Babcock & Wilcox Enterprises (BW) Q1 2022 earnings call transcript

Thank you, Bethany, and thanks to everyone for joining us on Babcock & Wilcox Enterprises' first quarter 2022 earnings conference call. I'm Sharon Brooks, Director of Communications. Joining the call today are Kenny Young, B&W's Chairman and Chief Executive Officer, and Lou Salamone, Chief Financial Officer, to discuss our first quarter results. During this call, certain statements we make will be forward-looking. These statements are subject to risks and uncertainties, including those set forth in our safe harbor provision for forward-looking statements that can be found at the end of our earnings press release and also in our Form 10-Q that will be filed today and our Form 10-K that is on file with the SEC and provide further detail about the risks related to our business.

Additionally, except as required by law, we undertake no obligation to update any forward-looking statement. We also provide non-GAAP information regarding certain of our historical and targeted results to supplement the results provided in accordance with GAAP. This information should not be considered superior to, or as a substitute for, the comparable GAAP measures. A reconciliation of historical non-GAAP measures can be found in our first quarter earnings release published this afternoon and in our company overview presentation that will be filed on Form 8K this afternoon and posted on the Investor Relations section of our website at babcock. com. I will now turn the call over to Kenny.

Thank you, Sharon, and thanks to everyone for joining us this afternoon. Well, it continues to be an extremely exciting time for all of us at Babcock & Wilcox. As a company, we have a very long and successful history as a technology leader and solutions provider throughout the world and across the power generation industry. That is something our employees are extremely proud of, not only because of what the company has accomplished and the strong relationships we've built with our customers and suppliers and others, but also because it puts us in a truly unique position to support the world's energy transition and drive innovation forward. I do want to recognize and thank our employees around the world for their continued tireless efforts in driving our company forward.

In fact, with their help, in the 12 months ended, March 31, 2022, we have reached approximately $75 million of adjusted EBITDA, which is a significant accomplishment. Today, we're working hard to support our customers' needs for clean energy with an extensive range of proven technologies, including our climate bright suite of decarbonization technologies and our innovative hydrogen production technology solutions for solar power construction and installation and market-leading waste energy and biomass energy systems. We have mission controls and cooling systems and next-generation energy storage solutions and aftermarket parts and services to help our customers keep their plants running at peak performance. We continue to support our fossil fuel customers globally as the need to provide power from fossil fuels has increased due to limited supply and higher prices for natural gas.

We'll talk more about some of the progress we're making in those areas a little bit later on today, but first, I'm very pleased to share that we ended the quarter ahead of our plan, and with increases in revenues, bookings, and backlog over the same quarter a year ago. In fact, we now have the highest backlog since 2018, and we continue to be in a great position for an outstanding 2022 and beyond to meet our adjusted EBITDA targets and also achieve significant year-over-year growth as we focus on our long-term strategic objectives and, as always, the fundamentals like safety and strong project execution. Like many companies, we are seeing some supply chain challenges due to the war in Ukraine and the resurgence of COVID-19 in China and elsewhere, and we are working to mitigate these issues by leveraging our established global resources with respect to raw materials that may be delayed or impacted as these situations evolve.

At the same time, we're seeing the potential for additional tailwinds across our business segments as customers face decisions not only about decarbonization efforts to support climate change goals, but also about energy security and alternatives to natural gas. B&W has the ability to serve customers' needs across those spectrums, and so we will also continue to monitor the potential for opportunities in those areas as the situation continues to evolve. While the pandemic has continued to cause delays for some project bookings or push back some of the start dates of some projects, bookings for the quarter were very strong at $239 million, which reflects a 41% increase over the same quarter a year ago. Despite these increases, we did see some impacts, particularly in our aftermarket parts and services group, as the high use of coal during the period meant that parts and service visits were delayed by some customers.

Backlog at quarter in was a solid $721 million, and we continue to see a robust pipeline of more than $7.5 billion of identified project opportunities over the next three years.

