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Additional Second Quarter Highlights and Recent Developments:

 

·

Schuff’s backlog was $329.3 million as of June 30, 2015 compared to $306.1 million as of March 31, 2015. Notable projects include the Wilshire Grand Center in Los Angeles, the Sacramento Kings Arena, and the new Apple headquarters in Cupertino, CA.

 

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Conference Call

 

 

Cautionary Statement Regarding Forward-Looking Statements

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This release contains, and certain oral statements made by our representatives from time to time may contain, forward-looking statements. Generally, forward-looking statements include information describing actions, events, results, strategies and expectations and are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans," "seeks," "estimates," "projects," "may," "will," "could," "might," or "continues" or similar expressions. These statements are based on the beliefs and assumptions of HC2's management and the management of HC2's subsidiaries. The Company believes these judgments are reasonable, but you should understand that these statements are not guarantees of performance or results, and the Company’s actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative, that may be revised or supplemented in subsequent reports on Forms 10-K, 10-Q and 8-K. Factors that could cause actual results, events and developments to differ include, without limitation, capital market conditions, the ability of HC2's subsidiaries to generate sufficient net income and cash flows to make upstream cash distributions, trading characteristics of the HC2 common stock, the ability of HC2 and its subsidiaries to identify any suitable future acquisition opportunities, our ability to realize efficiencies, cost savings, income and margin improvements, growth, economies of scale and other anticipated benefits of strategic transactions, integrating financial reporting of acquired or target businesses, completing pending and future acquisitions and dispositions, litigation and other contingent liabilities, changes in regulations, taxes and risks that may affect the performance of the operating subsidiaries of HC2. Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

 

About HC2

HC2 Holdings, Inc. is a publicly traded (NYSE MKT: HCHC), diversified holding company, which seeks to acquire and grow attractive businesses that generate sustainable free cash flow. HC2 has a diverse array of operating subsidiaries, across a broad set of industries, including, but not limited to, telecom/infrastructure, large-scale U.S. construction, energy, subsea services and life sciences. HC2 seeks opportunities that generate attractive returns and significant cash flow in order to maximize value for all stakeholders. Currently, HC2's largest operating subsidiaries are Schuff, a leading structural steel fabricator in the United States, and Global Marine, a leading global offshore engineering company focused on subsea cable installation and maintenance. Founded in 1994, HC2 is headquartered in Herndon, Virginia.

For More Information on HC2 Holdings, Inc., Please Contact:

Ashleigh Douglas

ir@HC2.com

212-339-5875

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2015				2014				2015				2014
Services revenue		$	147,841			$	42,111			$	221,559			$	85,465
Sales revenue			133,141				54,475				261,231				54,475
Net revenue			280,982				96,586				482,790				139,940
Operating expenses:
Cost of revenue  - services			134,589				39,530				196,509				80,637
Cost of revenue - sales			110,909				43,330				221,445				43,330
Selling, general and administrative			26,476				14,032				49,529				20,236
Depreciation and amortization			5,236				344				10,242				554
Loss on sale or disposal of assets			498				447				971				367
Total operating expenses			277,708				97,683				478,696				145,124
Income (loss) from operations			3,274				(1,097	)			4,094				(5,184	)
Interest expense			(10,041	)			(1,012	)			(18,649	)			(1,013	)
Amortization of debt discount			(84	)			(576	)			(176	)			(576	)
Other income (expense), net			(4,937	)			1,665				(4,744	)			1,616
Foreign currency transaction gain (loss)			1,822				437				1,051				403
Loss from continuing operations before income (loss) from equity investees and income tax benefit (expense)			(9,966	)			(583	)			(18,424	)			(4,754	)
Income (loss) from equity investees			1,429				-				(1,259	)			-
Income tax benefit (expense)			(2,464	)			(1,946	)			3,369				(1,955	)
Loss from continuing operations			(11,001	)			(2,529	)			(16,314	)			(6,709	)
Gain (loss) from discontinued operations			(11	)			27				(20	)			44
Loss from sale of discontinued operations			-				-				-				(784	)
Net loss			(11,012	)			(2,502	)			(16,334	)			(7,449	)
Less: Net (income) loss attributable to noncontrolling interest			(204	)			(1,059	)			57				(1,059	)
Net loss attributable to HC2 Holdings, Inc.			(11,216	)			(3,561	)			(16,277	)			(8,508	)
Less: Preferred stock dividends and accretion			1,089				200				2,177				200
Net loss attributable to common stock and participating preferred stockholders		$	(12,305	)		$	(3,761	)		$	(18,454	)		$	(8,708	)
Basic loss per common share:
Loss from continuing operations attributable to HC2 Holdings, Inc.		$	(0.48	)		$	(0.22	)		$	(0.74	)		$	(0.50	)
Gain (loss) from discontinued operations			-				-				-				-
Loss from sale of discontinued operations			-				-				-				(0.05	)
Net loss attributable to HC2 Holdings, Inc.		$	(0.48	)		$	(0.22	)		$	(0.74	)		$	(0.55	)
Diluted loss per common share:
Loss from continuing operations attributable to HC2 Holdings, Inc.		$	(0.48	)		$	(0.22	)		$	(0.74	)		$	(0.50	)
Gain (loss) from discontinued operations			-				-				-				-
Loss from sale of discontinued operations			-				-				-				(0.05	)
Net loss attributable to HC2 Holdings, Inc.		$	(0.48	)		$	(0.22	)		$	(0.74	)		$	(0.55	)
Weighted average common shares outstanding:
Basic			25,514				16,905				24,838				15,780
Diluted			25,514				16,905				24,838				15,780

