Good morning. And welcome to HC2 Holdings Second Quarter 2021 Earnings Conference Call. Today’s call is being recorded and we have allocated one hour for prepared remarks and Q&A. At this time, I’d like to turn the conference over to Anthony Rozmus, Investor Relations for HC2. Thank you. You may begin.

Good morning. Thank you for being with us to review HC2’s second quarter 2021 earnings results. We are joined by Avie Glazer, Chairman of HC2; Wayne Barr Jr., CEO of HC2; and Mike Sena, HC2’s Chief Financial Officer. As usual we have posted our earnings release and our slide presentation on our website at hc2.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. Now for some brief disclaimers. During this call, management may make certain statements and assumptions which are not historical fact, 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 HC2’s actual results to differ materially from these forward looking statements. The risk factors that could cause these differences are more fully discussed in our cautionary statement that is included in our earnings release and a 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. HC2 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 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. Finally, results for the insurance segment, which was sold on July 1st, are excluded from today’s discussion and analysis of performance for the comparable periods. At this point, it is my pleasure to turn things over to Avie Glazer.

Good morning, everyone. I’d like to thank you all for joining us today as we provide some exciting updates on our company’s progress. We believe that our excellent second quarter results, including record backlog of DBM, record adjusted EBITDA at Spectrum and strong progress on the commercial launch of Glacial RX in Life Sciences are a preview of the long-term power and potential of our strategic plan. First, let’s talk about Infrastructure. A key milestone for our company was recent closing of our acquisition of Banker Steel, which added an industry leader to DBM, expanding the size and geographic footprint was already one of the largest steel fabrication and erection companies in the U.S. With the addition of Banker Steel, DBM reported a record project backlog of $1.6 billion at the end of the quarter and this does even include another $300 million of contracts that have been verbally awarded, but not yet officially signed, which makes our total adjusted backlog $1.9 billion. In fact, I have some additional good news to share with everyone today. DBM was just last week awarded a contract for the Inglewood Basketball Event Center, the new home of the NBA Los Angeles Clippers. Please note that given the award was after the end of the quarter, this project is not included in a $1.9 billion of adjusted backlog. Deal erection [ph] for this project was planned to start in the summer of 2022 and we look forward to keeping you posted on the progress of this new arena. DBM is an outstanding asset, with its expanded size and geographic reach, it is very well positioned to capitalize on this record backlog of projects in the quarters ahead. In addition, we believe the potential Infrastructure Spending Bill before Congress can only be viewed as a…

Thanks, Avie, and thank you all for joining us today. We are pleased with our second quarter results, which we believe demonstrate our company’s continued evolution and the strength and potential of our assets, which set us further along the path to succeed with our long-term strategy. Our quarter goal is to identify unique market opportunities that will grow and value in today’s evolving economy, and we made a number of strategic decisions in the second quarter that have advanced that objective. The team is excited and engaged. But we know there’s more work to be done to grow our business segments and unlock meaningful value for stockholders. Importantly, we achieved the near-term goals we highlighted for you last quarter. As Avie mentioned, we closed our acquisition of Banker Steel, increasing our backlog to record level $1.9 billion. We also closed on our sale of Continental. These two transactional milestones were significant steps forward and provide us with enhanced liquidity to ramp up our strategy and support our businesses. Additionally, concurrent with the completion of the Banker Steel acquisition, and facilitated in part by the enhanced liquidity and other improvements of H2, DBM entered into a new credit facility, which was used to fully repaid DBM’s existing debt obligations under portion of the Banker Steel acquisition and provide additional working capital capacity. More recently, we announced that we provided an additional $15 million in Series C funding to R2 Technologies through Pansend, our Life Sciences segment. The additional investment will allow R2 to continue the rollout of new products, as well as fund the further development of Glacial Spa, Glacial AI and other cutting edge aesthetic dermatological products. I will now provide you an update on each of our three business segments. At Infrastructure, we completed the acquisition of Banker…

Thanks, Wayne. I will first review our financial performance and then I’ll walk you through key changes to our capital structure to help bridge the quarter and the key transactions that have taken place in the first half of 2021. Consolidated total revenue for the second quarter of 2021 was $243.8 million, an increase of 34.1%, compared to $181.8 million in the prior year period. The increase was driven by our Infrastructure segment, due primarily to DBM’s recent acquisition of Bankers Steel, as well as from higher revenues across DBM service offerings attributable to timing and project work under execution and backlog mix. Net loss attributable to common and participating preferred stockholders for the second quarter of 2021 was $23.7 million or $0.31 per share, compared to net income of $12.7 million or $0.25 per share in the prior year period. Total adjusted EBITDA, which excludes discontinued operations was $6.5 million in the second quarter of 2021, down from adjusted EBITDA of $10.6 million in the prior year period. The decrease was driven by margin compression at Infrastructure combined with the timing of work under execution and increased spend at our Life Sciences segment. This was offset by continuing improvement in our Spectrum segment. Now onto some color for each of our three operating segments. At Infrastructure, revenue increased 34.6% to $232 million from $172.3 million in the prior quarter. As discussed earlier, this increase is due to the acquisition of Banker Steel, as well as higher revenues cross DBM service offerings. Infrastructure adjusted EBITDA for the second quarter of 2021 decreased from $19.1 million in the prior year period to $13.9 million. The decrease is driven by the timing of project work under execution and the change in backlog mix, including the impact of market pressures on point-of-sale margins…

