bwxt-20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________________________________________________________________________________________

FORM 10-Q

_________________________________________________________________________________________________________________________________


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

For the quarterly period ended September 30, 2021.


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

For the transition period from to .

Commission File No. 001-34658

BWX TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

__________________________________________________________________________________________________________________________________

Delaware

80-0558025

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

800 Main Street, 4th Floor

Lynchburg,

Virginia

24504

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code: (980) 365-4300

_________________________________________________________________________________________________________________________________


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	BWXT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant's common stock outstanding at October 28, 2021 was 92,201,983.

Table of Contents

BWX TECHNOLOGIES, INC.

INDEX – FORM 10-Q



		PAGE
PART I – FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements	2
	Condensed Consolidated Balance Sheets
	September 30, 2021 and December 31, 2020 (Unaudited)	2
	Condensed Consolidated Statements of Income
	Three and Nine Months Ended September 30, 2021 and 2020 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income
	Three and Nine Months Ended September 30, 2021 and 2020 (Unaudited)	5
	Condensed Consolidated Statements of Stockholders' Equity
	Three Months Ended March 31, June 30 and September 30, 2021 and 2020 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows
	Nine Months Ended September 30, 2021 and 2020 (Unaudited)	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 6.	Exhibits	34

Signatures		35

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BWX TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS


	September 30, 2021		December 31, 2020
	(Unaudited) (In thousands)
Current Assets:
Cash and cash equivalents	$	69,381	$	42,610
Restricted cash and cash equivalents	3,071		3,070
Investments	3,820		3,707
Accounts receivable – trade, net	57,136		153,368
Accounts receivable – other	24,471		22,239
Retainages	70,176		55,172
Contracts in progress	540,504		449,176
Other current assets	45,264		44,256
Total Current Assets	813,823		773,598
Property, Plant and Equipment, Net	983,974		816,471
Investments	10,031		9,356
Goodwill	285,066		283,708
Deferred Income Taxes	25,431		49,415
Investments in Unconsolidated Affiliates	84,636		71,806
Intangible Assets	187,384		192,751
Other Assets	99,368		96,398
TOTAL	$	2,489,713	$	2,293,503

See accompanying notes to condensed consolidated financial statements.

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BWX TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' EQUITY


	September 30, 2021		December 31, 2020
	(Unaudited) (In thousands, except share and per share amounts)
Current Liabilities:

Bank overdraft	$	—	$	88,694
Accounts payable	137,936		184,392
Accrued employee benefits	74,102		89,740
Accrued liabilities – other	77,872		78,028
Advance billings on contracts	102,370		83,581
Accrued warranty expense	5,513		5,292

Total Current Liabilities	397,793		529,727
Long-Term Debt	1,253,832		862,731
Accumulated Postretirement Benefit Obligation	24,389		25,689
Environmental Liabilities	93,051		84,153
Pension Liability	109,829		144,859
Other Liabilities	32,245		28,576
Commitments and Contingencies (Note 6)
Stockholders' Equity:
Common stock, par value $0.01 per share, authorized 325,000,000 shares; issued 127,303,992 and 127,009,536 shares at September 30, 2021 and December 31, 2020, respectively	1,273		1,270
Preferred stock, par value $0.01 per share, authorized 75,000,000 shares; No shares issued	—		—
Capital in excess of par value	170,514		153,800
Retained earnings	1,678,478		1,549,950
Treasury stock at cost, 35,102,009 and 31,698,747 shares at September 30, 2021 and December 31, 2020, respectively	(1,286,261)		(1,095,452)
Accumulated other comprehensive income (loss)	14,311		8,198
Stockholders' Equity – BWX Technologies, Inc.	578,315		617,766
Noncontrolling interest	259		2
Total Stockholders' Equity	578,574		617,768
TOTAL	$	2,489,713	$	2,293,503

See accompanying notes to condensed consolidated financial statements.

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BWX TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Unaudited) (In thousands, except share and per share amounts)
Revenues	$	498,727	$	519,878	$	1,532,099	$	1,566,606
Costs and Expenses:
Cost of operations	361,530		373,783		1,130,153		1,133,760
Research and development costs	2,870		2,933		9,491		11,565
Losses (gains) on asset disposals and impairments, net	(981)		25		(1,018)		324
Selling, general and administrative expenses	58,458		62,638		176,037		170,733
Total Costs and Expenses	421,877		439,379		1,314,663		1,316,382
Equity in Income of Investees	10,618		8,271		26,197		19,247
Operating Income	87,468		88,770		243,633		269,471
Other Income (Expense):
Interest income	160		161		369		453
Interest expense	(11,483)		(7,701)		(28,725)		(23,533)
Other – net	1,624		10,652		33,316		28,019
Total Other Income (Expense)	(9,699)		3,112		4,960		4,939
Income before Provision for Income Taxes	77,769		91,882		248,593		274,410
Provision for Income Taxes	17,611		18,687		59,211		61,199
Net Income	$	60,158	$	73,195	$	189,382	$	213,211
Net Income Attributable to Noncontrolling Interest	(244)		(24)		(372)		(283)
Net Income Attributable to BWX Technologies, Inc.	$	59,914	$	73,171	$	189,010	$	212,928
Earnings per Common Share:
Basic:
Net Income Attributable to BWX Technologies, Inc.	$	0.64	$	0.77	$	1.99	$	2.23
Diluted:
Net Income Attributable to BWX Technologies, Inc.	$	0.63	$	0.76	$	1.99	$	2.22
Shares used in the computation of earnings per share (Note 10):
Basic	94,277,253		95,483,003		94,978,638		95,450,994
Diluted	94,483,975		95,730,696		95,190,676		95,706,880

See accompanying notes to condensed consolidated financial statements.

