Babcock & Wilcox Enterprises, Inc.

Good afternoon, and thank you for attending today's Babcock and Wilcox Enterprises second quarter 2025 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 now like to turn the conference over to our host, Sharon Brooks, B&W's Director of Communications. Thank you. You may proceed, Mrs. Brooks.

Thank you, Jayla, and thanks to everyone for joining us on Babcock and Wilcox Enterprises second quarter 2025 earnings conference call. As Jayla said, 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 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 was filed this afternoon 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 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.

Thanks, Sharon. Well, good afternoon, everyone, and thanks for joining us on our second quarter 2025 earnings call. We generated strong operating results highlighted by strong performance from our parts and services business, which posted a 31% increase in revenues compared to the second quarter of 2024. This growth has been spurred by the rising need for power and electricity due to the rapid expansion of AI-driven data centers, as well as increased baseload generation usage across the consumer manufacturing and industrial sectors. In fact, most of our clients expect increases in baseload generation by up to 120 gigawatts over the next 10 years from data centers alone. As a result, we continue to work with our customers to evaluate opportunities to further augment their power generation capacity with either biomass, hydrogen, natural gas, and coal. And we are working closely with our utility customers to help extend the life and improve the efficiency of their existing coal and natural gas power plants. We believe this increased demand continues to position us for sustained success across our higher margin parts and services businesses and provides B&W with a strong outlook for the second half of 2025 and beyond. Adjusted EBITDA, including diamond power, was $21.6 million for the second quarter, which was over 70% greater than street expectations and primarily driven by by the 31% increase in higher margin parts and services revenue coming from coal and fossil fuel power plants in the US and internationally as well. This reflects our intent to exit from certain large new-build projects internationally, and while we continue to expand our parts and services presence globally to support coal and fossil fuel customers around the world, We also are actively pursuing large upgrades and new builds in the U.S. to support power generation needs and expect to make key announcements by the end of the year. Large project revenue will remain up and down each quarter depending on timing and quarter-over-quarter overlap of new bookings. Company-wide revenues with Diamond Power came in at $170.8 million, which is just ahead of street expectations. Revenue from continued operations without diamond power for the quarter came in at $144.1 million, which is roughly the same as second quarter of 2024, again, mainly due to slightly lower projects, while parts and services, however, saw a dramatic increase. Overall, our revenues for the first half of 2025 from continuing operations without diamond power were up year over year to just under $300 million in top-line revenues. Operating income increased to 8.1 million in the second quarter of 2025, and adjusted EBITDA without Diamond Power, otherwise called adjusted EBITDA from continuing operations, was 15.1 million in the second quarter of 2025, which is a 90% increase compared to 8 million in the second quarter of 2024. Adjusted EBITDA from continuing operations more than doubled for the first six months of 2025 to 21.2 million, compared to the first six months in 2024. The company's core business continues to perform ahead of expectations, and we anticipate returning to positive cash flows in 2025 when excluding Brightloop. Additionally, through a combination of asset sales, debt reduction, and improved cash flows, the company has alleviated the previous doubt about continuing as a going concern. We believe we are well positioned now to win new plant conversions, plant upgrades, and behind-the-meter data center projects in North America and beyond, as we are in key discussions and negotiations on several opportunities and expect continued strong performance as we move forward through the year into 2026 and beyond. During the quarter, we completed the sale of Diamond Power International for gross proceeds of $177 million. million, or roughly about eight times EBITDA. This further improves our balance sheet and reinforces the mark-to-market value of our underlying assets as we recapitalize our business. This represents a significant improvement in our net leverage ratios as we look to continue supporting our customers' long-term power needs and position the company for the advancement of our new technologies, such as BrightLoop. We also recently entered into a private bond exchange with a limited number of note holders. These exchanges will help to reduce our annual interest expense by little over $1 million annually while reducing outstanding debt and extending debt maturity to 2030. This privately negotiated bond exchange resulted in $131.8 million of outstanding bonds due in 2026 being replaced with new bonds in the amount of $100.7 million that will be due in 2030. This represents a positive step in our restructuring and refinancing efforts while demonstrating continued support from our lenders and bondholders. Moving forward, we remain intently focused on our strategic vision and continue to explore the sale of other non-strategic assets as well as potential refinancing options to reduce our current and long-term debt obligations. We continue to see strong global demand for our diverse portfolio of technologies and are making progress in converting our $7.6 billion global pipeline of identified project opportunities. Our backlog of $418.1 million at the end of second quarter was a 49% increase compared to the same period in 2024. This represents another extremely strong quarter for our backlog as we continue to perform in based on higher baseload generation demand in North America. We believe these results affirm our strong foundation while underpinning our pipeline and outlook for the year ahead. Our efforts to progress Brightloop are moving forward as we further the commercial development of existing projects and continue working to improve the overall operational effectiveness of these technologies to produce low-cost hydrogen or steam We're seeing an increasing activity for our Bright Loop technology, both for steam generation as well as hydrogen production that can produce energy with lower costs and expenditures. In fact, we are in discussions with a number of oil and gas companies and large utilities about using Bright Loop for specific steam or hydrogen generation projects. I'll now turn the call over to Cameron to discuss the financial details of the second quarter of 2025. Cameron?