Good evening. My name is Hannah and I will be your conference operator today. At this time, I would like to welcome everyone to the Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you.

Sharyn, you may begin your conference call..

Thank you, Hannah. And thanks to everyone for joining us on Babcock & Wilcox Enterprises' Third Quarter 2023 Earnings Conference Call. I'm Sharyn Brooks, Director of Communications. Joining the call today are Kenny Young B&W Chairman and Chief Executive Officer and Lou Salamone, Chief Financial Officer to discuss our third 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 third quarter earnings release published this afternoon and in our company overview presentation that will be filed on Form 8-K this afternoon and posted on the Investor Relations section of our website at babcock.com. I will now turn the call over to Kenny..

Thanks, Sharyn. And thanks to everyone for joining us today. Well as you can tell by our earnings release, it's been a busy third quarter for Babcock & Wilcox.

I'd like to start the call today by first reviewing our third quarter performance on a continued operations basis accounting for the announced reclassification of our solar business, as well as the latest advancements across our Bright Lube and Climate bright initiatives.

I'll also discuss our announced strategic business realignment and the rationale behind that decision as well as details related to our 2023 and 2024 financial targets, which are based primarily on the strong performance of our aftermarket parts and services businesses, before turning the call over to Lou.

Let me start by highlighting the broad-based activities that drove revenue growth across all business segments during the quarter. Revenue for the third quarter was $239 million, which is 13% improvement compared to the prior year and our third consecutive quarter of revenue expansion on a year-over-year basis.

Our top-line improvement was led by thermal revenues then increased approximately 17% when compared to the third quarter of 2022 followed by renewable more specifically our renewable services as well as environmental revenues increasing 11% and 4% respectively.

Our aftermarket parts and services business and thermal and renewable typically our higher margin businesses continue to perform above our internal expectations. Consolidated adjusted EBITDA from continuing operations for the quarter was also impressive at $20 million, an improvement of $7 million or 54% when compared to the same period last year.

This is inclusive of roughly $2 million in expenses for Bright Lube and Climate Bright in Q3 2023.

While product mix was a large factor in the adjusted EBITDA performance for the quarter attributable to the higher margin nature of our aftermarket businesses, we also demonstrated strong execution on increased volumes of projects within our environmental segment. While continued operation bookings and backlog were mostly flat year-over-year.

This is largely attributable to timing of new bookings, as negotiations on a few larger opportunities are taking slightly longer than anticipated.

Some of these delays are positive due to increased scope for B&W aftermarket services, as many utilities and large energy companies are reevaluating the timing of newbuild projects and deferring to upgrades due to higher interest rates and other geopolitical factors.

Our outlook for near term booking opportunities remains robust positioning as well to achieve updated backlog growth in a range of $550 million to $650 million by year-end 2023 based on continued operations, not including our reclassified assets.

In addition, based on our improved performance of thermal parts and services and our global reach and providing clean energy technologies, we remain confident in achieving our revised full year adjusted EBITDA target from continuing operations of $85 million to $90 million in 2023 when excluding Bright Lube and Climate Bright expenses.

Transitioning to Bright Lube and Climate Bright commercial activities, we are pleased to provide several updates related to our hydrogen generation technology and project portfolio.

As previously mentioned, we are developing a small Bright Lube hydrogen production plant in Massillon, Ohio, very near our headquarters here in Akron, we are close to signing a definitive agreement for hydrogen uptake at this location for up to 3 tonnes per day of hydrogen production for the next 10 years.

We are also excited to announce we have a Letter of Intent for project level financing, and we have signed a lease agreement and are moving forward with construction to produce hydrogen by the end of 2024, or very shortly or early end of 2025.

With regard to our medium and larger platforms, we are also excited to announce a collaboration with Air Products, which represents a key step forward in our development of net negative carbon intensity hydrogen production facility in Louisiana utilizing Bright Lube technology.

More specifically, we have signed a memorandum of understanding with their products to enter into a definitive offtake agreement for up to 200 tonnes of carbon negative hydrogen per day, as well as the CO2 produced at the facility, with the initial production facility expected to be operational and late 2026.

This comes on the heels of our previously announced offtake agreement with General Hydrogen to acquire both hydrogen and CO2 from our medium sized biomass Bright Lube platforms. Both of these agreements come with 10-year length terms.

