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Exhibit 99.1

 

LOGO

 

LOGO

 

Babcock & Wilcox Announces First Quarter 2012 Results

–      Earnings per share of $0.39

–      Revenues of $766 million increased 10.8%

–      Record Backlog of $6.0 billion

CHARLOTTE – May 9, 2012 – The Babcock & Wilcox Company (NYSE: BWC) (“B&W” or the “Company”) today reported first quarter 2012 revenues of $765.9 million, an increase of $74.6 million, or 10.8%, from the first quarter of 2011. Earnings per share for the first quarter of 2012 were $0.39 compared to $0.11 in the first quarter of 2011. In the first quarter of 2011, earnings per share included approximately $0.17 of charges related to loss contracts. Excluding the impact of these prior year charges, earnings per share in the first quarter of 2012 increased 39.3% compared to the first quarter of 2011.

Recent Highlights

 

   

Named to MIT Technology Review’s 2012 TR50 List of the World’s Most Innovative Companies

   

Received Full Notice to Proceed on West Palm Beach Waste-to-Energy Facility Contract, Added $676 Million to Backlog

   

Awarded $1.3 Billion, Ten-Year Waste Isolation Pilot Plant Management Contract

   

Awarded $150 Million Environmental Equipment and Construction Contract for Alliant Energy

   

Awarded $130 Million Naval Nuclear Component Contract

   

Awarded $30 Million Design and Engineering Selective Catalytic Reduction (SCR) System Contract for Xcel Energy

   

Awarded $20 Million EPC Industrial Environmental Control Systems Contract

   

Announced Retirement of Brandon C. Bethards and Appointment of E. James Ferland as President and Chief Executive Officer

Results of Operations

Consolidated revenues for the first quarter of 2012 were $765.9 million, an increase of $74.6 million, or 10.8%, from the first quarter of 2011. The Power Generation and Nuclear Energy segments increased 16.3% and 32.6%, respectively, while the combined government segments declined 1.3%. The double-digit growth rate in consolidated revenues is primarily due to strong environmental control equipment and services sales, growth in new renewable steam generation systems, and higher nuclear services revenues.

Operating income for the first quarter of 2012 was $65.7 million, an increase of $43.8 million from the first quarter of 2011. Included in operating earnings in the first quarter of 2011 were charges related to loss contracts totaling $32.7 million. Excluding the impact of these charges in the prior year, operating earnings in the first quarter of 2012 increased $11.1 million or 20.3% compared to the first quarter of 2011.


The increase in operating income (excluding these 2011 charges) was primarily due to improvements in operational performance in the Government segments, partially offset by an increase in research and development expenses related to the Company’s small modular reactor program and lower equity income contributions from the Company’s unconsolidated steam boiler joint venture in China.

“In the first quarter, the Company performed well above prior year levels, and in-line with expectations,” said E. James Ferland, President and Chief Executive Officer of B&W. “Importantly, strong bookings in the first quarter of 2012 resulted in an ending backlog of $6.0 billion, the highest quarter-end backlog the Company has ever reported. Bookings in the quarter include the impact of the full notice to proceed received for the West Palm Beach waste-to-energy plant, $249 million of environmental awards and a new $130 million contract for advanced naval reactor designs. Over the last few quarters, the Company has realized a significant increase in environmental control systems bookings as a result of legislative requirements in the United States to generate electricity with fewer emissions. At the end of the first quarter, the Power Generation segment had more than $4 billion of bids outstanding or in progress, which includes more than $2 billion for environmental control systems and services,” Ferland concluded.

Liquidity

The Company’s cash and investments position, net of debt, was $418.7 million at the end of the first quarter of 2012, a decrease of $125 million compared to $543.7 million at the end of the fourth quarter of 2011. During the quarter, the Company contributed $91.6 million to its pension plans. In addition to net cash, the Company maintains a $700.0 million revolving credit agreement with $483.8 million of availability as of the end of the first quarter. The Company believes it maintains adequate liquidity to fund operations, which could include increased working capital requirements to fund internal growth, R&D programs, and product and geographic expansion opportunities.

