VATE - Earnings call transcript Q2 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and welcome to INNOVATE Corp.'s Second Quarter 2022 Earnings Conference Call. All participants’ will be in a listen-only mode. After preapred 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 second 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 our also We and being our be will prepared website. session. Q&A be remarks with begin a This on simulcast will to archived call by call is

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

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

Avie Glazer

adjusted the by period. results, revenue with INNOVATE quarter, excited we period. In the the EBITDA this XX% first second and half prior are advancements over concluded the XX% made XXXX increased afternoon. consolidated and strong during Good grew year

pleased and with of growing quarter revenue are compared had year the Sciences three opportunities segments: Life Spectrum. as months in as growth a We of six well outstanding the of XXXX, Infrastructure for quarter continued prior of our across Infrastructure, with second another and periods. XX% number this operating to all first momentum, XX%

Our profitability revenue Investigational announce the the are study. commenced we and MediBeacon's towards accepted Device monitoring thrilled the future into Sciences, steady and the our healthy Life backlog technology. enormous continued In projects set Exemption that FDA application, to visibility growth company path in milestone an and pivotal pipeline large is for MediBeacon's of in the pioneering in stage kidney quarters. commercialization now its the has This U.S.

the of the broadcasting resilience and global in Additionally, challenging OT and Rx business. against products. platform commercialization both its Glacial demonstrated dynamics broadcasting RX distribution Glacial Spa the continues And network finally, market

resiliency across to has last improved of not maximize the facing the and and of and recognize We abroad. that I number sustainability geopolitical Wayne backdrop, the pleased of this over remain business budget the for our With we and call exemplifies each on of demand their distribution across while long-term to models. We its respective the national will leverage businesses, embedded to our since that Barr, network's we growth. that that broader next-generation the operating in opportunities segment all and I'm challenging potential to platform value. for the has of each proud of look confident challenges, execute companies U.S. capitalize plenty scale runway explore both our distribution INNOVATE. future We platform, CEO of still turn that, we three strategy which and Against environment a macro remain performance seek sectors as on spoke are to all

Wayne Barr

you Thanks, today. all us Avie, and for joining thank

During continues results. DBM second its to yet first despite face. projects in as ability businesses share demand is built of larger momentum half INNOVATE welcomed DBM macroeconomic consistent segments the underscored many quarter second XXXX, impressive financial like This backlog increased and and now others challenging delivered sustain levels, and for on robust each our line commercial, the quarter that during indeed pipeline. each was performance. of and highlights market another delivered the the operating would these maintain performed our so we on last some successes Global a by revenue from the is capitalizing year industrial and for growth well I performance trends trends public scale presently strong to benefit quarter. its sector. to top construction marked from DBM deliver services by of

the In the fact, The DBM the in quarter. market. in clear visibility for opportunities backlog continued future to ability revenue sales recognized in potential team's revenue increase $XXX an to backlog advantage the resulting at outpacing we have significant in backlog confidence the into the were take the million during and provides quarter, of

discerning the better small begun this DBM strategy such cost of as its of and part long-term. new And margins capacity of market, DBM these jobs. energy see We its cost the costs, has point-of-sale welding more to over are become While selection believe to consumables, in increased components. the has will lead as for rod saturates a overall that

overwhelming from continues its Turning of transformative and results Avie elaborate products. the positive now of to XXX I'd RX fit on Sciences. provided. updates to technology like the devices has now customers to on Life feedback receive some Glacial and

period. Measurement study System our The of well is targets we study total partners over in MediBeacon, evaluation announce the significant over as been see the GFR see underway earlier, pivotal its have subjects also of strategic are with global excited by Transdermal Avie XX% a upside the an to study of believe the marketplace that the We after of help as to the sales and U.S. completed At to-date. will application XXX China. we begin potential accepted was IDE a of in we The XX-day FDA. commencement mentioned subjects acceleration