Based on the trend -- the traction we have received to date is become clear that commercial solutions that address carbon neutral targets have become imperative. Importantly in parallel, we continue progressing in Wyoming and within recently announced hydrogen hubs, especially in West Virginia.

This includes permitting fuel commitments and collaboration offtake land allocations as well as project funding. While our recent developments across Bright Lube projects continued to progress we're also pleased to announce a meaningful update to our board of directors. Effective today, Dr.

Naomi Boness will join our board of directors bringing an extensive expertise within the energy sector, particularly in hydrogen generation and carbon capture. We welcome Naomi to the board and are confident her deep industry experience will prove valuable as we continue to accelerate our hydrogen strategy going forward.

To reiterate our updated pipeline when excluding the reclassified operations is over $8.5 billion across all three segments, with approximately $1 billion and Bright Lube opportunities. We believe this puts us on a pathway to reach $1 billion in bookings by 2028, with a combination of small, medium and large projects.

We feel confident that could lead to $1 billion in revenues from Bright Lube by 2030 and beyond, and would still only represent 1% of the market share of total hydrogen spin by 2030.

I now like to focus on the announced strategic business realignment, including what it means for the company going forward, and its immediate impact to our current operations.

In response to today's market conditions, which include higher interest rate costs, and reduce their delayed growth capital expenditures by our customers, we see growth a growing global trend and extending the operational lifespan of existing power and industrial generation facilities.

This presents us with an opportunity to shift our focus to the more predictable revenue streams generated from our aftermarket businesses. We plan to utilize these cash flows to strengthen our balance sheet and reduce our overall debt. While we are also evaluating strategic aftermarket alternatives related to non-strategic assets.

Further, we expect to realize up to $30 million in annualized cost savings primarily through reduction of the high overhead associated with seeking multiple newbuild projects.

Our heightened focus on producing more predictable cash flow generation is consistent with our approach to provide long term profitable growth for the company and its shareholders, ultimately driving our decision to streamline our efforts to concentrate on aftermarket businesses and capitalize on higher margin parts and service opportunities.

In order to ensure a successful realignment of our updated strategy, our focus is on the following. One a greater emphasis on higher margin aftermarket parts and services across all three segments, while further reducing overhead costs associated with certain large newbuild project opportunities.

Reducing our seniors secure letters of credit facility by up to $20 million by the end of fiscal year 2024. Refinancing our existing senior secured credit facility to reduce our interest expense by up to $5 million. And just today announcing a commitment for $150 million and refinancing.

Bolstering cash flow generation and strengthening the balance sheet and utilizing federal, state and project level financing to accelerate the deployment of our Bright Lube and Climate Bright technologies.

While we recognize the long term growth potential for solar from both the community and utility standpoint, there were several key factors that our management team and board considered when evaluating what steps the company would take regarding the pathway and for continued growth.

As part of this evaluation process, we have decided to reclassify our solar business out of continuing operations. This is primarily due to the historical projects, the higher risks and the margin profiles.

Looking ahead to next year, our focus on promoting future growth aligns with the sustained demand, we observe across all segments, paving the way for improved performance in 2024 with our announced adjusted EBITDA target range of $100 million to $110 million when excluding Bright Lube and Climate Bright.

Importantly, given our strategic business realignment, we now have increased visibility and confidence in our outlook as a significant portion of our targeted adjusted EBITDA will be generated from existing backlog with less reliance on large projects.

I'll now turn the call over to Lou to discuss the financial details of the third quarter, Lou?.

Thanks, Kenny. I'm pleased to review our third quarter results and our recent commitment for the refinancing of our senior credit facility. Further details of which can be found on our 10-Q that is on file with the SEC. I'd also like to call your attention to the fact that I will be referring to amounts of our continuing operations.

Our third quarter consolidated revenues were $239.4 million, which is a 13% improvement compared to the third quarter of 2022.

This is primarily attributable to higher volumes in our renewable segment due to the B&W Renewable Services operations, as well as the thermal segment volume, which increased due to higher levels of construction and parts activity.

Our net operating income for the third quarter of 2023 was $5.5 million, compared to an operating loss of $2.7 million in the third quarter of 2022. Our adjusted EBITDA was $20 million, as compared to $13 million in the third quarter of 2022.

Bookings in the third quarter of 2023 were $198 million, and the ending backlog at the end of the quarter, third quarter of 2023 was $507 million. Our net loss per share in the third quarter was $0.18 as compared to a loss per share of $0.15 in the third quarter of 2022.

