Good morning. My name is Nicole, and I will be your conference operator today. At this time, I would like to welcome everyone to the Southland second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, press star and number two. Thank you. Alex, you may begin. Good morning, everyone, and welcome to the Southland second quarter 2024 conference call. This is Alex Murray, Director of Corporate Development and Investor Relations. Joining me today are Frank Renda, President and Chief Executive Officer, and Cody Gallarda, Executive Vice President and 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 conditions may differ materially from those projected in forward-looking statements. Therefore, you should not rely on any of these forward-looking statements, and we do not undertake any duty to update these statements. For a discussion of some of the risks that could affect results, please see the Risk Factors section of our Form 10-K for the year ended December 31, 2023, that was filed with the SEC on March 4, 2024, and discussion on Form 10-Q for the quarter ended June 30, 2024, 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. Thank you, Alex. Good morning, and thank you for joining Southland's second quarter 2024 conference call. We reported mixed results in the second quarter, with revenue of $252 million, down from $257 million last year. We reported a gross loss of $40 million, which compares to a gross loss of $34 million in the same period last year. Despite the challenges in the quarter, we had several positive leading indicators, including strong cash flow from operations of $27 million and new awards of $375 million in the strong bidding environment we've discussed in prior quarters. Our second quarter's income statement was negatively impacted by unfavorable adjustments of $40 million from the decision to settle disputes on legacy projects. While we were disappointed by the impact this had on our results this quarter, we will significantly strengthen our balance sheet by collecting $58 million from these disputes in the third quarter. This is in addition to the strong positive cash flow from operations of $27 million in the second quarter. Earlier this year, on our fourth quarter 2023 conference call, I mentioned that we expected to have the opportunity to settle a considerable number of legacy disputes with a focus on generating cash in 2024. Our focus has been to quickly negotiate settlements that accelerate cash collections and minimize the risk and uncertainty associated with prolonged and expensive settlement pursuits. While we are disappointed about having to make the decision to settle for less than we believe that we were entitled to in certain circumstances, it was the best decision for Southland's long-term outlook. With the recent dispute settlements and other initiatives to strengthen our balance sheet, we are in a much stronger position today to negotiate our remaining legacy disputes, and we will continue to vigorously pursue all the money that we are owed. We believe there will continue to be opportunities to generate a significant amount of cash from resolving legacy disputes and strong performance in our core business in the coming quarters. Along with strong operating cash generation, we have taken other steps to continue to bolster our balance sheet. This will allow us to pursue more opportunities in our core business. We closed a $42.5 million real estate transaction in July, which resulted in $16 million of debt reduction and approximately $25 million of cash for general corporate purposes. We also continue to work through a debt refinance, which we mentioned on our last call. We will have additional details when this transaction is finalized, which we expect to occur before we report our third quarter results. Challenges persist in our legacy portfolio of projects, but we continue to make operational strides to put this work behind us, and I've never been more confident in our core business projects than I am with the work that we have picked up over the past couple of years. We ended the quarter with $2.74 billion of backlog, up from $2.64 billion last quarter. We booked approximately $375 million of new award during the quarter. This included the $202 million Bull Run Filtration Facility in Portland, Oregon, and three new water resource projects totaling $150 million. We are also excited to announce that we have been informed that our team has been selected for phase II of the North End Treatment Plant in Winnipeg. The project is being delivered as a Progressive Design-Build. We are in active contract discussions with the owner on the pre-construction phase of the contract, which we expect to transition from pre-construction activity into a construction contract by 2026. We expect our portion of the construction contract to be approximately $220 million. None of this amount is included in our second quarter backlog. We are currently working on phase I of the program with our partner, Aecon. I would also like to note that we are currently working on the pre-construction phase for the Earthquake-Ready Burnside Bridge in Portland, Oregon. The new win on phase II of the North End Treatment Plant brings our total pending alternative delivery construction contracts to approximately $500 million, which is not included in our $2.74 billion of backlog today. We have mentioned on previous calls that we are seeing our customers shifting towards alternative delivery contracts, like the progressive design builds or construction manager, general contractor models. Alternative delivery methods promote early involvement of the contractor in the design process. We believe collaboration between the owner, designer, and contractor helps in identifying potential issues early and allows us for more informed decision-making