Earnings call transcript: Southland Holdings sees mixed results in Q2 2025

Southland Holdings Inc. reported a mixed financial performance for the second quarter of 2025. The company’s revenue fell to $215 million, a decrease of $36 million from the previous year. Despite this, the gross profit margin improved significantly, reaching 6.2% from a negative 15.9% in the prior year. The market reacted negatively, with the stock price dropping by 8.21% to $4.63, reflecting investor concerns over the company’s net loss of $10.3 million. According to InvestingPro analysis, the company appears undervalued compared to its Fair Value, despite ongoing profitability challenges. InvestingPro subscribers can access detailed valuation metrics and 6 additional key insights about Southland Holdings through the comprehensive Pro Research Report.

Key Takeaways

• Gross profit margin improved to 6.2% from -15.9% in Q2 2024.
• Revenue decreased by $36 million year-over-year.
• Stock price fell by 8.21% following the earnings report.
• Total backlog stands at $2.32 billion, with strong future demand anticipated.
• Infrastructure Investment and Jobs Act (IIJA) continues to provide market support.

Company Performance

Southland Holdings experienced a challenging quarter with a revenue decline to $215 million, down from Q2 2024. Despite the drop in revenue, the company improved its gross profit margin to 6.2%, marking a significant turnaround from a negative margin the previous year. The focus on high-margin, short-duration projects appears to be paying off, although the net loss of $10.3 million remains a concern.

Financial Highlights

• Revenue: $215 million (down $36 million from Q2 2024)
• Gross Profit: $13.4 million (up $53 million from prior year)
• Gross Profit Margin: 6.2% (improved from -15.9% in prior year)
• Net Loss: $10.3 million ($0.19 per share)
• EBITDA: $4.2 million (compared to -$49.9 million in prior year)

Market Reaction

The stock price of Southland Holdings dropped by 8.21% to $4.63, reflecting investor concerns over the company’s financial losses and revenue decline. This movement is significant, given the stock’s 52-week range of $1.85 to $4.9. Despite recent volatility, InvestingPro data shows impressive momentum with a 49.35% return over the past six months and a 42.46% year-to-date gain. The market’s reaction suggests a cautious outlook despite the company’s improved gross profit margin and strong backlog.

Outlook & Guidance

Southland Holdings remains optimistic about its future, with a $2.32 billion backlog and expectations of burning approximately 41% of it over the next 12 months. The company anticipates improving operating cash flow in the coming quarters and sees robust demand driven by federal funding from the IIJA. However, guidance suggests continued challenges, with projected negative EPS for upcoming quarters.

Executive Commentary

CEO Frank Renda emphasized the strong demand fueled by federal funding: "We’re seeing robust demand driven by this federal funding." He also reiterated the company’s strategic focus: "Our strategy is clear: focus on high quality, high margin work." CFO Keith Bassano noted the reduced impact of legacy projects: "We expect legacy projects to have less of an impact on the overall results."

Risks and Challenges

• Continued net losses may impact investor confidence.
• Declining revenue could hinder growth prospects.
• Legacy projects and their resolutions remain a potential risk.
• Market competition in infrastructure projects could affect margins.
• Macroeconomic factors may influence future project opportunities.

Q&A

During the earnings call, analysts focused on the company’s strategy to resolve legacy project claims and improve margins. Executives confirmed a continued focus on high-margin projects and highlighted the strong infrastructure spending pipeline, including a potential $20 billion investment in Texas water infrastructure.

Full transcript - Southland Holdings Inc (SLND) Q2 2025:

Tina, Conference Operator: Good morning. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Southland Second 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 session.

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 Southwind second 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 Southland’s control. Southland’s actual results and financial condition may differ materially from those projected in the 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 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 06/30/2025, that was filed with the SEC last night. We will also refer to non GAAP financial measures, and you will find reconciliations in the press release 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 Southwind’s second quarter twenty twenty five conference call. I want to take a moment to acknowledge some recent operational accomplishments across North America. In Florida, we celebrated a significant milestone with the opening of The US 1 Jupiter Federal Bridge, a project that will improve transportation for the region. We also successfully started driving the first 60 inches piles for the Shands Bridge project, a critical step forward on the new bridge over the St.

