Babcock & Wilcox Enterprises, Inc.

Good afternoon. Thank you for attending the Babcock and Wilcox Enterprises Fourth Quarter 2024 Conference Call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would like to turn the conference over to your host, Sharon Brooks, BMW's Director of Communications. Thank you. You may proceed, Mrs. Brooks.

Thank you, Cameron, and thanks to everyone for joining us on Babcock and Wilcox Enterprises Fourth Quarter and Full Year 2024 Earnings Conference Call. I'm Sharon Brooks, Director of Communications and Marketing. Joining the call today are Kenny Young, B&W's Chairman and Chief Executive Officer, and Cameron Freymeier, Chief Financial Officer, to discuss our fourth 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 annual report on Form 10-K that has been filed with the SEC today. Additionally, except as required by law, we undertake no obligation to update any forward-looking statement. We also provide non-GAAP information, including 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 earnings release published this afternoon and in our company overview presentation filed on Form 8K today and posted on the investor relations section of our website at babcock.com. I will now turn the call over to Kenny.

Thanks, Sharon. Well, good afternoon, everyone, and thanks for joining us on our fourth quarter and full year 2024 earnings call. In 2024, we took specific actions that aligned with our business strategy that also paved the way to refinance or reduce our current debt obligations in 2025. With intent, we are shifting our focus on continued operations toward greater predictable revenues and margins, particularly from our thermal operations based on tailwinds of increased demand from the utility and industrial power generation sectors. We also see new biomass energy plants becoming a reality in North America and anticipate possible bookings later this year. We saw improvements across many of our top metrics during the fourth quarter of 2024, including improvements in revenues, operating income, and adjusted EBITDA when compared to 2023. Our fourth quarter revenue came in at $200.8 million compared to $174.7 million in the fourth quarter of 2023, which was an increase of 15%. Operating income from continuing operations increased to $11.6 million in the fourth quarter of 2024 compared to operating loss from continuing operations of 3.3 in the fourth quarter of 2023. reflecting the continued strong production of our core businesses. Adjusted EBITDA from continuing operations was $24.0 million in the fourth quarter of 2024, which was a 55% year-over-year increase compared to the fourth quarter of 2023. Our margins are benefiting from our strategic shift to reduce reliance on high-interest, low-margin new-build projects And after taking into account the recent divestitures, we have revised our full year 2025 EBITDA target range to be 70 to 85 million, excluding Bright Loop and Climate Bright expenses. Importantly, we continue to invest in our Bright Loop opportunities and continue to anticipate spending in the range of 10 to 15 million in 2025. on our Bright Loop projects and technology advancement, including CapEx, which is apart from the Maslin construction. Transitioning to our full-year financial performance on a continuing operations basis, we continue to display year-over-year improvement in adjusted EBITDA, excluding Bright Loop and Climate Bright, with a 13% increase from 2023 on yearly totals. We expect our improving adjusted EBITDA performance trend to continue as we move through 2025 leading to our full year 2025 adjusted EBIT at target range of 70 to 85 million. Revenues remain stable across the year with the largest positive impact seen in our environmental segment. And perhaps the strongest performance across 2024 came in our bookings and backlog numbers. We continue to see strong demand for our diverse portfolio of technologies, which is driving our increased bookings of approximately 900 million in 2024 and a backlog now of over 540 million as we enter 2025. Specifically in 2024, we saw a year-over-year increase of 39% in our bookings and 47% in our backlog. We believe that these results affirm our strategic approach while underpinning our pipeline and outlook for sustained growth in 2025 and beyond. We believe in the increasing need for power and electricity fueled by demand from AI data centers, electric vehicles, and expanding economies will be key drivers for growth across our broad range of technologies. We are seeing utility and industrial clients, including the oil and gas sector, continuing to increase capacity utilizing our core technologies while evaluating further power generation augmentation through biomass, hydrogen, and natural gas. We expect these tailwinds to increase in the coming years as the amount of front-end engineering design or feed opportunities has grown. Today, we have 12 to 15 active feed studies that represent potential projects of over $1 billion in revenues in our pipeline. We believe that these expected industry tailwinds provide a strong foundation for BW to grow in 2025 and beyond as we continue to drive for higher margins and improve cash flows. Overall, our results in the fourth quarter and across 2024 reflect the strong demand for our diverse portfolio that support the generation of efficient and sustainable energy regardless of fuel source. B&W has developed a strong foundation to capitalize on the continued growth in natural gas conversions, environmental solutions, carbon capture, and clean energy opportunities globally with utility and industrial customers. Our investments across our Climate Rights suite of decarbonization technology to support the world's energy transition are progressing well, and we're making steady progress on our Bright Loop project in Massillon, Ohio, with a target of producing hydrogen by early 2026. Notably, we also recently announced a $10 million in funding for the development of a Bright Loop hydrogen production and carbon capture facility in Mason County, West Virginia. We remain fully committed to expanding our Brightloop commercial activities in the years ahead with targeted bookings of approximately $1 billion by 2028, which represents less than 1% of the estimated global market for hydrogen production. Within Brightloop, it's been extremely exciting to watch our team advance the engineering process and the business towards deploying these technologies at scale and further expanding our suite of carbon capture solutions. During 2024, we made further progress on our stated strategy to divest non-strategic assets to improve our balance sheet, avoid internationally large new bill projects, and reduce associated corporate overhead. Importantly, we remain in negotiations related to the sale of other assets and in discussions with new senior lenders and certain bondholders to potentially reduce or refinance our current debt. I'll now turn the call over to Cameron to discuss the financial details for the fourth quarter and full year of 2024 results. As previously disclosed, Cameron has officially taken over as B&W CFO following Lou Salamone's retirement at the end of 2024. I'd like to express my sincere gratitude to Lou for his steadfast leadership over the past six years, and we wish him all the best in his retirement. Cameron has an extensive background and career here at Babcock & Wilcox, and I'm excited about moving forward together. And with that, I'll turn things over to Cameron. Cameron?