Q1 2022 Babcock & Wilcox Enterprises Inc Earnings Call
Exciting time for all of Us at Babcock and Wilcox you know as a company we have a very long and successful history as a technology leader in solutions provider throughout the world and across the power generation industry.
That is something our employees are extremely proud of not only because of what the company has accomplished and the strong relationships, we've built with our customers and suppliers and others, but also because it puts us in a truly unique position to support the worlds energy transition and drive innovation forward I do want to reckon.
Nice and thank our employees around the world for their continued tireless efforts in driving our company forward.
In fact with their help in the 12 months ended March 31, 2022, we have reached approximately $75 million of adjusted EBITDA, which is a significant accomplishment.
Today, we're working hard to support our customers' needs for clean energy with an extensive range of proven technologies, including our climate bright suite of de Carbonization technologies, and our innovative hydrogen production technology solutions for solar power construction and installation.
And market, leading waste to energy on biomass energy systems.
We have a mission controls and cooling systems and next generation energy storage solution and aftermarket parts and services to help our customers keep their plants running at peak performance.
Continue to support our fossil fuel customers globally is the need to provide power from fossil fuels has increased due to limited supply and higher prices for natural gas.
We will talk more about some of the progress we're making in those areas a little bit later on today, but first I am very pleased to share that we ended the quarter ahead of our plan and with increasing in revenues bookings and backlog over the same quarter a year ago. In fact, we now have the highest backlog.
Since 2018, and we continue to be in a great position for an extend the outstanding 2022 and beyond to meet our adjusted EBIT targets and also achieved significant year over year growth as we focus on our long term strategic objectives and as always the fundamentals like safety.
And strong project execution.
Like many companies we are seeing some supply chain challenges due to the war in Ukraine, and the resurgence of COVID-19 in China and elsewhere.
And we are working to mitigate these issues by leveraging our established global resources with respect to raw materials that may be delayed or impacted.
These situations evolve.
At the same time, we're seeing the potential for additional tailwind across our business segments as customers face decisions not only about decarbonization efforts to support climate change goals, but also about energy security and alternatives to natural gas.
BMW has the ability to serve customers' needs across those spectrums and so we will also continue to monitor the potential for opportunities in those areas as the situation continues to evolve.
While the pandemic has continued to cause delays for some project bookings are pushed back some of the starts start dates of some projects bookings for the quarter were very strong at $239 million, which reflects a 41% increase over the same quarter a year ago.
These increases we did see some impacts, particularly in our aftermarket parts and services group.
As the high use of coal during the period meant that parts and service visits were delayed by some customers.
Backlog at quarter end was a solid $721 million and we continue to see a robust pipeline of more than $7 5 billion of identified project opportunities over the next three years.
Turning to our climate bright decarbonization platform, we've had a very exciting quarter. Then included the announcement that we're partnering with kiewit industrial to support the Fidelis New energies plan 200 megawatt net negative carbon impact biomass power plant and Baton Rouge Baton Rouge.
Louisiana.
It will be the largest of its kind in the world and we will provide power for fidelity has grown fuels facility, which will produce sustainable jet fuel diesel fuel green hydrogen and others.
We will provide a BMW biomass boiler, our proprietary oxy bright oxy combustion carbon capture technology and a full suite of environmental systems to control emissions.
This project actually is currently not in our backlog.
And we're very excited about the opportunities for oxy bright system, which uses pure oxygen for combustion and can be used with the wide range of fuels to produce a concentrated stream of <unk>, which can then be sequestered underground or put to other beneficial use.
It is truly a groundbreaking project and a great opportunity to demonstrate the leadership role <unk> can play in providing advanced technologies for de carbonization emission controls and the generation of clean power and we're pleased to have been named the preferred supplier for this project is to provide our engineering design equipment and <unk>.
Technology as it moves forward.
We're also making progress in our efforts to develop a near term near term demonstration site for the next scale up of our bright loop de carbonization hydrogen and syngas production technology.
This is a technology, we are extremely enthusiastic about and one that we've developed through the many years of effort in conjunction with the Ohio State University and the department of energy.
Truly revolutionizing the boiler system and uses a chemical reaction process to create combustion without incineration.
Right look process uses a patent particle which is very flexible and can react with a variety of feedstocks, including natural gas biomass coal treated municipal solid waste syngas and even petroleum coke from the refining industry. So it really provides customers with a lot of options in terms of the apt.
