VATE - Earnings call transcript Q2 2024

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Operator

Good afternoon, and welcome to the INNOVATE Corporation's Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. And now I would like to turn the conference call over to Anthony Rozmus with Investor Relations. Please go ahead.

Anthony Rozmus

Good afternoon. with review being XXXX second 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

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

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

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

to EBITDA. not provide refer of financial financial also will transparency the GAAP greater these in substitute as useful and performance. adjusted review measures, our non-GAAP Management for such We supplemental measures a data certain operational while measures believe that allow for

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

Paul Voigt

afternoon. Good

Rustin $XX.X delivered quarter the with second of revenues and momentum $XX.X in EBITDA $XXX.X of $XXX.X adjusted showcased of DBMG our million. XXXX. million of EBITDA Our by financial results. second the of at and INNOVATE another delivered continued adjusted into revenues as team quarter million million strong his quarter and

quarter. by expansion to XXX second also XX.X% in year-over-year of Adjusted by the EBITDA points gross Adjusted XX.X%. margin was driven basis expanded XXX approximately EBITDA basis approximately to once margin significant again growth points

but and quarter. the awarded has its remains into level backlog, to billion of perspective to through continued DBMG been steadfast our a healthy has and and total lot $X able we to opportunities projects takes profitable not of active second at will contracts, DBMG a smart There big of yet I'm come as DBMG market. to online, are as add end they coming confident adjusted bidding a from a project assessing backlog consideration which remain that in way. backlog. be work signed in the at substantially

to improved, than a quarter our expect still strong results slightly we we year While second be last and lower have had for year. expectations the

expect do we However, margin slightly robust levels for pipeline continues better than have a DBMG XXXX. be to XXXX. to

of launched Life aspects sales QX high top posting growth for North row. a from system RX growth quarter. quarter. single This to and in on a the The quarter 'XX fx all Sciences, RX system and a in the record unit line achieved the a its third QX in clear of business. 'XX Glacial in to in consecutive revenue Moving largest XXX% increase another success phenomenal to is quarter fantastic third America posted landing recently system is the sales

Worldwide RX line in revenue experienced over QX XXX% XXXX. growth top

treated average with meet increase at outpace and monthly last utilization seeing GLACIAL demand. focused team ramping in demand per are the production increase up providers same utilization the as XXX% RX in periods prior year. is and provider growth XX% over on We production, a continued to period demonstrated GLACIAL patients

users, by from patient XXX% in due XXX% rate the growing website to providers searches. year-over-year in and This GLACIAL well industry. top X,XXX% brand exponential at of awareness in promotion an as as in GLACIAL represented key social opinion provider existing is increase leaders growth mentions is

outpaced growth competitors engagement XX%. by RX's industry

continue we RX expanded our of momentum market We Canada, GLACIAL into state-of-the-art as Middle use in quarter. East. see U.S., technology, third to and China into Mexico, sales the by encouraged the continued momentum of are the this building and the the has expanded of We the demand is product in the

Additionally, second D we investment stock new during ] a Series [ in RX. closed preferred quarter, the

RX end As increased part diluted that prior XX.X% well compared additional and million $XX.X of million previously On ] basis, of XX.X% interest the fully Hansen into at to shares to of second cash. Hansen's $X.X transaction, [ was now converted quarter. Series D accrued related notes intercompany issued a a the as transaction. the ownership as of to the owns XX.X% as

program market through for monitoring This with substantive health the the leading of real-time review partners. At with collaborations great of continues work industry opportunity by MediBeacon, continued is MediBeacon care see further kidney MediBeacon monitoring evidenced continue FDA. kidney to R&D we to the in functions.

Nephrology for continues be key to investment companies pharmaceutical a focus globally.

slow growing Assessment of functions part range are to clinical in a importance in kidney of the kidney settings of which development expansion across of disease. designed potential is therapeutic interventions, the to

Kidney publication broadly International in The July landmark the positive XXXX prominent globally. of peer-reviewed of function. the clinicians Furthermore, company's standard described opinion one is GFR company received immediate top Kidney key the reference the journals a International nephrology as kidney technology MediBeacon's measurement in and leaders. feedback for from peer-reviewed

pharmaceutical tumors. study for to the as & monotherapy solid virus to sold Phase entered clinical one And ] Johnson in back [ at related Inc, BeneVir, the XXXX; of oncolytic the Biotech, Johnson Janssen's advanced which companies Janssen in and of I was of combination

the Spectrum to to year-over-year. $X.X another and strong adding the second to quarter million which team Moving in line, incrementally delivered doubled the top we as quarter, EBITDA profitability. led nearly adjusted to Les are turn has their on Spectrum, better In

networks, EBITDA the and driven to reduced churn cutting. continue cost growth, by adjusted continued launch and revenue of see We new

third States. FreeTV XX% X, providing their HCX launched ], United across with distribution On the [ July network, of the PHY broadcast

from launched recently presidential in-focus channels, news benefiting we Salem are TV First and that Additionally, news cycle. Media the

and with broadcast market PBS Spectrum stations across improvement datacasting. efforts X prior Public X.X collaborative with PMVG, strengthen the Additionally, as such continues areas OTA work to in show to our Venture to the Overall, Group, years. to advertising the continues continues country as ATSC over Media advance

stations, incentives taking full low-power performance Class and which by regulatory A to markets. is TV to The preparing submit in FCC station optimize Broadcasting announced selective recently to advantage of HCX modifications engineering strong

