Babcock & Wilcox Enterprises (BW)

Megan Wilson Vice President, Investor Relations
Kenny Young Chairman & Chief Executive Officer
Lou Salamone Chief Financial Officer
Rob Brown Lake Street Capital Market
Brent Thielman DA Davidson
Alex Rygiel B. Riley
Call transcript
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Hello and welcome to the Babcock & Wilcox Enterprises Third quarter 2021 Earnings Conference Call. My name is Charlie and I will be coordinating your call today. [Operator Instructions] I would now hand you over to your host, Megan Wilson, Vice President of Investor Relations to begin. Megan, please go ahead.

Megan Wilson

Thank you, Charlie and good morning everyone. Wilcox quarter & call. earnings Babcock to Enterprises' XXXX third conference Welcome Megan Investor of Vice at I'm President Relations Wilson, B&W.

Officer Lou Joining Young, me Chief and B&W's Kenny our Financial Salamone, Chairman and quarter this Chief Executive morning results. to discuss are third Officer;

call, and release our filed make our XX-K with will certain press our can for statements Safe related are quarterly Harbor These be XX-Q business. those including be we and the that risks that provision further to uncertainties, our file to earnings on Form provide statements risks in end found this report on set this about forward-looking. and afternoon Form statements During the the subject our detail and forth of SEC is at in forward-looking

law, except undertake required Additionally, to statements. forward-looking update no by we as any obligation

certain X-K of be afternoon the With found quarter earnings Form in our turn to posted release and third that, our superior information non-GAAP accordance provided section historical We GAAP considered the company be measures This regarding targeted provide reconciliation website GAAP. substitute overview will a in can at Investor filed I measures. results on with this Relations afternoon on presentation over of Kenny. also the published A to our historical in the and of for, results this to, as our comparable or not supplement babcock.com. should non-GAAP and information call

Kenny Young

reflect through XXXX with of a and of contract Babcock of expectations XXXX strength had the technologies momentum in of Wilcox our booking a and million combined results in further in Thanks for technology exceeded an Megan. and another Good afternoon at and Asia. bookings of Greenland, anticipated $XX the our third for award recent and during and We're expanding third investing quarter announcements build in platform, build renewable new projects call. this renewable coming environmental continued energy we offerings the We're million and everyone & including strong supply new our strategic business. to our another we quarter three clean bookings, and with what new waste or do. energy a the progress year $XXX achieved a our quarter, making anticipate projects days. we bookings fourth waste in energy in in the strategy. thanks effects the build extraordinary challenges, supply quarter joining our third We two $XX for quarter COVID our new toward We two decarbonization and the our said million waste awards booking we're facility We're projects. Despite growing renewable would we We're we chain build of energy are doing global East the for received facility acquisitions. quarter climate

We growing also regulation expand expect about our methane energy and to concern will of globally pipeline. waste that continue the the emissions

through does now is and parts and not $X.X more have services. include pipeline XXXX opportunities overall project identified Our this billion than

business service due the as usage result our base natural see also within to higher installed in and direct prices. demand potential parts of growth gas higher We our and a

XX% plant term third environmental quarter expansion, on is opportunities, that to to the drive related more during of strategy. we're target contracts renewable our environmental award focused long on We pipeline region ongoing emission Asia-Pacific which two of global our and the helped be with the continue in power and our than showing control

by transportation of these targets to improvement year occasion and know to despite backlog And are But of least very higher issues, set worldwide no on expectations, based end which end external management compared teams supply year we compared strong XXXX. more influenced a rose with current have COVID global adjusted And the represents XX employees our we or to million XXXX, last we and based expect to chain external responded Looking impacts, XXXX. targeting the shipping, further for results, global way full forward operational our the EBITDA including of I'm at control. year that robust significant derive despite on other and to proud we results. and our beyond continue factors COVID these delivering very the challenges. significantly

