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Sep 30, 2023
Babcock & Wilcox Q3 2023 Earnings Report
Reported improved revenues and adjusted EBITDA compared to Q3 2022, driven by Thermal segment revenue increase of 17%, and announced strategic business realignment focused on higher margin aftermarket businesses.
Key Takeaways
Babcock & Wilcox reported a 13% increase in revenues to $239.4 million in Q3 2023 compared to Q3 2022. The company's net loss was $12.3 million, and adjusted EBITDA was $20.0 million. They announced a strategic business realignment focused on higher margin aftermarket businesses and more predictable cash flows.
Revenues increased by 13% compared to the third quarter of 2022, reaching $239.4 million.
Net loss was $12.3 million, nearly the same as the $12.8 million loss in the third quarter of 2022.
Adjusted EBITDA improved to $20.0 million, compared to $13.0 million in the third quarter of 2022.
Announced strategic business realignment focused on higher margin aftermarket businesses and more predictable cash flows.
Babcock & Wilcox
Babcock & Wilcox
Forward Guidance
B&W updated its full year 2023 Adjusted EBITDA target to $85.0 million to $90.0 million, excluding BrightLoop™ and ClimateBright™, and introduced a full year 2024 Adjusted EBITDA target of $100.0 - $110.0 million, also excluding BrightLoop™ and ClimateBright™.
Positive Outlook
- Greater focus on higher margin aftermarket parts and services across all three segments while reducing overhead associated with large new build projects
- Reducing required security packages with a targeted reduction of up to $20 million in posted Letters of Credit (“LCs”) by the end of fiscal year 2024
- Refinancing existing $150 million Senior Secured Credit facility to reduce our interest expense by up to $5 million
- Bolstering cash flow generation and strengthening the balance sheet along with project level financing to accelerate the deployment of our BrightLoop™ and ClimateBright™ technologies
- Revised pipeline of over $8.5 billion in identified global project opportunities over the next three years
Challenges Ahead
- Impact of global macroeconomic conditions, including inflation and volatility in the capital markets
- The impact of our divestiture of Babcock & Wilcox Solar Energy, Inc.("Babcock & Wilcox Solar", "B&W Solar")
- Our ability to integrate acquired businesses and the impact of those acquired businesses on our cash flows, results of operations and financial condition
- Our recognition of any asset impairments as a result of any decline in the value of our assets or our efforts to dispose of any assets in the future
- General economic and business conditions, including changes in interest rates and currency exchange rates