HCHC - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen and welcome to the Fourth Quarter and Full Year 2018 HC2 Holdings Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Garrett Edson, Senior Vice President of ICR.

You may begin.

Garrett Edson

afternoon. good and you Thank We would review earnings joining to you to fourth quarter thank HCX’s XXXX for and us like full results. year CEO Sena, today Chairman, me Philip of and HCX With and Chief HCX’s are Mike Financial Officer. President Falcone, on being the section. call at Relations website webcast afternoon’s hcX.com our This is in Investor

be on hour follow replay in again the the section. A you We our dial-in replay presentation, website also to for invite X which the is HCX’s webcast this available call call. The XXXX-XXX-XXXX will of with XXXXXXX. after confirmation along can approximately be accessed the of code IR with

actual and facts, fully the turn from certain that be that Reform being are pursuant our could and are subject I to risk more in The these Litigation forward-looking Act to could with the remind to Phil, that HCX’s filings to made in Harbor provisions These the statements call factors Securities Before historical cause of differences risk factors forward-looking I Private assumptions forward-looking statements. would which like results of will are over to call, assumptions discussed differ XXXX. the cause this and statements certain earnings SEC. these materially Safe everyone not are

obligation In made our in SEC conference this as update forward-looking this by as law. addition, only revise and the any expressly or statements, as stated except reports. or statements call of intent of are to included these in required disclaims call the forward-looking date HCX

the EBITDA, information or website. about to SEC company’s not available income. this will without most under provide taped available pre-tax call cannot income, management non-GAAP call, our in that rules non-GAAP comparable limited insurance these financial required as Certain be and measures, earnings operating measures which the release, also reconciliations most recent on otherwise will operating insurance finally, the the is as such And disclosed During press with is adjusted adjusted but prior GAAP be duplicated constitute consent. to the adjusted information including measures reminder, certain

call CEO Now President, the Falcone. turn I would Phil like to to Phil? and HCX’s over Chairman,

Philip Falcone

Thanks, Thank everyone. joining afternoon and you us today. Garrett good for

up We and and quarter a deliver high-level a forward. vision overview a both this on change we present things longer going how I to are bit from moving our of on and term perspective. quarter to goals strategic going am near-term and more focus the

discuss had your and portfolio successfully then open the well across for extremely the CFO, detail Our a performance late we and will quarter’s in alone, November. then busy Q&A. we that Overall, GrayWolf construction fourth very Mike performed our for Industrial we call In the will active more and fourth quarter quarter XXXX. Sena financial acquired up in segment an matter, transformative the and

One investments, meaningful received function from of company the our system. This providing designation MediBeacon, measurement Science breakthrough FDA real-time for review potential process FDA investment. kidney that the expedited be greater from working the device will Life regulatory provide upside an to the with Pansend for its means

of its investment quarter assets expand added $X.X over treaties recaptured acquisitions and Humana in significant operations to continues completing of segment key station our We the markets. with our gain broadcasting Our another strategic to billion booked insurance transaction. the a in and reinsurance portfolio

secured Marine in seeking segment. our of end are we of our we announced of We notes, Global and the to And our secured alternatives, refinancing including XXXX. senior senior the completed also Services debt Marine maturity possible extended with strategic new sale that

we pursue and will of share multiple time we and Specifically, will we value. strategic Global when definitive price that receive process as Global maximize and for alternatives remains to it appropriate take an agreement, continue we information. for in Marine, paths terms If the process certainly ongoing the to have expect a

As at debt the we from level. HCX noted would proceeds reduce sale to any utilized be previously,

this is questions we answer further time given or it Beyond still comment ongoing an cannot that, at process. active and

As I to further minutes to that few to term. to transformation a portfolio, we of our want XXXX beyond to bribe value speak and over our take position in look regard business shareholder the will longer us the at

Our strategy longer is term hybrid.

