Q1 2024 INNOVATE Corp Earnings Call

Operator: 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. And I'd like to turn the conference call over to Nilsika with investor relations. Please go ahead.

Good afternoon, and welcome to innovate Corp's first quarter 'twenty 'twenty four earnings conference call all participants will be in a listen only mode.

Nilsika: After their prepared remarks and presentation there will be a question and answer session. Please note. This event is being recorded.

Nilsika: I'd like to turn the conference call over to Neil Sika, but Investor Relations. Please go ahead.

Nilsika: 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.

Nilsika: Good afternoon. Thank you for being with US to review <unk> first quarter 2024 earnings results. We are joined today by Paul void Innovates interim CEO and Mike setup innovate CFO.

Nilsika: We've posted our earnings release, and our slide presentation on our website innovate Corp dotcom.

Nilsika: We will begin our call with prepared remarks to be followed by a Q&A session.

Nilsika: This call is also being simulcast and will be.

Nilsika: The archived on our website.

Nilsika: During this call, management may make certain statements and assumptions that are not historical facts, will be forward-looking, and are being made pursuant to the safe harbor provisions of the Private Security 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.

Nilsika: 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.

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

Nilsika: Factors that could cause these differences are more fully discussed in the cautionary statement.

Nilsika: In our earnings release, and the slide presentation and further detailed in our 10-K and other filings with the SEC.

Nilsika: 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 report. Innovate 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.

Nilsika: 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.

Paul Kenneth Voigt: <unk> disclaims any intent or obligation to update or revise these forward looking statements, except as expressly required by law.

Paul Kenneth Voigt: Management will also refer to certain non-GAAP financial measures such as adjusted EBITDA.

Paul Kenneth Voigt: 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.

Paul Kenneth Voigt: At this point, it's my pleasure to turn things over to Paul void.

Paul Kenneth Voigt: Good afternoon.

Paul Kenneth Voigt: 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.

Paul Kenneth Voigt: We had a great start to the first quarter of 2024 by achieving strong operational and financial results.

Paul Kenneth Voigt: <unk> delivered revenues of $315 2 million and adjusted EBITDA of $12 eight in the first quarter of 2024.

Paul Kenneth Voigt: 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 a 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 bidding activity remains at a high level.

Paul Kenneth Voigt: Rustin and his team at DBM global delivered another strong quarter with revenues of $307 9 million and adjusted EBITDA of $18 3 million.

Paul Kenneth Voigt: 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.

Paul Kenneth Voigt: <unk> 150 basis points to 14, 6%.

Paul Kenneth Voigt: Percent.

Paul Kenneth Voigt: Adjusted EBITDA margin also expanded year over year by approximately 70 basis points to five 9% in the first quarter.

Paul Kenneth Voigt: D B M totally adjusted backlog, which takes into consideration awarded but not yet signed.

Paul Kenneth Voigt: <unk> contracts remains at a healthy level of $1 2 billion at the end of the first quarter.

Paul Kenneth Voigt: Overall, the commercial construction sectors of the market continued to be very tight although the bidding activity remains at high levels.

Paul Kenneth Voigt: However, we are seeing numerous opportunities, both in the 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 Shereen and the R2 team had another exciting quarter and continued 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.

Paul Kenneth Voigt: However, we are seeing numerous opportunities both in industrial and larger realizations sectors of the market. This surge in new work activity will be a meaningful piece of our business in 2024 and beyond.

Paul Kenneth Voigt: Moving on to life Sciences.

Paul Kenneth Voigt: And screen and the <unk> team had another exciting quarter and continues to gain traction.

Paul Kenneth Voigt: With yet another record breaking increase in North American system sales growth of 183% as compared to the prior year quarter.

Paul Kenneth Voigt: <unk> achieved record high system sales in a single quarter in North America for the second quarter in a row.

Paul Kenneth Voigt: R2 has continued to grow outside of North America by launching its product in the Middle East during the quarter. R2 has also continued its growth in other areas of the business. Experiencing a 115% increase in patients treated and a 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.

Paul Kenneth Voigt: <unk> has continued to grow outside of North America by launching their product in the middle East during the quarter.

Paul Kenneth Voigt: Our two 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.

Paul Kenneth Voigt: With a continued focus on market awareness initiatives are two experienced increases across the board from social media mentions and followers to website traffic.

Paul Kenneth Voigt: 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.

