Good morning. My name is Joanna, and I will be our conference operator today. At this time, I would like to welcome everyone to the Southland 4th Quarter and 4th of the 2025 conference call. All odds have been placed on you to prevent any background noise. After the speaker's remarks, there will be a question in the next session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, please press star followed by the 2. Thank you, Alex. You may be Kendrick Conklin.

Good morning, everyone, and welcome to the Southland Fourth Quarter Full Year 2025 Conference Call. This is Alex Murray, Vice President of Corporate Development and Investor Relations. Joining me today are Frank Brenda, 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 meeting of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Forward-looking statements are uncertain and outside of Southland's control. Southland's actual results and financial condition may differ materially from those projected in forward-looking statements. Therefore, you should not rely on any of these forward-looking statements and we do not undertake any duty to update these statements. For discussion of some of the risks that could affect results, please see the risk factors section of our Form 10-K for the year ended December 31, 2025 that was followed with the SEC last night. We will also refer to non-GAAP financial measures and you will find reconciliation in the press release relating to this conference call, which can be found on the Investor Relations page of our website. With that, I'll now turn the call over to Frank.

Thank you, Alex. Good morning, and thank you for joining Southland's fourth quarter and full year 2025 conference call. The fourth quarter and full year 2025 results we are reporting today were significantly impacted by a number of discrete items, the most substantial of which we will address directly before turning to our capital structure and the performance of our underlying business. Before we review the details of the quarter, let me start by saying that I am extremely disappointed in our financial results for 2025, and I am committed to providing you with a complete explanation of the challenges we faced and the strategic plan we have implemented to move the company forward, which I believe tells a more complete and encouraging story than the numbers we reported last night. Revenue for the fourth quarter was $104 million, inclusive of the revenue reversal of $92 million from adjustments related to legacy dispute negotiation. Gross loss for the quarter was $193 million, and significant drivers include $136 million related to an adverse legal ruling, $44 million related to other legacy dispute negotiations, and a $22 million impact from our legacy civil project. The unfavorable adjustment of $136 million is related to the Washington State Convention Center project within our American Bridge subsidiary. This was the result of an adverse trial court ruling on a construction contract dispute. Combined with the reversal of an expected recovery and related items, this outcome had a material impact on our fourth quarter and full year reported results. This was a legacy project that Southwind took over when we acquired American Bridge from certain sureties in 2020. We believe we were contractually entitled to significant recoveries through an affirmative claim. This January, we received an adverse legal ruling, which ruled in favor of the counterparty denying our claim and granting their counterclaim. While we intended to appeal this ruling, certain sureties entered into negotiations with the counterparty on behalf of Southland after year-end. Through the rights the sureties have included in their respective general indemnity agreements, based on these negotiations and due to the events occurring prior to year-end that led to the adverse ruling, we recorded a long-term accrued liability, which significantly impacted results. Any settlement that is agreed will be paid by the sureties under the general indemnity agreements. The sureties agreed to forbear on seeking repayment of any settlement related to Washington State Convention Center until March 27, 2027. Over the past several months, we have also been working closely with our surety partners to bring additional capital into the business and to restructure our senior credit facility. Our objective is to optimize the capital structure for long-term performance and the successful closeout of legacy projects. To date, we have successfully brought in $116 million to support bonded construction projects under our general indemnity agreements with the sureties. This included approximately $14 million before December 31, 2025, and $102 million so far in the first quarter. Repayment terms are expected to be included in a long-term financing agreement, and the sureties have agreed not to require repayment prior to March 27, 2027. Separately, we announced in an 8K this week that the sureties have also replaced our senior lender. As part of this transaction, we paid down and reduced our principal by approximately $14 million, and the sureties assume the remaining $110 million of debt under this facility. The sureties have agreed to waive all scheduled quarterly principal and monthly interest payments through maturity. Based on the current interest rate, this will reduce debt service by approximately $27 million over the next 12 months. Taken together, our sureties have committed to fund any Washington State Convention Center settlement with no repayment required until at least March of 2027 and have provided $226 million in total support. We are now working toward a long-term financing agreement and a credit amendment that will formalize these arrangements and expect to provide the flexibility we need to execute going forward. We are grateful for our surety partners' support. Their commitment to this comprehensive capital solution is a significant vote of confidence in Southland, the quality of our project teams, and our strategic path forward. Now to discuss our long-term plan. the first step in our strategic plan involved bringing necessary capital into the business we have the funding and support of our surety partners to successfully close out our legacy contracts and execute on the strong backlog of new core work their decision to provide support reflects their assessment of our work and the quality of the projects in our portfolio we also took action to restructure our senior debt facility to create greater flexibility and improve cash flow. Next, we have committed to the sureties to monetize idle equipment and non-core assets, including certain real estate. This is a strategic effort to optimize our asset base and ensure our fleet is aligned with our core project footprint. We are also pursuing the settlement of outstanding disputes. We expect to use the proceeds from these asset sales and certain claim settlements to pay down our senior credit facility prior to maturity, further strengthening our balance sheet as we execute on our project backlog. Moving forward, we will continue to focus our bidding on water resource, bridge, marine, and tunnel projects in the geographies where our teams deliver the strongest performance and the highest margins. that is where we are most competitive and by concentrating our resources there we expect to produce more consistent and predictable results during the fourth quarter we added approximately 118 million dollars in new awards in our core end markets this was led by a 48 million dollar data center contract in our civil segment for a private client in the southwest this project marks an important milestone for us as it involves installing water pipelines for a major data center project. We recently broke ground, and the project is progressing well. We expect to complete the work in 2026. We were also awarded a $40 million construction manager at risk for CMAR water resource project in our civil segment in Texas, and a $30 million pump station and transmission main project for the city of Cape Coral, Florida. During the quarter, the bull run filtration facility project was terminated for convenience. This reduced backlog by approximately $160 million, which brings our total backlog to slightly over $2 billion. Turning toward the broader market, we see a period of robust multi-year demand for the specialized infrastructure services we provide. In the public sector, the Infrastructure Investment and Jobs Act continues to move from authorization and active construction, and in the private sector, the rapid expansion of data centers has created a unique tailwind for our industry. This is creating a steady pipeline of water resource, bridge, marine, and tunnel projects across our key regions. Our pipeline remains active across both segments. Upcoming opportunities include the Pahoque Basin Regional Water System Phase 2 Design Build in New Mexico, Phase 3 of the Winnipeg North End Sewage Treatment Plant, where we are already executing Phases 1 and 2, significant pipeline and treatment plant opportunities across Texas and the Southwest, the Claiborne Pell Bridge Rehabilitation in Rhode Island, and the Liberty Bend Bridge Design Build in Missouri. We continue to be selective in our pursuit strategy focused on high quality work in our core markets with our recent capital restructuring and strategic plan in place we are confident that we have the right team to capitalize on these opportunities in short the market demand is here we have the surety support and our fleet is being optimized as we put the legacy impacts behind us and build on the performance of our core backlog. We expect to deliver the strong and consistent results our business is capable of producing. We have the technical capability and the discipline to be highly selective, bidding on the high-margin, high-quality work that we expect to drive Southland's values for years to come. With that, I'll now turn the call over to Keith for a financial update.