Vacations, where it can be used.
Just as important since brightly abuses of chemical reaction, we can isolate syngas as from the process, including pure hydrogen.
Along with a pure stream of Cotwo for either sequestration or other industrial uses.
We are moving into a full scale demonstration of the technology. This year and we have identified one site in particular with favorable conditions and we are working to secure access to the property along with a potential hydrogen off taker.
We are also working to secure external grants and investments for this groundbreaking project and at the same time, we're moving forward with final design and engineering.
Is progressing as planned.
Needless to say interest in a bright loop product is very high worldwide, particularly given its revolutionary ability to use solid fuels to generate hydrogen as a part of our commercial demonstration project, we plan to use biomass fuel to generate hydrogen sequester. The CODI generated from the process and also use this site.
Other solid fuels using this chemical looping process.
So again, we see this as a game changing technology evolution that can effectively separate cotwo, while producing hydrogen steam or syngas.
It's exceptionally versatile and can support a wide array of applications and its scalable. So we can be adopted economically to both large and small installations.
With respect to other aspects of our business, we continue to see strong interest, particularly in our renewable energy technology and expect to announce a number of newbuild renewable bookings in the second quarter.
Certainly our first quarter revenues of $68 million and our BMW renewable segment, which is a 136% increase over the first quarter 2021 represents a great start to the year as we continue as we see continued demand for our waste to energy biomass energy products and other products and service.
Within this segment.
We're also seeing continued growth within our global parts and service business with bookings.
Equipment upgrade services and replacement parts and we're excited about opportunities to build on our parts and service and retrofit opportunities not only throughout North America, but internationally as well.
We continue to make strategic investments in our clean and renewable energy businesses as part of our growth strategy and closed on two strategic acquisitions during the quarter.
And the first which closed in February we acquired 100% of fossil power system or Fps based in Nova Scotia, Canada, and Fps is a leading designer and manufacturer of hydrogen natural gas and renewable pulp and paper combustion equipment, including <unk> scanners plant controls and safety systems.
FBS technologies and capabilities are ideally suited to clean energy applications, such as firing hydrogen, which complements our clean energy strategy in particular, the bright loop and bright Gen technologies, we closed on an additional acquisition in February when <unk> acquired 100% of the equity interest of opt.
MS Industries based in Tulsa, Oklahoma, creating an even broader foundation of capabilities to serve our customers optimism has a reputable and reliable technologies that align closely with bmw's business and designs and manufactures steam generation and waste heat recovery technologies for use in the power generation petrochemical.
In process industries, including package boilers water tube and fire tube waste heat boilers.
<unk> Super heaters waste recovery equipment and products for sulfuric acid plants. This acquisition provides opportunities in the growing heat recovery steam generator aftermarket as well as access to broader U S package boiler and manufacturing capabilities.
We're extremely pleased to have the experienced and dedicated Fps and optimists employees and additional capabilities as part of our company and the transition activities related to these acquisitions continues to move along smoothly.
We also announced in March that BMW joined the United Nations Global compact.
This initiative provides a global platform for the development implementation and disclosure of responsible business practices in the areas of human rights labor environment and anticorruption.
This reinforces our company's commitment to the 10 principles of the global compact and our commitment to advancing the UN sustainable development goals.
It also helps further positioned BMW as the leader in the global energy transition to clean sustainable and socially responsible ways of powering utilities industry.
With that I'll turn the call over to Lou to discuss the financial details of the first quarter of 2020 to Luke.
Thanks, Kenny I am pleased to review our first quarter results.
Further details on which can be found in the 10-Q that will be on file with the SEC.
Our first quarter consolidated revenues were $204 million, which is a 21% improvement compared to the first quarter of 2021. This was primarily due to higher volume by Newbuild projects and the impact of the acquisitions, we completed in the fourth quarter of 2021, and the first quarter of 2022.
In addition to a higher level of activity in the environmental segment and was partially offset by a lower level of construction activity in the thermal segment.
Our operating loss in the first quarter was $6 8 million as compared to an operating loss of $6 5 million in the quarter of 2021, our adjusted EBITDA was $12 million compared to an $8 6 million adjusted EBITDA in the first quarter of 2021.
