BWSN Babcock & Wilcox Enterprises Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15 (d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 30, 2024

 

BABCOCK & WILCOX ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		001-36876		47-2783641
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

1200 East Market Street Suite 650 Akron, Ohio		44305
(Address of Principal Executive Offices)		(Zip Code)

 

Registrant’s Telephone Number, including Area Code: (330) 753-4511

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class		Trading Symbol		Name of Each Exchange on which Registered
Common stock, $0.01 par value per share		BW		New York Stock Exchange
8.125% Senior Notes due 2026		BWSN		New York Stock Exchange
6.50% Senior Notes due 2026		BWNB		New York Stock Exchange
7.75% Series A Cumulative Perpetual Preferred Stock		BW PRA		New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company  ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

 

 

  

Item 2.01 Completion of Acquisition or Disposition of Assets

 

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 Company does not have any material relationship with the Buyer other than in respect of the transaction.

 

Item 8.01 Other Events.

 

On October 31, 2024, the Company issued a press release announcing the sale of SPIG and GMAG to the Buyer. A copy of the press release is attached as Exhibit 99.2, and the information contained in Exhibit 99.2 is incorporated herein by reference.

 

The information furnished pursuant to this Item 7.01, including Exhibit 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit No.		Description
99.1		Unaudited Pro Forma Condensed Consolidated Financial Information
99.2		Press Release, dated October 31, 2024
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

  

 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	BABCOCK & WILCOX ENTERPRISES, INC.
November 5, 2024	By:	/s/ Louis Salamone
		Louis Salamone
		Executive Vice President, Chief Financial Officer and Chief Accounting Officer
		(Principal Accounting Officer and Duly Authorized Representative)

  

 

 

 

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

 

 

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.

 

 

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

 

 

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

 

 

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

 

 

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.

 

 

 

Exhibit 99.2

 

 

News Release

 

Babcock & Wilcox Announces Closing of Previously Announced Sale of its Italian and Swedish Businesses

 

(AKRON, Ohio – October 31, 2024) – Babcock & Wilcox Enterprises, Inc. (“B&W” or the “Company”) (NYSE: BW) announced the closing of the previously announced sale of the Italy-based SPIG S.p.A. (SPIG) group of companies and Sweden-based Babcock & Wilcox Vølund AB — formerly known as Götaverken Miljö AB (GMAB) — to AUCTUS Capital Partners AG for approximately $40 million, subject to customary adjustments and expenses.

 

About Babcock & Wilcox

 

Headquartered in Akron, Ohio, Babcock & Wilcox Enterprises, Inc. is a leader in energy and environmental products and services for power and industrial markets worldwide. Follow us on LinkedIn and learn more at babcock.com.

 

Forward-Looking Statements

 

B&W cautions that this release contains forward-looking statements, including, without limitation, statements relating to the closing of the previously announced sale of the Italy-based SPIG S.p.A. group of companies and Sweden-based Babcock & Wilcox Vølund AB, formerly known as Götaverken Miljö AB. 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.

 

###

 

Investor Contact:		Media Contact:
Investor Relations		Ryan Cornell
Babcock & Wilcox		Public Relations
704.625.4944		Babcock & Wilcox
investors@babcock.com		330.860.1345
		rscornell@babcock.com

 

 

 

v3.24.3

Cover	Oct. 30, 2024
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 30, 2024
Entity File Number	001-36876
Entity Registrant Name	BABCOCK & WILCOX ENTERPRISES, INC.
Entity Central Index Key	0001630805
Entity Tax Identification Number	47-2783641
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1200 East Market Street
Entity Address, Address Line Two	Suite 650
Entity Address, City or Town	Akron
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	44305
City Area Code	330
Local Phone Number	753-4511
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common stock, $0.01 par value per share
Trading Symbol	BW
Security Exchange Name	NYSE
Senior Notes 8. 125 Percentage Due 2026 [Member]
Document Information [Line Items]
Title of 12(b) Security	8.125% Senior Notes due 2026
Trading Symbol	BWSN
Security Exchange Name	NYSE
Senior Notes 6. 50 Percentage Due 2026 [Member]
Document Information [Line Items]
Title of 12(b) Security	6.50% Senior Notes due 2026
Trading Symbol	BWNB
Security Exchange Name	NYSE
Series A 7. 75 Percentage Cumulative Perpetual Preferred Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	7.75% Series A Cumulative Perpetual Preferred Stock
Trading Symbol	BW PRA
Security Exchange Name	NYSE

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