- Revenues of $132.5 million
- Net income of $34.7 million, a $91.7 million
improvement
- Adjusted EBITDA of $25.6 million with
adjusted EBITDA margin of 19.3%
- Diluted EPS improved to $0.69, compared to
$(1.39)
- Quarterly bookings increased 106% compared to
third quarter 2019, and increased 111% sequentially
- The above results include the recognition of
a $26.0 million loss recovery settlement related to certain
historical EPC loss contracts
Babcock & Wilcox Enterprises, Inc. ("B&W" or the
"Company") (NYSE: BW) reported financial results for the third
quarter ended September 30, 2020.
Management Commentary
“Our third quarter results improved significantly, driven by a
loss recovery from our historical European EPC loss projects, and
reflecting the ongoing execution of our turnaround strategy," said
Kenneth Young, B&W's CEO. "Despite the challenges presented by
COVID-19 and its impact on revenues across our segments, adjusted
EBITDA was roughly break-even for the quarter before the benefit of
the loss recovery, demonstrating the benefits of our cost-savings
initiatives. Our rebranding initiative announced in August, coupled
with our reorganization and international expansion, is
accelerating our growth and drove our bookings of $177 million in
the quarter, an improvement of 106% compared to the third quarter
of 2019. Our pipeline of over $5 billion of identified project
opportunities that we expect to bid through 2023 continues to
strengthen, and the expansion of our international presence is
progressing as planned."
“While COVID-19 impacted all of our segments in the third
quarter, a number of projects that were previously delayed or
deferred due to the pandemic are restarting," Young added. "We
continue meeting customer and market needs by providing technology
solutions to help achieve a clean, sustainable energy and
industrial infrastructure. This includes our broad suite of
advanced renewable, environmental and thermal technologies, such as
high-performance waste-to-energy systems, innovative submerged
grind conveyor systems, and flexible natural gas-fired package
boilers, as well as strategic partnerships to accelerate advanced
energy storage solutions."
Louis Salamone, B&W's CFO, commented: "As an essential
business, we continue to focus on supporting our customers and
driving our growth strategy while continuing to manage our costs
and cash flow through the global pandemic. While we can't fully
predict the evolving impacts of COVID-19, based on the current
strength of our bookings, pipeline and information from our
customers, as well as current assumptions regarding the impacts of
COVID-19 on our business, we continue to target between $70 million
and $80 million of adjusted EBITDA in 2021."
New Segment Financial Reporting
Beginning with the third quarter of 2020, B&W is reporting
its financial results under three new reportable segments aligned
with the Company's strategic, market-focused organizational and
rebranding initiative announced this past August to accelerate
growth and provide stakeholders with improved visibility into its
renewable and environmental growth platforms. Segment results for
prior periods have been restated for comparative purposes.
- B&W Renewable segment:
Cost-effective technologies for efficient and environmentally
sustainable power and heat generation, including waste-to-energy,
biomass energy and black liquor systems for the pulp and paper
industry. The segment's leading technologies support a circular
economy, diverting waste from landfills to use for power generation
and replacing fossil fuels, while recovering metals and reducing
emissions.
- B&W Environmental segment: A
full suite of best-in-class emissions control and environmental
technology solutions for utility and industrial steam generation
applications around the world. The segment's broad experience
includes systems for cooling, ash handling, particulate control,
nitrogen oxides and sulfur dioxides removal, chemical looping for
carbon control, and mercury control.
- B&W Thermal segment: Steam
generation equipment, aftermarket parts, construction, maintenance
and field services for plants in the power generation, oil and gas,
and industrial sectors. The segment has an extensive global base of
installed equipment for utilities and general industrial
applications including refining, petrochemical, food processing,
metals and others.
Results of Operations
Consolidated revenues in the third quarter of 2020 were $132.5
million compared to $198.6 million in the third quarter of 2019.
The Company's focus on core technologies and profitability,
combined with the adverse impacts of COVID-19, were the primary
drivers of the revenue decline.