Bookings in the first quarter of 2022 with $239 million, which is a 41% increase compared to the first quarter bookings of 2021.
Our ending backlog was $721 million, which is a 35% increase compare to the backlog at the end of the first quarter of 2021 and as Kenny is the highest backlog for several years.
I'll now turn to our first quarter segment results within the Babcock and Wilcox renewable segment as Kenny mentioned earlier revenues were $68 million for the first quarter of 2022, which is an increase of 136% compared to the $28 8 million in the first quarter of 2021.
This was primarily driven by higher volume of new build projects as well as the acquisitions in the fourth quarter of 2021 adjusted EBITDA in the quarter was $1 5 million as compared with 200000 in the first quarter of 2021 again, primarily due to the increase in volume, which was partially offset by impacts.
Business mix within the segment.
Within the Babcock and Wilcox environmental segment's revenues were $34 9 million in the first quarter, which is an increase of 12, 2% compared to the $31 2 million in the first quarter of 2021. The increase is primarily driven by increased volume in our ash handling systems scrubbers.
Potatoes, and cooling systems adjusted EBITDA in this segment was $1 4 million for the quarter as compared to $1 1 million in the same period last year. This is primarily due to the increased volume.
Turning to our Babcock and Wilcox thermal segment revenues were $102 2 million in the first quarter of 2022, which is a decrease of 6% compared to $108 3 million in the first quarter of 2021. This was primarily due to a lower level of activity on construction projects and partly offset by the ACA.
Physicians completed in the first quarter of 2021.
Adjusted EBITDA in the first quarter of 2022 was $14 million, which is a 34%.
Compare which is up 34% compared to the $10 5 million in the first quarter of 2021.
This was primarily due to acquisitions and the continued cost savings and restructuring initiatives benefiting the current year, which more than offset the overall decrease in volume.
I'll now turn to our balance sheet cash flow and liquidity.
Total debt at March 31, 2022 was $343 8 million and the company had cash cash equivalents and restricted cash of $117 million and.
And finally based on our strong bookings and backlog in the first quarter of 2022, we are reiterating our 2022 target of $110 million to $120 million and adjusted EBITDA I'll now turn the call back over to Kenny.
Thanks, Luke will be in W has come a long way over the last couple of years and today, we have a strong balance sheet solid performance across all three of our business segments.
Standing technology, and a robust pipeline of potential opportunities we.
We also have a tremendous team of dedicated employees, who continue to be focused on safety on strong project execution on growing bookings and our backlog.
Im really stepping up to drive forward and support the world's climate objectives, while also providing the products and services our customers need to meet the energy demands not only just today, but also in the future.
It took a lot of hard work perseverance and commitment to get where we are today and we're excited about the opportunities ahead of us across our businesses.
See continued growth in our renewable newbuild waste energy and biomass energy business opportunities for our renewable aftermarket parts and services, we see new opportunities for our thermal business with an increased need for equipment upgrades and services as our customers work to keep their plants operating efficiently and cleanly.
So they can supply needed power to their customers.
And as energy security takes a more prominent place and is prioritized.
Current geopolitical climate.
We also see increased opportunities for our environmental business in the areas of emissions control ash handling and cooling systems.
In construction installation services.
Perhaps most importantly, we continue to see BMW on the forefront of the global fight against climate change. So we have said before that we expect 2022 to be a milestone year for our climate, Brian de carbonization and hydrogen solutions platform and that remains true today.
We are enthusiastic about the opportunities ahead in this area and about being a leader and innovator in carbon capture de carbonization and hydrogen production as we drive forward with our advanced technologies and demonstrate the solutions. We can provide to help our customers address the worlds urgent climate objectives.
With that now I'll turn the call back over to Bethany, who will assist taking your questions.
Thank you.
If you would like to ask a question. Please press star one on your telephone keypad.
And any new things like <unk> that question. Please press star followed by Tim again to ask a question. Please press star one as a reminder.
Please remember to pick up your handset before asking a question, we'll pause briefly to allow questions to generate each year.
Our first question from the line of Rob Brown with Lake Street Capital. Please go ahead.
Good afternoon.
My first question is on the <unk> project and just wanted to get a sense of sort of how that rolls out into the into the business and then maybe some further color on the claim.
CODI reduction component is that the first commercial scale of that project and I just wanted to just said.
