INNOVATE Corp. Announces First Quarter 2025 Results
- Infrastructure: DBM Global first quarter revenue of $264.9 million -
- Life Sciences: MediBeacon$(R)$ Transdermal GFR ("TGFR") System Received FDA Approval to Assess Kidney Function -
- Spectrum: Expects commercial opportunities in datacasting to generate revenue by the end of the year -
NEW YORK, May 06, 2025 (GLOBE NEWSWIRE) -- INNOVATE Corp. ("INNOVATE" or the "Company") $(VATE)$ announced today its consolidated results for the first quarter.
Financial Summary
(in millions, except per
share amounts) Three Months Ended March 31,
----------------------------------------
Increase /
2025 2024 (Decrease)
------- ------ -------------
Revenue $ 274.2 $ 315.2 (13.0)%
Net loss attributable to
common stockholders and
participating preferred
stockholders $ (24.8) $ (17.7) (40.1)%
Basic and diluted loss per
share attributable to
common stockholders(1) $ (1.89) $ (2.21) 14.5%
Total Adjusted EBITDA(2) $ 7.2 $ 12.8 (43.8)%
(1) Basic and diluted loss per common share for the three months ended March 31, 2024, has been retroactively adjusted to reflect the 1-for-10 reverse stock split effected on August 8, 2024.
(2) Reconciliation of GAAP to Non-GAAP measures follows
Commentary
"To begin 2025, INNOVATE has made meaningful progress on key initiatives that has strengthened the foundation across our three operating segments, " said Avie Glazer, Chairman of INNOVATE. "The Infrastructure segment expanded its adjusted backlog to $1.4 billion in the first quarter, reflecting the team's continued efforts to secure new projects that will drive sustained growth in the future. We are seeing great momentum in Life Sciences with MediBeacon's previously announced FDA approval of its TGFR system in January, which started the year on the front foot while R2 delivered strong year-over-year growth. The Spectrum segment delivered consistent year-over-year performance, demonstrating resilience and operational stability amid a dynamic market environment."
"We entered the year with strong momentum that positions us well to build on our strategic priorities and drive growth in 2025," stated Paul Voigt, INNOVATE's Interim CEO. "In the first quarter, DBMG added a few substantial projects to the adjusted backlog, amounting to more than $500 million, and we continue to be optimistic on the pipeline for the remainder of the year. At Life Sciences, on the heels of the FDA's approval of the TGFR, MediBeacon looks forward to exploring potential applications with clinicians both in the hospital and outpatient settings. R2 kicked off 2025 by tripling its year-over-year revenue and continued expanding sales and distribution into key international markets. Broadcasting is also experiencing a strong start to 2025 with the introduction of two OTA networks. With more streaming networks aiming to extend their reach, we are witnessing a rise in new opportunities within the OTA space."
First Quarter 2025 Highlights
Infrastructure
-- DBM Global ("DBMG") reported first quarter 2025 revenue of $264.9 million,
a decrease of 14.0%, compared to $307.9 million in the prior year
quarter. Net income attributable to INNOVATE was $4.6 million, compared
to $4.4 million for the prior year quarter. Adjusted EBITDA decreased to
$16.7 million from $18.3 million in the prior year quarter.
-- DBMG grew gross margin to 15.6% in the first quarter, an expansion of
approximately 110 basis points year-over-year and Adjusted EBITDA margin
to 6.3% in the first quarter, an expansion of approximately 40 basis
points year-over-year.
-- DBMG's reported backlog and adjusted backlog, which takes into
consideration awarded but not yet signed contracts, was $1.4 billion as
of March 31, 2025, compared to reported and adjusted backlog of
$1.0 billion and $1.1 billion, respectively, as of December 31, 2024.
-- DBMG has seen a surge of awards in both the commercial and industrial
markets, adding over $500 million in new awards to adjusted backlog
across our companies in the first quarter.