GAAP operating income in the third quarter of 2020 was $14.1
million, including the impact of a non-recurring loss recovery of
$26.0 million recognized in the B&W Renewable segment under an
October 10, 2020 settlement agreement with an insurer in connection
with five of the six historical European EPC loss contracts,
compared to an operating loss of $3.2 million in the third quarter
of 2019. The increase was partially offset by lower volume in each
of the segments and customer delays as a result of COVID-19, as
well as restructuring and settlement costs and advisory fees of
$6.2 million. GAAP net income was $34.7 million, a $91.7 million
improvement compared to third quarter 2019, primarily driven by the
non-recurring loss recovery and favorable foreign exchange effects,
partially offset by lower interest expense. Adjusted EBITDA
improved to $25.6 million compared to $10.1 million in the third
quarter of 2019.
All amounts referred to in this release are on a continuing
operations basis, unless otherwise noted. Reconciliations of
operating income, the most directly comparable GAAP measure, to
adjusted EBITDA, as well as to adjusted gross profit for the
Company's segments, are provided in the exhibits to this
release.
Babcock & Wilcox Renewable segment revenues were
$39.1 million in the third quarter of 2020 compared to $51.3
million in the third quarter of 2019 due to new anticipated
revenues being deferred due to COVID-19, as well as the advanced
completion of activities on the historical EPC loss projects
compared to the third quarter of 2019. Adjusted EBITDA in the third
quarter of 2020 was $23.6 million compared to $(0.6) million in
last year's quarter, primarily due to the aforementioned
non-recurring loss recovery of $26.0 million, partially offset by
lower volume. The segment's adjusted gross profit was $32.1 million
in the third quarter of 2020 compared to $6.6 million reported in
the third quarter of 2019, primarily driven by the loss recovery,
partially offset by lower volume.
Babcock & Wilcox Environmental segment revenues were
$25.3 million in the third quarter of 2020 compared to $45.0
million in the third quarter of 2019. The decrease was primarily
due to the completion of large construction projects in the prior
year and the postponement of new projects by customers as a result
of COVID-19. Adjusted EBITDA was $1.1 million compared to $1.8
million in the same period last year, driven primarily by the
impact of COVID-19 and lower volume. Adjusted gross profit declined
to $5.9 million in the third quarter of 2020, compared to $9.0
million in the prior-year period, primarily due to the decrease in
revenue partially offset by favorable product mix. At September 30,
2020, the segment had two remaining significant loss contracts,
previously reported as part of B&W SPIG's U.S. entity. The
first was approximately 100% complete at the end of the third
quarter of 2020 with only performance testing remaining, which is
expected to be completed in the fourth quarter of 2020. The second
was approximately 97% complete at the end of the third quarter of
2020 and is expected to be completed in the fourth quarter of
2020.
Babcock & Wilcox Thermal segment revenues were $70.0
million for the third quarter of 2020, compared to $108.2 million
in the prior-year period. The decrease is attributable to the
adverse impacts of COVID-19 resulting in customer delays and lower
parts, construction, package boilers and international service
orders. Adjusted EBITDA in the quarter declined to $7.3 million
compared to $12.9 million in the third quarter last year, primarily
due to the decrease in revenue volume. This was partially offset by
the results of costs savings and restructuring initiatives.
Adjusted EBITDA margin was 10.4% in the quarter as compared to
11.9% in the same period last year. Adjusted gross profit in the
third quarter of 2020 was $20.6 million compared to $25.6 million
in the prior-year period, consistent with the decrease in Adjusted
EBITDA. Adjusted gross profit margin was 29.5% compared to 23.7% in
the same period last year, primarily due to favorable product mix
and the benefits of costs savings and restructuring
initiatives.
Financing, Liquidity and Balance Sheet
At September 30, 2020, the Company had cash and cash equivalents
of $38.9 million and borrowing availability of $23.1 million.
On October 23, 2020, the Company received $26.0 million from an
insurer through a previously disclosed loss recovery settlement. As
required by the Company’s U.S. Revolving Credit Facility, 50% of
the net proceeds, or approximately $8 million, of the settlement
received by the Company was applied as a permanent reduction of the
U.S. Revolving Credit Facility.
In addition, as previously disclosed, on October 30, 2020, the
Company entered into an amendment of its Credit Agreement to
provide, among other matters, that with respect to any prepayment
event, the commitment reduction amount shall be only an amount
equal to 50% of the net cash proceeds of such prepayment event, and
also established, as required by the terms of the Credit Agreement,
new financial covenants of interest coverage ratios and senior
leverage ratios.