Johns River. In Toronto, our team successfully flooded the Ashbridges Bay Outfall Tunnel, a major achievement that marks the nearing completion of this multiyear large scale project. Finally, our work with the Army Corps of Engineers continues to progress as our teams have now installed the first gates on the Center Hill and Wolf Creek Dam gate replacement projects in Tennessee and Kentucky. These achievements are a testament to the hard work and dedication of our employees who are the driving force of our company. Thank you to all our teams for their unwavering commitment to safety and operational excellence.

Now to discuss our quarterly results. We reported second quarter revenue of $215,000,000 and gross profit of $13,400,000 Consolidated gross profit margin was 6.2%, an increase from negative 15.9% in the prior year period. The improvement was driven by strong performance in our new core work and less impacts from legacy projects in this quarter versus the same quarter last year. Our teams performed well this quarter despite unfavorable conditions including adverse weather. It is encouraging to see the strong consistent results in our core business as evidenced by our Civil segment, which delivered a gross profit margin of 18%.

This is a direct result of our disciplined bidding strategy and our team’s expertise executing complex high value projects. Revenue for the quarter was lower than anticipated due to impacts from weather and timing on new project starts. We had two water resource projects in the West totaling over $340,000,000 in combined contract value that experienced delayed starts that were outside of our control. Both projects have now started and we expect them to ramp as we progress through the end of the year. During the quarter, we added approximately $67,000,000 in new awards.

This was led by the McNeil Tunnel project in Austin, Texas, bringing our total backlog to approximately $2,320,000,000 dollars

Tina, Conference Operator: We are excited about the success we are having in converting high margin short duration projects to backlog. Backlog

Frank Renda, President and Chief Executive Officer, Southland: We continue to be excited about the opportunities bidding in both segments in the back half of this year. So far in the third quarter, we have executed a $77,000,000 contract in our transportation segment for a bridge rehab project for a private client in the Pacific Northwest. We also have been awarded or are the low bidder on an additional $65,000,000 of new projects that we are finalizing contracts on, which we expect to convert to backlog in the third quarter. Our outlook on the market remains unchanged. We’re confident that sustained investment and robust demand for infrastructure, especially from federal and state governments, will serve as a powerful tailwind for our business for years to come.

The IIJA is in full swing and continues to be a major catalyst for our industry. We’re seeing robust demand driven by this federal funding. The current federal infrastructure cycle will expire in 2026, but we believe this funding will provide a strong tailwind for our business for several more years as it takes time for projects to work through design, permitting, and ultimately construction. We’re also optimistic that there will be bipartisan support to reauthorize spending to address the nation’s critical infrastructure needs. State and local spending is strong in our key markets across the Sunbelt.

We’re also seeing state and local governments developing long term plans to meet the demand caused by population shifts and aging infrastructure. In May, the Texas Senate passed House Joint Resolution seven, which if passed in November by voters, will unleash $20,000,000,000 for water infrastructure development projects across the state over the next two decades. This is a significant investment in one of our core markets. We are well positioned to help rebuild and expand Texas’ water resources. This is just one of the many examples of the strong demand for our services, which we expect to continue for the foreseeable future.

With a strong pipeline of opportunities from private and public clients, we have excellent visibility into future demand. We continue to be selective in our approach focusing on improving profitability over top line growth. We are excited about upcoming opportunities and have pending proposals including the Pier 31 extension at the Naval Submarine Base in Groton, Connecticut for the Naval Facilities Engineering Command. We also expect to propose on the Eleuthera Glass Window Bridge in The Bahamas and Phase three of the Winnipeg North End sewage treatment plant. We are currently constructing Phase one of the program and are in the preconstruction phase of Phase two of the program.

We also expect to propose on the Alka Sand Ohio River Tunnel and numerous water resource projects across the Sunbelt. In closing, our teams performed well in the quarter despite some challenging conditions. We continue to make good progress winding down legacy work and are excited about the opportunities in all our end markets. While we are operating in an environment of strong market tailwinds, we are also aware of the challenges in our business. Our strategy is clear: focus on high quality, high margin work, proactively manage our cost structure and maintain strong financial discipline.

Our improved margins this year are a clear sign that this strategy is working. We are confident in our ability to continue to convert our new core backlog into profitable results and create long term value for our stakeholders. We remain excited about our future and the strong market position we have built. With that, I’ll now turn the call over to Keith for a financial update.