We premarket PMA have submitted a or the to FDA. approval module also X

reminder, MediBeacon's which yet the clear submissions year. have in a MediBeacon device our being submitted thereby made manufacturing, on was during this MediBeacon This Earlier business. closer pioneering progress is ownership demonstrating raise, X, participated its protecting kidney five stake capital technology. Module modules. in earlier past is front. year, month, another towards commercializing modules previously step the in As two PMA submitted by we the monitoring this

future feel look and on you commercializing the the updates. its to company increasingly bullish prospects we of As MediBeacon make towards strides forward providing additional product, with

in at Finally, financial a the results Spectrum, second challenging operating quarter environment. reflect the

in television advertising in response softness year, advertising, side, distribution broadcasting new direct the diginets. market slowed revenue has of particularly origination the this the growth On and

new with religious and networks. shopping, We opportunities, are however, news seeing revenue

Azteca current and business, challenged by services. has been and with network Our cost along for advertising America, particularly content markets, viewership post-production the increased declining

exploring various address them to we'll strategies have these communicate and challenges as We been they solidify.

be available next-generation to focused opportunities. filling long-term our while network, exploring on continue We the capacity on

been are XX revenue air. XXXX and operations, are our over call, on long-term. new mentioned All Spectrum and we As committed now have at decreasing station on completed to optimizing improving targeted builds the costs last for

the are The that actions as licensed Additionally, in New WKOB-LD site station we within auction. a will we begin City order. to which Trade we currently believe several to signal displacement the Center taken changes on Spectrum's for providing relatively relocated improve from will of and will we the New weeks, the completing market. benefit York of overall next was is these York a in station The result robust air on incentive the are from this build-out front far-ranging short a performance, for One new City, and World new be

as I Before to well over in governance believe all it key measures the that like the and of we alignment some that second Mike, will I'd reinforce as help to stakeholders. ensure some changes occurred our with turn to discuss company's corporate quarter,

and in years. the Board Board to Board Lombard service at announced reelection Board June. Meeting of of the Directors they we that business Ken would Stockholders Annual and companies quarter, Directors Courtis Shelly not before Fortune our tax XXXX his landscapes. our partner having navigate to members June, one the held Michael Goldstein fill the them appointment During and and me of brings of our two for expertise to helped informed of the the Please few of end last Gorzynski, over PwC, Brian DBM to tax their six from was the served currently at thank for Brian to a reduction At stand INNOVATE let five past XXX seats. and Directors of At PwC the of the company members and XX-years that as over Brian at retirement since year. the business to Board to board sits on vacant Board complex bear,

the sizes, New the to at advisory vacancy. are fortunate Stanford again to Audit of Goldstein forward Fortune several also and Brian enabling once of Ms. York have have on Ingenuity, all CEO three to that York Exchange is here clients. Stock Amy we Business us with School. audit including Committee, in look the we Warren INNOVATE are companies appointment our XXX Wilkinson listed Graduate members to Lecturer remaining unique Wilkinson Founder entrepreneurship at fill announced Gfeller yesterday, thereby Amy requiring leaders New And we rule perspective. in company the We join least on notify is the just of his the a independent join and Management committee. an him firm a She its compliance and will at to Exchange of Board for Stock

were Mr. the with we departure of compliance Ms. requirement this of consequence Lombard as disclosed, previously and As in a Courtis. not

execute us strategic We and the Board of forward welcome we conclusion, second of and each capital remain I'll about We for financial strong results review increasingly and will our quarter. Mike INNOVATE's environment. during financials a macroeconomic pleased with look over implementing delivered of future an that, continually operating the believe to working to we are exploring continue With and segments, INNOVATE against to navigate and them. challenging to to optimistic both for it Brian structure. our help the In Amy core measures turn framework while

Michael Sena

prior in Infrastructure led attributable by period. contribution with Banker stockholders of total by increase $X.XX XXXX review quarter or per $XX.X second the you to of $XXX.X year million $X.X Infrastructure May of prior an in walk then compared key was I'll The adjusted first second loss increase acquired $XX.X to XXXX our million for in Steel the excludes increase the segment, increase of by our increases a operations, EBITDA along driven projects which Net preferred quarter at the common will XXXX, primarily the share, the net driven million prior to of compared and I year from was million, The share period. performance, Wayne. EBITDA, quarter the financial Consolidated entering Steel of and of participating from year through was Thanks, the contribution an an million adjusted per discontinued was from Banker capital XXXX. our the which $X.XX market. $XXX.X of loss XX.X% for demand segment, and Total second structure. infrastructure in was market or revenue aspects in period. the was million in larger $XX.X

