Innovate Corp (VATE) 2024 Q1 法說會逐字稿

Good afternoon and welcome to elevate Corp's first quarter 2024 earnings conference call. All participants will be in a listen only mode after their prepared remarks and presentation, there will be a question and answer session. Please note this event is being recorded, and I would like to turn the conference call over to Mr. [Neil Seika] with Investor Relations. Please go ahead.

下午好，歡迎參加 2024 年第一季財報電話會議。所有參與者在準備好發言和演示後將處於只聽模式，隨後將進行問答環節。請注意，本次活動正在錄製中，我想將電話會議轉交給投資者關係部門的 [Neil Seika] 先生。請繼續。

Good afternoon. Thank you for being with us to review innovates First Quarter 2020 for earnings results. We are joined today by Paul Beesley, innovates Interim CEO and Mike center, innovate, CFO. We have posted our earnings release and our slide presentation on our website at avistacorp.com. We will begin our call with prepared remarks to be followed by a Q&A session. This call is also being simulcast and will be archived on our website.

午安.感謝您與我們一起回顧 2020 年第一季的獲利結果。今天，創新臨時執行長保羅比斯利 (Paul Beesley) 和創新財務長 Mike Center 加入我們。我們已在我們的網站 avistacorp.com 上發布了收益報告和幻燈片演示。我們將以準備好的發言開始我們的電話會議，然後進行問答環節。該電話會議也將同時直播，並將存檔在我們的網站上。

During this call, management may make certain statements and assumptions which are not historical facts. It will be forward-looking and are being made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve risks assumptions and uncertainties and are subject to certain assumptions and risk factors that could cause its actual results to differ materially from these forward-looking statements.

在這次電話會議中，管理階層可能會做出某些不屬於歷史事實的陳述和假設。它將具有前瞻性，並根據 1995 年《私人證券訴訟改革法案》的安全港條款制定。任何此類前瞻性陳述都涉及風險假設和不確定性，並受到某些假設和風險因素的影響，這些假設和風險因素可能導致其實際結果與這些前瞻性陳述有重大差異。

The risk factors that could cause these differences are more fully discussed in the cautionary statement that is included in our earnings release and the slide presentation and further detailed in our 10-K and other filings with the SEC.

我們的收益發布和幻燈片簡報中包含的警告聲明中更全面地討論了可能導致這些差異的風險因素，並在我們向 SEC 提交的 10-K 和其他文件中進一步詳細說明。

In addition, the forward-looking statements included in this conference call are only made as of the date of this call. And as stated in our SEC reports, NOV disclaims any intent or obligation to update or revise these forward-looking statements, except as expressly required by law, Management will also refer to certain non-GAAP financial measures such as adjusted EBITDA. We believe that these measures provide useful supplemental data that while not a substitute for GAAP measures allow for greater transparency in the review of our financial and operational performance.

此外，本次電話會議中所包含的前瞻性陳述僅在本次電話會議之日作出。如我們在 SEC 報告中所述，NOV 不承擔任何更新或修改這些前瞻性陳述的意圖或義務，除非法律明確要求，管理階層也會參考某些非 GAAP 財務指標，例如調整後的 EBITDA。我們相信，這些措施提供了有用的補充數據，雖然不能取代公認會計準則措施，但可以提高我們財務和營運績效審查的透明度。

At this point, it is my pleasure to turn things over to Paul Boyd.

此時此刻，我很高興將事情交給保羅·博伊德。

Good afternoon. We had a great start to the first quarter of 2024 by achieving strong operational and financial results. Innovate delivered revenues of $315.2 million and adjusted EBITDA of $12.8 million in the first quarter of 2024. Rustin and his team at DBM Global delivered another strong quarter with revenues of $307.9 million and adjusted EBITDA of $18.3 million, while top line results were relatively flat compared to a year ago, we experienced strong year-over-year adjusted EBITDA growth, which was driven by significant gross margin expansion, up approximately 150 basis points to 14.6%. Adjusted EBITDA margin also expanded year-over-year by approximately 70 basis points to 5.9% in the first quarter.

