Core Points - INNOVATE Corp. announced that its subsidiary DBM Global Inc. will pay a cash dividend of approximately $5.5 million, or $1.42 per share, to stockholders on June 16, 2025 [1] - As the largest stockholder of DBMG, INNOVATE expects to receive around $5 million from the total dividend payout [1] - Individual stockholders of INNOVATE are not eligible to receive the cash dividend [1] Company Overview - INNOVATE Corp. operates in three key areas of the new economy: Infrastructure, Life Sciences, and Spectrum, employing approximately 3,100 people across its subsidiaries [2] - DBM Global Inc. focuses on delivering sustainable value through integrated steel construction services and professional services, with operations in multiple countries including the United States, Australia, Canada, India, New Zealand, the Philippines, and the United Kingdom [3]

Core Viewpoint - INNOVATE Corp. announced that DBM Global Inc. has secured an $85 million term loan and a $135 million revolving credit facility to repay existing debts and enhance working capital capacity [1][2]. Group 1: Credit Facility Details - The total amount of the Credit Facility is $220 million, maturing on May 20, 2030, with an accordion feature allowing an increase of up to $50 million [2]. - The Credit Facility is provided by a syndicate led by UMB Bank, N.A., and is classified as senior secured debt [2]. Group 2: Management Insights - Rustin Roach, Chairman and CEO of DBMG, expressed excitement about the relationship with banking partners and highlighted the liquidity support for working capital requirements [3]. - Paul Voigt, interim CEO of INNOVATE, noted that the Credit Facility will provide long-term flexibility and support continued growth, especially after DBMG added over $500 million in new awards to their adjusted backlog last quarter [4]. Group 3: Company Overview - INNOVATE Corp. operates in three key areas: Infrastructure, Life Sciences, and Spectrum, employing approximately 3,100 people across its subsidiaries [4]. - DBM Global Inc. focuses on delivering sustainable value through a collaborative portfolio, offering integrated steel construction services and professional services across various market segments, including commercial, healthcare, and public works [5].

Financial Data and Key Metrics Changes - Consolidated total revenue for Q1 2025 was $274.2 million, a decrease of 13% compared to $315.2 million in the prior year period [20] - Net loss attributable to common stockholders for Q1 2025 was $24.8 million, or $1.89 per fully diluted share, compared to a net loss of $17.7 million, or $2.21 per fully diluted share in the prior year [20] - Total adjusted EBITDA was $7.2 million in Q1 2025, down from $12.8 million in the prior year period [20] Business Line Data and Key Metrics Changes - Infrastructure segment revenue decreased 14% to $264.9 million from $307.9 million in the prior year quarter, primarily due to project timing [21] - Life Sciences segment revenue increased 210% to $3.1 million from $1 million in the prior year quarter, driven by increased unit sales [23] - Spectrum segment revenues were $6.2 million, down $100,000 compared to the first quarter of 2024, with adjusted EBITDA of $1.4 million, a decrease of $200,000 [23] Market Data and Key Metrics Changes - DBM Global achieved revenues of $264.9 million and adjusted EBITDA of $16.7 million during the quarter, with a backlog now reaching $1.4 billion [6][8] - R2 tripled its year-over-year revenue to $3.1 million in Q1 2025, with significant growth in North America [12] - The company is currently serving 28 countries and continues to expand its global footprint [13] Company Strategy and Development Direction - The company is focused on leveraging valuable assets to achieve a sustainable capital structure before debt maturities [6][7] - The strategic vision emphasizes maximizing the value of assets, with ongoing exploration of strategic alternatives [18] - The company is pursuing commercial opportunities in data casting and modernizing broadcasting capabilities [16][18] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute on strategic objectives and highlighted the strong backlog and robust pipeline for DBM [6][8] - The ongoing tariff situation is being monitored, with no material impact observed on DBM's business as of now [9] - Management remains optimistic about the market opportunity for R2 and the momentum experienced year over year [15] Other Important Information - The company had $33.3 million in cash and cash equivalents as of March 31, 2025, down from $48.8 million at the end of 2024 [25] - Total principal outstanding indebtedness was $672 million, an increase from $668.3 million at the end of 2024 [26] Q&A Session Summary - No questions were raised during the Q&A session, and the call concluded with closing comments from management expressing satisfaction with the momentum to start the year [27][28]

INNOVATE Corp. Q1 2025 Earnings Release Supplement May 6, 2025 INNOVATE Corp. ™ 2025 Safe Harbor Disclaimers Cautionary Statement 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." Generally, forward-looking statements include information describing actions, events, results, strategies and expectat ...