XX services approximately in bookings of seeing alone. bookings in would now We which are October anticipate of are believe our the base end operating to XXXX. level bookings as at million third due of fourth strong remain quarter bookings, quarter $XXX highest to accelerated following again, the We million XXXX, the business We million many since gas. levels, of the high higher global price result in with significantly natural install total and annual of will in our of parts $XXX the facilities

or most bright and carbon produce and in clean unparalleled lead or an climate to the million patents The our Carbon and zero to the carbon anticipate towards methane BrightLoop. been industrial biomass is to with some innovative also objectives, Project as has one COX our this next has for an green in University, and production and been Australia, Limited variety This of existing of produce When completed, while of our jointly signed growth seek and steam developed agreement has BrightLoop propelling to a production researched our customers excuse demonstrated looping or to capture technology our expertise and collaboration solutions, enhance urgent revolution we are in for active joint Ohio hubs hydrogen be isolating this develop dioxide by platform expected we To exclusive is our bright adjusted me bookings State growing portfolio. licensing We scalable This pipeline from by chemical research Foundation gas it's used energy Renewables XX decarbonization Energy backed of target hydrogen recently launch address in BMWs has BMW fuels by more May process successfully in capture Green interest an technology world's with and the Anthony potential. BrightLoop Interest technology the climate which hydrogen, and further to carbon to State The of excited hydrogen, technology has complements experience its particularly transformational capture industrial Ohio US and the a momentum purposes. global carbon as both our Port or hydrogen proven future. solutions other how continued opportunities, exciting climate BMW alone, of plant gas National of decarbonization including Capture of our for OSU Innovation utilizing looping reductions. small chemical at for Port the fully Australia. about backlog largest feedstocks, the expanding, technologies from with And is are is and the used Centre. $XXX the to strategies, sin large installations. decarbonization of -- a our southeastern the we development demonstrated steam sin offering, growing world's EBITDA agreement gas for and hydrogen Authority Technology than pipeline, was for and adaptable in raising strategy. recent sin particle jointly our the acquisition strong between ongoing accelerating million, $XXX and XXXX

work months. announcing actively coming We roughly We projects September, acquisition the and closed welcome and called based bright are comment at Solar the we best customer's and and progress solar construction services We a climate of continuing expanded clean Fosler the to the renewable projects on carbon installation together by opportunities two business solar additional solution work to the by substantial the specific in to and our leading third potential now the the on and Fosler excited in end are thrilled booking needs state XX energy installation controlling capture talented of team quarter. Services determine commercial in US. on acquisitions about B&W anticipate and firm further to to

and resources will that accelerate to access B&Ws support provide B&W the relationships projects. are synergies to including We the in growth, energy to strong customer existing further presence and industry larger scale confident Fosler’s

energy opportunities these to newer continuing solar drive efforts long-term early and seeing to solutions technologies. look to our combine forward are with B&Ws We storage

also A/S services a an VODA This to service and customary Denmark, in transaction waste energy, conjunction renewable is customers. flexible, our expanding business the the including close Europe. serving to targeted business VODA services Denmark, agreement satisfaction renewable ongoing. of which year with following business, is in to We energy end aftermarket platform In acquire in regulatory review form and currently service scalable the closing of by create conditions a for renewable signed B&W existing aftermarket biomass parts B&Ws will

to acquisition aggressively to call value opportunities discuss continuing in of Lou, in quarter markets our and over mature are key the We to explore emerging turn further increase additional both performance Lou. acquisitions. third of XXXX. points through opportunities and to shareholder technologies the financial I'll now pursue

Lou Salamone

Thanks, Kenny.

within XX% restrictions a as segments limited revenues our activity by in project a segment, improvement Our to of in to activity were customers quarter overall thermal the project COVID. sites. to offset well all due third is the timing This quarter segment be and our effects business environmental as partially ability XXXX. million. due is the projects impacted to of renewable improvement our and higher compared $XXX increased workforce a our was This delayed project third consolidated were of segment. in COVID-XX, of higher primarily travel job as This volume level by Revenues our adversely

of XXXX. GAAP million compared income $XX.X the quarter to million third in income in $XX.X of quarter Our third XXXX operating operating was the of

primarily The the and with included in This an compared quarter from increase to XXXX. Adjusted in agreement third XXX,XXX $XX in $XX.X due an a gross increases insurer. settlement quarter to however, revenue margins. a earlier EBITDA increase of XXXX, million was was million of third referenced

discussed. $XX non-recurring insurance loss quarter the is in XXXX of recovery just of third the million Excluding

