Q2 2022 Babcock & Wilcox Enterprises Inc Earnings Call

And.

Good afternoon.

Thank you for attending the Babcock and Wilcox second quarter 2022 earnings call. My name is Matt and I will be your moderator for today's call. All lines will be needed during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Sharon Brooks with Babcock and Wilcox. Sharon, please go ahead.

Thank you, Matt, and thanks everyone for joining us on Babcock and Wilcox Enterprises second quarter 2022 earnings conference call. I'm Sharon Brooks, Director of Communications.

Joining the call today are Kenny Young, B&W's Chairman and Chief Executive Officer, and Lou Salomon, 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 also in our Form 10Q that will be filed today and our Form 10K that is on file with the SEC, and provide further detail about the risks related to our business. Additionally, 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 and targeted results to supplement the results provided in accordance with GAAP. This information should not be considered superior to or as a substitute for the comparable GAAP measures. 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 that will be filed on Form 8K this afternoon and posted on the Investor Relations section.

seen by our customers and potential customers as a technological leader and innovator in energy transition. With the combined efforts of our worldwide employees and our senior leadership team, we continued to progress against our long-term strategic growth strategy during the second quarter. While our revenues improved 9%, our adjusted EBITDA increased by 35%, and our bookings and backlog improved by 46%.

in the second quarter, combined with our recent and anticipated bookings.

Position us well for a strong 2022, 2023, and beyond.

The war in Ukraine, lingering COVID-19 effects, and global supply chain disruption present ongoing challenges to our project timing and parts deliberately, similar to many other companies around the world. However, we continue to work to mitigate these challenges the best we can by leveraging our established global resources with respect to raw materials and other items that are delayed from time to time.

And we may continue to experience impacts as these global conditions progress. Longer term, however, we recognize potential tailwind opportunities for our business segments as demand for energy security and alternatives to natural gas continue to emerge.

Our recent bookings and backlog support put us in position to meet our adjusted EBITDA targets for the year and show continued year-over-year growth, though we remain cognizant of the macroeconomic headwinds and uncertainty given various geopolitical issues.

As a global technology leader and a solutions provider, we keenly focused on expanding our operations both internationally and domestically.

as well as developing current and new customer relationships to uniquely position the company to support the world's clean energy transition and drive innovation forward. We are well positioned to meet the projected demand for global green initiatives with our full suite of proven technologies and that Dr. Wilcox will emerge as a driving force into creating a more sustainable future.

While we continue to support our strong industrial and utility customers utilizing our thermal technologies for basal generation.

and energy security, we're also focused on emerging markets within the clean energy space.

And I want to recognize the tremendous strides we have made as a company within our environmental and renewable energy business through the recent contract awards that have been announced, as well as our continuing efforts in evolving ClimateBrite decarbonization platform and the scale up of our bright loop decarbonization hydrogen and thin gas production technologies.

We will elaborate a bit more on the progress we have made within these areas today, but it is important to emphasize the exceptional tailwinds we have identified within these evolving technologies.

as evidenced by our increased.

bookings and backlog, we remain intently focused on continuing to convert our global pipeline of identified project opportunities to bookings as reflected in the 46% improvement over the same quarter a year ago. While the pandemic and global supply chain challenges have continued to cause delays for some project bookings or pushback start dates of certain projects, we are still looking

Bookings for the quarter remain very strong at $245 million, increasing 46% compared to the same quarter a year ago, with a significant portion derived from the increased volumes within our Renewable Business segment.

Backlog at the end of the quarter was 731 million.

And our robust pipeline of more than 7.5 billion have identified global project opportunities in the next three years, positioned us well for multiyear growth, and we are preparing to capitalize on the positive impacts across our customer base as demand for our long-term energy security and decarbonization technology grows.

Pivoting to our Climate-Bright decarbonization platform, we are excited to report that our partnership with Kiewit Industrial to support the Fidelis New Energy's planned 200 megawatt net-negative carbon impact biomass power plant in Baton Rouge, Louisiana is currently progressing.

Fidelis recently announced the start of construction for the grown fuels complex at this same site, which will be using B&W's biomass and bright loop technology.

and we'll create the largest biomass or the largest net negative CO2 biomass to energy facility.

The company will provide a B&W Biomatte boiler, our proprietary Oxybright Oxycombustion carbon capture technology, which uses pure oxygen for combustion and can be used with a wide range of fuels to produce a concentrated stream of CO2, which can then be sequestered underground or put to other beneficial use.

