The Babcock & Wilcox Company ( BWC)

Q3 2011 Earnings Call

November 8, 2011 8:30 AM ET


Michael Dickerson – Vice President and Investor Relations Officer

Brandon Bethards – President and CEO

Mary Pat Salomone – Chief Operating Officer

Mike Taff – Chief Financial Officer

James Canafax – General Counsel.


Rob Norfleet – BB&T Capital Market

Joe Ritchie – Goldman Sachs

Tahira Afzal – KeyBanc

Jamie Cook – Credit Suisse

Steven Fisher – UBS

Randy Bhatia – Capital One Southcoast

Chase Jacobson – William Blair

Andy Kaplowitz – Barclays Capital

Scott Levine – JP Morgan

John Roger – D. A. Davidson & Company



Ladies and gentlemen, thank you for standing by. And welcome to The Babcock & Wilcox Company Third Quarter 2011 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the company’s prepared remarks, we will conduct a question-and-answer session, and instructions will be given at that time.

I would now like to turn the call over to our host, Mr. Michael Dickerson, B&W’s Vice President and Investor Relations Officer. Please go ahead.

Michael Dickerson

Thank you, Robin, and good morning, everyone. Welcome to The Babcock & Wilcox Company’s third quarter 2011 earnings conference call. I’m Mike Dickerson, Vice President and Investor Relations Officer at B&W.

Joining me this morning are Brandon Bethards, B&W’s President and Chief Executive Officer; Mary Pat Salomone, Chief Operating Officer; Mike Taff, Chief Financial Officer; and James Canafax, our General Counsel.

Many of you have already seen a copy of our press release issued last night. For those of you who have not, it is available on FirstCall and on our website at

During this call, certain statements we make will be forward-looking. I want to call your attention to our Safe Harbor provision for forward-looking statements that can be found at the end of our press release.

The Safe Harbor provision identifies risk factors that may cause actual results to differ materially from the content of our forward-looking statements. Our annual report on Form 10-K and quarterly reports on Form 10-Q on file with the SEC, provides further detail about the risk factors related to our business.

Additionally, I want to remind you except as required by law B&W undertakes no obligation to update any forward-looking statement to reflect events of circumstances that may arise after the date of this call.

Also on today’s call the company provides non-GAAP information regarding certain of its historical results to supplement of the results provided in accordance with GAAP. And it should not be considered superior to or substitute for comparable GAAP measures.

B&W believes the non-GAAP measures provide meaningful insight into the company’s operational performance and provides these measures to help investors facilitate comparisons of operating results with prior periods and assist them in understanding B&W’s ongoing operations.

Reconciliation of these non-GAAP measures can be found in the third quarter earnings release issued last night and in our company overview presentation posted on the Investor Relations section of our website at

The format for today’s call, we’ll begin with some remarks by Brandon about current business conditions and a status of short-term opportunities. Second, Mary Pat will take you through the performance of each of our business segments, followed by Mike who will provide some additional financial details about the quarter. Lastly, Brandon will conclude with some final comments.

Due to the number of participants on today’s call, I would ask you to limit yourself to one question and perhaps one follow-up. You of course, are welcome to get back in the queue.

With that, I will now turn the call over to Brandon.

Brandon Bethards

Thank you, Mike. Good morning, everyone and thank you for joining us. Let me start today by describing my view of our performance for this quarter and the business and the current business environment we are experiencing. First of all, I’m pleased to be able to report an 11.8% year-over-year increase in consolidated revenues for the third quarter of 2011.


You call me [Melanie].


Yes. Just a quick comment on the…

Brandon Bethards

Operator, you are on the main line.


I sent the e-mail of the order of Q&A people.





Brandon Bethards

Excuse me, gentlemen, ladies and gentlemen.


… one of our special request upfront, but I’m assuming that otherwise the best item will be in order correct, so for instance...

Michael Dickerson

Okay. Let’s get started again.

Brandon Bethards

Okay. My apologies for that...


How did that happen?

Brandon Bethards

Let me -- it will give the bears and the eagle fans a chance to catch a quick wink here while we correct this problem. Let me, this is Brandon and let me start over again with the leading comments.

By describing my view of our performance this quarter in the current business environment we are experiencing. First of all, I’m pleased to be able to report an 11.8% year-over-year increase in consolidated revenues for the third quarter of 2011.

This is the fourth quarter in a row for positive year-over-year consolidated revenue growth and the third quarter in a row in which that growth was evident in all four of our reported business segments.

On a consolidated basis, revenues were $700 and $7.6 million, an increase of $74.8 million. I think is also important to note that our consolidated quarterly growth rate has accelerated throughout the year, our reported revenue growth rates over the corresponding prior year period for this year were 4.4% in the first quarter, 9.3% in the second quarter and again, 11.8% in the third quarter.

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