New the million. quarter bookings were in $XXX of third XXXX

of thermal related million to and construction Our September was a de-booking segment. the backlog booking inclusive a XXXX $XXX at $XX million XX is in

cash million, The agreements equivalents not mind of of acquisition. decrease expense million and was does was quarter cash, and the driven backlog notes in of issued September reduction quarter. million sheet services. the previously to public restricted cash cash gross $XX.X by balance out I'll Cash time common flow Importantly, $X.X and keep XXXX paid through months million. the third EBITDA. We adjusted the for speaking with debt, for flow discussed turn is XXXXand September the lead is now of of and our senior and quarter XX, interest the and cash XX stock rate sales the is senior at that of the year. was the parts proceeds loans net XX after Net the foster $XXX.X the under shorter our at cash million. rate XXXX which offerings This inclusive our aftermarket on secure $XXX.X last use X.XX XX, include ended compared our from to generally times operations last of on total interest construction quarter interest and term debt reduction primarily notes the total this prior of leverage in Net year and February in our liquidity. during

sizable quarter year the XXXX. our accelerated million XXXX. for performance, As the all third new anticipating of EBITDA experiencing quarter, and XXXX. our effect annual including is least segments This the at of for bookings business. year full fourth build full adverse Kenny since based we're achieved on current adjusted on the of expectations, of the two highest targeting And of strong level stated, entering booking despite projects. the COVID-XX And we're bookings renewable the We're we XX

the of end quarters We first us expect that our EBITDA higher this has robust the to strong to And target end compared year performance to of our backlog we're positioned year as XXXX. achieve full of XXXX. year for significantly a in the with confident adjusted the quarter fourth three for

XXXX over strategies, $XX and acquisition and strong back our between $XXX I'll to $XXX backlog, in million the a raising between of bookings, other EBITDA as to result elements from Kenny. and this target adjusted ongoing our million. growth of million addition $XXX we're to million accelerating and now and As turn

Kenny Young

Lou, thanks that. the bottom-line. Well, here's for

have tremendous We amount accomplished year. a this

the all the COVID have we due excited about so So years, global even over our chain how and past cost climate when and initiatives more energy challenges are far issues our strategy. considering our continued and supply actions, to face, and international acquisition couple we we bright expansion our platform, come our reduction far clean

to XXXX together a coming strong us are and an even elements end and XXXX and these beyond. of for All positioning better

booking awarded than and two renewable three is of build significant the the opportunities billion our bookings during end renewable third Our XXXX with or new bookings progress build $X.X on more pipelines the for by quarter propelling two additional year.

global We to attention accelerating to climate drive Clariant in emissions energy as from growing interest bright And expect continue pipeline. by methane waste [ph] to announcements. shown our the our our recent is technologies towards in waste

actively we clean renewable In by acquisitions addition to and other our technologies and XX potential both pursuing. two opportunities the are expanded further energy pursue additional aggressively in markets. mature Clariant to nearly announcing continue and projects We business emerging

sustainable our dependable confident our the strategic dedicated remain bookings and around our our world of actions clean, to about and are grow business term financial impact support profitably we performance accelerated forward, Looking energy. to the on of and in long plans

back this who the taking Charlie few a over with call to with questions. I'll So now assist that, can turn


Rob [Operator question Street Capital Instructions] first of Our comes Market. Brown Lake from

open. line ahead. go is Please Your

Rob Brown

good Hi, energy some the terms won Could Good detailed quarter. of you. and progress more in that Thank projects afternoon. in you give the you pipeline? wastes

