- First Quarter GAAP EPS of $0.20, Adjusted EPS of $0.27
- Global Power Gross Profit Increased 19.3%
- Reaffirm Guidance Range of $1.25 - $1.45 Adjusted EPS for 2016
CHARLOTTE, N.C.--(BUSINESS WIRE)--
Babcock & Wilcox Enterprises, Inc. (B&W) (NYSE:BW) announced today first
quarter 2016 revenues of $404.1 million, an increase of $7.0 million, or
1.8%, from the first quarter of 2015. GAAP earnings per share for the
first quarter of 2016 were $0.20 compared to $0.21 in the first quarter
of 2015. Adjusted earnings per share, which excludes the impact of
spin-off transaction costs and restructuring for the quarter, were $0.27
for the three months ended March 31, 2016 compared to $0.26 in the prior
year period.
"First quarter performance exceeded our internal projections and
provided a solid start to 2016," said Mr. E. James Ferland, Chairman and
Chief Executive Officer. "Strong performance in Global Power is expected
to offset challenges in Industrial Environmental throughout the year as
the soft climate for U.S. industrial markets persists in the near-term.
We are reaffirming our 2016 guidance range of $1.25 to $1.45 adjusted
EPS."
Results of Operations
Consolidated revenues for the first quarter of 2016 were $404.1 million,
an increase of 1.8%, compared to $397.2 million for the first quarter of
2015 due to increased revenues in Global Power and Global Services more
than offsetting a decrease in Industrial Environmental revenues. GAAP
operating income for the first quarter of 2016 and 2015 was $17.3
million in both years even with approximately $3.0 million of additional
costs as a stand-alone company in the 2016 period. In the first quarter
2016, strong performance in Global Power and improved equity income from
our Asian joint ventures offset an unfavorable revenue mix in Global
Services and slower sales in Industrial Environmental. Adjusted
operating income in the first quarter of 2016 was $21.3 million, an
increase of $0.2 million, compared to adjusted operating income of $21.1
million in the first quarter of 2015.
First quarter 2016 revenues for the Global Power segment increased 5.3%
to $130.5 million in the quarter compared to $123.9 million in revenues
in the prior year period driven by an increase in new build steam
projects that was partially offset by a decline in new build
environmental projects. Gross profit in the Global Power segment was
$24.4 million, a 19.3% increase compared to $20.4 million for the same
period in 2015 due to increased volume and a higher amount of net
project improvements from favorable milestone achievements.
Revenues in the Global Services segment were $241.2 million in the three
months ended March 31, 2016, versus $232.2 million in the corresponding
period in 2015, an increase of $9.0 million primarily related to
increased construction work partially offset by lower projects and parts
revenues. The Global Services segment reported a gross profit of $48.2
million in the first quarter of 2016, which was $5.1 million less than
the gross profit of $53.3 million in the prior year first quarter
primarily due to the mix of construction and services activities.
The Industrial Environmental segment contributed $32.5 million in
revenues this period compared to $41.1 million in the first quarter of
2015, a decrease of $8.6 million due to lower environmental solutions
product sales. Gross profit in the Industrial Environmental segment was
$7.6 million in the first quarter of 2016, a $2.1 million decrease
compared to $9.7 million in the prior year period primarily due to lower
revenue as a result of the soft U.S. industrial market.
"Beyond our strong core operations, we continue to expect to announce
one to two acquisitions this year. We remain engaged in multiple
promising opportunities," Mr. Ferland said. "Our balanced capital
allocation strategy favors acquisitions to diversify the business, but
has allowed us to put in place a meaningful share repurchase program
while we work to complete transactions that we expect will provide
long-term earnings growth."
Liquidity
The Company’s cash and cash equivalents balance, net of restricted cash,
decreased $78.4 million to $286.8 million at the end of the first
quarter of 2016, reflecting project timing and the impact of the share
repurchase program. The consolidated cash position includes $210.8
million in non-U.S. cash. The Company continues to expect the free cash
flow conversion rate will be between 75% and 100% of net income for the
full year 2016.
Share Repurchase Program
The Company repurchased 1.8 million shares of our common stock for $34.7
million during the first quarter of 2016 under a $100 million share
repurchase program that was authorized in 2015 by the Board of
Directors. The Company expects to repurchase the remaining $34.1 million
of our common stock authorized by the current program by the end of the
third quarter of 2016.
