Babcock & Wilcox Enterprises, Inc.

Good afternoon. Thank you for attending the Babcock and Wilcox second quarter 2022 earnings call. My name is Matt and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Sharon Brooks with Babcock and Wilcox. Sharon, please go ahead.

Thank you, Matt, and thanks everyone for joining us on Babcock and Wilcox Enterprises' second quarter 2022 earnings conference call. I'm Sharon Brooks, Director of Communications. Joining the call today are Kenny Young, B&W's Chairman and Chief Executive Officer, and Lou Salamone, Chief Financial Officer, to discuss our second 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 today 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 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 second quarter earnings release published this afternoon and in our company overview presentation that will be filed on Form 8K this afternoon and posted on the investor relations section of our website at babcock.com. I will now turn the call over to Kenny.

Thank you, Sharon, and thanks to everyone for joining us this afternoon. Our second quarter results highlight another exciting step for the company as we continue to support our customers' energy transformation as well as continued support for thermal base load generation. We are now seen by our customers and potential customers as a technological leader in and innovator in energy transition. With the combined efforts of our worldwide employees and our senior leadership team, we continued to progress against our long-term strategic growth strategy during the second quarter. While our revenues improved 9%, our adjusted EBITDA increased by 35%, and our bookings and backlog improved by 46% as compared to the second quarter of 2021. Our net income was lower due to negative effects from foreign exchange rates and a shareholder litigation settlement. But overall, we are using the strength of our balance sheet, using cash to accelerate growth in our renewable segments, as well as increasing inventory for our thermal segment to leverage our competitive advantage in our parts and services business. These accomplishments in the second quarter, combined with our recent and anticipated bookings, position us well for a strong 2022, 2023, and beyond. The war in Ukraine, lingering COVID-19 effects, and global supply chain disruption present ongoing challenges to our project timing and parts delivery, similar to many other companies around the world. However, we continue to work to mitigate these challenges the best we can, by leveraging our established global resources with respect to raw materials and other items that are delayed from time to time. And we may continue to experience impacts as these global conditions progress. Longer term, however, we recognize potential tailwind opportunities for our business segments as demand for energy security and alternatives to natural gas continue to emerge. Our recent bookings and backlog support put us in position to meet our adjusted EBITDA targets for the year and show continued year-over-year growth, though we remain cognizant of the macroeconomic headwinds and uncertainty given various geopolitical issues. As a global technology leader and a solutions provider, we keenly focused on expanding our operations both internationally and domestically, as well as developing current and new customer relationships to uniquely position the company to support the world's clean energy transition and drive innovation forward. We are well positioned to meet the projected demand for global green initiatives with our full suite of proven technologies, and Babcock & Wilcox will emerge as a driving force in creating a more sustainable future. While we continue to support our strong industrial and utility customers utilizing our thermal technologies for basal generation and energy security, we are also focused on emerging markets within the clean energy space. And I want to recognize the tremendous strides we have made as a company within our environmental and renewable energy business through the recent contract awards that have been announced, as well as our continuing efforts in evolving ClimateBrite decarbonization platform and the scale-up of our Bright Loop decarbonization, hydrogen, and syngas production technologies. We will elaborate a bit more on the progress we have made within these areas today, but it is important to emphasize the exceptional tailwinds we have identified within these evolving technologies. As evidenced by our increased bookings and backlog, we remain intently focused on continuing to convert our global pipeline of identified project opportunities to bookings as reflected in the 46% improvement over the same quarter a year ago. While the pandemic and global supply chain challenges have continued to cause delays for some project bookings or pushback start dates of certain projects, bookings for the quarter remain very strong at 245 million. increasing 46% compared to the same quarter a year ago, with a significant portion derived from the increased volumes within our renewable business segment. Backlog at the end of the quarter was $731 million, and a robust pipeline of more than $7.5 billion of identified global project opportunities in the next three years positioned us well for multi-year growth, and we are preparing to capitalize on the positive impacts across our customer base as demand for our long-term energy security and decarbonization technology