Q1 2025 Babcock & Wilcox Enterprises Inc Earnings Call
I'll now turn the conference over to your host Sharon Brooks Bmw's Director of Communications. Thank you you May proceed Ms Brooks.
Operator: to call off an opportunity for questions and answers at the end.
Matt: I'd like to turn the conference over to your host, Sharyn Brooks, BNW's Director of Communications. Thank you. You may proceed, Ms. Brooks.
Thank you, Matt and thanks to everyone for joining us on Babcock <unk> Wilcox Enterprises' first quarter 2025 earnings Conference call I'm, Sharon Brooks director of Communications and marketing.
Sharyn Brooks: Thank you, Matt, and thanks to everyone for joining us on Babcock & Wilcox Enterprises first quarter 2025 earnings conference call. I'm Sharyn Brooks, Director of Communications and Marketing.
Speaker Change: Joining the call today are Kenny young <unk>, Chairman and Chief Executive Officer, and Cameron Primer, Chief Financial Officer to discuss our first quarter results.
Sharyn Brooks: Joining the call today are Kenny Young, B&W's Chairman and Chief Executive Officer, and Cameron Frymyer, Chief Financial Officer, to discuss our first 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 10-Q that was 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.
Speaker Change: 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 10-Q that was filed this afternoon and our Form 10-K that is on file with the.
Speaker Change: 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.
Sharyn Brooks: Additionally, except as required by law, we undertake no obligation to update any forward-looking statements.
Speaker Change: 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 first quarter earnings release published this afternoon.
Sharyn Brooks: 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.
Sharyn Brooks: A reconciliation of historical non-GAAP measures can be found in our first quarter earnings release published this afternoon, and in our company overview presentation filed on Form 8K this afternoon and posted on the investor relations section of our website at babcock.com.
Kenny Young: And in our company overview presentation filed on form 8-K. This afternoon and posted on the Investor Relations section of our website at <unk> Dot Com I will now turn the call over to Kenny.
Kenny Young: I will now turn the call over to Kenny. Thanks, Sharon. And thanks, everyone, for joining this afternoon. We are pleased to report a strong start to 2025 with robust first quarter results across our entire business. Our results in the first quarter reflect the strong global and North American demand for our technologies as we continue converting our 7.6 billion global pipeline of identified project opportunities into new bookings. We generated strong operating results highlighted by revenue, operating income, and adjusted EBITDA that exceeded both company and consensus expectations for the quarter. The results in the quarter were led by a strong performance from our global parts and services business.
Kenny Young: Thanks, Sharon and thanks, everyone for joining this afternoon.
Speaker Change: We are pleased to report a strong start to 2025 with a robust first quarter results across our entire business. Our results in the first quarter reflects the strong global and North American demand for our technologies as we continue converting.
Speaker Change: Seven $6 billion global pipeline of identified project opportunities into new bookings.
Speaker Change: We generated strong operating or operating results highlighted by revenue operating income and adjusted EBITDA that exceeded both company and consensus expectations for the quarter.
Speaker Change: The results in the quarter were led by a strong performance from our global parts and services business, which posted the highest Q1 bookings revenue gross profit and EBITDA in the past decade.
Kenny Young: posted the highest Q1 bookings, revenue, gross profit, and EBITDA in the past decade. The company's core business continues to perform ahead of expectations, and we anticipate returning to positive cash flows in 2025.
Speaker Change: The company's core business continues to perform ahead of expectations and we anticipate returning to positive cash flows in 2025.
Speaker Change: We are also excited to report a significant accomplishment from our recent strategic efforts to reduce or refinance our current debt.
Kenny Young: We are also excited to report a significant accomplishment from our recent strategic efforts to reduce or refinance our current debt. Earlier today, we announced that approximately 40% of our outstanding bonds have been exchanged into new five-year notes at a discount to par, which significantly reduces our current debt, lowers our overall net debt, and reduces our annual interest expense. This privately negotiated bond exchange is expected to result in $131.8 million of outstanding bonds due in 2026, being replaced with new bonds in the amount of $100.8 million that will be due in 2030. This lowers our annual interest expense by $1.1 million and combined represents a positive step in our restructuring and refinancing efforts while demonstrating continued support from our lenders and bondholders.
Speaker Change: Earlier today, we announced that approximately 40% of our outstanding bonds have been exchanged into new five year notes at a discount to par which significantly reduces our current debt lowers our overall net debt and reduces our annual interest expense.
