Babcock & Wilcox Enterprises, Inc.

Hello, everyone, and welcome to the Babcock and Wilcox Enterprises Fourth Quarter and Fall Year 2021 Earnings Conference Call. My name is Victoria, and I will be coordinating your call today. If you would like to ask a question during the presentation, you may do so by pressing star 1 on your telephone keypad. If you wish to withdraw your question, please press star 2. When preparing to ask your question, please ensure that your line is unmuted locally. I'll now pass over to your host, Megan Wilson, Chief Strategy Officer, to begin. Please go ahead.

Thank you, Victoria, and good morning, everyone. Welcome to Babcock & Wilcox Enterprises' fourth quarter and full year 2021 earnings conference call. I'm Megan Wilson, Chief Strategy Officer and Senior Vice President of Corporate Development 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 fourth quarter and full-year 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 annual report on 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 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 fourth quarter and full-year 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. Thanks, Victoria. And good morning, everyone. And thanks for joining our call. Well, wow, what a year. 2021 was a year of unprecedented growth and accomplishments for B&W. especially compared to 2020. Revenues were up about 28%. Our net income swung from a loss of negative $10 million to net income of about $32 million, positive. And an adjusted EBITDA increased by about 260%, and that actually excludes a non-recurring loss recovery in 2020. We also achieved our ambitious target of adjusted EBITDA of $70 million for the year. Annual bookings and ending backlog were both up about 20% with our highest level of annual bookings since 2017. Our quarter-over-quarter results for the fourth quarter were actually just as significant. Revenues were up about 28%. Net income was up a remarkable 504%. And adjusted EBITDA was up about 77%, and bookings were up 61%. In 2021, we did what we said we would do. We focused on execution. We booked four renewable waste-to-energy new-build projects in 2021, and actually a fifth we just announced last month. We closed several strategic acquisitions and continued investing and building our Climate Bright decarbonization platform, including driving forward on commercial demonstration projects for our innovative Bright Loop hydrogen production technology. Our extraordinary fourth quarter bookings of $269 million included awards of two additional renewable new build projects, including contracts for $58 million and $24 million to supply advanced waste energy technology for power plants in Europe. With the addition of an 11 million booking for biomass boiler upgrade in the beginning of 2022, we have booked five sizable renewable energy projects since September. Our recent acquisitions over the last six months have strategically expanded our clean and renewable energy businesses. We're excited about the substantial opportunities we see for solar. solar installation and construction services in the United States through our BW Fossler solar business, which is reflected through our growing pipeline. We are also exploring opportunities to combine solar with B&W's long-term, long-duration energy storage solutions and look forward to continuing our efforts to drive these newer technologies. Through our November acquisition of VOTA, a flexible, scalable, renewable aftermarket parts and services business based in Denmark, we launched our B&W Renewable Services Platform to further expand our renewable operation and maintenance for parts and services business in Europe and focused on renewable waste to energy and biomass to energy technologies. In February of this year, we acquired FPS, a leading designer and manufacture of hydrogen, natural gas, and renewable pulp and paper combustion equipment and technologies based in Nova Scotia, Canada. FPS igniters and control system capabilities are ideally suited to clean energy applications such as firing hydrogen, which complements BMW's hydrogen generation and combustion technologies. And we see significant potential growth in those markets, not only in North America, but around the world. In February, we also completed a small bolt-on acquisition of Optimus Industries in Tulsa, Oklahoma, which designs and manufactures waste heat recovery products, including package boilers, water tube and fire tube, waste heat boilers, economizers and superheaters, and units for sulfuric acid plants. We expect the addition of U.S. package boiler manufacturing capabilities to increase our U.S. market access and create additional opportunities for the combined business moving forward. We are continuing to explore additional acquisition and investment opportunities in both emerging technologies and mature markets, and aggressively pursuing opportunities to further increase shareholder value. Our results, bookings, and strategic actions in 2021 have positioned us for an even stronger 2022. Looking forward, As we previously mentioned, we increased our 2022 target to a range of 110 million to 120 million in adjusted EBITDA. And our overall pipeline is now more than 7.5 million of identified project opportunities through 2024, which again does not include parts and services. Additionally, we anticipate growth in our parts and service business as the year progresses due to higher demand by our installed base as a direct result of higher natural gas prices. Our robust and growing pipeline, recent contract wins, and strategic acquisitions give us confidence in our ability to achieve a significant year-over-year growth in 2022, and we anticipate that full year 2022 will realize the potential and continued momentum of our ongoing growth strategies. As always, our EBITDA will ramp between Q1 being the lowest and Q4 being the highest as normal based on our historical trends. Most importantly, we believe that 2022 will be a milestone year for our Climate Bright decarbonization platform. As interest in our technologies is rapidly expanding, particularly for our breakthrough Brightloop technology to produce hydrogen, and our steam or syngas from a variety of fuels or feedstocks while isolating CO2 for sequestration of utilization without, the good news, without any additional parasitic load or loss of efficiency on the plant. In November of 2021, we signed an exclusive global license agreement with Ohio State Innovation Foundation for a unique particle that is used within our Bright Loop platform for decarbonization and the production of hydrogen and or steam or syngas, which complements B&W's existing chemical looping technology portfolio. This technology was jointly researched and developed by B&W in collaboration with the Ohio State University, and it's used to produce hydrogen from syngas has been successfully demonstrated. We have proven how fully scalable and adaptable this technology is for both large and small installations, and we are excited about its transformational potential. So excited, in fact, that we are now moving forward with a number of potential commercial scale demonstration projects, including detailed design and engineering, site selection, permitting, and financing, all with a goal of having equipment on the ground for at least one plant by the end of 2022 and producing hydrogen by the end of 2023. Our robust pipeline of energy transition, carbon capture, and hydrogen production opportunities is accelerating as our customers seek solutions to address some of the world's most urgent climate objectives. We are continuing working on over 20 potential climate bright carbon capture and hydrogen projects to really determine the size and scale and best carbon capture solution based on customer specific needs and anticipate booking additional climate bright projects in the coming months. I'll now turn the call over to Lou to discuss the key points of our financial performance in the fourth quarter of 2021, as well as our full year results. Lou.