Good afternoon, and welcome to INNOVATE Corp.'s Second Quarter 2025 Earnings Conference Call. Please note, this event is being recorded. I would now like to turn the conference call over to Neel Nick Sikka with Investor Relations. Please go ahead.

Good afternoon. Thank you for being with us to review INNOVATE's second quarter 2025 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. 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. 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. 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. 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. We are pleased to report our second quarter 2025 financial results and will provide you with an update on our three operating segments. INNOVATE delivered consolidated revenues of $242 million and adjusted EBITDA of $15.7 million in the second quarter. The second quarter continued to showcase our commitment to long-term value creation. We took meaningful steps to allow us to focus on executing our strategic plans, including advancing a series of refinancing transactions to extend our debt maturities. We remain focused on execution across each of our operating segments, and I'm proud of the momentum our teams are building. To start the review of the Infrastructure segment, DBM Global achieved revenues of $233.1 million and adjusted EBITDA of $19.3 million. During the quarter, DBM has seen gross margin compression year-over-year of approximately 230 basis points to 17.9%, and adjusted EBITDA margin compression of approximately 240 basis points to 8.3% year-over-year. Despite the year-over-year decrease in margins, we remain impressed by the performance of DBM Global, who delivered better-than-expected margins in the second quarter. As far as our adjusted backlog, it has increased year-over-year by approximately $300 million to just over $1.3 billion. We are also happy to report that DBM has a sizable project that will add approximately $400 million to adjusted backlog in the third quarter, and we remain very optimistic about the pipeline. Given the deferment of awards in the second half of 2024, the outcomes for DBM for the first half of 2025 are aligned with what we anticipated. DBM remains well-positioned in the second half of 2025 with a strong backlog and robust pipeline. Despite the fluctuating tariff situation, DBM continues to book projects into its backlog and is not seeing an impact on the demand from its customers. Operationally, the team remains focused on margin discipline and control as we manage through the inflationary pressure. Nevertheless, we continue to pursue strategic bids that align with our risk-return profile. We remain confident in DBM's positioning as one of the leading integrated steel fabrication and construction service firms in North America. Within Life Sciences, MediBeacon continues to make steady traction in exploring the potential application for transdermal GFR monitoring systems with clinicians in hospitals and other settings. Additionally, we previously announced that the National Medical Products Administration in China also approved MediBeacon's TGFR monitor and TGFR sensor. Lumitrace continues to be under review and is on track for approval by the end of this year. The Journal of the American Society of Nephrology August print edition is expected to include transdermal GFR data published online earlier this year. MediBeacon's TGFR system is still on track to be available for commercial sale in the fourth quarter of this year. While we continue to make progress on our strategic alternatives, there is no further information on any strategic alternatives since our last call. R2 built on its recent momentum with another strong quarter, increasing top line revenue to $3.2 million in the second quarter of 2025 compared to $1.7 million in the second quarter of 2024. This momentum was fueled by increased shipments outside North America. R2 now carries a backlog of approximately 50 units globally, positioning the company for continued growth. With this sizable backlog, another significant order received from its partner in China and growing consumable revenue associated with the continually increasing installed base, we expect R2 to return another strong quarter in the third quarter. R2's providers love Glacial Skin for the device's unique ability to deliver controlled cooling for inflammation reduction, skin brightening, and pigment correction, all without any downtime. Along with providing stunning results for patients, Glacial Skin devices deliver impressive business outcomes for providers. In Q2 2025, patient treatments grew 115.1% while average monthly utilization per provider increased 28.5% compared to the same period last year. Glacial's skin rising brand awareness has proven to be a powerful sales driver with social media engagement growth outperforming industry competitors by 823%. Supporting this surge, R2 saw quarter-over-quarter increases of 51.6% in social media mentions and 140.6% in web users. We are very satisfied with R2's achievements and maintain our belief that the market potential for R2 is substantial. We are extremely pleased with the progress the company has made over the past year. Moving to Spectrum. Second quarter revenues were $5.7 million and adjusted EBITDA was $1 million. While first half results were principally impacted by two network cancellations, we see promising trends with recent launches on our platform of three strong networks—Marathon Ventures, Nosey, and Confess—which both launched in April and are performing well as well as the August 1 launch of Lionsgate's MovieSphere Network, a channel of mostly recent films, which represent new and exciting content for the over-the-air market. We expect to see more over-the-air network content, particularly from the streaming space, which has become overcrowded. Ad sales softness, which the industry experienced in the first half-year in the wake of volatility in the economy has started to improve with the outlook for the fourth quarter 2025 looking very promising. We continue to review data casting as a compelling long-term opportunity for us and are actively engaged in exploring commercial applications, principally using ATSC 3.0 for now. We continue to work closely with a large global network group that's exploring broader commercial applications of broadcast data technology, focusing on gaming, entertainment, health care, and auto manufacturers, among other sectors that have interest. We just launched our fourth ATSC 3.0 station in collaboration with them as we move toward commercial deployment. As before, we are open-minded on technology protocols and have worked closely with Qualcomm in exploring 5G broadcast. We already have a station converted to 5G in Fort Wayne, Indiana and have done extensive and successful testing on carrying video signals to smartphones. The petition we filed with the FCC to allow the voluntary adoption of 5G broadcast low-power TVs received considerable support from broadcasters and vendors during the comment period that ended July 1, 2025. We continue to expect a decision on the petition by the end of the year.

