- Company generated consolidated revenues of $148.6 million in
the first quarter of 2020
- GAAP consolidated operating income improved by $21.7 million
over the prior-year quarter to an operating loss of $10.3
million
- Consolidated adjusted EBITDA improved by $5.1 million over the
prior-year quarter
- Babcock & Wilcox segment adjusted EBITDA improved by 17.2%
over the prior-year quarter to $10.7 million
- Company successfully completed its financing process,
providing a two-year credit extension and additional liquidity
Babcock & Wilcox Enterprises, Inc. ("B&W Enterprises")
(NYSE: BW) announced today first quarter 2020 GAAP loss from
continuing operations of $33.5 million, an improvement of $16.3
million compared to a loss of $49.9 million in first quarter 2019.
Adjusted EBITDA was a positive $0.7 million, an improvement of $5.1
million compared to negative adjusted EBITDA of $4.4 million in the
prior year period, resulting in the Company's fourth consecutive
quarter of profitability on an adjusted EBITDA basis.
On May 14, 2020 the Company amended its Credit Agreement, which
amendment replaces and supersedes the previously disclosed
agreement to refinance the Company's senior debt by May 15, 2020,
among other things. Under the terms of the amended Credit
Agreement, and as agreed between the Company, its senior lender
syndicate, and B. Riley Financial, Inc., the Company's current
revolving credit facility and availability for letters of credit
will be extended for two years with a maturity date of June 30,
2022.
"Our financing agreement and two-year credit extension, in
financial markets distressed by the effects of COVID-19, is a major
success. This agreement gives us the financial stability to focus
on converting our turnaround to growth, and we appreciate the
collaboration of our lenders and other stakeholders to reach this
milestone," said Kenneth Young, B&W Enterprises Chief Executive
Officer. "Before the worldwide economic downturn caused by the
COVID-19 pandemic, our business was progressing as planned in the
first quarter of 2020. Our $21.7 million improvement to a GAAP
operating loss of $10.3 million and $5.1 million improvement to
consolidated adjusted EBITDA of $0.7 million in the quarter
directly reflect our ongoing efforts to improve profitability and
our team's commitment to serving our customers and delivering
strong performance amid this global crisis."
"As we've discussed before, many of our projects are delayed or
deferred due to the global COVID-19 pandemic and the measures taken
by local and national governments to control its spread, and we are
not able to fully predict the extent of this impact at this time,"
Young continued. "We have implemented work-at-home mandates in many
locations, and where necessary have furloughed some employees.
However, we are an essential business, and are committed to
supporting our customers in critical infrastructure industries such
as power generation, pulp and paper and hospital facilities.
Despite all of these challenges, our bookings in the first quarter
roughly matched those of the prior-year period, and we are seeing
our pipeline increase as many new projects are emerging, including
renewable or green energy projects."
"Despite an operating loss on a GAAP basis, we closed the first
quarter of 2020 with positive adjusted EBITDA despite the combined
effects of COVID-19 and our industry's historically weak first
quarter spending patterns. This is due to the determination and
experience of the management and employee team that engineered the
turnaround of our business, and their efforts to plan and implement
changes throughout our operations in response to the unprecedented
impacts of COVID-19," said Louis Salamone, B&W Enterprises
Chief Financial Officer. "With our financing agreement in place, we
continue to focus on managing our costs and cash flow through this
crisis, while continually evaluating its effects on our business,
to support our customers in the long-term. As we evaluate the
impact of COVID-19, while it is impossible to fully predict, we
expect deferrals and delays of certain projects to affect our
performance in the second quarter of 2020, and anticipate the
majority of deferred projects to re-mobilize in late 2020 and
through 2021."
Results of Operations
The Company's focus on core technologies and profitability was
the primary driver, as expected, of a decline in revenue in the
first quarter of 2020 compared to the first quarter of 2019.
