BW 10-K & 10-Q changes, risk factors and insider trading
Babcock & Wilcox Enterprises, Inc. (also BW-PA) · NYSE · Heating Equipment, Except Electric & Warm Air Furnaces · CIK 1630805 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “In the past, we have identified conditions and events that raised substantial doubt about our ability to continue as a going concern and it is possible that we may identify conditions and events in the future that raise substantial doubt about our ability to continue as a going concern.”
New heading “Sales or issuances of shares of our common stock may adversely affect the market price of our common stock.”
Removed heading “Our financial condition raises substantial doubt as to our ability to continue as a going concern, and since December 2022, we have entered into a number of amendments and waivers to our Debt Facilities to, among other things, provide relief or waiver under certain financial and other covenants and to waive certain events of default thereunder.”
Removed heading “We are in need of additional financing to continue as a going concern, and current ongoing discussions with our lenders and other parties to secure additional financing may result in additional indebtedness and dilution to our existing shareholders.”
Removed heading “Our customers, suppliers, vendors, employees and other third parties with whom we do business may react negatively to the substantial doubt about our ability to continue as a going concern.”
Removed heading “Substantial sales, or the perception of sales, of our common stock by us or certain of our existing shareholders could cause our stock price to decline and future issuances may dilute our common shareholders' ownership.”
Largest changes
“Our financial condition raises substantial doubt as to our ability to continue as a going concern, and since December 2022, we have entered into a number of amendments and waivers to our Debt Facilities to, among other things, provide relief or waiver under certain financial and other covenants and to waive certain events of default thereunder.”see in full comparison
“Further, even if we obtain additional financing as a result of these discussions or otherwise, there can be no assurance that our plan to improve our financial position will be successful or that we will be able to obtain additional capital in the future on commercially reasonable terms or at all or otherwise comply with the covenants contained in the Credit Agreement. As a result, our liquidity and ability to timely pay our obligations when due would be adversely affected. …”see in full comparison
“Our Consolidated Financial Statements have been prepared assuming that we will continue to operate as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Since December 2022, we have entered into a number of amendments and waivers to our Debt Facilities to, among other things, provide relief or waiver under certain financial and other covenants and to waive certain events of default thereunder.”see in full comparison
“Our customers, suppliers, vendors, employees and other third parties with whom we do business may react negatively to the substantial doubt about our ability to continue as a going concern. …”see in full comparison
“In the past, we have identified conditions and events that raised substantial doubt about our ability to continue as a going concern and it is possible that we may identify conditions and events in the future that raise substantial doubt about our ability to continue as a going concern.”see in full comparison
“We are in need of additional financing to continue as a going concern, and current ongoing discussions with our lenders and other parties to secure additional financing may result in additional indebtedness and dilution to our existing shareholders.”see in full comparison
Full comparison: every changed paragraph (53)
The risks discussed below are not the only ones facing our business but do represent those risks that we believe are material to us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also harm our business. Please read the cautionary notice regarding forward-looking statements under the heading "Cautionary Statement Concerning Forward-Looking Information.Information" in Part I of this Annual Report.
Our financial condition raises substantial doubt as to our ability to continue as a going concern, and since December 2022, we have entered into a number of amendments and waivers to our Debt Facilities to, among other things, provide relief or waiver under certain financial and other covenants and to waive certain events of default thereunder.
Our Consolidated Financial Statements have been prepared assuming that we will continue to operate as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Since December 2022, we have entered into a number of amendments and waivers to our Debt Facilities to, among other things, provide relief or waiver under certain financial and other covenants and to waive certain events of default thereunder.
Although we currently have approximately $5.0 million available to borrow under our Credit Agreement, we expect that we will require additional financing to fund working capital to continue as a going concern. Accordingly, there is substantial doubt about our ability to continue as a going concern. We have taken, or plan to take, certain actions to address our liquidity needs. Based on our ability to raise funds through such actions, we have concluded that it is probable we will have sufficient capital to meet our operating, debt service and capital requirements for the next twelve months. Failure to effectively execute our plans, as well as delays or disruptions in these plans due to circumstances outside of our control, could have an adverse effect on our financial position, results of operations and/or ability to continue as a going concern. If we become unable to continue as a going concern, we may have to liquidate our assets and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our Consolidated Financial Statements.
We are in need of additional financing to continue as a going concern, and current ongoing discussions with our lenders and other parties to secure additional financing may result in additional indebtedness and dilution to our existing shareholders.
We have experienced losses from operations in each of the past three years, have had negative operating cash flows during the years ended December 31, 2024 and 2023 and are dependent on our ability to raise capital in the timeframe required in our Credit Agreement to refinance prior to its maturity and in order to avoid an event of default under the Credit Agreement. Since April 2024, we have entered into a number of amendments and waivers to the Credit Agreement to, among other things, provide relief or waiver under certain financial and other covenants and to waive certain events of default thereunder. Since the first quarter of 2025, we have been nearly fully drawn on our Credit Facility, minimal additional amounts were available for borrowings or letters of credit, and we were in compliance with the terms of the Credit Agreement subject to the amendments received that extend through November 28, 2025 or further as the senior notes are refinanced, as described in Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
We are actively in discussion with our current lenders, prospective new junior lenders, several holders of the senior notes and certain parties to further divest non-core assets to secure additional financing, refinancing and funding to continue as a going concern. These discussions have not yet resulted, and may never result, in a binding commitment by our lenders and other parties. There can be no assurance that our lenders or any other party will commit to provide additional financing consistent with these discussions or at all. If we are able to obtain additional financing, it may be on terms substantially different from our current discussions described above, and may require additional or different commitments by us with regard to other actions we will or will not take. If we fail to obtain necessary financing on acceptable terms or otherwise obtain short-term capital and continuing waivers with approval from our existing lenders, we may be unable to continue operation as a going concern.
Further, even if we obtain additional financing as a result of these discussions or otherwise, there can be no assurance that our plan to improve our financial position will be successful or that we will be able to obtain additional capital in the future on commercially reasonable terms or at all or otherwise comply with the covenants contained in the Credit Agreement. As a result, our liquidity and ability to timely pay our obligations when due would be adversely affected. Absent additional waivers from the lenders under our Credit Agreement, our lenders could declare all debt outstanding under the Credit Agreement as immediately due and payable. Furthermore, our creditors may resist renegotiation or lengthening of payment and other terms through legal action or otherwise. If we fail to obtain necessary financing on acceptable terms or otherwise obtain short-term capital with approval from our existing lenders or if we are not able to timely, successfully or efficiently implement the strategies that we are pursuing to improve our operating performance and financial position and comply with the covenants under the Credit Agreement, we may not have sufficient liquidity to sustain operations and to continue as a going concern and we could be required to reorganize our company in its entirety, including through bankruptcy proceedings.
We must refinance or repay our 8.125%6.50% Notes due 2026 and 6.50%Senior Notes due 2026 prior to their maturity.
As described in Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report, during 2021, we completed offeringsan offering of $151.2 million aggregate principal amount of our 8.125% Senior Notes due February 2026 and $151.4 million aggregate principal amount of our 6.50% Senior Notes due December 2026.2026, Inof additionwhich to the completed sales, we issued $35.0$84.8 million ofwas theoutstanding 8.125%at SeniorDecember Notes31, to B. Riley, a related party, in exchange for a deemed prepayment of our then-existing Last Out Term Loan Tranche A-3.2025. Depending on our future financial condition and results of operations, we may be unable to refinance our 6.50% Senior Notes Due 2026 on or prior to their maturity or at all.
In January 2024, we entered into a Credit Agreement, as described in Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report. The Credit Agreement, as amended, requires us to repay, defease, or otherwise satisfy in full or refinance the 6.50% Senior Notes Due 2026 by November 30, 2026, or extend the maturity date of the Notes Due 2026 to a date on or after July 18, 2028.
In January 2024, we entered into a Credit Agreement, as described in Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report. The maturity date of the Credit Agreement is January 18, 2027, provided that by November 28, 2025, the Notes Due 2026 have not been refinanced pursuant to a Permitted Refinancing, as defined in the Credit Agreement. The Second Amendment further amended the Credit Agreement by sunsetting the option to increase the amounts available to be borrowed based on inventory in the borrowing base under the Credit Agreement following the Specified Revolver Paydown, and extended the maturity date under the agreement from August 30, 2025 to October 31, 2025 in the event that the Indebtedness under any of the Company’s unsecured notes has not been refinanced pursuant to a permitted refinancing under the agreement. The October 31, 2025 maturity date was subsequently extended to November 28, 2025 in the Fourth Amendment to Credit Agreement, as described below in Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report. The maturity date of the Credit Agreement otherwise remains January 18, 2027.
There can be no assurance that our efforts to improve our financial position will be successful or that we will be able to obtain additional capital in the future on commercially reasonable terms or at all. If we are unable to repay, defease, satisfy or refinance our 6.50% Senior Notes Due 2026 on commercially reasonable terms or at all, it may materially and adversely affect our reputation, liquidity, business, financial condition or results of operations, we may breach our obligations under eitherthe ofCredit theAgreement or Senior Notes Due 2026 and it may be necessary for us to reorganize, including through bankruptcy proceedings.
