INNOVATE Corp.

Good afternoon and welcome to InnovateCorp third quarter 2024 earnings conference call. All participants will be in a listen-only mode. After prepared remarks and presentation, there will be a question and answer session. Please note, this event is being recorded. I would now like to turn the conference call over to Anthony Rasmus with Investor Relations. Please go ahead.

Good afternoon. Thank you for being with us to review Innovate's third 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 risk 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 of the SEC. In addition, the forward-looking statements included in this conference call are only made as of this date of this call 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. management will often 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 Boyd.

Paul Boyd Good afternoon. We are pleased to report our strong third quarter financial results and we'll update you on key milestones reached that exemplify the progress across each business segment. Innovate delivered consolidated revenues of 242.2 million and adjusted EBITDA of 16.8 million in the third quarter of 2024. DBM Global achieved revenues of 232.8 million and adjusted EBITDA of 20.9 million. During the quarter, DBM has seen gross margin improvement year-over-year of approximately 360 basis points to 18.8% and adjusted EBITDA year-over-year by approximately 70 basis points to 9%. As we've discussed on previous calls, we are expecting results for the full year to come in slightly lower versus last year. DBM delivered a very strong first half However, as expected, and as we signaled on previous calls, the back half of 2024 will be lighter compared to the same period of 2023. This year has been unusual with the first half outperforming the second half, and the results for the first nine months have met our expectations, aligning with results from the previous year. While third quarter sales were lighter than expectations, This was offset by higher margins in the quarter. We still expect adjusted EBITDA to be slightly lower than last year results. DBM's total adjusted backlog, which takes into consideration awarded but not yet signed contracts, increased to $1.1 billion at the end of the third quarter. There continues to be high volume of bidding opportunities in the commercial market today. although many projects have not yet been released to start construction. Moving on to life sciences, R2 posted another strong financial quarter and made significant commercial progress. Year-to-date, worldwide top-line sales reached 5.7 million, a record high. R2's top-line sales grew 217% for the first nine months, and it's September 30th. 2024 compared to the same period last year, and also already 73% higher than top line sales for the full year 2023. System unit sales worldwide saw a massive increase of 416% growth from third quarter 23 to third quarter 24. R2 has also secured a robust backlog of over 60 systems worldwide positioning the company well as it heads into the fourth quarter. Since its commercial launch, R2 has sold systems into multiple countries outside the U.S., including Canada, Mexico, UAE, Saudi Arabia, Qatar, Hong Kong, Japan, Singapore, Vietnam, and China. R2 plans to expand its international footprint in months to come. R2 is also pleased to announce the launch of a partnership with its very first national account chain. Glacial providers continue to see incredible results using glacial skin devices, evidenced by 168% growth in patients treated and the increase in average monthly utilization by 58% for glacial provider over the same period. Glacial brand awareness has a significant impact And we have seen repeated and continued growth in this area throughout 2024, exceeding industry competitor growth by 1,429%. R2 experienced year-over-year growth of 4,086% increase in social mentions, 498% increase in web users, and 104% increase in patient provider searches. We are extremely pleased with the progress and momentum of R2. They are well positioned in the market and have enough product capabilities to meet the current demand. MetaBeacon remains dedicated to collaborating with the FDA as they conduct substantive review of the kidney monitoring program. MetaBeacon continues to see great opportunities in the market for real-time monitoring of kidney function. The transdermal GFR in the first in-kind product for real-time assessment of kidney function, which is unlike any current methodologies in the market. And finally, Spectrum continues to achieve strong financial results with the launch of new networks and expanded coverage with existing customers. The quarter was highlighted by an improvement in profitability once again, with adjusted EBITDA of $1.7 million in the third quarter, a $2 million improvement year-over-year. Year-to-date, Spectrum has delivered $4.8 million in adjusted EBITDA, a significant increase compared to $900,000 through the first nine months of 2023. New launches once again drove higher revenue growth in the quarter. Of note, Free TV's network, Defy, launched in the third quarter. Broadcasting continues to see many OTA network opportunities on the horizon for 2025 as streaming networks explore over-the-air coverage. Broadcasting also continues to make progress on discussions with prospective strategic partners in pursuit of new spectrum-related revenue opportunities in ATSC 3.0, lighthousing, data casting, and 5G broadcasting. We are very happy with the operational results of all three of our segments. DBM's margin continues to be strong, and business has a robust pipeline well-positioned for 2025. At PanSend, R2 made significant progress in way of growth, and we continue to make progress at MetaBeacon. And Spectrum's profitability has improved dramatically in the quarter and year-to-date. We continue to see the benefits firsthand of the strong management teams in place at each of our business segments with the right path forward as evidenced by key milestones achieved so far in 2024. Addressing our capital structure remains a primary focus. We are consistently making headway in exploring strategic alternatives with non-pass-flowing businesses. We are encouraged by 2024 milestones we have seen at our non-cash flowing businesses as we work to execute on a strategy to address the capital structure. Our strategy requires patience within our established timeframe to ensure we maximize the value of these assets. We maintain optimism about the overall M&A market and remain encouraged by the positive market indicators along with ongoing progress and momentum around these assets. With that, I'll turn it over to Mike Sena, our CFO, for a review of our financials and capital structure.