focus We for led they HCX. and important on have a construction us portfolio while of generating years in an our insurance businesses the the built be driver businesses strong over cash will near-term by and we delivering

generating our and significant segment. our segment the Pansend we unlock focusing longer have and value Sciences on term, cash to at the our mid ability is engine segments broadcasting Life Beyond growth our to that

in First a is in of Inglewood, contracts doing and been new EBITDA segments XXXX and Jose. robust new such in DBM. has anchored an by team foremost, XXXX, among and outside open slated building generating great and job Bernardino job done their on San million. as just Linda it Bayview Rams/Chargers excellent LA its stadium Loma winning has up as is backlog It adjusted which Hospital our construction completion $XX filling of San cash business, in The generated large approximately the there as well Google working near to toward flow projects

value investment we has able years. been X create past HCX over of DBM Importantly, a and been a have great the stalwart for example to the

a DBM for XXXX, wins had addition project XXXX to a major business. start with the In midsize of a couple also to strong successful

we taking we mix to objective on As on LA the at in Ultimately, small to That Rams more capital. to noted type the prior that up off believe that still are the we the provide will as which projects target backlog projects focuses DBM larger our projects, midsize can more we profitably. tie and pursue work create a was today call, this lumpiness tend will more stability execute we working approach large that on said, business. we more

gives late expand and segment repair, acquisition business should into year. further to DBM revenue potential construction for in of with inherent initiative last GrayWolf of building adjusted we cross-selling Overall, heavy come. push the driver revenue. It goal streams acquisition opportunity continued which given cash DBM and $X minimize maintenance term a our of billion will million construction opportunity for recurring which Our and of relationships to provides entity longer term capabilities our also to commercial longer ultimately flow us of stickier expect strong consistent GrayWolf’s expand some the This to cyclicality be $XXX years continue EBITDA major for recurring the in another a at to contracts. generation our HCX

base end. we over a $X XXXX. increase have our billion, over increased past end addition, insurance well long-term care XXX% our year significantly $XXX notably increased acquisition Humana’s to from asset adjusted million quarters capital was of which most up at the In Total recent several through business, our year and built as segment insurance approximately

HCX the with additional portfolio an while were on telecom investment Also Human, potential Two generating that from the As significant Mike us the cash will insurance from payments achieve energy also receives are which remarks. generated the a and segments. more other subsidiary investment. recurring are that which in investment our fee a for tax future next there to provides his the portfolio, touch with also has businesses in the the management detail positive reminder, flow stream, cash as strong of shield positively returns transaction will of NOLs upon our few result years.

has years, and likely remains energy significant upside potential which longer slow the to run term. contribution coming telecom’s in little the expect most off contributor a solid for the over we While

to disappointed were its we during certainly performance Turning fourth Marine Services, with quarter. the

their of in company. growth and Marine abilities process potential and significant one I will year-over-year. will part remained which events was fourth we about Mike impacted investments. other quarter EBITDA and Specifically, address alternative at in at end earlier in several I being challenges the hybrid The also engage unanticipated the discrete to cash-generating Global operating adjusted that as advantages the Marine underscore of the a adjusted the point we confident Marine, stated our essentially our can effective EBITDA, our timing our core flat strategy the strategy we Services his remarks. of shifts backlog in an for continuing subsidiaries challenged, segment be XXXX are segments second in diversified strategy. the to is Furthermore, talk long-term is other When the of the can significant with decline our Even counterbalance. strategic the If for one given

cast on acquired operational over calls television and First, licenses. To invested power regarding as including stations XXX years, the XX strategy TV and that and full have our discussed Class I transactions A stations, point X, for of XXX we and very completed last in have comprised previous strong X.X including a portfolio the power, business, XXXX, March pending XX of low broadcasting as broad diversified stations. portfolio, and

long-term. our the the continues the having licenses longer in path our the and MSAs quarter construction licenses by XX% We term enviable also grow approximately silent owned down our permits key now of XXX position U.S. with of goal an to for our the us over-the-air fourth leaving population of of reached XX% in and network. population reaching up lighting many added silent We

cord, much as more the distribution As potential a continue option platform. the attractive to cut become people the has broadcasting alternative we to out build

to we In to ability broadcast moving to us anticipate as new another of the the mobile addition, realize advent for directly opportunity technology with forward. devices

of into for XXXX, look investment we homestretch overall approach the are our to beginning plan As we broadcasting.