throughout the project. We believe we can provide more innovative solutions and more efficient project execution while decreasing future risk potential. Alternative delivery contracts typically get awarded based on several factors other than just price, including schedule, resume, and technical score in our proposal. Our extensive technical experience across various markets makes us highly attractive to customers and gives us a true competitive advantage in alternative delivery bids. We believe our resume and over a 120-year history of delivering specialty infrastructure projects will continue positioning us well to win alternative delivery projects in the coming years. Demands across our end markets continue to be very strong, and we believe we will continue to win our fair share of the robust opportunities. The EPA recently updated its Clean Water Infrastructure Needs survey, which estimates that $630 billion is going to be needed to be spent over the next 20 years just to address water quality objectives of the Clean Water Act. To put this into perspective, the estimate 10 years ago was $271 billion. We are ranked third in water transmission lines and in the top 10 in water supply and water treatment plants by Engineering News-Record Sourcebooks rankings. We are well positioned to help improve North America's water infrastructure in an environment where there are few competitors that operate at the scale we do. We have active water projects across the U.S., from Florida all the way to Oregon, and several core markets in between. We also have several water resource projects in large metro areas in Canada. There are not many water contractors that have the technical expertise, scale, and geographic footprint that we have. This gives us a true competitive advantage to capitalize on these opportunities. We're also seeing increased bidding opportunities from the IIJA, which is providing a major tailwind for our pipeline. We're in the early innings of this impact the act will have on our results. We believe the IIJA will provide significant opportunities for the next decade, and we are positioning ourselves to capitalize on these opportunities from the IIJA in the near term. We are focused on remaining disciplined and choosing projects that fit our teams very well. We also continue to bid on projects with very limited competition. Given the strong demand, favorable competitive landscape, and improvement in our balance sheet, we are optimistic about the potential for long-term margin expansion as we continue to work through our legacy projects and our newer work with great bid margin continues to come online. In summary, we faced several challenges this quarter, largely driven by the impact settling legacy disputes had on our income statement. We are encouraged by the cash flow improvement of the business, the strategic actions taken to strengthen our balance sheet, and the substantial backlog and new project awards that position us well for the future. Our focus remains on executing our core business effectively, capitalizing on the opportunities presented by the IIJA, and driving long-term margin expansion. With that, I will now turn the call over to Cody for a financial update. Thank you, Frank, and good morning, everyone. I will provide an overview of our financial performance during the second quarter of 2024. 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 $252 million, down $5 million from the same period in 2023. Gross loss for the second quarter was $40 million, compared to a gross loss of $34 million for the same period in 2023. Gross profit margin in the quarter was -16%, compared to -13% in the same period of the prior year. Selling, general, and administrative costs in the second quarter were $15.7 million, a decrease of $700,000 compared to the same period in 2023. Interest expense for the quarter was $6.7 million, an increase of $2.4 million compared to the same period in 2023. The difference was attributable to increased borrowing costs and higher debt balances. Income tax benefit was $16 million for the quarter, compared to a benefit of $19 million in the same period last year.... We expect our 2024 annual effective tax rate to be in the 20%-24% range, depending on certain tax credits, nondeductible items, and certain state and local taxes. We reported a net loss of $46 million, or -$0.96 per share in the quarter, compared to a net loss of $13 million, or -$0.27 per share in the same period last year. We reported an adjusted net loss of $46 million in the quarter, or -$0.96 per share, which compares to an adjusted net loss of $35 million, or -$0.76 per share in the same period last year, after removing the non-cash benefit from eliminating the contingent earn-out liability and transaction-related expenses in the second quarter of 2023. In the second quarter, we produced EBITDA, or earnings before interest, taxes, depreciation, and amortization, of -$49.9 million, compared to EBITDA of -$19.1 million for the same period in 2023. We reported Adjusted EBITDA of -$49.9 million in the quarter, which compares to Adjusted EBITDA of -$42.2 million for the same period in 2023, after removing the non-cash benefit from eliminating the contingent earn-out liability and transaction-related expenses in the second quarter of 2023. Now to touch on segment performance for the quarter. Our Civil segment had revenues of $79 million, an increase of $14 million from the same period in 2023. Our Civil segment gross profit was $9 million, an increase of $3 million from the same period in the prior year. As a percentage of revenue for the quarter, our Civil segment had gross profit margin of 12%, compared to 9% in the same period in 2023. For the quarter, our Transportation segment had revenues of $172 million, a decrease of $19 million from the same