Financial Data and Key Metrics Changes - Consolidated revenues for the first quarter of 2025 were $274.2 million, a decrease of 13% compared to $315.2 million in the prior year period [19] - Net loss attributable to common stockholders was $24.8 million or $1.89 per fully diluted share, compared to a net loss of $17.7 million or $2.21 per fully diluted share in the prior year [19] - Total adjusted EBITDA was $7.2 million, down from $12.8 million in the prior year period [19] Business Line Data and Key Metrics Changes - Infrastructure segment revenues decreased 14% to $264.9 million from $307.9 million in the prior year quarter, primarily due to project timing and size [20] - Life Sciences segment revenues increased 210% to $3.1 million from $1 million in the prior year quarter, driven by increased unit sales [22] - Spectrum segment revenues were $6.2 million, a slight decrease of $100,000 compared to the first quarter of 2024 [22] Market Data and Key Metrics Changes - DBM Global achieved revenues of $264.9 million and adjusted EBITDA of $16.7 million, with a gross margin improvement of approximately 110 basis points to 15.6% [7] - R2 tripled its year-over-year revenue to $3.1 million, with significant growth in North America [12] - The company is now serving 28 countries and has entered into distribution agreements in several European and South American countries [13] Company Strategy and Development Direction - The company is focused on addressing its capital structure and near-term debt maturities while leveraging valuable assets [6] - The strategic vision emphasizes maximizing the value of assets and exploring strategic alternatives [17] - The company is actively pursuing commercial opportunities in data casting and modernizing broadcasting capabilities [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute on strategic objectives and highlighted the strong backlog and robust pipeline for DBM [6][7] - The ongoing tariff situation is being monitored, with no material impact observed on DBM's business as of now [8] - The company remains optimistic about the market opportunity for R2 and the momentum experienced year over year [15] Other Important Information - As of March 31, 2025, the company had total principal outstanding indebtedness of $672 million, an increase from the previous year [25] - Cash and cash equivalents were $33.3 million, down from $48.8 million at the end of 2024 [24] Q&A Session Summary - There were no questions during the Q&A session, and the call concluded with management expressing satisfaction with the momentum to start the year [26][27]

