Q2 2021 Babcock & Wilcox Enterprises Inc Earnings Call
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David Brown.
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Good day and thank you for standing by welcome to the bulk packs Wilcox Q2 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone I remain.
During this conference is being recorded.
I like to hand, the conference over Speaker today, Megan Wilson, Vice President of Investor Relations. Thank you. Please go ahead.
Thank you Sandy and good afternoon, everyone welcome to Babcock <unk> Wilcox Enterprises' second quarter 2021 earnings Conference call I'm, Megan Wilson, Vice President of Investor Relations at BMW.
Joining me. This afternoon are Kenny young <unk>, Chairman and Chief Executive Officer, and Lee Salamone, Chief Financial Officer to discuss our second quarter results.
During this call certain statements, we make will be forward looking these statements are subject to risks and uncertainties, including those set forth in our safe Harbor provision for forward looking statements that can be found at the end of our earnings press release and in our quarterly quarterly report on Form 10-Q filed this afternoon and our Form 10-K that is on file with the SEC.
And provide further detail about the risks related to our business.
<unk>, except as required by law, we undertake no obligation to update any forward looking statements.
We also provide non-GAAP information regarding certain of our historical results to supplement the results provided in accordance with GAAP. This information should not be considered superior to as a substitute for the comparable GAAP measures are.
A reconciliation of historical non-GAAP measures can be found in our second quarter earnings release published this afternoon and in our company overview presentation filed on form 8-K. This afternoon and posted on the Investor Relations section of our website at Babcock Dot com.
With that I will turn the call over to Kenny.
Thanks, Megan thanks to everyone for joining and good afternoon.
We're actually pretty excited to be on the call today.
<unk>, our second quarter results.
Our results for the second quarter 2021, really demonstrates the momentum of our strategic direction.
<unk>, our clean energy initiatives and cost reduction actions and a very strong parts and services platform. This momentum is reflected in our bookings and our increased pipeline driven by our international expansion and president as well as strong demand and.
And new project opportunities for our renewable energy and environmental solutions, including climate Bright our de carbonization platform.
We achieved another strong quarter of bookings with $168 million in the second quarter of 2021, which is a 100% improvement compared to the second quarter of 2020 and ended the second quarter with $500 million in backlog and importantly, and keep in mind that generally speaking our back.
<unk> does not include our shorter lead time parts and services.
Across all of our segments, we are seeing our proposal and engineering activities increase.
And are continuing to pursue a robust overall pipeline of now more than 6 billion of identified opportunities through 2024.
The launch of our climate bright de Carbonization platform in May is propelling the development of an exciting pipeline of carbon capture and hydrogen combustion opportunities as our customers seek solutions to address some of the world's most urgent climate objectives, including carbon dioxide and <unk>.
<unk> reductions.
As we continue to make progress in converting our pipeline to bookings, we are progressing and anticipate booking three to five renewable energy newbuild projects in 2021.
We're reaffirming our previously stated target of 70 to 80 million of adjusted EBITDA in 2021 based on our current visibility and our second quarter performance reflects our steady progress to achieve our EBIT targets with consolidated adjusted EBITDA of $15.1 million.
Which aligns with our internal expectations for 2021.
This is a seven fold improvement compared to the second quarter of 2020, and a 78% increase compared to the first quarter of 2021 as we previously indicated our normal cyclical performance typically shows increasing profitability from Q1 to Q4 each year.
And we anticipate Q4 will be our strongest quarter of this year based on anticipated or forecasted bookings.
We also closed a new four year senior financing agreement in June, which further demonstrates the confidence our lenders and shareholders have on our growth strategy.
The reduction of our total secured debt by over $347 million in 2021, and our improved capital structure have positioned us to grow across all segments as we invest in our climate bright technology platform pursue innovative technology agreements such as our recent exclusive long term <unk>.
<unk> storage license option with the U S Department of energy and continue to evaluate potential acquisition opportunities.
Turning back to our climate Bright technologies platform. We are excited about the suite a revolutionary de carbonization technologies designed to help utilities in industry aggressively combat greenhouse gas emissions and climate change through.
