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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _____________________________________________
 
FORM 8-K
 _____________________________________________
 
CURRENT REPORT
 _____________________________________________

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 4, 2018

BWX TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
 _____________________________________________
 
 
 
 
 
 
Delaware
 
001-34658
 
80-0558025
(State or other jurisdiction
 
(Commission
 
(IRS Employer
of incorporation)
 
File Number)
 
Identification No.)
 
 
 
 
 
800 Main Street, 4th Floor
 
 
 
 
Lynchburg, Virginia
 
 
 
24504
(Address of principal executive offices)
 
 
 
(Zip Code)

Registrant’s telephone number, including area code (980) 365-4300
 _____________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company    ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ¨





Item 2.02 Results of Operations and Financial Condition.
On May 4, 2018, we issued a press release announcing our financial results for the first quarter ended March 31, 2018.  A copy of the press release is attached as Exhibit 99.1, and the information contained in Exhibit 99.1 is incorporated by reference.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d)       Exhibits  
99.1    Earnings Release dated May 4, 2018.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
BWX TECHNOLOGIES, INC.
 
 
 
 
By:
 
/s/ Jason S. Kerr
 
 
 
Jason S. Kerr
 
 
 
Vice President and Chief Accounting Officer




May 4, 2018


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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
 
393350866_erheadera07.jpg


BWX Technologies Reports Robust First Quarter 2018 Results with Strong Revenue Growth
1Q18 GAAP EPS of $0.66, up 20%; 1Q18 non-GAAP EPS of $0.67, up 22%
Strong revenue growth of 7% with expanding segment margins
Consolidated backlog remains healthy at $3.6 billion
Reiterated 2018 guidance: EPS of $2.45 to 2.55; revenue of $1.75 to 1.85 billion

Lynchburg, VA - May 4, 2018 - BWX Technologies, Inc. (NYSE: BWXT) ("BWXT" or the "Company") reported first quarter 2018 revenue of $457 million, a 6.8% increase compared to $428 million in the first quarter of 2017. GAAP net income for the first quarter 2018 was $66.4 million, or $0.66 per diluted share, compared to GAAP net income of $55.7 million, or $0.55 per diluted share, in the prior-year quarter. Non-GAAP net income for the first quarter 2018 was $67.6 million, or $0.67 per diluted share, compared to non-GAAP net income of $55.3 million, or $0.55 per diluted share, in the first quarter of 2017. Year-over-year earnings per share improvements were driven primarily by strong operational performance and the benefit of lower expense due to tax reform. A reconciliation of non-GAAP results is detailed in Exhibit 1.

"Our first quarter performance provides a strong start to the year," said Rex D. Geveden, President and Chief Executive Officer. "The company continues to perform exceptionally well with EPS growth of 22 percent on top of strong revenue gains. We saw continued strength in all three segments of the business with an especially strong showing from the Nuclear Power Group.

"A few weeks ago we announced a definitive agreement to acquire Sotera Health’s Nordion medical isotope business. This was an opportunistic addition that is aligned with the strategic initiative to commercialize our breakthrough medical isotope manufacturing technology, creating the first new major business line for the company in over 25 years.”

First Quarter 2018 Segment Results
Nuclear Operations Group (NOG) segment revenue was $317 million for the first quarter of 2018, a 2.6% decrease from the prior-year period due to timing of contract activities. NOG operating income was $67.7 million in the first quarter of 2018, about flat compared with the prior-year period. Year-over-year segment operating margin expanded 50 basis points to 21.4%.

Nuclear Power Group (NPG) segment revenue was a record $113 million for the first quarter of 2018, a 45.2% increase from the prior-year period due to material timing on a China steam generator project and increased field service activity. NPG operating income was robust at $21.8 million in the first quarter of 2018, a 68% increase from the prior-year period. Year-over-year segment operating margin expanded 260 basis points to 19.3%.




Nuclear Services Group (NSG) segment operating income was $1.2 million for the first quarter of 2018, up $0.8 million versus the prior-year period.

Liquidity and Debt
The Company utilized cash in operating activities of $18.6 million in the first quarter of 2018 compared with net cash utilized in operating activities of $54.7 million, inclusive of a $30 million settlement payment, in the first quarter of 2017. At the end of the first quarter, the Company’s cash and short-term investments position, net of restricted cash, was $144.4 million.

As of March 31, 2018, outstanding balances under our credit facility included $502.8 million in term loans, no revolving line of credit borrowings, and $73.8 million in letters of credit. As a result, the Company had $326.2 million in remaining availability under its credit facility, excluding an additional $250 million accordion provision.

