Innovate Corp. · NYSE:VATE
Innovate — HC2 Holdings — Investor Presentation (May 2017)
41 slides from Innovate's investor presentation, May 11, 2017
Slide 1: Corporate Overview May 2017
HC2 HOLDINGS, INC. © HC2 Holdings, Inc. 2017 Corporate Overview May 2017
Slide 2: Special Note Regarding Forward-Looking Statements
© 2 0 1 7 H C 2 H O L D I N G S , I N C . 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-lo
Slide 3: Company Overview
Company Overview
Slide 4: HC2 Holdings, Inc. Who We Are, What We Do
© 2 0 1 7 H C 2 H O L D I N G S , I N C . HC2 Holdings, Inc. 3 W ho W e Are W ha t W e Do Di v ers i f i ed h o l d i n g c omp a n y Pe r man ent c a p i ta l S t r a teg ic a n d f i n a n c i a l p a r tne r Te a m o f v i s ion ar ie s B u y a n d b u i l d c omp a n ies E x e cute b
Slide 5: Investment Highlights: Why Invest in HC2?
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Investment Highlights 4 Why Invest in HC2? Leadership team has diverse network resulting in unique deal flow Unique combination of operating entities accessible through one investment – Controlling stakes in leading, stable, cash flow generating business
Slide 6: Clear focus on delivering sustainable value for all stakeholders
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Clear focus on delivering sustainable value for all stakeholders Value operator with long-term outlook Acquire controlling equity interests in diverse industries creating value through growth in operating subsidiaries Strong capital base allows funding
Slide 7: HC2 Company Snapshot
© 2 0 1 7 H C 2 H O L D I N G S , I N C . HC2 Company Snapshot 6 Early Stage and Other Holdings Core Operating Subsidiaries One of the largest steel fabrication and erection companies in the U.S. Recently changed name to DBM Global Inc. Offers full suite of integrated steel construction and pr
Slide 8: HC2 Executive Leadership Team
© 2 0 1 7 H C 2 H O L D I N G S , I N C . HC2 Executive Leadership Team 7 Philip A. Falcone Chairman of the Board, Chief Executive Officer and President Michael J. Sena Chief Financial Officer Paul K. Voigt Senior Managing Director Paul L. Robinson Chief Legal Officer & Corporate Secretary Suzi Raft
Slide 9: HC2 Stock Performance & Timeline
© 2 0 1 7 H C 2 H O L D I N G S , I N C . HC2 Stock Performance & Timeline 8 Note: As a result of the Schuff Tender, HC2’s ownership increased to 89% and subsequently through open market share purchases increased to 92% $- $2 $4 $6 $8 $10 $12 $14 5/29/2014 HC2 Acquires Schuff (65%) HC2 Acquires Glob
Slide 10: Segment Detail
Segment Detail
Slide 11: DBM Global Inc. (Schuff Intl.) – Company Snapshot
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Sacramento Kings Arena DBM Global Inc. (Schuff Intl.) – Company Snapshot 10 DBM Global Inc. is focused on delivering world class, sustainable value to its clients through a highly collaborative portfolio of companies which provide better designs, more effi
Slide 12: DBM Global Inc. (Schuff Intl.) – Core Activities
© 2 0 1 7 H C 2 H O L D I N G S , I N C . DBM Global Inc. (Schuff Intl.) – Company Snapshot 11 Core Activities The largest structural steel fabricator and erector in the U.S. In-house structural & design engineering expertise Provides structural steel fabrication & erection services for smalle
Slide 13: Global Marine Group – Company Snapshot
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Global Marine Group – Company Snapshot 12 “Engineering a Clean and Connected Future” Leading provider of offshore marine engineering delivered via two business units: Global Marine: Focusing on the telecommunications sector CWind: Focused on offshore renew
Slide 14: Global Marine Group – Core Activities
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Global Marine Group – Company Snapshot 13 Core Activities Maintenance Provision of vessels on standby to repair fiber optic telecom cables in defined geographic zones Location of fault, cable recovery, jointing and re- deployment of cables Operation of