will note platform we it able little assets build breakeven. have may reminder where run-rate streamlined and look and more initially and do expected our our further be EBITDA become want to of to acquired we than expansion efforts upgrading assets, adjusted ongoing our take should and a And We to be the focused broadcasting we integrate on add as create will necessary efficiencies effort platform. technology our to investment infrastructure. investment the thus a that to longer wind We out given

once value growth become out. is the expect readily apparent of trajectory fully platform and the to broadcasting built We

believe mid positioned large margin our being broadcasting once we profitability and then the the be fixed, will expansion we to This flow broadcasting will have we of value the program, become free be unlocked that there will to provide expenses squarely investment investment per platform community. to complete With long-term. us build as in our from at amount completed amount more We significant cash with out significant of apparent is much year. and

be the we long-term additional other $XXX EU net very sales would over BeneVir secure able during XXXX driving approvals and our did, By for HCX to Japanese payments cash significant an Turning segment, Sciences to as additional of to receive are should we completed about BeneVir of net I approximately monetization way will portfolio and Pansend the from opportunities milestones. companies that FDA, for we the discuss. value $XXX our two sale the up structuring million like we But to look forward, successful Life shareholders. Pansend million excited

FDA, the which process First, MediBeacon, the which addressing MediBeacon recently, system necessary function has the and FDA patient developed needs. a granted approval accelerates important kidney by how to measurement in device real-time validates breakthrough is was and market technology designation

MediBeacon XX thus We have invested in million far.

positioned monetization. We to value well attract are significant investment that via from very

We to you continue progress of will MediBeacon keep quarters. in future apprised of the

XXXX RX over XX product evening company, previous and lightening is and million in Dermatology, own have a approvals using second This noted the majority we cold The already XXXX where for in stake put calls. have to its in skin received we an which has just FDA investment company. and technology, work

and to looking properly excited to mid opportunities partnerships. are for continue and the both is evaluate we profits to Hence Asian term. growing currently commercialization product it strategic potential very commercialize position position long about in the to generate to RX markets. over U.S. its the We significant to RX sizable and various

on me briefly our balance sheet. touch Let

clearly While take. to it refinancing, the with step a unfortunately we of we that dissatisfied outcome necessary the had are was

on business execution CEO, and upon my our confident will are de-lever am this. to the we and Chairman priorities the accomplish of and As I improve

XXXX I over over we broadcasting CFO, and debt businesses we of While Marine, insurance This us some did from call our sciences Mike? existing positioned priority to we well portfolio for will time. our are reducing Global remiss built. is now top highlights. that, significant over our win if at no and quarter with our that not highlight near-term shareholders have at year Sena long-term potential will construction the cash fourth be of the the turn will and who unlock With and strong creation value doubt strong to value Mike life we help HCX, will full financial coming our businesses discuss flows meaningful

Mike Sena

from the construction the Thank insurance fourth right into inclusion and our performance. total in as was well you, $XXX.X increase fourth driven from broadcasting year for net revenues quarter our segment. get the $XXX.X new segments as Phil XXXX let’s million prior a telecom, XX.X% by revenue and of Consolidated higher quarter period from million, our

billion. and of fully full per compared the quarter revenue loss net per XX% preferred fourth $X.XX million to For grew XXXX to million $X.X of for $X.XXX $XX.X a attributable the the fully share period. in or year stockholders was $X.XX participating common diluted Net prior share diluted to or XXXX, year loss

share At reported period. a and year related year, comprises BeneVir, number which HCX’s of net gain KMG’s $X.XX $XXX million and was construction, diluted sale EBITDA in which our transactions HCX in Inseego. and energy participating preferred diluted the of to million adjusted net to $XXX.X year of the $X.XX the a the or prior income, per full million prior reinsurance per fully million gain to the purchase from loss of telecom income net sale services, long-term a investment were the recapture fourth the X bargain care $XX.X acquisition treaties $XX million during of million $XXX to KMG, a There a XXXX to core $XX period. gain For of company’s XXXX, million the from million $XX.X in including quarter one-time of $XX.X operating attributable segments gain a stockholders or contributed company’s to share compared of for fully marine subsidiaries of common related the Humana’s compared business,

