INNOVATE Corp. Announces Fourth Quarter and Full Year 2024 Results

- Infrastructure: DBM Global fourth quarter revenue of $225.7 million -

- Life Sciences: MediBeacon^® Transdermal GFR ("TGFR”) system received FDA approval to assess kidney function -

- Spectrum: Broadcasting achieved double-digit revenue growth in the fourth quarter and full year 2024 -

NEW YORK, March 31, 2025 (GLOBE NEWSWIRE) -- INNOVATE Corp. ("INNOVATE” or the "Company”) (NYSE: VATE) announced today its consolidated results for the fourth quarter.

Financial Summary

^{(2) Reconciliation of GAAP to Non-GAAP measures follows}

Commentary

"INNOVATE made several exciting advancements across all operating segments over the last year which capped another successful year for the business," said Avie Glazer, Chairman of INNOVATE. "The Infrastructure segment finished the year with an adjusted backlog of $1.1 billion, well-positioned to execute in 2025. At Life Sciences, in January 2025, MediBeacon's TGFR system gained FDA approval for the assessment of kidney function in patients with normal or impaired renal function. Also at Life Sciences, R2 continued gaining strong momentum in Q4, announcing collaborations with Woodhouse Spas and leading skincare product brands. At Spectrum, the Company delivered double-digit revenue growth in the fourth quarter and for the full year 2024.”

"We delivered fourth quarter and full year 2024 results largely in-line with our expectations," stated Paul Voigt, INNOVATE's Interim CEO. "We are pleased with the DBM team's disciplined execution, which has resulted in robust margins for 2024 and positioned the business favorably to secure quality projects in 2025. At Life Sciences, FDA approval for MediBeacon's TGFR is a major milestone that we have been anticipating for some time. In addition, two high profile peer-reviewed kidney journals published results from MediBeacon's clinical trials supporting TGFR effectiveness and reinforcing the large unmet medical need. R2 Technologies delivered another strong quarter and expanded its market reach into several new countries. Broadcasting achieved outstanding financial results driven by new quality networks added throughout the year and its fixed cost structure. Lastly, we reduced our total debt by $54.5 million, which is a significant improvement year-over-year."

Fourth Quarter 2024 and Recent Highlights

Infrastructure

• DBM Global reported fourth quarter 2024 revenue of $225.7 million, a decrease of 36.2%, compared to $353.8 million in the prior year quarter. Net Income attributable to INNOVATE was $8.7 million, compared to $8.9 million for the prior year quarter. Adjusted EBITDA decreased to $17.4 million from $30.0 million in the prior year quarter.
• DBM Global grew gross margin to 18.2% in the fourth quarter, an expansion of approximately 180 basis points year-over-year, while Adjusted EBITDA margin decreased to 7.7% in the fourth quarter, a reduction of approximately 80 basis points year-over-year.
• DBM Global's reported backlog and adjusted backlog, which takes into consideration awarded but not yet signed contracts, was $1.0 billion and $1.1 billion, respectively, as of December 31, 2024, compared to reported and adjusted backlog of $1.1 billion and $1.2 billion, respectively, as of December 31, 2023.
• Subsequent to year end, DBM has added over $500 million to adjusted backlog across our companies and we remain optimistic on the pipeline.

• In January 2025, the U.S. Food and Drug Administration ("FDA”) approved the MediBeacon^® TGFR for the assessment of kidney function in patients with normal or impaired renal function.
  • In February 2025, the National Medical Products Administration ("NMPA”) in China approved the MediBeacon^® TGFR Monitor and TGFR Sensor for the assessment of kidney function in patients with normal or impaired renal function. Lumitrace^® (relmapirazin) injection, categorized as a drug in China, is under review and is targeted for approval in late 2025.
  • In February 2025, two high level kidney journals published results from MediBeacon's Clinical Trials. The Journal of the American Society of Nephrology, one of the top kidney journals in the world, published the results of a clinical trial on patients with normal and impaired kidney function across a range of skin color demonstrating the TGFR clinical effectiveness. In addition, The Clinical Kidney Journal published data showing the misclassification of patients using the current clinical practice to estimating kidney function as compared to plasma derived measured kidney function with MediBeacon's Lumitrace^®.
• R2 Technologies, Inc. ("R2”) broke system unit sales records consecutively in each quarter in North America in 2024, delivering strong year-over-year growth.
• R2's worldwide system unit sales grew 113% in the fourth quarter of 2024 compared to the fourth quarter of 2023 and 182% for the full year 2024, year-over-year.