Life Sciences
-- The U.S. Food and Drug Administration ("FDA") approved the MediBeacon(R)
TGFR for the assessment of kidney function in patients with normal or
impaired renal function.
-- The National Medical Products Administration ("NMPA") in China approved
the MediBeacon(R) TGFR Monitor and TGFR Sensor for the assessment of
kidney function in patients with normal or impaired renal function.
Lumitrace(R) (relmapirazin) injection, categorized as a drug in China, is
under review and is targeted for approval in late 2025.
-- R2 Technologies, Inc. ("R2") delivered a strong start to 2025, reporting
revenue of $3.1 million, a 210% increase compared to $1.0 million in the
prior year quarter.
-- R2's gross worldwide system unit sales grew 163% in the first quarter of
2025 compared to the first quarter of 2024.
Spectrum
-- Broadcasting reported first quarter 2025 revenue of $6.2 million,
compared to $6.3 million in the prior year quarter. Net loss attributable
to INNOVATE was $5.4 million compared to $4.8 million in the prior year
quarter. Adjusted EBITDA was $1.4 million, compared to $1.6 million in
the prior year quarter.
-- Signed a contract with Marathon Ventures to distribute two new, vibrant
over-the-air ("OTA") networks - Nosey and Confess.
-- Ongoing efforts are being made to explore commercial opportunities in
datacasting, in collaboration with a leading mobile network provider,
with expectations to generate revenue by the end of 2025.
First Quarter 2025 Financial Highlights
-- Revenue: For the first quarter of 2025, INNOVATE's consolidated revenue
was $274.2 million, a decrease of 13.0%, compared to $315.2 million for
the prior year quarter. The decrease was primarily driven by our
Infrastructure segment, which was partially offset by an increase at our
Life Sciences segment. The decrease at our Infrastructure segment was
primarily driven by the timing and size of projects at Banker Steel and
the industrial maintenance and repair business, including the effect of
changes in estimated costs to complete those projects recognized in the
ordinary course of business in the comparable period, which also had
increased activity in the prior year on certain large commercial
construction projects that have since been completed or are nearing
completion in the current period. This was partially offset by an
increase at DBMG's commercial structural steel fabrication and erection
business as a result of an increase in project work. The increase at our
Life Sciences segment was attributable to R2, driven by an increase in
unit sales of both Glacial fx and Glacial Rx systems and an increase in
consumable sales in North America, as well as an increase in Glacial Spa
unit sales, consumable sales and Glacial fx unit sales outside North
America.
REVENUE by OPERATING SEGMENT
---------------
(in millions) Three Months Ended March 31,
------------------------------------------
Increase /
2025 2024 (Decrease)
-------- ------- ---------------
Infrastructure $ 264.9 $ 307.9 $ (43.0)
Life Sciences 3.1 1.0 2.1
Spectrum 6.2 6.3 (0.1)
-------- ------- --------
Consolidated INNOVATE $ 274.2 $ 315.2 $ (41.0)
======== ======= ========
-- Net Loss: For the first quarter of 2025, INNOVATE reported a Net loss
attributable to common stockholders and participating preferred
stockholders of $24.8 million, or $1.89 per fully diluted share, compared
to $17.7 million, or $2.21 per fully diluted share, for the prior year
quarter, which has been retroactively adjusted to reflect the 1-for-10
reverse stock split effected on August 8, 2024. The increase in Net loss
was primarily due to an increase of $4.7 million in loss from equity
investees, a $3.8 million increase in tax expense, a net decrease in
gross profit of $3.1 million, and a $3.0 million increase in interest
expense, which was partially offset by a $5.2 million increase in other
income, net, a $2.0 million decrease in other operating loss, and a
decrease in selling, and general and administrative ("SG&A") expenses of
$1.7 million. The overall increase in loss from equity investees was due
to an increase in losses recognized from MediBeacon as a result of equity
changes that resulted from the milestone payments received from Huadong
following FDA approval. The increase in tax expense was primarily driven
by the impact of projected pre-tax results on the annual effective tax
rate and the limitations on the utilization of net operating losses
("NOL") by INNOVATE's U.S. consolidated group as a result of the Internal
Revenue Code Section 382 and the Tax Cuts and Jobs Act's 80 percent
limitation on NOLs incurred after 2017. The decrease in gross profit was
primarily driven by our Infrastructure segment due to timing and size of
projects that have since been completed or are nearing completion in the
current period, including the effect of changes in estimated costs to
complete those projects recognized in the ordinary course of business in
the comparable period, which was partially offset by an increase in gross
profit at our Life Sciences segment primarily driven by R2 as a result of
an increase Glacial unit sales and consumable sales over the comparable
period. The increase in interest expense was primarily attributable to
increases in exit fees and a higher outstanding principal balance at our
Life Sciences segment as a result of the capitalization of unpaid
interest into the principal balance subsequent to the comparable period.