The Company may utilize various methods to effect the repurchases and
the timing of repurchases will depend upon several factors, including
market and business conditions, and repurchases may be discontinued at
any time. The pace of buy-backs beyond the first quarter of 2016 will be
determined based on the status of potential acquisitions as well as
market conditions.
Conference Call to Discuss First Quarter 2016 Results
|
Date:
|
|
Wednesday, May 11, 2016, at 8:30 a.m. EDT
|
|
Live Webcast:
|
|
Investor Relations section of website at www.babcock.com
|
|
|
|
|
Forward-Looking Statements
B&W cautions that this release contains forward-looking statements,
including, without limitation, statements relating to backlog, to the
extent they may be viewed as an indicator of future revenues;
management’s expectations regarding the industries in which we operate;
our guidance and forecasts for 2016; our projected operating margin
improvements, savings and restructuring costs; and growth through
acquisitions. These forward-looking statements are based on management’s
current expectations and involve a number of risks and uncertainties,
including, among other things, disruptions experienced with customers
and suppliers; the inability to successfully operate independently
following the spin-off; the inability to retain key personnel; adverse
changes in the industries in which we operate and delays, changes or
termination of contracts in backlog; the timing and amount of
repurchases of our common stock, if any; and the inability to grow and
diversify through acquisitions. 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 the our 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.
About B&W
Headquartered in Charlotte, N.C., Babcock & Wilcox is a global leader
in energy and environmental technologies and services for the power and
industrial markets. B&W companies employ approximately 5,700 people
around the world. Follow us on Twitter @BabcockWilcox and learn more at www.babcock.com.
|
Exhibit 1
Babcock & Wilcox Enterprises,
Inc.
Reconciliation of Non-GAAP Operating
Income and Earnings Per Share(1)(2)
(In
millions, except per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2016
|
|
|
|
GAAP
|
|
Restructuring
|
|
Spin Costs
|
|
Non-GAAP
|
|
Operating income (loss)
|
|
$
|
17.3
|
|
|
$
|
2.1
|
|
|
$
|
1.9
|
|
|
$
|
21.3
|
|
|
Income tax (expense) benefit
|
|
|
(6.6
|
)
|
|
|
(0.8
|
)
|
|
|
0.6
|
|
|
|
(6.8
|
)
|
|
Net income (loss)
|
|
$
|
10.6
|
|
|
$
|
1.3
|
|
|
$
|
2.5
|
|
|
$
|
14.4
|
|
|
Net loss attributable to non-controlling interest
|
|
|
(0.1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.1
|
)
|
|
Net income (loss) attributable to B&W shareholders
|
|
$
|
10.5
|
|
|
$
|
1.3
|
|
|
$
|
2.5
|
|
|
$
|
14.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS - continuing operations
|
|
$
|
0.20
|
|
|
$
|
0.02
|
|
|
$
|
0.05
|
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax rate
|
|
|
38.5
|
%
|
|
|
|
|
|
|
32.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2015
|
|
|
|
GAAP
|
|
Restructuring
|
|
NE segment
allocation
|
|
Non-GAAP
|
|
Operating income (loss)
|
|
$
|
17.3
|
|
|
$
|
2.4
|
|
|
$
|
1.4
|
|
|
$
|
21.1
|
|
|
Other income (expense)
|
|
|
(0.3
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.3
|
)
|
|
Income tax (expense) benefit
|
|
|
(5.7
|
)
|
|
|
(0.9
|
)
|
|
|
(0.4
|
)
|
|
|
(6.9
|
)
|
|
Net income (loss)
|
|
$
|
11.4
|
|
|
$
|
1.5
|
|
|
$
|
1.0
|
|
|
$
|
13.8
|
|
|
Net loss attributable to non-controlling interest
|
|
|
(0.1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.1
|
)
|
|
Net income (loss) attributable to B&W shareholders
|
|
$
|
11.3
|
|
|
$
|
1.5
|
|
|
$
|
1.0
|
|
|
$
|
13.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS - continuing operations
|
|
$
|
0.21
|
|
|
$
|
0.03
|
|
|
$
|
0.02
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax rate
|
|
|
33.4
|
%
|
|
|
|
|
|
|
33.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Figures may not be clerically accurate due to rounding.
|
|
|
|
(2) B&W is providing non-GAAP information, particularly adjusted EPS
and adjusted operating income, regarding certain of its historical
results and guidance on future earnings per share to supplement the
results provided in accordance with GAAP, and it should not be
considered superior to, or as a substitute for, the comparable GAAP
measures. B&W believes the non-GAAP measures provide meaningful
insight into the Company’s operational performance and provides
these measures to investors to help facilitate comparisons of
operating results with prior periods and to assist them in
understanding B&W’s ongoing operations.
|
|
|
|
Exhibit 2
Babcock & Wilcox Enterprises,
Inc.
