HC2 Holdings, Inc. (NYSE MKT:HCHC) Q1 2020 Earnings Conference Call - Final Transcript

May 11, 2020 • 05:00 pm ET

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HC2 Holdings, Inc. (NYSE MKT:HCHC) Q1 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] And our first question comes from Sarkis Sherbetchyan of B Riley FBR. Please go ahead.

Analyst
Sarkis Sherbetchyan

Hi, good afternoon, and thanks for taking my question here. I will start off with the construction segment first. I know, you said the adjusted backlog was 781 million, nearing an all time high there? And how can we kind of reconcile that against the no new backlog awards stated on the call?

Executive
Philip Falcone

Well, that's the number as of March 31. I'm not quite sure how when you talk about reconciling.

Analyst
Sarkis Sherbetchyan

So I think I heard in the commentary that you expect higher EBITDA in the second quarter versus the first quarter, is that correct?

Executive
Philip Falcone

Yes. That's typical. That, if you look back over the last number of years, that's not a typical, first quarter is typically the lightest from an EBITDA perspective.

Analyst
Sarkis Sherbetchyan

Yes. So the reason I'm using the word reconcile is because of the kind of pandemic updates so just trying to understand, I understand what's typical from 2Q versus 1Q, but given kind of the detailed release on construction and the pandemic and the lower, industrial services situation, kind of help us understand this time, the second quarter is going to be in line or better than the first quarter?

Executive
Philip Falcone

Well, I think as it relates to refilling the backlog that is more important for beyond the second quarter and the third quarter, if you get for instance in April, you get something if you're rewarded a contract if not like you start in May. So and that's one of the things with the backlog, there's very good visibility for over the next 12 plus months. But there's a lag time between getting a contract and then starting up that business. So, at some point where we believe we're in good shape now. But at some point, you have to fill up that backlog for future months or future quarters. I think, I'm not sure if that answers your question or not...

Analyst
Sarkis Sherbetchyan

No. And then also, if you kind of step back and think about the historical margins that the construction business has generated, do you still think that margin profiles still kind of something that we should take into consideration as an or has that kind of been under pressure? Can you help us there?

Executive
Philip Falcone

Yes. From our best estimates and from our knowledge, we haven't seen any margin contraction per se. Again, it remains to be seen how future months and what that looks like, but there -- we haven't seen anything to give us pause or cause for concern around that.

Analyst
Sarkis Sherbetchyan

Okay. Thanks for that. And I'll switch gears here into the broadcasting segment. You mentioned lower advertising kind of from heading into the pre-COVID situation. And if we kind of try to get a sense for when you'd expect the broadcasting to breakeven kind of given this changing environment?

Executive
Philip Falcone

Yes. I think as I mentioned from my first -- as I mentioned, from the perspective of broadcast,