PART I [Business](index=6&type=section&id=Item%201.%20Business) Babcock & Wilcox Enterprises, Inc. (B&W) is a global provider of renewable, environmental, and thermal technologies, strategically expanding through acquisitions in clean energy and influenced by capital expenditures and regulations Company Segments | Segment | Description | | :--- | :--- | | **B&W Renewable** | Technologies for waste-to-energy, solar, biomass, and black liquor systems | | **B&W Environmental** | Emissions control and environmental technology solutions like cooling, ash handling, and particulate control | | **B&W Thermal** | Steam generation equipment, aftermarket parts, and services for power generation, oil & gas, and industrial sectors | - The company completed four strategic acquisitions to bolster its renewable and thermal segments: **Fosler Construction (Sept 2021)**: 60% stake in a solar energy contractor to capitalize on the high-growth U.S. solar market[26](index=26&type=chunk) **VODA A/S (Nov 2021)**: 100% ownership of a Danish aftermarket parts and services provider to strengthen its renewable service business in Europe[27](index=27&type=chunk) **Fossil Power Systems, Inc. (Feb 2022)**: 100% ownership of a manufacturer of hydrogen, natural gas, and renewable combustion equipment[28](index=28&type=chunk) **Optimus Industries, LLC (Feb 2022)**: 100% ownership of a designer of waste heat recovery products[29](index=29&type=chunk) - The COVID-19 pandemic has adversely impacted business by disrupting global supply chains, delaying projects into 2022 and beyond, and imposing travel restrictions that affect the company's ability to service customers at worksites[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) 2021 Capital Activities | Activity | Date | Net Proceeds / Amount (in millions) | | :--- | :--- | :--- | | **Equity Offerings** | | | | Common Stock Offering | Feb 2021 | ~$163.0 | | Preferred Stock Offering | May 2021 | ~$106.4 | | **Debt Offerings** | | | | 8.125% Senior Notes | Feb 2021 | ~$120.0 | | 6.50% Senior Notes | Dec 2021 | ~$145.0 | - At December 31, 2021, the company employed approximately **1,800 people worldwide**, with about **400 hourly employees** affiliated with unions, and considers its employee and union relations to be in good standing[66](index=66&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse operational, industry, financial, international, and ownership risks, including COVID-19 impacts, fixed-price contract losses, coal-fired plant dependence, liquidity needs, geopolitical events, and significant shareholder influence - **Operational Risks**: The business continues to be adversely affected by the COVID-19 pandemic, which has caused project delays and supply chain disruptions[83](index=83&type=chunk)[84](index=84&type=chunk) The company is also subject to losses if actual costs exceed estimates on fixed-price contracts, a risk that has materialized in the past[88](index=88&type=chunk) - **Industry Risks**: A substantial portion of revenue (**47% in 2021**) is related to coal-fired power plants, making the company vulnerable to a decline in spending on coal-based energy[121](index=121&type=chunk)[123](index=123&type=chunk) Demand is also subject to macroeconomic downturns and supply chain issues[125](index=125&type=chunk) - **Liquidity and Capital Risks**: The business requires significant bonding and letter of credit capacity to bid on and execute contracts[132](index=132&type=chunk) Goodwill and intangible assets (**$160.3 million** at year-end) are subject to impairment risk[137](index=137&type=chunk) Debt agreements contain restrictive covenants that could limit operational flexibility[146](index=146&type=chunk) - **International & Regulatory Risks**: The company's business may be affected by sanctions and export controls related to Russia's invasion of Ukraine[178](index=178&type=chunk) It is also subject to the U.S. Foreign Corrupt Practices Act (FCPA) and other anti-bribery laws, as well as political and economic uncertainties in foreign markets[185](index=185&type=chunk)[187](index=187&type=chunk) - **Ownership Risks**: B. Riley Financial, Inc. holds significant influence, controlling approximately **30.3% of the voting power** and having the right to nominate three directors as of December 31, 2021[198](index=198&type=chunk)[200](index=200&type=chunk) [Unresolved Staff Comments](index=34&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None[244](index=244&type=chunk) [Properties](index=34&type=section&id=Item%202.%20Properties) The company's principal properties include owned and leased manufacturing facilities, administrative offices, and service centers across its three segments globally Principal Properties by Segment (as of Dec 31, 2021) | Segment | Location | Use | Ownership | | :--- | :--- | :--- | :--- | | **B&W Renewable** | Esbjerg, Denmark | Manufacturing/Admin | Owned | | | Copenhagen, Denmark | Admin Office | Leased (2023) | | **B&W Environmental** | Paruzzaro, Italy | Admin Offices | Leased (2024) | | | Ding Xiang, China | Manufacturing | Leased (2023) | | **B&W Thermal** | Akron, Ohio | Admin Offices | Leased (2034) | | | Lancaster, Ohio | Manufacturing | Leased (2041) | | | Dumbarton, Scotland | Manufacturing | Owned | | | Guadalupe, Mexico | Manufacturing | Leased (2024) | [Legal Proceedings](index=34&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding ongoing investigations and litigation is incorporated by reference from Note 22 to the Consolidated Financial Statements - For details on legal proceedings, refer to Note 22 of the Consolidated Financial Statements[246](index=246&type=chunk) [Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[248](index=248&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matter and Issuer Purchase of Equity Securities](index=35&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matter%20and%20Issuer%20Purchase%20of%20Equity%20Securities) The company's common stock trades on the NYSE, with its performance lagging benchmarks, and it issued preferred stock to B. Riley in 2021 to prepay term loans - The company's common stock is traded on the NYSE under the symbol **BW**[251](index=251&type=chunk) - A performance graph comparing cumulative total shareholder return over five years shows B&W's stock performance lagging behind the S&P 500, Russell 2000, and a custom peer group[255](index=255&type=chunk) - On June 1, 2021, the company issued **2,916,880 shares** of its Preferred Stock to B. Riley in a private exchange to prepay **$73.3 million** of existing term loans[257](index=257&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operation](index=36&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation) This section analyzes the company's financial performance from 2019-2021, highlighting 2021 revenue growth to $723.4 million, a return to profitability with $31.5 million net income, increased Adjusted EBITDA, and strengthened liquidity through strategic financing activities [Overview](index=37&type=section&id=Overview) B&W's business is structured into Renewable, Environmental, and Thermal segments, with recent strategic acquisitions expanding its clean energy focus, driven by global power generation and industrial sector capital expenditures - The company's business is organized into three market-facing segments: Babcock & Wilcox Renewable, Babcock & Wilcox Environmental, and Babcock & Wilcox Thermal[260](index=260&type=chunk) - Recent strategic acquisitions include **Fosler Construction (solar)**, **VODA (renewable services)**, **Fossil Power Systems (combustion equipment)**, and **Optimus Industries (waste heat recovery)** to expand its clean energy and thermal businesses[261](index=261&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk)[265](index=265&type=chunk) - Key business drivers include climate change initiatives, environmental regulations, electricity prices, and the overall strength of the industrial sector[266](index=266&type=chunk) [Results of Operations - Years Ended December 31, 2021, 2020, and 2019](index=38&type=section&id=Results%20of%20Operations%20-%20Years%20Ended%20December%2031%2C%202021%2C%202020%2C%20and%202019) In 2021, consolidated revenues increased 27.7% to $723.4 million, driven by strong recovery in Thermal and Environmental segments, leading to a net income of $31.5 million and increased backlog Consolidated Financial Performance (in millions) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Revenues** | $723.4 | $566.3 | $859.1 | | **Operating Income (Loss)** | $20.8 | $(1.7) | $(29.4) | | **Net Income (Loss)** | $31.5 | $(10.3) | $(129.0) | | **Adjusted EBITDA** | $70.6 | $45.7 | $46.0 | Segment Revenue Performance (in millions) | Segment | 2021 | 2020 | % Change | | :--- | :--- | :--- | :--- | | B&W Renewable | $156.8 | $156.2 | +0.4% | | B&W Environmental | $133.8 | $108.0 | +23.9% | | B&W Thermal | $433.3 | $305.0 | +42.1% | - The B&W Renewable segment's adjusted EBITDA decreased to **$23.2 million** in 2021 from **$25.0 million** in 2020, primarily because 2020 results included a one-time **$26.0 million** insurance settlement recovery related to legacy EPC loss contracts[299](index=299&type=chunk)[301](index=301&type=chunk) - Backlog increased to **$639 million** at the end of 2021, up from **$535 million** at the end of 2020, with bookings of **$779 million** for the year[289](index=289&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) The company significantly improved its liquidity and capital structure in 2021 