午安.我們在 2024 年第一季取得了良好的開端，並取得了強勁的營運和財務表現。Innovate 2024 年第一季的營收為 3.152 億美元，調整後 EBITDA 為 1,280 萬美元。Rustin 和他在DBM Global 的團隊再次實現了強勁的季度業績，收入為3.079 億美元，調整後EBITDA 為1830 萬美元，雖然營收結果與去年同期相比相對持平，但我們經歷了強勁的同比調整後EBITDA 成長，受毛利率顯著擴張的推動，成長約150個基點至14.6%。第一季調整後 EBITDA 利潤率也較去年同期成長約 70 個基點至 5.9%。

DBM.'s total adjusted backlog, which takes into consideration awarded but not yet signed contracts remains at a healthy level of 1.2 billion at the end of the first quarter. Overall, the commercial construction sectors of the market continue to be very tight although the bidding activity remains at high levels. However, we are seeing numerous opportunities both in industrial and modularization sectors of the market. This surge in new work activity will be a meaningful piece of our business in 2024 and beyond.

考慮到已授予但尚未簽署的合同，DBM. 調整後的未完成訂單總額在第一季末仍保持在 12 億美元的健康水平。總體而言，儘管招標活動仍處於高水平，但商業建築市場仍然非常緊張。然而，我們在市場的工業和模組化領域看到了許多機會。新工作活動的激增將成為 2024 年及以後我們業務的重要組成部分。

Moving on to Life Sciences, Dave and Srini and the R. two team had another exciting quarter and continues to gain traction with yet another record-breaking increase in North American system sales growth of 183% as compared to the prior year quarter are to achieve to record high system sales in a single quarter in North America for the second quarter in a row, our team has continued to grow outside of North America by launching their product in the Middle East during the quarter.

轉向生命科學領域，Dave 和 Srini 以及 R. 兩個團隊又度過了一個激動人心的季度，並繼續獲得牽引力，北美系統銷售額與去年同期相比將實現 183% 的創紀錄增長。第二季在北美創下單季系統銷售額新高，我們的團隊在本季在中東推出了產品，從而在北美以外的地區繼續成長。

Our two continued growth in other areas of the business experiencing a 115% increase in patients treated and 47% increase in average monthly utilization per glacial provider from the same period of last year with a continued focus on market awareness initiatives. Our two experienced increases across the board from social media mentions and followers to website traffic. As these are clear indicators of qualified buyer interest, it is important to note that these initiatives have led to a significant increase in system sales opportunities in 2024.

我們兩家公司在其他業務領域持續成長，與去年同期相比，接受治療的患者數量增加了 115%，每個冰川提供者的平均月利用率增加了 47%，並繼續關注市場意識舉措。我們兩個經歷了從社群媒體提及和追蹤者到網站流量的全面成長。由於這些是合格買家興趣的明確指標，因此值得注意的是，這些措施導致 2024 年系統銷售機會大幅增加。

We are encouraged by the momentum our two is beginning to build in the market as we continue to see expanded use and demand of their state of the art technology, and this momentum has continued into the second quarter and MediBeacon. The Company continues to work through their substantive review for kidney monitoring program with the FDA as previously explained MediBeacon met with the FDA in the first and second quarters of 2024 and is working interactively to resolve outstanding questions in order to move to approval status, we hope to provide an update on MediBeacon process. As mentioned on our last call, MediBeacon pivotal study results were posted on the clinicaltrials.gov website on April 18th.