$XX.X telecommunications quarter fourth our was For to and the prior year life million million of improvements million by sciences lower operating compared our prior which $XX.X recurring at core Lower from marine segments the contributions $XXX.X EBITDA were XXXX, million in year partially insurance to the services segment, in Total full offset the corporate period. and versus adjusted of EBITDA, expenses. XXXX adjusted was subsidiaries excludes year. in construction, $XXX.X

million year For the compared $XX.X $XX.X EBITDA, the of million insurance, adjusted XXXX, prior was for full to excluding year.

recorded bit year couple XXXX $XX.X the to a of for construction, XXXX go segments. of quarter million fourth take into for minutes adjusted into largest full just and At detail Let’s million. we adjusted our a the the more of generated at $XX.X EBITDA of EBITDA

Meanwhile, adjusted the quarter the Adjusted signed to projects The to large XXXX. our Marine at notably at impacted pleased segment, $XXX the of million and not million into contracts the quarter shifting first we attributable GrayWolf. into million with that most XXXX. are consideration, was that We performance in by the for performance western receivable $X.X yet driven at of and the erection in million. commercial quarter million new for items DBM goal fabrication was vessel included Global the which scale EBITDA global fourth out and construction GrayWolf. $XXX was quarter XXXX. for as Clearly, generated into the the several LA to $XXX.X million, as of year as fourth quarter and write-downs; and million $XX was Rams reach cost shifted to we a impacted which business in to Loma adjusted At are for the fourth of we future the recorded million DBM backlog and of was not adjusted us Linda which of begin projects quarter of Thus a awarded, Marine at in this result takes Bayview comprised expecting was customer at XXXX be claims DBM are projects The the for Chargers $X.X and disappointed our we at XXXX to primarily end Hospital, equity GrayWolf additional were investment; Services, backlog backlog $X.X which our move turnkey the attributable HMN projects. Marine Google $XXX.X $XXX and $X unutilized backlog, stadium, million, the expected until to at of of but of XXXX, approximately projects shifting and second through million EBITDA million at contribute comprises following: full $XX.X rejected DBM are EBITDA quarters. out additionally XXXX at of we of unable least quarter of U.S.,

backlog maintain well major $XXX time. as approximately to robust of offshore continues recent a win, end positions to project the million to adjusted grow XXXX, of Marine power the company a over EBITDA thanks installation of which However,

quarter and generated by million care from by caused operating year Finally, an of adjusted the XXXX increase Humana’s claims. addition we income business of offset of driven of at $X.X investment insurance, million pre-tax reserves care Humana’s for $X.X the and income long-term full higher business a by of new higher proportion net in full long-term year the The fourth for were results XXXX.

for a portfolio. forward investment noted. We expect HCX driver already management investment recurring strong will their strong, flows be for Phil insurance receives moving stream as a cash of HCX fee

As more and part reserves certain of assumptions actuarial comply the of the conservative statutory long-term long-term in reserves care more with underwriting. bolster regulatory there experience acquired care with utilized to These changes were of the guidelines. to consistent for the changes business, be with historical blocks’ acquisition our Department actuarial Humana’s Texas to line Insurance

purposes, years. tax for changes tax cash year. large a tax We any tax filings, loss tax that were reserves in adjusted the for to in from shield future mirror similarly at operating will the payments which this which least anticipate For current resulted ultimately net resulted largely reform, few next statutory

a year of payments in subsidiary. approximately reminder, As insurance last paid $XX the we tax million cash

of a investments $X.X and associated and the had equivalents available. includes positive has cash, of surplus cash HCX’s investments HCX statutory with cash on this XXXX, effect So the end very segment. At insurance consolidated which billion,