Speaker Change: It was privately negotiated bond exchange is expected to result in 131 8 million of outstanding bonds. Due in 2026 being replaced with new bonds in the amount of $108 million that will be due in 2013.
Speaker Change: This lowers our annual interest expense by $1 1 million and combined represents a positive step in our restructuring and refinancing efforts, while demonstrating continued support from our lenders and bondholders move.
Speaker Change: Moving forward, we continue to explore further debt refinancing options and are in discussions regarding other potential asset.
Kenny Young: Moving forward, we continue to explore further debt refinancing options and are in discussions regarding other potential asset dispositions to reduce our current and long-term debt obligation. In support of that objective, earlier this month, we also announced the sale of the majority of the assets of our Denmark-based waste energy subsidiary for $20 million in gross proceeds to Canadevia Innova, formerly known as Hitachi Zosui. As part of this sale, $5 million of the $20 million in total proceeds is directed to fund our Bright Loop project in Massillon, Ohio. As a part of this asset sale, we have also entered into agreements to work together regarding the North American waste-to-energy market, leveraging each company's best-in-class waste-to-energy grade technologies and B&W's boiler technologies.
Speaker Change: Positions to reduce our current and long term debt obligations.
Speaker Change: In support of that objective earlier. This month, we also announced the sale of the majority of the assets of our Denmark based waste to energy subsidiary for $20 million in gross proceeds to <unk> and Nova formerly known as Hitachi Zosen.
Speaker Change: As part of the sale $5 million of the $20 million in total proceeds is directed to fund our bright new project in Massillon, Ohio.
Speaker Change: As a part of this asset sale. We have also entered into agreements to work together regarding the north American waste to energy market leveraging each company's best in class waste to energy, great technologies, and Bmw's boiler technologies.
Speaker Change: We also entered into an agreement to jointly develop bright loop opportunities to leverage renewable natural gas and other applications.
Kenny Young: We also entered into an agreement to jointly develop Bright Loop opportunities to leverage renewable natural gas and other applications. AVI is a global leader in waste-to-energy technologies, carbon capture, and renewable natural gas, and we look forward to working with them on joint opportunities in the years to come. We continue to see strong global demand for our diverse portfolio of technologies and are making progress in converting our $7.6 billion global pipeline of identified project and opportunities as displayed by our strong bookings and backlog results this quarter. Our backlog of $526.8 million at the end of the first quarter was a 47% increase compared to the same period of 2024.
Speaker Change: <unk> is a global leader in waste to energy technologies carbon capture and renewable natural gas and we look forward to working with them on joint opportunities in the years to come.
Speaker Change: We continue to see strong global demand for our diverse portfolio of technologies and are making progress in converting our seven 6 billion global pipeline of identified projects and opportunities as displayed by our strong bookings and backlog results. This quarter are.
Speaker Change: Our backlog of $526 8 million at the end of the first quarter was a 47% increase compared to the same period of 2024.
Speaker Change: This represents the largest backlog in recent company history as our thermal segment continues to perform based on higher Baseload generation demand in North America.
Kenny Young: This represents the largest backlog in recent company history as our thermal segment continues to perform based on higher baseload generation demand in North America. In addition, we achieved bookings from continued operations of $167 million, an 11% increase compared to the same period of 2024. This increase in bookings is supported by record high bookings from our global parts and services business. We believe these results affirm our strong foundation while underpinning our pipeline and outlook for the year ahead.
Speaker Change: Addition, we achieved bookings from continued operations of $167 million and 11% increase compared to the same period of 2020 for.
This increase in bookings is supported by record high bookings from our global parts and services business.
Speaker Change: We believe these results affirm our strong foundation, while underpinning our pipeline and outlook for the year ahead.
Speaker Change: Our efforts to progress bright loop are moving forward as we further the commercial development of existing projects and continue working to improve the overall operational effectiveness of these technologies to produce low cost green hydrogen we.
Kenny Young: Our efforts to progress Bright Loop are moving forward as we further the commercial development of existing projects and continue working to improve the overall operational effectiveness of these technologies to produce low-cost green hydrogen. We are continuing to progress with engineering work for our previously announced Bright Loop projects. We are finalizing the Financing for Madison, Ohio project, for which we have already received a significant offtake agreement. When completed, the plant will produce five tons of hydrogen per day, and we anticipate completing financing in the next few months while simultaneously placing long lead time orders and continuing with all permits, licenses, and construction.