我們對我們兩家公司開始在市場上建立的勢頭感到鼓舞，因為我們繼續看到他們最先進的技術的使用和需求的擴大，並且這種勢頭一直持續到第二季​​度和 MediBeacon。正如先前所解釋的，該公司繼續與 FDA 進行腎臟監測計畫的實質審查，MediBeacon 於 2024 年第一季和第二季與 FDA 會面，並正在互動解決懸而未決的問題，以便進入批准狀態，我們希望提供MediBeacon 流程的更新。正如我們上次電話會議中所提到的，MediBeacon 關鍵研究結果已於 4 月 18 日發佈在 ClinicalTrials.gov 網站上。

As noted on the clinicaltrials.gov website, MediBeacon transdermal GFR measurement system met the predetermined primary and secondary endpoints established with the FDA prior to starting the study, we see great opportunity in the market for real-time monitoring of kidney function. And we have seen a number of recent studies and trends in the market impact ash, chronic kidney disease or the acronym DKD. study forecasts that up to 16.5% of the population across eight countries will suffer from CKD. by 2032. Astrazeneca sponsored and recently presented this study at the World Congress of Nephrology, the reveal that CK. study concluded that a record CKD. diagnosis was associated with significant improvements in CKD management and monitoring pharmaceutical companies.

正如 ClinicalTrials.gov 網站上所指出的，MediBeacon 透皮 GFR 測量系統滿足了 FDA 在開始研究之前確定的預定主要和次要終點，我們看到了即時監測腎功能的市場巨大機會。我們看到最近的一些研究和市場趨勢對灰燼、慢性腎臟病或縮寫 DKD 產生影響。研究預測，八個國家高達 16.5% 的人口將患有 CKD。到2032年。阿斯特捷利康贊助並最近在世界腎臟病學大會上展示了這項研究，揭示了 CK。研究結論是創紀錄的CKD。診斷與 CKD 管理和監控製藥公司的顯著改善有關。

Are increasing investments in nephrology with a robust R&D pipeline that targets a range of kidney disease indications. It is estimated that there are approximately 500 pharmaceutical assets ranging from early development approved therapeutics that target chronic kidney disease indications. We see a number of factors, including the growth of GLP. dash one agnostics like Zenefits that are likely to positive would positively impact the growing addressable market for products that would provide an accurate and clinically practical assessment of kidney function.

透過針對一系列腎臟疾病適應症的強大研發管線，增加對腎臟病學的投資。據估計，大約有 500 種製藥資產，包括針對慢性腎臟病適應症的早期開發核准療法。我們看到了許多因素，包括 GLP 的成長。像 Zenefits 這樣的 dash one 不可知論者可能會對不斷增長的潛在市場產生積極影響，這些產品將提供準確且臨床實用的腎功能評估。

Les and team at Spectrum delivered with a strong quarter and grew EBITDA to $1.6 million in the first quarter. Of note, the new 2024 network launches are driving higher revenue growth beginning with free TV January first network launches of 365 and the outlaw and subsequent launch of three new sports networks, outdoor America, Motor Sports one and speed sports TV network distribution revenues are growing as churn rates decline with existing network customers. Pricing has held and new programmers emerge, particularly for cable and streaming networks.

Les 和 Spectrum 團隊的季度業績表現強勁，第一季 EBITDA 成長至 160 萬美元。值得注意的是，2024 年新推出的網絡正在推動更高的收入增長，首先是365 的免費電視一月首個網絡推出，以及Outlaw 和隨後推出的三個新體育網絡（戶外美國、Motor Sports one和速度體育電視網絡）的發行收入正在成長隨著現有網路客戶的流失率下降。定價保持不變，新的程式設計師出現，特別是對於有線和串流媒體網路。

Looking for over the air coverage and in April, Spectrum participated in the NAB conference in Las Vegas, which generated considerable interest in HC2 Broadcasting's, robust national distribution platform from content providers and broadcasters. At the conference, we announced the operating and revenue share agreements with large market public broadcast stations to provide three Datto light housing and commercial applications.

