BWX Technologies Announces Second Quarter 2015 Results
- Successfully Completed Spin-off of Power Generation Business
- Nuclear Operations Produces Strong Operating Performance
- EPS $0.32 When Adjusted for Spin Cost and Restructuring Charges
- Backlog in Nuclear Energy Nearly Double from Prior Year Period
LYNCHBURG, Va.–(BUSINESS WIRE)–Aug. 5, 2015– BWX Technologies, Inc. (NYSE: BWXT) (“BWXT” or the “Company”) today reported second quarter 2015 revenues of $357.1 million, a decrease of $5.4 million, or 1.5%, from the second quarter of 2014. GAAP earnings per share from continuing operations for the second quarter of 2015 were $0.00 compared to $0.20 in the second quarter of 2014. Adjusted (Non-GAAP) earnings per share from continuing operations, which excludes a $0.27 per share impact of spin-related and restructuring costs for the quarter, were $0.32 compared to $0.35 in the second quarter of 2014. Unless stated otherwise, the results of operations discussion included in this release are on a continuing operations basis and exclude the results of operations from our former Power Generation business, which are included as part of discontinued operations in the attached financial statements.
“In the first half of 2015, we completed the spin-off of our former Power Generation business, as anticipated, while continuing to deliver solid operating results. BWXT is now better positioned to attract an investor base specifically suited to our Company’s unique operational and financial characteristics,” said Mr. John A. Fees, Executive Chairman. “Our Nuclear Operations segment continued to deliver strong and stable operating performance in the second quarter. In addition, the Nuclear Energy segment produced significantly improved bookings and backlog this quarter. Looking forward, we have a solid backlog in our Nuclear Operations segment, nearly two times the backlog in Nuclear Energy compared to the prior year period, and we see good prospects in all of our business segments to deliver EPS growth in the second half of the year.”
Results of Operations
The Company’s consolidated revenues for the second quarter of 2015 were $357.1 million, a decrease of 1.5%, compared to $362.5 million for the second quarter of 2014. The Nuclear Operations segment revenues were relatively unchanged at $291.8 million in the second quarter of 2015 compared to $293.4 million in the same quarter in 2014. Similarly, revenues from the Nuclear Energy segment were $45.5 million compared to $44.9 million in the prior year period. The Technical Services segment revenues were $21.6 million in the second quarter of 2015 compared to $26.0 million in the same quarter in 2014, a decrease of$4.4 million, primarily attributable to the termination of our work scope for the American Centrifuge Program last year.
GAAP operating income for the second quarter was $11.6 million, a decrease of $15.9 million compared to $27.5 million in the same period of 2014. The decline in consolidated GAAP operating income is primarily attributable to spin-related and restructuring costs for the second quarter. Operating income in the Nuclear Operations segment increased $2.5 million compared to last year’s second quarter profit to $61.1 million primarily due to improved productivity in our equipment manufacturing operations. Our Nuclear Energy segment reported operating income of $2.4 million in the period compared to $1.5 million of operating income in the prior year period as the segment continues to restructure the business in order to reduce costs and improve operating profit margins. Our Technical Services segment operating income decreased $9.6 million in the quarter to $5.5 million, primarily attributable to the loss of the Y-12 National Security Complex and Pantex Plant contracts. Our results include a significant improvement in the mPower operating loss by $27.4 million to a loss of $(4.5) million in the three months ended June 30, 2015 compared to a loss of $(31.9) million in the same period of 2014 due to the restructuring of our mPower program to focus on technology development.
GAAP operating income from continuing operations for the second quarter of 2015 includes $16.5 million of special charges for restructuring activities and $24.5 million of spin-related costs. Excluding these charges and mark-to-market adjustments for pension and post-retirement benefits, adjusted operating income for the second quarter of 2015 was $54.7 million, or an increase of 4.0% compared to adjusted operating income of $52.6 million in the second quarter of 2014.
“We are pleased with the progress we’ve made across our different businesses during this period,” said Mr. Fees. “In addition to the solid results in the Nuclear Operations business, the Nuclear Energy segment reported bookings near $190 million, the highest bookings quarter for the segment in almost five years. We expect the Nuclear Energy segment to take full advantage of these bookings as it continues its restructuring efforts focused on improving margins and driving organic growth. While the Technical Services segment remains focused on improving performance across its operations, we continue to be optimistic about the segment’s growth opportunities. Now that the spin-off is complete, we will accelerate our strategies for driving the Company’s growth and continuing to return value to our shareholders.”
Liquidity and Debt
The Company generated consolidated cash flows from operations of $78.2 million, inclusive of cash flows of our former Power Generation business, compared with $5.8 million in the second quarter of 2014, driven primarily by improvements in project cash flows. At the end of the second quarter, the Company’s post-spin cash and investments position, net of restricted cash, was $58.7 million.
As of June 30, 2015, outstanding balances under our credit facility included a $300 million term loan, $30 million in revolving loans, and letters of credit issued under the facility totaling $71.7 million, resulting in $498.3 million of availability under our credit facility as of the end of the second quarter 2015.
Quarterly Dividend
On July 31, 2015, the Company declared a quarterly cash dividend of $0.06 per common share. The dividend will be payable on September 10, 2015 to shareholders of record on August 20, 2015.
Outlook
Segment guidance provided for 2015 remains unchanged at the business unit level. The Company reaffirms its guidance that revenue from Nuclear Operations will be consistent with levels achieved in the last two years and expected operating margin in the high teens for the second half of the year. Additionally, adjusted earnings per share for the full year 2015 are still expected to be between $1.30 and $1.40. Adjusted earnings per share exclude mark-to-market adjustments for pension and post-retirement benefits, restructuring costs and spin costs.
Conference Call to Discuss Second Quarter 2015 Results
Date: Thursday, August 6, 2015, at 8:30 a.m. EST
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 and bookings, to the extent they may be viewed as an indicator of future revenues; growth prospects and strategies in our segments and our 2015 outlook. These forward-looking statements are based on management’s current expectations and involve a number of risks and uncertainties, including, among other things, adverse changes in Federal appropriations to government programs in which we participate; our ability to successfully bid for new projects; the ability of BWXT to successfully operate independently; the inability to retain key personnel; 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, 2014 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
BWX Technologies, Inc. is a leading supplier of nuclear components and fuel to the U.S. government; provides technical, management and site services to support governments in the operation of complex facilities and environmental remediation activities; and supplies precision manufactured components and services for the commercial nuclear power industry. BWXT has approximately 5,200 employees and significant operations in Lynchburg, Va.; Erwin, Tenn.; Mount Vernon, Ind.; Euclid, Ohio; Barberton, Ohio; and Cambridge, Ontario, as well as more than a dozen U.S. Department of Energy sites around the country. For additional information please visit our website at www.bwxt.com.
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Source: BWX Technologies, Inc.
BWX Technologies, Inc.
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