Our customers, suppliers, vendors, employees and other third parties with whom we do business may react negatively to the substantial doubt about our ability to continue as a going concern.
Our customers, suppliers, vendors, employees and other third parties with whom we do business may react negatively to the substantial doubt about our ability to continue as a going concern. The inclusion of a "going concern" explanatory paragraph in the auditor's report covering our audited Consolidated Financial Statements contained in this annual report may only heighten these concerns about our financial viability and may discourage existing or new customers, suppliers, vendors and other third parties from entering into business relationships with us on terms that we find acceptable or at all, including by demanding the posting of additional standby letters of credit or surety bonds before engaging in business with us. We may also have difficulty in retaining and attracting employees as a result of these concerns. As a result, our management team may need to address these concerns with these various constituencies, which may divert their attention from other important business activities. These adverse reactions by each of these groups of constituencies may further impair our financial condition in a re-enforcing cycle. All of these risks could materially and adversely affect our ability to continue operating as a going concern and we could be required to reorganize our company in its entirety, including through bankruptcy proceedings.
Our evaluation of strategic alternatives for certain businesses and non-core assets may not result in a successful transaction.transactions.
We continue to evaluate strategic alternatives for our business lines and assets to improve our capital structure, such as the decision in the third quarter of 2023 to sell B&W Solar.structure. There can be no assurance that these ongoing strategic evaluations will result in the identification or consummation of any transaction. We may incur substantial expenses associated with identifying and evaluating potential strategic alternatives. The process of exploring strategic alternatives may be time consuming and disruptive to our business operations, and if we are unable to effectively manage the process, our business, financial condition and results of operations could be adversely affected. We cannot assure you that any potential transaction or other strategic alternative, if identified, evaluated and consummated, will prove to be beneficial to shareholders and that the process of identifying, evaluating and consummating any potential transaction or other strategic alternative will not adversely impact our business, financial condition or results of operations. Any potential transaction would be dependent upon a number of factors that may be beyond our control, including, among other factors, market conditions, industry trends, the interest of third parties in our business, the availability of financing to potential buyers on reasonable terms, and the consent of our lenders.
•demand for electricity and other end products of steam-generating facilitiesfacilities, including for emerging markets such as AI data centers;
In the past, we have identified conditions and events that raised substantial doubt about our ability to continue as a going concern and it is possible that we may identify conditions and events in the future that raise substantial doubt about our ability to continue as a going concern.
We have previously identified conditions and events that raised substantial doubt about our ability to continue as a going concern. Through strategic action, we have alleviated these issues, but we cannot guarantee that no such conditions or events will occur in the future. In that event, we may be required to seek additional financing to fund our business activities, which may not be available to us on reasonable terms or at all, and the reports from our independent registered public accounting firm may also contain statements expressing substantial doubt about our ability to continue as a going concern. Failure to effectively execute our plans, as well as delays or disruptions in these plans due to circumstances outside of our control, could have an adverse effect on our financial position, results of operations and/or ability to continue as a going concern. If we become unable to continue as a going concern, we may have to liquidate our assets and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our Consolidated Financial Statements.
Our Debt Facilities contain financial and other restrictive covenants. These covenants could limit our financial and operating flexibility as well as our ability to plan for and react to market conditions, meet our capital needs and support our strategic priorities and initiatives should we take on additional indebtedness for acquisition or other strategic objectives. Our failure to comply with these covenants also could result in events of default which, if not cured or waived, could require us to repay indebtedness before its due date, and we may not have the financial resources or otherwise be able to arrange alternative financing to do so. We have entered into a number of amendments and waivers to our Debt Facilities to, among other things, provide relief or waiver under certain financial and other covenants and to waive certain events of default thereunder. Absent additional waivers from the lenders under our Debt Facilities, our lenders could declare all debt outstanding under the Debt Facilities as immediately due and payable, and our creditors may resist renegotiation or lengthening of payment and other terms through legal action or otherwise. Our compliance with the covenants of our Debt Facilities may be adversely affected by severe market contractions or disruptions to the extent they reduce our earnings for a prolonged period, and we are not able to reduce our debt levels or cost structure accordingly. Any event that requires us to repay any of our debt before it is due could require us to borrow additional amounts at unfavorable borrowing terms, cause a significant reduction in our liquidity and impair our ability to pay amounts due on our indebtedness. Moreover, if we are required to repay any of our debt before it becomes due, we may be unable to borrow additional amounts or otherwise obtain the cash necessary to repay that debt, when due, which could have a material adverse effect on our business, financial condition and liquidity.
In line with industry practice, we are often required to post standby letters of credit and surety bonds to support contractual obligations to customers as well as other obligations. There arewere $41.3$59.6 million total outstanding letters of credit under domestic facilities as of December 31, 2024.2025. The aggregate value of all such letters of credit and bank guarantees outside of our Letter of Credit Agreement as of December 31, 2024,2025, was $3.1$6.5 million. The aggregate value of the outstanding letters of credit provided under the Letter of Credit Agreement backstopping letters of credit or bank guarantees was $0.8$7.2 million as of December 31, 2024.2025. Of the outstanding letters of credit issued under the Letter of Credit Agreement, $4.4$27.1 million are subject to foreign currency revaluation and $15.7$16.5 million backstop certain surety bonds. We have also posted surety bonds to support contractual obligations to customers relating to certain contracts. We, and certain of our subsidiaries, have jointly executed general agreements of indemnity in favor of surety underwriters relating to surety bonds those underwriters issue in support of some of our contracting activity. As of December 31, 2024,2025, bonds issued and outstanding under these arrangements in support of contracts totaled approximately $177.8$253.4 million. The aggregate value of the letters of credit backstopping surety bonds was $15.7$16.5 million. These letters of credit and bonds generally indemnify customers should we fail to perform our obligations under the applicable contracts. If a letter of credit or bond is required for a particular contract and we are unable to obtain it due to insufficient liquidity or other reasons, we will not be able to pursue that contract, or we could default on contracts that have been awarded or are underway. We utilize bonding facilities, but, as is typically the case, the issuance of bonds under each of those facilities is at the surety’ssurety's sole discretion. Moreover, due to events that affect the insurance and bonding and credit markets generally, bonding and letters of credit may be more difficult to obtain in the future or may only be available at significant additional cost. Our inability to obtain or maintain adequate letters of credit and bonding and, as a result, to bid on new work could have a material adverse effect on our business, financial condition and results of operations.
Several proposals have been adopted or are currently pending before federal, state, and foreign legislative and regulatory bodies that could significantly affect our business. The General Data Protection Regulation, or GDPR, in the European Union, which went into effect on May 25, 2018, placed new data protection obligations and restrictions on organizations, including restrictions on the cross-border transfer of information. Similar obligations and restrictions exist under United Kingdom data protection law, including the UK GDPR and the UK Data Protection Act. If we are not compliant with GDPR or UK GDPR requirements, we may be subject to significant fines and our business may be seriously harmed. We are certified under and currently rely upon the EU-U.S. Data Privacy Framework ("EU-U.S. DPF") and/or the UK Extension of the EU-U.S. DPF, as well as certain approved forms of data protection agreements, called Standard Contractual Clauses, for data transfers from EU and UK to the US.DPF. These transfer mechanisms may be subject to challenge or invalidation, which may restrict the transfer of personal data which could impact our operations and increase our costs.
In addition, the California Consumer Privacy Act and the California Privacy Rights Act placed additional requirements on the handling of personal data, including employee data. Similar laws have passed in Virginia, Connecticut, Utah, Colorado, Indiana, Montana and Oregon and have been enacted or proposed in other states and at the federal level, reflecting a trend toward more stringent privacy legislation in the United States.
•the construction and manufacture of renewable, environmental and thermalour products;
As a result of Russia's invasion of Ukraine, the United States, the United Kingdom and the European Union governments, among others, have developed coordinated sanctions and export control measure packages.
Based on the public statements to date, these packages may include:
•comprehensive financial sanctions against Russian banks (including SWIFT cut off);
•additional designations of Russian individuals with significant business interests and government connections;
•designations of individuals and entities involved in Russian military activities;
•enhanced export controls and trade sanctions targeting Russia's import of certain goods; and
•closure of airspace to Russian aircraft.
Moreover, asAs the Russia-Ukraine conflict continues, there can be no certainty regarding whether such governments or other governments will impose additional sanctions, export controls or other economic or military measures against Russia.
•changes in our liquidity position;
•our compliance with our obligations under our debt facility;
•future sales of our common stock by our shareholdersshareholders, including B. Riley;
•future issuancespurchases of our common stock by us;
•future issuances of our common stock by us, including through our at-the-market sales programs;
•payment of dividends on our Preferred Stock;
Sales or issuances of shares of our common stock may adversely affect the market price of our common stock.
