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Babcock & Wilcox Enterprises (BW)

Participants
Megan Wilson Chief Strategy Officer and Senior Vice President, Corporate Development
Kenny Young Chairman and Chief Executive Officer
Lou Salamone Executive Vice President and Chief Financial Officer
Zane Karimi D.A. Davidson
Alex Rygiel B. Riley
Rob Brown Lake Street Capital Markets
Call transcript
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Operator

00:00 Hello, everyone, and welcome to the Babcock & Wilcox Enterprises Fourth Quarter and Full-Year 2021 Earnings Conference Call. My name is Victoria and I will be coordinating the call today. [Operator Instructions] 0:25 I'll now pass over to your host, Megan Wilson, Chief Strategy Officer to begin. Please go ahead.

Megan Wilson

0:33 Thank you, Victoria and good morning everyone. Wilcox quarter & earnings full-year Babcock call. conference to Enterprises and fourth XXXX Welcome Wilson, Officer Officer Chief President Megan results. am I Strategy Development fourth and Difficulty] our of and [Technical Chief discuss Financial to quarter full-year Corporate Vice Senior certain this make we call, will X:XX forward-looking. statements During be in those press the for SEC Annual statements that forward-looking file our These including can subject release end our XX-K in be on related detail risks to our forth are at to of and about statements earnings our Safe and uncertainties, found Form business. is on and set Harbor further Report risks provide provision the it the with law, undertake required Additionally, to as X:XX no we except update by obligation statements. any forward-looking

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

Kenny Young

XXXX. negative up to for a for about Well, of were, EBITDA joining about $XX both, backlog positive X:XX million adjusted in income XX:XX and Thanks, year the call. thanks up ambitious an accomplishments to $XX XX% with growth loss Megan. XXXX our Thanks loss unprecedented from year. And and and million have non-recurring a EBITDA actually net compared our ending annual million income were recovery highest B&W, bookings level exclude annual XXXX our and target good Victoria the what of swung We also XXXX. since of by everyone of a of $XX our and for XX%, of XXX% wow, about excluding achieved net not increased especially morning revenues year booking -- was about adjusted

month. results quarter-over-quarter a significant, new revenues million last projects acquisitions just included new bookings on and technology we up we announced power we would We what hydrogen including decarbonization production EBITDA XXX% and $XX focused platform, our that build about including for was, In four and forward $XX innovative XX%, renewable two of advanced demonstration contracts closed and several plants Our quarter continue ClimateBright we million the $XXX our execution, was in if for BrightLoop XXXX additional and booked did up said were driving strategic we energy Europe. were of quarter technology. XX%. fourth X:XX investing to income do, as of fourth energy for in to extraordinary X:XX building build XXXX, actually net actually for supply awards on million projects, remarkable and were waste XX% renewable commercial waste we up Our the up adjusted bookings about projects just to

projects, With in upgrade XXXX, five boiler of booking we the $XX addition beginning renewable sizable have for an of the million energy booked September. biomass since

are Our solar. see renewable excited and months recent we businesses. for the our six energy acquisitions over clean opportunities the expanded strategically substantial have last about We X:XX

B&W applications and our and exploring focused to we Through our on services parts and look we and capabilities X:XX designer Canada. continuing energy acquired November service in X:XX generation technologies and control combustion, are renewable which and gas construction our only combustion firing through around for also growing suited complements our launched are acquisition manufacturer this VODA, to leading Nova to bolt-on equipment see Fosler Europe heat the X:XX storage B&Ws Solar sulfuric in such and and year, we potential those expand also markets, opportunities energy waste reflected designs pipeline, services plants. solar economizers forward these and operation Tulsa, our in manufactures aftermarket business, installation recovery of duration ideally and water and In products, and hydrogen biomass natural acquisition with technologies. B&Ws the Scotia acid North growth completed super pulp not BW energy in for renewable heaters FPS world. of newer further and combine hydrogen, flexible, a scalable, packaged to fired efforts to America, clean waste a which is which long-term, drive States, of Optimus and significant for platform a solar Industries small February, long through those United solutions units system we ignitors business including and maintenance and In based in to the FPS tube, February of Denmark, paper parts tube Renewable boilers renewable energy waste technologies renewable Services and we hydrogen business as based our heat or in but a in Oklahoma, to technology.

