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

Good morning, and welcome to the Annual Meeting of Stockholders of Babcock & Wilcox Enterprises, Inc. I am Kenny Young, Chairman of the Board, and I will be serving as Chairman of today's meeting. I would now like to call the meeting to order, and please note that the agenda and rules of conduct for the meeting are posted on the web portal for this meeting. The agenda identifies the proposals that will be presented today for a vote of stockholders. These proposals are described in detail in the proxy statement furnished to our stockholders for today's meeting. You may vote your shares electronically during today's meeting using the voting icon on the virtual meeting platform, and the polls are now open to do so. If you have already submitted a proxy to instruct how to -- how your shares are to be voted on the proposals, your vote has been received and there is no need to vote your shares during this meeting, unless you wish to revoke your proxy and change your vote. In addition, any validated stockholders may submit a question in the designated field. We will post answers to the questions on the Investor page of the company's website, babcock.com. Now let me make some other introductions as also present today is John Dziewisz, Senior Vice President and Corporate Secretary, who will be serving as secretary of today's meeting. Other members of the Board of Directors who are also on the call are Henry Bartoli, Alan Howe, Philip Moeller, Rebecca Stahl and Joseph Tato. We're also joined by Mr. Craig Donnan and Mr. Zach Stephens, representatives of Deloitte & Touche. In the past year, our ongoing turnaround efforts and strategic actions, including launching new segments, expanding internationally, implementing additional cost-saving initiatives and significantly reducing our secured debt, have provided a strong foundation for the continued execution of our growth strategy. Despite the adverse effects of COVID, we booked $645 million of new work in 2020, continued this momentum with $169 million in bookings in the first quarter of '21. We ended the first quarter of 2021 well, giving up -- giving us further confidence in our ability to achieve our adjusted EBITDA target of $70 million to $80 million of adjusted EBITDA in 2021. Our strengthened balance sheet puts us in a favorable position to [ compete globally ] on mature and emerging technologies, both organic and inorganic opportunities. We have leading-edge decarbonization technologies and are now seeing stronger opportunities emerge across our Renewable and Environmental segments. Looking forward, our focus is creating stronger shareholder returns as we continue executing our long-term plans to profitably grow our Renewable, Environmental and Thermal segments. I'll now turn the meeting over to Mr. Dziewisz who 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 include 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, 2020, were first mailed or made available to stockholders of record on April 5, 2021. 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 March 23, 2021, the record date for those entitled to vote at today's meeting, is available for inspection on the virtual meeting platform. The list has also 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, Mr. Dziewisz. 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 March 23, 2021, the company had outstanding 85,663,813 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 71,673,009 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. As a reminder, the polls are open for voting. Mr. Dziewisz, will you briefly introduce the proposals?

Mr. Chairman, as shown in the Notice of this Meeting, the items of business upon which a vote of stockholders will be taken today are the following. The first proposal is the approval of amendments to the company's restated certificate of incorporation to declassify the Board of Directors and provide for annual elections of all directors beginning at the 2023 Annual Meeting of Proposals (sic) [ Annual Meeting of Stockholders ]. Next is the election of each of Henry E. Bartoli and Philip D. Moeller as directors of the company. If proposal 1 is approved, these individuals, if elected, will serve as Class I directors for a term of 2 years. If proposal 1 is not approved, these individuals, if elected, will serve as Class III directors for a term of 3 years. Proposal 4 is approval of amendments to the company's restated 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 company's bylaws. Proposal 5 is a proposal to ratify the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for our fiscal year 2021. Proposal 6 is approval on a nonbinding advisory basis of the compensation of the company's named executive officers as presented in the proxy statement for the meeting. The final proposal is a proposal to approve the 2021 long-term incentive plan.

Thank you, Mr. Dziewisz. If anyone wishes to vote who has not already done so, please do so now using the link on the virtual meeting platform. 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 that 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 a 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 2023 Annual Meeting of Stockholders, at least 61,733,251 shares of common stock or approximately 72% 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 I in the event that proposal 1 is approved, at least 60,253,923 votes or approximately 99.9% 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 III in the event that proposal 1 is not approved, at least 60,236,042 votes or approximately 99.9% 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 bylaws, at least 61,681,467 shares of common stock or approximately 72% 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 71,616,626 votes or approximately 99.9% 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 61,204,506 votes or approximately 98.7% of all votes of common stock present in person or represented by proxy and entitled to vote on the matter were voted in favor of the proposal. Regarding proposal 7, the approval of the Babcock & Wilcox Enterprises, Inc. 2021 long-term incentive plan, at least 59,415,214 votes or approximately 96% 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 Henry Bartoli and Philip Moeller are elected for a 3-year term, expiring at the 2024 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 proposals, one, to ratify the appointment of Deloitte & Touche as the company's independent registered public accounting firm; and two, to approve on a nonbinding basis the compensation of the company's named executive officers; and three, to approve the 2021 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. On behalf of our Board of Directors, management team and amazing employees around the world, we thank you for participating in the Babcock and Wilcox Enterprises, Inc. 2021 Annual Meeting of Shareholders.