- Generates 3Q21 earnings per share of $0.63 (GAAP), $0.76 (non-GAAP)
- Narrows 2021 non-GAAP earning per share guidance to low end of initial range
- Returns $166 million of cash to shareholders in 3Q21 through share repurchases
BWX Technologies, Inc. reported third quarter 2021 revenue of $499 million, down 4% compared with $520 million in the third quarter 2020. GAAP net income for the third quarter 2021 was $59.9 million, or $0.63 per diluted share, compared with GAAP net income of $73.2 million, or $0.76 per diluted share, in the prior-year period. Non-GAAP net income for the third quarter 2021 was $72.0 million, or $0.76 per diluted share, compared with non-GAAP net income of $75.6 million, or $0.79 per diluted share, in the prior-year period. A reconciliation of non-GAAP results is detailed in Exhibit 1.
“BWXT delivered its strongest quarter year-to-date as we executed well in all areas of the business” said Rex D. Geveden, president and chief executive officer. "However, given the pandemic headwinds which were acute in the first and third quarters as well as unfavorable government contract award timing, we are narrowing 2021 guidance to the low end of the initial range.”
“We maintain strong conviction in the future growth of BWXT as we continue to execute and reliably generate cash across the core businesses while simultaneously building for future growth through new technology investments in microreactors for space and national security applications, advanced nuclear fuels, and nuclear medicine. Our conviction is underscored by the fact that we returned more than $166 million of cash to investors through strategic share repurchases in the third quarter. We look forward to sharing our growth plans at the BWXT Investor Day on November 16 in New York City,” said Geveden.
Segment Results
Nuclear Operations Group (NOG) segment revenue was $387 million for the third quarter 2021, about the same compared with the prior-year period as volume across operations were consistent. NOG GAAP and non-GAAP operating income was $79.4 million and $79.5 million, respectively, in the third quarter 2021, a 16% increase compared with the prior-year period driven by more favorable contract adjustments due to timing of certain milestones. This resulted in a strong third quarter 2021 segment GAAP and non-GAAP operating margin of 20.5% and 20.6%, respectively.
Nuclear Power Group (NPG) segment revenue was $83.4 million for the third quarter 2021, a 23% decrease from the prior-year period primarily due to lower volume of field services and component manufacturing volume partially offset by higher nuclear medicine demand. NPG GAAP and non-GAAP operating income was $9.0 million and $9.3 million, respectively, for the third quarter 2021, a significant decrease compared with the prior-year period driven primarily from lower revenue and the significant decrease of funds received under the Canadian COVID-19 Economic Response Plan to offset incurred expenses related to the pandemic that occurred in the prior-year period. Third quarter 2021 segment GAAP and non-GAAP operating margin was 10.8% and 11.1%, respectively.
Nuclear Services Group (NSG) segment operating income was $10.3 million for the third quarter 2021, up 36% compared with the third quarter 2020 driven by better project fee performance.
Cash and Capital Returned to Shareholders
The Company generated $67.3 million of cash from operating activities in the third quarter 2021, compared with $7.5 million of net cash utilized in the third quarter 2020. As of September 30, 2021, the Company’s cash balance, net of restricted cash, was $69.4 million.
During the third quarter 2021, the Company returned $186 million of cash to shareholders in share repurchases and dividends, resulting in a total of $246 million of cash returned to shareholders year-to-date, including $186 million in share repurchases and $60 million in dividends.
On October 28, 2021, the BWXT Board of Directors declared a quarterly cash dividend of $0.21 per common share. The dividend will be payable on December 10, 2021, to shareholders of record on November 19, 2021.
Updated 2021 Guidance
• Non-GAAP EPS of $3.05 which is the low end of initial range of $3.05 to $3.20 (excludes pension and post-retirement benefits mark-to-market)
• Consolidated revenue flat to up 1% vs. 2020 results
• NOG revenue down ~1%
• NPG revenue up ~9%
• Non-GAAP operating income and margin
• NOG operating margin of “high teens” with upside from CAS pension reimbursement
• NPG operating margin of ~12.5%
• NSG operating income of ~$25 million
• Capital expenditures of ~$280 million
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.