Turning to our ClimateBright decarbonization platform, we've had a very exciting quarter that included the announcement that we're partnering with Kiewit Industrial to support the Fidelis New Energy's planned 200-megawatt net-negative carbon impact biomass power plant in Baton Rouge, Louisiana. It will be the largest of its kind in the world, and we will provide power for Fidelis' Grown Fuels Facility, which will produce sustainable jet fuel, diesel fuel, green hydrogen, and others. We will provide a B&W biomass boiler, our proprietary OxyBright, OxyCombustion carbon-capture technology, and a full suite of environmental systems to control emissions. This project actually is currently not in our backlog, and we're very excited about the opportunities for our OxyBright system, which uses pure oxygen for combustion and can be used with a wide range of fuels to produce a concentrated stream of CO2, which can then be sequestered underground or put to other beneficial use.

It's truly a groundbreaking project and a great opportunity to demonstrate the leadership role B&W can play in providing advanced technologies for decarbonization, emission controls, and the generation of clean power. And we're pleased to have been named the preferred supplier for this project and to provide our engineering design, equipment, and technology as it moves forward. We're also making progress in our efforts to develop a near-term demonstration site for the next scale-up of our bright-loop decarbonization, hydrogen, and syngas production technology. This is a technology we're extremely enthusiastic about and one that we've developed through the many years of effort in conjunction with The Ohio State University and the Department of Energy. It truly revolutionizes the boiler system and uses a chemical reaction process to create combustion without incineration.

The Bright Loop process uses a patent particle, which is very flexible and can react with a variety of feedstocks, including natural gas, biomass, coal, treated municipal solid waste, thin gas, and even petroleum coke from the refining industry. So it really provides customers with a lot of options in terms of the applications where it can be used. Just as important, since BrightLoop uses a chemical reaction, we can isolate thin gases from the process, including pure hydrogen, along with a pure stream of CO2 for either sequestration or other industrial uses. We are moving into a full-scale demonstration of the technology this year, and we have identified one site in particular with favorable conditions, and we are working to secure access to the property along with a potential hydrogen offtaker.

We are also working to secure external grants and investments for this groundbreaking project, and at the same time, we're moving forward with final design and engineering, which is progressing as planned. And needless to say, interest in our Bright Loop product is very high worldwide, particularly given its revolutionary ability to use solid fuels to generate hydrogen. As a part of our commercial demonstration project, we plan to use biomass fuel to generate hydrogen, sequester the CO2 generated from the process, and also use this site to test other solid fuels using this chemical looping process. So again, we see this as a game-changing technology evolution that can effectively separate CO2 while producing hydrogen, steam, or syngas. It's exceptionally versatile and can support a wide array of applications, and it's scalable, so we can be adopted economically to both large and small installations.

With respect to other aspects of our business, we continue to see strong interest, particularly in our renewable energy technology, and expect to announce a number of new-build renewable bookings in the second quarter. Certainly, our first-quarter revenues of $68 million in our B&W renewable segment, which is a 136% increase over the first quarter of 2021, represents a great start to the year. As we see continued demand for our waste-to-energy, biomass-to-energy products, and other products and services within this segment. We're also seeing continued growth within our global parts and services business with bookings for equipment upgrades, services and replacement parts. And we're excited about opportunities to build on our parts and service and retrofit opportunities, not only throughout North America, but internationally as well.

We continue to make strategic investments in our clean and renewable energy businesses as part of our growth strategy and closed on two strategic acquisitions during the quarter. In the first which closed in February we acquired 100 of Fossil Power Systems or FPS based in Nova Scotia Canada And FPS is a leading designer and manufacturer of hydrogen natural gas and renewable pulp and paper combustion equipment including igniters scanners plant controls and safety systems FPS technologies and capabilities are ideally suited to clean energy applications, such as firing hydrogen, which complements our clean energy strategy, in particular the BrightLoop and BrightGen technologies. We closed on an additional acquisition in February when B&W acquired 100% of the equity interests of Optimus Industries based in Tulsa, Oklahoma, creating an even broader foundation of capabilities to serve our customers.