Future sales or issuances of common stock or other equity related securities may adversely affect the market price of our common stock, including any shares of our common stock issued to finance capital expenditures, finance acquisitions or repay debt. In April 2024, we entered into a Sales Agreement, establishing an at-the-market program, which permits us to issue and sell shares of our common stock having an aggregate offering price of up to $50.0 million. As of December 31, 2025, an aggregate of 20.0 million shares of common stock have been sold pursuant to the Sales Agreement, for net proceeds of $40.4 million. In November 2025, we entered into the 2025 Sales Agreement, another at-the-market program, which permits us to issue and sell shares of our common stock having an aggregate offering price of up to $200.0 million. As of December 31, 2025, 18.7 million shares have been sold pursuant to the 2025 Sales Agreement for net proceeds of $95.7 million.
On November 4, 2025, in connection with the entry into a limited notice to proceed ("LNTP") with Applied Digital, we issued to Applied Digital, in a private placement, (i) 0.5 million shares of common stock, par value $0.01 per share for a purchase price of $2 million, (ii) a warrant exercisable to purchase 2.6 million shares of our common stock at an exercise price of $4.11, subject to registration rights and (iii) an additional warrant to purchase up to 7.86 million shares of our common stock.
Additionally, we are party to a Registration Rights Agreement with B. Riley, pursuant to which we filed a resale shelf registration statement permitting the resale of approximately 25.6 million shares of our common stock. We may also be required to register for resale any additional shares of our common stock that B. Riley may acquire in the future. We have refreshed our at-the-market offerings in the past and expect to refresh our at-the-market programs periodically, which could lead to additional dilution for our stockholders in the future.
Substantial sales, or the perception of sales, of our common stock by us or certain of our existing shareholders could cause our stock price to decline and future issuances may dilute our common shareholders' ownership.
Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. As of December 31, 2024, we had an aggregate of approximately 95.1 million shares of common stock outstanding, approximately 28.8 million shares of which were held by B. Riley. We entered into the Registration Rights Agreement with B. Riley and other shareholders on April 30, 2019, pursuant to which B. Riley has customary demand and piggyback registration rights for all shares of our common stock they beneficially own. We filed a resale shelf registration statement on behalf of the shareholders party to the Registration Rights Agreement permitting the resale of approximately 25.6 million shares of our common stock that were issued to B. Riley and the other shareholders party thereto. We may also be required to register for resale any additional shares of our common stock that B. Riley may acquire in the future.
Any sales of substantial amounts of our common stock, or the perception that these sales might occur, could lower the market price of our common stock and limit our ability to raise capital through the issuance of equity securities. Any sales, or perception of sales, by our existing shareholders could also impact the perception of shareholder support for us, which could in turn negatively affect our customer and supplier relationships. Further, if we were to issue additional equity securities (or securities convertible into or exchangeable or exercisable for equity securities) to raise additional capital, including in connection with any financing, or if our oustanding warrants are converted to common stock, our shareholders' ownership interests in us will be diluted and the value of our common stock may be reduced.
We may issue additional preferred stock that could dilute the voting power or reduce the value of our common stock.
Our certificate of incorporation authorizes us to issue, without the approval of our shareholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends and distributions, as our board of directors generally may determine. In 2021, we issued 7.7 million shares of our 7.75% Series A Cumulative Perpetual Preferred Stock. The terms of one or more additional classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. For example, we could grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of the common stock.
We are subject to income taxes in the United States and numerous foreign jurisdictions. A change in tax laws, treaties or regulations, or in their interpretation, in any country in which we operate could result in a higher tax rate on our earnings, which could have a material impact on our earnings and cash flows from operations. Generally, future changes in applicable U.S. or foreign tax laws and regulations, including the Organisation for Economic Co-operation and Development's ("OECD") Global Minimum Tax ("Pillar 2") initiative, or their interpretation and application could have an adverse effect on our business, financial conditions and results of operations.
Our business could be harmed if we fail to maintain effective internal control over financial reporting, and we have identified certain material weaknesses as of December 31, 2024.2024 and December 31, 2025.
As discussed in Part II, Item 9A. of this Annual Report, we identified certain material weaknesses as of December 31, 20242025 in fivethree components of internal control based on criteria established in the 2013 Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Due to the existence of these material weaknesses, we concluded that our internal control over financial reporting was not effective as of December 31, 2024.2025. While we do not believe that these material weaknesses have impacted the accuracy or reporting of our consolidated financial results, until these material weaknesses are remediated, or should new material weaknesses arise or be discovered in the future, there is a reasonable possibility that a material misstatement of our interim or annual financial statements will not be prevented or detected on a timely basis. In addition, we may experience delays in satisfying our reporting obligations to comply with SEC rules and regulations, which could result in investigations and sanctions by regulatory authorities. Any of these could adversely affect our business and the value of our commonlisted stock,securities, and we may be unable to maintain compliance with NYSE listing standards.
As of December 31, 2024,2025, our defined benefit pension and postretirement benefit plans were underfunded by approximately $184.6$174.3 million. In addition, certain of these postretirement benefit plans were collectively bargained, and our ability to curtail or change the benefits provided may be impacted by contractual provisions set forth in the relevant union agreements and other plan documents. We also participate in various multi-employer pension plans in the United States and Canada under union and industry agreements that generally provide defined benefits to employees covered by collective bargaining agreements. Absent an applicable exemption, a contributor to a United States multi-employer plan is liable, upon termination or withdrawal from a plan, for its proportionate share of the plan's underfunded vested liability. Funding requirements for benefit obligations of these multi-employer pension plans are subject to certain regulatory requirements, and we may be required to make cash contributions which may be material to one or more of these plans to satisfy certain underfunded benefit obligations. See Note 14 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for additional information regarding our pension and postretirement benefit plan obligations.
Management's Discussion & Analysis (MD&A)
New heading “In the fourth quarter of 2025, we reassessed our segment structure as a result of the completion of our strategic shift to streamline and simplify our business. This transformation included the divestiture of certain non-core assets, as described in Note 4 to the Consolidated Financial Statements. As a result of this assessment, we have determined we have one reportable segment, labeled as B&W. The revised segment presentation has been applied retrospectively to all periods presented. For further information regarding our segment reporting, see Note 6 to the Consolidated Financial Statements.”
New heading “2025 vs 2024 Consolidated Results”
New heading “Financial advisory services”
Removed heading “Components of Our Results of Operations”
Removed heading “Operating income (loss)”
Removed heading “2023 vs 2022 Consolidated Results”
Removed heading “Impairment of goodwill and long-lived assets”
Removed heading “(Gain) loss on asset sales, net”
Removed heading “Advisory fees for settlement costs and liquidity planning”
Removed heading “Acquisition pursuit and related costs”
Removed heading “Product development”
Removed heading “Letter of credit fees”
Removed heading “B&W Renewable Segment Results”
Removed heading “2024 vs 2023 results”
Removed heading “2023 vs 2022 results”
Removed heading “B&W Environmental Segment Results”
Removed heading “2024 vs 2023 results”
Removed heading “2023 vs 2022 results”
Removed heading “B&W Thermal Segment Results”
Removed heading “2024 vs 2023 results”
Removed heading “2023 vs 2022 results”
Removed heading “Business Combinations”
Largest changes
“Adjusted EBITDA on a consolidated basis is defined as the sum of the Adjusted EBITDA for each of the segments, further adjusted for corporate allocations and research and development costs. At a segment level, the Adjusted EBITDA presented in this report is consistent with the manner in which our CODM primarily reviews the results of operations and makes strategic decisions about the business. Our CODM is the chief executive officer and on a quarterly basis reviews actuals to budgets and forecasts when making decisions. …”see in full comparison
“Impairment of goodwill and long-lived assets”see in full comparison
“Adjusted EBITDA is calculated as earnings before interest, tax, depreciation and amortization, and adjusted for items such as gains or losses arising from the sale of non-income producing assets, net pension benefits, stock compensation, restructuring activities, impairments, gains and losses on debt extinguishment, legal and settlement costs and costs related to financial consulting. …”see in full comparison
“Management believes it is taking all prudent actions to address its liquidity concerns, however, these plans have not been finalized, and are subject to market conditions that are not within the Company's control, therefore we have determined that there is substantial doubt about our ability to continue as a going concern for the twelve months following the issuance of these financial statements.”see in full comparison
“The annual quantitative assessment was performed using a combination of the income approach (discounted cash flows), the market approach and the guideline transaction method. The income approach uses the reporting unit's estimated future cash flows, discounted at the weighted-average cost of capital of a hypothetical third-party buyer to account for uncertainties within the projections. The income approach uses assumptions based on the reporting unit's estimated revenue growth, operating margin and working capital turnover. …”see in full comparison
Cash flows used in operating activities was $118.7 million in the year ended December 31, 2024, which is primarily attributable to the current year net loss, including discontinued operations, ofsee in full comparison$59.8$59.9 million,gainandonnon-cash adjustments arising from the BWRS saleof businessesof $58.9 million,and uses from operations,partially offset by$79.1themillion in non-cash expense arising from adjustmentsmark to market, prior servicepensions,cost amortization for pension and postretirement plans of $34.9 million and depreciation andamortization, impairment on long-lived assets,amortization ofdeferredlong-livedfinancingassetscostsofand$16.7debt discount, operating lease expenses and stock-based compensation expenses.million. Cash flows used in operating activitieswasalso$42.3included movements in certain operating assets and liabilities such as utilization of contracts in progress of $41.6 millioninand accounts receivable -trade, net of $12.2 million, which are primarily impacted by timing differences related to progress made on ongoing projects, billings, and collections, accrued and other current liabilities of $28.5 million resulting from theyeartimingendedofDecember 31, 2023, which is primarily attributablepayments tothevendors,currentandyearpensionnetliabilities,loss,accruedincludingpostretirementdiscontinuedbenefitsoperations,and employee benefits of$197.0$16.8million, partially offset by $137.7 million in non-cash expense arising from goodwill impairment, adjustments to prior service pensions, depreciation and amortization, amortization of deferred financing costs and debt discount, operating lease expenses and stock-based compensation expenses.million.