Excluding consolidated million. was cash insurance $XX segment, the

announced segment. our of today initiation the also at We construction guidance

for Marine, segment alternatives are the to million Global the company for thank segment we this provide guidance has Operator? that your ongoing like and would $XX $XX the up XXXX, today. questions. process projecting of time open adjusted not of EBITDA time. at you elected call to construction EBITDA to now, For for Due And between strategic adjusted your the We full million. for the year for I

Operator

FBR. question Thank Instructions] Riley you. Our B. [Operator Sherbetchyan Sarkis comes of from first

Your line is now open.

Sarkis Sherbetchyan

are $XX So, million afternoon, provided you the I guidance, you was can first guys? you to Good from and guide think Mike. expected construction, maybe contribution Phil How breakout to relates the $XX it for the question GrayWolf? million, obviously

Philip Falcone

as it’s I strong on not going extremely that still – the are basis. Again, But not time more and DBM. is at the a are and at GrayWolf we this numbers, looking Things between think are consolidated out walk at backlog we company. you guidance just it through we well. we breaking it are

Sarkis Sherbetchyan

Understood. And any if anything construction, of about a just for takes kind you kind the positive, negative of update environment, and of there? any think business puts kind little

Philip Falcone

there, Yes. these strong a construction, capacity are jobs number at not the look projects of out is still fact operating with we level, at. and a of Again, residential in overcapacity. this there is very things to And lot continue sizable are

– in is the large than I different jobs. is going a not bit of also cross-selling, this not you us an We additional that at thing bit is for the a the and it’s type cutback. you is turn months. already there we GrayWolf were so be the we think of visibility We, not and seeing it’s reasons And that. a to ongoing XX This at something changing been at and probably maintenance that no discussed, a look wedded keen frankly, And why on you stability. are there news going a be to quite the looking from the to as And all. which of is are still all. no maintenance believe previous at so XX LA inventory Rams typically real aspect, job is slowdown kind that slowdown type But is terms good we business. one see to quarters has more are because

we many business. It’s the really there two process is between connect think going like on to we the can that So complementary. We sales entities. be

Sarkis Sherbetchyan

‘XX if out you Services kind of delivery That’s time, provided super respect I for as the as from the at to ‘XX gap concerned numbers of anything the segment, XQ second into at from bridge the establish the guide the Just have changed are of anything but look as from or has kind trying frame if takes the standpoint some us fiscal actual of with Marine guidance you providing right? help puts moving macros a or and on a try understand business kind the this are not to between helpful. I than the of to and etcetera? half to guess, ‘XX ‘XX shift of you us customer that reference are far understand to just that’s versus

Philip Falcone

Yes.

it’s backlog HMN the lumpy to a all-time at $X.X bought shifting by they if no I question not laid changed. Mike continue of that out a listen, frankly $X.X we business reason we to no there an when our disappointed write-down, there is the over as has a high different, that backlog it’s business in will project was And you means the but previous is receivable wish $X.X the this been strategic up the kind issue. million realize of you that’s the million and reflection business. is mentioned, had unfortunately, no can’t out is look overall but believe end all. is Mike especially at quarter. for And global were of these that I As The of business. in would the company. result, not, people hopefully, million This environment control, And is again, doing but it in And quite what XXX guys is it’s the know from an

Sarkis Sherbetchyan

better understand that? $XXX handle marine was maybe help regards and to around kind the is at to to above the global headlines us from can with if you the understanding impact of Q there lot No, just like communities reading any business, investment million, a and guess nice the Huawei, it’s get I a the it in impact if I the wanted does XXX see backlog that’s And so helpful. prior think of

Philip Falcone

complicated our sales quite It changed the a scope. It’s we with where a relatively hasn’t global mind, only headline. I mid-December mean, keep in business, out in is that’s This process frankly, went really books.