Optimus has reputable and reliable technologies that align closely with B&W's business and designs and manufactures steam generation and waste heat recovery technologies for use in the power generation, petrochemical, and process industries, including package boilers, water tube and fire tube waste heat boilers, economizers, superheaters, waste recovery equipment, and products for sulfuric acid plants. This acquisition provides opportunities in the growing heat recovery steam generator aftermarket, as well as access to broader U. S. package boiler manufacturing capabilities.

We're extremely pleased to have the experienced and dedicated FPS and Optimus employees and additional capabilities as part of our company, and the transition activities related to these acquisitions continues to move along smoothly. We also announced in March that B&W joined the United Nations Global Compact. This initiative provides a global platform for the development, implementation, and disclosure of responsible business practices in the areas of human rights, labor, the environment, and anti-corruption. This reinforces our company's commitment to the 10 principles of the Global Compact and our commitment to advancing the UN Sustainable Development Goals.

It also helps further position B&W as a leader in the global energy transition to clean, sustainable, and socially responsible ways of powering utilities and industry. With that, I'll turn the call over to Lou to discuss the financial details of the first quarter of 2022. Lou?

Thanks, Kenny. I'm pleased to review our first quarter results, further details on which can be found in the 10Q that will be on file with the SEC. Our first quarter consolidated revenues were $204 million, which is a 21% improvement compared to the first quarter of 2021. This is primarily due to higher volume by new build projects and the impact of the acquisitions we completed in the fourth quarter of 2021 and the first quarter of 2022, in addition to a higher level of activity in the environmental segment and was partially offset by a lower level of construction activity in the thermal segment. Our operating loss in the first quarter was $6.8 million, as compared to an operating loss of $6.5 million in the quarter of 2021.

Our adjusted EBITDA was $12 million, compared to an $8.6 million adjusted EBITDA in the first quarter of 2021. While bookings in the first quarter of 2022 were $239 million, which is a 41% increase compared to the first quarter bookings of 2021. Our ending backlog was $721 million, which is a 35% increase compared to backlog at the end of the first quarter of 2021, and as Kenny stated, is the highest backlog for several years.

I'll now turn to our first quarter segment results. Within the Babcock & Wilcox Renewable segment, as Kenny mentioned earlier, revenues were $68 million for the first quarter of 2022, which is an increase of 136% compared to the $28.8 million in the first quarter of 2021. This was primarily driven by higher volume of new-build projects, as well as acquisitions in the fourth quarter of 2021.

Adjusted EBITDA in the quarter was $1.5 million as compared to $200,000 in the first quarter of 2021, again primarily due to the increase in volume, which is partially offset by impacts of business mix within the segment. Within the Babcock & Wilcox environmental segments, revenues were $34.9 million in the first quarter, which is an increase of 12.2% compared to the $31.2 million in the first quarter of 2021. The increase is primarily driven by increased volume in our ash handling systems, scrubbers, precipitators, and cooling systems. Adjusted EBITDA in this segment was $1.4 million for the quarter as compared to $1.1 million in the same period last year. This is primarily due to the increased volume.

Turning to our Babcock & Wilcox thermal segment, revenues were $102.2 million in the first quarter of 2022, which is a decrease of 6% compared to $108.3 million in the first quarter of 2021. This was primarily due to a lower level of activity on construction projects and partly offset by the acquisitions completed in the first quarter of 2021.

Adjusted EBITDA in the first quarter of 2022 was $14 million, which is up 34% compared to the $10.5 million in the first quarter of 2021. This is primarily due to acquisitions and the continued cost savings and restructuring initiatives benefiting the current year, which more than offset the overall decrease in volume. I'll now turn to our balance sheet, cash flow and liquidity.

Total debt at March 31, 2022 was $343.8 million, and the company had cash, cash equivalents, and restricted cash of $117 million. And finally, based on our strong bookings and backlog in the first quarter of 2022, we're reiterating our 2022 target of $110 to $120 million in adjusted EBITDA. I'll now turn the call back over to Kenny.