Paul Kenneth Voigt: We are encouraged by the momentum.

Paul Kenneth Voigt: 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 MediVecan, the company continues to work through its substantive review for kidney monitoring programs with the FDA. As previously explained, MetaBeacon 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.

Paul Kenneth Voigt: <unk> is beginning to build in the market as we continue to see expanded use in demand of their state of the art technology and this momentum has continued into the second quarter.

Paul Kenneth Voigt: And net of Beacon. The company continues to work through their substantive review for kidney monitoring program with the FDA.

Paul Kenneth Voigt: As previously explained meta beacon met with the FDA in the first and second quarters of 2024, and it's working interactively to resolve outstanding questions in order to move to approval status.

Paul Kenneth Voigt: We hope to provide an update on MetaBeacon'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.

Paul Kenneth Voigt: We hope to provide an update of meta beacons process.

Paul Kenneth Voigt: As mentioned on our last call <unk> pivotal study results were posted on the clinical trial Dot Gov website on April 18th.

Paul Kenneth Voigt: Noted on the clinical trials Gov website.

Paul Kenneth Voigt: Meta beacons transdermal GFR measurement system met the predetermined primary and secondary endpoints established with the FDA prior to starting the study.

Paul Kenneth Voigt: We see great 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 the study at the World Congress of Nephrology. The REVEAL-DAF CK study concluded that a record CKD diagnosis was associated with significant improvements in CKD management and monitoring.

Paul Kenneth Voigt: We see great 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.

Paul Kenneth Voigt: The impact dash chronic kidney disease or the acronym decay D study forecast set up to 16 and a half presented the population across eight countries will suffer from CK D by 2032.

Paul Kenneth Voigt: Astrazeneca sponsored and recently presented the study at the World Congress of Nephrology.

Paul Kenneth Voigt: The reveal that CK study concluded that a record CK D diagnosis was associated with significant improvements in CK deep management and monitoring.

Paul Kenneth Voigt: 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. 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 function.

Paul Kenneth Voigt: Pharmaceutical companies are increasing investments in nephrology with a robust R&D pipeline that targets a range of kidney disease indications.

Paul Kenneth Voigt: It is estimated that there are approximately 500 pharmaceutical assets ranging from early development to approved therapeutics that target chronic kidney disease indications.

Paul Kenneth Voigt: We see a number of factors, including the growth of DLP Dash, one agnostics like <unk> that are likely to positively positively impact the growing addressable market for products that would provide an accurate and clinically practical assessment of kidney function.

Paul Kenneth Voigt: The Lesson Team at Spectrum delivered 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 FreeTV's January 1st network launches of 365, an outlaw and subsequent launch of three new sports networks: Outdoor America, Motorsports One, and Speed Sports TV.

Paul Kenneth Voigt: Lesson team at spectrum.

Paul Kenneth Voigt: <unk> delivered with a strong quarter and grew EBITDA to $1 $6 million in the first quarter.

Paul Kenneth Voigt: Of note the new 2024 network launches are driving higher revenue growth beginning with free Tvs January 1st network launches of $3 65.

Paul Kenneth Voigt: The outlaw and subsequent launch of three new sports networks.

Paul Kenneth Voigt: Network distribution revenues are growing as churn rates decline with existing network customers, and pricing has held and new programmers emerge, 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 HD2 Broadcasting's robust national distribution platform from content providers and broadcasters. At the conference, we announced operating and revenue share agreements with large market public broadcast stations to provide 3.0 light housing and commercial applications.

Paul Kenneth Voigt: Outdoor America Motorsports won and speed sports television.

Paul Kenneth Voigt: Network distribution revenues are growing as churn rates declined with existing network customers.

Paul Kenneth Voigt: He has held a new programmers emerge, particularly for cable and streaming networks looking for over the air coverage.

Paul Kenneth Voigt: And in April spectrum participated in the <unk> conference in Las Vegas, which generated considerable interest in <unk> broadcasting's robust national distribution platform from content providers and broadcasters.

Paul Kenneth Voigt: At the conference, we announced the operating and revenue share agreements with large market public broadcast station to provide green Dot O light housing and commercial applications and.

Paul Kenneth Voigt: 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 broadcast, as well as other strategic partners, including equipment vendors for 5G broadcast. We believe our efforts in alternative technologies like ATS 3.0 and 5G broadcasting will offer opportunities to optimize future revenue. 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.