Through advanced research and development combined with joint efforts with U S Department of energy and various universities BMW has unparalleled experience and clean energy solutions backed by more than 90 active patents for carbon capture alone and has the expertise and technology.
To lead the worlds next industrial revolution towards a zero carbon future.
Our climate Bright solutions include for example, our breakthrough bright loop technology to produce hydrogen steam or syngas from a variety of fuels, our feedstocks, while isolating C O two for capture or for other industrial purposes. This includes the production of Green.
<unk> hydrogen while simultaneously isolating <unk>. This technology does not have the same overhead or parasitic load requirements as other carbon capture technologies, which results in a higher efficiency.
Expand bmw's industrial presence. This technology has the potential to change how industries worldwide use combustion technology or solve bright regenerative <unk> solvent technology, which is designed to deliver economical and efficient carbon capture across a range of industries saw Brian is our.
Post combustion carbon capture technology and can be applied to a wide range of industrial or utility boiler technologies to capture cotwo.
Our oxy bright combustion process, which is a solution for <unk> isolation and sequestration applications for industrial and power generation facilities and uses and an innovative integration of pure oxygen to produce sequestration ready C O two and.
And lastly, our bright gen. Our hydrogen combustion technology, which is currently in operation and multi multiple refineries and industrial facilities around the world and provides zero carbon energy generation. We are currently working on close to 20 potential climate by projects to determine the best.
Carbon capture solution based on customers specific needs and as I said greater than our expectations, we anticipate booking climate by projects in the coming months.
Finally, we are continuing to explore a significant number of attractive targets for investments or acquisitions in both emerging technology in mature markets currently multiple investments or acquisition opportunities are in advanced due diligence phases, including three renewable or emerging technology opportunities that.
We're in exclusive negotiations in addition to opportunities within emerging technology markets. We continue to explore acquisition opportunities within the thermal services sector with the potential to achieve immediate synergies and higher margins leveraging the strength of our experienced management team.
We remain dedicated to increasing shareholder value through both organic and inorganic growth, while driving a worldwide transformation to a green environmental future. Let me turn the call over to Lou now to discuss a few of our financials for Q2 of 2021, Luke Thanks, Kenny our second.
Consolidated revenues were $202.9 million. This is a 50% improvement compared to the second quarter of 2020, primarily due to a higher level of construction activity in the quarter. This improvement in revenue was realized even though revenues continue to be in all of our segments continue to be adversely affected.
<unk> by COVID-19, as customers delayed projects and travel restrictions limited the ability for the company's workforce to be at job sites.
Our GAAP operating income in the second quarter of 2021 improved to an operating income of $2.8 million inclusive of restructuring and settlement costs and advisory fees of $6.9 million. This is compared to an operating loss of $7.7 million in the second quarter of 2020 adjusted EBITDA.
<unk> was $15.1 million compared to $1.7 million in the second quarter of 2020 the.
The improvement was primarily due to higher construction volume improved project execution and continued positive impact of the benefits of our overhead and G&A reductions as well as other cost savings and restructuring initiatives.
Turning to our cash flow balance sheet and liquidity.
Cash flow from operations in the second quarter of 2021 was a use of $32.1 million of cash as previously disclosed on May seven 2021, we closed an underwritten registered public offering of 4 million shares of 775% series a cumulative perpetual.
Preferred stock at.
At an offering price of $25 a share the offering resulted in net proceeds of approximately $95.7 million after deducting underwriting discounts and commissions, but before expenses.
Additionally, on May 26, 2021, we completed the sale of over 400000 shares of preferred stock at an offering price of $25 per share for net proceeds of approximately $10.7 million after deducting underwriting fees.
As previously disclosed on June 20 June one 2021, we entered into an agreement with B Riley for the exchange of approximately $73 million of our existing term loans with B Riley for $2.9 million shares of preferred stock as Kenny mentioned earlier, we closed a new four year revolver.
Credit agreement with PNC Bank on June 32021, under which PNC has provided a $50 million asset based revolving credit facility as well as a letter of credit agreement with PNC, which includes the issuance of up to $125 million in letters of credit secured in part by cash collateral.