Full comparison: every changed paragraph (155)
The following discussion includes a comparison of Results of Operations and Liquidity and Capital Resources for the years ended December 31, 20242025 and 2023.2024. We have also included a comparison of the Results of Operations for the years ended December 31, 2023 and 2022 for all of our segment discussions below. Unless otherwise noted, discussion of our business and results of operations in this Annual Report on Form 10-K refers to our continuing operations. For additional comparison of the years ended December 31, 2023 and 2022, see Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as filed on March 15, 2024 and amended on March 26, 2024.2023. Our consolidated financial statements are prepared in conformity with GAAP. Our discussion of financial results include non-GAAP measures (e.g., foreign currency impact, EBITDA, Adjusted EBITDA) to provide additional information concerning our financial results that we believe is useful to the readers of our financial statements in the assessment of our performance and operating trends. Unless otherwise noted, discussion of our business and results of operations in this Annual Report on Form 10-K refers to our continuing operations.
In the fourth quarter of 2025, we reassessed our segment structure as a result of the completion of our strategic shift to streamline and simplify our business. This transformation included the divestiture of certain non-core assets, as described in Note 4 to the Consolidated Financial Statements. As a result of this assessment, we have determined we have one reportable segment, labeled as B&W. The revised segment presentation has been applied retrospectively to all periods presented. For further information regarding our segment reporting, see Note 6 to the Consolidated Financial Statements.
We are a globally focused renewable, environmental and thermalenergy technologies provider with overnearly 155160 years of experience providing diversified energy and emissions control solutions to a broad range of industrial, electrical utility, municipal and other customers. Our innovative products and services are organized intoin three market-facingone reporting segments.segment. For a description of our reportable segmentssegment see Item 1, Business of this Form 10-K.
Customer demand is heavily affected by the variations in our customers' business cycles, power demand in their operating territories, and by the overall economies andeconomies, energy, environmental and noiseregulatory abatement needsrequirements of the countries in which they operate.
We have manufacturing facilities in Canada, Mexico, the United StatesMexico and the United Kingdom.States. Many aspects of our operations and properties could be affected by political developments, environmental regulations and operating risks. These and other factors may have a material impact on our international and domestic operations or our business as a whole.
Through our restructuring efforts, we continue to make significant progress to make our cost structure more variable and to reduce costs. We expect our cost saving measures to continue to translate to bottom-line results, with top-line growth driven by opportunities for our core technologies and support services across the B&W Renewable, B&W Environmental and B&W Thermal segments globally.
Through our restructuring efforts, we have made and will continue working to make significant progress reducing costs and improving profitability. We continue to explore other cost saving initiatives and in conjunction with top-line growth driven by opportunities for our core technologies, we will continue to improve cash generation and evaluate additional non-core business and asset sales to continue to strengthen our liquidity. These initiatives have been and may continue to be important factors that could cause our actual results to differ materially from those indicated in these financial statements. If one or more events related to these or other risks or uncertainty materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate.
In addition, we continue to evaluate further dispositions, opportunities for additional cost savings and opportunities for subcontractor recoveries and other claims where appropriate and available. If the value of our business was to decline, or if we were to determine that we were unable to recognize an amount in connection with any proposed disposition in excess of the carrying value of any disposed asset, we may be required to recognize impairments for one or more of our assets that may adversely impact our business, financial condition and results of operations.
On October 31, 2025, we completed a sale of the net assets comprising our ASH business for $29 million, subject to customary fees and adjustments and recorded a gain of $21.5 million on the sale. For more information on this sale, see Note 4 to the Consolidated Financial Statements.
The revenue and operating results presented for ASH for the year ended December 31, 2025 represent the financial results for January through October 2025 operations. While there is a slight decline in revenue for 2025 compared to prior years, operating margins are consistent at approximately 28%.
On July 31, 2025, we closed the sale of our Diamond Power business for a base purchase price of $177 million, subject to certain offsets and adjustments. We recorded a gain of $53.2 million on the sale. For more information on this sale, see Note 4 to the Consolidated Financial Statements.
The revenue and operating results presented for Diamond Power for the year ended December 31, 2025 represent the financial results for January through July 2025 operations. Revenue and operating margins are lower in 2025 compared to 2024 and 2023 due to the sale closing in July 2025 and related transaction costs incurred.
On April 29, 2025, we sold our Vølund business for a base purchase price equal to $15.0 million plus $0.1 million (400,000 Danish krone). We recorded a net loss of $36.8 million, which included a write off of CTA of $52.6 million. For more information, see Note 4 to the Consolidated Financial Statements.
The revenue and operating results for the year ended December 31, 2025 primarily represent the financial results for January through April 2025 operations as well as the net loss on the sale primarily from the write off of CTA. The decrease in revenue and operating margin is a result of the slowdown in sales and engagement of projects toward the end of 2024 and into 2025 as the Company engaged in the sale of the business.
During the fourth quarter of 2024, we committed to a plan to sell our Vølund business resulting in a significant change that would impact our business. As of December 31, 2024, we met all of the criteria for the assets and liabilities of this business, formerly part of our B&W Renewable segment, to be accounted for as held for sale.
For 2024, annual revenue decreased to $34.5 million from $81.4 million in 2023 primarily as a result of several larger projects that had higher volume of work in 2023 than in 2024. The annual Operating loss for 2024 was $18.5 million, which is slightly higher than the Operating loss of $16.4 million for 2023 as a result of the aforementioned reduction of revenue due to the lack of larger projects to replace the larger volume of work in 2023. For 2023, annual revenue decreased from $98.5 million in 2022 as the aforementioned larger projects that were in process and had larger volume of work in 2022 than in 2023. This decrease in revenue is also the primary cause for the decrease in Operating Loss from $4.2 million in 2022 as well as increased expenses in the O&M contracts that have since been exited.
During the third quarter of 2023, we committed to a plan to sell our B&W Solar businessbusiness, resulting in a significant change that would impact our operations. As of September 30, 2023, we met all of the criteria for the assets and liabilities of this business, formerly part of our B&W Renewable segment,business to be accounted for as held for sale. In addition, we also determined that the operations of the B&W Solar business qualified as a discontinued operation, primarily based upon its significance to our current and historic operating losses. The decision to sell the B&W Solar business, along with the significant increase in estimated costs to complete the B&W Solar loss contracts, resulted in a triggering event that required us to immediately perform certain valuations. Certain trade accounts receivable and contract assets were determined to be uncollectible, resulting in charges of $17.6 million. During 2023, we recognized an impairment of $56.6 million, or the entire balance of goodwill associated with B&W Solar. These charges have been included in Loss from discontinued operations, net of tax in the Consolidated Statements of Operations. The impairmentdecrease chargesin revenue and additionaloperating contractmargin lossesis duringa result of the yearfocus endedon Decemberthe 31,sale 2023of totaledthe $56.6business millionin 2024 and $44.1 million, respectively.2025.
During the fourth quarter of 2025, we discontinued marketing B&W Solar for sale due to lack of potential buyers and terminated our broker arrangement with a third party provider. As of December 31, 2025, B&W Solar was disposed of through abandonment, as we ceased all business operations and either transferred or wrote off its remaining assets. As a result, the B&W Solar business no longer meets the criteria of held for sale as of December 31, 2025, but continues to meet the criteria for discontinued operations for all periods presented.
Certain circumstances beyond our control have extended the period required to complete the sale within one year. Specifically, market conditions driven by uncertainties with potential administration changes and related impacts to the solar industry. We initiated actions necessary to respond to the change in circumstances by engaging an advisory service provider with more specialized industry qualifications. We continue to meet the criteria to account for the B&W Solar business as held for sale and discontinued operations as of December 31, 2024 For 2024, annual revenue increased to $68.4 million from $34.7 million in 2023 as a result of three large projects being executed in Pennsylvania. Operating loss for 2024 improved to $20.8 million from $117.9 million in 2023 as a result of 2023 including asset impairments as a result of being classified as available for sale and several loss-making contracts occurring in 2023 as well as 2024 including a $6.8 million gain due to an insurance claim settlement. Revenue for 2023 decreased from $41.9 million in 2022 as a result of lower volume in regard to projects in New York. Operating Loss for 2023 increased from the Operating loss in 2022 of $6.5 million as a result of the impairments and loss-making contracts occurring in 2023 as well as 2022 including a $9.6 million gain due on the change in fair value of the contingent consideration from the acquisition.