How that developed in the market.
Yes. Thanks.
I appreciate the question.
The <unk> project is very exciting for us obviously, we announce.
The partnership to be on that project, we are obviously in full.
Full engineering mode and.
And in discussions in and around the configuration of that particular technology I believe for Dallas has already started.
The groundbreaking associated with the grown fuels portion of that particular plant facility in Baton Rouge.
It will be shortly but.
So theres two parts to that one is the grown facility, which actually is the creator of the jet fuels were not involved in that.
The second part of that is the <unk>.
Biomass plant facility that will actually power grown fuels and that's obviously, where we are we're focused on from our boiler technology and providing our.
Oxy bright combustion technology, we've actually done small scale up work on the oxy bright previously.
So this will be a further move of that but it is ready for commercial.
Implementation and Thats, what this will represent.
On that plant.
It'll be a 200 megawatt as we talked about in there or larger it's still to be determined.
In conjunction on top of that with the Oxy bright.
Technology, sequestered cotwo, but fidelity plans to isolate <unk> and sequester that it's part of their.
Carbon initiatives associated with that jet fuel. So we're excited about that as I mentioned in the remarks, it's not in our backlog we are still working through details on that.
But obviously groundbreaking in its size and groundbreaking in.
Utilizing the de carbonization and sequestering that here in the U S. So we're excited about that and obviously that long term relationship that we developed which the Dallas is great as well too so.
It's a good relationship all the way around.
On that particular piece so it's.
More to follow on that obviously, we will put out public statements. When they can on that particular plan as it continues to move forward.
But it clearly is a milestone for us in <unk>.
Actually on the getting the oxy combustion into a large commercial.
Implementation.
To get that going so we're excited about that.
Okay, great. Thank you and then on the <unk>.
Pipeline you had good order activity, but you also mentioned some project timing shifts around could you give us a sense of how much is shifting around and do you sort of pick that up this year or Thanksgiving shifted out further.
Yes, it's shifted I'll, let Luke comment more but some of the order delays.
Which are obviously factored in the numbers overall, but at this point in time, but.
It's been an implement case for about two months.
Delays I think you can think about it in that terms.
Pluses and minuses there some delays that are a few weeks and so maybe a little bit longer but on average it's around that particular area. I mean, most of our customers if not all of our customers are have been very supportive of shifting supply of steel and other components from Europe to Asia associated with their particular projects.
We haven't had any any difficulties so far with any customer.
Around making those changes obviously in the supply chain coming.
Coming out of Europe .
Shifting it over overseas.
As we get into specific components and a few things here and there on the parts aspect it is delayed a little bit.
On some of the revenues, but we've also as you can see in the balance sheet, we increased inventory.
But I think roughly $10 million ish somewhere in that category, but we increased inventory to help compensate for some of those.
<unk> parts, so that we weren't positioned to leverage our parts business in particular in the fossil fuel sector win.
A lot of our clients had been running those plants 24 seven.
It put a delay on when we could go in and do take advantage of that and put new parts and services and field services and the like so that afforded us the opportunities to kind of figure out some of the global supply chain aspects around it and we feel pretty confident now that once we get into this that will be in pretty good position to.
To provide those fundamental parts and services.
We're starting to see that happen already so it's to US I think we're in a good position there, but anything you want to add to that.
Yes, I would.
Tried to estimate for example, what the Ukraine situation did for us.
And.
I don't want to give specific numbers because it's just an estimate.
You can't tell sometimes whether it's COVID-19 or the Ukraine War, but I'd say right now in that quarter. We were we were impacted.
Less than about $10 million range for revenue that moved that.
It was strictly timing not a.
Not a loss of revenue.
And that impacted our.
Gross profit by a couple of million dollars, but as I said most of that will happen in the next couple of quarters if not.
This quarter, we're in and about 800000 of it was.
<unk>.
<unk> that we had to pay for supplies so some impact.
Not tremendous but.
We paid attention to it and as Kenny said.
The supply chain team did a great job of purchasing ahead per needs with increased our inventory and also gone around and we have a global supply chain. So we're obviously able to be a lot more nimble in seeking alternate suppliers.
For for any of these purchases, but we continue to monitor it.
Ali.
Okay. Thank you for that.
I will turn it over.
Thanks, Chuck Thank you Michael Thank.
