Innovate Corp (VATE) 2024 Q2 法說會逐字稿

Good afternoon, and welcome to the INNOVATE Corporation's second quarter 2024 earnings conference call. (Operator Instructions) Please note this event is being recorded. And now I would like to turn the conference call over to Anthony Rozmus with Investor Relations. Please go ahead.

下午好，歡迎參加 INNOVATE Corporation 2024 年第二季財報電話會議。（操作員說明）請注意此事件正在被記錄。現在我想將電話會議轉給投資者關係部門的安東尼·羅茲穆斯 (Anthony Rozmus)。請繼續。

Good afternoon. Thank you for being with us to review INNOVATE's second quarter 2024 earnings results. We are joined today by Paul Voigt, INNOVATE's Interim CEO; and Mike Sena, INNOVATE's CFO. We have posted our earnings release and our slide presentation on our website at innovatecorp.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 INNOVATE 2024 年第二季的獲利結果。今天，INNOVATE 臨時執行長 Paul Voigt 也加入了我們的行列。以及 INNOVATE 財務長 Mike Sena。我們已在我們的網站 Innovativecorp.com 上發布了收益報告和幻燈片簡報。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, will be forward-looking and are being made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

在本次電話會議中，管理階層可能會做出某些非歷史事實的陳述和假設，這些陳述和假設將具有前瞻性，並且是根據1995 年《私人證券訴訟改革法案》的安全港條款做出的。

Any such forward-looking statements involve risks, assumptions and uncertainties and are subject to certain assumptions and risk factors that could cause INNOVATE's actual results to differ materially from these forward-looking statements.

任何此類前瞻性陳述均涉及風險、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 INNOVATE 的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演示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 this date and as stated in our SEC reports. INNOVATE disclaims any intent or obligation to update or revise these forward-looking statements, except as expressly required by law.

此外，本次電話會議中包含的前瞻性陳述僅在當前日期做出，並如我們的 SEC 報告中所述。除法律明確要求外，INNOVATE 不承擔任何更新或修改這些前瞻性陳述的意圖或義務。

Management will also refer to certain non-GAAP financial measures such as adjusted EBITDA. We believe 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. At this point, it is my pleasure to turn things over to Paul Voigt.

管理階層也會參考某些非公認會計準則財務指標，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。此時此刻，我很高興將事情交給 Paul Voigt。

Good afternoon. Our momentum continued into the second quarter as showcased by our financial results. INNOVATE delivered revenues of $313.1 million and adjusted EBITDA of $26.7 million in the second quarter of 2024. Rustin and his team delivered another strong quarter at DBMG with revenues of $305.2 million and adjusted EBITDA of $32.5 million.

午安.正如我們的財務表現所表明的那樣，我們的勢頭持續到第二季​​。INNOVATE 2024 年第二季營收為 3.131 億美元，調整後 EBITDA 為 2,670 萬美元。Rustin 和他的團隊為 DBMG 帶來了另一個強勁的季度業績，收入達 3.052 億美元，調整後 EBITDA 達 3,250 萬美元。

Adjusted EBITDA growth was once again driven by significant gross margin expansion of approximately 650 basis points to 20.2%. Adjusted EBITDA margin also expanded year over year by approximately 420 basis points to 10.6% in the second quarter.

調整後 EBITDA 成長再次受到毛利率大幅擴張約 650 個基點至 20.2% 的推動。第二季調整後 EBITDA 利潤率也較去年同期成長約 420 個基點至 10.6%。

DBMG total adjusted backlog, which takes into consideration awarded, but not yet signed contracts, remains at a healthy level of $1 billion at the end of the second quarter. DBMG has continued to work through its backlog.

DBMG 調整後的未完成訂單總額（考慮到已授予但尚未簽署的合約）在第二季末仍保持在 10 億美元的健康水準。DBMG 繼續處理積壓的工作。

DBMG has been as active from a project bidding perspective and remain steadfast in assessing opportunities as they come to market. There are a lot of big projects coming online, and I'm confident that we will be able to add substantially to our backlog in a smart and profitable way.

從專案投標的角度來看，DBMG 一直非常活躍，並且在機會進入市場時始終堅定地評估機會。有很多大型專案即將上線，我相信我們將能夠以明智且有利可圖的方式大幅增加我們的積壓工作。

While we had a strong second quarter and our expectations for the year have improved, we still expect results to be slightly lower than last year. However, we do expect margin levels to be slightly better than 2023. DBMG continues to have a robust pipeline for 2025.