Thank you. [Operator Instructions] Thank you. Ladies and gentlemen, our first question comes from the line of Brian Charles with R.W. Pressrich. Please proceed with your question.

Thanks. Thanks for taking my question and congratulations on the quarter. Good quarter and congratulations on the Banker Steel acquisition as it is very nice to see that backlog. I just got a couple of questions, though. Could you give me a little more color on the second quarter EBITDA and maybe how that Infrastructure and how that progress is going forward in the context of this backlog? I imagine it was down a bit and I know your comments, you also had a market pressures on point-of-sale contracts, as well as other construction delays? Is that clearing up or is there kind of a trend you can give us on EBITDA might be going looking at or how might be looking going forward?

Yeah. I would say a couple a couple points on that. This is Mike. Thanks for that question. One is that we are starting to see point-to-sale margins coming back, just based on the level of work that’s coming into the market. So that’s a positive sign. And when you look at the backlog and you look at -- when that comes in. If you -- around $1 billion of that backlog is going to burn off over the next 12 months and we’re in the early stage of ramping up these projects. As -- and we’ve also talked about, as we start to sign some of these larger projects versus the small to medium-sized projects that we’ve been working on the last couple of years, you see opportunities to find execution improvements over the over the bigger, longer, more complex projects.

Okay. Okay. I am thinking and I guess we’ve talked about in the past, I had a sort of a run rate of about $90 million of EBITDA and I am inclined to think that with this backlog over the next couple of years, that’s something I’m still comfortable with it and even maybe growing from there. I don’t know if you have any guidance on that?

Well, we can really just talk about, what we’ve done historically from EBITDA perspective and when you combined, we’ve said also that Banker Steel is roughly half besides DBM and you are looking at what DBM has done over the last 12 months, you can get there.

Okay. Good enough. Thanks. All right. My next question then I’ll get back in queue, just for housekeeping. With the sale of the insurance subsidiary, understand $65 million of cash and the remainder, so $25 million of HC2 securities that I think were characterized in a press release as broadcast securities, is that correct or is there a combination of that $25 million, I think you mentioned also HC2 preferred, I don’t know if I am…

Mike, what…

Yeah.

It’s for you.

That’s right. You have it right. We talked about in the press release the securities that came back were related to broadcasting. There was some preferred there and also some common down there that we -- that was returned. The insurance company also holds HC2 pref, so if you look at in 8 -- the 8-K we filed in early July, that pref was set to had a redemption date of May 29, 2021. We entered into exchange agreements with virtually the same terms that extended the maturity or the redemption date out to 2026.

But -- hey, Brian, it’s Wayne. The pref that did come back though was the DBM broadcasting pref.

Okay. Okay. Good enough.

I’m sorry…

Okay. Thank you.

I am sorry, the HC2 broadcasting pref. Yeah. Sorry.

All right. Good enough. Thanks again.

Sorry.

That’s it for me.

Thank you. [Operator Instructions] Thank you. Our next question comes from the line of Derrick Wenger with Concise Capital. Please proceed with your question.

Yes. Thank you. If I could just drill down on Brian’s second question, the $25 million of securities that you got, can you delineate what those are and how they will be paid off?

So those are securities of our underlying subs and broadcasting. They -- right now they were received -- the insurance company was owned by HC2, so those securities were transferred up to HC2 and they’re being held at that level for the time being.

And what is the breakdown of the $25 million.

It’s primarily HC2 be preferred shares.

Which will be paid off bullet in 2026 or?

We have not, it’s intercompany. So from a consolidated basis for HC2 it’s all eliminated in consolidation and all within the same house.

Okay. Thank you.

Thank you. [Operator Instructions] Ladies and gentlemen, that concludes our question-and-answer session. I’ll turn the floor back to Mr. Glazer for any final comments

Thanks. I want to, excuse me, I want to thank everyone for joining us on the call this morning. I’m sure you are as excited as we are about the future of INNOVATE and I look forward to speaking with you again on our next call. Thanks for joining us.

Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.