capabilities technologies package and business continuing shareholder further and to value. emerging are the forward. increase markets We aggressively create boiler both US additional US pursuing opportunities the moving and access to investment combined to We opportunities mature our X:XX increase expect and in for additional addition explore opportunities of market manufacturing acquisition

and bookings results, us XXXX in Our stronger XXXX. have positioned even actions strategic for an

services. anticipate service prices. business our again does base result progresses, X:XX installed higher than opportunities our our increased direct natural as is previously $XXX a higher to and more now as in demand due include not through of million $XXX and parts parts identified to our and and the growth we as range we of a $X.X gas overall forward, to year Looking Additionally, project adjusted which million we pipeline of million EBITDA XXXX by XXXX, target mentioned,

feedstocks, as November our isolating recent platform for the of year jointly utilization global looping the BrightLoop anticipate the will of it's XXXX demonstrated. in State syngas, used by strategic ClimateBright and COX us technology year-over-year and unique our ramp of without for from and is is particle exclusive realize give load lowest technology confidence XXXX, hydrogen As fuels expanding will in and researched signed B&W while an Most we our portfolio. highest will steam our been syngas or This significant historical the trends. within any decarbonization wins for milestone based Technology of with acquisitions produce particularly and ongoing produce of foundation robust to potential State X:XX ability in variety that platform In hydrogen believe for our full-year interest or QX on growing EBITDA hydrogen as rapidly a parasitic XXXX without contract our loss strategies. continued growth B&Ws syngas QX existing was sequestration achieve and between good and steam breakthrough successfully importantly, used for a normal license momentum that to Our or being and our has University collaboration BrightLoop our in production Ohio the the agreement plan. to technology developed chemical which that and we from of XXXX complements with be on a or being our X:XX decarbonization innovation efficiency always, news a or in growth additional Ohio pipeline, we

and small is We installations, both this how adaptable we are potential. scalable transformational its technology fully have large for proven and and -- excited about accept

the the with carbon number one climate detailed robust opportunities the customers of now producing of urgent ground address equipment most So excited in and on by accelerating the with of engineering, at Our objectives. some as design a permitting projects, solutions capture fact financing, production forward our having the hydrogen X:XX energy XXXX. scale and hydrogen for we pipeline that demonstration is of of site all commercial end and potential moving are transition, seek to world's of XXXX end selection, by least plant and goal including

on months. on continuing needs hydrogen anticipate to best booking -- potential and over projects capture ClimateBright well XX as additional are as points carbon over to determine financial now Lou will key results. really our X:XX of ClimateBright I customer-specific and working scale full-year and carbon based call quarter to We of solution discuss coming the the XXXX, turn fourth our the the performance in size projects Lou? in and capture the

Lou Salamone

XX:XX Thanks, Kenny.

quarter fourth review turn and our XXXX then XXXX to our First, results. I'll full-year results I'll

beyond the continued primarily your as in the of and mitigate SEC to and revenue. the further income can strategies impact attention further to million this an earlier XX-K our million, refer COVID-XX, Fosler net it for discuss I'd that with increase income the what in call acquisitions detail of in to increase $XX. was compared to filed we we fact due to For you here call. in and details the a expanded and XXXX, improvement, for revenues geographic compared XXXX. level to The was segments, XX% of $XXX.X our XX:XX million, Consolidated improvement improved higher were thermal compared VODA million loss $X.X our a in was environmental Net presence segment. renewable to operating XXXX operating XXXX. activity XX:XX referenced due in of GAAP million, $XX.X was XXXX well in of loss $XX.X primarily in X this as XXXX, to

