Babcock & Wilcox Enterprises (BW) Q1 2025 Earnings Call May 12, 2025 05:00 PM ET Speaker0 Good afternoon. Thank you for attending the Babcock and Wilcox Enterprises First Quarter twenty twenty five Conference Call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I'll now like to turn the conference over to your host, Sharon Brooks, BNW's Director of Communications. Thank you. You may proceed, Ms. Brooks. Speaker1 Thank you, Matt, ...

Exhibit 99.1 "We are pleased to report a strong start to 2025, highlighted by first quarter consolidated revenue and Adjusted EBITDA that exceeded Company and consensus expectations," commented Kenneth Young, B&W's Chairman and Chief Executive Officer. "We are excited to announce that approximately 40% of our bonds have been exchanged into new five year notes at discount to par, which significantly reduces our current and overall debt and lowers our annual interest expense. Operationally, our Global Parts & ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-36876 BABCOCK & WILCOX ENTERPRISES, INC. (Exact name of registrant as specified in its charter) | Delaware | 47-2783641 | | --- | - ...

Financial Data and Key Metrics Changes - In Q4 2024, the company's revenue was $200.8 million, a 15% increase from $174.7 million in Q4 2023 [8][10] - Operating income from continuing operations improved to $11.6 million in Q4 2024, compared to an operating loss of $3.3 million in Q4 2023 [9] - Adjusted EBITDA from continuing operations was $24.0 million in Q4 2024, reflecting a 55% year-over-year increase [10] - For the full year 2024, consolidated revenues were $717.3 million, stable compared to the previous year [21] - The net loss from continuing operations was $73 million in 2024, an improvement from a loss of $75.8 million in 2023 [21] Business Line Data and Key Metrics Changes - The environmental segment showed the largest positive impact on revenues, contributing to the overall stability of revenues throughout the year [12] - Bookings for 2024 reached approximately $900 million, a 39% increase from $638.7 million in 2023, while backlog increased by 47% to over $540 million [13][22] Market Data and Key Metrics Changes - The company noted strong demand for its technologies driven by sectors such as AI data centers and electric vehicles, which are expected to be key growth drivers [14] - The company has 12 to 15 active front-end engineering design studies representing potential projects worth over $1 billion [15] Company Strategy and Development Direction - The company is shifting focus towards predictable revenues and margins, particularly from thermal operations, and is investing in biomass energy plants [8][10] - The strategic plan includes divesting non-core assets to improve the balance sheet and reduce reliance on low-margin new-build projects [17][26] - The company aims for targeted bookings of approximately $1 billion by 2028 within its Bright Loop hydrogen production initiative [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the improving adjusted EBITDA performance trend and anticipated continued growth in 2025 [12][30] - The company is actively negotiating to refinance current debt obligations and is optimistic about returning to positive cash flows in 2025 [25][27] Other Important Information - The company completed the sale of its SPIG and GMAB businesses for net proceeds of $33.4 million, which improved its balance sheet [26] - The company has a total debt of $464.6 million as of December 31, 2024, raising concerns about its ability to continue as a going concern [24][25] Q&A Session Summary Question: Guidance for the year and factors affecting it - Management discussed the uncertainty surrounding new tariffs and their potential impact on project timing and margins [36][38] Question: Update on the Wyoming project and IRA impacts - Management indicated confidence in IRA credits moving forward and ongoing discussions with Black Hills for financing [45][46] Question: Impact of EPA reconsidering emissions regulations - Management noted that existing coal plants are likely to remain operational despite regulatory changes, with minimal impact on business [52][55] Question: Pipeline and bookings outlook for the year - Management expressed optimism about the pipeline, with expectations for continued strong bookings and opportunities in biomass and thermal sectors [58][60]

Babcock & Wilcox Enterprises, Inc. (BW) Q4 2024 Earnings Conference Call March 31, 2025 05:00 PM ET Company Participants Operator - Conference Call OperatorSharon Brooks - Director of Communications and MarketingKenny Young - Chairman and Chief Executive OfficerCameron Freymeier - Chief Financial Officer Conference Call Participants Aaron Svichalo - Analyst (via Craig Hallam)Rob Brown - Analyst (Lake Street Capital Markets) Operator Good afternoon. Thank you for attending the Babcock and Wilcox Enterprises ...