Quarterly Dividend
On May 4, 2018, our Board of Directors declared a quarterly cash dividend of $0.16 per common share. The dividend will be payable on June 6, 2018, to shareholders of record on May 18, 2018.

2018 Outlook
BWXT reiterated guidance for 2018:
EPS in a range of $2.45 to $2.55 (excluding mark-to-market of pension and post-retirement benefits)
Revenue in a range of $1.75 to $1.85 billion
NOG revenue in a range of $1.3 to $1.4 billion and operating margin in the high teens with upside potential
NPG revenue in a range of $300 to $350 million and operating margin of approximately 12%
NSG operating income of approximately $20 million
Research and development costs of approximately $15 million
Corporate unallocated costs of approximately $20 million
Other income primarily related to pension and other post-employment benefit plans in a range of $30 to $35 million
Effective non-GAAP tax rate in a range of 22% to 25%
Capital expenditures of approximately $150 million, primarily to support growth in Navy business
Depreciation and amortization of approximately $60 million


Long-term Outlook
BWXT reiterated long-term guidance that beyond 2017, and excluding the benefit of tax reform, it anticipates an EPS Compound Annual Growth Rate (CAGR) in the low-double digits over a three to five year period based on a robust organic growth strategy and balance sheet capacity.

Conference Call to Discuss First Quarter 2018 Results

Date:            Monday, May 7, 2018, at 9:00 a.m. EDT
Live Webcast:    Investor Relations section of website at www.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; the anticipated benefits of our proposed acquisition of Nordion’s medical isotope business; timing of future revenues from the acquisition of Nordion’s medical isotope business and new medical isotope business; our plans and expectations for the NOG, NPG and NSG segments; and our outlook and guidance for 2018 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 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 BWXT’s filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2017 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 6,100 employees, BWXT has nine 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.

Investor Contact:
 
Media Contact:
Alan Nethery
 
Jud Simmons
Vice President and Chief Investor Relations Officer
 
Director, Media and Public Relations
980-365-4300
Investors@bwxt.com
 
434-522-6462
hjsimmons@bwxt.com




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 March 31, 2018
 
 
GAAP
 
Acquisition Related Costs
 
Impairment
(Gains) /
Charges
 
 
Non-GAAP
 
 
 
 
 
 
 
 
 
 
Operating Income
$
79.9

 
$
1.6

 
$

 
 
$
81.4

Other Income (Expense)
5.1

 

 

 
 
5.1

Provision for Income Taxes
(18.6
)
 
(0.4
)
 

 
 
(19.0
)
Net Income
66.4

 
1.2

 

 
 
67.6

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%


 
 
Three Months Ended March 31, 2017
 
 
GAAP
 
 
 
Impairment
(Gains) /
Charges
 
 
Non-GAAP
 
 
 
 
 
 
 
 
 
 
Operating Income
$
76.3

 
$

 
$

 
 
$
76.3

Other Income (Expense)
4.1

 

 
(0.4
)
 
 
3.7

Provision for Income Taxes
(24.6
)
 

 
0.0

 
 
(24.6
)
Net Income
55.8

 

 
(0.4
)
 
 
55.4

Net Income Attributable to Noncontrolling Interest
(0.1
)
 

 

 
 
(0.1
)
Net Income Attributable to BWXT
$
55.7

 
$

 
$
(0.4
)
 
 
$
55.3

 
 
 
 
 
 
 

 
 
 

Diluted Shares Outstanding
100.7

 
 
 
 
 
 
100.7

Diluted Earnings per Common Share
$
0.55

 
$

 
$
0.00

 
 
$
0.55

 
 
 

 
 
 
 
 
 
 

Effective Tax Rate
30.6%

 
 
 
 
 
 
30.7%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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 and unreliability of estimating any mark-to-market adjustments for pension and post-retirement benefits, which are determined at the end of the year.
 
 
 
 
 
 
 
 
 
 




BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS
 
 
March 31,
2018
 
December 31,
2017
 
 
(Unaudited)
(In thousands)
Current Assets:
 
 
 
 
Cash and cash equivalents
 
$
143,335

 
$
203,404

Restricted cash and cash equivalents
 
5,362

 
7,105

Investments
 
1,034

 
2,934

Accounts receivable – trade, net
 
174,150

 
189,217

Accounts receivable – other
 
8,058

 
19,365

Contracts in progress
 
337,375

 
420,628

Other current assets
 
33,536

 
30,437

Total Current Assets
 
702,850

 
873,090

Property, Plant and Equipment
 
1,023,856

 
1,013,141

Less accumulated depreciation
 
673,954

 
664,512

Net Property, Plant and Equipment
 
349,902

 
348,629

Investments
 
8,909

 
9,301

Goodwill
 
216,999

 
218,331

Deferred Income Taxes
 
84,727

 
86,740

Investments in Unconsolidated Affiliates
 
47,043

 
43,266

Intangible Assets
 
106,718

 
110,405

Other Assets
 
22,391

 
22,577

TOTAL
 
$
1,539,539

 
$
1,712,339






BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
March 31,
2018
 
December 31,
2017
 
 
(Unaudited)
(In thousands, except share
and per share amounts)
Current Liabilities:
 