<unk> provided by an affiliate of MSP partners.
The agreements have a maturity date of June 32025.
All obligations under our prior credit agreement have been discharged and the agreement has been terminated approximately $9 million in deferred fees under the prior credit agreement have been waived due to our successful refinancing completed prior to July 2021.
We ended the quarter with total gross debt of $170.9 million and cash cash equivalents and restricted cash of $143.6 million. This significantly reduces our net leverage to four one times the last 12 months adjusted EBITDA.
Net interest expense for the quarter was $7.9 million as compared to $15.3 million in the prior year quarter with the decrease primarily driven by the reduction of our total debt the reduction of the rate on our last out term loans and the rates on our senior notes issued during the public comments stock and senior.
Your notes offerings in February of this year.
Looking forward, we expect our interest expense to be further reduced due to the benefit of a full quarter of reduced debt levels.
The common stock preferred stock and senior note offerings. We completed earlier this year served to reduce our total secured debt by more than $347 million.
Turning to our cost savings initiatives. In addition to the $133 million of cost savings initiatives previously disclosed we've implemented approximately $4 million of additional cost savings in the second quarter of 2021 for a total of $137 million of savings, we expect to implement an increment.
<unk> 5 million of cost savings actions during the remainder of 2021. These initiatives reflect the strength of our management team and our commitment to improved EBITDA margins, which you are targeting to reach 10% to 12% over the next few years.
We're continuing to target adjusted EBITDA of $70 million to $80 million 2021 based on our current assumptions any and impact and the about the impacts of Covid and supported by the continued momentum of our financial performance in the second quarter of 2021.
Despite the adverse effect of COVID-19 on all of our business segments, we achieved significant year over year improvements in revenue net income and adjusted EBITDA were beginning to see the impact of previously deferred projects resuming with strong bookings and a higher level of construction activity in the first half of 'twenty.
In 'twenty, one as Kenny noted our normal cyclical performance typically displays increased profitability from Q1 to Q4 each year with.
We've demonstrated this momentum in the second quarter of 2021, with a 78% increase in EBITDA as compared to the prior quarter. The strong performance in the first half of this year provides a solid foundation for growth organically and inorganically and positions us to achieve our full year.
Adjusted EBITDA targets I'll now turn it back over to Kenny.
Lew, Thanks will and closing our ongoing strategic growth initiatives, including expanding internationally.
Implementing additional cost saving initiatives that Lou mentioned launching our climate bright platform and significantly reducing our secured debt are propelling our much improved financial results. Our strong performance in the second quarter of 2021 with another solid quarter of bookings demonstrates our steady progress toward.
Achieving our adjusted EBITDA targets, our capital structure improvements have positioned us to further invest in our clean energy growth initiatives and take advantage of organic inorganic opportunities within both mature and emerging technologies.
Our acquisition efforts are progressing as we move into advanced due diligence phases on three renewable or emerging technology opportunities that are in exclusive negotiations and we continue to further evaluate opportunities within mature technologies.
Our more than $6 billion of pipeline through 2024 is building as the demand for our technology increases and we see new opportunities emerging across our climate bright projects and renewable new build opportunities looking forward, we remain dedicated to increasing shareholder value mature holder returns.
As we continue executing our long term plans to profit to profitably grow our renewable environmental and thermal segments. So with that I'll turn the call back over to safety and we will open up and answer a few of your questions. Thanks, everyone.
Okay and as a reminder to ask a question you will need to transpire one on your telephone again, if he would like to ask a question first on iPhone and that's helpful.
We'll pause for just a moment to compile the Q&A roster.
Sorry, I referenced question, let me have Rob Brown from Lake Street Capital Ralph Your line is open.
Good afternoon.
Hey, Rob.
First question is on the renewable projects you talked about I think you said three to five that are that are in the pipeline and moving forward.
Sense of sort of the revenue levels on those and how those rollout.
And when you think those could close.
Those typically we've talked about renewable energy plant, our Newbuild project and opportunities are going to range, they're going to they're going to vary from on the low end, let's just call it $30 million to $35 million on the high end. They could go up to 75% to $80 million typically for us on core technologies it depends on the full scope.