Revenue Performance - Revenue from Continuing Operations in Q4 2024 was $200.8 million, a 15% increase year over year compared to $174.7 million in Q4 2023[5] - Revenues for Q4 2024 were $200.8 million, an increase from $174.7 million in Q4 2023, while total revenues for the year decreased to $717.3 million from $727.3 million[36] - Total revenues for the year ended December 31, 2024, were $717.3 million, a slight decrease from $727.3 million in 2023[39] - The Renewable segment revenues in Q4 2024 were $33.6 million, an 18% increase compared to $28.5 million in Q4 2023[11] - The Thermal segment revenues in Q4 2024 were $148.2 million, a 29% increase compared to $115.0 million in Q4 2023[13] - The Babcock & Wilcox Renewable segment generated revenues of $110.1 million in 2024, down from $140.8 million in 2023, representing a decline of about 21.9%[39] - The Babcock & Wilcox Thermal segment reported revenues of $497.9 million for 2024, nearly flat compared to $499.2 million in 2023[39] Operating Income and Loss - Operating Income from Continuing Operations in Q4 2024 was $11.6 million, an increase of $14.8 million compared to an operating loss of $3.3 million in Q4 2023[5] - Operating income for Q4 2024 was $11.5 million, compared to a loss of $3.3 million in Q4 2023, with a total operating income of $25.1 million for the year, up from $16.6 million[36] - Net loss from Continuing Operations in Q4 2024 was reduced to $45.0 million, compared to a net loss of $58.3 million in Q4 2023[5] - The company reported a net loss of $63.0 million in Q4 2024, slightly higher than the loss of $62.2 million in Q4 2023, with a total net loss of $59.8 million for the year compared to $197.0 million in the previous year[36] - For the year ended December 31, 2024, Babcock & Wilcox reported a net loss of $59.8 million, an improvement from a net loss of $197.0 million in 2023[38] Bookings and Backlog - Full Year 2024 Bookings from Continuing Operations reached $889.6 million, a 39% increase compared to the same period in 2023[5] - Continuing Operations Backlog at the end of 2024 was $540.1 million, a 47% increase compared to the end of 2023[5] - Bookings for the Babcock & Wilcox Thermal segment surged to $717 million in 2024, a significant increase from $410 million in 2023, marking a growth of approximately 75.6%[39] - The total backlog as of December 31, 2024, was $540 million, up from $369 million in 2023, indicating a growth of about 46.3%[39] Financial Position - Cash and cash equivalents decreased to $23.4 million as of December 31, 2024, down from $39.9 million a year earlier[37] - Total assets decreased to $727.0 million as of December 31, 2024, from $775.7 million in 2023[37] - The company’s total liabilities increased to $1,010.2 million in 2024, compared to $976.1 million in 2023[37] - Current borrowings rose significantly to $125.1 million in 2024 from $6.2 million in 2023, indicating increased financial leverage[37] - Cash flows from operating activities for the year ended December 31, 2024, were negative at $118.7 million, compared to negative $42.3 million in 2023[38] - Net cash provided by investing activities was $110.0 million in 2024, a significant recovery from a cash outflow of $7.9 million in 2023[38] - The company ended the period with cash, cash equivalents, and restricted cash totaling $131.1 million, up from $71.4 million at the beginning of the year[38] Future Outlook - The company anticipates a Full Year 2025 adjusted EBITDA target range of $70 million to $85 million[9] - The company continues to face challenges from macroeconomic conditions, including inflation and supply chain disruptions, which may impact future performance[29] - Management is actively monitoring market conditions and managing costs to maintain liquidity and support customer needs[29] - The company has not provided specific financial guidance due to uncertainties in market conditions and operational performance[30] Adjusted EBITDA - Adjusted EBITDA from Continuing Operations for the full year 2024 was $68.9 million, a 13% increase compared to $60.8 million in 2023[14] - Adjusted EBITDA for the year ended December 31, 2024, increased to $68.9 million, compared to $60.8 million in 2023, reflecting a growth of approximately 13.4%[40]