The Company is continuing to pursue cost recoveries from
responsible subcontractors for the B&W Renewable segment's
European EPC loss contracts. The Company also continues to evaluate
additional opportunities for cost savings and potential
dispositions as appropriate.
Earnings Call Information
B&W plans to host a conference call and webcast on Thursday,
November 12, 2020 at 8:30 a.m. ET. to discuss the Company’s third
quarter 2020 results. The listen-only audio of the conference call
will be broadcast live via the Internet on B&W’s Investor
Relations site. The dial-in number for participants in the U.S. is
(833) 227-5843; the dial-in number for participants outside the
U.S. is (647) 689-4070. The conference ID for all participants is
4193759. A replay of this conference call will remain accessible in
the investor relations section of the Company's website for a
limited time.
COVID-19 Impact
The global COVID-19 pandemic has disrupted business operations,
trade, commerce, financial and credit markets, and daily life
throughout the world. The Company's business has been, and
continues to be, adversely impacted by the measures taken and
restrictions imposed in the locations in which it operates by local
governments and others to control the spread of this virus. These
measures and restrictions have varied widely and have been subject
to significant changes from time to time depending on the changes
in the severity of the virus in these locations. These
restrictions, including travel restrictions and curtailment of
other activity, negatively impact the Company's ability to conduct
business. Although some of these restrictions have been lifted or
scaled back, a recent resurgence of COVID-19 has resulted in the
reimposition of certain restrictions and may lead to other
restrictions being implemented in response to efforts to reduce the
spread of the virus. These varying and changing events have caused
many of the projects the Company anticipated to begin in 2020 to be
delayed to later in 2020 and others to be delayed further into 2021
and 2022. Many customers and projects require B&W's employees
to travel to customer and project worksites. Certain customers and
significant projects are located in areas where travel restrictions
have been imposed, certain customers have closed or reduced on-site
activities, and timelines for completion of certain projects have,
as noted above, been extended into next year and beyond.
Additionally, out of concern for the Company's employees, even
where restrictions permit employees to return to Company offices
and worksites, the Company has advised those who are uncomfortable
returning to worksites due to the pandemic that they are not
required to do so for an indefinite period of time. The resulting
uncertainty concerning, among other things, the spread and economic
impact of the virus has also caused significant volatility and, at
times, illiquidity in global equity and credit markets. As part of
the Company’s recent response to the impact of the COVID-19
pandemic on its business, the Company has taken a number of cash
conservation and cost reduction measures. At the time of this
release, it is impossible to predict the overall impact the
pandemic will have on the Company's business, liquidity, capital
resources or financial results. More detail can be found in the
Company's Form 10-Q for the third quarter of 2020.
Non-GAAP Financial Measures
The Company uses non-GAAP financial measures internally to
evaluate its performance and in making financial and operational
decisions. When viewed in conjunction with GAAP results and the
accompanying reconciliation, the Company believes that its
presentation of these measures provides investors with greater
transparency and a greater understanding of factors affecting our
financial condition and results of operations than GAAP measures
alone.
This release presents adjusted gross profit for each business
segment and adjusted EBITDA, which are non-GAAP financial measures.
Adjusted EBITDA on a consolidated basis is defined as the sum of
the adjusted EBITDA for each of the segments, further adjusted for
corporate allocations and research and development costs. At a
segment level, the adjusted EBITDA presented is consistent with the
way the Company's chief operating decision maker reviews the
results of operations and makes strategic decisions about the
business and is calculated as earnings before interest, tax,
depreciation and amortization adjusted for items such as gains or
losses on asset sales, mark to market ("MTM") pension adjustments,
restructuring and spin costs, impairments, losses on debt
extinguishment, costs related to financial consulting required
under the U.S. Revolving Credit Facility and other costs that may
not be directly controllable by segment management and are not
allocated to the segment. The Company presented consolidated
Adjusted EBITDA because it believes it is useful to investors to
help facilitate comparisons of the ongoing, operating performance
before corporate overhead and other expenses not attributable to
the operating performance of the Company's revenue generating
segments. This release also presents certain targets for our
adjusted EBITDA in the future; these targets are not intended as
guidance regarding how the Company believes the business will
perform. The Company is unable to reconcile these targets to their
GAAP counterparts without unreasonable effort and expense due to
the aspirational nature of these targets.