雖然我們第二季表現強勁，並且對今年的預期有所改善，但我們仍然預計結果將略低於去年。不過，我們預期利潤水準將略好於 2023 年。DBMG 到 2025 年仍然擁有強大的管道。

Moving on to Life Sciences, R2 posted another fantastic quarter. The success of the recently launched Glacial fx system is clear and landing to phenomenal growth in all aspects of the business. R2 achieved a 200% increase in system unit sales growth from Q2 2023 to Q2 2024 and a record high system sales in North America for the third quarter in a row.

轉向生命科學領域，R2 又發布了出色的季度業績。最近推出的 Glacial 外匯系統的成功是顯而易見的，並且在業務的各個方面都取得了顯著的成長。從 2023 年第二季到 2024 年第二季度，R2 的系統銷量成長達 200%，並且連續第三季在北美地區的系統銷量創下歷史新高。

This is the third consecutive quarter posting its largest top line revenue in a single quarter. Worldwide, R2 experienced 143% growth in top line revenue over Q2 2023. We are seeing demand outpace production, and the team at R2 is focused on ramping up production to meet demand.

這是連續第三個季度創下單季最高收入。在全球範圍內，R2 的營收較 2023 年第二季成長了 143%。我們看到需求超過了生產，R2 團隊致力於提高產量以滿足需求。

Glacial providers demonstrated continued utilization growth prior periods with 170% increase in patients treated and a 53% increase in average monthly utilization per Glacial provider over the same period as last year.

Glacial 提供者的前期利用率持續成長，與去年同期相比，接受治療的患者數量增加了 170%，每個 Glacial 提供者的平均月利用率增加了 53%。

Glacial brand awareness is growing at an exponential rate due to promotion from existing Glacial providers as well as top key opinion leaders in the industry. This is represented by year-over-year growth of 477% in website users, 1,006% increase in social mentions and 491% in patient provider searches.

由於現有 Glacial 提供者以及業界頂級關鍵意見領袖的推廣，Glacial 品牌知名度正在呈指數級增長。這體現在網站用戶年增 477%、社群提及量年增 1,006% 以及患者提供者搜尋量年增 491%。

R2's engagement growth outpaced industry competitors by 94%. We are encouraged by the momentum of R2 is building in the market as we continue to see expanded use in demand of the state-of-the-art technology, and this momentum has continued into the third quarter. We expanded our sales of the Glacial product into the US, Mexico, Canada, China, and the Middle East.

R2 的參與度成長超過產業競爭對手 94%。我們對 R2 在市場上形成的勢頭感到鼓舞，因為我們繼續看到最先進技術的需求不斷擴大，而且這種勢頭一直持續到第三季。我們將 Glacial 產品的銷售擴大到美國、墨西哥、加拿大、中國和中東。

Additionally, during the second quarter, we closed a new Series D preferred stock investment in R2. As part of the transaction, R2 converted $15.5 million of intercompany notes and related accrued interest that was previously issued into a Series D shares as well as additional $5.8 million of cash. Janssen's ownership increased to 81.4% as compared to 56.8% prior to the transaction. On a fully diluted basis, Janssen now owns 73.1% at the end of the second quarter.

此外，在第二季度，我們完成了對 R2 的新 D 系列優先股投資。作為交易的一部分，R2 將先前發行的 1550 萬美元公司間票據和相關應計利息轉換為 D 系列股票以及額外的 580 萬美元現金。楊森的持股比例從交易前的 56.8% 增加到 81.4%。截至第二季末，在完全稀釋的基礎上，楊森目前擁有 73.1% 的股份。

At MediBeacon, we continue to work through substantive review of the kidney monitoring program with the FDA. MediBeacon continues to see great opportunity in the market for real-time monitoring of kidney functions. This is evidenced further by continued MediBeacon R&D collaborations with leading health care industry partners.

在 MediBeacon，我們繼續與 FDA 一起對腎臟監測計畫進行實質審查。MediBeacon 繼續看到即時腎功能監測市場的巨大機會。MediBeacon 與領先的醫療保健產業合作夥伴的持續研發合作進一步證明了這一點。

Nephrology continues to be a key investment focus for pharmaceutical companies globally. Assessment of kidney functions across a range of clinical settings is growing in importance in part to the expansion of potential therapeutic interventions, which are designed to slow the development of kidney disease.

