BWX Technologies Reports First Quarter 2021 Results and Commences New Multi-Year Guidance Framework

Rhea-AI Summary

BWX Technologies reported Q1 2021 revenue of $528 million, down 2.6% from $542 million in Q1 2020. Net income was $69.7 million ($0.73 per diluted share), a decrease from $75.5 million ($0.79 per diluted share) year-over-year. The Nuclear Operations Group faced a 5.1% revenue decline, while the Nuclear Power Group saw a 22% increase. The company generated $98.4 million in cash from operations, compared to a $6.4 million loss in Q1 2020, and declared a $0.21 dividend per share. BWXT reiterated 2021 guidance for revenue and non-GAAP EPS between $3.05 and $3.20.

Positive

• New agreements in microreactor programs and medical isotopes contribute to a strong backlog.
• 22% revenue increase in Nuclear Power Group driven by higher field services and manufacturing.
• The company generated $98.4 million in cash from operating activities, a strong improvement over the previous year.

Negative

• 2.6% revenue decline year-over-year indicates potential market challenges.
• Nuclear Operations Group revenue decreased by 5.1%, reflecting lower long-lead material production.
• Net income dropped compared to the prior-year period, indicating profitability pressures.

BWX Technologies, Inc. (NYSE: BWXT) ("BWXT", "we", "us" or the "Company") reported first quarter 2021 revenue of $528 million, a 2.6% decrease compared with $542 million in the first quarter 2020. Net income for the first quarter 2021 was $69.7 million, or $0.73 per diluted share, compared with GAAP net income of $75.5 million, or $0.79 per diluted share and non-GAAP net income of $75.6 million, or $0.79 per diluted share, in the prior-year period. A reconciliation of non-GAAP results is detailed in Exhibit 1.

“Solid first quarter results were complemented by the achievement of several important milestones including new wins in microreactor programs, new agreements and progress in medical isotopes, and completion and booking of the multi-year pricing agreement with Naval Reactors," said Rex D. Geveden, president and chief executive officer. "Not only do these milestones boost backlog to near-record levels, but they also strategically position the company to execute and continue to grow.”

“We also commenced a new multi-year guidance framework in our presentation materials, which we see as the first step towards a more comprehensive business outlook at an investor day later this year. Our focus over the medium-term will be to drive smart, long-term growth across the company, efficiently convert profits into cash, and return more than 50% of free cash flow to investors,” said Geveden.

Segment Results

Nuclear Operations Group (NOG) segment revenue was $402 million for the first quarter 2021, a 5.1% decrease from the prior-year period, driven by higher production volume which was more than offset by lower long-lead material production. NOG operating income was $74.4 million in the first quarter 2021, an 18% decrease compared with the prior-year period driven by the less long-lead material production and fewer favorable contract adjustments that were driven in part by the negative impacts from COVID absences early in the year, resulting in first quarter 2021 segment operating margin of 18.5%.

Nuclear Power Group (NPG) segment revenue was $107 million for the first quarter 2021, a 22% increase from the prior-year period primarily due to higher field service, parts manufacturing and fuel handling activity, partially offset by lower component manufacturing volume. NPG operating income was $10.3 million for the first quarter 2021, a 22% and 20% respective GAAP and non-GAAP increase from the prior-year period driven primarily from higher volume. First quarter 2021 segment operating margin was 9.6%.

Nuclear Services Group (NSG) segment operating income was $5.7 million for the first quarter 2021, down slightly compared with $6.4 million of operating income for the first quarter 2020 driven by the sale of the U.S. commercial nuclear services business in 2020, which was partially offset by better contract performance.

Cash and Capital Returned to Shareholders

The Company generated $98.4 million of cash from operating activities in the first quarter 2021, compared with $6.4 million of cash utilized in operating activities in the first quarter 2020 driven primarily from the receipt of a single $88.7 million cash payment on January 4, 2021, that historically was received before the end of the prior fiscal year. As of March 31, 2021, the Company’s cash balance, net of restricted cash, was $57.7 million.