– it’s sold longer process, by to a by no this now. just we did and business but So expect means long be –

I, – an it’s and we’ve process. as ongoing Mike it’s So, and said, both

Sarkis Sherbetchyan

or you And asset cost I know MediBeacon well, the the Dermatology think the an call, from expectation there? for to it. RX you what hope and kind kind kind mentioned partnerships Got of just you strategic invested Maybe you’ve the just kind monetization as I so total frame accomplish the of of potential establish you’ve the of a outlined mentioned on us help far.

Philip Falcone

very, OR think this will people virtue we and with, sophisticated the that it that been are things these probably high-quality what indicated time products is think very of of too than in I’m but again, the that – diligence by in associated longer anything dealing a I unfortunately. you’re but But about – the of hope. it as product is and very that super this I Yes, a are product, we’ve very FDA, is unique with is we trance talked with out the I’ve is just timing. that said as excited and ICU, think and take and by there like a the might not discussions we’ve – number is a number of is on this of if I types get And be kind Pansend times, these excited, when situations

Sarkis Sherbetchyan

I’ll queue. in the back that. for hop Thanks

Philip Falcone

Thanks.

Operator

comes next Our [Operator Kurt of Instructions] Thank from question Imperial Hoffman you. Capital.

now is open. Your line

Kurt Hoffman

today afternoon. the sources bit in corporate of what Good the on cash at talk through lower been about kind quite million, stands year-end, situation question of the next the the that’s level historically. uses and than get liquidity A a kind $X.X is Can it’s Holdco to and you year?

Philip Falcone

the aspect, reality kind number company, when are dividend X-year The all. down frankly have to of different dividends. that up quite to on one depending levers a concerned it XX/XX/XXXX. up It’s acquired moratorium other of we interesting of there note there but That pull. insurance quarter-to-quarter-to-quarter about a is this not we X-year is on and Yes. is at do was thing was moratorium And we the

Holdco, the at look ebbs or have a we cetera. are et the streams of by no levels subs – means and and and as kind the performance twice the underlying at that of different even as So, levers the cash it’s about cash the flows. that result dividend we the And thinking process of we

So, we’re quite frankly. it’s all not about that at something thinking

Kurt Hoffman

What type of the can magnitude dividends get you of insurance out of sub?

Philip Falcone

number, What is that Mike?

Mike Sena

statutory pull on up, that’s but surplus you what it’d XX% surplus, limitations on million. it’s $XX to – about based There’s limited be of can ours

Kurt Hoffman

Okay.

Philip Falcone

between up surplus and and Yes, has our kind of moved down $XXX million $XXX million.

Kurt Hoffman

you Do Pansend Okay. at and have cash be needs of will an the what expectation Broadcasting?

Philip Falcone

way anything, we’re that deal, going the Broadcast, did from be objective And made bond our Pansend we cash, we The something number to this was back Broadcast. point. on the contributing are to with relates and as cash for times. needs getting There’s think we point a at commitment that’s this at at we’ve no and Broadcast, of cash when it. part that it deminimis finance the additional and structured If I that’s should that important very that’s

incumbent Pansend. continue So, to build-out with funding a various Holdco it’s the Broadcast is nor to on not written be there commitment investments additional at

Kurt Hoffman

Right.

Okay, one EBITDA last Global contributed on Marine. that’s contracts? of the refresh you maintenance our from the in terms Can memory

Philip Falcone

without it’s not – broken in We contracts. we’ve past. into those but they that out have But that we’ve out, are going the think very again, something detail, I never broken attractive

Kurt Hoffman

much. very Thanks Okay.

Operator

question Sherbetchyan FBR. B. Riley have we from And you. Sarkis a follow-up at Thank do

now Your open. line is

Sarkis Sherbetchyan

Yes, thanks for follow-up. the taking

see take the come there, expected. please? you want maybe angle of in Broadcasting, you Just investment to prepared taking mentioned more integrations around to attractive than strategy or Is did just longer breakeven that the back I that’s remarks are a kind bit longer, a color may or think the on from some shift something

Philip Falcone

of when – little bulk where we and it’s it’s that’s taken the just losses the were based no, Yes, Azteca acquired a bit longer.

monumental sometimes on a And in terms it’s it from it’s I don’t movement longer of just of terms to and years, this you cash not want is not, of – date it, think think material you a time perspective. not put is of in when but

Sarkis Sherbetchyan

call it if appropriate the look expectation we kind maybe And Understood. the, for of this that quarter, at call first loss is of it the kind year? of EBITDA the half

Philip Falcone

You’ll see mentioned as you talking about we –are that Broadcast?