		June 30, 2015				December 31, 2014
Assets
Current assets:
Cash and cash equivalents		$	68,941			$	107,978
Short-term investments			12,265				4,867
Accounts receivable (net of allowance for doubtful accounts receivable of $2,345 and $2,760 at June 30, 2015 and December 31, 2014, respectively)			214,027				151,558
Costs and recognized earnings in excess of billings on uncompleted contracts			35,573				28,098
Deferred tax asset - current			1,701				1,701
Inventories			17,796				14,975
Prepaid expenses and other current assets			23,746				22,455
Assets held for sale			8,597				3,865
Total current assets			382,646				335,497
Restricted cash			7,188				6,467
Long-term investments			71,793				48,674
Property, plant and equipment, net			235,862				239,851
Goodwill			29,649				27,990
Other intangible assets, net			27,987				31,144
Deferred tax asset - long-term			20,998				15,811
Other assets			18,429				18,614
Total assets		$	794,552			$	724,048
Liabilities, temporary equity and stockholders' equity
Current liabilities:
Accounts payable		$	81,644			$	79,794
Accrued interconnection costs			31,551				9,717
Accrued payroll and employee benefits			19,222				20,023
Accrued expenses and other current liabilities			51,640				34,042
Billings in excess of costs and recognized earnings on uncompleted contracts			29,859				41,959
Accrued income taxes			912				512
Accrued interest			2,847				3,125
Current portion of long-term debt			12,752				10,444
Current portion of pension liability			6,037				5,966
Total current liabilities			236,464				205,582
Long-term debt			374,321				332,927
Pension liability			28,501				31,244
Other liabilities			7,754				1,617
Total liabilities			647,040				571,370
Commitments and contingencies (See Note 11)
Temporary equity (See Note 13)
Preferred stock, $0.001 par value – 20,000,000 shares authorized; Series A - 30,000 shares issued and outstanding at June 30, 2015 and December 31, 2014; Series A-1 - 10,000 and 11,000 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively; Series A-2 - 14,000  and 0 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively			53,013				39,845
Stockholders' equity:
Common stock, $0.001 par value – 80,000,000 shares authorized;  25,623,982 and 23,844,711 shares issued and 25,592,356 and 23,813,085 shares outstanding at June 30, 2015 and December 31, 2014, respectively			26				24
Additional paid-in capital			150,537				147,081
Accumulated deficit			(58,157	)			(41,880	)
Treasury stock, at cost – 31,626  shares at June 30, 2015 and December 31, 2014, respectively			(378	)			(378	)
Accumulated other comprehensive loss			(20,139	)			(15,178	)
Total HC2 Holdings, Inc. stockholders' equity before noncontrolling interest			71,889				89,669
Noncontrolling interest			22,610				23,164
Total stockholders' equity			94,499				112,833
Total liabilities, temporary equity and stockholders' equity		$	794,552			$	724,048

		Manufacturing Three Months Ended June 30, 2015				Marine Services Three Months Ended June 30, 2015				Telecommunications Three Months Ended June 30, 2015				Other (1) Three Months Ended June 30, 2015				HC2 Holdings, Inc. Three Months Ended June 30, 2015
Net income (loss)		$	5,878			$	10,360			$	587			$	(28,041	)		$	(11,216	)
Adjustments to reconcile net income (loss) to Adjusted EBIT:
(Gain) loss on sale or disposal of assets			498				-				-				-				498
Interest expense			366				963				-				8,712				10,041
Amortization of debt discount			-				-				-				84				84
Other (income) expense, net			(7	)			(35	)			(1	)			4,980				4,937
Foreign currency transaction (gain) loss			-				(1,354	)			(468	)			-				(1,822	)
Income tax (benefit) expense			4,334				6				-				(1,876	)			2,464
Loss from discontinued operations			11				-				-				-				11
Noncontrolling interest			499				-				-				(295	)			204
Share-based payment expense			-				-				-				2,365				2,365
Acquisition costs			-				-				-				1,969				1,969
Adjusted EBIT			11,579				9,940				118				(12,102	)			9,535
Depreciation and amortization			498				4,080				98				560				5,236
Depreciation and amortization (included in cost of revenue)			1,932				-				-				-				1,932
Foreign currency (gain) loss (included in cost of revenue)			-				2,758				-				-				2,758
Adjusted EBITDA		$	14,009			$	16,778			$	216			$	(11,542	)		$	19,461

		Manufacturing Three Months Ended March 31, 2015				Marine Services Three Months Ended March 31, 2015				Telecommunications Three Months Ended March 31, 2015				Other (1) Three Months Ended March 31, 2015				HC2 Holdings, Inc. Three Months Ended March 31, 2015
Net income (loss)		$	3,188			$	1,607			$	(524	)		$	(9,332	)		$	(5,061	)
Adjustments to reconcile net income (loss) to Adjusted EBIT:
(Gain) loss on sale or disposal of assets			423				-				50				-				473
Interest expense			344				996				-				7,268				8,608
Amortization of debt discount			-				-				-				92				92
Other (income) expense, net			(17	)			-				(5	)			(171	)			(193	)
Foreign currency transaction (gain) loss			-				448				322				1				771
Income tax (benefit) expense			2,569				6				-				(8,408	)			(5,833	)
Loss from discontinued operations			9				-				-				-				9
Noncontrolling interest			85				-				-				(346	)			(261	)
Share-based payment expense			-				-				-				2,235				2,235
Adjusted EBIT			6,601				3,057				(157	)			(8,661	)			840
Depreciation and amortization			478				4,030				98				400				5,006
Depreciation and amortization (included in cost of revenue)			1,875				-				-				-				1,875
Foreign currency (gain) loss (included in cost of revenue)			-				(1,823	)			-				-				(1,823	)
Adjusted EBITDA		$	8,954			$	5,264			$	(59	)		$	(8,261	)		$	5,898