腎臟病學仍然是全球製藥公司的主要投資重點。在一系列臨床環境中對腎功能的評估變得越來越重要，部分原因是為了擴大潛在的治療幹預措施，這些幹預措施旨在減緩腎臟疾病的發展。

Furthermore, MediBeacon's landmark peer-reviewed publication in Kidney International in July 2024 described broadly the company's technology as a reference standard for the measurement of GFR kidney function. Kidney International is one of the top peer-reviewed nephrology journals globally. The company received immediate positive feedback from the prominent clinicians and key opinion leaders.

此外，MediBeacon 於 2024 年 7 月在《Kidney International》上發表的具有里程碑意義的同行評審出版物廣泛描述了該公司的技術，作為測量 GFR 腎功能的參考標準。Kidney International 是全球頂尖的同儕審查腎臟病學期刊之一。該公司立即收到了著名臨床醫生和關鍵意見領袖的正面回饋。

And at BeneVir, which was sold to Janssen Biotech, Inc, one of Janssen's pharmaceutical companies of Johnson & Johnson back in 2018, entered Phase 1 of the clinical study related to the oncolytic virus as monotherapy and in combination for the advanced solid tumor.

BeneVir 於2018 年出售給強生旗下楊森製藥公司之一的楊森生物技術公司(Janssen Biotech, Inc)，該公司進入了與溶瘤病毒相關的臨床研究的一期，作為晚期實體瘤的單一療法和聯合療法。

Moving on to Spectrum, Les and the team delivered another strong quarter as we are incrementally adding to the top line, which has in turn led to better profitability. In the second quarter, Spectrum nearly doubled their adjusted EBITDA to $1.5 million year over year. We continue to see revenue and adjusted EBITDA growth, driven by the launch of new networks, reduced churn, and continued cost cutting.

接下來是 Spectrum，Les 和團隊在我們逐步增加營收的同時，又實現了強勁的季度業績，這反過來又帶來了更好的獲利能力。第二季度，Spectrum 調整後的 EBITDA 年成長近一倍，達到 150 萬美元。在新網路的推出、客戶流失率的減少和持續的成本削減的推動下，我們繼續看到收入和調整後的 EBITDA 成長。

On July 1, FreeTV launched their third network, Defy, with HC2 providing broadcast distribution across 60% of the United States. Additionally, we recently launched news channels, Salem Media and First TV that are benefiting from the in-focus presidential news cycle. Additionally, Spectrum continues to work with the Public Media Venture Group, PMVG, to advance our collaborative efforts with PBS stations across the country in areas such as ATSC 3.0 and datacasting.

7 月 1 日，FreeTV 推出了第三個網路 Defy，HC2 在美國 60% 的地區提供廣播分發。此外，我們最近推出了新聞頻道 Salem Media 和 First TV，這些頻道都受益於焦點總統新聞週期。此外，Spectrum 繼續與公共媒體創投集團 PMVG 合作，推動我們與全國 PBS 電視台在 ATSC 3.0 和資料廣播等領域的合作。

Overall, OTA broadcast market continues to strengthen as advertising continues to show improvement over prior two years. The FCC recently announced strong regulatory incentives to low-power and Class A TV stations, which HC2 Broadcasting is taking full advantage of by preparing to submit engineering modifications to optimize station performance in selective markets.

總體而言，隨著廣告繼續比前兩年有所改善，OTA 廣播市場繼續走強。FCC 最近宣布了對低功率和 A 類電視台的強有力的監管激勵措施，HC2 Broadcasting 正在充分利用這些激勵措施，準備提交工程修改，以優化特定市場中的電視台性能。

As it relates to 5G broadcasting, we are working closely with Qualcomm among other companies to explore potential opportunities in the United States. And finally, Spectrum is beginning to selectively add stations in markets where we have no coverage and have filed to acquire a station in Monterey, California, which will strengthen our statewide coverage in California.