Thank you, Frank, and good morning, everyone. I will discuss an overview of our financial performance during the fourth quarter and the full year ended December 31st, 2025. You can find additional details and information in the financial statements, footnotes, and management discussion and analysis that were filed on Form 10-K last night. Revenue in the fourth quarter was $104 million compared to $267 million in the prior year period. The decline was driven by the revenue reversal on the Washington State Convention Center project of approximately $48 million and other adjustments related to legacy dispute negotiations, which negatively impacted revenue by $44 million in the quarter. Gross loss in the fourth quarter was $193 million compared to gross profit of $8 million in the fourth quarter of 2024. The delta was driven primarily by the Washington State Convention Center judgment and related items, which represented a $136 million dollar impact to gross profit in the quarter this includes 85 million for the judgment inclusive of fees and interest 40 million for the reversal of a previously expected recovery 6.4 million in retention and 4.8 million related to a sanctions order beyond the washington state convention center impacted gross loss we recognized additional unfavorable adjustments totaling approximately 44 million related to legacy dispute negotiations in quarter additionally a legacy project in our civil segment incurred a 22 million dollar cost increase related to extended schedule impacts salary general and administrative expenses for the fourth quarter were 17 million compared to 15.7 million in the same period for the prior year this increase was primarily driven by bad debt expense of 1.4 million and 900 000 of business transformation expense is offset by a reduction in compensation expense. Interest expense was $9 million in the fourth quarter compared to $9.6 million in the prior year. Income tax benefit was approximately $300,000 in the fourth quarter compared to $14.1 million in the same period prior year. The reduction in benefit was largely attributable to non-deductible items and the effect of our valuation allowance on deferred tax assets in the quarter. Net loss attributable to Southland stockholders was $216 million, or a loss of $4 per share, compared to a loss of $4.2 million, or $0.09 per share in the fourth quarter prior year. EBITDA was negative $202 million in the fourth quarter, compared to negative $2.7 million in a prior year. Now to touch on segment performance for the quarter. Our civil segment had revenue of $58.4 million compared to $103.8 million in the same period in 2024. Our civil segment had a gross loss of $31.3 million compared to a gross profit of $8 million in the same period in the prior year. The reported loss was driven by legacy project write-downs that more than offset strong core civil performance. our transportation segment had revenue of 45.6 million a decrease of 117.9 million from the same period in 2024 our transportation segment had a gross loss of 162.1 million compared to a gross loss of 365 000 in the same period in the prior year the delta was driven by the washington state convention center adjustment and the other legacy adjustments i detailed earlier the material and paving business line had a gross loss of $26.9 million in the quarter. At the end of the quarter, we had approximately $74 million of remaining M&P backlog. We expect the remaining M&P projects to be completed this year. Now, to touch on results for the full year ended December 31st, 2025. Revenue was $772 million compared to $980 million in 2024, a decline of 21%. The decline reflects the revenue impact of legacy project completions and the contract adjustments I described earlier. Gross loss for the full year was $155 million compared to a gross loss of $63 million in 2024. Selling, general, and administrative expenses were $61.6 million for the full year, down from $63.3 million in the prior year. The reduction was primarily burdened by $2.4 million in compensation expenses, offset by $900,000 in business transformation expenses. The interest expense for the full year was $37 million, compared to $29.5 million in 2024. The increase was primarily driven by the interest rates on external borrowings, amortization of deferred financing costs, and the interest expense related to a real estate transaction, as compared to the same period in 2024. Income tax expense was $56.5 million in 2025, compared to tax benefit of $46.9 million in 2024. This reflects the establishment of a valuation allowance against our deferred tax assets in 2025, given the keynote loss position. I would like to reiterate, as I have in prior calls, that this valuation allowance does not limit our ability to use the deferred tax assets in the future. Net loss attributable to Southland stockholders was $306.5 million, or $5.67 per share, compared to a loss of $105 million, or $2.19 per share, in 2024. The full-year yield, though, was negative $191 million for 2025, compared to negative $100 million in 2024. In the full-year, our civil segment had revenue of $342.3 million compared to $323.3 million in 2024. Civil gross profit was $16.3 million, or a 4.8% margin, compared to a gross profit of $16.7 million, or 5.2% in the prior year. Our transportation segment had a full-year revenue of $429.8 million compared to $656.9 million in 2024. Transportation had a gross loss of $171.6 million compared to a gross loss of $79.8 million in the prior year. The increase in the loss was driven primarily by the Washington State Convention Center charge and the legacy project adjustments I just described earlier. The materials and paving business line contributed $52.1 million in revenue and had a gross loss of $42.8 million for the full year, compared to $100.7 million in revenue and gross loss of $83 million in 2024. As we put the remaining legacy work behind us, we expect the consolidated margin profile to move toward our core performance. Before we open it up for questions, let me address our forward outlook. We ended 2025 with just over $2 billion of backlog, of which we expect to burn approximately 38% in 2026. We are not providing formal financial guidance at this time. Given the magnitude of the restructuring actions underway and the uncertainty around the timing of legacy project resolutions, we do not believe it would be responsible to provide specific financial targets. We will revisit this decision as the restructuring progresses and our visibility into normalized earnings improves. Hocus is on three things. Closing out legacy work with discipline, which we now have a working capital to appropriately advance these projects. Enhancing the balance sheet through optimizing our asset base. And lastly, continuing to execute in the core business where our margins are the strongest. I will now return the call to Frank for closing remarks.