Company Overview - Babcock & Wilcox has over 155 years of experience providing diversified energy and emissions control solutions[24]. - The company has a vast installed base of steam generation equipment, generating stable cash flows to fund investments in new clean energy initiatives[26]. - Babcock & Wilcox holds a large number of U.S. and foreign patents, although no single patent is deemed critical to the business[48]. - Babcock & Wilcox's competitive advantages include its extensive experience and technical capabilities in converting a wide range of fuels to steam[41]. Financial Performance - The company has experienced losses from operations in each of the past three years and had negative operating cash flows for the years ended December 31, 2024 and 2023[61]. - Total revenue for 2024 decreased by $10.0 million to $717.3 million compared to $727.3 million in 2023, primarily due to a decline in the B&W Renewable segment[212]. - Operating income increased by $8.5 million from $16.6 million in 2023 to $25.1 million in 2024, driven by higher volume from natural gas conversion and environmental projects[213]. - Net loss from continuing operations decreased by $2.8 million to $73.0 million in 2024 from $75.8 million in 2023, influenced by increased operating income and a loss on debt extinguishment of $7.3 million[214]. - The company utilizes non-GAAP financial measures to provide greater transparency and understanding of its financial performance, which should be viewed alongside GAAP results[222]. Debt and Financing - The company currently has approximately $5.0 million available to borrow under its Credit Agreement and expects to require additional financing to fund working capital[60]. - The company completed offerings of $151.2 million aggregate principal amount of 8.125% Senior Notes due February 2026 and $151.4 million aggregate principal amount of 6.50% Senior Notes due December 2026[64]. - The company has entered into a number of amendments and waivers to its Debt Facilities since December 2022 to provide relief under certain financial covenants[58]. - The company faces substantial doubt about its ability to continue as a going concern due to its financial condition and ongoing discussions with lenders[60]. - The company must refinance its 8.125% Notes and 6.50% Notes due 2026 prior to their maturity to avoid adverse effects on its financial condition[66]. Operational Risks - The company is exposed to various operational risks, including equipment failures and natural disasters, which could disrupt production and increase costs[72]. - The company’s financial performance could be adversely affected by macroeconomic downturns and industry conditions, leading to potential contract delays or cancellations[96]. - Supply chain issues, including component shortages and geopolitical conflicts, could adversely affect business operations and customer relationships[98]. - The company is subject to risks associated with contractual pricing, which may lead to reduced profitability or losses on fixed-price contracts[68]. Strategic Initiatives - The company is evaluating strategic alternatives for its business lines, including the decision to sell B&W Solar in Q3 2023, but there is no assurance that these evaluations will result in successful transactions[79]. - The company’s growth strategy includes strategic acquisitions, but successful execution may be impacted by macroeconomic conditions and competition for acquisition targets[76]. - The company continues to explore cost-saving initiatives to improve cash generation and evaluate non-core business sales to strengthen liquidity[197]. Backlog and Bookings - The company’s backlog was $540.1 million as of December 31, 2024, compared to $368.2 million at December 31, 2023, indicating a significant increase in backlog[81]. - Total bookings increased significantly to $889.6 million in 2024 from $638.7 million in 2023, with notable growth in the B&W Thermal segment[220]. - Expected revenue recognition from backlog for 2025 is projected at $353.2 million, with significant contributions from the B&W Thermal segment[221]. Regulatory and Compliance - The company is required to obtain various permits and licenses for operations and believes it is currently in compliance with all relevant regulations[50]. - The company is subject to various environmental laws and regulations, which may impose significant liabilities and costs for compliance[125]. - Compliance with evolving privacy and data protection laws, such as GDPR and the California Consumer Privacy Act, is critical to avoid significant fines and operational impacts[114]. Employee and Labor Relations - As of December 31, 2024, Babcock & Wilcox employed approximately 1,950 employees, with about 1,900 being full-time[43]. - The company has successfully renegotiated four union contracts in 2024, with two contracts set to expire in 2025[43]. - The company relies on key personnel and may face disruptions if it fails to attract and retain qualified staff[164]. Market and Customer Dynamics - Demand for the company's products and services is influenced by spending in cyclical industries, particularly electric power generating companies[93]. - Approximately 35% of total revenues for continuing operations in 2024 came from international sales, up from 31% in 2023 and 26% in 2022[137]. - Customers may face difficulties in raising capital due to credit market limitations and increased interest rates, potentially impacting future cash flows and liquidity[97]. Intellectual Property and Cybersecurity - The company relies on intellectual property law and confidentiality agreements to protect its proprietary information, which may be vulnerable to theft or misappropriation[116]. - The company has implemented a cybersecurity risk management program informed by recognized industry frameworks[170]. - The company maintains a Security Operations Center to support visibility to cybersecurity incidents in real time[174]. Miscellaneous - The company has a history of paying cash dividends, with future distributions at the discretion of the Board of Directors[187]. - The company has identified certain material weaknesses in internal control over financial reporting as of December 31, 2024[161]. - The company may issue preferred stock, which could dilute the voting power or reduce the value of its common stock[149].