Thanks, Paul. Consolidated total revenue for the second quarter of 2025 was $242 million, a decrease of 22.7% compared to $313.1 million in the prior year period. The decrease was driven by our Infrastructure segment and to a lesser extent, our Spectrum segment, which was partially offset by an increase in our Life Sciences segment. Net loss attributable to common stockholders and participating preferred stockholders for the second quarter of 2025 was $22 million, or $1.67 per fully diluted share, compared to net income of $14.1 million, or $1.03 per fully diluted share in the prior year period, which has been retroactively adjusted to reflect the 1-for-10 reverse stock split effected on August 8, 2024. Total adjusted EBITDA was $15.7 million in the second quarter of 2025, a decrease from $26.7 million in the prior year period. The decrease was primarily driven by our Infrastructure segment and to a lesser extent, our Spectrum segment, which was partially offset by our Life Sciences segment and to a lesser extent, our Non-Operating Corporate segment. At Infrastructure, revenue decreased 23.6% to $233.1 million from $305.2 million in the prior year quarter. This decrease was primarily driven by the timing and size of projects at Banker Steel, DBMG's commercial structural steel fabrication and erection business, the industrial maintenance and repair business, and the construction modeling and detail business, which had increased activity in the comparable period on certain large commercial construction projects that have since been completed or are nearing completion in the current period. Infrastructure adjusted EBITDA for the second quarter of 2025 decreased to $19.3 million from $32.5 million in the prior year period. The decrease was primarily driven by a decrease in revenue and gross margins at DBMG's commercial structural steel fabrication and erection business, a decrease in revenue at Banker Steel, and a decrease in revenue and gross margin at the construction modeling and detailing business due to timing of certain large commercial construction projects that have since been completed or are nearing completion in the current period. This decrease was partially offset by an improvement in gross margins at the industrial maintenance and repair business and a decrease in recurring SG&A expenses, primarily driven by a decrease in compensation-related expenses due to timing and, to a lesser extent, decreases in travel expenses and professional and consulting fees. As of June 30, 2025, reported backlog and adjusted backlog, which takes into consideration awarded but not yet signed contracts, was $1.3 billion compared to reported backlog of $1 billion and adjusted backlog of $1.1 billion at the end of 2024. DBMG ended the quarter with $115.2 million in principal amount of debt, which is a decrease of $29.5 million from the end of 2024, primarily driven by its refinancing and a decrease in their credit line. As a reminder, the credit line balance tends to fluctuate based on timing of DBMG collections. At the end of the second quarter, the balance dipped due to collection timing, but we expect it to increase again during the second half of the year. At Life Sciences, revenue increased 88.2% to $3.2 million from $1.7 million in the prior year quarter. The increase in revenue was attributable to R2, primarily driven by increases in Glacial Spa unit sales, consumable sales, and Glacial fx unit sales outside of North America as well as an increase in Glacial fx unit sales and consumable sales in North America. The increase was partially offset by a decrease in Glacial Rx unit sales in North America. Life Sciences adjusted EBITDA losses decreased for the quarter, which was primarily driven by a decrease in equity method losses from MediBeacon as Pansend was unable to recognize any losses from MediBeacon due to Pansend's net carrying amount of its investment in MediBeacon being 0. Additionally, there was an increase in gross profit at R2, primarily driven by the increase in revenue and a decrease in SG&A expenses at R2. At Spectrum, year-over-year revenue decreased $500,000 to $5.7 million, and adjusted EBITDA decreased $500,000 to $1 million. The decreases were primarily driven by the loss of certain customers and a decrease in direct response advertising, which was partially offset by the launch of new networks subsequent to the comparable period. Net operating corporate adjusted EBITDA losses were $2 million for the second quarter of 2025, a $500,000 improvement from the second quarter of 2024. The decrease in losses was primarily driven by a decrease in legal fees due to legal matters settled subsequent to the comparable period, as well as a slight decrease in employee-related expenses, accounting and other professional expenses, and insurance expenses. At the end of the second quarter, the company had $33.4 million in cash and cash equivalents, excluding restricted cash, compared to $48.8 million as of December 31, 2024. On a stand-alone basis, as of June 30, 2025, our non-operating corporate segment had cash and cash equivalents of $3.1 million compared to cash and cash equivalents of $13.8 million at the end of 2024. Prior to the recently announced indebtedness refinancing transactions, as of June 30, 2025, INNOVATE had total principal outstanding indebtedness of $641.3 million, down $27 million from $668.3 million at the end of 2024, driven by the decrease in Infrastructure's outstanding debt, which was partially offset by R2's debt with Lancer Capital, which capitalizes unpaid interest into the principal balance. Yesterday, we announced the early settlement of the indebtedness refinancing transactions. The refinancing transactions included the initial closing of an exchange of corporate's senior secured notes, privately negotiated exchanges of certain of corporate's convertible senior notes, amendment and extension of corporate's credit line, amendment and extension of corporate's note with CGIC, amendment and extension of the spectrum notes, and amendment and extension of the R2 notes. This transaction allows us to extend our debt maturities and to continue to pursue our strategic plans. We expect the final settlement of the exchange offer to occur on August 15, subject to all conditions to the exchange offer having been satisfied or waived. With that, operator, we'd now like to open up the call for questions.

As there are no questions in the queue, I now hand the conference over to Mike Sena for his closing comments.

Thank you for joining the call this afternoon, and we look forward to providing further updates as they become available. Thank you.

Thank you. Ladies and gentlemen, the conference of INNOVATE has now concluded. Thank you for your participation. You may now disconnect your lines.