bwxt-20220930

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, 2022.


☐			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 November 3, 2022 was 91,222,288.

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, 2022 and December 31, 2021 (Unaudited)	2
	Condensed Consolidated Statements of Income
	Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive Income
	Three and Nine Months Ended September 30, 2022 and 2021 (Unaudited)	5
	Condensed Consolidated Statements of Stockholders' Equity
	Three Months Ended March 31, June 30 and September 30, 2022 and 2021 (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows
	Nine Months Ended September 30, 2022 and 2021 (Unaudited)	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 6.	Exhibits	32

Signatures		33

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

BWX TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS


	September 30, 2022		December 31, 2021
	(Unaudited) (In thousands)
Current Assets:
Cash and cash equivalents	$	51,400	$	33,891
Restricted cash and cash equivalents	2,908		2,896
Investments	3,820		3,811
Accounts receivable – trade, net	72,404		70,663
Accounts receivable – other	34,145		16,651
Retainages	76,193		51,507
Contracts in progress	545,517		546,595
Other current assets	63,317		47,718
Total Current Assets	849,704		773,732
Property, Plant and Equipment, Net	1,083,436		1,045,640
Investments	7,769		9,558
Goodwill	289,962		285,502
Deferred Income Taxes	20,458		21,394
Investments in Unconsolidated Affiliates	107,430		85,284
Intangible Assets	192,898		185,551
Other Assets	120,401		94,719
TOTAL	$	2,672,058	$	2,501,380

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, 2022		December 31, 2021
	(Unaudited) (In thousands, except share and per share amounts)
Current Liabilities:


Accounts payable	$	146,543	$	189,842
Accrued employee benefits	75,114		71,835
Accrued liabilities – other	80,749		80,998
Advance billings on contracts	98,545		111,619
Accrued warranty expense	5,846		5,321

Total Current Liabilities	406,797		459,615
Long-Term Debt	1,340,722		1,189,304
Accumulated Postretirement Benefit Obligation	21,553		24,333
Environmental Liabilities	94,414		92,642
Pension Liability	48,018		59,388
Other Liabilities	47,618		38,863
Commitments and Contingencies (Note 5)
Stockholders' Equity:
Common stock, par value $0.01 per share, authorized 325,000,000 shares; issued 127,638,048 and 127,311,985 shares at September 30, 2022 and December 31, 2021, respectively	1,276		1,273
Preferred stock, par value $0.01 per share, authorized 75,000,000 shares; No shares issued	—		—
Capital in excess of par value	186,790		174,288
Retained earnings	1,910,197		1,775,751
Treasury stock at cost, 36,420,960 and 35,915,747 shares at September 30, 2022 and December 31, 2021, respectively	(1,353,269)		(1,326,280)
Accumulated other comprehensive income (loss)	(32,280)		12,143
Stockholders' Equity – BWX Technologies, Inc.	712,714		637,175
Noncontrolling interest	222		60
Total Stockholders' Equity	712,936		637,235
TOTAL	$	2,672,058	$	2,501,380

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,
	2022		2021		2022		2021
	(Unaudited) (In thousands, except share and per share amounts)
Revenues	$	523,711	$	498,727	$	1,608,657	$	1,532,099
Costs and Expenses:
Cost of operations	399,281		361,530		1,217,108		1,130,153
Research and development costs	1,426		2,870		6,990		9,491
Losses (gains) on asset disposals and impairments, net	(251)		(981)		(222)		(1,018)
Selling, general and administrative expenses	58,160		58,458		172,974		176,037
Total Costs and Expenses	458,616		421,877		1,396,850		1,314,663
Equity in Income of Investees	14,783		10,618		34,881		26,197
Operating Income	79,878		87,468		246,688		243,633
Other Income (Expense):
Interest income	273		160		463		369
Interest expense	(9,625)		(11,483)		(24,983)		(28,725)
Other – net	11,496		1,624		35,401		33,316
Total Other Income (Expense)	2,144		(9,699)		10,881		4,960
Income before Provision for Income Taxes	82,022		77,769		257,569		248,593
Provision for Income Taxes	20,185		17,611		61,977		59,211
Net Income	$	61,837	$	60,158	$	195,592	$	189,382
Net Income Attributable to Noncontrolling Interest	(234)		(244)		(366)		(372)
Net Income Attributable to BWX Technologies, Inc.	$	61,603	$	59,914	$	195,226	$	189,010
Earnings per Common Share:
Basic:
Net Income Attributable to BWX Technologies, Inc.	$	0.67	$	0.64	$	2.13	$	1.99
Diluted:
Net Income Attributable to BWX Technologies, Inc.	$	0.67	$	0.63	$	2.13	$	1.99
Shares used in the computation of earnings per share (Note 9):
Basic	91,407,599		94,277,253		91,455,350		94,978,638
Diluted	91,655,536		94,483,975		91,665,383		95,190,676

See accompanying notes to condensed consolidated financial statements.