Lou Salamone

Sure. Southeast Asia. Actually, quarter, the in in obviously, announced one the other Greenland we the and in two

project fascinating, interesting creating technology let heating households, the in the existing this obviously area is only us of it's describe coming it's -- district production Greenland is. press interesting what's that and from in for directly itself. and, globally, not for also landfills case waste think But it's it briefly core exciting it's that energy where I area. particular utilizing our household also me it's wasting is obviously, waste part in steam for coming on from we utilizing an that but Greenland

So, and it's to create for is obviously, technology further landfills is electrical heating. be other -- using from district the for proof that fuel from or used can source methane purposes landfill reduce waste a energy, output to

core exciting our that's for also So, I us think technology. pretty to it's and

we've Southeast and the couple overall. to so in some waste a in sites think other is Asia sites couple largest Asia world to that a been project to in on -- add It the similar that in that there facilities I that particular technology in the further that participate is complementing it's actually, involved energy value we're proves, it's and and other and of area. technology continuing augment great that of our

this projects that pipeline mentioned anticipate of So, that we and have about year combinations we're that thrilled the tremendously we those, locations. we the yet are in

is Our global. pipeline

anticipate North So, this -- and throes announced. yet us, we're and once final America of projects Middle and more working one Europe, we of in or the are those opportunities Asia in for important those do in year parts But East, on they very would other announcing some world. get And, and be negotiations. of two we key

in excited So call. wouldn't finalized go into too this comments much are those on we obviously But about and announced further forward. getting moving

So positive for us.

Rob Brown

see on maybe And when be you increased you starting awarded? you, projects that those the activity, does great. and climate projects, lately that’s of XX to mentioned then Thank bright sort

Lou Salamone


there's year, will different And could our think it technologies I and I opportunities have new coming announcing be Port But a could there's a ones that that's or obviously coke, next think it particular, through are whether advancing increasing. opportunities. variabilities standpoint. where in it source think that talked for carbon coming before, the around be of at pet when fuel XX BrightLoop need you of or we're In fully I projects the gas, are part And natural technology waste, a sources, the be different about year, several kind what could we've in globally, coal, conjunction with working the I today be bit. to fuel lot anticipate that see the we a it booking soon. solutions. further opportunities working days in other -- announcements hydrogen be quite those I capture waste, syngas. we're BrightLoop from number create some announced itself, reiterate in utilizing this energy could could can biomass next even only those begin and to look create and be is could to within not months, or and on on can of possibly other it be utilized going those we to early it mean, materials technology. electricity biomass, in avails itself also industrial but we're processes, over energy of that could a it Rob be be thing either And or waste think syngas couple BrightLoop project, Anthony We that which food you'll a our time pelletize, be drive that simultaneously those

a dual the that capturing than of COX a It's associated has it will. of while type other if So rather kind simultaneously element. reaction output, you purpose with chemical

that BrightLoop syngas the and And the the the increased there's technology combustion and unique that industrial on would is overhead heat we're customer basis, utility capturing experience. producing so customer in or that aspect lift energy, creating COX, not an simultaneous

we're moving anticipate So forward move as and of those a forward. on commercial that, to with that projects, result small book getting

move associated technology now part well. that. is is excited capture commercial We a sometime the And we're world to technology moving that projects that This fossil revolutionary, you larger COX we'll trying think fossil capture of can at as into key that the that obviously, that. fuels look and with fuels, COX utilize And when right about a but is forward.

that as in we with and conjunction a ability think so renewable changer biomass other that use is are fuel forms well. And its game to true non-fossil

forward. position we a very standpoint, and that to we're those pursuing actively a nice in set aggressively we technology going So and think drive from opportunities

Rob Brown

I'll overview. great turn it a was That you. thank Good, over.

Kenny Young

Thanks, Rob.


Thielman Davidson. comes question from Brent next DA of The

go is Your open. ahead. Please line

Brent Thielman

Hey, thank you.

Kenny Young

Hey, Brent.

