- Full Year Adjusted EPS of $1.42 ($1.32 in 2014), Full Year GAAP EPS of $1.31
- Nuclear Energy Full Year Operating Profit Increased $25 Million Year-Over-Year
- Repurchased $70 Million of BWXT Stock in 2015, $52 Million in Fourth Quarter
- Announces 50% Increase to Dividend
- Increasing 2016 EPS Guidance Range to between $1.50 and $1.60
LYNCHBURG, Va.–(BUSINESS WIRE)–Feb. 24, 2016– BWX Technologies, Inc. (NYSE: BWXT) (“BWXT” or the “Company”) today reported fourth quarter 2015 revenues of $363.9 million compared to $395.4 million in the fourth quarter of 2014. Adjusted (Non-GAAP) earnings per share (EPS) from continuing operations were $0.38 compared to $0.36 in the fourth quarter of 2014. GAAP EPS from continuing operations for the fourth quarter of 2015, which include a $0.38 per share impact of non-cash, mark-to-market adjustments for pension and other post-retirement benefits, impairment charges and a one-time tax charge, were $0.00 compared to a loss of $0.59 in the fourth quarter of 2014. Unless stated otherwise, the results of operations discussed 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.
Adjusted EPS for the full year 2015 increased 7.6% to $1.42 versus adjusted EPS of $1.32 in the prior year. GAAP EPS in 2015, which include a $0.11 per share impact related to mark-to-market adjustments, spin-related costs, other restructuring costs, impairment charges, one-time tax charges and proceeds from a legal judgment, increased to $1.31 compared to $0.36 in 2014.
“BWXT ended the year with strong adjusted EPS growth due to good performance from our Nuclear Operations business and improvements in our Nuclear Energy business,” said Mr. John A. Fees, Executive Chairman. “We delivered on all of our 2015 guidance and came in above our adjusted EPS guidance. Our Nuclear Operations business once again achieved excellent margins, reflecting realization of contract incentives for ongoing cost reductions. Furthermore, the Nuclear Energy business delivered a strong final quarter to cap off a year of impressive operating profit growth. We are thrilled with the progress we’ve made with our restructuring efforts in this segment and the growth in our equipment and services businesses. Lastly, we continued to increase return to shareholders by accelerating our share repurchases in the fourth quarter, purchasing $52 million of BWXT stock, and outperforming the market by more than 30% in the second half of 2015. I’m proud of our employees and the hard work they put in last year to seamlessly transition through the spin-off of our former Power Generation business and deliver on our 2015 goals.”
Fourth Quarter and Full Year 2015 Results of Operations
At the consolidated BWXT level, adjusted operating income for 2015 was $237.5 million, representing an 8.6% increase over 2014 adjusted operating income of $218.7 million. For the year, the operating income growth was attributable to margin improvement in the Nuclear Energy segment, reduced corporate costs and reduced spending on mPower development. Adjusted operating income for the fourth quarter of 2015 was $62.1 million, or a decrease of 11.9% compared to adjusted operating income of $70.5 million in the fourth quarter of 2014. The decline in adjusted operating income was driven by beneficial contract amendments in the Nuclear Operations segment in the fourth quarter of 2014. Consolidated GAAP operating income for the fourth quarter, which includes a $52.5 million loss related to non-cash, mark-to-market adjustments for pension and other post-retirement benefits, was $9.6 million, an increase of $91.3 million compared to a loss of $81.7 million in the same period of 2014. For 2015, GAAP operating income, which includes a $31.6 million net loss related to pension mark-to-market adjustments, spin costs, other restructuring costs and proceeds from a legal judgment, was $205.9 million compared to $25.1 million in 2014.
The Nuclear Operations segment revenues were $300.4 million in the fourth quarter of 2015 compared to $343.8 million in the same quarter in 2014, which included beneficial contract amendments realized in the fourth quarter of 2014. Nuclear Operations operating income decreased to $65.5 million in the fourth quarter of 2015 compared to $90.4 million in the prior year period primarily due to the beneficial contract amendments and timing of naval nuclear fuel activities. The same factors impacting the change in Nuclear Operations fourth quarter results impacted the change in the segment’s full year results.