In addition to the ASH, Diamond Power, Vølund and B&W Solar and Vølund businesses, discontinued operations include the following subsidiaries divested in 2024: BWRS, SPIG, and GMAB. These sale transactions were part of a previously announced strategy to divest certain non-core businesses to reduce our debt, improve our balance sheet and increase liquidity. Results of operations and cash flows for these businesses and the financial position of the divested subsidiaries are reported as discontinued operations for all periods presented and the notes to the financial statements have been adjusted on a retrospective basis. For more information, see Note 4 to the Consolidated Financial Statements.
BWRS
On June 28, 2024, we, through our B&W PGG Luxembourg Finance Sárl subsidiary, entered into an agreement to sell the entire issued and outstanding share capital of our Denmark-based renewable parts and services subsidiary, BWRS, to Hitachi Zosen Inova AG ("Buyer"). The sale of BWRS to the Buyer was completed the same day. We received net cash proceeds of $83.5 million and recorded a gain on the sale of the business of $44.9 million. The proceeds were used to reduce outstanding debt and support working capital needs.
SPIG and GMAB
On October 8, 2024, we, through our B&W PGG Luxembourg Finance Sárl subsidiary and Babcock & Wilcox A/S subsidiary, entered into an agreement to sell the entire issued and outstanding share capital of our Italy-based SPIG and Sweden-based GMAB subsidiaries, to Auctus Neptune Holding S.p.A, which closed on October 30, 2024. We received net cash proceeds of $33.7 million and recorded an impairment of $5.8 million. The proceeds were used to support working capital needs and reduce outstanding debt. We recorded a gain of $14.1 million on this divestiture.
RESULTS OF OPERATIONS–YEARS ENDED DECEMBER 31, 2025, 2024 AND 2023
Components of Our Results of Operations
Revenue
Our revenue is the total amount of income generated by our business and consists primarily of income from our renewable, environmental and thermal technology solutions and services we provide to a broad range of industrial, electric utility and other customers. Revenue from our operations is assessed based on our three market-facing segments. B&W Renewable, B&W Environmental and B&W Thermal.
Operating income (loss)
Operating income (loss) consists primarily of our revenue minus costs and expenses, including cost of operations, SG&A and advisory fees and settlement costs.
Net loss consists primarily of operating income minus other income and expenses, including interest expense, foreign exchange, expense related to our benefit plans, and provision for income taxes.
The following discussion is of our consolidated results of operations below.
2025 vs 2024 Consolidated Results
Revenues increased by $6.6 million to $587.7 million in 2025 compared to $581.0 million 2024. The increase is driven by larger parts volume of $35.2 million and two natural gas conversion projects of $25.7 million offset partially by lower volume related to ESP projects of $20.0 million, construction projects of $18.7 million and package boilers of $10.7 million.
Costs of operations decreased by $10.5 million to $443.8 million in 2025 compared to $454.3 million in 2024. The decrease is primarily driven by a shift in business mix, as higher‑margin parts sales increased, revenue from larger projects declined and the remaining large projects required lower costs to complete.
SG&A expenses decreased by $5.1 million to $119.5 million in 2025 compared to $124.5 million in 2024. The decrease is primarily related to cost savings, partially offset by increased expenses in employee benefits in the current year.
Research and development costs decreased by $3.7 million to $1.5 million in 2025 compared to $5.1 million in 2024. The decrease is primarily driven by less development activity due to the increased commercialization of our BrightLoop™ technology.
Impairment of long-lived assets decreased by $2.8 million to $1.0 million in 2025 compared to $3.7 million 2024. The decrease is driven by the construction in process facility that was impaired in 2024, partially offset by impairment recognized in the current year relating to a reduction in our real estate footprint.
Loss (gain) on asset disposals increased in 2025 compared to 2024 relating to the write-off of equipment in one of our manufacturing locations which was disposed of in 2025 compared to 2024 which had minor disposals.
Operating income increased by $27.1 million to $20.7 million in 2025 compared to an operating loss of $6.3 million in 2024, primarily due to the revenue as described above and an increase in gross profit due to the improvement in cost of operations in product mix.
Loss from continuing operations decreased by $71.4 million to $32.8 million in 2025 compared to $104.3 million in 2024, primarily due to the revenue as described above and an increase in gross profit due to the improvement in cost of operations in product mix, reduction in benefit plan expense for the year due to better asset performance in 2025 than anticipated and reduced interest expense due to the debt repayments and refinancing during the year.
The following discussion of our consolidated and business segment results of operations includes a discussion of Adjusted EBITDA, which is a non-GAAP financial measure. Adjusted EBITDA differs from net (loss) income, the most directly comparable measure calculated in accordance with GAAP. Management believes that this financial measure is useful to investors because it excludes certain expenses, allowing investors to more easily compare our operating performance period to period. A reconciliation of net (loss) income to Adjusted EBITDA is included in "Non-GAAP Financial Measures" below.
Revenues decreased by $10.0 million to $717.3 million in 2024 as compared to $727.3 million in 2023, driven by a decline in our B&W Renewable segment related to lower pulp and paper projects and lower volume on a European renewable job in 2024.
Operating income increased $8.5 million from $16.6 million in 2023 to $25.1 million in 2024, primarily due to higher volume related to a natural gas conversion project, environmental projects as well as lower expenses, partially offset by a decrease of $11.7 million due to a large project in our U.S. construction business that was completed in 2023 and not fully replaced in 2024 in our B&W Thermal segment.
Net loss from continuing operations decreased by $2.8 million to $73.0 million in 2024 from $75.8 million in 2023, driven by increased operating income (as discussed in the paragraph above) and offset by a loss on debt extinguishment of $7.3 million attributable to terminating the Revolving and Letter of Credit Agreements with PNC and MSD.
2023 vs 2022 Consolidated Results
Revenues increaseddecreased by $117.9$6.4 million to $727.3$581.0 million in 2023 as2024 compared to $609.4$587.4 million in 2022,2023. The decrease is primarily attributabledriven toby increaseda revenue of $79.4$27.1 million decrease in ourthe globalU.S. parts and servicesconstruction business acrossas alla segmentsresult and $55.0 million due toof a large new construction project finishing in 2023,2023 that was not fully replicated in 2024, offset partially offset by a slightlarge declinenatural gas project of $16.7 million starting execution in service projects.2024.
Costs of operations decreased by $11.7 million to $454.3 million in 2024 compared to $466.0 million in 2023. The decrease is driven primarily by lower revenue as described above, as well as a shift in business mix and cost reductions.
OperatingSG&A incomeexpenses increaseddecreased $17.8by $10.4 million fromto $(1.2)$124.5 million in 20222024 compared to $16.6$134.9 million in 2023,2023. The decrease is primarily duedriven by continued efforts to increasedreduce gross margin from higher revenues.overhead.
Research and development costs decreased by $1.3 million to $5.1 million in 2024 compared to $6.5 million in 2023. The decrease is primarily driven by by less development activity due to the increased commercialization of our BrightLoop™ technology.
Impairment of long-lived assets increased by $3.7 million to $3.7 million in 2024. The increase relates to a construction in process facility that was impaired.
(Gain) loss on asset disposals, net decreased in 2024 compared to 2023 relating to minor disposals in 2024.
Operating loss decreased by $13.7 million to $6.3 million in 2024 compared to $20.1 million in 2023, primarily due to higher volume related to a natural gas conversion project, environmental projects as well as lower expenses, partially offset by a decrease of $11.7 million due to a large project in our U.S. construction business that was completed in 2023 and not fully replaced in 2024.
Loss from continuing operations decreased by $4.9 million to $104.3 million in 2024 compared to $109.2 million in 2023, driven by decreased operating loss (as discussed in the paragraph above) and partially offset by a loss on debt extinguishment of $7.3 million attributable to terminating the Revolving and Letter of Credit Agreements with PNC and MSD.
Interest expense in the Consolidated Financial Statements consisted of the following components:
The decrease in interest expense in 2025 compared to 2024 is driven by decreased borrowings on our revolving credit facility, the full redemption of our 8.125% Senior Notes, and efforts to reduce the outstanding balance on our 6.50% Senior Notes. Also contributing to the decrease is the realization of a portion of the deferred gain from our senior note exchange transaction. For further information refer to Note 15 to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.
The increase in interest expense in 2024 compared to 2023 is driven by increased borrowings on our revolving credit facility.
Our effective tax rate reflects a valuation allowance against deferred tax assets in jurisdictions other than Mexico, Canada, Brazil, Thailand, the Philippines, Indonesia, and the United Kingdom.
