Babcock & Wilcox Enterprises, Inc.

Hello everyone and welcome to the Babcock and Wilcox Q4 and full year 2022 earnings conference call. My name is Emily and I'll be coordinating your call today. After the presentation you will have the opportunity to ask any questions by pressing start followed by the number one on your telephone keypads. I'll now turn the call over to our host Sharon Brooks, Director of Communications. Please go ahead.

Thank you, Emily, and thanks to everyone for joining us on Babcock and Wilcox Enterprises' fourth quarter and full year 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 fourth quarter and full year 2022 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 will be filed with the SEC tomorrow, March 16, 2023, after the close of the market. 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 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. I will now turn the call over to Kenny.

Thanks, Sharon. Thanks, operator, and good morning, everyone. And thanks for joining our fourth quarter and full year 2022 earnings call. We had a very strong quarter for Babcock and Wilcox and generated backlog and new opportunities to position us to reach our 2023 EBITDA targets. We increased our pipeline of opportunities, especially around our clean energy technologies and renewable and environmental, as well as expanding opportunities with our Bright Loop hydrogen production technologies. Despite the near-term headwinds and ongoing supply chain disruptions, our seasonally strong fourth quarter results, which improved significantly on a sequential basis, enabled us to achieve our revised EBITDA, adjusted EBITDA target for the full year of 2022. Revenues in the fourth quarter increased 30% compared to 2021, and our quarterly bookings were 197 million, which were in line with our strong fourth-quarter bookings in the prior year. Our year-over-year results for 2022 were just as significant. Revenues for the year increased 23%, and our annual bookings of $908 million set a new record high since 2017. In addition, we booked seven renewable waste energy new-build projects in 2022 and announced several agreements with a number of leading companies to further augment our market applications of Brightloop, Solbright, and Oxibright technologies. Although our performance for the year was impacted by global supply chain and market conditions, we continue to execute and progress against our long-term strategic growth strategy. With an expanded pipeline of 8 billion in quality projects, and an ending backlog of $704 million, a 19% increase compared to the end of 2021. And remember, our backlog does not include our standard parts and service revenues. As we look forward to 2023, we see strong customer demand across all of our business segments, coupled with significant backlog and booking momentum. which reinforces our conviction for an improved full-year performance and continued growth throughout the year. Given our current visibility for new booking opportunities, we reiterate our 2023 full-year adjusted EBITDA target of 100 to 120 million. While industry challenges and negative impacts of the global supply chain pressures still remain, we have implemented several strategic initiatives to mitigate these headwinds where possible. In recent quarters, we have worked to expand the qualification of alternative suppliers and modified our sourcing strategies to limit the impact that industry-wide bottlenecks have had with respect to availability of raw materials, fabrication capabilities, and labor shortages, among a broad range of other factors. While we continue to evaluate where further improvements in our supply chain can be implemented, We are proud of our team's ability to react proactively to the present global and regional challenges while maintaining the highest level of operational performance. Our focus on providing customers with the technologies and services necessary to meet their growing demands for thermal-based load generation and clean energy solutions remain our top priority. In the fourth quarter, We also announced two significant contract awards in our environmental segment, which serves as a testament to our customers' confidence in our emission control and ash handling technologies. The first contract, valued at over $24 million, included the supply of two industrial package boilers, auxiliary equipment and advanced emission control technologies for a petroleum refinery in North America. Under that same contract, B&W Environmental will supply two select catalytic reduction systems, SCRs, to control nitrogen oxide emissions. The second contract, valued at over $20 million, included the design and supply of ash handling and conveying technologies for a power plant in North America, leveraging our equipment to assist the plant operator in reducing the environmental impact of the plant and ensuring compliance with emission requirements. B&W Environmental will design, manufacture, and supply four state-of-the-art Allen-Sherman-Hoff submerged grind conveyors, or SGC systems, that are designed to meet affluent limitation guidelines, ELG, and other coal combustion residuals requirements, and also supply two tube conveyors for the project. These contract awards follow two very instrumental announcements we made last quarter, including a $43 million contract to provide construction and installation services for an environmental upgrade project here in the U.S., in addition to a contract award to study the application of B&W Solbright solvent-based carbon dioxide capture solution for Consul Energy. Overall, we are pleased with the progress our environmental business segment has achieved and the validation it brings to our growth pipeline and ultimate goal of revenues being two-thirds environmental and renewable and one-third thermal. In addition, we just recently announced this year a $65 million contract to provide renewable waste to energy and environmental technologies to Low Stock Sustainable Energy Plant in the United Kingdom. This is one of the largest waste to energy plants in the UK and reflects strongly on our relationships with Copenhagen infrastructure partners and FCC environmental services. With respect to the supportive industry legislation that has been passed, we are excited to announce that we are collaborating with customers and partners to pursue a number of advanced clean energy projects and opportunities that will be made possible through the funding provided by the historic $1.7 trillion spending package recently signed by President Biden. The appropriations packages contain historic funding for clean energy projects, including opportunities for hydrogen generation, carbon capture, renewable energy, and methane mitigation demonstrations that would potentially benefit from B&W's advanced clean energy solutions. The spending package includes specific appropriations language that directs the Department of Energy to support commercial demonstration of hydrogen production using chemical looping utilizing coal, biomass, or natural gas. This is a significant accomplishment and development and we look forward to advancing our discussions with customers, partners, and representatives from the U.S. Department of Energy to explore ways in which we can accelerate the clean energy transition and provide essential innovative technologies for those projects. B&W has a diverse suite of renewable energy, environmental, and decarbonization technologies that are proven and ready to deploy, including hydrogen, CO2 capture, decarbonization, methane abatement, renewable energy, and emission controls. Our commitment to further drive sustainability is reinforced by our recently announced collaboration with Chart Industries to evaluate innovative applications utilizing our Brightloop technology and the Global Alliance with Fidelis to produce clean, zero-carbon intensity hydrogen. Through the collaboration with Chart Industries, B&W will further deploy its Brightloop hydrogen technology utilizing Chart's hydrogen liquefaction and carbon capture equipment. The partnership aims to provide low-carbon hydrogen generation and cost-effective transportable forms of liquid hydrogen and carbon dioxide while developing sales and marketing strategies for potential commercial customers. We are excited to partner with Chard Industry and look forward to advancing the scalability and innovative applications our Brightloop technology has to offer. The global alliance with Fidelis focuses on the production of clean hydrogen using B&W's bubbling fluidized bed boiler technology and Fidelis' proprietary Fidelis H2 technologies. The partnership aims to produce zero carbon intensity hydrogen from natural gas that meets the required threshold under the Inflation Reduction Act to qualify for the full $3 per kilogram 45V hydrogen production tax credit. We look forward to deploying these technologies at scale and further developing our suite of carbon capture solutions, ultimately leveraging our climate-bright decarbonization platform and supportive industry legislation to further diversify our environmental and renewable business. I'll now turn the call over to Lou to discuss the financial details of the fourth quarter and the full year 2022. Lou?