 
 
 
Current maturities of long-term debt
 
$
27,693

 
$
27,870

Accounts payable
 
99,224

 
93,421

Accrued employee benefits
 
57,637

 
82,477

Accrued liabilities – other
 
51,662

 
64,738

Advance billings on contracts
 
77,140

 
246,192

Accrued warranty expense
 
13,699

 
13,428

Total Current Liabilities
 
327,055

 
528,126

Long-Term Debt
 
471,367

 
481,059

Accumulated Postretirement Benefit Obligation
 
20,959

 
21,368

Environmental Liabilities
 
80,682

 
79,786

Pension Liability
 
274,801

 
296,444

Other Liabilities
 
19,425

 
19,799

Commitments and Contingencies
 
 
 
 
Stockholders' Equity:
 
 
 
 
Common stock, par value $0.01 per share, authorized 325,000,000 shares; issued 125,722,034 and 125,381,591 shares at March 31, 2018 and December 31, 2017, respectively
 
1,257

 
1,254

Preferred stock, par value $0.01 per share, authorized 75,000,000 shares; No shares issued
 

 

Capital in excess of par value
 
107,108

 
98,843

Retained earnings
 
1,053,090

 
990,652

Treasury stock at cost, 26,056,339 and 25,964,088 shares at March 31, 2018 and December 31, 2017, respectively
 
(820,749
)
 
(814,809
)
Accumulated other comprehensive income
 
4,435

 
9,454

Stockholders' Equity – BWX Technologies, Inc.
 
345,141

 
285,394

Noncontrolling interest
 
109

 
363

Total Stockholders' Equity
 
345,250

 
285,757

TOTAL
 
$
1,539,539

 
$
1,712,339





BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
Three Months Ended March 31,
 
 
2018
 
2017
 
 
(Unaudited)
(In thousands, except share
and per share amounts)
Revenues
 
$
457,463

 
$
428,229

Costs and Expenses:
 
 
 
 
Cost of operations
 
327,364

 
303,216

Research and development costs
 
3,607

 
1,519

Gains on asset disposals and impairments, net
 
(8
)
 

Selling, general and administrative expenses
 
53,762

 
51,097

Total Costs and Expenses
 
384,725

 
355,832

Equity in Income of Investees
 
7,150

 
3,875

Operating Income
 
79,888

 
76,272

Other Income (Expense):
 
 
 
 
Interest income
 
778

 
137

Interest expense
 
(3,560
)
 
(3,517
)
Other – net
 
7,910

 
7,486

Total Other Income (Expense)
 
5,128

 
4,106

Income before Provision for Income Taxes
 
85,016

 
80,378

Provision for Income Taxes
 
18,603

 
24,592

Net Income
 
$
66,413

 
$
55,786

Net (Income) Loss Attributable to Noncontrolling Interest
 
28

 
(67
)
Net Income Attributable to BWX Technologies, Inc.
 
$
66,441

 
$
55,719

Earnings per Common Share:
 
 
 
 
Basic:
 
 
 
 
Net Income Attributable to BWX Technologies, Inc.
 
$
0.67

 
$
0.56

Diluted:
 
 
 
 
Net Income Attributable to BWX Technologies, Inc.
 
$
0.66

 
$
0.55

Shares used in the computation of earnings per share:
 
 
 
 
Basic
 
99,526,187

 
99,444,910

Diluted
 
100,512,287

 
100,690,968





BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 
Three Months Ended March 31,
 
 
2018
 
2017
 
 
(Unaudited)
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
Net Income
 
$
66,413

 
$
55,786

Non-cash items included in net income from continuing operations:
 
 
 
 
Depreciation and amortization
 
14,061

 
13,976

Income of investees, net of dividends
 
(2,299
)
 
1,779

Gains on asset disposals and impairments, net
 
(8
)
 

Recognition of losses for pension and postretirement plans
 
505

 
446

Stock-based compensation expense
 
4,461

 
3,412

Changes in assets and liabilities:
 
 
 
 
Accounts receivable
 
16,943

 
(41,153
)
Accounts payable
 
10,528

 
(14,003
)
Contracts in progress and advance billings on contracts
 
(74,153
)
 