period in 2023. Our Transportation segment gross loss was $49 million, a decrease from a gross loss of $40 million in the same period in the prior year. As a percentage of revenue for the quarter, our Transportation segment had a gross profit margin of -29%, compared to -21% for the same period in 2023. The Materials and Paving business line contributed $9 million to revenue and -$47 million to gross profit in the second quarter. This was primarily related to unfavorable adjustments of $40 million in connection with dispute settlements that will produce a substantial amount of cash to be collected in the third quarter. We still anticipate we will be substantially complete with M&P projects by mid-2025. The remaining M&P backlog is just under $200 million, or 7% of our total backlog. The unfavorable adjustments of $47 million in the quarter resulted in lowering the percentage of work completed on certain projects. The accounting treatment results in a derecognition of revenue in the current period. This result does not impact the mid-2025 schedule to reach substantial completion on the remaining M&P projects. Our core operating results in the Transportation segment, which exclude materials and paving, would have been $163 million of revenue and -$2 million of gross profit, for a gross profit margin of -1%. We had an unfavorable adjustment on a legacy bridge project in the Midwest, which affected core results by -$17 million in the quarter. Consolidated core results in the quarter, which excludes materials and paving, would have been $243 million of revenue and $7 million of gross profit, for a gross profit margin of 3%. Turning to the balance sheet, as of June 30, 2024, we had net debt of $239 million, inclusive of cash and restricted cash of $69 million. As of June 30, 2024, we reclassified approximately $90 million of debt from long term to short term, as our revolving credit facility with Frost Bank matures on April 15, 2025. On August 9, 2024, we executed a term sheet with a new lender that will refinance approximately $110 million of our existing debt into a new long-term facility. We will announce additional details on this new debt structure when the transaction is finalized, which we expect to occur before we announce our third quarter results. As Frank highlighted, we have made significant strides in strengthening our balance sheet to support the opportunities we see in front of us. We had a strong quarter of cash flow from operations of $27 million, driven by our core business. We added $25 million of net proceeds from the real estate transaction, and we will receive $58 million of cash from dispute settlements in the third quarter. We expect to receive additional proceeds from the debt refinance transaction, for which we anticipate closing before we release next quarter's results. Further, we remain optimistic for the potential significant future cash inflows from disputes and change order settlements that stem from our legacy projects, and continued strong performance in our new core projects. Thank you for your time and interest in Southland. I'll now pass the call back to the operator for questions. Thank you. Ladies and gentlemen, we will now begin with the question-and-answer session. Should you have a question, please press the star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised.... Should you wish to decline from the polling process, please press the star followed by the number two. If you are using a speakerphone, please leave the handset before pressing any keys. One moment, please, for your first question. Our first question is coming from, Adam Thalhimer from Thompson Davis. Hey, good morning, guys. Good morning, Adam. Good morning, Adam. I wanted to ask about the Civil segment. Nice sequential increase in backlog there. When does that start to flow into revenue? Yeah, I think we're starting to see more and more on the civil side, and third and fourth quarter, we expect upticks from the civil business starting to flow into revenue in those quarters beyond. So getting closer on the new work. You know, we also continue to see the business performing really well. You know, revenue's up 21% from last year in this segment. Margins were up from 9% - 11.5% this year, and the civil backlog is up 38% from year-end. So all these trends, we expect to start showing revenue in the coming quarters, Adam. Great. And then, the remaining M&P backlog, do you have any sense, should we just straight line the recognition of that over the next four quarters, or does it flow through differently from that? Hey, Adam, it will be heavier weighted towards Q3 and Q4, as we expect some of those remaining projects will be substantially complete by year-end, with a small number trailing into 2025. Of that $200 million in backlogs left, it's definitely weighted closer rather than further. Okay. And then, I don't know how much detail you can give, but, you know, the $58 million is great news. Just curious, if you can touch on the ongoing discussions and the potential for more settlements in the coming quarters. Yeah. You know, $58 million helps a lot on claims that, you know, we've talked about in the past. You know, a lot of these disputes have built up as a result from COVID. A lot of the owners weren't in the office, and we had to self-finance a lot of these projects through COVID, and we are gonna go after all the money we have earned. We're starting to really make progress on getting to the table on a lot of these claims. We have a mediation with the city of Charlotte, which is one of the larger claims this week, and several more as we progress into the back half of the year. Approximately half of our CIE balance is on projects we are substantially complete on, so we believe we're gonna generate a significant amount of cash from these in