Sarkis Sherbetchyan

specifically. Broadcast Yes,

Philip Falcone

It’s that, business given to business expect we our that contracts gone – acquisition we have detail plan, on huge we just about is very on really model and excited mind, keep fully it’s now any and here. opportunity that XXX process people. – This but haven’t just change. into done, we an integration And first stations, in adding That that we’re operating – but closed we’ve – with it, we’ve our we haven’t what we we in November, signed integration an guidance aspect.

Sarkis Sherbetchyan

that’s And Phil. helpful, –

think I looks were a us where integration, going? maybe business bit do that kind to sense little I there when through get you plans if post-integration an see you give brain like mean, there, for your I a model what you more target on just update the pick the financial have to of or

Philip Falcone

partnership you that is mind, industry sharing when there’s to at channels you where more with tower from you’re a there. decided we in to on various – specific capacity programming stations entities, focused essentially se, going we’re revenue lease hosting the you different you other be and programming but can share model there’s per specific on think how people revenue model really and tower or and can where – that of about look and the ad-based either host you’re it’s on the the business, report into a getting on a whole that a Well, dynamic haven’t of Yes. that it, think couple avenues keep have the I

there’s point we that, a aspects we think and that two this of take as mix So, will gone both are it attractive perspective. detail but you’ll different extremely there financial at see to haven’t a into we from where

Sarkis Sherbetchyan

it. that. me. for all Thanks for Got That’s

Operator

question And Angelo you. comes Gallagher Lauren of Gordon. from Thank our next

now Your line is open.

Lauren Gallagher

giving been on quarter? Question this – become have guess, the delays last little of I I materially the on there what’s Hi, new of you’re contracts any kind thanks kind bit for when and last caused one integration will anything kind new breakeven, little of a has understand of kind thanks, time the up the the over business afternoon. a not Broadcasting, but signed? content bit changed a for timeline contract with following of

Philip Falcone

timing I the or and pending the have The to of us really not got it have, I process. of lease heck of material they inhibit a that from mean, stations. There going moving a integration and from a function lot contracts it’s with things Sinclair take really back our and whole acquisitions, internal XXX the me be that – see that operating perspective We’ve to signed. that there’s we It’s let just XXX in that we’re something is has forward. been acquisitions Again, do. as been don’t is Keep to at sorry, pending stations the XX. we’ll looking – up believe I’m that has with the additional acquired we’ve mind, we

ones that which process And about in the above in construction not. In got stations silent have XXX addition, of that determining XXX, out we’ve permits. XXX we and we over and build we’re licensed

arms it’s every if taken many hiring perspective, excited but to this thing are people, from operations kind goes but think if by, thing, I an without it’s the that just yes, kind just best every opportunity. more circling think day we a time, – where people you bit little of – So, around really day too of that opportunity the more we changed, one is, we’re about ask our deploying the has

Lauren Gallagher

Phil, short then little Thanks, weather issues? more just of bit a explain it about on caused project more whether what’s kind great. guess, of delays color. what’s bit And be to can the little you starting, about the I Marine, you delays those timing and caused Okay, a contracts for Global

Mike Sena

Yes.

