LYNCHBURG, Va.--(BUSINESS WIRE)--BWX Technologies, Inc. (NYSE: BWXT) (“BWXT,” “we,” “us” or the “Company”) reported first quarter 2019 revenue of $416 million, a 9.0% decrease compared with $457 million in the first quarter of 2018. Net income for the first quarter 2019 was $49.0 million, or $0.51 per diluted share, compared with GAAP net income of $66.4 million, or $0.66 per diluted share, and non-GAAP net income of $67.6 million, or $0.67 per diluted share, in the first quarter 2018. A reconciliation of non-GAAP results is detailed in Exhibit 1.
“Our backlog demonstrates continued strength and long-term visibility in our core business with the U.S. Navy,” said Rex D. Geveden, president and chief executive officer. “The Nuclear Operations Group received nearly $1.7 billion in orders, which resulted in all-time record backlog for the company of over $4.8 billion.”
“While first quarter results were lighter than the prior-year period, they were in line with our expectations. We anticipate a similar outcome in the second quarter preceding the Columbia-Class production ramp and Nuclear Services Group growth, which will result in nearly sixty percent of our earnings in the second half of the year. Accordingly, we continue to reiterate our guidance across the board.”
Segment Results
Nuclear Operations Group (NOG)
segment revenue was $305 million for the first quarter of 2019, a 3.7%
decrease from the prior-year period, driven primarily by timing of
long-lead material purchases and lower missile tube volume, partially
offset by higher fuel volume. NOG operating income was $57.6 million in
the first quarter of 2019, a 15% decrease compared with the prior-year
period primarily driven by lower volume and higher expenses associated
with on-boarding employees to meet expected increased volume demands.
First quarter segment operating margins were 18.9%.
Nuclear Power Group (NPG) segment revenue was $84.4 million for the first quarter of 2019, a 25% decrease from the prior-year period primarily due to decreases in the China steam generator project and lower field service and fuel activity, partially offset by increased revenue from the medical radioisotope acquisition. NPG operating income was $12.6 million in the first quarter of 2019, a 42% decrease from the prior-year period driven primarily from lower volume in the China steam generator project, field services and fuel activity, partially offset by the medical radioisotope acquisition. First quarter segment operating margins were 14.9%.
Nuclear Services Group (NSG) segment operating income was $1.6 million for the first quarter of 2019 compared with $1.2 million for the first quarter of 2018.
Liquidity and Debt
The Company utilized $17.7 million
of net cash in operating activities in the first quarter of 2019
compared with $18.6 million of net cash utilized in operating activities
in the prior-year period. At the end of the first quarter 2019, the
Company’s cash and short-term investments position, net of restricted
cash, was $26.6 million.
As of March 31, 2019, the Company had gross debt of $879.6 million and $64.3 million in letters of credit issued under the Company’s revolving credit facility. Gross debt included $400.0 million in senior notes, $276.9 million in term loans and $202.7 million in borrowings under the Company’s revolving credit facility. As a result, the Company had $233.0 million in remaining availability under its revolving credit facility.
Capital Deployment
The Company returned $36.8 million
to shareholders during the first quarter 2019, including $20.0 million
in share repurchases and $16.8 million in dividends. As of March 31,
2019, the total remaining share repurchase authorization stands at
$165.3 million.
On May 1, 2019, our Board of Directors declared a quarterly cash dividend of $0.17 per common share. The dividend will be payable on June 6, 2019, to shareholders of record on May 17, 2019.
2019 Guidance
BWXT reiterates guidance for 2019:
- Non-GAAP EPS of ~$2.50 (excluding mark-to-market for pension and post-retirement benefits)
-
Consolidated revenue growth of ~6%
- NOG revenue growth of ~6%
- NPG revenue ~flat
-
Operating income and margin
- NOG operating margin in the “high teens” with upside potential from CAS pension reimbursement
- NPG operating margin of ~13%
- NSG operating income of ~$25 million
- Other segment operating expense primarily R&D of ~1% of revenue
- Unallocated corporate expenses of ~$20 million
- Other income primarily related to pension and other post-employment benefits of ~$22 million
- Non-GAAP effective tax rate in a range of 23% to 24%
- Capital expenditures of ~$225 million
Long-term Guidance
BWXT reiterated long-term guidance
that, excluding the benefit of tax reform, the Company anticipates a
non-GAAP EPS compound annual growth rate (CAGR) in the low-double digits
over a three-to-five year period from 2017 based on a robust organic
growth strategy and balance sheet capacity.