On April 30, 2021, the BWXT Board of Directors approved a new share repurchase authorization for $500 million with no expiration date and declared a quarterly cash dividend of $0.21 per common share. The dividend will be payable on June 9, 2021, to shareholders of record on May 19, 2021.

During the first quarter 2021, the Company returned $40.3 million of cash to shareholders, including $20.0 million in share repurchases and $20.3 million in dividends.

2021 Guidance

BWXT reiterated all components of 2021 guidance:

• Non-GAAP EPS range of $3.05 – $3.20 (excludes pension and post-retirement benefits mark-to-market)
• Consolidated revenue growth of low-single digits vs. 2020 results
  • NOG revenue up slightly
  • NPG revenue growth of ~6%
• Non-GAAP operating income and margin
  • NOG operating margin of “high teens” with upside from CAS pension reimbursement
  • NPG operating margin of ~13%
  • NSG operating income range of $25-30 million
• Capital expenditures of ~$250 million

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 2021 Results
Date:			Tuesday, May 4, 2021, at 9:00 a.m. EDT
Live Webcast:			Investor Relations section of website at www.bwxt.com

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/q12021-release

BWXT may use its website (www.bwxt.com) as a channel of distribution of material Company information. Financial and other important information regarding 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 by 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; our plans and expectations for the NOG, NPG and NSG segments including the expectations, timing and revenue of our strategic initiatives, such as medical radioisotopes; disruptions to our supply chain and/or operations, changes in government regulations and other factors, including any such impacts of, or actions in response to the COVID-19 health crisis; and our expectations for 2021 and beyond. 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 products and services; capital priorities of power generating utilities; the impact of COVID-19 on our employees, contractors, suppliers, customers and other partners and their business activities; the extent to which the length and severity of the COVID-19 health crisis exceeds our current expectations; the potential recurrence of subsequent waves or strains of COVID-19 or similar diseases; 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, 2020 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

At BWX Technologies, Inc. (NYSE: BWXT), we are People Strong, Innovation Driven. Headquartered in Lynchburg, Va., BWXT provides safe and effective nuclear solutions for global security, clean energy, environmental remediation, nuclear medicine and space exploration. With approximately 6,700 employees, BWXT has 12 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 NASA facilities. Follow us on Twitter at @BWXTech and learn more at www.bwxt.com

EXHIBIT 1
BWX TECHNOLOGIES, INC.
RECONCILIATION OF NON-GAAP OPERATING INCOME AND EARNINGS PER SHARE(1)(2)(3)
Three Months Ended March 31, 2020
			GAAP				Restructuring Costs					Non-GAAP
Operating Income			$	98.3			$	0.2				$	98.4
Other Income (Expense)			0.2				—					0.2
Provision for Income Taxes			(22.8)				(0.0)					(22.9)
Net Income			75.6				0.1					75.7
Net Income Attributable to Noncontrolling Interest			(0.1)				—					(0.1)
Net Income Attributable to BWXT			$	75.5			$	0.1				$	75.6
Diluted Shares Outstanding			95.8									95.8
Diluted Earnings per Common Share			$	0.79			$	0.00				$	0.79
Effective Tax Rate			23.2%									23.2%
NPG Operating Income			$	8.5			$	0.2				$	8.6

(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.
(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.

 

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FAQ

What were BWXT's Q1 2021 financial results?

BWXT reported Q1 2021 revenue of $528 million, net income of $69.7 million, or $0.73 per diluted share.

How did BWXT's Nuclear Operations Group perform in Q1 2021?

The Nuclear Operations Group's revenue decreased by 5.1% to $402 million, and operating income dropped by 18%.

What is BWXT's 2021 guidance?

BWXT expects a non-GAAP EPS between $3.05 and $3.20 and low-single digit revenue growth.

What dividend did BWXT declare for shareholders?

BWXT declared a quarterly cash dividend of $0.21 per common share payable on June 9, 2021.

What notable achievements did BWXT highlight in the PR?

BWXT achieved new wins in microreactor programs and completed a pricing agreement with Naval Reactors.