BWX Technologies(US:BWXT)2023-05-07 16:00PART I – FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements for BWX Technologies, Inc., detailing financial performance and position for Q1 2023 compared to Q1 2022 Condensed Consolidated Balance Sheets The balance sheet as of March 31, 2023, shows total assets of $2.72 billion, an increase from $2.62 billion at December 31, 2022, primarily driven by increases in Property, Plant and Equipment and Contracts in progress Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | $851,729 | $771,619 | | Total Assets | $2,718,908 | $2,618,939 | | Total Current Liabilities | $348,857 | $367,860 | | Long-Term Debt | $1,361,574 | $1,282,624 | | Total Stockholders' Equity | $788,008 | $748,355 | Condensed Consolidated Statements of Income For the three months ended March 31, 2023, revenues increased to $568.4 million from $530.7 million, with operating income growing to $87.8 million and net income attributable to the company reaching $61.1 million Q1 2023 vs Q1 2022 Income Statement (in thousands, except EPS) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Revenues | $568,360 | $530,738 | | Operating Income | $87,842 | $71,573 | | Net Income Attributable to BWXT | $61,092 | $59,010 | | Diluted EPS | $0.67 | $0.64 | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities increased to $13.0 million in Q1 2023, while net cash used in investing activities decreased to $29.8 million, and net cash provided by financing activities was $49.3 million Cash Flow Summary for Three Months Ended March 31 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(13,024) | $(5,384) | | Net Cash Used in Investing Activities | $(29,780) | $(65,927) | | Net Cash Provided by Financing Activities | $49,336 | $60,574 | | Cash and Equivalents at End of Period | $47,529 | $29,315 | Notes to Condensed Consolidated Financial Statements This section provides detailed information on accounting policies, segment operations, and financial instruments, including revenue recognition methods and debt structure - The company operates in two reportable segments: Government Operations, which manufactures naval nuclear reactors and provides services to the U.S. Government, and Commercial Operations, which fabricates commercial nuclear components and provides medical radioisotopes6391 - Revenue is primarily recognized over time based on a cost-to-cost method, with net unfavorable changes in estimates resulting in a $7.8 million decrease in revenues for Q1 202392132 Disaggregated Segment Revenues - Q1 2023 vs Q1 2022 (in thousands) | Segment | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Government Operations | $459,886 | $431,777 | | Commercial Operations | $108,924 | $99,950 | | Total Revenues | $568,360 | $530,738 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the financial results for Q1 2023, highlighting a 7.1% increase in consolidated revenues driven by segment growth, an increase in operating income, and a total backlog of $3.8 billion - Consolidated revenues increased by 7.1% ($37.6 million) in Q1 2023 compared to Q1 2022, driven by increases of $28.1 million in Government Operations and $9.0 million in Commercial Operations29 - Consolidated operating income increased by $16.3 million to $87.8 million in Q1 2023, mainly due to an $18.3 million increase in the Government Operations segment175 - Total backlog at March 31, 2023, was $3.8 billion, with approximately 65% expected to be recognized as revenue by the end of 2024134159 Results of Operations This section provides a detailed breakdown of the operational performance by segment, showing revenue growth in both Government and Commercial Operations, alongside changes in operating income Segment Performance - Q1 2023 vs Q1 2022 (in thousands) | Segment | Revenue (Q1 2023) | Revenue (Q1 2022) | Operating Income (Q1 2023) | Operating Income (Q1 2022) | | :--- | :--- | :--- | :--- | :--- | | Government Operations | $459,886 | $431,777 | $90,560 | $72,231 | | Commercial Operations | $108,924 | $99,950 | $1,513 | $3,962 | - The increase in Government Operations revenue was primarily driven by higher volume in the manufacture of nuclear components for U.S. Government programs153 - The decrease in Commercial Operations operating income was due to a shift in project/product mix and a $1.2 million increase in restructuring-related costs177 Liquidity and Capital Resources The company's liquidity is supported by a Credit Facility, including a revolving credit facility and a term loan, alongside two series of senior notes, providing sufficient cash and borrowing capacity - The company maintains a Credit Facility with a $750 million revolver and a $250 million term loan, maturing in October 2027161 - As of March 31, 2023, borrowings under the Term Loan were $248.4 million, and borrowings under the Revolving Credit Facility were $330.0 million, with $417.4 million of availability remaining189 - The company has two outstanding senior notes: $400 million due 2028 and $400 million due 2029, both with an interest rate of 4.125%206208 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company states that its exposures to market risks have not changed materially from those disclosed in its 2022 Form 10-K - There have been no material changes to the company's market risk exposures from those disclosed in the 2022 10-K200 Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2023, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of March 31, 2023202 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls202 PART II – OTHER INFORMATION Item 1. Legal Proceedings The report refers to Note 5 of the financial statements for information on legal proceedings and states there were no material contingencies during the period - For information regarding ongoing investigations and litigation, the report incorporates by reference Note 5 to the unaudited condensed consolidated financial statements228 - There were no material contingencies during the period covered by this Form 10-Q136 Item 1A. Risk Factors There have been no material changes to the company's risk factors from those disclosed in its 2022 Form 10-K - No material changes have occurred in the company's risk factors since those disclosed in the 2022 Form 10-K2 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During Q1 2023, the company repurchased 112,376 shares at an average price of $61.42 per share, primarily for tax withholding obligations, with $397.6 million remaining for future repurchases Share Repurchases for Q1 2023 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 1 - Jan 31, 2023 | 143 | $57.67 | | Feb 1 - Feb 28, 2023 | 112,199 | $61.43 | | Mar 1 - Mar 30, 2023 | 34 | $61.87 | | Total | 112,376 | $61.42 | - As of March 30, 2023, approximately $397.6 million remained available for share repurchases under the publicly announced plan authorized on April 30, 20213230 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, stock grant agreements, CEO and CFO certifications, and XBRL data files - The exhibits include CEO and CFO certifications pursuant to Rule 13a-14(a)/15d-14(a) and Section 1350203 - Forms of 2023 stock option and restricted stock unit grant agreements for employees are included as exhibits203