Good afternoon. Thank you for attending the Babcock & Wilcox Enterprises Fourth Quarter 2024 Conference Call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would like to turn the conference over to your host, Sharyn Brooks, B&W's Director of Communications. Thank you. You may proceed, Mrs. Brooks.

Thank you, Cameron, and thanks to everyone for joining us on Babcock & Wilcox Enterprises fourth quarter and full year 2024 earnings conference call. I'm Sharyn Brooks, Director of Communications and Marketing. Joining the call today are Kenny Young, B&W's Chairman and Chief Executive Officer; and Cameron Frymyer, Chief Financial Officer, to discuss our fourth quarter results. 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 in our annual report on Form 10-K that has been filed with the SEC today. Additionally, except as required by law, we undertake no obligation to update any forward-looking statement. We also provide non-GAAP information, including regarding certain of our historical and targeted results 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 earnings release published this afternoon and in our company overview presentation filed on Form 8-K today and posted on the Investor Relations section of our website at babcock.com. I will now turn this call over to Kenny.

Thanks, Sharyn. Well, good afternoon, everyone, and thanks for joining us on our fourth quarter and full year 2024 earnings call. In 2024, we took specific actions that align with our business strategy and also paved the way to refinance or reduce our current debt obligations in 2025. With intent, we are shifting our focus on continued operations toward greater predictable revenues and margins, particularly from our Thermal operations based on tailwinds of increased demand from the utility and industrial power generation sectors. We also see new biomass energy plants becoming a reality in North America and anticipate possible bookings later this year. We saw improvements across many of our top metrics during the fourth quarter of 2024, including improvements in revenues, operating income and adjusted EBITDA when compared to 2023. Our fourth quarter revenue came in at $200.8 million compared to $174.7 million in the fourth quarter of 2023, which was an increase of 15%. Operating income from continuing operations increased to $11.6 million in the fourth quarter of 2024 compared to operating loss from continuing operations of $3.3 million in the fourth quarter of 2023, reflecting the continued strong production of our core businesses. Adjusted EBITDA from continuing operations was $24.0 million in the fourth quarter of 2024, which was a 55% year-over-year increase compared to the fourth quarter of 2023. Our margins are benefiting from our strategic shift to reduce reliance on high interest, low-margin newbuild projects. And after taking into account the recent divestitures, we have revised our full year 2025 EBITDA target range to be $70 million to $85 million, excluding BrightLoop and ClimateBright expenses. Importantly, we continue to invest in our BrightLoop opportunity to continue to anticipate spending in the range of $10 million to $15 million in 2025 on our BrightLoop projects and…

Thanks, Kenny. I am pleased to review our full year 2024 results in addition to commenting on our financial position entering 2025. For further detail, I call your attention to the fact that we filed our 10-K with the SEC this afternoon and you can refer to it for further details beyond what we discuss in this call. On a continuing operations basis, our 2024 consolidated revenues were $717.3 million, which remained stable compared to the revenue levels in the prior year. Net loss from continuing operations in 2024 was $73 million, which was a better result compared to the net loss of continuing operations of $75.8 million in 2023, primarily related to an overall decrease in our costs and expenses, offset partially by higher interest expense and banking fees. In addition, we had a loss per share of $0.96 in 2024 compared to a loss per share of $1.02 in 2023. Our adjusted EBITDA from continuing operations was $68.9 million compared to $60.8 million in 2023. Bookings and backlog performed very well across the year with year-end bookings coming in at $889.6 million, a 39% increase from the $638.7 million in 2023, while backlog saw a 47% increase from $368.2 million in 2023 to $540.1 million in 2024. SPIG, B&W Renewable Services, and Vølund were reclassified into discontinued operations for 2024, and their results are no longer reflected in our continuing operations. Our parts and services core business remained strong even with recent coal plant closures and natural gas conversions. Our robust backlog of $540.1 million and the strength of our parts business gives us confidence in our full year 2025 adjusted EBITDA target range of $70 million to $85 million. I will now turn to our balance sheet and liquidity and comment on our positive outlook for improving…

Thanks, Cameron. Well, in closing, we continue to execute against our strategic plan and remain intently focused on driving further improvements in our balance sheet. Our global pipeline of over $7.6 billion in identified project opportunities remains healthy across all segments, and we anticipate prospects for new bookings and stronger financial performance throughout 2025. B&W has deep industry expertise with clean energy and carbon capture technologies. And with our long history in traditional energy sources and highly experienced and capable employees, we believe we are well positioned to deliver improved value and consistent growth for everyone, including our shareholders. I would like to wrap up today by recognizing and thanking our customers as well as our employees who help meet the challenges of energy demand around the world. I will now turn the call back over to Cameron, who will help us with a few questions. Cameron?