(4,890
)
Income taxes
 
(5,502
)
 
(2,607
)
Accrued and other current liabilities
 
364

 
(29,810
)
Pension liability, accrued postretirement benefit obligation and employee benefits
 
(48,929
)
 
(38,891
)
Other, net
 
(989
)
 
1,279

NET CASH USED IN OPERATING ACTIVITIES
 
(18,605
)
 
(54,676
)
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
Purchases of property, plant and equipment
 
(17,634
)
 
(13,713
)
Purchases of securities
 
(1,033
)
 
(3,503
)
Sales and maturities of securities
 
2,948

 
3,317

Investments, net of return of capital, in equity method investees
 

 
(1,701
)
Proceeds from asset disposals
 
8

 

Other, net
 

 
691

NET CASH USED IN INVESTING ACTIVITIES
 
(15,711
)
 
(14,909
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
Borrowings under the Credit Agreement
 

 
73,600

Repayments under Credit Agreement
 
(6,951
)
 
(30,476
)
Dividends paid to common shareholders
 
(15,947
)
 
(8,985
)
Exercise of stock options
 
2,525

 
9,665

Cash paid for shares withheld to satisfy employee taxes
 
(4,657
)
 
(4,973
)
Other
 
(226
)
 
(146
)
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES
 
(25,256
)
 
38,685

EFFECTS OF EXCHANGE RATE CHANGES ON CASH
 
(2,236
)
 
1,013

TOTAL DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS
 
(61,808
)
 
(29,887
)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
 
213,144

 
134,600

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS AT END OF PERIOD
 
$
151,336

 
$
104,713

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
 
 
 
 
Cash paid during the period for:
 
 
 
 
Interest
 
$
3,463

 
$
3,330

Income taxes (net of refunds)
 
$
24,370

 
$
27,082

SCHEDULE OF NON-CASH INVESTING ACTIVITY:
 
 
 
 
Accrued capital expenditures included in accounts payable
 
$
4,735

 
$
3,016





BWX TECHNOLOGIES, INC.
BUSINESS SEGMENT INFORMATION
 
 
Three Months Ended March 31,
 
 
2018
 
2017
 
 
(Unaudited)
(In thousands)
REVENUES:
 
 
 
 
Nuclear Operations Group
 
$
316,631

 
$
325,081

Nuclear Services Group
 
30,033

 
27,854

Nuclear Power Group
 
112,816

 
77,674

Adjustments and Eliminations
 
(2,017
)
 
(2,380
)
TOTAL
 
$
457,463

 
$
428,229

 
 
 
 
 
SEGMENT INCOME:
 
 
 
 
Nuclear Operations Group
 
$
67,657

 
$
67,749

Nuclear Services Group
 
1,177

 
402

Nuclear Power Group
 
21,764

 
12,956

Other
 
(4,043
)
 
(1,612
)
SUBTOTAL
 
86,555

 
79,495

Unallocated Corporate
 
(6,667
)
 
(3,223
)
TOTAL
 
$
79,888

 
$
76,272

 
 
 
 
 
DEPRECIATION AND AMORTIZATION:
 
 
 
 
Nuclear Operations Group
 
$
7,778

 
$
7,631

Nuclear Services Group
 
913

 
938

Nuclear Power Group
 
3,595

 
3,388

Other
 

 

Corporate
 
1,775

 
2,019

TOTAL
 
$
14,061

 
$
13,976

 
 
 
 
 
CAPITAL EXPENDITURES:
 
 
 
 
Nuclear Operations Group
 
$
13,809

 
$
11,751

Nuclear Services Group
 
235

 
207

Nuclear Power Group
 
959

 
1,040

Other
 
512

 

Corporate
 
2,119

 
715

TOTAL
 
$
17,634

 
$
13,713






BWX TECHNOLOGIES, INC.
BUSINESS SEGMENT INFORMATION
 
 
Three Months Ended March 31,
 
 
2018
 
2017
 
 
(Unaudited)
(In thousands)
BACKLOG:
 
 
 
 
Nuclear Operations Group
 
$
3,002,488

 
$
3,405,096

Nuclear Services Group
 
27,841

 
35,612

Nuclear Power Group
 
550,097

 
478,357

TOTAL
 
$
3,580,426

 
$
3,919,065

 
 
 
 
 
BOOKINGS:
 
 
 
 
Nuclear Operations Group
 
$
60,076

 
$
244,765

Nuclear Services Group
 
27,751

 
37,050

Nuclear Power Group
 
36,908

 
82,698

TOTAL
 
$
124,735

 
$
364,513




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