We are also providing a full suite of environmental systems to control emissions.

Although we have not recognized this project within our backlog, we anticipate final booking this year.

Our partnership with Fidelity Energy is a meaningful indication of the company's progress with respect to our clean energy initiatives, and we look forward to the addition of similar projects within our portfolio where our advanced technologies enable the transition to responsible energy system innovation and progress for our planet, people, and our ecosystems.

Regarding our breakthrough bright loop technology, we are realizing increased interest in various opportunities, as evidenced by our recent announcement teaming agreement with New Point Gas. Although we have not announced specific timing and or revenue potential associated with this site, we look forward to serving as a foundational technology provider and delivering the advanced hydrogen generation, decarbonization and combustion technologies for the redevelopment of the new green loop technology.

of the site, which is the former US Department of Energy Portsmouth gaseous diffusion plant near Piketon, Ohio.

BMW will supply its bright-loop technology to produce hydrogen and isolate carbon dioxide for storage and supply extreme...

and supply a steam generator utilizing the company's BrightGen hydrogen combustion technology to produce clean near-zero emissions energy.

Babcock Wilcox Construction Company LLC will also provide the construction and installation services.

And when complete, the H2 Trillium Energy and Manufacturing Complex will operate as an integrated energy decarbonization hydrogen and closed-loop manufacturing facility, generating clean hydrogen and capturing carbon dioxide for long-term storage and or beneficial use.

I would also like to highlight the solar installation contracts for the community solar projects that were announced last week.

These contracts, which total more than $20 million, were awarded by Summit Ridge Energy to provide services for several community solar projects.

When complete, the seven.

Solar farms will provide approximately 20 megawatts of power.

for homes and businesses in northern and central Illinois. Engineering for the project is currently underway and completion of the installation is scheduled for the first quarter of 2023. These are in addition to our recently announced 240 megawatt utility project in western Ohio.

These contract awards speak to the growing demand for solar energy domestically, and B&W is well-positioned to provide world-class solar installation services for both community solar and utility scale projects.

Moving to our segment performance, we have seen exceptional growth within our B&W Renewable segment with second quarter revenues of $75.2 million, an increase of 96 percent as compared to the second quarter of 2021. And representing the continued demand for our solar installations, waste to energy, biomass energy products, and other services within this segment.

We are also seeing significant growth within our BMW environmental segment.

with our disclosed contracts to install a biomass-fired boiler and other combustion equipment for a green energy project in Europe and a supply of advanced environmental equipment for a power plant in Africa.

In tandem with this point, we are very pleased to have established senior leadership over our global thermal segment and our global, renewable, and environmental segment.

Chris Reicher will be named Senior Vice President, Thermal, and will lead our global thermal business, while Joe Buckler has been named Senior Vice President of Clean Energy and he will lead our renewable and environmental segments.

Both will report to Jimmy Morgan, our Chief Operating Officer.

The continued growth of our business makes it timely to put these changes into place to provide specific focus over these segments from a market facing and P&L perspective.

and to further unlock shareholder value in maximizing our long-term strategic growth plans.

Additionally, Brandy Johnson has been named Chief Strategy and Technology Officer and within this role Brandy will report to me.

and spearhead the research and development, demonstration and commercial implementation for our mature and emerging technologies.

We look forward to the leadership changes for Chris, Joe, and Brandy, which will further enhance our ability to react strongly and quickly to market changes and streamline efforts in developing and implementing our new technologies in parallel with addressing the needs of our thermal customers. We look forward to the leadership changes for Chris, Joe, and Brandy, which will further enhance our ability to react strongly and quickly to market changes and streamline efforts

I'll now turn the call over to Lou who will discuss the financial details for the second quarter of 2022. Lou? Thank you.

Thanks Kenny. I'm really pleased to review our second quarter results. Further details which can be found in the 10-Q that will be on file with the SEC.

Second quarter consolidated revenues were $221 million, which is a 9% improvement compared to the second quarter of 2021. This is primarily driven by higher volume, driven by new build projects, and the impact of acquisitions completed in the first quarter of 2022.

addition to a higher level of volume in the renewable segment and partially offset by lower developed by a lower level of construction activity in the thermal segment.

Our net operating income for the second quarter of 2022 was $3.7 million as compared to operating income of $2.8 million in the second quarter of 2021.