We are continuing to progress with engineering work for our previously announced bright loop projects. We are finalizing the financing for Massillon, Ohio project for which we have already.
Speaker Change: I have received a significant offtake agreement.
Speaker Change: When completed the plant will produce five tons of hydrogen per day, and we anticipate completing financing in the next few months, while simultaneously, placing long lead time orders and continuing with all permits licenses and construction and we anticipate hydrogen production from the mass one plant sometime by mid 2026.
Kenny Young: We anticipate hydrogen production from the Massillon plant sometime by mid-2026.
Speaker Change: We also continue to see opportunities for new projects related to renewable energy in the United States, which could enable us to leverage our content bright de carbonization platform and presents additional higher margin prospects. These opportunities are for behind the meter datacenter power applications as well as carbon dioxide removal technology.
Kenny Young: We also continue to see opportunities for new projects related to renewable energy in the United States, which could enable us to leverage our carbon decarbonization platform and presents additional higher margin prospects. These opportunities are for behind the meter data center power applications, as well as carbon dioxide removal technology. Looking forward, we anticipate industry tailwinds and generation demand to continue throughout 2025 and the years ahead.
Speaker Change: Looking forward, we anticipate industry tailwind and generation demand to continue throughout 2025 in the years ahead.
Speaker Change: The company is also keeping a close eye on the tariffs negotiations and any potential impact on the business in 2025.
Kenny Young: However, the company is also keeping a close eye on the tariff negotiations and any potential impact on the business in 2025. As stated, the company's core business continues to perform ahead of expectations, and we do again expect to return to positive cash flows in 2025.
Speaker Change: The company's core business continues to perform ahead of expectations and we do again expect to return to positive cash flows in 2025.
Speaker Change: Now I'll turn the call over to Cameron to discuss the financial details of the first quarter of 2025 cameras.
Cameron Frymyer: I'll now turn the call over to Cameron to discuss the financial details of the first quarter 2025. I am pleased to review our first quarter results, further details of which can be found in the 10-Q that is on file at the SEC. Our first quarter consolidated revenues were $181.2 million, which is a 10% increase compared to the first quarter of 2024. The increase is primarily driven by activity related to a large natural gas project for $8.5 million, higher construction volume of $6 million, and an increase in thermal parts sales of $10 million. Net loss from continuing operations in the first quarter of 2025 was $7.8 million, which was a better result compared to the net loss of $12.8 million in the first quarter of 2024.
Cameron Primer: Yes, Thanks, Kenny I am pleased to review our first quarter results.
Cameron Primer: Details of which can be found in the 10-Q that is on file with the SEC.
Cameron Primer: Our first quarter consolidated revenues were $181 2 million, which is 10% increase compared to the first quarter of 2024 the.
Cameron Primer: The increase was primarily driven by activity related to a large natural gas project for $8 5 million higher construction volume of $6 million and an increase in thermal part sales of $10 million.
Cameron Primer: Net loss from continuing operations in the first quarter of 2025 was $7 8 million, which was a better result, compared with a net loss of $12 8 million in the first quarter of 2024.
Cameron Primer: Our loss per share from continuing operations in the first quarter of 2025 was 11.
Cameron Frymyer: Our loss per share from continuing operations in the first quarter of 2025 was $0.11, compared to a loss per share of $0.19 in the first quarter of 2024. Our operating income in the first quarter of 2025 was $5.9 million, exceeding our quarterly expectations and outpacing operating income of $5.7 million in the first quarter of 2024. Our adjusted EBITDA was $14.3 million, compared to $11.3 million in the first quarter of 2024. Bookings in the first quarter of 2025 are $167 million, an 11% increase compared to the same period last year, and ending backlog was $526.8 million, a 47% increase since the coerced quarter of 2024.
Cameron Primer: Compared to a loss per share.
Cameron Primer: <unk> 19 in the first quarter of 2024.
Cameron Primer: Our operating income in the first quarter of 2025 was $5 9 million exceeding our quarterly expectations and outpacing operating income of $5 7 million in the first quarter of 2024.
Cameron Primer: Our adjusted EBITDA was $14 3 million compared to $11 3 million in the first quarter of 2024.
Kenny Young: Bookings in the first quarter of 2025 or $167 million, an 11% increase compared to the same period last year and ending backlog was $526 8, million% to 47% increase since the <unk> quarter of 2024 as Kenny previously mentioned this extremely strong quarterly bookings is supported by the high.