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BWX TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(Unaudited) (In thousands)
Net Income	$	61,837	$	60,158	$	195,592	$	189,382
Other Comprehensive Income (Loss):
Currency translation adjustments	(36,906)		(10,605)		(46,822)		4,616
Derivative financial instruments:
Unrealized gains (losses) arising during the period, net of tax (provision) benefit of $(177), $43, $(7) and $167, respectively	515		(119)		19		(491)
Reclassification adjustment for losses included in net income, net of tax benefit of $(74), $(61), $(178) and $(60), respectively	220		181		520		178
Amortization of benefit plan costs, net of tax benefit of $(163), $(153), $(488) and $(468), respectively	650		561		1,952		1,721
Unrealized (losses) gains on investments arising during the period, net of tax benefit of $5, $0, $24 and $60, respectively	(20)		—		(92)		89
Other Comprehensive Income (Loss)	(35,541)		(9,982)		(44,423)		6,113
Total Comprehensive Income	26,296		50,176		151,169		195,495
Comprehensive Income Attributable to Noncontrolling Interest	(234)		(244)		(366)		(372)
Comprehensive Income Attributable to BWX Technologies, Inc.	$	26,062	$	49,932	$	150,803	$	195,123

See accompanying notes to condensed consolidated financial statements.

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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, 2021	127,311,985	$	1,273	$	174,288	$	1,775,751	$	12,143	$	(1,326,280)	$	637,175	$	60	$	637,235

Net income	—	—		—		59,010		—		—		59,010		64		59,074
Dividends declared ($0.22 per share)	—	—		—		(20,279)		—		—		(20,279)		—		(20,279)
Currency translation adjustments	—	—		—		—		5,365		—		5,365		—		5,365
Derivative financial instruments	—	—		—		—		44		—		44		—		44
Defined benefit obligations	—	—		—		—		651		—		651		—		651
Available-for-sale investments	—	—		—		—		(24)		—		(24)		—		(24)
Exercises of stock options	—	—		—		—		—		—		—		—		—
Shares placed in treasury	—	—		—		—		—		(26,011)		(26,011)		—		(26,011)
Stock-based compensation charges	279,242	3		3,955		—		—		—		3,958		—		3,958
Distributions to noncontrolling interests	—	—		—		—		—		—		—		(59)		(59)
Balance March 31, 2022 (unaudited)	127,591,227	$	1,276	$	178,243	$	1,814,482	$	18,179	$	(1,352,291)	$	659,889	$	65	$	659,954
Net income	—	—		—		74,613		—		—		74,613		68		74,681
Dividends declared ($0.22 per share)	—	—		—		(20,273)		—		—		(20,273)		—		(20,273)
Currency translation adjustments	—	—		—		—		(15,281)		—		(15,281)		—		(15,281)
Derivative financial instruments	—	—		—		—		(240)		—		(240)		—		(240)
Defined benefit obligations	—	—		—		—		651		—		651		—		651
Available-for-sale investments	—	—		—		—		(48)		—		(48)		—		(48)
Exercises of stock options	—	—		—		—		—		—		—		—		—
Shares placed in treasury	—	—		—		—		—		(33)		(33)		—		(33)
Stock-based compensation charges	13,643	—		5,008		—		—		—		5,008		—		5,008
Distributions to noncontrolling interests	—	—		—		—		—		—		—		(69)		(69)
Balance June 30, 2022 (unaudited)	127,604,870	$	1,276	$	183,251	$	1,868,822	$	3,261	$	(1,352,324)	$	704,286	$	64	$	704,350
Net income	—	—		—		61,603		—		—		61,603		234		61,837
Dividends declared ($0.22 per share)	—	—		—		(20,228)		—		—		(20,228)		—		(20,228)
Currency translation adjustments	—	—		—		—		(36,906)		—		(36,906)		—		(36,906)
Derivative financial instruments	—	—		—		—		735		—		735		—		735
Defined benefit obligations	—	—		—		—		650		—		650		—		650
Available-for-sale investments	—	—		—		—		(20)		—		(20)		—		(20)
Exercises of stock options	19,345	—		458		—		—		—		458		—		458
Shares placed in treasury	—	—		—		—		—		(945)		(945)		—		(945)
Stock-based compensation charges	13,833	—		3,081		—		—		—		3,081		—		3,081
Distributions to noncontrolling interests	—	—		—		—		—		—		—		(76)		(76)
Balance September 30, 2022 (unaudited)	127,638,048	$	1,276	$	186,790	$	1,910,197	$	(32,280)	$	(1,353,269)	$	712,714	$	222	$	712,936

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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

See accompanying notes to condensed consolidated financial statements.

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BWX TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended September 30,
	2022		2021
	(Unaudited) (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	195,592	$	189,382
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	54,808		50,476
Income of investees, net of dividends	(10,733)		(12,375)

Recognition of losses for pension and postretirement plans	2,441		2,189
Stock-based compensation expense	12,047		14,861
Premium for early redemption of senior notes	—		10,752
Recognition of debt issuance costs from former debt instruments	—		4,212<