BW Babcock and Wilcox Enterprises Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 12b-25

NOTIFICATION OF LATE FILING

Commission File Number 001-36876

(Check One)

x	Form 10-K	¨	Form 20-F	¨	Form 11-K	¨	Form 10-Q	¨	Form N-SAR	¨	Form N-CSR

    

For the period ended December 31, 2018

¨	Transition Report on Form 10-K		¨	Transition Report on Form 10-Q
¨	Transition Report on Form 20-F		¨	Transition Report on Form N-SAR
¨	Transition Report on Form 11-K

For the Transition Period Ended: ________________________________

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•	$39.8 million pre-tax gain in 2018 for the sale of PBRRC, a subsidiary that held two operations and maintenance contracts for waste-to-energy facilities in West Palm Beach, Florida. Prior to the divestiture, PBRRC generated annual

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•	$49.2 million debt extinguishment loss from early repayment of the Second Lien Term Loan Facility on May 4, 2018 with $214.9 million of the proceeds from a Rights Offering that was completed on April 30, 2018. Through the Rights Offering, the Company raised $248.4 million of gross proceeds and issued 124.3 million shares of common stock.

•	$99.6 million of non-cash income tax charges in 2018 to increase the valuation allowance against the Company’s remaining net deferred tax assets. In 2017, $62.4 million of deferred tax expense was recorded primarily from the revaluation of its deferred tax balances.

•	$(67.5) million and $8.7 million of actuarially determined mark-to-market (losses) gains on the Company’s pension and other postretirement benefits in 2018 and 2017, respectively.

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$40.0 million and $86.9 million of goodwill and other intangible impairments in 2018 and 2017, respectively. The 2018 impairment charges were to fully impair goodwill related to the SPIG reporting unit and to impair other intangibles related to SPIG geographies that will be exited. The 2017 impairment charges fully impaired the goodwill of the Renewable reporting unit and $36.9 million related to the SPIG reporting unit.

•	$17.8 million and $2.7 million of financial advisory services in 2018 and 2017, respectively, which are required under the U.S. Revolving Credit Facility.

•	$6.5 million of gain on the sale of the Company’s interest in Babcock & Wilcox Beijing Company, Ltd., an equity method investment in China, that was recognized in the first quarter of 2018. The sale was completed in early 2018 with proceeds, net of withholding tax, of $19.8 million.

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$18.4 million and $18.2 million of other-than-temporary impairment of the Company’s interest in Thermax Babcock & Wilcox Energy Solutions Private Limited, an equity method investment in India, in the first quarter of 2018 and the second quarter of 2017, respectively, based on an agreement to sell, preceded by a change in strategy. The Company completed the sale in July 2018, which generated $15.0 million for the sale and settlement of contractual claims.

•	$2.9 million of accelerated depreciation expense in the second half of 2018 for fixed assets affected by the announcement in September 2018 that the Company would be consolidating office space and relocating its global headquarters to Akron, Ohio from Charlotte, North Carolina in mid-2019.

•	$1.5 million to dispose and write off unused IT equipment and cancel in-process IT projects in the second quarter of 2018.

•	$77.8 million of impairment and loss on sale of the Company’s former MEGTEC and Universal businesses in October 2018, which remains subject to adjustment. The loss is included in Loss from discontinued operations, net of tax.

•	completed the sale of the MEGTEC and Universal businesses on October 5, 2018, for $130 million, subject to adjustment, resulting in receipt of $112.0 million in cash, net of $22.5 million in cash sold with the businesses, and $7.7 million that was deposited in escrow pending final settlement of working capital and other customary matters;

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completed the sale of Palm Beach Resource Recovery Corporation, a subsidiary that held two operations and maintenance contracts for waste-to-energy facilities in West Palm Beach, Florida, on September 17, 2018 for $45 million subject to adjustment, resulting in receipt of $38.9 million in cash and $4.9 million, which was deposited in escrow pending final settlement of working capital and other customary matters;

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•	sold equity method investments in Babcock & Wilcox Beijing Company, Ltd., a joint venture in China, and TBWES, a joint venture in India, and settled related contractual claims, resulting in proceeds of $21.1 million in the second quarter of 2018 and $15.0 million in the third quarter of 2018, respectively;

•	sold another non-core business for $5.1 million in the first quarter of 2018;

•	initiated restructuring actions and other additional cost reductions beginning in the second quarter of 2018 that are designed to save approximately $84 million annually;

•	received $30 million in net proceeds from the Last Out Term Loan, from B. Riley FBR, Inc., a related party, in September and October 2018 (the Last Out Term Loan was assigned to Vintage Capital Management LLC, another related party, on November 19, 2018); and

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entered into several waivers and amendments to avoid default under the U.S. Revolving Credit Facility. Under the most recent limited waiver, which was entered into on March 15, 2019 and is expected to expire at 5:00 p.m., New York City time, on March 25, 2019, the Company’s lenders agreed to waive compliance with the following covenants: (1) that the Company maintain a minimum liquidity amount of $40.0 million as a condition to borrowing both at the time of any credit extension request and on the proposed date of the credit extension (as defined in the Amended Credit Agreement), provided that the Company must maintain a minimum liquidity amount of $35.0 million as a condition to borrowing both at the time of any credit extension request and on the proposed date of the credit extension, (2) that the Company maintain the specified consolidated interest coverage and senior leverage coverage ratios contained in the U.S. Revolving Credit Facility, (3) that certain contract completion milestones be met in connection with one renewable energy project, (4) that net losses in connection with certain renewable energy projects not exceed a designated cap, (5) that the Company’s independent registered public accounting firm certify its consolidated financial statements without a going concern qualification and (6) that certain compliance certificates be delivered to the lenders. The Limited Waiver also waives certain events of default related to development projects in the Renewable segment.

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