 - Second Quarter 2020 Consolidated Net Revenue of 377.0 Million - - Completes Sale of 30 Interest in HMN Joint Venture, Reducing Debt -NEW YORK, Aug. 10, 2020 GLOBE NEWSWIRE -- HC2 Holdings, Inc. HC2 or the Company NYSE: HCHC, a diversified holding company, announced today its consolidated results for the second quarter ended June 30, 2020.Second Quarter 2020 Highlights Redeemed approximately 50.6 million of HC2s 11.5 Senior Secured Notes. Net Income attributable to common and participating preferred stockholders of 12.7 million, or 0.26 per share, compared to 9.0 million, or 0.12 per fully diluted share, in the year-ago quarter. Net Income for the second quarter 2019 includes a 0.12 per share loss from discontinued operations. Adjusted EBITDA for Core Operating Subsidiaries of 23.5 million, compared to 25.2 million in the year-ago quarter. Total Adjusted EBITDA, excluding Insurance, of 15.2 million, compared to 25.5 million in the year-ago quarter. Core Operating Subsidiaries consists of HC2s Construction, Energy and Telecommunications segments.Subsequent Event Announced pursuit of strategic options for Telecommunications subsidiary, PTGi-International Carrier Services, Inc.We continued to navigate through the challenging environment caused by the COVID-19 pandemic, and I am proud of our teams ongoing efforts to ensure our businesses run as smoothly as possible while adhering to the highest standards in providing quality service to all of our customers, stated Wayne Barr, Jr., HC2s interim Chief Executive Officer. During the second quarter, we were pleased to complete the sale of a significant portion of our stake in HMN, which contributed to reduce debt at the holding company level by 27 since the beginning of the year, executing on our top priority of debt reduction and strengthening the balance sheet.We were pleased our Energy subsidiary tripled its Adjusted EBITDA compared to the prior-year period, and we are excited for the impending commercial launch of R2s CryoAesthetic technology within the next few months, added Mr. Barr. We are focused on the successful refinancing of our 11.5 Notes, as well as significantly reducing corporate expenditures as we evaluate all strategic options across our portfolio to enhance our capital structure and unlock value for our stockholders.Avie Glazer, Chairman of HC2, added, The last few months have been a period of transition for HC2. During this time, the Board has taken a fresh and thorough look at the company and its investments. Everyone at HC2 is excited, and we believe that there are a lot of opportunities to create and enhance value in the future and reward all stockholders.Second Quarter Financial Highlights Net Revenue: For the second quarter of 2020, HC2 consolidated net revenue was 377.0 million, compared to 479.2 million for the year-ago quarter. Lower revenues from the Telecommunications, Construction and Broadcasting segments, as well as the Insurance segment, net of eliminations, were partially offset by an increase in revenue from the Energy segment.NET REVENUE by OPERATING SEGMENT in millions Three Months Ended June 30, Six Months Ended June 30, 2020 2019 Increase Decrease 2020 2019 Increase Decrease Construction 172.3 195.7 23.4 348.8 387.8 39.0 Energy 10.3 5.5 4.8 20.7 10.6 10.1 Telecommunications 107.3 189.3 82.0 293.7 344.8 51.1 Total Core Operating Subsidiaries 289.9 390.5 100.6 663.2 743.2 80.0 Insurance 80.5 82.1 1.6 144.3 170.9 26.6 Broadcasting 9.5 10.0 0.5 19.6 19.8 0.2 Eliminations 1 2.9 3.4 0.5 5.3 5.7 0.4 Consolidated HC2 377.0 479.2 102.2 821.8 928.2 106.4 1 The Insurance segment revenues are inclusive of realized and unrealized gains and net investment income for the three and six months ended June 30, 2020 and 2019, inclusive of transactions between entities under common control, which are eliminated or are reclassified in consolidation. Net Income Loss: For the second quarter of 2020, HC2 reported Net Income attributable to common stock and participating preferred stockholders of 12.7 million, or 0.26 per share, compared to 9.0 million, or 0.12 per share, in the year-ago quarter. Net Income attributable to common and participating preferred stockholders per share for the second quarter 2019 includes net loss from discontinued operations of 0.12 per share.NET INCOME LOSS by OPERATING SEGMENT in millions Three Months Ended June 30, Six Months Ended June 30, 2020 2019 Increase Decrease 2020 2019 Increase