As Kenny mentioned, we've reclassified the solar business out of continuing operations. As a result will have taken an impairment charge of about $56.6 million and recognize contract losses of $47.9 million, which include future estimated losses, both of which are reported in discontinued operations.

We're pursuing potential recoveries of certain of these amounts, up to $40 million. And there is no assurance that these amounts will be recovered. Accordingly, such recoveries have not been recognized in the financial statements. I'll now turn to our third quarter segment results.

Within our Babcock & Wilcox Renewable segment, revenues were at $7.1 million for the third quarter of 2023, which is an 11% increase compared to $78.5 million in the third quarter of 2022. The increase in revenue is due primarily to higher volume associated with renewable services.

And our adjusted EBITDA in the third quarter was $10.1 million as compared to $4.5 million in the third quarter of 2022, primarily due to the higher revenue volumes as described above.

Within the Babcock & Wilcox Environmental segment, revenues were $46.4 million in the third quarter of 2023, which is an increase of 4% compared to the $44.6 million in the third quarter of 2022. The increase is primarily driven by a lower volume related to Bluegrass treatment projects offset by a higher overall volume of cooling technology projects.

Adjusted EBITDA was $5 million for the quarter as compared to $3.1 million for the same period last year. And again, this is primarily driven by higher product mix, higher margin product mix as described above, along with favorable close out of a blue glass -- Bluegrass treatment plants, sorry about that hard for me to say Bluegrass.

Turning our Babcock & Wilcox Thermal -- to our Thermal segment. Revenues were $107 million in the third quarter of 2023, which is an increase of 17% compared to the $91.3 million in the third quarter of 2022.

And this was primarily attributable to the higher level of volume in our construction progress projects, as well as parts and service and our package boiler businesses. This was partially offset by a decline in certain service projects.

Adjusted EBITDA in the third quarter of 2023 was $11.3 million, compared to $10.8 million in the third quarter of 2022. This was primarily driven by the higher revenue volume and product mix described above. I'll now turn to our balance sheet cash flow and liquidity.

Total debt at September 30, 2023, was $377.6 million, and the company had cash cash equivalents and restricted cash balance of $65.1 million.

Additionally, subsequent to September 30, 2023, we obtained a commitment to refinance our senior credit facility and amend our existing reimbursement agreement, including updating certain financial covenants there under. The refinance commitment is expected to reduce our interest cost by up to $5 million per year based on current interest rates.

The financing, financing and strategic alignment should significantly improve our liquidity this quarter and onward. I'm also pleased to announce that we have -- as Kenny had mentioned, we've signed a letter of intent for the financing of our first Bright Lube hydrogen project being developed in Massillon, Ohio.

Now I'll turn the call back over to Kenny..

Thanks, Lou. While I closing, while Q3 wasn't without challenges, man included several strategic decisions to improve the fundamentals of our business. We are extremely excited about the growth opportunities ahead of us.

With increasing commercial interest in our core and new technologies and global demand for our baseload power generation our market outlook remains robust, and we see the momentum and booking activity accelerating into 2024 and beyond.

Finally, as always, I'd like to recognize the efforts of our employees as they continue to drive our success as an organization worldwide.

With the outstanding support of our extremely talented and experienced employees and the continued confidence of our customers, we're driving innovation and supporting the global transition to sustainable solutions. And we're focused on delivering strong profitable growth for our shareholders.

We are entering a new phase and as we execute our strategic business realignment, and we look forward to the transformation that will enhance overall margins and improve cash flows generation for the company.

I'll now turn the call back over to Hannah, who will assist with any questions, Hannah?.

Thank you. [Operator Instructions] Our first question is from the line of Aaron Spychalla with Craig-Hallum. You may proceed..

Yeah, good afternoon, Kenny and Lou, thanks for taking the questions.

Hey, Aaron. No problem..

Thanks, first for me on the guidance. Appreciate some of the color there. Can you can you just talk a little bit more about the exclusion of kind of Bright Lube and Climate Bright there.

What those investments might look like as we think about 2024 and then maybe just elaborate a little bit you talked about some kind of project level financing and other things that you're pursuing there..

Sure, now be happy to. So I would think about Bright Lube and Climate Bright from a broader company expense standpoint to be, I don't know, under $10 million, but 5 to 7, perhaps somewhere in that neighborhood and just to give some transparency there.