XX:XX was a included a full-year million $XX XXXX, also more prior XXXX million, in income million from EBITDA operating an settlement, increase, a $XX.X XX% is XXXX $XX level the of in few which $XXX target item. an excludes the XXXX. the as million increase, compared $XX million, $XX.X $XX.X year ago. to adjusted settlement XXXX signed I We fourth segment, XXXX Fosler just $XX.X $XXX thermal we XX% EBITDA and million fourth highest was a prior of with that's one-time XX:XX within adjusted is compared of million the the mentioned is quarter and a consolidated XX:XX turn Net construction including due project income higher fourth mentioned quarter the results, three $XXX to quarter of all Let well of volume large year-end. more in bookings annual compared and So since We business activity bookings, of income in a to that million were fourth Backlog the reaching the a the XX:XX of to fifth, compared December million times insurer, which fourth achieved XX, energy in and in as our four at segments, this non-recurring note as in bookings me were than million, is improvement, acquisitions VODA. increased to an million quarter now primarily to XX% in as XXXX, quarter XXXX. X $X to Kenny this segment waste our in of the this projects XXXX revenues net than our renewable the level moments

inclusive our our on growth Our in the fourth $X.X propelled stock quarter the to interest operating in times, out our flow XX:XX and GAAP were and rate compared the stated, the a to prior turn As through of the results XXXX backlog of was increasing anticipate project notes of and of primarily further net and follow liquidity. million execution common last XX cash compared rates XXXX. a to flow, notes $XXX and actions. of times, Bookings $XXX debt during to of XXXX senior operating reduction and the income of growth in XXXX now performance the and was $XXX XX:XX for on pipeline than Net by were quarter end leverage Cash VODA. back renewable will secured quarter. the EBITDA decrease bookings profile and adjusted increase, $X.X in is strategy We in robust million XXXX for XX% us proceeds issued offering, in bookings was income the continued to by strategic quarter as profitability loans We said earlier senior EBITDA. to our at adjusted fourth paid fourth in due booked the of from $X.X again of the sizable and offering the XX% a Net acquisitions million million new EBITDA over and million the of the year strategic We opportunities based cash million a fourth $XXX coming $XX.X waste $XX.X The propel closed the XXXX. XXXX. quarter prior December energy operations sheet was term the after our of quarter, X.XX in million. year now turn quarterly more the executed achieve X.X% approximately XX:XX more fourth and cash execution. for well XX-months our is fourth notes in those annual million. public debt quarter to senior our this of the from the last cash over XXXX the strong supported Kenny under in at quarter. the cyclical drove XXXX. billion XX:XX it by quarter quarter. We in I'll reiterating level contributing XXXX to increase, accelerating This acquisition as of XXXX, XXXX. and to target and to stated, in full-year in build I'll was months interest $X.X of Kenny four XXXX’s of million, a in as adjusted projects of six expense $X.X highest restricted cash quarter XX:XX the the expect Fosler than $XXX revenue compared a $XX acquisitions to million driven of are million was increase as more million of momentum our of quarter first EBITDA was primarily I the through our equivalents $XXX projects balance was total favorable Adjusted normal million referenced XX:XX the December for past ended is for Again This our net we and target of improvement with X which as the fourth This Kenny. $X.X $XXX use than several XXXX, years. since million. million

Kenny Young

Babcock we over we XX:XX Wilcox Well, proud closing, and past have in three the we at are & strides the Lou, extremely milestone in thanks year XXXX. of tremendous for many years that. achieved

the up every meet and one tremendous want around to them. demand global employees and we achievements Our world the each the have to recognize of stepped of