由於涉及 5G 廣播，我們正在與高通等公司密切合作，探索美國的潛在機會。最後，Spectrum 開始有選擇地在我們沒有覆蓋的市場中增加電台，並已申請收購加州蒙特雷的電台，這將加強我們在加州的全州覆蓋範圍。

We are very happy with the operational results of all three of our segments as DBMG continues to perform at a high level with a robust pipeline, encouraging growth and momentum in R2, progress at MediBeacon and an increase in OTA demand combined with next-gen opportunities continue to develop.

我們對所有三個部門的營運結果感到非常滿意，因為 DBMG 憑藉強大的產品線繼續保持高水準的表現，鼓勵 R2 的成長和勢頭，MediBeacon 的進展以及 OTA 需求的增加以及下一代機會繼續發展。

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 an intercompany transaction where DBMG redeemed $41.8 million of our preferred stock in cash, which was upstream to INNOVATE and has created sufficient runway to execute our strategy to utilize our non-cash flowing assets to address our capital structure and set the company up to refinance our debt later this year.

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。我們現在已完成供股和公司間交易，其中DBMG 以現金贖回了我們4,180 萬美元的優先股，這是INNOVATE 的上游，並為執行我們的策略創造了足夠的跑道，以利用我們的非現金流資產來解決我們的資本問題架構並讓公司在今年稍後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 time frame we created to ensure that we maximize the value of these assets.

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，以確保我們最大限度地發揮這些資產的價值。

Exiting these businesses for the right value takes time. We continue to be optimistic on the overall M&A market and hope to reach resolution later this year 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 from the second quarter and continue for the remainder of the year. With that, I'll turn it over to Mike Sena for a review of our financials and capital structure.

為了獲得正確的價值而退出這些業務需要時間。我們對整體併購市場繼續持樂觀態度，並希望在今年稍後達成解決方案，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。我們希望從第二季度開始延續這一勢頭，並在今年剩餘時間內繼續下去。這樣，我會將其交給邁克·塞納 (Mike Sena)，以審查我們的財務和資本結構。

Thanks, Paul. Consolidated total revenue for the second quarter of 2024 was $313.1 million, a decrease of 15.1% compared to $368.8 million in the prior-year period. The decrease was primarily driven by our Infrastructure segment, which is partially offset by increases at our Life Sciences and Spectrum segments.

謝謝，保羅。2024 年第二季合併總營收為 3.131 億美元，較上年同期的 3.688 億美元下降 15.1%。這一下降主要是由我們的基礎設施部門推動的，但部分被生命科學和頻譜部門的成長所抵消。

Net income attributable to common stockholders and participating preferred stockholders for the second quarter of 2024 was $14.1 million or $0.10 per fully diluted share compared to a net loss of $10.5 million or $0.13 per fully diluted share in the prior-year period.

2024 年第二季歸屬於普通股股東及參與優先股股東的淨利為1,410 萬美元，或完全稀釋每股收益0.10 美元，而上年同期淨虧損為1,050 萬美元，或完全稀釋每股收益0.13美元。

Total adjusted EBITDA was $26.7 million in the second quarter of 2024, an increase from $16.5 million in the prior-year period. The increase is driven by all segments with the exception of Life Sciences segment, primarily as a result of timing of previously unrecognized losses from MediBeacon.

2024 年第二季調整後 EBITDA 總額為 2,670 萬美元，較去年同期的 1,650 萬美元有所增加。這一增長是由除生命科學部門之外的所有部門推動的，主要是由於 MediBeacon 之前未確認的損失所致。

At infrastructure, revenue decreased 15.8% to $305.2 million from $362.4 million in the prior-year quarter. This decrease was primarily driven by the timing and size of projects of Banker Steel and DBMG's commercial structural steel fabrication and erection business, both of which had increased activity in the comparable period on certain large commercial construction projects that are now at or near completion in the current period. This was partially offset by an increase of the industrial maintenance and repair business as a result of an increase in project work.

基礎設施業務收入從去年同期的 3.624 億美元下降至 3.052 億美元，下降 15.8%。這一下降主要是由於Banker Steel 和DBMG 的商業結構鋼製造和安裝業務的項目時間和規模造成的，這兩家公司在可比時期內增加了某些大型商業建築項目的活動，這些項目目前已在或接近完工。這被專案工作增加導致的工業維護和修理業務的增加部分抵消。

Infrastructure adjusted EBITDA for the second quarter of 2024 increased to $32.5 million from $23.5 million in the prior-year period. The increase was driven by higher margins on certain large commercial construction projects that are now at or near completion in the current period at DBMG's commercial structural steel fabrication and erection business.