Consolidated revenues in first quarter 2020 were $148.6 million,
down 36% compared to first quarter 2019. Lower volume in the
B&W segment related to the periodic nature of large
construction new build projects, lower volume due to the ongoing
wind-down of the SPIG U.S. operation, the impact of worksite
COVID-19 restrictions on services volume and selective bidding to
improve profitability in the SPIG segment, and the 2019 sale of
Loibl, a materials handling business in the Vølund & Other
Renewable segment, also drove the decline in revenue. The GAAP
operating loss in first quarter 2020 was $10.3 million, inclusive
of restructuring and settlement costs and advisory fees of $6.2
million, compared to an operating loss of $32.0 million in first
quarter 2019. The improvement in operating income was primarily due
to improved gross margins in the Babcock & Wilcox segment due
to higher parts margins in addition to the impacts of cost savings
and restructuring initiatives, as well as the absence of losses on
the six European EPC loss contracts and lower levels of direct
overhead support, warranty expense and SG&A in the Vølund &
Other Renewable segment, partly offset by the decline in overall
volume and changes in product mix in the SPIG segment described
above. Adjusted EBITDA improved to a positive $0.7 million compared
to negative $4.4 million in first quarter 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 segment revenues were $122.0 million
in the first quarter of 2020 compared to $188.6 million in the
prior-year period, primarily attributable to lower volume related
to the periodic nature of large construction new build projects.
Adjusted EBITDA in first quarter 2020 was $10.7 million, an
increase of 17.2% compared to $9.1 million in last year's quarter,
primarily due to higher parts margins and the results of costs
savings and restructuring initiatives partly offset by the decrease
in revenue volume; adjusted EBITDA margin was 8.7% in the quarter
as compared to 4.8% in the same period last year. Adjusted gross
profit in the Babcock & Wilcox segment in first quarter 2020
was $32.9 million, a 5.7% increase compared to $31.1 million in the
prior-year period, primarily related to the benefits of cost
reductions, partially offset by the effects of decreased volume as
described above; gross profit margin was 27.0%, compared to 16.5%
in the same period last year, primarily due to higher parts margins
and the benefits of costs savings and restructuring initiatives
partly offset by the decrease in revenue.
SPIG segment revenues were $11.3 million in the first
quarter of 2020 compared to $28.9 million in first quarter 2019,
mainly due to the ongoing wind-down of the SPIG U.S. operation, the
impact of worksite COVID-19 restrictions on services volume, and
more selective bidding and focus on core geographies and products
to improve profitability. Adjusted EBITDA was negative $1.2
million, down $1.9 million compared to positive $0.7 million in the
same period last year, driven by the decrease in revenue and lower
margins due to changes in product mix described above, as well as a
$0.7 million settlement on a legacy dry cooling project expected to
facilitate the collection of related outstanding receivables,
partly offset by lower overhead fixed costs. Adjusted gross profit
declined to $0.9 million in first quarter 2020, compared to $3.7
million in the prior-year period, primarily due to the decrease in
revenue, changes in product mix and legacy dry cooling project
settlement described above. At March 31, 2020, SPIG's U.S. entity
had two remaining significant loss contracts; the first was 100%
complete at the end of the first quarter 2020 with only performance
testing remaining, which is expected be completed in the third
quarter of 2020; the second was 89% complete at the end of the
first quarter of 2020 and is expected to be completed in the third
quarter of 2020. No additional charges were recognized on these
contracts in the first quarter of 2020.