Cameron Frymyer: As Kenny previously mentioned, this extremely strong quarterly bookings is supported by the high performance of our parts and service business this quarter.
Cameron Primer: Performance of our parts and service business this quarter.
Cameron Primer: I'll now turn to the balance sheet cash flow and liquidity.
Cameron Frymyer: I'll now turn to the balance sheet, cash flow, and liquidity. Total debt at March 31, 2025 was $473.6 million, and the company had cash, cash equivalents, and restricted cash balance of $116.8 million. The company's core performance core business is performing ahead of expectations.
Cameron Primer: Total debt at March 31, 2025 was $473 6 million and the company had cash cash equivalents and restricted cash balance of $116 8 million.
Cameron Primer: The company's core performing core business is performing ahead of expectations and we continue to anticipate returning to positive cash flow within 2025, excluding briarwood.
Cameron Frymyer: And we continue to anticipate return to positive cash flows in 2025, excluding bright One of our top priorities continues to be the refinancing and reduction of our current debt obligations. As noted previously, we have recently entered into a privately negotiated bond exchange, which is expected to result in $131.8 million of outstanding bonds due in 2026 being replaced with new bonds equal to $100.8 million that will be due in 2030. This is a significant positive step in our refinancing effort as it decreases our debt obligation by $31 million and reduces interest by $1.1 million a year.
Cameron Primer: One of our top priorities continues to be the refinancing and reduction of our current debt obligations. As noted previously we have recently entered into a privately negotiated bond exchange, which is expected to result in a $131 8 million of outstanding bonds due in 2026.
Cameron Primer: Being replaced with new bonds equal to a $100 8 million that will be due in 2030. This is a significant positive step in our refinancing effort as it decreases our debt obligation by $31 million and reduces interest by $1 1 million a year.
Furthermore, this demonstrates the continued support from our lenders and our bondholders.
Cameron Frymyer: Furthermore, this demonstrates the continued support from our lenders and our bondholders. We continue to explore further debt refinancing options to extend or reduce our current and long-term debt obligations.
Cameron Primer: We continue to explore further debt refinancing options to extend or reduce our current and long term debt obligations. We also continuing to investigate the sale of certain other assets similar to the sale of a Denmark based waste and Andrew subsidiary announced earlier. This month. The proceeds of these sales will be used primarily to pay down.
Cameron Frymyer: We also continue to investigate the sale of certain other assets, similar to the sale of Denmark-based Waste and Injury Subsidiary announced earlier this month. The proceeds of these sales will be used primarily to pay down existing debt and enhance working capital.
Kenny Young: Existing debt and enhanced working capital I'll now turn the call back over to Kenny.
Cameron Primer: Okay.
Kenny Young: I'll now turn the call back over to Kenny. Thanks, Cameron. Well, in closing, we remain intently focused on executing our strategic plan and driving further improvements in our balance sheet. Our global pipeline of over $7.6 billion in identified project opportunities remains healthy across all of our business segments, and we anticipate additional prospects for new bookings and stronger financial performance throughout 2025. We continue to believe our deep industry expertise with clean energy and carbon capture technologies, coupled with our long history in traditional energy sources, positions us well to deliver environmental conscious technology-driven solutions to our global customers.
Cameron Primer: Thanks Cameron.
Speaker Change: In closing, we remain intently focused on executing our strategic plan and driving further improvements in our balance sheet, our global pipeline of over $7 6 billion and identified project opportunities remains healthy across all of our business segments, and we anticipate additional prospects for new bookings and stronger finance.
Cameron Primer: Performance throughout 2025.
Cameron Primer: We continue to believe our deep industry expertise with clean energy and carbon capture technologies, coupled with our long history in traditional energy sources positions us well to deliver environmental.
Cameron Primer: Concerts technology, driven solutions to our global customers.
Cameron Primer: As always I would like to recognize the efforts of our dedicated and talented employees around the world focused on working hard and safely to deliver consistent profitable growth for our shareholders and help meet the worlds need for clean and reliable energy now and in the future I'd also like to thank our global customer.
Kenny Young: As always, I would like to recognize the efforts of our dedicated and talented employees around the world who focused on working hard and safely to deliver a consistent profitable growth for our shareholders. and help meet the world's need for clean and reliable energy now and in the future.
Cameron Primer: Based on suppliers for their continued support at <unk> Dot Com Wilcox and we remain excited about the prospects that lie ahead.