through strategic equity and debt offerings, ending the year with $224.9 million in cash and new debt facilities - The company executed several major financing actions in 2021, including offerings of common stock, preferred stock, 8.125% Senior Notes, and 6.50% Senior Notes, which significantly bolstered its cash position[334](index=334&type=chunk) Key Balance Sheet and Cash Flow Items (Year-End 2021) | Item | Amount (in millions) | | :--- | :--- | | Unrestricted Cash & Equivalents | $224.9 | | Total Debt | $340.3 | | Gross Preferred Stock | $191.7 | | Cash Used in Operations | $(111.2) | | Cash Used in Investing | $(33.5) | | Cash from Financing | $302.8 | - On June 30, 2021, the company replaced its prior A&R Credit Agreement with new debt facilities, including a **$50 million** asset-based revolving credit facility and a **$110 million** letter of credit facility[334](index=334&type=chunk)[343](index=343&type=chunk) - As of December 31, 2021, the company had outstanding letters of credit, bank guarantees, and surety bonds totaling approximately **$374.9 million** to support its contractual obligations[347](index=347&type=chunk)[349](index=349&type=chunk) [Critical Accounting Policies and Estimates](index=50&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section details critical accounting policies requiring significant management judgment, including revenue recognition on long-term contracts, business combinations, loss contingencies, and income taxes - **Revenue Recognition**: A significant portion of revenue is recognized over time using the cost-to-cost input method, which relies on estimates of total costs at completion[355](index=355&type=chunk) Changes in these estimates can materially impact reported profits[356](index=356&type=chunk) - **Business Combinations**: Acquired assets and liabilities are measured at their estimated fair values, with any excess purchase price recorded as goodwill, a process involving significant valuation estimates[361](index=361&type=chunk) - **Loss Contingencies**: Liabilities for probable and reasonably estimable losses are accrued, requiring judgment, especially for complex litigation, and future earnings could be affected by changes in estimates[363](index=363&type=chunk) - **Income Taxes**: The company records a valuation allowance against deferred tax assets that are not more likely than not to be realized[364](index=364&type=chunk) As of December 31, 2021, a valuation allowance exists in substantially all jurisdictions[366](index=366&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=52&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are interest rate fluctuations and foreign currency exchange rate exposures, particularly to the Danish krone, British pound, Euro, Canadian dollar, Mexican peso, and Chinese yuan - The company is exposed to foreign currency exchange risk, primarily from the **Danish krone**, **British pound**, **Euro**, **Canadian dollar**, **Mexican peso**, and **Chinese yuan**[369](index=369&type=chunk) - A hypothetical **100 basis point** change in FX rates would impact annual earnings by an estimated **$0.8 million**, based on intercompany loan balances at December 31, 2021[369](index=369&type=chunk) [Consolidated Financial Statements and Supplemental Data](index=52&type=section&id=Item%208.%20Consolidated%20Financial%20Statements%20and%20Supplemental%20Data) This section presents the audited consolidated financial statements for 2019-2021, along with the independent auditor's unqualified report on financial statements and internal controls Consolidated Statement of Operations Highlights (in thousands) | Line Item | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | **Revenues** | $723,363 | $566,317 | $859,111 | | **Operating Income (Loss)** | $20,821 | $(1,737) | $(29,382) | | **Net Income (Loss)** | $31,538 | $(10,297) | $(129,039) | | **Diluted EPS** | $0.26 | $(0.21) | $(3.87) | Consolidated Balance Sheet Highlights (in thousands) | Line Item | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $224,874 | $57,338 | | Total Assets | $913,265 | $599,077 | | Total Liabilities | $854,643 | $930,054 | | Total Stockholders' Equity (Deficit) | $58,622 | $(330,977) | Consolidated Statement of Cash Flows Highlights (in thousands) | Line Item | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(111,196) | $(40,806) | $(176,317) | | Net Cash (Used in) from Investing Activities | $(33,541) | $2,219 | $8,779 | | Net Cash from Financing Activities | $302,812 | $44,098 | $167,018 | [Controls and Procedures](index=109&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated and concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021, with the independent auditor issuing an unqualified opinion - The CEO and CFO concluded that disclosure controls and procedures were effective as of December 31, 2021[670](index=670&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2021[674](index=674&type=chunk) This assessment excluded the recently acquired businesses, Fosler Construction and VODA[675](index=675&type=chunk) - There were no material changes in internal control over financial reporting during the fourth quarter of 2021[677](index=677&type=chunk) [Other Information](index=112&type=section&id=Item%209B.%20Other%20Information) On March 2, 2022, the Board of Directors amended the company's bylaws to eliminate the age limitation for board members - The company's bylaws were amended on March 2, 2022, to remove any age limitation for directors[688](index=688&type=chunk) PART III [Directors, Executive Officers, and Corporate Governance](index=112&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%2C%20and%20Corporate%20Governance) This section provides information on executive officers as of March 1, 2022, with other governance details incorporated by reference from the 2022 Annual Meeting Proxy Statement Executive Officers (as of March 1, 2022) | Name | Age | Position | | :--- | :--- | :--- | | Kenneth Young | 58 | Chairman and Chief Executive Officer | | Louis Salamone | 75 | Executive Vice President, Chief Financial Officer and Chief Accounting Officer | | Jimmy B. Morgan | 53 | Executive Vice President and Chief Operating Officer | | John J. Dziewisz | 56 | Executive Vice President, General Counsel and Corporate Secretary | - Information regarding directors, the audit committee, and compliance with Section 16(a) is incorporated by reference from the company's definitive proxy statement[690](index=690&type=chunk) [Executive Compensation](index=113&type=section&id=Item%2011.%20Executive%20Compensation) Information concerning the compensation of directors and executive officers is incorporated by reference from the company's 2022 Annual Meeting Proxy Statement - Details on executive compensation are incorporated by reference from the Proxy Statement for the 2022 Annual Meeting of Stockholders[697](index=697&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=113&type=section&id=Item%2012.%20Security%20Ownership%20of%20Beneficial%20Owners%20and%20Related%20Stockholder%20Matters) This section provides equity compensation plan information as of December 31, 2021, with further security ownership details incorporated by reference from the 2022 Annual Meeting Proxy Statement Equity Compensation Plan Information (as of Dec 31, 2021) | Plan Category | Securities to be Issued Upon Exercise | Weighted-Average Exercise Price ($) | Securities Remaining for Future Issuance | | :--- | :--- | :--- | :--- | | Approved by security holders | 2,093,000 | $19.11 | 326,000 | [Certain Relationships and Related Transactions, and Director Independence](index=113&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information concerning related party transactions and director independence is incorporated by reference from the company's 2022 Annual Meeting Proxy Statement - Details on related transactions and director independence are incorporated by reference from the Proxy Statement for the 2022 Annual Meeting of Stockholders[699](index=699&type=chunk) [Principal Accountant Fees and Services](index=113&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding fees billed by the principal accountant, Deloitte & Touche LLP, is incorporated by reference from the company's 2022 Annual Meeting Proxy Statement - Information on fees paid to the principal accountant, Deloitte & Touche LLP, will be presented in the Proxy Statement for the 2022 Annual Meeting of Stockholders[700](index=700&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=114&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K report, including an index of all exhibits - This section contains the index of all exhibits filed with the Form 10-K, including the Master Separation Agreement, Bylaws, Indentures for senior notes, and various credit agreements[705](index=705&type=chunk)[706](index=706&type=chunk) [Form 10-K Summary](index=122&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that there is no Form 10-K summary - None[725](index=725&type=chunk)

Babcock & Wilcox Enterprises, Inc. (NYSE:BW) Q3 2021 Earnings Conference Call November 10, 2021 5:00 PM ET Company Participants Megan Wilson - Vice President, Investor Relations Kenny Young - Chairman & Chief Executive Officer Lou Salamone - Chief Financial Officer Conference Call Participants Rob Brown - Lake Street Capital Market Brent Thielman - DA Davidson Alex Rygiel - B. Riley Operator Hello and welcome to the Babcock & Wilcox Enterprises Third quarter 2021 Earnings Conference Call. My name is Charli ...

