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B&W Provides Interim Project Update
Posted December 31, 2019
(BARBERTON, Ohio – December 31, 2018) – Babcock & Wilcox Enterprises, Inc. (NYSE:BW) (B&W) announced today that it is updating the status and expected turnover and transition to ongoing maintenance of four European Renewable energy projects it previously announced would be handed over to customers by the end of 2018.
“Since joining B&W in late November, B&W Executive Vice President of Finance Louis Salamone, B&W Chief Strategy Officer Henry Bartoli, and I, along with B&W Chief Implementation Officer Robert Caruso, Interim B&W Chief Financial Officer Joel Mostrom and others, have conducted daily reviews and updates of B&W’s various Renewable projects in Europe and have visited a number of them,” said B&W Chief Executive Officer Kenneth Young. “These four projects are now operational and are in various stages of performance and reliability testing. Based on our continued reviews and discussions with customers, we anticipate turnover of these projects will take place at various times during the first and second quarters of 2019.”
“These four plants have reached active operational status and are generating steam heat and delivering electricity to the grid,” Young said. “Our DynaGrate® combustion grate systems are performing as expected and a few of the Renewable plants have achieved operational output of 100 to 105 percent.”
“We are currently making adjustments and modifications to maximize performance for our customers, and a few of the sites are now, or will be, shifting into reliability and performance testing over the next several weeks,” he continued. “We are working closely with our customers and financial institutions to move effectively through various handover and testing processes, procedures, documentation, punch lists, and test/certifications and anticipate final turnover and transition into maintenance phases within the first and second quarters of 2019. Two of these plants also will shift into 15-year operational and maintenance contracts with Babcock & Wilcox Vølund.”
“Additionally, Lou, Henry, Bob, Joel and I are evaluating further cost reductions for B&W’s business, in addition to the previously announced significant cost improvements,” Young said. “We do see a pathway to reach run-rate EBITDA levels around $100 million within the company’s respective core businesses in the future, following the completion of all current loss projects. We will implement a deeper level of profit-and-loss accountability within our lines of business and believe we can optimize the various business units even further. In addition, we will begin the process to refinance our senior debt positions in the first quarter.”
“Finally, I want to personally thank all our stakeholders for their continued support, hard work and efforts, and specifically recognize the outstanding effort by all the B&W employees who are working around the clock, through the holidays and weekends to ensure we support our customers and meet our commitments as a company.”
About B&W
Babcock & Wilcox is a global leader in energy and environmental technologies and services for the power and industrial markets, and has been transforming our world for 151 years. Follow us on Twitter @BabcockWilcox and learn more at www.babcock.com.
Forward-Looking Statements
B&W cautions that this release contains forward-looking statements, including, without limitation, statements relating to our strategic objectives, future profitability, and pending and future project execution. These forward-looking statements are based on management’s current expectations and involve a number of risks and uncertainties, including, among other things, our ability to continue as a going concern; our ability to obtain and maintain sufficient financing to provide liquidity to meet our business objectives, surety bonds, letters of credit and similar financing; our ability to satisfy the liquidity and other requirements under our U.S. revolving credit facility as recently amended, including our ability to receive concessions from customers on our Renewable energy loss contracts; our ability to maintain compliance with the NYSE’s continued listing criteria; the highly competitive nature of our businesses; general economic and business conditions, including changes in interest rates and currency exchange rates; general developments in the industries in which we are involved; cancellations of and adjustments to backlog and the resulting impact from using backlog as an indicator of future earnings; our ability to perform contracts on time and on budget, in accordance with the schedules and terms established by the applicable contracts with customers; failure by third-party subcontractors, joint venture partners or suppliers to perform their obligations on time and as specified; our ability to realize anticipated savings and operational benefits from our restructuring plans, and other cost-savings initiatives; our ability to successfully address productivity and schedule issues in our Renewable segment, including the ability to complete our Renewable energy projects within the expected time frame and the estimated costs; our ability to successfully partner with third parties to win and execute renewable contracts; changes in our effective tax rate and tax positions; our ability to maintain operational support for our information systems against service outages and data corruption, as well as protection against cyber-based network security breaches and theft of data; our ability to protect our intellectual property and renew licenses to use intellectual property of third parties; our use of the percentage-of-completion method of accounting; our ability to successfully manage research and development projects and costs, including our efforts to successfully develop and commercialize new technologies and products; the operating risks normally incident to our lines of business, including professional liability, product liability, warranty and other claims against us; changes in, or our failure or inability to comply with, laws and government regulations; actual or anticipated changes in governmental regulation, including trade and tariff policies; difficulties we may encounter in obtaining regulatory or other necessary permits or approvals; changes in, and liabilities relating to, existing or future environmental regulatory matters; changes in actuarial assumptions and market fluctuations that affect our net pension liabilities and income; potential violations of the Foreign Corrupt Practices Act; our ability to successfully compete with current and future competitors; the loss of key personnel and the continued availability of qualified personnel; our ability to negotiate and maintain good relationships with labor unions; changes in pension and medical expenses associated with our retirement benefit programs; social, political, competitive and economic situations in foreign countries where we do business or seek new business; the possibilities of war, other armed conflicts or terrorist attacks; the willingness of customers and suppliers to continue to do business with us on reasonable terms and conditions; and our ability to successfully consummate strategic alternatives for non-core assets, if we determine to pursue them. If one or more of these risks or other risks materialize, actual results may vary materially from those expressed. For a more complete discussion of these and other risk factors, see B&W’s filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. B&W cautions not to place undue reliance on these forward-looking statements, which speak only as of the date of this release, and undertakes no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.