The Company does not provide GAAP guidance because it is unable to reliably forecast most of the items that are excluded from GAAP to calculate non-GAAP results. These items could cause GAAP results to differ materially from non-GAAP results. See reconciliation of non-GAAP results in Exhibit 1 for additional information.
Conference Call to Discuss First Quarter 2019 Results
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Date: |
Thursday, May 2, 2019, at 8:30 a.m. EDT | |||||
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Live Webcast: |
Investor Relations section of website at www.bwxt.com |
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Full Earnings Release Available on BWXT Website
A
full version of this earnings release is available on our Investor
Relations website at http://investors.bwxt.com/interactive/newlookandfeel/4082835/Q12019.pdf.
BWXT may use its website (www.bwxt.com) as a channel of distribution of material Company information. Financial and other important information regarding the BWXT is routinely accessible through and posted on our website. In addition, you may elect to automatically receive e-mail alerts and other information about BWXT when you enrolling through the “Email Alerts” section of our website at http://investors.bwxt.com.
Forward-Looking Statements
BWXT cautions that this
release contains forward-looking statements, including, without
limitation, statements relating to backlog, to the extent they may be
viewed as an indicator of future revenues; completion of our multi-year
pricing agreement; the integration and anticipated benefits of our
acquisition of Nordion’s medical isotope business; timing of future
revenues from the acquisition of Nordion’s medical isotope business and
new medical radioisotope business; the timing and impact of the missile
tube welding issue; our plans and expectations for the NOG, NPG and NSG
segments; and our 2019 guidance and long-term guidance. These
forward-looking statements are based on management’s current
expectations and involve a number of risks and uncertainties, including,
among other things, our ability to execute contracts in backlog; the
lack of, or adverse changes in, Federal appropriations to government
programs in which we participate; the demand for and competitiveness of
nuclear power; capital priorities of power generating utilities; 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 BWXT’s filings with the Securities and Exchange Commission,
including our annual report on Form 10-K for the year ended December 31,
2018 and subsequent quarterly reports on Form 10-Q. BWXT 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.
About BWXT
Headquartered in Lynchburg, Va., BWX
Technologies, Inc. (NYSE:BWXT) is a leading supplier of nuclear
components and fuel to the U.S. government; provides technical and
management services to support the U.S. government in the operation of
complex facilities and environmental remediation activities; and
supplies precision manufactured components, services and fuel for the
commercial nuclear power industry. With approximately 6,250 employees,
BWXT has eleven major operating sites in the U.S. and Canada. In
addition, BWXT joint ventures provide management and operations at more
than a dozen U.S. Department of Energy and two NASA facilities. Follow
us on Twitter @BWXTech and learn more at www.bwxt.com.
EXHIBIT 1
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BWX TECHNOLOGIES, INC. RECONCILIATION OF NON-GAAP OPERATING INCOME AND EARNINGS PER SHARE(1)(2)(3) |
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| Three Months Ended March 31, 2018 | |||||||||||||||
| GAAP |
Acquisition |
Non-GAAP | |||||||||||||
| Operating Income | $ | 79.9 | $ | 1.6 | $ | 81.4 | |||||||||
| Other Income (Expense) | 5.1 | — | 5.1 | ||||||||||||
| Provision for Income Taxes | (18.6 | ) | (0.4 | ) | (19.0 | ) | |||||||||
| Net Income | 66.4 | 1.2 | 67.6 | ||||||||||||
| Net Income Attributable to Noncontrolling Interest | — | — | — | ||||||||||||
| Net Income Attributable to BWXT | $ | 66.4 | $ | 1.2 | $ | 67.6 | |||||||||
| Diluted Shares Outstanding | 100.5 | 100.5 | |||||||||||||
| Diluted Earnings per Common Share | $ | 0.66 | $ | 0.01 | $ | 0.67 | |||||||||
| Effective Tax Rate | 21.9 | % | 21.9 | % | |||||||||||
| (1) | Tables may not foot due to rounding. | |
| (2) |
BWXT is providing non-GAAP information regarding certain of its historical results and guidance on future earnings per share to supplement the results provided in accordance with GAAP and it should not be considered superior to, or as a substitute for, the comparable GAAP measures. BWXT believes the non-GAAP measures provide meaningful insight and transparency into the Company’s operational performance and provides these measures to investors to help facilitate comparisons of operating results with prior periods and to assist them in understanding BWXT’s ongoing operations. |
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| (3) | BWXT has not included a reconciliation of provided non-GAAP guidance to the comparable GAAP measures due to the difficulty of estimating any mark-to-market adjustments for pension and post-retirement benefits, which are determined at the end of the year. | |