Revenue Performance - Total revenue for Q1 2025 decreased by $41.0 million to $274.2 million from $315.2 million in Q1 2024, primarily driven by the Infrastructure segment[188]. - The Infrastructure segment revenue declined by $43.0 million, while the Life Sciences segment revenue increased by $2.1 million, reflecting a shift in project timing and size[188]. - Infrastructure segment revenue decreased by $43.0 million to $264.9 million for the three months ended March 31, 2025, due to project timing and size[196]. - Life Sciences segment revenue increased by $2.1 million to $3.1 million for the three months ended March 31, 2025, attributed to higher unit sales of Glacial systems[200]. - Spectrum segment revenue slightly decreased by $0.1 million to $6.2 million for the three months ended March 31, 2025, primarily due to network terminations[203]. Operating Income and Expenses - Income from operations for Q1 2025 increased by $0.6 million to $3.4 million compared to $2.8 million in Q1 2024, due to a decrease in other operating losses and SG&A expenses[189]. - Selling, general and administrative expenses decreased by $1.6 million to $29.3 million in the Infrastructure segment for the three months ended March 31, 2025[198]. - Other operating loss improved by $1.7 million to income of $0.1 million for the three months ended March 31, 2025, driven by the absence of a prior plant closure loss[199]. Debt and Financing - Interest expense rose by $3.0 million to $20.2 million in Q1 2025, attributed to increased exit fees and a higher outstanding principal balance in the Life Sciences segment[190]. - The company engaged in refinancing some of its debt in 2025, providing necessary capital for operations[180]. - A new $3.5 million convertible note was closed by Pansend with R2 Technologies, maturing on July 31, 2025, or upon a change in control[184]. - Total principal indebtedness increased by $3.7 million to $672.0 million as of March 31, 2025, compared to $668.3 million as of December 31, 2024[221]. - The Company raised a total of $35.0 million in gross proceeds from the Rights Offering and Concurrent Private Placement, incurring $1.8 million in dealer manager fees and related costs[225]. Strategic Initiatives - The company is evaluating strategic alternatives, including potential acquisitions or divestitures, to optimize its capital structure[178]. - The Company is exploring various initiatives to address its going concern issues, including potential debt refinancing and asset sales[230]. - The company is focused on strategic acquisitions, but the ability to identify and compete for opportunities may be limited by resources[276]. Cash Flow and Liquidity - Cash used in operating activities decreased to $14.1 million for the three months ended March 31, 2025, compared to $25.4 million for the same period in 2024, reflecting an improvement of $11.3 million[264]. - Cash provided by financing activities improved to $2.4 million for the three months ended March 31, 2025, compared to cash used of $12.9 million for the same period in 2024, a positive change of $15.3 million[266]. - As of March 31, 2025, the Company was in compliance with the liquidity covenant, ensuring sufficient cash and equivalents to cover interest obligations for the next six months[257]. Segment Performance - The Life Sciences segment reported a net loss of $7.6 million for the three months ended March 31, 2025, an increase of $3.1 million from a loss of $4.5 million in the same period of 2024[213]. - Adjusted EBITDA loss from the Life Sciences segment increased by $4.5 million to $8.7 million for the three months ended March 31, 2025, compared to a loss of $4.2 million in the same period of 2024[213]. - The Spectrum segment's net loss increased by $0.6 million to $5.4 million for the three months ended March 31, 2025, from $4.8 million in the same period of 2024[214]. - Non-Operating Corporate segment's net loss increased by $3.6 million to $16.1 million for the three months ended March 31, 2025, compared to $12.5 million in the same period of 2024[215]. Challenges and Risks - The company faces substantial doubt about its ability to continue operating as a going concern due to significant indebtedness and financing obligations[276]. - The company is dependent on key personnel, including the recent passing of the former CEO, which may affect management transition and operational stability[276]. - The company anticipates increased competition in its operating segments, which could impact market share and profitability[276]. - The company is exposed to geopolitical events, such as conflicts in the Middle East and Ukraine, which may affect financial markets and operational conditions[278]. - The company may face challenges in raising additional capital or refinancing existing debt on favorable terms, impacting growth and operational flexibility[278]. Backlog and Future Expectations - As of March 31, 2025, the total backlog for DBMG was $1,369.9 million, with $939.0 million under contracts or purchase orders and $430.9 million under letters of intent or notices to proceed[217]. - The Company anticipates quarterly interest payments of approximately $1.5 million for each quarter of 2025 based on the debt balance as of March 31, 2025[268].