為了尋求空中覆蓋，Spectrum 於 4 月參加了在拉斯維加斯舉行的 NAB 會議，該會議引起了內容提供者和廣播公司對 HC2 Broadcasting 強大的全國分發平台的極大興趣。在會議上，我們宣布了與大型市場公共廣播電台的營運和收入分成協議，以提供三種 Datto 燈罩和商業應用。

And given our continued efforts in exploring revenue opportunities for repurpose broadcast spectrum with new technology we continue to work closely with Qualcomm, the technology leader in 5G broadcasting as well as other strategic, including equipment vendors of 5G broadcasting. We believe our efforts in alternative technologies like ATSC 3.0 and 5G broadcasting will offer opportunities to optimize future revenues. We are very happy with the operational results of all three of our segments as DBN. continues to perform at high levels with a robust product pipeline, encouraging growth and momentum at our two progress at MediBeacon on FDA approval and an increase in OTA demand combined with next-gen opportunities continue to develop.

鑑於我們不斷努力探索利用新技術重新利用廣播頻譜的收入機會，我們將繼續與 5G 廣播技術領導者高通以及其他策略供應商（包括 5G 廣播設備供應商）密切合作。我們相信，我們在 ATSC 3.0 和 5G 廣播等替代技術方面的努力將為優化未來收入提供機會。我們對 DBN 所有三個部門的營運表現感到非常滿意。憑藉強大的產品線繼續保持高水平表現，MediBeacon 在 FDA 批准方面取得的兩項進展以及 OTA 需求的增加以及下一代機會的不斷發展，令人鼓舞的增長和勢頭。

We continue to be highly focused on addressing our capital structure, which we believe is the key driver in the underperformance of our stock price. We have now closed on our rights offering. And combined with our expectation of upstream cash payments from our subsidiaries, we believe we have created sufficient runway to execute on a strategy to utilize our non cash flowing assets to address our capital structure and set the company up to refinance our debt in 2024.

我們繼續高度關註解決我們的資本結構問題，我們認為這是導致我們股價表現不佳的關鍵驅動因素。我們現在已經結束了我們的配股發行。結合我們對子公司上游現金支付的預期，我們相信我們已經創造了足夠的跑道來執行一項策略，利用我們的非現金流資產來解決我們的資本結構問題，並使公司在2024 年為我們的債務再融資。

To that end, we continue to make progress exploring opportunities for our non cash flowing businesses. Our focus remains on being patient within the timeframe we have created to ensure that we maximize the value of these assets exiting these businesses for the right value takes time. We continue to be optimistic on the overall M&A market and hope to reach a resolution in 2024 as we continue to see positive indicators in the market, along with continued progress and momentum surrounding these assets. As discussed above, we look to build off this momentum in the second quarter and the remainder of the year.

為此，我們繼續在探索非現金流業務機會方面取得進展。我們的重點仍然是在我們設定的時間範圍內保持耐心，以確保我們最大化退出這些業務的資產的價值，以獲得正確的價值需要時間。我們對整體併購市場繼續持樂觀態度，並希望在 2024 年達成解決方案，因為我們繼續看到市場的積極指標，以及圍繞這些資產的持續進展和勢頭。如上所述，我們希望在第二季和今年剩餘時間內鞏固這一勢頭。

With that, I'll turn it over to Mike for a review of our financial and capital structure.

這樣，我會將其交給麥克，以審查我們的財務和資本結構。

As for consolidated, total revenue for the first quarter of 2024 was $315.2 million, a decrease of 0.8% compared to $317.9 million in the prior year period. The decrease was primarily driven by our Infrastructure segment, which was partially offset by increases in our spectrum and life sciences segments.

就合併而言，2024 年第一季的總營收為 3.152 億美元，較上年同期的 3.179 億美元下降 0.8%。這一下降主要是由我們的基礎設施部門推動的，但頻譜和生命科學部門的成長部分抵消了下降。

Net loss attributable to common stockholders for the first quarter of 2024 or $17.7 million or $0.22 per share compared to a net loss of $10.2 million or $0.13 per share in the prior year period. Total adjusted EBITDA was $12.8 million in the first quarter of 2024, an increase from $4.9 million in the prior year period. The increase was driven by all of our segments. And infrastructure, revenue decreased 1.2% to $307.9 million from $311.7 million in the prior year quarter. This decrease was primarily driven by the timing and size of projects at DBMG.'s commercial steel fabrication and erection business and Banker Steel which was partially offset by an increase in revenue at the industrial maintenance and repair business due to timing and size of projects.

