BWX Technologies, Inc. (NYSE:BWXT) Q3 2018 Earnings Conference Call Transcript

Nov 07, 2018 • 08:30 am ET


BWX Technologies, Inc. (NYSE:BWXT) Q3 2018 Earnings Conference Call Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to BWX Technologies, Inc., Third Quarter Earnings Conference Call. At this time, all participants are in a listen only mode. Following the company's prepared remarks, we will conduct a question-and-answer session and instructions will be given at that time. Please note this event is being recorded.

I would now like to turn the call over to our host, Mr. Alan Nethery, BWXT's Vice President and Chief Investor Relations Officer. Please go ahead.

Alan Nethery

Thank you Nicole and good morning everyone. We appreciate your joining us to discuss our 2018 third quarter results which we reported Tuesday afternoon. Copies of our press release and investor briefing, including details related to today's discussion are available on the Investors section of our website at

Joining me this morning are Rex Geveden, President and Chief Executive Officer; and David Black, Senior Vice President and Chief Financial Officer.

(Forward-Looking Cautionary Statements) On today's call, we will also provide non-GAAP financial measures such as adjusted earnings per share which are reconciled to GAAP in Tuesday's earnings release and our investor briefing presentation. BWXT believes that non-GAAP measures provide greater insight and transparency into the company's operational performance and that these measures help to facilitate comparisons of operating results with prior periods and assist in understanding BWXT's ongoing operations.

With that, I will now turn the call over to Rex.

Rex Geveden

Thank you Alan and good morning everyone. Yesterday, we reported third quarter earnings of $0.40 per share with revenue growth of 1.5%. Our results include an incremental reserve for missile tube rework resulting in a $0.21 negative impact to our third quarter reported figures and a $0.23 negative impact year-to-date. We saw good growth in orders primarily in Nuclear Operations which resulted in consolidated backlog growth to over $3.8 billion.

Let me briefly give you some third quarter highlights across our three reporting segments. In Nuclear Operations, we were awarded a six-year $505 million contract for down-blending of highly enriched uranium as anticipated. This is the single largest contract in the history of Nuclear Fuel Services business creating additional substantial backlog and providing visibility through the middle of the next decade.

We also continue negotiations on the next multi-year pricing agreement which is on schedule to be completed in the first quarter of 2019. Based on discussions and scenario planning with the customer, we believe that accelerated work scope related to the two carrier procurement which has been appropriated by the Congress to be more likely than not. In the Nuclear Power Group, we continued our trend of double-digit revenue growth and superb margins.

We completed the medical radioisotope acquisition for $213 million which includes approximately $50 million of future cash tax benefit. In the first hundred days since the close, we have transitioned the employees to BWXT, transferred seven of eight nuclear regulatory licenses and integrated the financial systems. Most importantly, we've utilized the expertise of our new employees to further develop detailed infrastructure plans for the