Financial Performance - INNOVATE's consolidated revenue for Q1 2025 was $274.2 million, a decrease of 13.0% from $315.2 million in Q1 2024[2] - Net loss attributable to common stockholders for Q1 2025 was $24.8 million, or $1.89 per share, compared to a loss of $17.7 million, or $2.21 per share, in the prior year[10] - Total Adjusted EBITDA for Q1 2025 was $7.2 million, down 43.8% from $12.8 million in Q1 2024[2] - Revenue for Q1 2025 was $274.2 million, a decrease of 13% compared to $315.2 million in Q1 2024[28] - Gross profit for Q1 2025 was $45.5 million, down from $48.6 million in Q1 2024, reflecting a gross margin of approximately 16.6%[28] - Net loss attributable to INNOVATE Corp. for Q1 2025 was $24.5 million, compared to a net loss of $17.4 million in Q1 2024[28] - Adjusted EBITDA is a key performance measure, but it should not be considered in isolation from net income or other U.S. GAAP financial measures[20] - Interest expense increased to $20.2 million in Q1 2025, up from $17.2 million in Q1 2024, indicating rising borrowing costs[32] - The company incurred realignment and exit costs of $1.1 million in Q1 2025, compared to $0.5 million in Q1 2024, reflecting ongoing restructuring efforts[32] - Non-controlling interest losses were recorded at $1.3 million in Q1 2025, compared to a loss of $2.7 million in Q1 2024, indicating improved performance in this area[32] - The Life Sciences segment's adjusted EBITDA was negative at $(8.7) million, highlighting challenges in this division[32] Segment Performance - The Infrastructure segment reported revenue of $264.9 million, a decrease of 14.0% from $307.9 million in the prior year quarter[8] - Life Sciences segment revenue increased to $3.1 million, up 210% from $1.0 million in the prior year quarter, driven by R2 Technologies[8] - Broadcasting segment revenue was $6.2 million, slightly down from $6.3 million in the prior year quarter[8] - The Infrastructure segment generated a net income of $4.6 million, while the Life Sciences and Spectrum segments reported losses of $7.6 million and $5.4 million, respectively[32] Cash and Assets - INNOVATE had cash and cash equivalents of $33.3 million as of March 31, 2025, down from $48.8 million at the end of 2024[12] - Total assets decreased to $868.0 million as of March 31, 2025, down from $891.1 million at the end of 2024[30] - Current liabilities increased significantly to $847.6 million in Q1 2025, compared to $483.0 million in Q4 2024[30] - Cash and cash equivalents decreased to $33.3 million from $48.8 million at the end of 2024[30] Strategic Focus and Opportunities - The company anticipates continued growth opportunities in the Life Sciences segment and potential commercial opportunities in datacasting[21] - INNOVATE Corp. is focused on strategic acquisitions and business opportunities to enhance its market position[22] - The company is focusing on market expansion and new product development to drive future growth[32] - INNOVATE Corp. is actively exploring strategic acquisitions to enhance its competitive position in the market[32] Risks and Challenges - The company faces risks including substantial indebtedness and potential supply chain disruptions that could impact future performance[24] - Depreciation and amortization expenses remained consistent at $4.4 million for both Q1 2025 and Q1 2024[32] - R2 Technologies reported a 163% increase in gross worldwide system unit sales in Q1 2025 compared to the same period in 2024[8] - MediBeacon's TGFR system received FDA approval for assessing kidney function, with additional approvals expected in China[8] - DBM Global's adjusted backlog reached $1.4 billion as of March 31, 2025, compared to $1.0 billion at the end of 2024[8]

Core Insights - INNOVATE Corp. reported a consolidated revenue of $274.2 million for Q1 2025, a decrease of 13.0% compared to $315.2 million in Q1 2024, primarily driven by the Infrastructure segment [2][8] - The company experienced a net loss attributable to common stockholders of $24.8 million, or $1.89 per share, compared to a net loss of $17.7 million, or $2.21 per share, in the prior year [2][12] - Adjusted EBITDA for Q1 2025 was $7.2 million, down 43.8% from $12.8 million in Q1 2024, reflecting challenges in both the Life Sciences and Infrastructure segments [2][14] Infrastructure Segment - DBM Global reported Q1 2025 revenue of $264.9 million, a decrease of 14.0% from $307.9 million in the prior year [4][9] - The adjusted backlog for DBM Global increased to $1.4 billion, up from $1.0 billion as of December 31, 2024, indicating strong project acquisition [5][4] - Gross margin improved to 15.6%, an increase of approximately 110 basis points year-over-year, while adjusted EBITDA margin rose to 6.3%, an increase of approximately 40 basis points [4][5] Life Sciences Segment - MediBeacon's Transdermal GFR System received FDA approval, enhancing growth prospects in the Life Sciences segment [3][10] - R2 Technologies reported a revenue of $3.1 million, a 210% increase compared to $1.0 million in the prior year, driven by increased unit sales [10][3] - The Life Sciences segment's adjusted EBITDA was negative at $(8.7) million, a decrease from $(4.2) million in the prior year, primarily due to higher equity method losses from MediBeacon [14][12] Spectrum Segment - The Spectrum segment reported revenue of $6.2 million, slightly down from $6.3 million in the prior year [10][9] - The company is exploring commercial opportunities in datacasting, with expectations to generate revenue by the end of 2025 [10][3] Financial Performance - Total adjusted EBITDA for Q1 2025 was $7.2 million, down from $12.8 million in Q1 2024, primarily due to declines in the Life Sciences and Infrastructure segments [14][12] - The company had cash and cash equivalents of $33.3 million as of March 31, 2025, down from $48.8 million at the end of 2024 [14][30] - The total liabilities increased to $1,036.9 million as of March 31, 2025, compared to $1,034.8 million at the end of 2024 [30][31]