Company Overview and Strategy - Babcock & Wilcox (B&W) is a global leader in advanced environmental, renewable, and thermal technologies and services for power and industrial applications, with over 150 years of experience[4, 12] - B&W's transformation is gaining momentum, with a pipeline of over $6.5 billion in identified project opportunities in high-growth markets over the next three years[5, 19] - B&W is expanding its clean energy portfolio through innovation and acquisition, including the launch of ClimateBright™ decarbonization technologies platform, acquisition of Fosler Construction Company Inc, and an agreement to acquire Voda A/S[5] Financial Performance and Targets - B&W achieved approximately $58 million in adjusted EBITDA in the 12 months ended September 30, 2021[6] - B&W is targeting an adjusted EBITDA of at least $70 million for FY2021 and $110-$120 million for FY2022[6] - As of September 30, 2021, B&W's LTM Q3 2021 Revenue was $681 million, with a revenue backlog of $101 million for B&W Renewable, $313 million for B&W Environmental, and $130 million for B&W Thermal[13] Market Position and Technologies - B&W has a large installed base of technologies, including more than 500 waste-to-energy and biomass-to-energy units in over 30 countries, and approximately 90 pulp & paper recovery boiler units in North America[11] - B&W's ClimateBright™ decarbonization technologies are ready for commercial demonstration, including BrightLoop™, OxyBright, and SolveBright[24] - B&W's waste-to-energy technology reduces methane emissions, with installations in more than 500 units in over 30 countries[26]

PART I - FINANCIAL INFORMATION This section provides a comprehensive overview of the company's financial performance and position, including detailed statements, notes, and management's analysis for the reported periods [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including statements of operations, comprehensive income (loss), balance sheets, stockholders' equity (deficit), and cash flows, along with detailed notes explaining the accounting policies and significant financial events for the periods ended September 30, 2021 and 2020 [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenues | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | 3 months ended Sep 30 | $159,960 | $132,513 | +$27,447 (+20.7%) | | 9 months ended Sep 30 | $531,068 | $416,464 | +$114,604 (+27.5%) | Operating Income (Loss) | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | 3 months ended Sep 30 | $14,761 | $14,074 | +$687 (+4.9%) | | 9 months ended Sep 30 | $11,083 | $(3,927) | +$15,010 | Net Income (Loss) Attributable to Stockholders of Common Stock | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | 3 months ended Sep 30 | $9,962 | $34,724 | -$24,762 (-71.3%) | | 9 months ended Sep 30 | $(4,107) | $(14,906) | +$10,799 | Diluted Earnings (Loss) Per Share (Continuing Operations) | Period | 2021 | 2020 | Change (YoY) | | :----- | :--- | :--- | :----------- | | 3 months ended Sep 30 | $0.11 | $0.69 | -$0.58 (-84.1%) | | 9 months ended Sep 30 | $(0.05) | $(0.35) | +$0.30 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Net Income (Loss) | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | 3 months ended Sep 30 | $13,648 | $34,555 | -$20,907 (-60.5%) | | 9 months ended Sep 30 | $1,346 | $(15,313) | +$16,659 | Total Comprehensive Income (Loss) | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | 3 months ended Sep 30 | $12,553 | $11,393 | +$1,160 (+10.2%) | | 9 months ended Sep 30 | $(5,413) | $(40,682) | +$35,269 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total Assets | Date | Amount (in thousands) | | :--- | :-------------------- | | Sep 30, 2021 | $729,358 | | Dec 31, 2020 | $591,792 | Total Liabilities | Date | Amount (in thousands) | | :--- | :-------------------- | | Sep 30, 2021 | $708,958 | | Dec 31, 2020 | $930,054 | Total Stockholders' Equity (Deficit) | Date | Amount (in thousands) | | :--- | :-------------------- | | Sep 30, 2021 | $20,400 | | Dec 31, 2020 | $(338,262) | Cash, cash equivalents and restricted cash | Date | Amount (in thousands) | | :--- | :-------------------- | | Sep 30, 2021 | $115,747 | | Dec 31, 2020 | $67,423 | [Condensed Consolidated Statement of Stockholders' Equity (Deficit)](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders'%20Equity%20(Deficit)) - The balance of stockholders' equity (deficit) significantly improved from **$(338,262) thousand** at December 31, 2020, to **$20,400 thousand** at September 30, 2021[24](index=24&type=chunk) - Key changes in stockholders' equity for the nine months ended September 30, 2021, included a common stock offering (net) of **$161,513 thousand**, a preferred stock offering (net) of **$106,043 thousand**, and an equitized Last Out Term Loan principal payment of **$72,922 thousand**[24](index=24&type=chunk) - The acquisition of Fosler Construction contributed **$22,262 thousand** to non-controlling interest[24](index=24&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net Cash Used in Operating Activities | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | 9 months ended Sep 30 | $(107,834) | $(67,296) | -$40,538 (-60.2%) | Net Cash (Used in) From Investing Activities | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | 9 months ended Sep 30 | $(5,878) | $1,958 | -$7,836 | Net Cash From Financing Activities | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | 9 months ended Sep 30 | $159,218 | $52,377 | +$106,841 (+204.0%) | Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :----- | :------------------ | :------------------ | :----------- | | 9 months ended Sep 30 | $48,324 | $(8,572) | +$56,896 | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1 – BASIS OF PRESENTATION](index=12&type=section&id=NOTE%201%20%E2%80%93%20BASIS%20OF%20PRESENTATION) - The COVID-19 pandemic has significantly disrupted global business operations, supply chains, and project timelines, leading to delays in anticipated projects from 2020 into late 2021 and beyond[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - The company incurred additional costs to protect employees and advised remote work, contributing to uncertainty regarding the virus's full impact on operational and financial performance[37](index=37&type=chunk) [NOTE 2 – EARNINGS PER SHARE](index=13&type=section&id=NOTE%202%20%E2%80%93%20EARNINGS%20PER%20SHARE) Basic Earnings (Loss) Per Share (Continuing Operations) | Period | 2021 | 2020 | | :----- | :--- | :--- | | 3 months ended Sep 30 | $0.12 | $0.70 | | 9 months ended Sep 30 | $(0.05) | $(0.35) | Diluted Earnings (Loss) Per Share (Continuing Operations) | Period | 2021 | 2020 | | :----- | :--- | :--- | | 3 months ended Sep 30 | $0.11 | $0.69 | | 9 months ended Sep 30 | $(0.05) | $(0.35) | - Due to net losses in the nine months ended September 30, 2021 and 2020, basic and diluted shares were the same, and anti-dilutive stock options were excluded from diluted share calculations[39](index=39&type=chunk)[41](index=41&type=chunk) [NOTE 3 – SEGMENT REPORTING](index=13&type=section&id=NOTE%203%20%E2%80%93%20SEGMENT%20REPORTING) - B&W operates through three market-facing segments: Babcock & Wilcox Renewable (waste-to-energy, biomass), Babcock & Wilcox Environmental (emissions control, environmental technology), and Babcock & Wilcox Thermal (steam generation equipment, aftermarket services)[42](index=42&type=chunk)[44](index=44&type=chunk) Segment Revenues (in thousands) | Segment | 3 months ended Sep 30, 2021 | 3 months ended Sep 30, 2020 | 9 months ended Sep 30, 2021 | 9 months ended Sep 30, 2020 | | :------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | B&W Renewable | $38,000 | $39,062 | $105,155 | $118,570 | | B&W Environmental | $38,249 | $25,262 | $97,767 | $76,354 | | B&W Thermal | $83,819 | $70,025 | $328,416 | $223,920 | | Total Revenues | $159,960 | $132,513 | $531,068 | $416,464 | Segment Adjusted EBITDA (in thousands) | Segment | 3 months ended Sep 30, 2021 | 3 months ended Sep 30, 2020 | 9 months ended