- Infrastructure: DBM Global's backlog increased to $1.6 billion following Banker Steel Acquisition -- Life Sciences: HC2 Increased its Stake in R2 Technologies -- Name Change to INNOVATE Corp Reflects Platform of Innovative Infrastructure, Life Sciences and Spectrum Businesses -
NEW YORK, Aug. 06, 2021 (GLOBE NEWSWIRE) -- HC2 Holdings, Inc. (“HC2” or the “Company”) (NYSE: HCHC), a diversified holding company, announced today its consolidated results for the second quarter ended June 30, 2021.
Financial Summary
(1) Reconciliation of GAAP to Non-GAAP measures follows.(2) Note that Total Adjusted EBITDA excludes results for discontinued operations.
Commentary“INNOVATE Corp. is a platform for the new economy. This is evident in the outstanding performance at DBM - our Infrastructure portfolio company. Following its acquisition of Banker Steel, DBM recorded a record backlog of $1.6 billion at the end of the quarter. In fact, taking into account contracts awarded but not signed, DBM’s backlog would have been approximately $1.9 billion,” said Avie Glazer, Chairman of HC2. “This outstanding performance was repeated in Spectrum, which had a record Adjusted EBITDA of $2.7 million.”
"Our solid second quarter results preview the long-term potential of our strategic plan, which is focused on a platform of innovative businesses that are positioned to capitalize on changing industry dynamics,” stated Wayne Barr, Jr., Chief Executive Officer of HC2. “Each of our segments has strong external growth catalysts, and we took a number of steps during the quarter to improve our financial position to have the flexibility to invest in growth initiatives that will enable our businesses to reach their full potential and drive stockholder value as we navigate this evolving economic environment.”
Barr continued, “At the segment level, each of our businesses gained strong momentum during the period. At Infrastructure, we completed our acquisition of Banker Steel, enhancing this segment’s geographic footprint and financial position. At Life Sciences, we are pleased with the progress R2 has made with its commercial launch of Glacial Rx™, and in July 2021, we invested an additional $15 million in R2 to further bolster commercialization and development efforts. At Spectrum, we delivered Adjusted EBITDA of $2.7 million, our third consecutive quarter of positive Adjusted EBITDA, driven in part by our significant efforts to optimize operations, along with growth in our Station Group OTA revenues.”
“Looking ahead to the second half of the year, we are excited to begin our next chapter as INNOVATE Corp.”
Second Quarter 2021 and Recent Highlights
Second Quarter Financial Highlights
Second Quarter 2021 Segment Highlights
Infrastructure
Life Sciences
Spectrum
Conference Call
HC2 will host a live conference call to discuss its second quarter 2021 financial results and operations today at 8:30 a.m. ET. The Company will post an earnings supplemental presentation in the Investor Relations section of the HC2 website at ir.hc2.com, to accompany the conference call. Dial-in instructions for the conference call and the replay follows.
*Available approximately two hours after the end of the conference call through August 17, 2021.
About HC2HC2 Holdings is being renamed INNOVATE Corp. INNOVATE is a portfolio of best-in-class assets in three key areas of the new economy – infrastructure, life sciences and spectrum. Dedicated to stakeholder capitalism, INNOVATE employs over 4,300 people across its subsidiaries.
Contacts
Investor Contact:Anthony Rozmusir@hc2.com(212) 235-2691
Media Contact:ReevemarkPaul Caminiti/Pam Greene/Luc HerbowyHC2@reevemark.com(212) 433-4600
Non-GAAP Financial Measures
In this press release, HC2 refers to certain financial measures that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”), including Total Adjusted EBITDA (excluding discontinued operations) and Adjusted EBITDA for its operating segments.
Adjusted EBITDA
Management believes that Adjusted EBITDA provides investors with meaningful information for gaining an understanding of our results as it is frequently used by the financial community to provide insight into an organization’s operating trends and facilitates comparisons between peer companies, since interest, taxes, depreciation, amortization and the other items listed in the definition of Adjusted EBITDA below can differ greatly between organizations as a result of differing capital structures and tax strategies. Adjusted EBITDA can also be a useful measure of a company’s ability to service debt. While management believes that non-U.S. GAAP measurements are useful supplemental information, such adjusted results are not intended to replace our U.S. GAAP financial results. Using Adjusted EBITDA as a performance measure has inherent limitations as an analytical tool as compared to net income (loss) or other U.S. GAAP financial measures, as this non-GAAP measure excludes certain items, including items that are recurring in nature, which may be meaningful to investors. As a result of the exclusions, Adjusted EBITDA should not be considered in isolation and does not purport to be an alternative to net income (loss) or other U.S. GAAP financial measures as a measure of our operating performance. Adjusted EBITDA excludes the results of operations and any consolidating eliminations of our Insurance segment.
