BWX Technologies Reports Third Quarter 2022 Results
BWX Technologies reported a strong third quarter 2022, with revenue of $523.7 million and a net income of $61.8 million or $0.67 EPS. The commercial operations segment grew by 22%, while overall revenue increased by 5% compared to the previous year. Adjusted EBITDA stood at $100.1 million. The company has narrowed its 2022 earnings guidance but anticipates revenue and EBITDA growth in 2023, supported by key nuclear projects and FDA acceptance of its technetium-99m generator application for priority review.
- Third quarter revenue of $523.7 million, a 5% increase YoY.
- Net income of $61.8 million (EPS of $0.67) reflects a 3% increase.
- Commercial operations revenue increased by 22% to $101.8 million.
- Adjusted EBITDA at $100.1 million, showing solid operational performance.
- FDA accepted technetium-99m generator application with priority review status.
- Strong revenue and EBITDA growth anticipated for 2023.
- Government Operations segment experienced lower production volumes, resulting in a decrease in operating income.
- Operating income decreased by 9% compared to the same period last year.
- Non-GAAP EPS decreased by 9% due to lower operating income and higher interest expenses.
-
3Q22 revenue of
$523.7 million
-
3Q22 net income of
$61.8 million $100.1 million
-
3Q22 diluted GAAP EPS of
$0.67 $0.69
-
3Q22 net cash provided by operating activities of
$65.0 million $25.4 million
- Narrows 2022 guidance and anticipates strong revenue and EBITDA(1) growth in 2023
- Technetium 99-m generator application accepted by FDA with priority review classification
“BWXT delivered third quarter results that were in line with our expectations that we framed in the second quarter earnings call," said
Geveden continued, “In the past couple of months, BWXT has made exciting progress in two important nuclear growth end-markets: nuclear medicine and commercial nuclear power. In September, we submitted our Tc-99m generator application to the FDA and last week we were notified by the FDA that our application has been accepted with a priority review classification. Also in September, BWXT Medical completed the first trial batch of Actinium-225 for Bayer’s evaluation in therapeutic clinical trials. In August, BWXT's clean-energy business was awarded a contract from GE-Hitachi to begin engineering for its BWRX-300 small modular reactor (SMR) pressure vessel that will enable us to begin manufacturing and procurement preparations. This award firmly supports the global interest in clean-energy SMR technology, and BWXT is well suited to provide design and efficient manufacturing solutions for complex nuclear components to GE-Hitachi as well as other SMR solutions.”
“Given current labor dynamics, we are narrowing 2022 earnings guidance by bringing down the top-end of the range. However, with the company’s new wins, recent growth initiative progress, and positive secular tailwinds in BWXT’s nuclear end-markets, we anticipate strong operational growth in 2023 and accelerating growth over the medium-term,” said Geveden.
Financial Results Summary
|
|
Three Months Ended |
|
|
|
|
||||||||
|
|
2022 |
|
2021 |
|
$ Change |
|
% Change |
||||||
|
|
(Unaudited) (In millions, except per share amounts) |
||||||||||||
Revenues |
|
|
|
|
|
|
|
|
||||||
Government Operations |
|
$ |
422.5 |
|
|
$ |
417.1 |
|
|
$ |
5.4 |
|
|
|
Commercial Operations |
|
$ |
101.8 |
|
|
$ |
83.4 |
|
|
$ |
18.4 |
|
|
|
Consolidated |
|
$ |
523.7 |
|
|
$ |
498.7 |
|
|
$ |
25.0 |
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
||||||
Government Operations |
|
$ |
77.7 |
|
|
$ |
87.5 |
|
|
$ |
(9.8 |
) |
|
(11)% |
Commercial Operations |
|
$ |
6.8 |
|
|
$ |
4.9 |
|
|
$ |
1.9 |
|
|
|
Unallocated Corporate (Expense) Income |
|
$ |
(4.7 |
) |
|
$ |
(5.0 |
) |
|
$ |
0.3 |
|
|
NM |
Consolidated |
|
$ |
79.9 |
|
|
$ |
87.5 |
|
|
$ |
(7.6 |
) |
|
(9)% |
Consolidated non-GAAP(1) |
|
$ |
81.5 |
|
|