Condensed Consolidated and Combined
Statements of Operations(1)
(In
millions, except per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2016
|
|
2015
|
|
Revenues
|
|
$
|
404.1
|
|
|
$
|
397.2
|
|
|
Costs and expenses:
|
|
|
|
|
|
Cost of operations
|
|
324.0
|
|
|
313.8
|
|
|
Research and development costs
|
|
2.8
|
|
|
4.5
|
|
|
Selling, general and administrative expenses
|
|
58.7
|
|
|
57.1
|
|
|
Restructuring activities and spin-off transaction costs
|
|
4.0
|
|
|
2.4
|
|
|
Total costs and expenses
|
|
389.5
|
|
|
377.7
|
|
|
Equity in income (loss) of investees
|
|
2.7
|
|
|
(2.1
|
)
|
|
Operating income
|
|
17.3
|
|
|
17.3
|
|
|
Other income (expense):
|
|
|
|
|
|
Interest income
|
|
0.3
|
|
|
0.2
|
|
|
Interest expense
|
|
(0.4
|
)
|
|
(0.1
|
)
|
|
Other – net
|
|
0.1
|
|
|
(0.3
|
)
|
|
Total other income (expense)
|
|
0.0
|
|
|
(0.3
|
)
|
|
Income before income tax expense
|
|
17.2
|
|
|
17.0
|
|
|
Income tax expense
|
|
6.6
|
|
|
5.7
|
|
|
Income from continuing operations
|
|
10.6
|
|
|
11.4
|
|
|
Income from discontinued operations, net of tax
|
|
—
|
|
|
1.4
|
|
|
Net income
|
|
10.6
|
|
|
12.7
|
|
|
Net income attributable to noncontrolling interest
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
Net Income attributable to shareholders
|
|
$
|
10.5
|
|
|
$
|
12.7
|
|
|
|
|
|
|
|
|
Amounts attributable to shareholders:
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
10.5
|
|
|
$
|
11.3
|
|
|
Income from discontinued operations, net of tax
|
|
—
|
|
|
1.4
|
|
|
Net Income attributable to shareholders
|
|
$
|
10.5
|
|
|
$
|
12.7
|
|
|
|
|
|
|
|
|
Basic earnings per share - continuing operations
|
|
$
|
0.20
|
|
|
$
|
0.21
|
|
|
Basic earnings per share - discontinued operations
|
|
—
|
|
|
0.03
|
|
|
Basic earnings per share
|
|
$
|
0.20
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
Diluted earnings per share - continuing operations
|
|
$
|
0.20
|
|
|
$
|
0.21
|
|
|
Diluted earnings per share - discontinued operations
|
|
—
|
|
|
0.03
|
|
|
Diluted earnings per share
|
|
$
|
0.20
|
|
|
$
|
0.24
|
|
|
|
|
|
|
|
|
Shares used in the computation of earnings per share:
|
|
|
|
|
|
Basic
|
|
51,627
|
|
|
53,388
|
|
|
Diluted
|
|
52,221
|
|
|
53,573
|
|
|
|
|
|
|
|
|
|
|
(1) Figures may not be clerically accurate due to rounding.
|
|
|
|
Exhibit 3
Babcock & Wilcox Enterprises,
Inc.