Thanks, Lou. Well, B&W has come a long way over the last couple years, and today we have a strong balance sheet, solid performance across all three of our business segments, outstanding technology, and a robust pipeline of potential opportunities. We also have a tremendous team of dedicated employees who continue to be focused on safety, on strong project execution, on growing bookings and our backlog, and on really stepping up to drive forward and support the world's climate objectives while also providing the products and services our customers need to meet the energy demands, not only just today, but also in the future. It took a lot of hard work, perseverance, and commitment to get where we are today, and we're excited about the opportunities ahead of us across our businesses.

We see continued growth in our renewable new-build waste energy and biomass energy business, opportunities for our renewable aftermarket parts and services. We see new opportunities for our thermal business with increased need for equipment, upgrades, and services as our customers work to keep their plants operating efficiently and cleanly so they can supply needed power to their customers. And as energy security takes a more prominent place and is prioritized in the current geopolitical climate. We also see increased opportunities for our environmental business in the areas of emissions control, ash handling and cooling systems, and construction and installation services. Perhaps most importantly, we continue to see B&Ws on the forefront of the global fight against climate change. So we've said before that we expect 2022 to be a milestone year for our climate-bright decarbonization and hydrogen solutions platform, and that remains true today.

We are enthusiastic about the opportunities ahead in this area and about being a leader and innovator in carbon capture, decarbonization, and hydrogen production. As we drive forward with our advanced technologies and demonstrate the solutions we can provide to help our customers address the world's urgent climate objectives.

With that, I'll turn the call back over to Bethany, who will assist taking your questions.

Yeah, thanks. I appreciate the question. So the Fidelis project is very exciting for us. Obviously, we announced the partnership on that project. We are obviously in full engineering mode and in discussions in and around the configuration of that particular technology. I believe Fidelis has already started the groundbreaking associated with the grown fuels portion of that particular plant facility in Baton Rouge, or will be shortly. So there's two parts to that. One is the grown facility, which actually is the creator of the jet fuels. We're not involved in that.

The second part of that is the biomass plant facility that will actually power that grown fuels, and that's obviously where we're focused. We've done from our boiler technology and providing our OxyBright combustion technology. We've actually done small or scale-up work on the OxyBright previously, so this will be a further move of that. But it's ready for commercial implementation, and that's what this will represent on that plant.

It'll be a 200 megawatt, as we talked about in there, or larger, still to be determined. And, you know, in conjunction on top of that with the Oxybrite technology to sequester the CO2. But Fidelis plans to isolate CO2 and sequester that as part of their carbon initiatives associated with that jet fuel. So we're excited about that. You know, as I mentioned in the remarks, it's not in our backlog. We're still working through details on that. But, you know, it's obviously groundbreaking in its size and groundbreaking. I'm also looking forward to working and utilizing that decarbonization and sequestering that here in the US. So we're excited about that. And obviously, the long-term relationship that we developed with Spadeless is great as well, too.

So it's a good relationship all the way around on that particular piece. So that it you know we more to follow on that Obviously we put out public statements when we can on that particular plan as it continues to move forward But it clearly is a milestone for us and especially on getting the oxygen combustion into a large commercial implementation to get that going So we excited about that Okay, great. Thank you. And then on the pipeline, you had good order activity, which you also mentioned some projects. Timing shifts around. Could you give us a sense of how much is shifting around, and do you sort of pick that up this year, or are things getting shifted out further?

Yeah, it's shifted. I'll let Lou comment more, but some of the order delays, which are obviously factored in the numbers overall by this point in time, but it's been an implementation or implicit. About two months of delays, I think you can think about it in that terms. I mean, you know, there's pluses and minuses. There's some delays that are, you know, a few weeks, and some may be a little bit longer, but, you know, on average, it's around that particular area. I mean, most of our customers, if not all of our customers, have been very supportive of shifting supply of steel and other components from Europe to, say, Asia associated with their particular projects. We haven't had any difficulty so far with any customer around making those changes, obviously, in supply chain coming out of Europe and shifting it overseas.