On a few of those projects some can be a little lower than some could even be higher.
In those scenarios, but the.
We're obviously well into discussions on those projects.
And had anticipated those closing a little bit earlier, obviously COVID-19 still plays a worldwide impact on moving people in and out of countries working with local governments on permits.
Other aspects, but we see all of that opening up and breaking through at this point and feel confident enough in.
In our projects and where we are in those to be able to at least give you some indication of where we're thinking about the business. So I wanted to make sure that we got that out but I don't know if that helps but that's that's how we think about it Rob.
That's very helpful. Thank you.
And then in Europe.
Your climate projects I think you said there are a few that are that are moving along what markets are you seeing the activity on those.
Those projects or is it or is it sort of diversify the crusher customer.
Global footprint.
It is diversified which is great I mean, it's.
Climate Brian.
Aspect and the inbound interest.
Exceeding our expectations and where we thought that business would be.
A lot of that obviously is being driven by the the.
Environmental aspects on a global basis, obviously, probably everybody on the call has read some of the recent UN reports that were put out.
On environmental issues.
But it is diversified we're seeing opportunities and cross our biomass and waste to energy opportunities, but also in oil and gas.
Petrochemical food processing.
A wide variety of industrial needs around that in covering actually those opportunities to cover all of our platforms.
Across the board so it's exciting to see some of the early interest in those technologies from our standpoint.
Obviously, there is there is still some things that we need to do to prevent some of the conceptual aspects around those technologies, but we're building up a pipeline of opportunities working through engineering studies in most cases.
To be able to provide details around how we would implement those technologies for the clients and more importantly, probably specifically, which which technologies we should be using for those various opportunities, but it is diversified both in industry types as well as our geography as well.
I'm here in the U S. Some in Europe, some in southeast Asia and other parts. So it's exciting for us to see that.
Interest in inbound demand and we're also looking at right now increasing resources inside the company and some engineering resources to support that growth.
Really excited to do so.
Okay, great. Thank you for that overview I'll turn it over.
Thanks, Rob.
For every next question, we have Brent Tillman from D. A Davidson your line is open.
Hey, Thank you good evening.
Lou.
I guess first question would just be on the.
The guidance respect that.
Seasonality of the business and certainly how it ramps up through the year, just trying to get a sense of how much visibility the backlog or even the pipeline.
Give you today and to that back half of the year versus what you've got to pick up.
In terms of shorter lead time work as you move through the rest of the year any help there would be would be great.
No. Good question. So as we indicated on the call obviously and as you picked up on our revenue and performance are always cyclical from Q in Q1 to Q4 with Q4 being always the highest Q1 being the lowest so this year will be no exception.
To that we are.
As we stated our parts and services business, which is not in our backlog is performing very strong.
This year I think we've seen a rebound of that platform back to very strong levels of of revenue is obviously, it's a higher margin business for us as well too. So that's very much a positive.
At the same time and as we're giving some indication on the call, which is I think a little unique but we wanted to give as much transparency as we could to state that we are seeing these projects come to fruition and confident that we're going to have these new build project bookings this year end and hopefully some of those will be announced sooner.
Other than later, but obviously there were well in negotiations discussions on contracts and limited notices and other aspects around those projects or we wouldn't have we wouldn't have made that statement.
So the combination of our pipeline we know what projects are coming we know what bookings are we anticipate getting in and around that plus the strength of the parts and services in that platform gives us a lot of confidence to reiterate our support of those targets and here we are mid year obviously.
Making those making those statements. So I hope that kind of paints the picture of how we think about it but the combination of all three of those gives us confidence going into this year and finishing it out very strongly and going into next year very strongly as well too, but clearly Q4 will be higher than Q3 without a doubt.
Based on where we see the bookings coming from and the timing of those bookings and where we are against all of that.
Okay I appreciate that Kenny and I guess the next question was on climate bright and some of the other newer technologies.
That you've introduced.
Did those begin to become pretty impactful as we get towards the end of the year or do you look at these as still a bit early on and they should be.
Bigger bigger opportunities as we move into 'twenty 2022 and beyond.