As stations a and XG in other coverage closely with to Qualcomm strengthen explore is broadcasting, statewide working the filed are beginning it California, will which in Monterey, we potential among relates to our have And to add in we companies California. Spectrum finally, States. where to acquire United station selectively no in have markets opportunities coverage

next-gen a to continue with MediBeacon and all pipeline, happy demand of level operational increase We of as perform our a robust opportunities growth high in with RX, an and results at are develop. progress combined X segments momentum encouraging very OTA to DBMG the continues in with at

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

and our has now rights assets up our to offering debt to intercompany DBMG $XX.X structure have capital sufficient created our year. execute closed where on the and which We redeemed was our our our INNOVATE in later of upstream an this company to flowing refinance noncash set million strategy transaction utilize to runway address and stock cash, preferred to

progress businesses. make to continue opportunities noncash exploring we end, that for To our flowing

time. Exiting frame the these right created being these patient value to for takes we remains the the value that ensure we businesses maximize time within focus on assets. Our of

look for and to we assets, build to resolution in year this off M&A to We continue on positive overall be along continue We indicators the year. the to optimistic hope reach the momentum discussed later above. market continue the market progress second as these and continued of the momentum from and see as quarter this remainder with surrounding

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

Michael Sena

which $XXX.X a $XXX.X revenue decrease million period. of of segments. increases XXXX at our second primarily the partially by Life is and driven offset was The by total decrease Consolidated million, in to XX.X% Paul. the Infrastructure Sciences Thanks, our was Spectrum prior-year quarter for compared segment,

or Net fully attributable diluted quarter stockholders in preferred per compared XXXX stockholders period. participating million prior-year share common of or $XX.X million was of net $XX.X $X.XX income per to a $X.XX the diluted for to fully loss share and the second

an driven of Total is adjusted period. of in as The with exception primarily the prior-year million the increase of from $XX.X unrecognized previously was segments $XX.X timing segment, second XXXX, of a result quarter all increase Sciences from the by MediBeacon. Life EBITDA million in losses

and million and to revenue erection of an $XXX.X commercial Banker industrial steel an repair commercial in of now that comparable projects in DBMG's and prior-year This $XXX.X the near quarter. work. increase This and project was decreased on structural or decrease construction of the size was from the fabrication period. in timing a XX.X% both Infrastructure, completion certain at increased as which activity business, million of business the At the driven result by Steel period maintenance in partially offset projects had by large current of increase are primarily

second the structural now are increased erection for in period projects at current at near XXXX EBITDA construction large adjusted million quarter by from business. on commercial million period. or higher in commercial driven increase the and that The Infrastructure margins was completion prior-year $XX.X the DBMG's to steel of certain $XX.X fabrication

to in timing decrease in Steel large recurring an Bankers partially of and commercial This due construction SG&A project by increase offset of at expenses. margins completion was a increase a

$X awarded $X.X adjusted in backlog As line expectation, and million, of backlog of and of into with contracts, end billion takes the was reported adjusted XXXX, but June $X.X billion of at compared yet backlog to billion consideration our signed reported not $XXX.X XX, was which backlog, and XXXX.

quarter, by by increase and the term as an with amount debt quarter which added offset of an principal agreement, which sales payments. million, amortization a the is $XX amendment in million of entered partially first separate driven incremental from an of primarily prepayment $XXX.X result to is property a $XX.X normal which loan million DBMG of credit the debt,

that invested at been reduce business, through the return continued able has working has to obligations debt end reduction of a capital XXXX. trend as DBMG to the began line to its

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

in approximately X DBMG reminder, reduced the its months. a million debt outstanding last As by has $XX

increased incremental was Glacial in the units in attributable XXX.X% sales an compared 'XX the unit half in fx from period. of to due The increase million $X.X system to to Rx revenue of quarter. Sciences, Life and sold prior-year launch Glacial prior-year $XXX,XXX second from the to At the primarily in increase RX, the revenue

primarily was increased MediBeacon. losses which recognized the due losses the from for investment to EBITDA adjusted Sciences quarter, in our method Life equity higher -- in

to comparable a was of XXXX, revenue launches customers, network individual which of $X.X of quarter number smaller by million, termination Spectrum, coverage the existing with $X.X expanded second of the to by and offset driven increase period. million and subsequent an markets At networks compared partially primarily the was