Sep 30, 2021 | 9 months ended Sep 30, 2020 | | :------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | B&W Renewable | $11,399 | $23,575 | $15,030 | $22,003 | | B&W Environmental | $3,471 | $2,177 | $7,270 | $1,408 | | B&W Thermal | $9,205 | $7,287 | $32,066 | $22,879 | [NOTE 4 – REVENUE RECOGNITION AND CONTRACTS](index=16&type=section&id=NOTE%204%20%E2%80%93%20REVENUE%20RECOGNITION%20AND%20CONTRACTS) - Revenue from customized, engineered solutions and construction services (transferred over time) accounted for **79%** and **80%** of total revenue for the three and nine months ended September 30, 2021, respectively[53](index=53&type=chunk) - Total backlog (remaining performance obligations) was **$540.0 million** as of September 30, 2021, with approximately **29.1%** expected to be recognized in the remainder of 2021, **32.6%** in 2022, and **38.3%** thereafter[56](index=56&type=chunk) - A non-recurring loss recovery of **$26.0 million** was recognized in Q3 2020 from an insurer for European B&W Renewable EPC loss contracts, and a reduction of cost of operations was recognized in Q3 2021 due to a subcontractor offer related to these contracts[61](index=61&type=chunk)[62](index=62&type=chunk) Net Contract Balance (in thousands) | Date | Amount | | :--- | :----- | | Sep 30, 2021 | $23,827 | | Sep 30, 2020 | $(4,694) | | Change | +$28,521 (+608%) | [NOTE 5 – INVENTORIES](index=18&type=section&id=NOTE%205%20%E2%80%93%20INVENTORIES) Total Inventories (in thousands) | Date | Amount | | :--- | :----- | | Sep 30, 2021 | $72,999 | | Dec 31, 2020 | $67,161 | - Raw materials and supplies increased from **$46,659 thousand** at December 31, 2020, to **$49,356 thousand** at September 30, 2021[67](index=67&type=chunk) - Finished goods increased from **$12,307 thousand** at December 31, 2020, to **$17,072 thousand** at September 30, 2021[67](index=67&type=chunk) [NOTE 6 – PROPERTY, PLANT & EQUIPMENT, & FINANCE LEASE](index=18&type=section&id=NOTE%206%20%E2%80%93%20PROPERTY,%20PLANT%20%26%20EQUIPMENT,%20%26%20FINANCE%20LEASE) Net Property, Plant and Equipment, and Finance Lease (in thousands) | Date | Amount | | :--- | :----- | | Sep 30, 2021 | $109,918 | | Dec 31, 2020 | $85,078 | - Property under construction significantly increased from **$5,336 thousand** at December 31, 2020, to **$11,224 thousand** at September 30, 2021[68](index=68&type=chunk) - Finance lease assets increased from **$30,551 thousand** at December 31, 2020, to **$57,393 thousand** at September 30, 2021[68](index=68&type=chunk) [NOTE 7 - GOODWILL](index=18&type=section&id=NOTE%207%20-%20GOODWILL) Goodwill Balance (in thousands) | Date | Amount | | :--- | :----- | | Sep 30, 2021 | $90,548 | | Dec 31, 2020 | $47,363 | - Goodwill increased by **$43,230 thousand** primarily due to the acquisition of Fosler Construction Company Inc. on September 30, 2021[69](index=69&type=chunk) - No impairment indicators were identified during the three months ended September 30, 2021, and goodwill is tested for impairment annually[69](index=69&type=chunk) [NOTE 8 – INTANGIBLE ASSETS](index=19&type=section&id=NOTE%208%20%E2%80%93%20INTANGIBLE%20ASSETS) Total Intangible Assets, Net (in thousands) | Date | Amount | | :--- | :----- | | Sep 30, 2021 | $37,528 | | Dec 31, 2020 | $23,908 | - Business acquisitions and adjustments contributed **$17,100 thousand** to intangible assets in the nine months ended September 30, 2021[71](index=71&type=chunk) - Estimated future intangible asset amortization expense for the year ending December 31, 2022, is **$5,633 thousand**[73](index=73&type=chunk) [NOTE 9 – LEASES](index=20&type=section&id=NOTE%209%20%E2%80%93%20LEASES) - The company executed leaseback agreements for its Copley, Ohio, and Lancaster, Ohio, locations after their sales, classifying them as finance leases with total future minimum payments of approximately **$5.6 million** and **$36.6 million**, respectively[74](index=74&type=chunk)[75](index=75&type=chunk) - The acquisition of Fosler Construction included two operating leases and one finance lease, with total future minimum payments of approximately **$1.5 million** for each type[76](index=76&type=chunk) Total Lease Liabilities (in thousands) | Date | Amount | | :--- | :----- | | Sep 30, 2021 | $65,777 | | Dec 31, 2020 | $41,602 | - Weighted-average remaining lease terms as of September 30, 2021, were **3.7 years** for operating leases and **15.3 years** for finance leases[79](index=79&type=chunk) [NOTE 10 – ACCRUED WARRANTY EXPENSE](index=22&type=section&id=NOTE%2010%20%E2%80%93%20ACCRUED%20WARRANTY%20EXPENSE) Accrued Warranty Expense Balance (in thousands) | Date | Amount | | :--- | :----- | | Sep 30, 2021 | $15,210 | | Dec 31, 2020 | $25,399 | - Additions to accrued warranty expense were **$5,155 thousand** for the nine months ended September 30, 2021, compared to **$4,508 thousand** in the prior year[82](index=82&type=chunk) - Payments for warranty claims totaled **$10,212 thousand** for the nine months ended September 30, 2021, compared to **$8,410 thousand** in the prior year[82](index=82&type=chunk) [NOTE 11 – RESTRUCTURING ACTIVITIES](index=23&type=section&id=NOTE%2011%20%E2%80%93%20RESTRUCTURING%20ACTIVITIES) Restructuring Expense (in thousands) | Period | 2021 | 2020 | | :----- | :--- | :--- | | 3 months ended Sep 30 | $4,575 | $2,396 | | 9 months ended Sep 30 | $7,968 | $6,739 | - Restructuring charges primarily consisted of severance and business service transition costs related to strategic initiatives and actions taken to address the impact of COVID-19[85](index=85&type=chunk)[87](index=87&type=chunk) - Cumulative restructuring costs to date reached **$48,282 thousand**, with accrued restructuring liabilities at **$7,038 thousand** as of September 30, 2021[86](index=86&type=chunk) [NOTE 12 – PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS](index=24&type=section&id=NOTE%2012%20%E2%80%93%20PENSION%20PLANS%20AND%20OTHER%20POSTRETIREMENT%20BENEFITS) - Total mark-to-market (MTM) adjustments for pension benefit plans resulted in gains of **$2.3 million** for both the three and nine months ended September 30, 2021[88](index=88&type=chunk) - Contributions to pension and other postretirement benefit plans totaled **$24.7 million** for the nine months ended September 30, 2021, a significant increase from **$1.6 million** in the prior year[89](index=89&type=chunk) - The company elected to defer **$20.9 million** of estimated 2021 Pension Plan contribution payments under the American Rescue Plan Act of 2021[90](index=90&type=chunk) [NOTE 13 – 2021 SENIOR NOTES OFFERING](index=24&type=section&id=NOTE%2013%20%E2%80%93%202021%20SENIOR%20NOTES%20OFFERING) - Completed a public offering of **$125.0 million** aggregate principal amount of **8.125%** senior notes due 2026 in February 2021, yielding approximately **$120.0 million** in net proceeds[91](index=91&type=chunk) - Issued an additional **$35.0 million** of Senior Notes to B. Riley Financial, Inc. in exchange for a deemed prepayment of an existing Last Out Term Loan[92](index=92&type=chunk) - Sold an additional **$25.6 million** aggregate principal amount of Senior Notes under a sales agreement, generating **$26.0 million** in net proceeds, with the notes bearing **8.125%** interest per annum, payable quarterly, and maturing on February 28, 2026[93](index=93&type=chunk)[95](index=95&type=chunk) [NOTE 14 – LAST OUT TERM LOANS](index=25&type=section&id=NOTE%2014%20%E2%80%93%20LAST%20OUT%20TERM%20LOANS) - As of June 30, 2021, the company has no remaining Last Out Term Loans, and no further borrowings are available under these facilities[96](index=96&type=chunk) - Payments in cash for Last Out Term Loans totaled **$75,408 thousand** for the nine months ended September 30, 2021[96](index=96&type=chunk) - An equitized deemed prepayment from preferred stock issuance accounted for **$72,922 thousand** of the reduction in Last Out Term Loans[96](index=96&type=chunk) [NOTE 15 – REVOLVING DEBT](index=25&type=section&id=NOTE%2015%20%E2%80%93%20REVOLVING%20DEBT) - On June 