This release also presents adjusted gross profit by segment. The
Company believes that adjusted gross profit by segment is useful to
investors to help facilitate comparisons of the ongoing, operating
performance of the segments by excluding expenses related to, among
other things, activities related to the spin-off, activities
related to various restructuring activities the Company has
undertaken, corporate overhead (such as SG&A expenses and
research and development costs) and certain non-cash expenses such
as intangible amortization and goodwill impairments that are not
allocated by segment.
Forward-Looking Statements
B&W Enterprises cautions that this release contains
forward-looking statements, including, without limitation,
statements relating to the application of the proceeds of the term
loans under the Agreement, and management expectations regarding
future growth and our ability to achieve sustained value for our
shareholders. These forward-looking statements are based on
management’s current expectations and involve a number of risks and
uncertainties, including, among other things, the impact of
COVID-19 on us and the capital markets and global economic climate
generally; our recognition of any asset impairments as a result of
any decline in the value of our assets or our efforts to dispose of
any assets in the future; our ability to obtain and maintain
sufficient financing to provide liquidity to meet our business
objectives, surety bonds, letters of credit and similar financing;
our ability to comply with the requirements of, and to service the
indebtedness under, our credit agreement as amended and restated
(the "A&R" Credit Agreement"); our ability to obtain waivers of
required pension contributions; the highly competitive nature of
our businesses and our ability to win work, including identified
project opportunities in our pipeline; general economic and
business conditions, including changes in interest rates and
currency exchange rates; cancellations of and adjustments to
backlog and the resulting impact from using backlog as an indicator
of future earnings; our ability to perform contracts on time and on
budget, in accordance with the schedules and terms established by
the applicable contracts with customers; failure by third-party
subcontractors, partners or suppliers to perform their obligations
on time and as specified; our ability to successfully resolve
claims by vendors for goods and services provided and claims by
customers for items under warranty; our ability to realize
anticipated savings and operational benefits from our restructuring
plans, and other cost-savings initiatives; our ability to
successfully address productivity and schedule issues in our
B&W Renewable and B&W Environmental segments, including the
ability to complete our B&W Renewable's European EPC projects
and B&W Environmental's U.S. loss projects within the expected
time frame and the estimated costs; our ability to successfully
partner with third parties to win and execute contracts within our
B&W Environmental and B&W Renewable segments; changes in
our effective tax rate and tax positions, including any limitation
on our ability to use our net operating loss carryforwards and
other tax assets; our ability to maintain operational support for
our information systems against service outages and data
corruption, as well as protection against cyber-based network
security breaches and theft of data; our ability to protect our
intellectual property and renew licenses to use intellectual
property of third parties; our use of the percentage-of-completion
method of accounting to recognize revenue over time; our ability to
successfully manage research and development projects and costs,
including our efforts to successfully develop and commercialize new
technologies and products; the operating risks normally incident to
our lines of business, including professional liability, product
liability, warranty and other claims against us; changes in, or our
failure or inability to comply with, laws and government
regulations; actual or anticipated changes in governmental
regulation, including trade and tariff policies; difficulties we
may encounter in obtaining regulatory or other necessary permits or
approvals; changes in, and liabilities relating to, existing or
future environmental regulatory matters; changes in actuarial
assumptions and market fluctuations that affect our net pension
liabilities and income; potential violations of the Foreign Corrupt
Practices Act; our ability to successfully compete with current and
future competitors; the loss of key personnel and the continued
availability of qualified personnel; our ability to negotiate and
maintain good relationships with labor unions; changes in pension
and medical expenses associated with our retirement benefit
programs; social, political, competitive and economic situations in
foreign countries where we do business or seek new business; the
possibilities of war, other armed conflicts or terrorist attacks;
the willingness of customers and suppliers to continue to do
business with us on reasonable terms and conditions; our ability to
successfully consummate strategic alternatives for non-core assets,
if we determine to pursue them; and the other factors specified and
set forth under "Risk Factors" in our periodic reports filed with
the Securities and Exchange Commission, including our most recent
annual report on Form 10-K and our quarterly report on Form 10-Q
for the quarter ended September 30, 2020. The Company cautions not
to place undue reliance on these forward-looking statements, which
speak only as of the date of this report, and the Company
undertakes no obligation to update or revise any forward-looking
statement, except to the extent required by applicable law.