the coming quarters. And then this, the money that we've collected, is gonna allow us to vigorously pursue these claims. Good news. Thanks, Frank. Thanks, Adam. Our next question will be coming from Christian Schwab from Craig-Hallum Capital. Hey, hey, good morning, guys. Just further clarity on the disputed contracts. We talked about maybe, you know, $100 million of the $200 million is close to being done, but and you mentioned Charlotte. I'm just trying to get an idea of how many projects and how many people do you have to negotiate with or for clawbacks, you know, for cash on that $200 million? Is it three or four people, three or four projects? Is it, you know, eight or nine projects? I guess that was never really clear. Yeah, we haven't disclosed a number of projects. We have a handful of claims related to our legacy portfolio. It is a little lumpy. You know, we did disclose additional details about the CityLYNX project that Frank just mentioned. That's the one of the larger ones that we have out there, and we do expect to be at the table to potentially settle those over the next couple of quarters here. Okay. So, you know, as far as that $200 million, is there any way for us to roughly, you know, Mack truck, you know, semi-truck, the range of cash that we could generate, you know, between now and the end of 2025 and that $200 million worth of work? Yeah. So if you look at our contract assets balance, you know, we've, you know, called it approximately $500 million, and we've shared about $250 million of that is related to claims on projects that are substantially complete. The largest we have out there, we disclosed, is the $115 million against City of Charlotte. So we do expect that everything that we have recorded, we will convert into cash, and we're gonna vigorously pursue these claims. So it sounds like you're meeting with them shortly. So, you know, the lion's share of your work done, in essence, thanks for that clarity, is in essence just, you know, one dispute, which we might get clarity on sooner than later. Cross our fingers, is that fair? We hope and expect so, Christian. We've had very favorable developments on each and every one of these claims over the last couple quarters. We expect for that to continue, as owners have now run out of appeal options and are gonna have to settle down and get to the table and get these taken care of. With that said, the timing is uncertain, but we're doing everything we can to collect on the money that we've earned as quick as possible. Great. And then my last question is: As we think about organic growth, you know, ex, you know, legacy COVID disputes, et cetera, you know, given, you know, the tremendous funding that we've talked about in government stimulus and the, you know, healthiest bidding project timeframe and some time, you know, how should we, you know, think about just, you know, organic growth, you know, on a three to five year basis now that it seems like we're potentially, hopefully in, you know, in the final innings of getting rid of the dispute? Yeah, absolutely. You know, all the markets continue to be really healthy. Civil, we talked about, you know, the last question with the backlog being up 38%. We think there's a really good chance to expand, you know, our civil business and profile contracts are getting larger on that side. You know, there's a lot of private work still out there on the civil side that we've touched upon that we really haven't, you know, pursued in the past. You've got the IIJA, you know, really just in the early innings, and so we expect to see growth potential from that as well. Yeah. Christian, I would just add on to that, and I expect the market we're in right now is definitely, you know, supportive of a expanding book-to-bill ratio through the foreseeable future. It's really just a matter of being selective and getting the best return we can, and choosing the right projects to go after that are out there. And then, you know, when you guys came public, you talked about, you know, on some of the civil stuff in particular, you know, kind of a low win rate and kind of focusing on the work you want to do, where we got the machines and the people, et cetera, and the infrastructure in place. Has anything, you know, changed in that, or would you say that still remains a core competency of the company? No, still remains a core competency of the company. You know, there's a tremendous amount of supply, so we're really able to get into the best contract terms for owners that, you know, we've worked for in the past, with limited competition. You know, we rarely see more than one or two bidders now. So since we've become public, you know, the bidding field has gotten even better, but we have remained extremely disciplined. Fantastic. No other questions. Thank you. Thanks. Thanks, Christian. Next question in line will be coming from Julio Romero from Sidoti & Company. Thanks. Hey, good morning, Frank, Cody, and Alex. Maybe, you know, staying on the contract disputes for a little bit, you talked about the mediation with Charlotte going on this week, that seems like there'll be some resolution in the near term. Just help us think about, you know, what are the chances that these contract disputes get settled in year 2025 instead of year 2024, and thus lead to gross losses in 2025? You know, Julio, to backtrack a little bit, most of these claims, almost all of these claims actually are from projects that were bid in 2018 and 2019. So like Cody mentioned, we've gone through the appeals process. We're getting closer and closer and are going to continue to fight for all that we've had to self-finance and all the money that we've earned on these projects. Okay. Okay. And then I guess back to Adam's question from earlier, the amount of revenue burned from M&P this quarter