VATE - Earnings call transcript Q1 2022

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Operator

Good afternoon and welcome to INNOVATE Corp's First Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. After prepared remarks and presentation, there will be a question-and-answer session. Please note this event is being recorded. I would now like to turn the conference over to Anthony Rozmus with Investor Relations. ahead. go Please

Anthony Rozmus

you first Thank with to us Good XXXX for earnings INNOVATE's quarter results. review afternoon. being

We are Sena, joined Wayne today by Avie Glazer, CEO Officer. INNOVATE; Financial Barr Chairman of and Chief Mike INNOVATE's Jr., of INNOVATE;

We have our on website our release innovatecorp.com. slide presentation at our posted earnings and

followed website. being We will simulcast our be be prepared This session. archived remarks with begin Q&A call our and will to on call by is also

results facts, the statement could assumptions this be call, the make more differ in and is may statements. are and SEC. statements cause are assumptions uncertainties cause these forward-looking that made forward-looking of will During actual our Litigation involve the historical being in cautionary certain statements risk and assumptions are our other and forward-looking these risk Act and and release which differences Safe not and the Any that XX-K filings the Harbor from that Private INNOVATE's management The with pursuant subject in slide materially Reform factors are presentation such certain could and further included risks, detailed earnings XXXX. discussed to fully to provisions Securities of factors to

transparency point, to is that adjusted At Glazer. GAAP any substitute to while except this and forward-looking of will Management or provide In call these measures, these supplemental over Avie financial this measures disclaims required in only data turn it date measures SEC obligation refer the and this our our revise conference of to review expressly for as or statements, as to performance. such statements addition, financial intent believe included a pleasure made by We the forward-looking INNOVATE operational also non-GAAP my in things reports. certain this are allow greater update call as EBITDA. of as not useful stated law. in

Avie Glazer

positive has start had Good to a afternoon. INNOVATE XXXX.

In results. revenue first adjusted our X,XXX%. XXX% with and increased pleased the quarter EBITDA grew consolidated first are We quarter,

Infrastructure, We are and seeing momentum Spectrum. across all segments; three our Life Sciences operating of

let's about Infrastructure. First, talk

quarter is DBM. quarter for first The slow historically a

DBM backlog However, for the healthy on $XXX.X first revenues number. a of bigger of making progress while jobs quarter maintaining million, strong achieved record XXXX

XXXX, the the $XXX fiscal DBM, year. For acquired we reference recorded before million year we entire in for

We deliver to call across are runway plenty excited our remain stages results first investigational with believe study. Sciences, to inflation, in our to are speaks opportunities achieving I being of of With that are each profitability we the still XXX of today, their outstanding to has in thrilled all with progress the market a plans few. commence step challenges to Both pleased in am to unfavorable the delivered supply immense and first the the despite toward made respective products like the to well-positioned advantage We just This performance revenues. of MediBeacon I'd device INNOVATE. each businesses. to the In CEO of continue to name the approval operating term. IDE and in or this market, now depth to of resiliency exemption OTA and ability continue our its constraints pose pivotal of grow and reiterate And early Barr, about believe turn as broader model over that in viability the the straight application near submit model Infrastructure. chain markets. FDA we our is There's still And optimize conditions and its ability ramp for such to machines to that, finally, transformation. quarter companies Life to underscoring RX operations INNOVATE broadcasting respective in of its to segments. six their the of quarter these Wayne in take companies the the we three operations prospects growth

Wayne Barr Jr.

you Avie, today. of to up momentum translating all us our businesses top Thanks, directly our thank terrific line for all XXXX left joining and across picked three off where with growth. XXXX

highlights each to of for our now Turning segments. operating

DBM mentioned projects the recovery. the Avie demand industrial public projects Global another record elevated As stayed benefited has delivered larger on DBM services scale and quarter. sector made post-COVID progress commercial, construction from as during in

