VATE - Earnings call 4 2023

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Operator

Good afternoon, and welcome to INNOVATE Corp.'s Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Anthony Rozmus with Investor Relations. Please go ahead.

Anthony Rozmus

Good afternoon. with review being XXXX Fourth for Results. Earnings you us INNOVATE's to Quarter Thank

today Voigt, by and joined are We Paul INNOVATE's Mike INNOVATE's CFO. Sena, CEO; Interim

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

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

being Act may these forward-looking certain are be and assumptions XXXX. Reform call, statements. management Private forward-looking to cause involve make to pursuant uncertainties are factors not risk risks, forward-looking facts this results and the which that could certain safe of During assumptions assumptions, the Any will historical such and and INNOVATE's and of harbor subject from and materially made are actual statements to differ statements provisions Litigation Securities

release statement and and the The with included in could discussed risk factors the other that earnings in the these differences fully our that SEC. XX-K is detailed more in and are slide cautionary filings cause our further presentation

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

over Voigt. is to turn to At this my pleasure point, Paul it things

Paul Voigt

for quarter $XXX million million Good afternoon. of EBITDA full fourth $XX.X $X.X adjusted and million year revenues delivered of XXXX. of billion $XX the adjusted the of in revenues and and EBITDA INNOVATE of

of XXXX. in operating strategic to perspective time, $XX.X $XXX.X the company the performance adjusted decision former INNOVATE and INNOVATE, EBITDA To to approximately only magnitude of of in back was our to our revenue at insurance pleased of at the segments exclude that start are was the with these million, made results million. transformation progress provide and HCX We XXXX, adjusted X some we when annual

expansions INNOVATE has then, line flow represent top and and significant has a and unprofitable key machine in has XX.X% Over year new milestones Spectrum by experienced for EBITDA. continued Since and launching CAGR CAGR a be the by from growth, XX.X% roughly to adding cash operations. existing the time, for and builds, today's on remains DBM -- adjusted approximately each that exiting delivering most X-year recently on results INNOVATE Pansend XXXX. strong profitability benefited station margin networks hit MediBeacon experienced RX, new and focused

progress with there still pleased has INNOVATE work to over much X that are the is done. We made last the years, but be

of INNOVATE. look continue will We prospects ways each by to encouraged future optimize the the assets in our and value at to remain for

by X.X%, adjusted Global million respectively. margins delivered approximately $XX to and strong XXX by with points on DBM the $XXX.X EBITDA another highlights and of moving fourth quarter, DBM gross basis Now In expanded EBITDA to adjusted the Year-over-year, quarter results. significantly basis and quarter and revenues fourth million. points XX.X% margin of XX

full full DBM delivered the for of increased As compared for to we EBITDA XXXX the XXXX. at forecasted year the adjusted X.X% beginning margins XXXX, of year X.X%

beginning signed DBM's the and contracts, at backlog, but $X.X year. awarded at to is not adjusted yet which consideration billion takes of total the stabilize was into end

for into would being XXXX the when pipeline. year opportunities as exiting DBM XXXX. more we of phenomenon XXXX to to slightly said, are short-lived will that see expect a in be and results past the we expect DBM projects enter experienced trend optimistic That only we lower this beyond, Given the in the be backlog strong, to DBM year, at size than looks

Moving had Life on incredible Sciences. another to quarter. RX Technologies

new experienced sold in of QX, in out a On RX QX fx launching fx Glacial growth best inventory RX American single From Glacial increase XXXX, sales a largest single QX full earnings its sales, of system XXXX securing quarter sales in system quarter. growth to the XX% QX, system heels in RX's This year-over-year. experienced in to increase system RX's led the since inception. year American North and in revenue XXX% North

time fourth quarter usefulness with market patient for over RX greatly skin XXX% RX and per expanded patient recovery provided both pain, Saudi growth its last the monthly machine. in the in is expand continued the and To has provider areas treatments. XXX% to of The to utilization year-over-year year. date, average the other and and increase monthly postoperatively conditions received global inflammation, in period UAE. machine continues from the XX,XXX being treated reach Glacial Arabia in of increase reduce approvals in RX used business, experiencing same