We are in year-over-year achieved significant three talent EBITDA. revenue, new net income growing segments. and expanding adding growth our and across We've and

strategies, ClimateBright is projects seeing are five promised, booking driving looking renewable on technology. and We XX:XX on for energy about significant growth in we long-term us are growth demonstration closing and pursuit platform decarbonization years strategic substantially the year just have we is continue As results $XXX solutions. transition executing help our deploy confident $XXX we hydrogen to continue progressed of continues world's a XX:XX which confidence the bookings potential demonstrate more questions. increased adjusted our confident who we XX:XX expect $X.X to are customers for achieve including that million With ClimateBright median that call innovator our proven towards on this take a acquisitions energy are innovative Victoria, over several offerings, to three-year drive I'll as million. build what our target capture to but recent BrightLoop the materializing, are B&Ws our technologies, continue emerging projects. to backlog and any of role And accomplished value. year, by And since Victoria? of reviews, build and leader to forward actions than energy several we and then September. to and advances we always a back with waste from we our decarbonization that the regarding waste capabilities our all can turn We and will shareholder renewable even new EBITDA carbon on as year-over-year our pipeline. our XX:XX demand platform ClimateBright strategic to the our coming commercial XXXX, and environmental giving BrightLoop to to in billion the The greater forward XX-plus increased and projects been The working B&W

Operator

you. Thank XX:XX

the Instructions] is to on our Karimi comes D.A. first question move call. Davidson. portion go now the Please line of from ahead, Zane will We open. from Q&A your And [Operator

Zane Karimi

question. you for good my XX:XX and taking thank Hey, morning

Kenny Young

XX:XX morning. Yes, good

Zane Karimi

-- solutions the take pertaining hand, be you elsewhere? bit as seeing one, a first [Technical you're what I the So it's seem through in about well as to Seems as concerns little talk more up to this opportunities waste XX:XX -- in Difficulty] be could solution of, here to business, in especially interest region? your early, like sort it to significant energy Can Europe. a but does the know energy the

Kenny Young

XX:XX [Technical operate come more thermal longer and operations. Difficulty] they that parts through greater that as tear and occurs and leads periods of services wear that clearly There's to eventually our for time.

premium just the the replacement So natural with increases happening, of those now watch positive as aspects other Europe alternate becoming and and natural and as hydrogen use from of run. in all now at further obviously forms. as continue and gas energy natural potentially well also think and these to lot and energy look production inclination impacts occurring where that initiatives forms, around that days a observe that geopolitical gas of [ships] we of you're utility in as kind of a it’s see different (ph) we hydrogen right a long-term providers very helps to of long us is and and for XX:XX right around worldwide especially drive a go fuel also a what's the in for the in source to some We have back

or two our lead on production we're about mentioned year. -- a forward commercial the to this we one call, demonstrations this capabilities And yet impact, so equally we're in looking and the excited could that hydrogen with but to move

that opens a actually, see up about you the anything Lou, So We're us. various want but standpoint, excited to in them impact opportunities negative we impacts us that? it add -- for don't that’s ways to from -- that. as

Lou Salamon

[indiscernible] XX:XX

Zane Karimi

XX:XX I'm [indiscernible] sorry.

Kenny Young

Go okay. that’s, No ahead. XX:XX

Zane Karimi

Okay, for queue, I last about to the jump XXXX but among into thank that XX:XX before how me the guidance, particularly And sequence you color. for we build of the think toward one segments? should year

Kenny Young

we of environmental and next XX:XX have will transition by two-third our past, and over you about in talk evolve to is Well, think strategy execute of against see revenue continue I that couple as talked the towards and about renewable. we the going and years as

that time. announcement pipeline period increase Our see that recent our we'll and support over and obviously, that

As we call this million million, EBITDA just QX our it lowest, target the ramp towards $XXX also of $XXX our talked be QX and about the on be be will the will be today the will year, like will higher.

to So it's and pursue we parts year. just it to it QX will course working and we bookings also the those but targets a time, close actively know see milestones. like our anticipate were being But low, normal normally this especially just trends and be and to layered that does. services they'd But business, the occur, announcements, that the seen have will that it heavily of those again at involved fully side, lot be in us reaching for anticipate and we're projects that in QX, and -- just same QX, timing QX, being it's cyclical we'll our high. we XX:XX whether into QX

Zane Karimi

the for that. you again, congratulations year. Thank XX:XX big And on

Kenny Young

and Thanks appreciate XX:XX Thank that. I you.