From a B&W standpoint, obviously, the project financing that we're referring to will going at the project level, versus an impact necessarily to B&W.

So there'll be a timing and depending on how that project financing is set up, and the exact structure of ownership of those particular projects, how the revenue will flow back and forth to B&W, as we've mentioned in the past. But from an expense perspective, rough order of magnitude, that's how we're thinking about Bright Loop and Climate Bright..

All right, thanks for that. And then second, just on the backlog.

Can you talk a little bit, can you just give a little more color on some of those projects, sounds like maybe just slipping into 2024 of any of those been lost? Or is it just kind of more of a project timing, and then you kind of talked about accelerating momentum? Just maybe some of the areas that you're looking for as we head into '24?.

Yeah, well, actually, I would -- even though we're in November here, we're talking about Q3 on this call. I would say some of those are slipping more into Q4, maybe into 2024. It just depends as we work through this negotiations on a few projects that we're trying to complete on that.

As referenced in my comments, some of those delays are referred to, is increasing some scope and activity potentially for B&W as few of the projects, we're looking to larger upgrades and enhancements. And some of our customers are now trying to ascertain how they can extend out the life of these plants longer than maybe they had anticipated.

So it's caused us to or caused them to relook at some of the scope in a positive way as it relates to B&W and so we're excited about that. But -- so those negotiations continued. But hopefully, and we have full intent to get those books still in Q4. But one or two of those may slip out into 2024, as well.

But it's more of a timing, I think, just from a negotiations aspect. And as the customers read, look at their approach to some of these technologies and the lifespan of the plants, which in the long run bodes well for us as an aftermarket provider. So that's how we look at it.

I think worldwide, obviously, some newbuild opportunities, in particular, I would say in renewable energy, waste energy. Some of those are delayed a little bit because of the interest rate increases and timing of capital expenditures. But not for any other reason. So there's a few that will probably extend into next year, overall.

But for us as we talked about on the business, as reducing the overhead associated with large newbuild, which this is an opportunity for us to do that, we also see potentially increasing opportunities around licensing and licensing and some of our waste to energy technologies and with -- in support of some of the new direction that we want to take in the company.

So we'll balance that as we transition more towards licensing and less on specific large new build opportunities..

Understood. Thanks for taking the questions. I'll turn it over..

Thank you, Mr. Spychalla. Our next question is from line of Brent Thielman, D.A. Davidson. You may proceed..

Hey, thanks. Good afternoon.

Hey, can you -- well, I just wanted to confirm the 2024 ebida target is 100 to 110 ex-Bright Lube and Climate Bright?.

That's correct. Yep. .

Okay. And I just -- again, another clarification, I think you said $5 million to $7 million against that potentially in costs just in support of Bright Lube and Climate Bright.

Is that the right sort of baseline?.

Yeah, that I think that's say below 10, but somewhere in that range.

I think it's a good number, if it will tweak and very little bit depending on the project financing and how we, we deal with that on these projects as they continue to advance and the timing of some of the state funding that we're anticipating, as well as other SPB level and investors that would be investing in those projects.

So there's just an element of that tiny piece and how the revenue flow between the project's back to BW would take place, which could plus or minus those expenses from a EBITDA standpoint. But and it's a little early to predict precisely how that will work and the timing of that. But we see that pathway unfolding. So just give you some range.

That's kind of how we're thinking about it..

Okay, that's helpful. And I guess, I mean, particularly in regard to some of these moves to boost the cash flow of the business. Can you talk about what sort of your expectations are assuming kind of this 2024 EBITDA target range, should get some benefits from this overall strategic realignment.

I assume there's less drag from certain operations as a function of this.

How should we think about that '24 EBITDA converting into cash flow?.

Yeah, Brent, from our standpoint, the emphasis on the thermal business, and what we're now what we also called power business, which generate much more cash flow than newbuild projects. We should start seeing a better conversion that we've had in the past, from adjusted EBITDA to the cash.

Some of that cash will be used, as Kenny talked about, to continue to expand our Bright Lube penetration. But we should be able to convert a much higher percentage than we've converted and have positive cash flow coming into the second quarter of next year.

Conversion rate would probably be -- I'll be a little bit broad on that because of CapEx, but the conversion rate would probably be in the 60% range with respect to cash..

Starting 2Q is that Bright Lube. .

Yeah, I'd say middle of Q2, we'll start seeing that. Plus Q1, as you know, Brent Q1 is always a slow quarter for us, as well as others in this industry..

