BWX Technologies, Inc 10-Q for FY2020 Q2

BWX Technologies, Inc. (BWXT)

10-Q 2020-08-03 For: 2020-06-30

Added on April 07, 2026

About this 10-Q

BWX Technologies, Inc filed this 10-Q on August 3, 2020, covering the quarter ended June 30, 2020 (FY2020 Q2).

Headline figures

Quarter ended June 30, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $504.52M; up 7.1% from $471.23M a year earlier
Net income: $64.26M; up 9.1% from net income of $58.88M a year earlier
Diluted EPS: $0.67; up 8.1% from $0.62 a year earlier

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	June 30, 2020		December 31, 2019
	(Unaudited) (In thousands)
Current Assets:
Cash and cash equivalents	$	61,584	$	86,540
Restricted cash and cash equivalents	3,069		3,056
Investments	3,710		5,843
Accounts receivable – trade, net	64,846		56,721
Accounts receivable – other	9,480		13,426
Retainages	46,767		46,670
Contracts in progress	395,847		376,037
Other current assets	38,670		41,462
Total Current Assets	623,973		629,755
Property, Plant and Equipment, Net	656,205		580,241
Investments	7,236		7,620
Goodwill	274,345		275,502
Deferred Income Taxes	55,747		58,689
Investments in Unconsolidated Affiliates	70,564		70,116
Intangible Assets	186,442		191,392
Other Assets	96,851		95,598
TOTAL	$	1,971,363	$	1,908,913


	June 30, 2020		December 31, 2019
	(Unaudited) (In thousands, except share and per share amounts)
Current Liabilities:
Current maturities of long-term debt	$	—	$	14,711
Accounts payable	141,459		170,678
Accrued employee benefits	66,489		82,640
Accrued liabilities – other	60,467		52,213
Advance billings on contracts	64,815		75,425
Accrued warranty expense	5,131		9,042
Income taxes payable	36,974		—
Total Current Liabilities	375,335		404,709
Long-Term Debt	826,831		809,442
Accumulated Postretirement Benefit Obligation	22,021		23,259
Environmental Liabilities	83,845		80,368
Pension Liability	157,229		172,508
Other Liabilities	24,570		14,515
Commitments and Contingencies (Note 6)
Stockholders' Equity:
Common stock, par value $0.01 per share, authorized 325,000,000 shares; issued 126,949,882 and 126,579,285 shares at June 30, 2020 and December 31, 2019, respectively	1,269		1,266
Preferred stock, par value $0.01 per share, authorized 75,000,000 shares; No shares issued	—		—
Capital in excess of par value	143,412		134,069
Retained earnings	1,447,642		1,344,383
Treasury stock at cost, 31,660,490 and 31,266,670 shares at June 30, 2020 and December 31, 2019, respectively	(1,093,287)		(1,068,164)
Accumulated other comprehensive income (loss)	(17,519)		(7,448)
Stockholders' Equity – BWX Technologies, Inc.	481,517		404,106
Noncontrolling interest	15		6
Total Stockholders' Equity	481,532		404,112
TOTAL	$	1,971,363	$	1,908,913


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
	(Unaudited) (In thousands, except share and per share amounts)
Revenues	$	504,520	$	471,231	$	1,046,728	$	887,685
Costs and Expenses:
Cost of operations	367,534		338,023		759,977		641,658
Research and development costs	4,029		5,332		8,632		10,506
Losses on asset disposals and impairments, net	299		151		299		151
Selling, general and administrative expenses	55,137		54,052		108,095		105,735
Total Costs and Expenses	426,999		397,558		877,003		758,050
Equity in Income of Investees	4,913		6,862		10,976		14,544
Operating Income	82,434		80,535		180,701		144,179
Other Income (Expense):
Interest income	61		137		292		552
Interest expense	(7,865)		(9,542)		(15,832)		(18,245)
Other – net	9,450		6,604		17,367		14,125
Total Other Income (Expense)	1,646		(2,801)		1,827		(3,568)
Income before Provision for Income Taxes	84,080		77,734		182,528		140,611
Provision for Income Taxes	19,684		18,734		42,512		32,501
Net Income	$	64,396	$	59,000	$	140,016	$	108,110
Net Income Attributable to Noncontrolling Interest	(138)		(122)		(259)		(254)
Net Income Attributable to BWX Technologies, Inc.	$	64,258	$	58,878	$	139,757	$	107,856
Earnings per Common Share:
Basic:
Net Income Attributable to BWX Technologies, Inc.	$	0.67	$	0.62	$	1.46	$	1.13
Diluted:
Net Income Attributable to BWX Technologies, Inc.	$	0.67	$	0.62	$	1.46	$	1.13
Shares used in the computation of earnings per share (Note 10):
Basic	95,457,629		95,357,311		95,434,990		95,306,210
Diluted	95,633,571		95,677,204		95,694,972		95,749,280