About B&W Enterprises
Headquartered in Akron, Ohio, Babcock & Wilcox Enterprises
is a global leader in energy and environmental technologies and
services for the power and industrial markets. Follow B&W on
LinkedIn and learn more at www.babcock.com.
Exhibit 1
Babcock & Wilcox Enterprises,
Inc.
Condensed Consolidated Statements of
Operations(1)
(In millions, except per share
amounts)
Three months ended September
30,
Nine months ended September
30,
2020
2019
2020
2019
Revenues
$
132.5
$
198.6
$
416.5
$
678.7
Costs and expenses:
Cost of operations
75.2
158.3
292.7
563.2
Selling, general and administrative
expenses
35.7
36.0
107.9
120.4
Advisory fees and settlement costs
3.8
4.5
10.1
22.9
Restructuring activities
2.4
2.6
6.7
9.6
Research and development costs
1.4
0.8
3.9
2.3
Gain on asset disposals, net
—
(0.3
)
(0.9
)
(0.2
)
Total costs and expenses
118.4
201.8
420.4
718.1
Operating income (loss)
14.1
(3.2
)
(3.9
)
(39.4
)
Other (expense) income:
Interest expense
(12.2
)
(29.5
)
(49.8
)
(67.4
)
Interest income
0.2
0.1
0.4
0.9
Loss on debt extinguishment
—
—
(6.2
)
(4.0
)
Loss on sale of business
—
—
(0.1
)
(3.6
)
Benefit plans, net
7.3
3.6
22.3
9.1
Foreign exchange
25.0
(26.7
)
22.7
(27.4
)
Other – net
(0.3
)
(0.3
)
(3.1
)
0.2
Total other income (expense)
20.0
(52.8
)
(13.7
)
(92.2
)
Income (loss) before income tax
(benefit) expense
34.1
(55.9
)
(17.6
)
(131.6
)
Income tax (benefit) expense
(0.5
)
1.0
(0.5
)
3.6
Income (loss) from continuing
operations
34.6
(57.0
)
(17.1
)
(135.2
)
Income from discontinued operations, net
of tax
—
—
1.8
0.7
Net income (loss)
34.6
(57.0
)
(15.3
)
(134.5
)
Net loss attributable to non-controlling
interest
0.2
—
0.4
0.1
Net income (loss) attributable to
stockholders
$
34.7
$
(57.0
)
$
(14.9
)
$
(134.4
)
Basic earnings (loss) per share -
continuing operations
$
0.70
$
(1.39
)
$
(0.35
)
$
(5.21
)
Basic earnings per share - discontinued
operations
—
—
0.04
0.03
Basic earnings (loss) per share
$
0.70
$
(1.39
)
$
(0.31
)
$
(5.18
)
Diluted earnings (loss) per share -
continuing operations
$
0.69
$
(1.39
)
$
(0.35
)
$
(5.21
)
Diluted earnings per share - discontinued
operations
—
—
0.04
0.03
Diluted earnings (loss) per
share
$
0.69
$
(1.39
)
$
(0.31
)
$
(5.18
)
Shares used in the computation of earnings
per share:
Basic
49.5
40.9
47.6
26.0
Diluted
50.1
40.9
47.6
26.0
(1) Figures may not be clerically accurate due to rounding.
Exhibit 2
Babcock & Wilcox Enterprises,
Inc.
