Babcock & Wilcox Enterprises (BW) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $233.6M, down year-over-year due to strategic reduction in low-margin projects and completion of a large 2023 project.

• Operating income rose to $42.2M from $12.4M in Q2 2023, driven by a $40.2M gain on the sale of a Denmark-based subsidiary and lower SG&A expenses.

• Net income attributable to stockholders was $25.3M, compared to a net loss of $5.1M in Q2 2023.

• Adjusted EBITDA for Q2 2024 was $23.3M ($24.6M excluding BrightLoop and ClimateBright), ahead of expectations but down from $26.1M in Q2 2023.

• Achieved $25M in annualized cost savings from strategic realignment, progressing toward $30M+ target.

Financial highlights

• Q2 2024 consolidated revenues were $233.6M; net income was $25.4M; EPS was $0.24, compared to a loss per share of $0.10 in Q2 2023.

• Operating cash flow for the first half of 2024 was $(26.6)M, reflecting the impact of the Denmark subsidiary sale and working capital changes.

• Cash and equivalents at June 30, 2024, were $202.1M; total debt was $476.8M; preferred stock outstanding: $191.7M.

• Adjusted EBITDA margin for Q2 2024 was 10% (up from 9% in Q2 2023).

• Backlog and implied backlog at Q2 end were $472M and $757.8M, respectively, up significantly year-over-year.

Outlook and guidance

• Full-year 2024 adjusted EBITDA guidance reiterated at $105M–$115M, excluding BrightLoop and ClimateBright.

• Management expects liquidity actions, cost savings, and asset sales to provide sufficient funding for the next 12 months.

• Anticipates $10–$15M in 2024 spending on BrightLoop technology and projects.

• Expects continued strong bookings and financial performance in the second half of 2024, with a healthy $9B project pipeline.

• Additional non-strategic asset sales expected to further improve cash, liquidity, and leverage.