Innovate Corp. · NYSE:VATE

Innovate — HC2 Holdings — Q4 2018 Earnings Presentation

25 slides from Innovate's earnings presentation, Mar 12, 2019

  1. Slide 1: Fourth Quarter 2018 Conference Call

    HC2 HOLDINGS, INC. Fourth Quarter 2018 Conference Call © HC2 Holdings, Inc. 2019

  2. 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

  3. 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 (“

  4. Slide 4: Fourth Quarter 2018 Key Highlights

    Fourth Quarter 2018 Key Highlights Successfully acquired GrayWolf Industrial 28% Adjusted EBITDA growth year-over-year MediBeacon receives “Break-through Device Designation” from FDA Collaborating with the FDA to expedite regulatory review Continuing to expand operations through strategic acqui

  5. Slide 5: Hybrid, Diversified Long-Term Strategy

    Hybrid, Diversified Long-Term Strategy Strong Cash Flow Driving Growth and Generation Unlocking Value © 2019 HC 2 HOLDINGS, INC. 4

  6. Slide 6: DBM Global Inc. – Consistent and Growing Cash Flow

    DBM Global Inc. – Consistent and Growing Cash Flow Fourth Quarter 2018 Highlights 2019 and Longer Term Initiatives  Adjusted EBITDA rose 28% 4Q18 vs. 4Q17  Fully integrate GrayWolf into DBM Global  Build relationships and find additional cross-selling  FY18 Adjusted EBITDA up 18% to $61 million

  7. Slide 7: Continental Insurance Group – Building Portfolio

    Continental Insurance Group – Building 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 – Significantly grew the platform and leverages Continental’s insurance operatio

  8. Slide 8: HC2 Broadcasting – Growth Engine

    HC2 Broadcasting – Growth Engine Significant Opportunities Broadcast Television Station: Key Metrics*  Positioned to take advantage of changing media  Operational Stations: 176 landscape – Full-Power Stations: 15  Create and utilize alternative distribution platform to bring valuable content to o

  9. Slide 9: 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

  10. Slide 10: Segment Financial Summary

    Segment Financial Summary ($m) Q4 2018 Q4 2017 FY2018 FY2017 Core Operating Subsidiaries Construction $19.4 $15.1 $60.9 $51.6 Marine Services 6.9 15.3 32.7 44.0 Energy 0.8 0.4 5.5 2.9 Telecom 1.4 1.6 5.3 6.9 Total Core Operating $28.5 $32.4 $104.4 $105.5 Adjusted Early Stage and Other Holdings EBITD

  11. Slide 11: Capital Discussion and Guidance

    Capital Discussion and Guidance HC2 Corporate Overview  Collateral Coverage Ratio1 exceeded 2.00x  $41.7 million in Consolidated Cash (excluding Insurance segment)  2019 Key Priorities: – Ongoing strategic alternative process related to Global Marine – Reduce HC2 Corporate debt – Continued focuse

  12. Slide 12: Appendix

    Appendix:

  13. 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  4Q18 Revenue: $185.1m  4Q18 Revenue: $44.4m  4Q18 Revenue: $4.6m  4Q18 Revenue: $213.0m 

  14. Slide 14: Consolidated Financial Summary

    Consolidated Financial Summary ($m) Q4 2018 Q4 2017 FY2018 FY2017 Total Net Revenue $524.9 $458.5 $1,976.7 $1,634.1 Total Operating Expenses 537.1 460.0 2,032.5 1,635.2 Income (Loss) From Operations (12.2) (1.5) (55.8) (1.1) Statement of Interest Expense (21.7) (15.7) (75.7) (55.1) Operations Income

  15. Slide 15: Additional Segment Profiles

    Additional Segment Profiles

  16. Slide 16: Marine Services: Global Marine Group Fourth Quarter Update

    Marine Services: Global Marine Group Fourth Quarter Update  4Q18 Net Income (Loss): Net (Loss) ($3.8)m vs. Net Income $6.2m in 4Q17; 2018 Net Income $0.3m vs. $15.2m for 2017  4Q18 Adjusted EBITDA: $6.9m vs. $15.3m in 4Q17  2018 Adjusted EBITDA: $32.7m vs. $44.0m in 2017  Global Marine backlog o

  17. Slide 17: Energy: American Natural Gas (ANG) Fourth Quarter Update

    Energy: American Natural Gas (ANG) Fourth Quarter Update  4Q18 Net Income (Loss): Net (Loss) ($0.3)m vs. Net Income $1.5m in 4Q17; 2018 Net (Loss) of ($0.9)m vs. ($0.5)m for 2017  4Q18 Adjusted EBITDA: $0.8m vs. $0.4m in 4Q17  2018 Adjusted EBITDA: $5.5m vs. $2.9m for 2017  Delivered 11.8m Gasol

  18. Slide 18: Telecommunications: PTGi-ICS Fourth Quarter Update

    Telecommunications: PTGi-ICS Fourth Quarter Update  4Q18 Net Income: $1.2m vs. $1.3m in 4Q17; 2018 Net Income of $4.6m vs. $6.2m for 2017  4Q18 Adjusted EBITDA: $1.4m vs. $1.6m for 4Q17  2018 Adjusted EBITDA: $5.3m vs. $6.9m for 2017  ICS Group acquired Go2Tel.com Inc. a well-established VoIP ca

  19. Slide 19: Reconciliations

    Reconciliations

  20. Slide 20: Reconciliation of Net Income (Loss) to Adjusted EBITDA – Three Months

    Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended December 31, 2018 (in millions) Three Months Ended December 31, 2018 Core Operating Subsidiaries Early Stage & Other Non- operating Total HC2 Life Other & Corporate Construction Marine Energy Telecom Sciences Broadca

  21. Slide 21: Reconciliation of Net Income to Adjusted EBITDA – Full Year

    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- operating Total HC2 Life Other & Corporate Construction Marine Energy Telecom Sciences Broadcastin g Elim

  22. Slide 22: Reconciliation to Adjusted EBITDA – Three Months Ended December 31, 2017

    Reconciliation of U.S. GAAP Net Income (Loss) to Adjusted EBITDA Three Months Ended December 31, 2017 (in millions) Three Months Ended December 31, 2017 Core Operating Subsidiaries Early Stage & Other Non- Life Other & operating Total HC2 Construction Marine Energy Telecom Sciences Broadcasting Elim

  23. Slide 23: Reconciliation to Adjusted EBITDA – Full Year Ended December 31, 2017

    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

  24. Slide 24: 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 December 31, Years Ended December 31, 2018 2017 2018 2017 Net Income (loss) - Insurance segment$ 22.4 $ 3.4 $ 165.2 $ 7.1 Net

  25. Slide 25: HC2 Holdings, Inc. Contact

    HC2 HOLDINGS, INC. ir@hc2.com • 212.235.2691 • 450 Park Avenue, 30th Floor, New York, NY 10022 © HC2 Holdings, Inc. 2019 March 2019

HC2 Holdings — Q4 2018 Earnings Presentation on 6ix