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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 1, 2019

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 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 1, 2019, we issued a press release announcing our financial results for the first quarter ended March 31, 2019.  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 1, 2019.

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 1, 2019


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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
 
397758361_erheadera18.jpg


BWX Technologies Reports First Quarter 2019 Results with Record Backlog
1Q19 EPS of $0.51 vs. 1Q18 GAAP EPS of $0.66 and 1Q18 non-GAAP EPS of $0.67
Reported record backlog of $4.8 billion and a record $4.0 billion in NOG
Returned $37 million of cash to shareholders through dividends and share repurchases
Reiterates 2019 guidance: non-GAAP EPS of ~$2.50; revenue growth of ~6%
Lynchburg, VA - May 1, 2019 - 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 Company’s 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 Company's 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 Company’s 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
Date:            Thursday, May 2, 2019, at 8:30 a.m. EDT
Live Webcast:    Investor Relations section of website at www.bwxt.com
Full Earnings Release Available on BWXT Website
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 Nordion’s medical isotope business; timing of future revenues from the acquisition of Nordion’s 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 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, 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.

Investor Contact:
 
Media Contact:
Alan Nethery
 
Jud Simmons
Vice President and Chief Investor Relations Officer
 
Director, Media and Public Relations
980-365-4300
 
434-522-6462
 
 
 
 
 
Mark Kratz
 
 
 
 
Manager, Investor Relations
 
 
 
434-522-3883
 
 
 




EXHIBIT 1

BWX TECHNOLOGIES, INC.
RECONCILIATION OF NON-GAAP OPERATING INCOME AND EARNINGS PER SHARE(1)(2)(3) 
Three Months Ended March 31, 2018
 
 
GAAP
 
Acquisition Related Costs
 
 
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%


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS
 
 
March 31,
2019
 
December 31,
2018
 
 
(Unaudited)
(In thousands)
Current Assets:
 
 
 
 
Cash and cash equivalents
 
$
22,976

 
$
29,871

Restricted cash and cash equivalents
 
4,024

 
3,834

Investments
 
3,601

 
3,597

Accounts receivable – trade, net
 
65,255

 
71,574

Accounts receivable – other
 
12,038

 
13,374

Retainages
 
72,000

 
57,885

Contracts in progress
 
351,953

 
318,454

Other current assets
 
45,717

 
43,859

Total Current Assets
 
577,564

 
542,448

Property, Plant and Equipment
 
1,150,110

 
1,132,392

Less accumulated depreciation
 
696,095

 
693,153

Net Property, Plant and Equipment
 
454,015

 
439,239

Investments
 
8,598

 
7,382

Goodwill
 
275,604

 
274,082

Deferred Income Taxes
 
61,154

 
63,908

Investments in Unconsolidated Affiliates
 
65,320

 
63,746

Intangible Assets
 
194,116

 
228,676

Other Assets
 
80,415

 
35,615

TOTAL
 
$
1,716,786

 
$
1,655,096






BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
March 31,
2019
 
December 31,
2018
 
 
(Unaudited)
(In thousands, except share
and per share amounts)
Current Liabilities:
 
 
 
 
Current maturities of long-term debt
 
$
14,383

 
$
14,227

Accounts payable
 
98,455

 
114,751

Accrued employee benefits
 
56,342

 
77,386

Accrued liabilities – other
 
58,032

 
62,163

Advance billings on contracts
 
88,117

 
98,477

Accrued warranty expense
 
10,431

 
10,344

Total Current Liabilities
 
325,760

 
377,348

Long-Term Debt
 
856,005

 
753,617

Accumulated Postretirement Benefit Obligation
 
19,223

 
19,236

Environmental Liabilities
 
87,972

 
86,372

Pension Liability
 
169,939

 
173,469

Other Liabilities
 
15,013

 
9,353

Commitments and Contingencies
 
 
 
 
Stockholders' Equity:
 
 
 
 
Common stock, par value $0.01 per share, authorized 325,000,000 shares; issued 126,379,796 and 125,871,866 shares at March 31, 2019 and December 31, 2018, respectively
 
1,264

 
1,259

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

 

Capital in excess of par value
 
119,525

 
115,725

Retained earnings
 
1,198,198

 
1,166,762

Treasury stock at cost, 31,243,844 and 30,625,074 shares at March 31, 2019 and December 31, 2018, respectively
 
(1,066,822
)
 
(1,037,795
)
Accumulated other comprehensive income
 
(9,316
)
 
(10,289
)
Stockholders' Equity – BWX Technologies, Inc.
 
242,849

 
235,662

Noncontrolling interest
 
25

 
39

Total Stockholders' Equity
 
242,874

 
235,701

TOTAL
 
$
1,716,786

 
$
1,655,096





BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
 
(Unaudited)
(In thousands, except share
and per share amounts)
Revenues
 
$
416,454

 
$
457,463

Costs and Expenses:
 
 
 
 
Cost of operations
 
303,635

 
327,364

Research and development costs
 
5,174

 
3,607

Losses (gains) on asset disposals and impairments, net
 

 
(8
)
Selling, general and administrative expenses
 
51,683

 
53,762

Total Costs and Expenses
 
360,492

 
384,725

Equity in Income of Investees
 
7,682

 
7,150

Operating Income
 
63,644

 
79,888

Other Income (Expense):
 
 
 
 
Interest income
 
415

 
778

Interest expense
 
(8,703
)
 
(3,560
)
Other – net
 
7,521

 
7,910

Total Other Income (Expense)
 
(767
)
 
5,128

Income before Provision for Income Taxes
 
62,877

 
85,016

Provision for Income Taxes
 
13,767

 
18,603

Net Income
 
$
49,110

 
$
66,413

Net (Income) Loss Attributable to Noncontrolling Interest
 
(132
)
 
28

Net Income Attributable to BWX Technologies, Inc.
 