We are I think without a doubt I think of it as we go into 2022 and beyond we'll see more and more and bigger opportunities there that the demand for this is starting to pick up.
Having said that we are we are in discussions on a few projects that are that are sizable within.
Our climate bright platform that could have meaningful impacts, maybe probably I'm sorry, not so much this year, just because of the timing of booking those projects, but clearly going into next year.
We're looking for possible bookings on a few sizable projects.
Even yet this year. So we're working through a lot of details associated with those and.
Engineering studies and other aspects associated with those but I would say the interest level on our climate, Brian it's been better than we anticipated in a very short period of time and so we're pretty excited about that obviously.
We're trying to ramp up other aspects around that to support that demand and and <unk>.
Obviously, we're very confident that we'll be able to do that but I think next year will be a bigger year. Obviously in the following years will be a bigger year, when we talked a lot about bright loop, which.
Personally very excited about but bright loop, we think is.
It has the potential to be a real game changing technology within the combustion processes inside industries, and really give us a pay bigger.
If you will addressable market inside the industrial areas.
Where that bright loop technology could actually perform a lot of different functions that are let's just say, our former combustion our boiler technologies wouldn't be able to.
Inside those industrial areas and we're seeing that unfold in some of the discussions and engineering aspects that we're underway with right now.
But it does have a very strong potential I mean, just the fact that from a global perspective getting Sidoti reductions in this global greenhouse gas approach reduced over the next 15.20 years, we're launching a technology now that has the ability to capture on a pure stream <unk>, but provide all of the necessary.
Elements to drive energy or other further industrial processes.
Limit.
A really non loss to efficiency of that particular plant.
And that's really important. So this is new technology that we're launching out there that could replace or potentially replace.
Some of the other technologies, but capture Cotwo, accordingly, and should be become a real game changer out there. So a lot of effort on our part is focused on that getting that out on a global basis.
And so far the technology studies and feedback that we're getting from our customers have been very supportive and we do look for that to really take off.
Sometime next year to become a lot more meaningful in our revenue aspects as well, but bright loop is just one part of our platform oxy combustion salt Brighton and others are.
<unk> position in the marketplace. Some of those are more applicable to older technologies that exist or boiler technologies that exist, which will be in demand. Obviously is the need to reduce cotwo will continue to grow. So we have a wide variety and a big platform and so we're pretty excited about getting that out there.
Okay.
Maybe last one just expectations for cash flow, either operating cash flow or free cash flow in the back half of the year.
I guess any thoughts on.
The commentary out there about supply chain disruptions has that been a hindrance to the business and profitability of our largest negligible at this point.
It's negligible at this point clearly the supply chain on a global basis is something we have to watch and focus on especially as.
As we as we build these design and build out these technologies, obviously, the various raw materials that are used to make that happen.
There is a lot of fluctuation that's been in the marketplace.
All of those raw materials I E. Steel for example, so those are all things that we really have to pay attention to but we're we've taken a lot of steps to try to minimize any impacts from that.
Obviously, not a perfect world are perfect science, but.
We have taken a lot of impacts there, but its something that we keep close eye on the technology.
Technology side as far as the semiconductor and other aspects that you read about often in the global supply chain are not big impacts for us its more in the raw materials.
Around steel and steel fabrication and other components, but.
Luke.
You anything you would add on the cash flows on the cash flows.
Should start turning positive most of that $32 million in this quarter was the result of interest payments and as we said in the.
Release, those will be decreasing with the decreased debt.
We also had.
Pick up of where we had a customer that gave us.
A large advanced payment in the first quarter that was worked off.
So that's that was part of the other reason and then finally, we had.
In the first half of the year.
The pension payment that we had to make and which now puts us in a position.
Where were on a minimum funding basis, our pensions fully funded so we expect that cash flow to start turning positive as the year continues.
Okay. Thank you best of luck.
Thank you. Thank you.
For our next question, we have Alex <unk> from B Riley Alex Your line is open.
Thank you and very nice quarter gentlemen, a couple of quick questions here.
First.
The climate opportunity sounds very exciting, but your thermal revenue in the quarter was incredibly strong.
