Babcock & Wilcox Enterprises, Inc. (BW) Earnings Call Transcript & Summary

Good day, ladies and gentlemen. At this time, it is my pleasure to turn the floor over to your host, Kenny Young. Sir, the floor is yours.

Thanks, and good morning, everyone, and welcome to the Annual Meeting of Stockholders of Babcock & Wilcox Enterprises, Inc. I am Kenny Young, Chief Executive Officer of Babcock & Wilcox, and I have been designated by the Board of Directors to serve as Chairman of today's meeting. Also present is John Dziewisz, Senior Vice President and Corporate Secretary, who will be serving as secretary of today's meeting. Members of the Board of Directors who are also on the call are Cynthia Dubin, Alan Howe, Brian Kahn, Bryant Riley and Ken Siegel. We are also joined by representatives of Deloitte & Touche, Craig Donnan and Zach Stephens. As we begin our meeting today, I want to acknowledge and thank 2 important groups of people who have been invaluable as we have worked through the unprecedented impact of COVID-19. First, let me say a few words about the Babcock & Wilcox employees around the world. B&W is a critical infrastructure provider, and our employees have continued to work during the pandemic to provide products and services that allow utilities to make electricity, help industries power their plants and hospitals and other facilities to continue operating. Despite the difficult circumstances presented by the pandemic, B&W employees have stayed focused on our customers and on supporting one another. And I want to thank each and every employee for their professionalism and dedication. I also want to recognize and thank all of the medical personnel and first responders who have worked tirelessly on the front lines as the pandemic has continued to ensue. They have our deepest gratitude for what they have done and continue to do. And now turning back to the business at hand. Please note that the rules of conduct for the meeting are posted on the web portal for this meeting. In addition, any validated stockholder may submit a question in the designated field. We will post answers to questions on the Investor page of the company's website, www.babcock.com. Now I'd like to call the meeting to order. Mr. Dziewisz will address additional preliminary matters.

Mr. Chairman, I have for filing with the records of this meeting, an affidavit from Broadridge Financial Solutions, stating that our proxy materials, which included the notice of meeting, proxy statement, proxy card, and an annual report containing audited financial statements of the company as of and for the year ended December 31, 2019, were first mailed or made available to stockholders of record on May 5, 2020. I will file this affidavit and the accompanying materials with the minutes of this meeting. Also a certified list of the stockholders prepared by the transfer agent as of the close of business on April 22, 2020, the record date for those entitled to vote at today's meeting is available for inspection. The list has been prepared and has been kept open for examination by any stockholder for 10 days prior to this meeting as required by law and the company's bylaws. Before I turn things back to the Chairman, I would like to advise you that certain statements in today's meeting may constitute forward-looking statements that are based on our current expectations and are subject to risks and uncertainties that could cause actual results to vary materially. Please see our latest filings with the SEC for a discussion of the risks that our businesses face.

Thanks, John. As Chairman of the meeting, I appoint Mr. [ Victor Latessa ], a representative of Broadridge Financial Solutions as our inspector of election this year. [ Mr. Latessa ] has taken the oath of office. [ Mr. Latessa ], will you now report on the quorum?

Mr. Chairman, at the close of business on April 22, 2020, the company had outstanding 46,407,120 shares of the company's common stock, each of which entitles the holder thereof to 1 vote on each matter presented. There are in excess of 38,836,387 shares of common stock of the company represented at this meeting in person or by proxy. This represents approximately 83.6% of the outstanding shares entitled to vote at this meeting.

Thank you, [ Mr. Latessa ]. Based on the report of the inspector of election, I declare that a quorum is present. As set forth in the proxy statement for this meeting, there are 7 proposals to be voted on at this meeting. At this time, I would like to declare the polls open for voting. Any stockholder who has not voted or wishes to change his or her vote, may vote on the proposals by clicking on the voting button on the web portal. Polls will remain open for the next 60 seconds. During this time, there will be silence. [Voting]

I now declare the polls to be closed with respect to voting on each of the foregoing proposals. I now ask the inspector of election to give a report on the preliminary results of the vote on each proposal. Please note that any votes were properly submitted before the closing of the polls but are not reflected in the preliminary report will be reflected in the final report of the inspector of election and in the company's report on Form 8-K that will be filed within 4 business days of today's date.

Mr. Chairman, as the inspector of election, I report as follows: regarding proposal 1, the approval of amendments to the company's certificate of incorporation to declassify the Board of Directors and provide for annual elections of all directors beginning at the 2022 Annual Meeting of Stockholders, at least 22,712,821 shares of common stock or approximately 48.9% of all shares outstanding and entitled to vote were voted in favor of the proposal. Regarding proposal 2, the election of directors to serve in Class 1 in the event that proposal 1 is approved, at least 19,304,223 votes or approximately 84.2% of all votes cast on the matter were cast in favor of each of the nominees listed in the proxy statement for this meeting. No votes were received for anyone other than the nominees. Regarding proposal 3, the election of directors to serve in Class II in the event that proposal 1 is not approved, at least 19,310,456 votes or approximately 84.2% of all votes cast on the matter were cast in favor of each of the nominees listed in the proxy statement for this meeting. No votes were received for anyone other than the nominees. Regarding proposal 4, the approval of amendments to the company's certificate of incorporation to remove provisions that require the affirmative vote of holders of at least 80% of the voting power to approve certain amendments to the certificate of incorporation and the bylaws, at least 22,554,935 shares of common stock or approximately 48.6% of all shares outstanding and entitled to vote were voted in favor of the proposal. Regarding proposal 5, the appointment of Deloitte & Touche, at least 38,639,442 votes or approximately 99.5% of all votes cast on the matter were voted in favor of the proposal. Regarding proposal 6, the advisory vote on named executive officer compensation, at least 17,505,947 votes or approximately 76.3% of all votes of common stock cast on the matter were voted in favor of the proposal. Regarding proposal 7, the approval of an amendment to the Babcock & Wilcox Enterprises, Inc. amended and restated 2015 long-term incentive plan, at least 21,852,428 votes or approximately 95.6% of all votes cast on the matter were voted in favor of the proposal.

Thank you, [ Mr. Latessa ]. The company accepts the preliminary results reported by the inspector of election. The secretary will file the inspector's final report with the records of this annual meeting. Based on these results, proposal 1 was not approved, and Matthew E. Avril and Alan B. Howe have each been elected for a 3-year term expiring at the 2023 Annual Meeting of Stockholders. Also based on these results, proposal 4, the proposal to amend the company's certificate of incorporation and bylaws to remove certain 80% voting requirements has not been approved. And finally, the proposal to ratify the appointment of Deloitte & Touche as the company's independent registered public accounting firm, the proposal to approve on a nonbinding basis, the compensation of the company's named executive officers and the proposal to approve the amended and restated long-term incentive compensation plan have all been approved. There being no other matters to properly come before this meeting, I now declare the meeting formally adjourned and all matters before it closed. Thank you for participating in the Babcock & Wilcox Enterprises, Inc. 2020 Annual Meeting of Stockholders. Have a good day.