Innovate Corp. · NYSE:VATE
Innovate — HC2 Holdings — Q2 2019 Earnings Presentation
25 slides from Innovate's earnings presentation, Aug 8, 2019
Slide 1: HC2 Holdings, Inc. Q2 2019 Earnings Release Supplement
HC2 Holdings, Inc. Q2 2019 Earnings Release Supplement August 8, 2019 © HC2 HOLDINGS, INC. 2019
Slide 2: Safe Harbor Disclaimers: Forward-Looking Statements
Safe Harbor Disclaimers Special Note Regarding Forward-Looking Statements Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This presentation contains, and certain oral statements made by our representatives from time to time may contain, forward-looking statements. G
Slide 3: Safe Harbor Disclaimers: Non-GAAP Financial Measures
Safe Harbor Disclaimers Non-GAAP Financial Measures In this release, HC2 refers to certain financial measures that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”), including Adjusted EBITDA (excluding the Insurance segment) and Adjusted Operating Income (“
Slide 4: 2Q19 and Subsequent Key Highlights
2Q19 and Subsequent Key Highlights Construction • 2Q19 Net Income of $8.9M; Adjusted EBITDA* of $23.1M, up 49% Y/Y • Contract backlog of $468.5M at quarter end, $661.5M on an adjusted-basis Insurance • YTD Net Income of $64.1M; Pre-tax Insurance AOI* of $61.7M, up $59.0M Y/Y • Total Adjusted Capital
Slide 5: Hybrid, Diversified Long-Term Strategy
Hybrid, Diversified Long-Term Strategy Strong Cash Flow Driving Growth and Generation Unlocking Value © HC2 HOLDINGS, INC. 2019
Slide 6: Pansend Life Sciences: R2 Dermatology
Pansend Life Sciences R2 Dermatology • Equity ownership* = ~63.4% ; Fully diluted* = ~57.6% • Investment-to-date = $27.5M • Two distinct medical devices based on unique patented technology, representing addressable markets in Asia and the rest of the world in excess of $20B 1. Contact device sold to
Slide 7: Pansend Life Sciences: MediBeacon
Pansend Life Sciences MediBeacon • Equity ownership* = ~49.9% ; Fully diluted* = ~41.5% • Total investment-to-date = $24.9M • U.S. patents granted = 32 • Company's Fluorescent Agent Platform** enables physiological function monitoring in critical health applications, including: 1. Kidney Health - Tr
Slide 8: Insurance: Long-Term Care Market History at a Glance
Insurance Continental Insurance Group, Ltd. ("CIGL") Long-Term Care ("LTC") Market History at a Glance • LTC policies were once a high growth product line, considered a mass-market way for middle income families to protect themselves against LTC risk – Medicare covers only a portion of LTC costs / l
Slide 9: Insurance: Opportunity to Create Value Capitalizing on LTC Dislocation
Insurance Continental Insurance Group, Ltd. ("CIGL") Compelling Opportunity to Create Value Capitalizing on Dislocation in the LTC Insurance Market LTC market attributes create opportunity • Imbalance of potential buyers to motivated sellers – Uncertainty around future capital allocation needs – Vol
Slide 10: Insurance: CIGL Building a Portfolio
Insurance Continental Insurance Group, Ltd. ("CIGL") Building a Portfolio Overview Key Metrics 2Q19 2Q18 • Platform established in early 2015 with the (post-KMG) (pre-KMG) formation of CIGL Balance Sheet • Completed initial acquisition from American Statutory Surplus ~$294M ~$69M Financial Group in
Slide 11: HC2 Financial Summary
HC2 Financial Summary Selected GAAP Financials (in millions) Three Months Ended June 30, Six Months Ended June 30, Increase / Increase / 2019 2018 (Decrease) 2019 2018 (Decrease) Net revenue $ 518.6 $ 496.8 $ 21.8 1,010.0 950.5 59.5 Total operating expenses 487.7 502.3 (14.6) 957.5 969.8 (12.3) Inco
Slide 12: HC2 Segment Financial Summary
HC2 Segment Financial Summary Non-GAAP Measures*: Adjusted EBITDA & Pre-tax Insurance AOI (in millions) Three Months Ended June 30, Six Months Ended June 30, Increase / Increase / 2019 2018 (Decrease) 2019 2018 (Decrease) Core Operating Subsidiaries Construction $ 23.1 $ 15.5 $ 7.6 35.5 25.5 10.0 Ma
Slide 13: HC2 Corporate Liquidity & Key Priorities
HC2 Corporate Liquidity & Key Priorities Overview & Liquidity 2019 and Near-Term Priorities Overview Priorities • Collateral Coverage Ratio exceeded 2.00x • Reduce HC2 Holdco debt • $53.9M in Consolidated Cash (excluding • Continue on multiple paths to maximize Insurance Segment) value in the Global
Slide 14: Appendix
Appendix © HC2 HOLDINGS, INC. 2019
Slide 15: Construction: DBM Global, Inc.