2024 年第二季基礎設施調整後 EBITDA 從去年同期的 2,350 萬美元增至 3,250 萬美元。這一增長是由於 DBMG 的商業鋼結構製造和安裝業務目前已完成或接近完成的某些大型商業建築項目的利潤率較高。

This increase was partially offset by a decrease in margins at Bankers Steel due to timing of completion of a large commercial construction project and an increase in recurring SG&A expenses.

這一增長被 Bankers Steel 的利潤率下降（由於大型商業建築項目的完工時間和經常性銷售、一般管理費用的增加）所部分抵消。

As of June 30, 2024, and in line with our expectation, reported backlog was $822.7 million, and adjusted backlog, which takes into consideration awarded, but not yet signed contracts, was $1 billion compared to reported backlog of $1.1 billion and adjusted backlog of $1.2 billion at the end of 2023.

截至2024 年6 月30 日，與我們的預期一致，報告的積壓訂單為8.227 億美元，調整後的積壓訂單（考慮到已授予但尚未簽署的合約）為10 億美元，而報告的積壓訂單為11 億美元，調整後的積壓訂單為10 億美元。

DBMG entered the quarter with $173.8 million in principal amount of debt, which is an increase of $14.1 million from the first quarter, primarily driven by an amendment to the credit agreement, which added an incremental separate term loan of $25 million, which is partially offset by a prepayment as a result of property sales and normal debt amortization payments.

DBMG 本季債務本金為 1.738 億美元，較第一季增加 1,410 萬美元，主要是由於信貸協議的修訂，其中增加了 2,500 萬美元的增量單獨定期貸款，部分抵消由於房地產銷售和正常債務攤銷付款而產生的預付款。

DBMG has been able to reduce its debt obligations through line reduction as invested working capital has continued to return to the business, a trend that began at the end of 2023. As the backlog stabilizes, we expect flat working capital needs throughout 2024. As a reminder, DBMG has reduced its outstanding debt by approximately $59 million in the last nine months.

隨著投入的營運資金持續回流至業務，DBMG 已能夠透過削減額度來減少債務，這一趨勢始於 2023 年底。隨著積壓穩定，我們預計 2024 年營運資金需求將持平。需要提醒的是，過去 9 個月，DBMG 已將其未償債務減少了約 5,900 萬美元。

At Life Sciences, revenue increased to 142.9% to $1.7 million from $700,000 in the prior-year quarter. The increase in revenue was attributable to R2, primarily due to incremental unit sales from the launch of the Glacial fx system in the second half of '23 and an increase in Glacial Rx units sold compared to the prior-year period.

生命科學部門的營收從去年同期的 70 萬美元增至 170 萬美元，成長 142.9%。營收的成長歸功於 R2，主要是由於 23 年下半年推出 Glacial fx 系統帶來的銷量增量以及 Glacial Rx 銷量與上年同期相比的增加。

Life Sciences adjusted EBITDA losses increased for the quarter, which was primarily due to higher equity method losses recognized from our investment in MediBeacon.

本季生命科學調整後 EBITDA 虧損增加，這主要是由於我們對 MediBeacon 的投資確認的權益法虧損增加。

At Spectrum, revenue was $6.2 million, an increase of $0.5 million compared to the second quarter of 2023, primarily driven by network launches and expanded coverage with existing customers, which was partially offset by the termination of a number of smaller networks and individual markets subsequent to the comparable period.

Spectrum 的收入為620 萬美元，比2023 年第二季度增加了50 萬美元，主要是由於網絡推出和現有客戶覆蓋範圍擴大所推動，但隨後一些較小網絡和個別市場的終止部分抵消了這一收入至可比較期間。

Spectrum reported adjusted EBITDA in the second quarter increased to $1.5 million from $0.8 million in the prior-year quarter. The increase was primarily due to the increase in revenue. Non-operating corporate adjusted EBITDA losses were $2.5 million for the second quarter of 2024, an improvement from the second quarter of 2023 of $0.9 million. The improvement was primarily driven by a decrease in compensation-related expenses due to headcount changes and a decrease in legal fees.