Our showcases provides our strong and revenue. potential total future backlog pipeline of into $X.X billion adjusted visibility

the more in the of in we point saturate margins ultimately, of become terms sale As jobs will impact market, DBM capacity believe have has which on new selective begun future. positive to has a

improvement see and sale expect some of beyond. margins XXXX. of were the we through and we down procured is projects improved that the our year way throughout continue improvements early become as the point have The We expectation XXXX gradual margin those to for as work visible to to wind in

mentioned of XXX in overwhelmingly across States, Life the turning to The began China The skin skin Now, is shipping during related the the and coupled customers more its here their the spa than customers made Rx platform. million $X.X those oral upon and reach have MediBeacon class best its by in ownership this Glacial cycles, MediBeacon about to and positive quarter. RX devices younger continue the in prospects and future the the quarter as control continues adjusted shipped has Surgery for Glacial of to businesses and treatment traction to and the clinical MediBeacon Rx two million At and inflammation we reducing innovate ongoing $X.X benefits presentations Glacial developing on and as its during cooling investment launched patients to presentations protected Sciences. team in to remain of Spectrum, to our Rx U.S. about We capitalize earlier, Glacial multiple to the United date make Rx first made last this ability in goals regions plans strong of Glacial significant pivotal stake highlights in the around of the EBITDA year world [indiscernible] progress meeting of San progress made FDA launch promise dermatological annual Glacial this Society be RX Glacial we the Data segment. RX IBA in to helping Pansend devices MediBeacon the And progress sales with additional And momentum the company. XX,XXX participating platform. momentum feedback. Medicine through Rx revealing kidney prospects findings American with Also RX to improved capital of towards during the it's commercial an optimistic the in now year-over-year the Beacon excited to month. submit to the continue study. gain the good of by raise. the Diego Avie has looking of technology was globally growth the $X.X presented tremendous the made in operating Laser progress. million. delivered of underscored during monitoring application Building our Pansend U.S. and commercializing Glacial product

cover revenue. of a quarter which completed expected Maine. adding Canadian out the optimizing Maine, builds government The XXX Altogether, new We and including builds, first awaiting remaining approval, broadcasting remaining shortly. targeted operations, continue all in builds two of its to focus eliminating two are costs stations XX In station DMAs is in nearly XXXX Spectrum stations own and operate will Bangor, XX. the that on XXX improving

for met one April's both strong pandemic the network addition, existing customers a of In convention and in the first days had in new Association with Vegas, Las which on materialize National years Spectrum turnout. of believe the platform, person Broadcasters three the in through course demand held because of the year. over of four prospects we carriage indications clear balance will of our seeing

on operating over linear to Mike the continues broadcasters. to and call that, capital to fruit segments focus to bear innovates line. and company's the see financials review With of I'll strategic we arena bottom its over profitable a actions benefit network the for three are turn air we've the pleased programming and top last structure. Over months core XX the our a that be continue sharpen conclusion, to In for taken

Michael Sena

walk contribution first was quarter share from net stockholders projects Banker share, participating Steel larger period. for $XXX.X $X.XX first to along the or Consolidated our and Thanks, $X.XX $XX.X structure. or $XXX.X million attributable is XXX.X% the increases preferred of of driven capital was of XXXX Wayne. And led you performance. key The the prior the and I'll to per by revenue quarter in Infrastructure million XXXX Infrastructure loss in increase of our with then market in compared to by prior I'll demand first income $XX.X per through for of an our review the increase million, total segment the Net aspects compared market. million common financial period. entering

on gain in first the of a of sale recognized we reminder, million As of a BeyondX the XXXX. $XX.X quarter

Steel for quarter million increase EBITDA adjusted the $X infrastructure the the period. the the in Banker was gain, been from in excludes at an would of first the contribution segment. Excluding prior XXXX increase $XX.X the XXXX EBITDA, $XX adjusted operations by quarter million. was year Total from in of discontinued an which loss have million primarily The driven

on in some $XXX Infrastructure, to At each the segments. million million quarter. to increased three from prior operating Now, revenue for $XXX.X color XXX.X% our .X of

repair year higher Steel construction first of and $XX.X offset is acquisition $XXX.X in of profit XXXX million the business, the of revenue in and higher and or $XX.X maintenance this part erection million expense business business Steel. an earlier, from business due the increased to resulting completion to to well contribution in the and due in the EBITDA prior discussed the construction by as from decrease Banker and fabrication was a business. detailed higher As in of as lower the XXXX additional and in driven Banker projects well a increase revenues of business industrials adjusted sales increased G&A repair Infrastructure largely offset the the at by to modeling in as industrials certain the detail year of due maintenance projects as the for modeling result margins million acquisition period. margin by as in quarter of completion the partially result as at increase The erection fabrication and which is increase prior Banker a an the Steel of the

