HC2 Holdings, Inc. (NYSE MKT:HCHC) Q1 2020 Earnings Conference Call - Final Transcript
May 11, 2020 • 05:00 pm ET
one of the reasons you've seen increased -- somewhat increased expenses is the number of stations coming online. For every station that comes online, you have expenses associated with it. You've got your utilities, you've got your tower rent, you've got your backbone expense. So if you bring on a tower or bring on a station today, you're going to be charged, you're going to incur additional expenses today. And by the time you fill that up there's again a lag time.
So the business -- from a model perspective, we've actually built a lot more stations than we expected. I think as I mentioned, the number as of March 31 was 218 stations. I think we built maybe 80 to 90 plus stations over the past number of months. And it takes time to fill those up. So, it has slowed down, getting to cash flow breakeven, but that's the reason and our objective is not necessarily -- the key part of this is getting the platform complete and our goals are getting to the 250 station mark. So you will see some added expenses, but that's from a growth perspective and building out the stations, it's from a breakeven perspective.
We've got a massive amount of capacity that we've got to fill up and we are doing a number of things, including working with various consultants on that. But there is a tremendous opportunity I don't want to give you a specific date, but that number of -- the negative number is not dramatic and is not unexpected. It is not an aberration from our goal, if anything, it's our engineering department doing much better than we expected. And I got an email today of a number -- few more stations coming online.
So I don't think you're going to see anything dramatic on that bottom-line positive or negative over the next number of months. But, if you look at it from, again, from a station build perspective, we've been ahead of schedule on that and as a result, it is slowed down our breakeven number, but we're awfully, awfully close. But I just -- I don't want to be wrong and give you a bad time period. But it's not necessarily an aberration and what we expected internally.
That's fair. And I noticed there is kind of like over 30 active projects underway and if my calculation serves correct, like over 50 stations need to connect to the central cast system upgrade that you've basically been deploying it, maybe if you can kind of state, how much capital you'd expect to spend either kind of here in 2020, for broadcasting to achieve all of that, and then kind of how would that be funded given kind of the lack of cash flow here?
Well, I wouldn't say there's a lack of -- how you have to look at it as we do have cash on the balance sheet. We do have some flexibility with regards to the