8-K
Babcock & Wilcox Enterprises, Inc. (BW)
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<br><br> incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 1200 East Market Street<br><br> 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<br> of Each Class | Trading<br> Symbol | Name<br> of Each Exchange on which <br><br> 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 UNAUDITEDPRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITEDPRO 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 UNAUDITEDPRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| PAGE | |
|---|---|
| Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30,<br> 2024 | 3 |
| Unaudited Pro Forma Condensed Consolidated Statement of Operations<br> for the Six Months Ended June 30, 2024 | 4 |
| Unaudited Pro Forma Condensed Consolidated Statement of Operations<br> for the Year Ended December 31, 2023 | 5 |
| Notes to the Pro Forma Condensed Consolidated Balance Sheet as of<br> June 30, 2024 | 6 |
| Notes to the Pro Forma Condensed Consolidated Statements of Operations<br> for the Six Months Ended June 30, 2024 and the Year Ended December 31, 2023 | 6 |
1
BABCOCK &WILCOX ENTERPRISES, INC.
INDEX TO UNAUDITEDPRO 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.
2
BABCOCK &WILCOX ENTERPRISES, INC.
CONDENSED CONSOLIDATEDBALANCE SHEET
JUNE 30, 2024
| (in thousands, except per share amounts) | Divestiture<br> Group Pro Forma Adjustments | Condensed<br> 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<br> 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<br> 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<br> 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<br> loss | (70,088 | ) | — | (70,088 | ) | |||
| Stockholders' deficit attributable<br> to shareholders | (198,929 | ) | (8,659 | ) | (207,588 | ) | ||
| Non-controlling interest | 585 | — | 585 | |||||
| Total stockholders'<br> deficit | (198,344 | ) | (8,659 | ) | (207,003 | ) | ||
| Total liabilities<br> and stockholders' deficit | 849,122 | $ | (51,135 | ) | $ | 797,987 |
All values are in US Dollars.
See accompanying Note to the Condensed Consolidated Balance Sheet
3
BABCOCK &WILCOX ENTERPRISES, INC.
CONDENSEDCONSOLIDATED STATEMENT OF OPERATIONS
FORTHE SIX MONTHS ENDED JUNE 30, 2024
| (in thousands, except per share amounts) | Company<br> Historical | Divestiture<br> Group Pro Forma Adjustments | Condensed<br> 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<br> 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<br> on asset disposals, net | 46 | (47 | ) | (1 | ) | ||||
| Total costs<br> 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<br> (expense) – net | 426 | 7 | 433 | ||||||
| Total other<br> expense, net | (31,120 | ) | 387 | (30,733 | ) | ||||
| Income (loss)<br> before income tax expense | 15,408 | 7,659 | 23,067 | ||||||
| Income tax expense | 5,985 | (793 | ) | 5,192 | |||||
| Income (loss)<br> 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<br> share | 90,264 | 90,264 | |||||||
| Shares used in the computation of diluted earnings per<br> share | 90,324 | 90,324 |
See accompanying Note to the Condensed Consolidated Statement of Operations
4
BABCOCK &WILCOX ENTERPRISES, INC.
CONDENSED CONSOLIDATEDSTATEMENT OF OPERATIONS
FOR YEAR ENDEDDECEMBER 31, 2023
| (in thousands, except per share amounts) | Company<br> Historical | Divestiture<br> Group Pro Forma Adjustments | Condensed<br> 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<br> 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<br> disposals, net | 57 | (1 | ) | 56 | |||||
| Total costs<br> 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<br> – net | (1,336 | ) | (32 | ) | (1,368 | ) | |||
| Total other<br> expense, net | (90,051 | ) | 1,091 | (88,960 | ) | ||||
| Income (loss)<br> before income tax expense | (70,152 | ) | 3,900 | (66,252 | ) | ||||
| Income tax expense | 8,481 | (1,252 | ) | 7,229 | |||||
| Income<br> (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<br> per share | 89,011 | 89,011 |
See accompanying Note to the Condensed Consolidated Statement of Operations
5
NOTETO 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.
NOTETO 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<br> Divestiture Group will be eliminated with these transactions. |
|---|---|
| · | All selling, general and administrative<br> expenses, research and development costs and corporate allocations of Divestiture Group will<br> be eliminated with the exception of corporate allocations. |
| --- | --- |
| · | All other income (expense) items<br> of Divestiture Group will be eliminated. |
| --- | --- |
| · | The loss on the sale of the Divestiture<br> Group business was included in the year ended December 31, 2023. |
| --- | --- |
6
Exhibit 99.2
| News<br> 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-LookingStatements
B&Wcautions that this release contains forward-looking statements, including, without limitation, statements relating to theclosing of the previously announced sale of the Italy-based SPIG S.p.A. group of companies and Sweden-based Babcock & WilcoxVølund AB, formerly known as Götaverken Miljö AB. These forward-looking statementsare based on management’s current expectations and involve a number of risks and uncertainties. For a more complete discussionof 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 readersnot to place undue reliance on these forward-looking statements, which speak only as of the date of this release, and we undertake noobligation 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 |