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
	(Unaudited) (In thousands)
Net Income	$	64,396	$	59,000	$	140,016	$	108,110
Other Comprehensive Income (Loss):
Currency translation adjustments	856		4,295		(11,084)		5,238
Derivative financial instruments:
Unrealized losses arising during the period, net of tax benefit of $141, $226, $32 and $390, respectively	(404)		(634)		(91)		(1,075)
Reclassification adjustment for (gains) losses included in net income, net of tax provision (benefit) of $32, $(70), $(106) and $(21), respectively	(89)		203		331		62
Amortization of benefit plan costs, net of tax benefit of $(167), $(155), $(334) and $(291), respectively	609		493		1,219		1,004
Unrealized gains (losses) on investments arising during the period, net of tax provision of $0, $(3), $(2) and $(10), respectively	154		27		(446)		51
Other Comprehensive Income (Loss)	1,126		4,384		(10,071)		5,280
Total Comprehensive Income	65,522		63,384		129,945		113,390
Comprehensive Income Attributable to Noncontrolling Interest	(138)		(122)		(259)		(254)
Comprehensive Income Attributable to BWX Technologies, Inc.	$	65,384	$	63,262	$	129,686	$	113,136


	Common Stock					Capital In Excess of Par Value					Accumulated Other Comprehensive Income (Loss)								Total Stockholders' Equity
	Shares	Par Value						Retained Earnings					Treasury Stock		Stockholders' Equity		Noncontrolling Interest
		(In thousands, except share and per share amounts)
Balance December 31, 2019	126,579,285	$	1,266	$	134,069	$	1,344,383		$	(7,448)	$	(1,068,164)	$	404,106	$	6	$	404,112
Net income	—	—		—		75,499			—		—		75,499		121		75,620
Dividends declared ($0.19 per share)	—	—		—		(18,254)			—		—		(18,254)		—		(18,254)
Currency translation adjustments	—	—		—		—			(11,940)		—		(11,940)		—		(11,940)
Derivative financial instruments	—	—		—		—			733		—		733		—		733
Defined benefit obligations	—	—		—		—			610		—		610		—		610
Available-for-sale investments	—	—		—		—			(600)		—		(600)		—		(600)
Exercises of stock options	56,431	1		1,331		—			—		—		1,332		—		1,332
Shares placed in treasury	—	—		—		—			—		(25,076)		(25,076)		—		(25,076)
Stock-based compensation charges	252,943	2		3,100		—			—		—		3,102		—		3,102
Distributions to noncontrolling interests	—	—		—		—			—		—		—		(127)		(127)
Balance March 31, 2020 (unaudited)	126,888,659	$	1,269	$	138,500	$	1,401,628		$	(18,645)	$	(1,093,240)	$	429,512	$	—	$	429,512
Net income	—	—		—		64,258			—		—		64,258		138		64,396
Dividends declared ($0.19 per share)	—	—		—		(18,244)			—		—		(18,244)		—		(18,244)
Currency translation adjustments	—	—		—		—			856		—		856		—		856
Derivative financial instruments	—	—		—		—			(493)		—		(493)		—		(493)
Defined benefit obligations	—	—		—		—			609		—		609		—		609
Available-for-sale investments	—	—		—		—			154		—		154		—		154
Exercises of stock options	22,556	—		537		—			—		—		537		—		537
Shares placed in treasury	—	—		—		—			—		(47)		(47)		—		(47)
Stock-based compensation charges	38,667	—		4,375		—			—		—		4,375		—		4,375
Distributions to noncontrolling interests	—	—		—		—			—		—		—		(123)		(123)
Balance June 30, 2020 (unaudited)	126,949,882	$	1,269	$	143,412	$	1,447,642		$	(17,519)	$	(1,093,287)	$	481,517	$	15	$	481,532