Thank you Mr. Zhang.
Our next question comes from the line.
Gentlemen, with D. A Davidson. Please go ahead.
Hey, good.
Good evening.
Couple of things.
Recognize the business is very seasonal.
The back half is obviously pretty consequential to the kind of your full year expectations, but it does seem like you're seeing an awful lot of growth momentum here. So just with respect to the guidance are there any is there any elements of increasing concern just regarding margins for the rest of the year.
Timing of projects and a contingent fees, you're just trying to factor in weigh in here.
Just in regard to maintaining the outlook. Thank you.
Thanks, Brent good good question al.
Tim.
Jumping and Philip too, but I think the biggest impact we had on margins in Q1 was a little bit lower in the parts and services getting mainly because the our customers' plants were.
We're running at full tilt because of the high price of natural gas.
And obviously parts and services, we've talked about publicly.
Historically is in the high <unk> and the gross margin level.
So we had a shift more towards some of the project aspect in.
In Q1.
But obviously thrilled on the fact that we were able to produce numbers primarily for all of the cost cutting in every all the measures that we took over the past couple of years to produce solid numbers in Q1.
And building up a backlog so we never predict things with jumping back to normal, but we are seeing.
Already.
Some of the parts and services business picked back up because clients are now at a point, where they've got to start.
Repairing and fixing some of these plants that had been running full tilt again.
24, 7%, but normally you don't so.
We'll see how that shakes out over the next several months, but we're entering into some of the parts season, we will continue to be cyclical I think our project business and even even some of the parts business because we're going to obviously get through spring and summer.
And the demand for these power plants will pick back up again, and so we often see the fall as being one of the stronger part season for us.
No I don't think Theres any surprise this year that that will be any different we fully anticipate that happening.
And I think we'll stay with the cyclical aspect around it at this point in time, but I think the margins will always shake out as parts and services fluctuates versus the project aspect that you saw in Q1, but any anything you want to add there.
Yes, just if you compare.
Where are we where gross profit wise 21 quarter to 'twenty, two we're a little under little over I'm.
Im sorry, 2% Delta from about 22% to 20% gross profit and as Kenny mentioned and I mentioned before most of that is due to the parts business being a little slower than we would've liked but for a good reason. These power plants stayed open so I think that'll we'll recover those.
That gross profit mix later as the parts start increasing so.
A couple of percent this quarter, we should start recovering as the parts orders flow in.
Because these plants have to they have to start replacing the parts that are wearing out so we're in and as also evidenced by the <unk>.
The very high backlog that we have so we're pretty comfortable with the gross profit will continue to recover.
Okay.
At that.
I guess second question is just what what sort of contingencies and other things are you doing just with respect to new bids in contracts, you've obviously got a very big backlog, you've been picking up a lot of work.
How are you guys kind of protecting yourself from some of the inflationary.
Logistical per cube.
<unk> challenges out there, particularly on a contractual basis.
Yeah.
Yes, no. Good question Brent So most of our contracts we have.
Have the ability to readjust pricing.
Especially obviously in times like this.
The pricing is unprecedented.
Because of the situation in Ukraine, and as well as Covid, but most of our contracts, we do a really good job of making sure and obviously over the past couple of years, because everything that's been going on with Covid, even more so to make sure that we've got flexibility.
If we have to redirect supply chain or pricing goes up on some of the corporate cereals.
<unk>.
So that the impact isn't necessarily borne by <unk>.
BMW, but.
Is passed along to our customer base not always the case, but.
We do I think a really good job of pushing on that enforcing that obviously we also.
As Lou mentioned have done a fabulous job managing the global supply chain to help with our vendors and suppliers to get ahead of the curve.
And it's been I will say a lot of our global supply cut vendors that provide some of our larger cost items, especially in steel manufacturing production and fabrication they've done a really good job of working through helping us work through some of those issues as well too so.
The combination of a lot of work by a lot of people on a global basis, but we try to do the best we can to be out ahead of the contractual language to make sure that that minimizes the impact on us lose anything.
Yes, I think you covered it well we as you saw an increase in our inventory that was planned.
We used our balance sheet, we had cash so we can go out and.
Purchase.
At a better cost.
