INNOVATE Corp.

Good afternoon and welcome to Innovate Corp's first quarter 2024 earnings conference call. All participants will be in a listen-only mode. After the prepared remarks and presentation, there will be a question and answer session. Please note, this event is being recorded. I would like to turn the conference call over to Nilsika with investor relations. Please go ahead.

Good afternoon. Thank you for being with us to review Innovate's first 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. 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. 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. 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. 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. NFV 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. At this point, it is my pleasure to turn things over to Paul Voigt.

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 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 of 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. 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. Moving on to life sciences, Dave and Shireen and the R2 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. R2 achieved record-high system sales in a single quarter in North America for the second quarter in a row. R2 has continued to grow outside of North America by launching their product in the Middle East during the quarter. R2 continued its 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, R2 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. We are encouraged by the momentum R2 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. At 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's process. As mentioned on our last call, MetaBeacon's pivotal study results were posted on the clinicaltrials.gov website on April 18th. As noted on the clinicaltrials.gov website, MetaBeacon's transdermal GFR measurement system met the predetermined primary and secondary endpoints established with the FDA prior to starting the study. 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. The IMPACT-CHRONIC KIDNEY DISEASE, or the acronym CKD 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-DAS-CK study concluded that a record CKD diagnosis was associated with significant improvements in CKD management and monitoring. Pharmaceutical companies 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 to approved therapeutics that target chronic kidney disease indications. We see a number of factors including the growth of GLP-1 agnostics like Ozempic that are likely to positively impact the growing addressable market for products that would provide an accurate and clinically practical assessment of kidney functions. Lesson 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's January 1st network launches of 365, and Outlaw and subsequent launch of three new sports networks, Outdoor America, Motorsports One, and Speed Sports TV. Network distribution revenues are growing as churn rates decline with existing network customers. Pricing has held, and new programmers emerged, particularly for cable and streaming networks looking for over-the-air coverage. And in April, Spectrum participated in the NAB Conference in Las Vegas, which generated considerable interest in AC2 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 3.0 light housing and commercial applications. And given our continued efforts in exploring revenue opportunities for repurposed 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 ATS 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 DBM continues to perform at high levels with a robust pipeline, encouraging growth and momentum at R2, progress at MetaBeacon on FDA approval, and an increase in OTA demand combined with next-gen opportunities continue to develop. 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. 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. With that, I'll turn it over to Mike for review our financial and capital structure.