The overall increase in other income, net was primarily driven by step-up
gain following MediBeacon's FDA approval in January 2025. The decrease in
other operating loss was primarily driven by an unrepeated loss related
to a plant closure at our Infrastructure segment in the comparable
period. The overall decrease in SG&A expenses was primarily driven by
decreases in professional and consulting fees, compensation-related and
travel expenses at our Infrastructure segment, which was partially offset
by an increase in computer and software-related costs in the current
period at our Infrastructure segment and an increase in selling costs at
R2 due to an increase in unit sales.
NET INCOME (LOSS) by OPERATING SEGMENT
--------------------------------------------------------------------
(in millions) Three Months Ended March 31,
--------------------------------------------
Increase /
2025 2024 (Decrease)
-------- ------- ---------------
Infrastructure $ 4.6 $ 4.4 $ 0.2
Life Sciences (7.6) (4.5) (3.1)
Spectrum (5.4) (4.8) (0.6)
Non-Operating
Corporate (16.1) (12.5) (3.6)
Other and
eliminations -- -- --
Net loss attributable
to INNOVATE Corp. $ (24.5) $ (17.4) (7.1)
Less: Preferred
dividends 0.3 0.3 --
-------- ------- --------
Net loss attributable
to common
stockholders and
participating
preferred
stockholders $ (24.8) $ (17.7) $ (7.1)
======== ======= ========
-- Adjusted EBITDA: For the first quarter of 2025, Total Adjusted EBITDA was
$7.2 million compared to Total Adjusted EBITDA of $12.8 million for the
prior year quarter. The decrease in Adjusted EBITDA was primarily driven
by our Life Sciences and Infrastructure segments, which was partially
offset by an increase at our Non-Operating Corporate segment. The
decrease at our Life Sciences segment was primarily due to higher equity
method losses recognized from MediBeacon. The decrease at our
Infrastructure segment was primarily driven by a decrease in revenue at
both Banker Steel and the industrial maintenance and repair businesses
due to timing of certain large commercial construction projects that have
since been completed or are nearing completion in the current period. The
decrease was partially offset by an increase in gross margins at the
industrial maintenance and repair businesses, an increase in gross profit
at DBMG's commercial structural steel fabrication and erection business
due to an increase in project work, as well as a decrease in recurring
SG&A, primarily as a result of decreases in professional and consulting
fees, compensation-related and travel expenses, partially offset by an
increase in computer and software-related costs in the current period at
our Infrastructure segment, and an increase in gross profit at R2 driven
by the increase in revenue. Additionally offsetting the decrease in
Adjusted EBITDA was our Non-Operating Corporate segment primarily driven
by a decrease in legal fees due to legal matters settled subsequent to
the comparable period.