As we get into specific components and a few things here and there on the parts aspect, it delayed a little bit on some of the revenues. But we've also, as you can see in the balance sheet, we increased inventory by, I think, roughly $10 million-ish, somewhere in that category. But we increased inventory to help compensate for some of those lagging parts so that we were in position to leverage our parts business, in particular in the fossil fuel sector. When a lot of our clients had been running those plants 24-7, it put a delay on when we could go in and take advantage of that and put new parts in, services in, field services and the like.

So that afforded us the opportunities to kind of figure out some of the global supply chain aspects around it. And we feel pretty confident now that once we get into this, that we'll be in a pretty good position to provide those fundamental parts and services. And, you know, we're starting to see that happen already. So it's, you know, to us, I think we're in a good position there. But, Lud, anything you want to add to that?

Yeah, I would. We've tried to estimate, for example, what the Ukraine situation did for us. And, you know, I don't want to give specific numbers because it's just an estimate. You can't tell sometimes whether it's COVID or the Ukraine war, but I'd say right now in that quarter we were impacted less than about the $10 billion range for revenue that moved. That was strictly timing, not a loss of revenue, and that impacted our gross profit by a couple of million dollars. But as I said, most of that will happen in the next couple of quarters, if not this quarter we're in. And about 800,000 of it was prices that we had to pay for supplies.

So some impact, not tremendous, but enough that we paid attention to it. And as Kenny said, the supply chain team did a great job of purchasing ahead for needs, which increased our inventory, and also have gone around. And we have a global supply chain, so we're obviously able to be a lot more nimble in seeking ultimate suppliers for any of these purchases. But we continue to monitor it daily.

Thanks, John.

Thanks, Brent. No, good question. I'll chime in and let Lou jump in as well, too. But, you know, I think the biggest impact we had on margins in Q1 was a little bit lower in the parts and services, again, mainly because our customers' plants were running at full tilt because of the high price of natural gas, you know, and then obviously parts and services we've talked about publicly and historically is, you know, in the high 30s in the gross margin level. So, you know, we had a shift more towards some of the project aspects in Q1, but, you know, obviously thrilled on the fact that we were able to produce numbers, you know, primarily for all the cost cutting and all the measures that we took over the past couple of years to produce, you know, solid numbers in Q1 and building up a backlog.

So, you know, we, it's never predictable, you know, things are jumping back to normal, but we are seeing already, you know, some of the parts and services business pick back up because clients are not at a point where they've got to start repairing and fixing, you know, some of these plants that have been running full tilt again, you know, 24-7 that normally don't. So we'll see how that shakes out over the next several months, but we're entering into some of the parts season. We will continue to be cyclical. I think our project business and even some of the parts business, because we're going to obviously get through spring and hit summer, and then the demand for these power plants will pick back up again.

And so, you know, we often see the fall as being one of the stronger part season for us. And I don't think there's any surprise this year that that will be any different. We fully anticipate that happening. And I think we'll stay with the cyclical aspect around it at this point in time. But I think the margins will always shake out as, you know, parts and services fluctuates versus the project aspect that you saw in Q1. But Lou, anything you want to add there?

Yeah, just to compare where we were gross profit-wise, 21 quarter to 22, we're a little under 2% delta from about 22% to 20% gross profit. And as Kenny mentioned and I mentioned before, most of that is due to the parts business being a little slower than we would have liked, but for good reason. And these power plants stayed open. So I think that will recover that gross profit mix later as the parts start increasing. So, you know, a couple percent this quarter we should start recovering as the parts orders flow in, because these plants have to, you know, they have to start replacing the parts that are wearing out. So we're, and it's also evidenced by the, you know, the very high backlog that we have.

So we're pretty comfortable that the gross profit will continue to recover.

