Innovate Corp. · NYSE:VATE
Innovate — HC2 Holdings — Q1 2019 Earnings Presentation
29 slides from Innovate's earnings presentation, May 7, 2019
Slide 1: HC2 Holdings, Inc. First Quarter 2019 Conference Call
HC2 HOLDINGS, INC. First Quarter 2019 Conference Call © 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: First Quarter 2019 Key Highlights
First Quarter 2019 Key Highlights 8% Y/Y revenue growth to $491.4 million Core Operating Subsidiaries Adjusted EBITDA Y/Y growth of 52% 24% Adjusted EBITDA growth year-over-year to $12.4 million Reaffirm 2019 Adjusted EBITDA guidance of $75-80 million Pre-tax Adjusted Operating Income of $
Slide 5: Hybrid, Diversified Long-Term Strategy
Hybrid, Diversified Long-Term Strategy Strong Cash Flow Driving Growth and Generation Unlocking Value © 2 0 1 9 H C 2 H O L D I N G S , I NC. 4
Slide 6: HC2 Broadcasting: Our Broadcast Strategy
HC2 Broadcasting Our Broadcast Strategy Take advantage of the prime opportunity to capitalize on the dynamically changing media landscape Create an alternative distribution platform to bring valuable content to over-the-air (OTA) viewers © 2 0 1 9 H C 2 H O L D I N G S , I NC. 5
Slide 7: HC2 Broadcasting: Growing Demand, Limited Licenses Available
HC2 Broadcasting Growing Demand, Limited Licenses Available More U.S. OTA Households Limited TV Spectrum Available (in millions) U.S. OTA Households* After the most recent auction of 20 Broadcast spectrum, available broadcast channels in a single DMA were reduced from 49 to 35 licenses. 15 Each
Slide 8: HC2 Broadcasting: Multiple Paths to Growth
HC2 Broadcasting Multiple Paths to Growth Three-Prong Strategy for Revenue & Adjusted EBITDA Expansion 1. Lease capacity to third-party content providers, collect an ongoing fee - Believe platform can attract major content providers once it covers 75% of US population - OTA lease rates are on an upw
Slide 9: HC2 Broadcasting: Platform Overview & Near-Term Priorities
HC2 Broadcasting Platform Overview & Near-Term Priorities Significant Opportunities Our OTA Platform* 2019 priorities: Operational Stations: 186 – Complete financing at – Full-Power Stations: 15 Broadcasting segment level – Class A Stations: 61 – Add broadcast assets where – LPTV Stations: 110 n
Slide 10: 2019 Corporate Liquidity & Key Priorities
2019 Corporate Liquidity & Key Priorities HC2 Corporate Overview Collateral Coverage Ratio1 exceeded 2.00x $46.6 million in Consolidated Cash (excluding Insurance segment) Liquidity Levers Key Priorities Ability to upstream dividends from Ongoing strategic alternative process Construction an
Slide 11: Segment Financial Summary
Segment Financial Summary ($m) Q1 2019 Q1 2018 Core Operating Subsidiaries Construction $12.4 $10.0 Marine Services 0.1 (2.4) Energy 1.0 0.7 Telecom 0.8 1.1 Total Core Operating $14.3 $9.4 Adjusted Early Stage and Other Holdings EBITDA Life Sciences ($2.9) ($4.3) Broadcasting (2.5) (5.1) Other - (0.