Yeah. Okay, and then I guess, just in regard to some of the financing, that you've done here recently.

Maybe your thoughts, next steps just related to the capital structure that you may or may not need to take, I guess in order to sort of support the ongoing kind of financing commitments you've got out there support the growth of that company's support Bright Lube.

Do you feel like the capital structures in place? You can do all that at that stage?.

Yeah, I think the committed financing that we talked about earlier, for the $150 million for the senior credit facility, which will be both what I'll call the letters of credit facility, and the revolver certainly helps our capital structure, as does the lower interest rate.

And as Kenny mentioned, we're kind of looking at some of the strategic areas that may not fit with our new direction, and that may generate some cash..

Yeah, I'll add -- yeah if I'll add to that, just real quick though. But that $100 million to $110 million EBITDA range, it's important to note and try to emphasize this that we were lessening, if you will, the reliance on large newbuild projects as it relates to that target.

That that doesn't mean that we won't be entering into certain projects, if it makes sense for us to enter into. We're trying to obviously allow those to be more upside to that target, rather than a necessity in order to achieve the target. So tried to be a little more conservative on that approach with putting that guidance or targets out there..

Okay, great. Thank you, Kenny..

Yeah. .

Thank you, Mr. Chairman. Our next question is from Rob Brown with Lake Street Capital Markets. You may proceed..

Good afternoon. I just want to clarify a little bit more on your comments on the realignment and the and not sort of pursuing these larger projects.

Sort of what kind of the -- assuming the waste energy, but are you are you then no bidding projects? Or how do you sort of go to market with that and have you changed your focus there?.

Yeah, it's not as complicated as it sounds. We were simply twofold and I'll explain it further. We have certain opportunities in certain parts on waste energy particular international opportunities require certain security package levels. The certain security packages, i.e. LCs letters of credit, as it relates to us come with high interest rates, right.

So a lot of in waste energy, the margins are not as high on newbuild, clearly not as high as our aftermarket parts and services on renewable services. But those letters of credit and the interest associated with the really compresses the margins, plus, you know, additional risks.

So, as we look at going forward two aspects, there are opportunities and projects that we're in discussions and negotiations on regarding waste energy, specifically, that would have higher margin potential or targets associated with them, that are well above and beyond the interest expense associated with the letters of credits.

So those are positive ones are opportunities for us to pursue that. But we want to remove the reliance of that in our forecasts so that they're more upside rather than a necessity, if that makes sense.

But secondarily, we do see an expansion opportunity on licensing, we have been licensing our waste energy technology in several markets, and that typically comes at even higher gross margins, and significantly lower amounts of letters of credit.

So the interest rate expenses are, or the cost of that are much more attractive to us from a margin standpoint.

So it's not necessarily a no bid or zero bid, it's just as we continue to focus will reduce the overhead down to match what we think is the hands one or two or three or whatever the projects that we think that are -- a stronger opportunity for us from a margin and cash flow standpoint, as we also increase the licensing model that we have, particularly around our waste energy technologies.

So it's -- I don't know if that makes sense, but it's as simple as that sounds..

Okay, got it. Thank you. The Bright Lube pipeline, I know you've given pretty good color on it over your last analyst kind of update.

But how is that pipeline kind of at this point? Are you seeing more projects come into it? Are you seeing what's the direction in terms of project certainty in some of those projects that we're waiting for some of the government supports and financing incentives?.

Yeah. So we are excited about the opportunities in the pipeline building. When we announced the pipeline, we typically keep it to three year projects that we think will book in the next three years. So I guess, if we expanded that pipeline to total opportunities, you would see several more billions in those opportunities.

And that's mainly run a Bright Lube as it relates to those larger projects. So our overall opportunities on Bright Lube keep growing around that. We have as a result of that, we keep expanding that organization going forward in Bright Loop and Climate Bright. We haven't got to a final decision on this yet.

But we're debating and discussing whether or not we should move Bright Loop and Climate Bright maybe to a separate, at least discussion, not necessarily segment going into next year. But we're not at that point yet. But the short term aspect, the opportunity, as Lou mentioned, Ohio now is moving into a real project for us.

The financing is coming into place, the offtake agreements are moving into definitive agreements for up to 10 years, take or pay on that hydrogen. Obviously, it's not a big plant, relatively speaking. But it's important because it puts in the ground commercial technology for us and moves it from where we were before.