Yeah, no, good question, Brent. So, most of our contracts, we have the ability to readjust pricing, especially, obviously, in times like this that the pricing is unprecedented. I'm not sure if I'm in it because of the situation in Ukraine and as well as COVID, but most of our contracts, we do a really good job of making sure, and obviously over the past couple of years because everything has been going on with COVID, even more so, to make sure that we've got flexibility if we have to redirect supply chain or pricing goes up on some of the core materials and parts so that the impact isn't necessarily borne on B&W. But, you know, is passed along to our customer base.

Not always the case, but, you know, we do, I think, a really good job of pushing on that and forcing that. Obviously, we also, you know, as Lou mentioned, have done a fabulous job managing the global supply chain to help with our vendors and suppliers to get ahead of the curve.

You know, and it's been, I will say, a lot of our global supply vendors that provide some of our larger cost items, Especially in steel manufacturing, production, and fabrication. I've done a really good job of working through, you know, helping us work through some of those issues as well, too. So, you know, it's a combination of a lot of work by a lot of people, you know, on a global basis. But we try to do the best we can to be out ahead of the contractual language to make sure that it minimizes the impact on us. Lou, anything?

I think you covered it well. As you saw, there's an increase in our inventory. That was planned. We used our balance sheet. We had cash so we could go out and purchase at a better cost many supplies that we knew were going to be sold in the next six months to a year. And then, as I mentioned earlier, we've got a global supply chain, so we can be more nimble and flexible with our suppliers and go to other parts of the world where pricing might be a little better.

So it's just, you know, it's a combination of things you have to do every day. And obviously, that's what our supply chain people have been very successful at.

Yeah no thanks Brent Yeah it we obviously excited by getting this project off the ground on the commercial demonstration and that you know necessary to prove in the scale up We you know we doing a 20 I think it close to 21 times scale up on the technology in this commercial demonstration which will then you know put us into position to be able to move it into bigger and broader applications And we have a number of customers that or the Bright Loop in particular where they following the engineering and the progress we making in this commercial demonstration very closely We're working with a number of governments, including the Department of Energy here in the U. S. , but we're working with a number of groups and entities.

that are following this aspect because there is demand and application for this technology. It probably doesn't feel like it sometimes from an investor standpoint, but we are accelerating the commercial demonstration process on BrightLoop specifically in that regard to move this into the marketplace. And we've got a lot of excitement by a lot of people that want to see We've isolated the group inside the company so that we've got dedicated resources that are focused on this commercial demonstration and working through those details now. We're also obviously working with a few customers that I think we mentioned in the notes. I don't want to get into the names of that yet. It's a little premature, but obviously I think we put in the press release.

Fidelis is also looking and helping and evaluating some of the hydrogen capabilities off Brightloop in conjunction with their Growns facility in Louisiana, and we've got a number of other clients that we're talking to right now about the commercial demonstration and location to move that forward, and hopefully we'll make some announcements soon on that whenever we get that across the goal line. But I would tell you that we've been extremely pleased with the interest levels by a wide variety of our clients, whether that be in petrochemical or in petrofuels or in, you know, food and beverage across the board that, you know, are looking for new combustion technology that can isolate CO2. And the benefit here is that our bright loop allows you to do that, but also create and parallel these multitude of syngases.

So, you know, automatically a customer overnight suddenly wakes up and realizes they have additional revenue aspects from this technology because they can produce other syngases while also providing the combustion for an industrial process. And obviously, on top of that, they can isolate the CO2, which makes it a much more attractive technology. So we do have a lot of interest from a lot of parties. We're excited about it. And we'll keep pressing, obviously, to get this demonstration done this year so that we can leverage that from a revenue standpoint, obviously, in 23 and beyond.

Yeah, no problem. Thanks, Brent.

Thanks, Alex. No, we are bullish on the increase of backlog going into the rest of the year, which obviously sets us up very strongly for 2023 and beyond.

It is interesting. We are, and I don't want to get too much into some of the details because they're sensitive, but in Europe right now, we're in discussions with a number of customers around, obviously, twofold. One is how to move quicker in renewable energy and some of these newer technologies or even our existing technology. So we're under a lot of discussions there as they're trying to figure out how to obviously obtain a broader set of energy security away from or because of the Ukraine situation and war. The other aspect is we have a lot of customers in Europe now that are looking to revamp some of their fossil fuel plants that continue burning a little bit longer than they had planned because of the response to high natural gas or even the lack of natural gas.