EBITDA second increase the for losses were the the prior-year due legal in the million from changes in due second EBITDA The of increase increased million. adjusted adjusted reported a improvement to quarter XXXX of Nonoperating compensation-related quarter in quarter. revenue. primarily $X.X primarily $X.X improvement million million $X.X of Spectrum the to from corporate to an driven and fees. $X.X decrease decrease headcount The in by second a quarter expenses XXXX, was was in

the of the to cash XXXX, of our basis, at quarter, XXXX. stand-alone million as December $XX.X as restricted of $XX.X second $XX.X nonoperating corporate On $X.X equivalents equivalents, cash XXXX. At compared the cash segment and end company million million at XX, a to had of of compared excluding end cash the XX, of million cash and June

cash quarter million intercompany result of DBMG. As preferred $XX.X a redemption of earlier, in received stock INNOVATE in as second Paul the the mentioned

with that received compliance we As has our NYSE the fallen share. are listing the $X not requirement per announced earlier notice below in in price as we stock year,

to disclosed, increase As minimum for the close, per the split market Board NYSE. share meet the of per X the stock August to after effective the share X, XX reverse price market XXXX, previously requirements approved

corporate a balance. interest offset principal XXXX, of the in down decrease As by of at the principal Infrastructure's debt, was driven debt of which Capital, June in end capitalized $XXX the CGIC from XX, of decrease INNOVATE payments of partial outstanding $XXX.X by Lancer the as a outstanding indebtedness into $XX.X partially which million result total RX's XXXX, had note, million million, redemption with extension the

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

Operator

comes Brian [Operator R.W. of from line first the from question Instructions] Your Charles

Brian Charles

Good me? afternoon. have may you Can one me -- a hear bad I'm hear sorry, can you I okay? gentlemen,

Operator

We ahead. can you. hear Go

Brian Charles

Great. Okay.

not down, a questions bidding just kind the to of of sort your such of know give enough you tenor delivering the pretty are that I backlog? you've the below getting you're couple come A in where questions. of been you confident stay backlog much much it it's backlog. has that process, is but pretty is? interest going Just But couple guidance. really of the could It and about

Michael Sena

mean I is Brian. this -- Yes. Mike,

It So some stabilize. things, come that to at expect was we billion. sitting we bit, an it's billion level. beginning down kind of said basis, to of It the aspects of $X.X in little timing on adjusted backlog at year, $X but is the sitting kind a the and there these has

Rustin still sees these in ton to confident is pretty into bidding projects be telling us a able we're convert market. as and he these guys of activity, come to the

So...

Brian Charles

seeing In tight that some Or for things Okay. it really... -- bidding just is are the are process, there too they competitive you market? are to a

Michael Sena

It is a There do. makes profitable for that sure. competitive they're sure are good that making getting Rustin a jobs doing job projects market of sense some that is to

that work of a is the always has. less see will participate team sitting there, released will are so And released, right position as we the lot we the but year, in as getting now. where they expectation we're and kind out And a get RFPs through we management of

Brian Charles

Okay. question keep to working, but last on one I'm know sorry, this. just not I

state given because in remain you margins Just market XXXX? more bit seems now, stable bit the of a market a the expect would will just down the come competitive? to they Or

Michael Sena

of are there is margins pressures again, amount But have in what there the think in market. projects we on is a some I think market, told. been there I out the Well, significant

to for work see did of through better in that than there. projects the margins last winning kind 'XX other of the receive year. are successful some we we'll kind And expect of as out and We some slightly we of see

Brian Charles

that, from update a All there? approvals with right. frame been Away I FDA. for to you color working color. might any question there other MediBeacon. on Is that you've one know Appreciate or Okay. get when the some maybe time

Michael Sena

the through continue the we have work process FDA. update mean the more market. we'll as with certainly provide, we I to Yes. information soon And to as

Brian Charles

Okay.

Have know addressing XXXX, Okay. any with the they're some talked conversations you've X.X% before year. you Or are I we notes, where that? you February do the not in And that? this ducks until bondholders? for had getting due them other started about you Have row

Michael Sena

and to we guess, talk and we point, mean, but are discussions a we to our basis I are. bondholders try Yes. be regular to not I at do very on as have, where refinancing this ready transparent

there'll that a know, talking And alternatives of you kind about end along of with our near think we the year. As we Life we time as exploring businesses. right further process, we're Sciences in start as that the strategic get be to refinancing

Operator

[Operator are questions Instructions] no time. There further at this

So over for I'll remarks. ahead. hand the call CEO, back closing Please to Paul Voigt, go

Paul Voigt

to Thank We appreciate the transparent our everybody future call. Yes. everybody's guys you the in look I Thank much forward news some being and care on call. sale you who positive to health into to assets. next to look with of the you. forward talking very support the and

Operator

Ladies participation. today's and your concludes gentlemen, Thank you this conference. for

You may now disconnect.

INNOVATE (VATE) 7 Aug 242024 Q2 Earnings call transcript