Paul Kenneth Voigt: And given our continued efforts in exploring revenue opportunities for repurpose broadcast spectrum with new technology. We continue to work closely with Qualcomm the technology leader in <unk> broadcasting as well as other strategic including equipment vendors of <unk> broadcasting we.

Paul Kenneth Voigt: Believe our efforts and alternative technologies like Ats, three dot O and five G broadcasting will offer opportunities to optimize future revenues.

Paul Kenneth Voigt: 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.

Paul Kenneth Voigt: Coverage and growth and momentum at our two <unk>.

Paul Kenneth Voigt: Progress at met a beacon on FDA approval and an increase in OTA demand combined with next gen opportunities continue to develop.

Paul Kenneth Voigt: We continue to be highly focused on addressing our capital structure, which we believe is the key driver of 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.

Paul Kenneth Voigt: We continue to be highly focused on addressing our capital structure, which we believe is the key driver and the underperformance of our stock price.

Paul Kenneth Voigt: 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 our strategy to utilize our noncash flowing assets to address our capital structure and set the company up to refi.

Paul Kenneth Voigt: Our debt in 2024.

Paul Kenneth Voigt: To that end, we continue to make progress exploring opportunities for our non-cash-flowing business. Our focus remains on being patient within the time frame 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 about 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 to review our financial and capital structure.

Paul Kenneth Voigt: And we continue to make progress exploring opportunities for our non cash flowing businesses are.

Mike: Our focus remains on being patient within the timeframe, we have created to ensure that we maximize the value of these assets.

Mike: Exiting these businesses for the right value takes time.

Mike: 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.

Mike: We look to build off this momentum in the second quarter and the remainder of the year.

Paul Kenneth Voigt: With that I'll turn it over to Mike for a review our financial and capital structure.

Michael J. Sena: Thanks, Paul. Consolidated total revenue for the first quarter of 2024 was $315.2 million, a decrease of 0.8% compared to $317.9 million in the prior year period. The decrease was primarily driven by our infrastructure segment, which was partially offset by increases at our spectrum and life sciences segments. Net loss attributable to common stockholders for the first quarter of 2024 was $17.7 million, or $0.22 per share, compared to a net loss of $10.2 million, or $0.13 per share, in the prior year period. Total adjusted EBITDA was $12.8 million in the first quarter of 2024, an increase from $4.9 million in the prior year period. The increase is driven by all of our sectors.

Mike: Thanks, Paul consolidated total revenue for the first quarter 2024 was $315 2 million.

Michael J. Sena: A decrease of <unk>, 8% compared to $317 9 million in the prior year period.

Michael J. Sena: The decrease was primarily driven by our infrastructure segment, which was partially offset by increases at our spectrum and life Sciences segments.

Michael J. Sena: Net loss attributable to common stockholders for the first quarter of 2024, or $17 7 million or <unk> 22 per share.

Michael J. Sena: Impaired to a net loss of $10 2 million or <unk> 13 per share in the prior year period.

Michael J. Sena: Total adjusted EBITDA was $12 8 million in the first quarter of 2024, an increase from $4 9 million in the prior year period.

Michael J. Sena: The increase was driven by all of our segments.

Michael J. Sena: At infrastructure, revenue decreased 1.2% to $307.9 million from $311.7 million in the prior year quarter. This decrease was primarily driven by the timing and size of projects at DBMG's commercial steel fabrication and erection business and Banker Steel, which was partially offset by an increase in revenue at the industrial maintenance and repair business due to timing and size of projects. Infrastructure adjusted for the first quarter of 2024 increased to $18.3 million from $16.3 million in the prior year period.

Michael J. Sena: Infrastructure revenue decreased one 2% to 379.

Michael J. Sena: From $311 7 million in the prior year quarter.

Michael J. Sena: This decrease was primarily driven by the timing and size of projects at <unk> commercial steel fabrication and erection business and banker steel.

Michael J. Sena: Which was partially offset by an increase in revenue at the industrial maintenance and repair business due to the timing and size of projects.

Michael J. Sena: Infrastructure adjusted EBITDA for the first quarter of 224 increased to $18 3 million from $16 3 million in the prior year period.

