Good afternoon. My name is Josh, and I will be your conference operator today. At this time, I would like to welcome everyone to the Babcock & Wilcox Q1 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. [Operator Instructions] Thank you. Chase Jacobson, Vice President of Investor Relations, you may begin your conference.

Thank you, Josh, and good afternoon, everyone. Welcome to Babcock & Wilcox Enterprise's First Quarter 2018 Earnings Conference Call. I'm Chase Jacobson, Vice President of Investor Relations at B&W. Joining me this afternoon are Leslie Kass, B&W's President and Chief Executive Officer; and Jenny Apker, Senior Vice President and Chief Financial Officer, to discuss our first quarter results and 2018 outlook. During this call, certain statements we make will be forward-looking. These statements are subject to risks and uncertainties, including those set forth in our safe harbor provision for forward-looking statements that can be found at the end of our earnings press release and also in our annual report on Form 10-K and our Form 10-Q that are on file with the SEC and provide further detail about the risks related to our business. Additionally, except as required by law, we undertake no obligation to update any forward-looking statements. We also provide non-GAAP information regarding certain of our historical results as well as our forward outlook to supplement the results provided in accordance with GAAP. This information should not be considered superior to, or as a substitute for, the comparable GAAP measures. A reconciliation of historical non-GAAP measures can be found in our first quarter earnings release published this afternoon and in our company overview presentation posted on the Investor Relations section of our website at babcock.com. With that, I'll turn the call over to Leslie.

Thank you, Chase. Good afternoon everyone. Performance in our Power and Industrial segments was generally in line with our expectations in the first quarter. However, the performance in these segments was overshadowed by the previously announced cost increases on our rolling new-build contracts. Despite these challenges, progress is being made on all six Renewable projects and four are expected to be completed in the middle of this year. We're working with our customers in an effort to identify recoveries and other cost mitigating opportunities and are pursuing potential claims from other parties to partially offset these losses. Before providing an update on our operational highlights, I'd like to speak to three strategic actions and initiatives. First, as most of you are aware, last week, we completed a rights offering, raising $248.5 million. We appreciate the strong support of our shareholders and the backstop provided by Vintage Capital Management. We used approximately $215 million of the net proceeds to repay our second-lien term loan. Repaying this debt not only improves our balance sheet and reduces interest expense, but also improves our overall financial flexibility. Second, we’re continuing to make progress with the process for the potential sales of MEGTEC and Universal and hope to make an announcement in the future as we work to further improve our financial flexibility. Third, on March 21, we appointed Robert Caruso as our Chief Implementation Officer. Bob is a Managing Director at Alvarez & Marsal and has more than 25 years of experience helping companies improve their financial and operational profile. Bob and I are working closely together with all of B&W's management team to drive efficiencies and cost reductions throughout the organization. We expect to be able to provide more detail on this effort this summer. Turning to our operations. In line with our…

Thanks, Leslie. Our first quarter consolidated revenues were $311 million, down 20% compared to the prior year, due to lower recognized revenue on our Renewable new-build projects and an expected year-over-year decrease in our Power segment. For the quarter, we reported a GAAP operating loss of $102.7 million. Adjusted EBITDA for the first quarter, which excludes the gain on the sale of our BWBC joint venture, an impairment charge related to our TBWES joint venture, restructuring and certain other costs, was a $62 million loss primarily due to the loss in our Renewable segment. Interest expense in the quarter was $13.4 million, up nearly $12 million compared to last year, reflecting a higher level of borrowings on our revolving credit facility and the second-lien term loan. We expect to significantly lower interest expense run rate for the remainder of the year following the repayments of our second-lien term loan, which was completed last week. Turning to our segment results. In Power, revenue was $159 million, down 19% year-over-year due mail to lower revenue on new build and environmental contracts, but partially offset by a modest increase in retrofit services contracts. Power's gross margin of 19.4% held steady year-over-year while the adjusted EBITDA margin of 7.1% was modestly lower compared to last year, largely as a result of lower volume. Based on the timing of contracts and backlog, our strong Q1 bookings and the normal cadence of revenue in the segment, we expect Q1 be the low point for Power segment revenue and profitability in 2018. In Renewable, revenue declined to $46 million in the first quarter 2018, reflecting the changes in estimated costs to complete new-build projects. Adjusted EBITDA in this segment was a loss of $62 million, mainly due to the increased estimated costs under six new-build projects and…

Thanks, Jenny. In closing, we believe that we're in the final stages for the Renewable projects. We're also taking actions toward our goal of improving B&W's overall business and driving stronger profitability and expect to provide an update on these activities over this summer. From a strategic viewpoint, we remain focused and are progressing on important initiatives. Over the last week, we completed the rights offering and repaid our second-lien term loan. We're continuing to make progress with the strategic process for MEGTEC and Universal. And our Chief Implementation Officer is onboard and helping with initiatives to improve our cost structure and define our strategy going forward. B&W has the most comprehensive portfolio of products and services for the coal-fired power market. This provides us with a competitive advantage and was demonstrated this quarter with robust bookings and solid margin performance within our Power segment. We're working with customers to develop or expand alliance agreements to ensure they have the services they need while providing us with increased visibility into our revenue stream. In Industrial, we're encouraged with the growth outlook for MEGTEC and Universal. And we continue to provide resources from across B&W to drive improved operational performance at SPIG. While we have lots of work yet to do, our position for the future is improving. With the support of our shareholders, we're building on B&W's strong foundation to ensure we continue to provide our customers with the high-quality engineered equipment and services they expect from our historic company. Finally, I would like to thank Jenny for her service as B&W’s Chief Financial Officer. It has been a pleasure working with you in this role for the last few months as well as in other positions over the years, and we wish you all the best in your retirement. With that, I will now turn the call back to Josh, who will assist us in taking your questions.

[Operator Instructions] Your first question comes from Bob Labick with CJS Securities. Your line is open.

Hi, it’s Craig Bibb on for Bob with CJS Securities. Could you tell – just what can you tell us about the sales process for Universal and MEGTEC?

Now we have to conclude it in the near future and I’m afraid that’s about all.

Okay. And then what are the margins on the bookings in the industrial backlog, the ballpark –

I think – I would – see, the margins on bookings is consistent with margins that we've given as kind of target margins for that segment for the rest of the year. There is nothing unusual or up or down that should be noted about those bookings margin.

Apart where we are now?

No, if you go back to the guidance we gave for margins in the industrial business for the full year, I think that's where you should look at the margins for the new bookings.

Okay. I mean, given the guidance, what should we look for cash burn for the remainder of the year?

We've given you some guidance as to the timing, but we've not given you specifics as to the quantum on a per year basis. There is a number of moving parts at this point in time, which include potential asset sales, include the potential for cost reduction, activities. It would be very challenging to give you a specific number right now in light of all of the moving pieces that are coming.

Okay. And just holding all the moving pieces as they are your guidance was that you will generate positive cash in Q4 and as far as you can go?

That is the forecast, yes.

Great. All right, thank you.

There are currently no further questions at this time. I will turn the call back to the presenters.

Thank you, everybody. We will look forward to following up with you in the coming days and weeks. A replay will be available for a limited time on our website later today.