Operator

Thank Perfect. your again you for XX:XX question.

Please ahead, from open. go B. Rygiel Our from is question Riley. line next your Alex comes

Alex Rygiel

you situation over year Good may fantastic you. address in customers’ Europe clean thermal a question and first, the views energy gentlemen XX:XX Eastern morning, both and Thank how tough Kenny it quarter. can and shift projects? on and the

Kenny Young

adopt us or that, for on waste platform obviously determine regard. to it's that it’s access it's in an prices the that situation a short more we Europe, and -- occurring too whether a energy XX:XX more watch production. for and energy early exponentially countries everyday not energy, will very Sure. to meaning -- we're biggest consumption we’re that's lead natural different gas is Obviously, The impact increased to natural to gas or order, growth it in closely moving moving and

to some or And conversations energy, see so impacted customers Ukraine at hit discuss see and that XX:XX would a situation obviously early by point That we what's to seeing a many future seeing now that other to time, figure in say impact. are delicate them a in of real in still obviously the just hate long-run of and environment, to as sources lot it's it's different their if are we're continues our and lot and but this time a about we're sources, alternative moment. of it's I happening Europe in some obviously predict, the started the a to will normal too right and very out is see to Europe, they happening need this shift geopolitical Ukraine. of reflected that to energy waste talking direction including too focus to at hydrogen and in course We request in aspect they with to growth it's in trying biofuels anything little we and point a to of do in any what's energy in create at having look us at and early and and in But but different a in energy long-term, that's those that grow. result ago years

now, leave Alex. that right it probably I'd at So

Alex Rygiel

strong. helpful time end-markets, is targeting of, pretty well still liquidity both where geographically? That your position sort as and XX:XX M&A Directionally as at then efforts, this your

Kenny Young

we're getting well. could leaving in lot XX:XX minority particular, in at both XX:XX continue and It need in without those the that biomass or looking for look technologies and investments to we're as a well energy ownership industries, as investments at of to from hydrogen as where particular these especially other source our aspects expanding a momentum, sector companies elsewhere areas. those lot opportunities very alternative hydrogen production in our that's about be in complements, And Yes, would of or BrightLoop a globally of equally production we're is different potential decarbonization and keep M&A utility as see still we excited globally. around some we propel emerging a around -- coming investing within founders. more. technologies, total ownership they emerging to the and we’re the but help in platform more in original with we'll even active look and acquire vertical that the we grow small world, some around In help in and the and and can those of the US of and B&W Europe some But

those course especially think prudent acquire Of we'll on opportunities mainly. well keep M&A with and and too. were flows, an those were But eye kinds we from just opportunities an we're emerging look lot of looking cash and high what towards of is still synergies those evaluate to there’s I those technologies there make evaluate and as it's sense, strength that at standpoint, the

Alex Rygiel

you Thank very much. XX:XX

Kenny Young

XX:XX Thanks, Alex.

Operator

your [Operator And from our Please Rob Brown go question Lake XX:XX ahead, Instructions] for you, Capital comes Perfect. Street Alex line question. Thank Markets. is next from your open.

Rob Brown

hydrogen [Technical technology good Hi, you and acquisition hydrogen on the Yes there, helps Difficulty] to strategy spend just morning how to Just maybe [Technical could Difficulty]. your FPS back go XX:XX that great.