Kenny Young: I'd also like to thank our global customer base and suppliers for their continued support of Babcock & Wilcox, and we remain excited about the prospects that lie ahead.
Matt: With that I'll turn the call back over to Matt who will insist assist.
Matt: With that, I'll turn the call back over to Matt, who will assist us on taking one or two questions. Ladies and gentlemen, we will now begin the Q&A session. 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 are using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered.
Speaker Change: To assist us on taking one or two questions Matt.
Speaker Change: Ladies and gentlemen, we will now begin the Q&A session, if you'd like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you only can move that question. Please press star followed by two again to ask a question press Star one as a reminder, if you're using a speaker phone. Please remember to pick up your handset before asking your question, we'll talk here briefly.
Speaker Change: These questions are registered.
Aaron's bipolar: First question is from the line of Aaron's bipolar with Craig Hallum.
Aaron Spychalla: First question is from the line of Aaron Spychalla with Craig Hallam. Yeah, hi, Kenny and Cameron. Thanks for taking the questions. You know, maybe first for me on guidance, just wanted to make sure I might have missed it. But, you know, you're kind of reiterating guidance for the year. And I know you had some kind of caution on just project timing and tariffs and things like that. But with the strong start to the year, just wanted to get a little bit more color there.
Kenny Young: Yes, Hi, Kenny <unk> camera and thanks for taking the questions.
Aaron's bipolar: Maybe first for me on <unk>.
Aaron's bipolar: <unk> just wanted to make sure I might have missed it but are you.
Aaron's bipolar: You're kind of reiterating guidance for the year and I know you had some kind of caution on just project timing and tariffs and things like that but with the strong start to the year just wanted to get a little bit more color there and maybe an update on the coal to gas conversion project and kind of thoughts for contribution this year versus the next couple of years.
Kenny Young: And, you know, maybe an update on the coal to gas conversion project and kind of thoughts for contribution this year versus the next couple of years. Yeah, we're at we haven't we didn't touch on guides on the call just to kind of it's not we're basically just keeping it where it is or was and on it and keeping an eye out for it rather than come back with different ranges and other aspects. We just said, let's leave it where it is, but not touch it. I think our, you know, the key part we got to keep an eye on is as we talked about offline is the tariffs.
Aaron's bipolar: Yes.
We haven't we didn't touch on guidance on the call just to kind of it is that we're basically just keeping it where it is or was in on it and keeping an eye out for it rather than come back with different ranges and other aspects. We just said, let's leave it where it is but not touch it.
Aaron's bipolar: I think our.
Speaker Change: <unk>, we got to keep an eye on as we've talked about offline is the tariffs.
Speaker Change: Out there and the potential impact that that may have on projects in that honestly right now, it's anybody's guess or clue.
Speaker Change: With all Thats going on in the World of these negotiations and discussions.
Speaker Change: And back and forth and back and forth, obviously, our customers keep an eye on those as well too.
Speaker Change: As it relates to I think for parts and services as we've talked about publicly probably not a big impact overall on the business, but some of the larger projects and upgrades and other aspects.
Speaker Change: Those are things that have potential impacts and we just have to work with our customers on timing of that so.
Kenny Young: those are things that have potential impacts, and we just have to work with our customers on timing of that. So, you know, the range is broad just because, you know, if a project gets delayed a month or two because of tariffs or other aspects, as people kind of wade through their strategies in and around those, you know, it just has an impact overall on the business. So, we just kind of didn't touch it on any update or any other conversation around the guidance on it. On the natural gas project right now, it's actually proceeding on schedule and doing, you know, it's on time on schedule for us and a customer.
Speaker Change: As such the range is broad just because if a project gets delayed a month or two because of tariffs or other aspects as people kind of wait through their strategies in and around those just has an impact overall in the business. So we just kind of didn't touch it.
Speaker Change: On any update or or any of the conversation around the guidance on it.
Speaker Change: On the natural gas project right now is actually proceeding on schedule and doing.
Speaker Change: It's on time on schedule for us and our customer that's the large one in Indiana, So thats progressing I think well.
Kenny Young: That's the large one in Indiana, so that's progressing, I think, well. The, you know, hopefully the tariff aspects don't impact that at all from, you know, any kind of delays that may happen later on this year. The bulk of shipment of inbound technology will happen later this year, early into next year, so any impact from the tariffs on that would not be realized until then. So, I think both us and the customer are just keeping a close eye on these constant negotiations and updates coming out of Capitol Hill, and, you know, we'll make kind of a real game time decision and strategy around those tariffs when we get closer to those activities, if that makes sense.