Condensed Consolidated and Combined
Balance Sheets(1)
(In
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
|
Cash and cash equivalents
|
|
$
|
286.8
|
|
|
$
|
365.2
|
|
|
Restricted cash and cash equivalents
|
|
37.2
|
|
|
37.1
|
|
|
Accounts receivable – trade, net
|
|
272.9
|
|
|
291.2
|
|
|
Accounts receivable – other
|
|
50.2
|
|
|
44.8
|
|
|
Contracts in progress
|
|
158.0
|
|
|
128.2
|
|
|
Inventories
|
|
91.0
|
|
|
90.1
|
|
|
Other current assets
|
|
28.1
|
|
|
21.5
|
|
|
Total current assets
|
|
924.3
|
|
|
978.2
|
|
|
Property, plant and equipment - gross
|
|
335.3
|
|
|
330.0
|
|
|
Accumulated depreciation
|
|
(186.8
|
)
|
|
(184.3
|
)
|
|
Net property, plant and equipment
|
|
148.5
|
|
|
145.7
|
|
|
Goodwill
|
|
201.8
|
|
|
201.1
|
|
|
Deferred income taxes
|
|
187.7
|
|
|
190.7
|
|
|
Investments in unconsolidated affiliates
|
|
92.8
|
|
|
92.2
|
|
|
Intangible assets
|
|
36.7
|
|
|
37.8
|
|
|
Other assets
|
|
18.3
|
|
|
17.4
|
|
|
Total assets
|
|
$
|
1,610.1
|
|
|
$
|
1,663.0
|
|
|
|
|
Short-term line of credit
|
|
$
|
3.1
|
|
|
$
|
2.0
|
|
|
Accounts payable
|
|
164.3
|
|
|
175.2
|
|
|
Accrued employee benefits
|
|
40.2
|
|
|
51.5
|
|
|
Advance billings on contracts
|
|
213.1
|
|
|
229.4
|
|
|
Accrued warranty expense
|
|
42.2
|
|
|
39.8
|
|
|
Other accrued liabilities
|
|
63.0
|
|
|
63.5
|
|
|
Total current liabilities
|
|
526.0
|
|
|
561.4
|
|
|
Accumulated postretirement benefit obligations
|
|
28.4
|
|
|
27.8
|
|
|
Pension liabilities
|
|
279.1
|
|
|
282.1
|
|
|
Other liabilities
|
|
45.7
|
|
|
43.4
|
|
|
Total liabilities
|
|
879.1
|
|
|
914.6
|
|
|
Commitments and contingencies
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
Common stock, par value $0.01 per share, authorized 200.0 million
shares; issued 50.9 million and 52.5 million shares at March 31,
2016 and December 31, 2015, respectively
|
|
0.5
|
|
|
0.5
|
|
|
Capital in excess of par value
|
|
795.4
|
|
|
790.5
|
|
|
Treasury stock at cost, 3.2 million and 1.4 million shares at March
31, 2016 and December 31, 2015, respectively
|
|
(61.7
|
)
|
|
(25.4
|
)
|
|
Retained earnings
|
|
11.5
|
|
|
1.0
|
|
|
Accumulated other comprehensive income (loss)
|
|
(15.5
|
)
|
|
(18.9
|
)
|
|
Stockholders' equity attributable to shareholders
|
|
730.2
|
|
|
747.7
|
|
|
Noncontrolling interest
|
|
0.8
|
|
|
0.7
|
|
|
Total stockholders' equity
|
|
731.0
|
|
|
748.4
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,610.1
|
|
|
$
|
1,663.0
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Figures may not be clerically accurate due to rounding.
|
|
|
|
Exhibit 4
Babcock & Wilcox Enterprises,
Inc.
Condensed Consolidated and Combined
Statements of Cash Flows(1)
(In
millions)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2016
|
|
2015
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net Income
|
|
$
|
10.6
|
|
|
$
|
12.7
|
|
|
Non-cash items included in net income:
|
|
|
|
|
|
Depreciation and amortization
|
|
6.3
|
|
|
11.6
|
|
|
(Income) loss of equity method investees, net of dividends
|
|
(2.7
|
)
|
|
2.1
|
|
|
Provision for (benefit from) deferred taxes
|
|
—
|
|
|
4.3
|
|
|
Recognition of (gains) losses for pension and postretirement plans
|
|
—
|
|
|
0.1
|
|
|
Stock-based compensation charges
|
|
4.9
|
|
|
—
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
Accounts receivable