30, 2021, the company entered into a new Revolving Credit Agreement for up to **$50.0 million** and a Letter of Credit Agreement for up to **$110 million**, both maturing on June 30, 2025[97](index=97&type=chunk)[98](index=98&type=chunk) - B. Riley Financial, Inc., a related party, provided a guaranty of payment for the company's obligations under the Reimbursement Agreement, for which the company pays B. Riley **$0.9 million** per annum[103](index=103&type=chunk) - The previous A&R Credit Agreement was terminated on June 30, 2021, resulting in a **$6.5 million** gain on debt extinguishment[104](index=104&type=chunk) - Aggregate value of letters of credit and bank guarantees was **$53.1 million**, and surety bonds totaled **$157.6 million** as of September 30, 2021[105](index=105&type=chunk)[107](index=107&type=chunk) [NOTE 16 – PREFERRED STOCK](index=27&type=section&id=NOTE%2016%20%E2%80%93%20PREFERRED%20STOCK) - Completed a public offering of **4,000,000 shares** of **7.75%** Series A Cumulative Perpetual Preferred Stock in May 2021, generating approximately **$95.7 million** in net proceeds, with an additional **444,700 shares** sold for **$10.7 million** net proceeds[110](index=110&type=chunk)[111](index=111&type=chunk) - The Preferred Stock has a cumulative cash dividend of **7.75%** per year (**$1.9375 per share**), payable quarterly, with dividends of **$1.7 million** and **$3.7 million** paid in June and September 2021, respectively[113](index=113&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - Issued **2,916,880 shares** of Preferred Stock to B. Riley in exchange for a deemed prepayment of **$73.3 million** of existing term loans[117](index=117&type=chunk) [NOTE 17 – COMMON STOCK](index=28&type=section&id=NOTE%2017%20%E2%80%93%20COMMON%20STOCK) - Completed a public offering of **29,487,180 shares** of common stock in February 2021, generating approximately **$163.0 million** in net proceeds, which were used to prepay the U.S. Revolving Credit Facility and reduce commitments[120](index=120&type=chunk)[121](index=121&type=chunk) - Stockholders approved the 2021 Long-Term Incentive Plan, authorizing **1,250,000 new shares** plus certain unissued shares from the prior 2015 Plan[122](index=122&type=chunk) [NOTE 18 –INTEREST EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION](index=29&type=section&id=NOTE%2018%20%E2%80%93INTEREST%20EXPENSE%20AND%20SUPPLEMENTAL%20CASH%20FLOW%20INFORMATION) Total Interest Expense (in thousands) | Period | 2021 | 2020 | | :----- | :--- | :--- | | 3 months ended Sep 30 | $8,330 | $12,203 | | 9 months ended Sep 30 | $30,574 | $49,776 | - Cash, cash equivalents, and restricted cash increased from **$67,423 thousand** at December 31, 2020, to **$115,747 thousand** at September 30, 2021[126](index=126&type=chunk) - Total cash paid for interest was **$18,800 thousand** for the nine months ended September 30, 2021, compared to **$14,420 thousand** in the prior year[128](index=128&type=chunk) [NOTE 19 – PROVISION FOR INCOME TAXES](index=30&type=section&id=NOTE%2019%20%E2%80%93%20PROVISION%20FOR%20INCOME%20TAXES) Income Tax Expense (Benefit) and Effective Tax Rate | Period | Income Tax Expense (Benefit) (in thousands) | Effective Tax Rate | | :----- | :---------------------------------------- | :----------------- | | 3 months ended Sep 30, 2021 | $301 | 2.2% | | 3 months ended Sep 30, 2020 | $(502) | (1.5)% | | 9 months ended Sep 30, 2021 | $6,683 | 83.2% | | 9 months ended Sep 30, 2020 | $(467) | 2.7% | - The effective tax rates are not reflective of the U.S. statutory rate primarily due to valuation allowances against certain net deferred tax assets and discrete items[131](index=131&type=chunk)[262](index=262&type=chunk) - The company adopted ASU 2019-12, Simplifying the Accounting for Income Taxes, on January 1, 2021, with an immaterial impact on its interim consolidated financial statements[181](index=181&type=chunk)[183](index=183&type=chunk)[264](index=264&type=chunk) [NOTE 20 – CONTINGENCIES](index=30&type=section&id=NOTE%2020%20%E2%80%93%20CONTINGENCIES) - In the Glatfelter Litigation, the court dismissed fraud and negligent misrepresentation claims and limited potential damages to a contractual cap of **$11.7 million**, with the company intending to vigorously litigate its counterclaim[133](index=133&type=chunk) - The SEC investigation into the company's B&W Renewable segment accounting charges from 2015-2019 has concluded, with the staff not intending to recommend any enforcement action[136](index=136&type=chunk) - In the Stockholder Derivative and Class Action Litigation, the company believes the outcome will not have a material adverse impact on its financial condition, results of operations, or cash flows, net of any insurance coverage[137](index=137&type=chunk) [NOTE 21 – COMPREHENSIVE INCOME](index=31&type=section&id=NOTE%2021%20%E2%80%93%20COMPREHENSIVE%20INCOME) - The balance of Accumulated Other Comprehensive Income (Loss) (AOCI) was **$(59,149) thousand** at September 30, 2021, compared to **$(52,390) thousand** at December 31, 2020[139](index=139&type=chunk) - Net other comprehensive loss for the nine months ended September 30, 2021, was **$(4,384) thousand**[139](index=139&type=chunk) - A reclassification of currency translation adjustment of **$4,512 thousand** was made to net income (loss) with the sale of a business for the nine months ended September 30, 2021[141](index=141&type=chunk) [NOTE 22 – FAIR VALUE MEASUREMENTS](index=32&type=section&id=NOTE%2022%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENTS) - The total fair value of available-for-sale securities was **$13,551 thousand** at September 30, 2021, primarily comprising corporate notes and bonds (**$8,719 thousand**) and United States Government and agency securities (**$4,131 thousand**)[142](index=142&type=chunk) - The fair value of the **8.125%** Senior Notes due 2026 was estimated at **$194,211 thousand**, compared to a carrying value of **$185,599 thousand**, as of September 30, 2021[147](index=147&type=chunk) - The fair value of warrants was established using the Black-Scholes option pricing model, and the Fosler Construction acquisition involved significant fair value measurements using unobservable (Level 3) inputs[148](index=148&type=chunk)[149](index=149&type=chunk) [NOTE 23 – RELATED PARTY TRANSACTIONS](index=33&type=section&id=NOTE%2023%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) - B. Riley beneficially owns **30.3%** of the company's outstanding common stock as of September 30, 2021, and is involved in various transactions[150](index=150&type=chunk) - The company paid B. Riley Securities, Inc. **$5.2 million** and **$9.5 million** for underwriting fees related to Senior Notes and common stock offerings, respectively, in February 2021[156](index=156&type=chunk)[157](index=157&type=chunk) - The company issued **$35.0 million** of Senior Notes to B. Riley in exchange for a deemed prepayment of an existing term loan and issued **2,916,880 shares** of Preferred Stock to B. Riley for a deemed prepayment of **$73.3 million** of Last Out Term Loans[158](index=158&type=chunk)[162](index=162&type=chunk) - The company pays B. Riley **$0.9 million** per annum for a guaranty of payment related to the Reimbursement Agreement[163](index=163&type=chunk) [NOTE 24 – ACQUISITIONS, ASSETS HELD FOR SALE, DIVESTITURES AND DISCONTINUED OPERATIONS](index=35&type=section&id=NOTE%2024%20%E2%80%93%20ACQUISITIONS,%20ASSETS%20HELD%20FOR%20SALE,%20DIVESTITURES%20AND%20DISCONTINUED%20OPERATIONS) - On September 30, 2021, the company acquired a **60%** controlling ownership stake in Fosler Construction Company Inc., a solar energy contractor, for approximately **$27.2 million** in cash plus contingent consideration (preliminarily valued at **$6.2 million**, maximum **$10.0 million**)[168](index=168&type=chunk)[169](index=169&type=chunk) - The company sold real property assets in Copley, Ohio, for **$4.0 million** (net proceeds **$3.3 million**, gain **$1.9 million**) and Lancaster, Ohio, for **$18.9 million** (net proceeds **$15.8 million**, gain **$13.9 million**), both with leaseback agreements[173](index=173&type=chunk)[174](index=174&type=chunk) - The company sold Diamond Power Machine (Hubei) Co., Inc. for **$2.8 million**, recognizing a **$2.2 million** pre-tax loss, which included a **$4.5 million** currency translation adjustment[178](index=178&type=chunk) [NOTE 25 – NEW ACCOUNTING STANDARDS](index=37&type=section&id=NOTE%2025%20%E2%80%93%20NEW%20ACCOUNTING%20STANDARDS) - The company adopted ASU 2019-12, Simplifying the Accounting for Income Taxes, on January 1, 2021, with an immaterial impact on its financial statements[181](index=181&type=chunk)[183](index=183&type=chunk) - The company is currently evaluating the impact of ASU 2021-04 (Earnings Per Share), ASU 2021-01 (Reference Rate Reform), and ASU 2020-06 (Debt with Conversion and Other Options) on its condensed consolidated financial statements, with effective dates ranging from fiscal years beginning after December 15, 2021, to December 15, 2023[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - The company is also evaluating ASU 2018-19 (Credit Losses), effective for smaller reporting companies after December 15, 2022, which will primarily impact the allowance for doubtful accounts and impairment model for available-for-sale debt securities[189](index=189&type=chunk) [NOTE 26 – PROPOSED ACQUISITION](index=39&type=section&id=NOTE%2026%20%E2%80%93%20PROPOSED%20ACQUISITION) - The company announced its intention to acquire **100%** of VODA A/S, a leading multi-brand aftermarket parts and service provider for waste-to-energy and biomass-to-energy markets in Denmark, for approximately **$30.0 million**[190](index=190&type=chunk) - The planned acquisition of VODA A/S aligns with B&W's aggressive growth and expansion of its clean and renewable energy businesses[191](index=191&type=chunk) - The acquisition is expected to close by the end of December 2021, subject to customary closing conditions, including Foreign Direct Investment clearance in Denmark[192](index=192&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation](index=39&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation) This section provides management's perspective on the company's financial condition and results of operations, discussing overall performance, segment-specific results, liquidity, capital resources, and critical accounting policies. It highlights revenue growth, improved operating income, and strategic initiatives like acquisitions and cost reductions [OVERVIEW OF RESULTS](index=39&type=section&id=OVERVIEW%20OF%20RESULTS) - B&W is a growing, globally-focused provider of renewable, environmental, and thermal technologies, with its business significantly dependent on capital and O&M expenditures in global electric power generation and industrial facilities[193](index=193&type=chunk)[196](index=196&type=chunk) - The company acquired a **60%** controlling ownership stake in Fosler Construction Company Inc., a solar energy contractor, on September 30, 2021, to expand its clean and renewable energy businesses[194](index=194&type=chunk) - Operating income increased to **$14.8 million** and **$11.1 million** for the three and nine months ended September 30, 2021, respectively, showing improved results in the Environmental and Thermal segments[198](index=198&type=chunk) - Ongoing restructuring efforts aim to make the cost structure more variable and reduce costs, with additional initiatives underway to improve cash generation and evaluate non-core asset sales[202](index=202&type=chunk)[203](index=203&type=chunk) [RESULTS OF OPERATIONS](index=41&type=section&id=RESULTS%20OF%20OPERATIONS) [Condensed Consolidated Results of Operations](index=41&type=section&id=Condensed%20Consolidated%20Results%20of%20Operations) Consolidated Revenues (in thousands) | Period | 2021 | 2020 | $ Change | | :----- | :--- | :--- | :------- | | 3 months ended Sep 30 | $159,960 | $132,513 | $27,447 | | 9 months ended Sep 30 | $531,068 | $416,464 | $114,604 | - Consolidated revenues increased by **$27.4 million (20.7%)** for the three months and **$114.6 million (27.5%)** for the nine months ended September 30, 2021, primarily due to higher activity in the Thermal and Environmental segments[212](index=212&type=chunk)[214](index=214&type=chunk) - Operating income increased by **$0.7 million** for the three months and **$15.0 million** for the nine months ended September 30, 2021, partially offset by a non-recurring **$26.0 million** loss recovery recognized in Q3 2020[213](index=213&type=chunk)[215](index=215&type=chunk) Adjusted Gross Profit (in thousands) | Period | 2021 | 2020 | $ Change | | :----- | :--- | :--- | :------- | | 3 months ended Sep 30 | $46,558 | $59,589 | $(13,031) | | 9 months ended Sep 30 | $130,537 | $128,817 | $1,720 | [B&W Renewable Segment Results](index=43&type=section&id=B%26W%20Renewable%20Segment%20Results) B&W Renewable Segment Revenues (in thousands) | Period | 2021 | 2020 | $ Change | | :----- | :--- | :--- | :------- | | 3 months ended Sep 30 | $38,000 | $39,062 | $(1,062) | | 9 months ended Sep 30 | $105,155 | $118,570 | $(13,415) | B&W Renewable Segment Adjusted EBITDA (in thousands) | Period | 2021 | 2020 | $ Change | | :----- | :--- | :--- | :------- | | 3 months ended Sep 30 | $11,399 | $23,575 | $(12,176) | | 9 months ended Sep 30 | $15,030 | $22,003 | $(6,973) | - The decrease in revenues, Adjusted EBITDA, and Adjusted Gross Profit was primarily due to the completion of large service and licensing projects in the prior year and the non-recurring **$26.0 million** loss recovery recognized in Q3 2020[221](index=221&type=chunk)[222](index=222&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk) [B&W Environmental Segment Results](index=44&type=section&id=B%26W%20Environmental%20Segment%20Results) B&W Environmental Segment Revenues (in thousands) | Period | 2021 | 2020 | $ Change | | :----- | :--- | :--- | :------- | | 3 months ended Sep 30 | $38,249 | $25,262 | $12,987 | | 9 months ended Sep 30 | $97,767 | $76,354 | $21,413 | B&W Environmental Segment Adjusted EBITDA (in thousands) | Period | 2021 | 2020 | $ Change | | :----- | :--- | :--- | :------- | | 3 months ended Sep 30 | $3,471 | $2,177 | $1,294 | | 9 months ended Sep 30 | $7,270 | $1,408 | $5,862 | - Revenue and Adjusted EBITDA increases were primarily driven by higher volume in the ASH project business and the release of projects previously postponed due to COVID-19[229](index=229&type=chunk)[231](index=231&type=chunk) - Adjusted EBITDA for the nine months ended September 30, 2021, benefited from a **$0.4 million** improvement on loss contracts, compared to a **$1.3 million** charge in the prior period[233](index=233&type=chunk) [B&W Thermal Segment Results](index=45&type=section&id=B%26W%20Thermal%20Segment%20Results) B&W Thermal Segment Revenues (in thousands) | Period | 2021 | 2020 | $ Change | | :----- | :--- | :--- | :------- | | 3 months ended Sep 30 | $83,819 | $70,025 | $13,794 | | 9 months ended Sep 30 | $328,416 | $223,920 | $104,496 | B&W Thermal Segment Adjusted EBITDA (in thousands) | Period | 2021 | 2020 | $ Change | | :----- | :--- | :--- | :------- | | 3 months ended Sep 30 | $9,205 | $7,287 | $1,918 | | 9 months ended Sep 30 | $32,066 | $22,879 | $9,187 | - Revenue increases were attributable to a higher level of activity in project business, parts, construction, package boilers, and international service orders, which were negatively impacted by COVID-19 in the comparable prior year period[238](index=238&type=chunk) - Adjusted EBITDA increase was mainly due to higher volume, partially offset by product mix, increased expenses from growth in Asia and the Middle East, and higher shared resources[239](index=239&type=chunk) [Bookings and Backlog](index=46&type=section&id=Bookings%20and%20Backlog) Total Bookings (in approximate millions) | Period | 2021 | 2020 | Change (YoY) | | :----- | :--- | :--- | :----------- | | 3 months ended Sep 30 | $173 | $177 | -$4 (-2.3%) | | 9 