The calculation of Adjusted EBITDA, as defined by us, consists of Net income (loss) as adjusted for discontinued operations; depreciation and amortization; Other operating (income) expense, which is inclusive of (gain) loss on sale or disposal of assets, lease termination costs, asset impairment expense and FCC reimbursements; interest expense; net gain (loss) on contingent consideration; loss on early extinguishment or restructuring of debt; other (income) expense, net; foreign currency transaction (gain) loss included in cost of revenue; income tax (benefit) expense; noncontrolling interest; bonus to be settled in equity; share-based compensation expense; non-recurring items; costs associated with the COVID-19 pandemic, and acquisition and disposition costs.
Management recognizes that using Adjusted EBITDA as a performance measure has inherent limitations as an analytical tool as compared to net income (loss) or other GAAP financial measures, as these non-GAAP measures exclude certain items, including items that are recurring in nature, which may be meaningful to investors.
Cautionary Statement Regarding Forward-Looking Statements
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This press release 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 expectations and are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “plans,” “seeks,” “estimates,” “projects,” “may,” “will,” “could,” “might,” or “continues” or similar expressions. Such forward-looking statements are based on current expectations and inherently involve certain risks, assumptions and uncertainties. The forward-looking statements in this presentation include, without limitation, any statements regarding our expectations regarding entering definitive agreements in respect of and consummating potential divestitures of any of our subsidiaries, our ability to successfully consummate previously announced acquisitions, HC2’s inability to predict the extent to which the COVID-19 pandemic and related impacts will continue to adversely impact HC2’s business operations, financial performance, results of operations, financial position, the prices of HC2’s securities and the achievement of HC2’s strategic objectives, and changes in macroeconomic and market conditions and market volatility (including developments and volatility arising from the COVID-19 pandemic), including interest rates, the value of securities and other financial assets, and the impact of such changes and volatility on HC2’s financial position. Such statements are based on the beliefs and assumptions of HC2’s management and the management of HC2’s subsidiaries and portfolio companies.
The Company believes these judgments are reasonable, but you should understand that these statements are not guarantees of performance, results or the creation of stockholder value and the Company’s actual results could differ materially from those expressed or implied in the forward-looking statements due to a variety of important factors, both positive and negative, including those that may be identified in subsequent statements and reports filed with the Securities and Exchange Commission (“SEC”), including in our reports on Forms 10-K, 10-Q, and 8-K. Such important factors include, without limitation: the severity, magnitude and duration of the COVID-19 pandemic, including impacts of the pandemic and of businesses’ and governments’ responses to the pandemic on HC2’s operations and personnel, and on commercial activity and demand across our businesses, capital market conditions, including the ability of HC2 and HC2’s subsidiaries to raise capital; the ability of HC2’s subsidiaries and portfolio companies to generate sufficient net income and cash flows to make upstream cash distributions; volatility in the trading price of HC2 common stock; the ability of HC2 and its subsidiaries and portfolio companies to identify any suitable future acquisition or disposition opportunities; our ability to realize efficiencies, cost savings, income and margin improvements, growth, economies of scale and other anticipated benefits of strategic transactions; difficulties related to the integration of financial reporting of acquired or target businesses; difficulties completing pending and future acquisitions and dispositions; effects of litigation, indemnification claims, and other contingent liabilities; changes in regulations and tax laws; and risks that may affect the performance of the operating subsidiaries and portfolio companies of HC2.
Although HC2 believes its expectations and assumptions regarding its future operating performance are reasonable, there can be no assurance that the expectations reflected herein will be achieved. These risks and other important factors discussed under the caption “Risk Factors” in our most recent Annual Report on Form 10-K filed with the SEC, and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this presentation.
You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to HC2 or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and unless legally required, HC2 undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
HC2 HOLDINGS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in millions, except per share amounts)(Unaudited)
HC2 HOLDINGS, INC.CONDENSED CONSOLIDATED BALANCE SHEET(in millions, except share amounts)(Unaudited)
HC2 HOLDINGS, INC.RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA(Unaudited)
HC2 HOLDINGS, INC.RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA(Unaudited)