Table of Contents

BWX TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(Unaudited) (In thousands)
Net Income	$	60,158	$	73,195	$	189,382	$	213,211
Other Comprehensive Income (Loss):
Currency translation adjustments	(10,605)		8,704		4,616		(2,380)
Derivative financial instruments:
Unrealized (losses) gains arising during the period, net of tax benefit (provision) of $43, $(12), $167 and $20, respectively	(119)		32		(491)		(59)
Reclassification adjustment for losses (gains) included in net income, net of tax (benefit) provision of $(61), $79, $(60) and $(27), respectively	181		(232)		178		99
Amortization of benefit plan costs, net of tax benefit of $(153), $(141), $(468) and $(475), respectively	561		688		1,721		1,907
Unrealized gains (losses) on investments arising during the period, net of tax benefit (provision) of $0, $1, $60 and $(1), respectively	—		(81)		89		(527)
Other Comprehensive Income (Loss)	(9,982)		9,111		6,113		(960)
Total Comprehensive Income	50,176		82,306		195,495		212,251
Comprehensive Income Attributable to Noncontrolling Interest	(244)		(29)		(372)		(283)
Comprehensive Income Attributable to BWX Technologies, Inc.	$	49,932	$	82,277	$	195,123	$	211,968

See accompanying notes to condensed consolidated financial statements.

Table of Contents


BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
	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, 2020	127,009,536	$	1,270	$	153,800	$	1,549,950	$	8,198	$	(1,095,452)	$	617,766	$	2	$	617,768

Net income	—	—		—		69,749		—		—		69,749		66		69,815
Dividends declared ($0.21 per share)	—	—		—		(20,173)		—		—		(20,173)		—		(20,173)
Currency translation adjustments	—	—		—		—		8,001		—		8,001		—		8,001
Derivative financial instruments	—	—		—		—		(578)		—		(578)		—		(578)
Defined benefit obligations	—	—		—		—		580		—		580		—		580
Available-for-sale investments	—	—		—		—		89		—		89		—		89
Exercises of stock options	61,260	—		1,517		—		—		—		1,517		—		1,517
Shares placed in treasury	—	—		—		—		—		(24,694)		(24,694)		—		(24,694)
Stock-based compensation charges	191,350	3		3,978		—		—		—		3,981		—		3,981
Distributions to noncontrolling interests	—	—		—		—		—		—		—		—		—
Balance March 31, 2021 (unaudited)	127,262,146	$	1,273	$	159,295	$	1,599,526	$	16,290	$	(1,120,146)	$	656,238	$	68	$	656,306
Net income	—	—		—		59,347		—		—		59,347		62		59,409
Dividends declared ($0.21 per share)	—	—		—		(20,164)		—		—		(20,164)		—		(20,164)
Currency translation adjustments	—	—		—		—		7,220		—		7,220		—		7,220
Derivative financial instruments	—	—		—		—		203		—		203		—		203
Defined benefit obligations	—	—		—		—		580		—		580		—		580
Available-for-sale investments	—	—		—		—		—		—		—		—		—
Exercises of stock options	13,936	—		339		—		—		—		339		—		339
Shares placed in treasury	—	—		—		—		—		(58)		(58)		—		(58)
Stock-based compensation charges	11,597	—		5,292		—		—		—		5,292		—		5,292
Distributions to noncontrolling interests	—	—		—		—		—		—		—		(40)		(40)
Balance June 30, 2021 (unaudited)	127,287,679	$	1,273	$	164,926	$	1,638,709	$	24,293	$	(1,120,204)	$	708,997	$	90	$	709,087
Net income	—	—		—		59,914		—		—		59,914		244		60,158
Dividends declared ($0.21 per share)	—	—		—		(20,145)		—		—		(20,145)		—		(20,145)
Currency translation adjustments	—	—		—		—		(10,605)		—		(10,605)		—		(10,605)
Derivative financial instruments	—	—		—		—		62		—		62		—		62
Defined benefit obligations	—	—		—		—		561		—		561		—		561
Available-for-sale investments	—	—		—		—		—		—		—		—		—
Exercises of stock options	—	—		—		—		—		—		—		—		—
Shares placed in treasury	—	—		—		—		—		(166,057)		(166,057)		—		(166,057)
Stock-based compensation charges	16,313	—		5,588		—		—		—		5,588		—		5,588
Distributions to noncontrolling interests	—	—		—		—		—		—		—		(75)		(75)
Balance September 30, 2021 (unaudited)	127,303,992	$	1,273	$	170,514	$	1,678,478	$	14,311	$	(1,286,261)	$	578,315	$	259	$	578,574

Table of Contents


BWX TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
	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
Net income	—	—		—		73,171		—		—		73,171		24		73,195
Dividends declared ($0.19 per share)	—	—		—		(18,242)		—		—		(18,242)		—		(18,242)
Currency translation adjustments	—	—		—		—		8,704		—		8,704		—		8,704
Derivative financial instruments	—	—		—		—		(200)		—		(200)		—		(200)
Defined benefit obligations	—	—		—		—		688		—		688		—		688
Available-for-sale investments	—	—		—		—		(81)		—		(81)		—