$ |
88.2 |
|
|
$ |
(6.7 |
) |
|
(8)% |
EPS (Diluted) |
|
|
|
|
|
|
|
|
||||||
GAAP |
|
$ |
0.67 |
|
|
$ |
0.63 |
|
|
$ |
0.04 |
|
|
|
Non-GAAP(1) |
|
$ |
0.69 |
|
|
$ |
0.76 |
|
|
$ |
(0.07 |
) |
|
(9)% |
Net Income |
|
|
|
|
|
|
|
|
||||||
GAAP |
|
$ |
61.8 |
|
|
$ |
60.2 |
|
|
$ |
1.7 |
|
|
|
Non-GAAP(1) |
|
$ |
63.2 |
|
|
$ |
72.2 |
|
|
$ |
(9.0 |
) |
|
(12)% |
Adjusted EBITDA(1) |
|
|
|
|
|
|
|
|
||||||
Government Operations |
|
$ |
90.4 |
|
|
$ |
98.6 |
|
|
$ |
(8.3 |
) |
|
(8)% |
Commercial Operations |
|
$ |
11.5 |
|
|
$ |
10.2 |
|
|
$ |
1.2 |
|
|
|
Corporate |
|
$ |
(1.7 |
) |
|
$ |
(3.1 |
) |
|
$ |
1.5 |
|
|
NM |
Consolidated |
|
$ |
100.1 |
|
|
$ |
105.7 |
|
|
$ |
(5.6 |
) |
|
(5)% |
Cash Flows |
|
|
|
|
|
|
|
|
||||||
Net Cash Provided By Operating Activities |
|
$ |
65.0 |
|
|
$ |
67.3 |
|
|
$ |
(2.3 |
) |
|
(3)% |
Purchases of Property, Plant and Equipment |
|
$ |
39.6 |
|
|
$ |
66.5 |
|
|
$ |
(26.8 |
) |
|
(40)% |
Free Cash Flow(1) |
|
$ |
25.4 |
|
|
$ |
0.8 |
|
|
$ |
24.6 |
|
|
NM |
Repurchases of Common Stock |
|
$ |
— |
|
|
$ |
165.8 |
|
|
$ |
(165.8 |
) |
|
NM |
Dividends Paid to Common Shareholders |
|
$ |
20.1 |
|
|
$ |
20.0 |
|
|
$ |
0.2 |
|
|
|
NM = Not Meaningful |
||||||||||||||
Revenues
Third quarter revenue increased in both operating segments. The Government Operations increase was driven by higher naval production and microreactors volume, partially offset by lower long-lead material production. The Commercial Operations increase was driven by higher field services, higher fuel handling and an increase in medical sales.
Operating Income and Adjusted EBITDA(1)
Third quarter total operating income decreased driven by lower operating income in Government Operations that was partially offset by higher operating income in Commercial Operations. The Government Operations decrease was driven by decreased labor efficiencies that resulted in fewer favorable contract adjustments, lower recoverable CAS pension income, and higher depreciation and acquisition amortization, partially offset by higher income in technical service joint ventures. The Commercial Operations increase was driven by higher revenue, a more favorable business mix and segment cost controls.
Third quarter total adjusted EBITDA(1) decreased for the reasons noted above as lower Government Operations adjusted EBITDA(1) was partially offset by higher Commercial Operations adjusted EBITDA(1).
EPS
The third quarter GAAP EPS increase was driven primarily by the absence of cost associated with an early bond redemption that occurred in the third quarter 2021 and lower share count, partially offset by lower FAS/CAS pension income, higher interest expense and a higher effective tax rate. The third quarter non-GAAP EPS decrease was driven by lower operating and FAS/CAS pension income, higher interest expense, and a higher effective tax rate, which was partially offset by a lower share count.
Cash Flows
Decreased operating cash flow was driven by higher cash taxes, partially offset by more favorable changes in working capital. Lower capital expenditures were driven by less spend on two major growth capital campaigns, for
Dividend
BWXT paid
2022 Guidance
(In millions, except per share amounts) |
|
|
|
As of |
|
As of |
|
|
Year Ended |
|
Year Ended |
|
Year Ended |
|
|
|
|
|
|
|
Revenues |
|
|
|
up |
|
up |
Adjusted EBITDA(1) |
|
|
|
up |
|
up ~ |
Non-GAAP(1) Earnings Per Share |
|
|
|
|
|
|
Net Cash Provided by Operating Activities |
|
|
|
|
|
|
Capital Expenditures |
|
|
|
|
|
< |
2022 Segment Outlook
(In millions) |
|
As of |
|
As of |
||||
|
|
Revenue |
|
Adjusted EBITDA(1) |
|
Revenue |
|
Adjusted EBITDA(1) |
Government Operations |
|
up |
|
|
|
up ~ |
|
|
Commercial Operations |
|
up |
|
|
|
up ~ |
|
|
Additional information can be found in the 2022 third quarter earnings call presentation on the BWXT investor relations website at www.bwxt.com/investors. 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.