should of our [growth], this margins contracts volume the of to chef backlog. due is of continuation to revenue profits revenues and Even XX in through margin we though Again, as jobs. aren't work higher XX projects percentage earnings sold the the The work far seen impact increase. to from and be those the we off quarter lower revenues have of margins, statement weakness attributed along started for we working income months start can as the beyond both a at really of to I've to duration those months banker finish. haven't as higher While enough XXXX in

billion backlog billion XXXX of signed fourth X.X the of end million reported XXXX. contracts recognized backlog market. into has $XXX first not the takes of As March revenue from quarter. which backlog consideration the DBM in from was still at is awarded million at significant yet down down end year. X.X down the is X.X from last of but [indiscernible] The was in quarter the Adjusted X.X billion year end seeing .X demand slightly

was the [non-favorite] quarter strong backlog to XXXX current at visibility informed contract in for included and company This the the provide subsequent fact, another Airport. it awarded and was JFK still beyond. backlog In not

capital expect and of selectives on of to However, DBM capital. by timing the projects up $XXX.X At the the as higher more primarily at DBMG DBM for working the offset an quarter is pivotal they MediBeacon adjusted be is more see yearend. ended with increase the increase size [indiscernible] recorded Considering we and final based spend the by receivables. the of of were prepare the income was backlog year. losses slight by over as working working down an we study. the profitable remainder see come of The receipt to from driven company's million EBITDA in in begins which decrease from move their partially million is Life the projects increase on our in investment debt down will Sciences, continue which driven revolver currently $XX.X to and of needs

were up footprint avoid the rather with Rx to million spa in launch in now from slowdown and of cash business decline the operating and losses $X.X also is mostly at It's December to the At revenue of of the of buildup very with first the end the increase the EBITDA were $X.X of cash compared a a but programs has prior company's expenses of adjusted standalone the the was launch corporate quarterly the $XX.X not with the the We full noting stations. strategically million first XXXX launched of was the the cash corporate of days. quarter discretionary early for and Certain bonus to quarter, of the the the in of that XXXX, by to by advertising obstacles driven momentum legal sales million revenues as shipping trends million the is pre-orders as result sales the company of X.X% XXXX. add basis anticipation as mix made decreased new first customers continue of building This $XX.X from adjusted RX quarter. equity, stages and the due be cash offset between timing partially early Glacial a as lower compared offset later of pleased of At are in equivalents million, end largely some as by sold we're former XX, network to and in LA business the in $X.X decreased to rollout. Spectrum, the cash quarter result worth On mostly an for and had the of XX, progress XXXX. settlement million station its by million swing. activity equivalents segment to plan partially the This as launched decreased million EBITDA adjusted in market. as $XX the in revenue process lower delivered with the million the increase Spectrum in expenses, compared number EBITDA a of X.X they in from $X.X XXXX prior driven of to Non-operating of bonus quarter service $X.X as well of accrued XXXX. professional first of a by CEO. March

in As of $XXX.X $XX.X a quarter line by of million driven indebtedness first strong as quarter operational as to capital results. principal million, outstanding XXXX XXXX. credit in infrastructures expected million result of from the working in March of rise total a financial start up XX, needs XXXX, demonstrated end standpoint and an first of had INNOVATE $XXX.X of at the primarily strong We're XXXX off a a from by

Our open reporting Spectrum that, on intact the and you. to like operator across we'd Infrastructure, strategy the Sciences Thank success forward long we remains term Life more look to call for in and up questions. With next quarter. now

Operator

Yes, thank you.

As the Instructions] R.W. and today first [Operator answer question Brian with will now Charles will session. from comes the mentioned, question we begin Pressprich. And

Wayne Barr Jr.

Hey Brian.

Brian Charles

my all can hear software me? I a end. Hi, you had at glitch I'm little sorry,

Wayne Barr Jr.

can We you? are How now.

Brian Charles

in navigating of you're of little terms Congratulations how thanks. was inflationary seeing contracts? demand through color I well, completion the get bit to Doing at current Good. contracts and that environment, your Thanks. and on you're navigating the this new in Okay. on quarter. a hoping DBMG of accepting

Wayne Barr Jr.