months ended Sep 30 | $510 | $478 | +$32 (+6.7%) | Total Backlog (in approximate millions) | Date | Amount | | :--- | :----- | | Sep 30, 2021 | $540 | | Sep 30, 2020 | $509 | - B&W Renewable backlog at September 30, 2021, included **$152.8 million** related to long-term operation and maintenance contracts for renewable energy plants[245](index=245&type=chunk) - Expected revenue from backlog is **$157 million** for the remainder of 2021, **$176 million** for 2022, and **$207 million** thereafter[246](index=246&type=chunk) [Corporate](index=47&type=section&id=Corporate) - Corporate costs in Adjusted EBITDA increased by **$1.0 million** to **$5.9 million** for the three months ended September 30, 2021, primarily due to higher incentive compensation costs[248](index=248&type=chunk) - Corporate costs decreased by **$1.3 million** to **$11.5 million** for the nine months ended September 30, 2021, primarily due to lower audit fees, personnel, director fees, and insurance costs, offset by higher incentive compensation[249](index=249&type=chunk) [Advisory Fees and Settlement Costs](index=47&type=section&id=Advisory%20Fees%20and%20Settlement%20Costs) - Advisory fees and settlement costs decreased by **$2.0 million** to **$1.8 million** for the three months ended September 30, 2021, and by **$0.4 million** to **$9.7 million** for the nine months ended September 30, 2021[250](index=250&type=chunk) - The decrease is primarily attributed to reduced use of external consultants during the periods[250](index=250&type=chunk) [Research and Development](index=47&type=section&id=Research%20and%20Development) - Research and development (benefit) expenses totaled **$(0.2) million** for the three months ended September 30, 2021, due to a **$0.8 million** foreign refundable credit from the 2020 tax year[251](index=251&type=chunk) - Research and development expenses totaled **$1.0 million** for the nine months ended September 30, 2021, a decrease from **$3.9 million** in the prior year, primarily due to the timing of specific R&D efforts[251](index=251&type=chunk) - R&D activities are focused on improving products, reducing costs, and mitigating performance risk[251](index=251&type=chunk) [Restructuring](index=47&type=section&id=Restructuring) - Restructuring charges amounted to **$4.6 million** for the three months and **$8.0 million** for the nine months ended September 30, 2021[252](index=252&type=chunk) - These charges primarily consist of severance and business service transition costs, incurred as part of the company's strategic, market-focused organizational and re-branding initiative[252](index=252&type=chunk) [Depreciation and Amortization](index=47&type=section&id=Depreciation%20and%20Amortization) - Depreciation expense was **$2.3 million** for the three months and **$7.4 million** for the nine months ended September 30, 2021[253](index=253&type=chunk) - Amortization expense was **$2.1 million** for the three months and **$5.5 million** for the nine months ended September 30, 2021[253](index=253&type=chunk) [Pension and Other Postretirement Benefit Plans](index=47&type=section&id=Pension%20and%20Other%20Postretirement%20Benefit%20Plans) - Pension benefits before MTM were **$7.6 million** for the three months and **$22.6 million** for the nine months ended September 30, 2021[254](index=254&type=chunk) - Total MTM adjustments for pension benefit plans resulted in gains of **$2.3 million** for both the three and nine months ended September 30, 2021[256](index=256&type=chunk) - Pension costs and funding requirements are highly dependent on financial market performance (equity markets, interest rates) and actuarial assumptions, with potential for volatility in results of operations[258](index=258&type=chunk) [Foreign Exchange](index=48&type=section&id=Foreign%20Exchange) - Foreign exchange resulted in a loss of **$(1.7) million** for the three months and **$(1.1) million** for the nine months ended September 30, 2021[260](index=260&type=chunk) - These foreign exchange gains and losses are primarily related to unhedged intercompany loans denominated in European currencies used to fund foreign operations[260](index=260&type=chunk) [Income Taxes](index=48&type=section&id=Income%20Taxes) Income Tax Expense (Benefit) and Effective Tax Rate | Period | Income Tax Expense (Benefit) (in thousands) | Effective Tax Rate | | :----- | :---------------------------------------- | :----------------- | | 3 months ended Sep 30, 2021 | $301 | 2.2% | | 3 months ended Sep 30, 2020 | $(502) | (1.5)% | | 9 months ended Sep 30, 2021 | $6,683 | 83.2% | | 9 months ended Sep 30, 2020 | $(467) | 2.7% | - The effective tax rate for the third quarter of 2021 is not reflective of the United States statutory rate primarily due to a valuation allowance against certain net deferred tax assets and favorable discrete items[262](index=262&type=chunk) - The U.S. was considered a non-loss jurisdiction and included in the estimated annual effective tax rate for the period ended September 30, 2021[262](index=262&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) [Liquidity](index=49&type=section&id=Liquidity) - Primary liquidity requirements include debt service, funding dividends on preferred stock, and working capital needs, funded by cash from operations, external financing (Revolving Credit Agreement, Senior Notes, equity offerings), and asset sales[265](index=265&type=chunk)[266](index=266&type=chunk) - The company implemented cash conservation measures, including suspending its 401(k) company match (reinstating January 1, 2022), utilizing government loans, and deferring **$20.9 million** of estimated Pension Plan contribution payments[268](index=268&type=chunk) [Cash and Cash Flows](index=50&type=section&id=Cash%20and%20Cash%20Flows) - Unrestricted cash and cash equivalents totaled **$107.1 million** at September 30, 2021, with **$39.2 million** held by foreign entities, and total debt was **$193.1 million**[269](index=269&type=chunk) - Cash used in operations was **$107.8 million** for the nine months ended September 30, 2021, primarily due to changes in pension, postretirement, and employee benefit liabilities and a net decrease in operating cash outflows associated with working capital[270](index=270&type=chunk) - Cash flows from investing activities used **$5.9 million**, mainly for the Fosler Construction acquisition and capital expenditures, offset by proceeds from asset sales[271](index=271&type=chunk) - Cash flows from financing activities provided **$159.2 million**, primarily from the issuance of common stock, Senior Notes, and Preferred Stock, offset by Last Out Term Loans repayments and a net reduction on the prior U.S. Revolving Credit Facility[272](index=272&type=chunk) [Debt Facilities](index=50&type=section&id=Debt%20Facilities) - The company entered into new Debt Facilities on June 30, 2021, including a Revolving Credit Agreement and a Letter of Credit Agreement, guaranteed by certain subsidiaries and B. Riley, for working capital and general corporate purposes[273](index=273&type=chunk) - The new facilities replaced the previous A&R Credit Agreement, which was terminated, with all loans repaid and outstanding letters of credit collateralized on June 30, 2021[275](index=275&type=chunk) [Last Out Term Loans](index=51&type=section&id=Last%20Out%20Term%20Loans) - As of June 30, 2021, the company has no remaining Last Out Term Loans, and no further borrowings are available under these facilities[276](index=276&type=chunk) - A **$6.2 million** loss on debt extinguishment was recognized in the quarter ended June 30, 2020, primarily representing the unamortized value of the original issuance discount and fees on the Tranche A-3 Last Out Term Loan[277](index=277&type=chunk) [A&R Credit Agreement](index=51&type=section&id=A%26R%20Credit%20Agreement) - The A&R Credit Agreement commitments were terminated, all loans were repaid, and all outstanding and undrawn letters of credit were collateralized on June 30, 2021[278](index=278&type=chunk) - The company