Glacial Additionally, market XXXX in in say skyrocket. XXXX, increase increase lead and product providers generation media a XXX% location experienced RX a impressions, a social to in increase Glacial to interest. XX% awareness since XXX% the provider of the the surveyed that continues From RX patient improve searches and solidifying a of portfolio's product, rates new customer and care. reduction standard to dramatically satisfaction the practice introduction the have is retention product ability of through Glacial inflammation outcomes that increased

safety, to met which monitoring through in approval with the study substantive in findings FDA for prenegotiated At and program quarter the order secondary to status. XXXX in positive work and for to in of first their MediBeacon, the working company FDA. review the MediBeacon and it outstanding move endpoints for respectively. the continues with the primary kidney efficacy XXXX, interactively pivotal met resolve its MediBeacon to is has disclosed questions

days. at The study expected next [ the clinicalstudies.gov The the found results ]. are on to ClinicalTrials.gov (sic) within study can be post site XX

granted Device FDA Breakthrough previously designation in the States. United reminder, As FDA the a

Pansend to with portfolio. continue across traction company is We with at the Spectrum, considerable progress launches. new gaining network be And pleased sizable the the

results agreements Specifically, the board, and across X These and FreeTV new favorable launched include network sports are early revenue we've promising. networks. large launches

also a we As maximize focused revenues. to on repurposing reminder, Spectrum our are

are broadcasters station an to into with signals. X.X network public provide ATSC lighthouse to We entering the agreement their

with media markets larger pursuing We who PBS country. venture much are major a represent the group relationship in across public a over XXX stations

addition signals, In be will PBS commercial pursuing applications. other to profit and datacasting lighthousing PBS and we opportunities station

important XG exploring As opportunities we participate and XG the able to most millions existing the United broadcast readily have that across will it hundreds an technology X United the proof relates in States to to signals of is are Phase here concept. in be XG order technology. SEC deliver application The to of broadcast its smartphones actively to reminder to stations filed in using of convert broadcast existing States with TV,

broadcasting. broadcasting We in to revenues future optimize will are working allow technology closely for moving with XG This leader Qualcomm, the forward.

our underperformance highly we of stock focused on believe our which are We capital price. key driver addressing structure, to is the

will end, our progress Our assets set noncash the our to be to flowing noncash that flowing in to exploring address for continue utilize focus capital To company opportunities make refinance XXXX. our we for for XXXX up businesses. structure and

right value the these time. takes exiting businesses However, for

along in as to We discussed reach assets are with are positive momentum above. optimistic and resolution beginning the as we these market hope overall positive XXXX, on the see indicators to M&A with market in

from incoming MediBeacon. has RX both bankers We have there engaged been on as interest strategics and

flowing will we this are liquidity fully milestones offering give XXXX, $XX rights believe a a to for assets and us to February, shore backstopped in our these late runway important for value. As private need announced and we exit the businesses past right needs million the we noncash launching our sale and push up

encouraged positioning you each business As on segments, and our forward move to the of we their by XXXX look we into here, updating throughout progress of year. the are

capital a that, With over Mike structure. for to our turn of it review and I'll financials

Michael Sena

quarter Thanks, was $X $XXX segment of for or total the XXXX year was attributable per was fourth quarter the $X.X driven the to XX.X% our per compared our or in primarily lesser XXXX period. by Paul. of common segment. a share share, million in million revenue extent, Net Consolidated loss prior The the Spectrum fourth million period. $X.XX year decrease compared of a decrease net loss stockholders $X.XX and, for to to a prior $XXX.X Infrastructure million, to of

$XX.X adjusted segment. $XX.X our which million partially was in driven was by EBITDA March the from HMN, the decrease year equity our in sold and investment in The income Total was Spectrum Sciences XXXX, million from the prior method nonoperating in period. Infrastructure, decrease which and by fourth Life of elimination of XXXX, offset of segments our Corporate was a quarter by

size and in and quarter. partially fabrication year $XXX.X detail erection offset Infrastructure, at of in projects. construction was maintenance repair revenue commercial decreased the primarily DBMG's Banker driven to timing million at prior revenue increase the business, industrial At and from which by timing million Steel to modeling XX.X% This decrease and business projects the of steel due $XXX.X and size was and an by the business,