Core Viewpoint - INNOVATE Corp. will release its financial results for Q1 2025 on May 6, 2025, after market close, followed by an earnings conference call at 4:30 p.m. ET [1]. Company Overview - INNOVATE Corp. operates in three key areas of the new economy: Infrastructure, Life Sciences, and Spectrum, employing approximately 3,100 people across its subsidiaries [4]. Conference Call Details - The conference call will be accessible via domestic dial-in at 1-877-704-4453 and international dial-in at 1-201-389-0920 [3]. - A replay of the conference call will be available approximately three hours after the call ends, accessible through domestic dial-in at 1-844-512-2921 and international dial-in at 1-412-317-6671 until May 20, 2025 [3]. - Interested parties can listen to the live call through INNOVATE's Investor Relations website, with registration required at least 15 minutes prior to the start [2]. Investor Contact - For investor inquiries, the contact is Anthony Rozmus from Solebury Strategic Communications, reachable at ir@innovatecorp.com or (212) 235-2691 [5].

Financial Data and Key Metrics Changes - Consolidated revenue for Q4 2024 was $236.6 million, a decrease of 34.5% compared to $361 million in the prior year period [31] - Adjusted EBITDA for Q4 2024 was $15 million, down from $21.5 million in the prior year period [32] - Net loss attributable to common stockholders for Q4 2024 was $16.9 million, or $1.29 per fully diluted share, compared to a net loss of $9.6 million, or $1.22 per fully diluted share in the prior year [32] Business Line Data and Key Metrics Changes - Life Sciences revenue increased 173.3% to $4.1 million from $1.5 million in the prior year quarter, primarily driven by R2's sales [36] - R2 achieved record top-line revenues of almost $10 million for the full year 2024, a 197% increase over 2023 [12] - Infrastructure segment revenue decreased 36.2% to $225.7 million from $353.8 million in the prior year quarter [33] - Spectrum's revenue for Q4 2024 was $6.8 million, an increase of 1.1 million compared to the fourth quarter of 2023 [37] Market Data and Key Metrics Changes - R2's system unit sales in North America grew 238% year-over-year, contributing to a combined worldwide system unit sales growth of 113% in Q4 2024 [13] - DBM Global ended the year with an adjusted backlog of $1.1 billion, compared to $1.2 billion at the end of 2023 [35] Company Strategy and Development Direction - The main objective for 2025 is to address the capital structure and near-term maturity of debt obligations [8] - The company is focused on leveraging valuable assets prior to debt maturities to achieve a sustainable capital structure [10] - MetaBeacon is exploring strategic alternatives and has engaged Jefferies Financial Group for potential monetization [11] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the pipeline and backlog levels, particularly in the infrastructure segment [19] - There is a cautious stance towards the cost of construction materials due to political uncertainties, but no material impact on financials is anticipated [21] - The company is encouraged by recent milestones and believes it is well-positioned to capitalize on growth opportunities in cloud computing and AI [20] Other Important Information - Total consolidated debt decreased by $54.5 million compared to last year, primarily due to improved working capital [29] - The company had $48.8 million in cash and cash equivalents at the end of Q4 2024, down from $80.8 million at the end of 2023 [39] Q&A Session Summary Question: Can you provide an update on discussions with Jefferies regarding MetaBeacon? - Management indicated that discussions with Jefferies have been ongoing since late 2023, with FDA approval being a critical milestone [47] Question: How does the valuation context from 2019 impact current discussions? - Management noted that the valuation from 2019 is a reference point, but the current discussions will depend on how the process unfolds [49] Question: What impact might tariffs have on DBM Global's backlog and margins? - Management stated that DBM typically locks in prices with mills when bidding, so they do not foresee a significant impact on backlog or margins at this time [55]