Many suppliers that we knew were going to be sold in the next six months to a year and then as I mentioned earlier, we've got a global supply chain. So we can be more nimble and flexible with with our suppliers and go to other other parts of the world.
Where pricing might be a little better so it's just.
It's a combination of things you have to do every day.
Obviously, that's that's what our supply chain people have been very successful at.
Okay really helpful. Maybe just the last one on the climate <unk> platform you continue to make really good inroads here.
I guess.
All of the things that you've seen over year over the past quarter, and what you've got sort of up and coming reaffirmed the dividend.
This can become more by contributing business next year is it sooner and just maybe the pace of success you've had here how that compares to those expectations I appreciate it.
Okay.
Yes, no. Thanks Brent.
Yes.
We're obviously excited about getting the project off the ground on the commercial demonstration.
Necessary to prove in the scale up we were.
We're doing a 20 I think it's close to 'twenty, one time scale up on the technology and the commercial demonstration, which will then put us into position to be able to move it into.
Bigger and broader application and we have a number of customers that are potential customers I guess, let me say on the bright looped in particular.
Where they are following the engineering and the progress we're making in the commercial demonstration very closely.
We're working with a number of governments, we are working with a number of.
Even including the department of energy here in the U S. But we're working with another number.
Groups and entities that are following this aspect because there is there is demand and application for this technology.
It probably doesn't feel like it sometimes from an investor standpoint, but we are accelerating the commercial demonstration process.
On bright loops, specifically in that regard to move this into the marketplace.
We've got a lot of excitement by a lot of people that want to see US move this into the next phase in order to broaden.
The appeal for this so.
We are working.
And we've isolated the group inside the company. So that we've got dedicated resources that are focused on this commercial demonstration and working through those details now we're also obviously.
Working with the few customers that I think we mentioned in the notes I don't want to get into the names of that yet a little premature but we.
But obviously I think we put in the press release Fidelity is also looking at helping in looking and evaluating some of the hydrogen capabilities upright loop in conjunction with their growing facility.
Louisiana, and we've got a number of other clients that we're talking to right now about the commercial demonstration and location to move that forward and hopefully we'll make some announcements soon on that whenever we get that across the goal line but.
Would tell you that we've been extremely pleased with the interest levels by a wide variety of our clients, whether that'd be in petrochemical or in <unk>.
Fuels or.
Food and beverage.
Across the board that are looking for new combustion technology that can isolate <unk>.
The benefit here is that our our bright loop allows you to do that.
But also create in parallel.
Multitude of syngas.
Automatically a customer overnight suddenly wakes up and realizes they have additional revenue aspects from this technology because they can produce other syngas, which while also providing the combustion for an industrial process.
<unk>.
And obviously on top of that they can isolate the cotwo, which makes it a much more attractive technology. So we do have a lot of interest from a lot of parties. We're excited about it.
And we'll keep pressing obviously to get this demonstration done this year. So that we can leverage that from a revenue standpoint, obviously in 'twenty three and beyond.
Yeah.
Okay I appreciate it thank you very much.
Yes, no problem. Thanks Brent.
Thank you Mr Thielman.
And our last question from the line of Alex Rygiel with B Riley. Please go ahead.
Thank you Kenny Lou and very nice quarter, a few questions here.
First backlog growth of 35% was really solid.
But you haven't even yet included Fidelis.
Sort of excluding Fidelis for the moment.
Sounds like Youre real bullish on expanding backlog between now and year end.
First is that a fair conclusion, and then secondly from a geographic standpoint do you see an acceleration in your international markets or do you see an acceleration in your U S markets.
Thanks, Alex now we are bullish on increased the backlog going in to the rest of the year, which obviously sets us up very strongly for 2023 and beyond.
It is interesting we are and I don't want to get too much into some of the details, but because they are sensitive but in Europe right now we're in discussions with a number of customers.
Obviously twofold one is is.
How to move quicker in renewable energy and some of these newer technologies or even our existing technologies. So we're.
We're under a lot of discussions there.
We're trying to figure out how to.
Obviously, you obtain a broader set of energy security away from.
Because of the Ukraine situation Award.
The other aspect is we have a lot of customers in Europe now that are looking to revamp. Some other fossil fuel pant plants to continue burning a little bit longer than they had planned because of the response to the high natural gas or even the lack of natural gas as force.
Those customers to re look at.
Some of those capabilities and so we're early in those.