Speaker Change: The.
Speaker Change: Hopefully the.
Speaker Change: The tariff aspects don't impact that at all from any kind of delays that might happen later on this year of the bulk of the shipment of of inbound technology will happen later this year.
Speaker Change: Early into next year, so any impact from the tariffs on that would not be realized until then so I think both us and the customer just keeping a close eye on these constant negotiations and updates coming out of capital Hill, and we'll make a kind of a real game time decision and strategy around those tariffs.
Speaker Change: When it when we get closer to those activities if that makes sense.
Speaker Change: No. It does thank you and then maybe second with asset sale. It sounds like some of those proceeds are going to be go into Massillon can you just remind us of.
Operator: No, it does.
Operator: Thank you.
Aaron Spychalla: And then maybe second, you know, with the asset sale, sounds like some of those proceeds are going to be going to Massillon. Can you just remind us of, you know, the timeline for that project? You touched on it a little bit, but just total, total kind of costs from from you and for the overall project. Sounds like financing still coming together there. And then just what that could mean for other projects in the pipeline as that gets up and running. Yeah, so obviously Mastlin's important for us to get in the ground. We have been and still working through the overall financing of that aspect of it.
Speaker Change: The timeline for that project you touched on it a little bit, but just total total kind of cost from from you and for the overall project sounds like financing still.
Speaker Change: Coming together, there and then just what that could mean for other projects in the pipeline does that gets up and running.
Speaker Change: Yes, so obviously.
Speaker Change: Important for us to get in the ground, we have been and still working through the the overall financing of that aspect of it. It's the project itself probably.
Speaker Change: At this stage needs around 40 or $50 million.
Kenny Young: The project itself probably at this stage needs around $40 or $50 million of additional financing to complete that project. We have, as we stated, wouldn't go too much further on this, but as we're in discussions with some financing options on the company, that's clearly one of them, and we're working through those details as we speak. So hopefully we can complete that here in the next few months, and then just release all of the orders that we have pending. The main bulk of that need right now is in the construction area, and we really want to get the construction teams on site, on ground here in the fall of this year, and we're trying to stay to that schedule as we speak.
Speaker Change: Additional financing to complete that project.
Speaker Change: We have as we stated wouldn't go too much further on this but as we are in discussions with the some financing options on the company Thats clearly one of them and we're working through those.
Speaker Change: Details as we speak so hopefully we can complete that here in the next few months.
Speaker Change: And then just released all of the orders that we have pending the main bulk of that need right. Now is in the construction area and we really want to get the construction teams onsite on ground here.
Speaker Change: In the fall of this year.
Speaker Change: We're trying to stay to that schedule as we speak and then with the anticipation depending on the winter.
Kenny Young: With the anticipation, depending on the winter, how light or hard it is, anticipate producing hydrogen sometime by mid-next year at this stage. I think as we move ahead with that project and move forward on that, some of the other opportunities that we're working on will start to really move more into a serious booking mode sometime in 2026, and that's the feedback we're getting as we still work through some of the pipeline aspects out there. But the pipeline of opportunities for Bright Loop seem to be growing. This is an opportunity phase, clearly, but within the oil and gas industry and some other heavy gas suppliers that are still looking at utilizing natural gas to hydrogen, and the value here that Bright Loop has, if you want to isolate CO2 today, great.
Speaker Change: <unk> light or hard it is anticipate producing hydrogen sometime by mid next year at this stage.
Speaker Change: <unk>.
Speaker Change: As we move ahead with that project.
Speaker Change: And move forward on that.
Speaker Change: Some of the other options or opportunities not options, but opportunities that we're working on we'll start to really move more into a serious booking mode.
Speaker Change: Sometime in 'twenty six.
Speaker Change: And that's the feedback we're getting is we still work through some of the pipeline aspects out there, but the pipeline.
Speaker Change: Of opportunities on for Brian <unk> seem to be growing I'm. Just this is opportunity phase clearly, but.
Speaker Change: Within the oil and gas industry and some other.
Speaker Change: Heavy gas suppliers that are still looking at.
Speaker Change: Utilizing natural gas to hydrogen.
And the value here that <unk> brings is it brings an alternative that says hey, if you want to isolate Q2 today, great. If you don't find.
Speaker Change: Yes.
Speaker Change: Up to the customer, but obviously if.
