BWX Technologies Reports Third Quarter 2021 Results, Narrows 2021 Guidance and Strategically Deploys Capital to Repurchase Shares

Rhea-AI Summary

BWX Technologies reported Q3 2021 earnings with a GAAP EPS of $0.63 and non-GAAP EPS of $0.76, with total revenue of $499 million, down 4% year-over-year. The company returned $166 million to shareholders through stock repurchases, while narrowing non-GAAP EPS guidance to $3.05, the low end of its previous range. Revenue from its Nuclear Operations Group remained stable, but the Nuclear Power Group saw a 23% revenue drop. Cash from operations was $67.3 million, significantly up from the previous year.

Positive

• Returned $166 million to shareholders in Q3 2021 through share repurchases.
• Nuclear Operations Group operating margin improved to 20.5%.

Negative

• Total revenue decreased by 4% year-over-year to $499 million.
• Nuclear Power Group segment revenue down 23%.

• Generates 3Q21 earnings per share of $0.63 (GAAP), $0.76 (non-GAAP)
• Narrows 2021 non-GAAP earning per share guidance to low end of initial range
• Returns $166 million of cash to shareholders in 3Q21 through share repurchases

LYNCHBURG, Va.--(BUSINESS WIRE)-- BWX Technologies, Inc. (NYSE: BWXT) ("BWXT", "we", "us" or the "Company") reported third quarter 2021 revenue of $499 million, down 4% compared with $520 million in the third quarter 2020. GAAP net income for the third quarter 2021 was $59.9 million, or $0.63 per diluted share, compared with GAAP net income of $73.2 million, or $0.76 per diluted share, in the prior-year period. Non-GAAP net income for the third quarter 2021 was $72.0 million, or $0.76 per diluted share, compared with 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.

“BWXT delivered its strongest quarter year-to-date as we executed well in all areas of the business” said Rex D. Geveden, president and chief executive officer. "However, given the pandemic headwinds which were acute in the first and third quarters as well as unfavorable government contract award timing, we are narrowing 2021 guidance to the low end of the initial range.”

“We maintain strong conviction in the future growth of BWXT as we continue to execute and reliably generate cash across the core businesses while simultaneously building for future growth through new technology investments in microreactors for space and national security applications, advanced nuclear fuels, and nuclear medicine. Our conviction is underscored by the fact that we returned more than $166 million of cash to investors through strategic share repurchases in the third quarter. We look forward to sharing our growth plans at the BWXT Investor Day on November 16 in New York City,” said Geveden.

Segment Results

Nuclear Operations Group (NOG) segment revenue was $387 million for the third quarter 2021, about the same compared with the prior-year period as volume across operations were consistent. NOG GAAP and non-GAAP operating income was $79.4 million and $79.5 million, respectively, in the third quarter 2021, a 16% increase compared with the prior-year period driven by more favorable contract adjustments due to timing of certain milestones. This resulted in a strong third quarter 2021 segment GAAP and non-GAAP operating margin of 20.5% and 20.6%, respectively.

Nuclear Power Group (NPG) segment revenue was $83.4 million for the third quarter 2021, a 23% decrease from the prior-year period primarily due to lower volume of field services and component manufacturing volume partially offset by higher nuclear medicine demand. NPG GAAP and non-GAAP operating income was $9.0 million and $9.3 million, respectively, for the third quarter 2021, a significant decrease compared with the prior-year period driven primarily from lower revenue and the significant decrease of funds received under the Canadian COVID-19 Economic Response Plan to offset incurred expenses related to the pandemic that occurred in the prior-year period. Third quarter 2021 segment GAAP and non-GAAP operating margin was 10.8% and 11.1%, respectively.

Nuclear Services Group (NSG) segment operating income was $10.3 million for the third quarter 2021, up 36% compared with the third quarter 2020 driven by better project fee performance.

Cash and Capital Returned to Shareholders

The Company generated $67.3 million of cash from operating activities in the third quarter 2021, compared with $7.5 million of net cash utilized in the third quarter 2020. As of September 30, 2021, the Company’s cash balance, net of restricted cash, was $69.4 million.