It's forced those customers to relook at some of those capabilities. And so we're early in those, you know, and it's hard to predict right now, you know, exactly how much impact that will have on our business and revenues. But, you know, we're seeing an uptick in activity overall. So, you know, we think there could be, you know, some potential upgrades and enhancements in our parts and services platform coming from that. On a larger scale, though, we are in talks about accelerating some of the waste energy projects and things that could be happening there as well, too. And so we're trying to be in position to support our customers best we can across all of those goals.

And at the same time, because of the BrightLoop and what its capabilities are, we're getting some interest to further some testing, Especially in biomass, the hydrogen or biomass, the energy using BrightLoop as a potential source. So we're in discussions with a few customers there as well too. So yeah, I would say we're bullish on the backlog increasing by the end of the year based on what we've discussed so far. And we'll see how things unfold here for the rest of the summer based on all of the geopolitical situation that's occurring. And we're in a position there, we'll see how we can move forward.

Alex, you cut out on my end. I apologize. Can you repeat that? You went completely blank right after you started to say something, so could you repeat that?

Yeah, I think, you know, it's obviously nothing has, I don't think the geopolitical situation or COVID hasn't really changed too much. I would say the multiples are, you know, what we're seeing from a seller expectation standpoint. You know, it's still a little bit variable out there. We, you know, we continue to look at, we look at a lot of different opportunities. Again, some of those are not necessarily 100% acquisition. Some of those are actually even minority investment aspects that may be on emerging technologies that could be in different areas that might help accelerate certain IP for us to take to the marketplace and further or improve upon CO2 absorption and some other things that we're trying to do.

So, you know, we constantly look at those opportunities that are out there. We still continue to look at, you know, opportunities where, especially on the thermal side of the business that might complement our parts and services platform, you know, and on those, you know, purely one to drive further cash flows from those acquisitions, because we think those would be high synergistic type opportunities as well, too. You know, and there are several out there across that whole, you know, gammon and range. And, you know, we'll look at those and respond accordingly and obviously, you know, keep looking at what we think are investments that really can move the needle.

Obviously, we put out the target of the 110 to 120. So, you know, as we look at acquisitions, I think we would look at acquisitions that would increase that range. And we're keeping, you know, obviously, unless it's a brand new technology that I mentioned, won't move that needle. But as we look at things that might add synergies and cash flows, clearly we would look to move that target up on anything that we pick up going forward. So that's kind of how we're thinking about it, and that's how we're focused on it right now. So, you know, we're keeping flexibility across the board there, and we're looking at a lot of things that can cross both those barriers.

But that's kind of how we feel about the acquisitions right now. And then lastly, as it relates to BrightLoop, when might we hear more as it relates to location, property, customer, so on and so forth?

We are working diligently right now on a couple of specific locations and sites and opportunities. So, you know, I hope it's in the not-too-distant future, you know, whether it's days or weeks, it's not months or quarters. But we're working diligently on that to move those forward. We're working behind the scenes 100% on engineering and working with EPC partner as well that would do part of the construction aspect around that. So, a lot of things going on in parallel. As we mentioned, we are also working with some federal funding aspects that would be associated with that and some other ways to offset some of the costs on that particular piece, even with a potential customer who might be willing to acquire or buy the facility as well from us.

So, we're in discussions with all of that, very real time. But, you know, I would think, hopefully, Alex, it's, you know, weak here from getting further announcements out around that demonstration, not too much longer than that.

Thanks. Well, operator, I'll turn it back over to you.

Thank you, Bethany, and thanks to everyone for joining us today. That concludes our conference call. A replay will be available on our website for a limited time later today. That concludes the Babcock & Wilcox Enterprises Q1 2022 earnings conference call. I hope you all enjoy the rest of your day. You may now disconnect your line.