grows. Pivoting to our Climate Bright decarbonization platform, we are excited to report that our partnership with Kiewit Industrial to support the Fidelis New Energies planned 200-megawatt net negative carbon impact biomass power plant in Baton Rouge, Louisiana, is currently progressing. Fidelis recently announced the start of construction for the Grown Fuels Complex at this same site, which will be using B&W's biomass and Brightloop technology, and will create the largest biomass or largest net negative CO2 biomass energy facility. The company will provide a B&W biomass boiler, our proprietary OxyBrite OxyCombustion carbon capture technology, which uses pure oxygen for combustion and can be used with a wide range of fuels to produce a concentrated stream of CO2, which can then be sequestered underground or put to other beneficial use. We are also providing a full suite of environmental systems to control emissions. Although we have not recognized this project within our backlog, we anticipate final booking this year. Our partnership with Fidelis New Energy is a meaningful indication of the company's progress with respect to our clean energy initiatives, and we look forward to the addition of similar projects within our portfolio where our advanced technologies enable the transition to responsible energy system innovation and progress for our planet, people, and our ecosystems. Regarding our breakthrough Bright Loop technology, we are realizing increased interest in various opportunities, as evidenced by our recent announcement teaming agreement with New Point Gas. Although we have not announced specific timing and or revenue potential associated with this site, we look forward to serving as a foundational technology provider and delivering the advanced hydrogen generation, decarbonization, and combustion technologies for the redevelopment of the site, which is the former U.S. Department of Energy Portsmouth gaseous diffusion plant near Piketon, Ohio. B&W will supply its BrightLoop technology to produce hydrogen and isolate carbon dioxide for storage and supply a steam generator utilizing the company's BrightGen hydrogen combustion technology to produce clean near-zero emissions energy. Babcock Wilcox Construction Company, LLC, will also provide the construction and installation services. And when complete, the H2 Trillium Energy and Manufacturing Complex will operate as an integrated energy decarbonization hydrogen and closed-loop manufacturing facility, generating clean hydrogen and capturing carbon dioxide for long-term storage and or beneficial use. I would also like to highlight the solar installation contracts for the community solar projects that were announced last week. These contracts, which total more than 20 million, were awarded by Summit Ridge Energy to provide services for several community solar projects. When complete, the seven solar farms will provide approximately 20 megawatts of power for homes and businesses in northern and central Illinois. Engineering for the projects is currently underway, and completion of the installation is scheduled for the first quarter of 2023. These are in addition to our recently announced 240-megawatt utility project in western Ohio. These contract awards speak to the growing demand for solar energy domestically, and B&W is well-positioned to provide world-class solar installation services for both community solar and utility-scale projects. Moving to our segment performance, we have seen exceptional growth within our B&W renewable segment with second quarter revenues of $75.2 million, an increase of 96% as compared to the second quarter of 2021, and representing the continued demand for our solar installations, waste-to-energy, biomass-to-energy products, and other services within this segment. We are also seeing significant growth within our B&W environmental segment, with our disclosed contracts to install a biomass-fired boiler, another combustion equipment for a green energy project in Europe, and a supply of advanced environmental equipment for a power plant in Africa. In tandem with this point, we are very pleased to have established senior leadership over our global thermal segment and our global renewable and environmental segment. Chris Riker will be named Senior Vice President, Thermal, and will lead our global thermal business, while Joe Buckler has been named Senior Vice President of Clean Energy, and he will lead our renewable and environmental segments. Both will report to Jimmy Morgan, our Chief Operating Officer. The continued growth of our business makes it timely to put these changes into place to provide specific focus over these segments from a market-facing and P&L perspective and to further unlock shareholder value in maximizing our long-term strategic growth plans. Additionally, Brandy Johnson has been named Chief Strategy and Technology Officer. And within this role, Brandy will report to me and spearhead the research and development, demonstration, and commercial implementation for our mature and emerging technologies. We look forward to the leadership changes for Chris, Joe, and Brandy. which will further enhance our ability to react strongly and quickly to market changes and streamline efforts in developing and implementing our new technologies in parallel with addressing the needs of our thermal customers. I'll now turn the call over to Lou, who will discuss the financial details for the second quarter of 2022. Lou? Thanks, Kenny.