INNOVATE (VATE) 6 Nov 24 2024 Q3 Earnings call transcript

In its recent earnings call, INNOVATE Corp. reported a strong third-quarter performance, showcasing impressive financial results and strategic advancements across its business segments. Interim CEO Paul Voigt led the call, providing updates on the company's progress and future outlook.

Financial Performance

INNOVATE Corp. achieved consolidated revenues of $242.2 million and adjusted EBITDA of $16.8 million in the third quarter of 2024. DBM Global, a significant segment, reported revenues of $232.8 million and adjusted EBITDA of $20.9 million. DBM Global's gross margin improved by approximately 360 basis points to 18.8%, and adjusted EBITDA grew by approximately 70 basis points to 9%.

Despite a lighter third quarter than expected, DBM Global's total adjusted backlog increased to $1.1 billion, positioning the company well for future growth. R2, another segment, experienced a record-breaking year-to-date sales of $5.7 million, a 217% increase compared to the same period last year. R2's international expansion continues, with systems sold in multiple countries outside the U.S., including Canada, Mexico, and China.

Strategic Initiatives and Market Positioning

INNOVATE Corp. is actively exploring strategic alternatives to address its capital structure, with a focus on noncash-flowing businesses. The company has made significant progress in this area, although the process requires patience and strategic planning. In the meantime, INNOVATE's management teams across its segments continue to perform well, with R2's growth, Spectrum's profitability, and DBM's robust pipeline setting the stage for future success.

FDA Update and Future Outlook

The call also touched upon INNOVATE Corp.'s ongoing collaboration with the FDA regarding MediBeacon, the company's kidney monitoring program. The FDA review process is ongoing, and INNOVATE is working closely with the regulatory agency to secure approval. Once approved, MediBeacon's real-time kidney function monitoring system could significantly impact the healthcare industry, offering a unique and innovative solution.

Looking ahead, INNOVATE Corp. anticipates a strong finish to the year, with confidence in its ability to win projects and maintain profitability. The company's strategic initiatives, coupled with its strong operational performance, set the stage for continued growth and success in the coming years.

Overall, INNOVATE Corp.'s third-quarter earnings call painted a picture of a company on the rise, with strategic advancements and financial performance underscoring its position as a leader in its industry. As the company continues to navigate the challenges and opportunities ahead, investors and stakeholders remain optimistic about its future prospects.