Spectrum 報告稱，第二季調整後 EBITDA 從去年同期的 80 萬美元增至 150 萬美元。增加的主要原因是收入增加。2024 年第二季非營運企業調整後 EBITDA 損失為 250 萬美元，比 2023 年第二季的 90 萬美元有所改善。這項改善主要是由於員工人數變動導致的薪酬相關費用減少以及法律費用減少所致。

At the end of the second quarter, the company had $80.2 million of cash and cash equivalents, excluding restricted cash compared to $80.8 million as of December 31, 2023. On a stand-alone basis, as of June 30, 2024, our non-operating corporate segment had cash and cash equivalents of $43.6 million compared to $2.5 million at the end of 2023. As Paul mentioned earlier, INNOVATE received $41.8 million in cash in the second quarter as a result of the inter-company preferred stock redemption of DBMG.

截至第二季末，該公司擁有 8,020 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 6 月 30 日，我們的非經營性企業部門的現金和現金等價物為 4,360 萬美元，而 2023 年底為 250 萬美元。正如 Paul 之前提到的，INNOVATE 在第二季度因 DBMG 的公司間優先股贖回而獲得了 4,180 萬美元現金。

As announced earlier in the year, we received notice that we are not in compliance with the NYSE listing requirement as our stock price has fallen below $1 per share. As previously disclosed, effective August 8, 2024, after market close, the Board approved the 1 for 10 reverse stock split to increase the per share market price to meet the minimum per share requirements of the NYSE.

正如今年稍早宣布的那樣，我們收到通知稱我們不符合紐約證券交易所的上市要求，因為我們的股價已跌至每股 1 美元以下。如同先前所揭露的，自 2024 年 8 月 8 日收盤後生效，董事會批准了 1 比 10 反向股票分割，以提高每股市場價格，以滿足紐約證券交易所的最低每股要求。

As of June 30, 2024, INNOVATE had total principal outstanding indebtedness of $698 million, down $24.8 million from $722.8 million at the end of 2023, driven by the decrease in Infrastructure's outstanding debt, a decrease in corporate debt as a result of the partial redemption of the CGIC note, which was partially offset by R2's extension with Lancer Capital, which capitalized interest payments into the principal balance. With that, operator, we'd now like to open up the call for questions.

截至2024年6月30日，INNOVATE的未償債務本金總額為6.98億美元，比2023年底的7.228億美元減少2,480萬美元，原因是基礎設施未償債務減少，部分贖回導致公司債務減少CGIC 票據的部分抵銷金額由 R2 與 Lancer Capital 的延期所部分抵消，Lancer Capital 將利息支付資本化至本金餘額。接線員，我們現在要開始提問。

(Operator Instructions) Brian Charles, R.W.

（操作員說明）Brian Charles, R.W.

Okay. Great. Thanks. Just a couple of questions. Thanks for taking my question. A couple of questions about the backlog. It has come down, and it's really not much below guidance. But could you just give sort of the kind of the tenor of the backlog? I know you've been delivering in your bidding process, but are you getting enough interest such that you're pretty confident that backlog is going to stay pretty much where it is?

好的。偉大的。謝謝。只是幾個問題。感謝您提出我的問題。關於積壓的幾個問題。它已經下降了，而且確實比指導值低了很多。但能否簡單介紹一下積壓的情況？我知道您在投標過程中一直在交付成果，但是您是否獲得了足夠的興趣，以至於您非常有信心積壓的訂單將保持在原來的水平？

This is Mike. Hi, Brian. How are you doing? So we kind of said in the beginning of the year, we expect the backlog to kind of stabilize. It was sitting at that on an adjusted basis, $1.2 billion level. It has come down a little bit, but there is some timing aspects to these things, and it's sitting at $1 billion. Rustin is telling us he still sees a ton of bidding activity, and we're pretty confident in these guys to be able to convert as these projects come into the market.

這是麥克。嗨，布萊恩。你好嗎？所以我們在今年年初就說過，我們預期積壓將趨於穩定。調整後的水準為 12 億美元。它已經下降了一點，但這些事情有一些時間方面的問題，而且它的價值是 10 億美元。魯斯汀告訴我們，他仍然看到大量的投標活動，我們對這些人能夠在這些項目進入市場時進行轉換非常有信心。

Okay. In the bidding process, are they seeing -- is it a competitive market? Or are there some things that are just too tight for you to really --

好的。在投標過程中，他們是否看到──這是一個競爭激烈的市場？或者是否有一些事情對你來說太緊而無法真正完成--

It is a competitive market for sure. There are some projects that Rustin is doing a good job of making sure that they're getting profitable jobs that makes sense to do. And so we're sitting in a position where we see a lot of RFPs out there, but less are getting released right now. And as we kind of work through the year, the expectation is that they will get released, and we will participate as the management team always has.