Keith Bassano, Chief Financial Officer, Southland: Thank you, Frank, and good morning, everyone. I’ll discuss an overview of our financial performance during the second quarter for 2025. 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 $215,000,000 down $36,000,000 from the same period in 2024. Gross profit was $13,400,000 an increase of $53,000,000 from the same period in 2024.

Gross profit margin in the quarter was 6.2% compared to negative 15.9% in the prior year. Selling, general and administrative costs in the second quarter were $13,600,000 a decrease of $2,100,000 compared to the same period in 2024. The decrease was primarily due to lower preconstruction expenses compared to the same period in 2024. Interest expense for the quarter totaled $10,000,000 up $3,300,000 from the prior year. This increase was primarily driven by an increase in interest expense related to a real estate transaction that closed in the second half of last year, increased interest rates on borrowings and increased deferred financing costs.

We anticipate interest expense to average approximately $9,500,000 per quarter going forward. Income tax benefit was $100,000 for the quarter or an effective tax rate of 0.6% compared to income tax benefit of $16,000,000 in the same period last year. 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 $10,300,000 or a net loss of $0.19 per share in the quarter compared to a net loss of $46,000,000 or a net loss of $0.96 per share in the same period last year. In the second quarter, we produced EBITDA of $4,200,000 compared to EBITDA of negative $49,900,000 for the same period in 2024.

Now to touch on segment performance for the quarter. Our Civil segment had revenues of $81,500,000 compared to revenue of $79,400,000 in the same period in 2024. Our Civil segment gross profit was $14,600,000 an increase of $5,400,000 from the same period in the prior year. As a percentage of revenue for the quarter, our Civil segment had gross profit margin of 17.9% compared to 11.5% in the same period in 2024. For the quarter, our Transportation segment had revenues of $133,900,000 a decrease of $38,300,000 from the same period in 2024.

Our Transportation segment had a gross loss of $1,200,000 an increase from a gross loss of $49,200,000 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 0.9% compared to a negative gross profit margin of 28.6% for the same period in 2024. The Materials and Paving business line contributed $21,700,000 to revenue and 3,800,000.0 second quarter. At the end of the quarter, we had approximately $99,000,000 of remaining M and P backlog. This is down from $139,000,000 at the end of last quarter.

We anticipate to be substantially complete with these projects by the 2025 with three projects final completion tailing into 2026. Our Transportation segment margin was negatively impacted in the quarter by an unfavorable adjustment of $7,000,000 on a legacy bridge project in the Midwest. This legacy project had significantly impacted our results over the past several years and we are now down to the final remaining contract items on the project. The new bridge opened earlier this year and demolition of the old bridge is well underway. This project is expected to be completed later this year.

Our remaining non M and P legacy backlog is now $40,000,000 down from $59,000,000 last quarter. Excluding the impacts of M and P and unfavorable adjustments in our non M and P legacy backlog, gross profit in the quarter in both Transportation and Civil segments produced double digit margins. We expect legacy projects to have less of an impact on the overall results as we continue to wind down these projects. This ongoing transition to a more profitable backlog is a key part of our long term strategy and a major driver of our improved margin profile. We finished the quarter with approximately $2,300,000,000 of backlog of which we expect to burn approximately 41% over the next twelve months.

Thank you for your time and interest in Southland. I’ll now pass the call back to the operator for questions.

Tina, Conference Operator: And our first question comes from the line of Kevin Gainey with Thompson Davis. Please go ahead.

Kevin Gainey, Analyst, Thompson Davis: Good morning, Frank, Keith, Alex. It’s Kevin on for Alex or Kevin on for Adam.

Frank Renda, President and Chief Executive Officer, Southland: Hey, good morning, Kevin. Good morning. Frank,

Kevin Gainey, Analyst, Thompson Davis: I know you kind of highlighted two awards that you guys closed in start of Q3 and then you rattled off a list of some opportunities in the future. I was wondering with those opportunities, are they more second half weighted, or are they likely to come maybe 2026?

Frank Renda, President and Chief Executive Officer, Southland: Yeah. We’re we’re excited about the second half. So there there is a lot coming in the second half, but, also in 2026. Overall, the pipeline remains strong. We expect demand to remain strong.