Balance December 31, 2018	125,871,866	$	1,259	$	115,725	$	1,166,762		$	(10,289)	$	(1,037,795)	$	235,662	$	39	$	235,701
Recently adopted accounting standards	—	—		—		(1,219)			77		—		(1,142)		—		(1,142)
Net income	—	—		—		48,978			—		—		48,978		132		49,110
Dividends declared ($0.17 per share)	—	—		—		(16,323)			—		—		(16,323)		—		(16,323)
Currency translation adjustments	—	—		—		—			943		—		943		—		943
Derivative financial instruments	—	—		—		—			(582)		—		(582)		—		(582)
Defined benefit obligations	—	—		—		—			511		—		511		—		511
Available-for-sale investments	—	—		—		—			24		—		24		—		24
Exercises of stock options	58,655	1		1,275		—			—		—		1,276		—		1,276
Shares placed in treasury	—	—		—		—			—		(29,027)		(29,027)		—		(29,027)
Stock-based compensation charges	449,275	4		2,525		—			—		—		2,529		—		2,529
Distributions to noncontrolling interests	—	—		—		—			—		—		—		(146)		(146)
Balance March 31, 2019 (unaudited)	126,379,796	$	1,264	$	119,525	$	1,198,198		$	(9,316)	$	(1,066,822)	$	242,849	$	25	$	242,874
Net income	—	—		—		58,878			—		—		58,878		122		59,000
Dividends declared ($0.17 per share)	—	—		—		(16,301)			—		—		(16,301)		—		(16,301)
Currency translation adjustments	—	—		—		—			4,295		—		4,295		—		4,295
Derivative financial instruments	—	—		—		—			(431)		—		(431)		—		(431)
Defined benefit obligations	—	—		—		—			493		—		493		—		493
Available-for-sale investments	—	—		—		—			27		—		27		—		27
Exercises of stock options	32,023	—		757		—			—		—		757		—		757
Shares placed in treasury	—	—		—		—			—		(260)		(260)		—		(260)
Stock-based compensation charges	4,927	—		3,823		—			—		—		3,823		—		3,823
Distributions to noncontrolling interests	—	—		—		—			—		—		—		(128)		(128)
Balance June 30, 2019 (unaudited)	126,416,746	$	1,264	$	124,105	$	1,240,775		$	(4,932)	$	(1,067,082)	$	294,130	$	19	$	294,149


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	June 30, 2020		December 31, 2019
	(In thousands)
Cash and cash equivalents	$	61,584	$	86,540
Restricted cash and cash equivalents	3,069		3,056
Restricted cash and cash equivalents included in Other Assets	2,903		2,804
Total cash and cash equivalents and restricted cash and cash equivalents as presented on our condensed consolidated statement of cash flows	$	67,556	$	92,400


	Six Months Ended June 30,
	2020		2019
	(In thousands)
Balance at beginning of period	$	8,006	$	9,583
Additions	6,627		—
Interest expense ⁽¹⁾	(1,464)		(788)
Balance at end of period	$	13,169	$	8,795


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Accumulated Other Comprehensive Income (Loss) Component Recognized	(In thousands)									Line Item Presented
Realized gain (loss) on derivative financial instruments	$	551	$	64	$	550	$	52	Revenues
	(430)		(337)		(987)		(135)		Cost of operations
	121		(273)		(437)		(83)		Total before tax
	(32)		70		106		21		Provision for Income Taxes
	$	89	$	(203)	$	(331)	$	(62)	Net Income
Amortization of prior service cost on benefit obligations	$	(776)	$	(648)	$	(1,553)	$	(1,295)	Other – net
	167		155		334		291		Provision for Income Taxes
	$	(609)	$	(493)	$	(1,219)	$	(1,004)	Net Income



Total reclassification for the period	$	(520)	$	(696)	$	(1,550)	$	(1,066)


	Three Months Ended June 30, 2020														Three Months Ended June 30, 2019
	Nuclear Operations Group		Nuclear Power Group		Nuclear Services Group		Total		Nuclear Operations Group		Nuclear Power Group		Nuclear Services Group		Total
	(In thousands)
United States:
Government	$	370,060	$	—	$	28,486	$	398,546	$	343,048	$	—	$	28,823	$	371,871
Non-Government	38,084		6,989		3,731		48,804		14,612		8,973		788		24,373
	$	408,144	$	6,989	$	32,217	$	447,350	$	357,660	$	8,973	$	29,611	$	396,244
Canada:

Non-Government	$	—	$	57,380	$	1,111	$	58,491	$	—	$	66,160	$	218	$	66,378

Other:

Non-Government	$	2,108	$	3,614	$	—	$	5,722	$	692	$	11,506	$	—	$	12,198

Segment Revenues	$	410,252	$	67,983	$	33,328	511,563		$	358,352	$	86,639	$	29,829	474,820
Eliminations							(7,043)								(3,589)
Revenues							$	504,520							$	471,231


	Six Months Ended June 30, 2020														Six Months Ended June 30, 2019
	Nuclear Operations Group		Nuclear Power Group		Nuclear Services Group		Total		Nuclear Operations Group		Nuclear Power Group		Nuclear Services Group		Total
	(In thousands)
United States:
Government	$	771,126	$	—	$	53,082	$	824,208	$	640,351	$	—	$	53,274	$	693,625
Non-Government	58,925		16,597		14,940		90,462		19,950		18,135		5,141		43,226
	$	830,051	$	16,597	$	68,022	$	914,670	$	660,301	$	18,135	$	58,415	$	736,851
Canada:

Non-Government	$	—	$	131,907	$	2,071	$	133,978	$	—	$	134,771	$	508	$	135,279

Other:

Non-Government	$	3,976	$	7,396	$	—	$	11,372	$	2,852	$	18,132	$	—	$	20,984

Segment Revenues	$	834,027	$	155,900	$	70,093	1,060,020		$	663,153	$	171,038	$	58,923	893,114
Eliminations							(13,292)								(5,429)
Revenues							$	1,046,728							$	887,685


	June 30,		December 31,
	2020		2019
	(In thousands)
Included in Contracts in progress:
Unbilled receivables	$	382,191	$	365,861
Retainages	$	46,767	$	46,670
Included in Other Assets:
Retainages	$	1,391	$	1,412
Advance billings on contracts	$	64,815	$	75,425


	2020		2021		Thereafter		Total
	(In approximate millions)
Nuclear Operations Group	$	722	$	1,098	$	2,094	$	3,914
Nuclear Power Group	178		209		384		771
Nuclear Services Group	33		5		5		43
Total Remaining Performance Obligations	$	933	$	1,312	$	2,483	$	4,728


	Pension Benefits														Other Benefits
	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019		2020		2019		2020		2019
	(In thousands)
Service cost	$	2,779	$	2,469	$	5,598	$	4,925	$	161	$	144	$	327	$	289
Interest cost	9,221		11,563		18,523		23,155		404		585		814		1,170
Expected return on plan assets	(19,211)		(17,418)		(38,575)		(34,854)		(672)		(628)		(1,344)		(1,255)
Amortization of prior service cost (credit)	825		725		1,650		1,450		(49)		(77)		(97)		(155)

Net periodic benefit (income) cost	$	(6,386)	$	(2,661)	$	(12,804)	$	(5,324)	$	(156)	$	24	$	(300)	$	49


	Six Months Ended June 30,
	2020		2019
	(Unaudited) (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	140,016	$	108,110
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	30,565		30,833
Income of investees, net of dividends	(927)		(6,314)

Recognition of losses for pension and postretirement plans	1,553		1,295
Stock-based compensation expense	7,477		6,352
Other, net	2,025		(977)
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable	(2,433)		6,836
Accounts payable	(6,641)		11,191
Retainages	(76)		(2,602)
Contracts in progress and advance billings on contracts	(27,560)		(69,549)
Income taxes	39,098		(6,184)
Accrued and other current liabilities	2,612		(15,192)
Pension liabilities, accrued postretirement benefit obligations and employee benefits	(32,996)		(22,983)
Other, net	2,917		6,250
NET CASH PROVIDED BY OPERATING ACTIVITIES	155,630		47,066
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(115,477)		(75,701)
Acquisition of business	(16,174)		—
Purchases of securities	(2,159)		(2,038)
Sales and maturities of securities	4,305		2,054
Investments, net of return of capital, in equity method investees	88		—
Other, net	—		17
NET CASH USED IN INVESTING ACTIVITIES	(129,417)		(75,668)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt	643,000		483,400
Repayments of long-term debt	(628,176)		(390,714)
Payment of debt issuance costs	(6,310)		—
Repurchases of common shares	(20,000)		(20,000)
Dividends paid to common shareholders	(36,764)		(32,976)
Exercises of stock options	1,790		1,400
Cash paid for shares withheld to satisfy employee taxes	(5,044)		(8,654)
Other, net	1,137		815