Vølund & Other Renewable segment revenues were $15.3
million for the first quarter of 2020, compared to $29.5 million in
first quarter 2019. First quarter revenues were lower compared to
the prior year quarter mainly due to the divestiture of Loibl, a
materials handling business in Germany, that contributed $7.2
million of revenue in the first quarter of 2019 and a lower level
of EPC project activity due to the completion of the European EPC
loss contracts, partially offset by the startup of two operations
and maintenance contracts in the U.K. that followed turnover of the
EPC loss contracts to the customers. Adjusted EBITDA in the quarter
improved to negative $3.3 million compared to negative $8.8 million
in the first quarter last year, primarily due to the absence of
losses on the European EPC loss contracts; in the first quarter of
2020, the segment recorded a gain of $0.1 million on the European
EPC loss contracts as compared to $4.1 million of losses recorded
in the first quarter of 2019, inclusive of warranty expense. The
improvement also reflected the benefits of restructuring, including
lower levels of direct overhead support, warranty expense and
SG&A. The segment's adjusted gross profit was positive $1.5
million in first quarter 2020, an improvement of $4.3 million
compared to negative $2.9 million reported in first quarter 2019,
primarily driven by the absence of losses on the European EPC loss
contracts and lower levels of direct overhead support and warranty
expense as described above, partially offset by the absence of
adjusted gross profit from Loibl due to its sale.
Financing, Liquidity and Balance Sheet
On May 14, 2020, the Company successfully amended its Credit
Agreement, which amendment replaces and supersedes the previously
disclosed agreement to refinance the Company's senior debt by May
15, 2020, among other things. Under the terms of the amended Credit
Agreement, the Company's current revolving credit facility and
availability for letters of credit will be extended for two years
with a maturity date of June 30, 2022. In addition, B. Riley
Financial, Inc. ("B. Riley") has provided $30 million of new
last-out term loans and has committed to provide $35 million of
additional incremental last-out term loans through the maturity
date. These incremental last-out term loans will amortize the
revolving credit facility through reductions in revolving credit
facility commitments over time. In addition to the $65 million
total of funding described above, B. Riley has committed to make an
additional $5 million in last-out term loans available at the
Company’s request for working capital purposes. B. Riley has also
provided a limited guaranty for all obligations under the Company's
revolving credit facility, other than letters of credit and
contingent obligations. In support of the refinancing, the Company
also entered into an agreement with B. Riley to equitize
approximately $16.2 million of fees and interest payments through
December 31, 2020 on the unpaid principal amount of the last-out
term loans, including the new term loans. All stock issued in
payment of these fees will be valued at a price equal to the
average volume weighted average price of the common stock over 15
consecutive trading days beginning on May 15, 2020, subject to
customary adjustments and, to the extent required, stockholder
approval under the rules of the New York Stock Exchange. Further
detail can be found in the related Form 8-K on file with the SEC
and related press release issued on May 14, 2020.
Based upon the terms of the amended Credit Agreement and the
cash management and cost-reduction measures taken to date, the
Company expects to maintain sufficient liquidity to fund its future
operations and meet its obligations to the extent that the Company
has concluded that there is no longer substantial doubt about its
ability to continue as a going concern, as reflected in the
Company's 10-Q on file with the SEC.
At March 31, 2020, the Company had a cash and cash equivalents
balance of $35.4 million and borrowing availability of $20.0
million.
Insurance Recoveries and Cost-Savings Measures
The Company is continuing to pursue cost recoveries under
various applicable insurance policies and from responsible
subcontractors for the Vølund & Other Renewable segment's
European EPC loss contracts. The Company previously indicated the
possibility of certain insurance recoveries being reflected in
first quarter 2020 results; however, the settlement processes
related to these potential insurance recoveries were delayed due to
COVID-19.
The Company has completed the implementation $119 million of
annualized cost-savings initiatives previously identified. The
Company continues to evaluate additional opportunities for cost
savings and continues to evaluate potential dispositions as
appropriate.
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 adversely
impacted by the measures taken by local governments and others to
control the spread of this virus. 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. While restrictions in some countries have begun
to lessen, the Company's headquarters and the headquarters of the
Babcock & Wilcox segment in Akron, Ohio, the headquarters of
the Vølund & Other Renewable segment in Denmark and the
headquarters of the SPIG segment in Italy (among other locations
where the Company and its customers, vendors and suppliers operate)
are currently subject to lock-down or shelter-in-place orders under
local ordinances, with employees continuing to work remotely if
possible. While some employees can work remotely, 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 also been
extended into next year. Additionally, out of concern for the
Company's employees, those who are uncomfortable returning to
worksites due to the pandemic are not required to do so. 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. 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.