The change in our income tax rate in 2025 compared to 2024 is primarily attributable to non-deductible items related to the dissolution and divestiture of certain entities, an increase in our valuation allowance and the difference between statutory and foreign jurisdictions. The change in our income tax rate in 2024 compared to 2023 is primarily attributable to an increase in valuation allowances, a change in the Company's permanent investment assertion and an unfavorable resolution of a foreign income tax matter.
Net loss from continuing operations increased by $61.6 million to $75.8 million in 2023 from $14.2 million in 2022, primarily attributable to a $75.0 million swing in benefit plans cost from a $37.5 million benefit in 2022 to a $37.5 million expense in 2023, offset slightly by the increased operating income described above.
What changed in the latest 10-Q
Risk Factors
We are subject to various risks and uncertainties in the course of our business. The discussion of such risks and uncertainties may be found under "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.
No wording changes found in this section.
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Management's Discussion & Analysis (MD&A)
New heading “Six Months Ended June 30, 2026 and 2025”
Largest changes
“Costs of operations increased by $225.8 million to $444.0 million in the six months ended June 30, 2026 compared to $218.2 million in the six months ended June 30, 2025. The increase is primarily driven by the mix of the business as large project volume increased, resulting in higher costs needed to complete certain projects. In addition, construction costs have increased due to a nationwide shortage of skilled labor, which has caused lower than expected productivity on certain job sites.”see in full comparison
“An increase in power demand has caused a nationwide boilermaker as well as other trade shortfall in skilled labor. These labor constraints have increased construction costs and affected productivity on certain projects. To the extent these conditions persist, they may adversely impact future project execution and operating results.”see in full comparison
Costs of operations increased bysee in full comparison$50.1$175.7 million to$171.0$273.1 million in the three months endedMarchJune31,30, 2026 compared to$120.8$97.4 million in the three months endedMarchJune31,30, 2025. The increase is primarily driven by theincreasedhigher revenue as described above as well as the product mix of higherlarge-projectlarge project volume which carries higher costs needed to complete certain projects. In addition, construction costs have increased due to a nationwide shortage of skilled labor, which has caused lower than expected productivity on certain job sites.
Cash flows used in operating activities wassee in full comparison$8.5$33.8 millionforin thethreesix months endedMarchJune31,30, 2025, whichiswas primarilyattributedattributable to thecurrentyear-to-date net loss of$22.0$80.5 million, partially offset by non-cashadjustmentsexpenses arising from the loss on sale of business of $35.8 million and impairment of long-lived assets of$8.8 million, depreciation and amortization of long-lived assets of $2.5 million, deferred financing fees of $1.5 million and operating lease expenses of $1.7$9.9 million. Cash flows used in operating activities also included movements in certain operating assets and liabilities such asaccountsdecreasesreceivablein- trade, netinventories of$14.3 million, advance billings on contracts of $7.5$7.9 million and pension liabilities, accrued postretirement benefits and employee benefits of$3.6$6.9million,millionwhichresultingare primarily impacted by collections, timing differences related to billings andfrom contributions made to the plan.TheseOffsetting these decreases werepartially offset by cash flowincreasesfrom accounts payable of $19.6 million andto contracts in progress of$11.0$9.8 millionwhichandareaccruedprimarilyandimpactedotherbycurrent liabilities of $8.1 million, due to the result of timing of payments tovendors and timing differences related to progress on ongoing projects.vendors.
Cash flows provided by operating activities wassee in full comparison$17.8$0.4 millionforin thethreesix months endedMarchJune31,30, 2026, which is primarily attributable toour currentnet loss of$76.9$62.7 millionbeingafteroffset byexcluding non-cashexpensesexpensearisingitemsfromsuchaas the change in fair value of customer warrants of$70.2 million, stock-based compensation of $13.2 million, depreciation and amortization of long-lived assets of $2.5$64.4 million andamortizationstock compensation expense ofcustomer warrants of $1.1$14.8 million. Cash flows provided by operating activities also included movements in certain operating assets and liabilities such as increases in accounts payable of$39.6 million and accrued and other current liabilities of $5.6$100.3 million,resultingpartiallyfromoffsetthebytimingincreasesof payments to vendors. Partially offsetting these inflows were outflows fromin accounts receivable–trade, net of$8.0$60.9million,million and contracts in progress of$18.0$17.8millionmillion,andasadvancedwell as a decrease in advance billings on contracts of$5.5$30.5millionmillion.whichAdvance billings on contracts and construction in progress are primarily impacted by timing differences related to progress made on ongoing projects, billings, and collections,increased operating costs as a result of increased revenue,and may fluctuate significantly period to period.
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The following discussion of our financial position and results of operations should be read in conjunction with the financial statements and the notes thereto included in the Condensed Consolidated Financial Statements in Item 1 of this Quarterly Report. The following discussion contains forward-looking statements that reflect our plans, estimatesestimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements as a result of many factors, including those described in more detail under "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the SEC. See also "Cautionary Statement Concerning Forward-Looking Information" herein. Unless otherwise noted, discussion of our business and results of operations refers to our continuing operations.
We are a globally focused energy technologies provider with nearly 160 years of experience providing diversified energy and emissions control solutions to a broad range of industrial, electrical utility, municipal and other customers. Our innovative products and services are organized in one reportingreportable segment.
An increase in power demand has caused a nationwide boilermaker as well as other trade shortfall in skilled labor. These labor constraints have increased construction costs and affected productivity on certain projects. To the extent these conditions persist, they may adversely impact future project execution and operating results.
For more information on our discontinued operations, see Notes 3 and 4 to the Condensed Consolidated Financial Statements.
In April 2025, we sold our Vølund business for a base purchase price equal to $15.0 million plus $0.1 million (400,000 Danish krone). We recorded a net loss of $36.8 million, which included a write off of CTA of $52.6 million. For more information, see Note 3 to the Condensed Consolidated Financial Statements.
In July 2025, we closed the sale of our Diamond Power business for a base purchase price of $177 million, subject to certain offsets and adjustments.adjustments, Weand recorded a gain of $53.2 million on the sale. DuringIn the threefirst monthsquarter ended March 31,of 2026, we recorded a gain of $3.5 million as part of the settlement of certain outstanding items in accordance with the agreement. For more information, see Note 3 to the Condensed Consolidated Financial Statements.
In October 2025, we completed a sale of the net assets comprising our ASH business for $29 million, subject to customary fees and adjustments, and recorded a gain of $21.5 million on the sale. For more information, see Note 3 to the Condensed Consolidated Financial Statements.
As of December 31, 2025, B&W Solar was disposed of through abandonment, as we ceased all business operations and either transferred or wrote off its remaining assets. For more information, see Note 3 to the Condensed Consolidated Financial Statements.
In June 2024, we, through our B&W PGG Luxembourg Finance Sárl subsidiary, sold all issued and outstanding share capital of our Denmark-based renewable parts and services subsidiary, BWRS, to Hitachi Zosen Inova AG. In the first quarter of 2026, we recorded a loss of $0.9 million as part of settlement negotiations with the buyer.
During the three months ended March 31, 2026, we recorded a loss of $0.9 million as part of settlement negotiations with the buyer. For more information, see Note 3 to the Condensed Consolidated Financial Statements.
The following discussion reflects the consolidated results of our operations as noted below:below.
Three monthsMonths endedEnded MarchJune 31,30, 2026 and 2025 Consolidated Results
Revenues increased by $65.8$180.9 million to $214.4$319.7 million in the three months ended MarchJune 31,30, 2026 compared to $148.6$138.9 million in the three months ended MarchJune 31,30, 2025. The increase is primarily driven by an increase in large project volume, including $31.0$100.7 million from Base Electron. This improvement is primarily due to the increasing need for electricity from fossil fuels driven by the demand from AI, data centers and expanding economies.
Costs of operations increased by $50.1$175.7 million to $171.0$273.1 million in the three months ended MarchJune 31,30, 2026 compared to $120.8$97.4 million in the three months ended MarchJune 31,30, 2025. The increase is primarily driven by the increasedhigher revenue as described above as well as the product mix of higher large-projectlarge project volume which carries higher costs needed to complete certain projects. In addition, construction costs have increased due to a nationwide shortage of skilled labor, which has caused lower than expected productivity on certain job sites.
SG&A expenses only slightly increased by $0.4 million to $33.7 million in the three months ended June 30, 2026 compared to $33.3 million in the three months ended June 30, 2025. SG&A expenses remained relatively consistent year over year.
Research and development costs only slightly decreased by $0.3 million to $0.6 million in the three months ended June 30, 2026 compared to $0.9 million in the three months ended June 30, 2025. These costs remained relatively consistent year over year.
Loss on asset disposals, net increased by $0.4 million to $0.6 million in the three months ended June 30, 2026 compared to $0.2 million in the three months ended June 30, 2025 primarily related to minor disposals in 2026.
