EX-99.1 2 tm2427502d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

BABCOCK & WILCOX ENTERPRISES, INC. 

INDEX TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

UNAUDITED PRO FORMA FINANCIAL INFORMATION

 

The following unaudited pro forma condensed consolidated financial information, which is based upon estimates by our management, is presented for informational purposes only. It is not intended to be indicative of the actual consolidated results of operations or the actual consolidated financial position that would have been achieved had the transactions or adjustments been consummated as of the dates indicated below, and it does not purport to indicate results that may be attained in the future.

 

BABCOCK & WILCOX ENTERPRISES, INC. 

INDEX TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

  PAGE
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2024 3
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Six Months Ended June 30, 2024 4
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 2023 5
Notes to the Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2024 6
Notes to the Pro Forma Condensed Consolidated Statements of Operations for the Six Months Ended June 30, 2024 and the Year Ended December 31, 2023 6

 

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BABCOCK & WILCOX ENTERPRISES, INC. 

INDEX TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

  

On October 30, 2024, Babcock & Wilcox Enterprises, Inc. (the “Company”), through B&W PGG Luxembourg Finance Sárl and Babcock & Wilcox A/S, each a subsidiary of the Company (the “Seller”), closed its previously-disclosed sale of the entire issued and outstanding share capital of its (i) Italian subsidiary SPIG S.p.A. (“SPIG”), and, indirectly, its subsidiaries, and (ii) Swedish subsidiary Babcock & Wilcox Vølund AB f/k/a Götaverken Miljö AB (“GMAB”) to Auctus Neptune Holding S.p.A. (the “Buyer” and the agreement governing such sale, the “Purchase Agreement”).

 

The total base purchase price paid pursuant to the Purchase Agreement was approximately €36.7 million, subject to certain adjustments for specified indemnity obligations or specified payments, dividends, encumbrances, releases, share issuances or other payments made (or obligations assumed) by SPIG or GMAB, other than as permitted in the Purchase Agreement. The Purchase Agreement also provides for a three-year non-competition covenant limited to the Company’s continuing Wet and Dry Cooling Business and a three-year non-solicitation covenant.

 

The following unaudited pro forma condensed consolidated financial statements are based on our historical consolidated financial statements as adjusted to give effect to the sale of the SPIG and GMAB (“Divestiture Group”). The unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2024 and the 12 months ended December 31, 2023 give effect to the sale as if it had occurred on January 1, 2023. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2024 gives effect to the transaction as if it had occurred on that date.

 

The unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results that would have occurred if the transactions actually occurred on the dates presented or to project our results of operations or financial position for any future period. The information below should be read in conjunction with the Company's consolidated financial statements as of and for six months ended June 30, 2024 and as of and for the year ended December 31, 2023.

 

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BABCOCK & WILCOX ENTERPRISES, INC. 

CONDENSED CONSOLIDATED BALANCE SHEET 

JUNE 30, 2024

 

(in thousands, except per share amounts)  Company Historical   Divestiture Group Pro Forma Adjustments   Condensed Consolidated Pro Forma 
Cash and cash equivalents  $95,466   $26,174   $121,640 
Current restricted cash and cash equivalents   75,332    (1,766)   73,566 
Accounts receivable – trade, net   124,967    (25,076)   99,891 
Accounts receivable – other   25,945    (9,144)   16,801 
Contracts in progress   88,644    (22,078)   66,566 
Inventories, net   110,309    (3,644)   106,665 
Other current assets   24,958    (919)   24,039 
Current assets held for sale   28,941    —    28,941 
Total current assets   574,562    (36,453)   538,109 
Net property, plant and equipment and finance leases   78,168    (2,054)   76,114 
Goodwill   83,842    —    83,842 
Intangible assets, net   30,518    (8,826)   21,692 
Right-of-use assets   27,632    (723)   26,909 
Long-term restricted cash   31,291    —    31,291 
Deferred tax assets   2,094    —    2,094 
Other assets   21,015    (3,079)   17,936 
Total assets  $849,122   $(51,135)  $797,987 
                
Accounts payable  $147,350   $(25,559)  $121,791 
Accrued employee benefits   11,850    (2,731)   9,119 
Advance billings on contracts   63,255    (11,135)   52,120 
Accrued warranty expense   6,695    (848)   5,847 
Current Portion:             — 
Financing lease liabilities   1,434    —    1,434 
Operating lease liabilities   3,532    (319)   3,213 
Other accrued liabilities   53,690    (951)   52,739 
Loans payable   3,475    —    3,475 
Current liabilities held for sale   42,609    —    42,609 
Total current liabilities   333,890    (41,543)   292,347 
Senior notes   339,024    —    339,024 
Loans payable, net of current portion   134,308    —    134,308 
Pension and other postretirement benefit liabilities   167,979    —    167,979 
Finance lease liabilities, net of current portion   25,465    —    25,465 
Operating lease liabilities, net of current portion   25,331    (404)   24,927 
Deferred tax liability   10,545    —    10,545 
Other non-current liabilities   10,924    (529)   10,395 
Total liabilities   1,047,466    (42,476)   1,004,990 
                
Stockholders' deficit:               
Preferred stock, par value $0.01 per share, authorized shares of 20,000; issued and outstanding shares of 7,669 at both June 30, 2024 and December 31, 2023   77    —    77 
Common stock, par value $0.01 per share, authorized shares of 500,000; issued and outstanding shares of 92,010 and 89,449 at June 30, 2024 and December 31, 2023, respectively   5,174    —    5,174 
Capital in excess of par value   1,550,977    —    1,550,977 
Treasury stock at cost, 2,154 and 2,139 shares at June 30, 2024 and December 31, 2023, respectively   (115,180)   —    (115,180)
Accumulated deficit   (1,569,889)   (8,659)   (1,578,548)
Accumulated other comprehensive loss   (70,088)   —    (70,088)
Stockholders' deficit attributable to shareholders   (198,929)   (8,659)   (207,588)
Non-controlling interest   585    —    585 
Total stockholders' deficit   (198,344)   (8,659)   (207,003)
Total liabilities and stockholders' deficit  $849,122   $(51,135)  $797,987 

 

See accompanying Note to the Condensed Consolidated Balance Sheet

 

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BABCOCK & WILCOX ENTERPRISES, INC. 