Our adjusted EBITDA was $20.6 million as compared to $15.2 million in the second quarter of 2021.

While bookings in the second quarter of 2022 were $245 million, which is an increase of 46% compared to the second quarter bookings of 2021.

Our ending backlog was 731 million, which is a 46% increase compared to the backlog at the end of the second quarter of 2021.

I'll now turn to our second quarter segment results.

Within our Babcock and Wilcox Renewables segment, revenues are $75.2 million for the second quarter of 2022.

This, as Kenny had mentioned, is a 96% increase compared to the 38.3 million in the second quarter of 2021.

The increase in revenue was primarily driven by higher volume of new build projects as well as the acquisition and continued growth of the fossil construction construction and our voter acquisition.

Adjusted EBITDA in the quarter was $8.9 million as compared to $3.4 million in the second quarter of 2021. And this is primarily due to higher revenue volume on new build projects.

and as discussed, a $7 million gain on the sale of some development rights of a future solar project that was sold during the year.

Within the Babcock's environmental segment, revenues were $31.6 million in the second quarter of 2022, which is an increase of 11% as compared to $28.4 million in the second quarter of 2021.

The increase is primarily driven by an emissions control technologies contract for an industrial facility and the adjusted EBITDA was 600,000 in the quarter as compared to 2.7 million in the same period last year and this lower profitability was primarily due to lower volume in the park sales as the plant and the utilities continue to operate full cycle.

rather than go into maintenance mode, which was anticipated. We expect that to turn around as the facilities will start doing some maintenance as they slow up a little bit with the demand for energy.

Turning to our Babcock Wilcox thermal segment, revenues were $116.3 million in the second quarter of 2022, which is a decrease of 15% compared to $136 million in the second quarter of 2021. This is primarily due to the completion of a very large construction project during Q2 2021 and is offset partially by the acquisitions.

Adjusted EBITDA on the second quarter of 2022 was 16.4 million, which is an increase of 30% compared to 12.6 million in the second quarter of 2021. And this is primarily due to a mix of projects with park sales outweighing the construction sales. Bothodies are placing theirene

I'll now turn it over to our balance sheet, cash flow and liquidity. Our total debt of June 30th, 2022 was $334 million and the company had cash and cash equivalents and restricted cash of $80.2 million.

Finally, based on our strong bookings and backlog in the second quarter, we're reiterating our 2022 target of $110 million to $120 million in adjusted EBITDA. I'll now turn the call back to Kenny.

Thanks, Lou.

There we go, off mute. Thanks, Lou.

In closing, Babcock & Wilcox continues to successfully build upon a significant transformation over the last couple of years. We now have a strong balance sheet.

expanding opportunities across all of our business segments, and a robust pipeline of more than 7.5 billion of identified global opportunities over the next three years.

We are extremely excited about the prospects for the business. And based on our recent bookings and existing backlog, we remain well positioned for our milestone of 2022, 2023, and beyond.

Our team of dedicated employees remains one of the most driving forces behind our success as a company. And collectively, their continued focus on safety, strong project execution, expansion of our bookings and backlog, and commitment to helping us become leaders in the global clean energy transition are unmatched across the industry.

Looking ahead.

B&W remains in a growth mode, and we continue to pursue our ongoing strategic initiatives, including the evaluation of additional acquisition opportunities for both mature and emerging technologies, investments in new clean energy projects, and the conversion of our significant global pipeline of identified projects into bookings.

And lastly, I'd like to touch on an issue that we have previously highlighted and one that is extremely important to our mission as a company. We continue to see BMW on the forefront of the global fight against climate change and as stated, we expect 2022 to be a milestone year driven by significant advancements within our Climate-Bright Decarbonization and Hydrogen Solution platform.

We remain excited about the opportunities ahead in this area and about being an innovative leader in carbon capture, decarbonization, and hydrogen production. And we continue to build on our advanced technologies to meet the growing demand of our customer base for a long-term energy security and decarbonization strategy. I will now turn the call back over to Matt, who will assist in taking a few questions. Matt?

Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. You will pause here briefly as questions are registered.

The first question is from the line of Rob Brown with Lake Street Capital. Your line is now open.

Good afternoon. Good afternoon, Liz. Good afternoon.