Kenny Young: If you don't, fine. you know, up to the customer. But, you know, obviously, if there are other mandates on CO2 in the future, that option has been built in. So there's very little cost then for that new plant to have to convert to carbon capture. It's just, it's a matter of what you want to do with the CO2, whether you, because we capture it as part of our process. So there's significant capital savings versus other natural gas to hydrogen technologies. And that's, you know, one of the reasons for getting a lot of attention on this technology.
Speaker Change: There are other mandates on <unk> in the future that option has been built in so theres very little cost then for that new plants have to convert to carbon capture it just it's a matter of what you want to do with as to whether you because we captured as part of our process. So.
Speaker Change: There is significant capital savings versus other natural gas to hydrogen technologies.
Speaker Change: And that's one of the reasons for getting a lot of attention on this technology right now.
Speaker Change: Some of these larger companies are looking alternatives.
Kenny Young: Right now, as some of these larger companies are looking at alternatives to steam methane reform and ATR, which clearly SMR and ATR are proven, bondable, bankable technologies, right? It's been out of the marketplace for quite some time. Bright Loop is new.
Speaker Change: Steam methane reformers, and ATR, which which clearly S tomorrow and ATR Rubin bond.
Speaker Change: <unk> bankable technologies.
It's been out in the marketplace for quite some time bright Lucas new so.
Speaker Change: The <unk> plant and getting the commercial plant up is vitally important.
Kenny Young: So the Maslin plant and getting the commercial plant up is vitally important. We also continue to have dialogue and are in discussions with the Department of Energy and other groups on Capitol Hill to participate either in Maslin or one or two of these other projects that we're involved in, Wyoming and or West Virginia. And we, you know, hopefully some of that will move to a favorable outcome as well, too. Way too early to tell. But, you know, those discussions and conversations.
Speaker Change: We also continue to have dialogue and are in discussions with the department of energy and other groups on Capitol Hill to participate either in Massillon or one or two of these other projects that we're involved in Wyoming, <unk> West Virginia and.
Speaker Change: <unk>.
Speaker Change: Hopefully some of that we'll move to a favorable outcome as well too way too early to tell but those discussions and conversations still continue.
Speaker Change: Understood. Thanks for taking the questions. So I'll turn it over I appreciate the color. Thanks, Sir.
Operator: Understood.
Aaron Spychalla: Thanks for taking the questions. I'll turn it over. Appreciate the call. Yeah. Thanks, Aaron. Thank you for your question.
Eric: Thanks, Eric Thank you for your question.
Speaker Change: Next question is from the line of Rob Brown with Lake Street Capital markets. Your line is now open.
Rob Brown: Next question is from the line of Rob Brown with Lake Street Capital Markets. Good afternoon. You had a pretty strong demand environment going on. What are some of the drivers that are kind of driving? Would someone on the demand side... Was that what you were asking about? I'm sorry, you cut out briefly there. Yes, I just you had a very good bookings quarter. I think he said one of the best in 10 years. Just wanted to get a sense of some of the drivers. Yeah, I mean, the exciting part about where we are, I mean, obviously, basal generation worldwide, right, is really increased.
Eric: Yeah.
Rob Brown: Good afternoon.
Speaker Change: You had a pretty strong demand environment going on what are some of the drivers that are that are kind of driving that at this point.
Speaker Change: On the <unk>.
Speaker Change: Demand side.
Speaker Change: Is that what youre asking about sorry, you cut out bridge there.
Speaker Change: Yes, sorry, just you had a very good bookings quarter I think you said one of the best in 10 years I just wanted to get a sense of some of the drivers for that demand at this point.
Speaker Change: Yes.
Speaker Change: Starting part about where we are I mean, obviously baseload generation worldwide right.
Speaker Change: Increased and so the concept of increasing the utilization of some of our.
Kenny Young: And so the concept of increasing utilization of some of our core technologies in and around coal plants are still vitally important to meet that basal generation. And we're just seeing some of the pickup from not only those plants, but, you know, other small plants as well, too, that could be natural gas package boilers and other aspects. So, you know, overall, from a parts and services standpoint, we're just seeing the need of basal generation increase, you know, and typically Q1 for us is a little bit light, normally in our parts and services business. So it was pretty exciting to see the demand come in, and it was, you know, global in reach.
Speaker Change: Core technologies around interact coal plants are still.
Vitally important to meet that Baseload generation and we're just seeing some of the pickup from not only not only those plants, but other.