Slide 15: American Natural Gas – Company Snapshot
© 2 0 1 7 H C 2 H O L D I N G S , I N C . American Natural Gas – Company Snapshot 14 Designs, builds, owns, operates and maintains compressed natural gas commercial fueling stations for transportation Current ownership 49.9% with ability to increase to 63% In-depth experience in the natural gas
Slide 16: PTGi International Carrier Services
© 2 0 1 7 H C 2 H O L D I N G S , I N C . PTGi International Carrier Services (“PTGi ICS”) 15 Leading international wholesale telecom service company providing voice and data call termination to the telecom industry worldwide Provides transit and termination of telephone calls through its own glob
Slide 17: Continental Insurance Group – Company Snapshot
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Continental Insurance Group – Company Snapshot 16 April 2015: HC2 established Continental Insurance Group (“CIG”) as its insurance platform led by industry veteran Jim Corcoran, as Executive Chairman December 2015: HC2 completed the acquisition of American F
Slide 18: Pansend Life Sciences
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Pansend Life Sciences 17 All data as of March 31, 2017 unless otherwise noted HC2’s Life Sciences Segment Is Focused on the Development of Innovative Healthcare Technologies and Products 80% equity ownership of company focused on immunotherapy; Oncolytic v
Slide 19: 704Games
© 2 0 1 7 H C 2 H O L D I N G S , I N C . 704Games (Formerly Dusenberry Martin Racing (DMi, Inc.)) 18 On December 31, 2014, HC2 / DMR (re-branded 704Games) completed a $6 million asset purchase agreement to acquire worldwide exclusive licensing rights to NASCAR® simulation style racing titles on int
Slide 20: Nervve
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Nervve 19 In October 2014, HC2 made an initial contribution of $5 million in convertible preferred equity Subsequent financing increased the total to $7.2 million Headquartered in Buffalo, New York Nervve has developed the fastest, most accurate video an
Slide 21: Appendix: 1Q17 Highlights / Select Financial Data
Appendix: 1Q17 Highlights / Select Financial Data
Slide 22: 1Q17 Highlights and Recent Developments
© 2 0 1 7 H C 2 H O L D I N G S , I N C . 1Q17 Highlights and Recent Developments 21 Solid first quarter results once again highlight the unique value HC2 brings to the market with our diverse, uncorrelated industry holdings – Construction: ~$500 million backlog; ~$800 million inclusive of contrac
Slide 23: HC2 Segment Overview
© 2 0 1 7 H C 2 H O L D I N G S , I N C . HC2 Segment Overview 22 Early Stage and Other Holdings Core Operating Subsidiaries 1Q17 Revenue: $112.7m 1Q17 Adjusted EBITDA: $8.6m Backlog $498m; $800 million with contracts awarded, but not yet signed Solid long-term pipeline with additional ~$350
Slide 24: Segment Financial Summary
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Segment Financial Summary 23 Adjusted EBITDA for Core Operating Subsidiaries $27.8m versus $12.7m in year-ago-quarter All data as of March 31, 2017 unless otherwise noted Construction formerly Manufacturing; Energy formerly Utilities ($m) Q1 2017 Q1 2016 Adj
Slide 25: Construction: DBM Global Inc. (Schuff)
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Construction: DBM Global Inc. (Schuff) 24 1Q17 Net Income: $3.2m versus $4.4m for 1Q16 1Q17 Adjusted EBITDA: $8.6m versus $11.5m for 1Q16 driven in part by delays caused by design changes on existing projects in backlog Pacific region continues to remain str
Slide 26: Marine Services: GMSL
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Marine Services: GMSL 25 Joint Venture established in 1995 with China Telecom China’s leading provider of submarine cable installation Located in Shanghai and possesses a fleet of advanced purpose-built cable ships Currency Exchange: CNY:USD 1:0.129 Al
Slide 27: Energy: ANG
© 2 0 1 7 H C 2 H O L D I N G S , I N C . -$0.4 $0.9 $2.5 $1.8 $6.8 $6.4 2014A 2015A 2016A Historical Performance Adjusted EBITDA Revenue Energy: ANG 26 All data as of March 31, 2017 unless otherwise noted Energy formerly Utilities 1Q17 Net Loss: ($0.7)m versus ($0.03)m for 1Q16 1Q17 Adjusted EBITDA
