Babcock & Wilcox Enterprises Inc. has successfully refinanced while also eliminating significant liabilities from money-losing European projects, putting the Barberton company on a path to profitability, its chief executive officer said Monday.
“We believe we can emerge from the shadows and unleash value,” said Kenneth Young, who was hired as CEO last November to head the financially troubled energy industry manufacturer. “We are on a path to achieving profitable operations as we exit 2019.”
Young made those comments in a late afternoon conference call, after the stock market closed, with industry analysts. His background includes turning around troubled companies. Young came to B&W from the Barberton company’s second-largest shareholder, California investment firm B. Riley Financial.
The conference call was a follow-up to B&W’s announcement Friday that it had beat a deadline to refinance the business and complete related transactions. The call also allowed executives to discuss fourth-quarter finances.
The company said it lost $233.4 million, or $1.39 a share, on revenue of $222.9 million for the fourth quarter ending Dec. 31. That compares to a loss of $107.5 million, or $2.44 a share, on revenue of $330.3 million a year ago.
For the year, B&W lost $725.3 million, or $5.70 a share, on revenue of $1.06 billion. That compares to a loss of $379.8 million, or $8.09 a share, on revenue of $1.34 billion for fiscal 2017.
Shares on Monday closed down a penny, or 3.9 percent, to 37 cents.
The complicated package announced Friday gives the company $150 million in secured financing from B. Riley with the ability to borrow $15 million more. And perhaps as important, B&W said it settled issues with major money-losing European waste-to-energy projects involving its Volund subsidiary and limited future liabilities.
Putting the European liabilities behind it reduces B&W’s “cash burn” and losses, Young said.
The underlying Volund business in Europe remains solid and B&W will not be exiting the United Kingdom or other European markets, Young said.
B&W elsewhere also has a strong business whose strengths have been overshadowed by issues with the waste-to-energy European projects, he said.
The company will focus on quality, high-margin projects around the globe, he said. The company has a substantial base of coal-fired power plant customers around the world, he said.
He also criticized a recent industry analyst report that had a headline of “It’s Over” as irresponsible research.
As part of the new agreements announced Friday, two significant shareholders and creditors, one of which is B. Riley Financial, will each get three seats on B&W’s seven-member board of directors, giving them oversight of the company. Part of the financing package includes seeking shareholder approval for a reverse stock split and related measures.
The financing deals were reached just in time.
B&W in regulatory filings early last week said it faced a 5 p.m. Friday deadline to reach an agreement with creditors to ensure the company remained a “going concern.”
B&W continues with plans to move about 650 employees from its Barberton campus and Copley by this fall to new leased headquarters in Akron’s East End offices, the former Goodyear headquarters building off East Market Street. B&W will sell its Barberton campus to the developers of the East End, who in turn will find other uses for the property.
B&W has about 4,000 employees globally.
The company makes and services coal-fired power plant boilers, pollution control equipment and more, and traces its roots back to 1867. It has been hurt in the U.S. by an abundance of cheap fracked natural gas that has led electric utilities here to shut down coal plants and switch to plants that use the cleaner-burning fuel.
Jim Mackinnon covers business and county government. He can be reached at 330-996-3544 or email@example.com. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