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 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; 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 and service the indebtedness under the amended Credit
Agreement; our ability to obtain waivers of required pension
contributions; the highly competitive nature of our businesses;
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 Vølund & Other Renewable segment, including the
ability to complete our European EPC 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
SPIG and Vølund & Other 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. 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 us on Twitter
@BabcockWilcox 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 March
31,
2020
2019
Revenues
$
148.6
$
231.9
Costs and expenses:
Cost of operations
114.6
201.1
Selling, general and administrative
expenses
37.6
42.4
Goodwill and other intangible asset
impairment
—
—
Advisory fees and settlement costs
4.2
13.6
Restructuring activities and spin-off
transaction costs
2.0
6.1
Research and development costs
1.3
0.7
Gain on asset disposals, net
(0.9
)
0.0
Total costs and expenses
158.9
263.9
Operating loss
(10.3
)
(32.0
)
Other (expense) income:
Interest expense
(22.1
)
(11.1
)
Interest income
—
0.6
Benefit plans, net
7.5
3.0
Foreign exchange
(9.3
)
(10.2
)
Other – net
(0.2
)
0.4
Total other expense
(24.0
)
(17.3
)
Loss before income tax (benefit)
expense
(34.3
)
(49.2
)
Income tax (benefit) expense
(0.8
)
0.6
Loss from continuing operations
(33.5
)
(49.9
)
Income from discontinued operations, net
of tax
1.9
—
Net loss
(31.6
)
(49.9
)
Net income attributable to non-controlling
interest
0.1
0.1
Net loss attributable to
stockholders
$
(31.5
)
$
(49.8
)
Basic and diluted loss per share -
continuing operations
$
(0.72
)
$
(2.71
)
Basic and diluted earnings per share -
discontinued operations
$
0.04
$
0.00
Basic and diluted loss per
share
$
(0.68
)
$
(2.71
)
Shares used in the computation of earnings
per share:
Basic and Diluted
46.4
18.4
(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)
March 31, 2020
December 31, 2019
Cash and cash equivalents
$
35.4
$
43.8
Restricted cash and cash equivalents
11.0
13.2
Accounts receivable – trade, net
139.3
142.2
Accounts receivable – other
22.7
23.3
Contracts in progress
83.6
91.6
Inventories
60.7
63.1
Other current assets
24.6
27.0
Current assets held for sale
7.0
8.1
Total current assets
384.2
412.2
Net property, plant and equipment, and
finance lease
94.8
97.1
Goodwill
47.0
47.2
Intangible assets
24.3
25.3
Right-of-use assets
12.2
12.5
Other assets
26.4
25.0
Non-current assets held for sale
7.2
7.3
Total assets
$
596.1
$
626.5
Revolving credit facilities
—
179.0
Last out term loans
—
104.0
Financing lease liabilities
0.8
—
Accounts payable
84.6
109.9
Accrued employee benefits
16.1
18.3
Advance billings on contracts
68.1
75.3
Accrued warranty expense
31.0
33.4
Operating lease liabilities
4.3
4.3
Other accrued liabilities
75.3
68.8
Current liabilities held for sale
8.3
9.5
Total current liabilities
288.4
602.5
Revolving credit facilities
185.0
—
Last out term loans
136.1
—
Pension and other accumulated
postretirement benefit liabilities
251.4
259.3
Non-current finance lease liabilities
30.4
30.5
Non-current operating lease
liabilities
8.1
8.4
Other non-current liabilities
20.4
20.9
Non-current liabilities held for sale
—
—
Total liabilities
919.8
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
46,407 and 46,374 at March 31, 2020 and December 31, 2019,
respectively
4.7
4.7
Capital in excess of par value
1,143.5
1,142.6
Treasury stock at cost, 619 and 616 shares