Sure.

was indicated work to starting. good DBMG. earlier and nature come significant seen from a demand which the the year bit we've a as And continuing of changing ago into bit. pretty is market departure a The as at see or on is the larger little the actually pandemic little release we've very we're the So a projects call in

couple And is bit to centers, nature scale then starting a of the team Rustin so indicated some of demand that for in changing inflation, larger come in the jobs. And little of while across back. and the see the experienced we're a projects our the keeping haven't jobs as I the rising and an expense really eye costs on slowdown the different we're

Brian Charles

the as these pass as just pressures, you? are Okay. to you've far And Are completion for that you work as headwind real through of them, are projects like on inflationary the contracts given a costs, got? able you

Michael Sena

or at impacted we anything it's big through. prices. we we in this mean, them impact Obviously, really steel the have point pass cost locked Brian, Hi Mike. not real seen a as that has I

collective a bargaining subject force it's good our also is agreements. labor have also to We of part

of good pretty into have does cost into bids. that visibility build larger DBM of pieces So their they some the the

Brian Charles

Okay.

I let's So Yes, And insulation. one is good question. see other that Thanks. guess that. from housekeeping away

some just Any this got Or refi You debt. addressing to on you're something yet? looking is year. guess that? I spectrum you're progress that

Wayne Barr Jr.

Yes. were We in initial obviously, addressing the of stages, that.

achieve I think results a very at we're kind of coming at from position, been able it good to the just we've that given broadcasting.

see getting significant for the group getting refinancing refinanced. call, debt forward to keen on we the very process station As to continue in the into that on And and we particular. deeper demand we're look indicated

Brian Charles

guess, Good Spectrum flow cash was assume the be I backing to this business maybe it's breakeven year, coming at fair the, into know. flow I like new year? it cash And about with right launch to from the going Is that. free stations. of into the as And positive the that to

Wayne Barr Jr.

From now, see year Spectrum debt but business, below What line we biggest understand million the with the the of is finished is Right the your current $X last EBITDA. year, yes. a you interest, picking. costs is

positive what is is flowing our with cash now. capital it So structure right

Brian Charles

Okay, in fair the one it extrapolate If Banker the grow that back same wanted for Steel to year, Steel driven the for the going rate for just historically at if am, to run quarter, to know. a after quarter that's think trying fourth relatively there's than the and compensated than I rate. I'm growing to be acquisition. year. acquisition. more the the final is extrapolate all largely and question comfortable certainly million over the it assume more third I DBMG first that But know Good an you're year $XX quickly. Is by EBITDA right. And Banker tends I this to to that that. year-on-year thinking relatively to is I trend slow I'm Then going

So to little this quarter earn added the year. third year, a what you and it last in be fourth the extra might

Wayne Barr Jr.

right. the has first you're can as in year. a as that -- XXXX will the you think the on because driven We the of apply what what current of that rest year Especially quarter that been into built past and of working jobs. of the the couple increase we obviously, think I I end happened like and last towards business the timing and do is really good give increase much first the take the the seasonality I just just look And years, quarter visibility couple from you don't on. the work we but through have DBM slower the by the of last quarter don't is so guidance, the of know percentage years isn't it that is projects based has

So helpful. give you hard on just number to the math a out that's last trends. based little it's a historical to If year extract

Brian Charles

All And fair last into That's enough. back one right. I'll Thanks. queue. then question. get

you're it that is new there and backlog regarding like higher more that the it demand like discerning sounds becoming you picking margin from sounds you're projects. projects Just fair be Is to the discerning and allows looking because characterization?

Wayne Barr Jr.

we're do of more selective. see have a we do the Yes. through that historically a saturated do starting selecting And We've on. take little and of a they that demand more to the It team being And they projects have very fortunate good is. the pandemic. the done getting very benefit Rustin come been projects continue that larger about little and the his to job is as

Brian Charles

Good to know.

Okay. Thanks. now. That's Appreciate for it me it. for

Wayne Barr Jr.

you. Thank

Operator

the All to to I you. floor comments. is to closing present any right, more there Instructions] for [Operator nothing would management return today, like Thank if

Wayne Barr Jr.

look participating I to balance moving you. year. Thank We good. evening. Very forward Have you. the nice Thank for everybody a of afternoon. the forward And appreciate through this

Operator

you all The for attending presentation. concluded. conference has today's Thank

lines. your disconnect now may You

INNOVATE (VATE) 6 May 222022 Q1 Earnings call transcript