Slide 28: Telecommunications: PTGi-ICS
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Telecommunications: PTGi-ICS 27 $(1.2) $2.0 $5.6 $162.0 $460.4 $735.0 2014A 2015A 2016A Historical Performance Adjusted EBITDA Revenue All data as of March 31, 2017 unless otherwise noted Strong quarterly results again due to continued growth in wholesale
Slide 29: Insurance: Continental Insurance Group
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Insurance: Continental Insurance Group 28 Note: Reconciliation of Adjusted Operating Income to U.S. GAAP Net Income in appendix. All data as of March 31, 2017 unless otherwise noted Continental Insurance, Inc. (CII) serves as a platform for run-off LTC boo
Slide 30: Pansend Life Sciences
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Pansend Life Sciences 29 All data as of March 31, 2017 unless otherwise noted HC2’s Life Sciences Segment Is Focused on the Development of Innovative Healthcare Technologies and Products 80% equity ownership of company focused on immunotherapy; Oncolytic v
Slide 31: Notable Financial and Other Updates
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Notable Financial and Other Updates 30 Collateral Coverage Ratio at Quarter End Exceeded 2.0x $92.3 million in Consolidated Cash (excluding Insurance segment) – $27.0 million Corporate Cash $9.2 million from DBM Global Received From Special Dividend in
Slide 32: Appendix: Reconciliations
Appendix: Reconciliations
Slide 33: Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA, Q1 2017
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended March 31, 2017 32 (in thousands)
Slide 34: Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA, Q1 2016
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended March 31, 2016 33 (in thousands)
Slide 35: Reconciliation of U.S. GAAP Net Income (Loss) to Insurance AOI
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Insurance AOI Three Months Ended March 31, 2017 and 2016 34 The calculation of Insurance Net Loss has been revised to exclude adjustments for intercompany eliminations as they are not considered relevant in ev
Slide 36: Appendix: Biographies
Appendix: Biographies
Slide 37: HC2 Executive Leadership Team: Philip A. Falcone
© 2 0 1 7 H C 2 H O L D I N G S , I N C . HC2 Executive Leadership Team 36 Philip A. Falcone Served as a director of HC2 since January 2014 and Chairman of the Board, Chief Executive Officer and President of HC2 since May 2014 Served as a director, Chairman of the Board and Chief Executive Offic
Slide 38: HC2 Executive Leadership Team: Michael J. Sena, Paul K. Voigt
© 2 0 1 7 H C 2 H O L D I N G S , I N C . HC2 Executive Leadership Team 37 Michael J. Sena Chief Financial Officer of HC2 since June 2015 Served as the Chief Accounting Officer of HRG from November 2012 to May 2015 From January 2009 to November 2012, held various accounting and financial repor
Slide 39: HC2 Executive Leadership Team: Paul L. Robinson, Andrew G. Backman
© 2 0 1 7 H C 2 H O L D I N G S , I N C . HC2 Executive Leadership Team 38 Paul L. Robinson Chief Legal Officer & Corporate Secretary of HC2 since March 2016 Served as Executive Vice President, Chief Legal Officer and Corporate Secretary for SEACOR Holdings Inc. for nearly nine years prior to HC
Slide 40: HC2 Executive Leadership Team: Suzi Raftery Herbst
© 2 0 1 7 H C 2 H O L D I N G S , I N C . HC2 Executive Leadership Team 39 Suzi Raftery Herbst Chief Administrative Officer of HC2 since March 2015 with over 17 years of diverse human resources, recruiting, equity and foreign exchange sales experience Prior to joining HC2, served as Senior Vice
Slide 41: HC2 Holdings Investor Relations Contact
HC2 HOLDINGS, INC. © HC2 Holdings, Inc. 2017 A n d r e w G . B a c k m a n • i r @ h c 2 . c om • 2 1 2 . 2 3 5 . 2 6 9 1 • 4 5 0 P a r k A v e n u e , 3 0 t h F l o o r , N e w Y o r k , N Y 1 0 0 2 2 May 2017