at March 31, 2020 and December 31, 2019, respectively
(105.7
)
(105.7
)
Accumulated deficit
(1,371.4
)
(1,339.9
)
Accumulated other comprehensive income
4.1
1.9
Stockholders' deficit attributable to
shareholders
(324.9
)
(296.4
)
Non-controlling interest
1.2
1.4
Total stockholders' deficit
(323.7
)
(294.9
)
Total liabilities and stockholders'
deficit
$
596.1
$
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)
Three months ended March
31,
2020
2019
Cash flows from operating activities:
Net loss
$
(31.6
)
$
(49.9
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization of
long-lived assets
4.2
7.3
Amortization of deferred financing costs,
debt discount and payment-in-kind interest
9.9
5.7
Non-cash operating lease expense
1.2
1.5
Gains on asset disposals
(0.9
)
—
Benefit from deferred income taxes,
including valuation allowances
(0.4
)
(0.2
)
Mark to market losses (gains) and prior
service cost amortization for pension plans
(0.2
)
—
Stock-based compensation, net of
associated income taxes
0.9
0.4
Changes in assets and liabilities:
Accounts receivable
10.6
0.2
Contracts in progress
7.7
8.7
Advance billings on contracts
(7.3
)
1.2
Inventories
1.3
(3.2
)
Income taxes
(1.9
)
—
Accounts payable
(26.5
)
4.6
Accrued and other current liabilities
6.1
6.5
Accrued contract loss
(2.6
)
(30.9
)
Pension liabilities, accrued
postretirement benefits and employee benefits
(10.3
)
(0.6
)
Other, net
4.4
11.0
Net cash used in operating
activities
(35.5
)
(37.7
)
Cash flows from investing activities:
Purchase of property, plant and
equipment
(2.4
)
(0.3
)
Purchases of available-for-sale
securities
(6.4
)
(6.0
)
Sales and maturities of available-for-sale
securities
3.4
1.0
Other, net
0.8
0.1
Net cash used in investing
activities
(4.5
)
(5.3
)
Cash flows from financing activities:
Borrowings under our U.S. revolving credit
facility
70.2
71.2
Repayments of our U.S. revolving credit
facility
(64.2
)
(40.8
)
Borrowings under Last Out Term Loan
Tranche A-2
—
10.0
Borrowings under Last Out Term Loan
Tranche A-4
30.0
—
Repayments under our foreign revolving
credit facilities
—
(0.6
)
Debt issuance costs
(5.7
)
(6.7
)
Other, net
0.6
—
Net cash from financing
activities
30.8
33.1
Effects of exchange rate changes on
cash
(1.4
)
0.1
Net decrease in cash, cash equivalents
and restricted cash
(10.6
)
(9.8
)
Cash, cash equivalents and restricted
cash, beginning of period
56.9
60.3
Cash, cash equivalents and restricted
cash, end of period
$
46.4
$
50.5
(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 March
31,
2020
2019
REVENUES:
Babcock & Wilcox segment
$
122.0
$
188.6
Vølund & Other Renewable segment
15.3
29.5
SPIG segment
11.3
28.9
Eliminations
—
(15.1
)
$
148.6
$
231.9
ADJUSTED EBITDA:
Babcock & Wilcox segment
$
10.7
$
9.1
Vølund & Other Renewable segment
(3.3
)
(8.8
)
SPIG segment
(1.2
)
0.7
Corporate
(4.1
)
(4.6
)
Research and development costs
(1.3
)
(0.7
)
$
0.7
$
(4.4
)
AMORTIZATION EXPENSE:
Babcock & Wilcox segment (2)
$
0.7
$
0.2
Vølund & Other Renewable segment
0.0
0.2
SPIG segment
0.7
0.8
$
1.4
$
1.2
DEPRECIATION EXPENSE:
Babcock & Wilcox segment
$
2.3
$
4.9
Vølund & Other Renewable segment
0.2
0.7
SPIG segment
0.3
0.5
Corporate
—
—
$
2.8
$
6.1
As of March 31,
BACKLOG:
2020
2019
Babcock & Wilcox segment
$
257
$
384
Vølund & Other Renewable segment
(3)
190
317
SPIG segment
60
70
Other/Eliminations
(6
)
(5
)
$
501
$
766
(1) Figures may not be clerically accurate due to rounding. (2)
Amortization expense in the Babcock and Wilcox segment includes
$0.5 million and $0.0 million in finance lease amortization for the
three months ended March 31, 2020 and March 31, 2019, respectively.