Financial Performance - Babcock & Wilcox Enterprises, Inc. is expected to report a quarterly loss of 5 cents per share for the fourth quarter, an improvement from a loss of 18 cents per share a year ago [1] - The projected quarterly revenue is $213.07 million, down from $227.2 million a year earlier [1] Recent Contracts - The construction subsidiary of Babcock & Wilcox was awarded $35 million in contracts for maintenance and service work at power plants and industrial facilities in North America [2] Stock Performance - Babcock & Wilcox shares experienced a decline of 7.6%, closing at $0.74 [2] Analyst Ratings - Lake Street analyst Rob Brown maintained a Buy rating but reduced the price target from $11 to $8 [5] - DA Davidson analyst Brent Thielman also maintained a Buy rating, cutting the price target from $4 to $3.5 [5]

Financial Data and Key Metrics Changes - The company reported consolidated revenues of $209.9 million for Q3 2024, a decrease compared to Q3 2023, primarily due to the divestiture of the BWRS asset, which accounted for $7.4 million in 2023 revenues [23] - Adjusted EBITDA for Q3 2024 was $22.3 million, an increase of 78% year-over-year when excluding the impact of the divested BWRS business [17] - The company recorded an operating loss of $1.4 million in Q3 2024, compared to operating income of $5.5 million in Q3 2023, largely due to one-time charges related to divestitures [24] Business Line Data and Key Metrics Changes - In the Renewable segment, revenues were $38.2 million, a decrease attributed to the divestiture of BWRS, with adjusted EBITDA down 51% to $5 million [26] - The Environmental segment saw revenues increase by 22% to $56.6 million, driven by growth in domestic industrial and European businesses, with adjusted EBITDA at $4.7 million [27] - The Thermal segment reported revenues of $119.9 million, a 12% increase, with adjusted EBITDA rising to $18.4 million, reflecting favorable project margins [28] Market Data and Key Metrics Changes - The company noted a significant increase in implied bookings to $810.5 million and an ending implied backlog of $628.2 million at the end of Q3 2024 [25] - The demand for energy from various sectors, including artificial intelligence and electric vehicles, is expected to drive growth across the company's technologies [9][10] Company Strategy and Development Direction - The company is focused on divesting non-strategic assets to improve its balance sheet, having raised over $116 million from asset sales in 2024 [14] - Investments in the BrightLoop and ClimateBright technologies are expected to lead to higher margins and improved cash flows in the future [16] - The company anticipates a strong pipeline of over $9 billion in project opportunities over the next three years, including $2.4 billion in BrightLoop and ClimateBright opportunities [13][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in leveraging the increasing demand for baseload generation and the growth of clean energy technologies [8][11] - The company expects strong operating momentum in Q4 2024, driven by its Thermal and Environmental segments [31] - Management highlighted the importance of ongoing investments in decarbonization technologies and the anticipated growth in hydrogen production [19][20] Other Important Information - The company achieved $26.5 million in cost savings to date, with a target of over $30 million in annualized savings [15] - A tentative agreement for a $10 million forgivable loan from West Virginia for a BrightLoop project is expected to be signed soon [21] Q&A Session Summary Question: Can you talk about the new EBITDA guidance range relative to past guidance? - Management indicated that the new guidance of $91 million to $95 million reflects adjustments due to the divestitures of SPIG and GMAB, which impacted previous expectations [35] Question: What is the traditional conversion rate for the active FEED studies? - Management stated that the conversion rate for active FEED studies is typically around 40% to 50%, with a high likelihood of follow-on projects [36] Question: Can you provide details on the timing and revenue cadence for the natural gas conversion project? - Revenue from the natural gas conversion project is expected to ramp up in 2025 and continue into 2026 and 2027 [42] Question: What is the current status of letters of credit and free cash flow outlook? - Letters of credit stand at approximately $80 million, with a timeline for rolling off over the next 1.5 years, and free cash flow conversion is projected at around 40% [45][47] Question: When will the Massillon project start generating hydrogen? - The company targets to produce hydrogen by early 2026, with full commercial operations expected around Q2 2026 [51]

Company Performance - Babcock & Wilcox Enterprises reported a quarterly loss of $0.11 per share, missing the Zacks Consensus Estimate of $0.02, and showing an improvement from a loss of $0.18 per share a year ago, resulting in an earnings surprise of -650% [1] - The company posted revenues of $209.9 million for the quarter ended September 2024, which was 5.54% below the Zacks Consensus Estimate and a decrease from year-ago revenues of $239.4 million [2] - Over the last four quarters, Babcock & Wilcox has not surpassed consensus EPS or revenue estimates [2] Stock Performance - Babcock & Wilcox shares have increased approximately 80.1% since the beginning of the year, significantly outperforming the S&P 500's gain of 25.8% [3] - The current consensus EPS estimate for the upcoming quarter is $0.15 on revenues of $248.4 million, and for the current fiscal year, it is $0.27 on revenues of $911.8 million [7] Industry Outlook - The Electronics - Power Generation industry, to which Babcock & Wilcox belongs, is currently ranked in the top 35% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]