Conference Call to Discuss Third Quarter 2022 Results
Date: |
|
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/3Q2022-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.
Non-GAAP Measures
BWXT uses and makes reference to adjusted EBITDA, free cash flow and free cash flow conversion, which are not recognized measures under GAAP. BWXT is providing these non-GAAP measures 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. Definitions for the non-GAAP measures are provided below and reconciliations are detailed in Exhibit 1, except that reconciliations of forward-looking GAAP measures are not provided because the company is unable to reliably forecast most of the items that are excluded from GAAP to calculate non-GAAP results. Other companies may define these measures differently or may utilize different non-GAAP measures, thus impacting comparability.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is calculated using non-GAAP net income, plus provision for income taxes, less other – net, less interest income, plus interest expense, plus depreciation and amortization.
Free Cash Flow (FCF) is calculated using net income to derive net cash provided by (used in) operating activities less purchases of property, plant and equipment.
Free Cash Flow conversion is free cash flow divided by net income.
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 each of our reportable segments, including the expectations, timing and revenue of our strategic initiatives, such as medical radioisotopes, SMR components and recent acquisitions; 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 and guidance for 2022 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 and other customers; the timing of technology development, regulatory approval and automation of production; the receipt and/or timing of government approvals; the impact of COVID-19 on our business and our employees, contractors, suppliers, customers and other partners and their business activities; the potential recurrence of subsequent waves or strains of COVID-19 or similar diseases; labor market challenges, including employee retention and recruitment; 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
About BWXT
At
(1) A reconciliation of non-GAAP results are detailed in Exhibit 1. Additional information can be found in the materials on the BWXT investor relations website at www.bwxt.com/investors. |
EXHIBIT 1
RECONCILIATION OF NON-GAAP OPERATING INCOME AND EARNINGS PER SHARE(1)(2)(3) (In millions, except per share amounts) |
||||||||||||||||
Three Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
Restructuring
|
|
Acquisition
|
|
|
Non-GAAP |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Operating Income |
$ |
79.9 |
|
|
$ |
1.2 |
|
|
$ |
0.5 |
|
|
|
$ |
81.5 |
|
Other Income (Expense) |
|
2.1 |
|
|
|
— |
|
|
|
— |
|
|
|
|
2.1 |
|
Provision for Income Taxes |
|
(20.2 |
) |
|
|
(0.2 |
) |
|
|
(0.1 |
) |
|
|
|
(20.5 |
) |
Net Income |
|
61.8 |
|
|
|
1.0 |
|
|
|
0.4 |
|
|
|
|
63.2 |
|
Net Income Attributable to Noncontrolling Interest |
|
(0.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
|
(0.2 |
) |
Net Income Attributable to BWXT |
$ |
61.6 |
|
|
$ |
1.0 |
|
|
$ |
0.4 |
|
|
|
$ |
63.0 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted Shares Outstanding |
|
91.7 |
|
|
|
|
|
|
|
|
91.7 |
|
||||
Diluted Earnings per Common Share |
$ |
0.67 |
|
|
$ |
0.01 |
|
|
$ |
0.00 |
|
|
|
$ |
0.69 |
|
Effective Tax Rate |
|
24.6 |
% |
|
|
|
|
|
|
|
24.5 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||
Government Operations Operating Income |
$ |
77.7 |
|
|
$ |
— |
|
|
$ |
0.5 |
|
|
|
$ |
78.2 |
|
Commercial Operations Operating Income |
$ |
6.8 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
6.8 |
|
Unallocated Corporate Operating Income |
$ |
(4.7 |
) |
|
$ |
1.2 |
|
|
$ |
— |
|
|
|
$ |
(3.5 |
) |
Three Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
Restructuring
|
|
Cost associated
|
|
|
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 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||