(3) Vølund & Other Renewable backlog at March 31, 2020,
includes $160.0 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(3)
(In millions)
Three months ended March
31,
2020
2019
Adjusted EBITDA (1)
Babcock & Wilcox segment
$
10.7
$
9.1
Vølund & Other Renewable segment
(3.3
)
(8.8
)
SPIG segment
(1.2
)
0.7
Corporate
(4.1
)
(4.6
)
Research and development costs
(1.3
)
(0.7
)
0.7
(4.4
)
Restructuring activities and spin-off
transaction costs
(2.0
)
(6.1
)
Financial advisory services
(0.9
)
(4.0
)
Settlement cost to exit Vølund contract
(2)
—
(6.6
)
Advisory fees for settlement costs and
liquidity planning
(2.6
)
(3.1
)
Litigation legal costs
(0.7
)
—
Stock compensation
(0.7
)
(0.6
)
Loss from business held for sale
(0.8
)
—
Depreciation & amortization
(4.2
)
(7.3
)
Gain on asset disposals, net
0.9
—
Operating loss
(10.3
)
(32.0
)
Interest expense, net
(22.1
)
(10.6
)
Net pension benefit before MTM
7.5
3.4
MTM loss from benefit plans
—
(0.4
)
Foreign exchange
(9.3
)
(10.2
)
Other – net
(0.2
)
0.4
Loss before income tax (benefit)
expense
$
(34.3
)
$
(49.2
)
(1) Adjusted EBITDA, for the three months ended March 31, 2019,
excludes stock compensation that was previously included in segment
results and totals $0.1 million in the Babcock & Wilcox
segment, $0.1 million in the Vølund & Other Renewable segment,
and $0.4 million in Corporate. Beginning in the third quarter of
2019, stock compensation is no longer considered in Adjusted EBITDA
for purposes of managing the business, and prior periods have been
adjusted to be presented on a comparable basis. (2) In March 2019,
we entered into a settlement in connection with an additional
European waste-to-energy EPC contract, for which notice to proceed
was not given and the contract was not started. The settlement
eliminates our obligations to act, and our risk related to acting,
as the prime EPC should the project have moved forward. (3) 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 March
31,
2020
2019
Adjusted gross profit (loss)
(1)
Operating income (loss)
$
(10.3
)
$
(32.0
)
Selling, general and administrative
("SG&A") expenses
37.5
42.3
Advisory fees and settlement costs
4.2
13.6
Amortization expense
1.4
1.2
Restructuring activities and spin-off
transaction costs
2.0
6.1
Research and development costs
1.3
0.7
Gain on asset disposals, net
(0.9
)
—
Adjusted gross profit (loss)
35.3
31.9
Adjusted gross profit by segment
is as follows:
Three months ended March
31,
2020
2019
Adjusted gross profit (loss)
(1)
Babcock & Wilcox segment
32.9
31.1
Vølund & Other Renewable segment
1.5
(2.9
)
SPIG segment
0.9
3.7
Adjusted gross profit (loss)
35.3
31.9
(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/20200514005888/en/
Investor Contact: Megan Wilson Vice President, Corporate
Development & Investor Relations Babcock & Wilcox
Enterprises 704.625.4944 | investors@babcock.com
Media Contact: Ryan Cornell Public Relations Babcock
& Wilcox Enterprises 330.860.1345 | rscornell@babcock.com
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