You could comment a little bit more on thermal in the quarter and then your environmental Ebitdas of nine 7% margin was also attractively strong.
Strongest in a couple of years, maybe comment on the success in that business line.
Yes, so the on the thermal side.
Alex where there'll be interesting about our business, obviously in any given quarter there'll be ebbs and flows on this.
We still see the pipeline trend and the long term trend that two thirds of our revenue over the next few years is going to come from renewable and environmental will just the newbuild projects that we have in the pipeline and those that were in a very actively engaged to book will drive that.
Without a doubt, but any given quarter, we will see ebb and flows on that piece thermal was.
A strong quarter for us in Q2 as we were.
Actually in the.
The deep process on the construction side, mainly in the U S doing some upgrades and enhancements on some older.
Technologies that needed to be completed in that time period. So we had some increased uplift from revenues from those projects.
Out there, but again, those will ebb and flow each quarter up and down on that piece of it but that was.
This quarter actually just picked up.
A significant amount of that revenue. So we saw some of that project Lumpiness impact us in Q2 on the thermal side.
And a good way, but yes the.
In the environmental aspect, where we.
We're seeing.
Not only in the climate bright aspect, but even in our core environmental technologies.
A lot more opportunities out there.
Our STC on our ACG U S. Some of our flue gas <unk> emission technologies right now we do see a number of those projects that are.
Unfolding and anticipate making more announcements here this year on those and so we see a good path right now on the environmental side as well.
And then as it relates to your EBITDA guidance for this year can you talk about some of the variables that could take you to either the high end or the low end of that range.
Yeah no good question.
Obviously, the parts and services business continues to.
Two.
Perform at anticipated and expected rates for us.
We do anticipate that continuing throughout the rest of the year and Thats been a positive this year.
We're moving back to more of a normal outage period in the fall in the spring fall will be.
One of the first falls, we didn't have really a fall outage periods last year because of Covid. So we see that returning back those outage periods worldwide is where we pick up a lot of parts and other aspects on performing services. During this period, so you'll see that continue.
We are seeing some improvements modest as they are on renewable parts and services as we get.
Provide more focus around that particular area as well.
So.
As long as that continues to perform which we fully anticipate it will then the key.
Other variable piece is really around the timing of these larger newbuild bookings and when we can recognize revenue.
Against those bookings so when they are if they are delayed a week or two or three.
Because of the various things that naturally would delay those.
Then.
Revenue that gets delayed out so.
It's really get around the timing of getting those booked in in the door and those projects started and executed so that we can start to recognize revenue on those projects.
We're obviously doing the best we can to speed up those projects and get those announced and get those projects started that are out there, but that's always the impact I think to our businesses the timing around those new projects.
If more of them get shifted towards the end of Q3 versus earlier than Q3, then you lose a couple of months of revenue if we could ship them earlier and begin to recognize more revenue or get more cost associated with these projects, which allows us to recognize the margin and the revenue.
Then you potentially could have a better year. So that's the variable aspect I think that we have to always focus on from a project standpoint is the timing of those and how much cost we can recognize on those projects in any given period. So I think the other the other thing to consider Alex is there is there is always the idea of mix where construction as we've talked about.
Before has a lower gross margin than than we have in our parts and certain of our service businesses in the second quarter, you saw a little bit of that show up because we had as Kenny talked about a very large construction project that came in and practically closed out. So we had a very good closeout on that but that.
Margins still less than then your margin on your parts business. So youll see a little you saw little Dimunition and that but it was really due to mix and we continue to see improvement in the margins going forward.
And then lastly can you comment on some geographic strengths and weaknesses and any hindrance from the Delta there.
The difficulty part of the Delta very right now is just.
Travel aspects, which adds a little bit of time here and there.
So the U K right now is a little bit more restrictive on getting in and out and getting from the UK into other parts of Europe right. Now is restricted for example on on getting in and out and those impacts on workforce.
Outside of BMW, but even governmental workforce and other aspects so.
Sure.
Hypothetically, where you need a permit or something to begin a certain site work.
That would normally take two days to get now takes 10 days because of.
Our resources locally that just aren't there. So those are always little things you run it through I think what Covid has some of those delays, but India.