Condensed Consolidated Balance
Sheets(1)
(In millions, except per share amount)
September 30, 2020
December 31, 2019
Cash and cash equivalents
$
38.9
$
43.8
Restricted cash and cash equivalents
9.4
13.2
Accounts receivable – trade, net
126.8
142.2
Accounts receivable – other
52.1
23.3
Contracts in progress
73.9
91.6
Inventories
67.0
63.1
Other current assets
20.6
27.0
Current assets held for sale
4.8
8.1
Total current assets
393.6
412.2
Net property, plant and equipment, and
finance lease
88.6
97.1
Goodwill
47.1
47.2
Intangible assets
23.7
25.3
Right-of-use assets
10.3
12.5
Other assets
34.9
25.0
Non-current assets held for sale
7.5
7.3
Total assets
$
605.8
$
626.5
Revolving credit facilities
—
179.0
Last out term loans
—
104.0
Financing lease liabilities
0.9
—
Accounts payable
80.0
109.9
Accrued employee benefits
17.4
18.3
Advance billings on contracts
54.0
75.3
Accrued warranty expense
26.8
33.4
Operating lease liabilities
4.0
4.3
Other accrued liabilities
86.8
68.8
Current liabilities held for sale
6.9
9.5
Total current liabilities
276.7
602.5
Revolving credit facilities
181.9
—
Last out term loans
173.3
—
Pension and other accumulated
postretirement benefit liabilities
236.4
259.3
Non-current finance lease liabilities
29.9
30.5
Non-current operating lease
liabilities
6.4
8.4
Other non-current liabilities
21.9
20.9
Non-current liabilities held for sale
—
—
Total liabilities
926.5
921.5
Commitments and contingencies
Stockholders' deficit:
Common stock, par value $0.01 per share,
authorized shares of 500,000; issued and outstanding shares of
52,006 and 46,374 at September 30, 2020 and December 31, 2019,
respectively
4.8
4.7
Capital in excess of par value
1,157.8
1,142.6
Treasury stock at cost, 716 and 616 shares
at September 30, 2020 and December 31, 2019, respectively
(106.0
)
(105.7
)
Accumulated deficit
(1,354.8
)
(1,339.9
)
Accumulated other comprehensive income
(loss)
(23.4
)
1.9
Stockholders' deficit attributable to
shareholders
(321.7
)
(296.4
)
Non-controlling interest
0.9
1.4
Total stockholders' deficit
(320.8
)
(294.9
)
Total liabilities and stockholders'
deficit
$
605.8
$
626.5
(1) Figures may not be clerically accurate due to rounding.
Exhibit 3
Babcock & Wilcox Enterprises,
Inc.
Condensed Consolidated Statements of
Cash Flows(1)
(In millions)
Nine months ended September
30,
2020
2019
Cash flows from operating activities:
Net loss
$
(15.3
)
$
(134.5
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization of
long-lived assets
12.3
19.1
Amortization of deferred financing costs,
debt discount and payment-in-kind interest
16.0
42.2
Amortization of guaranty fee
0.7
—
Non-cash operating lease expense
3.6
4.1
Loss on sale of business
0.1
3.6
Loss on debt extinguishment
6.2
4.0
(Gains) losses on asset disposals and
impairments
(0.9
)
(0.2
)
Benefit from deferred income taxes,
including valuation allowances
(0.8
)
(0.7
)
Mark to market losses (gains) and prior
service cost amortization for pension plans
(0.7
)
(0.1
)
Stock-based compensation, net of
associated income taxes
3.3
1.8
Changes in assets and liabilities:
Accounts receivable
28.6
41.3
Accrued insurance receivable
(26.0
)
—
Contracts in progress
21.6
23.1
Advance billings on contracts
(23.2
)
(68.1
)
Inventories
(4.9
)
(6.6
)
Income taxes
(4.8
)
1.6
Accounts payable
(33.5
)
(71.3
)
Accrued and other current liabilities
9.9
(21.1
)
Accrued non-cash interest expense
11.9
—
Accrued contract loss
(5.3
)
(49.8
)
Pension liabilities, accrued
postretirement benefits and employee benefits
(25.9
)
(5.8
)
Other, net
(40.3
)
16.2
Net cash used in operating
activities
(67.3
)
(201.1
)
Cash flows from investing activities:
Purchase of property, plant and
equipment
(2.3
)
(1.6
)
Proceeds from sale of business
8.0
7.4
Purchases of available-for-sale
securities
(19.1
)
(3.5
)
Sales and maturities of available-for-sale
securities
14.6
5.1
Other, net
0.8
(0.4
)
Net cash from investing
activities
2.0
7.1
Cash flows from financing activities:
Borrowings under our U.S. revolving credit
facility
126.3
251.9
Repayments of our U.S. revolving credit
facility
(123.4
)
(205.1
)
Borrowings under Last Out Term Loans
60.0
151.4
Repayments under Last Out Term Loans
—
(41.8
)
Repayments under our foreign revolving
credit facilities
—
(0.6
)
Shares of our common stock returned to
treasury stock
(0.3
)
—
Proceeds from rights offering
—
40.4
Costs related to rights offering
—
(0.7
)
Debt issuance costs
(10.3
)
(15.5
)
Issuance of common stock
—
1.4
Other, net
0.1
(0.3
)
Net cash from financing
activities
52.4
181.0
Effects of exchange rate changes on
cash
4.4
(4.0
)
Net decrease in cash, cash equivalents
and restricted cash
(8.6
)
(16.9
)
Cash, cash equivalents and restricted
cash, beginning of period
56.9
60.3
Cash, cash equivalents and restricted
cash, end of period
$
48.4
$
43.3
(1) Figures may not be clerically accurate due to rounding.