Thanks, Keith. Before we open it up for questions, I'd like to thank all of our stakeholders, including our great employees, surety partners, and shareholders for sticking with us through this difficult period. I acknowledge the results we reported are not acceptable. My two partners, Tim Nguyen and Rudy Renda, and I have been together from the start. We've put everything we have into this business and continue to be majority shareholders. This is all we have ever done. We've been through difficult periods before, and we've always come out stronger. This company has been standing for generations, And I have great confidence in our future, not because the numbers today are where we want them, but because I know the quality of our people, workmanship, and the strength of our core business. Looking ahead, we have $2 billion of backlog, the majority of which is core work at strong margins. We have the capital support of our surety partners, and we have a deep pipeline of opportunities in the markets where we perform best. Our job now is to execute, and that is exactly what we intend to do. Thank you for your time and interest in Safflin. I appreciate everyone joining today. I'll now pass the call back to the operator for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star, followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two. And if you are using your speakerphone, please lift the handset before pressing any key. One moment, please, for your first question. As a reminder, please press 0 now if you have any questions. First question comes from Julio Romero at Cedonian Company. Please go ahead.

Good morning, Frank, Keith, and Alex. This is Justin on for Julio. Good morning, Justin. Good morning, Justin. So, last quarter, you highlighted data center opportunities in the $15 to $20 million range and $50 to $75 million range, and recently announced a $48 million award in that vertical. Are you continuing to see opportunities of similar size, and how is that pipeline trending today?

Yes, we're continuing to see opportunities in that size. You know, we're pursuing jobs in that market, and, you know, this job is going really well for us, and we expect to continue to try to grow that side of the business.

Thanks. And then can you discuss how the margin profile of data center projects compare to your traditional contracts?

Yeah, so the data centers are going to fit into our civil segment, and we would expect margins to align with the core performance that we've had in that segment thus far.

Great, thanks.

And then shifting to your strategic plan, does the sale of non-core assets, including equipment and real estate, impact your ability to win new projects or execute on your backlog it does not so so that's going to be a you know key component to us you know paying down debt and and one of the priorities that we have you know we want to be able to to maximize value when we monetize these assets some of that equipment is specialized and and some of it relates to the wind down of the M&P business line we do not anticipate this to have a material

impact and and to go forward business from a bidding and an execution system great thanks for the caller i'll turn it back thanks jesson thank you thank you we have no further questions i will turn the call back over to frank for closing comments thanks everyone for joining we will talk again soon appreciate your support of southland ladies and gentlemen this concludes your conference call for today we thank you for participating and we ask that you please