Michael J. Sena: The increase is driven by higher margins in DBMG's commercial structural steel fabrication and erection and the industrial maintenance and repair business, which was partially offset by an increase in recurring SG&A primarily as a result of compensation-related expenses, as well as a decrease in margin at the construction, modeling, and detailing business. As of March 31, 2024, and in line with our expectation, reported backlog was $939.1 million, and adjusted backlog, which takes into consideration contracts awarded but not yet signed, was $1.2 billion, compared to reported backlog of $1.1 billion and adjusted backlog of $1.2 billion at the end of 2023.

Michael J. Sena: The increase was driven by higher margins at <unk> commercial structural steel fabrication and erection.

Michael J. Sena: In the industrial maintenance and repair businesses.

Michael J. Sena: Which was partially offset by an increase in recurring SG&A primary primarily as a result of compensation related expenses.

Michael J. Sena: As well as a decrease in margin with the construction modeling and detailing business.

Michael J. Sena: As of March 31, 2024, and in line with our expectation reported backlog was $939 1 million and adjusted backlog, which takes into consideration awarded but not yet signed contracts was $1 2 billion.

Michael J. Sena: Compared to reported backlog of $1 1 billion and adjusted backlog of $1 2 billion at the end of 2023.

Michael J. Sena: DBMG ended the quarter with $159.7 million in principal amount of debt, which is a decrease of $39.1 million from year-end 2023, primarily driven by the reduction of the credit facility and normal debt amortization payments. DBMG has been able to reduce its debt obligations through line reduction as investor working capital has continued to return to the business, a trend that began at the end of 2023. As backlog stabilizes, we expect flat working capital needs throughout 2024.

Michael J. Sena: KBFG ended the quarter with $159 7 million in principal amount of debt.

Michael J. Sena: Which is a decrease of $39 1 billion from year end 2023.

Michael J. Sena: Primarily driven by the reduction of the credit facility and normal debt amortization package.

Michael J. Sena: <unk> has been able to reduce its debt obligations through buying reduction is invest in working capital has continued to return to the business.

Michael J. Sena: The trend that began at the end of 2023.

Michael J. Sena: As backlog stabilizes, we expect flat working capital manage throughout 2024.

Michael J. Sena: And as a reminder, DVMG has reduced its outstanding debt by approximately $73 million in the last six months. At Life's Challenge, revenue was $1 million, an increase of $0.5 million from the prior quarter. The increase in revenue was attributable to R2, primarily due to growth in unit sales in North America. Life Sciences suggested EBITDA losses decreased for the quarter, which was primarily due to lower equity method losses recognized from our investment in MetaBeacon, and to a lesser extent, the decrease in SG&A expenses at R2, as well as an increase in revenue, primarily due to an increase in unit sales.

Michael J. Sena: And as a reminder, <unk>.

Michael J. Sena: AMG has reduced its outstanding debt by approximately $73 million in the last six months.

Michael J. Sena: At Life Sciences revenue was $1 million, an increase of <unk> 5 billion from the prior year quarter.

Michael J. Sena: The increase in revenue was attributable to our two primarily due to growth in unit sales in North America.

Michael J. Sena: Life Sciences, adjusted EBITDA losses decreased for the quarter, which was primarily due to lower equity method losses recognized from our investment in <unk>.

Michael J. Sena: And to a lesser extent a decrease in SG&A expenses that are too.

Michael J. Sena: As well as an increase in revenue primarily due to an increase in unit sales.

Michael J. Sena: At Spectrum, revenue was $6.3 million, an increase of $0.6 million compared to the first quarter of 2023, primarily driven by the launch of new networks and expanded coverage with existing customers, although it was partially offset by the termination of a number of smaller networks and individual markets subsequent to the comparable period. Spectrum reported adjusted EBITDA in the first quarter increased to $1.6 million from $0.4 million in the prior year quarter. The increase is primarily due to an increase in revenue and the impact of the personnel realignment implemented in the second half of 2023.

Michael J. Sena: At spectrum revenue was $6 3 million, an increase of <unk> 6 million compared to the first quarter of 2022 is primarily driven by the launch mid networks and expanded coverage with existing customers.

Michael J. Sena: The increase was partially offset by the termination of a number of smaller networks and individual market subsequent to the comparable period.

Michael J. Sena: Spectrum reported adjusted EBITDA in the first quarter increased to $1 6 million.

Michael J. Sena: <unk> 4 million in the prior year quarter.

Michael J. Sena: The increase was primarily due to the increase in revenue and the impact of the personnel realignment implemented in the second half of 2023.

