Babcock & Wilcox(BW) - 2024 Q3 - Quarterly Report

Financial Performance - Revenues for the three months ended September 30, 2024, were $209.859 million, a decrease of 12.4% compared to$ 239.414 million for the same period in 2023[13] - Operating loss for the three months ended September 30, 2024, was $(1.474) million, compared to an operating income of$ 5.543 million for the same period in 2023[13] - Net loss attributable to stockholders of common stock for the three months ended September 30, 2024, was $(9.047) million, compared to a net loss of$ (120.598) million for the same period in 2023[13] - Total costs and expenses for the three months ended September 30, 2024, were $211.333 million, down from$ 233.871 million in the same period in 2023, a decrease of 9.7%[13] - Total comprehensive loss income for the three months ended September 30, 2024, was $(1.859) million, compared to$ (125.206) million for the same period in 2023[15] - The company reported a net loss of $(16,833) thousand for the period, contributing to the overall accumulated deficit[19] - The company reported a net loss attributable to stockholders of common stock of$ 9.0 million for the three months ended September 30, 2024, compared to a loss of $120.6 million in the same period of 2023[40] - The company incurred total costs and expenses of$ 21.4 million for the three months ended September 30, 2024, significantly lower than $99.5 million in the same period of 2023[48] Research and Development - Research and development costs increased to$ 1.420 million for the three months ended September 30, 2024, from $0.898 million in the same period in 2023, reflecting a 58% increase[13] Assets and Liabilities - Total current assets increased to$ 530,223 thousand as of September 30, 2024, up from $497,593 thousand at December 31, 2023, representing a growth of 6.5%[18] - Total assets rose to$ 804,633 thousand, compared to $775,698 thousand at the end of 2023, indicating an increase of 3.5%[18] - Total liabilities increased to$ 1,007,751 thousand from $976,048 thousand, reflecting a rise of 3.2%[18] - The accumulated deficit grew to$ (1,578,936) thousand as of September 30, 2024, compared to $(1,570,942) thousand at December 31, 2023, marking an increase of 0.5%[19] - Cash and cash equivalents decreased to$ 30,629 thousand from $65,304 thousand, a decline of 53%[18] - Current liabilities decreased to$ 297,928 thousand from $350,197 thousand, a reduction of 14.8%[18] Cash Flow and Financing - Cash flows from operating activities resulted in a net cash used of$ 96,258,000 for the nine months ended September 30, 2023, compared to $50,473,000 in the same period of 2022[23] - The company experienced a significant increase in cash provided by investing activities, totaling$ 78,005,000 for the nine months ended September 30, 2023, compared to a net cash used of $8,589,000 in the prior year[26] - Borrowings on loan payable amounted to$ 184,806,000 for the nine months ended September 30, 2023, compared to $97,140,000 in the same period of 2022[26] - The total cash, cash equivalents, and restricted cash at the end of the period was$ 127,919,000, up from $65,106,000 at the end of September 30, 2022[26] Business Operations and Strategy - The company expects to reduce annual cash spending by approximately$ 25 million through strategies such as suspending dividends on Preferred Stock and delaying new product development[34] - The company initiated a cost savings plan with targeted annual savings of $31.5 million, of which$ 26.5 million has been achieved to date[35] - The company has classified its B&W Solar business as held for sale and discontinued operations as of September 30, 2024, due to significant operating losses[46][47] Sales and Revenue Recognition - Revenue from products and services transferred to customers at a point in time accounted for 21% of total revenue for the three months ended September 30, 2024, compared to 26% for the same period in 2023[62] - Revenue from products and services transferred to customers over time accounted for 79% of total revenue for the three months ended September 30, 2024, compared to 74% for the same period in 2023[62] Debt and Credit Agreements - The Credit Agreement provides for an up to $150 million asset-based revolving credit facility, including a$ 100 million letter of credit sublimit[88] - The interest rates applicable under the Credit Agreement include SOFR plus 5.25% for loans up to $100 million[91] - The company entered into the Second Amendment to the Credit Agreement, agreeing to apply net cash proceeds from specified transactions to repay$ 10.0 million in revolving loans, $15.0 million in pension liabilities, and$ 193.0 million in Senior Notes due 2026[97] - As of September 30, 2024, the company had $124.2 million outstanding on the Axos Credit Agreement, including$ 30.5 million drawn on the revolving credit portion and $93.7 million on the letter of credit portion[101] Taxation - For the three months ended September 30, 2024, the income tax expense from continuing operations was$ 0.2 million, resulting in an effective tax rate of (1.5)%[118] - In the nine months ended September 30, 2024, the income tax expense from continuing operations was $6.1 million, resulting in an effective tax rate of 136.5%[119] Shareholder Information - The company has sold 2.4 million shares of common stock for net proceeds of$ 2.0 million as part of an At-the-Market offering with an aggregate offering price of up to $50.0 million[112] - B. Riley beneficially owns approximately 31.3% of the company's outstanding common stock as of September 30, 2024, and has the right to nominate one member of the Board of Directors[137]