Brent Thielman

a from? in build I all recent Kenny, want last momentum progress momentum have renewables that you that coming of you to particular, guess, Can here. just month this more all been this I opportunities what's seeing in you're on And of come to in bit I guess the here pursuing? beyond kind recent bookings little the Congrats talk is back new just or all where so? pushed

Kenny Young

Yeah, great question.

year, think and past time. of over the for delayed I some think talked the to fact due been projects a that of these I quite on we've years. lot we've the projects -- bookings that past were couple And over we have projects variety been a working for COVID reasons around

as projects of lot in that globally actually and it cases, a signing simple I delays three as involved COVID, lot a from were a final had because contract required were region-to-region So for face-to-face those location-to-location. decisions to came of due COVID. people bookings And sessions. to that in new four in, was couple involved down and with involved some delaying attend unable or we're weeks, we mean, those mean, in varied

knew that there. basis. So QX around the projects the gone are away, starting in out countries exist. that to the impacts these were were are they There and of that were But energy we always about we we the obviously engineering around mean, across haven't obviously, still get on these We renew global in excited, the and so projects efforts still forth. a board. and fact that efforts difficult to on talked fact the negotiations I design so and

in have at worldwide sectors as now segments. these felt starting them projects and we're and would to news, -- COVID. of I energy We've like We move activity a out have and -- booked say been while, feels were going. especially even they I those people to them that thermal. the they think a few getting on forward, we it that is starting and our across now the get better and to and them three around nothing matter All significantly how also the out has increased aspects of think I So environmental, to three these renewed on all mentioned same other least publicly we all signed of excited I and to for getting on is projects the projects line, us. we're have renewables, us, finally work just that goal they're coming. for there And think things so forward. across learn proposal And and reason move were time, if there them are good to though, At a getting new occasions we've knew there's the

on increasing anticipate our think continuing vigor, and we these in on of that and the global refer there's we that clearly both projects, sectors. environmental I thermal, I renewed a forward renewable number and to a front reflected that's in to So think, pipeline move

looking a So about accelerate, combinations than originally our been bit and that think that -- anticipated. little our have thinking to Isn't we things they're the we'll how mentioned into we're are again, It's starting related -- a now they're my coming to for to year, the that as now. just I And excited while get and later we but on we've some of were move in working into in had happening it's backlog. backlog they're I days. announcements comments, further

So forward. keep We'll forward we're a move announcing as from growth projects. overall. year growing we process have to strategy we number next And excited to obviously, the look a this of

Brent Thielman


the as expected good I guess particular, mix on it might mean, there's have But into the headwind? that that like looks like pretty in Okay. we you looks a some leverage, terms strong overall year-on-year, into the maybe unwind margins quarter impacted get year. product earlier not fourth segment looks XXXX as the it Thermal at should that growth I still of as headwinds mix in Question, in or

Kenny Young

on this the of little year – component unique, variances earlier that we full was a talked installed is customers the of of especially and US, The the bit “Texas” year, I have and the up that construction that we again, would is those in drove mix have three, basis, way being guess, services, little is, this say, been, the unique additional that -- into projects, do had installed that due, it -- fall business. typically, same higher we to planned. this followed think due were usually and primarily I services, wrapping bit grow. or it with base – and lot where there's actually which aspect One wouldn't and base those about, major the our we I is operating services a bit for, and I always anticipate during, from the that operating the that parts aspect, freezer that, will was our significantly other two of as think, the aspect parts we're losses high about a we the we which construction more we in in as project to installed to the this just margin on thermal then have catch of had, couple but the worldwide than provide time the the was The continue power actually, incurred Yes. business. talked little what's through that's price each do year, we've What and some in on technology think natural and a varies we and a installation. other we some and – unique that and actually parts components But, more parts And had supplement. base we did of aspects typically impact, was the more a by projects. our parts ever summer, actually has aspects and a technologies sets bit more seeing, other on gas, issue. that the revenues What services Because little installed construction later quarter, some our other follow-on year, lower on, this up margins

and a I normally demand potential we year, provide and of for this So, be higher year. into its plants that on a installed what should in that services, these would will global there's next margins, going base performance, and higher think on we we strong basis, parts parts it position good services contribute, based and is higher see the which parts But our think, does. even that

the we So, it's anticipate early part. we'll pretty that a but that, our understanding if good that indications see early are and it's unfolds, – that, on the