Government Operations Operating Income |
$ |
87.5 |
|
|
$ |
0.2 |
|
|
$ |
— |
|
|
|
$ |
87.7 |
|
Commercial Operations Operating Income |
$ |
4.9 |
|
|
$ |
0.3 |
|
|
$ |
— |
|
|
|
$ |
5.2 |
|
Unallocated Corporate Operating Income |
$ |
(5.0 |
) |
|
$ |
0.3 |
|
|
$ |
— |
|
|
|
$ |
(4.7 |
) |
EXHIBIT 1 (continued)
RECONCILIATION OF CONSOLIDATED ADJUSTED EBITDA(1)(2)(3) (In millions) |
||||||||||||||||
Three Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP |
|
Restructuring
|
|
Acquisition
|
|
|
Non-GAAP |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net Income |
$ |
61.8 |
|
|
$ |
1.0 |
|
$ |
0.4 |
|
|
$ |
63.2 |
|
||
Provision for Income Taxes |
|
20.2 |
|
|
|
0.2 |
|
|
0.1 |
|
|
|
20.5 |
|
||
Other – net |
|
(11.5 |
) |
|
|
— |
|
|
— |
|
|
|
(11.5 |
) |
||
Interest Income |
|
(0.3 |
) |
|
|
— |
|
|
— |
|
|
|
(0.3 |
) |
||
Interest Expense |
|
9.6 |
|
|
|
— |
|
|
— |
|
|
|
9.6 |
|
||
Depreciation & Amortization |
|
18.6 |
|
|
|
— |
|
|
— |
|
|
|
18.6 |
|
||
Adjusted EBITDA |
$ |
98.5 |
|
|
$ |
1.2 |
|
$ |
0.5 |
|
|
$ |
100.1 |
|
||
Three Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP |
|
Restructuring
|
|
Costs associated
|
|
|
Non-GAAP |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net Income |
$ |
60.2 |
|
|
$ |
0.6 |
|
$ |
11.5 |
|
|
|
$ |
72.2 |
|
|
Provision for Income Taxes |
|
17.6 |
|
|
|
0.2 |
|
|
3.5 |
|
|
|
|
21.3 |
|
|
Other – net |
|
(1.6 |
) |
|
|
— |
|
|
(10.8 |
) |
|
|
|
(12.4 |
) |
|
Interest Income |
|
(0.2 |
) |
|
|
— |
|
|
— |
|
|
|
|
(0.2 |
) |
|
Interest Expense |
|
11.5 |
|
|
|
— |
|
|
(4.2 |
) |
|
|
|
7.3 |
|
|
Depreciation & Amortization |
|
17.5 |
|
|
|
— |
|
|
— |
|
|
|
|
17.5 |
|
|
Adjusted EBITDA |
$ |
105.0 |
|
|
$ |
0.8 |
|
$ |
— |
|
|
|
$ |
105.7 |
|
|
RECONCILIATION OF REPORTING SEGMENT ADJUSTED EBITDA(1)(2)(3) (In millions) |
||||||||||||||||
Three Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Income
|
|
Non-GAAP
|
|
Depreciation &
|
|
|
Adjusted
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Government Operations |
$ |
77.7 |
|
$ |
0.5 |
|
$ |
12.1 |
|
|
$ |
90.4 |
||||
Commercial Operations |
$ |
6.8 |
|
$ |
— |
|
$ |
4.6 |
|
|
$ |
11.5 |
||||
Three Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Operating Income
|
|
Non-GAAP
|
|
Depreciation &
|
|
|
Adjusted
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Government Operations |
$ |
87.5 |
|
$ |
0.2 |
|
$ |
10.9 |
|
|
$ |
98.6 |
||||
Commercial Operations |
$ |
4.9 |
|
$ |
0.3 |
|
$ |
5.0 |
|
|
$ |
10.2 |
||||
EXHIBIT 1 (continued)
RECONCILIATION OF CONSOLIDATED FREE CASH FLOW(1)(2)(3) (In millions) |
|||
Three Months Ended |
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Net Cash Provided By Operating Activities |
$ |
65.0 |
|
Purchases of Property, Plant and Equipment |
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(39.6 |
) |
Free Cash Flow |
$ |
25.4 |
|
Three Months Ended |
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Net Cash Provided By Operating Activities |
$ |
67.3 |
|
Purchases of Property, Plant and Equipment |
|
(66.5 |
) |
Free Cash Flow |
$ |
0.8 |
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(1) |
Tables may not foot due to rounding. |
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(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. |
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(4) |
For Non-GAAP adjustment details, see reconciliation of non-GAAP operating income and earnings per share. |
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View source version on businesswire.com: https://www.businesswire.com/news/home/20221107005973/en/
Investor Contact:
Vice President, Investor Relations
980-365-4300
Investors@bwxt.com
Media Contact:
Director, Media and Public Relations
434-522-6462
hjsimmons@bwxt.com
Source:
FAQ
What were BWXT's third quarter 2022 results?
What is BWXT's adjusted EBITDA for the third quarter of 2022?
How did BWXT's commercial operations perform in Q3 2022?
What is the future outlook for BWXT based on their latest earnings report?
What significant regulatory update did BWXT receive in Q3 2022?