During the third quarter 2021, the Company returned $186 million of cash to shareholders in share repurchases and dividends, resulting in a total of $246 million of cash returned to shareholders year-to-date, including $186 million in share repurchases and $60 million in dividends.

On October 28, 2021, the BWXT Board of Directors declared a quarterly cash dividend of $0.21 per common share. The dividend will be payable on December 10, 2021, to shareholders of record on November 19, 2021.

Updated 2021 Guidance

• Non-GAAP EPS of $3.05 which is the low end of initial range of $3.05 to $3.20 (excludes pension and post-retirement benefits mark-to-market)
• Consolidated revenue flat to up 1% vs. 2020 results
  • NOG revenue down ~1%
  • NPG revenue up ~9%
• Non-GAAP operating income and margin
  • NOG operating margin of “high teens” with upside from CAS pension reimbursement
  • NPG operating margin of ~12.5%
  • NSG operating income of ~$25 million
• Capital expenditures of ~$280 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 Third Quarter 2021 Results
Date:	Monday, November 1, 2021, at 5:00 p.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/3q2021-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 microreactors, advanced nuclear fuels and nuclear medicine; 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; the actions to contain the impact of such diseases, and potential employee unrest; 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 is a Fortune 1000 and Defense News Top 100 manufacturing and engineering innovator that 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 @BWXT 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 September 30, 2021
	GAAP				Restructuring Costs				Costs associated with early bond redemption					Non-GAAP
Operating Income	$	87.5			$	0.8			$	—				$	88.2
Other Income (Expense)	(9.7		)		—				15.0					5.3
Provision for Income Taxes	(17.6		)		(0.2		)		(3.5		)			(21.3		)
Net Income	60.2				0.6				11.5					72.2
Net Income Attributable to Noncontrolling Interest	(0.2		)		—				—					(0.2		)
Net Income Attributable to BWXT	$	59.9			$	0.6			$	11.5				$	72.0
Diluted Shares Outstanding	94.5													94.5
Diluted Earnings per Common Share	$	0.63			$	0.01			$	0.12				$	0.76
Effective Tax Rate	22.6		%											22.8		%
NOG Operating Income	$	79.4			$	0.2								$	79.5
NPG Operating Income	$	9.0			$	0.3								$	9.3
Unallocated Corporate Operating Income	$	(5.0	)		$	0.3								$	(4.7	)

Three Months Ended September 30, 2020
	GAAP				Restructuring Costs				One-time franchise tax audit expense					Non-GAAP
Operating Income	$	88.8			$	0.5			$	2.6				$	91.9
Other Income (Expense)	3.1				—				—					3.1
Provision for Income Taxes	(18.7		)		(0.1		)		(0.6		)			(19.4		)
Net Income	73.2				0.4				2.0					75.6
Net Income Attributable to Noncontrolling Interest	(0.0		)		—				—					(0.0		)
Net Income Attributable to BWXT	$	73.2			$	0.4			$	2.0				$	75.6
Diluted Shares Outstanding	95.7													95.7
Diluted Earnings per Common Share	$	0.76			$	0.00			$	0.02				$	0.79
Effective Tax Rate	20.3		%											20.4		%
NPG Operating Income	$	29.2			$	0.5			$	—				$	29.7

(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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211101005940/en/

Investor Contact:

Mark Kratz

Vice President, Investor Relations

980-365-4300

Investors@bwxt.com

Media Contact:

Jud Simmons

Director, Media and Public Relations

434-522-6462

hjsimmons@bwxt.com

Source: BWX Technologies, Inc.

FAQ

What were BWXT's Q3 2021 earnings per share?

BWXT reported Q3 2021 GAAP EPS of $0.63 and non-GAAP EPS of $0.76.

How much cash did BWXT return to shareholders in Q3 2021?

BWXT returned $166 million to shareholders through share repurchases in Q3 2021.

What is BWXT's updated guidance for non-GAAP EPS in 2021?

BWXT has narrowed its non-GAAP EPS guidance for 2021 to $3.05.

What factors affected BWXT's revenue in Q3 2021?

BWXT's revenue was affected by a 4% decline year-over-year, attributed to lower volume in the Nuclear Power Group.

When will BWXT's dividend be paid?

BWXT's quarterly cash dividend of $0.21 will be payable on December 10, 2021.