• Broadcasting reported fourth quarter 2024 revenue of $6.8 million, compared to $5.7 million in the prior year quarter. Net Loss attributable to INNOVATE was $4.6 million compared to $5.4 million in the prior year quarter. Adjusted EBITDA was $2.3 million, compared to $1.1 million in the prior year quarter. The improvement in financial results was once again driven by revenue growth from the launch of new networks and expanded coverage with existing customers, which was partially offset by the termination of a number of smaller networks and individual markets subsequent to the comparable period.
• Successful new network launches in 2024 of FreeTV's three new networks and most recently Fubo Sports in the fourth quarter.
• Commenced installation of the Dallas lighthouse station for PBS station, KERA.
• Pursuing commercial opportunities in datacasting together with a major mobile network operator.
• Progress with 5G broadcast technology that Broadcasting has been actively deploying in new markets with trial runs performing exceptionally well.

• Revenue: For the fourth quarter of 2024, INNOVATE's consolidated revenue was $236.6 million, a decrease of 34.5%, compared to $361.0 million for the prior year quarter. The decrease was driven by our Infrastructure segment, which was partially offset by increases at our Life Sciences and Spectrum segments. The decrease at our Infrastructure segment was primarily driven by the timing and size of projects, including the effect of changes in estimated costs to complete those projects recognized in the ordinary course of business, at Banker Steel and DBMG's commercial structural steel fabrication and erection business, both of which had increased activity in the comparable period on certain large commercial construction projects that have since been completed. This was partially offset by an increase at the industrial maintenance and repair business as a result of an increase in project work. The increase at our Life Sciences segment was attributable to R2, primarily driven by an increase in Glacial fx unit sales and consumables in North America and worldwide. The increase at our Spectrum segment was primarily driven by network launches and expanded coverage with existing customers.

• Net Loss: For the fourth quarter of 2024, INNOVATE reported a Net Loss attributable to common stockholders and participating preferred stockholders of $16.9 million, or $1.29 per fully diluted share, compared to $9.6 million, or $1.22 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 a net decrease in gross profit of $14.7 million, a $1.1 million increase in tax expense, a $0.4 million increase in interest expense, and a $0.1 million increase in depreciation and amortization, which was partially offset by a decrease of $3.6 million in loss from equity investees, a $2.7 million increase in other income, net, a $2.3 million increase in other operating income, and a decrease in selling, general and administrative ("SG&A”) expenses of $1.0 million. The decrease in gross profit was primarily driven by our Infrastructure segment due to timing and size of projects, including the effect of changes in estimated costs to complete those projects recognized in the ordinary course of business, partially offset by increases at our Spectrum segment driven by network launches and expanded coverage with existing customers and at our Life Sciences segment due to an increase in Glacial fx unit sales and consumable sales in North America and worldwide at R2. The increase in tax expense was driven by the INNOVATE Corp. U.S. consolidated group utilizing its remaining unlimited NOLs in 2024 and due to the Tax Cuts and Jobs Act's 80 percent limitation on net operating losses incurred after 2017. The overall decrease in loss from equity investees was primarily due to a decrease in losses recognized from MediBeacon. The overall increase in other income, net was primarily driven by an increase in foreign currency translation gains from our Infrastructure segment. The increase in other operating income primarily driven by a gain on lease modification at our Infrastructure segment in the current period and unrepeated lease impairments at our Non-Operating Corporate and Other segments in the prior year period. The overall decrease in SG&A expenses was primarily driven by timing of compensation-related expenses at our Infrastructure segment, which was partially offset by realignment costs incurred in the current year at our Infrastructure segment and an increase in selling costs at R2.