$
48,978

 
$
66,441

Earnings per Common Share:
 
 
 
 
Basic:
 
 
 
 
Net Income Attributable to BWX Technologies, Inc.
 
$
0.51

 
$
0.67

Diluted:
 
 
 
 
Net Income Attributable to BWX Technologies, Inc.
 
$
0.51

 
$
0.66

Shares used in the computation of earnings per share:
 
 
 
 
Basic
 
95,255,109

 
99,526,187

Diluted
 
95,821,354

 
100,512,287





BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
 
(Unaudited) (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
Net Income
 
$
49,110

 
$
66,413

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
15,122

 
14,061

Income of investees, net of dividends
 
(2,960
)
 
(2,299
)
Recognition of losses for pension and postretirement plans
 
647

 
505

Stock-based compensation expense
 
2,529

 
4,461

Changes in assets and liabilities:
 
 
 
 
Accounts receivable
 
5,812

 
27,387

Accounts payable
 
1,612

 
10,528

Retainages
 
(13,949
)
 
(10,444
)
Contracts in progress and advance billings on contracts
 
(43,735
)
 
(74,153
)
Income taxes
 
7,559

 
(5,502
)
Accrued and other current liabilities
 
(10,748
)
 
364

Pension liabilities, accrued postretirement benefit obligations and employee benefits
 
(25,876
)
 
(48,929
)
Other, net
 
(2,846
)
 
(997
)
NET CASH USED IN OPERATING ACTIVITIES
 
(17,723
)
 
(18,605
)
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
Purchases of property, plant and equipment
 
(44,519
)
 
(17,634
)
Purchases of securities
 
(1,786
)
 
(1,033
)
Sales and maturities of securities
 
1,800

 
2,948

Other, net
 

 
8

NET CASH USED IN INVESTING ACTIVITIES
 
(44,505
)
 
(15,711
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
Borrowings of long-term debt
 
212,500

 

Repayments of long-term debt
 
(113,457
)
 
(6,951
)
Repurchases of common shares
 
(20,000
)
 

Dividends paid to common shareholders
 
(16,797
)
 
(15,947
)
Exercises of stock options
 
823

 
2,525

Cash paid for shares withheld to satisfy employee taxes
 
(8,574
)
 
(4,657
)
Other
 
943

 
(226
)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
 
55,438

 
(25,256
)
EFFECTS OF EXCHANGE RATE CHANGES ON CASH
 
104

 
(2,236
)
TOTAL DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS
 
(6,686
)
 
(61,808
)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
 
36,408

 
213,144

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS AT END OF PERIOD
 
$
29,722

 
$
151,336

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
 
 
 
 
Cash paid during the period for:
 
 
 
 
Interest
 
$
14,767

 
$
3,463

Income taxes (net of refunds)
 
$
6,191

 
$
24,370

SCHEDULE OF NON-CASH INVESTING ACTIVITY:
 
 
 
 
Accrued capital expenditures included in accounts payable
 
$
11,249

 
$
4,735





BWX TECHNOLOGIES, INC.
BUSINESS SEGMENT INFORMATION
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
 
(Unaudited)
(In thousands)
REVENUES:
 
 
 
 
Nuclear Operations Group
 
$
304,801

 
$
316,631

Nuclear Power Group
 
84,399

 
112,816

Nuclear Services Group
 
29,094

 
30,033

Adjustments and Eliminations
 
(1,840
)
 
(2,017
)
TOTAL
 
$
416,454

 
$
457,463

 
 
 
 
 
SEGMENT INCOME:
 
 
 
 
Nuclear Operations Group
 
$
57,625

 
$
67,657

Nuclear Power Group
 
12,583

 
21,764

Nuclear Services Group
 
1,571

 
1,177

Other
 
(6,096
)
 
(4,043
)
SUBTOTAL
 
65,683

 
86,555

Unallocated Corporate
 
(2,039
)
 
(6,667
)
TOTAL
 
$
63,644

 
$
79,888

 
 
 
 
 
DEPRECIATION AND AMORTIZATION:
 
 
 
 
Nuclear Operations Group
 
$
8,009

 
$
7,778

Nuclear Power Group
 
4,516

 
3,595

Nuclear Services Group
 
761

 
913

Other
 
63

 

Corporate
 
1,773

 
1,775

TOTAL
 
$
15,122

 
$
14,061

 
 
 
 
 
CAPITAL EXPENDITURES:
 
 
 
 
Nuclear Operations Group
 
$
35,360

 
$
13,809

Nuclear Power Group
 
5,422

 
959

Nuclear Services Group
 
247

 
235

Other
 
1,921

 
512

Corporate
 
1,569

 
2,119

TOTAL
 
$
44,519

 
$
17,634






BWX TECHNOLOGIES, INC.
BUSINESS SEGMENT INFORMATION
 
 
Three Months Ended March 31,
 
 
2019
 
2018
 
 
(Unaudited)
(In thousands)
BACKLOG:
 
 
 
 
Nuclear Operations Group
 
$
4,009,617

 
$
3,002,488

Nuclear Power Group
 
769,351

 
550,097

Nuclear Services Group
 
44,997

 
27,841

TOTAL
 
$
4,823,965

 
$
3,580,426

 
 
 
 
 
BOOKINGS:
 
 
 
 
Nuclear Operations Group
 
$
1,676,737

 
$
60,076

Nuclear Power Group
 
50,076

 
36,908

Nuclear Services Group
 
35,006

 
27,751

TOTAL
 
$
1,761,819

 
$
124,735




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