And while confident we can secure new projects across all of our markets, our main focus is on increasing margins, you know, not not just increasing revenue. We’ve really been focusing on cleaning up the legacy work and taking a measured approach to adding new work. So we wanna make sure these projects fit us perfectly with all the right resources.

Kevin Gainey, Analyst, Thompson Davis: That sounds good. And then civil margins, if you guys can maybe touch on how you feel that may trend in the second half of the year given the strong first half?

Frank Renda, President and Chief Executive Officer, Southland: So Civil margins have been strong, and we’re excited about how our teams are performing here. The teams did well this quarter. And longer term, I’d expect Civil margins to be in the mid teens. We have a great deal of confidence in both the Civil and Transportation segments. We see internally on a job by job basis how our new core projects are performing and the strong margins in our backlog, However, some large unexpected swings from disputes and older projects have overshadowed these results.

And it’s going to take a little bit more time, Kevin, for these new projects to have a meaningful impact. But we’re excited about the long term potential of both businesses.

Kevin Gainey, Analyst, Thompson Davis: And I like the sound of that. And then just a quick one on cash flow. What are you guys thinking for operating cash flow in the back half? And is there any chance that could swing positive Q3, Q4?

Keith Bassano, Chief Financial Officer, Southland: Yes. No. So speaking of cash flow, so we had a use of operating cash flow here in the quarter, but we do expect that to pick up in Q3 and Q4, just normal cadence. And we’re

Kevin Gainey, Analyst, Thompson Davis: in the

Keith Bassano, Chief Financial Officer, Southland: peak construction season right now.

Kevin Gainey, Analyst, Thompson Davis: Perfect. Sounds good, guys. I’ll hop back in the queue.

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

Tina, Conference Operator: And your next question comes from the line of Christian Schwab with Craig Hallum. Please go ahead.

Christian Schwab, Analyst, Craig Hallum: Thanks for taking my question. So my first question has to do with the commentary regarding the higher margin short duration work. Can you just elaborate on that a little bit further, the increased opportunities that you’re seeing there? And is that something that you expect to continue on a multiyear basis? Or are you just being opportunistic in the short term?

Frank Renda, President and Chief Executive Officer, Southland: So we see a lot of opportunity the civil market right now, Christian. There’s tons of projects that are out there for us in core markets for owners that we’ve worked for in the past, have great relationships with. Also, on the CEMAR side, there are so many opportunities. So we see it as a near term opportunity. We’re going to continue to focus on those higher margin short duration.

And we also see this market, know, this strong civil market continuing into next year and years down the road as well.

Christian Schwab, Analyst, Craig Hallum: Great. And then as far as you know, we haven’t discussed this in a while, at least, on on conference calls. But now that we’re getting finally near the the done of the m MNTI work, and completion of that and a lot of business to win and the focus, as you said, on increasing margins, not necessarily focused on driving substantial revenue growth. You know, as we look to, you know, maybe beyond ’26, as, you know, the the three projects that trail off and and, you know, what what is a target, operating margin range as large as you want to make it that you think the company can operate at that time frame?

Frank Renda, President and Chief Executive Officer, Southland: We haven’t been in the public market for an extended period of time, Christian, but we’ve been doing this for a couple of decades now, and we couldn’t be more excited about the long term opportunities. You know, we we look at some of the the programs that are out there and and the infrastructure need, you know, here here in North America. And there’s there’s just so many op there’s so many opportunities for us to pick up really meaningful projects that will increase our our margin. So we’re gonna stay we’re gonna stay disciplined. What we’ve done and gone through the past couple of years really should set us up.

It’s going to set us up for long term success. So we have the right crews available. We have, you know, tailwinds in our in our business and really expect to to increase our our margins, you know, and hopefully, those mid mid teen civil margins and, you know, low low teen transportation margins will will be out there in the near future for us.

Christian Schwab, Analyst, Craig Hallum: Fantastic. And and then my last question, you know, can you give us an update on, you know, potential timing or resolution in in some form or fashion, you know, of of, you know, the massive amount of unresolved contracts that that are in dispute?