Kenny Young

XX:XX Yes, the unique hydrogen a is the burn in is characteristics standards visible. hydrogen you or consume from when not one flame around technology combustion often FPS standpoint particular of

and some two-fold as well, services few our about they and around it and has technology so we platform as which play. us but the that a been One, where more an very was predominantly that was things prevalent on XX:XX FPS would and strong And the the market for sensitivity. technology, -- FPS, as extension strong years that so of around was in more B&W that for utilizing significant more of it really that basis. American that ignitors, hydrogen in and a it’s scanner hydrogen hydrogen strong companies the to becomes business one it relates today, it. we been they part as had was liked need has -- to well And one as felt global some on combining technology world scanning many, really could parts incorporate one and focused required felt for relates marketplace you easy are its parts obtaining of that a so the we technology of services the many we and it North advantage on FPS that be

We basis services the an obviously think through we interest think international to technology was which working our from But doing global organization. grow we and that product one up that on and standpoint. and combustion hard be to standard can portfolio bring international the parts and are important we'll an we hydrogen

Rob Brown

[Technical XX:XX had Okay, playing project maybe how Difficulty] it Difficulty] more how then little pipeline of you or [Technical see through [Technical sort And of bit you a hit do just about out number frontend great. or your a [Technical do should if Difficulty] that and weighted on Difficulty]? think the pipeline ratable

Kenny Young

in Europe we anticipate exciting see particular the US, as when XX:XX quickly can, Well, that as as QX, aspects here know, overall, excited at see continues this we’re once US getting they in and projects book execute we'll the of out in both but fully go. timeframe, Southeast QX those to we're this very intend East that we get normal are projects work and some pipeline probably announced Asia, projects heavily are that in the the Europe there to and and so take that you were again now, these continue of projects. year well stage, a that to announced that out working bookings there’s The the But year. as this some projects as QX build, in the anticipate aspects. some that Obviously involved renewable other start But as develop of as active on to push can projects right announcements through standpoint, there in projects again time more the and engineering just we'll negotiation we our nature contract ready these to Middle larger number of you're throughout get we that working accomplished that, we well obviously, now. those on – through booking and XX:XX out in to typical there to opportunities those to on

of would some around it's in working but that start it's think the I on to would that see grow continues to QX, say that our $X.X we're the to just QX when more number pipeline for is increased now, reflective So -- very you bookings, billion it us, there to in we've just in that. on right I which from our typical give timeframes happened $X.X and QX and billion are fact color

Rob Brown

you. thank great, Okay, I’ll XX:XX it turn over.

Kenny Young

XX:XX Thanks, Rob.

Operator

follow-up question Zane go a XX:XX comes Davidson. our Please from as Perfect, thank ahead. And Karimi D.A. from final you.

Zane Karimi

XX:XX Yes. look of is the expecting follow-up. seen? like and the like this basis Thank we you growth in be for does what others disruptions business? And constrained quick, year have could what Real the taking supply sort that by installer pipeline

Kenny Young

-- as we supply phased in portfolio, XX:XX number capabilities of period larger right projects the I projects is necessarily again in the -- capable I working of Solar X, of in solar projects, panels an both and they projects and this that that's -- actively right pipeline bringing that standpoint access continues that over depends delivering chain the larger pipeline in be the restricted projects is be some be overall longer is number varies the and an for of see are right range, but for solar part in now. of a those on say that XX our opportunities from in right to would mean, in were and and term community for the the of we would that, constraint booked. issue things States of of overall now smaller XX, the technologies anticipate increase but megawatt wouldn't But business panels projects acquired range regard, balancing year. and us us those megawatt for is in the do a any the probably solar XXX-plus output. United down equally would now it we engaged on are obviously delivering that those customer continues few we're opportunities and XX:XX capable number to the booking build build -- a a which of smaller the about And opportunities right now but those of seeing we're have nice ones Obviously one now.

Zane Karimi

Thank you time. the XX:XX for

Operator

you would over to any questions. I Thank At Megan question, pass are further to Zane. time for Perfect. back this remarks. for XX:XX And final your like no there

Megan Wilson

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

Operator

XX:XX today's for Thank you call. everybody joining

may disconnect You lines. your now