Babcock & Wilcox Announces Increased Full-Year Adjusted EBITDA Target of $105 Million to $115 Million, New Contracts and Awards of Approximately $500 Million Year-to-Date
- Year-to-date contract signings and awards total around $500 million, almost double the previous year's amount.
- Full-Year 2024 Adjusted EBITDA target raised to $105-115 million, excluding BrightLoop™ and ClimateBright™ expenses.
- Increased pipeline and recent contract awards reflect growing global demand for power generation, upgrades, environmental technologies, and renewable energy projects.
- Successful signing of a $246 million gas conversion project and multiple projects in Environmental, Renewable, and Thermal segments ranging from $5-20 million each.
- Optimism and confidence in the company's future performance based on new contract wins and increased EBITDA guidance.
- None.
Insights
The announcement by Babcock & Wilcox Enterprises of a significant increase in contract signings and awards represents a strong indicator of the company's financial growth and market competitiveness. The doubling of the value of contracts year-over-year not only showcases the company's ability to attract substantial new business but also suggests a robust demand for their services in power generation, environmental technologies and renewable energy projects. The upward adjustment of the Adjusted EBITDA target for the full year 2024 to $105 million to $115 million indicates management's confidence in the company's operational efficiency and profitability. Investors should note that Adjusted EBITDA is a critical metric used to assess a company's underlying operational performance by excluding non-recurring items such as BrightLoop™ and ClimateBright™ expenses.
The market may react positively to this news, as it implies that B&W is not only growing but also potentially improving its margin profile. However, it's important to monitor the company's ability to deliver on these contracts and maintain cost controls to achieve the increased EBITDA target. Additionally, the exclusion of BrightLoop™ and ClimateBright™ expenses may warrant a closer look to understand the full impact of these projects on the company's financials.
Babcock & Wilcox's focus on environmental technologies and renewable and hydrogen energy projects aligns with global trends towards sustainable energy solutions. The mention of a $246 million gas conversion project alongside several other high-value projects indicates a strategic positioning within the energy sector that could offer long-term benefits. Given the increasing regulatory pressures and incentives for clean energy, B&W's portfolio diversification into renewables could provide a hedge against volatility in traditional energy markets.
Investors should be aware of the potential risks associated with the rapid scaling of operations and the execution of large-scale projects. The energy sector is highly regulated and any changes in policy or delays in project implementation could affect projected revenues and EBITDA targets. Furthermore, the transition towards sustainable technologies often requires significant R&D investment, which could impact short-term margins despite the promise of long-term gains.
The significant increase in contract signings indicates a growing market share for Babcock & Wilcox within the industrial and utility sectors. Their ability to secure a range of projects with values from $5 million to $20 million each suggests a versatile business model capable of catering to diverse customer needs. This versatility is a competitive advantage that can lead to a more resilient revenue stream.
Understanding the market dynamics and the competitive landscape is important for investors. B&W's growth trajectory should be compared with industry peers to gauge whether this performance is an outlier or in line with sector trends. Additionally, the anticipated impact on fourth quarter 2024 results highlights the importance of monitoring the company's quarterly performance to track progress toward achieving the revised EBITDA targets.
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B&W’s 2024 contract signings and awards are approximately
$500 million -
Full-Year 2024 Adjusted EBITDA target increased to
$105 million $115 million
“We believe that the global industrial and utility customers’ growing needs for increased and secure power generation, upgrades and enhancements, environmental technologies and renewable and hydrogen energy projects are reflected in our increased pipeline and recent contract awards,” said Kenneth Young, B&W’s Chairman and Chief Executive Officer. “In addition to our recently awarded
“As a result of these signings and commitments, we have increased our guidance to
“While risks are inherent in any project execution, our project performance continues to improve each quarter as we maneuver through challenges including global business conditions and supply chain and shipping pressures,” he said. “Through our operational improvements, we continue to mitigate risks on various projects and are focused on higher margin and higher quality projects across all of our businesses, and we expect to continue to see the impact of these improvements starting in Q4 2024 and beyond.”
About Babcock & Wilcox
Headquartered in
Forward-Looking Statements
B&W cautions that this release contains forward-looking statements, including, without limitation, statements relating to the Company’s bookings, business strategy, competitive position, and planned projects. These forward-looking statements are based on management’s current expectations and involve a number of risks and uncertainties. For a more complete discussion of these risk factors, see our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K. If one or more of these risks or other risks materialize, actual results may vary materially from those expressed. We caution readers not to place undue reliance on these forward-looking statements, which speak only as of the date of this release, and we undertake no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.
Non-GAAP Financial Measures
The Company uses non-GAAP financial measures internally to evaluate its performance and in making financial and operational decisions. When viewed in conjunction with GAAP results, the Company believes that its presentation of these measures provides investors with greater transparency and a greater understanding of factors affecting its financial condition and results of operations than GAAP measures alone. In addition to Adjusted EBITDA, in the fourth quarter of 2023, the Company introduced the non-GAAP financial measure of Adjusted EBITDA excluding BrightLoop™ and ClimateBright™. Management believes this measure is useful to investors because of the increasing importance of BrightLoop and ClimateBright to the future growth of the Company. Management uses EBITDA excluding BrightLoop and ClimateBright to assess the Company’s performance independent of these technologies. The presentation of non-GAAP financial measures should not be considered in isolation or as a substitute for the Company’s related financial results prepared in accordance with GAAP. This release presents Adjusted EBITDA, which is a non-GAAP financial measures. Adjusted EBITDA on a consolidated basis is defined as the sum of the Adjusted EBITDA for each of the segments, further adjusted for corporate allocations and research and development costs. At a segment level, the Adjusted EBITDA presented is consistent with the way the Company's chief operating decision maker reviews the results of operations and makes strategic decisions about the business and is calculated as earnings before interest expense, tax, depreciation and amortization adjusted for items such as gains or losses arising from the sale of non-income producing assets, net pension benefits, restructuring costs, impairments, gains and losses on debt extinguishment, costs related to financial consulting, research and development costs and other costs that may not be directly controllable by segment management and are not allocated to the segment. The Company presents consolidated Adjusted EBITDA because it believes it is useful to investors to help facilitate comparisons of the ongoing, operating performance before corporate overhead and other expenses not attributable to the operating performance of the Company's revenue generating segments. This release also presents certain targets for the Company’s Adjusted EBITDA in the future; these targets are not intended as guidance regarding how the Company believes the business will perform. The Company is unable to reconcile these targets to their GAAP counterparts without unreasonable effort and expense.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240410154820/en/
Investor Contact:
Investor Relations
Babcock & Wilcox
704.625.4944
investors@babcock.com
Media Contact:
Ryan Cornell
Public Relations
Babcock & Wilcox
330.860.1345
rscornell@babcock.com
Source: Babcock & Wilcox Enterprises, Inc.
FAQ
What is Babcock & Wilcox Enterprises, Inc.'s (BW) year-to-date contract signings and awards total?
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