Speaker Change: Small plants as well too that could be natural gas package boiler as other aspects. So overall from a parts and services standpoint, we're just seeing the need of Baseload generation increase.
Speaker Change: And typically Q1 for us is a little bit light normally on our parts and services business. So it was pretty exciting to see the demand come in and it's been it was.
Speaker Change: Global in reach so it was international as well as in domestic North America for us on that but primarily driven if you go back to the basic aspect of it a lot of these plants are being used more and more and more.
Kenny Young: So it was international as well as in domestic North America for us on that, but primarily driven, you know, if you go back to the basic aspect of it, a lot of these plants are being used more and more and more. Some of those plants, you know, last year may have shifted some of the outage work and delayed some of the outage work, you know, as a result, they have more parts wear and tear that they need to maintain. Some of these plants are placing orders, trying to anticipate parts and other aspects that they're going to need later on this year.
Speaker Change: Some of those plants last year may have shifted some of the outage work delays some of the outage work and as a result to have more parts wear and tear that they need to maintain some of these plants are.
Speaker Change: Placing orders trying to anticipate parts and other aspects that theyre going to need later on this year. So those combinations of all of those pieces that are happening across the board, but it's just exciting to see it translate into a very positive Q1.
Kenny Young: So, you know, there's combinations of all of those pieces that are happening across the board, but it's just exciting to see it translate into a very positive Q1. Okay, great.
Speaker Change: Yeah.
Speaker Change: Okay, Great and then I guess you took.
Speaker Change: So a little bit, but do you expect sort of normal seasonality.
Kenny Young: And then I guess you touched on a little bit, but do you expect sort of normal seasonality with a bit of a step up throughout the year in terms of just the demand cycle or the activity cycle? Yeah, I think we'll still see a normal seasonality in the parks and services. The outages obviously create some of that, you know, happening as well, too. But I think we'll, you know, Q2 will be always low like Q1 is and, you know, Q3, Q4 will do better for sure. I don't, we don't anticipate seeing much difference on that, even given the current aspect around it.
Speaker Change: With a bit of a step up throughout the year in terms of just the demand cycle or the.
Speaker Change: Activity cycle in those.
Speaker Change: Yes, I think we'll still see normal seasonality in the parts of services. The outages, obviously creates some of that.
Speaker Change: Happening as well too, but I think Q2 will be.
Speaker Change: Always low like Q1 is in Q3 Q4, we'll do better for sure.
Speaker Change: We don't anticipate seeing much difference on that even given the current aspect around it but.
Speaker Change:
Speaker Change: It's good to be a little bit ahead of the curve from a planning standpoint on where the demand is coming in our parts and services by Vince seasonality. There I don't know Cameron and May have a different thought on that.
Cameron Frymyer: But, you know, it's good to be a little bit ahead of the curve from a planning standpoint on where the demand's coming in on parks and services, but I think seasonality is there. I know Cameron and I have a different thought on that. No, I think that's exactly right. I think, you know, I think we'll, I think there's some lower this quarter, but I think this season now is a big part of it. So no, I agree completely. Thank you. I'll turn it... Thank you for your question.
Speaker Change: No I think thats exactly right I think.
Speaker Change: I think well I think there is some.
Speaker Change: This quarter, but I think the seasonality is a big part of it so no I agree completely.
Speaker Change: Okay.
Okay, great. Thank you I'll turn it over.
Speaker Change: Thank you for your question.
Speaker Change: There are no additional questions waiting at this time, so I'll pass the call back to Sharon Brooks for any closing remarks.
Sharyn Brooks: There are no additional questions waiting at this time, so I'll pass the call back to Sharyn Brooks for any closing remarks. Thank you for joining us today.
Speaker Change: Yeah.
Sharon Brooks: Thank you for joining US today. This concludes our conference call a replay will be available for a limited time on our website. If you have a question that was not addressed during today's call. Please feel free to reach out to our Investor relations team at investors at Babcock Dot com. Thank you.
Sharyn Brooks: This concludes our conference call. A replay will be available for a limited time on our website.
Sharyn Brooks: If you have a question that was not addressed during today's call, please feel free to reach out to our Investor Relations team at investorsatbabcock.com. Thank you.
Sharon Brooks: That concludes the conference call. Thank you for your participation you may now disconnect your lines.
Sharyn Brooks: That concludes the conference call. Thank you for your participation. You may now disconnect your lines.