recognized a **$6.5 million** gain on debt extinguishment in the quarter ended June 30, 2021, primarily from the write-off of accrued revolver fees offset by unamortized deferred financing fees[278](index=278&type=chunk) [Letters of Credit, Bank Guarantees and Surety Bonds](index=51&type=section&id=Letters%20of%20Credit,%20Bank%20Guarantees%20and%20Surety%20Bonds) - The aggregate value of letters of credit and bank guarantees was **$53.1 million** as of September 30, 2021[279](index=279&type=chunk) - Surety bonds supporting contractual obligations totaled approximately **$157.6 million** as of September 30, 2021[280](index=280&type=chunk) - Maintaining sufficient capacity under new Debt Facilities is essential to support future contract security requirements[281](index=281&type=chunk) [Other Indebtedness - Loans Payable](index=51&type=section&id=Other%20Indebtedness%20-%20Loans%20Payable) - The Denmark subsidiary received three unsecured interest-free loans totaling **$3.4 million** under a local government COVID-19 loan program, payable in April 2022, May 2022, and May 2023[282](index=282&type=chunk) - Fosler Construction, a recent acquisition, has two loans totaling **$7.6 million** (variable interest, minimum **6%**, payable January 1, 2022) and **$0.9 million** in vehicle and equipment loans[283](index=283&type=chunk) [Off-Balance Sheet Arrangements](index=53&type=section&id=Off-Balance%20Sheet%20Arrangements) - The company does not have any off-balance sheet arrangements that are reasonably expected to have a material current or future effect on its financial condition, results of operations, liquidity, capital expenditures, or capital resources as of September 30, 2021[285](index=285&type=chunk) [Critical Accounting Policies and Estimates](index=53&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There have been no significant changes to the company's critical accounting policies and estimates during the nine months ended September 30, 2021, as detailed in its Annual Report[286](index=286&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that the company's exposures to market risks have not materially changed from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2020 - The company's exposures to market risks have not materially changed from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2020[287](index=287&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2021, to provide reasonable assurance for financial reporting. The assessment excluded the recently acquired Fosler Construction, and no material changes to internal control over financial reporting were reported - The company's management, including the CEO and CFO, concluded that the design and operation of its disclosure controls and procedures are effective as of September 30, 2021[290](index=290&type=chunk) - The assessment of disclosure controls and procedures excluded internal control over financial reporting related to the recently acquired Fosler Construction, in accordance with SEC guidance[289](index=289&type=chunk) - There were no material changes in internal control over financial reporting during the nine months ended September 30, 2021, despite the impact of the COVID-19 pandemic on remote work[291](index=291&type=chunk) PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, equity security sales, and a list of exhibits, providing additional context to the company's financial disclosures [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference the information regarding ongoing investigations and litigation from Note 20 to the unaudited Condensed Consolidated Financial Statements - Information regarding ongoing investigations and litigation is incorporated by reference from Note 20 of the Condensed Consolidated Financial Statements[293](index=293&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and subsequent Quarterly Reports on Form 10-Q - There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and subsequent Quarterly Reports on Form 10-Q[294](index=294&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports the acquisition of common shares in connection with the vesting of employee restricted stock to satisfy statutory income tax withholding obligations, clarifying that the company does not have a general share repurchase program - The company acquired **198,609 shares** of common stock at an average price of **$7.82 per share** during the quarter ended September 30, 2021, to satisfy employee statutory income tax withholding obligations related to restricted stock vesting[297](index=297&type=chunk) - The company does not have a general share repurchase program at this time[295](index=295&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications from the Chief Executive Officer and Chief Financial Officer, as well as XBRL Taxonomy Extension documents - The exhibits include Rule 13a-14(a)/15d-14(a) and Section 1350 certifications from the Chief Executive Officer and Chief Financial Officer[296](index=296&type=chunk) - XBRL Taxonomy Extension Schema, Calculation, Label, Presentation, and Definition Linkbase Documents, along with the Cover Page Interactive Data File, are also included as exhibits[296](index=296&type=chunk) [SIGNATURES](index=55&type=section&id=SIGNATURES) This section confirms the official signing of the report by the designated financial officer on behalf of the company - The report was duly signed on behalf of Babcock & Wilcox Enterprises, Inc. by Louis Salamone, Executive Vice President, Chief Financial Officer, and Chief Accounting Officer, on November 10, 2021[302](index=302&type=chunk)

Babcock & Wilcox Enterprises, Inc. (NYSE:BW) Q2 2021 Earnings Conference Call August 12, 2021 5:00 PM ET Company Participants Megan Wilson - Vice President of Investor Relations Kenny Young - Chairman & Chief Executive Officer Louis Salamone - Chief Financial Officer Conference Call Participants Rob Brown - Lake Street Capital Brent Thielman - D.A. Davidson Alex Rygiel - B. Riley Operator Good day and thank you for standing by. Welcome to the Babcock & Wilcox Q2 Earnings Conference Call. At this time, all p ...

| --- | --- | --- | |---------|-------|-----------------------| | | | | | | | | | BABCOCK | | | | BABCOCK | | BABCOCK & WILCOX | | | | Investor Presentation | | BABCOCK | | August 12, 2021 | Safe Harbor Statement B&W Enterprises cautions that this presentation contains forward-looking statements, including, without limitation, statements relating to adjusted EBITDA and sales targets, expectations regarding future growth, expansion and profitability, as well as statements about B&W's future pipeline of new p ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-36876 BABCOCK & WILCOX ENTERPRISES, INC. (Exact name of registrant as specified in its charter) Delaware 47-2783641 (State or other ...

| --- | --- | --- | --- | --- | --- | |---------|-------|-------|-------|------------------|------------------| | | | | | | | | BABCO | | | | | | | BARCOCK | | | | | BABCOCK & WILCOX | | | | | | Company Overview | | | | | | | May 2021 | | Safe Harbor Statement B&W Enterprises cautions that this presentation contains forward-looking statements, including, without limitation, statements relating to adjusted EBITDA and sales targets, expectations regarding future growth, expansion and profitability, as well as ...

Babcock & Wilcox Enterprises, Inc. (NYSE:BW) Q1 2021 Earnings Conference Call May 13, 2021 8:00 AM ET Company Participants Megan Wilson - Vice President, Investor Relations Kenny Young - Chairman and Chief Executive Officer Lou Salamone - Chief Financial Officer Conference Call Participants Rob Brown - Lake Street Capital Zane Karimi - D.A. Davidson Alex Rygiel - B. Riley Operator Good day and thank you for standing by. Welcome to the Babcock & Wilcox Q1 2021 Earnings Conference Call. [Operator Instructions ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-36876 BABCOCK & WILCOX ENTERPRISES, INC. (Exact name of registrant as specified in its charter) Delaware 47-2783641 (State or other ...