Brent Thielman

guess helpful. the that's for was I one Yeah, last outlook. upward the just XXXX in the – Okay. revision the me

there accelerated for were related where's performance meaningful contributions the that, you've in baked the wondering the this sort of incremental – of business? a lot acquisitions Just just into if, core sort just to of done

Kenny Young

that always aspect but it's better a We of think, be role business, it's looking of well, talked in what accelerated increase that, and – parts The primarily of next mix. because we play will the that We've On based I So on a and would as from the acquisitions a those. all think, think services we're year. mix of at I about. too.

a accelerated pathway the get too. as And renewed acquisitions, we we we bookings. have the to – obviously, lot these We help well, out. more into the a see obviously have that'll getting of next optimism in fact year And we're that

the the of more delays, those this we to of targets. So, on And think there's and to takes for, COVID, normal. balance time these days next for quickly impact elements those combination about it's that a our stuff the norm. drive out becoming all that But, all always of But as more trying we're optimism the get increase it's COVID year. done target than just to

Brent Thielman

good. Okay. you. Very Thank

Kenny Young

Yeah. Thanks, Brent.


comes Rygiel Riley. Alex of question next The B. from

is open. line Please ahead. Your go

Alex Rygiel

nice and quarter. Kenny Lou,

Kenny Young

Alex. Appreciate it. Thanks,

Lou Salamone

Alex. you, Thank

Alex Rygiel

year here, with the $XXX XXX your expectation questions bookings of backlog in million appear around could quick new XXX end million. of the million of quarter the that fourth would Couple to

backlog us in I XX% catalysts notable as about as you expanding growth backlog early, to maybe you know, can and of But be think the to much XXXX? forecast sort variables in up don't So that it's year. year-over-year, help the even could further out

Kenny Young

take here. Lou, this I one? will think Sure, want you do to you cover

Lou Salamone


great that think of fact was, as moved out Kenny XXXX. deal is to into we XXXX said that the earlier, of be I did due it projects to have a going

off increase parts year with So a the also, our as we've backlog very in -- services, and expecting the And that and from salesforce one that we will seeing parts then And be on paying a uptake increases our Fosler we half. a the enhanced would We're other then increased a indicated, waste-to-energy a we've pickup well greatly the global of of wouldn't. finally, and projects. services primarily renewable backlog of number got waste-to-energy increased number That's Kenny factors, you as large where over which were past sales, as sales project know good projects. acquisition. proposals on and in

Alex Rygiel

you then as in renewable for revenue it recognition can announced And two projects to these? great. quarter, talk relates That's the about new cadence or the

Lou Salamone

Kenny that's way okay. XX months that. it XX cover are works, if got doing. and I'll obviously, is generally the we're that you've The Yeah. between projects you the way

you're about down project So fourth month almost materials the a going to amount would project the going you'll that And the early recognition the in the on is is? So, the in to say I But isn't projects. those I'd does you magnitude, ramped the it's of order setting latter XXth revenue of up, say, the then a of of months the location, from part revenue. first project is but the almost projects a a to XXth you the significant the revenue be as as much where of materials the and not EBITDA recognition comes heaviest up first and in workforce of where up quarter of pick as of that early cost several your month from because the of significant have some projects, But stages you completion. recognition the project, so your bell the revenue curve, get on. get that revenue the percentage lower, winding

Alex Rygiel

you Very very helpful. Thank much.

Lou Salamone

Thank you.


further this questions time. at no are There

Megan. back call to the hand I'll So over

Megan Wilson

for you joining today. later will on conference. time our a That replay Thank be limited our available us. website for A concludes


you concludes That for today's call. Thank joining.

now lines. may disconnect You your