The state discussions that we're having with several states now continue, those applications are moving into a real status. Some of those will start to move into public domain soon, and you'll see further announcements on that. It might be a phased in approach on some of that funding coming from states.

And we're -- we continue the discussions on the federal level as well too.

The other aspects, again, it's kind of a circular piece, but the hydrogen hubs that were just recently announced by the DoE, in particular, the Appalachian hub, there's mentioned we've mentioned before, previously, some of the work that's taking place there and Mountaineer in West Virginia, that's all pull through that will eventually some of that will get down to us.

That's going to take time obviously, but those things keep moving on. We've increased testing now, boy, I'm going to throw out a number, it's probably we're up to about 30 different fuel testing.

Samples that we're testing across a broad range both in, in utilizing solid fuels, such as certain coal developments also in biomass developments in multiple locations that's going through our labs at this point time. So we keep increasing the amount of fuel testing related to the opportunities.

And we keep developing the opportunities as we keep unfolding the projects that are there before us.

But as mentioned in the comments today, the developments around Air Products and getting to a 10 year agreement with moving forward with them to finalize a 10 year agreement that location is a big step, that plus the general hydrogen announcement puts us in an offtake of up to 220 tonnes a day.

We are in negotiations on the feedstock aspect, mainly biomass in that particular location. And we're in negotiations on the lease, and then the air permitting process there. We are also in discussions on funding around that project. So all corners of that pyramid are coming together.

The same -- and some of the other locations is and, we'll keep announcing that obviously, as we continue to make progress there. But Bright Loop keeps expanding. And we're excited about those opportunities. One of the areas I didn't talk about in the comments, but I'll say it on the call here that we're starting to see more early on this.

So we'll identify this as we move along. But what we're starting to see globally, and potentially in the U.S. is actually combining ammonia, either net negative or net neutral ammonia with coal-fired plants to reduce the overall CO2 offset of those coal fired plants. We see a wide that activity happening a lot, especially in Asia.

There's been some discussions with a few here in the U.S. So really early on on that application. But that's exciting for us. Because, as I mentioned before, a lot of these plants now we're looking to extend their life cycle and power generation.

And if we can introduce a net neutral, or net negative ammonia production from biomass, which Bright Lube can do, these power plants can actually have a carbon offset, that would take literally, depending on the mix could take a coal plant down to net -- at least net neutral by 2030. And we think that's an exciting development.

We're early in that discussion, but it bodes well for us, because it's both aftermarket parts and services for our baseload power generation and thermal group. But it also opens up offtake for the ammonia produced by net negative carbon intensity Bright Lube using biomass. So we're excited about both ends of that spectrum.

And that's one of the decision points that went into our thinking that get more around our thermal parts and services and our renewable parts and services and focus more on the Bright Lube Climate Bright, because it's becoming more real for us at the same time reduce some of the costs associated with some of the other areas.

So all of that adds into that realignment strategy..

Okay, great. Thank you for all the color. I'll turn it over..

Thank you, Mr. Brown. Our last question is on the line of Alex Rygiel with B. Riley. You may proceed..

Thanks. Good evening, Kenny and Lou, a lot going on here. So let's get into a couple of things. First, as it relates to the $30 million in annual cost savings.

Can you comment on the timing of that? And how important is that in getting to your [Indiscernible] $100 million to $110 million next year?.

Yeah, some of that is already started. And will help out a little bit in Q4 and clearly will kick in heavily into Q1 on that. Yeah -- so that process has already begun. Obviously, we're taking steps some of the timing of that may be more in Q1 than now.

But they've been identified and those are in process to be implemented, I guess, that's way to describe it..

Excellent. And then there was a reference to strategic alternatives related to non-strategic assets.

Is there any chance you could quantify kind of the possible value here that you could realize in making those?.

No, great question, Alex, I wish I could, but I'll leave that out for the moment. But just wanted to say we're -- we look at various things from assets. Some of those are could be property locations and other things assets that no longer strategically that we need going forward.

But -- and don't have a valuation or anything that we'd want to put out at this point in time..

Great, thank you very much..

Thanks, everyone. .

That concludes the question-and-answer session. I would now like to turn the call over to Sharyn for any closing remarks..

Thank you for joining us today. This concludes our conference call. A replay will be available for a limited time on our website later today..

That concludes today's call. Thank you for your participation. You may now disconnect your lines..