As starting that didn’t they there. I – the and recognized think hit of pieces end on with expected certain HMN, of complete that’s revenue to they I the by of them until and biggest some one the so XXXX, year, milestones the

there, that the had we aged periods. later that at can unfortunately didn’t some were projects weather and wrote was claims down I time some the Global so we and that’s into the it’s when approved Marine really of things piece biggest are And out and piece by them that think that that customer through very go the big receivables moved like the get complex from projects big piece. out some and that’s creating moved really a permits delayed rest that’s we that get core year-end these the business,

So, there is various different that aspect. factors on

Philip Falcone

just vessels vessels your add your are se. to always to your per And that, your when – said, your capacity, as plans are we’ve

take that should signed, reserve because or been you’re project starting you expected, months, delayed not of to with it’s the that you’re that you be to sitting and still may have by expense. that got X and have contract a you operating not vessel that this month so X vessel it’s you but If

sometimes. nuance create the this can of that’s lumpiness that the So, business

Lauren Gallagher

it, generically XQ, of comment you understood. guess, could continued if I the XXXX? has delay And caused Got kind into what

Mike Sena

further. It’s really just out slipped other projects that

were to the the later So, has some for other out slated in of QX projects year. that slipped

Philip Falcone

just on It’s quite contracts lost timing that. we’ve not anything like changed or It’s has frankly.

Lauren Gallagher

that customer? ship the And build can remind – us what’s back the underutilized time, to you

Mike Sena

So, the there’s two to components business.

flowing So, up a project rate – which standby that that the are a goes get seeing timing. through. business, start of the this breakage install and from when perspective, It’s a cable. there’s costs in actually rate you’re maintenance is the when unutilized the is not the part and we The about where we

delays and on those here. can’t the that And so the a you’re reasons you’ve case in customer, of be are to isn’t back unless contract which the built the committed

Philip Falcone

changed business specific contract over issue. job a or probably the It’s years. aspects it’s to And that the contract hasn’t of – Yes. the XX last one to job unfortunate the of

it clients the yes with depends contract. on particular shipping project you’re expectation or company job this your any has like think nuance same I your with or and projects and dealing that when

Lauren Gallagher

understood. it, Got

for the you thank Okay, time today.

Operator

Thank you. Jefferies. of And our Yeske question from next Richter comes

Your line is now open.

Richter Yeske

us needs to over long you growing and Can those the and time insurance fees? thoughts take around through that management to happen realize fee how what Hi. can walk

Philip Falcone

that the that the expect the fees there’s bring we every already as fully up – as And now moved a realized, say base, grows on with as you business associated is we we’re that fees run we do, are dollar that’s business board. to which we – getting on expand When from asset rate. where zero to

Richter Yeske

– Right. existing guess for words, the I right fee, question is fees other asset base In that are I we for grow? do so, base? the asset see now those the fully you grow the run-rated to is, need to

Mike Sena

which those for Well, yet that gets was the quarter, the quarter make of will was you run of on at in fully of cash fee and $XXX fourth continue year-end, part that reinsurance will as and we isn’t and sizable only to rate from earn in new investments that the beyond. which first recapturing some fully as cash get treaties see Humana basis about a invested acquired amount also we transaction million invested, the that that reflected we and had

fee grow. So, fee a –will as rate the invested, will the business to treaties you able blocks fully basis get today’s more based on get can other or the reinsurance we’re more recapture to acquire then and business, run extent, of to

Philip Falcone

a have task we accordingly assets grow. booked but not like Yes, yet, a not and the it’s – increase as fee it’s we’ll performed

Richter Yeske

million update the providing escrowed timing And with you of the on Okay. an $X BeneVir? mind then do

Mike Sena

was the June. September, will last so months which closed, after XX come It in deal

Richter Yeske

Okay, thank you.

Philip Falcone

Yes.

Operator

closing And this would now to back session. question-and-answer call Thank our turn you. over to ladies I like the and does conclude remarks. gentlemen, management for

Philip Falcone

continue your about as we’d business. you we for be Well, time And to the very thank excited today. again, mentioned,

time here the have are we thank afternoon you if you and again. any appreciate you questions. taking additional this We And

Operator

thank gentlemen, today’s and in This for concludes you conference. participating this Ladies program.

great disconnect. You all day. Everyone have a may

INNOVATE (VATE) 12 Mar 192018 Q4 Earnings call transcript