Reconciliation of Non-GAAP Earnings Per Share and Operating Income

(in $ millions, except per share amounts)

 

         Q1 2012              Q1 2011      

GAAP operating income

   $ 65.7       $ 21.9   

NFS material processing loss contracts

     —           11.1   

Nuclear Energy loss contract

     —           21.6   
  

 

 

    

 

 

 

Non-GAAP operating income

   $ 65.7       $ 54.6   
  

 

 

    

 

 

 

Reported earnings per share

   $ 0.39       $ 0.11   

NFS material processing loss contracts

     —           .06   

Nuclear Energy loss contract

     —           .11   
  

 

 

    

 

 

 

Non-GAAP earnings per share

   $ 0.39       $ 0.28   
  

 

 

    

 

 

 


B&W is providing non-GAAP information regarding certain of its historical results to supplement the results provided in accordance with GAAP and it should not be considered superior to, or as a substitute for, the comparable GAAP measures. B&W believes the non-GAAP measures provide meaningful insight in the Company’s operational performance and provides these measures to investors to help facilitate comparisons of operating results with prior periods and to assist them in understanding B&W’s ongoing operations.

Conference Call to Discuss First Quarter 2012 Results

 

Date:    Thursday, May 10, 2012, at 8:30 a.m. ET
Live Webcast:     Investor Relations section of website at www.babcock.com

Forward-Looking Statements

B&W cautions that this release contains forward-looking statements, including, without limitation, statements relating to our belief regarding the opportunity from environmental control systems and backlog, it the extent backlog may be viewed as an indicator of future revenues. 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 the timing, scope or enforcement of U.S. Environmental Protection Agency environmental rules affecting our customers and delays, changes or termination of contracts in backlog. If one or more of these or other risks materialize, actual results may vary materially from those expressed. For a more complete discussion of these and other risk factors, see B&W’s filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2011. B&W cautions not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and undertakes no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.

About B&W

The Babcock & Wilcox Company is a leader in clean energy technology and services, primarily for the nuclear, fossil and renewable power markets as well as a premier advanced technology and mission critical defense contractor. B&W has locations worldwide and employs approximately 12,700 people, in addition to approximately 10,400 joint venture employees. 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.babcock.com.

TABLES TO FOLLOW

 

Investor Contact:   Media Contact:
Michael P. Dickerson   Jud Simmons
Vice President and Investor Relations Officer   Public Relations Manager
704-625-4944 investors@babcock.com   434.522.6462 hjsimmons@babcock.com


THE BABCOCK & WILCOX COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

 

December 31, December 31,
     March 31,
2012
     December 31,
2011
 
    

(Unaudited)

(In thousands)

 

Current Assets:

     

Cash and cash equivalents

   $ 249,620       $ 415,209   

Restricted cash and cash equivalents

     59,040         61,190   

Investments

     111,237         68,805   

Accounts receivable – trade, net

     329,336         305,832   

Accounts receivable – other

     76,375         77,505   

Contracts in progress

     336,731         315,286   

Inventories

     114,025         107,298   

Deferred income taxes

     88,770         102,022   

Other current assets

     44,105         33,929   
  

 

 

    

 

 

 

Total Current Assets

     1,409,239         1,487,076   
  

 

 

    

 

 

 

Property, Plant and Equipment

     1,038,586         1,017,422   

Less accumulated depreciation

     611,529         595,131   
  

 

 

    

 

 

 

Net Property, Plant and Equipment

     427,057         422,291   
  

 

 

    

 

 

 

Investments

     4,006         3,775   
  

 

 

    

 

 

 

Goodwill

     276,824         276,180   
  

 

 

    

 

 

 

Deferred Income Taxes

     236,080         241,739   
  

 

 

    

 

 

 

Investments in Unconsolidated Affiliates

     178,427         163,568   
  

 

 

    

 

 

 

Other Assets

     204,864         194,482   
  

 

 

    

 

 

 

TOTAL

   $ 2,736,497       $ 2,789,111   
  

 

 

    

 

 

 


THE BABCOCK & WILCOX COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

December 31, December 31,
     March 31,
2012
    December 31,
2011
 
    

(Unaudited)

(In thousands)

 

Current Liabilities:

    

Notes payable and current maturities of long-term debt

   $ 4,650      $ 4,653   

Accounts payable

     224,659        237,494   

Accrued employee benefits

     236,138        303,803   

Accrued liabilities – other

     77,820        71,079   

Advance billings on contracts

     430,789        438,753   

Accrued warranty expense

     98,413        97,209   

Income taxes payable

     2,549        1,816   
  

 

 

   

 

 

 

Total Current Liabilities

     1,075,018        1,154,807   
  

 

 

   

 

 

 

Long-Term Debt

     597        633   
  

 

 

   

 

 

 

Accumulated Postretirement Benefit Obligation

     79,031        80,663   
  

 

 

   

 

 

 

Environmental Liabilities

     44,857        44,069   
  

 

 

   

 

 

 

Pension Liability

     539,225        586,045   
  

 

 

   

 

 

 

Other Liabilities

     88,808        87,921   
  

 