Frank Renda, President and Chief Executive Officer, Southland: Yeah. So, Krishna, we we continue to work through and make small progress on settling legacy claims. No major updates, this quarter on on larger claims. We continue to work vigorously to collect every dollar that we are owed and expect positive cash flow from these claims in the coming quarters. You know, it’s it’s important that that we remember most of this work, you know, was picked up in that twenty seventeen, eighteen, nineteen time frame.

So, you know, we’re we’re a year closer, now than than we were last quarter at this time and, you know, get getting some of the, getting some of the owners, to the table. So we can’t, yeah, can’t go on go on forever, and we’re gonna continue to fight for every dollar that that we’ve earned, man, and and had to finance, you know, so many of these these projects self finance so many of these projects that the owners are are reaping the benefit from.

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

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

Tina, Conference Operator: And your next question comes from the line of Julio Romero with Sidoti and Company.

Julio Romero, Analyst, Sidoti and Company: Thanks. Good morning, Frank and Keith.

Frank Renda, President and Chief Executive Officer, Southland: Hey, good morning, Julio.

John Valise, Analyst, David Davidson: Hey, Frank. I my ears perked up a little bit when I heard you mention civil segment’s expertise on executing complex high value products. Can you give us a refresher of Southland’s value prop with regards to complexity and handling complexity and what you guys bring to the table?

Frank Renda, President and Chief Executive Officer, Southland: Absolutely. I think we’re a very unique company in the civil market. We can do all aspects really of heavy civil work. We do the underground. We do the tunnels, water and wastewater treatment plants, all types of of marine work.

And, you know, we we pride ourselves on cross training, you know, our our employees. So we have an expertise that that not many people do, of our size where we self perform about 80% of the critical path work and take on some some really challenging, really challenging projects. Another thing that we do is, you know, we’ll we’ll manufacture some of our own PBMs, and there’s there’s not a lot of companies around that have the manufacturing capabilities that we do is that we do. So it gives us some real competitive advantages. And I think that’s why you see us in so many one or two bidder situations on on these civil projects.

Keith Bassano, Chief Financial Officer, Southland: And those are tunnel boring machines.

John Valise, Analyst, David Davidson: Helpful. And thanks for the clarification on the acronym there. Historically, you guys have been about 80% tied to public spending in terms of the projects you target. Have you seen any change in the pace of awards on the public side? And you mentioned IIJ funding.

How much runway do you think is left for projects you would target that would have IIJ funding? And kind of help us think about Southland’s exposure to federal versus state and local and other funding sources.

Frank Renda, President and Chief Executive Officer, Southland: Yeah. So first on the IIJ question, I think we’ve seen less than 50% of the IIJ money has been spent to this point. We kind of mentioned in the prepared remarks, It really takes some time for these projects to work through the design and permitting before people like us, you know, the contractors get involved. We’re optimistic that this funding will be reauthorized next year. We mentioned the resolution in Texas, which would deploy another $20,000,000,000 to address just the state’s water needs.

So we’re seeing states trying to prepare for this spend in addition to the federal money. Our country has neglected our infrastructure, you know, a bit for decades. You can look at the different end markets we are in, and the stats are just incredible. Roughly 7% of the nation’s 623 bridges are in poor condition. The dams in our country have an average of close to 60 years old, and nearly 17,000 dams in the country are considered high hazard potential, meaning there’s a likelihood of harm to residents if the dams were to fail.

You can see stats like this across different infrastructure end markets, and they’re really hard to believe. So the bottom line is we believe it’s critical to the country’s success that we improve the aging infrastructure. So we feel there there will be sustained long term demand for what we do. And, you know, what what we do is historically been 80 plus percent in the public market. We’re going to continue to focus on the public market.

But if private opportunities arise in the same type of work that we do, that could shift over time. But some pretty good demand on the private side and really good demand on the public side right now in our market.

John Valise, Analyst, David Davidson: Great context there. Last one for me, if I may, is just on the Civil segment. Given the shorter duration project focus of Civil, should we still be looking at kind of a quarterly high single digit backlog conversion run rate going forward?

Keith Bassano, Chief Financial Officer, Southland: So, yeah, with the civil, I would, I guess, let me

Alex Murray, Vice President of Corporate Development and Investor Relations, Southland: ask you this. Can you

Keith Bassano, Chief Financial Officer, Southland: just clarify the backlog conversion?

