B&W Provides Update and Amends Rights Offering

CHARLOTTE, N.C.–(BUSINESS WIRE)–$BW #BabcockWilcox–Babcock & Wilcox Enterprises, Inc. (B&W) (NYSE: BW) today provided an
investor update, and announced that it amended the terms of and extended
the expiration date for its pending common stock rights offering.

Rights Offering

B&W has amended its rights offering to:

• Increase its size to $248 million;
• Lower the per share subscription price from $3.00 to $2.00;
• Increase the number of shares issuable per right to 2.8 from 1.4; and
• Extend the expiration date from April 10, 2018 to April 30, 2018.

Vintage Capital Management LLC has agreed to increase its backstop of
the rights to $245 million.

Further details regarding the revisions to the rights offering can be
found in the additional press release that B&W published today.

Personnel Changes

Effective March 21, 2018, the Company appointed Robert M. Caruso, a
Managing Director of Alvarez & Marsal North America, LLC, to serve as
Chief Implementation Officer, reporting directly to B&W’s board of
directors. Mr. Caruso will work in tandem with B&W’s Chief Executive
Officer, Leslie C. Kass, and his duties include assisting management in
reviewing strategic options, developing the five-year business plan,
identifying opportunities for cost savings initiatives, evaluating B&W’s
cash flow forecast, and analyzing uses of working capital.

Jenny L. Apker, B&W’s Chief Financial Officer, has informed B&W that she
will retire as CFO on June 1, 2018 for health-related reasons. Ms. Apker
is expected to continue to work with B&W as a non-executive employee
until August 31, 2018 to assist in the CFO transition. Joel K. Mostrom,
a Senior Director of Alvarez & Marsal North America, LLC, will assume
the role of interim CFO on June 1, 2018. B&W expects to begin a search
for a permanent CFO in the second half of this year.

First Quarter Update and 2018 Outlook

As B&W has worked to progress its Renewable energy projects in Europe,
management, with review from the Chief Implementation Officer,
preliminarily identified approximately $51 million of additional
estimated costs to complete the projects. The largest portion of the
additional estimated costs are related to the project with the
previously announced steel beam failure.

The status of B&W’s six Renewable energy projects as of March 31, 2018
is as follows:

• The first project, a waste-to-energy plant in Denmark, is estimated to
  be 97% complete and is targeted to be completed by mid-2018
• The second project, a biomass plant in the United Kingdom, is
  estimated to be 86% complete and is targeted to be completed by
  mid-2018
• The third project, a biomass plant in Denmark, is estimated to be 98%
  complete and is targeted to be completed by mid-2018
• The fourth project, a biomass plant in the United Kingdom, is
  estimated to be 88% complete and is targeted to be completed by
  mid-2018
• The fifth project, a biomass plant in the United Kingdom, is estimated
  to be 61% complete and is targeted to be completed by late 2018
• The sixth project, a waste-to-energy plant in the United Kingdom, is
  estimated to be 81% complete and is targeted to be completed by the
  second half of 2018

B&W intends to seek not only insurance recoveries, but also plans to
seek additional relief from its customers and will pursue other claims
where appropriate and available. There can be no assurance as to
recovery amounts that B&W may realize. The $51 million of
additional renewable project costs do not take into account any
potential recoveries to mitigate these losses.

In B&W’s Power and Industrial segments, performance through first
quarter 2018 has been largely as anticipated, and B&W is reiterating its
previous guidance for these segments:

• Power: revenue down 5% to flat compared to 2017; gross margin
  approximately 20%
• Industrial: revenue up 14% to 19% compared to 2017; gross margin
  approaching 20%

Given the additional costs discussed above, B&W is withdrawing its 2018
guidance for the Renewable segment and is updating its 2018 consolidated
adjusted EBITDA guidance to a range of $20 million to $40 million.
Beginning with the release of its first quarter 2018 results, the
Company will provide segment level EBITDA that will allow investors to
better assess segment performance.

As of March 31, 2018, B&W had estimated cash and cash equivalents, net
of restricted cash, of $37 million and $177 million outstanding under
its revolving credit facilities. Upon completion of the rights offering,
B&W expects its cash and cash equivalents, cash flows from operations,
proceeds from asset sales and its borrowing capacity under the bank
credit facility will be sufficient to meet its liquidity needs for at
least the next 12 months.

Strategic Alternatives

B&W continues to make progress with the possible divestitures of its
MEGTEC and Universal businesses. In addition, the Company continues to
evaluate potential options regarding non-core assets.

Amendment with First-Lien Lenders

On April 10, 2018, B&W and its first-lien lenders entered into an
amendment and waiver of its revolving credit facility to provide B&W
additional time to complete the amended rights offering, to continue to
permit access to the revolving line of credit to meet liquidity needs
and to waive covenant violations in first quarter and amend future
covenants. Additional information regarding the amendment and waiver
will be included in a subsequent Form 8-K that will be filed with the
SEC later this week.

