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]

Financial Performance - Consolidated INNOVATE reported Q1 2025 revenue of $274.2 million, a decrease of $41.0 million or 13% compared to $315.2 million in Q1 2024[17, 22] - Net loss attributable to INNOVATE Corp was $24.5 million in Q1 2025[18, 22, 41] - Adjusted EBITDA decreased by $5.6 million to $7.2 million in Q1 2025, compared to $12.8 million in Q1 2024[18, 22] Segment Highlights - Infrastructure (DBMG) - Infrastructure segment revenue decreased to $264.9 million in Q1 2025 from $307.9 million in Q1 2024, a 14% decrease[17, 25, 27] - Infrastructure segment Adjusted EBITDA decreased to $16.7 million in Q1 2025 from $18.3 million in Q1 2024[18, 25, 27] - DBMG's adjusted backlog ended the first quarter with $1.4 billion, including over $500 million in new awards[12, 15, 27] Segment Highlights - Life Sciences (R2 Technologies) - Life Sciences segment revenue increased to $3.1 million in Q1 2025 from $1.0 million in Q1 2024, a 210% increase[17, 22] - R2 Technologies experienced gross system unit sales growth of 109% over the prior year quarter in North America and 163% worldwide[32] Segment Highlights - Spectrum - Spectrum segment revenue was $6.2 million in Q1 2025, compared to $6.3 million in Q1 2024[17, 33] - Spectrum segment Adjusted EBITDA was $1.4 million in Q1 2025, compared to $1.6 million in Q1 2024[12, 18, 33] Debt - Total principal outstanding debt was $672.0 million as of March 2025[36]

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]

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 performance [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 113% increase in worldwide system unit sales in Q4 2024 [13] - DBM Global's reported backlog was $1 billion, with an adjusted backlog of $1.1 billion at the end of Q4 2024 [35] - Spectrum's fourth quarter adjusted EBITDA increased to $2.3 million from $1.1 million in the prior year quarter [37] 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 with Jaffrey's Financial Group to maximize shareholder value following FDA approval [11] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential applications for the TGFR system and its impact on the market [11] - The company is cautiously monitoring the political landscape and its potential impact on construction material costs due to tariffs and inflation [21] - Management remains confident in DBM's ability to capitalize on opportunities driven by growth 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 ended Q4 2024 with $48.8 million in cash and cash equivalents, down from $80.8 million at the end of 2023 [39] Q&A Session Summary Question: Congratulations on the FDA approval of MetaBeacon. How deep into discussions is Jefferies right now? - Management indicated that discussions with medical device and pharmaceutical companies have been ongoing since the end of 2023, with FDA approval being a critical milestone [47] Question: Is the $400 million valuation from the previous equity injection still relevant in current discussions? - Management noted that the valuation was set back in 2019 and the current discussions will need to see how the process pans out [49] Question: How might tariffs impact the MetaBeacon business model and DBM Global's adjusted backlog? - Management stated that initial rollout and approval are in the U.S., and they do not foresee a significant impact from tariffs at this time [51][55]