 

   

 

 

 

Commitments and Contingencies

    

Stockholders’ Equity:

    

Common stock, par value $0.01 per share, authorized 325,000,000 shares; issued 119,020,291 and 118,458,911 shares at March 31, 2012 and

December 31, 2011, respectively

     1,190        1,185   

Preferred stock, par value $0.01 per share, authorized 75,000,000 shares; No shares issued

     —          —     

Capital in excess of par value

     1,116,544        1,106,971   

Retained earnings

     313,069        266,325   

Treasury stock at cost, 457,747 and 351,876 shares at March 31, 2012 and December 31, 2011, respectively

     (12,889     (10,059

Accumulated other comprehensive loss

     (518,809     (538,628
  

 

 

   

 

 

 

Stockholders’ Equity – The Babcock & Wilcox Company

     899,105        825,794   

Noncontrolling interest

     9,856        9,179   
  

 

 

   

 

 

 

Total Stockholders’ Equity

     908,961        834,973   
  

 

 

   

 

 

 

TOTAL

   $ 2,736,497      $ 2,789,111   
  

 

 

   

 

 

 


THE BABCOCK & WILCOX COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 

     Three Months Ended
March 31,
 
     2012     2011  
    

(Unaudited)

(In thousands, except share and
per share amounts)

 

Revenues

   $ 765,892      $ 691,277   
  

 

 

   

 

 

 

Costs and Expenses:

    

Cost of operations

     582,739        564,806   

Research and development costs

     29,036        17,308   

Gains on asset disposals and impairments – net

     (260     (10

Selling, general and administrative expenses

     106,023        102,633   
  

 

 

   

 

 

 

Total Costs and Expenses

     717,538        684,737   
  

 

 

   

 

 

 

Equity in Income of Investees

     17,357        15,361   
  

 

 

   

 

 

 

Operating Income

     65,711        21,901   
  

 

 

   

 

 

 

Other Income (Expense):

    

Interest income

     233        459   

Interest expense

     (623     (455

Other expense – net

     (1,102     (2,994
  

 

 

   

 

 

 

Total Other Expense

     (1,492     (2,990
  

 

 

   

 

 

 

Income before Provision for Income Taxes

     64,219        18,911   

Provision for Income Taxes

     20,357        5,244   
  

 

 

   

 

 

 

Net Income

   $ 43,862      $ 13,667   
  

 

 

   

 

 

 

Net Loss (Income) Attributable to Noncontrolling Interest

     2,882        (157
  

 

 

   

 

 

 

Net Income Attributable to The Babcock & Wilcox Company

   $ 46,744      $ 13,510   
  

 

 

   

 

 

 

Earnings per Common Share:

    

Basic:

    

Net Income Attributable to The Babcock & Wilcox Company

   $ 0.40      $ 0.12   

Diluted:

    

Net Income Attributable to The Babcock & Wilcox Company

   $ 0.39      $ 0.11   
  

 

 

   

 

 

 

Shares used in the computation of earnings per share:

    

Basic

     118,255,346        116,968,275   

Diluted

     118,859,141        117,957,245   
  

 

 

   

 

 

 


THE BABCOCK & WILCOX COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

     Three Months Ended
March 31,
 
     2012     2011  
    

(Unaudited)

(In thousands)

 

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net Income

   $ 43,862      $ 13,667   

Non-cash items included in net income:

    

Depreciation and amortization

     17,715        19,315   

Income of investees, net of dividends

     (6,893     (3,832

Gain on asset disposals – net

     (260     (10

In-kind research and development costs

     3,644        —     

Amortization of pension and postretirement costs

     21,524        20,474   

Stock-based compensation expense

     3,983        4,853   

Excess tax benefits from stock-based compensation

     (1,406     (4,031

Changes in assets and liabilities, net of effects of acquisitions:

    

Accounts receivable

     (28,497     (31,213

Net contracts in progress and advance billings on contracts

     (30,997     (44,328

Accounts payable

     (10,159     6,016   

Inventories

     (6,066     1,536   

Current and deferred income taxes

     21,306        21,479   

Accrued and other current liabilities

     4,378        8,535   

Pension liability, accumulated postretirement benefit obligation and accrued employee benefits

     (118,205     (71,633

Other, net

     (17,163     (22,401
  

 

 

   

 

 

 

NET CASH USED IN OPERATING ACTIVITIES

     (103,234     (81,573
  

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Decrease (increase) in restricted cash and cash equivalents

