Babcock & Wilcox Enterprises, Inc.

Hello and welcome to the Babcock and Wilcox Enterprises third quarter 2021 earnings conference call. My name is Charlie and I will be coordinating your call today. If you would like to ask a question during the presentation, you may register to do so by pressing start followed by one on your telephone keypad. I will now hand you over to your host, Megan Wilson, Vice President of Investor Relations to begin. Megan, please go ahead.

Thank you, Charlie, and good afternoon, everyone. Welcome to Babcock and Wilcox Enterprises' third quarter 2021 earnings conference call. I'm Megan Wilson, Vice President of Investor Relations at B&W. Joining me this afternoon 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 in our quarterly report on Form 10Q filed this afternoon and our Form 10K 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 statement. We also provide non-GAAP information regarding certain of our historical and targeted 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 afternoon and in our company overview presentation filed on form 8K this afternoon 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. Good afternoon, everyone, and thanks for joining our call. We had an extraordinary quarter at Babcock and Wilcox, and our results in the third quarter of 2021 exceeded our expectations and combined with our recent and anticipated bookings reflect the strength and the momentum of our strategy. Despite the continued effects of COVID and global supply chain challenges, we are doing what we said we would do. We're booking renewable waste energy projects, we're growing our environmental business, we're investing in our climate bright decarbonization platform, and we're expanding our clean energy offerings through strategic acquisitions. We achieved another strong quarter of bookings with 194 million of new bookings in the third quarter of 2021. And we received awards for two renewable build projects during the third quarter, including a $35 million contract to supply waste-to-energy technologies for a new-build facility in Greenland and a $38 million technology award for a new-build waste-to-energy facility in East Asia. We're making progress toward booking another two or three renewable new-build projects in the fourth quarter of this year, and we anticipate further announcements in the coming days. We also expect that the growing concern about and the regulation of methane emissions globally will continue to expand our waste energy pipeline. Our overall pipeline is now more than 6.5 billion of identified project opportunities through 2024, and this does not include parts and services. We also see potential growth in our parts and service business due to the higher demand and usage within our installed base as a direct result of higher natural gas prices. We continue to be focused on our ongoing global environmental expansion, which helped drive the award of two power plant emission control contracts in the Asia Pacific region during the third quarter. And more than 60% of our pipeline is related to renewable and environmental opportunities, showing that we're on target with our long-term strategy. Looking forward, And based on current expectations, we are targeting at least 70 million of adjusted EBITDA for full year 2021, which represents a significant operational improvement compared to 2020. And we expect to end the year with significantly higher backlog compared to the end of 2020. And know that we set these targets last year based on no further influence by COVID or other external factors beyond our control. But despite more global COVID impacts, including worldwide shipping, transportation, and supply chain issues, we continue delivering very robust results. I am very proud of the way our employees and our management teams have responded and rose to the occasion to drive these strong results despite external global challenges. We are now seeing accelerated bookings following the end of the third quarter with approximately 90 million in bookings in October alone. We anticipate total bookings of 250 million to 300 million in the fourth quarter of 2021, which would result in the highest level of annual bookings since 2017. We believe our parts and services business will remain strong as many facilities in our global install base are operating at significantly higher levels Again, due to the high price of natural gas, we are also raising our 2022 adjusted EBITDA target to between $110 and $120 million as we anticipate the continual minimum of our ongoing growth strategies, our growing pipeline, our strong backlog, and accelerated bookings and acquisition strategy. The launch of our Climate Bright decarbonization platform in May is propelling the development of an exciting pipeline of carbon capture and hydrogen production opportunities as our customers seek solutions to address some of the world's most urgent climate objectives, including carbon dioxide and methane reductions. B&W has unparalleled experience in clean energy solutions, backed by more than 90 active patents for carbon capture alone. and has the expertise and technology to lead the world's next industrial revolution towards a zero-carbon future. Interest in our climate-bright decarbonization technologies is expanding, particularly for our breakthrough bright-loop technology to produce hydrogen, steam, or syngas from a variety of fuels or feedstocks while isolating CO2 for capture or other industrial purposes. This growing interest has been demonstrated by our recent agreement to jointly develop an innovative biomass to hydrogen green energy project with the Port Authority, excuse me, Port Anthony Renewables Limited in Australia utilizing Brightloop. When completed, this plant is expected to be one of the largest green hydrogen hubs in southeastern Australia. To further enhance our Bright Loop offering, we recently signed an exclusive global licensing agreement with the Ohio State Innovation Foundation for a chemical looping process and particle used for decarbonization and the production of hydrogen, steam, or syngas, which complements B&W's existing chemical looping technology portfolio. This technology was jointly researched and developed in collaboration with the Ohio State University and its use to produce hydrogen from syngas has successfully been demonstrated at the U.S. National Carbon Capture Center. The joint research by OSU and B&W has proven how fully scalable and adaptable this technology is for both large and small installations, and we are excited about its transformational potential. We are continuing to actively work on and progress roughly 20 potential Climate Bright projects to determine the best carbon capture solution based on customers' specific needs and anticipate booking additional Climate Bright projects in the coming months. We further expanded our clean and renewable energy business by announcing two acquisitions in the third quarter. We closed the acquisition of a controlling stake in a leading commercial solar installation firm, now called Fossler Solar Services, at the end of September. And we are thrilled to welcome the talented Fossler team to B&W and excited about the substantial opportunities to work together on solar installation and construction services in the U.S. We are confident that B&W's strong presence in the energy industry will provide the synergies and scale to further accelerate Fossler's growth, including access to B&W's existing customer relationships and resources to support larger projects. We are seeing early opportunities to combine solar with B&W's long-term energy storage solutions and look forward to continuing our efforts to drive these newer technologies. We also signed an agreement to acquire Voda AS in Denmark, a flexible, scalable aftermarket parts and services business serving renewable energy, waste energy, and biomass customers. In conjunction with B&W's existing aftermarket service and business, Voda will form B&W Renewable Services to create a platform for our expanding renewable service business in Europe. This transaction is targeted to close by the end of the year following the satisfaction of customary closing conditions, including regulatory review in Denmark, which is currently ongoing. We are continuing to explore additional acquisition opportunities in both emerging technologies and mature markets and aggressively pursue opportunities to further increase shareholder value through acquisitions. I'll now turn the call over to Lou to discuss key points of our financial performance in the third quarter of 2021. Lou?