Slide 12: Appendix
Appendix:
Slide 13: HC2's Diversified Portfolio
HC2’s Diversified Portfolio Core Financial Core Operating Subsidiaries Services Subsidiaries Construction: Marine Services: Energy: Telecommunications: Insurance: DBM GLOBAL (SCHUFF) GMSL ANG PTGI ICS CIG 1Q19 Revenue: $192.1m 1Q19 Revenue: $42.4m 1Q19 Revenue: $5.1m 1Q19 Revenue: $155.5m
Slide 14: Consolidated Financial Summary
Consolidated Financial Summary ($m) Q1 2019 Q1 2018 Total Net Revenue $491.4 $453.7 Total Operating Expenses 469.8 467.5 Income (Loss) From Operations 21.6 (13.8) Interest Expense (22.3) (19.3) Statement of Operations Income (Loss) From Equity (4.9) (5.2) Investees (Selected Financial Data) Net loss
Slide 15: DBM Global Inc. – Consistent & Growing Cash Flow
DBM Global Inc. – Consistent & Growing Cash Flow First Quarter 2019 Highlights 2019 and Longer Term Initiatives 1Q19 Net Income $2.1m vs. $3.5m in 1Q18 Fully integrate GrayWolf into DBM Global Adjusted EBITDA rose 24% 1Q19 vs. 1Q18 Build relationships and find additional cross-selling opport
Slide 16: Continental Insurance Group – Building A Portfolio
Continental Insurance Group – Building A Portfolio Continental Insurance Group Overview Platform for run-off Long Term Care (“LTC”) books of business Completed acquisition of Humana’s ~$2.4 billion LTC Insurance block in August 2018 – Significantly grew the platform and leverages Continental’s i
Slide 17: Pansend – Unlocking Value Through Innovation
Pansend – Unlocking Value Through Innovation Small to Medium Investments – Significant Potential for Value Creation Sold to Janssen Biotech, Inc. 50% equity ownership 74% equity ownership (Johnson & Johnson) in 2Q18 Unique technology and Developed skin lightening and $8m total investment
Slide 18: Additional Segment Profiles
Additional Segment Profiles
Slide 19: Marine Services: Global Marine Group First Quarter Update
Marine Services: Global Marine Group First Quarter Update 1Q19 Net (Loss) of ($6.4)m vs. ($6.3)m in 1Q18 1Q19 Adjusted EBITDA: $0.1m vs. Adjusted EBITDA loss of ($2.4)m in 1Q18 Global Marine backlog of $455m as of March 31, 2019 Huawei Marine Network implemented a long-term annual dividend p
Slide 20: Energy: American Natural Gas (ANG) First Quarter Update
Energy: American Natural Gas (ANG) First Quarter Update 1Q19 Net (Loss) of ($0.6)m vs. ($0.7)m in 1Q18 1Q19 Adjusted EBITDA: $1.0m vs. $0.7m in 1Q18 Delivered 3.2m Gasoline Gallon Equivalents (GGEs) in 1Q19 vs. 3.0m GGEs in 1Q18; 11.8m GGEs in 2018 vs. 11.1m GGEs in 2017 Seek to increase exi
Slide 21: Telecommunications: PTGi-ICS First Quarter Update
Telecommunications: PTGi-ICS First Quarter Update 1Q19 Net Income: $0.6m vs. $1.1m in 1Q18 1Q19 Adjusted EBITDA: $0.8m vs. $1.1m for 1Q18 ICS Group acquired Go2Tel.com Inc. a well-established VoIP carrier that offers high-quality termination services, primarily in Latin America, South America
Slide 22: Reconciliations
Reconciliations
Slide 23: Reconciliation of Net Income (Loss) to Adjusted EBITDA: Q1 2019
Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended March 31, 2019 (in millions) Three Months Ended March 31, 2019 Core Operating Subsidiaries Early Stage & Other Non- Life Other & operating Total HC2 Construction Marine Energy Telecom Sciences Broadcasting Eliminatio
Slide 24: Reconciliation of Net Income (Loss) to Adjusted EBITDA: Q1 2018
Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended March 31, 2018 (in millions) Three Months Ended March 31, 2018 Core Operating Subsidiaries Early Stage & Other Non- Life Other & operating Total HC2 Construction Marine Energy Telecom Sciences Broadcasting Eliminatio
Slide 25: Reconciliation of Net Income (Loss) to Adjusted EBITDA: FY2018
Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Full Year Ended December 31, 2018 (in millions) Year Ended December 31, 2018 Core Operating Subsidiaries Early Stage & Other Non- Life Other & operating Total HC2 Construction Marine Energy Telecom Sciences Broadcasting Elimination Cor
Slide 26: Reconciliation of Net Income (Loss) to Adjusted EBITDA: FY2017
Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Full Year Ended December 31, 2017 (in millions) Year Ended December 31, 2017 Core Operating Subsidiaries Early Stage & Other Non- Life Other & operating Total HC2 Construction Marine Energy Telecom Sciences Broadcasting Elimination Cor
Slide 27: Reconciliation of Net Income (Loss) to Adjusted EBITDA: FY2016
Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Full Year Ended December 31, 2016 (in millions) Year Ended December 31, 2016 Core Operating Subsidiaries Early Stage & Other Non- Life Other & operating Total HC2 Construction Marine Energy Telecom Sciences Elimination Corporate Net (l
Slide 28: Reconciliation of Net Income to Insurance Adjusted Operating Income
Reconciliation of U.S. GAAP Net Income (Loss) to Insurance Adjusted Operating Income (in millions) Adjusted Operating Income - Insurance ("Insurance AOI") Three Months Ended March 31, 2019 2018 Net Income $ 33.8 $ 1.2 Effect of inv estment (gains) (6.0) (2.5) Acquisition costs 0.2 0.3 Insurance AOI
Slide 29: HC2 Holdings, Inc. Contact
HC2 HOLDINGS, INC. i r @ h c 2 . c o m • 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 th F l o o r , N e w Y o r k , N Y 1 0 0 2 2 © HC2 Holdings, Inc. 2019 May 2019