     2,150        (284

Purchases of property, plant and equipment

     (21,441     (20,753

Purchases of available-for-sale securities

     (64,802     (48,791

Sales and maturities of available-for-sale securities

     22,015        48,577   

Investment in equity and cost method investees

     (6,572     (4,716

Proceeds from asset disposals

     19        17   
  

 

 

   

 

 

 

NET CASH USED IN INVESTING ACTIVITIES

     (68,631     (25,950
  

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Payment of short-term borrowing and long-term debt

     (52     (797

Payment of debt issuance costs

     —          (70

Excess tax benefits from stock-based compensation

     1,406        4,031   

Exercise of stock options

     1,329        3,105   

Other

     (97     —     
  

 

 

   

 

 

 

NET CASH PROVIDED BY FINANCING ACTIVITIES

     2,586        6,269   
  

 

 

   

 

 

 

EFFECTS OF EXCHANGE RATE CHANGES ON CASH

     3,690        2,293   
  

 

 

   

 

 

 

NET DECREASE IN CASH AND CASH EQUIVALENTS

     (165,589     (98,961

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

     415,209        391,142   
  

 

 

   

 

 

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

   $ 249,620      $ 292,181   
  

 

 

   

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

    

Cash paid during the period for:

    

Interest (net of amount capitalized)

   $ 618      $ 892   

Income taxes (net of refunds)

   $ 6,853      $ 13,903   


The Babcock & Wilcox Company

Business Segment Information

For the Periods Ended March 31, 2012 and 2011

(In thousands of U.S. dollars)

 

     THREE MONTHS ENDED  
     3/31/12     3/31/11  

REVENUES:

    

Power Generation

   $ 414,273      $ 356,184   

Nuclear Operations

     250,178        250,455   

Technical Services

     24,973        28,360   

Nuclear Energy

     86,586        65,262   

Adjustments and Eliminations

     (10,118     (8,984
  

 

 

   

 

 

 

TOTAL

   $ 765,892      $ 691,277   
  

 

 

   

 

 

 

SEGMENT INCOME:

    

Power Generation

   $ 27,979      $ 26,633   

Nuclear Operations

     48,002        30,450   

Technical Services

     14,618        12,142   

Nuclear Energy

     (16,827     (37,478
  

 

 

   

 

 

 

SUBTOTAL

     73,772        31,747   

Corporate

     (8,061     (9,846
  

 

 

   

 

 

 

TOTAL

   $ 65,711      $ 21,901   
  

 

 

   

 

 

 

EQUITY IN INCOME OF INVESTEES:

    

Power Generation

   $ 3,822      $ 6,010   

Nuclear Operations

     0        0   

Technical Services

     13,535        9,351   

Nuclear Energy

     0        0   
  

 

 

   

 

 

 

TOTAL

   $ 17,357      $ 15,361   
  

 

 

   

 

 

 

PENSION EXPENSE:

    

Power Generation

   $ 16,439      $ 15,928   

Nuclear Operations

     10,371        8,946   

Technical Services

     698        634   

Nuclear Energy

     1,225        1,181   

Corporate

     1,946        1,680   
  

 

 

   

 

 

 

TOTAL

   $ 30,679      $ 28,369   
  

 

 

   

 

 

 

DEPRECIATION AND AMORTIZATION:

    

Power Generation

   $ 4,588      $ 4,720   

Nuclear Operations

     8,489        10,391   

Technical Services

     74        66   

Nuclear Energy

     1,545        1,181   

Corporate

     3,019        2,957   
  

 

 

   

 

 

 

TOTAL

   $ 17,715      $ 19,315   
  

 

 

   

 

 

 

RESEARCH AND DEVELOPMENT, NET:

    

Power Generation

   $ 4,839      $ 2,994   

Nuclear Operations

     119        11   

Technical Services

     215        0   

Nuclear Energy

     23,863        14,303   
  

 

 

   

 

 

 

TOTAL

   $ 29,036      $ 17,308   
  

 

 

   

 

 

 

CAPITAL EXPENDITURES:

    

Power Generation

   $ 5,731      $ 4,139   

Nuclear Operations

     12,774        11,766   

Technical Services

     0        0   

Nuclear Energy

     865        2,463   

Corporate

     2,071        2,385   
  

 

 

   

 

 

 

TOTAL

   $ 21,441      $ 20,753   
  

 

 

   

 

 

 

BACKLOG:

    

Power Generation

   $ 2,650,767      $ 1,500,655   

Nuclear Operations

     2,931,859        2,931,001   

Technical Services

     21,783        3,009   

Nuclear Energy

     350,068        471,897   
  

 

 

   

 

 

 

TOTAL

   $ 5,954,477      $ 4,906,562