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

and completion to profits in repair part an in we of acquisition As detailing incremental XXXX. to fabrication business, projects large $XX.X the continue and by and million G&A off profits as we in first erection the of the fabrication EBITDA by the well an and continue decreases increase of construction modeling as at But was maintenance quarter discussed adjusted is certain working The and increase industrial by half as the structural increased for offset Banker XXXX. million business, earlier, year to in partially increase Banker sold the XXXX DBM's offset from in steel prior $XXX.X to increase period. modeling commercial increased are also the business. Steel, due higher million to in which second the contribution in and this erection in and margins of as detail to the projects due in was revenue, of business resulting Infrastructure well $XX.X and see as industrial businesses, profit volume largely revenue lower-margin repair construction we and the maintenance see lower the expenses, an driven Steel lower at due and

XX [Chef] projects XX to contracts to range (ph) As finish. a reminder, from both and for Banker of Steel months duration from start

see of XXXX. projects off the We expect half those back to to roll continue during

$X.X XXst, Adjusted end compared was was as backlog, signed the XXXX, As yet at slightly into $X.X which December $X.X but billion, consideration reported contracts, of $X.X backlog billion XXXX. not takes of down awarded, June of from December billion, billion to XXXX.

While backlog to continue down team and the robust adjusted Rustin reported market. are from see year-end, a

have of to $XX.X RX, quarter. decrease they backlog, $XXX product as as from compared quarter $X.X by driven to down backlog our into pivotal which EBITDA increase which however, the in losses debt, study higher last of an recorded investment slightly Triple This backlog increased primarily sold Life fact, million In the Ring. were quarter, first increase the At reported gross partially reported $XXX.X due adjusted the second with while year-end, margin DBMG spend Sciences, maintaining as when quarter. a the at during income well ended billion, increase of was million slight adjusted million in from mix. in change an in at the by from commenced in MediBeacon, a of is quarter, offset

lower of $X.X the second to momentum network million of in related The is decline business, in adjusted to decreased year made business decrease costs quarter, was in prior continue rollout. result or at DBMG's to progress end footprint the building distributions the $XX quarter. needs the the advertising with projects utilized adjusted line increased revenues network has ongoing July, We company remainder anticipated decreased in million a program. EBITDA with XX.X% compared and $X.X its of expenses and of the a EBITDA launch the service of result DBMG settlement the result growth XXXX. very combined $X.X early Spectrum paid segment to million million declines with corporate million, of On At in in the delivered combined in $X.X a end content a as to decreased in $X.X network greater the of adjusted by We company the in the movements XX, a XXXX, has the as $X.X business of $X.X former receive quarter driven as from the resulted approved in Non-operating had and costs stand-alone with as lower capital CEO were the of levo station the driven year, as working RX well second the stations. as of At and expected million second million in of pleased company's Spectrum, than at prior as million DBMG down top EBITDA with mostly new a lesser from by be near-term quarter, of Glacial changes in and the revenue $XX.X Glacial to of December the the dividend second million with Spa stages losses XXst, to XXXX. end to build At equivalents for of XXXX. along extent, the Rx of the July planned. DBMG. had planned corporate line. cash revenue as of cash basis, has XXXX of higher of the delayed compared by and million, XXXX, a and quarter result from as equivalents, $XX.X cash June credit a compared corporate from had cash the activity

ratio to meet at charge line allow for of that capital needs. DBMG, with facility greater fixed in into change entered capacity amendment for available to an the the working We along definition will also UMB increase at the credit the coverage

capital needs up cash we various through on will solutions constraints we believe While working free business. are liquidity DBMG and the working our sufficient to have in we the and at business, recognize

capital million XXXX, XX, of of June line of by movements. working increase total result up $XX.X infrastructure's $XXX.X As at primarily million of INNOVATE indebtedness a in the million, $XXX.X credit of had principal XXXX, as end outstanding driven from its