2024 年第一季普通股股東應佔淨虧損為 1,770 萬美元，即每股 0.22 美元，而去年同期淨虧損為 1,020 萬美元，即每股 0.13 美元。2024 年第一季調整後 EBITDA 總額為 1,280 萬美元，較去年同期的 490 萬美元增加。這一增長是由我們所有部門推動的。基礎設施收入下降 1.2%，從去年同期的 3.117 億美元降至 3.079 億美元。這一下降主要是由於 DBMG. 的商業鋼鐵製造和安裝業務以及 Banker Steel 的專案時間和規模造成的，但由於專案時間和規模導致工業維護和維修業務收入的增加部分抵消了這一下降。

Infrastructure.

基礎設施。

Adjusted EBITDA for the first quarter of 2024 increased to $18.3 million from $16.3 million in the prior year period. The increase was driven by higher margins at CBMG.'s commercial structural steel fabrication and erection and the industrial maintenance and repair businesses, which was partially offset by an increase in recurring SG&A, primarily primarily as a result of compensation related expenses as well as a decrease in margin with the construction modeling and detailing business as of March 31st, 2024, and in line with our expectation, reported backlog was $939.1 million. And adjusted backlog, which takes into consideration awarded but not yet signed contracts, was $1.2 billion compared to reported backlog of $1.1 billion and adjusted backlog of $1.2 billion at the end of 2023. DBMG. ended the quarter with $159.7 million in principal amount of debt, which is a decrease of $39.1 million from year end to 2023, primarily driven by the reduction of the credit facility and normal debt amortization payments.

2024 年第一季調整後 EBITDA 從去年同期的 1,630 萬美元增至 1,830 萬美元。這一增長是由CBMG 的商業結構鋼製造和安裝以及工業維護和維修業務的利潤率提高所推動的，而經常性銷售、一般管理費用的增加部分抵消了這一增長，這主要是由於補償相關費用以及截至 2024 年 3 月 31 日，建築建模和細節設計業務的利潤率有所下降，與我們的預期一致，報告的積壓訂單為 9.391 億美元。考慮到已授予但尚未簽署的合同，調整後的積壓訂單為 12 億美元，而 2023 年底報告的積壓訂單為 11 億美元，調整後的積壓訂單為 12 億美元。資料庫管理組。本季末債務本金為 1.597 億美元，比 2023 年底減少 3,910 萬美元，主要是由於信貸安排和正常債務攤銷付款的減少。

CBMG. has been able to reduce its debt obligations through line reduction as invest in working capital has continued to return to the business, a trend that began at the end of 2023. As backlog stabilizes, we expect flat working capital needs throughout 2024. As a reminder, CBMG. has reduced its outstanding debt by approximately 73 million in the last six months.

CBMG。隨著營運資金投資持續回流至業務（這一趨勢於 2023 年底開始），公司能夠透過削減額度來減少債務。隨著積壓穩定，我們預計 2024 年營運資金需求將持平。提醒一下，CBMG。在過去六個月中，其未償債務減少了約 7,300 萬美元。

At Life Sciences revenue was $1 million, an increase of $0.5 million from the prior year quarter. The increase in revenue was attributable to our two primarily due to growth in unit sales in North America. Life Sciences adjusted EBITDA losses decreased for the quarter, which was primarily due to lower equity method losses recognized from our investment in MediBeacon and to a lesser extent, a decrease in SG&A expenses at R2 as well as an increase in revenue, primarily due to an increase in unit sales. At spectrum revenue was $6.3 million, an increase of $0.6 million compared to the first quarter of 2023, primarily driven by the launch new networks and expanded coverage with existing customers. Increase was partially offset by the termination of a number of smaller networks and individual markets subsequent to the comparable period.

