- 3Q22 revenue of $523.7 million
- 3Q22 net income of $61.8 million, adjusted EBITDA(1) of $100.1
million
- 3Q22 diluted GAAP EPS of $0.67, non-GAAP(1) EPS of $0.69
- 3Q22 net cash provided by operating activities of $65.0
million, free cash flow(1) of $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
BWX Technologies, Inc. (NYSE: BWXT) ("BWXT", "we", "us" or the
"Company") reported third quarter 2022 GAAP net income attributable
to BWXT of $61.6 million, or diluted earnings per share (EPS) of
$0.67, on revenue of $523.7 million. Third quarter 2022 non-GAAP(1)
net income attributable to BWXT was $63.0 million, or $0.69 diluted
EPS. Third quarter 2022 adjusted earnings before interest, taxes,
depreciation, and amortization (EBITDA)(1) was $100.1 million. A
reconciliation of non-GAAP results are detailed in Exhibit 1.
“BWXT delivered third quarter results that were in line with our
expectations that we framed in the second quarter earnings call,"
said Rex D. Geveden, president and chief executive officer. “Strong
performance from Commercial Operations combined with cost control
initiatives offset headwinds in the Government Operations segment
attributable to lower than projected production volumes due to
hiring challenges in a tough macro labor market impacting many
industries. We are continuing to address attrition and transitory
labor shortages by implementing a set of comprehensive actions
including aggressive recruiting, enhanced training and retention
measures.”
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 September
30,
2022
2021
$ Change
% Change
(Unaudited)
(In millions, except per share
amounts)
Revenues
Government Operations
$
422.5
$
417.1
$
5.4
1%
Commercial Operations
$
101.8
$
83.4
$
18.4
22%
Consolidated
$
523.7
$
498.7
$
25.0
5%
Operating Income
Government Operations
$
77.7
$
87.5
$
(9.8
)
(11)%
Commercial Operations
$
6.8
$
4.9
$
1.9
39%
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
6%
Non-GAAP(1)
$
0.69
$
0.76
$
(0.07
)
(9)%
Net Income
GAAP
$
61.8
$
60.2
$
1.7
3%
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
12%
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
1%
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 U.S. naval nuclear reactors and
medical radioisotopes, that are nearing completion.
Dividend
BWXT paid $20.1 million dollars, or $0.22 per common share, to
shareholders in the third quarter 2022. On November 1, 2022, the
BWXT Board of Directors declared a quarterly cash dividend of $0.22
per common share payable on December 13, 2022, to shareholders of
record on November 21, 2022.
2022 Guidance
(In millions, except per share
amounts)
As of August 8, 2022
As of November 7, 2022
Year Ended
Year Ended
Year Ended
December 31, 2021
December 31, 2022
December 31, 2022
Revenues
$2,124
up 6.5% - 8.0%
up 6.5% - 7.0%
Adjusted EBITDA(1)
$418
up 5.0% - 6.5%
up ~5.0%
Non-GAAP(1) Earnings Per Share
$3.06
$3.08 - $3.23
$3.10 - $3.15
Net Cash Provided by Operating
Activities
$386
$260 - $290
$260 - $290
Capital Expenditures
$311
$195 - $210
< $200
2022 Segment Outlook
(In millions)
As of August 8, 2022
As of November 7, 2022
Revenue
Adjusted EBITDA(1)
Revenue
Adjusted EBITDA(1)
Government Operations
up 6.0% - 7.5%
$400 - $405
up ~6.0%
~$395
Commercial Operations
up 7.5% - 8.5%
$48 - $50
up ~8.5%
~$50
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:
Monday, November 7, 2022, at 5:00 p.m.
EST
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
Securities and Exchange Commission, including our annual report on
Form 10-K for the year ended December 31, 2021 and subsequent Form
10-Q filings. 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 14 major operating sites in the U.S., Canada and the U.K.
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
(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
BWX TECHNOLOGIES, INC.
RECONCILIATION OF NON-GAAP
OPERATING INCOME AND EARNINGS PER SHARE(1)(2)(3)
(In millions, except per share
amounts)
Three Months Ended
September 30, 2022
GAAP
Restructuring Costs
Acquisition Related
Costs
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 September
30, 2021
GAAP
Restructuring Costs
Cost 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
%
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 September
30, 2022
GAAP
Restructuring Costs
Acquisition Related
Costs
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 September
30, 2021
GAAP
Restructuring Costs
Costs associated with early
bond redemption
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 September
30, 2022
Operating Income
(GAAP)
Non-GAAP
Adjustments(4)
Depreciation &
Amortization
Adjusted EBITDA
Government Operations
$
77.7
$
0.5
$
12.1
$
90.4
Commercial Operations
$
6.8
$
—
$
4.6
$
11.5
Three Months Ended September
30, 2021
Operating Income
(GAAP)
Non-GAAP
Adjustments(4)
Depreciation &
Amortization
Adjusted EBITDA
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 September
30, 2022
Net Cash Provided By Operating
Activities
$
65.0
Purchases of Property, Plant and
Equipment
(39.6
)
Free Cash Flow
$
25.4
Three Months Ended September
30, 2021
Net Cash Provided By Operating
Activities
$
67.3
Purchases of Property, Plant and
Equipment
(66.5
)
Free Cash Flow
$
0.8
(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.
(4)
For Non-GAAP adjustment details, see
reconciliation of non-GAAP operating income and earnings per
share.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221107005973/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
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