Exhibit 4
Babcock & Wilcox Enterprises,
Inc.
Segment Information(1)
(In millions)
SEGMENT RESULTS
Three months ended September
30,
Nine months ended September
30,
2020
2019
2020
2019
REVENUES:
Babcock & Wilcox Renewable
$
39.1
$
51.3
$
118.6
$
158.9
Babcock & Wilcox Environmental
25.3
45.0
76.4
234.5
Babcock & Wilcox Thermal
70.0
108.2
223.9
315.6
Eliminations
(1.8
)
(5.8
)
(2.4
)
(30.3
)
$
132.5
$
198.6
$
416.5
$
678.7
ADJUSTED EBITDA:
Babcock & Wilcox Renewable
$
23.6
$
(0.6
)
$
22.0
$
(4.2
)
Babcock & Wilcox Environmental
1.1
1.8
(0.1
)
2.5
Babcock & Wilcox Thermal
7.3
12.9
22.7
35.0
Corporate
(4.9
)
(3.1
)
(12.9
)
(17.0
)
Research and development costs
(1.4
)
(0.8
)
(3.9
)
(2.3
)
$
25.6
$
10.1
$
27.8
$
14.0
AMORTIZATION EXPENSE:
Babcock & Wilcox Renewable (2)
$
0.1
$
0.1
$
0.5
$
0.5
Babcock & Wilcox Environmental
0.8
0.8
2.3
2.5
Babcock & Wilcox Thermal (2)
0.4
0.1
1.3
0.3
$
1.3
$
1.0
$
4.1
$
3.3
DEPRECIATION EXPENSE:
Babcock & Wilcox Renewable
$
0.7
$
1.0
$
2.3
$
3.7
Babcock & Wilcox Environmental
0.4
0.4
1.4
1.6
Babcock & Wilcox Thermal
1.5
2.9
4.5
10.5
Corporate
—
—
—
—
$
2.7
$
4.3
$
8.2
$
15.8
As of September 30,
BACKLOG:
2020
2019
Babcock & Wilcox Renewable (3)
$
196
$
207
Babcock & Wilcox Environmental
107
112
Babcock & Wilcox Thermal
208
161
Other/Eliminations
(2
)
(7
)
$
509
$
473
(1)
Figures may not be clerically accurate due
to rounding.
(2)
Amortization expense in the Babcock and
Wilcox Renewable and Babcock and Wilcox Thermal segments include
$0.1 million and $0.4 million in finance lease amortization for the
three months ended September 30, 2020, respectively. Amortization
expense in the Babcock and Wilcox Renewable and Babcock and Wilcox
Thermal segments include $0.3 million and $1.2 million in finance
lease amortization for the nine months ended September 30, 2020,
respectively.
(3)
Babcock & Wilcox Renewable backlog at
September 30, 2020, includes $159.0 million related to long-term
operation and maintenance contracts for renewable energy plants,
with remaining durations extending until 2034. Generally, such
contracts have a duration of 10-20 years and include options to
extend.
Exhibit 5
Babcock & Wilcox Enterprises,
Inc.