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS 

FOR THE SIX MONTHS ENDED JUNE 30, 2024

 

(in thousands, except per share amounts)  Company Historical   Divestiture Group Pro Forma Adjustments   Condensed Consolidated Pro Forma 
Revenues  $441,198   $(42,959)  $398,239 
Costs and expenses:               
Cost of operations   338,227    (43,310)   294,917 
Selling, general and administrative expenses   91,963    (6,657)   85,306 
Restructuring activities   2,347    (33)   2,314 
Research and development costs   2,261    (184)   2,077 
Gain on sale of business   (40,174)   —    (40,174)
(Gain) loss on asset disposals, net   46    (47)   (1)
Total costs and expenses   394,670    (50,231)   344,439 
Operating income   46,528    7,272    53,800 
Other (expense) income:               
Interest expense   (25,368)   44    (25,324)
Interest income   592    (51)   541 
Loss on debt extinguishment   (6,124)   —    (6,124)
Benefit plans, net   188    —    188 
Foreign exchange   (834)   387    (447)
Other income (expense) – net   426    7    433 
Total other expense, net   (31,120)   387    (30,733)
Income (loss) before income tax expense   15,408    7,659    23,067 
Income tax expense   5,985    (793)   5,192 
Income (loss) from continuing operations   9,423    8,452    17,875 
                
Basic earnings (loss) per share               
Continuing operations  $0.02        $0.12 
                
Diluted earnings (loss) per share               
Continuing operations  $0.02        $0.12 
                
Shares used in the computation of basic earnings per share   90,264         90,264 
Shares used in the computation of diluted earnings per share   90,324         90,324 

 

See accompanying Note to the Condensed Consolidated Statement of Operations

 

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BABCOCK & WILCOX ENTERPRISES, INC. 

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS 

FOR YEAR ENDED DECEMBER 31, 2023

 

(in thousands, except per share amounts)  Company Historical   Divestiture Group Pro Forma Adjustments   Condensed Consolidated Pro Forma 
Revenues  $999,354   $(94,272)  $905,082 
Costs and expenses:               
Cost of operations   775,267    (92,001)   683,266 
Selling, general and administrative expenses   191,465    (13,228)   178,237 
Restructuring activities   4,222    (77)   4,145 
Research and development costs   8,444    (433)   8,011 
Impairment of assets   —    8,659    8,659 
Loss on asset disposals, net   57    (1)   56 
Total costs and expenses   979,455    (97,081)   882,374 
Operating income   19,899    2,809    22,708 
Other (expense) income:               
Interest expense   (49,895)   501    (49,394)
Interest income   1,192    (90)   1,102 
Benefit plans, net   (37,505)   —    (37,505)
Foreign exchange   (2,507)   712    (1,795)
Other expense – net   (1,336)   (32)   (1,368)
Total other expense, net   (90,051)   1,091    (88,960)
Income (loss) before income tax expense   (70,152)   3,900    (66,252)
Income tax expense   8,481    (1,252)   7,229 
Income (loss) from continuing operations   (78,633)   5,152    (73,481)
                
Basic and diluted loss per share               
Continuing operations  $(1.05)       $(0.99)
                
Shares used in the computation of basic and diluted loss per share   89,011         89,011 

 

See accompanying Note to the Condensed Consolidated Statement of Operations

 

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NOTE TO THE PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2024

 

The balance sheet of the Company as of June 30, 2024 reflected the assets and liabilities of Babcock & Wilcox Enterprises, Inc. and the assets and liabilities of the Divestiture Group. Upon completion of the transaction, substantially all of the Divestiture Group assets and liabilities will be eliminated. Included in the Pro Forma Adjustments column are the divested assets and liabilities, the costs and expenses to be paid at closing and the estimated net cash proceeds from the transaction. Also included in the Pro Forma Adjustments is an increase in retained deficit that would have resulted from the loss on the sale of the business.

 

NOTE TO THE PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND THE YEAR ENDED DECEMBER 31, 2023

 

The statements of operations for the six months ended June 30, 2024 and year ended December 31, 2023 reflected the revenue, costs and other income (expenses) of the Company. Upon completion of the transaction with the Buyer, substantially all of the revenue, costs and other income (expenses) associated with Divestiture Group will be eliminated, except for those costs and other income (expense) related to retained assets and liabilities not assumed by the Buyer. As a result of this disposition, management determined that the divestiture group was not recoverable and accordingly recorded an impairment of $8.7 million on certain intangible assets in the year ended December 31, 2023.

 

The Pro Forma Condensed Consolidated Statement of Operations were prepared to eliminate income and expenses based on the following assumptions:

 

·All revenue and cost of sales of Divestiture Group will be eliminated with these transactions.

 

·All selling, general and administrative expenses, research and development costs and corporate allocations of Divestiture Group will be eliminated with the exception of corporate allocations.

 

·All other income (expense) items of Divestiture Group will be eliminated.

 

·The loss on the sale of the Divestiture Group business was included in the year ended December 31, 2023.

 

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