ADJUSTED EBITDA by OPERATING SEGMENT
---------------
(in millions) Three Months Ended March 31,
---------------------------------------------
Increase /
2025 2024 (Decrease)
------- ------ ---------------
Infrastructure $ 16.7 $ 18.3 $ (1.6)
Life Sciences (8.7) (4.2) (4.5)
Spectrum 1.4 1.6 (0.2)
Non-Operating Corporate (2.2) (2.9) 0.7
Other and eliminations -- -- --
------- ------ --------
Total Adjusted EBITDA $ 7.2 $ 12.8 $ (5.6)
======= ====== ========
-- Balance Sheet: As of March 31, 2025, INNOVATE had cash and cash
equivalents, excluding restricted cash, of $33.3 million compared to
$48.8 million as of December 31, 2024. On a stand-alone basis, as of
March 31, 2025, our Non-Operating Corporate segment had cash and cash
equivalents of $3.0 million compared to $13.8 million as of December 31,
2024.
Conference Call
INNOVATE will host a live conference call to discuss its first quarter 2025 financial results and operations today at 4:30 p.m. ET. The Company will post an earnings supplemental presentation in the Investor Relations section of the INNOVATE website at innovate-ir.com to accompany the conference call. Dial-in instructions for the conference call and the replay follows.
-- Live Webcast and Call. A live webcast of the conference call can be
accessed by interested parties through the Investor Relations section of
the INNOVATE website at innovate-ir.com.
-- Dial-in: 1-877-704-4453 (Domestic Toll Free) / 1-201-389-0920
(Toll/International)
-- Conference Replay*
-- Dial-in: 1-844-512-2921 (Domestic Toll Free) / 1-412-317-6671
(Toll/International)
-- Conference Number: 13753315
*Available approximately three hours after the end of the conference call through May 20, 2025.
About INNOVATE
INNOVATE is a portfolio of best-in-class assets in three key areas of the new economy -- Infrastructure, Life Sciences and Spectrum. Dedicated to stakeholder capitalism, INNOVATE employs approximately 3,100 people across its subsidiaries. For more information, please visit: www.INNOVATECorp.com.
Contacts
Investor Contact:
Anthony Rozmus
ir@innovatecorp.com
(212) 235-2691
Non-GAAP Financial Measures
In this press release, INNOVATE refers to certain financial measures that are not presented in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"), including Total Adjusted EBITDA (excluding discontinued operations, if applicable) and Adjusted EBITDA for its operating segments. In addition, other companies may define Adjusted EBITDA differently than we do, which could limit its usefulness.
Adjusted EBITDA
Management believes that Adjusted EBITDA provides investors with meaningful information for gaining an understanding of our results as it is frequently used by the financial community to provide insight into an organization's operating trends and facilitates comparisons between peer companies, since interest, taxes, depreciation, amortization and the other items listed in the definition of Adjusted EBITDA below can differ greatly between organizations as a result of differing capital structures and tax strategies. Adjusted EBITDA can also be a useful measure of a company's ability to service debt. While management believes that non-U.S. GAAP measurements are useful supplemental information, such adjusted results are not intended to replace our U.S. GAAP financial results. Using Adjusted EBITDA as a performance measure has inherent limitations as an analytical tool as compared to net income (loss) or other U.S. GAAP financial measures, as this non-U.S. GAAP measure excludes certain items, including items that are recurring in nature, which may be meaningful to investors. As a result of the exclusions, Adjusted EBITDA should not be considered in isolation and does not purport to be an alternative to net income (loss) or other U.S. GAAP financial measures as a measure of our operating performance.
The calculation of Adjusted EBITDA, as defined by us, consists of Net income (loss) attributable to INNOVATE Corp., excluding: discontinued operations, if applicable; depreciation and amortization; other operating (income) loss, which is inclusive of (gain) loss on sale or disposal of assets, lease termination costs, (gains) losses on lease modifications, asset impairment expense and Federal Communications Commission reimbursements; interest expense; other (income) expense, net; income tax expense (benefit); non-controlling interest; share-based compensation expense; and realignment and exit costs.
Cautionary Statement Regarding Forward-Looking Statements
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