Forward-Looking Statements

The financial data for the quarter ended March 31, 2018 included in this
release is preliminary and subject to change as the Company closes its
books and prepares its financial statements for the quarter ended March
31, 2018, and actual results for may differ materially.

Additionally, B&W cautions that this release contains forward-looking
statements, including, without limitation, statements relating to our
strategic objectives; our business execution model; management’s
expectations regarding the industries in which we operate; our guidance
and forecasts; our projected operating margin improvements, savings and
restructuring costs; covenant compliance; potential charges; and project
execution. These forward-looking statements and the consequences of
certain of these matters are based on management’s current expectations
and involve a number of risks and uncertainties, including, among other
things, our actual results for the quarter ended March 31, 2018, which
are subject to change in connection with the process of closing the
books and finalizing the financial statements for such period; our
ability to successfully complete our rights offering and repay our
second-lien term loan; our ability to maintain sufficient sources of
liquidity to fund our operations, including sufficient bonding and
surety capacity to meet customer requirements; our ability to realize
anticipated savings and operational benefits from our restructuring
plans and other cost-savings initiatives; our ability to successfully
capitalize on the strategic alternative evaluation of our MEGTEC and
Universal business lines as well as certain non-core and other assets;
our ability to mitigate the losses incurred in connection with our
portfolio of renewable energy contracts, including our ability to
recover from our insurers, obtain relief from customers or recover from
our subcontractors; our ability to successfully integrate and realize
the expected synergies from acquisitions; our ability to realize the
benefits of expected cross-selling opportunities from acquisitions; our
ability to successfully address productivity and schedule issues in our
Renewable segment, including our efforts to enhance its resources and
infrastructure and the ability to complete our Renewable energy projects
within the expected timeframe and at the estimated costs; the actual
cost impacts of the matters identified in this release on the renewable
energy projects, including the amount of any recovery from third
parties; timely completion of engineering work; productivity of
subcontractors; timely completion of engineering work; productivity of
subcontractors; our ability to successfully refine our the execution
model of our Renewable segment; our ability to meet performance
guarantees; our ability to successfully partner with third parties to
win and execute renewable projects; changes in the jurisdictional mix of
our income and losses; disruptions experienced with customers and
suppliers; claims by third parties; the inability to retain key
personnel; adverse changes in the industries in which we operate; and
delays, changes or termination of contracts in backlog. If one or more
of these risks or other risks materialize, actual results may vary
materially from those expressed. For a more complete discussion of these
and other risk factors, see B&W’s filings with the Securities and
Exchange Commission, including our most recent annual report on Form
10-K and subsequent quarterly reports on Form 10-Q. B&W cautions not to
place undue reliance on these forward-looking statements, which speak
only as of the date of this release, and undertakes no obligation to
update or revise any forward-looking statement, except to the extent
required by applicable law.

Non-GAAP Financial Measures

B&W has provided full year adjusted EBITDA guidance of $20 million to
$40 million. It is not possible for B&W to identify the amount or
significance of future adjustments associated with potential mark to
market adjustments to our pension and other postretirement benefit plan
liabilities or other non-routine costs that we adjust in our
presentation of adjusted EBITDA. These items are dependent on future
events and/or market inputs that are not reasonably estimable at this
time. Accordingly, B&W is unable to reconcile without unreasonable
effort its forecasted range of adjusted EBITDA for the full year to a
comparable GAAP range. However, items excluded from adjusted EBITDA
guidance include the historical adjustments previously disclosed such as
interest, income taxes, depreciation, amortization, restructuring and
spin costs, acquisition and integration costs, financial advisory
services, gains or losses on asset sales, including any related
expenses, goodwill and other asset impairments, litigation settlements
and mark-to-market adjustments of pension and other postretirement
benefit plan liabilities. B&W’s full-year adjusted EBITDA guidance also
excludes the following estimable adjusting items: spin and restructuring
costs of approximately $8.2 million, financial advisory services costs
of approximately $9.4 million, the gain on the sale of BWBC (a former
Chinese joint venture) of $4.5 million, and additional acquisition
integration costs of less than $1 million.

About B&W

Headquartered in Charlotte, N.C., Babcock & Wilcox is a global leader
in energy and environmental technologies and services for the power and
industrial markets. Follow us on Twitter @BabcockWilcox
and learn more at www.babcock.com.

Contacts

Babcock & Wilcox
Investor Contact:
Chase Jacobson,
704-625-4944
Vice President, Investor Relations
[email protected]
or
Media
Contact:
Ryan Cornell, 330-860-1345
Public Relations
[email protected]