was only $9 million. Just, why was that again? Yeah. So part of the settlement that we discussed, you know, resulted in lowering the percentage of completion on the project, which causes a derecognition of revenue from prior periods. So that's an artificially lower number that does not correlate to the operational progress we made on the M&P portfolio. We still expect to be substantially complete with all M&P by mid-2025. Okay. Okay, that's... I appreciate that clarity. And then assuming there's no further derecognition from the contract resolutions in the third quarter, a good portion of it gets taken out in 3Q. Is that fair? That's correct. Of what's remaining? Okay. Okay. And then, you know, congrats on the term sheet signed for the $110 million of refinancing. Assuming that closes, how does that affect your GAAP interest expense dollars for maybe the fourth quarter, for example? Yeah. So we'll have more information as that unfolds, and we finalize that transaction. As we disclosed on the prior call, you know, we're looking at structures that preserve cash flow for debt service, that in this environment may come at the risk of higher interest rates or naturally come, you know, with higher interest rates, but will support our working capital position better than the existing fully amortizing term note structures we've had in the past. Okay, very good. And then last one for me, it's just, you know, a lot of the, lot of the companies are calling out, you know, a weather impact. Did you guys see any weather in either the second quarter or beginning of third? You know, we did see some higher than normal, you know, rain events in some areas, which definitely did impact our work. Notable, you can call out for July or? ... No, no - nothing to add at this point. You know, we'll see how we continue through Q3, and expect to make a tremendous amount of progress on all the projects we have out there. Very good. I'll pass it along. Thanks very much. Thanks, Julio. Again, should you have a question, please press star, followed by the number one on your touchtone phone, and you will hear a prompt that your hand has been raised. Again, if you have a question, please press star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Last question online will be coming from Brent Thielman from D.A. Davidson. Great, thanks. Good morning. Cody, could you just level set us on the balance sheet, I guess, with all the moving pieces and cash collection since the end of the quarter, the sale lease back, the settlement, I guess, you get the real estate transaction. Are you like, you know, kind of $175 million+ on a pro forma basis? Yeah. So the real estate transaction, as well as the settlement, were. The cash was not collected in Q2, was reflected, the, the settlements were reflected in the income statement. That cash was received subsequent to quarter end. So if you look at, you know, where we are on a, on a pro forma basis, you know, some of that will go back into working capital to support ongoing operations, but we don't have any further pro forma guidance on that at this point. The, the, as Frank mentioned, as part of the real estate transaction, there was a $16 million reduction of debt. So that transaction netted after debt paydown fees and expenses, about $25 million to the balance sheet. Okay, appreciate that. And then on the Transportation segment, it looked like there might have been some other projects that worked against you to some degree outside of the M&P portfolio. Maybe just an update on what's happening there, timelines to completion? Yeah. Brent, you know, we have a bridge in the Midwest that we still estimate to be substantially complete, you know, with our legacy work in mid-2025. We've gotten through the major milestones on the Midwest bridge project, which had a write-down in the quarter. We had an increase in the estimated cost to finish the project from increased subcontractor costs and feel we've captured all the costs associated with this project, with the adjustment in the quarter. You know, it's been a challenging project. It's another one that we bid prior to COVID, but the bridge is scheduled to be open early November. All right. Thanks, Frank. And then, you know, back to the just kind of $200-odd million in M&P backlog left to be executed. I guess after these dispute settlements, I mean, what are the remaining risks here associated with kind of executing that work over the next 12 months? Is it change orders, weather, inflation? I'm just trying to think about how we ought to handicap some risks still associated with that. And, Brent, just to clarify, your question is specific to M&P? That's correct. Yeah. Yeah. So we definitely think over the long run, there's potential cash upside on M&P. The substantial completion of the operational work in the field being done by mid-2025, I do expect there will be ongoing, you know, claim pursuits beyond that. But that will be after the projects are, you know, completely demobbed. So there is, you know, risk and settlement on any claim, but we fully expect to record... to collect what we've recorded on the balance sheet and think that, that, that will support the overall cash upside potential with M&P, albeit it will come after the completion of the work. Okay, very good. Thank you. Thank you. Thank you, Brent. There are no further questions at this time. I'd now like to turn the call back over to Mr. Frank Renda for final closing comments. Thank you all for joining us today. I want to express my appreciation to our employees for their hard work and commitment to safety, and also like to thank our shareholders for their continued trust in us. I'm excited about our growth outlook in the second half of the year and beyond. Thank you, everyone. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line.