Babcock & Wilcox(US:BW)2025-11-04 22:31Financial Performance - Operating income for Q3 2025 was $6.5 million, a 315% increase compared to Q3 2024, exceeding street expectations [4]. - Adjusted EBITDA from Continuing Operations in Q3 2025 was $12.6 million, a 59% increase compared to Q3 2024, also ahead of street expectations [4]. - Net loss from continuing operations was $2.3 million in Q3 2025, significantly improved from a loss of $7.9 million in Q3 2024 [4]. - Revenues for the three months ended September 30, 2025, were $149.0 million, a decrease of 4.3% compared to $152.6 million for the same period in 2024 [25]. - Operating income for the three months ended September 30, 2025, was $6.5 million, compared to an operating income of $1.6 million for the same period in 2024 [25]. - Net income attributable to stockholders for the three months ended September 30, 2025, was $35.1 million, compared to a net loss of $5.3 million for the same period in 2024 [25]. - Basic and diluted earnings per share for the three months ended September 30, 2025, were $0.30, compared to a loss of $0.10 for the same period in 2024 [25]. - Total costs and expenses for the three months ended September 30, 2025, were $142.5 million, a decrease of 5.7% from $151.1 million in the same period in 2024 [25]. - Research and development costs for the three months ended September 30, 2025, were $0.3 million, down from $1.2 million in the same period in 2024 [25]. - The company reported a gain on debt extinguishment of $1.7 million for the three months ended September 30, 2025 [25]. - The company experienced a total other expense, net of $7.8 million for the three months ended September 30, 2025, compared to $10.0 million for the same period in 2024 [25]. - The company reported a net loss of $45.4 million for the nine months ended September 30, 2025, compared to a net income of $3.2 million in 2024 [27]. - Net cash used in operating activities was $65.9 million, compared to $96.2 million in the previous year, indicating a reduction in cash outflow [27]. - Net cash provided by investing activities increased to $172.4 million from $78.0 million, primarily due to proceeds from the sale of business and assets [27]. - Cash, cash equivalents, and restricted cash at the end of the period stood at $201.1 million, up from $127.9 million at the beginning of the period [27]. - Depreciation and amortization of long-lived assets decreased to $7.8 million from $13.7 million year-over-year [27]. - The impairment of long-lived assets increased to $9.9 million from $5.8 million, reflecting challenges in asset valuation [27]. - Borrowings on loan payable amounted to $75.4 million, while repayments on loan payable were $126.8 million, indicating a net cash outflow in financing activities [27]. - The company experienced a foreign exchange loss of $5.7 million, compared to a loss of $1.4 million in the previous year [27]. - Stock-based compensation expenses decreased to $2.2 million from $3.8 million, reflecting a reduction in equity-based incentives [27]. Revenue and Backlog - Backlog reached $393.5 million, a 56% increase compared to Q3 2024, with Global Parts and Services achieving the highest revenue and gross profit results in recent history [4]. - Global Parts & Services revenue in Q3 2025 was $68.4 million, up from $61.7 million in Q3 2024, driven by increased electricity demand [8]. - Babcock & Wilcox Thermal segment revenues increased to $118.3 million in Q3 2025 from $109.4 million in Q3 2024, representing a growth of 8.2% [29]. - Babcock & Wilcox Renewable segment revenues rose to $15.2 million in Q3 2025, up from $9.5 million in Q3 2024, marking a significant increase of 60.0% [29]. - Babcock & Wilcox Environmental segment revenues decreased to $15.5 million in Q3 2025 from $33.7 million in Q3 2024, a decline of 54.0% [29]. - Total revenues for Babcock & Wilcox were $149.0 million in Q3 2025, slightly down from $152.6 million in Q3 2024, a decrease of 2.4% [30]. - The backlog for Babcock & Wilcox Thermal segment surged to $334 million in September 2025, up from $169 million in September 2024, reflecting a growth of 97.0% [29]. - Total bookings for Babcock & Wilcox reached $130 million in Q3 2025, compared to $120 million in Q3 2024, an increase of 8.3% [29]. Strategic Initiatives - Signed a limited notice to proceed for a contract exceeding $1.5 billion with Applied Digital to deliver one gigawatt of efficient energy for an AI Data Center project [4]. - Introduced a full-year 2026 Adjusted EBITDA target range of $70 million to $85 million, representing approximately 80% year-over-year growth, excluding AI Data Center projects [4]. - Company plans to convert coal plants to natural gas in partnership with Denham Capital to support data center power demands in North America and Europe [7]. - The company is focused on improving its financial position and exploring strategic acquisitions to implement its growth strategy [21]. Asset and Liability Management - Cash and cash equivalents increased to $24.4 million from $23.4 million year-over-year [26]. - Accounts receivable – trade, net rose to $101.7 million compared to $94.5 million in the previous year [26]. - Total current assets increased to $479.7 million from $552.5 million year-over-year [26]. - Total assets decreased to $657.9 million from $727.0 million year-over-year [26]. - Accounts payable decreased to $75.6 million from $92.1 million year-over-year [26]. - Current borrowings increased to $70.3 million from $125.1 million year-over-year [26]. - Total current liabilities decreased to $401.0 million from $406.7 million year-over-year [26]. - Operating lease liabilities increased to $3.4 million from $3.2 million year-over-year [26]. - Pension and other post-retirement benefit liabilities increased to $179.0 million from $192.7 million year-over-year [26]. - Total liabilities decreased to $401.0 million from $406.7 million year-over-year [26].