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Aaron Spychalla with Craig-Hallum.

First for me on the guidance, a little bit wider range than normal to start the year. Can you just kind of discuss some of the puts and takes there? What might get you to the top end versus the low end and just kind of confidence as we head through the year, how that builds, especially considering the new large coal-to-gas project?

Yes. I think the -- there's a couple of key metrics in there. I mean, first of all, with the introduction of all of the tariffs that have been recently announced, has some ups and downs as it relates to our business. Typically, the tariffs are all passed-through to customers in this particular case, but really don't know the economic impact of what customers may do, either delay a start of a project or delay a project, wait for, hopefully, the tariffs get removed and affect the margin of the project for the customer standpoint. So, we just don't know the outcome of that particular piece and how it's going to play out, obviously, over the course of the year. So, we're just keeping an eye on the tariff aspects on one hand. And then obviously, we need to get through some of the debt restructuring and financing, which on that particular front, to manage through, obviously, any impacts that would have, particularly on the business, if it's from a cost standpoint. So, we just need to see how that shakes out. So, there's a couple of key areas that we're focused on that gives us to step back and say, hey, let's give a little bit of a range here. So, we just don't know the impact of some of these, in particular, some of the tariffs that are being introduced.

Right. And on that, I mean, I know it's still early and obviously evolving by the day. But what's your kind of current thoughts on -- are you seeing an impact there? Any kind of delays in project timing versus how you're maybe thinking about it a quarter or two ago?

No. Well, the answer is we're in discussions with several customers on several aspects, right? We have -- we bring in, obviously, equipment around the world or pieces of some of the projects that we execute on in North America come in from around the world. And obviously, some things get exported out of the U.S. to other places in the world. So, we've got the tariff issue on both sides of the equation on some projects. So too early to know specific project by project, but we are in talks with customers directly about certain projects that we're involved in, the potential cost of those tariffs and what the customer may or may not want to do. Some of those could be minor. I mean, it could be $10,000 or $15,000 or a couple of hundred thousand. There are other cases where the tariffs might be more material, more into the $5 million to $7 million range depending on the scope and some of the aspects that are being considered there. So, we have to work with a customer and see how they want to handle that. Obviously, when the equipment transfers across the border as the tariffs can be paid immediately, and so that gets reflected back on to the client. In some cases, back on within their customers as well, too. So, it all depends. But no definitive outcome, I would say yet, at this time. We're just kind of cautiously in dialogue and discussions. And as you said, it changes daily, so who knows? And hopefully, some of these tariffs get removed or get reversed and business goes back to normal. But it's just a little too early to know.

Understood. And then I appreciate the update on Massillon. Can you maybe give an update on the Wyoming project, kind of where that stands, next guidepost we should kind of look for there? Is there any impact from kind of IRA? And again, just kind of broader federal noise there? An update there would be great.

Yes. No, no problem. It's obviously, from the IRA standpoint, which is all part of the conversation going on in D.C., I think the general, at least, feedback that we received is there's some confidence that the IRA credits will move forward. Specifically on Wyoming on that project, we are working with Black Hills. They're looking to get some financing on this initial project out of the Department of Energy and in discussions in and around that. And obviously, some of the budgetary items need to settle as it relates to that. And we feel like we do have Congressional support as it relates to that particular project. And we have appropriations language sitting in the DOE that would help that particular project to just need to get things a little settled and the administration here to get that pushed forward. But we are working with Black Hills on that and as they're trying to get this project accomplished as well, too. So, just working through some of those scenarios still here in the Department of Energy. But it's all positive. It just got to get to the right yes rather than a series of -- well, give us another week here to figure out what's going on. So, that -- a little caught up in that. It's a brand-new administration. Obviously, they're making a lot of noise and doing a lot of things in a very short period of time. But they've only been in place for a couple of months, so they're still trying to work through some of the dynamics and how all that's going to shake out under the loan program and how they're going to proceed. So, we're working with them and side by side on that front. So anticipated getting done here, but we're working with them on that front.

Right. And then maybe last, so the EPA is reconsidering some of the emissions regulations. Can you just maybe give an update there, what that could mean for the Thermal business, both on existing kind of power generation assets and then some of the coal-to-gas conversion opportunities you have in the pipeline?