Operating income increased by $4.8 million to $11.8 million in the three months ended June 30, 2026 compared to Operating income of $7.0 million in the three months ended June 30, 2025. The increase is primarily due to the revenue increase and increased gross profit, partially offset by the increased SG&A expenses noted above.
Income from continuing operations increased by $21.7 million to $14.3 million in the three months ended June 30, 2026 compared to a loss of $7.4 million in the three months ended June 30, 2025. The increase is primarily driven by the improvement in the operating income results noted above. We also benefited from a reduction to interest expense of $6.0 million, a change in fair value of customer warrants of $5.9 million and a decrease to tax expense of $5.1 million as noted below.
Six Months Ended June 30, 2026 and 2025
Revenues increased by $246.7 million to $534.1 million in the six months ended June 30, 2026 compared to $287.5 million in the six months ended June 30, 2025. The increase is primarily driven by an increase in large project volume, including $131.7 million from Base Electron. This improvement is primarily due to the increasing need for electricity from fossil fuels driven by the demand from AI, data centers and expanding economies.
Costs of operations increased by $225.8 million to $444.0 million in the six months ended June 30, 2026 compared to $218.2 million in the six months ended June 30, 2025. The increase is primarily driven by the mix of the business as large project volume increased, resulting in higher costs needed to complete certain projects. In addition, construction costs have increased due to a nationwide shortage of skilled labor, which has caused lower than expected productivity on certain job sites.
SG&A expenses increased by $16.1$16.4 million to $44.4$78.1 million in the threesix months ended MarchJune 31,30, 2026 compared to $28.3$61.6 million in the threesix months ended MarchJune 31,30, 2025. The increase is primarily driven by an increase in share price of our common stock during the threesix months ended MarchJune 31,30, 2026, which resulted in the increase in stock-based compensation expense for grants to senior members of management, including an increase in the valuation of stock appreciation rights Research and development costs increased by $0.5 million to $0.8 million in the three months ended March 31, 2026 compared to $0.3 million in the three months ended March 31, 2025. The increase is primarily driven by BrightLoop™ investment.rights.
Research and development costs increased by $0.1 million to $1.4 million in the six months ended June 30, 2026 compared to $1.3 million in the six months ended June 30, 2025. These costs remained relatively consistent year over year.
(Gain) lossLoss on asset disposals, netdisposals increased by $0.3 million to a$0.5 gainmillion in the threesix months ended MarchJune 31,30, 2026 compared to a$0.2 lossmillion in the threesix months ended MarchJune 31,30, 2025 dueprimarily related to smallminor disposals in 2026.
Operating loss decreased by $0.2 million to $1.7 million in the three months ended March 31, 2026 compared to $1.8 million in the three months ended March 31, 2025. The decrease is a result of the cost increases previously noted.
LossOperating from continuing operationsincome increased by $64.0$4.9 million to $79.6$10.1 million in the threesix months ended MarchJune 31,30, 2026 compared to $15.6$5.2 million in the threesix months ended MarchJune 31,30, 2025, primarily drivendue byto athe non-cashincreased changerevenue inincreasing fairgross value of customer warrants of $70.2 million and an increase in income tax expense of $2.2 million,profit partially offset by athe reductionincreased inSG&A interestexpenses expensenoted of $6.6 million.above.
Loss from continuing operations increased by $42.3 million to $65.4 million compared to a loss of $23.1 million in the six months ended June 30, 2025. The increase was primarily driven by non-cash change in fair value of customer warrants of $64.4 million, partially offset by a decrease in income tax expense of $2.9 million and a reduction in interest expense of $12.6 million.
The decrease in interestInterest expense for the three and six months ended MarchJune 31,30, 2026 is primarilylower compared to the resultthree ofand six months ended June 30, 2025 due to the debt refinancing and paydown oftransactions thethat Senior Notes Due 2026occurred in the2025 secondthat halfresults ofin 2025lower base principal and will result in the first quarter of 2026, and the accretion of the gain on exchange ofover athe portionlife of the Seniordebt. NotesSee DueNote 202613 intoto the SeniorCondensed NotesConsolidated dueFinancial 2030.Statements for further details.
The change in the fair value of the Warrants is primarily driven by fluctuations in the Company's stock price, which slightly decreased comparative to March 31, 2026, but increased comparative to the stock price at December 31, 2025. As a result, we recorded income of $5.9 million for the three months ended June 30, 2026, and expense of $64.4 million for the six months ended June 30, 2026.
The increase in customer warrant fair value expense of $70.2 million is a result of the change in fair value of customer warrants for the three months ended March 31, 2026 primarily driven by an increase in the Company’s stock price since the grant dates of the warrants.
Our effective tax rate for the three and six months ended June 30, 2026 is not reflective of the U.S. statutory rate primarily due to certain foreign countries having a tax rate higher than the U.S. statutory rate, valuation allowances against certain net deferred tax assets and favorable discrete items. In certain jurisdictions where we anticipate a loss for the year or incur a loss for the year-to-date period for which a tax benefit cannot be realized in accordance with ASC 740, we exclude the loss in that jurisdiction from the overall computation of the estimated annual effective tax rate.
Our effective tax rate for the first three months of 2026 is not reflective of the U.S. statutory rate, which was impacted by the mix of profitable foreign operations and losses in the U.S., certain foreign entities having a tax rate higher than the U.S. statutory rate, valuation allowances against certain net deferred tax assets and unfavorable discrete items. In certain jurisdictions where we anticipate a loss for the year or incur a loss for the year-to-date period for which a tax benefit cannot be realized in accordance with ASC 740, we exclude the loss in that jurisdiction from the overall computation of the estimated annual effective tax rate.
Total bookings as of MarchJune 31,30, 2026 and 2025 were as follows:
(1) Bookings of $2.4 billion were related to Base Electron for the six months ended June 30, 2026.
Our backlog as of MarchJune 31,30, 2026 and 2025 was as follows:
Of the backlog at MarchJune 31,30, 2026, we expect to recognize revenues as follows:
In addition to LossIncome (loss) from continuing operations, we use non-GAAP financial measures internally to evaluate our performance and make financial and operational decisions. When viewed in conjunction with GAAP results and the accompanying reconciliations, we believe that the presentation of these measures provides investors with greater transparency and a greater understanding of factors affecting our financial position and results of operations than GAAP measures alone. The presentation of non-GAAP financial measures should not be considered in isolation or as a substitute for the related financial results prepared in accordance with GAAP.
The following discussion of our business segment results of operations includes a discussion of EBITDA and Adjusted EBITDA. EBITDA focuses on the earnings generated from core business operations, without considering the effects of financing, accounting decisions or tax. EBITDA and Adjusted EBITDA differ from the most directly comparable measure calculated in accordance with GAAP. A reconciliation of LossIncome (loss) from continuing operations, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA is included below. Management believes that this financial measure is useful to investors because it excludes certain expenses, allowing investors to more easily compare our financial performance period to period. When viewed in conjunction with GAAP results, we believe the presentation of EBITDA and Adjusted EBITDA provides investors with greater transparency and a greater understanding of factors affecting our financial position and results of operations than GAAP measures alone.
Losses on debt extinguishment wereare due to the exit costs associated with our repurchase of outstanding Senior Notes due 2026.
Customer warrants are amortized over the life of the associated agreement and recorded as a reduction to Revenues in the Condensed Consolidated Statements of Operations. Management excludes the reduction to revenue from Adjusted EBITDA as they are a non-cash transaction and do not reflect the ordinary course of business.
Our primary liquidity requirements include debt service, funding dividends on Preferred Stock and working capital needs. We fund our liquidity requirements primarily through cash generated from operations, external sources of financing, including our Credit Agreement, senior notes, and equity offerings, and our Preferred Stock, each of which are described below and in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item I1 of this Quarterly Report in further detail. We believe that our current operating plan and borrowings available under our Credit Agreement will be sufficient to satisfy our foreseeable liquidity needs and capital expenditure requirements, including for at least the next twelve months. We may elect to raise additional capital through the sale of additional equity or debt financing to fund business activities such as strategic acquisitions, capital expenditures, working capital needs or other purposes beyond the next twelve months. Additional financing may not be available on terms favorable to us or at all, and may also be impacted by any disruptions in the financial markets. In addition, our existing indebtedness could limit itsour ability to obtain additional financing.
At MarchJune 31,30, 2026, our cash and cash equivalents, and restricted cash totaled $194.8$382.8 million, and we had total debt of $275.9$276.8 million, of which $25.4$23.7 million is unamortized premium. We also had $191.7 million of gross Preferred Stock outstanding. Our foreign businesscash locationswas held $12.8$11.4 million of our total cash and cash equivalents and restricted cash as of MarchJune 31,30, 2026. In general, our foreign cash balances are not available to fund our U.S. operations unless the funds are repatriated or used to repay intercompany loans made from the U.S. to foreign entities, which could expose us to taxes we have not made a provision for in our results of operations. We have no plans to repatriate these funds to the U.S. We had $37.9$48.5 million of restricted cash as of MarchJune 31,30, 2026 related to collateral for certain letters of credit as part of funding for several ongoing projects.