Reconciliation of Adjusted
EBITDA(2)
(In millions)
Three months ended September
30,
Nine months ended September
30,
2020
2019
2020
2019
Adjusted EBITDA
B&W Renewable segment
$
23.6
$
(0.6
)
$
22.0
$
(4.2
)
B&W Environmental segment
1.1
1.8
(0.1
)
2.5
B&W Thermal segment
7.3
12.9
22.7
35.0
Corporate
(4.9
)
(3.1
)
(12.9
)
(17.0
)
Research and development costs
(1.4
)
(0.8
)
(3.9
)
(2.3
)
25.6
10.1
27.8
14.0
Restructuring activities
(2.4
)
(2.6
)
(6.7
)
(9.6
)
Financial advisory services
(1.7
)
(1.2
)
(3.2
)
(8.4
)
Settlement cost to exit B&W Renewable
contract (1)
—
—
—
(6.6
)
Advisory fees for settlement costs and
liquidity planning
(1.4
)
(2.8
)
(5.2
)
(7.4
)
Litigation legal costs
(0.8
)
(0.5
)
(1.8
)
(0.5
)
Stock compensation
(1.2
)
(1.3
)
(3.1
)
(2.1
)
Loss from business held for sale
(0.1
)
—
(0.4
)
—
Depreciation & amortization
(4.1
)
(5.3
)
(12.3
)
(19.1
)
Gain on asset disposals, net
—
0.3
0.9
0.2
Operating income (loss)
14.1
(3.2
)
(3.9
)
(39.4
)
Interest expense, net
(12.0
)
(29.4
)
(49.3
)
(66.6
)
Loss on debt extinguishment
—
—
(6.2
)
(4.0
)
Loss on sale of business
—
—
(0.1
)
(3.6
)
Net pension benefit before MTM
7.3
3.6
22.3
10.4
MTM loss from benefit plans
—
—
—
(1.3
)
Foreign exchange
25.0
(26.7
)
22.7
(27.4
)
Other – net
(0.3
)
(0.3
)
(3.1
)
0.2
Total other income (expense)
20.0
(52.8
)
(13.7
)
(92.2
)
Income (loss) before income tax
(benefit) expense
34.1
(55.9
)
(17.6
)
(131.6
)
Income tax (benefit) expense
(0.5
)
1.0
(0.5
)
3.6
Income (loss) from continuing
operations
34.6
(57.0
)
(17.1
)
(135.2
)
Income from discontinued operations, net
of tax
—
—
1.8
0.7
Net income (loss)
34.6
(57.0
)
(15.3
)
(134.5
)
Net loss attributable to non-controlling
interest
0.2
—
0.4
0.1
Net income (loss) attributable to
stockholders
$
34.7
$
(57.0
)
$
(14.9
)
$
(134.4
)
(1)
In March 2019, we entered into a
settlement in connection with an additional B&W Renewable
waste-to-energy EPC contract, for which notice to proceed was not
given and the contract was not started. The settlement eliminated
our obligations to act, and our risk related to acting, as the
prime EPC should the project have moved forward.
(2)
Figures may not be clerically accurate due
to rounding.
Exhibit 6
Babcock & Wilcox Enterprises,
Inc.
Reconciliation of Adjusted Gross Profit
(Loss)(2)
(In millions)
Three months ended September
30,
Nine months ended September
30,
2020
2019
2020
2019
Adjusted gross profit (loss)
(1)
Operating income (loss)
$
14.1
$
(3.2
)
$
(3.9
)
$
(39.4
)
Selling, general and administrative
("SG&A") expenses
35.6
35.8
107.6
120.0
Advisory fees and settlement costs
3.8
4.5
10.1
22.9
Amortization expense
1.4
1.0
4.1
3.3
Restructuring activities
2.4
2.6
6.7
9.6
Research and development costs
1.4
0.8
3.9
2.3
Losses (gains) on asset disposals, net
—
(0.3
)
(0.9
)
(0.2
)
Adjusted gross profit (loss)
58.6
41.2
127.7
118.4
Adjusted gross profit by segment is as follows:
Three months ended September
30,
Nine months ended September
30,
2020
2019
2020
2019
Adjusted gross profit (loss)
(1)
B&W Renewable segment
32.1
6.6
48.4
19.3
B&W Environmental segment
5.9
9.0
15.5
33.6
B&W Thermal segment
20.6
25.6
63.8
65.5
Adjusted gross profit (loss)
58.6
41.2
127.7
118.4
(1)
Amortization is not allocated to the
segments' adjusted gross profit, but depreciation is allocated to
the segments' adjusted gross profit.
(2)
Figures may not be clerically accurate due
to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201112005408/en/
Investors: Megan Wilson Vice President, Corporate
Development & Investor Relations Babcock & Wilcox
Enterprises 704.625.4944 | investors@babcock.com
Media: Ryan Cornell Public Relations Babcock & Wilcox
Enterprises 330.860.1345 | rscornell@babcock.com
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