Babcock & Wilcox Enterprises (BW) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $209.9M, down year-over-year due to divestitures, but margins and Adjusted EBITDA improved, driven by strategic project selection, cost reductions, and avoidance of low-margin projects.

• Adjusted EBITDA rose to $22.3M, up from $20.0M in Q3 2023, with operating loss of $1.5M due to one-time charges and divestitures.

• Net loss attributable to common stockholders was $9.0M, a significant improvement from $120.6M loss in Q3 2023; loss per share was $0.10.

• Major one-time items included a $5.8M non-cash impairment from the SPIG sale and a $4.9M settlement to exit a loss-generating contract.

• Strong demand for energy and technology solutions, with a global pipeline of over $9B in project opportunities.

Financial highlights

• Q3 2024 consolidated revenues: $209.9M, down from $239.4M in Q3 2023, mainly due to BWRS divestiture; Adjusted EBITDA: $22.3M, up from $20.0M.

• Operating loss of $1.5M in Q3 2024 vs. $5.5M operating income in Q3 2023, due to one-time charges and divestitures.

• Net loss attributable to common stockholders: $9.0M; nine-month net loss: $8.0M, a significant improvement from $145.6M loss in 2023.

• Cash and equivalents at September 30, 2024: $127.9M; total debt: $475.4M.

• Implied bookings: $810.5M; ending implied backlog: $628.2M, up 22% year-over-year.

Outlook and guidance

• Revised full-year 2024 EBITDA target to $91M–$95M (excl. BrightLoop/ClimateBright), down from prior $105M–$115M due to divestitures.

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

• Anticipates strong Q4 results and continued momentum in Thermal and Environmental segments.

• Free cash flow conversion expected at ~40% of EBITDA after interest and BrightLoop costs.

• Backlog at September 30, 2024 was $361.6M, with 54% expected to be recognized as revenue in 2024.