The Technical Services segment revenues reached $22.4 million in the fourth quarter of 2015 compared to $14.1 million in the same quarter in 2014. Technical Services operating income increased $2.2 million to $2.6 million in the fourth quarter of 2015, primarily due to higher fees realized at one of our sites. For 2015, Technical Services operating income declined compared to 2014 due to the contracts for the Pantex Plant and Y-12 National Security Complex ending in 2014 as well as the termination of our work scope for the American Centrifuge Program.
Revenues from the Nuclear Energy segment were $41.7 million in the fourth quarter of 2015 compared to $40.5 million in the prior year period. For the fourth quarter and for the year, the exchange rate impact of the weakening Canadian dollar against the U.S. dollar was more than offset by revenue growth from the China steam generator project and increased services work. Nuclear Energy reported operating income of $1.6 million in the fourth quarter of 2015 compared to a loss of $18.6 million in the prior year period, which included a $16.1 million loss related to an adverse jury verdict in a lawsuit involving commercial nuclear contracts. The segment achieved fourth quarter operating income growth due to previously reported margin improvement initiatives and growth in the equipment business. For 2015, Nuclear Energy’s operating income increased $24.9 million to $1.7 million from a loss of $23.2 million in 2014 due to the increases in nuclear services and equipment operating income, the margin improvement initiatives and the impact of the adverse jury verdict reflected in 2014.
“BWXT is poised for another strong year as we carry the momentum we developed in the second half of the year into 2016,” said Mr. Fees. “We are committed to continue returning capital to our shareholders through share repurchases as well as our dividend, which we’ve increased this quarter. Additionally, we expect Nuclear Operations to complete the new pricing agreement negotiations for 2016 awards and out-year options in the first quarter of 2016, continuing the long-term stable performance of that segment. Our Nuclear Energy segment is on track to achieve its 10.0% operating profit margin target for 2016 as we continue to realize benefits from our margin improvement initiatives, execute on the healthy backlog in the business and win additional work. Lastly, the Technical Services segment remains focused on rebuilding for long-term growth, submitting several recent proposals with a strong pipeline of opportunities in the near-term.”
Liquidity and Debt
The Company generated consolidated cash flows from operations of $91.3 million in the fourth quarter of 2015 compared with $160.1 million, inclusive of cash flows of our former Power Generation business, in the fourth quarter of 2014. At the end of the fourth quarter, the Company’s cash and investments position, net of restricted cash, was $164.3 million.
As of December 31, 2015, outstanding balances under our credit facility included a $300 million term loan and letters of credit issued under the facility totaling $82.2 million, resulting in $317.8 million of availability under our credit facility, which excludes the additional $250 million accordion provision available to us for term loan, revolving credit borrowings and letter of credit commitments.
Share Repurchases
During the fourth quarter of 2015, the Company repurchased 1.7 million shares of its common stock at a total cost of $52 million. For 2015, the Company repurchased 2.4 million shares of its common stock at a total cost of $69.7 million. In October of 2015, our board approved a new $300 million repurchase authorization, which will begin on February 26, 2016 after the current authorization expires, and will continue for a two-year period.
Quarterly Dividend
On February 23, 2016, our Board of Directors declared a quarterly cash dividend of $0.09 per common share, a 50% increase. The dividend will be payable on March 24, 2016 to shareholders of record on March 7, 2016.
Full Year 2016 Outlook
Our 2016 guidance remains unchanged with the exception of our EPS guidance and a reduction in our planned mPower project spending to no more than $10 million per year. We are increasing our EPS guidance by $0.05 to be between $1.50 and $1.60 for the full year 2016. Included in our EPS increase is a pension expense reduction of approximately $5.0 million compared to previous guidance, which includes the impact of a change in the method of estimating pension expense.
Conference Call to Discuss Fourth Quarter 2015 Results
Date: Thursday, February 25, 2016, 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, management’s plans and expectations regarding our return of capital activities; new pricing agreements in our Nuclear Operations segment; our expectations for segment and overall operating performance, as well as outlook and guidance for 2016. 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 execute on contracts in backlog and obtain new contract awards; 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, 2015. 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 5,400 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. A company overview presentation, which will be presented at investor conferences and meetings throughout this quarter, is available on the Investor Relations section of our website. 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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