Construction DBM Global, Inc. Consistent, Growing Cash Flows 2019 and Longer Term Initiatives Key Metrics • Continue to integrate recently acquired (in millions) YTD YTD 2Q19 2Q18 2019 2018 Graywolf Industrial • Build relationships and find additional cross- Revenue 195.7 176.9 387.8 335.9 selling o
Slide 16: Marine Services: Global Marine Strategic Alternatives
Marine Services Global Marine Focus on Strategic Alternatives Process Update Key Metrics (in millions) YTD YTD • Continue seeking strategic alternatives, 2Q19 2Q18 2019 2018 including possible sale of Global Marine Revenue 39.4 68.4 81.8 105.1 Net Income (Loss) 1.9 10.9 (4.5) 4.6 Adjusted EBITDA* 9.
Slide 17: Energy: American Natural Gas
Energy American Natural Gas Fueling the Future 2019 and Longer Term Initiatives Key Metrics (in millions) • Recently acquired 20 stations from AMP, YTD YTD 2Q19 2Q18 2019 2018 increasing total station count to approximately 60 stations across 17 states Revenue 5.5 7.1 10.6 11.6 –Complementary statio
Slide 18: Telecommunications: PTGi ICS
Telecommunications PTGI ICS Solid Dividend Contributor Overview of Legacy Investment Key Metrics (in millions) • HC2 has received $16.6 million of YTD YTD 2Q19 2Q18 2019 2018 cumulative dividends from PTGi ICS since 2014, inclusive of $4.3 million dividends paid Revenue 189.3 190.5 344.8 392.8 in th
Slide 19: HC2 Broadcasting: Our New Growth Engine
HC2 Broadcasting Our New Growth Engine Significant Opportunities Key Station Metrics* • 2019 priorities: Full Power Stations 10 – Complete financing at Broadcasting segment Class A Stations 60 level LPTV Stations 107 – Add broadcast assets where necessary Total Operational Stations 177 – Upgrade tec
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations © HC2 HOLDINGS, INC. 2019
Slide 21: Reconciliation to Adjusted EBITDA: Three Months Ended June 30, 2019
Reconciliation of U.S. GAAP Income (Loss) to Adjusted EBITDA (in millions) Three Months Ended June 30, 2019 Core Operating Subsidiaries Early Stage & Other Non- Marine Life Other & operating Total Construction Services Energy Telecom Sciences Broadcasting Elimination Corporate HC2 Net income attribu
Slide 22: Reconciliation to Adjusted EBITDA: Three Months Ended June 30, 2018
Reconciliation of U.S. GAAP Income (Loss) to Adjusted EBITDA (in millions) Three Months Ended June 30, 2018 Core Operating Subsidiaries Early Stage & Other Non- Marine Life Other & operating Total Construction Services Energy Telecom Sciences Broadcasting Elimination Corporate HC2 Net income attribu
Slide 23: Reconciliation to Adjusted EBITDA: Six Months Ended June 30, 2019
Reconciliation of U.S. GAAP Income (Loss) to Adjusted EBITDA (in millions) Six Months Ended June 30, 2019 Core Operating Subsidiaries Early Stage & Other Non- Marine Life Other & operating Total Construction Services Energy Telecom Sciences Broadcasting Elimination Corporate HC2 Net Income attributa
Slide 24: Reconciliation to Adjusted EBITDA: Six Months Ended June 30, 2018
Reconciliation of U.S. GAAP Income (Loss) to Adjusted EBITDA (in millions) Six months ended June 30, 2018 Core Operating Subsidiaries Early Stage & Other Non- Marine Life Other & operating Total Construction Services Energy Telecom Sciences Broadcasting Elimination Corporate HC2 Net Income attributa
Slide 25: Reconciliation to Pre-tax Insurance AOI
Reconciliation of U.S. GAAP Income (Loss) to Pre-tax Insurance AOI (in millions) Three Months Ended June 30, Six Months Ended June 30, Increase / Increase / 2019 2018 (Decrease) 2019 2018 (Decrease) Net income (loss) - Insurance segment $ 30.3 $ 0.6 $ 29.7 $ 64.1 $ 1.8 $ 62.3 Effect of investment (g