Babcock & Wilcox Enterprises, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the Babcock and Wilcox Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad. If you require any further assistance, please press star 0. I would now like to turn the call over to Megan Wilson, Vice President of Investor Relations. Please go ahead.

Megan Wilson Thank you, Natalia, and good morning, everyone. Welcome to Babcock & Wilcox Enterprises' third quarter 2020 earnings conference call. I'm Megan Wilson, Vice President of Investor Relations at B&W. Joining me this morning are Kenny Young, B&W's Chairman and Chief Executive Officer, and Lou Salamone, Chief Financial Officer, to discuss our third quarter results. During this call, certain statements we make will be forward-looking. These statements are subject to risks and uncertainties, including those set forth in our Safe Harbor provision for forward-looking statements that can be found at the end of our earnings press release and also in our Form 10-Q that will be filed by tomorrow evening and our Form 10-K that is on file with the SEC, and provide further detail about the risks related to our business. Additionally, except as required by law, we undertake no obligation to update any forward-looking statements. We also provide non-GAAP information regarding certain of our historical results to supplement the results provided in accordance with GAAP. This information should not be considered superior to or as a substitute for the comparable GAAP measures. A reconciliation of historical non-GAAP measures can be found in our third quarter earnings release published this morning and in our company overview presentation filed on Form 8K this morning and posted on the investor relations section of our website at babcock.com. With that, I will turn the call over to Kenny.

Thanks, Megan, and good morning, everyone, and thanks for joining our call. Our third quarter results were stronger, primarily due to a loss recovery related to our historical European EPC loss projects, but also reflecting the ongoing execution of our turnaround strategy. Despite the challenges presented by COVID-19 and its impact on revenues across all of our segments, adjusted EBITDA was roughly break-even for the quarter before the benefit of the loss recovery, really demonstrating the effectiveness of our cost-saving initiatives. While we continue to feel the impacts of the pandemic, a number of projects that were previously delayed or deferred due to the pandemic are now restarting. Bookings improved significantly in the quarter, reflecting both the momentum of project restarts and the effects of our recent strategic actions. Specifically, we booked 177 million of new work in the third quarter, which is 106% increase over the third quarter in 2019 and 111% sequential increase compared to the second quarter of 2020. this improvement was driven by our rebranding and reorganization initiatives our ongoing international expansion our extended financing agreement and the value of the technology solutions we provide to our customers to support a clean sustainable energy and industrial infrastructure this includes our broad suite of advanced renewable and environmental and thermal technologies such as high performance waste 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. Looking forward, our pipeline of over 5 billion of identified opportunities that we expect to bid through 2023, which, by the way, does not include parts and services, continues to strengthen. And the expansion of our international presence is progressing as planned. Similar to other companies impacted by the pandemic, it's really impossible for us to fully predict the extent or timing of further COVID-19 effects. However, we continue to see significant opportunities to grow our business profitably, benefiting from our improved project execution and operational efficiency. Our focus is on the bottom line results and strong cash management. We continue to target between $70 million and $80 million of adjusted EBITDA in 2021 based on the visibility we have today. As I say all the time, two key points drive us at Babcock & Wilcox. We provide a critical and essential infrastructure, products, and services, and our managers and employees are experienced, dedicated, and stronger than ever. Our team continues to work with commitment and skill through the pandemic, and I want to recognize and thank all of our employees for all of their critical efforts. As we announced last quarter, we have aligned our market-facing segments and our financial reporting under three new segments, B&W Renewable, B&W Environmental, and B&W Thermal. These segments directly reflect our core markets, technologies, and strategic pursuits and align with B&W's customer needs by providing technology solutions to help them achieve a clean, sustainable energy and industrial infrastructure. We're working closely with various governmental agencies and NGOs through funded projects to design and build new technologies to support environmental conditions while reducing the carbon footprint and developing low emission technology to create energy from waste. We have the technologies, expertise, and qualified opportunities to expand our renewable and environmental platforms significantly over the next few years, while steadily growing our traditional thermal business through our vast install base around the world. B&W Renewable is the leader in developing ecological sound ways to use resources like biomass and waste to create clean, renewable energy. Under this brand, we offer best-in-class, highly efficient, and cost-effective technologies for environmentally sustainable power and heat generation and gasification, including waste energy, biomass energy, and black liquor systems for the pulp and paper industry. As you know, waste in landfills generates large amounts of methane, which as a greenhouse gas is significantly more harmful on a per-ton basis than carbon dioxide. We expect this segment to grow significantly worldwide as the demand for renewable waste energy technologies and biomass systems continues to play a key role in global carbon reduction targets. B&W Environmental supports a clean energy infrastructure by providing a full suite of best-in-class emission controls and environmental solutions for utility and industrial steam generation applications around the world. We expect our environmental segment to grow worldwide as environmental regulations continue to drive us toward a cleaner energy future. We are seeing this today in our increased bookings and strong pipeline. B&W Thermal provides proven steam generation products that are efficient, safe, and reliable, including steam generation equipment, aftermarket parts and construction, maintenance and field services for plants in the power generation, oil and gas, and industrial sectors. We expect it to grow steadily as we expand our aftermarket services and parts business to serve both our own vast install base as well as our competitors' units, while increasing our service capabilities worldwide. We are also gaining momentum through upgrades, complex boiler replacements, and various new builds as the global energy sector looks to improve efficiency and longevity within their current fleets. With our new organizational alignment and branding, combined with our effort to broaden our global sales, service, and business development presence geographically, particularly in the Middle East, Africa, and Asia-Pac regions, we expect growth from our expanding global pipeline and improved operational execution to drive significant earnings growth through 2021 and beyond. I'll now turn the call over to Lou, and he'll talk about some of the key points of our financial performance in the third quarter of 2020. Lou?