It is hard to predict right now exactly how much impact that will have on our business and revenues, but we're.
We're seeing an uptick in activity overall, so we think there could be some potential upgrades and enhancements in our parts and service platform coming from that.
One of the larger scale, though we are in talks about accelerating some of their waste to energy projects and things that could be happening there as well too and so we're we're trying to be in position to support our customers best we can across all of the goal.
And at the same time, we are because of the bright loop and what it's capable capabilities or we're getting some interest to further some testing, especially in biomass the hydrogen or biomass energy using brightly.
Potential source there we're in discussions with a few customers there as well too. So yes, I would say we're bullish on the backlog increasing by the end of the year.
Based on what we've discussed so far and we'll see how things unfold here for the rest of the summer based on all of the geopolitical.
Situation Thats occurring and we're in a position there will we will.
See how we can move forward.
That's helpful and turning to M&A as being sort of a kind of a.
For pillar.
To your growth strategy.
Are you starting to see pricing or shall we say seller expectations improve here a little bit with some of the market turmoil across the street.
And.
Any sort of segment in particular.
That is pitching your attention the most of these days.
Yeah.
Okay.
Alex you cut out on my end I apologize can you repeat that.
Completely blank right after an excellent start to play something could you repeat that.
Sorry, as it relates to acquisitions, clearly a core pillar to your future growth.
Can you talk a little bit about seller expectations, and whether or not the <unk>.
<unk> out there has improved for you all and then maybe identify sort of what's catching your eye. The most as it relates to which segments you think in the near term.
Could see some expansion.
Yes, I think.
Obviously nothing has I don't think the geopolitical situation of Covid hasn't really changed too much I would say the multiples are what we're seeing from a seller expectation standpoint.
It's still a little bit variable out there. We continue to look at we look at a lot of different opportunities again. Some of those are not necessarily 100% acquisition. Some of those are actually even minority.
Investment.
Aspects that may be on emerging technologies.
That could be in different areas that might help accelerate certain IP for us to take to the marketplace and further.
Or improve upon.
Sidoti absorption and some other things that we're trying to do so we constantly look at those opportunities.
That are out there.
We're still continuing to look at opportunities, where especially on the thermal side of the business that might complement our parts and services platform.
On those purely.
To drive further cash flows from from those acquisitions, because we think that those are would be high synergistic.
Type opportunities as well too.
And there are there are several out there across that whole gamut range.
We'll look at those and respond accordingly, and obviously keep looking at what we think are.
Investments that really can move the needle obviously, we brought out the target of the 110 to 120. So as we look at acquisitions I think we would look at acquisitions that would increase that range.
And we're keeping obviously unless it's a brand new technology that I mentioned won't move that needle, but as we look at things that might add synergies and cash flows clearly we would look to move that target up on anything that we pick up going forward. So that's kind of how we're thinking about it and that's how we're focused on it right now so.
We're keeping flexibility across the board there and we're looking at a lot of things.
And.
Across both those barriers, but that's kind of how we feel about the acquisitions right now.
And then lastly, as it relates to bright loop.
Might we hear more as it relates to.
Location property customer so on and so forth.
We are working diligently right now on some a couple of specific locations.
Insights and opportunity so I hope, it's not too distant future.
Whether it's the days or weeks, it's not months or quarters.
But we're working diligently on that to move those forward, we're working behind the scenes 100% of the engineering.
And working with you.
The partner as well that would do part of the construction aspect around that so a lot of things going on in parallel.
As we mentioned we're also working with some.
Some federal funding aspects that would be associated with that and some other other ways to offset some of the cost on that particular piece, even with a potential customer who might be willing to.
Acquire or buy the facility as well from us so.
In discussions with all of that very real time, but I would think hopefully Alex.
Weeks here from from getting further announcements out around that demonstration not not too much longer than that.
That's great. Thank you and good luck.
Thanks.
Operator, I'll turn it back over to you.
Thank you.
That concludes the question and answer session I would like to pass it back to Jim.
Any closing remarks.
Thank you Bethany and thanks to everyone for joining us today that concludes our conference call a replay will be available on our website for a limited time later today.
That concludes the Babcock and Wilcox Enterprises Q1, 2022 earnings conference call I Hope you all enjoy the rest of your day you may now disconnect your line.
Okay.