Innovate Corp. · NYSE:VATE
Innovate — HC2 Holdings — Investor Presentation (August 2017)
42 slides from Innovate's investor presentation, Aug 10, 2017
Slide 1: Corporate Overview August 2017
HC2 HOLDINGS, INC. © HC2 Holdings, Inc. 2017 Corporate Overview August 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 . $0 $2 $4 $6 $8 $10 $12 $14 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% *Pending Federal Communications Communication approva
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 17 All data as of June 30, 2017 unless otherwise noted HC2’s Pansend Life Sciences Segment Is Focused on the Development of Innovative Healthcare Technologies and Products 80% equity ownership of company focused on immunotherapy; Oncolytic virother
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: Appendix: 2Q17 Highlights / Select Financial Data
Appendix: 2Q17 Highlights / Select Financial Data
Slide 21: 2Q17 Highlights and Recent Developments
© 2 0 1 7 H C 2 H O L D I N G S , I N C . 2Q17 Highlights and Recent Developments 20 Second quarter performance once again highlight the unique value HC2 brings to the market with our diverse, uncorrelated industry holdings – Construction: $590 million backlog; >$800 million inclusive of contracts
Slide 22: HC2 Segment Overview
© 2 0 1 7 H C 2 H O L D I N G S , I N C . HC2 Segment Overview 21 Early Stage and Other Holdings Core Operating Subsidiaries 2Q17 Revenue: $138.9m 2Q17 Adjusted EBITDA: $11.1m YTD Adjusted EBITDA: $19.7m Backlog $590m; >$800m with contracts awarded, but not yet signed Solid long-term pipel
Slide 23: Segment Financial Summary
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Segment Financial Summary 22 All data as of June 30, 2017 unless otherwise noted Construction formerly Manufacturing; Energy formerly Utilities ($m) Q2 2017 Q2 2016 YTD 2017 YTD 2016 Adjusted EBITDA Core Operating Subsidiaries Construction $11.1 $13.2 $19.7
Slide 24: 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) 23 2Q17 Net Income1: $4.2m vs. $9.4m for 2Q16; YTD17 Net Income $7.4m vs. $13.7m for YTD16 2Q17 Adjusted EBITDA: $11.1m vs. $13.2m for 2Q16 driven in part by better than bid performance on commercial projects in 2Q16 (A
Slide 25: Marine Services: Global Marine Group
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Marine Services: Global Marine Group 24 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
Slide 26: Energy: American Natural Gas (ANG)
© 2 0 1 7 H C 2 H O L D I N G S , I N C . 2Q17 Net (Loss): $(0.4)m vs. Net Income of $0.1m for 2Q16; YTD17 Net (Loss) of $(1.1)m vs. Income of $0.04m for YTD16 2Q17 Adjusted EBITDA: $1.0m vs. $0.5m for 2Q16 YTD17 Adjusted EBITDA: $2.2m vs. $0.9m for the comparable 2016 year-to-date period Delivered
Slide 27: Telecommunications: PTGi-ICS
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Strong quarterly results again due to continued focus on higher margin wholesale traffic mix and improved operational efficiencies – 2Q17 Net Income: $2.1m vs. $1.0m for 2Q16; YTD17 Net Income of $3.6m vs. $2.2m for YTD16 – 2Q17 Adjusted EBITDA: $2.2m vs.
Slide 28: 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 27 Note: Reconciliation of Adjusted Operating Income to U.S. GAAP Net Income in appendix. All data as of June 30, 2017 unless otherwise noted Continental Insurance Group serves as a platform for run-off Long Term Care
Slide 29: Pansend
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Pansend 28 All data as of June 30, 2017 unless otherwise noted HC2’s Pansend Life Sciences Segment Is Focused on the Development of Innovative Healthcare Technologies and Products 80% equity ownership of company focused on immunotherapy; Oncolytic virother
Slide 30: 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 29 Collateral Coverage Ratio at Quarter End Exceeded 2.0x $104.6 million in Consolidated Cash (excluding Insurance segment) – $56.0 million Corporate Cash $11.5 million Received in Dividends and Tax Share from DBM Gl
Slide 31: Appendix: Reconciliations
Appendix: Reconciliations
Slide 32: Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended June 30, 2017 31 (in thousands) Three Months Ended June 30, 2017 Construction Marine Services Energy Telecom Life Sciences Other & Elimination Net Income (loss) attributable
Slide 33: Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA
© 2 0 1 7 H C 2 H O L D I N G S , I N C . Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended June 30, 2016 32 (in thousands) Construction Marine Services Telecom Energy Life Sciences Other & Elimination Net Income (loss) attributable to HC2 Holdings, Inc. 1,935$ Less
Slide 34: Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA
© 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 Six Months Ended June 30, 2017 33 (in thousands) Six Months Ended June 30, 2017 Construction Marine Services Energy Telecom Life Sciences Other & Elimination Net Income (loss) attributable to H
Slide 35: Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA
© 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 Six Months Ended June 30, 2016 34 (in thousands) Construction Marine Services Telecom Energy Life Sciences Other & Elimination Net Income (loss) attributable to HC2 Holdings, Inc. (28,527)$ Les
Slide 36: 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 and Six Months Ended June 30, 2017 and 2016 35 The calculation of Insurance Net Loss has been revised to exclude adjustments for intercompany eliminations as they are not considered relevan
Slide 37: Appendix: Biographies
Appendix: Biographies
Slide 38: 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 37 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 39: 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 38 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 40: 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 39 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 41: 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 40 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 42: 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 August 2017