John Valise, Analyst, David Davidson: Yeah. I’m just dividing your sales figure by by the backlog and pack it into about 9% for this quarter, eight and a half for last quarter. Oh, so I’m looking at, as, 8% this quarter, 11% last quarter.

Keith Bassano, Chief Financial Officer, Southland: Yeah. I we’re going to be pretty consistent there.

Frank Renda, President and Chief Executive Officer, Southland: We’re

Keith Bassano, Chief Financial Officer, Southland: going to be pretty consistent there for Civil. We did have a couple of projects that encountered some impacts during the quarter Outside of our control, we expect those to ramp up a little bit more as we get into the second half of the year. So we could see a little bit of an uptick, but nothing too, too significant.

John Valise, Analyst, David Davidson: Really helpful. Thanks very much.

Kevin Gainey, Analyst, Thompson Davis: Thank you.

Tina, Conference Operator: And our final question comes from the line of John Valise with David Davidson.

Julio Romero, Analyst, Sidoti and Company: Hi, good morning. Thank you for the time.

Frank Renda, President and Chief Executive Officer, Southland: Hi, good morning. Good morning.

Julio Romero, Analyst, Sidoti and Company: Could you perhaps provide more color on what the revenue impact was to each segment due to weather? And just as a follow-up, are you expecting, to revenue, catch up revenue more weighted on third quarter? Or do you expect it to just carry on more or less evenly to the second half?

Keith Bassano, Chief Financial Officer, Southland: Yes. So let me speak to the revenue decrease here at the store. So as I mentioned, we did have those couple of delays, not necessarily weather driven by those two, but those both have been since resolved. We do anticipate revenue to normalize in the back half of the year. Again, we’re in peak construction season, so we anticipate certainly a pickup over where we were in Q2.

We really don’t disclose as far as weather impacts by segment. That said, weather in the South has been wet for us and we did see some impacts there to the business.

Julio Romero, Analyst, Sidoti and Company: No problem. Thank you. And then just following on on the questions on civil. So just based on your commentary, we should expect continue to expect at least, about mid teens margin, portfolio 2025. Is that how I am I reading this right?

Keith Bassano, Chief Financial Officer, Southland: Yes. So we see so we’ve demonstrated, you know, those mid teen markets or mid teen margins here over the last couple of quarters. And as of any impacts from the legacy legacy civil work, we expect to see that going forward.

Julio Romero, Analyst, Sidoti and Company: Perfect. No problem. And then just one last one for me. Just on the focusing now just on transportation.

Kevin Gainey, Analyst, Thompson Davis: You were

Julio Romero, Analyst, Sidoti and Company: regarding the, the materials and, I I guess, just focusing on materials and paving, what do you is there a possibility of just catching up in the 2025 a little faster, or do you expect to just stick to the guidance of what you provide early on?

Frank Renda, President and Chief Executive Officer, Southland: So on, you know, on M and P, we’re down to just a handful of M and P projects left, which we expect to be substantially complete by the end of the add some projects, final completions date slip just a bit and expect three projects to completely wrap up in the first half of next year. But the impact to overall results continue to get smaller each quarter. You know, if you if you look at, you know, legacy burn, at the end of last year, we had 246,000,000 of total legacy legacy backlog, and we’re down $139,000,000 at the end of this quarter. So we worked down approximately $107,000,000 so far through the first two quarters. We’re making good progress, but it will just take some time before this is completely behind us.

And we’re getting closer every day. We expect most of this to burn off again in the next, two quarters with a couple tailing into next year.

Julio Romero, Analyst, Sidoti and Company: I appreciate that commentary. Thank you so much for the time.

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

Tina, Conference Operator: And with no further questions in queue, I will hand the call back to Frank Renda for closing remarks.

Frank Renda, President and Chief Executive Officer, Southland: I appreciate everybody joining. The last couple of years have been challenging, and we’re doing the right things to set the company up for success in the long term. We haven’t been a public company for very long, but we have been doing construction for a long time. Things are trending in the right direction, and we believe the company’s performance over the next five years will be significantly different from what we’ve seen in the past few. Appreciate your support, look forward to talking to you next quarter.

Thanks, everyone.

Tina, Conference Operator: Thank you again for joining us today. This does conclude today’s conference call. You may now disconnect.

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