Finally, May in opened we mechanics HMN XX% six-month to XX% in the through the exit as for window HMN. period a are you working selling ownership of in still our ownership know, the

by the up of year. wrapped are face first half of XXXX be to as quarter the fourth and three with approach beginning second end of expect half quarter the of focused We the across in the this the sale and finished the operations third headwinds businesses of we known strong all keenly the impacting of year our the on the macro today. We companies

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

Operator

[Operator be question R.W. you. a conducting session. of Please will question-and-answer Charles We a Pressprich. Thank this we go time have ahead. Brian Instructions] from At

Brian Charles

Thanks just quarter. call, were DBMG color off backlog, more a good environment the it it's questions, as last does projects my Is -- taking you for the that discerned being for able in forward regarding a down second that One, selective a remember be in going couple the about you still from I lower-margin and first a Hi, bit contracts in higher-margin still quarter? little And the but of your afternoon. of even in actually. question. bit -- difficult talking to operating you for from increased projects bit characterize the from the run signed little A year-end, more XXXX. did

Michael Sena

some a they Yes. improvements sales yes, projects the they're help to But projects. helped in big mean, but the selective their be from your larger quarter, such of question. Thanks quarter. really have Yes, as margins, for in and had they seeing continuing drive I in they some point-of-sale mean, are that I think couple I clippers did for still jobs,

terminal quarter. last big the about JFK one talked that other was The we

helped some quarter backlog came the this were things during quarter. in that big that there the bolster So

Brian Charles

might higher the than did year? it say backlog the the Okay. end at that pricing Fair at be margin to of a now

Michael Sena

we continue We've improvement margins. to see said in

first you're of as quarters. seeing in past our low results the pretty they Now two were 'XX in half the over

they we're we're continuing market to sure So where improving, are The see. make coming to I from. we understand -- but want has improved just

Brian Charles

Okay. Great, amount, you million general quarter thanks. corporate the or line. I -- corporate then guess credit line a think, And in down drew just you credit the Did third at I $XX draw the full on your July? in liquidity,

Michael Sena

on we right. it. We availability That's have of million had -- did $XX

We preferred in $XX So we so year out down we last million. the 'XX, yes. million drew took the when $X already had drawn

Brian Charles

for Then see. let's -- Okay. the

expecting the the that you from For it leased something distribution there. working you're for capital Is to you – were expect DBMG in purposes keeping year? is Or DBMG? just just from liquidity to later receive at the that's delay anticipating you that would something decided --

Michael Sena

Yes. Obviously, we're the We need on DBMG ensure is there. do to and to continuing so. see success results they to delivering continue

we're As the on say, obligations. a we we you timing working pressure is continue to to and to like -- capital. way meet on issue These to are our good believe a ways a working it problems and ongoing repeat have have,

Brian Charles

And queue. in get back Okay, then thanks. and I'll finally,

that discussed, or can any exercising the that you're sorry, residual put on working marine color I'm a you you're give working For little -- that you put of way to you now. there on is the in a a party? sale it terms a -- third is on sale Is

Michael Sena

everything buyer, I same terms, into same. actual for entered separate closing where put, we're sale. We're the just but the a the mean, is towards same window the party. a not sale we a No, the within working to third of the agreement

we fourth the the we things are that. or at regulatory it in we in time. some quarter approvals, this like quarter late there But So third said, -- expect like early

Brian Charles

Excellent, for thank you. got all I enough. now. fair That’s Okay,

Operator

other have follow-up Brian, questions? do any you

Brian Charles

I'm No, now. for you. Thank good

Wayne Barr

Brian. Thanks,

Avie Glazer

you. Thank

Operator

the have Ladies and the question-and-answer I call session. remarks. of to gentlemen, management like And would we for turn to closing the end reached back

Wayne Barr

as Thank good a happen this forward you, keeping We of we X developments Thank appreciate operator. your look our all on you today and Have across with participation you. to call, afternoon. segments. operating apprised us earnings

Operator

This concludes us. for joining today's conference. you Thank

now may You lines. disconnect your

INNOVATE (VATE) 6 Aug 222022 Q2 Earnings call transcript