer, Southland: Thanks, Adam. Appreciate it.

Chloe, Conference Operator: Our next question comes from the line of Julio Romero from Sidoti. Your line is open.

Julio Romero, Analyst, Sidoti: Thanks. Hey, good morning, Frank, and echoing the same sentiments. Welcome, Keith. Yes. So on Civil, nice uptick on bookings in the quarter.

If you could talk about some recent wins there and how you see bookings trending going forward?

Frank Renda, President and Chief Executive Officer, Southland: Yeah. So, you know, we’ve up a we’ve picked up a couple of jobs on on the civil side. They’re typically, they’re they’re you know, quicker hitter you know, quick hitting jobs. But, you know, as far as new awards, you know, we’re adding new work selectively. We’re focusing on projects where, you know, we have the right teams in place and a track record of success, particularly in markets where we’ve consistently delivered strong results, and, you know, we’re excited about the potential in both the civil and transportation businesses.

You know, we have teams that are performing well in in both segments. And and, naturally, I think we may see a small shift towards civil projects versus transportation as we wind down the paving business. But overall, the demand remains strong, and we’re confident in our ability to continue to win new projects in in all markets and are very excited about the the civil sector as well.

Julio Romero, Analyst, Sidoti: Yeah. Absolutely. Makes sense. And then, you know, I wanted to ask about alternative delivery. You know, where are you guys with regards to the 750,000,000 of pending alternative delivery projects that I believe you talked about last quarter?

Frank Renda, President and Chief Executive Officer, Southland: Yes. So on the alternative delivery front, we’ve got the Winnipeg project and we have the Burnside Bridge project. And both of those are continuing to progress well. We’re working along with our partners on those projects to develop that into a construction contract and hopefully hopefully continue to to progress throughout the year and turn into a actual construction contract within the year within a year. But all is all is progressing well.

No no bumps in the road so far, Julio.

Julio Romero, Analyst, Sidoti: Excellent. Good to hear. And then last one for me is just, where are you guys with regards to bonding capacity as it stands now?

Frank Renda, President and Chief Executive Officer, Southland: Yeah. So, you know, obviously, our surety partners play a critical role in our long term success, and we remain you know, we maintain regular meetings with them to discuss, you know, various opportunities we are we are pursuing. It’s important you know, really important to do that right now because of all the work that’s that’s out there. So as as far as bonding, you know, targeting strategic projects in the civil and transportation segment and, you know, have a a a great relationship with our current sureties.

Julio Romero, Analyst, Sidoti: Great. Thanks very much.

Frank Renda, President and Chief Executive Officer, Southland: Thank you, Julia.

Chloe, Conference Operator: Our next question comes from the line of Christian Schwab from Craig Hallum Capital Group. Your line is open.

Christian Schwab, Analyst, Craig Hallum Capital Group: Thanks for taking my questions. Great quarter. I guess line got dropped, unfortunately. So if this has been already addressed, I’m sorry. But as far as the work this summer and working off the more of the legacy design wins, did you give any clarity of what we should expect as we get into the busier working season, what the margin profile of the business would look like?

And a follow-up to that is, did we expect by the end of calendar twenty five to have the vast majority of all of that work complete?

Keith Bassano, Chief Financial Officer, Southland: Yeah. So speaking specifically to the the MMP work, we do anticipate having all that work substantially complete by the end of twenty twenty five. In terms of margin, you know, we feel really good about the 2,300,000,000.0 of new core backlog that I mentioned on the earlier remarks and contributions that it’s going to make in the coming quarters. So we still have risk on the remaining legacy work. As we progress throughout the year and we continue to complete the projects, we’re going to see less and less legacy impact.

We continue to produce positive EBITDA absent any noncash impacts from settlement disputes. And I would also say, you know, one of the reasons we haven’t provided guidance in the in the past is that those settlement disputes or or dispute settlements rather can impact results, you know, significantly one way or the other, and and timing is just typically hard to predict.

Frank Renda, President and Chief Executive Officer, Southland: Yeah. And and one follow-up to that, Keith, is, you know, we should start to see a couple of our large transportation projects start to start to really kick off, Christian, and the $600,000,000 Shenz Bridge and the $400,000,000 RK Bridge, and that’ll replace, you know, some of that some of that struggling MMP legacy work on a go forward basis. And, you know, we may have, you know, one of the legacy projects, you know, going into 2026, but a lot less of a drag here at the end of the year and start start ’26 with the legacy work.

Christian Schwab, Analyst, Craig Hallum Capital Group: Great. And and and then as as far as balance sheet strength, you guys feel like you’re in a great position there?

