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 Companys 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 Companys 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 Companys 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
|Thursday, May 2, 2019, at 8:30 a.m. EDT|
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/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 Nordions medical isotope business; timing of future revenues from the acquisition of Nordions 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 managements 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 BWXTs 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.
BWX TECHNOLOGIES, INC.
RECONCILIATION OF NON-GAAP OPERATING INCOME AND EARNINGS PER SHARE(1)(2)(3)
|Three Months Ended March 31, 2018|
Acquisition Related Costs
|Other Income (Expense)||5.1||5.1|
|Provision for Income Taxes||(18.6||)||(0.4||)||(19.0||)|
|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.|
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 Companys operational performance and provides these measures to investors to help facilitate comparisons of operating results with prior periods and to assist them in understanding BWXTs 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.|
Vice President and Chief
Investor Relations Officer
Director, Media and Public