Greetings. Welcome to the HC2 Holdings’ Inc. First Quarter 2021 Earnings Call. At this time all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] Please note this event is being recorded. I would now turn the conference over to your host Matt Chesler with Investor Relations. You may begin.

Good morning. Thank you for being with us to review HC2’s first quarter 2021 earnings results. We are joined by 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 pre-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 the cautionary statement that is included in our earnings release and a slide presentation, and further detailed in our Form 10-Q 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 is pending for disposition are excluded from today's discussion and analysis of performance for the comparable period. At this point, it’s my pleasure to turn things over to Wayne Barr.

Thanks Matt. Good morning and thank you all for joining us today. The first quarter was a pivotal one and what we expect to be a transformational year for HC2. We believe that HC2 is in the best position it has ever been to realize the inherent value in our underlying businesses. Our efforts to date have provided us with additional runway to execute our strategy and we believe strongly that each of our operating segments represents unique market opportunities to grow value in this evolving new economy. This is all coming about at a time when each of our operating segments is at a pivot point in its respective business lifecycle. DBMG is on the verge of expanding its geographic footprint at an optimal time. Pansend R2 technologies launched its first commercial FDA cleared device and Spectrum having substantially built out the nation's largest broadcast station group is focusing on generating revenue from this unique platform. Starting with some areas of near term focus, we are working to close two previously announced M&A transactions, each of which represents an important element of our strategy versus DBM's previously announced acquisition of Banker Steel like DBM's own chuffed steel Banker is one of the leading fabrication and erection companies in the country known for their large urban high rise projects in the New York metropolitan area, as well as work up and down the East Coast. Banker will add significant scale and breadth to DBM's operational footprint and enable DBM to provide fabricated steel for the entire East Coast construction market without detracting at all from its legacy markets primarily in the western half of the country. Banker brings with it a strong backlog and pipeline which we believe will result in even stronger more accelerated growth at DBM. In addition,…

First, let me review our financial performance. And then I walk you through key changes to our capital structure to help you bridge the quarter and the two transactions that have taken place so far in early 2021. Please note that our insurance segments operating results have been reclassified to discontinued operations and are therefore excluded from our discussion of the company's results from continuing operations. Consolidated total revenue for the first quarter of 2021 was $171.8 million a decrease of 7.9% compared to 186.6 million in the prior period. The decrease was driven by our infrastructure segment, which had lower revenues and structural steel fabrication and erection due to the timing of project work under execution and changes in backlog mix, as well as a decrease in power and industrial maintenance and repair work performed. Net income attributable to common and participating preferred stockholders for the first quarter of 21 was $12.2 million or $0.15 per share, compared to a net loss of 83.5 million or $1.82 per share in the prior year periods. Total adjusted EBITDA which excludes discontinued operations was 1 million in the first quarter 2021, up from an adjusted EBITDA of loss of 2.9 million in the prior year period. We saw improvement at infrastructure as well as spectrum partially offset by life sciences. Now onto some color for each of our three segments. At infrastructure revenue decreased 8.6% to $161.3 million from $176.5 million in the prior year quarter. As discussed earlier, this decline was due to lower revenues from our structural steel fabrication and erection business and a decrease in power and industrial maintenance and repair work performed. Infrastructure adjusted EBITDA for the first quarter of 2021 increased from 9 million in the prior period to 11.3 million. The EBITDA improvements were achieved…

At this time, we'll be conducting a question and answer session. [Operator Instructions] And our first question is from Kevin O'Brien with Imperial Capital. Please proceed with your question.

Good morning, gentlemen. I wonder if we could focus a little bit more about the pending acquisition of Banker Steel, specifically out of that $145 million purchase price, I'm sure you're currently looking at a couple of different financing options but given those scenarios is there a range of cash that might be needed to be contributed to get this over the goal line from the HC2 level and if that's the case, is there a range of cash needs that you might expect to utilize?

Kevin. It's Mike. thanks for the question. What I would say is that we're still working through the financing it's largely going to be financed down that at DBM and we're still working through the final throes of that as soon as we do have more clarity on that as we go through the final negotiations there with potential lenders we will certainly disclose that.

Understood, thanks. I guess post close, assuming a successful close can you maybe talk about a little bit more about Banker Steel and how its East Coast based sort of what the growth prospects you're expecting are and maybe specifically addressing sort of the backlog perspective that they currently have? Is it a similar profile to what you have where backlog is kind of shifted to a small and medium sized business? Or are there larger projects in there currently, that can sort of offset the mix and how does the mix change going forward?

Yes. sure. Kevin this is Wayne Barr. Good to talk to you again. So it's a very similar business to sub-steel, except for kind of the geographic diversity that they bring to the table. They are focused very heavily in the metropolitan New York area. So as a consequence some of their projects are high rises and large residential as well as office spaces that necessarily are just very-very big projects. And so from not only the existing projects they're working on but the backlog they tend to have larger projects in the backlog as well as the current things that they're working on. So I don't see that changing too much. They are experiencing a similar uptick as I understand it in the number of inquiries and projects that are that are out there. And I would assume that the nature of the projects is going to kind of stay very similar to what they've been doing already. They have a couple of very large marquee projects that they just finished up including one over at Hudson yard as well as one Vanderbilt and those are the types of projects that I would expect them to continue to bid on and win.