Keith Bassano, Chief Financial Officer, Southland: Yeah. So as as far as, you know, as far as liquidity and so as far as liquidity is concerned, you know, we feel we have ample liquidity to pursue all these opportunities that are ahead of us. Again, we remain extremely selective and and and, the market’s been affording us the opportunity to to do so. We’ve made significant process or progress rather to improve the balance sheet over the last couple quarters. And if you look at the unrestricted cash position at the end of twenty twenty five q one, it’s it’s more than double, you know, where we were at the at the end of q one of of last year.

In addition to that, we we also have access to the the the delayed draw facility, which it gives us some additional capacity should be needed.

Christian Schwab, Analyst, Craig Hallum Capital Group: Great. No other questions. Thank you.

Frank Renda, President and Chief Executive Officer, Southland: Thanks, Christian.

Chloe, Conference Operator: Our next question comes from the line of Gene Varese from D. A. Davidson. Your line is open.

Gene Varese, Analyst, D.A. Davidson: Hi, good morning and thank you guys.

Keith Bassano, Chief Financial Officer, Southland: Good morning, g. Good morning.

Gene Varese, Analyst, D.A. Davidson: Asking this, I guess, another way, looking at the civil segment. You guys had a terrific quarter, but looking at the profit swings that have been volatile over the past twelve months, how do you suggest approaching what a normal margin should be going forward for the segment, even the quarterly or annual basis? And I know you guys mentioned double digits, but I guess I just want to look for more color into it.

Frank Renda, President and Chief Executive Officer, Southland: Yeah. So we’re we’re gonna continue to focus on owners that we have a really good relationship with in the civil sector. And I think our teams have done an excellent job of of getting the returns that that we expect in the in the civil market. But, you know, I think I think mid teens returns are are more than should should be more than achievable in the civil segment.

Keith Bassano, Chief Financial Officer, Southland: Yeah. And to add to that, you know, the new core projects, again, producing the the the strong double digit margins. And excluding MMP, the the profit margin was 14% in the quarter.

Gene Varese, Analyst, D.A. Davidson: Okay. And for transportation, given the the current backlog, should we expect contraction in segment revenue in 2025, or are there some things that could be booked near term that could give that could drive the segment growth in 2025?

Frank Renda, President and Chief Executive Officer, Southland: Yeah. I kind of on the transportation business, typically, you have longer duration projects. So it takes a little bit longer for some of these new core jobs to make more of an impact on results. And we have some new core transportation projects, like I mentioned, the $600,000,000 Shands Bridge and the $400,000,000 r RK Bridge in New York that are really starting to ramp up and are gonna continue to contribute more to transportation margins as we progress through the year. You know, the m and p m the m and p impacts and and as we wind down, you know, it will have a it will have an impact on on revenue as we exit that M and P business, but there’s a lot of opportunity in the in the transportation side, on the bridge side.

Gene Varese, Analyst, D.A. Davidson: Thank you. And, are there any update on outstanding claims, or, are there pending timelines this year that could have a meaningful impact on the balance sheet?

Frank Renda, President and Chief Executive Officer, Southland: Yeah. So, you know, we continue to work through and and make small progress on settling legacy claims. We have no no major update from the larger claims to report this quarter, but we do expect a significant cash flow from these claims in the coming quarters. And we continue to work vigorously to collect every dollar that we are owed. And, you know, it’s important to remember almost all of these claims are from jobs that we picked up pre COVID in that 02/1718, and ’19 time frame.

Keith Bassano, Chief Financial Officer, Southland: Yeah. Timing will remain uncertain on those. But, again, as Frank mentioned, we we continue to make make progress towards towards settlements.

Gene Varese, Analyst, D.A. Davidson: And just one last from me. Given everything we’ve heard about just M and P drawing down and you increase in civil and then better work for transportation, How do you guys see free cash flow developing through 2025?

Keith Bassano, Chief Financial Officer, Southland: Yes. So we had a good Q1 generating positive operating cash flow. I mean, we’re off to a good start. We expect that cash flow to be more heavily weighted towards the back half of the year.

Gene Varese, Analyst, D.A. Davidson: Okay. Well, I appreciate the time. Thank you so much.

Keith Bassano, Chief Financial Officer, Southland: Thank you. Thank you.

Chloe, Conference Operator: There are no questions at this time. Please continue.

Frank Renda, President and Chief Executive Officer, Southland: Thank you everyone for your continued interest in Southwind and look forward to speaking next quarter.

Chloe, Conference Operator: This concludes today’s conference. Thank you for participating. You may now disconnect.

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