Hey, Rob. First question is really on the pipeline of the Climate Pride. You've got a couple of nice projects started here. How is that pipeline looking and can you give sort of a range of kind of a project level revenue for one of those type of projects? I don't think we've had all these projects on the pipeline in a while. Dr. Gagarin and I wanted to remind a few people.

Sure, yeah. The pipeline actually is growing. I mean, it's been very excited to see actually the response in the marketplace from our customers on the technology itself. And the general feedback has been extremely strong. We're hopeful to put out publicly a few engineering reviews and others that we've received from our customers once those are complete, then we'll solidify the strength of the technology overall.

very pleased with the momentum in the marketplace. You know, as we've talked about previously, the unique part about our Bright Lube technology in particular that we're excited about is that globally it increases, if you will, the addressable market for B&W as it relates to where we can position that technology. And what I mean by that basically is that, you know, that technology can be used in a wide variety of circumstances that B&W historically hasn't been able.

and in other vertical markets as well too globally. So we're excited about moving that forward, improving that scalable technology, obviously in the few places that we've just announced and look forward to furthering a number of other projects that we're in discussions with that are in our pipeline today. So we're seeing strong appeal and demand and workout areas here in conform.

and growth opportunities there. I think the other exciting part for us is we don't necessarily need to scale that technology up, although we can to base load generation we could. Eventually we'll get there, but there is a wide and big demand for a bright loop, if you will, even at 15 tons a day of hydrogen production, or what we're calling BLH15 or BLH25 or 25 tons a day of production, but

We can clearly move and plan to move up to higher production environment, whether that's 250, 300 tons per day of hydrogen production is eventually where we want to get to. But there's a strong demand for us at the BLH15 and BLH25 levels, which as we've always discussed in the past, reduces our overall exposure and risk and produces more smaller projects with quicker...

and better cash flow scenarios for the company with a reduced set of risks. So we're excited to move that along. As far as the, you know, the revenue, the typical revenue, you know, depending on

wide range of factors in and around that the the revenue for the company you know on this on the lower end will be you know, 35 to 50 million in technologies depending on the structure and the environmentals and you know some other pluses and minuses.

involved in that. It could range on the high end to several hundred million depending on the ultimate size we move into. But most of the ones that we're looking at today would be between the 35 and 50 million on average. So you can think about it in those terms as we announce these.

Okay, Lou, anything you want to add to that, I think that covers it. Yeah, no, thanks. No, I think you got it.

Thank you for your question. The next question is from the line of Alex Regal with B. Riley.

Thank you. And kind of expanding upon that, you've got a number of sort of project announcements that haven't yet hit your backlog. Any way to kind of bracket sort of what that pending backlog number looks like?

that could be additive over the next six months of projects that you've sort of announced already or signed some type of agreement with.

Yeah, I think we may have mentioned it a little bit here and there in the past, Alex, but overall, I think if you looked at the myriad of potential projects that we anticipate adding that we've announced publicly, you could look at that in the several hundred million dollar range plus, but without breaking it down into specific projects, just for sensitivities as we continue to negotiate on the final configuration of these projects, but it's a few hundred billion that's out there or greater.

that would be potentially added to the backlog over the next six to nine months.

helpful. And then Kenny or Lou, maybe you could talk a little bit about the cadence of EBITDA sort of in 3Q and 4Q that is implied in your full year guidance.

Understanding COVID in Ukraine delays and whatnot. I want to make sure we kind of understand what the seasonality will look like this year.

Yeah, with that, we're going into too much. Go ahead, Luke. No, no, no.

Nope, go ahead. I was just going to say that the cadence is one that's been consistent throughout the years over the four quarters. Your first quarter is the lowest quarter. Second quarter grows in the 40 to 50 percent range. And then the third quarter begins to kick off as there's higher usage of outages and maintenance and parts sales. And then the largest quarter.

probably more than double what the first quarter would be, would be the fourth quarter. And the fourth quarter is a combination of finishing outages, and then also a very heavy quarter for part sales as the utility business and so forth starts ramping up and purchasing for the following year and using up their budget. So the cadence is first quarter lower, second quarter,

20-30% higher, third quarter 20-30% higher, etc. on into the fourth quarter.

And then lastly, Kenny, the solar market this year was in somewhat of transition, but it seems to be there's much greater clarity today. I know through one of your earlier acquisitions you sort of bought a shadow backlog of opportunities that was quite substantial. Can you comment on how you see that shadow backlog or pipeline developing in 2023? Thanks, Kenny.