	June 30, 2020		December 31, 2019
	(In thousands)
Land	$	9,349	$	8,919
Buildings	254,951		221,462
Machinery and equipment	780,088		775,997
Property under construction	299,954		265,715
	1,344,342		1,272,093
Less: Accumulated depreciation	688,137		691,852
Property, Plant and Equipment, Net	$	656,205	$	580,241


	Total		Level 1		Level 2		Level 3
	(In thousands)
Equity securities
Mutual funds	$	5,752	$	—	$	5,752	$	—
Available-for-sale securities
U.S. Government and agency securities	2,307		2,307		—		—
Corporate bonds	2,824		1,421		1,403		—
Asset-backed securities and collateralized mortgage obligations	63		—		63		—
Total	$	10,946	$	3,728	$	7,218	$	—


	Total		Level 1		Level 2		Level 3
	(In thousands)
Equity securities
Equities	$	2,172	$	—	$	2,172	$	—
Mutual funds	5,685		—		5,685		—
Available-for-sale securities
U.S. Government and agency securities	2,044		2,044		—		—
Corporate bonds	3,483		1,855		1,628		—
Asset-backed securities and collateralized mortgage obligations	79		—		79		—
Total	$	13,463	$	3,899	$	9,564	$	—


Nuclear Operations Group Transfers	$	(863)	$	(1,047)	$	(1,536)	$	(1,904)
Nuclear Power Group Transfers	(145)		(33)		(274)		(73)
Nuclear Services Group Transfers	(6,035)		(2,509)		(11,482)		(3,452)
	$	(7,043)	$	(3,589)	$	(13,292)	$	(5,429)
OPERATING INCOME:
Nuclear Operations Group	$	85,972	$	75,226	$	176,331	$	132,851
Nuclear Power Group	1,102		14,883		9,572		27,466
Nuclear Services Group	4,122		1,490		10,522		3,061
Other	(5,600)		(6,744)		(10,959)		(12,840)
	$	85,596	$	84,855	$	185,466	$	150,538
Unallocated Corporate ⁽²⁾	(3,162)		(4,320)		(4,765)		(6,359)
Total Operating Income	$	82,434	$	80,535	$	180,701	$	144,179
Other Income (Expense)	1,646		(2,801)		1,827		(3,568)
Income before Provision for Income Taxes	$	84,080	$	77,734	$	182,528	$	140,611


Period	Total number of shares purchased ⁽¹⁾	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) ⁽²⁾
April 1, 2020 - April 30, 2020	—	—		—	$	145.3
May 1, 2020 - May 31, 2020	889	$	53.14	—	$	145.3
June 1, 2020 - June 30, 2020	—	—		—	$	145.3
Total	889	$	53.14	—


Exhibit Number						Description
3.1						Certificate of Amendment to Restated Certificate of Incorporation dated May 14, 2019 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on May 17, 2019 (File No. 1-34658)).

3.2						Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the SEC on May 17, 2019 (File No. 1-34658)).

3.3						Amended and Restated Bylaws (incorporated by reference to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 (File No. 1-34658)).

4.1						Indenture, dated June 12, 2020, among BWX Technologies, Inc., each of the guarantors party thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company 's Current Report on Form 8-K filed with the SEC on June 12, 2020 (File No. 1-34658)).

4.2						Form of 4.125% Senior Notes due 2028 (included in Exhibit 4.1) (incorporated by reference to Exhibit 4.2 to the Company 's Current Report on Form 8-K filed with the SEC on June 12, 2020 (File No. 1-34658)).

10.1*						Form of Restricted Stock Unit Grant Agreement for Non-Employee Directors.

10.2*						BWX Technologies, Inc. 2020 Omnibus Incentive plan (incorporated by reference to Appendix B to the Company 's Proxy Statement, dated March 17, 2020 (File No. 1-34658)).

10.3						Joinder Agreement, dated as of February 13, 2020, between Laker Energy Products Ltd. and Wells Fargo Bank, N.A., as Administrative Agent.

10.4						Joinder Agreement, dated as of July 9, 2020, between BWXT Mt. Athos, LLC and Wells Fargo Bank, N.A., as Administrative Agent.

31.1						Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer.

31.2						Rule 13a-14(a)/15d-14(a) certification of Chief Financial Officer.

32.1						Section 1350 certification of Chief Executive Officer.

32.2						Section 1350 certification of Chief Financial Officer.

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH						XBRL Taxonomy Extension Schema Document

101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						XBRL Taxonomy Extension Label Linkbase Document

101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)