India right now is a very difficult site, Australia still has reduced their inbound travel flow into those particular areas. The good news for US is we've really ramped up more and more resources locally in these geographies. So that's really helped this year, especially on some of the stronger aspects in our pipeline.
In renewable and in other areas.
In the Asia market, Australia for example.
<unk> some of those areas even in southeast Asia, perhaps even China, we have a better presence in those areas and so opportunities are a little easier for us to respond to an end and move forward.
Because of that increased international presence with a company didn't have that on historical basis, so that helps as well too but.
The Covid aspect right now is just the.
Overall, it's just that little dimension effect things take a little bit longer to get accomplished just because of the human aspect of COVID-19 and some of the impacts it has overall.
Lou.
But that's the best way I would describe it I think.
You described it pretty well, Kenny where we see the impacts varying around the world and we just keep monitoring it.
Very helpful. Thank you very much.
Yes, Thanks, Alex.
Our next question, we have Ryan Chavez, a private investor.
Your line is open good afternoon.
Hey, Ron.
You talked specifically about acquisition opportunities do you want to comment further about that.
I wouldn't get into obviously, who they are what they do we are in exclusivity on three today, we let me back up I guess.
To clarify a few points here.
The company has always been active and we've increased our M&A approach, obviously as we previously announced.
To acquire and looking at companies that do either one of two things one where we have.
Immediate synergies that we can build on and those are typically going to be more in mature markets into our services, our local services and different markets worldwide could be in North America, Europe and Asia. Some of those are in new technologies or new type of technologies, especially in the renewable.
And in the environmental sector that we think augment our platform those that we can grow and increase their market presence through either or.
Customer presence or our worldwide positioning on those technologies and thats exciting as well too.
Some of those are in unique.
I would view and describe more as longer term capabilities from a technology standpoint, so technology that would help improve let's say our climate bright platform.
But may not be material in revenues for a few years, but is an early easy way for us to broaden and strengthen either our technology. Our patent portfolio. So we do look at all of those in that respect.
On the on the renewable and environmental we want those to be growth.
Strategies for us whether that's.
A little in 'twenty, one or whether that's in 'twenty, two 'twenty three and beyond but we clearly are looking at those as long term growth aspects. Why we also look at others from a synergy in cash flows from an immediate perspective. So we try to balance those as we look at them and we're not at a position to announce anything at this point, but.
We are evaluating some we we obviously.
Our being specific about where and what we're focused on in these areas.
Hopefully, we'll get one or two of these across the goal line here soon.
Are these more bolt on acquisitions or focus more on the future.
I would say a little bit of both Ron and the ones that we mentioned we have 300 exclusivity.
But I would say two of those are more.
<unk> revenue growth opportunities.
Now when I say now over the next 12 months.
And others are bolt on meeting they provide some synergies and capabilities in our core technologies that we wouldn't have had or didn't have before.
But there is still a little bit of both.
With respect to.
Climate bright.
You did not announce any capability for next year do you expect that to be significant going forward next year.
Clearly has strong potential to be to do that very thing as I think I mentioned we are.
We have some active projects that are sizable in.
In climate bright.
And those will.
Those projects will obviously go.
Hopefully we get those books this year a few of them booked this year.
But they will have meaningful impact next year, obviously as those are the projects that some of those projects are going to take several months to implement so those revenues will have more meaning as we book those in those rollout into 'twenty two but.
That I think we mentioned on the call that we've got 20, some odd projects that we're actively involved in right now six months ago, we had too. So it's those are sizable projects.
They do range from the small into high end and.
5 million those some of those could be up to 70% to $100 million, but those projects will be more meaningful next year and I think we will see our pipeline there increase for the rest of this year and going into next year as well.
These will be more tightly managed and previous difficulties Oh of course.
Okay. Thank you.
Thanks, Ron.
There are no further questions at this time I would now like to turn the call back to Megan Wilson for closing remarks.
Thank you for joining us that concludes our conference call a replay will be available for a limited time on our website later today.
Ladies and gentlemen, this concludes today's conference call. Thank you all for participating you may now disconnect.
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