生命科學部門的收入為 100 萬美元，比去年同期增加 50 萬美元。收入的成長主要歸功於我們兩家公司在北美的銷售成長。本季度生命科學調整後 EBITDA 虧損有所減少，這主要是由於我們對 MediBeacon 的投資確認的權益法虧損較低，並且在較小程度上是由於 R2 的 SG&A 費用減少以及收入增加，這主要是由於單位銷售量的增加。頻譜收入為 630 萬美元，比 2023 年第一季增加 60 萬美元，主要是由於新網路的推出和現有客戶覆蓋範圍的擴大。同期成長率被一些較小網路和個別市場的終止所部分抵銷。

Spectrum reported adjusted EBITDA in the first quarter increased to $1.6 million from $0.4 million in the prior year quarter. The increase was primarily due to the increase in revenue and the impact of the personnel realignment implemented in the second half of 2023. Nonoperating corporate adjusted EBITDA losses were $2.9 million for the quarter of 2024, an improvement from the first quarter of 2023 of $0.6 million improvement was primarily driven by decreases in compensation related expenses, consulting fees and insurance expense, which was partially offset by an increase in legal fees.

Spectrum 報告稱，第一季調整後 EBITDA 從去年同期的 40 萬美元增至 160 萬美元。這一增長主要是由於收入增加以及2023年下半年實施的人事調整的影響。2024 年季度非經營性企業調整後 EBITDA 損失為 290 萬美元，比 2023 年第一季的 60 萬美元有所改善，這主要是由於薪酬相關費用、諮詢費用和保險費用的減少，部分被法律費用。

At the end of the first quarter, the Company had $38.4 million of cash and cash equivalents, excluding restricted cash, compared to $80.8 million as of December 31st, 2023. On a stand-alone basis as of March 31st, 2024 a non-operating corporate segment at cash and cash equivalents of $9.2 million compared to $2.5 million at the end of '23.

截至第一季末，該公司擁有 3,840 萬美元的現金和現金等價物（不包括限制性現金），而截至 2023 年 12 月 31 日為 8,080 萬美元。截至 2024 年 3 月 31 日，非營運企業部門的現金及現金等價物為 920 萬美元，而 2023 年底為 250 萬美元。

As announced earlier in the year, we received notice that we are not in compliance with NYSE listing requirements as our stock price. It has fallen below $1 per share. We are working on options to regain compliance with the NYSE, which includes the potential for a reverse stock split as disclosed in our recently filed proxy statement. As of March 31st, 2024, innovate had total principal outstanding indebtedness of $687 million, down $35.8 million from $722.8 billion at the end of 2023, driven by the decrease of infrastructures outstanding debt, which was partially offset by our team's extension of financial capital, which capitalized interest payments into the principal balance.

正如今年稍早宣布的那樣，我們收到通知稱我們的股價不符合紐約證券交易所的上市要求。目前已跌破每股 1 美元。我們正在研究重新遵守紐約證券交易所規定的選項，其中包括我們最近提交的委託書中披露的反向股票分割的可能性。截至2024 年3 月31 日，innovate 的本金未償債務總額為6.87 億美元，比2023 年底的7,228 億美元減少了3,580 萬美元，這是由於基礎設施未償債務減少所致，但我們團隊的財務資本擴張部分抵銷了這一減少，將利息支付資本化為本金餘額。

With that, operator, we'd now like to open up the call for questions.

接線員，我們現在要開始提問。

(Operator Instructions) No questions at this time. I will turn the call back over Paul.

（操作員說明） 目前沒有問題。我會把電話轉給保羅。

Yes, I appreciate everybody's time and support and patience and look forward to coming back to everybody with some positive news over the next quarter or two. Thank you for your time.

是的，我感謝大家的時間、支持和耐心，並期待在接下來的一兩個季度向大家帶來一些正面的消息。感謝您的時間。

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。您現在可以斷開連線。