Cash flows provided by operating activities was $17.8$0.4 million forin the threesix months ended MarchJune 31,30, 2026, which is primarily attributable to our current net loss of $76.9$62.7 million beingafter offset byexcluding non-cash expensesexpense arisingitems fromsuch aas the change in fair value of customer warrants of $70.2 million, stock-based compensation of $13.2 million, depreciation and amortization of long-lived assets of $2.5$64.4 million and amortizationstock compensation expense of customer warrants of $1.1$14.8 million. Cash flows provided by operating activities also included movements in certain operating assets and liabilities such as increases in accounts payable of $39.6 million and accrued and other current liabilities of $5.6$100.3 million, resultingpartially fromoffset theby timingincreases of payments to vendors. Partially offsetting these inflows were outflows fromin accounts receivable – trade, net of $8.0$60.9 million,million and contracts in progress of $18.0$17.8 millionmillion, andas advancedwell as a decrease in advance billings on contracts of $5.5$30.5 millionmillion. whichAdvance billings on contracts and construction in progress are primarily impacted by timing differences related to progress made on ongoing projects, billings, and collections, increased operating costs as a result of increased revenue, and may fluctuate significantly period to period.
Cash flows used in operating activities was $8.5$33.8 million forin the threesix months ended MarchJune 31,30, 2025, which iswas primarily attributedattributable to the currentyear-to-date net loss of $22.0$80.5 million, partially offset by non-cash adjustmentsexpenses arising from the loss on sale of business of $35.8 million and impairment of long-lived assets of $8.8 million, depreciation and amortization of long-lived assets of $2.5 million, deferred financing fees of $1.5 million and operating lease expenses of $1.7$9.9 million. Cash flows used in operating activities also included movements in certain operating assets and liabilities such as accountsdecreases receivablein - trade, netinventories of $14.3 million, advance billings on contracts of $7.5$7.9 million and pension liabilities, accrued postretirement benefits and employee benefits of $3.6$6.9 million,million whichresulting are primarily impacted by collections, timing differences related to billings andfrom contributions made to the plan. TheseOffsetting these decreases were partially offset by cash flow increases from accounts payable of $19.6 million andto contracts in progress of $11.0$9.8 million whichand areaccrued primarilyand impactedother bycurrent liabilities of $8.1 million, due to the result of timing of payments to vendors and timing differences related to progress on ongoing projects.vendors.
Cash flows used in investing activities was $3.5 million and $3.9 million for the three months ended March 31, 2026 and 2025, respectively, primarily due to capital expenditures associated with BrightLoop™ projects. 2026 is partially offset by proceeds from sale of business of $3.6 million.
Cash flows used in financinginvesting activities was $20.3$9.9 million forin the threesix months ended MarchJune 31,30, 2026, primarily due to payments on the Axos Credit Agreementpurchases of $29.1fixed million,assets buybacksrelating ofto SeniorBrightLoop™ Notes due 2026 of $15.0 million, employee tax withholding on stock-based compensation of $6.2 million and Preferred Stock dividend payment of $3.7 million,projects, partially offset by proceeds from the issuancesale of commonbusinesses stockand other asset disposals of $34.1$3.9 million. Cash flows usedprovided by investing activities were $10.6 million in financing activities was $0.4 million for the threesix months ended MarchJune 31,30, 2025, primarily due to proceeds from the paymentsale of theour PreferredVølund Stock dividendsbusiness of $3.7 million and net payments on the Axos Credit Agreement of $1.4$20.1 million, partially offset by the issuancepurchases of commonfixed stockassets ofrelating $5.2to million.BrightLoop™ projects.
Cash flows provided by financing activities was $191.4 million in the six months ended June 30, 2026, primarily related to the proceeds of $259.8 million pursuant to our equity offerings as described in Note 14 to the Condensed Consolidated Financial Statements, partially offset by buybacks of our Senior Notes due 2026 of $23.0 million and net repayments on the Credit Agreement of $18.7 million. Cash flows provided by financing activities was $2.6 million in the six months ended June 30, 2025, primarily related to the net borrowings on the Credit Agreement of $6.9 million and equity offerings of $5.5 million, partially offset by debt issuance related to the debt refinancing of $5.1 million and Preferred Stock dividend payments of $3.7 million.
For a summary of the critical accounting policies and estimates that we use in the preparation of our unaudited Condensed Consolidated Financial Statements, see "Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no significant changes to our policies during the threesix months ended MarchJune 31,30, 2026 from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
BW insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 2 Form 4 filings (2 insiders, 2 trade dates, 12,000 shares, about $115.0K) and open-market sales in 0 filings. Net open-market shares: 12,000 (purchases minus sales); net value about $115.0K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-18 | Howe Alan B |
Gift | 165,994 | — | — |
| 2026-08-18 | Howe Alan B |
Gift | 165,994 | — | — |
| 2026-08-13 | Moeller Philip D |
Open-market purchase | 5,000 | $9.50 | $47.5K |
| 2026-08-12 | Young Kenneth M |
Open-market purchase | 7,000 | $9.65 | $67.5K |
| 2026-08-07 | Young Kenneth M |
Shares withheld for tax | 25,050 | $9.38 | $235.0K |
| 2026-08-07 | Young Kenneth M |
Option exercise | 50,000 | $9.38 | $469.0K |
| 2026-08-07 | Frymyer Cameron M |
Option exercise | 38,333 | $9.38 | $359.6K |
| 2026-08-07 | Frymyer Cameron M |
Shares withheld for tax | 17,096 | $9.38 | $160.4K |
| 2026-08-05 | Young Kenneth M |
Shares withheld for tax | 20,875 | $10.14 | $211.7K |
| 2026-08-05 | Young Kenneth M |
Option exercise | 41,667 | $10.14 | $422.5K |
| 2026-08-05 | Frymyer Cameron M |
Shares withheld for tax | 14,866 | $10.14 | $150.7K |
| 2026-08-05 | Frymyer Cameron M |
Option exercise | 33,333 | $10.14 | $338.0K |
| 2026-08-04 | Frymyer Cameron M |
Shares withheld for tax | 7,433 | $9.52 | $70.8K |
| 2026-08-04 | Frymyer Cameron M |
Option exercise | 16,667 | $9.52 | $158.7K |
| 2026-05-29 | Dziewisz John J |
Shares withheld for tax | 22,050 | $19.18 | $422.9K |
| 2026-05-29 | Dziewisz John J |
Option exercise | 50,000 | $19.18 | $959.0K |
| 2026-05-29 | Dziewisz John J |
Shares withheld for tax | 50,715 | $19.18 | $972.7K |
| 2026-05-29 | Dziewisz John J |
Shares withheld for tax | 23,520 | $19.18 | $451.1K |
| 2026-05-29 | Dziewisz John J |
Option exercise | 53,334 | $19.18 | $1.0M |
| 2026-05-29 | Dziewisz John J |
Option exercise | 115,000 | $19.18 | $2.2M |
| 2026-05-15 | Boness Naomi Louise |
Option exercise | 85,000 | $21.22 | $1.8M |
| 2026-05-15 | Boness Naomi Louise |
Disposition to issuer | 46,750 | $21.22 | $992.0K |
| 2026-05-15 | Stahl Rebecca L |
Disposition to issuer | 46,750 | $21.22 | $992.0K |
| 2026-05-15 | Stahl Rebecca L |
Option exercise | 85,000 | $21.22 | $1.8M |
| 2026-05-15 | Howe Alan B |
Option exercise | 85,000 | $21.22 | $1.8M |
| 2026-05-15 | Howe Alan B |
Disposition to issuer | 46,750 | $21.22 | $992.0K |
| 2026-05-15 | Akbari Dr. Homaira |
Option exercise | 3,021 | $21.22 | $64.1K |
| 2026-05-15 | Moeller Philip D |
Disposition to issuer | 46,750 | $21.22 | $992.0K |
| 2026-05-15 | Moeller Philip D |
Option exercise | 85,000 | $21.22 | $1.8M |
| 2026-05-15 | Tato Joseph A |
Option exercise | 85,000 | $21.22 | $1.8M |
| 2026-05-15 | Tato Joseph A |
Disposition to issuer | 46,750 | $21.22 | $992.0K |
Well-known investors holding BW (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Millennium Management (Israel Englander) | 2026-06-30 | 1,346,695 | $19.0M | 0.01% | Reduced 60% |
| D. E. Shaw & Co. | 2026-06-30 | 772,100 | $10.9M | 0.01% | No change |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 327,505 | $4.6M | 0.0% | Reduced 87% |
| Polen Capital Management | 2026-06-30 | 249,411 | $3.5M | 0.03% | Reduced 8% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 117,539 | $1.7M | 0.0% | Added 36% |
| Two Sigma Investments | 2026-06-30 | 73,211 | $1.0M | 0.0% | Reduced 91% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 46,592 | $656.9K | 0.0% | New position |
| Renaissance Technologies | 2026-06-30 | 24,600 | $346.9K | 0.0% | Reduced 93% |