Great. Thank you. I guess one last question from me is switching to Spectrum. I want to understand I understood the dynamic correctly, the plan is for 17 new stations and if we use sort of the historical cost per station at about 180,000 per, that's about a $3 million price tag, but offsetting some of that is actually the sale of some of the licenses you had. Is that correct? So that might offset some of that cost to the tune of about a million dollars? Is that what I understand from the comments?

Yes. The offset is definitely correct. We have a very large portfolio of construction permits that enable us to petition the FCC use those construction permits, and convert those into stations. We got some press about the sales of those construction permits. They weren't really built out stations. We were selling the construction permits. We raised about a million dollars by doing that. And we're going to be using that million dollars to defray the expense of building out or converting 17 construction permits to actual on air stations.

Great. I understand maybe just one last quick one. I think your nearest term maturity is actually in Spectrum correct with about $16 million of term loan left over. Any thoughts on how you might address that maturity there? I guess specifically you obviously found earlier in the year four non-core assets that you were likely to sell are you pretty satisfied that what you have going forward? Or is there some additional asset sales that could be you utilize to chip away at that $16 million at that?

Yes. So the near term maturity of the broadcasting debt is obviously a high priority. We are in the initial stages of putting together presentation to go out and obtain refinancing of that really liked the momentum that Spectrum is showing. As we've indicated, the last couple of quarters, we've got the station group built and we've been focusing on generating revenue. And I think we're going to be able to enter the market for refinancing from a very good position. We do have approximately $4 million of additional non-core asset sales that are in the pipeline and we haven't made any further decisions on selling additional non-core assets at Spectrum. But to the extent that we do and we have something to come back to you all we certainly will.

Great. Thanks. That's all I had. I will jump back in the queue. Thanks.

And our next question is from Brian Charles with R.W. Pressrich. Please proceed with your question.

Thanks just one or a couple of follow up questions of some things you touched on before regarding the acquisition of Banker Steel and the timing in terms of potential cash needs to complete that acquisition. What's the timing relative to the insurance sale? Are you expecting to close it before the insurance segment is sold or afterward and maybe use some of the proceeds from that sale?

So the Banker deal has gotten through Hart-Scott-Rodino review and I think right now we're working through just the remaining requirements on both sides including the financing contingency. We haven't really thrown out an estimated closing date but I'm thinking about it in terms of weeks. The insurance transaction has progressed very nicely. It's with the regulator right now. And we just had not felt comfortable making any kind of concrete closing date estimate for that just given the fact that the regulator has to go through its process.

Okay. That's fair enough. So it sounds as if I can venture a guess that you don't need the proceeds from the insurance segment to close this transaction or at least that's not what you're counting on. It sounds like you've got things circled around enough to close the Banker Steel by itself.

With our current thinking about how the financing is going to work at DBM as well as just kind of our focus on the liquidity position at the holding company I think we're fairly comfortable right now and that the way the timing could line up Banker was to go before insurance I think we'd be in a position to handle it from a liquidity perspective.

Okay. Good enough. And one other general question I have had a few questions posed to me about this on the life sciences segment I know it's still generating negative EBITDA but you're comfortable you don't need to put any more investment cash into those businesses and over time they will, they're certainly generating value. Is there a timing of which you might think about monetizing those? I don't know if you've discussed that before but is this a couple years down the road or is it a long-term holding?

So I will talk a little bit about R2 just because they did initiate the commercial launch and we will be generating revenue this year. It is a startup company. The team Tim Holt has done a great job. It's an experience management team that has brought a device and technology to the market before and typically we point people to this management's prior experience with Zeltiq and if you take a look at kind of the history of Zeltique with it being sold and with it going public and then being sold we're thinking about liquidity event for R2 in very much the same way.

Okay. Good enough. Thanks. Let's see actually that's all I have got for now. Thank you.

[Operator Instructions] Our next question is from Richard Faulk with Centris. Please proceed with your question.

Well my question has already been answered and I want to thank you guys for being very open and transparent with this focused direction. I look forward to hearing better quarters in the future and keep on it.

great. Really appreciate it Richard. Thank you for your support.

And we have reached the end of question and answer session. I will now turn call over to Wayne Barr for closing remarks.

Thank you so much. So we really appreciate everybody waking up this Friday morning to join us for this quarterly earnings call. We look forward to coming back to you all at the appropriate time when we're able to close these two exciting M&A opportunities and available to answer any further questions. If you need to get in touch with Matt through our IR please go ahead and do. So hope everybody has a great weekend.

This concludes today's conference and you may disconnected lines at this time. Thank you for your participation.