這肯定是一個競爭激烈的市場。Rustin 在一些專案上做得很好，確保他們獲得有意義的有利可圖的工作。因此，我們看到有很多 RFP，但現在發布的卻很少。隨著我們這一年的工作，我們期望他們能夠被釋放，我們將像管理團隊一貫的那樣參與其中。

Okay. But just one last question on this. Just given, the state of the market now, would you expect margins to remain stable in 2025? Or will they come down a bit just because the market seems a bit more competitive?

好的。但這只是最後一個問題。鑑於目前的市場狀況，您預期 2025 年利潤率會保持穩定嗎？或者他們會因為市場競爭似乎更加激烈而下降嗎？

Well, I think there are some pressures on margins in the market, is what we have been told. But again, I think there is a significant amount of projects out there in the market. We expect for '24 to kind of see margins slightly better than we did last year. And we'll see as we kind of work through and receive some of the other successful in winning some of the projects that are out there.

嗯，我認為市場利潤率面臨一些壓力，這是我們被告知的。但我再次認為市場上有大量的項目。我們預計 24 年的利潤率將略高於去年。我們將看到，隨著我們的努力，並獲得其他一些成功的項目，贏得了一些項目。

Okay. All right. Thanks, appreciate that color. Away from that, one other question on MediBeacon. I know you've been working with the FDA. Is there any color or maybe update to a time frame for when you might get some approvals there?

好的。好的。謝謝，欣賞這個顏色。除此之外，MediBeacon 上還有一個問題。我知道你一直在與 FDA 合作。是否有任何顏色或可能更新您何時可以獲得批准的時間範圍？

Yeah. I mean we continue to work through the process with the FDA. And as soon as we have more information to provide, we'll certainly update the market.

是的。我的意思是，我們將繼續與 FDA 合作完成整個流程。一旦我們有更多資訊提供，我們一定會更新市場情況。

Okay. Thanks. And for the 8.5% notes, I know they're not due until February 2026, where you've talked about addressing them this year. Have you had any conversations with bondholders? Have we started that? Or are you getting some other ducks in the row before you do that?

好的。謝謝。對於 8.5% 的票據，我知道它們要到 2026 年 2 月才會到期，你們已經談到今年要解決這些問題。您與債券持有人進行過對話嗎？我們開始了嗎？或者在你這樣做之前你是否已經安排了其他一些鴨子？

Yeah. I mean, we are not ready to have, I guess, refinancing discussions at this point, but we do talk to our bondholders on a regular basis and try and be very transparent as to where we are. As you know, we're exploring strategic alternatives with our Life Sciences businesses. And as we get further along in that process, we think that there'll be a right time to start talking about refinancing as we kind of near the end of the year.

是的。我的意思是，我想我們目前還沒有準備好進行再融資討論，但我們確實會定期與債券持有人交談，並努力對我們的情況保持透明。如您所知，我們正在探索生命科學業務的策略替代方案。隨著我們在這過程中取得進一步進展，我們認為，隨著年底的臨近，將是開始討論再融資的合適時機。

(Operator Instructions) There are no further questions at this time. So I'll hand the call over back to Paul Voigt, CEO, for closing remarks. Please go ahead.

（操作員說明） 目前沒有其他問題。因此，我將把電話轉回給執行長 Paul Voigt，讓其致閉幕詞。請繼續。

Yeah. Thank you very much to everybody who listened to the call. We look forward to being transparent and talking to you guys in the future with some positive news on the sale of the healthcare assets. I appreciate everybody's support and look forward to our next call. Thank you.

是的。非常感謝所有收聽電話的人。我們期待未來能夠保持透明，並與大家討論有關醫療保健資產出售的一些正面消息。我感謝大家的支持，並期待我們的下一次通話。謝謝。

Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect.

女士們、先生們，今天的會議到此結束。感謝您的參與。您現在可以斷開連線。