Michael J. Sena: Non-operating corporate adjusted EBITDA losses were $2.9 million for the quarter of 2024, an improvement from the first quarter of 2023 of $0.6 million. The improvement was primarily driven by decreases in compensation related expenses, consulting fees, and insurance expenses, which was partially offset by an increase in legal.

Michael J. Sena: Non operating corporate adjusted EBITDA losses were two 9 million for the quarter of 2024 and improvement from the first quarter of 2020.

Michael J. Sena: $6 million.

Michael J. Sena: The improvement was primarily driven by decreases in compensation related expenses consulting fees and insurance expense.

Michael J. Sena: Which was partially offset by an increase in legal fees.

Michael J. Sena: At the end of the first quarter, the company had $38.4 million of cash and cash equivalents, excluding restricted cash, compared to $80.8 million as of December 31, 2023. On a standalone basis, as of March 31, 2024, a non-operating corporate segment had cash and cash equivalents of $9.2 million compared to $2.5 million at the end of 2023. As announced earlier in the year, we received notice that we are not in compliance with NYSC listing requirements as our stock price has fallen below $1 per share.

Michael J. Sena: At the end of the first quarter. The company had $38 4 million of cash and cash equivalents, excluding restricted cash compared to $80 8 million as of December 31 2023.

Michael J. Sena: On a standalone basis as of March 31, 2024 are non operating corporate segment had cash and cash equivalents of $9 2 million.

Michael J. Sena: <unk> to $2 5 million at the end of 'twenty three.

Michael J. Sena: As announced earlier in the year. We have received notice that we are not in compliance with NYSE listing requirements as our stock price as fallen below $1 per share.

Michael J. Sena: We are working on options to regain compliance with the NYSC, which includes the potential for a reverse stock split, as disclosed in our recently filed proxy statement. As of March 31, 2024, Innovate had total principal outstanding indebtedness of $687 million, down $35.8 million from $722.8 million at the end of 2023, driven by the decrease in infrastructure's outstanding debt, which was partially offset by R2's extension of capital, which capitalized interest payments into the principal balance.

Michael J. Sena: We are working on options to regain compliance with the NYSE, which includes the potential for reverse stock split as disclosed in our recently filed proxy statement.

Michael J. Sena: As of March 31, 2024, innovate have total principal outstanding indebtedness of $687 million.

Michael J. Sena: Down $35 8 million from $722 8 million at the end of 2020, it's rate driven by the decrease of infrastructures outstanding debt, which was partially offset by our team's extension before answer capital, which capitalized interest payments into the principal balance.

Operator: With that, operator, we'd now like to open up the call for questions. We will now begin the question-and-answer session. Should you have a question, please press star followed by

Michael J. Sena: That.

Speaker Change: Operator, we'd now like to open up the call for questions.

Operator: We will now begin the question and answer session. Should you have a question, please press star, followed by one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star, followed by two. If you're using a speakerphone, please leave the handset before pressing any key. Again, if you wish to ask a question, please press star 1 on your touchtone phone. No questions at this time. I will turn the call back over to Paul.

Operator: We will now begin the question and answer session should you have a question. Please press star followed by one on your Touchtone. Following you lose your comps that you had has been raised should you wish to decline from the polling process. Please press star followed by the two.

Paul: If you're using a speaker phone please lift your handset before pressing on it Keith.

Operator: Okay.

Paul: Again, if you wish to ask a question. Please press star one on your Touchtone failure.

Operator: No questions at this time I will turn the call back over to Paul.

Paul Kenneth Voigt: Yeah, I appreciate everybody's time, support, and patience and look forward to coming back to everybody with some positive news over the next quarter. Thank you.

Paul: Yes, I appreciate everybody's time, and support and patience and look forward to coming back to everybody with some positive news over the next quarter or two thank you for your time.

Operator: Ladies and gentlemen, this concludes today's conference call. You may now disconnect.

Speaker Change: Ladies and gentlemen. This concludes today's conference call you may now disconnect.

Operator: Okay.

Operator: Yes.

Operator: Okay.

Operator: [music].

Operator: Okay.

Operator: Okay.

Operator: Yes.

Operator: [music].

Operator: Okay.

Operator: Okay.

Operator: Yes.

Operator: No.

Operator: Okay.

Operator: Okay.

Operator: [music].

Operator: Sure.