Decrease Construction 1.6 8.9 7.3 1.5 11.0 9.5 Energy 0.4 0.7 1.1 1.0 1.3 2.3 Telecommunications 0.1 0.4 0.5 0.5 1.0 0.5 Total Core Operating Subsidiaries 1.9 8.6 6.7 3.0 10.7 7.7 Insurance 11.4 30.3 18.9 11.4 64.1 52.7 Life Sciences 1.2 1.4 0.2 4.4 4.0 0.4 Broadcasting 4.7 3.5 1.2 10.9 7.9 3.0 Other and Eliminations 46.1 1.1 45.0 4.0 4.7 8.7 Non-operating Corporate 38.9 22.5 16.4 70.0 46.1 23.9 Consolidating Eliminations attributable to HC2 Holdings Insurance Segment1 1.5 3.2 1.7 3.1 5.5 2.4 Net income loss attributable to HC2 Holdings, Inc. 13.1 9.4 3.7 70.0 6.6 76.6 Less: Preferred dividends, deemed dividends, and repurchase gains 0.4 0.4 0.8 0.8 1.6 Net income loss attributable to common stock and participating preferred stockholders 12.7 9.0 3.7 70.8 7.4 78.2 1 The Insurance segment results are inclusive of realized and unrealized gains and net investment income for the three and six months ended June 30, 2020 and 2019, inclusive of transactions between entities under common control, which are eliminated or are reclassified in consolidation. Adjusted EBITDA: Adjusted EBITDA for Core Operating Subsidiaries totaled 23.5 million for the second quarter of 2020, compared to 25.2 million for the year-ago quarter, as improvements at Energy were offset by reduced contributions from Construction and Telecommunications. For the second quarter of 2020, Total Adjusted EBITDA, which excludes the Insurance segment, totaled 15.2 million, compared to Adjusted EBITDA of 25.5 million for the year-ago quarter. The year-over-year decrease was primarily due to reduced contributions from the Other segment, which now consists of equity income from the 19 piece of the HMN joint venture the Company owns, plus increased losses at the Life Sciences and Broadcasting segments. The decline in the Other segment from the prior-year period was due to lower profits at the HMN joint venture due to timing of turnkey project work.ADJUSTED EBITDA by OPERATING SEGMENT in millionsThree Months Ended June 30, Six Months Ended June 30, 2020 2019 Increase Decrease 2020 2019 Increase Decrease Construction19.1 23.1 4.0 28.1 35.5 7.4 Energy4.2 1.3 2.9 8.0 2.3 5.7 Telecommunications0.2 0.8 0.6 0.6 1.6 1.0 Total Core Operating Subsidiaries23.5 25.2 1.7 36.7 39.4 2.7 Life Sciences4.5 1.8 2.7 8.7 4.7 4.0 Broadcasting1.1 0.9 0.2 2.1 3.4 1.3 Other and Eliminations0.9 7.4 6.5 0.7 2.5 3.2 Non-operating Corporate3.6 4.4 0.8 8.6 10.5 1.9 Total Adjusted EBITDA15.2 25.5 10.3 16.6 23.3 6.7 Balance Sheet: As of June 30, 2020, HC2 had consolidated cash, cash equivalents and investments of 4.6 billion, which includes cash and investments associated with HC2s Insurance segment. Excluding the Insurance segment, consolidated cash was 64.3 million, of which 0.9 million was at the HC2 corporate level.Second Quarter 2020 Segment Highlights Construction The Company continues to review strategic alternatives for DBM, including a potential sale or a subsidiary refinancing. For the second quarter of 2020, DBM reported Net Income of 1.6 million, compared to 8.9 million for the year-ago quarter. Adjusted EBITDA was 19.1 million, compared to 23.1 million in the year-ago quarter. DBMs results for the quarter were impacted by the timing and mix of project backlog, as well as from the COVID-19 pandemic, which has resulted in delays in new project awards for both its commercial construction and industrial services businesses. DBM was further impacted by certain industrial services customers electing to defer on routine maintenance and repair until a future date, and in some cases indefinitely defer or cancel new capital projects, in response to the lower demand in oil and gas markets. DBMs total backlog was approximately 410.3 million as of June 30, 2020, compared to 468.5 million for the year-ago quarter. Taking into consideration awarded, but not yet signed contracts, backlog would have been approximately 714 million at the end of the second quarter of 2020, compared to 662 million at the end of the second quarter of 2019. Energy For the second quarter of 2020, ANG reported Net Income of 0.4 million, compared to a Net Loss of 0.7 million for the year-ago quarter. Adjusted EBITDA increased to 4.2 million compared to 1.3 million for the year-ago quarter, driven by contributions from ANGs June 2019 acquisition of 20 ampCNG fueling stations, as well as from the Alternative Fuel Tax Credit, which was not yet approved for 2019 in the year-ago quarter. 