Yes. No, good question. We do get asked that a lot by a lot of people. It's kind of interesting. I mean, at just high level, it's the general feeling, I guess, with -- amongst the utilities, it's a little -- if utilities are solid on fossil fuels, in particular, coal aspect and they've got new cases around it, a lot of those are going to stay in place for the foreseeable future regardless of what the EPA aspects are that are out there. I think those clients that are looking at natural gas conversions for the long run are typically looking at overall operational costs of coal versus natural gas. And those conversions tend to have a 20-year capital life cycle. So, we don't typically see a big swing in a shift either way based on the regulatory aspect coming out of EPA because it's hard for the utilities to, obviously, readdress their capital needs every four years based on a different policy that might be invoked in D.C. So, I don't know that it will have a big impact. It obviously clearly supports the continuation of where coal plants are -- will continue on and don't see any changes of those. It could possibly delay some -- a couple of gas conversions for a few years on that, which would have, I don't know, not a material impact on our business because we were solid out the way, right? We sell the parts and services into the coal plant. If they convert to natural gas, that's fine, too, as well, and we can provide that conversion aspect on it. So, it's solid for us no matter which way they go. So, it may change the swing of revenues from a little bit more coal and a little bit less natural gas depending on that swing. But materially, it shouldn't have a big impact on our business out there.

The next question is from the line of Rob Brown with Lake Street Capital Markets. You may proceed.

You had strong bookings in the quarter but just wanted to get a sense of how the pipeline is shaping up for this year. Are you seeing that kind of bookings level continue? How should we think about the, I guess, the bookings run rates into the end of the year?

You faded out Rob, right at the end of that but I think you were asking, how do we kind of see the pipeline shaping up this year?

In bookings?

Correct.

Yes, no problem. So, as I briefly mentioned in the remarks, I mean, overall, we feel pretty solid about our pipeline and have been for quite some time, and the opportunities are actually growing and expanding. We're starting to -- as we see some of the FEED studies now transfer and to -- especially on some of the newer plants when we're looking at biomass opportunities here in the U.S. We're still seeing a lot of the data centers, especially the larger ones looking for new power sources to fill the need from the data center standpoint. And so, we -- some of the work there, and we do kind of feel like that one or two of those may wind up being booked this year as we go into '26 and '27. And we're working on those. Hopefully some announcements over the next few months. But we see one of the two of those at least seem as if we're going to move towards and progressing to a positive outcome for us and get some bookings in there as well, too, so we're excited about that. And we continue to ramp up, obviously, on across the board. On Thermal aspect, we're seeing opportunities to help expand some of the plants and reposition some of the plants and there are opportunities there around those as well, too. So, it's really on both sides of that standpoint. With intent, I think as I mentioned in the remarks, we're doing less and less on larger newbuild projects in -- the newbuild projects in Europe and internationally as well. We're going to focus more on parts and services on the international side. Just it reduces our LCs and other aspects. We think that's the right decision to make. And we think there's larger volumes here in North America to pursue. So, I think we'll see a steady aspect. Our Thermal business is doing quite well. We continue to expand on the parts and services side of Thermal on the international basis. And we see that continuing on for the foreseeable future on that aspect of it. And then like I mentioned, I think, we're going to possibly see a couple of biomass and other opportunities emerge here in the United States towards the later part of the year. So, we're excited about those as well.

Okay, great. And then on the West Virginia project, you talked about $10 million of support. What's the next steps there and help the size of that project?

Yes. So overall, that's estimated to be around $140 million, $150 million project for us, and we're in discussions with certain outside investors that would take that project over. The $10 million provided by the state, it specifically helps us do all of the teams, the early engineering work on the project. We have secured the land for that location or we're finalizing the agreements, I think, about the for that. But we'll secure the land for that location and complete that aspect in Mesa County, so we're -- and it's close to be nameless but a large data center. So that's happening. And there's -- the payments on the $10 million, there's milestone aspects that we've -- I think we've hit roughly about $5 million out of the $10 million or close to $5 million out of the $10 million, with the others coming with an outside EPC company that we'll probably retain for the project. And so, some of the funding will go towards that as well, too. But it helps repay the engineering aspects for the project and get it off the ground to completion so that we can get to FID on that a little bit quicker. And we're in discussions, as I mentioned, with a couple of outside investment firms on that front as well, too. So, the funding is nice to have because obviously, it helps cover internal costs and other aspects that go specifically into that project. So that's exciting to give.

That was the last question. I will now turn the call back over to the management team for any closing remarks.

Thank you for joining us. That concludes our conference call today. A replay will be available for a limited time on the B&W website.

That concludes today's Babcock & Wilcox fourth quarter 2024 earnings conference call. Thank you for your participation and enjoy the rest of your day.