|
|
17.5
|
|
|
18.3
|
|
|
Accounts payable
|
|
(16.0
|
)
|
|
(21.6
|
)
|
|
Contracts in progress and advance billings on contracts
|
|
(46.1
|
)
|
|
33.2
|
|
|
Inventories
|
|
(1.0
|
)
|
|
(0.6
|
)
|
|
Income taxes
|
|
(0.4
|
)
|
|
(6.1
|
)
|
|
Accrued and other current liabilities
|
|
1.3
|
|
|
1.4
|
|
|
Pension, accrued postretirement and employee benefits
|
|
(15.0
|
)
|
|
(7.0
|
)
|
|
Other, net
|
|
2.6
|
|
|
4.0
|
|
|
Net cash from operating activities
|
|
(37.9
|
)
|
|
52.4
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Decrease (increase) in restricted cash and cash equivalents
|
|
(0.1
|
)
|
|
2.2
|
|
|
Purchases of property, plant and equipment
|
|
(4.0
|
)
|
|
(5.8
|
)
|
|
Intangible asset additions
|
|
(0.3
|
)
|
|
—
|
|
|
Purchases of available-for-sale securities
|
|
(8.0
|
)
|
|
(4.4
|
)
|
|
Sales and maturities of available-for-sale securities
|
|
6.5
|
|
|
0.3
|
|
|
Proceeds from (cost of) asset disposals
|
|
(0.3
|
)
|
|
—
|
|
|
Net cash from investing activities
|
|
(6.2
|
)
|
|
(7.7
|
)
|
|
Cash flows from financing activities
|
|
|
|
|
|
Increase in short-term borrowing
|
|
1.1
|
|
|
—
|
|
|
Net transfers from former Parent
|
|
—
|
|
|
(25.1
|
)
|
|
Repurchase of shares of common stock
|
|
(36.3
|
)
|
|
—
|
|
|
Other
|
|
—
|
|
|
—
|
|
|
Net cash from financing activities
|
|
(35.2
|
)
|
|
(25.1
|
)
|
|
Effects of exchange rate changes on cash
|
|
1.0
|
|
|
(6.9
|
)
|
|
Cash flows from continuing operations
|
|
(78.4
|
)
|
|
12.7
|
|
|
Cash flows from discontinued operations:
|
|
|
|
|
|
Operating cash flows from discontinued operations, net
|
|
—
|
|
|
(4.7
|
)
|
|
Investing cash flows from discontinued operations, net
|
|
—
|
|
|
(0.1
|
)
|
|
Net cash flows from discontinued operations
|
|
—
|
|
|
(4.8
|
)
|
|
Net increase (decrease) in cash and equivalents
|
|
(78.4
|
)
|
|
7.9
|
|
|
Cash and equivalents, beginning of period
|
|
365.2
|
|
|
218.7
|
|
|
Cash and equivalents, end of period
|
|
$
|
286.8
|
|
|
$
|
226.6
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Figures may not be clerically accurate due to rounding.
|
|
|
|
Exhibit 5
Babcock & Wilcox Enterprises,
Inc.
Segment Information(1)
(In
millions)
|
|
|
|
|
|
SEGMENT RESULTS:
|
|
Three Months Ended March 31,
|
|
|
|
2016
|
|
2015
|
|
REVENUES:
|
|
|
|
|
|
Global Power
|
|
$
|
130.5
|
|
|
$
|
123.9
|
|
Global Services
|
|
241.2
|
|
|
232.2
|
|
Industrial Environmental
|
|
32.5
|
|
|
41.1
|
|
|
|
404.1
|
|
|
397.2
|
|
GROSS PROFIT:
|
|
|
|
|
|
Global Power
|
|
24.4
|
|
|
20.4
|
|
Global Services
|
|
48.2
|
|
|
53.3
|
|
Industrial Environmental
|
|
7.6
|
|
|
9.7
|
|
|
|
$
|
80.2
|
|
|
$
|
83.4
|
|
|
|
|
|
|
|
|
|
BOOKINGS:
|
|
Three Months Ended March 31,
|
|
|
|
2016
|
|
2015
|
|
Global Power
|
|
$
|
195.5
|
|
|
$
|
453.7
|
|
Global Services
|
|
172.5
|
|
|
221.6
|
|
Industrial Environmental
|
|
32.5
|
|
|
55.8
|
|
|
|
$
|
400.5
|
|
|
$
|
731.1
|
|
|
|
|
|
|
|
|
|
BACKLOG:
|
|
As of March 31,
|
|
|
|
2016
|
|
2015
|
|
Global Power
|
|
$
|
1,184
|
|
|
$
|
1,281
|
|
Global Services
|
|
1,073
|
|
|
1,213
|
|
Industrial Environmental
|
|
67
|
|
|
87
|
|
|
|
$
|
2,324
|
|
|
$
|
2,581
|
|
|
|
|
|
|
|
|
|
|
(1) Figures may not be clerically accurate due to rounding.
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160510006818/en/
Source: Babcock & Wilcox Enterprises, Inc.