Yeah, we're heavily focused, Alex, I think, on building up the strength of B&W and the solar market, obviously, continuing to do more of the community solar projects and the numbers. Again, going back to, I think, the smaller projects are nice because they reduce the overall risk profile of the company, but it gives us a lot of strength and credibility around that. So, at the same time...

As I mentioned, I'm taking the remarks here as we put out a press release a few weeks ago. We're picking up some smaller utility scale projects, doing the services work on the 240 megawatt in western Ohio.

a nice win for us and one that we'll realize obviously some impact this year. But putting it on the books is important. It proves in our capabilities and around both the strength of the community seller, which the company we acquired had been strong in, but now leveraging the strength of B&W and the positioning we have within the utility scale sector, I think in combining both of those puts us in a strong position going forward.

and we'll continue to effectively operate towards increasing the size and scale, but we'll do it in a very healthy way that doesn't outpace our capabilities while we continue to grow that business.

Very helpful. Thank you.

Thanks, Alex.

Thank you for your question.

The next question is from the line of Aaron's picello with Craig how long your line is now open

Hi, Kenny. Hi, Lou. Thanks for taking the questions.

Hey Aaron, how are you? Good. You're welcome. Doing good, thanks. First, in Europe , can you just kind of give us an update on how conversations are progressing there given kind of Russia, Ukraine, and the net gas prices? What areas of interest are you seeing, whether waste of energy or others, and just how you're thinking orders develop here as we look into the back half of the year and into 2023? You're welcome.

Yeah, I think it's driving several decisions over there that we're seeing. It's in our pipeline now, but we anticipate making a few announcements here in the not too distant future. I think we're seeing some increase in immediate response to demand on investment capital going into new waste energy plants.

You know, newer technologies looking at even the bright loop aspect and perhaps accelerating the project tour here or there in Europe . But clearly, without question, I mean every country is a little bit different in Europe as it relates to responding to that particular situation. But we are seeing, I think, across the board most of the energy companies look towards other technologies to long-term remove themselves from the reliance of too much natural gas.

in the European aspect. We are, as we've mentioned before, it's going to have a material impact on the business yet, too little too early to tell, but we are in conversations with a few as it relates to certain parts and services and other aspects on the recommissioning of some of the coal plants in Europe .

Not real positive those are going to 100% come across the board. We'll see how that progresses, you know, given time. But we're clearly in discussions with a few various companies, whether that be in Germany or in other parts that are looking to recommission some coal as it relates to potentially resolving some security issues on the natural gas side or having some power demand and basal generation at the When do you hope my job is gonna run on a

enter into the winter season and prepare for that. So we'll see how that impacts us overall. I think it's just too early to state that there's going to be material value coming from that as it relates to us. But I think what we are seeing is a little bit of a driver on a few projects in the waste energy and renewables side in response to what's happening over there.

All right, thanks. And then maybe second, just revisiting Climate Bright a little bit, can you talk about some of the gating factors on those projects moving forward and then just a little bit on the Inflation Reduction Act? Obviously hydrogen carbon capture is a big part of that. You know, how that might impact economics broadly for these projects as they look to move forward.

Sure. Well, let me start with the latter first. We're obviously, like everyone else, piecing together the impact of that legislation.

that anticipate getting signed here into law, but have been in discussions with a few around some of the particulars around that. We've, as I think we've mentioned in the past publicly, have spent a great deal of time with the Department of Energy and also various federal and state level organizations around trying to leverage.

a lot of the tax credits and initiatives coming from this. There is a desire, I think within various groups in the federal government to look towards leveraging either natural gas or even some of the waste coal items that we've talked about in the past, you know, inclusive of biomass and other materials, but in the hydrogen production and creation. And we're directly involved in many of those conversations.

around some of the programs that have been outlined not only in this act but some of the programs that have been outlined by the Department of Energy as well too.

Without getting into a lot of detail, we're obviously hopeful that we're participating in some of those and without question we'll be making announcements when and where appropriate in association with those. But we think the act will help drive some of the increased CO2 credits that are associated with that in conjunction with possibly some other funding that might come available in association with these in various states and we're in.

team talks obviously with those as we speak. On the bright loop side as far as the dating factors go the big area for us right now will be proving in the scale up aspect of that technology, you know 21 times over where we have tested previously which is pretty typical and normal within a evolution of technology.