SG&A from fourth decrease by million period. by expenses contributions for the EBITDA repair recurring The increased lower Banker prior adjusted million quarter and an decreased XXXX in offset in maintenance at industrial and the business. the of Infrastructure which partially $XX $XX.X to was increase Steel, from driven is year margins primarily

compared adjusted XXXX. backlog, not consideration backlog contracts, yet billion of end into XX, As $X.X and billion adjusted the reported signed but $X.X of to reported backlog and billion December of was XXXX, was $X.X which awarded takes at

credit DBMG to year-end and in of to the and is in working to debt we XXXX. on the been trend converting million debt, see primarily backlog. early into DBM earlier, with early by principal remains capital obligations of has reductions, from Paul continue ended has a those million to decrease meaningful of through amount see return reduce the the line continue we $XXX.X business, driven opportunities its amortization facility. early begun the reduction quarter As debt $XX.X an repayment, a normal focused payments opportunities and explained the note DBMG able XXXX, as to market, payments invested which

expect backlog the we capital in XXXX. working As stabilizes, flat needs

of ] (sic) rate rate X.XX%. DBMG extended UMB revolving on December amendment maturity May for line floor the and spread Additionally, XXXX, [ all interest XX, August from line established the of XXXX; X.XX% the XXXX, an and date XX, that increased across revolving into by interest tiers; XX, entered an the to UBM

for MediBeacon Sciences, adjusted losses investment losses method be additional resulted equity which zero. due recognized to due to At from losses in EBITDA expenses. reduction Pansend's cost of was initiatives in amount offset expenses the a reduced marketing in compensation decrease a being by a a at RX, and in partially result carrying investment higher SG&A decrease to increase This Life recognized the was driven to primarily as investments by into the MediBeacon, suspended quarter costs due previously in our in to decrease

At offset of ceased at quarter decreased by the fourth at customers decrease Spectrum, revenue in compared by a Spectrum's from markets advertising $X station new and $X.X the Azteca, of million million the million, quarter. XXXX. operations primarily the an in elimination which revenue, launched $X.X the reported during prior which networks end XXXX. in with driven to EBITDA its was XXXX, revenues adjusted fourth $X.X was This partially increase quarter of to of million year

million. by The quarter SG&A the for prior by a related adjusted of in legal XXXX, corporate fourth million prior decrease partially onetime Nonoperating period. unrepeated $X.X termination offset and which the bonus improvement the in of in due was The expenses year quarter EBITDA fourth decrease a was primarily primarily $X.X driven in period, a the expense of expenses. losses improvement an the XXXX to to of were from benefit was Azteca decrease

million $XX.X of $X.X and a of were fourth of Corporate to At On end million, excluding cash For the of cash adjusted million segment to $XX.X at the compared XXXX nonoperating of XX, $X.X of million. quarter, cash full the had improvement from end $XX.X our equivalents, million had December stand-alone year December full XXXX. and equivalents basis, year, the losses as company cash an $X.X XXXX for XXXX. the cash compared EBITDA million restricted the as XX, of

while used a As XXXX. execute mentioned The our February fully we for to payment backstopped offering rights meet needs our will help proceeds are interest sale by used launching shore and liquidity advance in up to XXXX be private to intercompany our strategy X, settle Paul, liquidity. we in an

and Capital. million XX, at December total outstanding $X.X of RX's outstanding principal INNOVATE XXXX, the of CGIC offset decrease is $XXX.X million down note indebtedness of Lancer in debt, million, $XXX.X end from borrowings Infrastructure's As which by primarily by from XXXX, Corporate's had unsecured with additional the new partially driven

With we'd like the operator, that, now to for call questions. up open

Operator

please at There Paul, with are Instructions] questions closing [Operator no the time. remarks. proceed further this

Paul Voigt

continued just very diligently everybody I you. very Thank we're a profitable for say support, to much. thank make you company. Thank and your and want this working to to hard very Yes. you

Operator

this and call. conference Thank you gentlemen, for joining. Ladies today's concludes

You may now disconnect.

INNOVATE (VATE) 4 Mar 242023 Q4 Earnings call transcript