The biggest items we're going to be observing obviously is going to be the cycle time of the bright loop. It's a chemical looping process as we talked about using a special iron ore particle that was jointly developed by us and Ohio State University and we'll be looking to prove in the cycle times of those particular particles and to really ascertain the wear and tear of those particles within the 21 timescale up.

That's probably the biggest gating factor. I think the rest of the technology from an output standpoint, we're very confident and comfortable with, but we'll need to verify that the wear and tear on those iron ore particles as it relates to each of those cycle times as we move into the next level of the platform where we move into providing obviously guarantees and other aspects around the wear and tear of those particles. That will be the biggest piece that we want to observe here.

on these next demonstrations that we're putting in place. So that's, hopefully that helps, but that's where our focus is.

No, that does, that helps a lot. Thanks for taking the questions.

You're welcome. Thank you for your question. The next question is from the line of Zane Karimi with DA Davidson. Your line is now open.

Hey, good afternoon, Seaman. Thank you for taking my questions.

Sure, Zane. How are you? Super. Start.

Hey, I'm doing well. Thank you.

First off here, but how are you approaching new contracts given the supply issues and the inflation seen across the market and essentially how are you protecting yourself?

So most of our contracts and projects, and we have thousands, so it's not a perfect science across the board, but most of them, we have provisions in the agreement that provide some protection against inflation on certain price and materials and other aspects around those. We also typically, our approach...

to these projects from a global supply chain perspective is we lock in the pricing for the key material pieces, you know, raw steel and other aspects that are included in the fabrication are typically locked in with our subcontractors prior to the project beginning as well. So that adds also a level of protection to the company that we're not subject to inflationary increases. Thanks for answering all of our questions.

On occasion, there are certain things that happen here or there that we've got to

absorbed, but those are typically minimal overall from that standpoint. I think the biggest impact for us that we have to really monitor and keep an eye on on a project level as it relates to delays, not necessarily on our part on projects, but as our customers are building, especially some of the new waste energy and other new technology plants going in, as they're acquiring fabrication and other aspects from the EPC, sometimes those are delayed with...

It means our lay down area or our technology could be delayed by a few days, a few weeks or whatever. Those are items that we have to keep an eye on. Of course, we do the best we can to put in protection for those delays so it doesn't actually impact us from a cost standpoint. We do try to mitigate that on a global basis. Again, not a perfect science overall, but for the most part, we've got that as best we can under control.

Kind of lewd anything you want to add to that.

Yeah, I think the other thing that we've done is we've purchased ahead on inventory where we know we're going to use it. So we're not subject to the volatility of the markets and we have on hand inventory that we can use to meet parts and other orders. And that also protects us from the rising prices because we bought the inventory earlier between.

you know, December and now. So I think those two, what Kenny spoke about and what we've done to have an inventory that we can deliver quickly at lower prices and have supply available helping us mitigate it. Not perfect, but we took steps to mitigate it early on as the pandemic hit and then the Ukraine situation hit.

Thank you for that. And my follow-up here would be do you think we could see more of an uptick in thermal maintenance and aftermarket work in 3Q versus 4Q, essentially to get ahead of the winter months? Are our schedules for that work pretty firm now?

The schedules are somewhat firm, but we do anticipate a pickup. We've actually seen an increase in bookings in the parts and services business.

as customers get ready for the fall outages and are trying to manage and schedule around those. You know as we've said prior and it's still true the the the cold plants in particular are still being used quite heavily.

obviously around the world, but in lieu of natural gas because of the high cost and pricing of natural gas itself. And so we're still seeing our customers utilize those plants 24-7, obviously through the summer months as well too. But we're seeing a lot of customers really gear up more towards certain outages in the fall.

And if it's particular probably different than the past You know, they're they're really ordering and booking ahead to try to be prepared for the fall outages which is great for us from a booking standpoint, but We're obviously getting prepared for you know, some of that revenue to bounce in as it relates to Q3 and Q4 so we do anticipate an uptick but that's within our plans obviously and and as we you know, stay before it's within our

target EBITDA that we're reinforcing here. So, okay. Thank you, gentlemen.

Great, Matt, I'll turn it back over to you.

There are no additional questions waiting at this time, so I will pause the conference over to Sharon Brooks for any closing remarks.

Thank you for joining us. This concludes our conference call. A replay will be available for a limited time on our website later today.

Thank you everyone.

That concludes the conference call. Thank you for your participation. You may now disconnect your lines.